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Audits, Inspections, and Evaluations

Report Number Title Issue Date Fiscal Year
OIG-17-37-D FROM: John E. McCoy II

Assistant Inspector General for Audits

SUBJECT: Office of Inspector General Emergency Management Oversight Team Deployment Audits

Audit Report Numbers OIG-13-84, OIG-13-117, OIG-13-124, OIG-14-50-D, OIG-14-111-D, OIG-15-92-D, OIG-15-102-D, OIG-15-105-D, OIG-16-53-D, OIG-16-85-D, OIG-16-106-D, OIG-17-37-D

After completing an internal review of our audits related to multiple Emergency Management Oversight Team (EMOT) projects, we have decided to permanently remove the subject reports from our public website.

Our internal review found the subject reports may not have adequately answered objectives and, in some cases, may have lacked sufficient and appropriate evidence to support conclusions. Answering objectives with sufficient and appropriate evidence is required under Government Auditing Standards or Quality Standards for Inspection and Evaluation. In an abundance of caution, we believe it best to recall the reports and not re-issue them.

Going forward, our EMOTs will deploy during the response phase of a disaster to identify and alert the Federal Emergency Management Agency (FEMA) and its stakeholders of potential issues or risks if they do not follow FEMA and other Federal requirements. The EMOT’s reviews will not be conducted under Government Auditing Standards. The teams will continue to observe and identify potential risk areas that will be addressed by future traditional audits, if necessary.

A complete list of the projects removed from our website is attached. You should not place any reliance on these reports.

Please contact me at (202) 254-4100 if you have any questions.

>FEMA's Initial Response to Severe Storms and Flooding in West Virginia DR-4273 		2017
OIG-17-35-D We determined the County has established policies, procedures, and business practices to properly account for and expend FEMA Public Assistance grant funds.  Therefore, if the County adheres to those policies, procedures, and business practices, FEMA has reasonable assurance that the County will properly manage the estimated $55.4 million in FEMA project funding awarded for replacement of the facility.

>Escambia County, Florida, Has Adequate Policies, Procedures, and Business Practices to Effectively Manage FEMA Grant Funds Awarded to Replace Its Central Booking and Detention Center 		2017
OIG-17-34-D We determined that the Columbia County Roads Department (Department) does not have written procurement policies and procedures that fully conform to Federal procurement standards; is not accounting for direct administrative costs properly; and cannot yet initiate large permanent work projects more than 9 months after the disaster.  These findings occurred because Department officials were not familiar with applicable Federal regulations and FEMA guidelines adequately.  In addition, the Oregon Office of Emergency Management (Oregon) is responsible for ensuring that its subrecipient,the Department, is aware of and complies with these requirements, as well as for providing technical assistance and monitoring grant activities.  Because of our audit, the Department is revising its policies and procedures to comply with Federal requirements.  However, the Department needs additional, ongoing assistance from Oregon and FEMA to ensure that it properly manages the $2 million FEMA grant it expects to receive.  Therefore, we recommended that FEMA disallow contract costs that do not comply with applicable Federal procurement standards, unless FEMA grants an exception to the administrative requirements as 2 CFR 200.102 allows and determines the costs are reasonable.  The OIG made three other recommendations to FEMA related to directing Oregon, as its grant recipient, to provide increased monitoring and technical assistance to the Department, to ensure the Department follows Federal regulations and FEMA guidelines and avoids misspending its $2 million grant award.

>Columbia County Roads Department, Oregon, Needs Continued State and FEMA Assistance in Managing Its FEMA Grant 		2017
OIG-17-27-MA We determined that the Contract Officer and Project Officer performed their duties according to Federal statutes, program guidance, and the IDIQ contract. In addition, there does not appear to be any internal control issues related to the segregation of duties related to contract purchases and receipt of goods.  We made no recommendations and FEMA concurred with our determination.

>Management Advisory Report: Review of FEMA Region IV Strategic Source IDIQ Contract for Office Supplies (OIG-17-27-MA) 		2017
OIG-17-25-D We determined that the Authority did not comply with Federal regulations in its award and administration of three contracts totaling $31.7 million. As a result, FEMA has no assurance that these costs were reasonable or that the Authority selected the most qualified contractors. Specifically, the Authority did not: perform cost/price analyses of bid proposals to ensure fair and reasonable costs; follow its own procurement policy and Federal regulations when evaluating and selecting its contractors; include all mandatory Federal provisions in contracts to document rights and responsibilities of the parties; maintain records sufficient to detail the significant history of its procurements; maintain an adequate contract administration system that included careful review of invoices; or include a ceiling price in time-and-material contracts that contractors exceed at their own risk. Therefore, we recommended that FEMA should ineligible contract costs, review costs associated with the Authority’s other large projects and disallow any costs that are ineligible; review the process the Authority used to procure its engineering contract; and direct the California Governor’s Office of Emergency Services, to provide increased guidance to the Authority and more closely monitor its performance to ensure the Authority complies with mandatory Federal regulations and FEMA guidelines.

