Federal Reports

Department did not comply with IPERA for FY 2016 because it did not meet two of IPERA’s six compliance requirements. First, the Department reported improper payment rates for the William D. Ford Federal Direct Loan Program (Direct Loan) and the Federal Pell Grant (Pell) program that did not meet the FY 2016 reduction targets it established in its FY 2015 Agency Financial Report. Second, the Department’s improper payment risk assessments for its Department-managed grant programs and Federal Student Aid-managed contracting activities did notconform to the Improper Payments Information Act of 2002, as amended, and with Office of Management and Budget guidance, because it did not consider all nine required risk factors in its assessments. In addition, the Department did not report the Vocational Rehabilitation State Grants program as a program that may be susceptible to significant improper payment in its Agency Financial Report even though the Department’s risk assessment showed that the program exceeded the statutory thresholds to be reported as such. We found that the Department’s improper payment estimates, methodologies, and reporting were generally accurate and complete; however, we identified issuesin all three areas. First, the Department needs to improve its policies and procedures over the Direct Loan and Pell programs’ improper payment estimates because we found errors with how the Department included the results of five program reviews in the two programs’ improper payment calculations.

Our review objectives were to (1) assess whether the Department complied with all applicable improper payment requirements and (2) evaluate the accuracy and completeness of its reporting, as well as its performance in recapturing improper payments.

The Program Support Center (PSC) obligated and expended funds for 17 of the 30 contracts we reviewed in accordance with appropriations law and Federal acquisition requirements; however, for the remaining 13 contracts, the PSC did not always obligate and expend funds for its contracts in compliance with applicable law and requirements, resulting in unreported Antideficiency Act obligation violations totaling $20.3 million and expenditure violations totaling $29.2 million. Also, for 4 of the 30 contracts reviewed, the PSC incorrectly extended the period of performance and the fiscal year funding beyond its 12 month period of availability. In addition, the PSC did not always submit contracts to the Office of Grants and Acquisition Policy and Accountability and Office of General Counsel for appropriations funding reviews before awarding the contracts. These conditions occurred because the PSC (1) funded nonseverable service contracts incrementally; (2) expended funds on a first-in, first-out basis instead of on the basis of a fund's period of availability; and (3) did not use correct product/service codes. Further, the Unified Financial Management System did not validate that expenditures were matched to obligations with an appropriate period of availability.

This summary report provides an overview of the results of our audit of the information security controls over Virginia's Medicaid Management Information System (MMIS). It does not include specific details of the vulnerabilities that we identified because of the sensitive nature of the information. We determined that Virginia did not adequately secure its Medicaid data and information systems in accordance with Federal requirements. Virginia had adopted a security program for its MMIS, but numerous significant system vulnerabilities remained. We have provided more detailed information and recommendations to Virginia so that it can address the issues we identified. The findings listed in this summary report reflect a point in time regarding system security and may have changed since we reviewed these systems.

The Office of the Inspector General previously conducted an evaluation of Kingston Fossil Plant (KIF) (Evaluation Report 2015-15329, dated March 10, 2016) to identify operational and cultural strengths and areas for improvement that could impact KIF's organizational effectiveness. Our final report identified several operational and cultural areas for improvement, along with recommendations for addressing those issues. We subsequently received KIF's management decision on June 20, 2016. The objective of this follow-up evaluation was to assess management's actions to address areas for improvement from our initial organizational effectiveness review. In summary, we determined the actions taken by KIF appear to address most areas for improvement identified during our initial organizational effectiveness evaluation. Some concerns remain related to the administration of discipline and unresolved conflict in one group. However, in general, individuals reported seeing positive changes at KIF.