- The Washington Times - Wednesday, October 19, 2011

The federal office tasked with rooting out waste, fraud and abuse will shrink to the smallest size in its history but be spared from the widespread layoffs employees feared would be announced Wednesday.

Forty to fifty contractors will be cut, but no offices will close, and no staffers will lose their jobs, the nation’s comptroller general and head of the Government Accountability Office (GAO), Gene L. Doadaro, said in a message to staff detailing how the auditor's office will implement steep budget cuts.

The action marks the second time this week observers had to warn that the federal government could soon have less of a handle on its money than ever, and that cuts to enforcement and oversight departments could inadvertently add to the national debt.

The IRS had warned on Monday that proposed cuts at the IRS would reduce the number of agents dedicated to recovering unpaid taxes.

The GAO, the government’s fiscal watchdog which reviews operations and identifies overlap, mismanagement and conflict of interest, weathered a $10 million cut in fiscal 2011 and tentative plans by House and Senate Republicans would cut an additional $35 million to $42 million from next year’s budget. The cuts resulted in a hiring freeze for most positions, which will decrease its workforce by 375 by the end of the next fiscal year, accomplishing $21 million in savings.

In fiscal 2010, the GAO identified $49.9 billion in potential savings, or an $87 return for every dollar spent on the agency.

The agency will further reduce expenses by cutting travel; employee benefits including a student loan repayment program; and closing two of its libraries.

But none of the agency’s satellite offices will close, which is how cuts in previous years had been accomplished.

“We’re delighted,” said union President Ronald La Due Lake. “A lot of the anxiety was about field office closures.”

The employees’ union had negotiated an agreement in recent days that would have allowed workers at remote offices that were closed to choose to relocate to Washington, D.C., at their own expense to keep their jobs.

As the government has sprawled in size, mechanisms for policing it are smaller than ever. The GAO had 5,300 employees in 1979, and fewer than 3,200 in 2009, according to an analysis by the Brookings Institution and the Sunlight Foundation. During that time, the amount of spending to be monitored, adjusted for inflation, increased from $1.3 trillion to $3.1 trillion, Congressional Budget Office figures show.

Lawmakers also want analysts to begin providing a cost-benefit analysis to each of its studies - essentially an audit of an audit. That would mean an increase in the workload, which could raise the cost of the studies and discourage lawmakers making decisions on how billions of dollars are spent in seeking them.

Budget hawks were also concerned this week that cuts to the Internal Revenue Service’s (IRS) enforcement division would have a similar effect.

On Monday, IRS Commissioner Douglas H. Shulman sent a letter to congressional committees warning that proposed cuts of hundreds of millions of dollars to the agency would directly reduce the number of agents dedicated to recovering unpaid taxes, resulting in $4 billion in lost revenue.

The money lost by a diminished enforcement department will outweigh the savings by a factor of seven and “will result in a direct increase to the nation’s deficit,” Mr. Shulman wrote.