Federal Reports

To modernize its financial and acquisition management systems, VA established the Financial Management Business Transformation (FMBT) program to replace legacy systems with a new Integrated Financial and Acquisition Management System (iFAMS). This implementation will occur in a series of 18 waves, starting with the National Cemetery Administration (NCA). The VA Office of Inspector General (OIG) conducted this audit as part of its oversight of this extensive modernization program because of risks associated with the continued use of the legacy financial systems and VA’s previous failed attempts to replace them. The OIG identified four system functionality issues and three procedural weaknesses from the first iFAMS deployment at NCA, which went live on November 9, 2020. The deputy assistant secretary for the FMBT Service concurred with the OIG’s five recommendations: (1) implement controls to mitigate the risk that data are unreliable and inconsistently recorded between the legacy system and iFAMS when staff deobligate funds for converted contracts; (2) establish and implement a methodology to prioritize user feedback in the risk management process; (3) use the risk register to document and assess the risks associated with the manual deobligation process; (4) ensure that converted contracts are included in integrated system testing and user acceptance testing; and (5) implement a process to formally acknowledge whether requests related to high-priority business intelligence reports have been accepted as requirements. Improving risk management, system testing, and communication could help the FMBT Service prevent issues from affecting a significantly greater number of staff at VA’s larger administrations and allow the FMBT Service to achieve the overall program goals of promoting operational efficiency, strengthening compliance, strengthening automated controls, mitigating long-standing audit deficiencies, and improving data reliability and reporting.

Ginnie Mae generally followed Federal guidance in precrisis planning and executed its crisis management strategy with respect to the COVID-19 pandemic. However, it does not have an agencywide crisis readiness plan, addressing likely hazards arising from a crisis, or include all key elements in line with crisis guidance from CIGFO.

We audited the State of Georgia’s monitoring of its Community Development Block Grant Disaster Recovery (CDBG-DR) Hurricanes Harvey, Irma, and Maria (HIM) grants’ activities and subrecipients. We initiated this audit to further HUD’s strategic objective to support effectiveness and accountability in long-term disaster recovery. HUD awarded more than $50.9 million in disaster recovery funds to the State for the natural disasters that occurred in January and September 2017. Our objective was to determine whether the State effectively monitored its CDBG-DR HIM grants’ activities and subrecipients to ensure that the activities addressed unmet long-term recovery needs.The State’s approach and efforts to conduct monitoring reviews of its HIM grant activities and subrecipients were not sufficient. Specifically, the State (1) lacked an understanding of the differences between monitoring reviews and day-to-day operations, (2) had inadequate monitoring procedures, and (3) lacked policies and procedures to conduct remote monitoring. As a result, HUD and the State did not have assurance that the State’s controls for program administration were effective for addressing unmet long-term recovery needs. There was also a risk that the planned activities would not serve the State’s beneficiaries in a timely manner or meet its goals for the number of beneficiaries it planned to serve.We recommend that the Deputy Assistant Secretary for Grant Programs instruct the State to ensure that it has an adequate approach for monitoring by (1) providing training to staff that includes an understanding of monitoring reviews, (2) updating its policies and procedures, and (3) developing policies and procedures to ensure that monitoring is conducted remotely if needed. We also recommend that the Deputy Assistant Secretary for Grant Programs monitor the State’s CDBG-DR program to ensure that performance expectations are achieved.