Federal Reports

The OIG reviewed the Veterans Health Administration’s (VHA’s) assessment and management of inpatient alcohol withdrawal following several OIG inspections where adverse clinical outcomes associated with alcohol withdrawal, likely contributing to patient deaths, were identified. Determining the severity of alcohol withdrawal is critical in facilitating treatment decisions that may prevent the progression of symptoms which could be fatal.Inpatient management of alcohol withdrawal is not specifically addressed in current VHA clinical guidance, and it does not fall under one VHA national program office. The OIG evaluated national and system-level written guidance for specificity to inpatient management of alcohol withdrawal in four key areas: determination of alcohol withdrawal severity, inpatient treatment of alcohol withdrawal, inpatient staff training for assessing alcohol withdrawal severity, and oversight for inpatient management of alcohol withdrawal (guidance and monitoring).The OIG found healthcare systems lacked written guidance related to assessing and reassessing alcohol withdrawal severity; determining the appropriate inpatient level of care; evaluating co-occurring conditions; consulting with substance use disorder experts; and pharmacotherapy. Written guidance was also lacking for when nurses should consult prescribers based on patients' alcohol withdrawal severity, when prescribers should evaluate patients face-to-face based on nursing assessment findings, and when to transfer care.Written guidance for inpatient management of alcohol withdrawal could decrease the risk of adverse patient safety outcomes and, along with training, facilitate knowledge of proper administration and consistency of assessments. Detailed expectations for oversight and monitoring would allow for quality of care to be evaluated and assessed for compliance with available substance use disorder guidance.The OIG made three recommendations to the Under Secretary for Health related to consideration of identifying a national office responsible for oversight, implementing written guidance for the management of alcohol withdrawal across inpatient settings, and implementing inpatient staff training on standardized alcohol withdrawal severity scales.

The VA Office of Inspector General (OIG) reviewed a former VA surgeon’s eligibility to provide health care as a participant in VA’s Community Care Network (CCN) and the Marion VA Health Care System’s (facility) management of community care patient safety events.The OIG identified multiple failures by third-party administrator (TPA), Optum, and VA Office of Integrated Veteran Care (IVC) that undermined credentialing and oversight processes, and ultimately allowed the subject surgeon to practice in the VA community care program. First, Optum failed to address concerns identified by a third-party certified verification organization in the surgeon’s 2018 credentialing file. Second, imprecise language in the VA’s contract with the TPA did not provide adequate guidance for Optum in determining whether to exclude the surgeon from the CCN. Additionally, IVC failed to identify inconsistencies in the surgeon’s credentialing file that should have impacted credentialing decisions. Finally, misapplication of privacy rules prevented Optum’s leaders from releasing important information to IVC relevant to the surgeon’s voluntary relinquishment of the Florida medical license. The OIG concluded that the facility’s patient safety training did not include completing patient safety event reports for events in the community and the patient safety manager was unaware of the ability to contact the TPA for updates on the status of patient safety concerns reported to the TPA.The OIG made two recommendations to the Under Secretary for Health related to review of the surgeon’s eligibility to participate in the CCN and CCN contract; four recommendations to the IVC Executive Director related to ensuring Optum’s sufficient review, documentation, and compliance of CCN providers; one recommendation to the VISN Director to review all community care provided by the surgeon; and one recommendation to the Facility Director related to patient safety event report education and follow-up.

This Office of Inspector General (OIG) Comprehensive Healthcare Inspection Program report describes the results of a focused evaluation of the care provided at the Richard L. Roudebush VA Medical Center in Indianapolis, Indiana. This evaluation focused on five key operational areas:• Leadership and organizational risks• Quality, safety, and value• Medical staff privileging• Environment of care• Mental health (suicide prevention initiatives)The OIG issued four recommendations for improvement in three areas:1. Medical staff privileging• Ongoing Professional Practice Evaluations o Equivalent specialized training and similar privileges o Service-specific criteria2. Environment of care• Safe and clean environment3. Mental health• Comprehensive Suicide Risk Evaluation completion

This Office of Inspector General (OIG) Comprehensive Healthcare Inspection Program report describes the results of a focused evaluation of the inpatient and outpatient care provided at the Miami VA Healthcare System, which includes the Bruce W. Carter VA Medical Center and multiple outpatient clinics in Florida.This evaluation focused on five key operational areas:• Leadership and organizational risks• Quality, safety, and value• Medical staff privileging• Environment of care• Mental health (suicide prevention initiatives)The OIG issued two recommendations for improvement in two areas:1. Quality, safety, and value• Peer reviews for unanticipated deaths within 24 hours of admission2. Medical staff privileging• Completion of Ongoing Professional Practice Evaluations for licensed independent practitioners

An Amtrak Train Attendant based in Miami, Florida, was terminated from employment on January 2, 2024, following our investigation. Our investigation found that the employee violated company policies by engaging in outside employment at several companies while on a medical leave of absence. During her interview, the employee admitted that she was employed full-time with various employers from 2019 through 2023.

