Auditors Say Feds Needlessly Wasted $43 Billion
Policy + Politics

Auditors Say Feds Needlessly Wasted $43 Billion


Every year, tens of billions of tax dollars are lost to waste, fraud and abuse within the federal government. But much more could be lost if it wasn’t for a team of federal watchdogs tasked with flagging any inefficiencies or wrongdoing within all government programs and projects. 

That’s according to the Special Council of the Inspectors General on Integrity and Efficiency (CIGIE)—the group in charge of overseeing the 15 presidentially appointed IG’s. The group consistently reminds lawmakers of out how the auditors’ work saves the federal government billions of dollars each year—despite their annual collective operating budget of over $1 billion. 


The $43 billion identified by the IG’s in 2014 is just the tip of the iceberg. The Center for American Progress estimates that annual tax gap—what Americans owe the IRS—is between $400 billion and $500 billion. All in, the government wastes close to $800 billion every year. Enough to fix every road and bridge, invest in jobs and the future, and really help those who need it most.

Related: 10 Outrageous Examples of Government Waste 

Every time the IG’s conduct an investigation, they issue a report with recommendations for ways the agencies can improve and potentially save money through better management practices. 

This year, CIGIE said that taken together, all of the auditors’ recommendations this year would result in about $32 billion in savings, The Washington Examiner first reported. Recommendations typically include telling agencies to ramp up their oversight or come up with a new policy that will help them run more efficiently. 

Unlike publicly traded companies, which are responsible to shareholders, the agencies, which are ultimately responsible to taxpayers, do not have to adhere to the recommendations. In some cases, they are ignored or are only partially implemented. Even in the latter case, the IG’s estimate some pretty significant cost savings. 

The investigations this year have already resulted in $11 billion that was returned to the Treasury. 

The IG’s total operating budget for 2014 was about $1.6 billion, according to CIGIE’s financial audit for 2014. 

Related: Federal Government Blatantly Wastes $30 Billion This Year 

By calculating the potential savings based on IG recommendations--$32 billion—with the recovered $11 billion, the agencies could have saved a total of $43 billion this year if agencies accede to the IG’s recommendations, (which isn’t likely.) 

That represents a $27 return on every dollar invested (or a 2,600 percent increase) using the $43 billion figure divided by the IG’s total operating budget for this year. That’s up from last year’s $21 per dollar invested in the IG’s operating costs. 

Of course, it’s difficult to really measure how much the IG’s work could potentially save. CIGIE’s estimates take into account how much the auditors highlight in questionable costs and how their recommended strategies could resolve those issues. However, agencies might decide not to take up the auditors’ recommendations and instead come up with their own cost-saving strategies. 

CIGIE’s cost savings estimates (to prove to Congress they’re worth their weight) come at the end of a tough year for the IG community. Earlier this year, the Commerce Department’s IG, Todd Zinser was under a federal investigation for allegedly protecting his top deputies who were accused of intimidating staffers who attempted to report wrongdoing by Zinser. 

Similarly, earlier this year, a Senate oversight panel accused the Department of Homeland Security’s IG, Charles Edwards, of knowingly altering and delaying investigations. He stepped down and is now on paid administrative leave.

Those are just a few bad apples, and overall the IG’s serve a crucial oversight function within the sprawling federal government.

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