The House Financial Services Committee voted 43-26 yesterday afternoon in favor of an amendment introduced by Reps. Ron Paul (R-TX) and Alan Grayson (D-FL) that would remove restrictions preventing the GAO from auditing the Federal Reserve. The amendment was modeled after Rep. Paul’s long-standing bill to audit the Fed, which was co-sponsored by over 300 Members in the House and supported by POGO and many other groups.
The vote on the final passage of the financial regulatory package to which the Paul-Grayson amendment is attached has been delayed until after Thanksgiving. Nonetheless, yesterday’s vote signals a defeat for Rep. Mel Watt (D-NC), who had introduced an alternative amendment that would have limited the scope of the GAO’s audits.
We will continue to monitor this important bill as it makes it way through Congress. In the meantime, however, we wanted to highlight an insightful observation made by one of our blog commenters, who points out that the GAO may not have the staffing and resources it needs to conduct these audits:
GAO currently has right around 3000 employees. Attrition is currently about 10% a year, with at least 330 people planning to leave in the next two years for sure (Based on a voluntary survey of all GAO employees of which 2220 participated.) Along with the other additional work GAO has been tasked with, with respect to the TARP, GAO is currently overwhelmed. GAO's audits, controls, and processes mean that on average each report takes 9 months to complete. The TARP legislation asks for a 60 day turn around, which is really way too fast. People are burning out, and I am not sure that asking GAO to audit the FED will do anything but overwhelm the system further.
One agency cannot be responsible for all of our good government. We need to either:
1. Expand GAO drastically,
2. Make the IGs more robust, and/or
3. Congress and the public will have to understand that GAO's work will not be as reliable as it has been in the past.
We hope Congress takes this message to heart before deciding to task the GAO with even more work.
-- Michael Smallberg