The Power of Power Point
The Power of Power Point

The President’s Own, the U.S. Marine Band played, so there is no doubt about the event’s prestige.

In a hall named for the late Andrew Mellon, of the Mellon financial aristocracy,  the people who are the conscience and the audit-cops of the federal executive branch gathered in Washington last month to recognize their achievements.

Inspectors general for all the government agencies have their red, white and blue carpet night, and we can presume the expense of their tickets is handled the way the IRS would like. 

The President’s Council on Integrity and Efficiency, for presidential appointees,  and the separate Executive Council on Integrity and Efficiency, for those inspectors general appointed by agency heads,  found plenty of reasons to congratulate their own.

These councils’ mission is set out in an executive order: to improve professionalism in the ranks, and to address issues of integrity and economy that “transcend” individual government agencies.” 

These are the overachievers who believe they and government can do the right thing, financially and ethically, by policing agencies they serve, and, sometimes, by policing enterprises subject to government scrutiny. 

Their speaker was Patricia McGinnis, CEO for the Council for Excellence in Government. 

Before getting to the prizes, they honored their dead:   foreign service program inspectors killed in an airplane crash in 1962, auditors killed by terrorists in 1984,  a special agent  shot and killed while executing arrest warrants on Bureau of Prisons officers.  

There are more than 11,800 auditors, investigators, inspectors and other professionals at 62 federal offices of inspectors general.  They are supposed to be “a significant, positive force for improving the economy, efficiency and effectiveness of federal programs and operations and for preventing and detecting fraud, waste, abuse, and mismanagement.”

During fiscal year 2006, “the community” says they identified potential savings of $9.9 billion from audit recommendations; $6.8 billion in investigative recoveries;  6,500 indictments and instances where charges were brought; 8, 400 successful prosecutions; 7,300 suspensions or debarments; and, 4,200 personnel actions.

They keep track. 

Their highest honor is named for Alexander Hamilton,  the first secretary of the treasury, and an inspector general in his own right.

The IG community contributes nominations, said spokeswoman Marilyn Richardson.  Those are vetted by groups of members and finally, the councils’ Chairman, Clay Johnson III, deputy director of the Office of Management and Budget, the president’s agency, chose the Hamilton winner. 

“This award recognizes outstanding achievements in improving the integrity, efficiency, and effectiveness of Executive Branch agency operations,” the program says. 

This year, it was the U.S. Department of Education’s Nelnet Audit Team, the group that did the work behind the department’s investigation of the college lending company from Lincoln.    

The Department of Education winners listed were: Gary Whitman, Chicago assistant regional inspector general-audit; Howard Sorensen, assistant counsel;  Kenneth Oba, auditor; Kenneth Smith, advice and assistance team;  Michael Kostrezewa, auditor;  Patrick Howard, director of the advice and assistance team;  Richard Dowd, Chicago regional inspector general for audit.

“In recognition of a truly diligent and outstanding OIG effort resulting in the termination of long-standing abusive over-billing practices by lenders; preventing billions of future improper payments,” the award citation said.  

A spokeswoman for the Office of Management and Budget said a number of worthy nominees were considered. 

“The award was based on which team best exemplified the spirit of the IG community in detecting and preventing waste, abuse, and fraud,” she said.

The audit, which took a year,  found some payments to Nelnet were based on what the inspector general determined to be ineligible loans. 

“We disagree with the audit report and believe that the OIG’s new interpretation mischaracterized the Department of Education's longstanding and reasonable interpretation of the 9.5 percent regulation,” said Nelnet spokesman Ben Kiser.

 Nelnet settled its issues with the department earlier this year,  when it agreed to take the student loan “special allowance payments” it had already collected, worth about $278 million, and seek no more. 

A subsequent Department of Justice review of the audit started, but is of uncertain status. 

Nelnet maintains it did nothing wrong.

Education Secretary Margaret Spellings has acknowledged that the federal government “had some responsibility” for confusion over subsidy rules that helped student loan companies reap hundreds of millions of dollars in potentially excessive payments at taxpayer expense.

 Spellings also said she has no plans to pursue a full accounting of the cost of what the Education Department’s inspector general called “improper” payments.

Here’s a link to the audit report, which contains Nelnet’s responses:


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