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
GRANT OVERSIGHT ISSUES
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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
FUTURE PLANS AND CHALLENGES
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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.
OIG, DOT AUDITS UNDERWAY OR COMING SOON
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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.
