Federal Reports

We audited Neighborhood Housing Services of Los Angeles County’s (NHSLA) Neighborhood Stabilization Program 2 (NSP2). The audit was based on a complaint alleging questionable NSP2 financial activity, double payments to contractors, and payments to contractors for incomplete work. Our Office of Audit received the referred complaint in late 2018. However, because the complaint included concerns regarding activities and auditee actions from at least 5 years before, we did not address the specific complaint issues but instead reviewed more recent program activities. The objective of the audit was to determine whether NHSLA administered its NSP2 in accordance with program requirements, focusing on procurement and contracting, expenditures of program income, and tracking and accounting of program income.NHSLA did not always follow program requirements in administering its NSP2. Specifically, it (1) could not support NSP2 activities in its interfund account and revolving loan fund, (2) borrowed NSP2 program income and deposited those funds into its non-NSP2 accounts, (3) could not support administrative and project delivery costs, and (4) did not have proper documentation to support the procurement of its construction contract. As a result, the U.S. Department of Housing and Urban Development (HUD) did not have assurance that more than $5.1 million in program income was used for its NSP2, $1.7 million in salary expenditures was in accordance with program requirements, and $856,692 in construction costs was reasonable.We recommend that the Director of the Los Angeles Office of Community Planning and Development require NHSLA to (1) support the eligibility of interfund activities or repay the program $3.4 million from non-Federal funds, (2) return $529,745 in program income funds to its NSP2 account, (3) support the use of its loan proceeds or repay the program $658,261 from non-Federal funds, (4) support transfers of NSP2 funds or repay the program $500,000 from non-Federal funds, (5) support its administrative and project delivery costs or repay the program more than $1,388,545 from non-Federal funds and not reimburse another $324,478, (6) support the reasonableness of the construction contract or repay the program $856,692 from non-Federal funds, and (7) develop and implement procedures and controls for its procurement.

DOL-OIG Investigations Newsletter Volume XXXI for the period of October 1 - November 30, 2020

Memorandum for Department of Defense Lead Inspector General

During the COVID-19 pandemic, the Postal Service provided vital service, including the delivery of critical items such as medications, stimulus payments, and Social Security checks. Further, the Postal Service is the leading delivery service provider for online purchases. A May 2020 Harris Poll survey on America’s 100 essential companies’ responses to the COVID-19 pandemic, ranked the Postal Service as number one, based on its resolve, integrity, responsiveness, and permanence. Our objective was to evaluate mail service during the early stages of the novel coronavirus (COVID-19) disease pandemic.

On 27 March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided emergency assistance and healthcare response for individuals, families, and businesses affected by the Coronavirus disease. Section 3610 of the CARES Act provided agencies discretionary authority to reimburse costs of paid leave to federal contractors and subcontractors using existing appropriations to keep these individuals in a ready state and to protect the life and safety of government and contractor personnel. Given the unprecedented circumstances surrounding these Section 3610 authorities, including the potential risk to National Reconnaissance Office (NRO) programs as well as substantial funding outlays, the NRO Office of Inspector General conducted this evaluation. The objectives were to evaluate the NRO's implementation of Section 3610 of the CARES Act and to identify preliminary impacts to the NRO's mission. The OIG determined that the NRO used a multifaceted strategy consistent with Section 3610 and Office of Management and Budget guidance to ensure mission resilience while protecting the health and safety of the NRO contractor workforce. The OIG also identified potential impacts to the NRO's mission that could influence the efficiency and effectiveness of NRO's activities moving forward.

The OIG investigated an allegation that a company improperly billed hours in late 2018 and early 2019 to a grant it received from the National Fish and Wildlife Foundation (NFWF) to manage Hurricane Sandy coastal resiliency projects.We determined that five employees of the company recorded 561.75 labor hours to the NFWF grant when, in fact, they worked on a National Oceanic and Atmospheric Administration contract. We learned that the company corrected the improper billing and took administrative action against four employees before we initiated our investigation. The company did not charge the NFWF for the 561.75 labor hours; it, however, also never notified the NFWF of the problem.As a result of our investigative efforts, the company conducted a second review of the billing on the NFWF grant and determined that additional hours charged by three of its employees to the NFWF grant were inappropriate. The company subsequently reimbursed the NFWF $44,332.94. On October 14, 2020, the NFWF provided the company with a written notice terminating its grant agreement, effective 30 days from the date of the memo.