Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?
115th Congress   }                                 {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                 {          115-799

======================================================================



 
                       IG SUBPOENA AUTHORITY ACT

                                _______
                                

 June 29, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Gowdy, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4917]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 4917) to amend the Inspector 
General Act of 1978 to provide testimonial subpoena authority, 
and for other purposes, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Summary and Purpose of the Legislation...........................     1
Background and Need for Legislation..............................     2
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     3
Statement of General Performance Goals and Objectives............     3
Legislative History..............................................     3
Committee Consideration..........................................     4
Roll Call Votes..................................................     4
Explanation of Amendments........................................     4
Application of Law to the Legislative Branch.....................     4
Duplication of Federal Programs..................................     4
Disclosure of Directed Rule Makings..............................     4
Federal Advisory Committee Act...................................     4
Unfunded Mandates Statement......................................     5
Earmark Identification...........................................     5
Committee Estimate...............................................     5
New Budget Authority and Congressional Budget Office Cost 
  Estimate.......................................................     5
Section-by-Section Analysis......................................     6
Changes in Existing Law Made by the Bill, as Reported............     6

                   Summary and Purpose of Legislation

    H.R. 4917, the Inspector General Subpoena Authority Act, 
enhances the ability of inspectors general to identify waste, 
fraud, abuse, and mismanagement in the Executive Branch. The 
bill authorizes inspectors general to issue testimonial 
subpoenas for contractors, grant recipients, and former federal 
employees, as necessary to perform the functions required by 
the Inspector General Act of 1978.\1\
---------------------------------------------------------------------------
    \1\ Inspector General Act of 1978, P.L. 95-452, 92 Stat. 1101, 
codified as amended at 5 U.S.C. app Sec. Sec. 1-13.
---------------------------------------------------------------------------

                  Background and Need for Legislation

    The Inspector General Act of 1978 (the Inspector General 
Act) established inspectors general to promote economy, 
efficiency, and effectiveness within Executive Branch 
departments and agencies.\2\ The role of an inspector general 
is to make recommendations based on independent and objective 
audits, evaluations, and investigations of the agency. 
Inspectors general promote good stewardship of taxpayer dollars 
and improve the effectiveness of government. Their 
recommendations often involve practical methods to reduce 
agency waste and mismanagement, while improving operations. 
During fiscal year (FY) 2016, the 73 Offices of Inspector 
General (OIGs) made recommendations with potential cost savings 
totaling $45.1 billion.\3\ Compared to the total OIG 
community's FY 2016 budget of $2.7 billion, the potential 
savings represent a return of approximately $17 on every dollar 
invested in the OIGs.\4\
---------------------------------------------------------------------------
    \2\Id.
    \3\ Council of the Inspectors Gen. on Integrity & Efficiency, 
Progress Report to the 
President, Fiscal Year 2016, available at https://www.ignet.gov/sites/
default/files/files/
FY16_Annual_Report_to_the_President_and_Congress.pdf. (last accessed 
Mar. 1, 2018).
    \4\Id.
---------------------------------------------------------------------------
    During a hearing before the Committee in November 2017, 
multiple inspectors general testified on issues and challenges 
the broader inspector general community faces while fulfilling 
their role under the Inspector General Act. Peace Corps 
Inspector General Kathy Buller, who serves as Chair of the 
Legislative Committee of the Council of the Inspectors General 
on Integrity and Efficiency (CIGIE), testified about CIGIE's 
top legislative priorities.\5\ Among those was legislation to 
authorize testimonial subpoenas for inspectors general.
---------------------------------------------------------------------------
    \5\Recommendations and Reforms from the Inspectors Generals: 
Hearing Before the H. Comm. on Oversight & Gov't Reform, 115th Cong. 
(2017) (written testimony of Kathy Buller).
---------------------------------------------------------------------------
    Federal employees are obligated to provide testimony and 
fully cooperate with inspector general audits, investigations, 
and other reviews. During the November 2017 hearing, all three 
inspectors general described situations in which the inability 
to compel testimony from certain witnesses severely hampered 
their work.\6\ In some cases, federal employees simply resigned 
rather than cooperate with the IG.\7\ For example, Department 
of Justice Inspector General Michael Horowitz explained his 
office was unable to obtain important information from former 
Department of Justice employees in investigations involving 
allegations of whistleblower retaliation and sexual assault.\8\
---------------------------------------------------------------------------
    \6\Id.
    \7\Id.
    \8\Id. (written testimony of Michael Horowitz).
---------------------------------------------------------------------------
    H.R. 4917 would enable inspectors general to compel 
testimony in cases where witnesses refuse to cooperate by 
authorizing them to issue testimonial subpoenas to contractors, 
grant recipients, and former federal employees, as necessary, 
to perform the functions required by the Inspector General Act 
of 1978. To ensure the new authority is not abused, an 
inspector general contemplating a testimonial subpoena must 
undergo a panel review process by three other inspectors 
general prior to the subpoena's issuance. After the review 
panel, the requesting inspector general must notify the 
Attorney General to ensure the subpoena will not interfere with 
any ongoing Department of Justice investigations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the previous section.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goal or objective of this bill is to provide testimonial 
subpoena authority to inspectors general.

