Federal Reports

This document discusses EAC OIG’s planned oversight activities for fiscal year 2016.

Our periodic assessment of ARC administered older open grants determined that ARC continued to administer these grants in an effective manner. Generally, timely follow-up action is initiated on older inactive grants to determine the potential for closing and deobligations.

Repeated attempts by ARC Program staff and OIG to obtain HUD cooperation and action to close grants and de-obligate funds for use on other needed projects in Appalachia remains unsuccessful.

The annual BAMR provides detailed information about the status of construction related grants administered by other Federal agencies for the Appalachian Regional Commission

Loan Guarantee Program

Employee Integrity

We found that SOLEX College did not disburse Title IV funds only to eligible students enrolled in Title IV-eligible programs. We found that SOLEX College’s two English as a second language programs were not Title IV-eligible programs because SOLEX College did not admit only students who needed English as second language instruction to use their already existing knowledge, training, or skills for gainful employment and did not document its determinationsthat the students needed the instruction for such purposes. For award years 2012–2013 and 2013–2014, SOLEX College disbursed $1,795,500 in Pell funds to students who were enrolled in ineligible English as second language programs.

We concluded that the Higher Learning Commission did not establish a system of internal control that provided reasonable assurance that schools’ classifications of delivery methods and measurements of student learning for competency-based education programs, including direct assessment programs, were sufficient and appropriate to help the Department ensure that the schools’ programs were properly classified for the purposes of awarding Federal student aid authorized. We further reported that the Higher Learning Commission did not consistently apply its standards for reviewing competency-based education programs because its policies and procedures for substantive change applications needed strengthening. As a result of these weaknesses, the Department might not receive sufficient information about a school’s proposed competency-based education programs to make fully informed decisions about the Title IV eligibility of the programs.

Timely follow-up action is initiated on older inactive grants to determine the potential for closing and de-obligations.

ARC Program staff and OIG to obtain HUD cooperation and action to close grants and de-obligate funds for use on other needed projects in Appalachia remains unsuccessful

In August 2008, numerous newspaper articles questioned the fairness of a TVA Maintain and Gain transaction granting water access to The Cove at Blackberry Ridge LLC (Blackberry). The articles raised questions about whether the Blackberry's primary investor, a Congressman, used his position to influence TVA's decision to grant Blackberry's request for water access. Because doubt was cast on the fairness of a TVA process, the OIG conducted an inspection and found no evidence of pressure on TVA from the Congressman to give Blackberry water access on this lakefront project. However, the appearance of possible favoritism resulted in reputational harm to both the Congressman and TVA. As a result of that inspection, TVA and the Board of Directors developed the "Obtaining Things of Value from TVA Protocol" (Protocol) in June 2009 to provide a means to identify the potential of actual or apparent conflicts of interest or the appearance of the exertion of undue influence on the part of a person applying for a TVA benefit.This audit was initiated to determine whether (1) the design provides reasonable assurance of meeting its intended purpose and (2) the Protocol was implemented as required. We determined the Protocol provides false assurance TVA is mitigating the risk of undue influence due to several factors: (1) the design not meeting its intended purpose, (2) the Protocol not being implemented as required, due to inconsistent incorporation into policies and procedures and noncompliance with some Protocol requirements, (3) a lack of consequences for the applicant's noncompliance with self-disclosure, and (4) an absence of instructions on how an employee should disclose knowledge of actual or apparent undue influence limits the likelihood it will be identified and prevented. Ultimately, this poses a risk of reputational harm to TVA and the applicant, person, corporation, or entity seen as receiving the benefit.We recommended TVA (1) perform a risk assessment to determine what types of "things of value" and "covered persons" should be defined in the Protocol; (2) enhance the Protocol by evaluating the benefit of whether to define applicant violation consequences, incorporating reporting guidelines for employees, and revising immediately, and requiring review cadence; (3) require implementation of the Protocol for benefits identified as "things of value," into all TVA related policies and processes; (4) develop a repository for all types of defined "covered person" requests other than those related to Section 26a permit and interest in real property requests; (5) identify who is responsible to brief the TVA Board's Audit, Risk, and Regulation Committee; (6) provide annual training; and (7) disseminate the Protocol annually, at a minimum, to TVA personnel who could be affected by its requirements.

