u.s. department of transportation office of inspector general grant oversight issues and future...
TRANSCRIPT
U.S. Department of Transportation Office of Inspector General
GRANT OVERSIGHT ISSUES AND FUTURE CHALLENGES
Presented by Joe ComéDeputy Principal Assistant Inspector General for Auditing and Evaluation
AASHTO Internal/External Audit Conference
Savannah, Georgia July 12, 2012
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WHO ARE THOSE AUDITORS?
Grantees Single Audits (CPAs)
Other Federal
State Oversight
Office of Inspector General
Federal Granting Agency
Local e
ntities
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U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF INSPECTOR GENERAL “FORMAL ORGANIZATION CHART”
Regional Offices
Audit
• Atlanta, GA
• Baltimore, MD
• Cambridge, MA
• Fort Worth, TX
• New York, NY
• Oklahoma City, OK
• San Francisco, CA
• Seattle, WA
Investigations
• Cambridge, MA
• Chicago, IL
• Fort Worth, TX
• New York, NY
• San Francisco, CA
• Sunrise, FL
• Washington DC
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“LESS FORMAL DESCRIPTION”
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AVIATION
Wildlife Hazard Mitigation
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BRIDGES
Interstate 35W Bridge (2007)Construction material on deck
Under-designed gusset plates
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TUNNELS
Central Artery Tunnel (2006)
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TRANSIT
Effects of Hurricane Sandy on New York’s Subway System
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HIGHWAY PROJECTS
Alaskan Way Viaduct Replacement Project
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BIG MONEY
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Audits
• 143 audit reports
• 385 recommendations
• Over $3 billion in financial recommendations
Investigations
• 82 indictments
• 73 convictions
• $98 million in fines, restitutions, and recoveries.
RETURN ON INVESTMENT
$ 41DOT OIG’s return for
each budget dollar spent
in fiscal year 2013
On track for similar results in fiscal year 2014:
• Over $532 million financial recommendations
• Over $1.3 billion in fines, restitutions, recoveries, and forfeitures—the bulk of which comes from Toyota’s settlement with the Federal Government.
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DOT GRANTS
In this tight budget environment, taxpayers expect the Government to be a good steward of tax dollars spent on DOT grants.
DOT’s Estimated Grant Obligations
FY 2013 $100.1 billion
Source: OMB Object Class Analysis, Budget of the U.S. Government, Fiscal Year 2013
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Issues :
• Missing elements
• Unclear or unspecified milestones
• Undefined terms
• Inconsistency between agreements and other documents
GRANT AGREEMENTS
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Issues :
• Lack of outcome measures to determine project success relative to program goals
• Plenty of upfront goals but less after the fact measures
• Data for measuring program success not collected or not collected consistently
MEASURING PERFORMANCE
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Issues:
• Expenditures that are not allowable
• Expenditures not credited to proper account
• Problems with indirect costs
• Poor documentation for expenditures
SUPPORTING EXPENDITURES
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Issues:
• Lack of support for major management decisions and modifications to projects
• Poor documentation of change orders and rationale
• Contract files issues
OTHER DOCUMENTATION
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Issues:
• Lack of training plan
• Insufficient training on key tasks
• Knowledge of controls
TRAINING
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Issues:
• Remedies available and situations that warrant use
• When to use tracking
• Feedback considered when making and amending grants
• Reluctance to use enforcement authority for noncompliance
REMEDIES AND SANCTIONS
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Issues:
• Knowledge of fraud potential
• How to report fraud
• Current fraud issues related to Transportation projects
FRAUD AWARENESS AND REPORTING
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We’re going to parachute in and do a surprise audit, but I want to keep the whole thing low key.
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• ARRA project closeout
• Oversight of major projects
• Oversight of States’ use of Federal-aid funds through the Financial Integrity Review and Evaluation Program (FIRE)
• Oversight of preliminary engineering on highway projects
• Oversight of the Bridge Inspection Program
• Implementation of OIG Bridge Program recommendations and MAP-21 Bridge provisions
FHWA-RELATED AUDITS UNDERWAY
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• National Transit Database
• Oversight of at-risk transit agency grantees
• Efforts to deploy low or no emission buses and other transit-focused technologies
• Hurricane Sandy grant award and oversight processes
FTA-RELATED AUDITS UNDERWAY
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• Evolving nature of Federal audit mandates
• Everything is an IT audit
• “Super Circular” impacts
• Innovative financing requires innovative auditing
• The dream of performance budgeting
FUTURE CHALLENGES
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QUESTIONS?
We don’t want you to view this panel as being in any way confrontational, so please ask questions.