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Audits, Inspections, and Evaluations

Report Number Title Issue Date Fiscal Year
OIG-18-85 The Federal Emergency Management Agency (FEMA), through its Public Assistance (PA) Program, is currently responding to Hurricane Irma — one of the most catastrophic disasters in recent United States history.  FEMA’s damage estimates for Florida and Georgia exceed $4.2 billion, with debris removal operations constituting approximately 36 percent of the total PA cost.  Debris removal costs in Florida and Georgia are estimated to reach approximately $1.5 billion as of May 2018.  FEMA’s guidance for debris monitoring lacks sufficient information to ensure adequate oversight.  In the 2011 OIG report, FEMA’s Oversight and Management of Debris Removal Operations, we identified deficiencies in FEMA’s debris removal guidance.  To resolve these deficiencies, we made 10 recommendations to, in part, strengthen FEMA’s debris removal guidance and procedure.  In response, FEMA released additional criteria pertaining to debris estimating and monitoring to enhance the overall effectiveness of the process.  FEMA removed the detailed responsibilities when it released its Public Assistance Program and Policy Guide (PAPPG).  Going forward from the PAPPG version 1.0, FEMA relies solely on the subrecipient to monitor the debris removal operations, and removes monitoring responsibilities from both FEMA and the State.  Subrecipients now have a greater responsibility to identify issues or concerns during debris removal operations.  We made three recommendations that when implemented will strengthen FEMA’s debris monitoring operations.  FEMA concurred with all recommendations.

>Management Alert - Observations of FEMA's Debris Monitoring Efforts for Hurricane Irma 		2018
OIG-18-75 Collectively, our FY 2017 work shows that FEMA continues to face systemic problems and operational challenges, as the variety of findings summarized in this report illustrates In FY 2017, FEMA did not manage disaster relief grants and funds adequately and did not hold grant recipients accountable for properly managing disaster relief funds. We continue to identify problems such as improper contract costs, and ineligible and unsupported expenditures.

In FY 2017, we identified $2.08 billion in questioned costs, which represents 96 percent of the $2.16 billion audited.2 We issued 37 reports concerning FEMA grants, programs, and operations funded by the DRF. Specifically, we conducted 16 grant audits, 13 proactive audits, and 8 program audits. In the last 9 fiscal years, we audited grant funds totaling $13.75 billion and reported potential monetary benefits of $6.55 billion.

>Summary and Key Findings of Fiscal Year 2017 FEMA Disaster Grant and Program Audits 		2018
OIG-18-74 FEMA needs to continue providing technical assistance to and monitoring of California’s Public Assistance grant funding management.  This helps avoid the risk of exposing millions of taxpayer dollars to fraud, waste, or mismanagement and violating the Robert T. Stafford Disaster Relief and Emergency Assistance Act. In doing so, FEMA can assist California in providing reasonable, but not absolute assurance that Public Assistance subgrant funds are spent in accordance with Federal regulations and FEMA guidelines.

>Special Report: Lessons Learned from Previous Audit Reports Related to California's Practice of Managing Public Assistance Grant Funds 		2018
OIG-18-71 We found that FEMA overpaid its employees because it mistakenly believed the Department’s payroll provider had an automated control to prevent payments over the annual cap, and because it did not follow its own premium pay policy. We also found that FEMA has no effective policy or practice to determine the Fair Labor Standards Act status of FEMA employees during disaster deployments, which also contributed to this issue. Since discovering the overpayments, FEMA has been working to calculate how many people were overpaid, but it cannot finish that analysis until it addresses a number of outstanding questions.

>FEMA Paid Employees Over the Annual Premium Pay Cap 		2018
OIG-18-66 In July 2017, FEMA reported that it awarded 252 projects under the PA alternative procedures pilot program valued at $11.9 billion, with just 26 of those projects (10.32 percent) closed. During our fieldwork, we gained access to FEMA’s grant management system of record and reviewed supporting documentation for the project worksheets in our scope to determine if FEMA followed its criteria when validating cost estimates. However, FEMA did not sufficiently document actions that it took to validate subrecipient cost estimates to ensure costs are reasonable. Of the three obligated projects we reviewed during our fieldwork, we did not find evidence that FEMA completed the required steps identified to validate the reasonableness of subrecipient cost estimates.

