Inspector generals almost always pay for themselves by recovering money from fraud and recommending ways to save money. Note: Savings on large agencies extend beyond the viewing area of the chart. Data for Treasury's IG was not available.
Taxpayers could save as much as $43 billion if officials running the biggest federal departments would do what their internal watchdogs recommended in 2014.
That $43 billion would be about $27 returned for every dollar invested in the work of 14 of the 15 inspectors general overseeing White House cabinet-level departments. Together, the budgets of the 14 IGs amount to more than $1.6 billion, according to their semiannual reports to Congress.
Total returns on investment were calculated by adding potentially avoidable costs identified by the IGs to amounts actually recovered. Then, the total was divided by their annual budgets. The Department of Treasury IG has yet to release its report, so it was excluded from calculations for this article.
That’s up from about $21 per dollar invested in 2013, according to the Council of the Inspectors General on Integrity and Efficiency.
The 14 watchdog offices returned almost $11 billion to the U.S. Treasury as a direct result of their investigative work. They also made management recommendations worth more than $32 billion in savings.
Such recommendations included actions such as implementing tighter controls and oversight to decreasing improper payments. Those alone represent almost $20 returned for every taxpayer dollar invested.
Despite their success, however, the IGs face two main barriers. First, the watchdogs are limited in their actions. Despite the potential savings, departments are not obligated to follow their auditors’ recommendations.
“There’s no consequence out there for ignoring the IGs’ recommendations,” said Leslie Paige, a spokeswoman for Citizens Against Government Waste. Her organization is a nonprofit oversight group that includes among its co-founders the crusading investigative reporter Jack Anderson.
“[Return on investment] is helpful, but if there’s no accountability and no change, you have to question if this is a useful activity,” Paige said.
“The fact that so many billions are found with understaffed offices and often politically sympathetic IGs shows you what they’re uncovering is the tip of the iceberg,” said Judicial Watch President Tom Fitton.
The IGs’ semiannual reports make it difficult to measure the exact savings of their audits. The estimated potential savings range from the watchdogs identifying questionable costs to recommending new practices in the administration of their programs.
In addition to dollar returns, another measure of IG efficiency is the number of investigations and audits produced based on its staff and budget. However, like the recommendations, the diverse methods of presenting data across the Cabinet-level IGs make it difficult to accurately compare them.
Further, IGs’ audits don’t result in the manger running a wasteful program being relieved or otherwise disciplined.
“You’ll see facts in the reports that should result in firings, maybe criminal prosecutions,” Fitton said. “Rarely do you see these things come from the reports.”
Between the inability to enforce their recommendations on department managers and to prosecute ineffective bureaucrats, the IGs are faced with an uphill battle.
“Is waste decreasing because of IG activity?” Fitton said. “I don’t think anyone would make that case.”
Even so, when looking at the high returns on investment with the IGs’ work, it’s intuitive to think that additional money would result in greater results.
The second problem IGs face is limited resources.
“They’re underfunded, they’re ignored and essentially often politicized and manipulated and stonewalled,” Paige said. “Their ability to chase the dollars is outpaced by the money going out the door. I’d like to see some money taken away from the wasteful programs and give it to the IG.”
There is also the question of whether a high return on investment represents an efficient IG or an especially inefficient department being overseen.
“I certainly believe both are true,” said Don White, spokesman for the Department of Health and Human Services Inspector General. “I do believe that the HHS IG, although relatively small, is effective.”
White’s office had the highest return on investment among Cabinet-level IGs in terms of potential savings and actual recovery.
However, rampant waste throughout the federal government may make the IGs’ work look less impressive.
“To find waste in the government bureaucracy is like shooting a fish in a barrel, so it doesn’t show you much about the efficiency of the IGs,” Fitton said.
Additionally, there is hesitation to commit more money to an already wasteful government.
“We don’t want to see any more spending that will add to the national debt,” Paige said. “It would have to be paid for somehow.”
Despite the barriers, the Cabinet IGs compiled an average potential savings of $16 for each dollar invested. For actual money recovered, the IGs returned an average of $4 in fiscal 2014.
The HHS IG potentially saved $70 for every dollar invested. The Department of Defense and the Department of Housing and Urban Development followed, with about $37 and $33 returned on investment.
With a bigger budget, the HHS IG believes a bigger return is possible, according to White.
The Department of Justice IG had the lowest return on investment, losing 63 cents for every dollar invested in fiscal 2014.
"Focusing solely on dollar-related findings fails to recognize the hundreds of criminal administrative investigations we conduct each year," said DOJ IG spokesman John S. Lavinsky. He cited several reports, such as those involving the Boston Marathon bombing, in addition to year-to-year fluctuations.
Regardless of the returns on investments, the power ultimately resides outside of the IGs’ hands.
“Congress is terribly weak on oversight,” Paige said.
Without a body overseeing the IGs’ reports, little can be enforced after they’re issued.
“It ought to be the focus of Congress to be the stewards of public funds,” Fitton said.