Our objective was to determine whether the Postal Service was effectively testing and monitoring the performance of, providing effective oversight over the contract for, and storage of, charging stations. We observed testing at Vienna, Virginia; conducted site observations and interviews at the MDC; and reviewed related policies and procedures.

We performed a self-initiated audit at the Chicago Processing and Distribution Center and four delivery units serviced by the P&DC during the week of July 24, 2023. The delivery units included the Cragin, Daniel J. Doffyn, Northtown, and Roger P. McAuliffe StationsWe issued individual reports for the four delivery units and the P&DC we visited.We issued a report summarizing the results of our audits at all four delivery units with specific recommendations for management to address.

The Washington Metropolitan Area Transit Authority (WMATA) Office of Inspector General (OIG) reported to our office that a contractor employed by Amtrak as a project manager/consultant was also working as a full-time senior employee at WMATA. Beginning in October 2023, the contract worker was working a full-time schedule for Amtrak that significantly overlapped with his work schedule for WMATA. During his interview with WMATA OIG and Amtrak OIG agents, the contractor admitted to working both jobs and to violating time and attendance policies.The Amtrak vendor terminated the contract employee on December 26, 2023, for violating his conditions of employment. On December 28, 2023, he resigned from WMATA.

Increased power supply demands could delay electric school bus deployment.

The EPA OIG Office of Investigations has identified concerns regarding the EPA’s failure to properly oversee and administer its Clean School Bus Program.

This informational report provides general information and highlights the IIJA ReConnect Program funding as of September 30, 2023.

An investigation of alleged misuse of government resources by an FEC employee.

This report communicates the results of the Federal Trade Commission (FTC) Office of Inspector General’s (OIG) audit of the FTC’s contractor invoice processes.

An Amtrak Conductor based in Jacksonville, Florida, signed a deferred prosecution agreement in the Seventh Judicial Circuit, State of Florida, on December 22, 2023. The charges will be dismissed if the employee fulfills the terms of the agreement. Our investigation found that the employee attempted to sell high-security railroad switch keys on Facebook Marketplace. The employee was previously suspended from employment without pay in lieu of termination for a period of 67 days.

The objective of our audit was to determine whether USPTO’s processes and activities for acquisition planning are effective and consistent with established practices, procedures, and regulations. Overall, we found that USPTO’s processes and activities for acquisition planning were ineffective and not consistent with established regulations, policies, and procedures. Specifically, we found the following:I. USPTO’s policies and procedures did not provide sufficient guidance on the use of its Patent and Trademark Office Acquisition Guidelines acquisition procedures. II. USPTO did not retain key documents, and documents developed during acquisition planning were insufficient and not supported. III. USPTO did not adhere to federal regulations relating to the Small Business Administration’s (SBA’s) Business Development program (the 8(a) Program).

We contracted with Ernst & Young LLP (EY), an independent certified public accounting firm, to perform the audit. This management letter summarizes EY’s findings and recommendations related to PBGC’s internal control deficiencies and other matters. The issues noted in this report are not significant; and, therefore, the deficiencies were not required to be reported in the Independent Auditor’s Report (AUD-2024-02) issued on November 15, 2023. In FY 2023 EY had issued four new recommendations and closed 14 prior years' recommendations with the total of six open recommendation remaining at the end of FY 2023. EY will continue working with PBGC to resolve these recommendations.

Our objective was to review and report information about USDA’s use of social media for transparency and disclosure.

In accordance with our Annual Performance Plan Fiscal Year 2023, the Office of Inspector General (OIG) conducted a review of United States Capitol Police (USCP or Department) Insider Threat Capabilities. Our objectives were to (1) assess the Department's Insider Threat capabilities and (2) compare those practices to those of partner agencies. Our scope included operations, existing policies, and procedures related to the Department's Insider Threat capabilities.

