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4.5. External audit

As the supreme audit institution, the GAO was established in the BAA in 1921 to help Congress fulfil its role in federal budget processes. Congress has subsequently clarified and expanded the original charter by subsequent acts and regulations (for example, the Accounting and Auditing Act 1950, the Federal Manager’s Financial Integrity Act 1982, the CFOA 1990). With effect from 7 July 2004, the GAO’s legal name became “the Government Accountability Office” under the GAO Human Capital Reform Act 2004 to better reflect its main functions (GAO, 2004). Most of legal provisions relating to the GAO are codified in Chapter 7 of Title 31.

4.5.1. Managerial, financial and operational independence

The law provides strong protection for the independence of the GAO. The most important productions are those relating to the tenure of the Comptroller General who is appointed for a single 15-year term by the President, confirmed by the Senate (Title 31, s. 703). The Comptroller General may only be removed by impeachment or joint resolution of Congress, and only for permanent disability, inefficiency, neglect of duty, malfeasance, a felony or conduct involving moral turpitude. The Comptroller General may appoint, pay, assign, and remove officers (except the Deputy Comptroller General) and employees that he/she decides are necessary to carry out the GAO’s duties (s. 731). Furthermore, the GAO has financial independence. Title 31 prescribes that amounts necessary to carry out the GAO’s mandate may be appropriated to the Comptroller General (s. 736).

4.5.2. Institutional coverage of audits

The Comptroller General is provided with wide-ranging powers to investigate all matters relating to the receipt, disbursement, and application of public funds (s. 712). The GAO therefore has authority to audit all federal departments and agencies. The law explicitly includes certain agencies, such as the Internal Revenue Service (s. 713), the Federal Reserve Board, the Federal Reserve Banks, and the Federal Deposit Insurance Corporation (s. 714) as being within the ambit of GAO’s audit authority. Some of these institutions are outside “general government” as defined in National Accounts.

4.5.3. Types of audit

The scope of audit authority is wide, ranging from examining compliance with laws and financial controls as well as undertaking performance-oriented audits focusing on ascertaining the contributions of public programmes to important national outcomes and goals. Chapter 7, s. 712, elaborates on the

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Comptroller General’s investigatory powers cited above. These include authority to:

●Estimate the cost to the government of complying with each restriction on expenditures of a specific appropriation in a general appropriations law, and report the estimates to Congress.

●Analyse expenditures of each executive agency in order to help Congress decide whether public money has been used and expended economically and efficiently.

●Make investigations and reports upon the request of either house of Congress or a committee of Congress having jurisdiction over revenue, appropriations, or expenditures.

The Comptroller General also has authority to evaluate the results of programmes and activities carried out under existing law by departments and agencies on his own initiative or when either house of Congress orders an evaluation (s. 713).

4.5.4. Powers of investigation

Strong powers of investigation are provided in the law. Each agency is required to provide to the Comptroller General information the Comptroller General requires about the duties, powers, activities, organisation, and financial transactions of the agency (s. 716). When an agency record is not made available within a reasonable time, the Comptroller General may make a written request to the head of the agency, requiring him/her to provide the information within a 20-day period. Failure by the agency head to provide the requested information would result in the GAO informing the President, the OMB, the Attorney General and Congress in writing, which could lead to court action, as prescribed by law. The issuance of subpoenas is also envisaged in the law.

4.5.5. Reporting obligations and publication

At the beginning of each regular session of Congress, the Comptroller General is required to report to Congress (and to the President when requested by the President) on the work of the Comptroller General (s. 719). A report includes recommendations on:

●Legislation the Comptroller General considers necessary to make easier the prompt and accurate making and settlement of accounts.

●Other matters related to the receipt, disbursement, and use of public money which the Comptroller General considers advisable.

The Comptroller General also responds to requests for reports from Congress, including on expenditures and contracts an agency may be making