Federal Reports

Management Letter Fiscal Year 2023 Financial Statement Audit

An Amtrak supervisor based in Philadelphia violated company policies by using his company‐leased vehicle and, occasionally, his company fuel card to travel to his vacation home at least thirteen times over a nine‐month period. The employee admitted to these actions during his interview with our agents. He was removed from his supervisory position on December 18, 2023.

What We Looked AtThe U.S. Department of Transportation (DOT) has a fleet of 38 aircraft that are operated and maintained by the Federal Aviation Administration’s (FAA) Flight Program Operations within the Air Traffic Organization. FAA uses these aircraft for a variety of missions, including critical event response and transportation for DOT executives, such as the Secretary of Transportation, and other Government agency officials. The Office of Management and Budget’s guidance to Executive Department heads allows Federal officials to travel on Government aircraft but with restrictions. Several Members of Congress requested we review DOT executives’ use of Government aircraft. Our objective was to determine whether the Office of the Secretary (OST) complied with Federal regulations, policies, and procedures regarding executive travel on DOT aircraft. What We FoundOST complied with Federal regulations, policies, and procedures for the Secretaries’ travel on DOT aircraft from January 2017 to June 2023. Records for each of the 15 trips contained the required authorizations, justifications, and approvals for use of the DOT aircraft, including documentation such as trip memos and cost comparisons, as appropriate. However, in evaluating OST’s cost comparisons, we determined that FAA did not consistently update the DOT aircraft flight hour cost rates OST uses to determine the cost effectiveness of Secretarial transportation. As a result, FAA’s flight hour rates may not have reflected the most current operating costs. We also identified three instances in which FAA did not use the correct flight hour rate for its cost estimates. While the incorrect cost estimates did not negatively impact cost effectiveness in these instances, this control weakness could result in incorrect cost comparisons. Our RecommendationsDOT concurred with our two recommendations to improve FAA’s aircraft rate update process and provided documentation of FAA’s actions taken in response. We consider both recommendations resolved but open pending OIG review of FAA’s documentation.

We audited the U.S. Department of Housing and Urban Development (HUD), Office of Single Family Housing’s Federal Housing Administration (FHA) Resource Center’s handling of housing discrimination inquiries.  We initiated the audit to assist HUD with ensuring that the FHA Resource Center (1) provided accurate and complete information on potential housing discrimination to its customers and (2) ensured that instances of potential housing discrimination were routed through the proper channels. Our objective was to assess whether the FHA Resource Center appropriately rerouted inquiries related to housing discrimination, including discrimination in appraisals, to HUD’s Office of Fair Housing and Equal Opportunity (FHEO) in accordance with its standard operating procedures.The FHA Resource Center did not consistently reroute housing discrimination inquiries to FHEO in accordance with its standard operating procedures.  Specifically, it did not reroute 14 of 68 reviewed housing discrimination inquiries to FHEO as required.  In addition, it did not reroute 3 of 10 test calls that we placed relating to housing appraisal discrimination.  These inconsistencies occurred because the FHA Resource Center lacked clear guidance on how to handle discrimination inquiries when the inquiries included multiple concerns, such as a customer alleging discrimination while also complaining about living conditions in public housing.  The FHA Resource Center also did not consistently provide refresher training on how to handle discrimination inquiries.  As a result of these inconsistencies, customers with discrimination concerns were at higher risk of FHEO not addressing their concerns, living in unfavorable conditions, or losing their homes.We recommended that the Deputy Assistant Secretary for Single Family Housing update policies and procedures regarding discrimination complaints to ensure consistency among customer service representatives in rerouting these complaints to FHEO.    Also, we recommend that the Deputy Assistant Secretary ensure that the FHA Resource Center updates its training program so that refresher training on housing discrimination is regularly provided to staff (such as monthly, quarterly, semiannually, etc.).  HUD took actions during the audit to implement these recommendations.

As part of our annual audit plan, we performed an audit of costs billed to the Tennessee Valley Authority (TVA) by America Fujikura Ltd. dba AFL Telecommunications LLC (AFL) for optical ground wire cable (OPGW) and hardware under Contract Nos. 12674 & 15270. Our audit objective was to determine if costs were billed in accordance with the terms of the contracts. Our audit scope included approximately $29.5 million in costs billed to TVA from March 19, 2018, through August 31, 2022.In summary, we determined:AFL did not provide credits totaling $307,320 for returned steel reels.AFL overbilled TVA $72,025, including (1) $43,903 because AFL did not always use the most cost-effective unit rate available and (2) $28,122 because AFL sometimes used unit rates that were in excess of the contracts' pricing schedules.(Summary Only)