Federal Reports

The OIG performed a risk assessment of VA’s grant closeout process to determine if an audit or review of VA’s process was warranted, as required by the Grants Oversight and New Efficiency Act of 2016. The act also required agencies to report on grants that were expired for more than two years that had not been closed out, and to report challenges leading to delays in closing such grants. Given these requirements, the assessment team focused on the timeliness of grant closeouts at VA. The team considered the number of open grants expired for more than two years, the relative size of their undisbursed balances compared to their respective grant programs, and the relative size of these grant programs to VA’s overall budget. VA reported 34 expired grants more than two years old with undisbursed balances as of the end of 2019. The reported undisbursed balances for these open but expired grants totaled approximately $14.8 million, but this total was reduced to less than $500,000 when the team adjusted for system discrepancies associated with the State Home Construction and Veterans Cemetery Grants Programs. For fiscal year 2020, the estimated budgets for the grant programs covered in this risk assessment totaled approximately $2.27 billion, or only about 1.03 percent of VA’s overall budget estimate of $221 billion. Moreover, VA’s largest grant program, State Home Per Diem, obligates funds at the time an invoice is paid. As a result, for about 67 percent of the $2.27 billion grant budget, VA has implemented a process to mitigate the risk of undisbursed balances that can tie up funds for other uses. The team concluded that an overall audit or review of the timely closeout of grants is not warranted at this time.

Medicare Part B covers dialysis services for beneficiaries with end-stage renal disease (ESRD). Prior OIG reviews identified inappropriate Medicare payments made for ESRD (dialysis) services that were medically unnecessary, not properly ordered, undocumented, or did not comply with Medicare consolidated billing requirements.

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DHS’ funding and payments for PALMS violated Federal appropriations law. Specifically, DHS violated the bona fide needs rule in using fiscal year (FY) 2011 component funds in FYs 2012 and 2013 for e-Training services and PALMS implementation respectively, when the funds were not legally available for those needs. As a result of the bona fide needs rule and purpose statute violations, DHS may also have violated the Antideficiency Act in FYs 2013 – 2015 when the Department augmented appropriations for the Human Resources Information Technology program with component funds. We made nine recommendations to address violations of Federal appropriations law and to improve controls to prevent such potential violations in the future.