In July, former New Orleans Mayor Ray Nagin was sentenced to 10 years in U.S. federal prison, following his conviction on 20 charges of fraud, including conspiracy to commit bribery and money laundering. The high-profile arrest and conviction resulted from the work of the U.S. Federal Bureau of Investigation (FBI) and the city's Office of the Inspector General (IG), which was instituted in 2009 to clamp down on the city's notorious reputation for fraud and abuse. When an IG's auditors and investigators can help bring down a former big city mayor, it's a clear message that no one is above the law.
An IG is one of the last backstops to help safeguard taxpayers' money. More cities have established IG offices encompassing auditors and investigators in the past decade to provide an extra layer of checks and balances in local government. Shrinking tax revenues and waning budgets mean governments often have to do more with less, and reducing waste and fraud has proven to be an effective way to tighten monetary belts.
Although IG offices take many different shapes and operate in many different fashions, they all share a common mission of protecting taxpayers from misuse of their money. Those who work in the profession say it's a difficult role, but ongoing successes can help build credibility and respect from those they oversee.
FIGHTING FRAUD AND WASTE
IG offices operate in federal, state, and local jurisdictions and can vary dramatically in terms of their size and scope of operations. Phillip Zisman, executive director of the Association of Inspectors General, and former IG of Yonkers, N.Y., says almost all offices have the same mandates to help minimize fraud, waste, abuse, and corruption, and to promote effectiveness and efficiency. When criminal activities are suspected, they often work in cooperation with law enforcement ranging from the local district attorney's office to the FBI (see "Partnering With Law Enforcement" on page 37).
Zisman's organization develops standards for conduct and best practices for IG offices and provides training and certification for IGs, auditors, and investigators. It also works as an advocate for the IG function to help bridge the gap between IG offices and the communities they serve. "We try to build awareness of the work that IGs do," he explains. "It's sometimes a lonely job because a lot of people don't like being second-guessed by auditors working in inspector general offices."
Uncovering fraud is an important role for IGs. In fact, most IG offices in cities are born out of the need to fight corruption. New Orleans IG Ed Quatrevaux says government is an attractive target for fraudsters because public-sector agencies have a lot of money and are vulnerable. His office's main focus is the city's government, but that can encompass anyone doing business with the city.
Walking into a city like New Orleans, Quatrevaux discovered that almost everything the office reviewed had "some type of fraud." His team quickly rethought their risk assessment model to go after the most money first. Mounting discoveries of fraud and abuse, along with high-profile criminal convictions, can strike fear in the hearts of fraudsters. While Quatrevaux's office continues to discover fraud in New Orleans institutions, he knows it has helped keep at least a few individuals from profiting from it. "We are trying to convince people that they...