Federal Reports

We found that the photovoltaic systems (PV) and water tanks installed in participant’s homes had deficiencies.  Such deficiencies included inverters and batteries with signs of rust; water intrusion that could lead to electrical shorts; electrical conduits that were degrading due to direct exposure to the sun; electrical conduits with water; and water tanks that were leaking, overflowing, or both.  Based on statistical projections, at least 57 percent of installations had at least one deficiency.  In addition, we noted that almost 33 percent of inverters and battery storage systems were not installed in accordance with the installer agreements and manufacturers’ specifications.  The contractors who installed the batteries and inverters exposed them to the elements and direct sunlight, contrary to the terms of the agreements and manufacturer specifications.  In addition, we determined that PRDOH’s installation oversight was inadequate.  PRDOH disregarded its own contract terms and the equipment manufacturers’ guidelines, which required the equipment to be protected from direct sunlight and the elements.  Although quality control inspections were performed, the inspections did not identify that the installations were improperly completed.  PRDOH’s actions could lead to manufacturers voiding equipment warranties, equipment lasting less than the required timeframe, and malfunction of improperly installed equipment.  Further, PRDOH spent more than $19 million on installation services that do not comply with the agreements and manufacturers’ specifications.

We also found that PRDOH did not provide adequate support to justify its contract amendments with installers to perform additional subtasks.  PRDOH provided a memorandum to support its contract amendment, which cited that 99 percent of repair cases needed corrections to electrical components to install the PV system.  However, PRDOH could provide support for only 2 percent of the repair cases, which significantly contradicts the 99 percent figure.  This condition occurred because PRDOH’s original scope of work and contract was vague and did not specifically list the preliminary electrical work and three subtasks that PRDOH’s installers completed as part of the installations.  By making these contract amendments, rather than clearly including the work in the original scope of work and contracts, PRDOH lost bargaining power and likely spent more than was necessary. As a result, PRDOH did not assist as many disaster recovery program participants as it could have without the costly $31 million contract amendments. Finally, we also found that the methodology PRDOH used when calculating household income for eligibility purposes of the CEWRI program led to inconsistent eligibility determinations among program participants with similar income amounts.  This occurred because PRDOH incorrectly interpreted and applied the IRS 1040 methodology when determining the participant’s household income.  As a result, PRDOH could not ensure that it adequately or appropriately distributed disaster recovery funds among low- and moderate-income program participants to whom the program is meant to benefit.

We recommend that the Director of the Office of Disaster Recovery instruct PRDOH to (1) remediate all outside installations that are directly exposed to sunlight and the elements or repay HUD more than $19 million from non-Federal funds, (2) submit supporting documentation so HUD can evaluate the basis of the contract amendments and determine the eligibility of more than $31 million in disaster recovery funds, (3) structure future contracts to ensure the scope of work is clearly defined so that all parties understand the agreement, and (4) re-evaluate the methodology used to determine income eligibility to ensure a consistent application that improves the outcomes of the program.

We found that UCRC misclassified its agreements and did not verify whether subcontractors were on an exclusions list prior to awarding funds. 

We found that BOR complied with required laws and regulations when awarding drought mitigation funds but there are opportunities for improvement. 

We found that since 2016 the company has made targeted improvements to the processes and data it uses to manage its state-of-good-repair (SOGR) work, and other improvement initiatives are underway. Despite these efforts, the company’s infrastructure asset management capabilities have not advanced significantly because it has not yet taken some foundational steps, including fully establishing a governance framework and strengthening its SOGR infrastructure asset data. Until it addresses these issues, it cannot reasonably demonstrate how the federal funds it receives will reduce its SOGR backlog or the timeline to eliminate it.

We recommended that the company fully establish a governance framework for infrastructure asset management that includes specific objectives and performance metrics, as well as defined activities and resources needed to achieve a state of good repair. Further, we recommended that the company better communicate roles and responsibilities of staff and departments involved in SOGR work. We also recommended advancing ongoing data improvement efforts and developing additional controls to help maintain a complete, accurate inventory.

We determined whether the First Responder Network Authority (FirstNet Authority) is ensuring that the Nationwide Public Safety Broadband Network (NPSBN) is achieving service availability requirements. We found that overall, FirstNet Authority did not ensure that the NPSBN met service availability requirements. We found that FirstNet Authority did not adequately assess contractor performance to ensure that AT&T achieved service availability requirements. Specifically,

• FirstNet Authority’s approach to measuring service availability fails to provide a comprehensive assessment, covering only a fraction of cell sites and of the NPSBN’s approximately 3-million-square-mile coverage footprint.
• FirstNet Authority did not ensure that contractor-provided information was reliable and accurate and that contract requirements were met.
• FirstNet Authority did not verify that service availability requirements were met for the Pacific territories.