As the embattled Corporation for National and Community Service faces questions about its future, its internal watchdog has been hobbled by a mysterious Congressional budget cut that is forcing it to shed more than half its staff and put new investigations on hold.
Lawmakers this year cut the budget of the corporation’s Office of the Inspector General from $7.7-million to $4-million. Sixteen of its 33 staff members are losing their jobs this month, and another four may depart soon, a bloodletting that lawmakers and government watchdogs say will severely curtail the inspector general’s ability to root out waste, fraud, and other abuses by national-service programs like AmeriCorps.
“They pretty much don’t exist as an office for a year, which is awful,” said Jake Wiens, an investigator at the nonprofit Project on Government Oversight.
“The corporation gives out a lot of grants, and grants are by nature high-risk,” Mr. Wiens said. “You need an inspector general that’s doing audits, that’s doing investigations, to act as a deterrent but also to recover lost funds and ensure that [the corporation] is actually doing what it’s supposed to be doing.”
Members of both parties blame each other for the cuts, which happened during Congress’s annual appropriations process. Its investigations have at times been politically charged, and critics have accused it of overreach. The corporation, meanwhile, says it is stepping up its own oversight in the wake of the cuts.
Investigations on Hold
Because of the cuts, the inspector general’s office has been forced to postpone any new investigations, according to William Hillburg, who served as its spokesman until he lost his job this month.
The office has sent letters to a handful of groups that it had planned to audit, he said, letting them know that work has been postponed.
Other cases that the inspector general normally would have investigated further have been turned over to the corporation.
For now, the watchdog is focusing on cases it has already handed to the Department of Justice for possible prosecution. Mr. Hillburg declined to share details of the investigations and audits because they are under way. It will also continue to carry out routine activities like the annual audit of the Corporation for National and Community Service’s financial statements, Mr. Hillburg said.
Among the stalled efforts is an investigation into whether AmeriCorps volunteers working with Planned Parenthood advocated inappropriately for birth control or engaged in other prohibited activities.
The investigation, which was undertaken at the request of Republican Senators Mike Enzi and Orrin Hatch, was not far enough along to determine if problems do exist, Mr. Hillburg said.
Even if the corporation’s watchdog fares better in next year’s federal budget, it will take a long time before it truly gets back on its feet, according to Mr. Hillburg. The Office of the Inspector General has asked for $5.4-million in 2013 because it will need time to hire and train employees, he said.
The office was thrown into the political spotlight in 2009 when the White House dismissed its then-head, Gerald Walpin. Members of Congress criticized Mr. Walpin’s removal, but the White House said he had been acting erratically.
Mr. Walpin rejected that characterization and sued to be reinstated, but a court ruled against him.
The office has been without a leader ever since, although a nominee is waiting confirmation by the Senate.
Recovering Money
The office’s work has at times been politically charged. Last year it raised concern about “undue influence” by then-corporation board member Stephen Goldsmith in awarding money to the Vista program in New York, where Mr. Goldsmith later became deputy mayor.
A lawyer for the city called the report baseless and “breathtakingly irresponsible.”
Mr. Walpin accused the White House of removing him because of an investigation into alleged misspending of AmeriCorps money by a nonprofit run by Kevin Johnson, a former basketball star and an Obama supporter who is now mayor of Sacramento. The administration denied the charge.
Cases of Fraud and Waste
In other cases, the office has uncovered problems of waste and fraud and recovered money.
In November, for example, the former executive director of a government agency that administered AmeriCorps grants in American Samoa pleaded guilty to a conspiracy to steal $325,000 from the national-service program.
In total, the watchdog says, the inspector general’s office recovered $446,000 in misused money from all of its investigations in 2011, while its auditors questioned nearly $1-million in spending.
Blame Game
Rumors abound, but no one seems to know, or wants to say, how exactly the $3.7-million cut ended up in the final federal-budget bill.
Inspector general offices tend to be popular with both parties—and Mr. Wiens says it’s rare to see an office’s budget slashed by 50 percent, even in the current, cost-conscious era.
Members of both parties blame each other.
After the inspector general raised concerns about the cut in January, three Republican senators sought ways to restore the funds. Republican Senators Susan Collins and Charles Grassley, along with Mr. Enzi, sent a letter to Tom Harkin, a Democrat who chairs the subcommittee that oversees the corporation, asking him to move $4-million this year from the corporation’s $835-million budget to its inspector general’s office.
“We simply do not understand what motivated this cut, considering the demonstrated need for a robust Office of Inspector General at the corporation,” the letter said.
In a response, Mr. Harkin said that while he agreed that the budget cut was “unfortunate,” it would not be “appropriate” to reopen the budget process “to address a reduction to only one of the hundreds of programs that were cut.”
He, in turn, blamed House Republicans for the cuts, noting that a proposal by Rep. Denny Rehberg would have zeroed out money for the corporation.
“There is no question where this funding cut originated: Just look at the U.S. House’s proposal compared to the Senate proposal,” Kate Cyrul, communications director for Mr. Harkin, wrote in an e-mail to The Chronicle. “Senator Harkin did not want funding for the [inspector general’s] office to be cut.”
A spokesman for Mr. Rehberg did not respond to requests for comment.
The office’s former leader, Mr. Walpin, has also jumped into the blame game. The corporation “is a pet agency of the Obama administration, and these cuts are its latest move to torpedo independent oversight,” Mr. Walpin wrote this month in The American Spectator.
A White House official denied that, saying the president requested an $8.4-million budget for the office in 2012, and it was Congress that enacted the budget cut.
Sandy Scott, a spokesman for the corporation, said the agency was likewise “surprised” and disappointed by the cut.
The corporation says it is helping out by providing administrative support such as assistance with audits.