Federal Reports

Audit of the FY 2014 financial statements with Management Letter.

The center for Rural Development works with communities to establish local philanthropic leadership and resources via a network of local partners in order to develop long term funding for future community development in all KY ARC distressed counties.

We found that the Department did not have a comprehensive plan or strategy to prevent student loan default, and thus could not ensure various Department offices’ efforts were coordinated and consistent. We also found that the roles and responsibilities of the offices and personnel tasked with preventing defaults or managing key default-related activities and performance measures to assess the effectiveness of the various default prevention activities were not well-defined. Further, we found that FSA’s Portfolio Performance Management Services group—the group responsible for analyzing the Federal student loan portfolio—had access to extensive loan and borrower information but had not used the information to identify trends or make recommendations for improvements or enhancements to the Department’s current default prevention activities. We also found that the servicing contracts that FSA executed with the Title IV Additional Servicers (TIVAS) in June 2009 did not explicitly establish minimum required default prevention activities that TIVAS must perform for borrowers with delinquent Department-held loans.

The Inspector General Act of 1978 (Public Law 95-452), as amended, requires that the Inspector General report semiannually to the head of the Department and the Congress on the activities of the office during the 6-month periods ending March 31 and September 30. The semiannual reports are intended to keep the Secretary and the Congress fully and currently informed of significant findings and recommendations by the Office of Inspector General.

As the U.S. Postal Service continues to address its difficult financial situation, some have argued that overall efficiency would improve if the Postal Service were to focus exclusively on the first and last mile (collection and delivery). While the introduction of workshare discounts has led to private industry taking over a portion of the middle mile – mail processing and transportation – allowing private industry to take over the entire middle mile warrants close examination. We therefore asked Dr. John Panzar, an expert in postal economics, to look at the economic implications of the Postal Service abandoning the middle mile completely and focusing exclusively on the first and last mile for the letter and flat market. Dr. Panzar finds that the Postal Service’s mail processing plays a vital role in ensuring the efficiency of the postal sector, even in the absence of economies of scale in mail processing.

To see our report, click on the link below

Management Letter for Fiscal Year 2014 Audit of the FLRA's Financial Statements

We completed a review of the Freeport Housing Authority’s administration of its low-rent housing and homeownership programs.  We selected the Authority due to a request from the U.S. Department of Housing and Urban Development’s (HUD) New York Office of Public and Indian Housing officials.  The objective of the audit was to determine whether the Authority administered its low-rent housing and homeownership programs in accordance with HUD’s regulations.

Our review determined that the Authority did not administer its low-rent housing and homeownership programs in accordance with HUD’s regulations.  Specifically, former Authority officials did not (1) maintain adequate records to support the proper procurement of services, including justifications for not using customary procurement procedures; (2) administer its homeownership program in compliance with the HUD-approved homeownership plan; (3) comply with admissions and occupancy administrative requirements; and (4) implement financial and general administrative practices that were consistent with requirements.  As a result, officials could not provide documentation to show that they expended more than $1 million in Federal funds for properly procured services.

Further, our review determined that officials could not ensure the proper use of more than $1.25 million in homeownership sale proceeds.  As such, some proceeds may have been improperly spent, depriving the Authority of funds that could have been used to complete the sale of all scattered-site properties under the program.  Former Authority officials also lacked records to support the integrity of the Authority’s tenant selection process and financial controls to ensure the proper allocation and disbursement of $270,849 in Federal funds.           

We recommend that the Director of HUD’s New York Office of Public Housing require Authority officials to (1) implement controls to ensure that the emergency procurement procedures in the Authority’s procurement policy comply with Federal regulations and are consistently followed, (2) provide supporting documents for the use of approximately $1.25 million in homeownership program sale proceeds, (3) maintain records to show the proper selection of applicants from the Authority’s waiting lists, and (4) develop and implement financial controls to ensure the proper allocation and disbursement of funds.

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Recommendations

Public and Indian Housing

•   2015-NY-1002-002-C

  $1,250,417.00

   

  We recommend that the Director of HUD’s New York Office of Public and Indian Housing require Authority officials to provide supporting documents for the proper use of $1,250,417 in sale proceeds from the scattered-site properties. Any amounts not supported or found to be improperly used should be repaid to the homeownership program from non-Federal funds.

During this period, we closed 68 investigations involving fraud or corruption related settlements, fines, restitutions, recoveries, and savings. In addition, as a result of our investigative work, criminal actions were taken against a number of people, including school officials and service providers who cheated the students they were in positions to serve. We also issued 12 audit-related reports that included recommendations to improve program operations.

The enclosed report presents the results of the audit of the Commission’s financial statements for the fiscal year ended September 30, 2014.

As part of our annual audit plan, we audited costs billed to the Tennessee Valley Authority (TVA) by VECTOR JV. VECTOR is a joint venture between Bechtel Power Corporation and Sargent & Lundy LLC, providing engineering services for Bellefonte Nuclear Plant Unit 1. Our objective was to determine if the $60.7 million in costs paid by TVA for Bechtel's services from October 1, 2010, through December 31, 2012, were billed in accordance with the contract terms and conditions. In summary, we determined VECTOR overbilled TVA an estimated $358,434 in costs for Bechtel's services, including:$246,353 in ineligible other direct costs.An estimated $47,978 in temporary living costs.$64,103 in ineligible labor costs.In addition, we noted several opportunities to improve contract administration by TVA. Specifically, we found TVA paid VECTOR (1) an estimated $1,747,353 in temporary living allowance (TLA) costs for Bechtel employees for time periods not shown on employee TLA certification forms and (2) an estimated $50,486 in excess costs because temporary living monthly allowances were not included in the contract's compensation terms until April 30, 2011. Summary Only

As consumers and small businesses increasingly use computers, smartphones, tablets and other devices to buy and sell goods, there is a growing demand for flexible ways to buy services to ship these goods. The Postal Service lags behind its primary competitors in offering technology-savvy customers mobile applications and credit services to pay for packages and shipping. But the Postal Service is making some moves towards increased payment flexibility; in fiscal year (FY) 2015 it plans to deploy mobile checkout and in FY 2014 it began offering smart card readers to all post offices. We recently looked at these initiatives. We also researched global trends in payment technologies for shipping and packages. The Postal Service could consider adopting some of these technologies as it works to satisfy eCommerce customers and be more relevant in the digital age.

The objective of this evaluation was to determine whether the organization’s financial management system and record keeping complies with federal requirements. The evaluation was conducted in accordance with the Council of the Inspectors General on Integrity and Efficiency's Quality Standards for Inspections and Evaluations, as applicable, and concluded that the Northwest Heritage Resources (NWHR) did not comply with financial management system requirements. NWHR did not have written policies and procedures in place for the management of Federal awards, to ensure that grant funds are not commingled, or to ensure that debarred or suspended contractors or recipients did not receive Federal assistance. Also, NWHR did not have a Section 504 self-evaluation on file.written policies and procedures in place .

As part of our annual audit plan, we audited costs billed to the Tennessee Valley Authority (TVA) by Nexant, Inc., for commercial and industrial energy efficiency services. Our audit included $63.6 million in costs paid by TVA between December 29, 2009, and March 21, 2014. Our objective was to determine if the costs billed to TVA were in compliance with the contract's terms and conditions. In summary, we determined Nexant overbilled TVA an estimated $431,846, including:$269,009 in subcontractor costs.An estimated $144,570 in labor costs.An estimated $18,267 in travel costs.Additionally, we found TVA overpaid $67,189 in incentive payments of which Nexant has refunded $15,685. Summary Only