U.S. Spent $1 Billion on a Watchdog That Didn’t Bark
Policy + Politics

U.S. Spent $1 Billion on a Watchdog That Didn’t Bark

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For the better part of the last two years, a federal inspector general tasked with overseeing a tiny, obscure agency in Alaska, did next to nothing—while raking in a government salary from his remote office in Phoenix, Arizona.

Mike Marsh, the former IG, who was solely in charge of auditing the Denali Commission, an economic-development agency in rural Alaska, conducted 12 inspections and issued six audit reports between 2011 and 2013.


And that’s with the help of outside contractors.

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That’s according to a new report by the Government Accountability Office, which was asked by the Alaskan congressional delegation to audit the auditor’s work between this two-year timeframe.

GAO found that although Marsh’s office was operating with budget resources totaling $1 billion (between 2011-2013), he provided “limited coverage” which they said increased the agency’s exposure to major problems like waste, fraud and abuse.

Limited coverage, indeed.

GAO found that Marsh had only reviewed $150,000 of the more than $167 million in grants —That means less than 1 percent of the federal grant money doled out through the Denali Commission during that period, had been audited.

Beryl Davis, the lead author of the GAO report, said that not only were there issues related to the inspections that Marsh completed (including noncompliance with federal reporting standards) butMore importantly, there were concerns that this IG was not conducting audits,” Davis said. 

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That’s a pretty big concern—since that’s exactly what Marsh was appointed by the Denali Commission to do.

“I think when you look at the responsibilities of the IG there is an expectation that they’re going to look at how they can improve the efficiency and effectiveness within their agency’s operation,” Davis said. “And without having that performance audit and without these investigations there is limited ability to bring to anyone’s attention any fraud or abuse.” 

The GAO audit was conducted after Marsh had resigned from his post last December. The agency is now under the Commerce Department IG’s umbrella. 

The Denali Commission was a pet project created by former Sen. Ted Stevens (R-AK) in 1998. The program, which has received more than $1.1 billion through Congress since its inception, funds infrastructure projects in rural Alaska. Steven’s directed hundreds of millions of dollars to the agency and it has funded at least 2,000 projects so far. The Alaska delegation has fought to keep it as a steady funding stream for federal grants and it has dodged steep budget cuts in previous years. 

But not everyone is happy about that. In fact, before Marsh resigned from his IG post last December, he launched a super bizarre campaign to get Congress to abolish the entire Denali Commission.

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That’s right. The auditor had personally asked Congress to stop funding his office and essentially lay him and his colleagues off. He wrote a letter last summer detailing the bizarre request.

“I have concluded that [my agency] is a congressional experiment that hasn’t worked out in practice,” Marsh wrote at the time. “I recommend that Congress put its money elsewhere.”

According to The Washington Post, the former auditor even detailed his proposition in a seven-page presentation complete with graphics and a bibliography—which he sent to the House Oversight and Government Reform Committee, the Senate Homeland Security and Government Affairs Committee and the Office of Management and Budget.

Of course, Marsh’s elaborate request to essentially lose his job was denied.

The Denali Project remains in tact and funding new projects—however, it is the subject of a separate GAO investigation where auditors are probing into questionable practices revolving around how the agency administers and awards its grants. 

Stay tuned. 

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