>The Victor Valley Wastewater Reclamation Authority in Victorville, California, Did Not Properly Manage $32 Million in FEMA Grant Funds 		2017
OIG-17-21-D We determined that for the projects we reviewed, the City effectively accounted for and expended FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines.  City officials accounted for disaster expenditures on a project-by-project basis, procured contracts for disaster work appropriately, and maintained adequate documentation to support the costs.  We made no recommendations.

>Perth Amboy, New Jersey, Effectively Managed FEMA Grant Funds Awarded for Hurricane Sandy Damages 		2017
OIG-17-20-D We determined that the Authority did not account for FEMA funds on a project-by-project basis as Federal regulations and FEMA guidelines require.  We also identified $577,959 (Federal share $433,469) of project costs that FEMA should disallow.  We recommended that the Regional Administrator, FEMA Region II disallow the $577,959 of questioned costs.

>FEMA Should Disallow $577,959 of $2.9 Million Awarded to Puerto Rico Aqueduct and Sewer Authority for Hurricane Irene Damages 		2017
OIG-17-19-D We determined that the Cooperative has an effective accounting system in place to ensure it accounts for disaster-related costs on a project-by-project basis and can properly support those expenditures.  As of June 2016, Cooperative officials had completed all disaster repairs using their own resources and contractors.  However, Cooperative officials said they do not intend to claim $4.1 million in contracting costs because they believe their contracting methodology did not fully comply with Federal requirements when hiring disaster contractors.  Therefore, we did not assess the Cooperative’s procurement policies and procedures, nor review its contract costs.  Because the audit did not identify any issues requiring further action from FEMA, we consider this audit closed. 

>Western Farmers Electric Cooperative, Oklahoma, Has Adequate Policies, Procedures, and Business Practices to Manage its FEMA Grant 		2017
OIG-17-18-D We determined the Town did not always account for and expend FEMA grant funds according to Federal regulations and FEMA guidelines.  Therefore, FEMA should disallow $2.0 million of $3.59 million in grant funds awarded to the Town.  We made four recommendations to the Regional Administrator, FEMA Region I, to disallow ineligible or unsupported costs and improve the State’s grant management activities.

>FEMA Should Disallow $2.0 Million of $3.59 Million Awarded to Stratford, Connecticut 		2017
OIG-17-17-D We determined that the Omaha Public Power District (OPPD) generally accounted for disaster costs on a project-by-project basis and adequately supported costs it claimed.  However, OPPD overstated the fringe benefit rate it applied to its labor costs on three large projects. We recommended that FEMA disallow $67,570 in ineligible costs and instruct Nebraska to ensure that OPPD calculates and applies its fringe benefit rate according to Federal cost principles and FEMA guidelines for all future disasters.  FEMA concurred with all three of our recommendations.

>Omaha Public Power District in Nebraska Generally Accounted for and Expended FEMA Grant Funds Properly 		2017
OIG-17-16-VR We determined that the Colorado State Division of Homeland Security and Emergency Services’ additional technical assistance and continuous monitoring of Larimer County’s procurement and project-related activities are effective.  We also verified that the County can document and account for its disaster-related costs on a project-by-project basis and that its policies and procedures are adequate to account for FEMA grant funds according to Federal regulations and FEMA guidelines. Because the verification review did not identify any issues requiring further actions from FEMA, the report contains no recommendations and we consider this verification review closed.

>Verification Review of Larimer County, Colorado, OIG Audit Report (OIG-15-34-D) 		2017
OIG-17-13-D We determined that of the 55 grant audit reports we issued in fiscal year 2015, 43 reports contained 154 recommendations resulting in potential monetary benefits of $1.734 billion. This amount included $457.46 million in questioned costs that we recommended FEMA disallow as ineligible or unsupported and $1.28 billion in cost avoidance, unused obligated funding, and unused funds at risk that we recommended FEMA put to better use. The eight program audits did not relate to specific grants. In three program audits, we deployed staff to major disasters to assess FEMA’s initial response to disasters. Another program audit related to technical assistance we provided during a disaster deployment. The remaining four program audits covered other FEMA programs or operations, contained six recommendations for improving FEMA programs or operations, and identified $1.6 million in potential monetary benefits.

