Federal Reports

We performed an audit examining HUD’s efforts to prevent duplication of benefits when using Community Development Block Grant (CDBG) Disaster Recovery and Mitigation funds.  Our objective was to determine how the U.S. Department of Housing and Urban Development (HUD) assesses the adequacy of grantee procedures to prevent a duplication of benefits, both before and after grant execution.

HUD certified grantees’ high-level processes for preventing duplication of benefits before grant execution and allowed grantees to develop more detailed procedures for individual grant activities later.  However, HUD did not review grantees’ more detailed procedures before grantees began spending funds on program activities.  In addition, HUD certified before grant award that grantees had adequate procedures when the grantees’ procedures did not meet the adequacy criteria HUD established in the Federal Register.  Further, HUD’s adequacy criteria did not include all statutory requirements.  Because HUD certified procedures that did not meet requirements and did not review detailed activity-level procedures before grantees began spending funds, HUD risked grantees’ failing to prevent any duplication of benefits in accordance with the law.

We recommended that the Director of the Office of Disaster Recovery (1) review grantees’ activity-level procedures to prevent any duplication of benefits for adequacy before grantees process applications for assistance and (2) ensure that all applicable requirements for preventing any duplication of benefits are included in the adequacy criteria, grantee certifications, and HUD review checklists supporting the certification.

An Amtrak lead service attendant based in Miami, Florida, resigned from her position on October 20, 2023, as a result of our investigation. We found that the former employee violated company policies by engaging in outside employment while on a medical leave of absence.

On August 20, 2020, in response to the coronavirus (COVID-19) pandemic, the Tennessee Valley Authority (TVA) created the Pandemic Relief Credit (PRC) to provide a measure of relief to local power companies (LPCs), industries, businesses, and people of TVA’s seven state service region. Relief was provided in the form of a 2.5 percent credit to LPC and directly served customers’ demand and nonfuel energy charges. In August 2021, TVA extended the 2.5 percent credit through fiscal year (FY) 2022. TVA subsequently extended the 2.5 percent credit through FY 2023. Through July 2023, TVA had issued about $630 million in PRCs.We included this audit in our annual audit plan due to the amount of credits issued to LPCs and issues identified in a previous audit of pandemic-era credits. Our audit objective was to determine if adequate controls were in place to ensure the PRCs were calculated and utilized in accordance with TVA Board of Directors’ (TVA Board) approval. Our audit scope was the $449,227,369 of credits issued under the PRC for the period October 2020 through September 2022.We determined some controls were adequate to ensure PRCs were calculated and utilized in accordance with TVA Board approval. Specifically, controls were adequate to ensure (1) PRCs were calculated accurately and (2) LPCs that elected to pass the standard service portion of the credit to their customers did so in a nondiscriminatory manner. However, we determined the control in place to ensure the Time of Use (TOU) portion of the credit that was passed to LPC customers was inadequate. Specifically, the control for testing whether the LPC was passing the credit to the TOU customers was to ask LPC personnel if the credit was passed on to the customers. Due to the inadequacy of the control, TVA was not aware that one of the 25 LPCs we tested had not passed the majority of the credits to their end-use TOU customers totaling about $420,000. In addition, since the standard service portion of the credit did not have to be passed on to LPC customers, the cash positions of LPCs could be increased by the PRC. We determined 44 LPCs had surplus cash in excess of the TVA Board’s previously established 33 percent cash ratio threshold and noted 36 of these had not passed the standard service portion of the credit on to their end-use customers.

The EPA’s P2 grant results aligned with program goals, but without a supervisory verification process, the program may report inaccurate grant results to the public.

We reviewed the Animal and Plant Health Inspection Service Wildlife Services’ investigations of livestock deaths by Mexican gray wolves.