Inspectors General, Offices of

An inspector general (IG) is an official of a federal agency who has been appointed by the president of the United States specifically to review and report on operations within his or her agency. The IG is the chief law enforcement official within that department or agency (except for the Department of Justice [DOJ]). The Office of the Inspector General (OIG) consists essentially of two divisions: criminal investigations and audit. Unlike an auditor in the private sector, the IG is responsible for reporting under the Chief Financial Officer's Act (Financial Statement Audits), which must meet the standards established by the American Institute of Certified Public Accountants and Generally Accepted Government Audit Standards.

The idea behind the creation of the Offices of Inspectors General is not new; IGs fulfill roles similar to those played by internal auditors or integrity officers. There is evidence that suggests that early civilizations performed review and inspection on the status and accountability of their equipment and personnel. This practice has changed from the ways it was carried out by the Samarians and ancient Egyptians or, for that matter, from what was practiced in the United States in the mid-20th century. Agencies historically examined accounts and records to detect fraud; today the primary purpose of such audits is to express an opinion on the fairness of the presentation of financial statements. Following accepted practices, General George Washington maintained a journal and ledger that he presented to the Continental Congress for an accounting of funds during the Revolutionary War, thus establishing at the very beginning of U.S. history the principal of accountability to an official body of legislators. Later, in the 19th century, railroads were among the first private enterprises to regularly require audits and inspections of their vast property holdings.

As the nation expanded, so, too, did the number and range of government programs. Along with this increase, the government decentralized. Funding and assets were managed by appointed regional administrators, a situation that led to waste, fraud, and abuse of programs and operations. There was one incident of fraud and abuse that was so egregious that President John F. Kennedy in 1962 directed that an Office of Investigation and Audit be established at the U.S. Department of Agriculture (USDA). The event involved a scheme on the part of a Texas cotton farmer having USDA officials transfer other farmers’ cotton allotments to his own cotton acreage. In this way all his land could be used to grow this tightly regulated crop. Such a scheme would have been impossible without the help of high-level officials, either inside the USDA or in Washington, D.C., or both. The farmer profited by several tens of millions of dollars. As time went on other federal agencies instituted the USDA model for investigation and audit.

This specific event led to greater concerns over government integrity, and on October 12, 1978, the Inspector General Act was enacted. Initially, 18 federal agencies were covered by the act and the existing Offices of Investigation and Audit were re-formed as Offices of Inspectors General. The purpose of the act was to create independent and objective units to conduct audits and investigations relating to the programs and operations of their respective federal agencies. By the early 21st century, more than 50 federal agencies had IGs.

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