>Summary and Key Findings of Fiscal Year 2015 FEMA Disaster Grant and Program Audits 		2017
OIG-17-121-MA We are providing this report to emphasize the potential housing challenges and risks that FEMA needs to address during Hurricane Harvey’s recovery efforts based on our observations and discussions with FEMA officials at the Austin, Texas Joint Field Office.  FEMA is currently responding to Hurricanes Harvey, Irma, and Maria, some of the most catastrophic disasters in recent United States history.  Damages from Hurricane Harvey are estimated to exceed $100 billion.  On September 22, 2017, the State of Texas General Land Office entered into an Intergovernmental Service Agreement to provide assistance to FEMA in the delivery of Direct Housing Assistance (DHA) to Hurricane Harvey survivors on a temporary basis.  FEMA estimates these costs will reach approximately $1 billion.  The agreement does not clearly identify basic controls to ensure DHA funds are spent according to Federal regulations. For instance, the agreement does not include approval authorities and physical inspections, or separation of duties and independent certifications.  We are concerned that without adequate controls in place the Federal funds may be at risk of fraud, waste, and abuse.  Therefore, it is imperative that FEMA ensure Texas’ proposed project management plan clearly identifies the internal controls needed to ensure that Federal funds will be properly spent.  Our report also provides observations on the current and past issues with FEMA’s use of direct housing assistance programs.

>Management Alert - Observations and Concerns with FEMA's Housing Assistance Program for Hurricane Harvey Efforts in Texas 		2017
OIG-17-120-D-SPANISH Este informe asistiremos a los beneficiarios y sub-beneficiarios de las subvenciones de asistencia por desastre de la Agencia Federal para el Manejo de Emergencias (FEMA) a: documentar y contabilizar los costos relacionados con el desastre; minimizar la pérdida de los fondos de asistencia por desastre de FEMA; maximizar la recuperación financiera; y prevenir el fraude, malversación y abuso de los fondos de desastre. El informe revisado es efectivo para todas las emergencias y desastres mayores declarados a partir del 1 de abril de 2017.

>Consejos de Auditoría para Administrar los Costos de Projectos Relacionados con Desastres 		2017
OIG-17-120-D The Audit Tips provides an overview of OIG responsibilities; applicable disaster assistance Federal statutes, regulations, and guidelines; the audit process and frequent audit findings; and key points to remember when administering FEMA grants.  Using this report should assist disaster assistance applicants to (1) document and account for disaster-related costs; (2) minimize the loss of FEMA disaster assistance funds; (3) maximize financial recovery; and (4) prevent fraud, waste, and abuse of disaster funds.  We have updated the report to include information on FEMA’s second edition of the Public Assistance Program and Policy Guide that supersedes many of the Public Assistance publications and individual policy documents

>Audit Tips for Managing Disaster-Related Project Costs 		2017
OIG-17-118-D We determined that the County accounted for and expended the majority of FEMA grant funds according to Federal regulations and FEMA guidelines.  However, the County claimed $246,294 of ineligible and unsupported costs for two large projects.  County officials said these issues occurred because FEMA officials provided inconsistent guidance regarding the types of direct administrative costs that were eligible; and internal clerical errors for overstated material costs.  We recommended FEMA disallow $246,294 of ineligible and unsupported costs and provide clearer guidance for documenting eligible direct administrative costs.

>FEMA Should Disallow $246,294 of $3.0 Million in Public Assistance Grant Funds Awarded to Lincoln County, Missouri 		2017
OIG-17-117-D We identified that the Diocese generally accounted for FEMA funds on a project-by-project basis as required by Federal regulations and FEMA guidelines.  However, it did not follow Federal procurement standards in awarding two contracts totaling $897,955. The Diocese and its parishes did not provide supporting documentation for procurements or their local procurement processes.  This occurred primarily because the Diocese was not familiar with certain Federal regulations and FEMA guidelines.  As FEMA’s grantee, New York should have done more to ensure the Diocese was aware of and complied with Federal procurement standards and documentation requirements.  FEMA should emphasize New York’s role in proper grant administration.

>Audit of FEMA Grant Funds Awarded to the Roman Catholic Diocese of Brooklyn, New York 		2017
OIG-17-113-D We determined that while the Commission has a system in place to account for funds on a project-by-project basis and generally expended Public Assistance grant funds according to FEMA guidelines, the Commission needs additional assistance in developing long-term solutions for repetitive damages to county roads and managing its $5.4 million FEMA grant. We found that the Commission did not receive adequate guidance from FEMA and Alabama concerning Hazard Mitigation funding for long-term solutions to repetitive damages to roads; thus, potentially costing FEMA millions of dollars in the future; and project formulation, causing improperly written project scopes.  Additionally, the Commission did not have proper procurement procedures to ensure that small businesses, minority-owned firms, and women’s business enterprises have an opportunity to bid on Federal contracts; and adequate procedures to ensure proper documentation is collected to support $24,000 in costs. The report contains five recommendations to the Regional Administrator, FEMA Region IV, to provide the Commission with additional guidance to properly manage its $5.4 million and save millions in the future.  FEMA agreed with all recommendations.

