Federal Reports

September 30, 2018 Semiannual Report

This report responds to a request from Senator Claire McCaskill, Ranking Member, U.S. Senate Homeland Security and Governmental Affairs Committee. Based on the request, our objectives were to examine the role of the Postal Service network in facilitating illicit drug distribution, explore associated risks and vulnerabilities in the system, and identify opportunities to mitigate those risks.

This report identifies our views of the top management and performance challenges facing Amtrak (the company). Many other inspectors general are legislatively required to produce similar reports focusing on high-risk or high-impact activities and performance issues that affect programs, operations, and the achievement of strategic goals. Those reports have shown that periodically identifying and reporting these challenges to management and other decision-makers can help improve organizational performance. Although we are not legislatively required to report on top management and performance challenges, we do so with the intent of providing similar benefits.In deciding whether to identify an issue as a top management and performance challenge, we considered its significance in relation to the company’s mission and strategic goals; its susceptibility to fraud, waste, and abuse; whether the underlying causes are systemic in nature; and the company’s progress in addressing the challenge. We discussed the challenges we identified with company executives and senior managers to obtain their insights and reviewed industry, government, and legal documents to gain additional perspectives. We also solicited and considered comments from company executives in finalizing this report.

In this audit, we sought to determine whether the Department had effective oversight of the programs provided to charter schools and whether it sufficiently monitored State educational agencies to ensure that (1) procedures and internal controls were in place to identify the causes for charter school closures and for mitigating the risks of future charter school closures, (2) close-out procedures for Federal funds received by a charter school are performed in accordance with Federal law and regulations, (3) assets acquired with Federal funds by a charter school that closes are disposed of in accordance with Federal law and regulations, and (4) student information and records from closed charter schools are protected and maintained in accordance with Federal law and regulations.We found that the Department’s oversight and monitoring of the States was not effective to ensure that the States performed the charter school closure process in accordance with Federal laws and regulations. Specifically, we found that the Title I, Individual with Disabilities Education Act, and Charter School Program offices did not always (1) provide adequate guidance to the States regarding their charterschool closure procedures and (2) sufficiently monitor the States to ensure they had adequate internal control systems regarding charter school closures. This occurred because the Department did not consider charter school closures to be a risk to Federal funds, and, therefore, did notprioritize providing guidance to the States on how to manage the charter school closure process or monitor the States’ charter school closure processes. As a result, the Department lacked assurance that the State educational agencies ensured all applicable Federal requirementsfor the closed charter schools were consistently performed and documented. During follow-up work in September and October 2017, we found the program offices had issued some guidance regarding requirements related to charter school closures and also updated some of their State monitoring procedures. These State monitoring procedures addressed some issues related to monitoring and oversight of closed charter schools, but we did not verify whether the new procedures have been fully implemented.