                          Legislative History

    On November 15, 2017, the Committee held a hearing 
entitled, Recommendations and Reforms from the Inspectors 
General, to examine the implementation of the Inspector General 
Empowerment Act of 2016 and ongoing management challenges 
identified by inspectors general in their respective agencies. 
During the hearing, Kathy Buller, Inspector General of the 
Peace Corps and Executive Chair of the CIGIE Legislation 
Committee, testified on CIGIE's legislative priorities. 
Specifically, Ms. Buller testified regarding the need for 
testimonial subpoena authority for inspectors general.
    On February 2, 2018, Representative Steve Russell (R-OK) 
introduced H.R. 4917, the Inspector General Subpoena Authority 
Act. H.R. 4917 was referred to the Committee on Oversight and 
Government Reform. The Committee considered H.R. 4917 at a 
business meeting on February 6, 2018, and ordered the bill 
favorably reported by voice vote.
    In the 114th Congress, on May 18, 2015, then-Chairman Jason 
Chaffetz (R-UT) introduced H.R. 2395, the Inspector General 
Empowerment Act of 2016, with Representative Mark Meadows (R-
NC) and Ranking Minority Member Elijah Cummings (D-MD). H.R. 
2395 contained a similar provision to H.R. 4917. On May 19, 
2015, the Committee ordered H.R. 2395 favorably reported by 
voice vote and on June 21, 2016, the House passed the bill, as 
amended, by voice vote.
    Also in the 114th Congress, on February 26, 2015, Senator 
Chuck Grassley (R-IA) introduced S. 579, the Inspector General 
Empowerment Act of 2015, with Senator Ron Johnson (R-WI), and 
Senator Claire McCaskill (D-MO). S. 579 contained a similar 
provision to H.R. 4917. On March 4, 2015, the Senate Committee 
on Homeland Security and Governmental Affairs ordered S. 579 
favorably reported, as amended, by voice vote.
    In the 113th Congress, on September 16, 2014, 
Representative Darrell Issa (R-CA) introduced H.R. 5492, the 
Inspector General Empowerment Act of 2014, with Ranking 
Minority Member Elijah Cummings (D-MD) and Representative Mark 
Meadows (R-NC). H.R. 5492 contained a provision similar to H.R. 
4917. On September 17, 2014, the House Committee on Oversight 
and Government Reform ordered H.R. 5492 favorably reported, as 
amended, by voice vote.

                        Committee Consideration

    On February 6, 2018, the Committee met in open session and, 
with a quorum being present, ordered the bill favorably 
reported by voice vote.

                            Roll Call Votes

    There were no roll call votes requested or conducted during 
Committee consideration of H.R. 4917.

                       Explanation of Amendments

    There were no amendments to H.R. 4917 offered or adopted 
during Committee consideration of the bill.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill provides testimonial subpoena authority to inspectors 
general. As such, this bill does not relate to employment or 
access to public services and accommodations.

                    Duplication of Federal Programs

    In accordance with clause 2(c)(5) of rule XIII no provision 
of this bill establishes or reauthorizes a program of the 
Federal Government known to be duplicative of another Federal 
program, a program that was included in any report from the 
Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                  Disclosure of Directed Rule Makings

    This bill directs the Chairperson of the Council of the 
Inspectors General on Integrity and Efficiency, in consultation 
with the Attorney General, to promulgate regulations to carry 
out revisions to Sec. 6A of the Inspector General Act of 1978 
(5 U.S.C. App.).

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of Section 5(b) of the appendix to title 5, 
United States Code.

                      Unfunded Mandates Statement

    Pursuant to section 423 of the Congressional Budget and 
Impoundment Control Act (Pub. L. 113-67) the Committee has 
included a letter received from the Congressional Budget Office 
below.

                         Earmark Identification

    This bill does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the House of Representatives.

                           Committee Estimate

    Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of 
the House of Representatives, the Committee includes below a 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.

   New Budget Authority and Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the House of 
Representatives, the cost estimate prepared by the 
Congressional Budget Office and submitted pursuant to section 
402 of the Congressional Budget Act of 1974 is as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 1, 2018.
Hon. Trey Gowdy,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4917, the IG 
Subpoena Authority Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 4917--IG Subpoena Authority Act

    H.R. 4917 would amend the Inspector General Act of 1978 to 
expand the subpoena authority of inspectors general at some 
agencies. The bill also would create a process for a panel of 
inspectors general to approve specific uses of the subpoena 
authority and also for the Attorney General to disapprove such 
uses.
    Using information from several agencies, CBO estimates that 
any budgetary effects from implementing H.R. 4917 would not be 
significant because the new subpoena authority probably would 
be used infrequently. Enacting H.R. 4917 could affect direct 
spending by some agencies because they are authorized to use 
receipts from the sale of goods, fees, and other collections to 
cover operating costs. Therefore, pay-as-you-go procedures 
apply. Because most agencies can make adjustments to the 
amounts collected as operating costs change, CBO estimates that 
any net changes in direct spending by those agencies would be 
insignificant. Enacting H.R. 4917 would not affect revenues.
    CBO estimates that enacting H.R. 4917 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 4917 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                      Section-by-Section Analysis


Section 1. Short title

    Section 1 establishes the short title of the bill.

