Semiannual Report to Congress

October 1, 2009 – March 31, 2010
Office of the Inspector General

American Recovery and Reinvestment Act of 2009

The American Recovery and Reinvestment Act of 2009 (Recovery Act), which was signed into law on February 17, 2009, provides $787 billion in funding as a stimulus to the economy. Of that funding, the Department received $4 billion for grant funding to enhance state, local, and tribal law enforcement; to combat violence against women; and to fight Internet crimes against children.

The OIG is providing guidance and oversight related to the Department’s Recovery Act efforts. For example, OIG staff meets with Department managers involved in distributing and overseeing Recovery Act funds to discuss best practices; to identify specific fraud, waste, and abuse risks for Recovery Act funding; and to make specific suggestions to help mitigate these risks. In addition, since the passage of the Recovery Act, the OIG has provided training to 1,411 employees and grant recipients from the Department’s three grant making agencies (OJP, OVW, and COPS), and more than 1,038 grant administrators, sub-grantees, and staff from state administering agencies.

The OIG also has met with state and local grant management officials to provide information on the OIG’s oversight efforts and to encourage prompt and effective reporting to the OIG on any grant or contract issues that involve Department funds. Since the passage of the Recovery Act, the OIG has met with grant administrators and oversight officials from 43 states and from the District of Columbia, Puerto Rico, and the Virgin Islands.

In addition, the OIG has initiated 24 Recovery Act audits and inspections to examine whether Department components are properly managing Recovery Act funds in accordance with the Recovery Act, OMB guidelines, and sound grant management practices. The audit work is being performed in phases to provide timely feedback to the Department. The OIG is issuing Management Advisory Memoranda and Technical Advisory Reports, which identify risk areas as soon as the OIG becomes aware of them and recommend actions that grant administrators can implement to minimize that risk.

Finally, the Recovery Act designated the Department’s Inspector General to serve as one of the members of the Recovery Accountability and Transparency Board. The Board is coordinating oversight of Recovery Act funds throughout the federal government.

Reports Issued

Improving the Grant Management Process for Department Tribal Grant Programs

The OIG issued a report making recommendations to the Department relating to Tribal grant management and oversight. The report focused on grants to Tribes and provided our analysis of additional actions Departmental components can take to promote the overall effectiveness and integrity of Department funding awarded to Tribal governments.

A priority recently identified by the Department’s leadership is supporting criminal justice activities in American Indian and Alaska Native Tribal Country. To this end, the Department is accelerating its distribution of grants to Tribal communities. In FY 2009, the Department awarded $50 million in appropriated grant funding to American Indian and Alaska Native Tribes and received $248 million in funding under the Recovery Act specifically targeted at Tribal populations. In addition to these funds, Tribes are also eligible to apply for several Department Recovery Act competitive grant programs available to states, local governments, and other entities.

While the Department is increasing the distribution of grants to Tribes, only a fraction of the nation’s 563 federally recognized Tribes traditionally submit grant applications to the Department. In addition, many of the Tribal organizations that apply for grants have inadequate accounting and management infrastructure to properly account for the funds. As part of its efforts to expand the number of grants awarded to Tribal organizations, the Department asked the OIG for recommendations relating to Tribal grant management and oversight. Our past work identified two primary concerns regarding the Department’s management of its Tribal grant programs:  1) the need for coordination of the Tribal grant program among the three separate components of the Department that award grants to Tribes and among other federal agencies that award large amounts of grants to Tribes, and 2) the need to provide assistance and oversight to Tribes with inadequate accounting systems.

