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Audits, Evaluations and Reviews
Audits, Evaluations and Reviews
Our application of agreed-upon procedures resulted in questioned costs amounting to $21,499, including $15,386 in grant costs, and $6,113 in education awards. A questioned cost is: (1) an alleged violation of a provision of law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the expenditure of funds; (2) a finding that, at the time of testing, such cost was not supported by adequate documentation; or, (3) a finding that the expenditure of funds for the intended purpose was unnecessary or unreasonable.
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), contracted with Mayer Hoffman McCann P.C. (MHM) to perform agreed-upon procedures on grant costs and compliance for Corporation-funded Federal assistance provided to the University of San Francisco - School of Education (USF).
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), contracted with Regis & Associates, PC to perform agreed-upon procedures of grant cost and compliance for Corporation-funded Federal assistance provided to the Delaware Commission on Community and Volunteer Service (Commission). As a result of applying these procedures, we questioned Federal-share costs of $38,678. The detailed results of our agreed-upon procedures (AUP) on claimed costs are presented in Exhibit A, Consolidated Schedule of Awards, and Claimed and Questioned Costs and the Subgrantees' Schedule of Awards, and Claimed and Questioned Costs. A questioned cost is an alleged violation of a provision of law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the expenditure of Federal funds, or a finding that, at the time of testing, such cost is not supported by adequate documentation.
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), performed an audit of Corporation grants awarded to Lutheran Community Services Northwest (LCSNW). The purpose of the audit was to determine whether the costs claimed by LCSNW for its Senior Companion Program (SCP), Retired and Senior Volunteer Program (RSVP), and AmeriCorps program were allowable, allocable, and in compliance with applicable laws, regulations, and terms and conditions of the grants.
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), contracted with Richard S. Carson and Associates (Carson Associates) to perform an independent Fiscal Year (FY) 2009 Federal Information Security Management Act (FISMA) evaluation of the Corporation's information technology systems, controls, and policies.
We have audited the accompanying consolidated statements of financial position of the Corporation for National and Community Service (Corporation) as of September 30, 2009 and 2008, and the related consolidated statements of operations and changes in net position and cash flows, and the combined statements of budgetary resources (hereinafter referred to as the "financial statements") for the years then ended. These financial statements are the responsibility of Corporation management. Our responsibility is to express an opinion on these financial statements based on our audits.
We have audited the accompanying Schedule of Financial Position of the Corporation for National and Community Service (Corporation) National Service Trust Fund as of September 30, 2009 and 2008, and the related Schedules of Operations and Changes in Net Position, Budgetary Resources and Trust Obligations for the years then ended. These schedules are the responsibility of Corporation management. Our responsibility is to express an opinion on these schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and applicable provisions of Office of Management and Budget Bulletin No. 07-04, Audit Requirements for Federal Financial Statements, as amended. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the schedules are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the schedules. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall schedule presentation. We believe that our audits provide a reasonable basis for our opinion.
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), contracted with Clifton Gunderson LLP (auditors) to perform agreed-upon procedures on grant expenditures and compliance with grant terms and provisions (including compliance with applicable laws and regulations) for Corporation-funded Federal assistance provided to the University of Maryland Center on Aging (UMCA).
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), performed an audit of the Learn and Serve Higher Education grant awarded by the Corporation to the American Association of Community Colleges (AACC). The purpose was to examine the grant costs incurred by AACC to determine whether the amounts incurred and claimed are allowable under the grant agreement, its terms and conditions, and applicable Federal law and regulations. In addition, we determined if AACC had adequate procedures and controls to ensure its subgrantees are in compliance with Federal laws, applicable regulations and award conditions.
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), performed an audit of the Financial Management Responses of New Grantees. The purpose of the audit was to determine if the new grantees' responses to the Corporation's Financial Management Survey (FMS), and additional procedures performed by the Corporation, are adequate to determine whether the new grantees' financial management systems meet applicable regulations, Office of Management and Budget (OMB) Circular and grant requirements.
