Federal Reports

We identified gaps in Ginnie Mae’s guidance and process for troubled issuers. Ginnie Mae made progress in developing an issuer default governance framework, but has not (1) defined its authorities for marketing troubled portfolios; (2) formalized guidance for how to identify potential buyers before extinguishment; (3) established expectations for determining portfolio value, price before sale, and evaluation against other options or (4) included a step to evaluate prospective purchasers’ ability to absorb an extinguished portfolio. Additionally, we found Ginnie Mae had implemented our previous recommendation to develop and implement controls to determine the total impact of a large- or multiple-issuer default, the maximum-size default Ginnie Mae could adequately execute, and individual issuers’ ability to adapt to changing market conditions, but there was a gap related to the semiannual capacity reports submitted by master subservicers (MSS).

We verified the OSMRE implemented 9 of the 11 recommendations we made in a 2017 evaluation report.

To modernize its financial and acquisition management systems, VA established the Financial Management Business Transformation (FMBT) program to replace legacy systems with a new Integrated Financial and Acquisition Management System (iFAMS). This implementation will occur in a series of 18 waves, starting with the National Cemetery Administration (NCA). The VA Office of Inspector General (OIG) conducted this audit as part of its oversight of this extensive modernization program because of risks associated with the continued use of the legacy financial systems and VA’s previous failed attempts to replace them. The OIG identified four system functionality issues and three procedural weaknesses from the first iFAMS deployment at NCA, which went live on November 9, 2020. The deputy assistant secretary for the FMBT Service concurred with the OIG’s five recommendations: (1) implement controls to mitigate the risk that data are unreliable and inconsistently recorded between the legacy system and iFAMS when staff deobligate funds for converted contracts; (2) establish and implement a methodology to prioritize user feedback in the risk management process; (3) use the risk register to document and assess the risks associated with the manual deobligation process; (4) ensure that converted contracts are included in integrated system testing and user acceptance testing; and (5) implement a process to formally acknowledge whether requests related to high-priority business intelligence reports have been accepted as requirements. Improving risk management, system testing, and communication could help the FMBT Service prevent issues from affecting a significantly greater number of staff at VA’s larger administrations and allow the FMBT Service to achieve the overall program goals of promoting operational efficiency, strengthening compliance, strengthening automated controls, mitigating long-standing audit deficiencies, and improving data reliability and reporting.

Ginnie Mae generally followed Federal guidance in precrisis planning and executed its crisis management strategy with respect to the COVID-19 pandemic. However, it does not have an agencywide crisis readiness plan, addressing likely hazards arising from a crisis, or include all key elements in line with crisis guidance from CIGFO.

We audited the State of Georgia’s monitoring of its Community Development Block Grant Disaster Recovery (CDBG-DR) Hurricanes Harvey, Irma, and Maria (HIM) grants’ activities and subrecipients. We initiated this audit to further HUD’s strategic objective to support effectiveness and accountability in long-term disaster recovery. HUD awarded more than $50.9 million in disaster recovery funds to the State for the natural disasters that occurred in January and September 2017. Our objective was to determine whether the State effectively monitored its CDBG-DR HIM grants’ activities and subrecipients to ensure that the activities addressed unmet long-term recovery needs.The State’s approach and efforts to conduct monitoring reviews of its HIM grant activities and subrecipients were not sufficient. Specifically, the State (1) lacked an understanding of the differences between monitoring reviews and day-to-day operations, (2) had inadequate monitoring procedures, and (3) lacked policies and procedures to conduct remote monitoring. As a result, HUD and the State did not have assurance that the State’s controls for program administration were effective for addressing unmet long-term recovery needs. There was also a risk that the planned activities would not serve the State’s beneficiaries in a timely manner or meet its goals for the number of beneficiaries it planned to serve.We recommend that the Deputy Assistant Secretary for Grant Programs instruct the State to ensure that it has an adequate approach for monitoring by (1) providing training to staff that includes an understanding of monitoring reviews, (2) updating its policies and procedures, and (3) developing policies and procedures to ensure that monitoring is conducted remotely if needed. We also recommend that the Deputy Assistant Secretary for Grant Programs monitor the State’s CDBG-DR program to ensure that performance expectations are achieved.

We audited the expenditures made by the Florida Fish and Wildlife Conservation Commission under grants awarded by the FWS.

