NEW YORK (Bloomberg) — The watchdog for the US government's bailout programme will report the results of his audit of bonuses paid to American International Group Inc. executives at a congressional hearing this week.

Neil Barofsky, the special inspector general for the Troubled Asset Relief Programme, began the probe after lawmakers criticised the company's payment of $165 million in bonuses to employees working for one of the units that forced AIG to take the federal bailout last year. He is scheduled to testify at a House Oversight and Government Reform Committee hearing on October 14, chairman Edolphus Towns said in a statement late on Friday.

AIG was ordered by the US Treasury in March to scale back bonuses and reimburse the government for some 2008 payments. President Barack Obama called AIG's bonus payments an "outrage", and Towns criticised AIG for acting under a "shroud of secrecy" while relying on taxpayers funds. Then-chief executive officer Edward Liddy asked some employees to refund portions of the payments.

AIG "will serve as an excellent illustration of what went wrong and what we need to change", Towns, a New York Democrat, said at a hearing in April.

Barofsky is also probing whether AIG paid more than necessary to banks including Goldman Sachs Group Inc. to settle transactions including credit-default swaps backed by AIG. Barofsky is trying to determine whether AIG or the government sought to reduce the payments instead of meeting its obligations in full.

Towns proposed revising the insurer's $182.3 billion bailout package last month to ease the terms and slow the company's sale of units, saying it would increase the chances the US is repaid. Congress should help AIG recover "and that means looking at a number of options, including restructuring the federal loans", Towns said last month in an e-mailed statement.