Open Recommendations

We recommend the CEO perform a review of the Incurred Costs Grant budget application and timekeeping records related to the disasters from 2020 and 2021 to identify the actual hours worked and corresponding costs for case time and administrative leave hours for office closures. The review should clearly distinguish between distinct categories of hours, including actual case/matter/supporting activity hours and leave.

We recommend the CEO implement a procedure to ensure that all relevant information, including the dates of office closures, offices impacted or closed, and staff on administrative leave due to disasters Hurricane Laura and Winter Storm Uri are adequately documented; and do so each time such actions are taken in response to future disasters.

We recommend that the CEO revise LSLA’s contracting policy to require recompeting recurring purchases and long-standing contracts every three to five years.

We recommend that the CEO implement a process to ensure LSLA follows its procurement policy. This includes documenting bids for all applicable purchases. Additionally, sole-source justifications should be documented and approved.

We recommend that the CEO implement a process to ensure unauthorized personnel do not enter into contracts on behalf of LSLA. Alternatively, if LSLA decides that it would be beneficial to allow more flexibility in contract approval authority, this should be formalized in the written policies and any deviations from the written policies should be adequately documented and approved.

We recommend that the CEO ensure LSLA's written cost allocation policies are updated to fully align with LSC requirements. Subjective adjustments should be minimized, and the considerations resulting in those adjustments should be formalized in the policies.

We recommend that the CEO update LSLA’s cost allocation methodology to ensure unrestricted funds are equitably included as a source to pay for indirect costs.

We recommend that the CEO ensure LSLA allocates the maximum allowable indirect costs to all funding sources, as per LSC guidance.

We recommend the CEO update the LSLA Accounting Manual to include policies and procedures surrounding card usage, statement reviews, payment processes and the credit card reconciliation process.

We recommend the CEO establish explicit written policies and procedures for board travel reimbursement policies. In addition, the policies should stipulate when per diem allowance limits can be overridden as well as the required documentation of review and approval.

We recommend that the CEO revise LSLA's written policies to include the following details:
• Timeline for preparing management reports
• Identification of known commitments
• Contents of the income and expense report
• Support of projections by schedules that document assumptions used to arrive at final projected amounts
• Budget constructions from cost centers
• Format of management reports
• Preparation of a budget to actual report or similar report containing the required information

We recommend that the CEO implement a process to document management's review of monthly reports. This should include a signature and date to denote the review and ensure compliance with LSC’s Financial Guide.

We recommend the CEO update the LSLA Accounting Manual to include policies for reconciling labor costs with timekeeping records, and to ensure that paid time off is allocated proportionally based on hours worked across different funding sources.

We recommend that the CEO ensure LSLA's written policies reflect the actual practices in place and comply with the applicable legal requirements for unclaimed client funds.

We identified questioned costs of $438,032 due to improper documentation and non-compliance with disaster grant requirements.QC further broken down as follows:
• LADRC – Leave & Holiday Hours totaling $39,983 in Questioned Costs.
• Incurred Costs Grant – Unallowable Expenses Totaling $287,624 in Questioned Costs.
• Incurred Costs Grant – Leave Hours Totaling $110,425 in Questioned Costs.

The Chief, Tax Compliance Officer, should review the 1,130 tax returns with potentially erroneous clean vehicle tax credits and assess the additional tax owed, if any.

As of May 2024, our analysis identified 225 individual taxpayers who had their tax returns incorrectly rejected for Tax Year 2023. The IRS incorrectly rejected tax returns when the taxpayer claimed the Previously Owned Clean Vehicles Credit on the Form 1040, U.S. Individual Income Tax Return, Schedule 3, Additional Credits and Payments, and attached the Form 8936. This occurred because the business rule was looking for the Form 8936 to be attached to the specific line claiming the credit instead of attached to the tax return.

In February 2024, we notified the IRS of concerns with seven business rules on the Form 8936 not functioning as stated in the business rule documentation. These business rules ensure the accuracy of the calculations on the Form 8936. Although the rules worked appropriately based on the context of the tax form, the business rule documentation did not match the computer programming.

The Chief, Taxpayer Service should develop a strategic approach that includes the assessment of available data, such as the volume and geographic location of taxpayers receiving Letter 5747C, lack of appointment availability, etc., to proactively anticipate the potential demand for Saturday Help events at various TAC locations.

The Chief, Taxpayer Service should evaluate additional actions that can be taken to better assist taxpayers and reduce the demand on the TAC from individuals required to verify their identity, such as having dedicated Saturday Help events to conduct in-person identity verification.

The Chief, Taxpayer Services should implement a service-wide policy that will require the TACs holding Saturday Help events to follow a consistent triage process of taxpayers. Ideally, the process would allow TACs to identify taxpayers who are there seeking services that cannot be rendered and identify the estimated population(s) of taxpayers who will be able to be assisted at a particular site during Saturday operations, potentially reducing the crowd size at the TAC offices.

The Chief, Taxpayer Services should issue guidance to IRS TAC employees advising them to not triage taxpayers outside the facility and if they do go outside to engage with taxpayers to ensure the appropriate physical security measures are in place.