The U.S. Postal Service’s Western Processing Region has about 84 Processing and Distribution Centers (P&DC) that assist in the Postal Service’s universal service obligation to bind the nation together and provide prompt, reliable, and efficient postal services to all communities. During fiscal year (FY) 2022, we evaluated the efficiency of operations at eight P&DCs in the Western Processing Region. These P&DCs spanned six different divisions and served a total population of about 27.49 million.

Our objective was to evaluate the U.S. Postal Service’s service performance of Election Mail during the November 2022 mid-term elections. To evaluate the service performance of Election Mail, we reviewed Election Mail policies, analyzed service performance data, and conducted 104 observations at mail processing facilities and 793 observations at delivery units.

We evaluated Farm Service Agency's (FSA) administration and oversight of the Wildfires and Hurricanes Indemnity Program (WHIP) in Puerto Rico.

Our objective was to determine whether costs incurred by the Postal Service, as they relate to contractor employee labor qualifications for paid invoices, conform to contract requirements. For our audit work, we randomly selected and reviewed 92 time and materials invoices from FY 2021. We tested to determine if labor categories upheld contractual terms, employees’ experience complied with the proposed labor categories, labor billing rates aligned with contractual terms, and the Postal Service approved excess hours worked.

An Amtrak electrical journeyman, based in Washington, D.C., signed a civil settlement agreement on March 23, 2023, with the U.S. Attorney’s Office, Southern District of Florida, and agreed to pay $23,360 in restitution and a $5,640 penalty. Our investigation found that the employee submitted an application containing false statements and information to a lender backed by the Small Business Administration to qualify for a Payroll Protection Program loan. As a result, the employee received $20,800 in federal CARES Act funds to which she was not entitled.

The purpose of this compendium is to analyze open and unresolved recommendations concerning programs that received funding under the Infrastructure Investment and Jobs Act (IIJA).

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

We audited the Philadelphia Housing Authority’s (Authority) management of lead‐based paint in its public housing program based on our assessment of the risks of lead‐based paint in public housing agencies’ (PHA) housing developments. The risk factors included the age of buildings, the number of units, household demographics, reported cases of childhood lead poisoning, and reports of missing lead‐based paint inspections in HUD’s data. The audit objective was to determine whether the Authority adequately managed lead‐based paint and lead‐based paint hazards in its public housing units.The Authority did not adequately manage lead‐based paint and lead‐based paint hazards in its public housing units. Specifically, it did not always perform lead‐based paint visual assessments within the required timeframe and mitigate lead‐based paint hazards in a timely manner. Further, the Authority needs to improve its processes for maintaining lead‐based paint documentation and providing accurate lead‐based paint disclosures to tenants. The Authority also did not ensure that its contractors provided lead‐based paint inspection and risk assessment reports that met HUD’s requirements. These weaknesses occurred because the Authority lacked adequate procedures and controls to appropriately manage its housing units that contained lead‐based paint. As a result, households that participated in the Authority’s program were at an increased risk of being exposed to lead‐based paint hazards, particularly families with children under 6 years of age.We recommend that the Director of the Philadelphia Office of Public Housing require the Authority to (1) establish procedures and controls to ensure that lead‐based paint visual assessments are performed within the required timeframe; (2) implement procedures and controls to ensure that lead‐based paint hazard reduction work is performed within the required timeframe and that all identified hazards are abated or treated with interim controls; (3) maintain lead‐based paint documentation for its properties in a manner that it is readily available for review by HUD and the Authority’s tenants if requested; (4) perform a search for historical lead‐based paint documentation; and (5) implement adequate procedures and controls to ensure that accurate lead disclosures are provided to current and prospective tenants and that contracted inspectors’ deliverables comply with applicable requirements. We also recommend that the Director of the Philadelphia Office of Public Housing work in conjunction with HUD’s Office of Lead Hazard Control and Healthy Homes to (1) provide training to the Authority’s staff involved with managing lead‐based paint and technical assistance to the Authority in developing and implementing new procedures and controls and (2) assess the quality of lead‐based paint inspections and risk assessments performed by the Authority’s contractors.

OIG reviewed USDA cardholder transactions for improper or erroneous purchasesin conformance with laws and regulations.