Section 2. Additional authority provisions for Inspectors General

    Section 2 amends the Inspector General Act of 1978 by 
adding a new section 6A to authorize Inspectors General to 
subpoena the attendance and testimony of certain witnesses as 
necessary in carrying out the provisions of the Inspector 
General Act.
    The section also creates a panel of three inspectors 
general selected by the Council of the Inspectors General on 
Integrity and Efficiency (CIGIE) to review and approve any 
proposed subpoena within a specified timeframe. Following 
approval from the panel, the issuing inspector general must 
notify the Attorney General of the subpoena. The Attorney 
General may object to a subpoena because the subpoena will 
interfere with an ongoing investigation.
    Lastly, the section defines ``inspector general,'' 
determines applicability of the provision, and directs the 
Chairperson of CIGIE to prescribe regulations to carry out the 
purpose of the section in consultation with the Attorney 
General.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                     INSPECTOR GENERAL ACT OF 1978




           *       *       *       *       *       *       *
                                reports

  Sec. 5. (a) Each Inspector General shall, not later than 
April 30 and October 31 of each year, prepare semiannual 
reports summarizing the activities of the Office during the 
immediately preceding six-month periods ending March 31 and 
September 30. Such reports shall include, but need not be 
limited to--
          (1) a description of significant problems, abuses, 
        and deficiencies relating to the administration of 
        programs and operations of such establishment disclosed 
        by such activities during the reporting period;
          (2) a description of the recommendations for 
        corrective action made by the Office during the 
        reporting period with respect to significant problems, 
        abuses, or deficiencies identified pursuant to 
        paragraph (1);
          (3) an identification of each significant 
        recommendation described in previous semiannual reports 
        on which corrective action has not been completed;
          (4) a summary of matters referred to prosecutive 
        authorities and the prosecutions and convictions which 
        have resulted;
          (5) a summary of each report made to the head of the 
        establishment under section 6(c)(2) during the 
        reporting period;
          (6) a listing, subdivided according to subject 
        matter, of each audit report, inspection reports, and 
        evaluation reports issued by the Office during the 
        reporting period and for each report, where applicable, 
        the total dollar value of questioned costs (including a 
        separate category for the dollar value of unsupported 
        costs) and the dollar value of recommendations that 
        funds be put to better use;
          (7) a summary of each particularly significant 
        report;
          (8) statistical tables showing the total number of 
        audit reports, inspection reports, and evaluation 
        reports and the total dollar value of questioned costs 
        (including a separate category for the dollar value of 
        unsupported costs), for reports--
                  (A) for which no management decision had been 
                made by the commencement of the reporting 
                period;
                  (B) which were issued during the reporting 
                period;
                  (C) for which a management decision was made 
                during the reporting period, including--
                          (i) the dollar value of disallowed 
                        costs; and
                          (ii) the dollar value of costs not 
                        disallowed; and
                  (D) for which no management decision has been 
                made by the end of the reporting period;
          (9) statistical tables showing the total number of 
        audit reports, inspection reports, and evaluation 
        reports and the dollar value of recommendations that 
        funds be put to better use by management, for reports--
                  (A) for which no management decision had been 
                made by the commencement of the reporting 
                period;
                  (B) which were issued during the reporting 
                period;
                  (C) for which a management decision was made 
                during the reporting period, including--
                          (i) the dollar value of 
                        recommendations that were agreed to by 
                        management; and
                          (ii) the dollar value of 
                        recommendations that were not agreed to 
                        by management; and
                  (D) for which no management decision has been 
                made by the end of the reporting period;
          (10) a summary of each audit report, inspection 
        reports, and evaluation reports issued before the 
        commencement of the reporting period--
                  (A) for which no management decision has been 
                made by the end of the reporting period 
                (including the date and title of each such 
                report), an explanation of the reasons such 
                management decision has not been made, and a 
                statement concerning the desired timetable for 
                achieving a management decision on each such 
                report;
                  (B) for which no establishment comment was 
                returned within 60 days of providing the report 
                to the establishment; and
                  (C) for which there are any outstanding 
                unimplemented recommendations, including the 
                aggregate potential cost savings of those 
                recommendations.
          (11) a description and explanation of the reasons for 
        any significant revised management decision made during 
        the reporting period;
          (12) information concerning any significant 
        management decision with which the Inspector General is 
        in disagreement;
          (13) the information described under section 804(b) 
        of the Federal Financial Management Improvement Act of 
        1996;
          (14)(A) an appendix containing the results of any 
        peer review conducted by another Office of Inspector 
        General during the reporting period; or
          (B) if no peer review was conducted within that 
        reporting period, a statement identifying the date of 
        the last peer review conducted by another Office of 
        Inspector General;
          (15) a list of any outstanding recommendations from 
        any peer review conducted by another Office of 
        Inspector General that have not been fully implemented, 
        including a statement describing the status of the 
        implementation and why implementation is not complete;
          (16) a list of any peer reviews conducted by the 
        Inspector General of another Office of the Inspector 
        General during the reporting period, including a list 
        of any outstanding recommendations made from any 
        previous peer review (including any peer review 
        conducted before the reporting period) that remain 
        outstanding or have not been fully implemented;
          (17) statistical tables showing--
                  (A) the total number of investigative reports 
                issued during the reporting period;
                  (B) the total number of persons referred to 
                the Department of Justice for criminal 
                prosecution during the reporting period;
                  (C) the total number of persons referred to 
                State and local prosecuting authorities for 
                criminal prosecution during the reporting 
                period; and
                  (D) the total number of indictments and 
                criminal informations during the reporting 
                period that resulted from any prior referral to 
                prosecuting authorities;
          (18) a description of the metrics used for developing 
        the data for the statistical tables under paragraph 
        (17);
          (19) a report on each investigation conducted by the 
        Office involving a senior Government employee where 
        allegations of misconduct were substantiated, including 
        a detailed description of--
                  (A) the facts and circumstances of the 
                investigation; and
                  (B) the status and disposition of the matter, 
                including--
                          (i) if the matter was referred to the 
                        Department of Justice, the date of the 
                        referral; and
                          (ii) if the Department of Justice 
                        declined the referral, the date of the 
                        declination;
          (20) a detailed description of any instance of 
        whistleblower retaliation, including information about 
        the official found to have engaged in retaliation and 
        what, if any, consequences the establishment imposed to 
        hold that official accountable;
          (21) a detailed description of any attempt by the 
        establishment to interfere with the independence of the 
        Office, including--
                  (A) with budget constraints designed to limit 
                the capabilities of the Office; and
                  (B) incidents where the establishment has 
                resisted or objected to oversight activities of 
                the Office or restricted or significantly 
                delayed access to information, including the 
                justification of the establishment for such 
                action[; and];
          (22) detailed descriptions of the particular 
        circumstances of each--
                  (A) inspection, evaluation, and audit 
                conducted by the Office that is closed and was 
                not disclosed to the public; and
                  (B) investigation conducted by the Office 
