Federal Reports

We audited New York State’s Hurricane Sandy disaster procurement processes.  Our audit objective was to determine whether the State conducted its Hurricane Sandy-funded disaster recovery procurements using full, fair, and open competition methods.  By continuing to use a November 2012 Governor-issued temporary waiver, the State did not foster open competition and ensure that it obtained the best services at the best prices.  Our testing found that the State used the Governor’s waiver to explain why it did not follow its contracting requirements when it (1) allowed six contracts to extend beyond 5 years, (2) did not follow its mini bid process for two contracts, and (3) entered into four contracts with initial terms of more than 1 year.  During our work, the State indicated the waiver was not expired or explicitly superseded and was still in effect.  Further, the U.S. Department of Housing and Urban Development (HUD) has not instructed disaster recovery grantees to limit the use of waivers.  Although a waiver of requirements, including those for procurement, might be needed immediately following a disaster, the State’s continued use of a waiver 5 or more years later does not appear to be reasonable or cost effective.  The State’s repeated use of the waiver led to numerous contract extensions that cost more than $99 million and other contract changes that increased those contracts’ costs by $103 million.

In addition, the State can improve its disaster recovery procurement processes by addressing its policy’s weaknesses.  Our review of 14 contracts found that the State’s policies (1) allowed agreements to lapse or be backdated and (2) did not fully address potential conflict-of-interest issues.  These issues occurred because Federal regulations required the State to adopt and follow its own procurement requirements, and the State lacked key internal controls.  Further, the Housing Trust Fund Corporation (Corporation), which had oversight authority, gave the State authority to enter into contracts on its behalf.  Improvement in the State’s procurement processes for its remaining disaster recovery funds should ensure that the State (1) limits its potential liability for contractors’ actions and costs, (2) provides full, fair and open treatment to prospective contractors, and (3) obtains the contracted services at the best value, all of which could result in improved program delivery to disaster impacted communities.

We recommend that the Office of Community Planning and Development’s Office of Disaster Recovery issue guidance to all disaster recovery grantees that waivers of requirements related to a disaster’s impact should be for reasonable and limited time periods after a disaster occurs.  Further, the State should revise its policies and procedures to improve its procurement processes and address the identified issues.

This report presents the results of our audits of delivery operations and property conditions in the North Carolina District in the Atlantic Area. 

This report presents a summary of the results of our self-initiated audits of delivery operations and property conditions at three delivery units, as well as district-wide delivery operations in the North Carolina District in the Atlantic Area (Project Number 25-080). The delivery units included the Airport Station in Charlotte, NC, as well as Concord Main Post Office (MPO) and Concord Parkway Station, both in Concord, NC.

We previously issued interim reports to district management for each of the three delivery units regarding the conditions we identified. In addition, we issued a report on the efficiency of operations at the Charlotte Regional Processing and Delivery Center (RPDC), which services these delivery units. judgmentally selected the three delivery units based on the number of Customer 360 (C360) inquiries related to delivery, Informed Delivery5 contacts associated with the unit, and stop-the-clock (STC) scans performed away from the delivery point and compared them to the district average. The units were also chosen based on first and last mile failures and undelivered routes.
 

Section 487(a)(17) of the Higher Education Act of 1965, as amended (HEA), requires postsecondary schools participating in Title IV programs to annually report data, including data relevant to students’ cost of attendance and financial aid and the schools’ graduation rates, to the U.S. Department of Education’s (Department) Integrated Postsecondary Education Data System (IPEDS) to the satisfaction of the Secretary. The objective of our inspection was to determine whether Joliet Junior College (JJC) reported verifiable data to IPEDS for the 2021–2022 reporting period. We found that JJC did not always report verifiable data to IPEDS for the 2021–2022 reporting period. The total amount of grant and scholarship aid that JJC students received for the 2021–2022 reporting period and the number of full-time undergraduate students who were enrolled in the fall of 2021 and seeking their first postsecondary certificate or degree that the school reported to IPEDS were not verifiable. In addition, the number of students who were full-time undergraduate students who began attending the school during academic year 2019–2020, were seeking their first postsecondary certificate or degree, and completed their program of study by the end of academic year 2021–2022 (150 percent of the normal time) that JJC reported to IPEDS were not verifiable. While not all reported financial aid and program completion data were verifiable, the average tuition and fees, books and supplies, room and board, and other expenses charged to full-time undergraduate students who were seeking their first certificate or degree that the school reported to IPEDS for the 2021–2022 reporting period were verifiable. JJC did not always report verifiable data to IPEDS because it did not update and implement procedures for collecting, consolidating, assessing the reliability of, and reporting data to IPEDS. 

We performed an audit of the costs billed to the Tennessee Valley Authority (TVA) by Johnson Service Group, Inc. (JSG) under Contract No. TVA‑04012020‑125806 for noncraft staff augmentation services.  Our audit objective was to determine if the costs billed to TVA by JSG were in accordance with the contract’s terms.  Our audit scope included about $32.5 million in costs billed to TVA from June 26, 2024, to March 11, 2025. 

In summary, we determined the costs billed by JSG generally complied with the contract except for a net overbilling of $3,288 in travel costs.  We also determined that TVA inadvertently credited an invoice instead of issuing a payment, resulting in an underpayment of $1,700.  In addition, TVA’s hiring managers provided approval for costs to be billed by JSG, which were not in accordance with the contract’s terms. Specifically, TVA could have saved $30,765 if TVA hiring managers had not allowed and/or approved reimbursement for (1) travel instead of temporary living allowances (TLA) for temporary assignments at one location exceeding 90 days, (2) excessive TLA rates, and (3) ineligible or excessive travel costs.

Why We Did This Report

The U.S. Environmental Protection Agency Office of Inspector General received an allegation of whistleblower reprisal under 41 U.S.C. § 4712 from a former employee of an EPA grantee. The complainant alleged that she was terminated in December 2023 in retaliation for making several disclosures regarding potential grant fraud and gross mismanagement of an EPA grant or subgrant.

Summary of Findings

The investigation determined that the complainant made at least five separate protected disclosures to tribal employees, including the COO and CEO. We found that these protected disclosures were contributing factors in the complainant’s termination. We also determined that the tribe cannot demonstrate by clear and convincing evidence that it would have terminated the complainant in the absence of her protected disclosures. As such, we substantiated the complainant’s retaliation allegations.