Federal Reports

We investigated allegations that an oil and gas company improperly reported oil and gas production from Federal leases to the Office of Natural Resources Revenue (ONRR), which resulted in a loss of public mineral royalties.We found the company failed to properly report production and mineral royalties to ONRR as alleged, but we did not find the company intended to defraud the Government. The improper reporting occurred because the company did not provide adequate lease production information to the contractor it hired to perform the production and royalty reporting. Further, the contractor was unfamiliar with ONRR’s reporting procedures and requirements.

Due to the importance of identifying and correcting safety issues, we performed an evaluation to determine if corrective actions were being implemented to address observations identified through the TVA Observation Program (TOP). We found corrective actions were generally being implemented to address observations identified through TOP. In addition, we found Local Health and Safety Committees were generally taking action to address negative trends in at-risk observations. However, we identified opportunities for improvement related to (1) at-risk observations that should not have been included as part of TOP, (2) documentation of corrective actions in SafetyNet, and (3) closure of some at-risk observations in SafetyNet.

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An Amtrak electrician in Chicago, Illinois, resigned from employment on April 14, 2020, following our investigation which revealed the employee violated company policies by establishing a business and using it to engage in fraudulent credit card schemes for personal gain during a portion of his continuous FMLA leave. The employee admitted that he used the proceeds from his business-related fraud scheme to travel and party. Further, he was initially dishonest with our agents when asked about his conduct. Criminal judicial proceedings are pending.

Our objective was to assess whether the Postal Service is effectively hiring and retaining first-line supervisors. We reviewed recruitment and retention initiatives to determine if they met their intended purpose. Additionally, we evaluated a statistical sample of 246 first-line supervisor vacancies from FYs 2016 to 2018 to determine whether the Postal Service filled first-line supervisor vacancies timely and whether first-line supervisors met qualifications outlined in job announcements.

We audited the City of Mesa’s Community Development Block Grant (CDBG) program based on (1) a hotline complaint alleging CDBG noncompliance; (2) a prior U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audit (2011-LA-1006), which determined that the City needed to improve how it administered its Neighborhood Stabilization Program 1 funds; and (3) our objective to promote fiscal responsibility and financial accountability. The audit objective was to determine whether the City administered its CDBG program funds in compliance with HUD requirements; specifically, whether it (1) awarded funds that met a CDBG national objective, (2) spent funds only for activities that were eligible and supported, and (3) adequately monitored subrecipients.We determined that the complaint had some merit and that the City did not administer its program in accordance with HUD requirements. Specifically, the City did not always (1) ensure that its CDBG activities met a national objective or that subrecipients followed HUD’s requirements or its own subrecipient agreements, (2) maintain adequate documentation, and (3) implement adequate internal controls. This condition occurred because the City did not always have sufficient knowledge of and disregarded HUD’s and its own requirements when it administered its CDBG program. As a result, the City was unable to support that it spent more than $3.1 million on CDBG activities that met HUD requirements. There was also little assurance that the City would use the additional $225,000 allocated for similar activities in compliance with HUD requirements. We recommended that the Director of HUD’s San Francisco Office of Community Planning and Development require the City to (1) support the eligibility of more than $3.1 million in CDBG costs or repay its program from non-Federal funds, (2) suspend $225,000 in activities until it can show that the activities meet program requirements, (3) implement its policies and procedures that require adequate documentation to be maintained, and (4) develop and implement adequate and effective internal controls.