Federal Reports

Our audit determined that the Department could improve its management of the Federal Real Property Assistance Program (FRPA). FRPA allows the Department to sell or lease, at a Public Benefit Allowance discount, surplus Federal real property to eligible entities for educational purposes. We found that although the Department’s FRPA awarding process was generally appropriate, it did not compile surplus property screening lists in accordance with its own criteria, did not always correctly calculate applicants’ Public Benefit Allowance discounts, and approved incomplete applications. As a result, the Department may not be considering all potentially eligible entities and may be awarding properties to entities that will not provide the greatest and longest lasting public benefit, are unable to maintain the property, or will not be using the property for an education-related purpose. We also found that the Department needed to improve its monitoring of program participants, as participants did not consistently submit required utilization reports and the Department did not request the reports when they were not submitted by the deadline. In addition, the Department did not always document or timely complete follow-up activities to address issues identified during its review of utilization reports and did not schedule required site visits within the first 12 months following conveyance for almost all of the properties that we reviewed. In some cases, property files were missing site inspection reports and documentation of required follow-up. Thorough, timely, and consistent monitoring is necessary to ensure that properties are being used for agreed-on educational purposes and to mitigate the potential for misuse. Noncompliance can result in the denial of services to those who could benefit from the use of such property and represents a loss to the interests of the Federal Government. We made eight recommendations to improve the Department’s FRPA awarding and monitoring processes through standardization, employee training, and enhanced supervisory review.

We found that the Department complied with Executive Order 13520, adequately addressed improper payment risks, and described an adequate level of oversight to reduce and recapture improper payments for FY 2011. However, it did not address monitoring or oversight of Pell Grant program recipients who did not use the IRS Data Retrieval Tool (IRS DRT) when completing their FAFSA or recipients who were not selected for verification in its improper payment monitoring and oversight efforts. Verification is a process schools are required to conduct to confirm specific information reported on the FAFSA by the applicant. The IRS DRT is an optional tool that enables Federal student aid applicants and, as needed, parents of applicants to transfer certain tax return information from an IRS Web site directly to their online FAFSA. Only 22 percent of all FAFSAs submitted for the 2011–2012 academic year used the IRS DRT. By not studying the population of applicants who do not use the IRS DRT and who are not selected for verification, the Department may miss opportunities to further reduce and recapture improper payments. We recommended that the Department study Pell Grant program recipients who do not use the IRS DRT and who are not selected for verification to determine whether the Department has adequate controls in place or needs to implement additional controls to mitigate the risk of improper payments to this population of Pell Grant recipients.

Citrix

The Postal Service’s pension surplus was projected to be $13.1 billion as of the end of fiscal year 2011. Most of the surplus – $11.4 billion – is in the Federal Employees’ Retirement System (FERS) pension program. A surplus occurs when assets exceed accrued liability. FERS has been in surplus since 1992, and the OIG wanted to investigate the reasons behind this persistent surplus. Are there distinctive characteristics of the Postal Service and its employees that cause the surplus? And can the surplus be expected to continue?