Federal Reports

We performed this review to determine whether the Des Moines Independent Community School District expended ESSER grant funds for allowable purposes in accordance with applicable requirements. We determined that of the 20 expenditures that we reviewed, 17 were allowable and in accordance with applicable requirements. Two expenditures totaling $164,580 were unallowable because they were for advertising and public relations costs prohibited under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 Code of Federal Regulations part 200), and a portion ($33,326) of the remaining expenditure totaling $666,527 appeared to be allowable but Des Moines either did not pay or adequately support proof of payment for that portion (the other $633,201 of this expenditure was both allowable and supported with documentation). We also identified a cash management issue related to the unsupported amount of $33,326 because Des Moines was reimbursed by the ESSER grant for that amount before it had an immediate need for those funds. Lastly, we found that Des Moines complied with key Federal procurement requirements, including those covering the procurement methods to be followed and contract cost, price, and provisions, when procuring the goods or services associated with each ESSER expenditure we reviewed. We made four recommendations to address the unallowable and unsupported expenditures and the cash management issue that we identified to ensure ESSER funds are used, documented, and managed in accordance with applicable requirements.

We conducted this audit to assess the adequacy of the Bureau of Industry and Security’s (BIS’) efforts to reduce the risk of threats from China’s Military-Civilian Fusion strategy. We specifically reviewed BIS’ process for approving export license applications, as well as its response to a related management alert we issued in October 2023. Based on our sample of export license applications, we found that BIS’ approval process was adequate in reducing the risk of controlled items being inappropriately approved for export to China for potential use to support China’s military advancement. However, we also found that BIS, in consultation with other federal agencies, made a policy decision to exclude certain deemed exports and reexports from regulatory licensing requirements. (A deemed export is a release in the United States of controlled technology to a foreign person; the release is “deemed” an export to the person’s most recent country of citizenship or permanent residency.) BIS and other agencies have concluded that subjecting U.S. companies to deemed export licensing requirements could impair U.S. innovation and technological leadership. However, this decision may allow the release of U.S.-controlled advanced computing and semiconductor manufacturing technology and software source code to China. As a result, China might gain access to technologies and software it could use to enhance its military capabilities. We recommended that BIS take further action to mitigate the risk of unauthorized release of these technologies and software.

Enhanced Planning, Performance Measurement and Evaluation, and Information Can Improve Oversight of Broker-Dealer Examinations report No. 583

The VA Office of Inspector General (OIG) issued a management advisory memorandum to inform the Veterans Health Administration (VHA) Under Secretary for Health of concerns facility leaders and staff expressed to OIG staff regarding VA’s new electronic health record (EHR) during Healthcare Facility Inspections. The OIG conducted Healthcare Facility Inspections of the VA Southern Oregon Healthcare System and the Jonathan M. Wainwright Memorial VA Medical Center in Walla Walla, Washington, during the weeks of March 4 and June 3, 2024, respectively. VA deployed the new EHR at the Jonathan M. Wainwright Memorial VA Medical Center and the VA Southern Oregon Healthcare System in March 2022 and June 2022, respectively.Leaders at the VA Southern Oregon Healthcare System described the implementation of the new EHR as “the single largest challenge that we have here,” noting that the new EHR has impacted “every system” and resulted in “rewriting the way VA does business.” The director at the Jonathan M. Wainwright Memorial VA Medical Center described multiple challenges, including timing of deployment, which overlapped with dealing with the effects of the pandemic; limited training; and enterprise-wide communication deficiencies. Additionally, leaders and staff at both medical facilities described notable concerns related to (1) efficiency and loss of productivity, (2) staffing, (3) financial impacts, and (4) patient safety.Since 2020, the OIG has reported on various issues with the new EHR. Interviews of leaders and staff during Healthcare Facility Inspections of the VA Southern Oregon Healthcare System and the Jonathan M. Wainwright Memorial VA Medical Center demonstrate that new and previously-identified issues persist in 2024.The OIG requested the Under Secretary for Health evaluate whether the issues cited in the memorandum warrant process reviews and/or contract enhancements to improve efficiency, user experiences, and patient safety.

The VA Office of Inspector General (OIG) conducted this audit to determine whether VA and its contractor had sufficient controls to prevent, respond to, and mitigate the impact of major performance incidents affecting the electronic health record (EHR) system.In May 2018, VA awarded a 10-year contract to Cerner (now Oracle Health) to implement the system. Since then, it has experienced hundreds of major performance incidents affecting the five VA medical centers where the system was initially deployed.The OIG found VA and Oracle Health did not have adequate controls to prevent system changes from causing major incidents, to respond to those incidents uniformly and thoroughly, or to mitigate their impact by providing standard procedures and interoperable downtime equipment. Further, although major performance incidents can delay care to veterans, VA had no formal process to link reports of these delays to specific major performance incidents. Ultimately, the inadequate controls for handling major incidents stemmed from the May 2018 contract. In May 2023, VA modified the contract to strengthen some requirements for addressing major incidents but could do more.The EHR system’s estimated cost has grown. It was originally $16 billion. If VA does not improve controls, major performance incidents will continue, leading to further costly delays in system implementation and posing an ongoing risk to patient safety.The OIG made nine recommendations, including real-time data sharing to give VA greater awareness of potential problems in system operations, prioritizing major performance incident response in a clear and consistent manner, developing and enforcing response and other performance metrics to hold the contractor accountable, requiring sufficient detail in post-resolution reports, raising staff awareness of procedures and acquiring appropriate backup systems for downtime, and better identifying and addressing major performance incidents linked to negative patient outcomes.

Our audit determined that while the Peace Corps does have an established framework to oversee and monitor domestic awarded contracts, it can improve its management of the following: • Contract oversight including contract modifications, documentation, and guidance for Contract Officer Representatives and Technical Points of Contact; and • Contract completion, including performance assessments and closeout.