TREASURY ORDER: 114-01

DATE: May 16, 1989

SUNSET REVIEW: TBD

SUBJECT: Office of Inspector General

By virtue of my authority as Secretary of the Treasury, including the authority contained in P.L. 100-504 (the Inspector General Act Amendments of 1988), 31 U.S.C. 321(b), 5 U.S.C. 301, and 302, it is hereby ordered that:

1. The Office of Inspector General (OIG).

a. There is within the Department of the Treasury an Office of Inspector General (OIG). The OIG shall be headed by an Inspector General (IG) who is appointed by the President and who shall report to and be under the general supervision of the Secretary and the Deputy Secretary. The IG shall provide policy direction for and shall conduct, supervise, and coordinate audits and investigations relating to the programs and operations of the Department.

b. The Office of Inspector General shall include the former administratively established Office of the Inspector General and the internal audit functions of the following offices:

(1) Office of Internal Affairs, Bureau of Alcohol, Tobacco and Firearms;

(2) Office of Internal Affairs, United States Customs Service; and

(3) Office of Inspection, United States Secret Service.

c.

(1) The Office of Inspector General shall be placed organizationally within the Departmental Offices, but shall be independent of the Departmental Offices and all other offices and bureaus within the Department. Each fiscal year, the Inspector General shall submit to the Secretary a request for a separate appropriation account as contemplated by 31 U.S.C. 1105(a)(25). The staffing and funding level transmitted to OMB for the Inspector General shall be subject to final determination by the Secretary or the Deputy Secretary.

(2) The Office of the Inspector General shall be provided by the Department, and/or the bureaus, with adequate and appropriate office space at central and field office locations together with such equipment, office supplies, communications facilities and services necessary for the effective operation of such offices, and shall be provided with necessary maintenance services for such offices, equipment, and facilities located therein. For Fiscal Year 1991 and thereafter, the Office of Inspector General shall reimburse the providing entity for the costs of
providing such space, equipment, supplies, communications facilities and services, and maintenance thereof. In addition, this paragraph is not be to construed to affect the extent of the Inspector General's obligation to reimburse providing entities for the costs of providing space, equipment, supplies, communications facilities and services, and maintenance thereof in Fiscal Years 1989 or 1990.

d. All employees and officials of the Department of the Treasury shall report to the Inspector General any complaints or information concerning the possible existence of any activity constituting a violation of law, rules, or regulations, or mismanagement, gross waste of funds, abuse of authority, or a substantial and specific danger to the public health and safety relating to the Department, except that law enforcement bureau employees, i.e., employees of the Internal Revenue Service; United States Customs Service; Bureau of Alcohol, Tobacco and Firearms; and the United States Secret Service, shall report such matters either to the heads of the Internal Affairs or Inspection Offices of the bureau in which they work, or to the Inspector General.

e.

(1) No officer or employee of the Department shall prevent the Inspector General from initiating, carrying out, or completing any audit or investigation, or from issuing any subpoena during the course of an audit or investigation, except that the Inspector General shall be under the authority, direction, and control of the Secretary and the Deputy Secretary of the Treasury with respect to matters set forth in Section 8C(a) of the Inspector General Act, as amended.

(2) No officer or employee of the Department shall prevent or prohibit any duly appointed officer or employee of the Office of Inspector General from obtaining access to any information or documentation which the Inspector General has determined is necessary to the execution of an audit, investigation or other inquiry, except that the Inspector General shall be under the authority, direction, and control of the Secretary and the Deputy Secretary of the Treasury with respect to matters set forth in Section 8C(a) of the Inspector General Act, as amended.

(3) Whenever information or assistance requested by the OIG is unreasonably refused or not provided, the Inspector General shall report the circumstances to the Secretary or Deputy Secretary without delay.

f.

(1) The Inspector General shall have access to returns and return information, as defined in section 6103(b) of the Internal Revenue Code of 1986, only in accordance with the provisions of section 6103 of such Code and the Inspector General Act Amendments of 1988.

