the Committee really did not do much with the allegations until December of that year. Could you comment on that? Mr. DESEVE. I could. I have asked the same question to the Members of the Committee, including the former assistant director to the FBI who ran the investigation. What they would say, I think, if they were here-and you can certainly ask them-is they did not want to run two investigations simultaneously. They deferred to the jurisdiction of your Committee and the investigators in your Committee to do the background investigation. They then relied on that investigation when it was complete to take their action. I believe it was an action of censure against the IG. Again, because I was not there making each decision with them, because we want them to be independent, I rely on what they told me as to their motivation. Senator COLLINS. Just so you know, the allegations were filed with the Integrity Committee before my Subcommittee began its investigation. Mr. DESEVE. Right. Senator COLLINS. Several months before. Mr. DESEVE. I do understand that. Senator COLLINS. There was no action Mr. DESEVE. If you want to fault them, you can fault them for that hiatus, for that lack of action during that period. Senator COLLINS. One reason I took action was because nothing was happening, and I just wanted to convey that to you. Mr. DESEVE. And I think that is quite appropriate. I think it is a very appropriate role of the Congress to goad-all of us in the Executive Branch who need to be goaded. Senator COLLINS. Mr. DeSeve, I do hope that we can continue to work together on the legislation. I would like it to have the administration support. It has the support of the Inspector General community, and I hope that we can enact it next Congress. I realize the time is running short in this one. Mr. DESEVE. We would like to do that, and I think that there are very good provisions in it. Senator COLLINS. Thank you, Mr. Chairman. Chairman THOMPSON. Perhaps we could even get the "acting" removed from Mr. DeSeve's name one of these days. Senator COLLINS. That is the irony. Mr. DESEVE. Acting is an honorable profession. [Laughter.] Chairman THOMPSON. It must not be too honorable. Some people leave it, you know. [Laughter.] Listening to this reminds me of a somewhat analogous situation. We set up these independent people because we want them to be totally independent, and we are very jealous of the pressures on them and so forth. And then we discover that every once in a while, they get too independent and we have a Saturday night massacre and we are very concerned that we want our special investigators, special counsel, whatever, to be independent. Then we draw up a law that makes sure that they are independent, and we get a situa do not know whose control they are supposed to be in, but it is the same kind of problem in trying to set up an independent entity or investigator or inspector and so forth, but on the other hand, to have some kind of safeguard, so that if they exceed their authority or do wrong, that there is some remedy for that, too. I think that we are fine-tuning it about as much as we can. It looks to me like the statute was designed pretty well, and Senator Collins and some of her suggestions, we are getting pretty close to there, but we never ultimately can devise a perfect system that is going to take in account for all the aberrations of personal behavior. We are just going to have to continue to try to get the right kind of people in these jobs. So thank you very much again for being here. Mr. DESEVE. Thank you, Mr. Chairman. Chairman THOMPSON. You have been very helpful. Mr. DESEVE. Thank you, Mr. Chairman. Chairman THOMPSON. We are adjourned. [Whereupon, at 12:22 p.m., the Committee was adjourned.] APPENDIX Introduction PREPARED STATEMENT OF MS. BROWN Mr. Chairman, I am June Gibbs Brown, Inspector General of the U.S. Department of Health and Human Services. Thank you for the opportunity to testify today regarding the state of the Inspector General (IG) community at the 20th anniversary of the IG Act. Specifically, you asked that I testify about the importance of the relationship between IGs and agency heads and ways to ensure that the goals and objectives of the Federal Government are successfully achieved. In this regard, I will discuss my present working relationship with the Secretary of Health and Human Services and will give you my views on possible improvements to the IG Act, including those proposed in S. 2167, the Inspector General Act Amendments of 1998, sponsored by Senator Collins. We in the IG community greatly appreciate this Committee's longstanding support of the Federal Inspectors General. I would like to extend my thanks to the Chair for holding this hearing, to Senator Glenn for his longstanding support, and to the other Members for their continuing interest in IG issues. I would especially like to thank Senator Collins and her Permanent Subcommittee on Investigations staff who have devoted considerable effort to promoting and protecting the integrity and independence of IGs generally and have supported the activities of our office in particular. I believe that it is very useful to periodically take stock of the "health status" of the Inspector General concept through proceedings such as today's hearing. I personally enjoy the opportunity to pause and reflect on the evolution of the Offices of Inspectors General (OIG). As the longest serving member of the IG community and having been the Inspector General in five different Federal agencies since 1979,1 I am fortunate to have been a participant in this evolution. I was also the Inspector General of the Pacific Fleet; a position not covered by the IG Act. It gives me particular pleasure to be asked to appear today to discuss the successful working relationship that has been forged between Secretary Shalala and myself. Agency heads and Inspectors General are asked to perform a difficult balancing