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Audits, Inspections, and Evaluations

Report Number Title Issue Date Fiscal Year
OIG-16-11 Since 2001, FEMA provided first responder organizations with more than $9 billion through the AFG and Staffing for Adequate Fire and Emergency Response (SAFER) programs. According to FEMA, it began using the eGrants system in 2003 to manage the funds awarded through these programs. However, the eGrants system does not comply with Department of Homeland Security (DHS) information system security requirements. Specifically, access to the eGrants system is not controlled or limited because FEMA instructs grantees to share usernames and passwords within the grantee’s organization and with contractors who manage grants. As a result, someone other than the primary point of contact can take action or make changes in eGrants without the grantee’s knowledge. Additionally, in June 2014, DHS’s Office of Cyber Security advised FEMA it should not authorize eGrants to operate because it poses an unacceptable level of risk to the agency. FEMA’s Chief Information Officer acknowledged the high level of risk posed by system deficiencies and vulnerabilities. Despite the known system deficiencies and risks, FEMA authorized the continued use of the system.

>Security Concerns with Federal Emergency Management Agency's eGrants Grant Management System 		2016
OIG-16-06 The independent public accounting firm KPMG LLP has issued an unmodified (clean) opinion on DHS' consolidated financial statements. In the independent auditors’ opinion, the financial statements present fairly, in all material respects, DHS’ financial position as of September 30, 2015. KPMG LLP issued an adverse opinion on DHS’ internal control over financial reporting of its financial statements as of September 30, 2015. The report identifies seven significant deficiencies in internal control; three of which are considered material weaknesses. The material weaknesses are in financial reporting; information technology controls and financial system functionality; and property, plant, and equipment. The report also identifies instances of noncompliance with four laws and regulations.

>Independent Auditors' Report on DHS' FY 2015 Financial Statements and Internal Control over Financial Reporting 		2016
OIG-16-07 DHS’ mission to protect the Nation entails a wide array of responsibilities. These range from facilitating the flow of commerce and travelers, countering terrorism, and securing and managing the border to enforcing and administering immigration laws and preparing for and responding to natural disasters. This report identifies major challenges that affect the Department as a whole, as well as its individual components, who work together to achieve this multi-faceted mission. We identified nine areas of most persistent concern for the Department: (1) DHS Management and Operations Integration; (2) Acquisition Management; (3) Financial Management; (4) Information Management and Technology; (5) Transportation Security; (6) Border Security and Immigration Enforcement; (7) Disaster Preparedness and Response; (8) Infrastructure Protection and Cybersecurity; (9) Employee Accountability and Integrity.

>Major Management and Performance Challenges Facing the Department of Homeland Security 		2016
OIG-16-05-D FEMA requested our assistance in determining whether its preliminary proposal to provide permanent or semi-permanent housing construction to the Oglala Sioux Tribe of the Pine Ridge Indian Reservation is consistent with Federal statutes and regulations and FEMA guidelines. FEMA has begun disaster recovery efforts in response to a disaster declaration for severe storms, straight-line winds, and flooding that occurred in May 2015. In limited circumstances, section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) grants the Federal Emergency Management Agency (FEMA) the authority to provide individuals or households affected by a disaster permanent or semi­permanent housing. However, to ensure the integrity of the Individual Assistance program, FEMA should adequately document the facts and circumstances that justify this decision. FEMA should also ensure that its proposed actions are the most cost-effective solution to the Oglala Sioux Tribe’s unique housing problems as compared to other alternatives.

>FEMA's Plan to Provide Permanent or Semi-Permanent Housing to the Oglala Sioux Tribe of the Pine Ridge Indian Reservation in South Dakota 		2016
OIG-16-04-D FEMA has no assurance that mission-assigned fuel deliveries for New York went only to FEMA-designated recipients. We reviewed the $6.37 million FEMA paid the Defense Logistics Agency for 1.7 million gallons of fuel. However, of this amount, we found incomplete and questionable supporting documentation for $4.56 million in fuel deliveries. Therefore, we could not verify the eligibility of the recipients that received this fuel. In addition, the Defense Logistics Agency delivered $1.81 million of fuel to recipients outside the mission assignment’s scope of work. As a result, FEMA cannot be sure that any of the fuel went to approved power restoration or emergency public transportation work in New York, as FEMA intended.

>FEMA Has No Assurance that Only Designated Recipients Received $6.37 Million in Fuel 		2016
OIG-16-03-D FEMA’s Program Guide for the Alternative Procedures pilot program and letters of undertaking provide acceptable guidance in most areas to ensure compliance with Federal rules and regulations. However, our review of seven large dollar value projects valued at $3.9 billion identified weaknesses in five areas of guidance: (1) estimating project costs; (2) responding to Office of Inspector General (OIG) audits; (3) managing cash responsibly; (4) applying insurance proceeds; and (5) obtaining insurance for future losses. These weaknesses put Federal funds at greater risk of fraud, waste, and abuse. Correcting these weaknesses will better ensure that participants in the pilot program will follow Federal requirements when spending Federal funds. Further, to protect the Federal taxpayer from inflated estimates, FEMA’s oversight should include additional steps to assess the accuracy of subgrantee fixed-cost estimates that exceed certain thresholds. In addition, FEMA needs to make other changes to comply with the Stafford Act and protect the integrity of the program.

