Federal Reports

CFTC OIG Semi-Annual Report ending March 31, 2020

Transmittal Letter for OIG Semi-Annual Report to Congress ending March 31,2020

As part of our annual audit plan, we audited costs billed to the Tennessee Valley Authority (TVA) by Morsey Constructors, LLC (Morsey) for general construction and modification services performed under Contract No. 9275. Our audit included approximately $8.3 million in costs billed to TVA during calendar years 2014 through 2018. Our objective was to determine if Morsey billed TVA in accordance with the contract's terms.In summary, we determined Morsey overbilled TVA up to $3,819,541, including (1) from $1,543,520 to $3,698,483 in subcontractor costs that had not been preapproved by TVA, <br> (2) $100,354 in overbilled equipment costs, (3) $36,945 in unsupported and ineligible travel costs, and (4) a net underbilling of $16,241 because Morsey billed incorrect craft and noncraft time and materials billing rates. In addition, we determined TVA paid an additional $134,810 in labor costs because Morsey used statutory payroll tax rates instead of effective payroll tax rates in the build up of its craft and noncraft labor billing rates. (Summary Only)

The OIG assessed the merits of a hotline complaint received in March 2019 regarding building conditions and patient safety at the Northport VA Medical Center in Northport, New York. The complainant alleged that medical center managers did not take adequate action to maintain the center’s buildings. According to the complaint, the delivery system for steam heat failed and caused damage that contaminated employee and patient areas with asbestos, lead paint, and other debris. The review team determined that damage occurred in building 65 of the medical center and that four rooms were closed for repairs from February through mid-October 2019. The room closures did not, however, affect patient care because other space was available. The team also found that prior medical center leaders did not plan effectively to address building 65’s deficiencies. The OIG made three recommendations to the Veterans Integrated Service Network 2 director. These included developing an oversight process to make certain that medical center leaders effectively develop and execute the master plan to reduce the medical center’s footprint in order to better manage aging infrastructure. The OIG also recommended that the medical center’s director define a timeline for implementing the master plan and communicate plan objectives to stakeholders. The recommendations call for (1) the medical center’s master plan and the strategic capital investment plan to be consistent and (2) the master plan to be executed following agreed upon milestones and available resources. Finally, the OIG recommended that the medical center director develop processes and procedures for submitting work orders—including for notifications when work orders are assigned and reviewed for accuracy and consistency—to help the center’s engineering service prioritize work and manage resources.