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Business Crimes BulletinFeaturesLegislationRegulationWhite Collar Crime

CARES Act Puts Inspectors General Back in the Spotlight

By Daniel R. Alonso, Preston Burton and Meredith Leeson
June 01, 2020

Federal Inspectors General — the nation's watchdogs over government agencies and government programs — are back in the news. First, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, received close attention not only for its $2 trillion infusion of taxpayer dollars into the U.S. economy, but also for its oversight mechanisms. The CARES Act established both a Special Inspector General for Pandemic Recovery (SIGPR) and a Pandemic Response Accountability Committee (PRAC), comprised exclusively of existing IGs. Soon after the Act passed, President Donald Trump put IGs in the headlines again, first by firing Michael Atkinson, the IG for the Intelligence Community, and then by removing Glenn Fine, acting IG of the Defense Department, from his post. Fine had just been appointed to chair the PRAC.

IGs have been part of the federal landscape for more than 40 years, so why all the fuss now? The answer is that they are a key element of the government's built-in mechanisms for protecting the nation's fisc, and a relief package of this scope strongly indicates that the IGs and the new oversight bodies will spend many years scrutinizing funds spent under it. Consequently, participating small, medium, and large businesses that have not previously interacted much with government agencies or programs, including lenders new to government-backed loans, can avoid unnecessary disruption by familiarizing themselves with what IGs do and how they work.

IG Establishment

The modern federal IG system was born with the Inspector General Act of 1978 (IG Act), which emphasized the need for "independent and objective [government] units" within federal agencies to root out waste, fraud, and abuse. Their central function is: 1) to conduct audits and investigations of programs and agencies; 2) to recommend policies to promote efficiency and effectiveness, as well as deter fraud and abuse; and 3) to inform agency heads and Congress about identified problems or deficiencies.

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