IGs Brave the New World

Probably more than anything, the Y2K challenge pointed up government's huge dependence on IT. Not only has this reality modified staffing and skill needs in IG offices, but it has also affected their operational goals.

At the Defense Department, the largest IG operation, the demands for quality and speed that have pushed the acquisition envelope have played the same role in IG performance, Lieberman says. "As a result of automation, everything is done at so much faster a pace," he says. Audit processing time is down to half of what it was in 1992, while the number of audit reports has almost doubled over the same period. In 1992, an audit took an average of 511 days to process, compared with 270 days in 2000. The average cost per audit dropped by 45 percent over this same period, from $392,000 to $216,000. And in 1992, 142 final reports were produced, compared with 202 last year.

Some of the efficiencies are the result of such automated tools and processes as videoconferencing and e-mail, which cut down on travel and coordination time. Similarly, audit software allows IG offices to use already-formulated survey instruments without having to create a new survey each time. But the real gains come from a performance management focus, which measures results. And, as Lieberman says, "nothing can be measured better than time."

Lieberman says timeliness is critical in audits. "It's like fruit ripening. They lose strength every day," Lieberman says, "It's the same with audit results. They get stale." The IG used to take two years to review an issue in all four services before releasing a final audit, but now that's never done. Now reports are issued as useable pieces are completed, so the results are much more timely. It's an effective way to counter complaints about lack of currency or relevance.

These types of improvements have been made while the Defense IG's office has been on a staffing roller coaster ride. The IG staff is 28 percent smaller than its 1995 high of 1,800 employees. The cuts have followed the same across-the-board pattern as that of the entire department, with no real planning behind them.

As the IG's office has focused on improving its own operations, its auditors continue to detail problems in how Defense conducts its business. An audit last year pointed to a 50 percent reduction in Defense's acquisition workforce from 1990 to 1999, a cut that has been particularly troublesome, Lieberman says. The cuts took place at a time when the acquisition workload increased by 28 percent. The cutback has resulted in an increased backlog in closing completed contracts and insufficient staff to carry out required work. The workforce is now afflicted with skill imbalances and high staff turnover, among other things.

Another area of concern for auditors at Defense is IT contracting. "Every IT project has major flaws," Lieberman says. In services contracting, in general, which now covers over half of all government purchases, an IG review of 105 Defense contract actions revealed problems with each one of them. These included such things as failure to do independent cost estimates or lack of supporting documents in contract files.

Lieberman remains skeptical about many of the efficiency gains being cited across government and whether agencies recognize the importance of information technology in their operations. "We're not buying nearly as much process reform across the department as people think," he says. "We're layering these new systems over old processes."

Under the Bush administration, the Defense IG office will continue to focus on IT and services contracting audits, with a special emphasis on health care fraud, such as improper billing and fraudulent claims. That area has "almost an unlimited amount of workload," Lieberman says, with some 500 cases. Assessing the quality of the products that Defense purchases will remain a priority, particularly in light of quality assurance staff cuts over the last decade.

The result of all these pressures is that those involved in services contracting may soon find themselves visited by their local inspector general. In the past, "we, like everybody else, have ignored service contracting issues," Lieberman says. You can bet that won't be the case in the future.