Federal Reports

The auditors determined that NEA substantially complied with the DATA Act for FY 2017 Q2. Quarter 2 data was submitted timely with over 95 percent of its data submitted accurately, completely, and in accordance with government-wide data standards. However, we noted six procurement awards included in File C that were not listed in File D1. These transactions were erroneously included in File C due to timing issues and a misunderstanding about what types of transactions should be included. These six files represent 2.3% of the sample tested.We recommend that NEA enforce the validations required by the Standard Operating Procedures (SOP) to ensure all obligations in File C correspond to the award data in File D1. Moreover, NEA should update their DATA Act SOP to reflect the type of awards that should be excluded and/or included from DATA Act reporting.

We have audited the accompanying Balance Sheet of the National Endowment for the Arts (NEA)as of September 30, 2017 and 2016 and the related Statements of Net Cost, Changes in NetPosition, and Budgetary Resources for the years then ended, and the related notes to thefinancial statements.In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the National Endowment for the Arts as of September 30, 2017 and 2016, and its net cost, changes in net position, and budgetary resources for the years then ended, in accordance with accounting principles generally accepted in the United States of America.Although not considered to be material weaknesses or significant deficiencies, we noted certain other matters that were communicated to management in a separate letter. Additionally, we have provided the status of the prior year findings in Appendix I.

In our fiscal year 2017 audit, we did not identify any deficiencies in internal control over financialreporting that we consider to be material weaknesses. We noted three matters in FY 2017 thatare discussed in Appendix I and one matter from our FY 2016 audit that remains open.Additionally, we have provided the status of the prior year management letter comments inAppendix I.

In September 2016, a complainant and letters from several Senators and Representatives alleged the Eastern Colorado Health Care System (ECHCS) used unofficial wait lists for group therapies. Also alleged was that the Colorado Springs Community Based Outpatient Clinic did not take timely action on Post Traumatic Stress Disorder Clinic Team (PCT) consults and falsified medical documentation following a veteran’s suicide. We substantiated ECHCS staff improperly used unofficial wait lists for group therapies. This occurred because management misinterpreted national guidance. As a result, management did not have access to accurate wait times and lacked assurance that staff scheduled all requests. We substantiated PCT staff did not timely process consults. In fiscal year 2016, staff did not initiate scheduling within VHA’s goal of 7 days for an estimated 38 percent of consults or provide care within VHA’s goal of 30 days for an estimated 64 percent of consults. We determined PCT staff inaccurately recorded dates for calculating wait times for an estimated 91 percent of consults that resulted in care, and improperly closed an estimated 40 consults without adequate documentation of scheduling efforts. These conditions occurred for a variety of reasons, including that PCT staff didn’t prioritize consult processing, have sufficient staffing resources, properly record dates, or always record scheduling attempts as required. As a result, veterans experienced underreported delays by an estimated 50 days for initial treatment, and management did not have assurance that staff attempted to schedule all veterans. For an estimated 210 consults, veterans were inappropriately denied the Veterans Choice Program. We did not substantiate Colorado Springs PCT staff falsified medical records. We reviewed medical documentation, interviewed the complainant, and ensured that the Office of Healthcare Inspections reviewed the records. We recommended the ECHCS Director ensure staffing resources are sufficient and staff follow policy when scheduling. The ECHCS Director concurred with all recommendations and provided corrective actions. We closed two recommendations and will monitor remaining corrective actions.

The Consolidated Reports Act of 2000 and Office of Management and Budget (OMB) Circular A-136, Financial Reporting Requirements, require that the Office of Inspector General provide the agency head with a summary of the top management and performance challenges facing the agency. It is our assessment that the areas of financial management, human capital, information technology, administrative services, and awardee accountability represent the top management and performance challenges for the National Endowment for the Arts (NEA). Following is a discussion of each challenge area.

EAC OIG, through the independent public accounting firm of Brown & Company CPAs and Management Consultants, PLLC, audited EAC's financial statements for the fiscal years ended September 30, 2017, and September 30, 2016.

In our opinion, the closing package financial statements present fairly, in all material respects, the financial position of the Postal Service as of September 30, 2017, and its net costs and changes in net position for the year then ended in accordance with U.S. generally accepted accounting principals.

Napa State Hospital must improve its policies, procedures, and business practices to account for and expend FEMA grant funds according to Federal regulations and FEMA guidelines. Specifically, it did not properly document and adequately account for project costs; comply with its overtime policy; and comply with Federal requirements for insurance. Additionally, there were major differences in the damage estimates FEMA and the Hospital calculated