Federal Reports

We found that the Department complied with IPERA, although issues remained with the completeness of the calculation of the estimated improper payment rate for the Pell Grant program. In addition, its proposed methodologies for estimating improper payment rates for the Pell Grant, William D. Ford Direct Loan, and Federal Family Education Loan programs were flawed. We found that the Department used new methodologies for estimating improper payment rates that were pending approval by Office of Management and Budget (OMB) and that the Department did not follow OMB guidance for reporting of Payment recapture audit programs. We recommended that the Department ensure that the issues identified for the estimated improper payment rate for the Pell Grant program computed under the OMB-approved methodology using the FAFSA/Internal Revenue Service (IRS) Data Statistical Study and the issues identified in our FY 2011 IPERA audit are adequately addressed. The Department should also ensure that the proposed methodologies for estimating improper payment rates for all programs use the appropriate point estimate and disclose the estimate’s confidence limits.

The OIG audited TVA's fiscal year 2012 compliance with the Improper Payment Information Act of 2002, as amended. In summary, we found TVA was in compliance with applicable IPIA requirements.

We found two issues that hinder a more effective geothermal energy program at the Bureau of Land Management (BLM). First, Geothermal Resources Operational Orders (orders) are outdated. BLM no longer uses several of the orders, some orders reference organizations and regulations incorrectly, one order has been in draft status since 1980, and none of the orders address inspection and enforcement adequately. Second, BLM does not have a standardized geothermal inspection and enforcement program. We found variations in types of inspections conducted, forms and formats used for conducting inspections, and frequency of inspections. We also found issues concerning who is conducting inspections and the training requirements for inspectors. Finally, we found inconsistencies in data collection for inspections because there is no guidance on data collection.

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

We reviewed management's assertions contained in the Detailed Accounting of Fiscal Year 2012 Drug Control Funds, dated January 28, 2013 (Accounting). The U.S. Department of Education's management is responsible for the Accounting and the assertions contained therein. Based on our review, nothing came to our attention that caused us to believe that management's assertions, contained in the Accounting, are not fairly stated in all material respects, based upon the Office of National Drug Control Policy Circular: Drug Control Accounting, dated May 1, 2007.

We reviewed management' s assertions about performance-related measures for key drug control programs administered by the U.S. Department of Education (Department) contained in the Department’s Performance Summary Report for Fiscal Year 2012. The Department’s management is responsible for the Performance Summary Report and the assertions contained therein. Based on our review, nothing came to our attention that caused us to believe that management's assertions are not fairly stated in all material respects, based upon the Office of National Drug Control Policy Circular: Drug Control Accounting, dated May 1, 2007.

In May 2004, the Nuclear Regulatory Commission (NRC) incorporated the National Fire Protection Association's (NFPA) Standard 805 as a voluntary alternative to the existing fire protection standards as published in Section 50.48, "Fire Protection," and Appendix R of the 10 Code of Federal Regulations (10 CFR 50). On March 4, 2009, the Tennessee Valley Authority (TVA) committed to the NRC to transition Browns Ferry Nuclear Plant (BFN) to NFPA 805 by a license amendment date of March 4, 2012.TVA has included the BFN NFPA 805 transition project as part of fire protection risk in its Enterprise Risk Management process. We reviewed the BFN transition to the NFPA 805 program. Our audit objective was to evaluate BFN's performance in transitioning to the NFPA 805 program requirements by the license amendment date.TVA did not meet the NFPA 805 transition date for the License Amendment Request submittal of March 2012 and has revised its commitment date to March 2013. We determined the Nuclear Power Group's delays in transitioning to NFPA 805 adversely impacted BFN's ability to meet the 2012 commitment date. Specifically, historical indecisiveness coupled with a lack of due diligence and inadequate attention to emerging industry fire protection regulations contributed to revising the commitment date. In addition, the Nuclear Power Group's mitigation strategy as provided in Enterprise Risk Management documentation did not include consideration of the consequences of not meeting the revised March 2013 deadline, which would include NRC-assessed penalties.

Our evaluation of the Department’s monitoring of i3 program grant recipients found that Department program officers regularly engaged with and monitored i3 grantees. However, they did not hold accountable i3 grantees that did not respond or did not respond timely to Department requests. We recommended that the Department develop appropriate requirements or consequences for unresponsive i3 grantees. We also found that if program officer workload increases or if the technical assistance for the evaluation component is no longer available, the Department’s ability to monitor the grantees could be negatively impacted in the future. We recommended that the Department continue to monitor any increase in program officers’ workload to ensure adequate monitoring. The Department should also ensure that a technical assistance contractor is available for future project periods or find an equivalent alternative for technical assistance.

We found that the Puerto Rico Department of Education (PRDE) generally obligated and spent Recovery Act funds in accordance with applicable laws, regulations, guidance, and program requirements. However, we found that PRDE did not follow proper procurement procedures when using Recovery Act funds to purchase equipment totaling more than $3.4 million and overpaid $7,000 in Recovery Act funds for professional services not rendered. In addition, computer equipment PRDE had purchased with $3.5 million of Recovery Act funds was unused because required software had not been installed. Our audit also noted that in December 2011, PRDE received a waiver to extend the grant obligation for its Title I funds until September 30, 2012, and the liquidation period to December 29, 2012. However, as of September 30, 2012, PRDE had a remaining balance of $35.3 million in funds, representing more than 9 percent of its $386.4 million Title I allocation. This significant remaining balance raised concerns about PRDE’s ability to liquidate its remaining funds on allowable costs that were obligated before the end of the grant period. We made nine recommendations, including that the Department follow up with PRDE during a future monitoring visit to determine whether the funds were obligated and liquidated appropriately.