>Clearer Guidance Would Improve FEMA's Oversight of the Public Assistance Alternative Procedures Pilot Program 		2016
OIG-16-02 FPS is not managing its fleet effectively. FPS did not properly justify that its current fleet is necessary to carry out its operational mission. Specifically, FPS did not justify the need for: more vehicles than officers; administrative vehicles; larger sport utility vehicles; home-to-work miles in one region; and discretionary equipment added to vehicles. Additionally, FPS overpaid for law enforcement equipment packages, did not have standard operating procedures for fleet management, a sound vehicle allocation methodology, or accurate fleet data to make effective management decisions. The Department of Homeland Security (DHS) and the National Protection and Programs Directorate (NPPD) fleet managers did not provide sufficient oversight to ensure FPS complied with all Federal and departmental guidance. As a result, FPS cannot ensure it is operating the most cost-efficient fleet and potentially missed opportunities to save more than $2.5 million in fiscal year 2014.

>The FPS Vehicle Fleet Is Not Managed Effectively ( 		2016
OIG-16-01-D FEMA spent more than $1.4 billion under the Individuals and Households Program on more than 182,900 applicants with losses related to Hurricane Sandy, as of April 2015. We reviewed FEMA’s process for verifying applicants’ insurance policies at the time of registration for this program. Before authorizing Individuals and Households Program payments, FEMA does not verify the accuracy of applicants’ “no insurance coverage” self-certifications. This condition exists because a reliable and comprehensive database does not exist for FEMA to verify the status of applicants’ insurance coverage. Consequently, FEMA relies on self-certification and legal statements on the application to ensure accuracy of applicants’ “no insurance coverage” information. FEMA is thereby exposing Federal disaster assistance funds to possible duplicate, improper, or fraudulent payments. We determined that FEMA paid approximately $250 million in homeowners’ assistance to more than 29,000 Hurricane Sandy applicants who may have had private insurance.

>FEMA Faces Challenges in Verifying Applicants' Insurance Policies for the Individuals and Households Program 		2016
OIG-15-152-D At the time of our audit, Mount Carmel Baptist Church (Mount Carmel) did not have adequate policies, procedures, and business practices to account for and expend FEMA grant funds according to Federal regulations and FEMA guidelines. Although the disaster occurred in 2013, Mount Carmel had not begun work to repair any of its damaged facilities and, therefore, had not incurred any costs for disaster-related work. In addition, Mount Carmel may lack the financial stability to meet the required 25 percent non-Federal cost share for the grant award. Finally, a Mount Carmel affiliate did not always comply with Federal grant requirements for a past Federal grant it received from another Federal agency. Therefore, FEMA should place special award conditions as needed on Mount Carmel though additional requirements.

>Mount Carmel Baptist Church in Hattiesburg, Mississippi Needs Assistance to Ensure Compliance with FEMA Public Assistance Grant Requirements 		2015
OIG-15-151-D The Borough received a $7 million grant award from the New Jersey Office of Emergency Management (New Jersey), a Federal Emergency Management Agency (FEMA) grantee, for damages resulting from Hurricane Sandy, which occurred in October 2012. We conducted this audit early in the grant process to identify areas where the Borough may need assistance in managing Federal funds. The Borough of Spring Lake, New Jersey, (Borough) accounted for disaster costs on a project-by-project basis and met applicable Federal regulations in processing disaster related procurement transactions. However, the Borough completed one large project below the estimated project cost, and about $2.0 million remains obligated for that project. Therefore, FEMA should deobligate the $2.0 million in unneeded funds as soon as possible and put those funds to better use. In addition, the Borough could not provide adequate support for emergency and permanent restoration work totaling $798,317. The Borough also had not applied insurance proceeds totaling $431,507 against claims for eligible project costs. Therefore, the $431,507 represents ineligible duplicate benefits, because FEMA cannot fund costs that insurance covers. These findings occurred, in part, because the Borough did not effectively coordinate with New Jersey to ensure Borough compliance with FEMA grant requirements.

>FEMA Should Recover $2.0 Million in Unneeded Funds and Disallow $1.2 Million of $7 Million in Grant Funds Awarded to Spring Lake, New Jersey, for Hurricane Sandy 		2015
OIG-15-150 The Transportation Security Administration (TSA) conducts or oversees passenger checkpoint screening at 450 federalized airports. Passenger checkpoint screening is a process by which passengers are inspected to deter, detect, and prevent explosives, incendiaries, weapons, or other security threats from entering sterile areas of an airport or getting onboard an aircraft. As threats to transportation security evolved, TSA needed a screening technology to detect nonmetallic threats. TSA developed Advanced Imaging Technology (AIT) to screen passengers for both metallic and nonmetallic threats concealed under clothing—without physical contact. In 2013, TSA equipped all AIT with Automated Target Recognition software, which displays a box around anomalies on a generic outline of a body. Our objective was to determine the effectiveness of TSA’s AIT, Automated Target Recognition software, and checkpoint screener performance in identifying and resolving anomalies and potential security threats at airport checkpoints. The compilation of the number of tests conducted, names of the test airports, and quantitative and qualitative results of our testing is classified or designated as Sensitive Security Information. We made one recommendation that when implemented should strengthen the effectiveness of identifying and resolving security threats at airport checkpoints.

