News that newly inaugurated U.S. President Donald Trump had fired 17 federal inspectors general (IGs) generated significant political reaction and outrage among many in the internal audit profession. For those who are unfamiliar with the U.S. IG model, these are (typically) officials nominated by the president and confirmed by the U.S. Senate. Their responsibilities are prescribed in the IG Act of 1978 (as amended):

1. to conduct and supervise audits and investigations relating to the programs and operations of the establishments (agencies);
2. to provide leadership and coordination and recommend policies for activities designed (A) to promote economy, efficiency, and effectiveness in the administration of, and (B) to prevent and detect fraud and abuse in, such programs and operations; and
3. to provide a means for keeping the head of the establishment and the Congress fully and currently informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress of corrective action.

The IIA weighed in on the terminations, expressing “concerns about maintaining the independent oversight critical to government accountability.” While acknowledging Trump’s authority as president to remove IGs, The IIA urged “adherence to the established legal processes to preserve public trust.”

I share the disappointment that The IIA and many others have expressed over removal of these incumbent IGs. But I am not surprised by the move. Suggestions by many that the president’s actions are unprecedented are not supported by the facts. In fact, as the Congressional Research Service (CRS) recently noted, “one of President Ronald Reagan’s first official acts upon his inauguration on January 20, 1981, was to remove all 15 confirmed and acting IGs then working across the executive branch. This action appears to have caused bipartisan concern in Congress.”

A popular myth over the decades was that Reagan reversed his decision in the face of criticism. In reality, according to the CRS, congressional outrage abated when Reagan renominated some of those he had fired to vacant IG posts. No legal challenge was mounted in the face of the IGs removals, and the precedent was more or less established.

I fully understood that a president has the authority to remove IGs (with or without cause) when, in 2002, the White House informally offered me the nomination to the newly designated, presidentially appointed IG post at the Tennessee Valley Authority (TVA), a government agency that provides electricity for power companies. I declined the offer, because I recognized that IGs were vulnerable to removal by the president, and I had two children in college. The civil service protections I had enjoyed the previous two decades would be gone if I accepted a presidential appointment. My concerns were reenforced by other events at the time. Less than four months earlier, two IGs had been “quietly” forced out by the White House, including one who was summoned by the chief administrator of her agency and told “it is time to move on.”  

While termination of IGs by presidents over the past two decades has been infrequent, removals have nonetheless occurred – including at least two IGs who were removed by Trump during his first term. In 2022, Congress amended the IG Act to include a “substantive rationale” requirement that mandates the president provide Congress with a 30-day, substantive rationale notice before removing an incumbent IG. Much of the criticism and pending litigation relating to this past January’s removal of the 17 IGs focuses on circumvention of the “substantive rationale” provision, and not whether the president has the right to remove an IG.

Implicit in the outrage is over IG’s independence. But the challenge here is in how to achieve it within the boundaries of the separation of government powers prescribed by the U.S. Constitution. Article Two of the Constitution establishes the executive branch of the federal government, which carries out and enforces federal laws. It further vests the power of the executive branch in the office of the President of the United States and establishes the president’s powers and responsibilities. IGs are clearly employees of the executive branch, and their removal is arguably within the president’s purview. The 2022 “substantive rationale” provision has not been tested in the courts, and the CRS appears to caution Congress on a potential outcome in the concluding paragraph of its report:

President Trump’s January 2025 action appears to be a direct challenge to the enforceability of Congress’s removal procedures under the IG Act. If this matter is litigated, the executive branch may seek to curtail Congress’s options to control even procedural requirements for removals. A judicial decision limiting Congress’s authority to impose such rules could substantially impact fundamental oversight of agency programs, spending, and staff.

So, what does all of this mean? To me, the firings are yet another reminder of the illusiveness of audit independence. This is not limited to the U.S. federal government, or any government in the world, for that matter. The challenge to internal audit independence remains one of the many inconvenient truths our profession faces. I suspect that a day does not go by when a corporate CAE is not removed by a CEO (or even by a CFO in some organizations) in an effort to check the independence of the function. That is why audit committees have a vital role to play in ensuring internal audit independence.

While Congress does not have the clear cut authority over IGs in government that boards (and audit committees) do in the corporate sector, Congress is not without tools to ensure effective oversight. Foremost among these tools is its own audit/oversight body, The U.S. Government Accountability Office (GAO). The GAO is the “congressional watchdog” that functions as an independent, non-partisan agency that works for Congress. GAO reports provide transparency over how taxpayer dollars are spent and provides Congress and federal agencies with reliable information to help the government save money and work more efficiently. Congress also maintains the “power of the purse.” The executive branch is dependent upon Congress to appropriate the funds it needs to operate. Congressional insistence upon strong and effective agency IGs before agency funds are appropriated would go a long way toward strengthening IG independence.

As for a more likely solution, recent events signal that it may be time to revisit the IG Act. I would call on President Trump and his advisors to put forth the specific reasons for the January removal of each of the IGs. That should be followed by proposals to overcome any perceived deficiencies with the existing model. If the concern is that IGs are staying in their roles too long, perhaps it is time to consider term limits. If the concern is that some IGs are not effective in identifying fraud, waste, abuse and mismanagement, then stronger performance metrics need to be devised. Any proposal needs to be put forth to Congress so that appropriate legislation can be crafted and swiftly enacted. Reform of the IG model, if needed, must be the product of a legislative and executive branch partnership.

Regardless of any actions taken in the wake of the recent firings, I am not optimistic that the U.S. IG model will become drama-free. Even if the current administration agrees to changes, it is unlikely that a future president (buoyed by Article II of the Constitution) will not take similar steps to remove one or more IGs without a substantive rationale.

I welcome your thoughts on this dilemma.