Fiscal Year 2023 Independent Evaluation of the SEC’s Implementation of the Federal Information Security Modernization Act of 2014, Report No. 580

The United States Coast Guard’s National Maritime Center (NMC) struggled to approve merchant mariner training offered by NMCapproved third-party training providers in a timely manner, and it routinely extended merchant mariner training courses and programs past their 5-year regulatory approval period. NMC also did not have adequate quality control measures, resulting in training providers offering training that did not meet all regulatory and policy standards.

We audited costs claimed by the Tennessee Wildlife Resources Agency under grants awarded by the FWS through WSFR.

As part of our annual audit plan, we audited costs billed to the Tennessee Valley Authority (TVA) by HJM Forest Resource Management Services, LLC (HJM) under Contract No. 15243 for vegetation management, initial clearing, and maintenance of TVA transmission line rights-of-way. Our audit objective was to determine if costs were billed in accordance with the terms of the contract. Our audit scope included about $16.5 million in costs billed to TVA from September 1, 2020, through December 31, 2022. In summary, we determined costs billed by HJM generally complied with the contract, except for $3,853 in overbilled labor costs due to ineligible premium overtime pay. (Summary Only)

We have completed our fiscal year (FY) 2023 Federal Information Security Modernization Act of 2014 (FISMA) penetration test and vulnerability assessment. The objective of this evaluation was to test and verify the technical implementation of a limited set of security controls on judgmentally selected U.S. Department of Housing and Urban Development (HUD) information systems and applications.HUD demonstrated successes in securely configuring networks and systems. The local area network (LAN) configurations in the Regional Office we tested ensured that our security testing tools could not operate properly, which prevents unauthorized use of security tools on network-connected devices. We also found that HUD improved its ability to detect active threats. HUD’s security information and event management solution detected one of our simulated malicious activities. Lastly, HUD made progress at addressing known vulnerabilities, as they mitigated a structured query language injection vulnerability on one of the web applications we tested.Our testing did identify potential security weaknesses within one of the tested systems. We exploited an authentication bypass vulnerability, reducing the effectiveness of HUD's least privilege, non-repudiation, and session auditing controls. Using a nonprivileged account, we discovered a plain text password file from 2003. This password file was not current, but a lack of encryption allowed us to learn password trends of users. We accessed privileged information on a HUD system without a privileged account. We discovered that a select number of HUD usernames can be associated with an employee’s identity, leading to a higher risk of additional attacks.We discovered some systems used unsupported or end-of-life operating systems. While we discovered strengths in some of HUD’s security posture, this evaluation revealed security weaknesses in one of the systems we tested which HUD should continue to improve. This report issues recommendations that address the specific weaknesses we discovered. We also offer opportunities for improvement, which will not be formally tracked as recommendations, to help guide HUD in technical system improvements. Continued collaboration between OCIO and program offices will help address weaknesses and improve HUD’s overall security posture. The OIG has determined that the contents of this report would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.Open configuration optionsRECOMMENDATION STATUS DATE ISSUED SUMMARY2023-OE-0001a-01 Open December 20, 2023 The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.2023-OE-0001a-02 Open December 20, 2023 The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.2023-OE-0001a-03 Open December 20, 2023 The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.2023-OE-0001a-04 Open December 20, 2023 The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.2023-OE-0001a-05 Open December 20, 2023 The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.2023-OE-0001a-06 Open December 20, 2023 The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

This report presents the results of our verification inspection of the U.S. Small Business Administration’s (SBA) corrective actions for the five recommendations from the Office of Inspector General (OIG) evaluation report SBA’s Handling of Identity Theft in the COVID-19 Economic Injury Disaster Loan Program (Report 21-15).We initiated this verification inspection to determine whether the closed recommendations were fully implemented or if further corrective actions were needed. Accordingly, our objective was to determine the effectiveness of the corrective actions SBA implemented to 1) resolve credit-related issues for Coronavirus Disease 2019 Economic Injury Disaster Loan identity theft victims, 2) charge-off fraudulent loans and remove Uniform Commercial Code filing fees for loans associated with identity theft, and 3) review over 150,000 returned billing statements and resolve any involving identity theft.We determined OIG Report 21-15 recommendations 1, 2, 3, and 4 to be fully implemented; however, SBA management has not fully implemented recommendation 5. We will track management’s execution by reopening the recommendation and will work with SBA to establish a target date for enacting corrective actions through the audit follow-up process.