>Covert Testing of TSA's Passenger Screening Technologies and Processes at Airport Security Checkpoints 		2015
OIG-15-149-D Riverside General Hospital (Riverside) received a $32.4 million award from the Texas Division of Emergency Management (Texas), a Federal Emergency Management Agency (FEMA) grantee, for damages resulting from Hurricane Ike in September 2008. At FEMA’s request, we audited $32.4 million, or 100 percent of the grant award. Riverside’s misuse of Federal funds did not end in 2012 with the indictment and departure of its Chief Executive Officer and others on charges of bilking Medicare out of $158 million. Following the indictments, Riverside’s remaining management continued to misuse and mismanage Federal funds—this time, FEMA funds. By 2013, Texas had advanced $17.6 million of the $32.4 million FEMA grant to Riverside. Riverside alleged that it spent $13.2 million of the $17.6 million received for disaster expenses. However, Riverside completely disregarded Federal grant requirements, and Texas did not adequately monitor Riverside’s grant activities. In fact, Riverside spent $7.9 million to fund its hospital operations and other unverifiable items. Further, Riverside awarded $12.2 million in disaster-related contracts without competition and did not always account for or support the grant funds. Therefore, we question the entire $32.4 million grant award, including $17.6 million in advanced funds and $14.8 million in unused funds.

>FEMA Should Recover $32.4 Million in Grant Funds Awarded to Riverside General Hospital, Houston, Texas 		2015
OIG-15-146-D This is our sixth annual “capping” report summarizing our disaster-related audits. Our first five annual reports focused solely on our Public Assistance and Hazard Mitigation grant audits. This year, we added the results of our non-grant audits to reflect all of our work related to Disaster Relief Fund activities. In fiscal year (FY) 2014, we issued reports on 61 audits of FEMA grants, programs, and operations funded from the Disaster Relief Fund: 49 grant audits and 12 program audits. The 61 reports contained 159 recommendations, with potential monetary benefits of $1 billion, which included $971.7 million reported for grant audits and $29.3 million reported for program audits. The $971.7 million represents 28 percent of the $3.44 billion in grant funds we audited in FY 2014. One Hazard Mitigation Grant Program audit resulted in $812 million of the $971.7 million of potential monetary benefits. We continue to find problems with grant management, ineligible and unsupported costs, and noncompliance with Federal contracting requirements. The 12 program audits included 3 audits of FEMA’s initial response to disasters, 4 audits related to issues we identified during our audits of FEMA’s disaster responses, and 5 other audits of FEMA programs or operations. The 12 program audit reports recommended improvements to FEMA programs or operations and the recoupment of a $29.3 million debt that a state owed to FEMA. FEMA has been proactive in responding to our FY 2014 recommendations.

>Summary and Key Findings of Fiscal Year 2014 FEMA Disaster Grant and Program Audits 		2015
OIG-15-148-D The City received a $248.3 million grant for 2005 Hurricane Katrina damages. In this third audit of the grant, we reviewed $142.1 million FEMA approved for 43 permanent repair projects. At the time of our audit, the City had not completed work on all projects and, therefore, had not submitted a final claim for all project expenditures. For most of the projects in our audit scope, the City of Gulfport, Mississippi, (City) accounted for and expended Federal Emergency Management Agency (FEMA) funds according to Federal regulations and FEMA guidelines. However, the City did not comply with Federal procurement requirements when awarding two contracts for project management services valued at $10.4 million, of which $4.2 million was unreasonable. City officials were not aware that Federal procurement regulations prohibited the use of a qualifications-based contracting method for program management services. However, the grantee (Mississippi) is responsible for ensuring that its subgrantee (the City) is aware of and complies with Federal requirements, as well as for providing technical assistance and monitoring grant activities.

>FEMA Should Recover $4.2 Million of $142.1 Million in Grant Funds Awarded to the City of Gulfport, Mississippi, for Hurricane Katrina Damages 		2015
OIG-15-145-D The Federal Emergency Management Agency (FEMA) Region III and the West Virginia Division of Homeland Security and Emergency Management (West Virginia) requested our assistance at FEMA’s Joint Field Office in Charleston, West Virginia to provide assurance that FEMA is complying with Public Assistance and Federal grant requirements regarding the eligibility of damages to the runway safety area at Yeager Airport in Charleston, West Virginia. FEMA opened the Joint Field Office in response to a disaster declaration for severe winter storms, flooding, landslides, and mudslides that occurred in March 2015. FEMA should take reasonable steps to determine whether the damage to the runway safety area (i.e., the Engineered Arresting structure) at Yeager Airport is the direct result of the disaster, and, if so, that a duplication of benefits does not occur. Further, FEMA should fully document such determinations in the agency’s official disaster records. This action should provide reasonable assurance that FEMA obligates Public Assistance funding only for eligible work, thus preventing future large deobligations or recoveries for work that FEMA or an audit may later determine to be ineligible.

>OIG Deployment Activities at FEMA's Joint Field Office in Charleston, West Virginia -Yeager Airport 		2015
OIG-15-147-D The City of Asbury Park, New Jersey, (City) received a $9.3 million Public Assistance grant award from the New Jersey Office of Emergency Management (New Jersey), a Federal Emergency Management Agency (FEMA) grantee, for damages resulting from Hurricane Sandy, which occurred in October 2012. Our audit objective was to determine whether the City accounted for and expended FEMA funds according to Federal requirements. The City generally accounted for and expended FEMA funds for permanent work according to Federal regulations and FEMA guidelines. However, the City did not provide adequate support for $771,461 of the $798,819 it had claimed for debris removal and emergency work at the time of our audit. As a result, FEMA has no assurance that these costs are valid and eligible. FEMA initially estimated that debris and emergency work would exceed $2 million. Because we conducted this audit early in the grant cycle, the City has an opportunity to supplement deficient documentation or locate missing documentation before too much time elapses. FEMA should disallow any costs the City cannot adequately support and direct New Jersey to assist the City in properly supporting the costs it has claimed and additional costs the City plans to claim. The City also did not include all federally required contract provisions in five contracts totaling $3.9 million. We did not question these contract costs, because this instance of noncompliance did not cause negative consequences and because the City otherwise complied with Federal procurement standards.

