Federal Reports

What We Looked AtPreventing accidents in railroad operations that result from employees' illicit drug and/or alcohol impairment is critical to ensuring the safety of the traveling public. Illicit drug use discovered during investigation of fatal railroad accidents and a recent increase in the percentage of railway workers testing positive for drug use underscore the importance of the Federal Railroad Administration's (FRA) oversight of railroads' drug and alcohol testing programs. Given the importance of drug and alcohol testing to protecting transportation safety, our office is conducting a series of reviews on drug testing programs within the transportation industry. Our objectives for this self-initiated audit were to assess FRA's (1) review and approval of railroads' random alcohol and drug testing program plans, and (2) controls for enforcing compliance with the plans and minimum annual random alcohol and drug testing rates.What We FoundFRA has not adequately reviewed and approved railroads' drug and alcohol testing plans as required or documented its review and approval process. Our review found that FRA reviewed and approved incomplete plans that do not fully adhere to FRA regulations. Specifically, we reviewed 102 drug and alcohol testing plans from applicable railroads and determined that approximately 51 percent of the reviewed and approved plans were incomplete and did not contain key elements required by FRA regulations. In addition, FRA's ability to verify and enforce railroads' compliance with drug and alcohol testing requirements is limited by internal control weaknesses. For example, FRA's program guidance for overseeing drug and alcohol testing compliance is outdated and does not reflect current regulations or provide for supervisor review. FRA has also not established a process for following up on action items issued to railroads during compliance audits to verify they undertake recommended actions. Furthermore, FRA procedures do not fully meet its drug and alcohol testing compliance audit goals.Our RecommendationsFRA concurred with all four of our recommendations to improve its guidance and oversight of the drug and alcohol testing program and proposed appropriate actions and completion dates.

As part of our annual audit plan, we audited the allocation of labor expenses in the Tennessee Valley Authority’s (TVA) Information Technology (IT) organization. Our audit objective was to determine if financial transactions for labor charged to Operations and Maintenance and Capital general ledger accounts under the IT organization during fiscal year 2018 received the proper accounting treatment. We were unable to determine if financial transactions for labor charged to Operations and Maintenance and Capital general ledger accounts under the IT organization during fiscal year 2018 received the proper accounting treatment. TVA’s IT had informal processes in place to compare forecast to actual project costs on a monthly and quarterly basis to ensure labor charges received the proper accounting treatment. While the description of these variance review processes appeared adequate, we found (1) they were not documented, and (2) limited evidence was provided to show the described processes were followed. TVA management agreed with our recommendations.

IPERA Determination

Harris County, Texas needs additional technical assistance and monitoring to ensure grants management comply with Federal procurement regulations. The County’s procurement policies, procedures, and business practices were not adequate to expend disaster grant funds in accordance with Federal procurement regulations and Federal Emergency Management Agency (FEMA) guidelines. We recommended FEMA disallow $2.7 million in ineligible costs and require Texas to work with the County to incorporate Federal procurement regulations when using Federal funds, and review procurement activities before the County awards future contracts. We made three recommendations that will help improve the procurement capability of Harris County, Texas. FEMA concurred with all three recommendations.

We audited costs claimed by the Chicago Horticultural Society (CHS) on Grant No. L15AC00032 with the Bureau of Land Management (BLM) to determine whether they were allowable and allocable and whether the CHS complied with Federal regulations, BLM policies and procedures, and contract terms and conditions. We found the CHS did not comply with many of the applicable Federal regulations, BLM policies and procedures, and contract terms and conditions.

What We Looked AtThe Pipeline and Hazardous Materials Safety Administration (PHMSA) is responsible for determining whether proposed and existing liquefied natural gas (LNG) facilities meet Federal safety standards. According to the U.S. Energy Information Administration, LNG exports from the United States are projected to rise from about 2 trillion cubic feet in 2020 to 6 trillion cubic feet in 2030. Given the importance of PHMSA’s oversight of LNG facilities, we initiated this audit with the following objectives: to assess PHMSA’s (1) review of new LNG facilities’ plans for compliance with Federal siting requirements, (2) inspection of existing LNG facilities in accordance with Agency policies and Federal standards, and (3) evaluation of State gas programs’ oversight of LNG facilities. What We FoundPHMSA’s standard operating procedures for its reviews of LNG facility developer applications are generally comprehensive, but they do not include a second-level verification of reviews by engineers. Second-level verification steps reduce the risk that PHMSA’s analysis will be incomplete, contain errors, or lack consistency. In addition, while PHMSA’s inspections of existing interstate LNG facilities met Agency standards, its evaluations of State gas programs missed deficiencies in inspection intervals and inspector training. One factor is that PHMSA’s guidance does not require evaluators to document which records they review. Evaluators described using their own judgment when selecting records, but that means some State records may never be reviewed due to the inherent biases in judgmental sampling. As a result, there is an increased risk that the Agency’s evaluation results will neither accurately measure State gas program performance nor give PHMSA the information it needs to respond to inquiries, conduct inspections, and pass on institutional knowledge to new evaluators. Our RecommendationsPHMSA concurred with and implemented our three recommendations to improve its guidance on reviewing applications and evaluating State programs. We consider all three recommendations resolved and closed.