Introduction
Congress established the OIG as an independent oversight authority of the Board, the government agency component of the broader Federal Reserve System, and the CFPB. In fulfilling this responsibility, the OIG conducts audits, evaluations, investigations, and other reviews related to Board and CFPB programs and operations. By law, the OIG is not authorized to perform program functions.
Consistent with the Inspector General Act of 1978, as amended (IG Act), our office has the following responsibilities:
- to conduct and supervise independent and objective audits, investigations, and other reviews related to Board and CFPB programs and operations to promote economy, efficiency, and effectiveness within the Board and the CFPB
- to help prevent and detect fraud, waste, abuse, and mismanagement in Board and CFPB programs and operations
- to review existing and proposed legislation and regulations and make recommendations regarding possible improvements to Board and CFPB programs and operations
- to keep the Board of Governors, the Director of the CFPB, and Congress fully and currently informed
Congress has also mandated additional responsibilities that influence the OIG’s priorities, to include the following:
- Section 38(k) of the Federal Deposit Insurance Act, as amended (FDI Act), requires that the OIG review failed financial institutions supervised by the Board that result in a material loss to the DIF and produce a report within six months. Section 38(k) also requires that the OIG conduct an in-depth review of any nonmaterial losses to the DIF that exhibit unusual circumstances. For those in-depth reviews, we report our results in a manner similar to a material loss review. For nonmaterial losses that do not exhibit unusual circumstances, we typically summarize the results of our assessments in a table in accordance with the requirements of section 38(k).
- Section 211(f) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires that the OIG review the Board’s supervision of any covered financial company that is placed into receivership and produce a report that evaluates the effectiveness of the Board’s supervision, identifies any acts or omissions by the Board that contributed to or could have prevented the company’s receivership status, and recommends appropriate administrative or legislative action.
- Section 989E of the Dodd-Frank Act established the Council of Inspectors General on Financial Oversight (CIGFO), which comprises the Inspectors General (IGs) of the Board, the Commodity Futures Trading Commission, the U.S. Department of Housing and Urban Development, the U.S. Department of the Treasury (Treasury), the FDIC, the Federal Housing Finance Agency, the National Credit Union Administration, the Securities and Exchange Commission, and the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). CIGFO is required to meet at least quarterly to share information and discuss the ongoing work of each IG, with a focus on concerns that may apply to the broader financial sector and ways to improve financial oversight. Additionally, CIGFO is required to issue a report annually that highlights the IGs’ concerns and recommendations, as well as issues that may apply to the broader financial sector. CIGFO also has the authority to convene a working group of its members to evaluate the effectiveness and internal operations of the Financial Stability Oversight Council, which was created by the Dodd-Frank Act and is charged with identifying threats to the nation’s financial stability, promoting market discipline, and responding to emerging risks to the stability of the nation’s financial system.
- With respect to IT, FISMA established a legislative mandate for ensuring the effectiveness of information security controls over resources that support federal operations and assets. Consistent with FISMA requirements, we perform annual independent reviews of the Board’s and the CFPB’s information security programs and practices, including the effectiveness of security controls and techniques for selected information systems.
- The USA Patriot Act of 2001 grants the Board certain federal law enforcement authorities. Our office serves as the external oversight function for the Board’s law enforcement program.
- Section 11B of the Federal Reserve Act mandates annual independent audits of the financial statements of each Federal Reserve Bank and of the Board. We oversee the annual financial statement audits of the Board and of the Federal Financial Institutions Examination Council (FFIEC). (The Board performs the accounting function for the FFIEC.) The FFIEC is a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board, the FDIC, the National Credit Union Administration, the Office of the Comptroller of the Currency (OCC), and the CFPB and to make recommendations to promote uniformity in the supervision of financial institutions. (Under the Dodd-Frank Act, the U.S. Government Accountability Office performs the financial statement audit of the CFPB.)
