Federal Reports

The National Institute of Standards and Technology’s (NIST’s) Hollings Manufacturing Extension Partnership (MEP) is a national network of 51 MEP Centers—in all 50 states and Puerto Rico—providing any U.S. manufacturer with resources to improve production processes, upgrade technological capabilities, and facilitate product innovation. The MEP mission is to enhance the productivity and technological performance of U.S. manufacturing.NIST makes federal financial assistance awards in the form of cooperative agreements to state, university, and nonprofit organizations to operate Centers. However, renewal funding for each Center is contingent, in part, upon successful reviews and evaluations of its operations, including its performance. NIST principally monitors MEP’s performance through economic impact surveys completed by a Center’s clients. The intent of the survey is to capture quantified impacts on a client’s employment, sales, investment, and cost savings that occurred over the last 12 months, as a result of the services received.NIST uses economic impacts from survey responses not only to monitor Center performance but also to gauge MEP’s overall success. NIST reports MEP’s economic impacts publicly in various ways, including to Congress, which uses the information to make annual funding decisions regarding MEP appropriations.Our evaluation objective was to determine whether NIST’s MEP effectively monitored and evaluated economic impact reporting. We found that NIST’s inadequate oversight of the MEP economic impact reporting process resulted in inaccurate and unreliable economic impacts. Specifically, we found that (1) MEP’s FY 2022 economic impacts are unreliable, including 48 percent of the total sales reported by Centers we reviewed, (2) NIST overstated MEP’s return on investment from FYs 2020 to 2023—notably by 34 percent in FY 2020, and (3) Centers require clients to take MEP surveys, contrary to federal directive. We also reported another matter related to Centers not accurately reporting program income earned—raising concerns about compliance with award terms and conditions.We made eight recommendations to help NIST ensure accountability and data reliability in its reporting of MEP’s economic impacts.

The U.S. International Development Finance Corporation (DFC) Office of Inspector General (OIG) contracted with the independent public accounting firm RMA Associates, LLC (RMA) to conduct the Federal Information Security Modernization Act of 2014 (FISMA) audit of DF) for FY 2024 to evaluate the effectiveness of the DFC's information security program and practices, and determine what maturity level DFC achieved for each of the core metrics and supplemental metrics outlined in the FY 2023 - 2024 Inspectors General (IG) FISMA Reporting Metrics. Our objectives were to evaluate the effectiveness of the DFC's information security program and practices and determine the maturity level DFC achieved for each of the core metrics and supplemental metrics outlined in the FY 2023 - 2024 IG FISMA Reporting Metrics.

VA’s Veterans Transportation Program offers travel solutions for veterans to get to and from VA healthcare facilities at little or no cost to veterans. One travel option is transportation by wheelchair van. VA’s Health Administration Service is responsible for administering the contracts that provide wheelchair-accessible transportation services for veterans to access VA medical facilities in the healthcare system.The OIG conducted this review because of a hotline referral that alleged mismanagement of contracts for wheelchair transportation services at the Dallas VA Medical Center in VA’s North Texas Health Care System. The OIG substantiated the allegation that Health Administration Service officials mismanaged the contracts and found that staff overpaid the contractor approximately 30 percent, or $3.7 million, for mileage overcharges and duplicate invoices. Certifying officials did not verify invoices and relied on program assistants to approve or deny invoices for certification. In addition, a manager who plays a key role in the program’s operations did not ensure staff followed VA’s financial policy for reviewing and certifying invoices or provide certifying officials with the current contract rates or a standard operating procedure.The OIG recommended that the Dallas medical center director, with the Health Administration Service chief, develop local policy and standard operating procedures to ensure invoices are adequately reviewed before payment is made. The OIG also recommended that the Health Administration Service chief recover approximately $3.7 million in overpayments.

One of the Postal Service’s key initiatives of its Delivering for America 10-year plan is to revitalize nearly 19,000 delivery units by targeting markets where it can aggregate delivery units into fewer, larger, centrally located sorting and delivery centers (S&DC). According to the Postal Service, S&DCs will have package sortation equipment, standardize operations, and reduce mail handling costs. The first S&DC was opened in November 2022, and a total of 29 were implemented by the end of September 2023.

