ITC hurt by agency’s weak inspector general role

Introduction

The U.S. International Trade Commission has ended five years of temporary inspectors general who failed to produce any investigations, audits, and reports, and employed one with the funding and authority to root out any fraud within the agency, according to the Government Accountability Office.

The ITC, which sets sanctions in unfair trade and patent infringement cases that hurt U.S. companies, employed a series of temporary watchdogs from 2005 to 2009, and even left the inspector general job vacant for 17 months of that period. The only form of oversight the ITC inspector general’s office performed during that time was reviewing audits by public accountants, a violation of the 1978 inspector general law, the GAO said.

Budgetwise, the ITC failed to give its inspector general an “adequate budget and staff resources” for 2005-09, the GAO said, which “contributed significantly” to the lack of investigations and audits. While the ITC budget rose 23 percent during the same four-year period, to about $75 million in 2009, the agency did not increase funding for its internal watchdog.

In addition to being starved of funding, the ITC watchdog also was denied access for two months to some agency documents for a 2009 procurement inquiry “because of the chairman’s uncertainty about the IG’s authority to have access,” the GAO said. In another instance that year, an agency employee removed certain procurement files from the IG office without permission.

The weakness of the ITC watchdog means the trade panel was deprived of “valuable audit information for management to help improve program performance and operations, reduce costs, facilitate decision making, oversee or initiate corrective action, and contribute to accountability,” the GAO said.

In fiscal 2010, the trade panel appointed a Senior Executive Service-level inspector general, Philip M. Heneghan, and approved a budget of $816,837 for the watchdog office, which included five full-time employees.

FAST FACT: There are currently 59 inspectors general at government agencies, 29 appointed by the White House and approved by the U.S. Senate, and the remaining 30 hired by the head of the agency they work for.

Following are other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities. Congressional Research Service reports, which prepared for lawmakers but not made public, were provided by the Center for Democracy and Technology:

• While U.S. jobs steadily declined from June 2009 to August 2010, the employment rate rebounded faster than during almost all of the prior 10 economic recoveries of the postwar period (Congressional Research Service).
• Consolidation is pushing a majority of the Pentagon’s defense contracts to subcontractors, which brings increased costs and delays on weapon programs (GAO).
• Despite a high rate of tax evasion among self-employed Americans, the IRS audits a relatively small percentage of them. Unreported income from sole proprietors accounts for 20 percent, or $68 billion, of the estimated $345 billion in unpaid taxes (OIG).