>Asbury Park, New Jersey, Needs Assistance in Supporting More Than $2 Million in FEMA Grant Funds for Hurricane Sandy Debris and Emergency Work 		2015
OIG-15-144 We evaluated the Department of Homeland Security (DHS) enterprise-wide security program for TopSecret/Sensitive Compartmented Information intelligence systems. We assessed DHS programs for continuous monitoring management, configuration management, identify and access management, incident response and reporting, risk management, security training, plans of actions and milestones, remote access management, contingency planning, and contractor systems. This report will be issued to the Office of Inspector General of the Intelligence Community.

>Review of DHS' Information Security Program for Intelligence Systems for Fiscal Year 2015 		2015
OIG-15-141-D The Township of Brick, New Jersey (Township) received a $14.57 million Public Assistance grant award from the New Jersey Office of Emergency Management (New Jersey), a Federal Emergency Management Agency (FEMA) grantee, resulting from Hurricane Sandy damages in October 2012. Our audit objective was to determine whether the Township accounted for and expended FEMA funds according to Federal requirements. FEMA should disallow $2.78 million in grant funds awarded to the Township. Although the Township generally accounted for FEMA funds on a project-by-project basis, it did not fully comply with Federal and FEMA procurement requirements in awarding contracts for disaster work, resulting in $1,496,131 in unreasonable debris removal costs. The unreasonable costs represent the difference between hourly rates the Township paid its contractors and the hourly rates that the State of New Jersey negotiated for statewide debris removal activities and made available to all municipalities within the state. Therefore, we question the unreasonable costs as ineligible. We also question as ineligible $1,286,255 of unrelated hazard mitigation costs. However, these costs may be eligible under other FEMA projects or programs. Therefore, the Township should work with New Jersey and FEMA to determine the eligibility of the hazard mitigation costs we question.

>FEMA Should Disallow $2.78 Million of $14.67 Million in Public Assistance Grant Funds Awarded to the Township of Brick, New Jersey, for Hurricane Sandy Damages 		2015
OIG-15-143-D Rock County Highway Department, Minnesota, (Department) received a $1.25 million grant for damages from a 2014 disaster. We conducted this audit early in the grant process to identify areas where the Department may need additional technical assistance or monitoring to ensure compliance with Federal requirements. The Department has established policies, procedures, and business practices to account for and expend Federal Emergency Management Agency (FEMA) Public Assistance grant funds according to Federal regulations and FEMA guidelines.

>Rock County, Minnesota, Highway Department Has Adequate Policies, Procedures, and Business Practices to Effectively Manage Its FEMA Public Assistance Grant Funding 		2015
OIG-15-142-D The Puerto Rico Department of Housing received two Federal Emergency Management Agency (FEMA) grant awards totaling $186.13 million to implement the New Secure Housing Program following Hurricane Georges in September 1998. In August 2012, the Puerto Rico Department of Housing submitted final expenditure claims totaling $184.34 million. FEMA requested that we audit these claims to facilitate closeout of the grants. The Puerto Rico Department of Housing did not always account for and expend FEMA grant funds awarded for the New Secure Housing Program according to Federal requirements. Of the $179.98 million of construction costs the Puerto Rico Department of Housing claimed, we found that $90.79 million was ineligible. The majority of these findings occurred because the Puerto Rico Emergency Management Agency, as the grantee, should have done a better job of managing the grants.

>The Puerto Rico Department of Housing Did Not Properly Administer $90.79 Million of FEMA Grant Funds Awarded for the New Secure Housing Program 		2015
OIG-15-140 We audited the DHS components’ coordination in performing their cyber missions. We sought to determine whether their cyber roles and responsibilities have been well delineated and a process is in place for department-wide information sharing and coordinated response to cyber incidents and criminal investigations. We also evaluated the components’ compliance with applicable DHS information security requirements. Department of Homeland Security (DHS) components have strengthened coordination in performing their cyber missions. For example, United States Immigration and Customs Enforcement (ICE) and United States Secret Service (USSS) have enhanced relationships with the National Protection and Programs Directorate’s (NPPD) National Cybersecurity and Communications Integration Center to improve information sharing and coordination on incident response and investigation. Despite these positive steps, the Department can take additional actions to improve its cyber mission coordination. For example, the Office of Policy has not developed a cyber strategic implementation plan due to its recent establishment and limited staff. Without a strategic plan, DHS cannot effectively align the components’ cyber responsibilities and capabilities with DHS’ overall mission.

>DHS Can Stregthen its Cyber Million Coordination Efforts 		2015
OIG-15-137 U.S. Customs and Border Protection (CBP) developed the Analytical Framework for Intelligence (AFI)—an index of relevant data in existing systems—to augment Department of Homeland Security’s (DHS) ability to gather and develop information about persons, events, and cargo of interest. We performed this audit to determine the status of AFI implementation and whether effective controls have been applied to protect the sensitive information processed and stored by the system. CBP has made significant progress in implementing AFI. CBP fully deployed AFI on schedule and within budget, and has taken measures to secure the sensitive information the system processes and stores from unauthorized access. In addition, CBP developed a privacy impact assessment to ensure that privacy considerations for operating AFI were addressed throughout system deployment. Since deployment, system users have provided positive feedback to the component about AFI’s functionality and usefulness. Despite these positive steps, we identified deficiencies that the component must address to further secure the system.

