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INSPECTOR GENERAL INSPECTIONS AND EVALUATIONS

DAO 213-2: INSPECTOR GENERAL INSPECTIONS AND EVALUATIONS
Number: DAO 213-2
Effective Date: 2006-10-19

SECTION 1. PURPOSE.

.01 This Order prescribes the policies and procedures for inspections and evaluations conducted by the Office of Inspector General (OIG).

.02 This revision generally updates the Order to reflect policies and procedures for inspections and evaluations not previously contained in this Order. It also reflects title and function changes within the OIG, as set forth in Department Organization Orders 10-13 and 23-1.

SECTION 2. AUTHORITY.

.01 The Inspector General Act of 1978, as amended, 5 U.S.C.A., Appendix 3 (the Act), provides the Office of Inspector General with authority to review and inspect the programs and operations of the Department of Commerce (the Department). OIG inspection and evaluation activities will generally be carried out by or under the direction of the Office of Inspections and Program Evaluations (OIPE) and the Office of Systems Evaluation (OSE).

.02 In performing the OIG's inspection and evaluation function, the Inspector General is authorized, under the Act, to have access to all records, reports, audits, reviews, documents, papers, recommendations and other material available to the Department regarding its programs and operations.

SECTION 3. RESPONSIBILITIES OF THE OIG.

.01 Inspection and Evaluation Functions. The OIG will perform and report on inspections, program evaluations, and systems evaluations of operating units, programs, and operations of the Department.

.02 Inspections. An inspection is a review of a Department operating unit, sub-unit, field office, program activity, contract, grant, loan, loan guaranty, or of an entity receiving funds from a Department operating unit, such as a contractor or grantee. These reviews are designed to give agency managers timely information about programs and operations in order to address problems, and to highlight those activities that are being performed well. Inspections seek to encourage effective, economical, and efficient operations while identifying, redressing and preventing fraud, waste and abuse in Department programs.

.03 Program Evaluations. Program evaluations are in-depth reviews of specific management issues, policies, or programs. These reviews may address government-wide or multi-agency issues, as well as internal Department programs or operations.

.04 Systems Evaluations. Systems evaluations are reviews of policy, planning, acquisition, development, deployment, operations, maintenance, and all related aspects, including information security, of the Department's information technology and other systems. These reviews address management, technical, operational and contractual issues, and seek to improve efficiency, effectiveness, and security. Systems evaluations are also conducted to help ensure that systems investments are well managed and that they maintain an appropriate balance between achieving technical requirements and managing costs, schedules, and other risks.

.05 Quality Standards. OIPE and OSE manage their activities using a quality control system designed to assure that established professional standards, policies and procedures are adhered to in the conduct of inspections and evaluations, the preparation and issuance of reports, the resolution of contested findings, and the performance of all other aspects of their assigned duties. In addition to the policies and procedures set forth in this Order, OIPE and OSE comply with the Quality Standards for Inspections established by the President's Council on Integrity and Efficiency.

SECTION 4. RESPONSIBILITIES OF DEPARTMENT OFFICIALS AND EMPLOYEES.

.01 General. Secretarial Officers and the heads of operating units are responsible for ensuring compliance with Department policies and procedures, including internal controls established to prevent fraud, waste and abuse in the programs and operations of the Department; extending full cooperation to the OIG in implementing an effective inspection and evaluation program; and objectively reviewing and evaluating findings and recommendations. Although the Secretarial officers and heads of operating units do not have to accept all recommendations, in accordance with Section 9 of this Order and DAO 213-5, they must take timely action on all accepted recommendations and provide justification for any rejected recommendations.

.02 Agency Liaison. Each Secretarial Officer or head of an operating unit shall appoint a senior official as agency liaison, who will be the primary contact between OIG and the Department office or operating unit at the headquarters level for the conduct of inspections and evaluations.

.03 Cooperation with the OIG. It is Department policy that all employees fully cooperate with the OIG so that each inspection and evaluation may be promptly conducted and brought to an appropriate conclusion. Departmental officials shall make every effort to assist the OIG in achieving the objective of effective inspections and evaluations.

