Federal Reports

The OIG investigated an allegation that a former Bureau of Indian Affairs (BIA) realty specialist solicited a $200 bribe from a longtime lessee of tribal land so the lessee could retain the lease.We could not prove or disprove the bribery allegation. The lessee provided us a transaction receipt for a $200 check he wrote to a local store for cash, which he said he then paid to the BIA employee in exchange for assistance with renewing the lease. The lessee, however, could not provide any further evidence to corroborate his claim. The former BIA employee denied soliciting or accepting money from the lessee.During our investigation, we learned the lessee submitted a $57,000 lease renewal payment to the BIA but was not awarded the lease because he did not submit his bid in time. The former BIA employee erroneously sent the lessee an invoice and then accepted the payment and issued it to the Tribe. At the time of our report, neither the Tribe nor the BIA had reimbursed the lessee for the erroneous payment.The employee left the Department during our investigation. We referred this matter to the U.S. Attorney’s Office, which declined prosecution.

We audited the Commonwealth of Massachusetts’ (State) Small Cities Community Development Block Grant (CDBG) program because the State was the largest recipient of CDBG funds in New England. HUD awarded the State more than $88 million in CDBG funding for program years 2015, 2016, and 2017. In addition, we had not audited any of the State’s community planning and development programs in the last 10 years. Our audit objective was to determine whether the State provided adequate oversight and monitoring to ensure that its grantees complied with applicable State and Federal laws and requirements regarding (1) procurement, (2) conflict of interest, (3) program delivery, and (4) indirect cost rates.The State did not always ensure that its grantees complied with applicable State and Federal laws and requirements. Specifically, grantees did not always (1) properly conduct and document environmental reviews, (2) obtain independent cost estimates, (3) properly charge program delivery costs, and (4) obtain the State’s approval for projects that exceeded program limits.These deficiencies occurred because the State did not provide adequate oversight to ensure that its grantees complied with applicable State and Federal laws and requirements. As a result, we identified more than $1.5 million in questioned costs charged to the program, and HUD did not have assurance that all costs were eligible and supported.We recommend that the Director of HUD’s Massachusetts Office of Community Planning and Development require State officials to (1) repay $665,920 in ineligible program costs; (2) support or repay $896,387 in unsupported program costs; and (3) provide additional guidance to their grantees and strengthen controls over procurement, site-specific environmental reviews, and the definition of which expenses are considered program delivery costs.

The Office of the Inspector General conducted a review of the Hydro Generation, South Western Region (Hydro SW) to identify operational and cultural strengths and risks that could impact Hydro SW’s organizational effectiveness. Our report identified strengths within Hydro SW related to (1) organizational alignment, (2) positive interactions within and outside of Hydro SW, (3) effective leadership, and (4) positive ethical culture. However, we also identified risks that could hinder Hydro SW’s effective execution and its continued ability to meet its responsibilities in support of the PO mission. These were comprised of risks related to (1) inadequate resources including training, materials, and staffing and (2) perceptions of upper management support including spending and lack of hydro experience.

To evaluate internal controls over the accounting and reporting of administrative costs and determine whether the administrative costs claimed by the District of Columbia Disability Determination Division (DC-DDD) for Fiscal Years (FY) 2016 and 2017 were allowable and properly allocated.

Amtrak (the company) contracted with the independent public accounting firm of Ernst & Young LLP to audit its consolidated financial statements as of and for the fiscal year then ended, September 30, 2018, and to provide a report on internal control over financial reporting and compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters, which they issued on January 28, 2019.1 Because the company receives federal financial assistance, it must obtain an audit performed in accordance with U.S. generally accepted government auditing standards.The contract also required Ernst & Young to perform a Single Audit of the company’s federal financial assistance for the fiscal year ended September 30, 2018, in accordance with the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The objective of the Single Audit was to test internal control over compliance with major federal program award requirements and determine whether the company complied with the laws, regulations, and provisions of contracts or grant agreements that may have a direct and material effect on its major federal programs.