Federal Oversight Agencies: Working Within Checks and Balances

Federal Oversight Agencies: Working Within Checks and Balances 2016-12-15T20:07:02+00:00

Political appointees are faced with the challenge of achieving results in addressing the concerns of the nation, a very powerful charge. Many of the problems that must be addressed have existed for years, yet each new Administration is optimistic that it will bring results and make a lasting impact. It then becomes the responsibility of political appointees to deliver. They bring to their positions the enthusiasm, optimism, and energy to achieve critical priorities.


It must be pointed out, however, that political appointees don’t have carte blanche with respect to what they can do to effect change. Statutory and regulatory structures exist within every Department, Agency, Commission, and Board. Political appointees are not exempt from having to operate within the boundaries of the law.

A system of checks and balances is part of the U.S. Constitution and is established in the three branches of government: the Executive branch, the Legislative branch, and the Judicial branch. Each has a role in the good governance of the others, and can keep the other branches from acting inappropriately or illegally.

Agencies with Oversight Authority

Two very respected and powerful agencies with an important mission of oversight of government operations and reporting on program effectiveness are the Government Accountability Office (GAO) and the Office of Management and Budget (OMB).

GAO is also known as the “investigative arm of Congress” and the “congressional watchdog.” GAO supports the Congress in meeting constitutional responsibilities and helps improve the performance and accountability of the Federal government for the benefit of the American people. The overall mission of the GAO is to investigate how effectively the Federal government spends taxpayer dollars.

OMB’s predominant mission is to assist the President in overseeing the preparation of the Federal budget and to supervise its administration in Executive branch agencies. In helping to formulate the President’s spending plans, OMB evaluates the effectiveness of agency programs, policies, and procedures, assesses competing funding demands among agencies, and sets funding priorities. OMB ensures that agency reports, rules, testimony, and proposed legislation are consistent with the President’s Budget and with Administration policies.

Many other agencies and commissions exist to regulate and provide oversight to various program operations within the government structure and in private sector business operations. For example, the Financial Institutions Reform, Recovery and Enforcement Act provides for the establishment of several entities with oversight in the banking industry. The most well-known are:

The Office of Thrift Supervision (OTS): A bureau of the Treasury Department created to charter, regulate, examine and supervise savings institutions.

Federal Housing Finance Agency (FHFA): An independent Federal agency resulting from the statutory merger of the Federal Housing Finance Board (FHFB) and the Office of Federal Housing Enterprise Oversight (OFHEO). It absorbed the powers and regulatory authority of both entities and has expanded legal and regulatory authorities including the ability to place government-sponsored enterprises into receivership or conservatorship.

Federal Deposit Insurance Corporation (FDIC): An independent agency that maintains the stability and public confidence in the nation’s financial system by insuring deposits, examining and supervising financial institutions and managing receiverships.

Regulatory Agencies

A regulatory agency has responsibility over the legislation (acts and regulations) for a given sector. Regulatory agencies exist at both the federal and state level. These agencies can impact a variety of businesses, in a variety of ways, such as through regulations on products, antitrust rulings and compliance laws.

An example would be the Federal Trade Commission (FTC) voiding a proposed merger of Microsoft and Yahoo! out of concern that a combination of the two companies would have an unfair competitive advantage in the market.

Another example is the Food and Drug Administration (FDA) recall of Peter Pan peanut butter that was found to contain salmonella bacteria, which hurt ConAgra Food’s revenues and created an opportunity for J.M. Smucker Company’s Jif brand to gain additional market share.

Another government agency, the Securities and Exchange Commission (SEC), has responsibility for enforcing the Federal securities laws and regulating the securities industry, the nation’s stock and options exchanges, and other electronic securities markets. The SEC stores information on all publicly-traded companies in an online database. This database provides earnings data and annual reports on public companies to the general population.

Still another example is the Environmental Protection Agency (EPA) recent ban of the Pesticide Flubendiamide — which was commonly used on almonds, alfalfa, tomatoes and other crops — saying the chemical posed an “unreasonable threat.”

The following is a list of other U.S. Federal regulatory agencies, many with oversight responsibilities:

  • Animal and Plant Health Inspection Service (APHIS)
  • Army Corps of Engineers
  • Bureau of Alcohol, Tobacco and Firearms (ATF)
  • Commodity Credit Corporation (CCC)
  • Commodity Futures Trading Commission (CFTC)
  • Consumer Product Safety Commission (CPSC)
  • Department of Veterans Affairs (VA)
  • Drug Enforcement Administration (DEA)
  • Employment and Training Administration (ETA)
  • Employment Standards Administration (ESA)
  • Energy Efficiency and Renewable Energy (EREN)
  • Equal Employment Opportunity Commission (EEOC)
  • Farm Credit Administration (FCA)
  • Federal Aviation Administration (FAA)
  • Federal Communications Commission (FCC)
  • Federal Deposit Insurance Commission (FDIC)
  • Federal Election Commission (FEC)
  • Federal Energy Regulatory Commission (FERC)
  • Federal Highway Administration (FHA)
  • Federal Maritime Commission (FMC)
  • Federal Railroad Administration (FRA)
  • Nuclear Regulatory Commission (NRC)

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