>The Covington County Commission Needs Additional Assistance in Managing a $5.4 Million FEMA Grant 		2017
OIG-17-110 We determined that FEMA is unable to assess flood hazard miles to meet its program goal and is not ensuring mapping partner quality reviews are completed in accordance with applicable guidance.  FEMA needs to improve its management and oversight of flood mapping projects to achieve or reassess its program goals and ensure the production of accurate and timely flood maps.  We made four recommendations that would help FEMA strengthen its management and oversight of flood mapping projects to achieve program goals.  FEMA concurred with all four recommendations.

>FEMA Needs to Improve Management of its Flood Mapping Program 		2017
OIG-17-108-D We determined that FEMA’s policies are not sufficient enough to prohibit unaccredited, unlicensed, unregistered, and non-state approved non-profit schools from receiving Public Assistance funds.  We made one recommendation for the FEMA Assistant Administrator for the Recovery Directorate to strengthen its policies and guidelines pertaining to non-profit schools eligibility for Public Assistance.  FEMA agreed with our finding and recommendation, and will take corrective action to resolve the recommendation by February 28, 2018; therefore, we consider the recommendation resolved and open.

>FEMA Should Strengthen Its Policies and Guidelines for Determining Public Assistance Eligibility of PNP Schools 		2017
OIG-17-106-D We determined that Downe Township did not always follow Federal procurement standards in awarding contracts for disaster work.  We recommended that FEMA disallow $832,040 of $2.5 million in grant funds awarded to the Township.  The Township did not have support for $445,385 of the questioned costs.  We also recommended that the Administrator, FEMA Region II, deobligate unused project costs, and withhold $2.3 million in funds requested for additional project work until New Jersey provides assurance that the Township complies with all Federal procurement standards for FEMA funded work.  FEMA Region II concurred with all of our recommendations.

>Audit of FEMA Public Assistance Grant Funds Awarded to Downe Township, New Jersey 		2017
OIG-17-105-D We determined that the County’s accounting policies, procedures, and business practices appear adequate to account for FEMA grant funds according to Federal regulations and FEMA guidelines.  However, the County could benefit from Florida, as FEMA’s grant recipient, providing additional technical assistance and monitoring of its pending projects.

>St. Johns County, Florida, Could Benefit from Additional Technical Assistance and Monitoring to Ensure St. Johns County, Florida, Could Benefit from Additional Technical Assistance and Monitoring to Ensure Compliance with FEMA Grant Requirements 		2017
OIG-17-102-D We determined that the City followed Federal regulations and FEMA guidelines when accounting for FEMA funds; however, FEMA mistakenly obligated $587,538 of ineligible funding because of a mathematical error.  We made two recommendations to the Regional Administrator, FEMA Region IV, to disallow $587,538 as ineligible costs.  FEMA agreed with our finding and recommendations, and has taken corrective action to resolve both recommendations.  Therefore, we consider these recommendations resolved and closed with no further action required from FEMA.

>Audit of FEMA Public Assistance Grant Funds Awarded to the City of Pensacola, Florida 		2017
OIG-17-07-D We determined that Pennsylvania did not comply with Federal regulations.  Since 2005 Pennsylvania has returned to compliance.  However, it has not remitted earnings on drawdowns held as investments.  We recommended that FEMA collect $2,430,541 from Pennsylvania in investment earnings on disaster assistance funds.  FEMA Region III concurred with the two recommendations in the report.

>FEMA Should Recover $2.4 Million in Investment Gains Pennsylvania Improperly Earned on Federal Disaster Funds 		2017
OIG-17-06-D For the projects we reviewed, we identified $1,771,894 (Federal share $1,328,921) of costs that FEMA should disallow.  We recommended that Regional Administrator, FEMA Region IV, disallow $1,771,894 of ineligible costs and direct the Florida Division of Emergency Management to monitor the County’s performance for compliance with Federal grant requirements on open projects.