.04 Access to Records. Each Department office or operating unit and each employee shall furnish the OIG, upon request, access to and copies of records, reports, audits, inspections, reviews, documents, papers, recommendations, or other materials available to it. The OIG will handle such materials consistent with all current laws and regulations protecting the confidentiality of the information. In conformity with law, Department officials shall also provide the necessary authorization for OIG access to computer and other data or records when such are kept by another government agency or by any outside contractor, grantee or other recipient of Department assistance.

.05 No Reprisal. No employee or official who has authority to take, direct others to take, recommend, or approve any personnel action, shall direct any employee to refrain from making a complaint, reporting information or cooperating with the OIG. Further, no employee or official shall take or threaten to take any action against any employee as a reprisal for making a complaint, disclosing information to or cooperating with the OIG, or for evidencing an intention to do so, unless the complaint was made or the information disclosed with the knowledge that it was false or with willful disregard for its truth or falsity.

SECTION 5. PROCEDURES FOR INSPECTIONS AND EVALUATIONS.

.01 Requests for Inspections or Evaluations. Department officials may request inspections or evaluations as needs arise. Routine requests shall be directed to the Assistant Inspectors General for Inspections and Program Evaluations or Systems Evaluations, as appropriate. The OIG will consider such requests, but retains discretion as to the subject matter and timing of all inspection and evaluation activities.

.02 Inspection and Evaluation Notifications. The OIG may provide advance notification of an inspection or evaluation or, in limited circumstances, may begin an inspection without prior notification. When notification is provided, the appropriate Department office or operating unit will be notified verbally or in writing of all survey, inspection, and evaluation work expected to require 20 or more staff days of effort, or when a report to the Department office or operating unit under review is planned.

.03 Survey. Prior to an inspection or evaluation, the OIG may perform a survey of the organization, program, or function being considered for review, which may include one or more of the following steps:

a. Obtain and review pertinent information about the organization, program or function to be reviewed, including its mission, goals, budget, staffing, reports, and any other readily available data;

b. Ascertain problems and concerns, and identify areas where the need for a detailed review is indicated;

c. Coordinate the proposed review with other OIG offices, including relevant regional and field offices; and/or

d. Prepare a brief plan or project proposal for approval by the Inspector General. This proposal should contain the purpose, objectives, and scope of the review, referencing any special matters to be reviewed.

.04 Entrance Conference. At the start of an inspection or evaluation, the OIG will arrange to discuss with officials responsible for the organization, program or function to be reviewed, the objectives and general scope of the review, the anticipated completion date, and other relevant matters.

.05 Conduct of Fieldwork. In conducting an inspection or evaluation, the OIG may undertake one or more of the following activities:

a. Interview officers and employees of the agency or operating unit;

b. Interview individuals outside the agency or operating unit, as necessary and appropriate. These may include users or beneficiaries of the organization's programs or services, contractors and individuals in other organizations that work with the organization, program or operation being reviewed;

c. Conduct physical surveys of the site(s) being inspected and of the activities carried out there;

d. Examine selected documents and records, as necessary; and/or

e. Test computer or other operating systems or procedures to identify vulnerabilities or other problems.

.06 Progress Briefings. During an inspection or evaluation, OIG inspectors and evaluators will hold periodic meetings with officials of the organization being reviewed to discuss the progress of the review and to identify issues being developed. During these meetings, Department officials are encouraged to express their views on the preliminary findings and to provide any information that may have been overlooked by the inspection or evaluation team that could alter or impact its conclusions.

.07 Exit Conference. Upon completion of the inspection or evaluation, the OIG will hold one or more exit conferences with officials responsible for the operating unit, program or operation under review in order to discuss the results of the review and proposed recommendations.

a. Upon completion of an on-site inspection or evaluation, the OIG team leader may provide an exit briefing to the official-in-charge on the preliminary findings.

b. At the conclusion of the review, the OIG team leader will arrange, through the agency liaison, for OIG officials to brief senior agency officials on the results of the inspection or evaluation. This briefing is intended to convey timely information to managers and to provide a forum to discuss the review's findings, sensitive issues, and proposed recommendations.

c. Open and candid discussion of the results of the review during an exit conference is encouraged in order to ensure that final reports are factual and that the recommendations contained therein are sound and reasonable.

SECTION 6. ISSUANCE OF INSPECTION AND EVALUATION REPORTS.

.01 Preliminary Reports. The OIG may issue a preliminary report before completing the full inspection or evaluation when significant findings require immediate management action to prevent, detect, or redress fraud, waste, or serious abuse, or to correct a management or operational problem that requires immediate attention.

