Federal Reports

EAC OIG, through the independent public accounting firm of McBride, Lock & Associates, LLC, audited $2.0 million in funds received by the Pennsylvania Secretary of the Commonwealth under the Election Data Collection Grant. The objective of the audit was to identify costs claimed in the grant’s Financial Status Reports that are not allocable, allowable, reasonable, and in conformity with EAC award terms and conditions and applicable Federal grant requirement.

EAC OIG, through the independent public accounting firm of McBride, Lock & Associates, LLC, audited $2.0 million in funds received by the Ohio Secretary of State under the Election Data Collection Grant. The objective of the audit was to identify costs claimed in the grant’s Financial Status Reports that are not allocable, allowable, reasonable, and in conformity with EAC award terms and conditions and applicable Federal grant requirement.

EAC OIG, through the independent public accounting firm of McBride, Lock & Associates, LLC, audited $20.4 million in funds received by the Nebraska Secretary of State under the Help America Vote Act. The objectives of the audit were to determine whether the Secretary of State (1) used payments authorized by Sections 101, 102, and 251 of the grant in accordance with grant and applicable requirements; (2) accurately and properly accounted for property purchased with Grant payments and for program income; and (3) met HAVA requirements for Section 251 f funds for creation of an election fund, providing required matching contributions, and meeting the requirements for maintenance of a base level of state outlays, commonly referred to as Maintenance of Expenditures (MOE).

EAC OIG, through the independent public accounting firm of McBride, Lock & Associates, LLC, audited $2.0 million in funds received by the Minnesota Secretary of State under the Election Data Collection Grant. The objective of the audit was to identify costs claimed in the grant’s Financial Status Reports that are not allocable, allowable, reasonable, and in conformity with EAC award terms and conditions and applicable Federal grant requirement.

EAC OIG, through the independent public accounting firm of McBride, Lock & Associates, LLC, audited $2.0 million in funds received by the Illinois Board of Elections under the Election Data Collection Grant. The objective of the audit was to identify costs claimed in the grant’s Financial Status Reports that are not allocable, allowable, reasonable, and in conformity with EAC award terms and conditions and applicable Federal grant requirement.

EAC OIG, through the independent public accounting firm of CliftonLarsonAllen LLP, audited EAC's acquisition and procurement of goods and services. The objective of the audit was to determine if EAC had policies and procedures to allow them to be compliant and maintain compliance with specific laws and regulations that govern the federal acquisition process, and to test EAC's level of compliance with these laws and regulations.

At the request of the Tennessee Valley Authority's (TVA) Supply Chain and Senior Vice President, Generation Construction, the OIG audited the costs billed to TVA by AMEC Environment and Infrastructure, Inc., (AMEC) for loading coal combustion by-products from the spill at TVA's Kingston Fossil Plant onto rail cars and/or trucks for off-site disposal under an advance authorization agreement (AA) and AMEC's contract with TVA. The audit included $19.3 million in costs billed to TVA from June 2, 2009, through January 13, 2011. The objective was to determine if AMEC billed TVA in accordance with the terms and conditions of the AA agreement and contract. We determined AMEC overbilled TVA $2,187,410, which included $2,123,694 in overbilled and unsupported standby costs and $63,716 in overbilled tonnage costs. Summary Only

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

This report contains classified information that is exempt from disclosure under the Freedom of Information Act. To obtain further information, please contact the OIG Office of Counsel at OIGCounsel@oig.treas.gov, (202) 927-0650, or by mail at Office of Treasury Inspector General, 1500 Pennsylvania Avenue, Washington DC 20220.

This report contains classified information that is exempt from disclosure under the Freedom of Information Act. To obtain further information, please contact the OIG Office of Counsel at OIGCounsel@oig.treas.gov, (202) 927-0650, or by mail at Office of Treasury Inspector General, 1500 Pennsylvania Avenue, Washington DC 20220.

