Federal Reports

As part of our annual audit plan, we performed an audit of costs billed to the Tennessee Valley Authority (TVA) by Terracon Consultants, Inc. (Terracon) for geotechnical and hydrogeological site investigations and groundwater quality monitoring services under Contract No. 15087.  Our audit objective was to determine if costs were billed in compliance with the contract’s terms.  Our audit scope included $9.93 million in costs paid from January 3, 2022, through October 21, 2024.

In summary, we determined Terracon overbilled TVA an estimated $387,879, including (1) an estimated $304,431 in overbilled labor costs (of which TVA has recovered $3,164), (2) $81,898 in ineligible subcontractor markups, and (3) $1,550 in overbilled travel costs.  In addition, we identified instances where meals and incidental costs associated with travel were not billed in accordance with the contract, resulting in a net immaterial overbilling.  We also found TVA did not include a pricing schedule containing the time and material billing rates until March 28, 2024, although the contract was effective July 13, 2020.

Why We Did This Report

The U.S. Environmental Protection Agency Office of Inspector General conducted this audit to determine whether the EPA complied with the Payment Integrity Information Act for fiscal year 2024 reporting and to review the EPA’s implementation of its corrective action plans for prior audit recommendations.

Summary of Findings

The EPA did not comply with applicable Office of Management and Budget requirements for the Payment Integrity Information Act of 2019 for its fiscal year 2024 reporting. Specifically, for its grants payment stream, the EPA published a 0.77 percent improper payment estimate with no unknown payments. The Agency’s estimate was not based on an accurate sampling and estimation methodology plan, referred to as a statistical sampling plan. Therefore, we could not determine whether the published estimate is valid and representative of the grant program characteristics. In addition, the EPA needs to improve its documentation to ensure compliance with policies and procedures. The Office of the Chief Financial Officer does not require staff to document who performed the risk assessment review and what information staff considers in the qualitative risk assessment reviews.

We found that the Agency completed corrective actions for the three recommendations from our FY 2023 audit report and for one recommendation from our FY 2021 audit report.

Why We Did This Report

The U.S. Environmental Protection Agency Office of Inspector General performed this audit to determine whether the U.S. Chemical Safety and Hazard Investigation Board, known as the CSB, complied with the Payment Integrity Information Act of 2019 in fiscal year 2024.

Summary of Findings

In FY 2024, the CSB complied with PIIA and OMB improper payment requirements. The outlays for the CSB totaled $11.34 million. The CSB reported gross improper payments totaling $2,659. These improper payments were associated with payroll and travel expenses. The CSB reported no unknown payments, resulting in a total improper and unknown payment of $2,659, or 0.02 percent of total outlays. This total was significantly less than the statutory threshold of 1.5 percent of program outlays established in PIIA for improper and unknown payments. In addition, we confirmed that the CSB complied PIIA reporting requirements to (1) publish payment integrity information with the Agency’s annual financial statement and accompanying materials and (2) post the annual financial statement and accompanying materials on its website.

The VA Office of Inspector General (OIG) Vet Center Inspection Program provides a focused evaluation of aspects of the quality of care delivered at vet centers. This inspection report evaluated four randomly selected vet centers throughout Midwest district 3 zone 2: Evanston, Illinois; Gary Area, Indiana; and La Crosse and Milwaukee, Wisconsin.

This OIG inspection focused on four review areas: suicide prevention; consultation, supervision, and training; outreach; and environment of care. The suicide prevention review evaluated vet center staff participation on VA medical facility mental health executive councils, resulting in one recommendation across three of the four vet centers inspected. The consultation, supervision, and training review identified concerns with external clinical consultation, monthly client record reviews, and completion of select trainings, resulting in three recommendations across all four vet centers inspected. The outreach review evaluated outreach plan completion, inclusion of strategic components, and tailoring of outreach activities to eligible individuals, which resulted in one recommendation across three of the four vet centers inspected. The environment of care review evaluated vet centers’ physical environment and general safety, resulting in one recommendation at one of the three vet centers inspected. One vet center was closed and had a temporary location; therefore, an environment of care review was not completed at this site. However, the inspection did result in additional findings related to the vet center’s closure and relocation, resulting in two recommendations.

