Federal Reports

The objective of this inspection was to determine if the Farm Credit Administration complied with the Payment Integrity Information Act for FY 2025.

Annual summary perspective on the most serious management and performance challenges facing the FTC, as well as a brief assessment of the agency’s progress in addressing those challenges.

We have reviewed the U.S. Department of Housing and Urban Development’s (HUD’s) Detailed
Accounting Report and the related management assertions for National Drug Control Program activities
for the fiscal year ended September 30, 2025. We also reviewed the Budget Formulation Compliance
Report, which includes budget formulation information for fiscal year 2027, and the related
management assertions for National Drug Control Program activities. HUD’s management is responsible
for preparing the Detailed Accounting Report and Budget Formulation Compliance Report in accordance
with (or based on) the Office of National Drug Control Policy’s (ONDCP) Circular, National Drug Control
Program Agency Compliance Reviews, dated September 9, 2021. Our responsibility is to express a
conclusion about the reliability of each assertion made in these reports.
We performed this review as required by section 705(d) of Public Law 105-277, which requires National
Drug Control Program agencies to submit to the Director of ONDCP a detailed accounting of all funds
spent by the agencies for National Drug Control Program activities during the previous fiscal year and
that the accounting be authenticated by agency inspectors general before submission.

For our review, we performed the following: (1) reviewed HUD’s evidence for the assertions, (2)reviewed HUD’s source files for data reported in the Detailed Accounting Report, (3) determined whether HUD made the assertions required by ONDCP, and (4) made necessary inquiries of HUD and ONDCP personnel.

Based upon our review, we are not aware of any material modifications that should be made to HUD’s
Detailed Accounting Report and Budget Formulation Compliance Report for them to be in accordance
with ONDCP’s Circular, National Drug Control Program Agency Compliance Reviews, dated September 9,
2021.

HUD’s management’s assertions, along with the Detailed Accounting Report and Budget Formulation
Compliance Report, are included as attachment A.
 

This is the second report of the fiscal year 2025 financial statements audit of the Smithsonian Institution performed by the independent public accounting firm of KPMG LLP (KPMG). On February 27, 2026, KPMG issued its independent auditor’s report on the Smithsonian Institution’s statement of financial position as of September 30, 2025, and the related statements of financial activity and cash flows. KPMG expressed an unmodified opinion that concluded the financial statements were presented fairly, in all material respects, in accordance with the applicable financial reporting standards. 
 

This report communicates the results of the Fiscal Year 2025 Federal Trade Commission Office of Inspector General review of the FTC’s compliance with the Payment Integrity Information Act of 2019 (PIIA) (Public Law 116-117).

The Office of the Inspector General performed an audit to determine if the backup and recovery process for operational technology cyber assets at Tennessee Valley Authority (TVA) natural gas plants were (1) designed in accordance with federal guidance and (2) operating as defined by TVA policy.  We determined TVA Generation’s backup and recovery procedure was designed in accordance with federal guidance for most areas.  However, the (1) procedure did not align with federal guidance for encryption and (2) process was not operating as defined by TVA Generation’s procedure.  Specifically, the National Institute of Standards and Technology recommends cryptographic mechanisms be implemented to prevent unauthorized disclosure and modification of data; however, encryption was not addressed in TVA Generation’s procedure.  Additionally, none of the plants selected for testing had a documented backup and recovery plan as required by procedure.

Background 

The Postal Regulatory Commission (PRC) participates in the General Services Administration SmartPay® program. The program provides purchase cards to federal agencies through contracts negotiated with bank providers. PRC purchase card holders will use the government purchase card as its preferred acquisition method for official government business purchases $10,000 and under, to expedite purchasing, streamline payment, and reduce administrative costs. 

In 2022, prior to relinquishing its oversight responsibility to the U.S. Postal Service Office of Inspector General (OIG), the PRC OIG conducted the PRC Purchase Card Expenses audit, which found among other things, that the PRC purchase card policy needed strengthening. This audit follows up on those findings. 

What We Did 

Our objective was to evaluate the PRC purchase card expenses and assess the effectiveness of internal controls and procedures. For this audit, we analyzed 252 of the 588 purchases (or about 43 percent) made from October 1, 2023, through July 31, 2025. 

What We Found 

The PRC made significant strides to improve controls over their purchase card program since the PRC Purchase Card Expenses audit, including standing up the Office of Budget and Finance, updating purchase card policies, and initiating a system to electronically track all purchases. However, we found opportunities for the PRC to further strengthen controls over purchase card transactions. Specifically, we identified inconsistencies and missing documentation across several transactions and noted other opportunities for the PRC to replace recurring monthly payments with contracts. Lastly, we found that the PRC did not consistently use preferred vendors as required. These conditions may result in missed opportunities for cost savings, reduce individual accountability, and increase the risk of misuse of purchase cards. 

Recommendations and Management’s Comments 

We made three recommendations to address the issues identified in the report. The Postal Regulatory Commission agreed with all three recommendations. Management’s comments and our evaluation are at the end of each finding and recommendation. The OIG considers management’s comments responsive to all recommendations. Corrective actions should resolve the issues identified in the report.