Federal Reports

Our audit objectives were to assess whether key contract provisions aimed at mitigating legal and financial risks were included in high-value, high-risk active contracts, and to assess the company’s contract record-keeping practices to identify opportunities, if any, for improvement. We have redacted the sensitive data from the report.Our work showed that all 20 of the high-value, high-risk company contracts we reviewed contained key contract provisions that successful organizations commonly use to mitigate risks - such as warranties, insurance, indemnifications, and bonds. However, we found that internal controls for managing contracts are weak because the company lacks a contract management system.To address an identified internal control weakness and reduce its financial and legal risks, we recommended that the company document and initiate a plan for the timely completion of the steps necessary to fully define user requirements for a contract management system, determine how best to meet those requirements, establish roles and accountability for system implementation, secure the needed resources, and establish a project monitoring process to implement a cost-effective solution for enhancing the management and oversight of its contracts.In commenting on a draft of this report, the company’s Vice President, Senior Managing Deputy General Counsel, stated that the company agreed with our recommendation.

Our objective was to assess the effectiveness of the U.S. Postal Service’s irregularity reporting process for highway contract routes (HCR) at the Chicago Network Distribution Center (NDC). This is the second and final report in our series examining HCR irregularities.

The objective of our audit was to assess the effectiveness of the Postal Service’s National Recycling Program (NRP). In fiscal year (FY) 2014, the Postal Service approved $33 million for the NRP as part of an overarching initiative to drive waste and cost out of operations, generate revenue, and provide better stewardship for the environment. The goal of the NRP is to reduce trash disposal costs; and increase recycling revenue from office mixed paper, undeliverable standard mail, and discarded lobby mail by maximizing the value of the existing network.

Audit Report

We found that Puerto Rico can improve its oversight of the Adult Education program to ensure that it (1) submits complete,supported, and accurate performance data to the Department, (2) uses funds in compliance with applicable laws and regulations, and (3) obtains and reviews single audit reports of subgrantees. Specifically, we found that Puerto Rico did not always: submit complete, supported, and accurate program performance data to the Department; provide sufficient documentation to demonstrate compliance with the approval process for personal services contracts; provide semiannual certifications for employees who worked full time on the Adult Education program; provide sufficient documentation to support nonpayroll payments; and obtain and review Office of Management and Budget Circular A-133 single audit reports for Adult Education program subgrantees that required a single audit.

EAC OIG, through the independent public accounting firm of Brown & Company, LLC, audited EAC's financial statements for fiscal year 2017. This letter conveys information concerning control weaknesses, identified during that audit, which do not risk to the level of a significant deficiency or material weakness.