This Office of Inspector General (OIG) Comprehensive Healthcare Inspection Program report describes the results of a focused evaluation of the care provided at the W.G. (Bill) Hefner VA Medical Center in Salisbury, North Carolina.This evaluation focused on five key operational areas:• Leadership and organizational risks• Quality, safety, and value• Medical staff privileging• Environment of care• Mental health (suicide prevention initiatives)The OIG issued four recommendations for improvement in the mental health area of review:• Comprehensive Suicide Risk Evaluationo Completion following positive suicide screeno Suicide prevention team notified of suicidal or self-directed violent behaviors in previous 12 months• Full-time suicide prevention coordinator appointed for community-based outpatient clinics that serve 10,000 veterans annually• Suicide-related events reported monthly to mental health leaders and quality management staff

Like other federal agencies, NASA collects personally identifiable information, or PII. The Agency’s high-profile mission and broad connectivity with the public make it susceptible to increased privacy risks. While it has a comprehensive privacy program, NASA needs to take additional steps to better protect individuals’ personal information that it collects, uses, and maintains.

The purpose of this report is to bring to your attention needed improvements that the Office of Inspector General (OIG) identified while reviewing Peace Corps’ response process for cybersecurity incidents and its adherence to Federal and agency requirements. We reviewed the agency’s actions taken during three separate cybersecurity incidents from June 2022 through July 2023.

We reviewed the actions of the NPS and USPP in preparing for WFAF’s demonstration at the Ellipse on January 6, 2021.

Management Letter Fiscal Year 2023 Financial Statement Audit

An Amtrak supervisor based in Philadelphia violated company policies by using his company‐leased vehicle and, occasionally, his company fuel card to travel to his vacation home at least thirteen times over a nine‐month period. The employee admitted to these actions during his interview with our agents. He was removed from his supervisory position on December 18, 2023.

What We Looked AtThe U.S. Department of Transportation (DOT) has a fleet of 38 aircraft that are operated and maintained by the Federal Aviation Administration’s (FAA) Flight Program Operations within the Air Traffic Organization. FAA uses these aircraft for a variety of missions, including critical event response and transportation for DOT executives, such as the Secretary of Transportation, and other Government agency officials. The Office of Management and Budget’s guidance to Executive Department heads allows Federal officials to travel on Government aircraft but with restrictions. Several Members of Congress requested we review DOT executives’ use of Government aircraft. Our objective was to determine whether the Office of the Secretary (OST) complied with Federal regulations, policies, and procedures regarding executive travel on DOT aircraft. What We FoundOST complied with Federal regulations, policies, and procedures for the Secretaries’ travel on DOT aircraft from January 2017 to June 2023. Records for each of the 15 trips contained the required authorizations, justifications, and approvals for use of the DOT aircraft, including documentation such as trip memos and cost comparisons, as appropriate. However, in evaluating OST’s cost comparisons, we determined that FAA did not consistently update the DOT aircraft flight hour cost rates OST uses to determine the cost effectiveness of Secretarial transportation. As a result, FAA’s flight hour rates may not have reflected the most current operating costs. We also identified three instances in which FAA did not use the correct flight hour rate for its cost estimates. While the incorrect cost estimates did not negatively impact cost effectiveness in these instances, this control weakness could result in incorrect cost comparisons. Our RecommendationsDOT concurred with our two recommendations to improve FAA’s aircraft rate update process and provided documentation of FAA’s actions taken in response. We consider both recommendations resolved but open pending OIG review of FAA’s documentation.

We audited the U.S. Department of Housing and Urban Development (HUD), Office of Single Family Housing’s Federal Housing Administration (FHA) Resource Center’s handling of housing discrimination inquiries.  We initiated the audit to assist HUD with ensuring that the FHA Resource Center (1) provided accurate and complete information on potential housing discrimination to its customers and (2) ensured that instances of potential housing discrimination were routed through the proper channels. Our objective was to assess whether the FHA Resource Center appropriately rerouted inquiries related to housing discrimination, including discrimination in appraisals, to HUD’s Office of Fair Housing and Equal Opportunity (FHEO) in accordance with its standard operating procedures.The FHA Resource Center did not consistently reroute housing discrimination inquiries to FHEO in accordance with its standard operating procedures.  Specifically, it did not reroute 14 of 68 reviewed housing discrimination inquiries to FHEO as required.  In addition, it did not reroute 3 of 10 test calls that we placed relating to housing appraisal discrimination.  These inconsistencies occurred because the FHA Resource Center lacked clear guidance on how to handle discrimination inquiries when the inquiries included multiple concerns, such as a customer alleging discrimination while also complaining about living conditions in public housing.  The FHA Resource Center also did not consistently provide refresher training on how to handle discrimination inquiries.  As a result of these inconsistencies, customers with discrimination concerns were at higher risk of FHEO not addressing their concerns, living in unfavorable conditions, or losing their homes.We recommended that the Deputy Assistant Secretary for Single Family Housing update policies and procedures regarding discrimination complaints to ensure consistency among customer service representatives in rerouting these complaints to FHEO.    Also, we recommend that the Deputy Assistant Secretary ensure that the FHA Resource Center updates its training program so that refresher training on housing discrimination is regularly provided to staff (such as monthly, quarterly, semiannually, etc.).  HUD took actions during the audit to implement these recommendations.