The TVA developed an integrated resource plan (IRP) to guide the organization in meeting future energy demand. Due to the importance of the TVA's IRP as a directional document for TVA's future, the OIG evaluated the adequacy of TVA's development process for the 2015 IRP, including demand-side and supply-side strategies. We determined TVA's process for developing the 2015 IRP was adequate in considering potential future uncertainties and associated responses. Specifically, we determined the IRP project team met stakeholder input objectives by engaging numerous stakeholders and incorporating public opinions into the development of the IRP; considered project risks, including those related to project management; and incorporated practices commonly seen in integrated planning processes, as well as best practices, into the IRP. In our opinion, the IRP team improved on integrated resource planning efforts as the 2015 IRP incorporated lessons learned from the 2011 IRP, where applicable. Additionally, we determined scenario and strategy development and consideration of IRP inputs were consistent with those of other organizations. TVA developed metrics to analyze the portfolios generated in the 2015 IRP that reflected stakeholder input, where applicable, and were consistent with TVA's strategic mission and imperatives. Lastly, we determine considerations included in the Supplemental Environmental Impact Statement were adequate.

Seek link below for the full report.

During this semiannual period, we issued a report on the Library’s need to determine an eDeposit and eCollections strategy and two reports on security at the Library’s facility in Landover, Maryland. These reports highlighted a number of issues of significant importance to the Library. For example, the eDeposit audit report revealed that the Library lacks an overarching eCollections strategy for ingesting and protecting electronic works, which takes into account the unique business needs of the U.S. Copyright Office and the necessity to better manage critical financial management information. In addition, the Library’s new senior leadership team provided OIG with significant additional funding to support contracting for a wide variety of information technology-related audit efforts.

We found significant weaknesses in the processes for performing program reviews. We also found a weakness in selecting schools for program reviews. Program review specialists did not always conduct program reviews in accordance with FSA’s program review procedures. Specifically, required forms and documents were missing from the program review files, and staff did not always complete forms, adequately document fiscal testing for timely disbursement of funds and excess cash, determine whether schools had implemented Direct Loan quality assurance systems, and conduct distance education program reviews. We also found limited evidence of supervisory review of the program review files to ensure program review procedures are adequately completed. Further, the time allotted to perform program reviews may not have been adequate. Program Compliance division managers did not consider high annual dropout rates when prioritizing schools for program reviews as required by the HEA. As a result of the significant internal weaknesses we found, FSA has limited assurance that program reviews are appropriately identifying and reporting all instances of noncompliance.

The OIG audited TVA's Contractor Workforce Management (CWM) process for acquiring craft and noncraft staff augmentation contractors to determine whether the process was operating as intended and risks were being adequately mitigated. The purpose of the process was to "maintain the highest performing contractor workforce at the lowest total cost of ownership."We determined there was no assurance the process was operating as intended, and some risks were not being adequately mitigated. Specifically, we determined (1) the process was primarily designed to acquire and process staff augmentation contractors, but the process could only provide limited assurance of assembling the least-cost contractor workforce; (2) controls around contractor employment tenure could be improved; (3) numerous exceptions to a control capping noncraft staff augmentation contractor salaries were being granted; (4) hiring managers could choose job positions in the contractor selection system with higher pay rates than intended for the position being filled; (5) CWM performance metrics were not being calculated; and (6) contractor data inaccuracies existed within TVA systems. We also identified three CWM process risks that may not be adequately mitigated, including compliance with TVA's Citizenship Requirements policy, conflicting employer-employee relationships, and compliance with United States Citizenship and Immigration Services guidance. TVA management agreed with our recommendations to address the findings and risks noted above. Summary Only

At the request of the Assistant Chief of Police (ACOP), the Office of Inspector General (OIG) conducted agreed-upon procedures (AUPs) related to Leave Restriction Status (LRS). OIG engaged Cotton and Company, LLP to assist in determining the adequacy, effectiveness, and efficiency of policies, procedures, and practices regarding the Department’s LRS process. In addition, we identified best practices for improving upon processes in effect as of June 30, 2015.  OIG obtained USCP’s applicable directives, Standard Operating Procedures (SOPs), and Collective Bargaining Agreements (CBA) for sworn officers and civilian personnel. We also conducted interviews with USCP personnel, consisting of two deputy chiefs, two lieutenants, four sergeants, and a Human Resources Specialist.

At the request of the Assistant Chief of Police (ACOP), the Office of Inspector General (OIG) conducted agreed-upon procedures (AUPs) related to its restricted duty program. With ACOP concurrence, we agreed to the following: (1) assess controls and compliance with applicable guidance pertaining to restricted duty decision-making, (2) examine years of service and leave balances related to trends in the population of restricted duty beneficiaries and benefit payments, and (3) suggest options for revising the restricted duty benefit.  OIG analyzed data the Department provided for Fiscal Year (FY) 2013 through March 31, 2015 the most recent years available. OIG reviewed applicable Federal laws, regulations, and program policies, reviewed a non-statistical sample of restricted duty beneficiaries and assignments, and interviewed Department officials, including representatives of the Office of Human Resources (OHR).