For our final report on our evaluation of the Office of the Secretary’s (OS’) incident response program, our objective was to assess the adequacy of actions taken by the U.S. Department of Commerce (the Department) and its bureaus when detecting and responding to cyber incidents in accordance with federal and Departmental requirements. Overall, we identified fundamental deficiencies in OS’ cybersecurity incident response program that increased the risk of successful cyberattacks. Specifically, we found the following: I. OS Security Operations Center’s (OS SOC)’s security tools were not properly configured to detect incidents; II. OS SOC did not effectively handle a simulated incident; and III. OS’ Office of the Chief Information Officer did not manage its incident detection and response program in accordance with federal requirements.

For our final report on our audit of the U.S. Census Bureau’s (the Bureau’s) working capital fund (WCF) for the fiscal year ended September 30, 2020, our audit objective was to determine whether budgetary controls over the WCF are adequate including whether the Bureau (1) appropriately determines its rates (including overhead charges), (2) appropriately accounts for advances and carryover balances, and (3) equitably distributes costs to the Bureau’s customers in accordance with applicable laws, regulations, and policy. We contracted with Ollie Green & Company (OG&C)—an independent certified public accounting firm—to perform this audit in accordance with Government Auditing Standards and contract terms. Our office oversaw the progress of this audit; however, OG&C is solely responsible for the attached report and conclusions expressed in it.

The U.S. Postal Service processes international mail to more than 180 countries throughout the world. The Postal Service encounters situations where mail service to foreign countries must be suspended due to lack of transportation, COVID-19 concerns, or other unrelated disruptions.Our objective was to evaluate the Postal Service’s international mail service suspension-related operations. We reviewed applicable policies and procedures and observed operations at the four Postal Service International Service Centers.

What We Looked AtWe queried and downloaded 60 single audit reports prepared by non-Federal auditors and submitted to the Federal Audit Clearinghouse between October 1, 2022, and December 31, 2022, to identify significant findings related to programs directly funded by the Department of Transportation (DOT).What We FoundWe found that reports contained a range of findings that impacted DOT programs. The auditors reported 20 incidents of significant noncompliance with Federal guidelines related to 12 grantees that require prompt action from DOT's Operating Administrations (OA). Of these 20 incidents, 11 were repeat findings related to 6 grantees. The auditors also identified questioned costs totaling $5,538,037 for four grantees. Of this amount, $3,703,195 was related to the Joint Programs of the Shoshone and Arapaho Tribes of the Wind River Reservation, and $1,787,378 was related to the Navajo Nation. Additionally, we identified nonmonetary repeat findings that caused qualified opinions for Joint Programs of the Shoshone and Arapaho Tribes of the Wind River Reservation, the County of San Joaquin, California, and the State of Mississippi.RecommendationsWe recommend that DOT coordinate with the impacted OAs to develop a corrective action plan to resolve and close the findings identified in this report. We also recommend that DOT determine the allowability of the questioned transactions and recover $5,538,037, if applicable.

In November 2021, Congress passed the VA Transparency & Trust Act of 2021 (Transparency Act) to facilitate oversight of VA’s spending of COVID 19 emergency relief funding, including Families First Coronavirus Response Act (FFCRA) funds. To comply, VA must provide a detailed plan to Congress outlining its intent and justification for obligating and expending FFCRA funds. Additionally, the Transparency Act requires VA to submit biweekly reports to Congress detailing its obligations, expenditures, and planned uses, as well as justification for any deviations from the plan. The act also requires the VA Office of Inspector General (OIG) to submit semiannual reports comparing how VA is actually obligating and expending covered funds to those planned. In this third such report, the OIG found VA generally complied with the Transparency Act because VA provided justification for its programs and activities and largely aligned VA provided obligations and expenditures to the detailed plan. The OIG review team relied on VA provided obligations and expenditures of $60 million from April 1, 2020, through August 23, 2022, to identify VA’s general spending of FFCRA covered funds. However, VA did not provide sufficient supporting documentation requested by the team to assess line-level details needed to make a full assessment. When that documentation is received, the OIG will review the affected FFCRA topics and any updates to VA’s plans or the biweekly reporting mechanisms for other Transparency Act covered funds in subsequent semiannual OIG reports. Although the OIG did not make recommendations in this report, there are two unimplemented recommendations from a March 2022 OIG report related to Transparency Act funds that could interfere with VA’s long term compliance with the act if not addressed.

