Federal Reports

We performed an audit of the costs billed to the Tennessee Valley Authority (TVA) by Burns & McDonnell Engineering Company, Inc (B&M) under Contract No. 15388 for engineering services.  Our audit objectives were to determine if (1) costs were billed in accordance with the contract terms, (2) the reasonableness of TVA’s process for evaluating and awarding proposed fixed price tasks issued under the contract, and (3) tasks were issued using the most cost-efficient pricing methodology.  Our audit scope included about $20.12 million in costs paid by TVA under Contract No. 15388 between September 25, 2020, and December 31, 2023.  This included approximately $19.97 million for fixed price projects and $156,136 for cost-reimbursable projects.  Our audit primarily focused on fixed price projects under the contract.  In summary, we determined:

• B&M did not provide credits to TVA for unearned fee, resulting in an overbilling of $16,854. 
• TVA did not evaluate fee for all tasks greater than $50,000 as required by the contract. 
• There were inconsistent guidelines regarding when competition was required and, as a result, TVA routinely direct-assigned fixed price tasks to B&M.  Without adequate competition between the contract partners on fixed price tasks, TVA is less able to ensure it is paying a fair fixed price amount.
• The use of fixed price compensation terms for tasks caused TVA to pay at least $644,550 more than it would have if the tasks had been issued under cost‑reimbursable payment terms.  Additionally, we estimated TVA could potentially avoid up to $2.52 million in future costs by issuing tasks under cost-reimbursable payment terms for the remaining contract spend.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements.

This Office of Inspector General (OIG) Healthcare Facility Inspection program report describes the results of a focused evaluation of the care provided at the VA Southern Oregon Healthcare System in White City. 

This evaluation focused on five key content domains:
   •    Culture
   •    Environment of care
   •    Patient safety
   •    Primary care
   •    Veteran-centered safety net

The OIG issued one recommendation for improvement in one domain:
   1.    Environment of care
   •    Relocate papers and folders outside of examination rooms or secure them in protective coverings

This Office of Inspector General (OIG) Care in the Community healthcare inspection program report describes the results of a focused evaluation of community care processes at eight VA Desert Pacific Healthcare Veterans Integrated Service Network (VISN) 22 medical facilities with a community care program. 

This evaluation focused on four domains:
   •    Leadership and Administration of Community Care
   •    Community Care Diagnostic Imaging Results
   •    Administratively Closed Community Care Consults
   •    Community Care Provider Requests for Additional Services

The OIG issued 12 recommendations for improvement in the four domains:
   •    Leadership and Administration of Community Care
     o    Community oversight councils functioning according to charters
     o    Completing the operating model staffing tool reassessment
     o    Entering patient safety events in the Joint Patient Safety Reporting system
     o    Briefing patient safety trends, lessons learned, and corrective actions
     o    Scanning community care documents into the electronic health record
   •    Community Care Diagnostic Imaging Results
     o    Attaching diagnostic imaging results to the Community Care Consult Result note
     o    Using the significant findings alert for abnormal results
   •    Administratively Closed Community Care Consults
     o    Making two attempts to obtain medical documents after administrative closure
   •    Community Care Provider Requests for Additional Services
     o    Processing requests
     o    Incorporating requests in the electronic health record
     o    Verifying providers’ signatures on forms
     o    Sending denial letters to community providers

A Train Attendant based in New York City was terminated on January16, 2025, after his administrative hearing. Our investigation found that the employee violated company policy by sexually harassing a woman on an Amtrak train from Albany to Syracuse, New York, on April 26, 2024. During our interview with the employee, he admitted to his actions. He is ineligible for rehire.

The Office of Inspector General (OIG) is issuing this management advisory to bring attention to concerns regarding SBA’s use of hold codes for potentially fraudulent Paycheck Protection Program (PPP) loans referred by lenders. 

Opportunities exist for SBA to enhance its handling of lender-referred PPP loans suspected of fraud or illegal activity and its process for capturing these loans to ensure they are promptly flagged to mitigate fraud risk and financial loss. SBA’s Office of Credit Risk Management (OCRM) established a project for lenders to refer PPP loans suspected of fraud or illegal activity; however, we found that SBA did not flag all suspicious loans referred by lenders with a hold code 50 or capture all the loans in its summary workbook. 

SBA did not flag all PPP loans referred by lenders as suspected of fraud or illegal activity because OCRM wanted to validate the referred loan information with lenders first and this delayed response for flagging the loans was inconsistent with SBA’s established procedures and how other program offices handled lender referrals. Flagging a suspicious loan triggers a targeted review during both forgiveness and post-forgiveness examinations, providing an opportunity to mitigate improper payment due to fraud. To maximize this opportunity, SBA should immediately flag and review all suspicious loans referred by lenders and establish procedures to ensure all referred loans are captured in OCRM’s summary workbook.

Implementing our recommendations will enhance program integrity and mitigate fraud risk and financial loss by ensuring only eligible applicants receive program funding and that opportunities are identified to recover fraudulent or ill-gotten funds. SBA management partially agreed with four recommendations and agreed with one recommendation.