act. Ideally, an Inspector General should serve as a senior advisor to the Secretary on waste, fraud, and abuse issues. In this role, the IG assists in ensuring that programs are administered in a cost-effective manner, and that they are structured so as to avoid fraud and abuse. Equally important, an Inspector General must maintain the independence and objectivity necessary to investigate, audit and critique those programs in the best interest of the taxpayers. I believe that Secretary Shalala would agree with me that we have successfully struck this balance. Collaboration between the Inspector General and Agency Head Since the first day that I entered the Department of Health and Human Services, Secretary Shalala has made it clear that when policy was formulated at HHS, the Inspector General would always have a "seat at the table." This was not my earliest experience. While working as the first Inspector General for the Department of the Interior in 1979, some senior agency managers would signal their displeasure with the IG mission in a number of ways. Some were subtle, and some were not so subtle. As a somewhat comical example, when our audits found fault with program administration, agency management might simply "neglect" to provide a chair for me 1 The Department of the Interior, the National Aeronautics and Space Administration, the Department of Defense, the Social Security Administration and currently, the Department of Health and Human Services. at senior staff meetings. I soon learned literally to bring my own chair to the room. As the IG Act became better understood, I had no repeat of this gamesmanship. I am pleased to say that Secretary Shalala has never treated me in such a manner. Perhaps her comfort with and support for the Inspector General's role is attributable, in part, to the fact that she had prior positive experience as a Federal manager interacting with an IG. While serving as an Assistant Secretary at the Department of Housing and Urban Development (HUD), Secretary Shalala worked closely and effectively at that time with HUD's Inspector General, then Charles Dempsey. When she arrived at HHS, Secretary Shalala was already knowledgeable of the responsibilities and authorities of a Federal IG. She viewed the IG not as an adversary or a threat, but as a valuable resource. So, she affirmatively sought to engage an experienced and aggressive Inspector General, and ensured that the IG's advice was heard on both enforcement issues and program development matters. Secretary Shalala's philosophy set the tone for managers throughout HHS. Senior managers know that before the Secretary acts, she will likely consult with me to determine whether we have conducted inquiries that bear on pending decisions. Senior managers know that the IG will eventually be consulted, and they confer with OIG staff in early stages of developing program and administrative processes, rules, and procedures. Where we have developed information that reveals vulnerabilities in agency programs or administrative processes, departmental managers act to close these loopholes, avoiding ineffective expenditures or improper conduct. As independent fact-finders, our audits, evaluations, and investigations produce reliable data on the operation of agency programs. Often, they provide answers to key questions facing management. For example, are there trends indicating vulnerabilities in program accountability? Are the appropriate services reaching the intended beneficiaries? Are program rules and policies sufficiently clear that administrators, providers, and recipients can properly utilize them? Is the Agency's oversight of those rules so lax that it invites abuse? Are controls in place to minimize improper payments? This and a host of similar information is generated by the Federal Inspectors General. At HHS, Secretary Shalala and her senior staff actively solicit this information and seek to incorporate it into their program management. Frequently, these managers even approach me or my staff and request an evaluation or study of one of their program areas. Though our findings are sometimes unflattering, in the long run, the programs benefit. We also regularly refer to the Secretary's priorities in developing our work plans. Where possible, we schedule fact-finding reviews that will assist the Secretary and her managers in these priority areas. Agency responses to OIG recommendations are reflected in legislative proposals and regulatory changes as well as in less formal administrative actions and modifications. Thus, our preventive efforts often amplify the effectiveness of OIG activities by instituting legislative, regulatory and operational change throughout a given program or operation. An Inspector General must also share half of the responsibility for maintaining a successful partnership with the agency head. An IG has to earn a seat at the table. The quality of the OIG audits, evaluations, and investigations must be unassailable. A Secretary would quite rightly lose faith in an IG whose work was unreliable or biased. In this regard, I have been favored with a staff-both those hired by me and those in place when I arrived of the highest caliber and commitment. Their work consistently makes me proud. But I also know, and regularly caution my staff, that an IG must remain vigilant. One irresponsible or carelessly prepared work product can do substantial damage to the credibility of the entire Office, and to the Inspector General concept as a whole. I also believe that a successful Inspector General must be willing to broaden the focus of OIG efforts beyond just the traditional after-the-fact investigations and audits of past conduct. I urge that Inspectors General honor both of the dual requirements of the IG Act, that they not just detect, but also prevent, waste, fraud, and abuse. When Inspectors General do this, I believe that cooperative and productive relationships with agency managers will