>Sandy Recovery Improvement Act Review 		2018
OIG-18-64 The County estimated that it had sustained $2.7 million in damages from severe storms and flooding in February 2017. We conducted the audit early in the grant process to identify areas in which the County may need additional technical assistance and monitoring to ensure compliance with Federal requirements. DHS OIG found that the County does not have adequate procurement policies, procedures, and business practices that comply fully with all Federal standards for its planned procurements, totaling approximately $500,000. At the time of our fieldwork, FEMA had not completed project worksheets to define the scope of disaster work. At this early stage in the grant process, Utah needs to provide the County with additional technical assistance and increased monitoring. Doing so should provide FEMA reasonable, but not absolute, assurance that the County will spend the $2.7 million in total estimated disaster-related costs according to Federal requirements.

>Cache County, Utah, Needs Additional Assistance and Monitoring to Ensure Proper Management of Its FEMA Grant 		2018
OIG-18-63 The Diamondhead Water and Sewer District (District), received a Federal Emergency Management Agency (FEMA) grant award of $49.3 million from the Mississippi Emergency Management Agency (Mississippi) for damage resulting from Hurricane Katrina in 2005. We had concerns because it took the District about 10 years to break ground on its new wastewater treatment plant. We also wanted to determine whether FEMA accurately applied its “50 Percent Rule.” we identified $1.5 million of improper procurement, unsupported costs, duplicate insurance benefits, and uncompleted project costs that FEMA should disallow to the District. These problems were largely the result of Mississippi not fulfilling its grantee responsibility to ensure the District properly managed FEMA funds. Mississippi is responsible for monitoring subgrant activities, and is compensated with Federal funds to support subgrant management and oversight. It is FEMA’s responsibility to hold Mississippi accountable for proper grant administration.

>FEMA Should Recover $20.4 Million in Grant Funds Awarded to Diamondhead Water and Sewer District, Mississippi 		2018
OIG-18-62 The Victor Valley Wastewater Reclamation Authority, through its main engineering contractor (Contractor C), presented incorrect data and misinformed FEMA in obtaining a Federal grant of more than $33 million for its pipeline replacement and relocation project. Authority officials wanted to move the pipeline outside of the Mojave Riverbed, but noted the high cost to do so. Authority officials knew that replacing and relocating the pipeline was the most expensive repair option, as their Contractors A and C informed them. However, through Contractor C, Authority officials repeatedly provided FEMA incorrect data that made Alternative 2 appear to be the least expensive. Based on the incorrect information Authority officials provided, FEMA funded $11 million for the replacement and relocation project in 2013 and an additional $22 million in 2014, a total of $33 million. We question the entire $33 million as ineligible because the Authority did not comply with Federal regulations, and FEMA policies and procedures, in preparing cost estimates for FEMA.

>Victor Valley Wastewater Reclamation Authority, California, Provided FEMA Incorrect Information for Its $33 Million Project 		2018
OIG-18-60 At the time of our audit, Federal Emergency Management Agency (FEMA) estimated that the City of Waterloo, Iowa (City), sustained approximately $1.9 million in damages from severe storms and flooding from September 21 through October 3, 2016. The City did not provide all requested information and explanations necessary to perform our review; therefore, we were unable to assess whether the City’s policies, procedures, and business practices were adequate to account for FEMA Public Assistance grant funds properly. The City’s failure to cooperate with a Federal audit put approximately $1.9 million dollars in potential FEMA grant funding at risk of being deobligated or not funded.

>The City of Waterloo, Iowa Jeopardizes $1.9 Million in Estimated FEMA Grant Funding 		2018
OIG-18-54 In November 2015, we reported that the Federal Emergency Management Agency’s (FEMA) information technology (IT) management approach did not adequately address technology planning, governance, and system support challenges to effectively support its mission. We issued five recommendations to the FEMA Chief Information Officer (CIO) aimed at improving the agency’s management of IT.1 Specifically, we recommended the CIO finalize key planning documents related to IT modernization; execute against those planning documents; fully implement an IT governance board; improve integration and functionality of existing systems; and implement agency-wide acquisition, development, and operation and maintenance standards.

 

>Management Alert - Inadequate FEMA Progress in Addressing Open Recommendations from our 2015 Report, "FEMA Faces Challenges in Managing Information Technology" (OIG-16-10) 		2018
OIG-18-49 The Federal Emergency Management Agency (FEMA) estimated that the City of Cedar Falls, Iowa (City), had sustained approximately $893,000 in damage caused by severe storms and flooding from September 21 through October 3, 2016. We audited early in the grant process to identify areas in which the City may need additional technical assistance or monitoring to ensure compliance with Federal procurement requirements. Except for procurement, the City’s policies, procedures, and business practices appear to be adequate to account for and expend FEMA grant funds according to Federal regulations and FEMA policies. Specifically, the City’s procurement policies did not provide sufficient opportunities for disadvantaged firms to compete for contracts, or prevent awarding contracts to debarred or suspended contractors. After we discussed these issues, City officials moved quickly to modify procurement policies to comply with Federal requirements.

