The Inspector General Act of 1978 and the Watchdogs Inside Every Agency

On October 12, 1978, President Jimmy Carter signed a bill that almost nobody outside a few congressional offices was watching. That autumn the news was full of the Camp David accords, inflation and a fight over natural gas prices. The Inspector General Act ran only a few pages in its first form. It created offices with a slightly old-fashioned military title in about a dozen federal departments and agencies, and gave each one an unusual job: to work inside an agency, with full access to its files, while reporting not only to the agency's boss but also to Congress. The idea had grown out of a decade of scandals, from Watergate to fraud in the new Medicare and Medicaid programs, and out of the dogged work of a North Carolina congressman who chaired a House oversight subcommittee. Nearly half a century later there are more than seventy of these offices, and they have become some of the most important, and most vulnerable, guardians of honest government.

In short: Inspectors general are independent auditors and investigators inside federal agencies. They look for fraud, waste, abuse and mismanagement, report to both the agency head and Congress, and in the big departments are appointed by the president with Senate confirmation. A president can fire them, but the law requires advance notice to Congress and a real explanation, rules that were written precisely because presidents of both parties had pushed against them.

Before the watchdogs

The federal government had auditors long before 1978. The General Accounting Office, now the Government Accountability Office, has worked for Congress since 1921. Agencies had their own internal audit and investigation units. The problem, as Congress came to see it, was that those internal units were scattered, understaffed and answerable to the very officials whose programs they were checking.

The Department of Agriculture had created an inspector general on its own authority in 1962, after a scandal involving a Texas businessman named Billie Sol Estes who had exploited federal farm programs. That office was later abolished by the department, which showed the weakness of a watchdog that existed only at a secretary's pleasure.

In the mid-1970s, Representative L.H. Fountain, a Democrat from North Carolina, led investigations showing that the Department of Health, Education and Welfare had little idea how much money it was losing to fraud in its programs. Congress responded in 1976 by creating, by law, an inspector general at that department. Two years later, the 1978 act expanded the model to many more agencies.

What an inspector general does

The job description in the law is broad. An inspector general conducts audits and investigations of the agency's programs and operations, recommends ways to promote economy and efficiency, and works to prevent and detect fraud and abuse. In practice, that covers several kinds of work:

• Audits of whether programs are spending money as intended and achieving what they are supposed to.
• Investigations of possible crimes and misconduct, by employees, contractors or people receiving federal money. Many offices have criminal investigators who work with federal prosecutors.
• Inspections and evaluations that look at how well a program or office is run.
• Hotlines where employees and the public can report problems, and protection for whistleblowers who come forward.

Inspectors general have the right to access all of the agency's records, and they can issue subpoenas for documents from people and organizations outside the federal government. An agency head generally may not stop an inspector general from starting or completing an audit or investigation. The law makes narrow exceptions in a few departments that handle national security and law enforcement, where the secretary can halt particular work for specified reasons, and must then tell Congress.

What an inspector general cannot do is just as important. They do not run programs or set policy. They cannot fire anyone or overrule a secretary. Their power is the power of the report: they find facts, make recommendations and make sure Congress and the public know.

Two bosses, on purpose

The strangest and most important feature of the law is what people call dual reporting. An inspector general is under the general supervision of the agency head but reports to Congress as well.

Twice a year, each office sends a semiannual report to Congress through the agency head, listing significant problems found, recommendations made and whether the agency has acted on earlier recommendations. The agency head can add comments but cannot change the report. For particularly serious or flagrant problems, an inspector general can send what is known as a seven-day letter: the report goes to the agency head, who must forward it to Congress within seven days.

The arrangement is deliberately awkward. An inspector general needs enough of a relationship with the agency to get cooperation and access, and enough independence to say unwelcome things. Congress, which funds the programs and writes the laws, needs a reliable source inside each agency that is not simply the agency's own public relations office.

It also explains why the job attracts a particular kind of person. Many inspectors general have come up through careers as auditors, federal prosecutors or investigators rather than through politics. The best of them are known inside their agencies as hard to please and difficult to pressure, which is the point. An inspector general who is popular with the officials being audited is probably not looking very hard.

There is a cost to that independence, and it falls on the inspector general personally. Their reports often embarrass the people they work alongside every day, and their budgets are set in part through the agencies they oversee. Congress has tried to ease that tension by letting inspectors general flag budget requests that they consider inadequate, so that lawmakers can see when an agency is starving its own watchdog.

Who appoints them

The law divides inspectors general into two groups.

In the large cabinet departments and major agencies, the inspector general is nominated by the president and confirmed by the Senate. The law says the choice must be made without regard to political affiliation and solely on the basis of integrity and demonstrated ability in fields such as accounting, auditing, financial analysis, law, management analysis, public administration or investigations.

In smaller entities, added by amendments in 1988, the head of the entity appoints the inspector general. These include organizations such as the Federal Reserve Board and Amtrak, among many others.

There are also special inspectors general created for particular programs or emergencies, such as the reconstruction of Afghanistan or the pandemic relief programs of 2020. And there is a council, the Council of the Inspectors General on Integrity and Efficiency, created in 2008, that coordinates their work, sets professional standards and investigates allegations against inspectors general themselves.