usually follow. Both the Inspector General and the Secretary must remain mindful that there is a risk that if an IG develops too close a relationship with the Secretary and agency management, the IG could be, or appear to be, inappropriately co-opted. No longer the watchdog, the IG would instead be viewed as a house pet, unwilling to criticize or embarrass agency colleagues by issuing negative reports or conducting meritorious investigations. Certainly this could occur, but a Secretary and an Inspector General are fully capable of avoiding this outcome by keeping sight of their organizational roles. Enforcement has been, and remains, a vital responsibility of the Inspectors General. Wrongdoers inside and outside the agency must be identified; their schemes to abuse and defraud Federal programs must be halted; and their ill-gotten gains must be returned. Individual audits, investigations and evaluations serve these critical functions—to improve and protect the fiscal integrity of programs such as Medicare, to safeguard federal beneficiaries and property, and to deter would-be abusers. I believe that Secretary Shalala and I have struck the right balance. We have demonstrated, I hope, that an Inspector General can be a valued internal advisor on issues relating to fraud and abuse, without compromising any of the Inspector General's independence. Secretary Shalala arrived at HHS with a firm understanding of what an IG is and does. She has never-not even once-sought to encroach on the independence of my office and its efforts. By virtue of her professionalism, management philosophy, and perhaps even her personality, the Secretary wants to hear the plain truth of what the IG has found. She would rather deal with the facts as they are, and would never ask us to shade our findings to avoid criticism. Even in those uncomfortable instances when I have informed the Secretary that we were investigating a member of HHS management, she has been unwavering. The OIG should "do what you need to do," she has said, whatever the outcome. The Secretary has also supported OIG independence in more tangible ways. For example, she has consistently sought to provide the OIG with needed resources. She was a strong proponent of the Health Insurance Portability and Accountability Act of 1996 a statute that provided new resources and authorities for the critical fight against health care fraud and abuse in this country. Though I am consulted on agency programs and management issues, both the Secretary and I are careful that I not assume "program operating responsibilities" that would endanger my ability to independently audit or investigate those programs. I freely provide factual information that will assist decision-makers in setting policy and procedures for administration of their programs-but I am not asked to participate, nor do I participate, in the day-to-day operations of those programs. For example, my auditors might be consulted about appropriate record-keeping requirements for a grant program; however, we would not participate in the selection of a grantee. A key component of OIG independence is our direct communication with the Members and staff of the Congress. Frankly, I suspect that no agency head relishes the fact that IGs have, by law, an independent relationship with oversight Committees. Information can and must go directly from the Inspectors General to the Hill, without prior agency and administration clearance. Secretary Shalala has never sought to interfere in these important communications in any way. During meetings with Committee staff in advance of today's hearing, I was asked whether I had any recommendations on how other Inspectors General might achieve the same sort of productive working relationship with their agency heads that I am fortunate to have at HHS. I have given this a great deal of thought; and, as I have discussed here today, I believe that one critical key to our success at HHS has been the Secretary's clear understanding of the appropriate role of an Inspector General. Most new political appointees are drawn directly from the private sector, and have little familiarity with Inspectors General. These new officials, perhaps understandably, are apprehensive of an internal "cop" looking over their shoulders. If these new appointees could be better informed at the very beginning of their tenure concerning the responsibilities and independence of the IG, misunderstandings could be avoided. The new Secretary would be assured that a strong Inspector General is an asset, not a liability, and their collaboration would stand a better chance of "getting off on the right foot." I recall that during the early years after the IG Act was implemented, new political appointees attended sessions that were part "pep talk"-the President addressed the audience—and part substantive instruction. This kind of training provided valuable information to new appointees on how to be a Federal manager and included a discussion of the role of the IGs. I believe it would be beneficial to re-institute such training for new senior Federal managers, and even invite Inspectors General to address these groups. Similarly, IGs could benefit from early training on matters such as their dual responsibilities for enforcement and prevention; their independence and how to safeguard it; and the role they can play in support of agency policymaking without compromising their independence. When I was Vice Chair of the President's Council on Integrity and Efficiency (PCIE) from 1994-1997, I made it a practice to meet with each new Inspector General to answer questions, offer suggestions and provide guidance on issues such as independence. This, of course, was only the most informal sort of "coaching." I believe it is appropriate to raise for PCIE discussion the possibility of instituting some kind of more structured orientation for new Inspectors General. The orientation might include pointers on working |