Summary

This letter provides information Congress requested at the March 25, 2009, hearing entitled The Roles and Responsibilities of Inspectors General within Financial Regulatory Agencies. During the hearing, the former Inspector General (IG) of the Department of Homeland Security (DHS) testified that provisions of the Inspector General Act of 1978, as amended (IG Act), allow the Secretary of the Department of the Treasury to prevent the IG from pursuing an investigation or audit, including the issuance of subpoenas, under certain conditions. Due to concerns about the possible inappropriate use of such authorities, Congress asked GAO to identify federal agencies that possess the authority under the IG Act to prohibit audits and investigations by their offices of inspectors general (IG offices) and to determine the extent to which such provisions have been used to limit the IGs' activities.

The IG Act provides specific protections intended to help ensure the independence of IG audits and investigations. For example, the IG Act prohibits an agency head from preventing an IG from initiating, carrying out, or completing any audit or investigation, or from issuing any subpoena during the course of any audit or investigation. However, the IG Act authorizes the heads of six agencies to prohibit their respective IGs from carrying out or completing an audit or investigation, or from issuing any subpoena if the head determines that such prohibition is necessary to prevent either the disclosure of certain sensitive information or significant harm to certain national interests. In addition, the enabling legislation for the CIA IG contains a provision that authorizes the CIA Director to prohibit the audits and investigations by the IG if the Director determines such prohibition is necessary to protect vital national interests of the United States. In 1982, Congress amended the IG Act to establish the Department of Defense (DOD) IG and placed the IG under the authority, direction, and control of the Secretary of Defense with respect to audits or investigations or the issuance of subpoenas that require access to certain information. In 1988, Congress again amended the IG Act to apply a similar provision at the Department of the Treasury. Congress authorized the Secretary of the Treasury to prohibit the Treasury IG from carrying out or completing an audit or investigation or from issuing a subpoena if the Secretary determines that it is necessary to prevent significant impairment to the national interest or the disclosure of certain sensitive information. Such information includes (1) ongoing criminal investigations or proceedings, (2) sensitive undercover operations, (3) the identity of confidential sources, including rotected witnesses, (4) deliberations and decisions on policy matters, including documented information used as a basis for making policy decisions, the disclosure of which could reasonably be expected to have a signification influence on the economy or market behavior, (5) intelligence or counterintelligence matters, or (6) other matters the disclosure of which would constitute a serious threat to national security or to the protection of any person authorized federal protection under certain laws. The Treasury IG and the Secretary of the Treasury must follow a congressional notification process similar to that applicable to DOD. Similar statutory authority was provided to the agency heads at DHS, the Department of Justice (DOJ), the United States Postal Service (USPS), and the Federal Reserve Board of Governors of the Federal Reserve System (FRB) through amendments to the IG Act. The heads of these agencies and the IGs must follow congressional notification requirements similar to those applicable to DOD and Treasury. At the CIA, the Director may prohibit the work of the IG if the Director determines such prohibition is necessary to protect vital national interests of the United States. If the CIA Director prohibits the CIA IG's activities for reasons authorized by statute, the Director must submit the reasons within 7 days to the intelligence committees and advise the IG that such a report was submitted as well as provide a copy of the report to the IG that is consistent with the protection of intelligence sources and methods. The CIA IG may also submit comments considered appropriate to the intelligence committees.