We Looked At  The Department of Transportation (DOT) reported $12.9 billion in general Property, Plant, and Equipment (PP&E) in its fiscal year 2022 Agency Financial Report (AFR), including $4.2 billion in capitalized equipment. Federal agencies are required to prepare accurate annual financial statements that adhere to accounting principles, as well as to establish internal controls to reduce risk and promote efficient use of property. This requirement exists to provide reliable, accurate descriptions of an agency’s financial position, which includes property. Given DOT’s significant investment in capitalized equipment and the importance of its management, we initiated this audit to assess DOT’s internal controls for managing capitalized equipment, specifically (1) policies for managing capitalized equipment; (2) oversight controls; and (3) guidance regarding capitalization thresholds.  What We Found DOT’s policies and procedures for managing capitalized equipment are out-of-date and noncompliant with Federal law. For example, DOT Orders about managing capitalized equipment are dated as far back as 1992, and do not require Operating Administrations to conduct inventories in accordance with the Federal Personal Property Management Act of 2018. In addition, several Operating Administrations’ policies and procedures do not comply with these laws. The Department also lacks proper oversight controls, including an adequate reconciliation process, to ensure that Operating Administrations are maintaining accurate inventories of their equipment. This resulted in the Maritime Administration failing to correct misclassifications of nearly 70 percent of the Department’s total net value of capitalized equipment for fiscal year 2022. Further, we estimated that FRA did not capitalize up to $53 million of eligible equipment. Lastly, DOT also lacks clear guidance on deviating from standard capitalization thresholds, limiting its ability to establish effective internal controls for capitalized asset management.  Our Recommendations We made seven recommendations to improve DOT’s internal controls to effectively manage capitalized equipment. 

What We Looked At
The Office of National Drug Control Policy (ONDCP) advises the President on drug control issues and is responsible for developing and implementing the National Drug Control Strategy (the Strategy), a comprehensive plan with long-range goals for reducing drug abuse and its consequences in the United States. To carry out the Strategy's goals, ONDCP works with more than a dozen Federal agencies-including the National Highway Traffic Safety Administration (NHTSA)-through the National Drug Control Program (NDCP). We most recently reviewed NHTSA's NDCP activities for fiscal year 2019, identifying errors and omissions in the Agency's reports. Given the length of time since our last review and issues it identified, we self-initiated this performance audit. Our objective was to assess NHTSA's internal controls over its NDCP activity. Specifically, we looked at NHTSA's (1) controls for tracking drug control obligations and consistently reporting to ONDCP and (2) documentation to show compliance with drug control budget formulation requirements.

What We Found
NHTSA lacks controls for tracking and consistently reporting drug control-related obligations as required. Instead, the Agency relies on the expertise of its staff to estimate drug control-related obligations; however, staff used varying methodologies when contracts addressed multiple areas and inconsistently reported contract obligation amounts. As a result, ONDCP cannot rely on the accuracy of NHTSA's reported drug control-related obligations, inhibiting ONDCP's ability to accurately inform Congress and the public about the funds NHTSA spent on drug control activities. In addition, NHTSA lacks documentation to show it complies with drug control budget formulation requirements. NHTSA does not have formal written approval for its methodology from ONDCP and could not provide documentation to support how it calculated the budget estimates reported to ONDCP. As a result, NHTSA cannot ensure its budget estimates reasonably and fairly quantify funding that the Agency will use for drug control activities.

Our Recommendations
We made four recommendations to improve NHTSA's internal controls of drug control-related reporting. The Agency concurred with all four of our recommendations. We consider recommendations 1, 2, and 4 resolved but open pending completion of the planned actions and recommendation 3 resolved and closed.

We determined that the EPA awarded WIIN Act funds consistent with nearly all guidance and improved Agency processes to increase the transparency of funding decisions. We identified two documentation issues that the EPA experienced before it awarded funds. Agency staff reported to us that they had addressed one of these issues with additional controls and a new oversight structure within the Office of Water, or the OW, and the other through a new standard operating procedure within the Office of Grants and Debarment.

To see our report, click on the link below