The OIG audited the distributor compliance assessments completed through December 31, 2012, to determine if (1) the assessments were adequately planned and performed to verify distributors' compliance with key provisions of the wholesale power contract, (2) the assessments were performed in accordance with the Distributor Compliance Charter and applicable policies, and (3) there was adequate segregation between the group charged with developing, interpreting, and implementing TVA's retail regulatory policy, Retail Regulatory Affairs, and the group responsible for assessing distributors' compliance with TVA's regulatory policies and procedures, Distributor Compliance.We found several positive attributes in Distributor Compliance's planning and performance of the assessments; however, we noted areas where changes were needed to improve (1) assessment planning and performance and (2) compliance with the Distributor Compliance charter and applicable professional standards and policies regarding the assessment reports. Specifically, we noted:Scope statements in the reports did not always reflect the actual information that was reviewed.Documentation of sampling methodologies was inadequate and the methodologies could be modified to provide more assurance that assessment objectives are met.Recommendations did not always help detect issues and/or prevent identified issues from recurring.Testing for misclassified residential accounts was not being performed.Distributors were not made aware of all issues identified during the assessments and the unreported issues.We determined there was adequate segregation between Retail Regulatory Affairs and Distributor Compliance. However, certain work being performed by both groups was duplicative.We made the following recommendations: (1) include testing for the number of days provisions in the contract, (2) include testing to identify penalty exempt accounts in all assessments, (3) when possible, select a sample containing items from across the population instead of from a subset of the population, (4) fully document sampling methodology in working papers and the report, including details for replacing and/or expanding the sample, (5) review and update processes for ensuring all applicable issues are included in report, (6) include recommendations that help improve distributors' compliance with the wholesale power contract by detecting issues and/or preventing identified issues or errors from recurring, (7) include in assessments the testing for potentially misclassified residential customers, and (8) inform distributors of all issues identified during the assessments.

Because of the importance of a reliable transmission system, the OIG audited the risk of significant equipment failure in the Energy Delivery (ED) organization. ED identified four specific actions in its enterprise risk management documentation to mitigate the risk of significant equipment failure. We found the identified mitigation strategy and supporting actions were appropriately designed; however, a lack of funding to the asset preservation program contributed to ED's inability to effectively reduce the risk as planned. While the risk was not being reduced as planned, ED was managing the risk by performing preventive maintenance and replacing assets as funding permitted. In addition, we found improvements were needed in ED's risk documentation. Specifically, we found certain actions included in ED's risk documentation did not directly affect the risk rating or mitigate risk. Conversely, the risk documentation lacked the preventive maintenance program and planned actions for implementing a critical spares program designed to further manage risk. Summary Only

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

Our audit to determine whether FSA selected Title IV Additional Servicers servicing prices that were most efficient and cost-effective found that it did so; however, we could not determine whether it did the same for changes made to those contracts. We also found that FSA did not adequately monitor Title IV Additional Servicers’ compliance with contract requirements. We were unable to determine whether FSA selected the most efficient and cost-effective prices for the contract changes because a contract modification to include a requirement for cohort default rate challenges resulted in a separate cost of more than $600,800, which was possibly more costly than it would have been if that requirement was included initially. In addition, FSA did not properly document decisions for 18 of 21 contract changes that totaled more than $1.2 million. We also found that contracting officer representatives did not sufficiently validate Title IV Additional Servicers’ invoices and confirm the timeliness and adequacy of deliverables, and FSA used inadequate criteria in its contract monitoring. We made 10 recommendations to address the weaknesses identified, including that FSA develop and implement guidance and procedures on how to adequately validate borrower volumes and related costs in invoices, and apply those steps to the invoices from our audit period to ensure accurate billing and payment occurred.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

The OIG audited $4.8 million in costs billed to the Tennessee Valley Authority (TVA) by Nol-Tec Systems, Inc., to design, furnish, and install hydrated lime injection systems for SO3 mitigation at various TVA fossil plants. Our objective was to determine if the costs billed to TVA for the period January 1, 2011, through September 19, 2012, were in compliance with the terms and conditions of the contract.We found Nol-Tec overbilled TVA $292,678, including (1) $150,147 of ineligible sales commissions, (2) $89,155 of ineligible labor costs, (3) $39,878 for a duplicate payment made by TVA, and (4) $13,498 of ineligible subcontractor markup costs. Summary Only

At the request of the United States Capitol Police (USCP or Department) Chief Financial Officer (CFO), the Office of Inspector General (OIG) conducted a performance audit of the reimbursement process for the Department's Library of Congress (LOC) Division, Special Events Unit. The objectives of our audit were to determine if (1) controls were operating effectively and efficiently with respect to the special events reimbursement process, and (2) the Department complied with applicable laws, regulations, and guidance pertaining to management and operation of LOC Division special events reimbursable activities. Our scope included controls, processes, and operations in place from October 1, 2011, through December 31, 2012. 

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

Our audit sought to determine whether the Department’s OESE complied with applicable laws, regulations, and guidance for selecting recipients to be awarded discretionary grants and whether OESE had sufficient internal controls to ensure that its review process resulted in a fair and objective competition. We reviewed OESE’s three largest discretionary grant programs: Striving Readers Comprehensive Literacy, Impact Aid School Construction—Recovery Act, and Grants for Enhanced Assessment Instruments. We concluded that for these grant programs, OESE complied with applicable laws, regulations, and guidance when selecting recipients to be awarded discretionary grants, and internal controls were sufficient to ensure a fair and objective competition. However, we noted some improvements were needed in the retention of required documentation and suggested that OESE ensure that program offices maintain documentation to demonstrate that they followed proper procedures.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements