Federal Reports

Our Objective(s)To determine whether Cherry Bekaert LLP's revised 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 the U.S. Department of Transportation's (DOT) major program.
Why This Report(s)We recently conducted a quality control review (QCR) on the Chesapeake Bay Bridge and Tunnel District (CBBT) of Cape Charles, VA, for the fiscal year that ended June 30, 2023 (OIG Report Number SA2025048). In that QCR, we determined Cherry Bekaert's audit work for the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements did not comply with requirements of the Single Audit Act, the Uniform Guidance, and requirements for DOT's Transportation Infrastructure Finance and Innovation Act program. To determine CBBT's compliance with these requirements, Cherry Bekaert performed internal control and compliance testing, and we conducted a follow-up QCR on the testing performed.
What We FoundReview of Audit Work.

Cherry Bekaert's revised audit work complied with the requirements of the Single Audit Act, the Office of Management and Budget's Uniform Guidance, and DOT's major program.
We found nothing to indicate that Cherry Bekaert's opinion on DOT's major program was inappropriate or unreliable.

Review of Reporting Package.

CBBT's reporting package was not subject to review during this QCR since our previous QCR dated September 29, 2025, found no deficiencies requiring resubmission.

RatingWe assigned Cherry Bekaert an overall rating of Pass.

Our Objective(s)To assess FTA's determinations of applicants' progress toward meeting Transit Asset Management (TAM) performance targets prior to awarding Capital Investment Grants (CIG).
Why This AuditThe CIG Program provides discretionary grants for the construction and expansion of transit infrastructure. In 2021, the Infrastructure Investment and Jobs Act (IIJA) authorized $3 billion per year in annual appropriations and provided $1.6 billion per year in advance appropriations for the CIG Program for a combined funding level of up to $23 billion for these grants from fiscal year 2022 through 2026. We initiated this audit due to the influx of funding to FTA from IIJA, as well as the Act's new CIG program requirement related to TAM.
What We FoundFTA determined IIJA's TAM performance target progress requirement did not apply to over a quarter of the grants OIG reviewed.

IIJA required FTA to determine whether CIG applicants were making progress towards meeting their TAM performance targets before awarding CIG grants.
FTA determined the IIJA requirement did not apply to 5 of the 19 CIG grants FTA awarded from January 2023 through January 2025-totaling about $7.3 billion (over 50 percent) of the funds awarded at that time.
FTA determined the requirement was not applicable to four of the five grants because the grant requests were submitted prior to the Agency implementing the new requirement in January 2023, even though the grants were awarded after January 2023.
FTA determined the requirement did not apply to the fifth grant because the applicant did not own, operate, or manage capital assets with established TAM performance targets.

FTA primarily relied on CEO attestations to determine TAM performance target progress for applicable CIG grants.

FTA primarily relied on CEO attestations to determine TAM performance target progress for the 14 CIG grants where FTA determined the requirement applied. Those grants awarded approximately $6.8 billion in CIG funding.
Because FTA's procedures do not require staff to independently verify applicants' self-reported progress towards meeting TAM performance targets, FTA is missing an opportunity to confirm applicants' program eligibility and prevent potential fraud.

RecommendationsWe made 1 recommendation to improve FTA's processes for determining CIG applicants' progress towards meeting TAM performance targets.

VHA pharmacies cannot dispense drugs that are damaged or expired or will be expiring soon. To address this issue and to recover some costs, VA contracted with Pharma Logistics LLC to provide national reverse distribution services, where manufacturers accept returned drugs in exchange for credits toward future purchases. Pharma Logistics collected returned drugs, sorted them, returned them to the manufacturers, disposed of nonreturnable products, and coordinated the application of credits from manufacturers to VA accounts. The OIG’s objective was to determine whether Pharma Logistics complied, in all material respects, with its contract regarding drug return credits and billing. Of the about $114.4 million in manufacturer credits for drugs that VA facilities expected from reverse distribution services as of March 2024, VA received only about $110.3 million. Of the $4.1 million variance, over $3.6 million of the unapplied credits were related to Pharma Logistics improperly closing jobs and $526,520 was used for contract-prohibited processing fees. VA agreed with the OIG’s three recommendations for it to confer with VA’s Office of General Counsel regarding the potential recovery of credits.

The previously-issued audit report containing the Annual Financial Statements of the Federal Prison Industries, Inc. (FPI) for fiscal year (FY) 2021, dated December 2021, was withdrawn and removed from the OIG’s website and Oversight.gov as a result of material misstatements in FPI’s financial statements that were discovered in FY 2023. The report now linked to this page contains the auditor’s report on the FPI’s restated financial statements for FY 2021.

The previously-issued audit report containing the Annual Financial Statements of the Federal Prison Industries, Inc. (FPI) for fiscal year (FY) 2022, dated March 2023, was withdrawn and removed from the OIG’s website and Oversight.gov as a result of material misstatements in FPI’s financial statements that were discovered in FY 2023. The report now linked to this page contains the auditor’s report on the FPI’s restated FY 2022 financial statements and completed FY 2023 financial statements.

The independent public accounting firm of McBride, Lock & Associates, LLC, under contract with the Office of Inspector General, audited Help America Vote Act (HAVA) grants administered by the Wyoming Secretary of State, totaling just under $12 million. This included federal funds, state matching funds, and interest income earned on the reissued Section 101 and Election Security grants.