As part of our annual audit plan, we performed an audit of costs billed to the Tennessee Valley Authority (TVA) by America Fujikura Ltd. dba AFL Telecommunications LLC (AFL) for optical ground wire cable (OPGW) and hardware under Contract Nos. 12674 & 15270. Our audit objective was to determine if costs were billed in accordance with the terms of the contracts. Our audit scope included approximately $29.5 million in costs billed to TVA from March 19, 2018, through August 31, 2022.In summary, we determined:AFL did not provide credits totaling $307,320 for returned steel reels.AFL overbilled TVA $72,025, including (1) $43,903 because AFL did not always use the most cost-effective unit rate available and (2) $28,122 because AFL sometimes used unit rates that were in excess of the contracts' pricing schedules.(Summary Only)

In planning and performing our audit of the financial statements of the United States Capitol Police (USCP or the Department) as of and for the year ended September 30, 2023. We considered USCP’s internal control over financial reporting as a basis for designing audit procedures that are appropriate in circumstances for the purpose of expressing our opinion on the financial statements. 

Our objective was to assess the Postal Service’s processing and delivery of Veterans Affairs Consolidated Mail Outpatient Pharmacy medications. We interviewed Postal Service management, obtained and analyzed Postal Service data, and visited Veterans Affairs Consolidated Mail Outpatient Pharmacy and third-party shipper locations to observe operations. Additionally, we judgmentally selected and visited 14 Postal Service facilities where we interviewed local management and employees and observed processing and delivery practices for medication packages.

From 2001 to 2022, the Community Development Block Grant - Disaster Recovery program provided almost $98 billion to states, cities, counties, and territories to help them recover from disasters. Administering disaster recovery has been a recurring U.S. Department of Housing and Urban Development (HUD) top management challenge since 2018. Therefore, we audited the disaster recovery program to determine whether the Office of Community Planning and Development (CPD) had improved the timing of its delivery of disaster recovery funds and whether it met congressional allocation timing requirements.CPD’s time to deliver disaster program funds to grant recipients varied between 2001 and 2022 and trended upward. For 2018 and 2019 disaster relief funding, CPD took significantly longer to allocate and award the funds. Further, CPD did not meet the publishing requirements mandated in one public law and did not meet the allocation requirements for another. CPD’s increase in time to deliver disaster program funds and its inability to meet a few of the statutory requirements were caused by (1) the disaster recovery program’s lacking permanent authorizing legislation; (2) required coordination among multiple Federal agencies, various HUD offices, and the grantees; and (3) other external and internal issues. As a result, grantees had to wait longer to execute their grant agreements and start spending the disaster recovery funds. Further, CPD lacked consistent and documented allocation data for all grantees, which impaired its ability to benchmark and consistently report the date of allocation to Congress or the public. In 2020, CPD issued a Federal Register (FR) notice with an appendix titled “The Consolidated Notice,” which decreased the time it took CPD to allocate disaster program funds. However, opportunities exist to further improve the timing of CPD’s delivery of disaster program funds. We recommend that the Director of the Office Disaster Recovery (1) collect and record the number of days that it or other entities take to complete each milestone in the grant process, (2) establish timing benchmarks for the milestones at each significant step in the allocation and award process based on actual data accumulated for the various grants, and (3) take steps to ensure that the milestone point of allocation is formally defined and documented, to allow for accurate tracking of compliance with requirements. We believe that implementation of the recommendations in this report will improve overall timing of program delivery and ensure that funds are provided to grantees as quickly as possible.

The United States Capitol Police (USCP or the Department) Office of Inspector General (OIG) conducted an audit of the Department’s financial statements for the years ended September 30, 2023 and 2022.

