Federal Reports

What We Looked AtSince March 2020, Congress has provided $69.5 billion in supplemental funding to the Federal Transit Administration (FTA) to help transit systems in the United States mitigate the impacts of the Coronavirus Disease 2019 (COVID-19) pandemic. As of August 1, 2022, FTA had obligated over $63 billion and expended over $46 billion. In addition to increased funding, the Coronavirus Aid, Relief, and Economic Security (CARES), Coronavirus Response and Relief Supplemental Appropriations (CRRSA), and American Rescue Plan (ARP) Acts permitted changes in how recipients use FTA funds. Accordingly, our audit objective was to assess the design of FTA’s controls to address risks FTA has identified for COVID-19 relief funding. What We FoundFTA’s 2021 Internal Control Plan identified 16 risks and mitigation strategies related to its COVID-19 relief funds, 12 of which FTA currently considers to be risks. We determined that FTA’s controls fully address 8 of these 12 identified remaining risks, because they are relevant and sufficient in scope and specificity to mitigate the related risk, and partially address 4 of the 12 remaining risks. For the four risks that Agency officials indicated no longer applied, we found that FTA’s controls partially address two risks and do not address two. We included our assessment of these areas should FTA management determine the risks are applicable at a future time. Adding controls for those risk areas that are not fully addressed will help the Agency mitigate the potential impact of the risks facing its COVID-19 relief funding. Our RecommendationsFTA concurred with our two recommendations to improve controls for addressing COVID-19 funding risks. We consider all recommendations resolved but open pending completion of the planned actions.

On October 11, 2022, an Amtrak pipe fitter based in Miami, Florida, signed a civil settlement agreement with the U.S. Attorney’s Office, Southern District of Florida, and agreed to pay $10,000 in restitution and a $5,000 penalty. Our investigation found that the employee submitted an application that contained false statements and information to the Small Business Administration in order to qualify for a CARES Act Economic Injury Disaster Loan Advance, resulting in the receipt of funds to which he was not entitled.

On October 11, 2022, an Amtrak coach cleaner based in Miami, Florida, signed a civil settlement agreement with the U.S. Attorney’s Office, Southern District of Florida, and agreed to pay $10,000 in restitution and a $5,000 penalty. Our investigation found that the employee submitted an application that contained false statements and information to the Small Business Administration in order to qualify for a CARES Act Economic Injury Disaster Loan Advance.

The small business segment in the U.S. is growing and has a strong potential to generate more revenue for the Postal Service. Consumer expectations are changing, including demands for faster shipping. For small businesses to compete with larger competitors, they need help with speedy and efficient logistics and fulfillment. Additional services and further outreach to small businesses at post offices can position the Postal Service for continued success serving this segment. The Postal Service’s Delivering for America 10-year plan, released in March 2021, acknowledges the need to improve how the retail network serves small businesses.

HUD established procedures in the Lead Safe Housing Rule in 1999 to eliminate lead-based paint hazards, as far as practicable, in public housing. However, it did not have a plan to manage lead-based paint and lead-based paint hazards in public housing. Additionally, HUD generally did not monitor whether public housing agencies had implemented lead-based paint hazard reduction and documented the activities at their public housing developments. These weaknesses occurred because HUD relied on public housing agencies to implement their own methods to achieve lead-safe housing, which should have included implementing lead-based paint hazard reduction. Further, instead of monitoring public housing agencies for compliance with the lead-based paint hazard reduction procedures in the Lead Safe Housing Rule, HUD relied on public housing agencies’ annual certifications of compliance. Without a plan to manage lead-based paint and lead-based paint hazards in public housing and ensure that public housing agencies implemented lead-based paint hazard reduction, HUD lacked assurance that (1) families with children under 6 years of age residing in public housing were not exposed to lead-based paint hazards and, thus, protected from lead exposure and (2) its procedures for eliminating lead-based paint hazards in public housing were effective.We recommend that the General Deputy Assistant Secretary for Public and Indian Housing require the Real Estate Assessment Center in coordination with the Office of Field Operations to (1) develop a plan to manage lead-based paint and lead-based paint hazards in public housing, (2) determine whether public housing agencies identified as having lead-based paint in their housing developments maintain and implement a plan for controlling lead-based paint, and (3) assess the lead-based paint hazard reduction activities performed at 19 developments associated with 18 public housing agencies reviewed that did not implement interim controls or adequately document that lead-based paint had been abated or treated with interim controls. If those reduction activities did not fully abate the lead-based paint, HUD should ensure that the public housing agencies implement interim controls and ongoing maintenance and reevaluation programs.