Government Waste Watchdogs Under Fire

Federal spending, both in real terms as well as a percentage of gross domestic product, has swollen to near-historic levels. An equally alarming, but less high-profile trend compound taxpayers’ concerns: government watchdogs, tasked to sniff out waste, fraud, and abuse, are being starved of money, compromising their oversight capabilities over the exploding federal leviathan.

The Government Accountability Office (GAO) is by far the largest of the federal government watchdog agencies, publishing more than 1,000 reports and audits annually. Its unique oversight mandate straddles the entire federal government. For example, its exemplary High-Risk series, which affords taxpayers, policymakers, and lawmakers a biannual snapshot of the federal programs most at risk for waste, fraud, and abuse has drawn attention to federal program vulnerabilities from A (the U.S. Department of Agriculture’s [USDA] food stamp program) to Z…okay, actually W (the federal weapons acquisition program). GAO personnel are not simply auditors (in fact, only a small percentage of GAO’s staff are certified public accountants). Instead, they evaluate program performance, point out the absence of performance metrics when appropriate, and make recommendations about whether to eliminate, consolidate, or reform programs based upon their findings.

For example, long before the now-bankrupt solar panel manufacturer Solyndra became front-page news for taking $500 million in taxpayer money down with it, GAO had authored no fewer than four detailed reports sounding the alarm on the Department of Energy’s loan guarantee program. GAO cited its simmering (and unremediated, it turns out) susceptibility to cronyism and warned about the potential for significant losses for taxpayers.

GAO’s work is essential to keeping an eye on trillions of dollars in taxpayer expenditures, guiding taxpayers and lawmakers on where to eliminate wasteful spending, and recommending how best to restructure programs that are not working. Ironically, GAO’s budget is now under siege, which will make their work more difficult.

GAO’s budget has begun to erode over the last several years, dropping from $571.1 million in fiscal year (FY) 2010 to $511.3 million in FY 2012. GAO staffing has also been reduced, which compromises the agency’s ability to drill down into program spending details. And drilling down into the details is what help yield savings for taxpayers. According to GAO’s FY 2011 annual report to Congress, the agency identified $45.7 billion in savings for the federal government last year, a return of $81 for every dollar spent. The figure is less than the nearly $50 billion GAO saved in FY 2010, but it still exceeds its FY 2011 target of $42 billion.

Stalwart foe of wasteful spending Sen. Tom Coburn (R-Okla.) has taken umbrage at the cuts. In a September 20, 2011 interview with FOX News’ Greta Van Susteren, Coburn said, “It’s very disappointing to me that the appropriations committee would cut the members’ (of Congress) budget by 3 percent but cut the only effective tool that we have to help us with oversight 8.5 percent. [GAO] is doing what the Appropriations Committee should be doing and they’re helping those of us who care about waste, fraud, abuse, and duplication in government show how many stupid things go on and how many things we’re funding that don’t have any good result…and of course, who funds them? The Appropriations Committee, so it very well could be payback as far as I’m concerned. If you’re going to cut them three times what you cut the members’, there’s something wrong.”

In fact, the funding trend at GAO doesn’t bode well for taxpayers. Sixty years ago, the whole federal budget was $42.6 billion and employed 2.2 million people; today, the budget stands at an astonishing $3.7 trillion andthe federal (non-military workforce) stands at 2.7 million with millions more in outside contractors.Yet, GAO is less than half the size it was in 1950.

GAO is not the only watchdog whose budget isn’t keeping pace with rapidly rising federal expenditures, distended programs, and intensifying oversight demands. From 2009 to 2010, the aggregated budgets of all 69 statutory Offices of Inspectors General (OIG) basically flatlined, creeping from $2.4 to $2.5 billion, at a time when the budgets of the agencies they oversee have exploded as a result of the stimulus and programmatic increases.

USDA IG Phyllis Fong recently testified before the House Subcommittee on Oversight and Government Reform, detailing her agency’s efforts to track fraud in the Supplemental Nutrition Assistance Program (SNAP), widely known as the food stamp program. According to Fong, over the last five years, the OIG completed “779 SNAP investigations that have resulted in 1,356 indictments, 944 convictions, and 792 sanctions against individuals and businesses. During that time, our monetary results have totaled more than $186 million.”

While that sounds praiseworthy, CAGW and many others have vividly illustrated that the SNAP program is riddled with management weaknesses and vulnerabilities that have been identified by the OIG, yet gone stubbornly uncorrected for years. SNAP costs have exploded over the last four years; estimated losses to the program as a result of fraud are estimated to be around $750 million nationwide (based upon USDA’s claim of a one percent fraud rate, which is laughably low). USDA’s oversight personnel are stretched razor-thin across the country, and some states cannot afford to devote local law enforcement resources to the labor-intensive job of chasing down the bad actors. To compound the problem, the USDA OIG has sustained a 10 percent budget cut, which will certainly not help staunch the hemorrhaging of taxpayer money from SNAP. It is clear that the growth of the program (and the fraud that follows it) have rapidly outpaced the USDA’s oversight capabilities.

The Project on Government Oversight (POGO) has begun maintaining a webpage devoted to tracking the currently vacancies at IG offices across federal agencies. According to POGO, the IG spots at 12 agencies have leadership vacuums, among them the Departments of Labor, Interior, Justice, and Defense. The Interior Department has gone more than two and a half years without oversight leadership; the State Department has gone without an IG for more than four years. Most of those vacancies cannot expect to be filled anytime soon since the majority do not yet have a nominee identified. Vacancies in the top job at the Offices of Inspector General make a considerable difference in the direction, vigor, and motivation of an agency.

More importantly, leaving these jobs empty offers a window onto the nature of President Obama’s management culture; oversight is clearly not on his list of priorities.

Federal watchdogs are the taxpayers’ eyes and ears on the ground in Washington. They are the sentinels that stand between taxpayers and, at best, lackluster program performance and at worst, grotesque and undeterred plundering of federal spending programs. Without the watchdogs, federal officials fly blind, never knowing what is working and what is failing to achieve its goals. Trying to put together a budget which will cut wasteful spending and reduce deficits and the national debt is, in fact, a relatively useless exercise when lawmakers and administration officials cannot even measure program integrity or correct program mismanagement.

Lax oversight invites even more unscrupulous activity and wasteful spending by those who have calculated the odds and know that their chances of being caught and prosecuted are minimal and shrinking. Massive financial scandals can and will fester, going unrecognized and unresolved. Congress and the administration are starving our federal watchdogs of resources and robust leadership, threatening to turn them into lapdogs and taxpayers into victims.