In OIG Report #98-02 Review of Corporation for National and Community Service Pre-Award Financial Assessment of Grant Applicants, dated February 20, 1998, we found that Office of Grants Management (OGM) staff did not always collect information required for assessing new grantees. OGM also did not always resolve new grantee deficiencies that were identified during the assessment process prior to making a grant award or renewal.
Our 1998 report recommended that the OGM strengthen its guidelines for pre-award financial assessments of grantees. Specifically, the report provided detailed information on how to document the grant officer's assessment and consistently document procedures performed during site visits. It also recommended criteria for determining when a more detailed assessment, other than the Financial Management Survey and a review of prior grantee audit reports, was necessary.
Many of the same problems identified by the OIG 11 years ago were found during this audit. For example, the OGM still primarily relies on the responses provided on the FMS, a less-than-reliable source of information, to determine whether new grantees' financial management systems meet OMB Circular and grant requirements. The FMS contains self-reported information and lacks any method for verification of responses. The Corporation's review process also needs improvement. Of the 32 FMS documents provided by OGM for our audit, we found that 20, or 63 percent, showed no documentary evidence of a review by Grants Management personnel.
These serious shortcomings became evident in our on-site tests of 13 new grantees for this audit. Of that total, we found that nine new grantees had financial management systems that were either inconsistent with their FMS responses or were not in compliance with applicable regulations.
Acting on a request from staff of the House Appropriations Committee, Subcommittee on Labor, Health & Human Services, Education, and Related Agencies, the Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), conducted an Evaluation of the Fiscal Year 2008 Budget Process (Evaluation). We conducted the evaluation, which included an analysis of the formulation and execution of the Fiscal Year (FY) 20081 Budget, to determine whether the Corporation properly and efficiently used the appropriated funds it was provided.
While the Corporation generally accomplished the purposes for which it received appropriations, it insufficiently managed the funds that it received in FY 2008. As a result, the Corporation was forced to curtail needed hiring, training, and the acquisition of needed supplies during the second half of FY 2008. If it had not drastically cut back on its spending, the Corporation would have ended up in violation of the legal constraints on spending by Federal agencies, i.e., an Anti-Deficiency Act (ADA) violation.
Many of the issues identified in this report resulted from a corporate organizational structure that may no longer be adequate in view of the size of current programs and operations. The organizational structure needs to provide a means to focus the attention of the Chief Executive Officer (CEO) on overall Corporation operations, not only program operations. The absence of a Deputy Chief Executive Officer, an operationally focused Chief Operating Officer (COO), or other senior official with responsibilities over organizational-wide administrative functions, along with budget pressures and significant information technology (IT) problems that occurred, placed a severe strain on the organization and its CEO. This focus on program operations left a void in managing other operations.
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), conducted the Audit of the National Service Trust Fund Status Report for the Year Ended September 30, 2008 (Audit). We conducted the audit to express an opinion on whether the Corporation's September 2008 National Service Trust (Trust) Fund Status Report presents fairly, in all material respects, and to notify Congress' Committees on Appropriations of the accuracy of the report, as well as any internal controls weaknesses noted related to the Trust operations. In meeting the latter objective, the OIG will provide copies of this report to the committee.
In our opinion, the schedules referred to in the Trust Fund Status Report present fairly, in all material respects, the financial position as of September 30, 2008, and the results of its operations and changes in net position, budgetary resources, and Trust obligations for the year then ended in conformity with the basis of accounting described in the Trust Fund Status Report and provisions of the Strengthen AmeriCorps Program Act of 2003. We noted that the current Corporation policies related to Trust operations and reporting are not current. Based on our observations, we recommend the Corporation update its policies, particularly Corporation Policy CFO-06-001, Administrative Control of Funds, and Corporation Policy 1027, Calculating the Service Award Liability. In Other Matters, we noted that certain input data to the Corporation's Service Award Liability (SAL) model may change significantly because the Edward M. Kennedy Serve America Act (Serve America Act) will become effective on October 1, 2009, which will significantly change existing Corporation operations and its AmeriCorps programs.