We prepared this white paper to report on the U.S. Small Business Administration’s (SBA) 7(a) loan program performance during SBA’s response to the Coronavirus Disease 2019 (COVID-19) pandemic and address potential risks SBA should consider in managing the program.We identified factors that could impact the 7(a) loan program and should be considered in SBA’s program risk strategy. Specifically, in FY 2021, the total amount of loans increased to $31.4 billion from $19.4 billion in FY 2020 (62 percent increase) and $20.6 billion in FY 2019 (53 percent increase), as did the average loan amount. Loan approvals decreased in FY 2020 and returned to pre-pandemic levels in FY 2021. Default and charge-off rates also significantly declined after implementation of the CARES Act.The relief payments likely attributed to declining default and charge-off rates. Small businesses also had access to additional support during the COVID-19 pandemic, which included the Paycheck Protection Program, the Restaurant Revitalization Fund, Economic Injury Disaster Loans, and deferred 7(a) loan payments. However, variable interest rates for 7(a) loans increased because the base prime rate increased from 3.25 percent to 6.25 percent in 2022. The effects of the pandemic combined with the rising interest rates could increase the risk for subsequent defaults and charge-offs. These program trends could increase SBA’s liability and have a negative impact on its ability to achieve its zero-subsidy rate goal.To ensure 7(a) loan program integrity, reduce the risk of financial loss and facilitate meeting its zero-subsidy rate goal, SBA should consider potential risks related to higher loan amounts, rising interest rates, staffing shortages, delayed defaults, and charge-offs in its 7(a) risk strategy.SBA management generally agreed with our findings and key considerations, stating that they believed the relief payments helped to prevent loan defaults. They acknowledged that the lasting impact of the relief payments, the effects of the higher loan amounts, and rising interest rates were unknown. Management stated they will continue to consider our key considerations in their risk strategy.

The U.S. Postal Service’s surface network uses highway contract routes, which are routes of travel served by contracted suppliers to transport mail between plants and other designated stops. The suppliers are expected to operate according to scheduled arrival and departure times defined in the contract. From fiscal years (FY) 2020 to 2022, the Postal Service reported that 679,407 scheduled highway contract route trips were omitted, meaning the supplier failed to run a scheduled trip. Omitted trips increased by about 129 percent from 132,158 in FY 2020 to 302,096 in FY 2022.

This report presents a summary of the results of our self-initiated audits assessing the efficiency of selected processes at three selected retail units in the Arizona–New Mexico (AZ-NM) District. These retail units include Yuma Main Office, Lake Havasu City Post Office, and Phoenix-Sierra Adobe Station in the AZ-NM District of the WestPac Area. We previously issued interim reports to district management for each of these retail units regarding the conditions we identified.

The Management and Use of Official Time final audit report, originally issued on September 16, 2022, was reissued on March 20, 2023. The report was revised to remove statements pertaining to questioned costs for official time used for representational activities. We originally developed average hourly costs for official time hours in the background section of the report for presentational purposes only, not for questioned costs as defined in the IG Act. However, these changes did not alter the finding and six recommendations made in the final report.

The U.S. Postal Service’s Central Area has about 6,224 delivery units to assist in the Postal Service’s universal service obligation to bind the nation together and provide prompt, reliable, and efficient postal services to all communities. As of September 2022, about 78,000 city and rural carriers delivered to about 32 million possible delivery points in the Central Area. During fiscal year (FY) 2022, we evaluated mail delivery, customer service, and property conditions at 14 delivery units in the Central Area.

The U. S. Postal Service’s WestPac Area has about 2,996 delivery units to assist in the Postal Service’s universal service obligation to bind the nation together and provide prompt, reliable, and efficient postal services to all communities. As of September 2022, about 64,000 city and rural carriers delivered to about 30 million possible delivery points in the WestPac Area. During fiscal year (FY) 2022, we evaluated mail delivery, customer service, and property conditions at 15 delivery units in the WestPac Area.

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

NASA is developing advanced nuclear power system technologies, generally plutonium-238-based radioisotope power systems, to expand solar system exploration where conventional solar or chemical powered space flight is less effective. In this audit, we evaluated NASA’s management of the plutonium-238 it uses to power deep space satellite missions, nuclear power technology development, and the Program’s effectiveness in supporting NASA science missions.

We audited costs claimed by the State of Hawaii, Department of Land and Natural Resources, under grants awarded by the FWS through WSFR.