                involving a senior Government employee that is 
                closed and was not disclosed to the public[.]; 
                and
          (23) a description of the use of subpoenas for the 
        attendance and testimony of certain witnesses 
        authorized under section 6A.
  (b) Semiannual reports of each Inspector General shall be 
furnished to the head of the establishment involved not later 
than April 30 and October 31 of each year and shall be 
transmitted by such head to the appropriate committees or 
subcommittees of the Congress within thirty days after receipt 
of the report, together with a report by the head of the 
establishment containing--
          (1) any comments such head determines appropriate;
          (2) statistical tables showing the total number of 
        audit reports, inspection reports, and evaluation 
        reports and the dollar value of disallowed costs, for 
        reports--
                  (A) for which final action had not been taken 
                by the commencement of the reporting period;
                  (B) on which management decisions were made 
                during the reporting period;
                  (C) for which final action was taken during 
                the reporting period, including--
                          (i) the dollar value of disallowed 
                        costs that were recovered by management 
                        through collection, offset, property in 
                        lieu of cash, or otherwise; and
                          (ii) the dollar value of disallowed 
                        costs that were written off by 
                        management; and
                  (D) for which no final action has been taken 
                by the end of the reporting period;
          (3) statistical tables showing the total number of 
        audit reports, inspection reports, and evaluation 
        reports and the dollar value of recommendations that 
        funds be put to better use by management agreed to in a 
        management decision, for reports--
                  (A) for which final action had not been taken 
                by the commencement of the reporting period;
                  (B) on which management decisions were made 
                during the reporting period;
                  (C) for which final action was taken during 
                the reporting period, including--
                          (i) the dollar value of 
                        recommendations that were actually 
                        completed; and
                          (ii) the dollar value of 
                        recommendations that management has 
                        subsequently concluded should not or 
                        could not be implemented or completed; 
                        and
                  (D) for which no final action has been taken 
                by the end of the reporting period; and
          (4) a statement with respect to audit reports on 
        which management decisions have been made but final 
        action has not been taken, other than audit reports on 
        which a management decision was made within the 
        preceding year, containing--
                  (A) a list of such audit reports and the date 
                each such report was issued;
                  (B) the dollar value of disallowed costs for 
                each report;
                  (C) the dollar value of recommendations that 
                funds be put to better use agreed to by 
                management for each report; and
                  (D) an explanation of the reasons final 
                action has not been taken with respect to each 
                such audit report,
        except that such statement may exclude such audit 
        reports that are under formal administrative or 
        judicial appeal or upon which management of an 
        establishment has agreed to pursue a legislative 
        solution, but shall identify the number of reports in 
        each category so excluded.
  (c) Within sixty days of the transmission of the semiannual 
reports of each Inspector General to the Congress, the head of 
each establishment shall make copies of such report available 
to the public upon request and at a reasonable cost. Within 60 
days after the transmission of the semiannual reports of each 
establishment head to the Congress, the head of each 
establishment shall make copies of such report available to the 
public upon request and at a reasonable cost.
  (d) Each Inspector General shall report immediately to the 
head of the establishment involved whenever the Inspector 
General becomes aware of particularly serious or flagrant 
problems, abuses, or deficiencies relating to the 
administration of programs and operations of such 
establishment. The head of the establishment shall transmit any 
such report to the appropriate committees or subcommittees of 
Congress within seven calendar days, together with a report by 
the head of the establishment containing any comments such head 
deems appropriate.
  (e)(1) Nothing in this section shall be construed to 
authorize the public disclosure of information which is--
          (A) specifically prohibited from disclosure by any 
        other provision of law;
          (B) specifically required by Executive order to be 
        protected from disclosure in the interest of national 
        defense or national security or in the conduct of 
        foreign affairs; or
          (C) a part of an ongoing criminal investigation.
  (2) Notwithstanding paragraph (1)(C), any report under this 
section may be disclosed to the public in a form which includes 
information with respect to a part of an ongoing criminal 
investigation if such information has been included in a public 
record.
  (3) Except to the extent and in the manner provided under 
section 6103(f) of the Internal Revenue Code of 1986, nothing 
in this section or in any other provision of this Act shall be 
construed to authorize or permit the withholding of information 
from the Congress, or from any committee or subcommittee 
thereof.
  (4) Subject to any other provision of law that would 
otherwise prohibit disclosure of such information, the 
information described in paragraph (1) may be provided to any 
Member of Congress upon request.
  (5) An Office may not provide to Congress or the public any 
information that reveals the personally identifiable 
information of a whistleblower under this section unless the 
Office first obtains the consent of the whistleblower.
  (f) As used in this section--
          (1) the term ``questioned cost'' means a cost that is 
        questioned by the Office because of--
                  (A) an alleged violation of a provision of a 
                law, regulation, contract, grant, cooperative 
                agreement, or other agreement or document 
                governing the expenditure of funds;
                  (B) a finding that, at the time of the audit, 
                such cost is not supported by adequate 
                documentation; or
                  (C) a finding that the expenditure of funds 
                for the intended purpose is unnecessary or 
                unreasonable;
          (2) the term ``unsupported cost'' means a cost that 
        is questioned by the Office because the Office found 
        that, at the time of the audit, such cost is not 
        supported by adequate documentation;
          (3) the term ``disallowed cost'' means a questioned 
        cost that management, in a management decision, has 
        sustained or agreed should not be charged to the 
        Government;
          (4) the term ``recommendation that funds be put to 
        better use'' means a recommendation by the Office that 
        funds could be used more efficiently if management of 
        an establishment took actions to implement and complete 
        the recommendation, including--
                  (A) reductions in outlays;
                  (B) deobligation of funds from programs or 
                operations;
                  (C) withdrawal of interest subsidy costs on 
                loans or loan guarantees, insurance, or bonds;
                  (D) costs not incurred by implementing 
                recommended improvements related to the 
                operations of the establishment, a contractor 
                or grantee;
                  (E) avoidance of unnecessary expenditures 
                noted in preaward reviews of contract or grant 
                agreements; or
                  (F) any other savings which are specifically 
                identified;
          (5) the term ``management decision'' means the 
        evaluation by the management of an establishment of the 
        findings and recommendations included in an audit 
        report and the issuance of a final decision by 
        management concerning its response to such findings and 
        recommendations, including actions concluded to be 
        necessary;
          (6) the term ``final action'' means--
                  (A) the completion of all actions that the 
                management of an establishment has concluded, 
                in its management decision, are necessary with 
                respect to the findings and recommendations 
                included in an audit report; and
                  (B) in the event that the management of an 
                establishment concludes no action is necessary, 
                final action occurs when a management decision 
                has been made; and
          (7) the term ``senior Government employee'' means--
                  (A) an officer or employee in the executive 
                branch (including a special Government employee 
                as defined in section 202 of title 18, United 
                States Code) who occupies a position classified 
                at or above GS-15 of the General Schedule or, 
                in the case of positions not under the General 
                Schedule, for which the rate of basic pay is 
                equal to or greater than 120 percent of the 
                minimum rate of basic pay payable for GS-15 of 
                the General Schedule; and
                  (B) any commissioned officer in the Armed 
                Forces in pay grades O-6 and above.