>City of Cedar Falls, Iowa Has Policies, Procedures, and Business Practices to Manage Its FEMA Grant 		2018
OIG-18-40 The Indiana Department of Homeland Security (Indiana) received $27.9 million in Federal Emergency Management Agency (FEMA) Hazard Mitigation Grant Program (HMGP) funds to disburse to eligible subgrantees for projects in 10 disasters declared from June 2004 to April 2014. Our objective was to determine whether Indiana administered the grant program in accordance with Federal regulations and ensured subgrantees properly accounted for and expended FEMA funds. Indiana unable to demonstrate it has procedures and processes to ensure compliance with all Federal monitoring and financial reporting requirements. Specifically, Indiana did not perform required subgrant monitoring during project implementation and post closeout; submit quarterly progress and financial reports that met requirements; and comply with financial management requirements to ensure subgrantees accounted for and expended FEMA grant funds according to Federal regulations and FEMA guidelines.

>Indiana Needs to Improve the Management of Its FEMA Hazard Mitigation Grants 		2018
OIG-18-39 Audit of FEMA Public Assistance Grant Funds Awarded to Volunteer Energy 2018
OIG-18-38 Facing continued negative publicity and pressure from Members of Congress, FEMA established the Sandy Claims Review Process (SCRP). In doing so, FEMA did not rely on legislatively mandated internal controls designed to ensure appropriate payments for flood victims. Additionally, during the formation and operation of the SCRP, FEMA failed to establish contractor expectations or provide consistent guidance and oversight related to Hurricane Sandy claims. These omissions resulted in policyholders receiving unsupported additional payments, excessive costs to operate the SCRP, and time delays in processing the claims

>Unsupported Payments Made to Policyholders Who Participated in the Hurricane Sandy Claims Review Process 		2018
OIG-18-33 Because of the high dollar amount in disaster funds likely awarded and the history of audit questioned costs for FEMA disaster funds, FEMA’s inadequate grant management poses a significant risk to taxpayer dollars. We identified issues in our previous reports that demonstrate FEMA’s ongoing issues with ensuring disaster grant recipients and subrecipients comply with Federal regulations and FEMA guidelines. Specifically, FEMA faces significant challenges in ensuring its grant recipients properly manage FEMA disaster funds. This alert highlights the significant deficiencies with FEMA’s internal controls and its lack of enforcement of Federal requirements. As FEMA moves forward with its recovery efforts, it must hold recipients accountable for proper grant management. FEMA must implement and use effective controls to overcome existing problems with managing and monitoring funds for disaster response and recovery.

>Management Alert - FEMA Faces Significant Challenges Ensuring Recipients Properly Manage Disaster Funds 		2018
OIG-18-30 This is a Department of Homeland Security, Office of Inspector General management alert to make the Federal Emergency Management Agency (FEMA) and its partners aware of active attempts — observed during our ongoing disaster oversight work in Puerto Rico — to profit from disaster survivors seeking FEMA assistance. We observed posted notices featuring a logo similar to FEMA’s, advertising paid services to complete the FEMA disaster assistance application on behalf of survivors. These services appear to be associated with FEMA, but actually are not, and demand a fee for services FEMA provides at no cost.

To complete the disaster assistance application forms, the paid service requires disaster survivors to provide their Personally Identifiable Information (PII) — such as their social security number, household annual income, and bank account numbers — to a third party, which exposes survivors to unnecessary risks.

>Management Alert - FEMA Must Take Steps to Stop Those Attempting to Profit from Disaster Survivors Seeking Assistance in Puerto Rico 		2018
OIG-18-29 This is a Department of Homeland Security Office of the Inspector General (OIG) special report on Federal Emergency Management Agency (FEMA) and FEMA recipient and sub recipient disaster-related procurements. FEMA is currently responding to some of the most catastrophic disasters in U.S. history — Hurricanes Harvey, Irma, Maria, and the October 2017, California wildfires. Because of the massive scale of damage and the large number and high-dollar contracts that will likely be awarded, there is a significant risk that billions of taxpayer dollars may be exposed to waste, fraud, and abuse.

