Federal Reports

What We LookedWe performed a quality control review (QCR) on the single audit that MSL CPAs and Advisors performed for the Greater Orlando Aviation Authority’s (GOAA) fiscal year that ended September 30, 2022. During this period, GOAA expended approximately $178 million from U.S. Department of Transportation (DOT) programs. MSL determined that DOT’s major program was the Federal Aviation Administration’s Airport Improvement Program. Our QCR objectives were to determine whether (1) MSL’s audit work complied with the Single Audit Act of 1984, as amended, the Office of Management and Budget’s Uniform Guidance, and the extent to which we could rely on the auditor’s work on DOT’s major program and (2) GOAA’s reporting package complied with the reporting requirements of the Uniform Guidance. What We FoundMSL complied with the requirements of the Single Audit Act, the Uniform Guidance, and DOT’s major program. We found nothing to indicate that MSL’s opinion on DOT’s major program was inappropriate or unreliable. However, we identified deficiencies in MSL’s audit work that require correction in future audits. Accordingly, we assigned MSL a rating of pass with deficiencies.

The U.S. Department of Housing and Urban Development’s (HUD) Office of the Chief Human Capital Officer (OCHCO) and the Office of Departmental Equal Employment Opportunity (ODEEO) both have responsibilities related to increasing the percentage of employees who identify as Hispanic or Latino. HUD provides an Annual Equal Employment Opportunity Program Status Report, also known as the Annual Management Directive 715 Report (MD-715), to the U.S. Equal Employment Opportunity Commission. In HUD’s fiscal year (FY) 2022 MD-715 and FY 2021 and FY 2022 Annual Reports on Hispanic Employment, HUD described 14 primary initiatives related to the recruitment of individuals who identify as Hispanic or Latino. The initiatives fall into four categories: barrier analysis, collaboration and partnerships with stakeholders, marketing and outreach, and applicant flow data. In addition to these initiatives, HUD described several other efforts that OCHCO and ODEEO had completed or planned related to increasing the percentage of individuals who identify as Hispanic or Latino. OCHCO and ODEEO collaborated quarterly, and ODEEO presented participation rates at quarterly briefings with general deputy assistant secretaries. OCHCO and ODEEO also hired new staff and filled vacant positions. Additionally, OCHCO established a recruitment event calendar and initiated the procurement process for technology-based recruitment tools, while ODEEO leveraged minority-serving and Hispanic-serving institution databases.We found that OCHCO and ODEEO faced challenges with determining the impact of recruitment efforts related to individuals who identify as Hispanic or Latino. No HUD-wide standard existed for how to measure the success of recruitment efforts. During interviews, both OCHCO and ODEEO officials stated that they considered success to be an increase in participation rates, which is the number of employees who identified as Hispanic or Latino in HUD’s total workforce, and spreading the word about HUD as an employer. Additionally, OCHCO was unable to tie a specific hire to a specific recruitment effort.OCHCO began tracking recruitment events it attended or planned to attend in February 2022 but did not track all recruitment efforts from other HUD program offices or their respective field offices. Collecting and maintaining complete information about all recruitment efforts, as well as being able to measure the impact of those efforts, are crucial to measuring the success of the recruitment process.HUD’s applicant flow data, which is information collected about applicants' demographics, such as race and ethnicity, have only been available since FY 2022 due to HUD’s transition to a new system. This means that OCHCO has not yet determined whether analyzing applicant flow data could help measure the impact of recruitment efforts. OCHCO plans to organize and analyze applicant flow data as more data become available. OCHCO also faced data limitations related to its race and national origin (RNO) data. We identified a risk that the RNO data might not give OCHCO an accurate account of HUD’s workforce because the data do not include a category for those employees who chose not to identify their RNO, as providing RNO data is voluntary.We offer three recommendations to improve OCHCO’s ability to determine the impact of recruitment efforts and to collect information about recruitment efforts across all HUD program offices and their respective field offices.

The U.S. Postal Service offers reduced postage rates (i.e., worksharing rates) to mailers for handling, pre-applying barcodes, pre-sorting, and transporting mail. Worksharing rates are also referred to as workshare discounts because postage rates are reduced based on costs the Postal Service is estimated to avoid from worksharing activities the mailing industry performs, which enables the Postal Service to increase its operational efficiency. In fiscal year (FY) 2022, 87 percent of domestic market dominant mail was workshared. Ninety-seven percent of domestic market dominant workshared mail consisted of either First-Class Mail or Marketing Mail. Domestic market dominant workshared First-Class Mail and Marketing Mail consisted primarily of letters. The Postal Service increased the percentage of workshare discounts that align with avoided costs from 41 percent in FY 2018 to 91 percent in FY 2022. Worksharing is dependent on the Postal Service, Postal Regulatory Commission, and mailing industry performing several key activities; and the procedures for the workshare discount calculation process being current and sufficiently detailed for effective implementation by responsible personnel.

For our evaluation of the United States Patent and Trademark Office’s (USPTO’s) and the U.S. Department of Commerce’s (the Department’s) ethics oversight of USPTO patent examiners, our evaluation objective was to determine whether USPTO and the Department effectively administered ethics rules to prevent financial conflicts of interest by USPTO patent examiners. Overall, we found that USPTO and the Department did not effectively administer the Department’s ethics program to protect against potential conflicts of interest by patent examiners. Specifically, we found that I. USPTO and the Department did not ensure examiners filed confidential financial disclosure reports (CFDRs) as required; II. The Department did not identify or resolve potential financial conflicts in CFDRs; and III. USPTO and the Department did not provide specialized training or guidance to examiners on potential ethics conflicts.

The OIG conducted this inspection to assess the stewardship and oversight of funds by the VA Memphis Healthcare System in Tennessee. This inspection assessed financial activities and administrative processes to determine whether appropriate controls and oversight were in place. These included open obligations, purchase card use, inventory and supply management, and pharmacy operations.After analyzing a judgmental sample of 20 open obligations, the team found that 10 obligations totaling approximately $11.5 million were more than 90 days past the end of the performance period, and the team could not verify whether healthcare system staff reviewed these obligations, as required. In another sample, the team found that four obligations had residual funds of $7,200 that should have been deobligated.Using a sample of 40 purchase card transactions, the team estimated that staff may have made noncompliance errors in over 18,500 transactions resulting in approximately $19.8 million in questioned costs.For inventory and supply management, the team found that training issues, inadequate staffing levels, poor oversight, and data validity issues affected the healthcare system’s stock levels. Healthcare system staff also could not provide documentation to show that required physical inventories were completed or that the chief supply chain officer reviewed the list of personnel with access to the inventory system.The team also found that the healthcare system can further improve pharmacy efficiency by adhering to inventory management best practices, such as adding scannable barcodes to shelving, increasing inventory turnover rates for “A” and “C” items in accordance with Pharmacy Benefit Management target rates, and ensuring compliance with the B09 reconciliation process.The OIG made nine recommendations to the healthcare system director to address the issues identified.