Government Waste Continues

December 8, 2014
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Earlier this week, I noted that some Inspectors General provide insufficient oversight of federal government activities. They should be more aggressive in uncovering waste and abuse in federal agencies.  

Nonetheless, many Inspectors General issue helpful reports that alert Congress and the public to wrongdoing. Here is a sampling of recent reports showing the widespread mishandling of federal tax dollars:

  • Internal Revenue Service (IRS): Tax fraud by incarcerated individuals amounted to $1 billion in 2012, growing from $166 million in 2007. One inmate defrauded the government of $4 million over a 10-year period.
  • Department of Homeland Security (DHS): The Inspector General for DHS issued a new report highlighting 68 ways that the agency has wasted tax dollars. The list includes a $1.5 billion cost overrun for construction of the agency’s new headquarters, FEMA’s botched handling of relief for Hurricanes Katrina and Isaac, DHS employees claiming unearned overtime, and insufficient oversight of DHS’s procurement processes.
  • Housing and Urban Development (HUD): According to HUD’s Inspector General, New York City misspent $183 million it received from the federal government to rebuild hospitals following Hurricane Sandy. The city used the funds for employee pay and benefits, which were not allowable grant expenses.
  • Drug Enforcement Agency (DEA): Over the course of 20 years, the DEA allowed an individual running a Ponzi scheme to conduct onsite investment training for employees. The trainer, Kenneth McLeod, used the seminars to solicit clients for his bond investment fund, which promised risk-free returns of 8 to 10 percent. More than half of McLeod’s 130 investors came from the DEA. The Inspector General cites DEA for numerous oversight lapses including failing to verify McLeod’s credentials.

Even with the recent politicization of some Inspector General reports, the reports can be useful to illuminate waste, mismanagement, and fraud within the federal government.

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