Federal Reports

The Diamondhead Water and Sewer District (District), received a Federal Emergency Management Agency (FEMA) grant award of $49.3 million from the Mississippi Emergency Management Agency (Mississippi) for damage resulting from Hurricane Katrina in 2005. We had concerns because it took the District about 10 years to break ground on its new wastewater treatment plant. We also wanted to determine whether FEMA accurately applied its “50 Percent Rule.” we identified $1.5 million of improper procurement, unsupported costs, duplicate insurance benefits, and uncompleted project costs that FEMA should disallow to the District. These problems were largely the result of Mississippi not fulfilling its grantee responsibility to ensure the District properly managed FEMA funds. Mississippi is responsible for monitoring subgrant activities, and is compensated with Federal funds to support subgrant management and oversight. It is FEMA’s responsibility to hold Mississippi accountable for proper grant administration.

The Department of Health and Human Services (HHS), National Institutes of Health (NIH), Division of Financial Advisory Services (DFAS), is the cognizant Federal agency responsible for negotiating and establishing indirect cost rates for for-profit organizations that receive the majority of their Federal awards from HHS.

The Office of the Inspector General conducted an evaluation of Lagoon Creek Combined Cycle Plant (LCCC) to identify strengths and risks that could impact LCCC’s organizational effectiveness. Our evaluation identified strengths related to(1) teamwork, (2) a supportive plant manager, and (3) organizational alignment. However, we also identified issues that could pose risks to LCCC’s effectiveness and its continued ability to meet its responsibilities. Specifically, some employees expressed concerns related to expired certifications because of lack of training to maintain those certifications, and their lack of in-depth knowledge regarding the operating systems at LCCC. In addition, several employees stated that communication could be improved to better share information across groups.

Fiscal Year: 2018Executive Summary: The IPERIA requires agencies and entities, such as the U.S. Equal Employment Opportunity Commission (EEOC), with improper payment estimates that do not meet the statutory thresholds to report an estimate of the annual amount and rate of improper payments, as well as reduction targets in their annual Agency Financial Reports (AFRs) or Performance and Accountability Reports (PARs) per M-15-02 Part IA 9 Step 4c (page 16). These agencies also are required to conduct a risk assessment to identify programs/activities that may be susceptible to significant improper payments. If an agency determines that it is not at high risk for significant improper payments, then risk assessments are required at least every 3 years. For programs reporting improper payment estimates that do not meet the statutory threshold, the other requirements on annual reduction targets, corrective action plans, etc. are not applicable. Additionally, small agencies should have a payment recapture program in place.

The VA Office of Inspector General (OIG) conducted a review in response to a Hotline complaint alleging that the Veterans Benefits Administration (VBA) Office of Transition, Employment, and Economic Impact (OTEEI) authorized printing services that were out of scope, resulting in an unauthorized commitment. The complainant also alleged that OTEEI misused the General Operating Expense (GOE) Appropriation to develop and maintain a dashboard and purchase Information Technology (IT) equipment and software. The OIG substantiated the allegation that VBA’s Chief of Transition executed an unauthorized commitment when he notified CALIBRE to print Transition Assistance Program training materials. As a result, OTEEI inappropriately obligated and spent approximately $2.1 million. The OIG also substantiated the allegation that OTEEI inappropriately obligated and spent approximately $9.6 million of its GOE Appropriation, rather than the IT Systems Appropriation, to develop and maintain a dashboard and purchase IT equipment and software. As a result, OTEEI committed statutory violations totaling about $11.7 million, resulting in improper payments. OTEEI also committed a Purpose Statute violation and may have violated the Antideficiency Act, pending the adjustments to its appropriation accounts. The OIG made three recommendations to include taking action to remedy the unauthorized commitment, obtaining appropriate funding for all future IT costs, and making account adjustments to debit the IT account and credit the GOE account.