           *       *       *       *       *       *       *


SEC. 6A. ADDITIONAL AUTHORITY.

  (a) Testimonial Subpoena Authority.--In addition to the 
authority otherwise provided by this Act and in accordance with 
the requirements of this section, each Inspector General, in 
carrying out the provisions of this Act (or in the case of an 
Inspector General or Special Inspector General not established 
under this Act, the provisions of the authorizing statute), is 
authorized to require by subpoena the attendance and testimony 
of witnesses as necessary in the performance of the functions 
assigned to the Inspector General by this Act (or in the case 
of an Inspector General or Special Inspector General not 
established under this Act, the functions assigned by the 
authorizing statute), which in the case of contumacy or refusal 
to obey, such subpoena shall be enforceable by order of any 
appropriate United States district court. An Inspector General 
may not require by subpoena the attendance and testimony of any 
current Federal employees, but may use other authorized 
procedures.
  (b) Nondelegation.--The authority to issue a subpoena under 
subsection (a) may not be delegated.
  (c) Panel Review Before Issuance.--
          (1) Approval required.--
                  (A) Request for approval by subpoena panel.--
                Before the issuance of a subpoena described in 
                subsection (a), an Inspector General shall 
                submit a request for approval to issue a 
                subpoena to a panel (in this section, referred 
                to as the ``Subpoena Panel''), which shall be 
                comprised of three Inspectors General of the 
                Council of the Inspectors General on Integrity 
                and Efficiency, who shall be designated by the 
                Inspector General serving as Chairperson of the 
                Council.
                  (B) Protection from disclosure.--The 
                information contained in the request submitted 
                by an Inspector General under subparagraph (A) 
                and the identification of a witness shall be 
                protected from disclosure to the extent 
                permitted by law. Any request for disclosure of 
                such information shall be submitted to the 
                Inspector General requesting the subpoena.
          (2) Time to respond.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the Subpoena Panel shall 
                approve or deny a request for approval to issue 
                a subpoena not later than 10 days after the 
                submission of such request.
                  (B) Additional information for panel.--If the 
                Subpoena Panel determines that additional 
                information is necessary to approve or deny 
                such request, the Subpoena Panel shall request 
                such information and shall approve or deny such 
                request not later than 20 days after the 
                submission of such request.
          (3) Denial by panel.--If a majority of the Subpoena 
        Panel denies the approval of a subpoena, that subpoena 
        may not be issued.
  (d) Notice to Attorney General.--
          (1) In general.--If the Subpoena Panel approves a 
        subpoena under subsection (c), the Inspector General 
        shall notify the Attorney General that the Inspector 
        General intends to issue the subpoena.
          (2) Denial for interference with an ongoing 
        investigation.--Not later than 10 days after the date 
        on which the Attorney General is notified pursuant to 
        paragraph (1), the Attorney General may object to the 
        issuance of the subpoena because the subpoena will 
        interfere with an ongoing investigation and the 
        subpoena may not be issued.
          (3) Issuance of subpoena approved.--If the Attorney 
        General does not object to the issuance of the subpoena 
        during the 10-day period described in paragraph (2), 
        the Inspector General may issue the subpoena.
  (e) Regulations.--The Chairperson of the Council of the 
Inspectors General on Integrity and Efficiency, in consultation 
with the Attorney General, shall prescribe regulations to carry 
out the purposes of this section.
  (f) Inspector General Defined.--For purposes of this section, 
the term ``Inspector General'' includes each Inspector General 
established under this Act and each Inspector General or 
Special Inspector General not established under this Act.
  (g) Applicability.--The provisions of this section shall not 
affect the exercise of authority by an Inspector General of 
testimonial subpoena authority established under another 
provision of law.