We found weaknesses in the Department’s processes for reviewing and evaluating Teacher Incentive Fund program (TIF) applications with regard to the involvement and support of stakeholders, a required element of the application. Non-Federal reviewers accepted varying levels of evidence of the support of teachers, principals, other personnel, and unions, and their overall evaluations of stakeholder support were unclear. We found that Department staff interpreted reviewer comments to indicate that applications demonstrated adequate stakeholder support when the comments did not clearly support that interpretation. As a result, the Department increased its risk of providing funding to grantees that did not adequately demonstrate stakeholder support, which increases the risk that a grantee will face significant challenges in meeting its project objectives. We also determined that the Department needed to improve its process for monitoring TIF grantees during the 1-year planning period that was in effect if the grantee did not have all of the required TIF core elements in place at the time of application. We found that monitoring activities related to developing missing core elements were inadequate for 13 of the 14 TIF planning period grantees (93 percent) that we reviewed. The Department did not begin to monitor grantees’ progress toward developing missing core elements until almost 6 months after awards were made, and subsequent monitoring activities were insufficient and inconsistent. We found that 7 of these 14 grantees (50 percent) had not fully developed one or more core elements at the end of the planning period. We also noted that 28 of the 54 total planning period grantees (52 percent) from the FY 2010 TIF competition were not ready for implementation after the 1-year planning period. The Department placed these grantees into “implementation with conditions” status, which meant that the grantees could not make any incentive compensation payouts until they successfully developed all core elements, similar to the terms under which they operated during the 1-year planning period. These 28 grantees received about $177 million of the $364 million (49 percent) initially awarded to planning period grantees. Based on our findings, we made a number of recommendations, including that the Department ensure that requirements for demonstrating stakeholder support are adequately defined and that it develop a formal monitoring plan for the TIF program that includes specific monitoring tools and processes related to the unique programmatic risks associated with grantees that have not yet successfully developed required core elements.

At the request of Tennessee Valley Authority's (TVA) Supply Chain, we audited AREVA NP, Inc.'s calendar year 2011 rate adjustments required under the terms in its contract. The contract provided for AREVA to complete engineering, licensing, construction, and startup operations of a single Bellefonte Nuclear Plant unit by the end of 2017. The objective of our audit was to determine if AREVA's rate adjustments were in accordance with the contract terms.In summary, we determined AREVA's net credit adjustment of $134,544 due to TVA was understated. Based on the methodology included in the contract, we determined the adjustment should be a credit to TVA of $564,765. AREVA officials agreed with our findings. AREVA issued TVA a credit of $375,875 and plans to issue TVA a credit for the remaining $188,890. 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

The Federal Election Commission (FEC) Office of Inspector General (OIG) contracted with Brown & Company (Brown) to perform an inspection of the FEC’s Disaster Recovery Plan (DRP) and Continuity of Operations Plans (COOP). The objective of the inspection was to determine if the FEC has effectively implemented the FEC’s DRP and COOPs in accordance with applicable laws and regulations, and best practices for the federal government.

Tennessee Valley Authority's (TVA) Facilities Management (FM) business unit is responsible for managing TVA's facilities portfolio and providing services across TVA, such as building maintenance and grounds and property management. Within FM, Facilities Programs and Projects manages efforts for facility renovations, upgrades, major repairs, energy efficiency, sustainability, and other facilities' needs. These efforts include TVA's Facilities Asset Preservation (FAP) Program, which was designed "to ensure core facility related assets are maintained in a condition to satisfy their intended operational capabilities." The FAP team is responsible for gathering asset information, identifying deficiencies, recommending corrective actions, and implementation planning for approved projects.TVA's facilities asset portfolio includes over 34 million square feet of gross space in about 3,446 structures, and a small number of these properties are not in use. From 2009 to 2011, FM identified 19 underutilized properties. Two of these properties, former coal plants, were decommissioned in 2011. A third property, part of TVA's Muscle Shoals reservation, is being mitigated under an extensive redevelopment project, which includes the November 2012 TVA Board of Directors approval of the possible sale of 1,000 acres of the Muscle Shoals property. In addition, TVA established the Challenged Properties Program (CPP) in March 2012 to develop strategies for proper handling of underutilized or vacant properties.Because of the importance of proper maintenance to the safe, efficient, and effective operation of assets, we initiated this audit to evaluate TVA's efforts to identify and mitigate risks associated with its buildings and infrastructure. As of July 2011, TVA's Enterprise Risk Management identified the risk of building and infrastructure failures among other safety risks and the FAP Program as the primary strategy to mitigate these risks.In summary, our audit disclosed FM's FAP Program was adequately designed to identify and mitigate the risks of building and infrastructure failures, and FM's processes for remediating identified risks are reasonably effective. However, we found TVA's risk exposure from building failures is elevated because the identified risks exclude underutilized properties, and FAP funding has not been adequate to address the risks in the long term. We also identified opportunities to improve some FAP Program and related FM processes.

SIGTARP's Quarterly Report to Congress

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