The Chief, Taxpayer Services should provide explicit notifications on the IRS website of closed sites that were previously listed and scheduled to be open.

Develop training for examination staff that
(a) provides an overview of the Bank Exams Tailored to Risk model risk metrics, adjustment factors, and bump-up rules.
(b) provides an overview of the process for using Bank Exams Tailored to Risk to scope an examination.
(c) reinforces the resources and guidance materials available to help examination staff understand these topics.

Establish a process to periodically assess the need for additional training as the Bank Exams Tailored to Risk Program redevelops the models and implements new adjustment factors and bump-up rules.

We recommend that the Bureau for Global Health take the following actions:
Establish procedures to facilitate the deployment of staff to the field when needed during a health emergency.

We recommend that the Bureau for Global Health take the following actions:
Develop a timeline for finalizing all aspects of its Global Health Emergency Management System, including provisions for periodic testing of plans and for documenting and incorporating bureau-specific lessons learned.

We recommend that the Bureau for Management take the following actions:
Develop a plan for the identification, recruitment and retention of skilled personnel to task forces in the event of a global health emergency, including contingency planning for a lack of available staff.

We recommend that the Bureau for Management take the following actions:
Develop a plan to periodically test procedures in Automated Directives System, Chapter 112 through proactive exercises and evaluation activities and integrate lessons learned into the chapter.

We recommend that the North Carolina Department of Health and Human Services, Division of Health Benefits develop mitigating controls and strategies to lower risk within the high- and moderate-rated risk areas we identified.

We recommend that the North Carolina Department of Health and Human Services, Division of Health Benefits develop mitigating controls and strategies to lower risk within the high- and moderate-rated risk areas we identified.

We recommend that TSA evaluate and revise, as appropriate, its Surface Operations Program Manual and ensure accurate data collection and detailed supervisory reviews.

We recommend that TSA complete the 2023 Annual Report on Transportation Security and submit the report to Congress.

In August 2024, we notified the Director, Examination Case Selection, Small Business/Self-Employed Division, of our concern that the business rule that performed a validity check on the gross proceeds amount reported on Form 1099-S, Proceeds From Real Estate Transactions, was not working as intended. Our analysis identified 13 of 20 records erroneously rejected or were identified as errors by IRIS. We recommended that the IRS request programming changes to prevent Forms 1099-S from being rejected or incorrectly identified as errors.

In April, 2024, we notified the Director, Submission Processing, Taxpayer Services, of our concerns with the missing and inconsistent criteria used by IRIS to process paper-filed Forms 1099. We recommended that the IRS request programming changes, if needed, to ensure that IRIS business rules are using the same criteria as the legacy ERS.

USAID/Pakistan determine the allowability of $43,418 in unsupported questioned costs detailed on pages 22 to 23 of the audit report and recover any amount that is unallowable.

USAID/Pakistan determine the allowability of $382,115 in questioned costs ($330,782 ineligible and $51,333 unsupported), as detailed on pages 17 to 19 of the audit report and recover any amount that is unallowable.

(U) Rec 1: Recommendation is Classified.

(U) Rec 1: Recommendation is Classified.

We recommend that the Centers for Disease Control and Prevention: Develop, implement, and maintain a centralized repository to store required documentation pertaining to PEPFAR funds that are redirected due to a pandemic or other emergency.

We recommend the FSA Chief Operating Officer assess the feasibility and appropriateness of implementing a managerial cost accounting system in consultation with relevant Department officials, the Office of Management and Budget, and other Federal agencies, such as those highlighted in the report referenced above.

We recommend the FSA Chief Operating Officer evaluate the financial information requirements for FSA’s initiatives and projects and determine if FSA’s existing information systems support the reporting of financial information consistent with the expectations of external stakeholders.

We recommend the FSA Chief Operating Officer, in coordination with the Department of Education's Budget Director, ensure that spend plans and quarterly updates are submitted timely and comply with requirements.

The TAS, Executive Director, Systemic Advocacy, should ensure that collaborative teams have measurable outcomes to track program effectiveness.

The TAS, Executive Director, Systemic Advocacy, should develop and implement a quality review process for collaborative teams.

The TAS, Executive Director, Systemic Advocacy, should develop and implement a method to monitor collaborative teams through a dashboard view.

The TAS, Executive Director, Systemic Advocacy, should develop guidance to ensure consistent executive oversight for collaborative teams.

The TAS, Executive Director, Systemic Advocacy, should develop additional performance measures to assess whether systemic advocacy projects are effective in addressing systemic issues.

The TAS, Executive Director, Systemic Advocacy, should ensure that quality reviews are conducted on the 13 advocacy projects completed while the reviews were suspended. Additionally, ensure that if quality reviews are suspended in the future, that any projects whose reviews were not done due to the suspension, are completed when the quality review process restarts.

The TAS, Executive Director, Systemic Advocacy, should ensure that management addresses staffing issues and timely reassigns inventory when delays are identified in the SAMS issue review.