>Enhancements to Technical Controls Can Improve the Security of CBP's Analytical Framework for Intelligence 		2015
OIG-12-104 CBP Acquisition of Aviation Management Tracking System (Revised) 2012
OIG-15-139-D Los Alamos County, New Mexico, (County) received a $5.1 million award from the New Mexico Department of Homeland Security and Emergency Management Agency, a FEMA grantee, for damages resulting from severe storms and flooding in September 2013. Our audit objective was to determine whether the County accounted for and expended FEMA funds according to Federal regulations and FEMA guidelines. The County generally accounted for and expended Federal Emergency Management Agency (FEMA) Public Assistance grant funds according to Federal requirements. However, the County did not always comply with Federal procurement standards in awarding its three largest contracts for disaster work totaling $1.9 million. Specifically, the County did not take all required affirmative steps to assure the use of small, minority, women-owned, and labor-surplus area firms when possible. However, although the County did not take the specific steps that Federal procurement standards require, it did award all three contracts to these types of disadvantaged firms. In addition, the County’s contractors performed adequately and billed for their work appropriately. Therefore, we did not question costs because the County’s noncompliance with Federal requirements did not negatively impact the Federal government. County officials said that they were not aware of this requirement, but would update their policies and procedures to include this Federal procurement standard for future disasters.

>Los Alamos County, New Mexico, Generally Accounted For and Expended FEMA Grant Funds Properly 		2015
OIG-15-138 The Department of Homeland Security (DHS) manages a diverse warehouse portfolio. According to the Government Accountability Office, managing the Federal government’s real property — which includes warehouses — is a high-risk area. DHS’ components own and lease warehouses for a variety of reasons, such as storing disaster relief supplies, computer equipment, seized assets, and excess property. Our audit objective was to determine the effectiveness of DHS’ process of assessing and managing its warehousing needs. Although DHS has taken steps to assess its warehouses, it cannot effectively manage its warehouse needs because some of the components misclassify many of their warehouses. We found buildings that should not have been on the Department’s warehouse inventory. Conversely, we found buildings that should have been classified as warehouses, but were not. Because the warehouse inventories are inaccurate, DHS cannot manage warehouses or demonstrate compliance with requirements to limit the size of real property inventories and reduce costs. Even though most warehouses we visited were well organized and appeared to support the components’ missions, we identified three warehouses that CBP could potentially consolidate or close and put $1 million per year to better use.

>Accurate Reporting and Oversight Needed to Help Manage DHS' Warehouse Portfolio 		2015
OIG-15-135-D On August 24, 2014, a magnitude 6.0 earthquake struck northern California. FEMA expects eligible damages in Napa County, California (County), from the earthquake and aftershocks to exceed $6 million. We conducted this audit early in the grant process to identify areas where the County may need additional technical assistance or monitoring to ensure compliance with Federal requirements. The County has adequate policies, procedures, and business practices to account for Public Assistance grant funds according to Federal regulations and Federal Emergency Management Agency (FEMA) guidelines. The County can account for disaster costs on a project-by-project basis and is able to adequately support repair costs. Additionally, the County’s insurance procedures and practices are adequate to ensure that the County can properly manage anticipated insurance proceeds. The County also has adequate procurement policies and procedures that are consistent with Federal procurement standards. However, the County did not follow Federal procurement standards or its own contracting requirements when it awarded, without competition, a non-emergency grant management contract for $973,778. Therefore, we question $973,778 as ineligible contract costs.

>Napa County, California, Needs Additional Technical Assistance and Monitoring to Ensure Compliance with Federal Regulations 		2015
OIG-15-136-D St. Tammany Parish (Parish) received awards totaling $15.3 million from the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (Louisiana), a Federal Emergency Management Agency (FEMA) grantee, for the Hazard Mitigation Grant Program resulting from four federally declared disasters. The Parish’s hazard mitigation projects generally met FEMA’s eligibility requirements; and the Parish’s project management generally complied with applicable regulations and guidelines. However, the Parish did not always account for and expend grant funds according to Federal regulations and FEMA guidelines. We audited 11 projects totaling $14.98 million, or 98 percent of the total $15.3 million award. However, at the time of our audit, the Parish had completed only 4 of the 11 projects and had claimed project costs of $6.9 million for the 11 projects in our audit scope. We found $609,271 in ineligible project costs and $320,108 in unsupported project costs for total questioned costs of $929,379. These findings occurred, in part, because Louisiana has not properly managed its grants. Most significantly, Louisiana had not developed and implemented a comprehensive strategy to close all Hazard Mitigation Grant Program projects.

>FEMA Should Recover $929,379 of Hazard Mitigation Funds Awarded to St. Tammany Parish, Louisiana 		2015
OIG-15-132-D The City of Duluth, Minnesota, (City) received a Public Assistance grant award of $13.34 million from Minnesota’s Department of Public Safety, Division of Homeland Security and Emergency Management (Minnesota), a FEMA grantee, for damages resulting from severe storms and flooding in June 2012. The City did not follow Federal procurement standards in awarding $3.08 million for 12 contracts—$1.54 million for 8 non-exigent contracts and $1.54 million for 4 exigent contracts. Although the City competitively awarded all but 3 of the 12 contracts we reviewed, it did not take required steps to provide opportunities to disadvantaged firms to bid on federally funded work, as Congress intended. Therefore, we question the $1.54 million the City claimed for eight contracts for non-exigent work. We generally do not question costs for work when lives and property are at risk. Therefore, of the $1.54 million the City claimed for exigent work, we question only $8,566 in markups on the cost because one of the City’s contractors billed on a prohibited cost-plus-percentage-of-cost basis.