To ensure veterans’ monthly compensation benefits are consistent with their levels of disability, the Veterans Benefits Administration (VBA) requires reexaminations for veterans when there is a need to verify the continued existence or the current severity of a disability. VBA’s policy is to request reexaminations only when mandated by law or if necessary before reducing an evaluation (i.e., reducing a veteran’s disability rating due to improvements in the disability). While required reexaminations are important to ensure taxpayer dollars are spent appropriately, unwarranted reexaminations are a waste of appropriated funds, could cause undue hardships for veterans, and reduce the efficiency and timeliness of claims processing. The OIG conducted this review to determine whether VBA staff correctly followed procedures when requesting medical reexaminations.The OIG found VBA can reduce unwarranted reexaminations. When VBA staff complete rating decisions on veterans’ claims for benefits, they may enter approximate reexamination control dates in the electronic system. The review team estimated staff erroneously established reexamination controls in 66 percent of cases (3,149 of 4,754), including for veterans whose disabilities were permanent and not likely to improve. This occurred, in part, because VBA does not require staff to cite objective evidence for why reexaminations are needed.Once the reexamination control date arrives, VBA’s policy is for a “locally designated claims processor with expertise in review examination ordering” to determine whether reexamination is still needed. However, VBA did not define or provide criteria for such a claims processor. Further, it did not establish training requirements or monitor completion of relevant training. The team estimated claims processors requested unwarranted reexaminations when controls matured in 44 percent of cases (9,733 of 22,534).Until VBA strengthens its reexamination process, it lacks assurance that veterans are being required to attend reexaminations only when warranted. VBA concurred with the OIG’s three recommendations to update guidance, enhance information systems, and train employees.

Michael Devine, a former Fire, Life and Safety Assistant Supervisor based in New York, was found guilty on March 15, 2023, of one count of Grand Larceny in the Fourth Degree after a three-day bench trial in the Supreme Court of the State of New York. Devine created counterfeit Amtrak badges for himself and other employees and participated in a scheme with co-workers to use these fake badges and/or their official Amtrak badges to “swipe” each other in and out on Amtrak’s time and attendance machines. Devine resigned on December 10, 2021, and he is ineligible for rehire. A sentencing hearing is pending.

What We Looked AtThe Contractor Performance Assessment Reporting System (CPARS) is the official Governmentwide source for entering information on the past performance of Federal contractors. The assessments reported in CPARS can help provide a balanced view of contractor performance and give source selection officials valuable information to consider when making award decisions. This information is particularly important when officials need to make award decisions quickly, such as when responding during natural disasters or to the COVID-19 global pandemic and implementing new legislative requirements with short suspense dates. However, various reports issued by the Government Accountability Office have highlighted the lack of contractor performance information as an ongoing issue in the Federal Government. In addition, a 2017 Department of Defense (DoD) Office of Inspector General (OIG) audit found significant shortfalls in DoD’s contractor performance reporting. Given these issues, we initiated this audit to assess the Department of Transportation’s (DOT) compliance with requirements for reporting contractors’ past performance information. What We FoundDOT faces challenges in meeting Federal CPARS reporting guidance for the system’s registration and assessment deadlines. Specifically, Operating Administration officials assigned CPARS responsibilities frequently did not register contracts within 30 days of the award or complete contractor performance assessments within 120 days after the period of performance ended, as recommended. Overall, DOT’s ability to meet its CPARS timeframes is impacted by insufficient departmental oversight and guidance, other priorities and staffing issues, disagreements over contractor assessments, and inadequate training. Until the Department addresses these issues, DOT cannot ensure it is in compliance with CPARS guidance for reporting contractors’ past performance information. Also, source selection officials—looking to initiate new procurement actions—may question the value of or may not have the CPARS assessments they need to make timely award decisions. Our RecommendationsWe made 10 recommendations to improve DOT’s compliance with requirements for reporting contractors’ past performance information. DOT concurred with all 10 recommendations and provided appropriate planned actions and completion dates. We consider all recommendations as resolved but open pending completion of the planned actions.

This Office of Inspector General Comprehensive Healthcare Inspection Program report describes the results of a focused evaluation of the inpatient and outpatient care provided at the Amarillo Health Care System in Texas. This evaluation focused on five key operational areas:• Leadership and organizational risks• Quality, safety, and value• Medical staff privileging• Environment of care• Mental health (emergency department and urgent care center prevention initiatives)The OIG identified concerns within the medical staff privileging area of review:• Focused Professional Practice Evaluation processes• Privileging request review