>FEMA Should Recover $1.8 Million of $5.5 Million in Public Assistance Grant Funds Awarded to Columbia County, Florida, for Tropical Storm Debby Damages 		2017
OIG-16-99-D Wildfires devastated the Berkeley Tuolumne Camp from August to October 2013. FEMA expects eligible damages, before deducting insurance, to exceed $12 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.

>FEMA and California Need to Assist the City of Berkeley to Improve the Management of a $12 Million FEMA Grant 		2016
OIG-16-98 Since 2001, the Federal Emergency Management Agency’s (FEMA) Assistance to Firefighters Grant (AFG) Program has awarded fire departments and first responder organizations almost $10 billion through AFG and Staffing for Adequate Fire and Emergency Response (SAFER) grants. We reviewed whether recipients complied with grant requirements and guidance to prevent waste, fraud, and abuse of grant funds. This report on SAFER grants is being issued as a companion report to our report on AFG grants.

>FEMA's Grant Programs Directorate Did Not Effectively Manage Assistance to Firefighters Grant Program -SAFER Grants 		2016
OIG-16-97-D Cimarron Electric Cooperative (Cimarron) received a $69.2 million Federal grant from the Oklahoma Department of Emergency Management (Oklahoma), a FEMA grantee, for damages resulting from a severe winter storm in February 2013. Our audit objective was to determine whether Cimarron accounted for and expended FEMA funds according to Federal regulations and FEMA guidelines.

>FEMA Should Recover $51.2 Million in Grant Funds Awarded to Cimarron Electric Cooperative, Kingfisher, Oklahoma 		2016
OIG-16-94-D Augusta-Richmond County, Georgia (County), received a $12.93 million grant award from the Georgia Department of Emergency Management (Georgia), a Federal Emergency Management Agency (FEMA) grantee, for damages resulting from a February 2014 severe winter storm. Our audit objective was to determine whether the County accounted for and expended FEMA funds according to Federal requirements.

>FEMA Held Augusta-Richmond County, Georgia, Accountable for Not Complying with Federal Contracting Requirements when Managing a 2014 Public Assistance Disaster Grant 		2016
OIG-16-86-D The April 2013 fertilizer plant explosion devastated the City of West, Texas, killing 15 people and leveling homes in a 5-block radius. The West School Administration received a $5.1 million Federal Emergency Management Agency (FEMA) grant from the Texas Division of Emergency Management, a FEMA grantee, for emergency measures. Our audit objective was to determine whether West School Administration accounted for and expendedFEMA funds according to Federal requirements.

>The West School Administration Effectively Accounted for the FEMA Emergency Grant Funds Awarded for the West, Texas Fertilizer Plant Explosion 		2016
OIG-16-85-D FROM: John E. McCoy II

Assistant Inspector General for Audits

SUBJECT: Office of Inspector General Emergency Management Oversight Team Deployment Audits

Audit Report Numbers OIG-13-84, OIG-13-117, OIG-13-124, OIG-14-50-D, OIG-14-111-D, OIG-15-92-D, OIG-15-102-D, OIG-15-105-D, OIG-16-53-D, OIG-16-85-D, OIG-16-106-D, OIG-17-37-D

After completing an internal review of our audits related to multiple Emergency Management Oversight Team (EMOT) projects, we have decided to permanently remove the subject reports from our public website.

Our internal review found the subject reports may not have adequately answered objectives and, in some cases, may have lacked sufficient and appropriate evidence to support conclusions. Answering objectives with sufficient and appropriate evidence is required under Government Auditing Standards or Quality Standards for Inspection and Evaluation. In an abundance of caution, we believe it best to recall the reports and not re-issue them.

Going forward, our EMOTs will deploy during the response phase of a disaster to identify and alert the Federal Emergency Management Agency (FEMA) and its stakeholders of potential issues or risks if they do not follow FEMA and other Federal requirements. The EMOT’s reviews will not be conducted under Government Auditing Standards. The teams will continue to observe and identify potential risk areas that will be addressed by future traditional audits, if necessary.

A complete list of the projects removed from our website is attached. You should not place any reliance on these reports.

Please contact me at (202) 254-4100 if you have any questions.

>FEMA's Initial Response to the 2015 Texas Spring Severe Storms and Flooding 		2016
OIG-16-78-D The City of Evans, Colorado (City) received a $10.8 million grant from Colorado, a Federal Emergency Management Agency (FEMA) grantee, for damages from severe storms and flooding in September 2013. 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.