           *       *       *       *       *       *       *


   requirements for federal entities and designated federal entities

  Sec. 8G. (a) Notwithstanding section 12 of this Act, as used 
in this section--
          (1) the term ``Federal entity'' means any Government 
        corporation (within the meaning of section 103(1) of 
        title 5, United States Code), any Government controlled 
        corporation (within the meaning of section 103(2) of 
        such title), or any other entity in the Executive 
        branch of the Government, or any independent regulatory 
        agency, but does not include--
                  (A) an establishment (as defined under 
                section 12(2) of this Act) or part of an 
                establishment;
                  (B) a designated Federal entity (as defined 
                under paragraph (2) of this subsection) or part 
                of a designated Federal entity;
                  (C) the Executive Office of the President;
                  (D) the Central Intelligence Agency;
                  (E) the General Accounting Office; or
                  (F) any entity in the judicial or legislative 
                branches of the Government, including the 
                Administrative Office of the United States 
                Courts and the Architect of the Capitol and any 
                activities under the direction of the Architect 
                of the Capitol;
          (2) the term ``designated Federal entity'' means 
        Amtrak, the Appalachian Regional Commission, the Board 
        of Governors of the Federal Reserve System and the 
        Bureau of Consumer Financial Protection, the Board for 
        International Broadcasting, the Committee for Purchase 
        From People Who Are Blind or Severely Disabled, the 
        Commodity Futures Trading Commission, the Consumer 
        Product Safety Commission, the Corporation for Public 
        Broadcasting, the Defense Intelligence Agency, the 
        Equal Employment Opportunity Commission, the Farm 
        Credit Administration, the Federal Communications 
        Commission, the Federal Deposit Insurance Corporation, 
        the Federal Election Commission, the Election 
        Assistance Commission, the Federal Housing Finance 
        Board, the Federal Labor Relations Authority, the 
        Federal Maritime Commission, the Federal Trade 
        Commission, the Legal Services Corporation, the 
        National Archives and Records Administration, the 
        National Credit Union Administration, the National 
        Endowment for the Arts, the National Endowment for the 
        Humanities, the National Geospatial-Intelligence 
        Agency, the National Labor Relations Board, the 
        National Science Foundation, the Panama Canal 
        Commission, the Peace Corps, the Pension Benefit 
        Guaranty Corporation, the Securities and Exchange 
        Commission, the Smithsonian Institution, the United 
        States International Trade Commission, the Postal 
        Regulatory Commission, and the United States Postal 
        Service;
          (3) the term ``head of the Federal entity'' means any 
        person or persons designated by statute as the head of 
        a Federal entity, and if no such designation exists, 
        the chief policymaking officer or board of a Federal 
        entity as identified in the list published pursuant to 
        subsection (h)(1) of this section;
          (4) the term ``head of the designated Federal 
        entity'' means the board or commission of the 
        designated Federal entity, or in the event the 
        designated Federal entity does not have a board or 
        commission, any person or persons designated by statute 
        as the head of a designated Federal entity and if no 
        such designation exists, the chief policymaking officer 
        or board of a designated Federal entity as identified 
        in the list published pursuant to subsection (h)(1) of 
        this section, except that--
                  (A) with respect to the National Science 
                Foundation, such term means the National 
                Science Board;
                  (B) with respect to the United States Postal 
                Service, such term means the Governors (within 
                the meaning of section 102(3) of title 39, 
                United States Code);
                  (C) with respect to the Federal Labor 
                Relations Authority, such term means the 
                members of the Authority (described under 
                section 7104 of title 5, United States Code);
                  (D) with respect to the Committee for 
                Purchase From People Who Are Blind or Severely 
                Disabled, such term means the Chairman of the 
                Committee for Purchase From People Who Are 
                Blind or Severely Disabled;
                  (E) with respect to the National Archives and 
                Records Administration, such term means the 
                Archivist of the United States;
                  (F) with respect to the National Credit Union 
                Administration, such term means the National 
                Credit Union Administration Board (described 
                under section 102 of the Federal Credit Union 
                Act (12 U.S.C. 1752a);
                  (G) with respect to the National Endowment of 
                the Arts, such term means the National Council 
                on the Arts;
                  (H) with respect to the National Endowment 
                for the Humanities, such term means the 
                National Council on the Humanities; and
                  (I) with respect to the Peace Corps, such 
                term means the Director of the Peace Corps;
          (5) the term ``Office of Inspector General'' means an 
        Office of Inspector General of a designated Federal 
        entity; and
          (6) the term ``Inspector General'' means an Inspector 
        General of a designated Federal entity.
  (b) No later than 180 days after the date of the enactment of 
this section, there shall be established and maintained in each 
designated Federal entity an Office of Inspector General. The 
head of the designated Federal entity shall transfer to such 
office the offices, units, or other components, and the 
functions, powers, or duties thereof, that such head determines 
are properly related to the functions of the Office of 