>FEMA Should Recover $1.78 Million of Public Assistance Grant Funds Awarded to the City of Duluth, Minnesota 		2015
OIG-15-134-D The Knoxville Utilities Board received a Public Assistance award of $2.7 million from the Tennessee Emergency Management Agency, a FEMA grantee, for damages resulting from severe storms and tornadoes in April 2011. We audited projects totaling $2.5 million. For the projects we reviewed, the Utility properly accounting for and expended FEMA funds according to Federal requirements.

>The Knoxville Utilities Board Effectively Managed FEMA Public Assistance Grant Funds Awarded for Damages from Tornadoes and Severe Storms in April 2011 		2015
OIG-15-133-D The Knoxville Utilities Board received a Public Assistance award of $5.2 million from the Tennessee Emergency Management Agency, a FEMA grantee, for damages resulting from severe storms and tornadoes in June 2011. We audited projects totaling $4.3 million. For the projects we reviewed, the Utility properly accounting for and expended FEMA funds according to Federal requirements.

>The Knoxville Utilities Board Effectively Managed FEMA Public Assistance Grant Funds Awarded for Damages from Tornadoes and Severe Storms in June 2011 		2015
OIG-15-129-D The City of Mankato, Minnesota (City) received a $939,719 grant for damages from a June 2014 disaster. We conducted this audit early in the grant process to identify areas where the City may need additional technical assistance or monitoring to ensure compliance with Federal requirements. The City has established policies, procedures, and business practices to account for and expend FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines.

>Mankato, Minnesota, Has Adequate Policies, Procedures, and Business Practices to Effectively Manage Its FEMA Public Assistance Grant Funding 		2015
OIG-15-131-D This is our third audit of the FEMA Public Assistance grant the City received for 2005 Hurricane Katrina damages. For the majority of the $376 million we reviewed, the City of Biloxi, Mississippi (City) accounted for and expended FEMA funds according to Federal requirements. However, the City did not follow all Federal procurement standards for a contract totaling$21.7 million for management of an infrastructure project. As a result, full and open competition did not always occur, which increased the risk of fraud, waste, and abuse, and at least $8.1 million of the $21.7 million in contract costs was unreasonable.

>FEMA Should Recover $21.7 Million of $376 Million in Public Assistance Grant Funds Awarded to the City of Biloxi, Mississippi, for Hurricane Katrina Damages 		2015
OIG-15-130-D The City of Kenner, Louisiana (City), received a $5.4 million FEMA Public Assistance grant award for August 2012 Hurricane Isaac damages. Our audit objective was to determine whether the City accounted for and expended FEMA funds according to Federal regulations and FEMA guidelines. The City generally accounted for and expended FEMA Public Assistance grant funds according to Federal requirements. However, FEMA should recover $148,500 of the $5.4 million award because the City claimed project costs that insurance covered. In addition, the City awarded 12 contracts totaling $3.1 million, without taking the required affirmative steps to ensure the use of small and minority firms, women’s business enterprises, and labor-surplus area firms when possible. As a result, FEMA has little assurance that these types of firms had sufficient opportunities to bid on federally funded work.

>The City of Kenner, Louisiana, Generally Accounted For and Expended FEMA Grant Funds Properly 		2015
OIG-15-126-D On August 24, 2014, a magnitude 6.0 earthquake struck northern California. FEMA expects eligible damages in the City of Napa, California (City) from the earthquake and aftershocks to exceed $8 million. We conducted this audit early in the grant process to identify areas where the City may need additional technical assistance or monitoring to ensure compliance with Federal requirements. The City has adequate policies, procedures, and business practices to account for Public Assistance grant funds according to Federal regulations and FEMA guidelines. The City can account for disaster costs on a project-by-project basis and is able to support disaster-related costs adequately. Additionally, the City’s insurance procedures and practices are adequate to assure FEMA that the City can properly manage anticipated insurance proceeds and obtain and maintain insurance to mitigate the cost of future damages.

>The City of Napa, California, Needs Additional Technical Assistance and Monitoring to Ensure Compliance with Federal Regulations 		2015
OIG-15-128-D FEMA’s selection of the Hurricane Sandy JFO in Lincroft, New Jersey, was not cost effective because FEMA waited until after Hurricane Sandy struck. While FEMA’s policies and procedures provide FEMA disaster response officials flexibility in responding to the unique disaster circumstances, FEMA was unprepared to set up a cost-effective JFO in New Jersey. As a result, FEMA’s selection of the New Jersey JFO for Hurricane Sandy exposed the Federal Government to unnecessary costs and delayed JFO operations. By taking advantage of nearby Federal facilities or locating more affordable flexible office space, FEMA might have avoided these facility costs and saved significant Federal disaster funds. Additionally, FEMA could have saved over $1.5 million by taking corrective actions to reduce lease costs as the disaster workforce decreased.

