Federal Reports

Objective: To determine whether the Social Security Administration (SSA) implemented appropriate controls and practices to manage its Agile software development projects.

We completed a corrective action verification (CAV) of recommendations from prior Office of Inspector General (OIG) audit reports on the U.S. Department of Housing and Urban Development’s (HUD) government purchase cards and government travel cards, both issued January 31, 2020. During our CAV, we followed up on all 10 recommendations from OIG audit report 2020-KC-0001 and all 13 recommendations from OIG audit report 2020-KC-0002. Our CAV objective was to determine whether HUD implemented adequate corrective actions in response to the recommendations.Corrective actions were not fully implemented or completed for 2 of 10 recommendations from audit report 2020-KC-0001 and 3 of 13 recommendations from audit report 2020-KC-0002. The Office of the Chief Procurement Officer (OCPO) and the Office of the Chief Financial Officer (OCFO) did not fully implement the agreed-upon corrective action plans because (1) responsibilities for the corrective actions transferred to three separate offices in less than 1 year and there were insufficient resources to complete the planned actions and (2) management later decided to change corrective action plans due to reporting difficulties, reluctance to collect information regarding disciplinary actions, and the timing of union negotiations. However, OCPO and OCFO closed the recommendations without revising the management decisions or fully implementing or completing the corrective actions. As a result, HUD lacked assurance that the agency used efficient and effective techniques to prevent or detect inappropriate use of government purchase and travel cards. Specifically, HUD could not ensure that disciplinary actions were performed when inappropriate use of government purchase and travel cards was detected or a consistent method was implemented for reviewing and analyzing (1) training records and (2) data for split transactions and appropriate methods of payment. We recommend that HUD submit a revised management decision to address the recommendation and fully implement those actions for two recommendations from OIG audit report 2020-KC-0001 (2020-KC-0001-001A and 002A) and three recommendations from OIG audit report 2020-KC-0002 (2020-KC-0002-001A, 001D, and 002C).

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

We audited the Long Branch Housing Authority based on the results of our previous audits of the Asbury Park and Red Bank Housing Authorities, which received management services and technical assistance from Long Branch for several years. The objective of the audit was to determine whether Long Branch properly handled income and expenses associated with its agreements with Asbury Park and Red Bank in accordance with requirements.Long Branch did not properly handle income and expenses related to services provided under agreements with two other public housing agencies.  Specifically, it improperly accounted for more than $2.2 million as non-Federal funds.  Additionally, it did not properly allocate and support base payroll expenses and maintain adequate documentation to substantiate incentive payments.  This condition occurred because Long Branch improperly considered itself to be a contractor and did not have adequate controls to ensure compliance with Federal requirements.  As a result, HUD did not have assurance that $1.5 million in incentives paid from agreement income was eligible and reasonable, and nearly $700,000 in unspent agreement income that had not been used continued to improperly reside in a Long Branch account.  Additionally, HUD did not have assurance that an estimated $1 million in base payroll expenses was paid from the proper funds, and any Long Branch program funds used were not available to benefit its own residents.We recommend that HUD require Long Branch to (1) provide support to show the reasonableness and eligibility of the $1.5 million in employee incentives paid from agreement income or reimburse its program for any amount it cannot support, (2) provide support for a reasonable estimate of employee time used to perform services for the two agencies and reimburse its program for any program funds improperly used for those expenses, and (3) implement adequate controls to ensure that it properly classifies income received under any future agreements or activities and to ensure compliance with applicable cost principle requirements in the future.  Additionally, we recommend that HUD make a determination regarding nearly $700,000 in outstanding agreement income, including whether those unspent funds should be returned to the public housing agencies.