>Colorado Should Provide the City of Evans More Assistance in Managing FEMA Grant Funds 		2016
OIG-16-72 The Chief Financial Officers Act of 1990 (Public Law 101-576) and the Department Of Homeland Security Financial Accountability Act (Public Law 108-330) require us to conduct an annual audit of the Department of Homeland Security’s (DHS) consolidated financial statements and internal control over financial reporting

>Federal Emergency Management Agency's Management Letter for DHS' FY 2015 Financial Statements Audit 		2016
OIG-16-67-D The Town of Lyons, Colorado (Town), received a $36 million Public Assistance grant for damages from a September 2013 flood. We conducted this audit early in the grant process to identify areas where the Town may need additional technical assistance or monitoring to ensure compliance with Federal requirements.

>Lyons and Colorado Officials Should Continue to Improve Management of $36 Million FEMA Grant 		2016
OIG-16-66-D The Municipality of Villalba, Puerto Rico (Municipality), received a $2.58 million grant awar from the Puerto Rico Emergency Management Agency (Puerto Rico), a Federal Emergency Management Agency (FEMA) grantee, for damages resulting from Hurricane Irene in August 2011.

>FEMA Should Disallow $1.30 Million of $2.58 Million in Public Assistance Grant Funds Awarded to the Municipality of Villalba, Puerto Rico, for Hurricane Irene Damages 		2016
OIG-16-63-D San Bernardino County,California (County), receive a $16.5 million Public Assistance grant award for damages resulting from California wildfires that occurred from October 2007 through March 2008. We audited $14.3 million of the $16.5 million gross award.

>San Bernardino County, California, Generally Accounted for and Expended FEMA Public Assistance Funds Properly 		2016
OIG-16-60-D The Municipality of Jayuya, Puerto Rico (Municipality), received a $4.46 million grant award from the Puerto Rico Emergency Management Agency (Puerto Rico), a Federal Emergency Management Agency (FEMA) grantee, for damages resulting from Hurricane Irene in August 2011. We audited projects totaling $3.54 million to determine whether the Municipality accounted for and expended FEMA funds according to Federal requirements. For the projects we reviewed, the Municipality generally accounted for and expended FEMA funds according to Federal requirements. However, we did identify $267,960 (Federal share $200,970) of costs that FEMA should disallow. These costs consisted of $237,695 of duplicate benefits and $30,265 of unsupported project costs.

>FEMA Should Recover $267,960 of $4.46 Million in Public Assistance Grant Funds Awarded to the Municipality of Jayuya, Puerto Rico, for Hurricane Irene Damages 		2016
OIG-16-59 Public Law 110-53, Implementing Recommendations of the 9/11 Commission Act of 2007, requires the Department of Homeland Security (DHS) Office of Inspector General (OIG) to audit individual states’ management of Homeland Security Grant Program (HSGP) awards. We audited the State of Maryland, which was awarded $35 million from FEMA for fiscal years 2011–13. In most instances, Maryland distributed and spent the HSGP awards in compliance with applicable laws and regulations; however, the State lacked adequate controls over more than $10.8 million in grant funds we reviewed. This occurred because FEMA and the State did not ensure adequate management and oversight of HSGP funds.

>Maryland's Management of Homeland Security Grant Program Awards for Fiscal Years 2011-13 		2016
OIG-16-53-D FROM: John E. McCoy II

Assistant Inspector General for Audits

SUBJECT: Office of Inspector General Emergency Management Oversight Team Deployment Audits

Audit Report Numbers OIG-13-84, OIG-13-117, OIG-13-124, OIG-14-50-D, OIG-14-111-D, OIG-15-92-D, OIG-15-102-D, OIG-15-105-D, OIG-16-53-D, OIG-16-85-D, OIG-16-106-D, OIG-17-37-D

After completing an internal review of our audits related to multiple Emergency Management Oversight Team (EMOT) projects, we have decided to permanently remove the subject reports from our public website.

Our internal review found the subject reports may not have adequately answered objectives and, in some cases, may have lacked sufficient and appropriate evidence to support conclusions. Answering objectives with sufficient and appropriate evidence is required under Government Auditing Standards or Quality Standards for Inspection and Evaluation. In an abundance of caution, we believe it best to recall the reports and not re-issue them.

Going forward, our EMOTs will deploy during the response phase of a disaster to identify and alert the Federal Emergency Management Agency (FEMA) and its stakeholders of potential issues or risks if they do not follow FEMA and other Federal requirements. The EMOT’s reviews will not be conducted under Government Auditing Standards. The teams will continue to observe and identify potential risk areas that will be addressed by future traditional audits, if necessary.

A complete list of the projects removed from our website is attached. You should not place any reliance on these reports.

Please contact me at (202) 254-4100 if you have any questions.