>FEMA's Process for Selecting Joint Field Offices Needs Improvement 		2015
OIG-15-127-D Jefferson Parish, Louisiana, (Parish) received an award of $18.1 million from the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (Louisiana), a FEMA grantee, for damages resulting from Hurricane Isaac, which occurred in August 2012. Our audit objective was to determine whether the Parish accounted for and expended FEMA funds according to Federal regulations and FEMA guidelines. The Parish generally accounted for and expended FEMA funds according to Federal regulations and FEMA guidelines. However, we identified $129,480 of ineligible costs

>Jefferson Parish, Louisiana, Generally Accounted For and Expended FEMA Grant Funds Properly 		2015
OIG-12-111 US-VISIT Faces Challenges in Identifying and Reporting Multiple Biographic Identities (Redacted) 2012
OIG-15-125-D Scott County’s Physical Development Department in Jordan, Minnesota (County), received a $2.6 million grant for damages from a June 2014 disaster. We conducted this audit early in the grant process to identify areas where the County may need additional technical assistance or monitoring to ensure compliance with Federal requirements. The County has established policies, procedures, and business practices to account for and expend FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines.

>Scott County, Minnesota, Physical Development Department Has Adequate Policies, Procedures, and Business Practices to Effectively Manage Its FEMA Public Assistance Grant Funding 		2015
OIG-15-122 We did not find any evidence that the production and subsequent mailing of 3-year DACA-related EADs held in NPS from February 17 through February 19, 2015, was done in defiance of the Federal District Court’s injunction. We determined that a combination of factors led to the production, and mailing of about 2,000 of these 3-year EADs. USCIS Service Center Operations Directorate (SCOPS) management was not specific in its direction to USCIS Office of Information Technology (IT) staff. In addition, SCOPS management was mistaken in its assumptions about what IT staff was able to do or had done in halting production of the 3-year EADs. Finally, within IT, we concluded there was a lack of understanding about the consequences of actions taken related to release of the EADs that had been held. USCIS could not provide reliable data on the actual number of EADs held in NPS that were subsequently produced and mailed. USCIS also continues to discover EADs that were produced or issued after the injunction but not included in the 2,128 originally identified. Therefore, we cannot validate the number of 3-year EADs produced or issued after February 16, 2015.

>USCIS' Issuance of 3-year Employment Authorization Documents Following a Federal District Court Injunction 		2015
OIG-15-124 DHS provides grant guidance over the acquisition of public safety communication equipment. However, the guidance the Office of Emergency Communications and the Federal Emergency Management Agency (FEMA) issued is unclear, inconsistent, and does not prevent grantees from purchasing non-interoperable communications equipment. The Office of Emergency Communications, within the National Protection and Programs Directorate, develops the National Emergency Communications Plan and the SAFECOM Guidance; however, neither document dictates specific requirements when purchasing emergency communications equipment. FEMA’s grant guidance also does not specify interoperability requirements. Without clear and consistent DHS grant guidance requiring interoperability, grantees could spend Federal funds for non-interoperable communications equipment purchases. Without interoperable emergency communications equipment, the lives of first responders and those of whom they are trying to assist may be at risk.

>DHS Needs to Improve Grant Guidance for Public Safety Communications Equipment 		2015
OIG-15-123-D The County received a $14 million grant for damages from Hurricane Isaac, an August 2012 disaster. We conducted this audit early in the grant process to identify areas where the County may need additional technical assistance or monitoring to ensure compliance with Federal requirements. At the time of our audit, the Jackson County, Mississippi, Board of Supervisors (County) had not established accounting procedures to account for disaster costs on a project-by-project basis, as Federal regulations and FEMA guidelines require. As a result, we had to rely on direct assistance from County officials to identify project costs and related supporting documentation. Additionally, although most of the County’s contracts complied with Federal procurement standards, the County improperly procured an architectural and engineering (A/E) contract totaling $1.3 million for dredging navigation channels. Inadequate competition increased the likelihood of fraud, waste, and abuse of Federal funds and resulted in at least $353,154 of unreasonable costs. Further, in soliciting bids for the A/E contract, the County did not provide opportunities for disadvantaged firms, such as small and minority firms, to bid on federally funded work as Congress intended. Lastly, the contract included a clause making payment contingent upon FEMA funding, which Federal cost principles do not allow.

>The Jackson County, Mississippi, Board of Supervisors Would Benefit from Technical Assistance in Managing Its $14 Million FEMA Grant Award 		2015
OIG-15-121-MA We reviewed whether, from October 1, 2013, to December 31, 2014, DHS components reported conference expenses to OIG and the public as required. During this time period, DHS components reported 28 (15 percent) of 187 conferences they were required to report to OIG; of the 28, 2 (7 percent) were reported within the required 15 days. Based on conference expenses reported in the first quarter of fiscal year (FY) 2015, the components' compliance with the reporting requirement is improving-the percentage of conferences reported rose from 13 percent in FY 2014 to 30 percent in the first quarter of FY 2015. For all but one conference with expenses exceeding $100,000, DHS published conference expenditures on its website as required, but the public cannot easily find this information. We made three recommendations to improve DHS components' required reporting of conferences to OIG and the public. DHS concurred with these recommendations and took responsive action; we consider all three recommendations closed.

>Management Advisory on Department of Homeland Security Components' Reporting of Conference Spending (OIG 15-121-MA) 		2015
OIG-15-120 We reviewed 12 of FEMA Region V’s 166 disaster-related responsibilities and determined that the region was not meeting 3 of these 12 responsibilities. Specifically, Region V did not: (1) have policies and procedures to provide temporary public transportation during disasters; (2) process first-level Public Assistance appeals in a timely manner; and (3) hold mandated meetings to inform the Regional Administrator about the region’s emergency management issues.

