Federal Reports

We audited the Housing Authority of the City Long Beach’s Housing Choice Voucher Program based on a referral from the U.S. Department of Housing and Urban Development’s (HUD) Los Angeles Office of Public Housing due to concerns regarding its financial activity control weaknesses. The objective of the audit was to determine whether the Authority administered its Housing Choice Voucher Program in accordance with Program requirements, with an emphasis on its financial transactions, cost and payroll allocations, contracting, and procurement.The Authority did not follow Program requirements under 2 CFR (Code of Federal Regulations) 200 and 24 CFR 982 in administering its Housing Choice Voucher Program. It did not adequately support or perform overhead allocations, follow procurement requirements, or ensure that costs were eligible. As a result, HUD had no assurance that Housing Choice Voucher Program funds totaling more than $2.4 million were appropriately used for the operation of the Program. In addition $5,648 was not used for eligible Program expenses.We recommend that the Director of the Los Angeles Office of Public Housing require the Authority to (1) develop and implement a HUD-approved cost allocation plan(s), (2) support the reasonableness of more than $1.9 million in overhead allocations[1] or repay the Housing Choice Voucher Program from non-Federal funds, (3) determine how much of the general operating costs applied to the Housing Choice Voucher Program and repay potential overcharges (estimated at $50,947) to the Program from non-Federal funds, (4) support or repay $25,827 in personnel expenses and $64,150 for accounting services that applied to other programs from non-Federal funds, (5) support the reasonableness of the $340,701 Casterline and $33,415 Genesis contract amounts or repay the Program from non-Federal funds, (6) implement additional written procurement and contracting policies and procedures, and (7) repay the Housing Choice Voucher Program for $5,648 in unallowable expenses from non-Federal funds.[1] The Authority reimbursed $183,251 to the Housing Choice Voucher program, but did not adequately indicate to which of the questioned costs it was applicable. Offsets to the questioned costs may be applied once a correct allocation and reconciliation is performed.

What We Looked AtIn support of its mission to operate the National Airspace System, the Federal Aviation Administration (FAA) relies on an expansive portfolio of capital assets—including infrastructure, technology, and systems. These capital investments contribute to the multibillion-dollar acquisition portfolio that FAA manages each fiscal year. Over the years, various stakeholders have identified significant issues with the Agency’s acquisition processes and practices. Citing those concerns, Representative Bill Shuster, then Chairman of the House Committee on Transportation and Infrastructure, asked us to conduct a review. Accordingly, our audit objective was to assess FAA’s competitive award practices for its major acquisition program contracts, including safeguards against conflicts of interest (COI) on the part of FAA officials involved in the award process. What We FoundFAA’s competitive award practices for its major program contracts expose the Agency to cost and performance risks. First, FAA’s actions to establish fair, reasonable, and realistic contract pricing lack sufficient support—specifically, independent Government cost estimates (IGCE) and price analyses, both of which are key to efficient pricing. Second, FAA’s award practices for its major program contracts do not always promote competition, which could contribute to the Agency’s continued reliance on the same small pool of contractors. Third, FAA is putting the integrity of its procurement process at risk because it does not consistently take required actions to prevent COI. For example, FAA could not provide complete COI agreements for all the officials involved in the selection process for five contracts with a total value of over $1 billion. Finally, FAA lacks complete award documentation and a tracking process for its major program contracts, which impacts its ability to manage potential cost and schedule risks. We determined that FAA put up to $4.9 billion in Federal funds at risk because it did not have required IGCEs before it awarded three competitive contracts and did not provide a sound rational basis for awarding another three contracts noncompetitively. Our RecommendationsFAA concurred with all 10 of our recommendations to improve its major program contract award practices and provided appropriate completion dates.

Our objective was to determine whether Social Security Administration (SSA) processing center (PC) employees correctly processed Old-Age, Survivors and Disability Insurance (OASDI) post-entitlement alerts produced by the Title II Redesign (T2R) system.

We selected the Tucson P&DC for review based on our analysis of manual flats productivity as measured by the Management Operating Data System (MODS). The Tucson P&DC’s FY 2019 manual flats productivity of 992 mailpieces per hour was significantly higher than the national average productivity of 332 mailpieces per hour. Our objective was to assess manual flats processing operations at the Tucson P&DC.

This Management Advisory Memorandum (MAM) was originally issued to then-Director Kathleen Sawyer, and posted on March 2, 2020. Consistent with the OIG’s usual practices, the Federal Bureau of Prisons (BOP) was provided the opportunity to review the MAM for factual and legal accuracy before the March issuance, and it raised no concerns to the OIG at that time. After the March issuance, the BOP notified the OIG of concerns, primarily about language in the MAM relating to the applicability of certain provisions of the Federal Acquisition Regulation (FAR) to contracts below a threshold amount. After considering those concerns, the OIG modified the MAM and is reissuing it as modified and removing the original MAM from our website. The modifications do not substantially affect the OIG’s recommendations.