Federal Reports

This report presents the results of the VA OIG’s supplemental review of service obligations for VHA’s recruitment, relocation, and retention incentives, which follows on a report published in June 2025. While completing that audit, the OIG team became aware of an issue occurring when some VA employees breached their required service obligations. Accordingly, the OIG initiated this supplemental review to determine whether VA issued debt notices for these employees.

Regional human resources staff could not consistently provide evidence that debt notices were initiated or issued to employees who breached an incentive service agreement. The breach of service obligation periods ranged from about one month to one and a half years. During FYs 2020–2023, VA did not initiate debt notices to at least 1,100 employees who moved to another region or left VA before fulfilling their agreements, resulting in VHA paying about $17.5 million for the breached service obligations. This occurred because regional human resources officials did not always accurately enter data into HR Smart, VA’s personnel system of record, and pop-up notifications in this system did not prevent staff from processing personnel actions even when service obligations would be breached. Furthermore, regional officials could not access personnel records when an employee left their network and, therefore, could not determine whether such employees met the required service obligations. VA concurred with all eight recommendations from the June 2025 report and the four new recommendations in this report and has taken action to improve how it governs the recruitment, relocation, and retention incentive process.
 

The independent public accounting firm of Allmond & Company, LLC, under contract with the Office of Inspector General, audited the EAC’s financial statements for the fiscal year ended September 30, 2025. The purpose of this letter is to convey information concerning control weaknesses that did not rise to the level of a significant deficiency or material weakness.

Demand Response (DR) programs offer incentives for electric utility customers to reduce their energy use during peak demand which reduces the need for generation and helps offset market purchases during times of peak cost.  TVA is expanding its portfolio and plans to invest more than $1.5 billion in its Energy Efficiency and DR programs from fiscal year (FY) 2024 through FY 2028.  Due to the risk of TVA’s investment not meeting the anticipated reduction in energy needs, we performed an evaluation to determine if TVA's investment in DR programs was delivering intended benefits. 

While the Demand Management (DM) organization increased the DR curtailment capacity, they did not meet the targets for FY 2024 or FY 2025. The curtailment capacity achieved was 27 percent less than planned in FY 2024 and 23 percent less than planned in FY 2025.  We identified two contributing causes for not achieving the DR program targets for curtailment capacity:  (1) the planned increases in DR capacity were set before some new and redesigned programs were completed, which resulted in inaccurate estimates; and (2) there were challenges with implementation and adoption of new and redesigned DR programs that impacted achievement of the goal.  Not achieving the planned curtailment capacity could result in increased cost to TVA.  Planned curtailment capacity is included in TVA’s strategy to meet demand.  If DM does not achieve its goals, TVA could be required to meet the demand with purchased power.  Since DR programs are mainly used when demand and therefore prices are the highest, purchasing the necessary capacity can be costly.

This report presents the results of our audit of selected financial activities and accounting records at U.S. Postal Service Washington, D.C., Headquarters; the Accounting Service Centers in Eagan, MN, and St. Louis, MO; and the St. Louis Accounting Service Center Satellite Office in San Mateo, CA, for the fiscal year ending September 30, 2025. 

Background

The Postal Reorganization Act of 1970 requires annual audits of the U.S. Postal Service’s financial statements. The Postal Accountability and Enhancement Act of 2006 requires the Postal Service to comply with Section 404 of the Sarbanes-Oxley Act. This section requires the Postal Service to report the scope and adequacy of its internal control structure and procedures and assess its effectiveness.

The U.S. Postal Service Board of Governors contracted with an independent public accounting (IPA) firm to express opinions on the Postal Service’s fiscal year 2025 financial statements and internal controls over financial reporting (an integrated audit). The IPA firm maintained overall responsibility for testing and reviewing significant Postal Service accounts, processes, and internal controls.