>Lessons Learned from Prior Reports on Disaster-related Procurement and Contracting 		2018
OIG-18-28 Osceola Electric Cooperative, Inc. (Osceola) received a $10 million Federal Emergency Management Agency (FEMA) grant award for damages caused by a severe winter storm in April 2013. Although the disaster occurred 4 years ago, Osceola has not completed all FEMA projects. We conducted this audit early in the grant process to identify areas in which Osceola may need additional technical assistance or monitoring to ensure compliance. Osceola generally accounted for and expended $10 million FEMA Public Assistance Funds according to Federal regulations and FEMA guidelines.

>Osceola Electric Cooperative, Iowa, Generally Managed FEMA Grant Funds According to Federal Requirements 		2018
OIG-18-26 Severe winter storms, flooding, and mudslides during January and February 2017 caused significant damage to Solano County, California (County). County officials estimate damages at $1.6 million. Based on our limited testing, the County appears to have in place policies, procedures, and business practices to generally account for and expend FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines. The County should be able to account for disaster-related costs on a project-by-project basis and adequately support these costs.

>Solano County, California, Has Policies, Procedures, and Business Practices to Manage Its FEMA Grant Funding 		2018
OIG-18-25 The Omaha Tribe’s serious financial management weaknesses combined with inadequate and missing documentation resulted in unreliable financial records. As a result, we have little confidence that the transactions recorded in the accounting system actually occurred or that the tribe completed its FEMA-authorized projects. Therefore, we question $13.9 million as unsupported. Due to the unreliable financial information, we calculated the amount unsupported as the entire $16.9 million FEMA provided for both grants, less $2.8 million in unused Federal funding that FEMA should put to better use; $165,000 in unclaimed insurance coverage; and approximately $74,749 that we were able to verify as supported and eligible.

>The Omaha Tribe of Nebraska and Iowa Mismanaged $14 Million in FEMA Disaster Grants 		2018
OIG-18-21 FEMA is currently responding to Hurricane Harvey in Texas, one of the largest disasters in U.S. history, with current damage estimates reported to exceed $100 billion. Due to the massive scale of damage, FEMA and Texas, as a FEMA grantee, will face many challenges in the recovery phase of the disaster. As FEMA moves into the recovery phase for Hurricane Harvey, it will begin to obligate hundreds of millions, if not billions, of dollars from the Disaster Relief Fund for administrative costs and for Public Assistance and Hazard Mitigation grants to eligible state, tribal, and local governments and certain nonprofit organizations. Texas, as FEMA’s grantee, will be responsible for oversight and monitoring of the disaster grants to Texas subrecipients.

>Special Report: Lessons Learned from Prior DHS-OIG Reports Related to FEMA's Response to Texas Disasters and Texas' Management of FEMA Grant Funds 		2018
OIG-18-17 The Hospital must improve its policies, procedures, and business practices to account for and expend FEMA grant funds according to Federal regulations and FEMA guidelines. Specifically, it did not properly document and adequately account for project costs; comply with its overtime policy; and comply with Federal requirements for insurance. Additionally, there were major differences in the damage estimates FEMA and the Hospital calculated.

>Napa State Hospital, California, Should Improve the Management of Its $6.7 Million FEMA Grant 		2018
OIG-18-14 Management Alert - Concerns with Potential Duplicate or Ineligible FEMA Public Assistance Funding for Facilities Damaged by Back-to-Back Disasters 2018
OIG-18-13 FEMA and CBP Oversight of Operation Stonegarden Program Needs Improvement 2018
OIG-18-12 We prepared this special report to address challenges FEMA, Texas, Florida, U.S. territories in the Caribbean, and California may face managing insurance under the Public Assistance program in the wake of Hurricanes Harvey, Irma, and Maria, and the October 2017 California wildfires. This report describes lessons learned from findings and recommendations contained in our DHS OIG grant audit reports issued from fiscal years 2013–2017. During fiscal years 2013–2017, we issued 37 Disaster Assistance grant audit reports that disclosed challenges with FEMA’s Public Assistance insurance process. The major recurring challenges we identified included (1) Duplicate benefits in which subrecipients claimed FEMA reimbursement for costs that were covered by insurance; (2) Insufficient insurance in which subrecipients did not obtain and maintain sufficient insurance coverage required as a condition for receiving Federal disaster assistance; and (3) Misapplied or misallocated insurance proceeds in which subrecipients received insurance proceeds, and misapplied or did not allocate those proceeds to FEMA projects.