>FEMA's Initial Response to the Severe Storms and Flooding in South Carolina 		2016
OIG-16-52-D The Pueblo of Jemez, New Mexico (Pueblo), received a Public Assistance grant award of $1.6 million from the New Mexico Department of Homeland Security and Emergency Management (New Mexico), a Federal Emergency Management Agency (FEMA) grantee, for damages from severe storms, flooding, and mudslides that occurred in September 2013. The Pueblo accounted for disaster costs on a project-by-project basis. However, the Pueblo did not follow Federal procurement standards in awarding five contracts totaling $312,117. As a result, full and open competition did not occur and FEMA has no assurance that small and minority businesses and women’s business enterprises had sufficient opportunities to bid on federally funded work. In some instances, FEMA also has no assurance that costs were reasonable.

>FEMA Should Recover $312,117 of $1.6 Million Grant Funds Awarded to the Pueblo of Jemez, New Mexico 		2016
OIG-16-49 FEMA’s Homeland Security Grant Program (HSGP) provides funds to state, territorial, local, and tribal governments to enhance their ability to prepare for, prevent, protect, respond to, and recover from terrorist attacks, major disasters, and other emergencies. FEMA has not adequately analyzed recurring Office of Inspector General recommendations to implement permanent changes to improve its oversight of HSGP. This occurred because FEMA has not clearly communicated internal roles and responsibilities, and does not have policies and procedures for conducting substantive trend analysis of audit recommendations. Without sufficiently analyzing audit findings and recommendations, FEMA may not be able to develop proactive solutions to recurring and systemic problems, resulting in missed opportunities to improve the management and oversight of its HSGP.

>Analysis of Recurring Audit Recommendations Could Improve FEMA's Oversight of HSGP 		2016
OIG-16-47 FEMA does not provide adequate oversight of the WYO program under the National Flood Insurance Program (NFIP). Specifically, FEMA is not using the results from its Financial Control Plan reviews to make program improvements; is not performing adequate oversight of the Special Allocated Loss Adjustment Expense reimbursement process; and does not have adequate internal controls to provide proper oversight of the appeals process. These conditions exist because FEMA does not have adequate guidance, resources, or internal controls. As a result of this inadequate oversight, FEMA is unable to ensure that WYO companies are properly implementing the NFIP and is unable to identify systemic problems in the program. Furthermore, without adequate internal controls in place, FEMA’s NFIP funds may be at risk for fraud, waste, abuse, or mismanagement.

>FEMA Does Not Provide Adequate Oversight of Its National Flood Insurance Write Your Own Program 		2016
OIG-16-46 KPMG, LLP evaluated selected general IT controls and business process application controls at the Federal Emergency Management Agency (FEMA). KPMG, LLP determined that FEMA took corrective actions to address certain prior-year IT control deficiencies. For example, FEMA made improvements by designing and consistently implementing certain account management and configuration management controls. However, KPMG, LLP continued to identify general IT control deficiencies related to security management, access controls, segregation of duties, configuration management, and contingency planning for FEMA’s core financial and feeder systems. Collectively, these deficiencies limited FEMA’s ability to ensure that critical financial and operational data were maintained in such a manner as to ensure their confidentiality, integrity, and availability.

>Information Technology Management Letter for the Federal Emergency Management Agency Component of the FY 2015 Department of Homeland Security Financial Statement Audit 		2016
OIG-16-43-D The Authority received an $8.04 million Public Assistance grant award from the Puerto Rico Emergency Management Agency (Puerto Rico), a FEMA grantee, for damages resulting from Hurricane Irene in August 2011. Our audit objective was to determine whether the Authority accounted for and expended FEMA funds according to Federal requirements. The Puerto Rico Electric Power Authority, Puerto Rico, (Authority) generally accounted for and expended Public Assistance grant funds according to Federal regulations and Federal Emergency Management Agency (FEMA) guidelines. However, the Authority did not comply with the Single Audit Act, which requires non-Federal entities that expend $500,000 or more in a year in Federal awards to obtain a single or program-specific audit for that year. Although the Authority did not take steps to ensure that it met the Single Audit Act requirements, Puerto Rico, as grantee, is responsible for ensuring that its subgrantee (the Authority) is aware of and complies with grant requirements. As a result of this deficiency, FEMA and Puerto Rico did not have an opportunity to review the Single Audit report that would have made them aware of any potential issues with the Authority’s administration of the FEMA grant.

>The Puerto Rico Electric Power Authority Effectively Managed FEMA Public Assistance Grant Funds Awarded for Hurricane Irene in August 2011 		2016
OIG-16-42-D At the time of our audit, the Federal Emergency Management Agency (FEMA) estimated that the City of Colorado Springs, Colorado, (City) had sustained approximately $3.6 million in damages from storms in 2015. 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. Therefore, if the City follows those policies, procedures, and business practices, FEMA has reasonable assurance that the City will properly manage its FEMA grant.

