Federal Reports

What OIG Evaluated: 

The objectives of this audit were to evaluate 1) the adequacy of the Library’s grants operations policies and procedures, 2) the Contracts and Grants Directorate and the Program Office’s compliance with those procedures, and 3) the grantees’ compliance with those procedures.

What OIG Found: 

- The Library Could Improve Its Procedures for Performing Financial Monitoring of Grantees
- The Library Could Improve Its Procedures for Performing Financial Reviews of Proposed Grant Costs
- The Library Should Consider Limiting Extensions to a Grants Period of Performance
- The Library Did Not Follow Its Procedures for the Closeout and Award of Grants

What OIG Recommends: 
- Conduct training for Contracts and Grants Directorate on how to obtain and review grantees’ Single Audit  reports. The training should also include the process for Identify Fiscal  Yearly internal control deficiencies, performing follow-up activities, and reviewing SEFA expenditures. In addition, the training should define audit terminology. 
- Require grantees to provide grant expenditure reports that detail the grantee’s expenditures at the cost code and transaction level at least on an annual basis. These reports should come directly from the grantees accounting system. Also, require the grantee to reconcile these expenditures to the expenditures it  reported by budget category in the Budget Summary Reports that it submitted to the Library. Ensure that the grantee researches and resolves any differences.
- Require that any grantees that are not subject to A-133 undergo an independent audit. 
- Include the following steps in its  grantee risk assessment procedures: (1) If a Single Audit  report is available for the grantee, review the report for any internal control or compliance findings that could affect the grantee’s performance under a Library award. Determine whether the grantee has taken any corrective actions to address the Audit  findings. (2) Reconcile the expenditures that the grantee reported in its  FFR, Budget Summary Report, and drawdowns or advances to the expenditures that the grantee may have reported in its  SEFA or Audit  report. Research and resolve any discrepancies. (3) Reconcile the grant expenditure reports that detail the grantee’s expenditures at the cost code and transaction level to the expenditures  reported by budget category in the Budget Summary Reports that it  submitted to the Library. Research and resolve any differences. (4) Review the transactions in the grantee’s expenditure reports and request explanations for any large transactions, transactions that do not appear to be allowable or allocable to the grant, and unusual journal entries.
- Implement writ ten procedures for performing and documenting its  financial reviews of costs included in grantees’ original proposals and proposal amendments. Writ ten procedures could include verification that (1) Labor costs are supported by payroll records (2)Proposed fringe benefit  cost rates are supported by grantee records. (3) Subgrantee and consultant costs are based on existing proposals and commitments to perform work under the grant. (4) Travel costs are reasonable. (5) The grantee applied its  indirect cost rates to the correct allocation base. (6) Other direct costs are supported by vendor quotes. (7)The grantee’s Single Audit  reports do not include internal control or compliance weaknesses that could affect the grantee’s performance. (8) For nonpublic entities, Audit  reports are available to support that the organization is solvent and is able to perform under the award.
- Consider limiting the number of times that it can extend a grant’s period of performance.
- Consider updating its guidelines and procedures to include policies for the novation or transfer of a grant to a new organization, and consulting with the Library’s Office of General Counsel.

We completed a follow-up inspection of Pine Hill School to determine what progress had been made to correct the issues identified in our prior reports and determine whether the facility conditions have changed since our last reviews.We found that the school addressed many of the issues identified in our previous reports and that the overall facility conditions had improved. Specifically, Indian Affairs (IA) and the school implemented 9 of the 12 recommendations from our 2016 inspection and addressed a number of safety and health issues we previously identified including the inoperable fire alarm system.However, some of the issues identified in our 2016 inspection remain unresolved—mainly the extensive water damage and mold in the library, kindergarten classroom, and the gymnasium, as well as general deficiencies that were present throughout the school. We also found that Pine Hill School’s 25,000-square-foot dormitory remained significantly underused and that the IA’s facility inventory continued to be inaccurate, even though the IA reported that it had made corrections to its inventory since our last review.We also identified additional safety, health, and security risks during this inspection not covered in our 2016 inspection. For example, routine inspections of critical equipment and potential indoor environmental contaminants were not regularly completed and access to potentially dangerous areas was not restricted. Although the IA conducted annual safety and health inspections at the school as required, we found that neither the IA nor the school could confirm that the deficiencies identified during those inspections were addressed. Furthermore, an IA official informed us that it was not tracking deficiencies identified during safety and health inspections to confirm they were being addressed. We made 13 new recommendations to ensure that the progress made to date will be maintained, and that future improvements will properly address many of the long-standing facility issues facing the school. We also recommended that the Office of Financial Management reopen one recommendation from our previous report that we found was not addressed, and we repeated one recommendation from our prior inspection report that had not yet been addressed.