Three years into President Obama’s tenure, 12 federal agencies—ten of which are responsible for a combined budget of $681 billion—are without permanent inspector generals, leaving them more prone to fraud and waste, an investigation by the Project on Government Oversight has found.
Not included in that budgetary figure are the Troubled Asset Relief Program and the reconstruction of Afghanistan.
A 2011 report by the Commission on Wartime Contracting found as much as $60 billion in U.S. taxpayer money has been lost to waste and fraud in Iraq and Afghanistan, but the Special Inspector General for Afghanistan Reconstruction (SIGAR), which does not require Senate confirmation, has been without a permanent inspector general for more than a year.
Inspector general offices serve as watchdogs within federal agencies, conducting independent investigations into waste and fraud. Only three of the agencies have inspector general nominees under consideration. Jake Wiens, an investigator at the Project on Government Oversight, said inspector general offices are "incredibly important to having a well functioning federal government."
The Association of Certified Fraud Examiners estimates that U.S. organizations lose seven percent of their annual revenues to fraud. With an operating budget of at least $681 billion, a seven percent fraud rate would mean that $47.7 billion is disappearing every year.
A 2008 study by the Government Accountability Office of 95 major defense acquisitions projects found cost overruns of 26 percent, totaling $295 billion over the life of the projects.
Yet some of the largest federal agencies sit without permanent inspector generals.
"The most egregious case is the State Department," Wiens said. "That’s vacant because the White House hasn’t nominated a candidate. It’s been over four years, and no one’s there."
The State Department, which is paired with USAID for budgetary purposes, had a 2010 budget of $51.7 billion, and has not had a permanent inspector general in 1,485 days.
Likewise, the Department of the Interior—2010 budget of $12 billion—has been without a permanent inspector general for 1081 days. The Department of Labor—$13.3 billion budget in 2010—941 days.
Although these agencies have acting inspector generals, Wiens said having appointed inspector generals are important because they are more thoroughly vetted. A permanent inspector general is also more likely to set long-term goals and better understand the specific risks within the agency.
Upon entering office, President Obama vowed to run the most transparent and open administration in history.
"Over the last eight years, government spending on contracts has doubled to over half a trillion dollars. Far too often, the spending is plagued by massive cost overruns, outright fraud, and the absence of oversight and accountability," Obama said in a 2009 speech outlining a new executive directive to improve government contracting. "We are spending money on things that we don't need, and we are paying more than we need to pay, and that's completely unacceptable."
"So long as I'm president, I won't stop fighting to cut waste and abuse in Washington," Obama continued in a 2010 speech.
The White House did not return requests for comment.