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Brought to you by the Council of the Inspectors General on Integrity and Efficiency
Federal Reports
Report Date
Agency Reviewed / Investigated
Report Title
Type
Location
Department of State
Inspection of Embassy Pretoria and Constituent Posts, South Africa
The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s compliance with the travel card program requirements for fiscal year 2018 based on our risk assessment. Our audit objective was to determine whether HUD travel cards were used for potentially illegal, improper, or erroneous purchases and whether travel cards were used when required. We found that out of a sample of transactions that we identified as high risk, HUD’s travel cards were used for 166 illegal, improper, or erroneous purchases totaling nearly $23,000. In addition, 19 employees used their personal sources of payment instead of the government travel card in violation of the Federal Travel Regulations. We recommend that the Office of Chief Financial Officer (1) coordinate with the related program offices, the Office of the Chief Human Capital Officer, and the Office of Employee Labor Relations to take appropriate actions against the employees identified in this report; (2) improve controls to ensure the proper use of the travel cards and prevent or detect employees who did not use their government travel cards when required; and (3) provide employees with appropriate training on the issues identified in this report and ensure that all cardholder training is up to date.
The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s compliance with the purchase card program requirements for fiscal years 2017 and 2018 based on our risk assessment. Our audit objective was to determine whether HUD maintained accurate records of cardholders and transactions; HUD employees took purchase card training when required; and HUD purchase cards were used for illegal, improper, or erroneous transactions. HUD did not have accurate and complete records of cardholders and transactions, including errors in cardholder closure dates, errors in training dates, inadequate tracking of merchant category code (MCC) overrides, and incomplete transactional data. In addition, purchase cardholders and approving officials did not always take purchase card training when required. Further, we identified 10 instances in which HUD purchase cards were used for improper purchases and incurred improper interest charges totaling $29,423. We recommend that the Chief Procurement Officer (1) implement processes to periodically audit or reconcile the shared service provider’s records, (2) review hierarchies, (3) ensure that training is taken when required, (4) suspend cardholders or approving officials who fail to take training or repeatedly cause HUD to pay interest, and (5) research the incomplete monthly transactional data and identify a solution. In addition, we recommend that the Chief Procurement Officer (1) enhance the process to periodically analyze data for split transactions or improper MCCs, (2) improve notifications to employees, and (3) follow up on any potential issues identified.
Independent Attestation Review: U.S. Department of Housing and Urban Development, Office of Special Needs, Continuum of Care Homeless Assistance Grants Program, Regarding Drug Control Accounting for Fiscal Year 2019
We conducted an attestation review of the U.S. Department of Housing and Urban Development (HUD), Office of Special Needs, Continuum of Care Homeless Assistance Grants Program, regarding drug control accounting and associated management assertions for fiscal year 2019. As required by Federal statute 21 U.S.C. 1704(d)(1), we reviewed HUD’s drug control accounting, including its written assertions. Our responsibility is to express a conclusion on the subject matter or assertion based on our review. We performed review procedures on HUD’s assertions and the accompanying fiscal year 2019 reports. Based upon our review, we are not aware of any material modifications that should be made to HUD’s assertions or the accompanying fiscal year 2019 reports in order for them to be in accordance with Office of National Drug Control Policy requirements.
We audited Community Action North Bay’s Continuum of Care Program based on hotline complaints (HC-2016-2275 and HT-2019-1142) and concerns expressed by the San Francisco Office of Community Planning and Development that included matching noncompliance issues. The complaints alleged improper accounting, timekeeping irregularities, unreported program income, and conflicts of interest. Our objective was to determine whether the Community administered its Continuum of Care Program in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.The complaints and concerns had merit. The Community did not administer its Continuum of Care Program in accordance with HUD requirements. Specifically, it did not maintain documents required to support that (1) it met the matching contribution requirement, (2) its rapid rehousing and permanent supportive housing programs assisted eligible individuals, and (3) program income and expenses were supported and eligible. These conditions occurred because the Community did not implement corrective actions recommended by HUD and its staff lacked the knowledge and skills needed to administer the program. As a result, the Community is at risk of having to repay HUD grant funds totaling $647,827 if it cannot provide supporting documentation related to required matching contributions. It also could not support the eligibility of individuals assisted by its rapid rehousing and permanent supportive housing programs.We recommend that the Director of HUD’s San Francisco Office of Community Planning and Development require the Community to (1) support that it met the matching contribution requirement or reimburse HUD $577,670 from non-Federal funds, (2) reclassify $28,576 as program income to the specific permanent supportive housing program, and (3) support that $2,687 paid to a board member for legal services was allowed through a HUD-approved waiver or repay HUD from non-Federal funds.
Suspected Violations of Title 18 U.S. Code § 287 – False, Fictitious, or Fraudulent Claims: Not Substantiated; and Title 18 U.S. Code § 1001 – False Statements, Concealment: Not Substantiated
The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s compliance with the purchase card program requirements for fiscal years 2017 and 2018 based on our risk assessment. Our audit objective was to determine whether HUD maintained accurate records of cardholders and transactions; HUD employees took purchase card training when required; and HUD purchase cards were used for illegal, improper, or erroneous transactions.
HUD did not have accurate and complete records of cardholders and transactions, including errors in cardholder closure dates, errors in training dates, inadequate tracking of merchant category code (MCC) overrides, and incomplete transactional data. In addition, purchase cardholders and approving officials did not always take purchase card training when required. Further, we identified 10 instances in which HUD purchase cards were used for improper purchases and incurred improper interest charges totaling $29,423.
We recommend that the Chief Procurement Officer (1) implement processes to periodically audit or reconcile the shared service provider’s records, (2) review hierarchies, (3) ensure that training is taken when required, (4) suspend cardholders or approving officials who fail to take training or repeatedly cause HUD to pay interest, and (5) research the incomplete monthly transactional data and identify a solution. In addition, we recommend that the Chief Procurement Officer (1) enhance the process to periodically analyze data for split transactions or improper MCCs, (2) improve notifications to employees, and (3) follow up on any potential issues identified.
Implement a process with ARC to ensure that cardholders and approving officials are notified before purchase card training is due to allow training to be completed in a timely manner.
Require ARC to update its MCC tracking log, to include the amount, the date of MCC override removal, and staff assigned, to ensure that an override is removed after the approved purchase is made.
Implement a process with Citibank and ARC to provide global notifications to cardholders and approving officials before autoclosures of credit card statements.
Obtain supporting documentation for the $1,807 spent on two cardholders’ purchase cards or require the vendors or cardholders to repay the funds to the applicable HUD program.