>Special Report: Lessons Learned from Previous Audit Reports on Insurance under the Public Assistance Program 		2018
OIG-18-09 The County does not have legal responsibility for the disaster-related repairs on township roadway projects. Therefore, the County is not eligible to receive $6,151,893 in Federal funding identified as township projects because it is not legally responsible for the repairs to the damaged facilities (roadways).

>Management Alert - FEMA Should Recover $6.2 Million in Public Assistance Funds for Disaster Repairs That Are Not the Legal Responsibility of Richland County, North Dakota 		2018
OIG-18-08 CalRecycle also has sufficient policies, procedures, and business practices in place to account for disaster costs on a project-by-project basis in accordance with most Federal regulations and FEMA guidelines. CalRecycle did not follow these policies, procedures, and practices when accounting for and expending $198.9 million in project costs. Therefore, we questioned these costs unless CalRecycle can correct the deficiencies we identify. CalRecycle did not adequately document costs, account for costs on a residential lot-by-lot basis, effectively monitor contractors to ensure they performed to contract terms and conditions, or clearly separate costs for eligible and ineligible work.

 

>FEMA and California Need to Assist CalRecycle, a California State Agency, to Improve Its Accounting of $230 Million in Disaster Costs 		2018
OIG-18-07
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    • >DHS Needs a More Unified Approach         		2018
    OIG-18-06 FEMA did not manage disaster relief grants and funds adequately and did not hold grant recipients accountable for properly managing disaster relief funds. We continue to identify persistent problems such as improper contract costs, and ineligible and unsupported expenditures as examples of this continued failure. Over the 7-year period, FYs 2009 to 2015, we found $1.64 billion, or 15 percent, in questioned costs out of the $10.9 billion that we audited, which we recommended FEMA disallow as ineligible and unsupported costs. In FY 2016, we found $155.6 million2, or 23 percent, in questioned costs out of the $686 million that we audited, confirming that FEMA is not making progress managing disaster relief funds adequately. We continue to identify persistent problems throughout FEMA’s grant process, we are concerned that billions of tax payer dollars remain at risk.

     

    >Summary and Key Findings of Fiscal Year 2016 FEMA Disaster Grant and Program Audits         		2018
    OIG-18-02 In 2013 and 2014, we conducted an audit of the District of Columbia’s (DC) management of the Homeland Security Grant Program (HSGP) for grants awarded from fiscal years 2010 through 2012. In September 22, 2014, we issued an audit report entitled, District of Columbia’s Management of Homeland Security Grant Program Awards for Fiscal Years 2010 Through 2012 (OIG-14-147), which included 11 recommendations to improve the overall effectiveness of DC’s management of the Homeland Security Emergency Management Agency’s (HSEMA) State Homeland Security Program (SHSP) and Urban Area Security Initiative (UASI) funds. We determined that DC HSEMA met the intent of our prior recommendations and demonstrated improvements in its SHSP and UASI subrecipient monitoring and oversight. We also confirmed DC HSEMA submitted required THIRA reports to FEMA. Overall, FEMA and DC HSEMA’s implementation of our prior recommendations achieved the intended results of strengthening grant program management, performance, and oversight

    >Verification Review of District of Columbia's Management of Homeland Security Grant Program Awards for Fiscal Years 2010 Through 2012         		2018
    OIG-18-01 Mississippi Emergency Management Agency (MEMA) followed applicable Federal grant requirements.  It is FEMA’s responsibility to hold Mississippi accountable for proper grant administration.  MEMA did not provide proper oversight of a $29.9 million Hazard Mitigation grant, or follow Federal Regulations and FEMA guidelines when accounting for grant funds.  As a result, FEMA has no assurance that MEMA properly accounted for and expended Federal funds.

    >Hazard Mitigation Grant Funds Awarded to MEMA for the Mississippi Coastal Retrofit Program         		2018
    OIG-17-97-D We determined that FEMA did not have sufficient evidence to support its decision that Hurricanes Katrina and Rita directly caused damages to the roads and water distribution system.  The demonstration of direct cause is necessary for work to be considered eligible for Federal disaster assistance funding, as required by the Stafford Act and FEMA’s own policies.  As a result, FEMA should not have awarded the initial $785 million, or the additional $1.25 billion to complete the repairs.  We recommended that FEMA disallow $2.04 billion in questioned costs —the initial award of $785 million, plus the additional $1.25 billion award.  We made two recommendations and FEMA non-concurred with both of our recommendations.