.02 Draft Reports. The OIG will normally furnish a draft report to the Department officials who have responsibility for taking action on the reported matters. Where appropriate, agency efforts to correct identified problems during the course of the inspection or evaluation will be recognized by the OIG in its reports. In some special circumstances, such as when the OIG has no recommendations, or when a report is the result of follow-up work on a prior OIG review, a final report may be issued without first issuing a draft report.

.03 Agency Response to Draft Reports. Within 30 days of the transmittal of the draft report, Department officials shall submit to the appropriate Assistant Inspector General written comments that respond to the issues and recommendations raised in the draft report.

a. The candid responses of agency officials to the OIG's findings and recommendations are a critical part of the inspection or evaluation process. Specifically, agency officials should include in their responses:

1. A brief indication of the corrective action(s) taken or proposed to be taken for each finding or recommendation with which the agency agrees; and

2. A statement of the basis for the agency's rejection of each finding or recommendation with which the agency disagrees.

b. Agency officials may request, and the OIG may approve, an extension of the due date for the agency's response to the draft report. Such requests should be directed to and approved by the appropriate Assistant Inspector General.

.04 Final Reports. The OIG will issue a final report as soon as practicable after receiving the agency's comments in response to the draft report. In the final report, the OIG will address the comments received on the draft report, including opposing views, and append to the final report a copy of the agency's written response. When a Department office or operating unit fails to respond to a draft report within the established time frame or an approved extension of the response period, the OIG may issue the inspection or evaluation report in final without comments. Advance notice will be provided to the Department office or operating unit before a report is issued under these circumstances.

SECTION 7. REFERRALS TO THE OFFICE OF INVESTIGATIONS.

Indications of fraud or other criminal activity discovered during an inspection or evaluation will be referred to the Assistant Inspector General for Investigations (AIGI). Inspection and evaluation reports will not be issued until matters under investigation either have been resolved or issuance of the report is cleared by the IG. When the inspection or evaluation is being performed at the request of a program or contracting officer, or other designated Department official, the OIG will notify the requestor that the matter has been referred to the AIGI, unless the IG or the AIGI determines that such notification would interfere with an investigation or prosecution.

SECTION 8. HANDLING OF INSPECTION AND EVALUATION REPORTS AND INFORMATION.

.01 Dissemination of Reports. Inspection and evaluation reports will be provided to Department officials who oversee the organization, program or operation that is being inspected or evaluated, and who have responsibility for taking action on the reported matters. These officials must coordinate any further dissemination of OIG inspection and evaluation reports with the OIG.

a. The OIG reviews final inspection and evaluation reports for public release. Inspection and evaluation reports that have been cleared for public release will generally be made available on the OIG website at www.oig.doc.gov, or may be obtained from the OIG Publications Unit.

b. The release of any inspection or evaluation report in response to a Freedom of Information Act (FOIA) or Privacy Act request will be determined by the OIG. All requests for copies of inspection or evaluation reports should be promptly referred to the OIG FOIA Officer in accordance with applicable Department procedures.

.02 Control of Sensitive Inspection and Evaluation Reports. Inspection and evaluation reports will be marked "For Official Use Only" when deemed necessary by the OIG. As such, they become subject to applicable Department security regulations concerning administratively controlled materials.

.03 Inquiries Concerning Inspections and Evaluations. Inquiries to a Department agency or operating unit concerning the OIG's inspection and evaluation activities, whether contemplated or in progress, should be referred to the appropriate Assistant Inspector General.

SECTION 9. ACTION ON INSPECTION AND EVALUATION REPORTS.

.01 Follow-up on Reports. The OIG is responsible for following up on all open recommendations contained in inspection and evaluation reports, and will request the agency or operating unit to provide an action plan within 60 days to address any recommendations that remain open.

.02 Resolution Procedures. Detailed procedures for resolving inspection and evaluation recommendations are contained in DAO 213-5, including requirements for assuring that final written determinations are made within a maximum of six months from the issuance of the report, and formally resolved as rapidly as possible.

SECTION 10. EFFECT ON OTHER ORDERS.

This order supersedes Department Administrative Order 213-2 dated August 2, 1985.

Signed by: Inspector General

Approved by: Secretary of Commerce

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Page last updated:February 4, 2010