Federal Reports

What We Looked AtUnder the Office of National Drug Control Policy (ONDCP) Circular, Accounting of Drug Control Funding and Performance Summary (Circular), when drug-related obligations total less than $50 million and a detailed accounting would be an unreasonable burden, agencies may submit alternative reports. For this reason, the Federal Aviation Administration (FAA) submitted alternative Drug Control Obligation Summary and the Performance Summary reports. We reviewed the reports and related management assertions to determine the reliability of those assertions compliance with the Circular in all material respects. We conducted our review in accordance with generally accepted Government auditing standards for attestation engagements. Specifically, we reviewed selected accounting internal controls to determine whether drug control funds were properly identified in the accounting system. In addition, we reviewed FAA’s internal controls for performance measures to gain an understanding of how the measures were developed. We limited our review processes to inquiries and analytical procedures appropriate for an attestation review according to the Circular’s criteria.What We FoundFAA’s Drug Control Obligation Summary identified $20,516,000 of obligations from two of FAA’s drug control decision units. When we traced those obligations, we found no material exceptions. FAA’s performance targets for fiscal year 2019 were to: initiate regulatory investigations on 95 percent of all airmen involved in the sale or distribution of illegal drugs within 30 days of knowledge of a conviction or notification by law enforcement, ensure the aviation industry conducts random drug and alcohol testing of safety sensitive employees with results not exceeding 1 percent positives for drugs and 0.5 percent positives for alcohol, and conduct 1,205 drug and alcohol inspections of the aviation industry to ensure compliance with Federal regulations. FAA indicated that it met its performance targets.Based on our review, we are not aware of any material modifications that should be made to FAA’s fiscal year 2019 Drug Control Obligation Summary and Performance Summary reports in order for them to be in accordance with the Circular.

We conducted an attestation review of the U.S. Department of Housing and Urban Development (HUD), Office of Special Needs, Continuum of Care Homeless Assistance Grants Program, regarding drug control accounting and associated management assertions for fiscal year 2019. As required by Federal statute 21 U.S.C. 1704(d)(1), we reviewed HUD’s drug control accounting, including its written assertions. Our responsibility is to express a conclusion on the subject matter or assertion based on our review. We performed review procedures on HUD’s assertions and the accompanying fiscal year 2019 reports. Based upon our review, we are not aware of any material modifications that should be made to HUD’s assertions or the accompanying fiscal year 2019 reports in order for them to be in accordance with Office of National Drug Control Policy requirements.

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s compliance with the travel card program requirements for fiscal year 2018 based on our risk assessment. Our audit objective was to determine whether HUD travel cards were used for potentially illegal, improper, or erroneous purchases and whether travel cards were used when required. We found that out of a sample of transactions that we identified as high risk, HUD’s travel cards were used for 166 illegal, improper, or erroneous purchases totaling nearly $23,000. In addition, 19 employees used their personal sources of payment instead of the government travel card in violation of the Federal Travel Regulations. We recommend that the Office of Chief Financial Officer (1) coordinate with the related program offices, the Office of the Chief Human Capital Officer, and the Office of Employee Labor Relations to take appropriate actions against the employees identified in this report; (2) improve controls to ensure the proper use of the travel cards and prevent or detect employees who did not use their government travel cards when required; and (3) provide employees with appropriate training on the issues identified in this report and ensure that all cardholder training is up to date.

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s compliance with the purchase card program requirements for fiscal years 2017 and 2018 based on our risk assessment. Our audit objective was to determine whether HUD maintained accurate records of cardholders and transactions; HUD employees took purchase card training when required; and HUD purchase cards were used for illegal, improper, or erroneous transactions. HUD did not have accurate and complete records of cardholders and transactions, including errors in cardholder closure dates, errors in training dates, inadequate tracking of merchant category code (MCC) overrides, and incomplete transactional data. In addition, purchase cardholders and approving officials did not always take purchase card training when required. Further, we identified 10 instances in which HUD purchase cards were used for improper purchases and incurred improper interest charges totaling $29,423. We recommend that the Chief Procurement Officer (1) implement processes to periodically audit or reconcile the shared service provider’s records, (2) review hierarchies, (3) ensure that training is taken when required, (4) suspend cardholders or approving officials who fail to take training or repeatedly cause HUD to pay interest, and (5) research the incomplete monthly transactional data and identify a solution. In addition, we recommend that the Chief Procurement Officer (1) enhance the process to periodically analyze data for split transactions or improper MCCs, (2) improve notifications to employees, and (3) follow up on any potential issues identified.

We conducted an attestation review of the U.S. Department of Housing and Urban Development (HUD), Office of Special Needs, Continuum of Care Homeless Assistance Grants Program, regarding drug control accounting and associated management assertions for fiscal year 2019. As required by Federal statute 21 U.S.C. 1704(d)(1), we reviewed HUD’s drug control accounting, including its written assertions. Our responsibility is to express a conclusion on the subject matter or assertion based on our review. We performed review procedures on HUD’s assertions and the accompanying fiscal year 2019 reports. Based upon our review, we are not aware of any material modifications that should be made to HUD’s assertions or the accompanying fiscal year 2019 reports in order for them to be in accordance with Office of National Drug Control Policy requirements.

We audited Community Action North Bay’s Continuum of Care Program based on hotline complaints (HC-2016-2275 and HT-2019-1142) and concerns expressed by the San Francisco Office of Community Planning and Development that included matching noncompliance issues. The complaints alleged improper accounting, timekeeping irregularities, unreported program income, and conflicts of interest. Our objective was to determine whether the Community administered its Continuum of Care Program in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.The complaints and concerns had merit. The Community did not administer its Continuum of Care Program in accordance with HUD requirements. Specifically, it did not maintain documents required to support that (1) it met the matching contribution requirement, (2) its rapid rehousing and permanent supportive housing programs assisted eligible individuals, and (3) program income and expenses were supported and eligible. These conditions occurred because the Community did not implement corrective actions recommended by HUD and its staff lacked the knowledge and skills needed to administer the program. As a result, the Community is at risk of having to repay HUD grant funds totaling $647,827 if it cannot provide supporting documentation related to required matching contributions. It also could not support the eligibility of individuals assisted by its rapid rehousing and permanent supportive housing programs.We recommend that the Director of HUD’s San Francisco Office of Community Planning and Development require the Community to (1) support that it met the matching contribution requirement or reimburse HUD $577,670 from non-Federal funds, (2) reclassify $28,576 as program income to the specific permanent supportive housing program, and (3) support that $2,687 paid to a board member for legal services was allowed through a HUD-approved waiver or repay HUD from non-Federal funds.