The Corporation concurred with our recommendation that it update its policies, and specifically its administrative control of funds policy. It also agreed that it should regularly review its policies to ensure that they remain current and has started reviewing all of its policies. In addition, The Corporation stated that it has begun a project to update the SAL model. The Corporation's verbatim response to the draft report is included as an Appendix.
In his weekly address on April 18, 2009, President Obama prescribed a road map instruction to all parts of the Government which he heads to perform "the painstaking work of examining every program, . . . every dollar of government spending and asking ourselves: Is this program really essential? Are taxpayers getting their money's worth? Can we accomplish our goals more efficiently or effectively some other way?" To accomplish this, he instructed his administration to "scour our budget line by line for programs that don't work so we can cut them to make room for ones that do."
While the OIG began its "painstaking work of examining" the RFCUNY Fellows Program, and the Corporation's grants to RFCUNY for that program, before President Obama's instruction, the OIG's inquiry and this final statement of OIG's finding and conclusion implement the President's instructions. As this final letter report concludes, the RFCUNY program doesn't work as a grantee of AmeriCorps funds because it adds no service to the community which is not already provided by the Fellows Program, without the AmeriCorps education awards which are at the heart of the Corporation's grants to RFCUNY. Therefore, taxpayers are not getting their money's worth, and the Corporation could accomplish its goals more effectively if the funds for these grants were used instead to provide service by AmeriCorps members in communities where the need exists, not in the RFCUNY program, which has already filled the need.
As we were concluding the draft of this letter report, the New York Times (May 11, 2009, p. A19) reported facts which make the OIG's conclusion, that the grant of education awards is unnecessary to ensure that New York has sufficient teachers, even more compelling; in fact, it establishes that education awards are being used to deprive college graduates of teaching jobs they are seeking, but are foreclosed from obtaining, because of taxpayer-financed Fellows who are chosen over the non-taxpayer-financed new teachers.
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), contracted with Cotton & Company LLP to perform agreed-upon procedures to assist the OIG in grant cost and compliance testing of Corporation-funded Federal assistance provided to The Research Foundation of the City University of New York (RFCUNY). The Corporation awarded two Education Award Program grants to RFCUNY that were categorized as Professional Model grants.
SUMMARY OF RESULTS
As a result of applying our procedures, we questioned education awards of $16,152,414 and draw downs of $773,254. In general, we questioned the education awards for members whose eligibility was not established in accordance with grant requirements for criminal background checks. Draw downs were questioned mostly for fixed fees related to members whose eligibility we questioned and also for drawing down in excess of fees earned. In addition, our compliance findings when taken as a whole indicate pervasive problems of eligibility, timekeeping, and documentation. A questioned cost is an alleged violation of a provision of law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the expenditure of funds or a finding that, at the time of testing, includes costs not supported by adequate documentation. Detailed results of our agreed-upon procedures on claimed costs are presented in Exhibit A.
Participants who successfully complete terms of service under AmeriCorps grants are eligible for education awards and, in some cases, accrued interest awards funded by the Corporation's National Service Trust. These award amounts are not funded by Corporation grants and thus are not included in claimed grant costs. But at the time that a grant is awarded, and due to the grant award, these amounts become immediate obligations of the National Service Trust. Therefore, as part of our agreed-upon procedures, and using the same criteria used for the grantee's claimed costs, we determined the effect of our findings on AmeriCorps members' entitlement to education and accrued interest awards.
The Office of Inspector General (OIG), Corporation for National and Community Service (Corporation), contracted with Mayer Hoffman McCann P.C. (MHM) to perform agreed-upon procedures (AUP) for Education Award Program (EAP) grants provided to The College of New Jersey (TCNJ).
As a result of applying our procedures, we questioned education awards of $3,362. A questioned education award is an alleged violation of provision of law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the eligibility of education awards; or a finding that, at the time of testing, such award was not supported by adequate documentation.