The OIG issued a total of eight recommendations for improvement.

The objective of our audit was to determine whether the U.S. Department of Education (Department) complied with the Payment Integrity Information Act of 2019 (PIIA) for FY 2024. We found that the Department complied with the PIIA for the FY 2024 reporting period because it met all six compliance requirements as described in Finding 1. However, we found that the Department could improve its processes for implementing its methodologies for estimating improper payments and unknown payments. While we found that the point estimates for the Federal Pell Grant (Pell) and William D. Ford Federal Direct Loan (Direct Loan) programs reflect the programs' annual improper payments and unknown payments, we found that the Department’s improper payment and unknown payment estimates for these programs were not reliable because of issues in the calculation of the confidence intervals, as described in Finding 2. Specifically, the improper payment sampling and estimation plans for the Pell and Direct Loan programs included nonrandom student-level sampling from some of the compliance audits Federal Student Aid (FSA) used to calculate the estimates, which affected the accuracy and appropriateness of the confidence intervals used in the calculation of the improper payment and unknown payment estimates. The nonrandom student-level sampling issue has been a repeat finding since our report on the Department’s compliance with improper payment reporting requirements for FY 2019. We recommend that FSA develop sampling and estimation plans for the Pell and Direct Loan programs that will produce reliable estimates. 

The Payment Integrity Information Act (PIIA) requires agencies to annually review and identify programs and activities that may be susceptible to significant improper payments, estimate the improper payment rates in agency programs, and report on their actions to reduce and recover those payments. For FY 2024, AmeriCorps met eight of ten PIIA compliance requirements. We made three findings relating to the two remaining requirements.  We found that: (1) AmeriCorps reported an improper payment rate above the ten percent compliance threshold for one program, the Foster Grandparent Program (FGP); (2) AmeriCorps’ published improper payment estimates for AmeriCorps State and National (ASN) and FGP are not accurate, reliable, or consistent with OMB guidance; and (3) AmeriCorps’ published improper payment estimates for the National Service Trust (NST) are not accurate, reliable, or consistent with OMB guidance. AmeriCorps concurred with the first finding and agreed to continue to develop and implement actions to reduce improper payment rates below ten percent. AmeriCorps did not concur with our second and third findings. We made six new recommendations related to our second and third findings in this report on unmatched reporting errors, payments to ineligible recipients, and published improper payment estimates for the NST. AmeriCorps declined to implement all six recommendations. We will keep open the two prior year recommendations related to the first finding until AmeriCorps submits documentation to demonstrate the completion and sufficiency of the corrective actions. The six recommendations related to the second and third findings will remain open and be classified as unresolved (disagreed) in our Semiannual Report to Congress.

HUD’s Office of Single Family Housing did not consistently monitor its Field Service Management (FSM) contractors’ property preservation and protection services.  Specifically, HUD provided inconsistent monitoring for 34 of the 79 statistically sampled records we reviewed, and these involved discrepancies between HUD’s assessment, the support, and the performance work statement.  HUD did not develop and apply a clear and uniform review framework to ensure that its process and procedures provided for effective FSM contract monitoring.  As a result, HUD (1) cannot ensure its REO inventory is being maintained in an adequate condition and (2) is not aware of whether contracting actions are needed to address deficient performance.  

We recommend that HUD (1) develop and implement uniform procedures for the FSM desk monitoring review, including a second level review for the FSM monitoring reviews and process for each inspection type; (2) update the FSM monitoring plan and FSM qualitative monitoring database to (a) clearly define the monitoring questions, (b) include a section for Q7 New Not Ready to Show properties, (c) define which routine inspection reports will be reviewed to conduct the routine inspection monitoring reviews and (d) develop a monitoring question to evaluate photo date stamps; and (3) ensure that program officials periodically provide all FSM CORs and staff involved in the monitoring process uniform property inspection training.