Federal Reports

The audit of AmeriCorps grants awarded to YouthBuild USA found that AmeriCorps was aware of inconsistencies between Federal Statute and Federal Regulations concerning limitations on Federal share of member living allowance and member support costs beginning in 2009 and neither updated its Federal regulations nor effectively explained the inconsistencies to grantees. In addition, YouthBuild did not comply with Federal or AmeriCorps requirements, resulting in $3,604,355 of questioned Federal and match costs. The audit identified an additional $3,087,791 in funds put to better use. The questioned costs and funds put to better use stem from YouthBuild’s ineffective system of internal controls over timekeeping that failed to provide reasonable assurance that it and its subgrantees are adequately managing AmeriCorps funds. YouthBuild’s weak internal controls allowed a subgrantee to recruit prospective and existing employees as AmeriCorps members and permit them to earn and receive education awards for the same hours worked fulfilling their normal employment duties. In addition, YouthBuild’s timekeeping and member training hours policies significantly deviated from Federal regulations and AmeriCorps’ policy; and YouthBuild did not sufficiently monitor its subgrantees to detect instances of non-compliance with its policies. AmeriCorps agreed to disallow $3,083,528 in questioned costs due to the YouthBuild subgrantee recruiting employees as AmeriCorps members and other instances of subgrantee non-compliance undetected by YouthBuild’s monitoring. However, AmeriCorps did not agree with recommendations to disallow the remaining $520,827 of questioned costs related to noncompliant timekeeping practices and to require YouthBuild to pay $3,087,791 in outstanding education awards. These decisions by AmeriCorps increase the likelihood that grantees will adopt fraudulent timekeeping practices and put a significant amount of AmeriCorps funds at risk.

As required by the Charge Card Abuse Prevention Act of 2012, Public Law 112-194, we performed risk assessments of the U.S. Department of Housing and Urban Development’s (HUD) purchase and travel card programs. In our risk assessments, we analyzed and identified the risks of illegal, improper, or erroneous purchases. Using information provided by HUD, we assessed risk for eight different risk factors and ranked each risk factor as low, medium, or high, based on predetermined criteria. We determined that the overall risk for both programs was low and at this time, an audit is not warranted. However, we did identify areas of medium risk in which HUD could make improvements to strengthen its charge card controls related to three risk factors for the purchase card assessment and one risk factor for the travel card assessment. The risks in both programs centered around weaknesses in procedures and monitoring. Specifically, in the purchase card program, the Office of the Chief Procurement Officer (OCPO) used and relied on an outdated policy implementation guide that did not reflect OCPO’s current processes and lacked standard operating procedures outlining the specific steps taken to execute the controls. Further, the monthly monitoring review process did not always ensure that potential improper use transactions were cleared with adequate documentation. In the travel card program, HUD program offices did not always follow up on potentially improper transactions identified by the Office of the Chief Financial Officer (OCFO) in a timely manner, and OCFO lacked the authority to act when reviews were untimely. We also noted that HUD did not sufficiently monitor for employees who did not use their government travel card when required for official travel-related purchases. To improve its processes and oversight for the purchase card and travel card programs, we made recommendations to develop and implement policies and procedures in the areas that we assessed as medium risk. While we assessed risks of illegal, improper, or erroneous purchases as low in both charge card programs, implementation of these recommendations will enhance and further strengthen HUD’s controls and oversight activities in this area.