STATEMENT OF …

                               STATEMENT OF
                            ANNE SPRIGHTLEY RYAN
                 INSPECTOR GENERAL, SMITHSONIAN INSTITUTION
                                 BEFORE THE
                     COMMITTEE ON HOUSE ADMINISTRATION
                   UNITED STATES HOUSE OF REPRESENTATIVES
                               AUGUST 1, 2007


Good morning. I appreciate this opportunity to give you my views on the
recommendations of the Smithsonian Board of Regents' Governance Committee and the
Independent Review Committee (IRC) as they affect the operations of my office.


In April, I testified to your counterparts in the Senate about governance issues, including
impediments to effective oversight and the need to improve accountability and
transparency. I questioned whether the Regents had adequate information for
meaningful oversight. And I questioned whether the Institution adequately considered its
fiduciary duty when expending Smithsonian funds.


Since that time, the Governance Committee and the IRC have explored these and other
governance issues in depth. We strongly endorse their conclusions and recommendations.
Indeed, some of the IRC's report is based on data we generated and reported in our two
audits of executive compensation and our review of the Secretary's expenses, and the
entire governance crisis arose because of the Regents' response to our reviews. I would
also note that the Government Accountability Office is studying Smithsonian governance
as well, at the request of the Senate Rules Committee.


The Smithsonian Regents and management have taken significant steps to address critical
weaknesses in oversight and accountability and to reestablish the public's trust. While it
is premature to judge this work-in-progress, I can report on the recommendations
relating to my office, which cover three areas: access; compliance reviews; and the level of
our resources.


In the first area, the Governance Committee's recommendations recognize the important
role we play in oversight and accountability. The Regents have committed to
strengthening our office, welcoming unfettered communication on any matter we deem
appropriate. At the Regents' Audit and Review Committee meeting in early September,


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we will be working on formalizing the reporting relationship of our office to the Board so
that our role is embedded in the governance structure. And I'm pleased to report our
office will be moved back downtown, likely by year's end, easing our access not only to
management but also to core facilities and employees.


The recommendations also ask that we conduct regular reviews to monitor compliance
with new policies, such as those on executives' and Regents' travel and business expenses.
These reviews will ensure greater accountability. We will also examine the policies
themselves, which are still evolving, to ensure that they appropriately safeguard the
Institution's limited resources and reflect its nonprofit status.


Finally, the Governance Committee directed the Audit and Review Committee to
determine whether our resources are adequate. As the IRC noted, and as we have long
maintained, they are not. Our staff, which currently is authorized at 16 positions, has
declined from a high of 24 in the mid-90s, although the Institution's appropriations
during that time increased 80 percent. With such limited resources, our office has not
been able to provide critically needed oversight of this complex Institution's over 6,000
employees and its 19 museums, 9 research centers, and the National Zoo.


Currently, in addition to the new requests under the Committees' recommendations, we
are required to oversee the annual financial statement audits of the Institution and IT
security reviews under the Federal Information Security Management Act. We are about
to issue audits reports on retail operations at the zoo and on how the Institution has
handled employee relocation expenses; we are working on an audit of revenue contracts
at Smithsonian Business Ventures, and are starting one of worker's compensation. There
are additional high-risk areas that we need to address, such as multi-million dollar capital
projects; financial reporting systems and internal controls; facilities maintenance; and
following up on animal care issues at the zoo, to name a few. And all this does not even
include our investigative work.


Nonetheless, we are now more optimistic that our resources will begin to match the
Institution's oversight needs. Just last week, we learned that management had agreed to
forward our request for 5 new positions for fiscal year 2009. Of course much will depend
on OMB and Congressional appropriators.


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In sum, governance reform has begun in earnest, and the signs are encouraging. The real
benefits will come with the comprehensive implementation of the Committees'
recommendations. And the strengthening of our office promises better oversight of, and
therefore more confidence in, the Institution. We look forward to providing you and
your staff with further updates on this progress.




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