    >FEMA Should Disallow $2.04 Billion Approved for New Orleans Infrastructure Repairs         		2017
    OIG-17-95-D We determined that The Hospital accounted for FEMA funds on a project-by-project basis as Federal regulations and FEMA guidelines require.  However, as of February 2017, the Hospital had not arranged for an audit of its Federal award, which it must complete and submit to the Federal Audit Clearinghouse by June 30, 2017.  We recommended that the Regional Administrator, FEMA Region IV, direct the South Carolina Emergency Division to actively monitor the Hospital’s compliance with the annual audit requirements.  If the Hospital does not meets it audit requirement by the June 30, 2017, due date, FEMA should direct South Carolina to impose appropriate additional award conditions to ensure the integrity of the FEMA award.

    >Williamsburg Regional Hospital, South Carolina, Generally Accounted for and Expended FEMA Grant Funds Awarded for Emergency Work Properly         		2017
    OIG-17-93-D We determined the Borough of Lavallette did not always account for and expend FEMA grant funds according to Federal regulations and FEMA guidelines.  Therefore, FEMA should disallow $3.9 million of $13.2 million in grant funds awarded to the Borough.  We made six recommendations to the Regional Administrator, FEMA Region II, to disallow duplicate costs, ineligible labor, contract and excessive equipment costs, unsupported equipment costs, unapplied credits, unneeded funds to put to better use and improve the State’s grant management activities.

    >FEMA Should Recover $3.9 Million of $13.2 in Grant Funds Awarded to the Borough of Lavallette, New Jersey         		2017
    OIG-17-83-D Fort Bend County, Texas (County), needs additional technical assistance to account for FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines. Specifically, the County needs to revise its accounting policies and procedures to ensure it can fully support the disaster work it intends to complete with its own labor force. In addition, although the County’s procurement policies and procedures generally comply with Federal procurement standards, they did not include all required contract provisions in either of their disaster contracts. Because of our audit, the County revised its policies and procedures to include implementing a plan that specifically addressed Federal requirements for documenting and accounting for disaster-related costs and compliance with Federal procurement standards.

    >Fort Bend County, Texas, Needs Additional Assistance and Monitoring to Ensure Proper Management of Its FEMA Grant         		2017
    OIG-17-80-D Cancellation of OIG Audit – FEMA’s Initial Response to the 2016 Catastrophic Flooding in Louisiana 2017
    OIG-17-79-D We conducted this audit early in the Public Assistance process to identify areas where the Department may need additional technical assistance, or monitoring to ensure compliance, before improperly expending any of the Federal grant funds.  We determined if the Department conforms to its policies, procedures, and business practices, FEMA has reasonable assurance, but not absolute, that the Department will properly manage the Public Assistance grant funds it receives. During our audit, we determined the Department did not always use the lowest of FEMA and local rates for equipment costs.  Department officials agreed with this finding and took immediate corrective action by notifying Oregon that they would revise and resubmit payment reimbursement claims with correct equipment rate costs.  The Department has revised its procurement procedures for small contracts to include affirmative steps and assure the use of DBEs when possible, as 2 CFR 200.321 requires.  We are not requiring any further action from FEMA, therefore we consider this audit closed. 

    >Linn County Road Department, Oregon, Has Sufficient Policies, Procedures, and Business Practices     		2017
    OIG-17-77-D We determined that The County did not comply with Federal procurement standards in expending FEMA Public Assistance grant funds.  Specifically, the County used a shared services agreement with the Houston-Galveston Area Council (HGAC) to procure two contracts totaling $1.5 million.  The HGAC’s procurement practices unreasonably restricted competition by not allowing smaller contractors to compete for the work, and HGAC did not take the specific steps that Federal regulations require to provide opportunities for disadvantaged firms to bid on federally funded work when possible.  We recommended FEMA disallow those costs as ineligible and direct the state to better monitor the County’s grant subaward activities.

    >FEMA Should Recover $1.5 Million in Grant Funds Awarded to Hays County, Texas         		2017
    OIG-17-67 KPMG LLP, under contract with DHS OIG, audited FEMA’s financial statements and internal control over financial reporting.  The resulting management letter discusses 17 observations related to internal control for management’s consideration.  The auditors identified internal control deficiencies in several processes, including personnel actions; ethics training requirements and filings; intergovernmental activity payments; Web Integrated Financial Management System; and the deobligation of undelivered orders.  These deficiencies are not considered significant and were not required to be reported in our Independent Auditors' Report on DHS’ FY 2016 Financial Statements and Internal Control over Financial Reporting, dated November 14, 2016, included in the DHS FY 2016 Agency Financial Report.

