Federal Reports

We performed the 23rd review of the Lower Manhattan Development Corporation’s (LMDC) administration of the $2.783 billion in Community Development Block Grant (CDBG) Disaster Recovery funds awarded to the State of New York in the aftermath of the September 11, 2001, terrorist attacks on the World Trade Center (WTC) in New York City. This review was performed in response to a congressional mandate that we continuously audit the administration of these funds. The objective of the audit was to determine whether LMDC administered its Disaster Recovery-funded WTC Performing Arts Center activity under its WTC Site program in accordance with applicable requirements. We reviewed more than $47.2 million, or 100 percent, of the funds disbursed for the activity during our audit period.LMDC generally administered its Disaster Recovery-funded WTC Performing Arts Center activity under its WTC Site program in accordance with applicable requirements. For the more than $47.2 million in disbursements reviewed, LMDC ensured that disbursements were for eligible and supported costs. In addition, LMDC provided effective subrecipient and contractor oversight for the activity reviewed.There are no recommendations.

We audited the Housing Authority of the City of Annapolis, MD’s Housing Choice Voucher Program because we received a complaint alleging that the Authority (1) ignored discrepancies between income information for applicants and program participants and (2) did not properly administer its program. Our objective was to determine whether the Authority administered its program in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. We focused the audit on whether the Authority (1) accurately calculated and maintained support for housing assistance payments, (2) properly administered its waiting list and selected applicants from it, and (3) admitted only eligible applicants.The allegation regarding the Authority’s ignoring discrepancies between income information for applicants and program participants had no merit. However, the allegation that the Authority did not always properly administer its program had merit. Specifically, the Authority did not (1) properly administer its waiting list and select tenants from it and (2) maintain adequate documentation to show that it admitted eligible applicants into its program. These conditions occurred because the Authority (1) was unaware of some waiting list requirements, (2) lacked controls to ensure that it maintained documentation to show that it properly selected applicants from the waiting list, (3) lacked procedures to ensure that it maintained documentation to show that it admitted eligible families into the program, and (4) did not establish a reasonable timeframe before admitting applicants who had engaged in criminal activity. As a result, HUD lacked assurance that applicants admitted into the program (1) were properly placed on the waiting list, (2) were selected fairly from the waiting list, and (3) met all eligibility requirements.We recommend that HUD require the Authority to (1) update its administrative plan to clearly define the weights or rankings of its waiting list preference system; (2) develop and implement controls to ensure that it administers its waiting list according to the requirements in its administrative plan, including maintaining documentation to show that it properly selected applicants from the waiting list; (3) develop and implement procedures to ensure that it maintains documentation to show that it admitted eligible families into the program; and (4) update its administrative plan to establish the timeframe during which an applicant must not have engaged in criminal activity before it will admit the applicant into the program.

When Congress established average sales price (ASP) as the basis for Medicare Part B drug reimbursement, it also provided a mechanism for monitoring market prices and limiting potentially excessive payment amounts. The Social Security Act mandates that OIG compare ASPs with average manufacturer prices (AMPs). If OIG finds that the ASP for a drug exceeds the AMP by a certain percentage (currently 5 percent), the Act directs the Secretary of Health and Human Services to substitute the ASP based payment amount with a lower calculated rate. Through regulation, CMS outlined that it would make this substitution only if the ASP for a drug exceeds the AMP by 5 percent in the 2 previous quarters or 3 of the previous 4 quarters.

This management advisory presents the evaluation results of two 7(a) loans as part of our ongoing High Risk 7(a) Loan Review Program. This is the second in a series of advisories for 7(a) loans we reviewed in fiscal year 2019. The objectives of our evaluation were to determine whether (1) high‐dollar/early‐defaulted 7(a) loans were originated and closed in accordance with the Small Business Administration’s (SBA’s) rules, regulations, policies, and procedures and (2) material deficiencies existed that warrant recovery of guaranteed payments to lenders.Our review of these two high-dollar/early-defaulted 7(a) loans identified that lenders for both loans did not provide sufficient evidence to support that they originated and closed the loans in accordance with SBA’s requirements. Specifically, the lenders did not provide adequate documentation to substantiate reasonable assurance that the borrowers met requirements for eligibility, repayment ability, and equity injection.As a result, the lenders’ material noncompliance with SBA requirements while originating and closing the loans resulted in a combined potential loss to SBA of approximately $2 million. We recommended that SBA require the lenders to bring the two loans into compliance or seek recovery of approximately $2 million. SBA agreed with the recommendations and stated they will contact the lenders to obtain additional information to bring the loan into compliance. If the issues are not overcome, SBA will seek recovery from the lenders.