How they can be removed

A watchdog that can be removed at any moment for any reason is not much of a watchdog. Congress has tried several times to deal with that problem without crossing constitutional limits.

The original 1978 law allowed the president to remove an inspector general but required the president to tell both houses of Congress the reasons. In the Inspector General Reform Act of 2008, Congress added a requirement that the president give that notice at least thirty days before the removal takes effect. The idea was to give Congress time to ask questions and, if it chose, to object publicly.

In practice, presidents found ways around the spirit of the law. They placed inspectors general on administrative leave during the thirty days, effectively removing them at once. And the reasons given were often a single sentence saying the president had lost confidence in the official.

In 2020, President Trump removed several inspectors general within a few weeks, including Michael Atkinson, the inspector general for the intelligence community, who had forwarded to Congress the whistleblower complaint that led to the first impeachment, and Steve Linick at the State Department. Congress responded in late 2022, with bipartisan support, by tightening the rules. The changes required a substantive rationale with detailed and case-specific reasons for a removal, and limited the use of leave to sideline an inspector general during the notice period. They also restricted who could serve as acting inspector general, to prevent agencies from filling the post with a political loyalist.

The argument for presidential control

There is a serious constitutional argument on the other side, and it is not made in bad faith. The Constitution vests the executive power in the president, who is responsible for seeing that the laws are faithfully executed. On this view, officials inside executive agencies must ultimately answer to the president, and Congress cannot install officers who are effectively its agents within the executive branch. Some presidents of both parties, and their lawyers, have raised concerns about inspectors general on precisely these grounds, especially about requirements that seem to give Congress a say in removals.

There is a practical argument too. Inspectors general are not elected. Some critics, including some agency heads, have complained that a few offices have used their independence to pursue investigations with political overtones or to second-guess policy choices that belong to elected officials.

The law already reflects a reasonable answer to both points. It does not stop a president from firing an inspector general. It requires notice and reasons, which are tools of transparency, not vetoes. And it limits what inspectors general can do to finding facts and making recommendations. Policy remains with the elected officials and their appointees. I think the bigger risk is the opposite one: a government in which nobody inside the agencies is allowed to tell the truth about how money is being spent.

How to read an inspector general's report

These reports are public, and most are written to be understood by people who are not auditors. A few habits make them far more useful.

Start with the summary, usually a page or two at the front labelled something like "what we found" and "what we recommend." It tells you the question the office asked and the short answer. Many readers stop there, which is a mistake, because the details are where the evidence lives.

Look next at the scope and method. Did the office examine every case or a sample? Over what period? Did it visit sites or rely on records? A finding based on a careful sample of files is strong; one based on a handful of interviews is weaker. Good reports tell you which is which.

Then read the agency's response, which is usually printed at the end. Agencies can agree, partly agree or disagree with each recommendation, and they often explain what they plan to do. The gap between what the inspector general recommended and what the agency promised is often the most important part of the document.

Finally, check whether the recommendations were carried out. Offices track open recommendations, and the semiannual reports to Congress list those still unresolved. A recommendation that sits open for years is a signal for Congress, reporters and the public to ask why.

Two cautions. An audit that finds problems is not proof that a program is a failure; it is a tool for fixing it. And a report that finds no problems is not always a clean bill of health. It may reflect a narrow question, limited access or an office without enough staff to look harder. Reading carefully is how you tell the difference.

Why progressives should care about auditors

It is easy to think of inspectors general as dry accountants. Their work is often anything but dry. Their reports have uncovered fraud in disaster relief, abuse in immigration detention, dangerous conditions in veterans' hospitals, failures in food safety inspections and mismanagement in pandemic loan programs. When a program meant to help people is failing, an inspector general's report is often the first credible account.

For anyone who believes government can do good things, that matters twice. First, the people who depend on a program are the ones harmed when money is stolen or wasted. Second, nothing feeds cynicism about government faster than waste that goes unaddressed. A strong system of inspectors general is part of how public programs earn and keep public trust.

That is also why a weakened system matters. When inspectors general are fired, sidelined or starved of staff, the government does not become more efficient; it becomes harder to see. Problems still happen. They just stay hidden longer, and the people who pay are those who rely on the programs.

What you can do

• Read the reports. Every inspector general publishes audits and investigations, and they are written for the public. When a program you care about is in the news, look for the inspector general's work on it.
• Ask your members to defend the watchdogs. Use our representative lookup to find your representative and senators, their contact forms and their latest votes. Ask whether they will fund inspectors general fully and insist on the notice rules.
• Follow the fight over the civil service. Our coverage of the government being gutted tracks firings, cuts and the court cases over them.
• Track oversight bills. The Congress votes and bills page shows how oversight and inspector general legislation fares when it comes to a vote.
• Back the groups that watch. The organizations directory lists nonprofits by cause in every state, including legal aid, civil rights and voting groups that often rely on inspectors general's findings.

The 1978 law was a quiet piece of good government passed in a noisy year. It has lasted because it rests on a simple bargain: let a few independent people inside each agency look at everything, and let them tell Congress what they find.