Federal Reports

What We Looked At    Each year, the Federal Aviation Administration (FAA) procures billions of dollars in information technologies (IT) and telecommunications (telecom) products and services in support of its mission to provide the safest and most efficient aerospace system in the world. For fiscal year 2024, the Agency requested approximately $3.9 billion for its IT and telecom needs. Our prior audit of the Department of Transportation’s (DOT) IT shared services contract vehicles identified issues with DOT’s award and modification practices. Given our previous findings, and the high dollar amounts FAA expends for IT and telecom services, we initiated this audit. Our objective was to evaluate FAA’s practices for awarding and modifying its IT and telecom contracts. We focused our review on the award and modification practices associated with (1) determining sound pricing and (2) promoting competition. What We FoundFAA’s noncompliant IT and telecom contracting practices inhibit establishment of sound pricing. Per the Agency’s Acquisition Management System (AMS), procurement teams are required to conduct price and, at times, cost analyses, and program offices must develop sound independent Government cost estimates (IGCEs) prior to contract awards. However, FAA officials could not provide the required price and cost analyses for 3 of 26 sample contracts or the required IGCE for 1 of these 3 contracts. Additionally, FAA developed inadequate IGCEs for 16 sample contracts. Without adequate IGCEs, FAA lacks a critical pricing tool to help conduct price analysis, detect unreasonable offerors, and establish sound pricing. FAA’s IT and telecom contract award and modification actions also restrict competition. Specifically, FAA extended contracts noncompetitively, expanded the scope of a contract noncompetitively, and made questionable noncompetitive award decisions. These actions were largely due to the Agency’s lack of sufficient procurement planning and unclear guidance in AMS. As a result, FAA denies other firms the opportunity to deliver IT and telecom products and services. Our RecommendationsWe made seven recommendations to strengthen FAA’s IT and telecom contract award and modification practices. FAA concurred with all seven recommendations. We consider all recommendations resolved but open pending completion of planned actions.  

We audited the Boston Housing Authority’s public housing program to determine whether the physical condition of the Authority’s program units complied with the U.S. Department of Housing and Urban Development’s (HUD) and the Authority’s requirements.  The audit was initiated based on our assessment of risks associated with public housing agencies’ program units and recent media attention and public concern about the condition of subsidized housing properties.

The Authority’s public housing program units were not consistently maintained in a decent, safe, and sanitary condition and in good repair.  Specifically, we reviewed a sample of 36 units and determined that 31 units had 113 deficiencies.  Of the 31 units, 61 percent had 37 deficiencies that existed at the time of the Authority’s last inspection, and 35 percent had 18 life-threatening deficiencies that needed to be corrected within 24 hours.  Further, we reviewed the site, exterior, systems, and common areas of 29 of the Authority’s public housing buildings and determined that 24 buildings had 105 deficiencies, which included 31 life-threatening deficiencies that needed to be corrected within 24 hours.  Of the 24 buildings, 6 buildings had 18 deficiencies that existed at the time of the Authority’s last inspection.

Additionally, the Authority did not consistently perform annual self-inspections for all public housing units and correct deficiencies in a timely manner. Specifically, for 55 units reviewed, the Authority did not perform 37 of the 103 required inspections, collectively, for the Authority’s 2022 and 2023 fiscal years. Additionally, we reviewed 71 deficiencies that the Authority identified during its annual inspections, consisting of 31 life-threatening and 40 non-life-threatening deficiencies.  We determined that the Authority did not correct (1) more than 22 percent of the life-threatening deficiencies within 24 hours, including six deficiencies that were miscategorized as non-life threatening and (2) more than 87 percent of the non-life-threating deficiencies within the Authority’s 20-day requirement.  See table 1 below.

Table 1.  The Authority’s annual inspection deficiencies were not corrected in a timely manner

The Authority also did not consistently correct life-threatening, non-life-threatening health and safety, and non-health and safety deficiencies identified during HUD’s Real Estate Assessment Center’s (REAC) inspections in a timely manner.  We reviewed a sample of 41 life-threatening, 35 non-life-threatening health and safety, and 86 non-health and safety deficiencies and determined that the Authority did not consistently correct the deficiencies within HUD’s or the Authority’s established timeframes.  It also did not consistently support that deficiencies had been corrected.  Further, of the 162 deficiencies, we determined that 66 still existed at the time of our observations, or we could not confirm whether the Authority had corrected the deficiencies.  See table 2 below.

