Federal Reports

The Office of Inspector General performed an inspection of four mission areas within the U.S.Department of Agriculture (USDA) to determine if the USDA and its mission areas are effectively identifying and mitigating security vulnerabilities on their publicly accessible web applications and websites.

This report contains sensitive content. It is being withheld from public release due to concerns about the risk of circumvention of law.

In August 2024, we issued an audit report on the California Department of Housing and Community Development’s (HCD) fraud risk management practices, finding that HCD was not adequately prepared to prevent, detect, and respond to fraud due to the lack of focus it placed on fraud risks and establishing a robust fraud risk management framework for the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act funding for the Emergency Solutions Grant (ESG) program to prevent, detect, and respond to fraud (2024-LA-1001, issued August 2, 2024).  Building on that work, we audited HCD’s ESG CARES Act program to determine whether improper payments existed.  

HCD made improper payments in its ESG CARES Act program because it did not consistently follow HUD’s requirements.  Specifically, HCD and its subrecipients did not, (1) determine whether 318 landlord incentives for holding fees, signing bonuses, and additional security deposits totaling $1.02 million were eligible, reasonable, and necessary; (2) properly draw risk mitigation expenses, which resulted in an overpayment of $6,549 to landlords and, therefore, called into question the remaining $185,731 of risk mitigation expenses as unsupported; and (3) properly determine the reasonableness of payments to a contractor that provided kitchen services totaling $96,561.  We determined that these conditions occurred because HCD and its subrecipients believed their practices were in line with the flexibility HUD allowed for landlord incentives under the ESG CARES Act, and because these entities did not have policies and procedures for determining the types of landlord incentives that should be used and when to negotiate them.  In addition, both HCD’s Emergency Solutions Grants Financial Management and Monitoring Policies and Procedures were silent on subrecipients’ monitoring responsibilities over sub-subrecipients and contractors.   These results reduced the number of participants that could have been served by the program intended to reduce or mitigate homelessness and impacted on HCD’s ability to maintain program and payment integrity of the ESG CARES Act program. Although the ESG CARES Act program has concluded, HCD could make some of the same types of improper payments in the annual ESG program and other HUD-funded program it operates, since these programs allow expenses for similar activities.

We made recommendations in this report to address the control deficiencies identified within the ESG CARES Act program, as well as ensure the risk of the deficiencies occurring within the annual ESG program is mitigated.  Specifically, we recommend that the Director of HUD’s San Francisco Office of Community Planning and Development instruct HCD to (1) repay HUD from non-federal funds for the ineligible landlord holding fees of $964,952 drawn from ESG CARES Act funds, (2) determine whether the $58,878 drawn for 18 signing bonuses from ESG CARES Act funds were reasonable under the program participant’s particular circumstances, and not more than necessary to house the program participants, or repay HUD from non-federal funds, (3) repay HUD from non-federal funds for the risk mitigation overpayments of $6,549 drawn from ESG CARES Act funds, (4) determine if the remaining risk mitigation expenses of $185,731 drawn from ESG CARES Act funds were reasonable and necessary in accordance with program requirements, or repay HUD from non-federal funds, (5) support the cost reasonableness of $96,561 drawn from ESG CARES Act funds for the kitchen services contractor, or repay HUD from non-federal funds, and (6) develop and implement additional written procedures and internal controls for the ESG program to ensure that it and its subrecipients do not charge holding fees, risk mitigation expenses, and that adequate ESG contracts are properly executed and maintained.

This report presents the results of our audits of mail delivery operations in the Ohio 1 District in the Central Area.

The U.S. Postal Service’s mission is to provide timely, reliable, secure, and affordable mail and package delivery to over 160 million residential and business addresses across the country. To fulfill this role, the Postal Service is committed to ensuring its delivery platform and services are always a trusted, visible, and valued part of America’s social and economic infrastructure. This includes leveraging people, technology, and systems at approximately 300 processing facilities and 31,100 post offices, stations, and branches in the nation to provide worldclass visibility of mail and packages as they move through the Postal Service’s integrated system. The U.S. Postal Service Office of Inspector General (OIG) reviews delivery operations at facilities across the country and provides management with timely feedback in furtherance of this mission.

This report presents a summary of the results of our self-initiated audits of delivery operations and property conditions at three delivery units, as well as district-wide delivery operations in the Ohio 1 District in the Central Area (Project Number 25-141). The delivery units included Station B and Shaker Heights Station in Cleveland, OH, and the Cleveland Heights Branch in Cleveland Heights, OH.

The Office of the Inspector General contracted with Sikich CPA LLC (Sikich) to determine whether contract modifications for the Pod 6 construction contract were reasonable, necessary, within the scope of the contract, and effectively awarded and administered.  Sikich found that the Smithsonian did not consistently administer contract modifications in accordance with the terms of the contract.

BIE did not ensure deficiencies were addressed timely; schools did not consistently implement mitigating measures or close corrected work orders.

The 2026 Census Test is the bureau’s next major test to prepare for the 2030 census. The bureau planned in-field operations at multiple sites to evaluate new and enhanced processes and methods for improving the design of the census, and bureau officials stated that they used a new, innovative data-driven process to select the test sites. 

Our objective was to assess the bureau’s test site selection methodology. However, the bureau could not provide supporting documentation of the judgments, methodologies, and assumptions used to plan, execute, and provide oversight of the selection process. As a result, we could not verify how the bureau selected the sites. 

Without establishing a formal, documented methodology as a solid foundation, as specified by its own statistical quality standards, the bureau risks inefficiencies or suboptimal site selections that could compromise overall readiness for the 2030 census and beyond. We made two recommendations to the bureau to strengthen its processes for reviewing and documenting site selections for future census tests.