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Audits, Evaluations and Reviews
Audits, Evaluations and Reviews
The Office of Inspector General contracted with CliftonLarsenAllen to perform an agreed-upon procedures audit of the Serve Illinois Commission (SI) and three of their subgrantees, City Year Inc., Lutheran Social Services of Illinois (LSSI) and Lessie Bates Davis Neighborhood House on AmeriCorps grant awards from April 2013 to December 2014.
The audit identified the following findings:
- Inadequate subgrantee monitoring by SI.
- Subgrantee’s noncompliance with federal standards based on its financial management system
- related to accounting, recording, and reporting grant costs.
- Improper National Service Criminal History checks.
- Timesheet-related deficiencies.
The audit questioned over $422,000 in reported costs with the preponderance of these costs related to the procedures used by subgrantees to conduct National Service Criminal History Checks for members and staff.
The audit identified SI’s inadequate subgrantee monitoring as a significant internal control weakness which contributed to LSSI’s noncompliance with federal standards. SI’s response to the draft report did not directly address the significant issues found with LSSI, but merely made excuses for the long-standing weakness identified.
Despite years of trying, the Corporation for National and Community Service (CNCS) remains unable to perform a reliable assessment of the susceptibility of all of its programs and activities to improper payments, and likewise unable to estimate reliably the amount or the rate of improper payments in the AmeriCorps State and National Program in fiscal year (FY) 2015. CNCS also failed to complete its improper payment assessments for the two Senior Corps programs that it considers susceptible to significant risk of improper payments. The improper payments information reported in CNCS’s FY 2015 Agency Financial Report (AFR) is therefore unreliable and incomplete in several respects. CNCS has again been unable to comply with the Improper Payments Elimination and Recovery Act of 2010, as amended (IPERA). As in the past, we found significant flaws at every stage of CNCS’s improper payments assessment process. Many of these flaws resulted from a lack of sufficiently qualified personnel to develop a sound testing methodology and execute CNCS’s complex sampling process.
The Office of Inspector General audited the costs incurred by Reading Partners, a Corporation for National & Community Service grantee, for the period April 2012 through March 2015. Our audit questioned Federal costs of $14,495. The questioned costs are the result of non-compliance with background check requirements for one staff person and lack of citizenship documentation for one AmeriCorps member. We also determined that the grantee has inadequate support of classroom space that is claimed as in-kind match.
Kearney & Company, P.C. (Kearney) performed a performance audit of grant costs and compliance testing of the Corporation for National and Community Service’s Federal assistance grant to the Student Conservation Association (SCA). This performance audit covered nine separate federally funded grants from grant year 2009 through 2013 awarded to SCA. The following issues were found:
- Finding #1: Criminal History Check (CHC) Not Updated.
- Finding #2: Unallowable Travel Cost Charged to Grant.
- Finding #3: Late National Sex Offender Public Website (NSOPW) Search.
- Finding #4: Member End-of-Term Evaluations Not Completed.
The audit found the following:
- The financial statements present fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America.
- Two significant deficiencies (Integrity Assurance Program and Information Technology) in the Corporation’s internal control over financial reporting; and
- One instance of noncompliance (Federal Information Security Modernization Act of 2014) with applicable provisions of laws, regulations, contracts.
The two significant deficiencies are a repeat condition from Fiscal Year 2014.
Evaluation of the Corporation’s Information Security and Privacy Program found these were not compliant in a number of respects with FISMA legislation, Office of Management and Budget guidance and applicable National Institute of Standards and Technology security publications. Evaluations testing found controls were ineffective in eight of 11 areas. In two of the eight areas, Continuous Monitoring Management and Risk Management, the deficiencies were severe enough to constitute a significant deficiency.
The audit of the Corporation for National & Community Service Trust Financial Statements found the statements present fairly in all material respects in accordance with accounting principles generally accepted in the United States of America.
Hoopa Valley Tribe (Hoopa) received grants totaling approximately $2.8 million from the Corporation for National and Community Service (Corporation) for its Tribal Citizen Community Corps (TCCC) and Hoopa AmeriCorps Native Land (ANL) programs between June 2012 and June 2014.
The Office of Inspector General (OIG) audited the costs incurred by Hoopa during this period and as a result, questioned $184,885 or approximately 7.4 percent, of the $2.5 million in Federal costs charged against these grants, as of July 2014. The questioned costs stem from non-compliance with applicable laws, regulations, and grant provisions, specifically attributed to the fact that the grantee did not perform and document required background checks for its AmeriCorps members and grantee’s staff.
To address these findings, we recommend that the Corporation disallow and recover the questioned costs. To improve compliance, we also recommend that Hoopa: (1) develop and implement procedures to ensure that required background checks are conducted for its AmeriCorps members and staff; and (2) familiarize staff with the grant agreement terms and applicable laws and regulations.
Cotton & Company LLP conducted a performance audit of cooperative agreements awarded to AFYA Incorporated (AFYA) and Education Northwest, formerly known as Northwest Regional Education Laboratory.
- Assessed the effectiveness of the Corporation for National and Community Service (Corporation)’s monitoring and oversight of the quality of the training provided by Education Northwest.
- Assessed the effectiveness of the Corporation’s fiscal monitoring and oversight of the cooperative agreements with both entities.
- Determined whether Corporation-funded Federal assistance provided to AFYA and Education Northwest was expended in accordance with cooperative agreement terms and conditions, laws, and regulations.
For fiscal year (FY) 2014, the Corporation for National and Community Service (CNCS) did not perform a reliable assessment of the susceptibility of its programs and activities to improper payments, nor did it did it reliably estimate the amount or the rate of improper payments in the AmeriCorps Program. As a result, the improper payments information reported in CNCS’s FY 2014 Agency Financial Report (AFR) is unreliable and is also incomplete in other respects. We found significant flaws at every stage of CNCS’s improper payments assessment process. Some of those flaws had a tendency to understate CNCS’s improper payments.