Inspector General and would, if so transferred, further the 
purposes of this section. There shall not be transferred to 
such office any program operating responsibilities.
  (c) Except as provided under subsection (f) of this section, 
the Inspector General shall be appointed by the head of the 
designated Federal entity in accordance with the applicable 
laws and regulations governing appointments within the 
designated Federal entity. Each Inspector General shall be 
appointed without regard to political affiliation and solely on 
the basis of integrity and demonstrated ability in accounting, 
auditing, financial analysis, law, management analysis, public 
administration, or investigations. For purposes of implementing 
this section, the Chairman of the Board of Governors of the 
Federal Reserve System shall appoint the Inspector General of 
the Board of Governors of the Federal Reserve System and the 
Bureau of Consumer Financial Protection. The Inspector General 
of the Board of Governors of the Federal Reserve System and the 
Bureau of Consumer Financial Protection shall have all of the 
authorities and responsibilities provided by this Act with 
respect to the Bureau of Consumer Financial Protection, as if 
the Bureau were part of the Board of Governors of the Federal 
Reserve System.
  (d)(1) Each Inspector General shall report to and be under 
the general supervision of the head of the designated Federal 
entity, but shall not report to, or be subject to supervision 
by, any other officer or employee of such designated Federal 
entity. Except as provided in paragraph (2), the head of the 
designated Federal entity shall not prevent or prohibit the 
Inspector General from initiating, carrying out, or completing 
any audit or investigation, or from issuing any subpoena during 
the course of any audit or investigation.
  (2)(A) The Secretary of Defense, in consultation with the 
Director of National Intelligence, may prohibit the inspector 
general of an element of the intelligence community specified 
in subparagraph (D) from initiating, carrying out, or 
completing any audit or investigation, or from accessing 
information available to an element of the intelligence 
community specified in subparagraph (D),, or from accessing 
information available to an element of the intelligence 
community specified in subparagraph (D), if the Secretary 
determines that the prohibition is necessary to protect vital 
national security interests of the United States.
  (B) If the Secretary exercises the authority under 
subparagraph (A), the Secretary shall submit to the committees 
of Congress specified in subparagraph (E) an appropriately 
classified statement of the reasons for the exercise of such 
authority not later than 7 days after the exercise of such 
authority.
  (C) At the same time the Secretary submits under subparagraph 
(B) a statement on the exercise of the authority in 
subparagraph (A) to the committees of Congress specified in 
subparagraph (E), the Secretary shall notify the inspector 
general of such element of the submittal of such statement and, 
to the extent consistent with the protection of intelligence 
sources and methods, provide such inspector general with a copy 
of such statement. Such inspector general may submit to such 
committees of Congress any comments on a notice or statement 
received by the inspector general under this subparagraph that 
the inspector general considers appropriate.
  (D) The elements of the intelligence community specified in 
this subparagraph are as follows:
          (i) The Defense Intelligence Agency.
          (ii) The National Geospatial-Intelligence Agency.
          (iii) The National Reconnaissance Office.
          (iv) The National Security Agency.
  (E) The committees of Congress specified in this subparagraph 
are--
          (i) the Committee on Armed Services and the Select 
        Committee on Intelligence of the Senate; and
          (ii) the Committee on Armed Services and the 
        Permanent Select Committee on Intelligence of the House 
        of Representatives.
  (e)(1) In the case of a designated Federal entity for which a 
board, chairman of a committee, or commission is the head of 
the designated Federal entity, a removal under this subsection 
may only be made upon the written concurrence of a \2/3\ 
majority of the board, committee, or commission.''.
  (2) If an Inspector General is removed from office or is 
transferred to another position or location within a designated 
Federal entity, the head of the designated Federal entity shall 
communicate in writing the reasons for any such removal or 
transfer to both Houses of Congress, not later than 30 days 
before the removal or transfer. Nothing in this subsection 
shall prohibit a personnel action otherwise authorized by law, 
other than transfer or removal.
  (f)(1) For purposes of carrying out subsection (c) with 
respect to the United States Postal Service, the appointment 
provisions of section 202(e) of title 39, United States Code, 
shall be applied.
  (2) In carrying out the duties and responsibilities specified 
in this Act, the Inspector General of the United States Postal 
Service (hereinafter in this subsection referred to as the 
``Inspector General'') shall have oversight responsibility for 
all activities of the Postal Inspection Service, including any 
internal investigation performed by the Postal Inspection 
Service. The Chief Postal Inspector shall promptly report the 
significant activities being carried out by the Postal 
Inspection Service to such Inspector General.
  (3)(A)(i) Notwithstanding subsection (d), the Inspector 
General shall be under the authority, direction, and control of 
the Governors with respect to audits or investigations, or the 
issuance of subpoenas, which require access to sensitive 
information concerning--
          (I) ongoing civil or criminal investigations or 
        proceedings;
          (II) undercover operations;
          (III) the identity of confidential sources, including 
        protected witnesses;
          (IV) intelligence or counterintelligence matters; or
          (V) other matters the disclosure of which would 
        constitute a serious threat to national security.
  (ii) With respect to the information described under clause 
(i), the Governors may prohibit the Inspector General from 
carrying out or completing any audit or investigation, or from 
issuing any subpoena, after such Inspector General has decided 
to initiate, carry out, or complete such audit or investigation 
or to issue such subpoena, if the Governors determine that such 