(2) Access by the Inspector General to returns and return information under section 6103(h)(1) of such Code shall be subject to the following additional requirements:

(a) In order to maintain internal controls over access to returns and return information, the Inspector General (or in the absence of the Inspector General, the Acting Inspector General, the Deputy Inspector General, the Assistant Inspector General for Audit, or the Assistant Inspector General for Investigations) shall provide the Assistant Commissioner (Inspection) of the Internal Revenue Service (IRS) written notice of the Inspector General's intent to access returns and return information;

(b) If the Inspector General determines that the Assistant Commissioner (Inspection) of the IRS should not be made aware of a notice of access to returns and return information, such notice shall be provided to the Senior Deputy Commissioner of the IRS; and

(c) Such notice shall clearly indicate the specific returns or return information being accessed and shall contain a certification by the Inspector General (or in the absence of the Inspector General, the Acting Inspector General, the Deputy Inspector General, the Assistant Inspector General for Audit, or the Assistant Inspector General for Investigation") that the returns or return information being accessed are needed for a purpose described under section 6103(h)(1) of the Internal Revenue Code of 1986. The notice shall also identify those employees of the Office of Inspector General who may receive such returns or return information.

2. Duties and Responsibilities of the Inspector General.

a. In General.

(1) The Inspector General shall recommend policies for and shall conduct, supervise, and coordinate audits and investigations relating to the programs and operations of the Department;

(2) The Inspector General shall recommend policies for and shall conduct, supervise, and coordinate other activities for the purpose of promoting economy and efficiency in the administration of, and for preventing and detecting fraud and abuse in, the Department's programs and operations;

(3) The Inspector General shall recommend policies for and shall coordinate relationships between the Department and other Federal, State and local governmental agencies and nongovernmental entities with respect to:

(a) all matters relating to the promotion of economy and efficiency in the administration of, or the prevention and detection of fraud and abuse in, programs and operations administered or financed by the Department; and

(b) the identification, investigation, and prosecution of participants in such fraud and abuse. Provided, however, that the responsibilities and authorities of the Inspector General under this paragraph shall not be construed to impair or reduce the responsibilities of program managers to ensure that their programs are administered in an economic and efficient manner and that such programs are protected against waste, fraud and abuse. Similarly, this paragraph shall not be construed to prevent program managers from coordinating with other agencies in fulfilling their responsibilities for proper administration of their programs;

(4) The Inspector General shall keep the Secretary and Deputy Secretary fully and currently informed concerning fraud and other serious problems, abuses, and deficiencies relating to the administration of the program. and operations of the Department. The IG shall recommend corrective action concerning such problems, abuses, and deficiencies and shall report on the progress made in implementing such corrective action;

(5) In the event that the Inspector General becomes aware of a particularly serious or flagrant problem, abuse, or deficiency, relating to the administration of programs and operations of the Department, the IG shall report immediately to the Secretary who shall transmit such report to the appropriate committees or subcommittees of Congress within seven calendar days, together with a report from the Secretary containing any comments he deems appropriate,

(6) The Inspector General shall prepare semiannually, not later than Apr 1 30 and October 31 of each year, a report to the Secretary for transmission to Congress within thirty days after receipt, pursuant to Section 5(a) of the Inspector General Act, as amended, summarizing the activities of the OIG and the Internal Affairs and Inspector Offices during the immediately preceding six-month period;

(7) The Inspector General shall institute Departmentwide policies for resolving disagreements between the OIG and auditees related to findings and recommendations included in OIG audit reports. To the extent practicable and appropriate, such policies shall provide for resolving such disagreements prior to the issuance of the audit reports in final form;

(8) The Inspector General shall review existing and proposed legislation and regulations relating to programs and operations of the Department and shall make recommendations in the semiannual reports to Congress concerning the impact of such legislation or regulations on the economy and efficiency in the administration of programs and operations administered or financed by the Department or the prevention and detection of fraud and abuse in such programs and operations;

(9) The Inspector General may require by subpoena the production of information, documents, reports, answers. records, accounts, papers, and other data and documentary evidence necessary for the performance of IG functions under the Inspector General Act, as amended, and under the Program Fraud Civil Remedies Act, except that the Inspector General shall be under the authority, direction, and control of the Secretary and the Deputy Secretary of the Treasury with respect to matters set forth in Section 8(a) of the Inspector General Act, as amended; Such subpoenas, in the case of contumacy or refusal to obey, shall be enforceable by order of any appropriate United State" district court: Provided, the Inspector General shall use procedure. other than subpoenas to obtain document" and information from Federal agencies when exercising authority under the IG Act, as amended; and

(10) The Inspector General and the IG's designee(s) shall have the authority to administer to or take from any person an oath, affirmation, or affidavit, whenever necessary for the performance of IG functions.

b. For Audits.