Given the weaknesses discovered in this evaluation, we believe that CNCS has not met its obligation to perform a susceptibility analysis in FY 2014 and should not wait two years before performing a reliable analysis. Instead, CNCS should use the information in this evaluation to conduct a more accurate risk assessment in FY 2015, develop a better estimate of improper payments in the AmeriCorps Program, and accurately report the results.
During the period 2011-2013, the Corporation awarded $963,062 to the Massachusetts Campus Compact (MACC), a coalition of colleges and universities that encourage student involvement in organizations that assist low-income communities. VISTA provided 88.6 percent of the funds, with the remainder coming from AmeriCorps.
Our audit found:
- VISTA unknowingly renewed its grant to MACC one day after AmeriCorps terminated its grant for cause. The Corporation treats each grant in isolation and lacks systems or processes for sharing critical information about grantees between programs.
- MACC charged the VISTA grant for student labor that was unsupported and unvalidated by a responsible supervisor.
- Twelve MACC workers were paid $115,976 from the VISTA grant without ever undergoing required criminal history background checks.
- MACC failed to oversee the sites and activities to which its 28 VISTA members were assigned.
- MACC overdrew the AmeriCorps grant for more members than it enrolled.
Overall, more than 13 percent of MACC’s claimed costs were overcharges. It lacked effective internal controls to ensure that costs charged to grants were correct in amount and properly supported and verified. We recommend that the Corporation disallow and recover the questioned costs identified in our audit. Any further dealings with MACC should be conditioned on significant improvements in its financial management practices, record keeping and host site monitoring.
We also recommend that the Corporation develop systems and procedures for timely sharing of information across grants and programs and consider transitioning its monitoring and oversight from a grant-centered approach to a grantee-centered approach. There is no justification for unknowingly awarding a grant to a grantee terminated by a sister program because of its failure to remedy grant management deficiencies. Here, the lack of communication between the programs resulted in a missed opportunity for the Corporation to prevent further waste of Federal funds, as evidenced by the questioned costs identified in this audit report.
Finally, the Corporation should determine why the Massachusetts State Office, which conducted a site visit to MACC during the period covered by our audit, failed to uncover the problems identified by our auditors. It is particularly hard to understand how the complete absence of host site monitoring records escaped their notice.
Audit of the Corporation’s Financial Statements found the statements presented fairly the financial position of the Corporation as of September 30, 2014 and 2013.
The auditors also identified two significant deficiencies and one instance of noncompliance with the Federal Information Security Management Act.
- Integrity Assurance Program - The Corporation does not yet have a fully functioning internal control monitoring process in place to determine the effectiveness of internal controls and support management’s required annual assurance statement under the Federal Managers Financial Integrity Act.
- Information Technology – The Corporation’s information technology internal control structure did not support a sound internal control environment in five categories: security management, access controls, configuration management, segregation of duties, and contingency planning.
The Trust financial statements present fairly, in all material respects, the financial position of the Trust as of September 30, 2014 and 2013, and its net cost of operations, changes in net position, cash flows, and budgetary resources for the years then ended, in accordance with accounting principles generally accepted in the United States of America.
Kearney & Company, P.C. has concluded that the Corporation's Information Security and Privacy Program was not compliant in a number of respects with FISMA legislation, OMB guidance, and applicable NIST security publications as of September 30, 2014. Their testing found the controls were ineffective in seven of the 12 areas. In four of the seven areas, the deficiencies were severe enough to constitute a significant deficiency; these areas were Continuous Monitoring Management, Risk Management, Plans of Action and Milestones (POA&M), and Privacy.
After auditing a total of 12 task orders issued under four consulting BPAs, the Office of Inspector General found shocking waste of taxpayer funds, lax oversight, unauthorized contractual commitments and widespread noncompliance with rules, regulations and sound contracting practices. Among the highlights:
- The Corporation wasted taxpayer funds on deliverables that were not used, were canceled after incurring substantial costs, or were never received.
- CNCS spent nearly $900,000 (of the $3 million in our sample) on five projects that it never used.
- Program officials exceeded their authority and violated Federal procurement requirements with impunity by directing consultants to deviate from contract terms.
- Procurement officers charged with sole legal authority to enter into, modify and terminate government contracts were kept in the dark.
- Instead of terminating a longitudinal study and returning the unspent funds to the Treasury, program officials diverted the funds to unrelated case studies.
- The Corporation abdicated its fiduciary responsibility regarding payments to consultants and other contract monitoring.
- Program officers relied excessively on the trustworthiness of contractors, including approving $2,427,463 in invoices for labor without obtaining timesheets.
- Procurement officers did not adequately review contractor proposals to protect the government's interests.
- Contracting officers did not review the qualifications, eligibility or cost proposals of subcontractors.
- Chronic documentation problems interfere with transparency and accountability of contractual actions.
- Contract files lacked basic documents plans for acquisition, monitoring and subcontracting.
- The procurement files did not document the reasons for critical decisions or identify the persons responsible for unauthorized changes to the scope and nature of consulting assignments.
Poor documentation practices and turnover at the staff and executive levels have created substantial gaps in the Corporation's institutional memory regarding consulting engagements.
The Corporation's operational units (grant programs and functional components, such as External Affairs) engage consultants under existing BPAs with little or no supervision at the enterprise level. Many of the problems that OIG detected here are longstanding and have not received sufficient attention or oversight. There has been no meaningful accountability for continuing waste and mismanagement of consulting services procured through BPAs.