Table 2.  The Authority did not correct REAC inspection deficiencies in a timely manner

Further, the Authority did not certify to HUD, within 3 business days, that the 41 life-threatening deficiencies had been corrected, remedied, or acted upon to abate within 24 hours.

These conditions occurred because the Authority did not ensure that its (1) inspectors thoroughly inspected units in a consistent manner and (2) policy requiring quality control inspections of units and buildings was fully and consistently implemented.  Additionally, after HUD’s COVID-19 waiver of the requirement for annual inspections expired and the Authority resumed performing inspections, the Authority lacked staffing resources to inspect all units, create work orders, correct the deficiencies identified in the Authority’s properties during its own inspections and REAC’s inspections in a timely manner, and report and certify in HUD’s Physical Assessment Subsystem that life-threatening deficiencies identified through a HUD REAC inspection had been corrected in a timely manner.

As a result, families resided in units that were not decent, safe, sanitary, and in good repair for longer periods, and HUD did not have timely information to monitor whether the Authority corrected life-threatening deficiencies in accordance with HUD’s 24-hour requirement.  If the Authority does not improve the quality of its inspections and address its increasing backlog of work orders, there is a risk of additional families’ residing in units that are not decent, safe, sanitary, and in good repair.
We recommend that the Director of HUD’s Boston Office of Public Housing require the Authority to (1) develop and implement a plan to correct the deficiencies identified for its public housing program units and buildings, including the remaining outstanding deficiencies noted during HUD’s REAC inspections, and (2) implement quality control procedures for its inspection and work order processes and mitigation of noted deficiencies to enhance the effectiveness of its unit inspections and ensure that all units meet HUD’s and its own requirements.
 

This informational report provides general information related to the Infrastructure Investment and Jobs Act (IIJA) funding for the Federal Wildland Firefighter Salaries and Expenses.

We audited the Department’s progress in managing and implementing the Business Applications Solution (BAS) program. BAS is an enterprise financial system that will modernize the Department’s aging and disparate systems. We found that although the program prepared for the National Oceanic and Atmospheric Administration's (NOAA's) operational transition to BAS, (1) the Department has not established the program’s baselines and does not adequately oversee the program’s cost and schedule performance; (2) the program does not have adequate cost and schedule management controls; and (3) the Department should capture the lessons it learned from implementing BAS at NOAA and apply them to upcoming implementations at the National Institute of Standards and Technology and the U.S. Census Bureau.

This report is a follow up to SBA OIG Report Number 21-06, Paycheck Protection Program (PPP) Loan Recipients on the Department of Treasury’s (Treasury) Do Not Pay (DNP) List, which reported SBA did not use Department of Treasury (Treasury) DNP data to screen borrowers for eligibility prior to approving loans originated before August 8, 2020 (PPP round one). In this report, we assess SBA actions to address potentially ineligible loans identified in report 21-06 and its implementation of controls to review DNP data for PPP loans originated after August 8, 2020 (PPP round two).SBA implemented a review plan to address 25,634 potentially ineligible PPP loans originated prior to August 8, 2020, and review DNP data sources pre-award for loans originated after August 8, 2020; however, inadequate policies and procedures exposed the program to avoidable risks. OIG found SBA’s review plan only included reviewing loans with submitted forgiveness applications where all funds had been disbursed and used. As a result, during PPP round one, lenders approved and disbursed 1,799 loans totaling over $89 million with known DNP matches that were not subject to manual review.OIG also found SBA’s manual loan reviews did not always sufficiently ensure borrowers’ eligibility. We statistically sampled 176 of 25,634 loans with DNP matches and concluded that SBA appropriately resolved 84 and inappropriately cleared the remaining 92 by either using pre-decisional memos that did not address the DNP hold codes, or the loan files did not contain sufficient documentation to support SBA’s review decisions. By projection, we estimate that lenders disbursed, and SBA forgave, 12,234 of 25,634 loans (or 48 percent) totaling over $1.4 billion without verifying the borrowers’ eligibility, which further exposed the program to financial losses and improper payments. In addition, SBA did not use all Treasury’s DNP restricted data sources for reviewing applicants during the first 2 months of pre-award reviews of DNP data for second round PPP loans. SBA identified 2,777 potentially ineligible applicants, totaling approximately $22.4 million. By comparison, our reassessment of applications using all Treasury’s minimally required DNP data sources identified 59,893 additional potentially ineligible loans, totaling about $1.9 billion. OIG recommends SBA implement or enhance policies and procedures to ensure compliance with program requirements and federal standards for identifying/preventing improper payments and seek remedy or repayment of ineligible loans.