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Washington — A Senate panel harshly criticized federal auto safety regulators for failing to do more to address safety issues, with several members suggesting they will not give the agency more money until it makes sweeping reforms.

Senators from both parties said at a Commerce Committee hearing Tuesday that a scathing Transportation Department Inspector General’s Office report shows the National Highway Traffic Safety Administration has systemic challenges.

The inspector report found myriad problems at NHTSA, saying it fails to carefully review safety issues, hold automakers accountable for safety lapses, carefully collect vehicle safety data, or properly train or supervise its staff. It says NHTSA rejects most staff requests to open investigations into suspected defects.

The report was disclosed by The Detroit News on Friday and made public Monday.

Sen. Claire McCaskill, D-Missouri, a former auditor, at a Commerce Committee hearing called the report “one of the worst I’ve ever seen” of any government agency. She said the agency has never used its authority to ensure automakers are complying.

“This isn’t about resources. This about blatant incompetent mismanagement,” she said.

McCaskill was incredulous that NHTSA officials didn’t agree on the threshold for opening an investigation. She said if it can’t get that right, “we might as well shut it down.” She told NHTSA’s chief that she assumes the agency is fixing that as a “baby step” to addressing bigger problems.

“I was shocked how bad it was. ... I am not about to give you more money until I see meaningful progress and reforming your internal processes,” she said. “You can’t start throwing money until you have a system in place to make this agency function like it’s supposed to.”

The White House earlier this year asked Congress to triple NHTSA’s defects budget and double its staffing levels, but Congress has shown little interest.

Separately, embattled air bag manufacturer Takata Corp. conceded that the number of deaths linked to the record-setting recall of about 32 million vehicles may rise. At the request of Sen. Richard Blumenthal, D-Connecticut, the company said it would consider creating a compensation program for victims similar to what General Motors created for ignition defects.

The air bags, which can explode with excessive force and send shrapnel flying, are linked to eight deaths and more than 100 injuries.

Takata vice president Kevin Kennedy said he didn’t have the authority to set up such a fund. But he vowed an answer within two weeks. He added it is “probably likely” that a compensation fund would turn up additional incidents related to the defect.

NHTSA Administrator Mark Rosekind — who was sworn in on the job in December — said the agency has 44 safety actions under way, and is responding to 10 of the 17 major recommendations for improvements from the inspector general’s office. He vows completion of all of them by June 2016. Rosekind said the agency “has looked for every way we can find to improve our own performance,” he said.

He has made the case that the agency badly needs more resources, saying the budget for its defects office has fallen 23 percent over a decade after adjusting for inflation.

Sen. John Thune, R-South Dakota, the committee chairman, told The Detroit News after the hearing that NHTSA “has a long ways to go.” He praised Rosekind for agreeing to make reforms. “They’ve got nowhere to go but up.”

The inspector general found a single screener spends four hours a day handling hundreds of complaints — and the agency ultimately ignores 90 percent of them. Rosekind agreed that was unacceptable.

Sen. Gary Peters, D-Bloomfield Township, said NHTSA “must prove” that the agency can reform itself. “Time is of the essence,” he said. “ It will be difficult to give the agency additional money until it demonstrates it changes. There is considerable work to do.”

Blumenthal said the report was a “searing, devastating indictment” of NHTSA. But he said he didn’t want to excuse corporate executives who should have done more. “We need to strengthen, not strangle (NHTSA),” said Blumenthal, adding the agency needs more resources and more legal authority to do its job.

Sen. Bill Nelson, D-Florida, said the agency “appears to have serious internal and managerial issues” as he showed the picture of a woman who was injured by a flying metal fragment in her face.

Inspector General Calvin Scovel said Congress shouldn’t give NHTSA resources unless it reforms itself. He praised NHTSA for unveiling an aggressive timetable for responding to the recommendations for reforms. But he said “the burden is on the agency at this point to make good on its promises” to reform.

Scovel vowed to “bird dog” NHTSA to ensure the reforms are completed. Another audit dating back to questions the inspector general’s office raised in 2011 about NHTSA will be released later this year.

dshepardson@detroitnews.com

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