    >Federal Emergency Management Agency's Management Letter for DHS' Fiscal Year 2016 Financial Statements Audit         		2017
    OIG-17-66-D We determined the City has established adequate policies, procedures, and business practices to account for and expend Public Assistance grant funds according to Federal regulations and FEMA guidelines. Therefore, if the City follows its policies, procedures, and business practices it has in place, FEMA has reasonable, but not absolute assurance, that the City will properly manage the Public Assistance grant funds it receives. We did not identify any reportable issues and consider this audit closed.

    >Milwaukie, Oregon, Has Adequate Policies, Procedures, and Business Practices to Manage Its FEMA Grant Funding         		2017
    OIG-17-64 Most of the deficiencies identified by the independent public accounting firm KPMG, LLP were related to security management, access controls, configuration management, and contingency planning of FEMA’s core financial and feeder systems.  The deficiencies collectively 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.  We recommend that FEMA, in coordination with the Department of Homeland Security Chief Information Officer and Acting Chief Financial Officer, make improvements to FEMA’s financial management systems and associated information technology security program.

    >Information Technology Management Letter for the Federal Emergency Management Agency Component of the FY 2016 Department of Homeland Security Financial Statement Audit         		2017
    OIG-17-62-D We determined that the District’s accounting policies, procedures, and business practices are adequate to account for FEMA grant funds and insurance proceeds according to Federal regulations and FEMA guidelines.  However, the District’s procurement policies, procedures, and business practices were not adequate to meet minimum Federal standards and address key procurement elements such as to ensure no award is made to any party debarred or suspended from Federal assistance programs.  The District took immediate corrective actions and amended its procurement procedures to be compliant with Federal procurement standards.  Non-compliance occurred because District officials were not fully aware of the required procurement standards for Federal grants.  We recommended that FEMA direct Texas to continue providing technical assistance and closely monitor the District to ensure it complies with Federal procurement standards for awarding and administering disaster-related contracts to prevent improper spending of the estimated $12,854,705 ($9,641,029 Federal share) in contract costs for remaining permanent work.  FEMA agreed with the findings and recommendation in the report.

    >Texas Should Continue to Provide Deweyville Independent School District Assistance in Managing FEMA Grant Funds         		2017
    OIG-17-57-D We determined that the County can account for and adequately support disaster-related costs.  However, the County’s procurement policies, procedures, and business practices do not meet all Federal procurement standard requirements.  As a result, the County awarded two bridge construction contracts totaling $458,150 without full and open competition.  We recommended that FEMA not fund $458,150 of ineligible contract costs, unless FEMA grants an exception for all or part of the costs according to Federal regulations.  Because of our audit, County officials said they will not claim FEMA reimbursement for either of the two contracts.  We discussed this decision with FEMA Region VI officials who said they will be alert for these costs should the County seek reimbursement for either of the two bridge construction contracts.  Based on FEMA’s response we consider this report closed and require no further action from FEMA.

    >Colorado County, Texas, Has Adequate Policies, Procedures, and Business Practices to Manage Its FEMA Grant         		2017
    OIG-17-53 KPMG, LLC, under contract with DHS OIG, discussed nine observations related to internal controls for NFIP’s consideration.  These issues include internal control deficiencies and the need for improvement in calculating written premiums, reviewing paid claims, monitoring third party service providers, and recording investments, which are not critical and are below the level of a significant deficiency.  Internal control weaknesses considered significant deficiencies were presented in our Independent Auditors’ Report on DHS’ FY 2016 Financial Statements and Internal Control over Financial Reporting, dated November 14, 2016, included in the DHS FY 2016 Agency Financial Report.

    >National Flood Insurance Program's Management Letter for DHS' Fiscal Year 2016 Financial Statements Audit         		2017
    OIG-17-50-VR We determined that FEMA did not implement our recommendations and suspended improvements on existing information technology systems. We recommended that FEMA include an enterprise solution in its Grants Management Modernization platform for tracking applicant compliance with the Public Assistance Program insurance requirements that are a condition of receiving a disaster assistance grant.

