Ignored IG recommendations cost billions

As federal officials hunt for line items ripe for budget-cutting, they might want to consult the nearly 17,000 recommendations made – and disregarded – in reports issued in 2012 by inspectors general across the government.

According to a new report from the House Oversight and Government Reform Committee, the number of open and unimplemented recommendations made in various IG reports skyrocketed to an all-time high. In 2009, IGs reported 10,894 open and unimplemented recommendations; that number jumped to 16,906 in 2012.

If implemented, the recommendations could save taxpayers $67 billion, the report stated. Committee staff who prepared the report also noted that the figures are conservative estimates and the total likely is significantly higher.

"As Congress and the administration work to identify new ways to save money, they would be well-served by implementing the recommendations of the IG community," the report noted. "If evidence continues to mount that the administration is dismissive of the work of the IG community, Congress should aggressively incorporate unimplemented recommendations into legislative actions."

The committee's report shows a correlation between the absence of a permanent inspector general in agencies and a high number of open and unimplemented recommendations. The State Department, Homeland Security Department and Agency for International Development consistently ranked among the highest of agencies with open and unimplemented recommendations; in 2012 they ranked first, second and fourth, respectively.

Combined with the Interior, Labor and Defense departments, the six agencies – which all must have IG vacancies filled by the president – have been without a permanent IG for 15 years collectively, according to the report.

In a March 5 House Oversight and Government Reform committee hearing, officials from the Transportation and Education department testified in the first of a planned series examining how agencies respond to IG recommendations.

"We are here today to talk about the facts: billions in federal government waste identified by non-partisan watchdogs," Rep. Darrell Issa (R-Calif.), committee chairman, said in statement. "We are joined by two widely-respected IGs who have spent years examining government programs, identifying areas of waste and know firsthand what recommendations could save taxpayers money."

As part of the report, members of the IG community identified critical areas that posed common challenges across agencies – and that are high priority. Among them were weaknesses in IT security as well as overpayments to contractors and contracting oversight.

"As cybersecurity threats increase, the IG community is concerned that departments and agencies are not properly addressing IT security, and has questioned how agencies will protect vital electronic data in an emergency," the report noted.

IGs queried for the report also frequently shared concerns about "inadequate oversight and controls over the outflow of federal funds, especially in contracting and bidding."

The report cited incidents of overpayment that could have been avoided with additional documentation or more stringent approval requirements. Committee staff also noted that agencies "were sometimes too trusting, allowing contractors to bill after the fact in cases in which prices were not set in advance." In the March 5 hearing, Transportation Department Inspector General Calvin Scovel admitted that "longstanding weaknesses in grants management and IT procurement and security have limited DOT’s ability to maximize its return on investment."

Scovel cited two specific examples in his testimony, noting that his office already has issued recommendations to fix the issues.

"In November 2011, we reported that idle funds from undelivered orders under inactive grants could free up approximately $1.4 billion for DOT agencies to use for other transportation infrastructure improvement projects and create jobs," Scovel said. "For fiscal year 2013, DOT plans to issue a policy requiring agencies to perform quarterly reviews and annual certifications of obligation balances and train personnel who handle them. Implementing this recommendation will help the department begin correcting a persistent, systemic problem with unliquidated obligations."

He also said DOT is taking on IT challenges, another high-priority issue at the agency, but noted that it would need funding to fully address the problem.

"DOT spends approximately $3 billion on its IT systems. ... However, as we reported in April 2012, the Department lacks an [enterprise architecture] to align IT investments with its mission, reduce duplicative systems, effectively spend information security funds, and realize cost savings," Scovel stated in his testimony. "DOT concurred with our recommendation to develop or revise its EA policy and procedures, and plans to develop an overarching EA policy by May 2013. However, DOT indicated that it would need funding to implement the policy and would commit to a completion date when funding becomes available."

DOT is not alone in its problems. IT and contracting issues are just two items on a long list of unimplemented recommendations that have hindered corrective actions and become federal money pits, including troubles with auditing, following up and resolving IG recommendations.

The sting of those problems – and the need to unearth savings – is only worsened by sequestration, committee members and those testifying at the hearing agreed.

"When we're saying there's going to be impact, it's true," said Rep. Elijah Cummings (D-Md.), the committee's ranking Democrat. "If there's something else that can be done to avoid certain things, I want to know what can be done."