What Office of Inspector General Evaluated

The objective of this evaluation was to assess  was to assess Library Services' capability to perform end-to-end monitoring of the effectiveness of the collections storage process and its stages, including the acquisition, processing, and storing of collection materials, across different collection formats (e.g., monographs and serials, manuscripts, music, etc.) through the use of performance measures.  

What Office of Inspector General Found

• The Library's new strategic plan provides focus and direction to Library Services' efforts to improve the collection services workflow.
• Library Services needs to broaden its capability to perform end-to-end monitoring of the collection services workflow
• Library Services needs to strengthen its capability to identify, measure, and track its inventory of unprocessed collection materials
• Library Services needs to establish performance targets based on complete and accurate data
• Library Services needs to establish key performance indicators that will help it measure the efficiency and effectiveness of its collection services workflow
• Library Services needs a cross-organizational approach to performance measurement that facilitates collaboration
• Library Services needs to track costs associated with outcome-oriented performance measures in fulfillment of strategic goals and objectives
• Library Services needs to track capacity utilization to measure the effectiveness of its collection services workflow
• Building a collection services workflow approach should be a Library-level priority in the Library Services directional plan 

What Office of Inspector General Recommended

• Library Services develop and implement performance measures for the collection services workflow that measure desired outcomes aligned with the first goal of the Library’s new strategic plan to expand user access and the goal’s first objective to increase the discoverability and availability of collection materials, including measures for analog and electronic collection materials of cycle time and the age of Library Services’ inventory of unprocessed materials.
• Library Services utilize baseline and trend data in measuring progress in fulfillment of the first goal of the Library’s new strategic plan to expand user access and the goal’s first objective to increase the discoverability and availability of collection materials.
• Library Services broaden its capability to perform end-to-end monitoring of the collection services workflow by mapping business processes that are key to meeting user needs.
• Library Services create a more precise definition of “arrearage” that it applies consistently across all areas within Library Services to help ensure that it has a complete and accurate inventory of unprocessed analog collection materials.
• Library Services create a complete and accurate inventory of unprocessed electronic collection materials.
• Library Services use complete and accurate data to establish an outcome-oriented target for reducing the size of its inventory of unprocessed analog collection materials (e.g., using a ratio of unprocessed analog materials to analog collection materials overall) and use the target to measure performance.
• Library Services use complete and accurate data to establish plans to set an outcome-oriented target for reducing the size of its inventory of unprocessed electronic collection materials (e.g., using a ratio of unprocessed electronic materials to electronic collection materials overall).
• Library Services establish outcome-oriented measures focused on its performance related to meeting user needs associated with the collection services workflow.
• Library Services develop key performance indicators that measure the efficiency and effectiveness of the collection services workflow.
• Library Services track allocation of resources associated with outcome based performance measures for all stages of the collection services workflow for analog and electronic collections materials.
• Library Services establish a capacity utilization performance measure that tracks the effectiveness of its collection services workflow.
• Library Services establish a Library-level priority in its directional plan to measure the effectiveness of the collections storage workflow, as described in the second, third, and fourth findings of OIG’s report, in fulfillment of the Library’s user access goal (and others as appropriate) to include: defining the overall initiative, linking it to the Library’s and Library Services’ goals and objectives; articulating the desired longer term impact of the work; determining the timespan of the initiative and its key components; setting output and outcome measures, and targets for those measures, to track progress of the work over time; and identifying ownership/accountability for reaching targets.