    >Verification Review: FEMA's Lack of Process for Tracking Public Assistance Insurance Requirements Places Billions of Tax Dollars at Risk         		2017
    OIG-17-48-D We determined that the Iron County Forestry and Parks Department’s (Department) accounting policies, procedures, and business practices are adequate to account for grant funds according to Federal regulations and FEMA guidelines.  However, the Department needs to revise its procurement policies and procedures to comply fully with all Federal procurement standards.  If the Department makes these revisions and follows them, FEMA should have reasonable assurance that (1) small and minority businesses, women’s business enterprises, and labor surplus area firms will receive sufficient opportunities to compete for federally funded work; (2) the risk of misinterpretations and disputes relating to contracts will be minimized; and (3) contracts are awarded to individuals, companies, or recipients who do not pose a business risk to the government.  Department officials acknowledged that they had improperly procured their contracts, but said they plan to seek FEMA reimbursement for the $72,235 in disaster-related contract costs they had incurred.  We recommended that FEMA not fund $72,235 of ineligible contract costs and direct the Wisconsin Emergency Management Agency to provide additional technical assistance and monitoring to the Department to ensure it complies with applicable Federal procurement standards and to prevent the improper spending of approximately $3.2 million in estimated disaster work.  FEMA concurred with all of our findings and recommendations.

    > Iron County Forestry and Parks Department, Wisconsin, Needs Assistance and Monitoring to Ensure Proper Management of Its FEMA Grant         		2017
    OIG-17-46-D We determined that although the Board accounted for disaster-related costs on a project-by-project basis, it did not comply with Federal procurement standards in awarding contracts for disaster work totaling $4.8 million.  Additionally FEMA inadvertently obligated an additional $508,884 in duplicate obligations.  Also the Board could have benefited from additional technical advice from Minnesota.  We recommended that FEMA disallow as ineligible $4.8 million for contracts that did not comply with Federal procurement standards and $508,884 for duplicate obligations.  We also recommended FEMA direct Minnesota to provide technical assistance and monitoring to the Board to ensure it complies with Federal procurement regulations, which should result in $2.6 million in cost avoidance.  FEMA generally agreed with the findings and recommendations in the report.

    >Minneapolis Park and Recreation Board Did Not Follow All Federal Procurement Standards for $5.1 Million in Contracts         		2017
    OIG-17-44-D The purpose of this advisory report is to notify FEMA of an issue we observed during our ongoing audit of CalRecycle.  We determined that CalRecycle expects it will cost about $230 million to complete debris removal work, and has received invoices totaling $200 million from two contractors performing the work.  Yet, these invoices included documentation with numerous discrepancies that did not fully support the invoiced costs as Federal cost principles and procurement standards require.  Moreover, as of September 8, 2016, our audit cutoff date, CalRecycle had paid its contractors about $186.4 million of the $200 million in invoiced costs, but had not completed its review of invoices nor collected all missing support records.   FEMA and California, therefore, should continue to assist CalRecycle in assuring that all costs are valid and eligible.  We recommended that FEMA Region IX Administrator (1) direct California, as grantee, to provide CalRecycle with technical assistance it may need to ensure compliance with all applicable Federal regulations, specifically for document support and contract management, and to avoid improperly funding any of the $230 million ($173 million Federal share) in contract costs CalRecycle estimates it will claim for damages caused by this disaster; and (2) direct California, as grantee, to ensure that all CalRecycle’s cost reimbursement claims for debris removal work are supported with adequate documentation and that costs are eligible in accordance with FEMA’s debris removal guidelines.

    >Management Advisory - CalRecycle, a California State Agency, Needs Assistance to Ensure that $230 Million in Disaster Costs Are Valid         		2017
    OIG-17-41-D We determined that for the projects we reviewed, the County effectively accounted for and expended FEMA Public Assistance grant funds according to Federal regulations and FEMA guidelines. Because the audit did not identify any issues requiring further action from FEMA Region IV, we consider this audit closed.

    >Aiken County, South Carolina, Effectively Managed FEMA Grant Funds Awarded for Severe 2014 Winter Storm         		2017
    OIG-17-38-D We determined that FEMA has not identified and recovered Federal funds that New York City spent, more than three years ago, on repairs to commercial residential properties.  These repairs included short-term measures such as temporary boilers and power generators.  FEMA recognizes that commercial landlords may have received an incidental benefit from the Federal assistance provided to New York City and used it for repairs to multifamily dwellings to ensure tenants could shelter in their homes.  However, it is the responsibility of New York State Division of Homeland Security and Emergency Services (the grantee) to ensure that the money that FEMA provides is spent in accordance with Federal laws and regulations.  Under FEMA rules, for-profit organizations are ineligible for Public Assistance grant funds.  We recommended that FEMA review and improve, as necessary, policies and procedures that protect government resources used to support disaster response and recovery activities.  We made three recommendations and FEMA concurred with all of them.

    >FEMA Needs to Improve Its Oversight of the Sheltering and Temporary Essential Power Pilot Program         		2017

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

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