Federal Reports

For our evaluation of the International Trade Administration’s (ITA’s) U.S. & Foreign Commercial Service’s (US&FCS’s) officer promotion process, our objective was to determine whether US&FCS adhered to applicable laws, regulations, and policies when conducting the 2018 officer promotion process. We found that ITA’s 2018 US&FCS officer promotion process did not adhere to certain applicable laws, regulations, and policies. Specifically, we found the following: I. ITA did not determine the number of available promotion opportunities before selection boards convened; II. board rankings and other sensitive information were improperly stored on an unsecured shared network drive; III. US&FCS incorrectly determined promotion eligibility; and IV. discrepancies were identified in the rankings of one selection board. We also noted a separate matter for ITA management's attention with respect to conflicts of interest within an “Other Matter” section of this report.

The VA Office of Inspector General (OIG) conducted an inspection to assess allegations related to delayed medication delivery from the VA Manila Outpatient Clinic (clinic) pharmacy in Pasay City, Philippines, prior to and during the COVID-19 pandemic.The OIG substantiated a patient experienced medication delivery delays and did not timely receive morphine from the clinic pharmacy in October and November 2019. While the patient requested a renewal in a timely manner, pharmacists could not fill the medication because there was no available stock from the Veterans Health Administration’s (VHA) prime vendor, McKesson Corporation (McKesson). The OIG did not substantiate a second patient experienced medication delivery delays for five new orders, a medication renewal, and a glucometer in November 2019. The OIG was unable to substantiate if this patient experienced delivery delays of three medication refills because the OIG could not determine when the patient requested the refills.Clinic leaders identified a pharmacy processing time of 10.09 days (eight days over VHA and clinic policy requirements) in October 2019. In November 2019, the Chief of Pharmacy Services initiated an action plan. The average pharmacy processing time decreased to 1.63 days in December 2019. The Philippine President declared a COVID-19 public health emergency on March 8, 2020, and implemented a quarantine on March 16, 2020, that imposed travel limitations. Four patients experienced medication delivery delays in March and April 2020 due to limited or nonexistent courier transport. The OIG substantiated pharmacists could not dispense insulin to a patient as the clinic pharmacy had no stock after April 2020. McKesson canceled orders for perishable items due to unavailability of flights to the Philippines. The OIG determined that none of these delays resulted in adverse clinical outcomes and made two recommendations related to pharmacy stock shortages and processing delays.

The VA Office of Inspector General (OIG) conducted an administrative investigation in response to a referral from VA officials about the potential for a conflict of interest involving VA employees’ establishment of a cooperative research and development agreement (CRADA) between VA and a private company in 2016. The CRADA contemplated VA sharing with the private company the health data of all veterans who had ever received health care from VA. The CRADA was canceled prior to the release of any health data. The OIG did not substantiate the existence of any conflict of interest; however, investigators found that two VA employees involved in creating the CRADA made false representations to and concealed material information from VA’s approving official for the agreement. Before the CRADA was executed, VA privacy experts informed the two VA employees that the terms of the proposed CRADA raised regulatory concerns that needed to be addressed before approval. Despite the privacy experts’ objections, the two VA employees intentionally failed to disclose the unresolved privacy issues to the approving official. They also falsely represented that all reviews, including privacy, information security, and legal, had been completed—implying that any identified issues had been addressed and resolved. The OIG concluded that the approving official relied on the information received from the two VA employees and was led to approve the CRADA under false pretenses. As a result of the two VA employees’ actions, the health data of tens of millions of veterans would have been placed at risk of disclosure if VA officials had not detected a problem and cancelled the CRADA before information was shared with the private company. The matter was declined for prosecution. The OIG made two recommendations related to determining what administrative action, if any, VA should take with respect to the two employees’ conduct.

What We Looked AtThis report presents the results of our quality control review (QCR) of KPMG LLP's management letter related to the audit it conducted, under contract with us, of the Federal Aviation Administration's (FAA) consolidated financial statements for fiscal years 2020 and 2019. In addition to its audit report on FAA's financial statements, KPMG issued a management letter that discusses 17 internal control matters that it was not required to include in its audit report.What We FoundOur QCR of KPMG's management letter disclosed no instances in which KPMG did not comply, in all material respects, with generally accepted Government auditing standards.RecommendationsKPMG made 20 recommendations in its management letter. FAA concurred with all 20 recommendations.

What We Looked AtThis report presents the results of our quality control review (QCR) of KPMG LLP’s management letter related to the audit it conducted, under contract with us, of the Department of Transportation’s (DOT) consolidated financial statements for fiscal years 2020 and 2019. In addition to its audit report on DOT’s financial statements, KPMG issued a management letter that discusses 12 internal control matters that it was not required to include in its audit report. What We FoundOur QCR of KPMG’s management letter disclosed no instances in which KPMG did not comply, in all material respects, with generally accepted Government auditing standards. RecommendationsKPMG made 14 recommendations in its management letter. DOT concurred with all 14 recommendations.