Federal Reports

We recently issued an audit report on the City and County of Honolulu’s (City) fraud risk management practices, which determined the grantee did not adequately develop a fraud risk management framework for the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding provided for the Emergency Solutions Grant (ESG) program to prevent, detect, and respond to fraud (Audit Report No. 2024-LA-1002, issued August 6, 2024). This audit follows that recent work, in which we audited the City’s ESG CARES Act program with the objective of determining if improper payments existed.  

The City made some improper payments in its ESG CARES Act program because it did not always follow HUD’s requirements.  Specifically, the City and its subrecipients did not (1) determine that 233 landlord signing bonus payments totaling $714,512 were reasonable and necessary, (2) prorate the rent amount for partial months resulting in $51,235 in overpaid rent (projected to be $248,572 in overpayments based on our statistical sample), and (3) ensure there were no duplication of benefits for three program participants totaling $10,100.  We also determined that HUD communicated draw deadline dates to grantees that were inconsistent with guidance it publicly issued, causing the City to draw $1.9 million in grant funds after the deadline.  These conditions occurred because we determined that officials of the City and its subrecipients were not aware of some of HUD’s requirements for the ESG CARES Act program and did not have controls for preventing a duplication of benefits.  In addition, HUD used a single draw deadline for grantees, which conflicted with the three separate expenditure deadlines that it established, but did not issue formal written notice so that all grantees, subrecipients, and the public would be aware of the single deadline.  These results reduced the number of participants that could have been served by the program, intended to reduce or mitigate homelessness, and impacted the City’s ability to maintain program and payment integrity of the ESG CARES Act program.  Although the ESG CARES Act program has concluded, the City could make some of the same types of improper payments in the annual ESG program and other HUD-funded programs it operates, since these programs allow expenses for similar activities.

We recommend that the Director of HUD’s Honolulu Office of Community Planning and Development instruct the City to (1) determine whether the $714,512 paid for 233 signing bonuses under the ESG CARES Act program were reasonable and necessary, (2) develop and implement written policies and procedures for the ESG program to ensure that rents are prorated for the first month for tenant-based rental assistance, (3) repay HUD from non-Federal funds $51,235 in overpaid rent to landlords, (4) develop and implement written policies and procedures to prevent duplication of benefits, and (5) review the rental assistance payments made for the ESG CARES Act program to identify other possible duplication of benefits with other rental assistance programs that the City operates. 
 

Our objective was to assess the progress of the National Oceanic and Atmospheric Administration (NOAA) in implementing the Geostationary Extended Observations (GeoXO) weather satellite program. We also evaluated NOAA’s efforts to address the risk of a future gap in geostationary observations, and we assessed the program’s risk management processes. 

We found that the GeoXO program has made adequate progress in its current phase of development and that it is achieving the desired technology maturity. However, NOAA should consider enhancing its continuity planning and risk management processes by (1) managing the risk of a continuity gap in geostationary satellite data, as the current series’s backup satellites are likely to reach the end of their lifespans before the first GeoXO satellite becomes operational, and (2) improving risk management processes to ensure the mission’s success.

The objective of this audit was to determine whether the Farm Credit Administration has designed and implemented appropriate controls over its Emergency Operations Center.

The Udall Foundation did not adhere to NIST standards, hindering its ability to devise a viable approach for managing its information security risks.

The OIG conducted this audit to determine whether VHA national program offices provided effective oversight of contracted community-based outpatient clinics (CBOCs). The audit team found the offices did not effectively oversee contracted CBOCs because oversight ended after vendors were awarded contracts to acquire, furnish, and run the clinics. This left VHA without national oversight of the effectiveness of the contracts. VHA’s policies governing contracts for CBOCs did not incorporate all responsibilities required of a VHA program office: identifying emerging national issues, communicating with internal and external stakeholders, managing quality and compliance, and evaluating program effectiveness and efficiency. The policy omissions limited program offices’ ability to identify and implement solutions for national issues, such as contractors not meeting performance metrics, start-up (construction) costs keeping small businesses from competing for contracts, staff having to manually create patient rosters (monthly lists of patients for which contractors can invoice VA), and medical centers (which were supposed to oversee CBOC operations) not appointing adequately certified contract monitors. The problems the OIG audit team documented may have adversely affected care provided to veterans—sampled CBOCs provided healthcare services that scored below VHA’s overall performance metrics—and created administrative challenges for VA medical centers and contracting offices.

The audit team also found that, contrary to federal acquisition requirements, contract templates did not give contracting officers the option to include performance incentives. Without effective means to hold contractors accountable for performance, the contracting officers and VA medical centers accepted and paid in full for services that did not meet requirements.

The OIG made 12 recommendations, including to delegate program office oversight responsibilities, monitor contractor compliance with the contracts, develop consistent procedures for patient rosters, and work with the VA Office of General Counsel on start-up costs and incentives.