prohibition is necessary to prevent the disclosure of any 
information described under clause (i) or to prevent the 
significant impairment to the national interests of the United 
States.
  (iii) If the Governors exercise any power under clause (i) or 
(ii), the Governors shall notify the Inspector General in 
writing stating the reasons for such exercise. Within 30 days 
after receipt of any such notice, the Inspector General shall 
transmit a copy of such notice to the Committee on Governmental 
Affairs of the Senate and the Committee on Government Reform 
and Oversight of the House of Representatives, and to other 
appropriate committees or subcommittees of the Congress.
  (B) In carrying out the duties and responsibilities specified 
in this Act, the Inspector General--
          (i) may initiate, conduct and supervise such audits 
        and investigations in the United States Postal Service 
        as the Inspector General considers appropriate; and
          (ii) shall give particular regard to the activities 
        of the Postal Inspection Service with a view toward 
        avoiding duplication and insuring effective 
        coordination and cooperation.
  (C) Any report required to be transmitted by the Governors to 
the appropriate committees or subcommittees of the Congress 
under section 5(d) shall also be transmitted, within the seven-
day period specified under such section, to the Committee on 
Governmental Affairs of the Senate and the Committee on 
Government Reform and Oversight of the House of 
Representatives.
  (4) Nothing in this Act shall restrict, eliminate, or 
otherwise adversely affect any of the rights, privileges, or 
benefits of either employees of the United States Postal 
Service, or labor organizations representing employees of the 
United States Postal Service, under chapter 12 of title 39, 
United States Code, the National Labor Relations Act, any 
handbook or manual affecting employee labor relations with the 
United States Postal Service, or any collective bargaining 
agreement.
  (5) As used in this subsection, the term ``Governors'' has 
the meaning given such term by section 102(3) of title 39, 
United States Code.
          (6) There are authorized to be appropriated, out of 
        the Postal Service Fund, such sums as may be necessary 
        for the Office of Inspector General of the United 
        States Postal Service.
  (g)(1) Sections 4, 5, 6 (other than subsections (a)(7) and 
(a)(8) thereof), 6A, and 7 of this Act shall apply to each 
Inspector General and Office of Inspector General of a 
designated Federal entity and such sections shall be applied to 
each designated Federal entity and head of the designated 
Federal entity (as defined under subsection (a)) by 
substituting--
          (A) ``designated Federal entity'' for 
        ``establishment''; and
          (B) ``head of the designated Federal entity'' for 
        ``head of the establishment''.
  (2) In addition to the other authorities specified in this 
Act, an Inspector General is authorized to select, appoint, and 
employ such officers and employees as may be necessary for 
carrying out the functions, powers, and duties of the Office of 
Inspector General and to obtain the temporary or intermittent 
services of experts or consultants or an organization thereof, 
subject to the applicable laws and regulations that govern such 
selections, appointments, and employment, and the obtaining of 
such services, within the designated Federal entity.
  (3) Notwithstanding the last sentence of subsection (d) of 
this section, the provisions of subsection (a) of section 8D 
(other than the provisions of subparagraphs (A), (B), (C), and 
(E) of subsection (a)(1)) shall apply to the Inspector General 
of the Board of Governors of the Federal Reserve System and the 
Bureau of Consumer Financial Protection and the Chairman of the 
Board of Governors of the Federal Reserve System in the same 
manner as such provisions apply to the Inspector General of the 
Department of the Treasury and the Secretary of the Treasury, 
respectively.
          (4) Each Inspector General shall--
  (A) in accordance with applicable laws and regulations 
governing appointments within the designated Federal entity, 
appoint a Counsel to the Inspector General who shall report to 
the Inspector General;
  (B) obtain the services of a counsel appointed by and 
directly reporting to another Inspector General on a 
reimbursable basis; or
  (C) obtain the services of appropriate staff of the Council 
of the Inspectors General on Integrity and Efficiency on a 
reimbursable basis.
  (h)(1) No later than April 30, 1989, and annually thereafter, 
the Director of the Office of Management and Budget, after 
consultation with the Comptroller General of the United States, 
shall publish in the Federal Register a list of the Federal 
entities and designated Federal entities and if the designated 
Federal entity is not a board or commission, include the head 
of each such entity (as defined under subsection (a) of this 
section).
  (2) Beginning on October 31, 1989, and on October 31 of each 
succeeding calendar year, the head of each Federal entity (as 
defined under subsection (a) of this section) shall prepare and 
transmit to the Director of the Office of Management and Budget 
and to each House of the Congress a report which--
          (A) states whether there has been established in the 
        Federal entity an office that meets the requirements of 
        this section;
          (B) specifies the actions taken by the Federal entity 
        otherwise to ensure that audits are conducted of its 
        programs and operations in accordance with the 
        standards for audit of governmental organizations, 
        programs, activities, and functions issued by the 
        Comptroller General of the United States, and includes 
        a list of each audit report completed by a Federal or 
        non-Federal auditor during the reporting period and a 
        summary of any particularly significant findings; and
          (C) summarizes any matters relating to the personnel, 
        programs, and operations of the Federal entity referred 
        to prosecutive authorities, including a summary 
        description of any preliminary investigation conducted 
        by or at the request of the Federal entity concerning 
        these matters, and the prosecutions and convictions 
        which have resulted.

           *       *       *       *       *       *       *


                                  [all]