>Colorado Springs, Colorado, Has Adequate Policies, Procedures, and Business Practices to Effectively Manage Its FEMA Public Assistance Grant Funding 		2016
OIG-16-41 In 2011, the former FEMA Chief Security Officer hired two employees with criminal convictions in their backgrounds. Our analysis of employee records from 2011 to 2014 in the Office of the Chief Security Officer’s Fraud and Internal Investigations Division disclosed two more employees with criminal conduct in their backgrounds. FEMA’s Office of the Chief Security Officer no longer employs these four individuals. FEMA premium pay records from 2011 to 2014 for employees in the Fraud and Internal Investigations Division showed that division management allowed employees to violate FEMA’s premium pay policy for compensatory time in 2014; premium pay requests from the same period did not reveal any overtime violations. As a result of hiring employees with criminal backgrounds or conduct, the Office of the Chief Security Officer spent $349,944 unnecessarily. Finally, from 2013 to 2014, the Office of the Chief Security Officer misused the Disaster Relief Fund by allowing employees to perform non-disaster­related activities, which violates the Stafford Act and may also be a potential Antideficiency Act violation.

>Response to Allegations of Mismanagement in FEMA's Office of the Chief Security Office 		2016
OIG-16-40-D Colorado Springs Utilities, Colorado (Utilities), received a $937,367 Public Assistance grant for damages from storms occurring May through June 2015. We conducted this audit early in the grant process to identify areas where the Utilities may need additional technical assistance or monitoring to ensure compliance with Federal requirements. The Utilities 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. Therefore, if the Utilities follow those policies, procedures, and business practices, FEMA has reasonable assurance that the Utilities will properly manage its FEMA grant.

>Colorado Springs Utilities, Colorado, Has Adequate Policies, Procedures, and Business Practices to Effectively Manage Its FEMA Public Assistance Grant Funding 		2016
OIG-16-38-D Oakwood Healthcare System, Inc. (Hospital), in Dearborn, Michigan, received a gross award of $15.2 million from the Michigan State Police Emergency Management and Homeland Security Division (Michigan), and FEMA grantee, for damages resulting from severe storms and flooding in August 2014. The Hospital did not always account for and expend FEMA grant funds according to Federal regulations and FEMA guidelines. Although the Hospital competitively awarded contracts for most non-exigent work, it did not always take the required affirmative steps to ensure the use of small and minority firms, women’s business enterprises, and labor surplus area firms when possible; and did not include all required contract provisions in its contracts. However, we did not question the costs because insurance proceeds covered essentially all the repair costs except for the insurance deductible. We also found that the Hospital did not initially account for labor costs properly. However, after we identified the improperly supported costs, Hospital employees corrected the records to reflect actual costs the Hospital incurred.

>Oakwood Healthcare System, Dearborn, Michigan, Needed Additional Assistance in Managing its FEMA Public Assistance Grant Funding 		2016
OIG-16-36-D The University of Wisconsin-Superior received an $8.6 million FEMA grant from Wisconsin Emergency Management, and FEMA grantee, for damages resulting from severe storms and flooding in June 2012. Our audit objective was to determine whether the University accounted for and expended FEMA funds according to Federal requirements. The University effectively accounted for and expended FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines.

>The University of Wisconsin-Superior Effectively Managed FEMA Grant Funds Awarded for Severe Storms and Flooding in June 2012 		2016
OIG-16-35-D The Town of Jamestown, Colorado, (Town) received a $10.4 million Federal Emergency Management Agency (FEMA) grant award for damages resulting from severe storms, flooding, landslides, and mudslides that occurred in September 2013. We conducted this audit early in the grant process to identify areas where the Town may need additional technical assistance or monitoring to ensure compliance with Federal requirements. Most of the Town’s policies, procedures, and business practices are adequate to account for and expend Public Assistance grant funds according to Federal regulations and FEMA guidelines. The Town accounted for disaster-related costs on a project-by-project basis. The Town also has adequate procurement policies and procedures in place that are consistent with Federal procurement standards. Further, the Town’s insurance procedures and practices are adequate to ensure that the Town can properly manage anticipated insurance proceeds. Although the Town had adequate policies, procedures, and business practices, at the time of our audit, the Town lacked the personnel with the necessary financial expertise to perform financial management activities according to Federal standards.

>Jamestown, Colorado, Needs Additional Assistance and Monitoring to Ensure Proper Management of Its $10.4 Million FEMA Grant 		2016

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

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