Federal Reports

What We Looked AtThe Payment Integrity Information Act of 2019 (PIIA) requires agencies to identify, report, and reduce improper payments in their programs. For fiscal year 2020, the Department of Transportation reported one program, the Federal Highway Administration’s (FHWA) Highway Planning and Construction (HPC) Program, as susceptible to significant improper payments and subject to PIIA reporting requirements. HPC reported total expenditures of over $46 billion and DOT estimated that about $172 million of those payments were improper. PIIA also requires inspectors general to annually report on their agencies’ compliance. Our audit objective was to determine whether DOT complied with PIIA’s requirements as prescribed by the Office of Management and Budget (OMB). We reviewed the improper payment testing results published in DOT’s fiscal year 2020 Annual Financial Report (AFR) and posted to the Federal Government’s Payment Accuracy website and used statistical sampling to test transactions. What We FoundDOT is in compliance with PIIA. For fiscal year 2020, DOT reported improper payment estimates for FHWA’s HPC. The payment integrity information in DOT’s 2020 AFR and data posted to the Payment Accuracy website was accurate and complete. DOT also conducted risk assessments of programs as the Office of Management and Budget requires. The Department published its planned and completed corrective actions in its supplemental data call posted to the Payment Accuracy website. DOT’s corrective action plans appear adequately designed, focused on true root causes, and effectively implemented and prioritized with an emphasis on reducing improper payments. Furthermore, for fiscal year 2020, FHWA’s HPC Program surpassed its fiscal year 2020 improper payment reduction target of 0.85 percent, reporting estimated improper payments of 0.37 percent or about $172 million—a decrease of $224 million from 2019. Lastly, DOT continues to take steps to reduce and recapture improper payments through its risk assessments, annual improper payment testing, and payment recapture audits. RecommendationsWe made no recommendations.

The City Carrier Cost System (CCCS) is a statistical study of mail delivered on city carrier routes. For each selected route, a data collection technician selects a sample of mail to be delivered on the scheduled test date. The technician records the mail class, product type, and other characteristics of each manually sampled mailpiece directly into a portable microcomputer using the Computerized On-Site Data Entry System (CODES) data collection software. The Postal Service conducted 9,257 and 8,694 CCCS tests in fiscal years (FY) 2019 and 2020, respectively. Our objective was to assess the reliability of CCCS data and evaluate CCCS sampling methodologies to identify opportunities for improved efficiencies.

We conducted a limited review of the U.S. Department of Housing and Urban Development’s (HUD) Office of the Chief Procurement Officer’s (OCPO) administration of five procurement activities under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act and related Office of Management and Budget memorandums gave HUD flexibility in modifying existing contracts and required rapid delivery of CARES Act funds. Our objective was to determine what HUD had done to accommodate contractors’ pandemic-related issues while ensuring that HUD met its business objectives. In addition, our objective included determining what challenges HUD encountered in procuring and administering its contracts during the pandemic. Based upon a limited review of five COVID-19-related contract transactions and our understanding of the prepandemic controls and policies that HUD had in place, HUD was adequately prepared before the pandemic to accommodate contractors’ pandemic-related issues while ensuring that HUD met its business objectives. Because HUD was adequately prepared, it did not encounter substantial challenges in procuring and administering its contracts. HUD used its existing policies, procedures, and systems to modify contracts to allow contractor accommodations. We did not make any recommendations to HUD.

We conducted a performance audit of a National Endowment for the Arts (Arts Endowment) award issued to the Kansas Department of Commerce (KDC). Based on our review, we determined KDC generally met the financial and compliance requirements set forth in the award documents. However, we identified the following areas requiring improvement. For instance, KDC: did not report actual costs on its Federal Financial Report; did not document its methodology for recording and reporting allocated payroll costs for Arts Endowment awards; and did not have written policies and procedures in place to ensure that contractors are not debarred or suspended prior to the award of Federal funds. Thus, we are questioning overstated costs totaling $950. We have made two recommendations for KDC to improve these areas, and one recommendation to the Arts Endowment regarding the questioned costs.

In this audit, we evaluated NASA’s management of cooperative agreements it had with Universities Space Research Association, specifically management and oversight of 21 active cooperative agreements valued at approximately $476 million.