(1) The Inspector General shall routinely perform internal audits for all Treasury bureaus and offices, with the exception of the IRS. With regard to the IRS, the Inspector General may audit any program, activity or function the IG deems appropriate. The Inspector General shall, in formulating each year's audit plan, solicit and consider bureau heads' recommendations with respect to appropriate subjects for audit and their relative prior. The Inspector General shall inform each bureau head of the audit plan with respect to that bureau;

(2) When the Inspector General initiates an audit under the authority contained in the second sentence of paragraph b.(l), the IG may provide the Commissioner of the IRS with written notice that the IG has initiated such an audit. If the IG issues such a notice, no other audit or internal review shall be initiated into the matter and any other audit or internal review of such matter in the Department shall cease;

(3) The Inspector General shall coordinate all requests for audit services within the Department submitted by IG's from other Federal, State or local government agencies;

(4) The Inspector General shall distribute copies of final audit reports to all headquarters and field officials responsible for taking corrective action on matters covered by those reports;

(5) The Inspector General shall keep the Secretary and Deputy Secretary informed of any significant problems, abuses or deficiencies disclosed in audits and the actions taken to correct them: and

(6) The Inspector General shall formulate Departmental audit policies and priorities and assure implementation of Federal audit standards in the Department pursuant to Section 4(b)(1)(A) and © of the Inspector General Act, as amended.

c. For Investigations.

(1) The Inspector General shall conduct investigations and shall prepare reports relating to the programs and operations of the Department, including those of the law enforcement bureaus, as the IG deems necessary or desirable;

(2) The Inspector General may receive and investigate complaints or information from any Treasury employee concerning the possible existence of an activity constituting a violation of law, rules or regulations, or mismanagement, gross waste of funds, abuse of authority, or a substantial and specific danger to the public health and safety;

(3) When the Inspector General initiates an investigation in any law enforcement bureau, under the authority of paragraph c.(1) and (2), the IG may provide the head of the law enforcement bureau with written notice that the IG has initiated an investigation. If the IG issues such a notice, no other investigation shall be initiated into the matter and any other pending investigation into the matter within the Department shall cease;

(4) The Inspector General shall require, receive, review, and analyze all reports informing the Secretary or Deputy Secretary of any significant problems, abuse, or deficiencies disclosed in any bureau or office investigation and the actions taken to correct them;

(5) The Inspector General shall report the results of any significant investigation of any high official to the Secretary or the Deputy Secretary or other appropriate management official for action, and may so report the results of other investigations;

(6) The Inspector General shall receive and monitor all requests submitted by IG's from other government departments and agencies for investigative services within the Department;

(7) The Inspector General shall receive all matters referred to the Department of the Treasury by the Special Counsel of the Merit Systems Protection Board (MSPB) regarding allegations of prohibited personnel practices, may investigate such matters, or may refer such matters for investigation to a law enforcement bureau Internal Affairs or Inspection Office;

(8) Bureaus or office" conducting investigations under 5 U.S.C. 1206(b)(3) for the Special Counsel of the MSPB shall forward to the Inspector General all investigative reports prepared for such investigations. The IG may prepare, or delegate to the appropriate bureau or office for preparation, final report. to the Special Counsel for review and signature of the Secretary or the Deputy Secretary; and

(9) The Inspector General shall report expeditiously to the Attorney General whenever the IG has reasonable ground" to believe there ha. been a violation of Federal criminal law. However, in matters involving chapter 75 of the Internal Revenue Code of 1986, the Inspector General shall report expeditiously to the Attorney General only offenses under section 7214 of such Code, unless the Inspector General obtains the consent of the Commissioner of Internal Revenue to exercise additional reporting authority with respect to such chapter.

d. For Oversight.