In November 2021, the Infrastructure Investment and Jobs Act (IIJA)1 provided $66 billion for passenger and freight rail improvements, the largest investment in rail in generations. Amtrak’s (the company) agreement workforce2—particularly its Electric Traction, Communication and Signals, and Track workers—will play a leading role in carrying out the company’s infrastructure rehabilitation and revitalization plans made possible in large part by IIJA. The company reported that it filled more than 4,600 agreement positions in fiscal year (FY) 2023 and expects to fill about 3,300 more by the end of FY 2024. Company officials acknowledge, however, that filling these jobs has been and continues to be challenging in a tight labor market in which multiple industries are vying for workers with the same skills and experience as the company—in many cases to support projects funded by IIJA in other transportation sectors.Our objective was to assess the extent to which the company is prepared to hire, onboard, and retain a sufficient agreement workforce to execute its growth plans. During our early work, managers in operating divisions voiced concerns that delays in the hiring process may be causing the company to lose viable candidates for its agreement ranks and could prevent it from efficiently bringing in new talent. We also noted potential issues with the company’s ability to track candidates through the preboarding process. Therefore, we revised our audit scope and methodology to identify any challenges in the Human Resources department that were contributing to these delays and tracking issues.

The EPA must execute processes with controls to enforce its stewardship of laptops and to safeguard against activities that could prevent it from protecting its assets from loss, theft, and mismanagement.

The Office of Inspector General (OIG) conducted this audit to determine if VA adhered to program requirements in using more than $1 billion appropriated by Congress from fiscal year (FY) 2019 through FY 2021 to repair buildings with identified seismic deficiencies in zones prone to earthquakes. The OIG reviewed 92 projects funded during that period and determined 42 of the buildings (46 percent) were nonessential, as opposed to critical buildings that must remain operational during a seismic event. The cost to address deficiencies in these 42 ancillary buildings was around $616 million.According to data from the Seismic Program Office, seismic evaluations had not been performed on 135 buildings considered critical or essential by February 23, 2023. The program office’s approval of funding to address seismic deficiencies in ancillary buildings without first completing all required seismic evaluations in critical and essential buildings increases the risks to veteran and employee safety and impedes the ability to continue to provide lifesaving care during and after an earthquake.The OIG found that the seismic evaluations were not completed because the program office placed a low priority on them and did not assign a deadline for their completion, despite a 2015 OIG audit recommending this issue be addressed. The program office also lacked an effective process for identifying and tracking buildings needing evaluations. Moreover, seismic data in VA’s Capital Asset Inventory—the authoritative record of VA’s real property—were incomplete, outdated, and not accessible to most VA engineering officials.The OIG recommended VA ensure seismic evaluations are done for all critical and essential buildings, work to correct Capital Asset Inventory inaccuracies, and request that seismic designation information be available to facility officials for review as part of their annual certifications of the Capital Asset Inventory.

VA partners with private sector companies using energy savings performance contracts to implement energy conservation measures without paying direct capital costs up front. The companies finance the capital costs of implementing these energy upgrades and are compensated through the energy cost savings received by VA. The measures help reduce energy or water usage at VA medical facilities—for example, by installing low-energy lighting and low-flow bathroom fixtures.Before awarding the work, VA must validate the contractor’s energy baseline and savings estimates to ensure future payments are based on reasonable energy savings. An energy baseline is the energy use or demand with existing equipment at a site before implementation. The contractor’s savings estimate is the difference between the baseline amount and the cost of utilities, operation, and maintenance for equipment to be installed. If the contractor’s estimates are overstated, VA may be locked into a payment schedule that exceeds its actual energy savings.After validation, a VA contracting officer negotiates a guaranteed cost savings amount with the contractor. By law, payments from the government cannot exceed this amount over the life of the contract. The amount is evaluated annually to determine if the contractor is delivering the promised savings. If not, VA can deduct the savings not realized from annual payments.The OIG found VA did not independently review the contractor’s energy baseline or estimated savings calculations at four of 13 medical facilities using energy savings performance contracts. Moreover, VA did not have effective policies or quality control procedures to ensure the contractor’s baseline and savings estimates were independently reviewed and that payments complied with the law and with Federal Energy Management Program guidance requiring one-time payments to be made in the same contract year as energy-related savings occurred. The OIG made four recommendations to address these weaknesses.

We audited costs claimed by the Connecticut Department of Energy and Environmental Protection under WSFR grants awarded by the FWS.