>Inspection of FEMA's Regional Offices - Region V 		2015
OIG-15-119-D Pulaski County (County) received an award of $5.8 million from the Missouri State Emergency Management Agency (Missouri), a FEMA grantee, for damages resulting from severe storms, straight-line winds, and flooding in August 2013. We conducted this audit early in the grant process to identify areas where the County may need additional technical assistance or monitoring to ensure compliance with Federal grant requirements. The County’s policies, procedures, and business practices were generally adequate to account for and expend FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines. However, the County’s procurement policies and procedures did not include all elements needed to comply fully with Federal requirements for the approximately $724,515 in estimated future disaster contracting.

>Pulaski County, Missouri, Could Benefit from Additional Assistance in Managing Its FEMA Public Assistance Grant 		2015
OIG-15-118 This audit is a follow-up to a 2007 Inspector General audit (OIG-07-5) of Transportation Security Administration’s (TSA) Federal Employees’ Compensation Act Program. Our objective was to determine whether TSA effectively and efficiently processed and managed workers’ compensation claims. TSA was responsive to our 2007 report recommendations and implemented internal controls across its workers’ compensation program. For example, TSA developed and implemented comprehensive policies and procedures for the submission and management of workers’ compensation claims. TSA also increased the number of workers’ compensation staff and implemented a strategy to address long-term, high-cost claims. Although TSA has made progress in addressing our prior report recommendations, we noted some additional concerns. Specifically, TSA used similar but separate functions for processing workers’ compensation claims without demonstrating increased effectiveness or efficiency in the processing or management of those claims. We also noted that TSA’s process for reviewing the accuracy of Department of Labor’s charges billed to TSA was not formally documented in its workers’ compensation policy.

>Transportation Security Administration's Management of Its Federal Employees' Compensation Act Program 		2015
OIG-15-117 The Government Charge Card Abuse Prevention Act of 2012 requires the Office of Inspector General to conduct an annual risk assessment on agency charge card programs. We conducted this audit to determine whether the Department of Homeland Security (DHS) implemented sufficient internal controls to prevent illegal, improper, or erroneous purchases and payments. DHS conducts a large volume of business using government charge cards each fiscal year. In fiscal years 2012 through 2014, DHS had more than $400 million per year in purchase and travel card transactions. DHS did not ensure components established documented procedures to comply with DHS requirements on charge card use. In addition, DHS components did not have sufficient oversight plans to prevent improper use of charge cards. As a result, there remains a moderate level of risk that DHS’ internal controls will not prevent illegal, improper, or erroneous purchases.

>Fiscal Year 2014 Assessment of DHS Charge Card Program Indicates Moderate Risk Remains 		2015
OIG-15-116-D Montgomery County, Maryland (County) received a Public Assistance award of $8.2 million from the Maryland Emergency Management Agency, a FEMA grantee for damages resulting from severe storms during June and July 2012. Our audit objective was to determine whether the County accounted for and expended FEMA funds according to Federal requirements. The County generally accounted for and expended Public Assistance grant funds according to Federal requirements. However, we did identify $36,244 of duplicate equipment costs the County claimed that FEMA should disallow.

>Montgomery County, Maryland, Generally Accounted for and Expended FEMA Public Assistance Grant Funds According to Federal Requirements – Hurricane Sandy Activities ( 		2015
OIG-15-115-D Montgomery County, Maryland (County) received a Public Assistance award of $8.2 million from the Maryland Emergency Management Agency, a FEMA grantee for damages resulting from severe storms during June and July 2012. The County generally accounted for and expended Public Assistance grant funds according to Federal requirements. However, we did identify $36,244 of duplicate equipment costs the County claimed that FEMA should disallow.

>Montgomery County, Maryland, Effectively Managed FEMA Public Assistance Grant Funds Awarded for Severe Storms During June and July 2012 		2015
OIG-15-114-D Fox Waterway Agency (Fox Waterway) received a $9.4 million award in Federal Emergency Management Agency (FEMA) grant funds for damages resulting from severe storms, straight-line winds, and flooding during April and May 2013. Our audit objective was to determine whether Fox Waterway expended FEMA funds according to Federal regulations and FEMA guidelines. Fox Waterway did not account for and expend FEMA funds according to Federal regulations and FEMA guidelines. The period of performance has expired for all projects, and Fox Waterway has not requested time extensions. Further, Fox Waterway officials could not tell us how much they had spent on disaster-related work or provide us documentation supporting all expenditures. Therefore, we question $9,367,187 of costs— $8,230,969 as ineligible and $1,136,218 as unsupported.

>FEMA Should Recover $9.3 Million of Ineligible and Unsupported Costs from Fox Waterway Agency in Fox Lake, Illinois 		2015
OIG-15-113-D The Mountain View Electric Association (Association) received a $7.1 million award of FEMA Public Assistance grant funds to repair facilities damaged in the Colorado Black Forest Fire. We audited $7.4 million in disaster-related costs, which included $322,417 in cost overruns. The Association did not always account for and expend FEMA Public Assistance grant funds in accordance with Federal regulations. Specifically, the Association did not follow all applicable Federal procurement standards in awarding FEMA-approved work valued at over $4 million for utility repairs and debris removal. As a result, FEMA has no assurance that costs are reasonable or that disadvantaged firms had sufficient opportunities to bid on Federal work as Congress intended.

>FEMA Should Disallow over $4 Million Awarded to Mountain View Electric Association, Colorado, for Improper Procurement Practices 		2015

*NDAA, Pub. L. 117-263, section 5274 Response Received. View responses

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