(1) The Inspector General shall have oversight responsibility for the Office of Internal Affairs of the Bureau of Alcohol, Tobacco and Firearms: the Office of Internal Affairs of the United States Customs Service; the Office of Inspection of the United States Secret Service; and the Office of the Assistant Commissioner (Inspection) of the IRS;

(2) The Inspector General shall require from the head of each office of Internal Affairs and Office of Inspection, monthly or more frequent reports of the significant activities being performed by such offices;

(3) Heads of Offices of Inspection or Internal Affairs shall routinely provide to the Inspector General timely information regarding any matter which could have a material effect on their office operations; and

(4) The Inspector General shall review, evaluate, and approve all Departmental and bureau programs, plans, policies and operation. for referring allegations of criminal civil rights violations against Treasury law enforcement personnel and may make recommendations for changes.

e. For Intelligence Activities.

(1) Pursuant to section 4 of Executive Order 12334, the Inspector General together with the General Counsel, to the extent permitted by law, shall report to the President's Intelligence Oversight Board concerning intelligence activities that the IG has reason to believe may be unlawful or contrary to Executive Order or Presidential directive: and

(2) All Treasury employees shall report to either the Inspector General, the General Counsel, or the head of an Inspector or Internal Affairs Office any matters which raise questions of propriety or legality under Executive Order 12333.

f. For Miscellaneous Matters.

(1) The Inspector General has the authority to select, appoint, and employ such officers and employees, including members of the Senior Executive Service (SES) and excepted service employees, as may be necessary for performing the functions and duties of the Office, subject to FTE ceilings and to the provisions of lime 5, 'United States Code;

(2) The Inspector General may exercise any and all administrative functions attendant upon this personnel authority except for those functions assigned by law to the Secretary, which may not be delegated;

(3) The Inspector General is authorized to exercise all authorities granted to an "appointing authority" pursuant to Title 5, United States Code as those authorities pertain to SES members or positions which are or would be within the OIG. With regard to any other authority accorded by law to the agency or the Secretary which pertains to SES members or positions within the OIG, the IG shall be under the direct supervision of the Secretary or the Deputy Secretary and no other Departmental official;

(4) The Inspector General has the authority to obtain services a" authorized by 5 U.S.C. 3109 at daily rates not to exceed the equivalent rate prescribed for grade GS-18 of the General Schedule by 5 U.S.C. 5332, and to enter into contracts and other arrangements for audits, studies and other services and to make such payments as may be necessary to carry out the IG's mission;

(5) The Inspector General, under procedures the IG develops, may obtain by detail investigative, audit, and support personnel from law enforcement bureaus' Internal Affairs and Inspection Offices for conducting investigation" or audit. under the IG's direct supervision; provided that, the Office of Inspector General shall reimburse the providing entity for the costs of employing a detailed employee for the period of the detail.

At the Inspector General's discretion, personnel so detailed shall remain on the rolls of the service or office from which they were detailed but will report exclusively to the Inspector General regarding the matter being investigated or audited;

(6) Bureau heads shall consult with the Inspector General in recruiting and selecting candidates to head Internal Affairs or Inspection Offices of the law enforcement bureaus; and prior to completing performance evaluations for individuals encumbering those positions;

(7) The Inspector General is hereby delegated the authority to issue final decisions on administrative appeals under 5 U.S.C. 552 and 552a with respect to records which are within the custody of the OIG; and

(8) The Inspector General may issue additional directives or regulations regarding the OIG as the Inspector General deems appropriate.

3. CANCELLATION. This Order supersedes Treasury Orders (TO):

a. TO 100-02, "The Office of the Inspector General and Delegation of Authority to the Inspector General," dated May 3, 1988; and

b. TO 102-07, "Delegation of Authority to Assistant Secretary (Management) to Make Certain Appellate Determinations Under the Freedom of Information Act, 5 U.S.C. 552, or the Privacy Act, 5 U.S.C. 552a," dated October 15, 1985.

Nicholas F. Brady

Secretary of the Treasury