Federal Reports

Our Objective(s) 

To evaluate single audit reports uploaded to the Federal Audit Clearinghouse between October 1, 2025, and December 31, 2025, and identify findings that affect directly awarded Department of Transportation (DOT) programs. Why This Audit OIG performs oversight of independent, non-Federal auditors' single audit reports. Over the past 3 fiscal years, on average over 200 single audit reports were issued that included findings related to programs directly funded by DOT. We issue memoranda that summarize these reports' significant findings and recommendations that require priority action by DOT. When warranted, we also recommend that DOT recover funds inappropriately expended by non-Federal entities. 

What We Found 

Auditors reported 16 findings related to 6 grantees that included significant noncompliance with Federal guidelines which require prompt action from DOT's Operating Administrations. Of the 16 findings, 6 were repeat findings related to 4 grantees. Auditors identified questioned costs totaling $5,475,471 for 2 grantees. Of this amount, $5,265,085 was related to the Navajo Nation, Window Rock, AZ. We identified nonmonetary repeat findings that caused qualified opinions for three grantees. 

Recommendations 

We made 2 recommendations to strengthen OST oversight of non-Federal entities and determine the allowability of questioned costs.

The Office of Inspector General (OIG) is issuing this evaluation report to assess the U.S. Small Business Administration’s process for awarding Small Business Investment Company (SBIC) licenses and its oversight of SBICs to ensure program integrity and mitigate financial loss. Our scope of work included 80 active leveraged SBICs licensed from October 1, 2022, through June 30, 2025. 

SBA established adequate SBIC licensing and oversight controls to provide reasonable assurance of compliance with regulatory and program requirements and complied with applicable requirements when awarding SBIC licenses and conducting oversight. We reviewed a small sample of licenses and examination reports based on our assessment of SBA’s licensing and oversight controls which provided reasonable assurance of SBA’s compliance with regulatory and program requirements. Specifically, of the 80 active SBICs that were licensed from October 1, 2022, through June 30, 2025, we reviewed four license approvals, one license pending approval, and three SBIC examination reports. We found no material deficiencies or problem areas warranting additional review. 

We made no recommendations in this report.

This report provides a summary of the results of the AmeriCorps OIG's peer review of the NEA OIG's system of quality control over its audit operations for the three year period ending March 31, 2025.  Peer reviews result in a report rating of pass, pass with deficiencies, or fail.  The NEA OIG received a report rating of pass.

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.

Congress passed three coronavirus relief acts within a 1-year period that provided more than $275 billion for an Education Stabilization Fund to prevent, prepare for, and respond to the coronavirus, including $189.5 billion for the Elementary and Secondary School Emergency Relief Fund (ESSER). The American Rescue Plan Act (ARP) provided $122 billion for ESSER to help State educational agencies (SEA) and local educational agencies (LEA) safely reopen and sustain the safe operation of schools and address the impact of the coronavirus pandemic on students. Ensuring that ARP ESSER funds are used effectively by grantees and achieve the intended impact is critical to help address the needs of students and educators. The Puerto Rico Department of Education (Puerto Rico DOE) was allocated about $3 billion in ARP ESSER funds to support 860 schools serving about 261,000 students. The objective of our inspection was to determine whether Puerto Rico DOE ensured that (1) services contracted for and paid with ARP ESSER funds to measure students’ academic progress were provided as required and (2) results were used as intended to modify individual students’ instructional plans and help prevent academic failure.

We found that Puerto Rico DOE did not ensure that the services contracted for and paid with ARP ESSER funds to measure students’ academic progress were provided in accordance with the executed contract. It also did not ensure that teachers used the results of the contractor-administered student academic proficiency assessments as intended to modify individual students’ instructional plans and help prevent academic failure. As a result, Puerto Rico DOE used $3.9 million in ARP ESSER funds to pay for student academic proficiency interim assessments that a contractor did not administer timely (10- and 20-week assessments) or at all (30- and 40-week assessments), and that did not achieve the intended purposes of helping teachers develop differentiated work plans based on each student’s academic lag, diagnose students’ immediate learning needs, and implement targeted re-teaching strategies effectively. We made four recommendations to ensure that the $3.9 million in ARP ESSER funds are not wasted, future contract work is adequately supervised by Puerto Rico DOE, and contractors are not paid for services they did not perform or that were outside the scope of the contract

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.

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.