Last week, the SEC Office of Inspector General (OIG) launched a new Cash Awards Program to incentivize SEC employee whistleblowers to identify potential fraud, waste, or mismanagement.
Pursuant to existing authority under 5 U.S.C. § 4512, the program will offer financial rewards to SEC employees whose reports lead to “significant, verifiable cost savings for the SEC.” The maximum cash award is $10,000 or 1 percent of the agency’s cost savings, whichever is lower, as provided in the above code.
“I think it’s a smart move – $10,000 is meaningful money for a federal employee, and most people there are mission-driven with a high level of integrity,” observed KKC’s Senior Special Counsel Andrew Feller, formerly a SEC Senior Counsel. “I think there will be a lot of interest in reporting waste, fraud, and abuse,” though he also noted that “I don’t think there’s as much of it as the agency’s critics believe.”
Feller said he hopes that OIG follows best practices to ensure tipsters’ safety, including provisions for anonymity and confidentiality.
“Our employees are often the first to see where resources can be better utilized or where risks may be hidden,” said Inspector General Kevin Muhlendorf in announcing the new initiative. “This program utilizes existing statutory authority to encourage staff to take an active role in safeguarding taxpayer dollars and ensuring the SEC operates at the highest level of efficiency.”
With the new program, the OIG aims to demonstrate its commitment to fiscal responsibility and operational integrity by relying on the expertise and initiative of its own employees to uphold that mission. Whether the program will lead to more employees coming forward remains to be seen, but the SEC OIG’s new approach is a notable step in federal oversight.
