Federal Reports

The OIG conducted a joint investigation with the U.S. Department of Transportation’s Office of Inspector General into allegations that a tribal transportation consortium fraudulently received more than $9 million between 2012 and 2015 by collecting Bureau of Indian Affairs (BIA) Roads Funds for tribes no longer affiliated with the consortium.We did not substantiate the allegations. We identified 24 tribes that were members of the consortium, and none of the representatives we spoke to corroborated the allegations. None of the representatives from tribes that had withdrawn from the consortium provided evidence that the consortium continued to collect their tribe’s BIA Roads Funds after they left.The consortium is a defunct entity and has not received BIA Roads Funds since 2015.

The OIG investigated allegations that a service-disabled veteran-owned small business (SDVOSB) acted as a pass-through entity to enable another company to obtain SDVOSB contracts that it was not eligible to receive. It was further alleged that the veteran identified as the SDVOSB’s owner had little or no involvement in the day-to-day operation of the SDVOSB.We found that the SDVOSB and the other company used the SDVOSB’s status to obtain approximately $3.5 million in U.S. Department of the Interior (DOI) SDVOSB contracts, which the other company would not otherwise have been eligible to receive. The SDVOSB shared the large company’s office space, support services, and staff, which were in Arizona, even though the SDVOSB was based outside of Arizona. Further, both the SDVOSB and the other company registered or updated System of Award Management profile records on the same days, using the same unique IP address. We also found no evidence that the SDVOSB’s veteran owner, who resided outside of Arizona, was involved in the day-to-day operations of the SDVOSB, even though this is a requirement to receive SDVOSB status.The U.S. Attorney’s Office for the Southern District of Arizona declined both criminal and civil prosecution of this matter. We have referred both the SDVOSB and the other company to our Administrative Remedies Division for consideration of suspension or debarment.

We conducted a performance audit of National Endowment for the Arts (Arts Endowment) awards issued to the Massachusetts Cultural Council (Council). Based on our review, we determined the Council generally met the financial and compliance requirements set forth in the award documents. However, the Council did not fully comply with Federal grants management requirements. For instance, the Council: did not report actual costs on one of three Federal Financial Reports (FFR); did not follow its FFR reporting policy; included unsupported costs and costs incurred outside the award period on all three FFRs; included unallowable fundraising, foreign travel, and entertainment costs on two of three FFRs; included unallowable sub-awards on two of three FFRs; did not follow Federal Financial Accountability and Transparency Act reporting requirements; and did not provide the required notification to all its Federal award participants; and did not submit its FFR and FDR reports by the reporting deadlines. Thus, we are questioning $3,014,242 in unsupported and unallowable costs, with a potential refund of $60,000 due to the Arts Endowment. There are 16 recommendations to address the findings, ten to the Council and six to the Arts Endowment.