We concluded that the Department should focus on increasing the coordination of its Tribal grant programs, both within the Department and with external agencies, and on providing assistance and oversight to Tribes with inadequate accounting systems. We provided a series of potential steps the Department should consider, including: 1) ensuring that grant solicitations clearly articulate program objectives and requirements and include a description of the accounting standards that will have to be met by the grant recipient, 2) making available to new grant applicants examples of “best practice” applications that illustrate what information the Department requires, 3) developing a Department-wide procedure for sharing information on high-risk grantees before awarding funds, and 4) increasing the monitoring and training of Tribal grantees through site visits and review of financial and progress reports. Our report concluded that implementation of these recommendations could improve the Tribal grant process, ensure appropriate use of grant money, and provide better coordination and oversight of Tribal grant funds.

Edward Byrne Memorial Justice Assistance Grant Program, Recovery Act Formula Awards

The OIG’s Audit Division reviewed OJP’s awarding of $2 billion in Recovery Act grants for the Edward Byrne Memorial Justice Assistance Grant Program administered by OJP’s BJA. These funds were awarded to states, territories, and local government jurisdictions to address crime in a variety of ways, such as training, personnel, equipment, supplies, contractual support information systems, research, and evaluation.

We reviewed the Byrne program to determine if funds were awarded in a prompt, fair, and reasonable manner. We determined that the OJP’s BJS, which was responsible for developing the funding allocations for the program, did so in an appropriate manner using a formula established by law and based on population estimates and violent crime data. We also determined that BJA acted reasonable deadlines for submitting applications, timely reviewed applications against solicitation requirements, and promptly made awards. As a result, we concluded that the awards were prompt, fair, and reasonable. However, we noted some missing elements in application packages, such as complete program narratives, project abstracts, and complete budget documents.

The Department’s Data Quality Procedures for Recovery Act Recipient Reports

In coordination with an initiative by the Recovery Accountability and Transparency Board, the OIG issued two separate reviews of Department data quality procedures for Recovery Act recipient reports. These reviews focused on the Department’s efforts to ensure that contract and grant recipients of Recovery Act funds accurately report each quarter how those funds were used, as required by the Recovery Act. We concentrated our reviews on the efforts of JMD, OJP, COPS, and OVW.

In October 2009, we issued Phase 1 of this review, which assessed whether the Department had established processes to perform data quality reviews intended to identify material omissions and significant reporting errors by recipients and to notify the recipients of the need to make appropriate and timely changes. We concluded that the Department had made significant efforts to ensure that data reported by Recovery Act funding recipients is complete and accurate. Specifically, we determined that JMD developed automated screening and data validation systems to support granting agencies’ verification of recipients’ reports and to enable the Department to identify any material omissions and significant errors. The Department’s granting agencies separately developed quality review processes that appeared to provide effective means for assessing the quality of the reported information and correcting any deficiencies identified. We concluded that further process improvements would be necessary as the initial Recovery Act reporting was completed and experience was gained with the reporting system.

For Phase 2 of our review, issued in February 2010, we focused on OJP, COPS, and OVW because these three components accounted for 99.7 percent of the Department’s Recovery Act funding. We provided data, surveys, and follow-up questions from the Recovery Board to these three components and conducted an analysis of the components’ responses. From the results of this review, it appeared that each granting component was making progress toward ensuring that recipients of Recovery Act funds submit quarterly reports and ensuring that the data reported are accurate.

Because the Department had the second highest number of non-reporting recipients of all federal agencies, we also examined the number of non-reporting recipients within the Department. For the initial reporting period that ended September 30, 2009, the Department reported to OMB a total of 733 Recovery Act recipients out of 4,050 (18 percent) that did not submit the required reports. However, the actions taken by the three Department components with the most non-reporters resulted in a significant reduction in the number of non-reporters for the second reporting period that ended December 31, 2009.

Review of the Award Process for the OVC Recovery Act Formula and Discretionary Grant Programs

The OIG’s Audit Division issued a report on the award process for the OVC Recovery Act formula and discretionary grant programs. We concluded that the OVC included all Recovery Act requirements in its three Recovery Act program solicitations, allocated and awarded funds in accordance with the applicable provisions of the Victims of Crime Act of 1984 for the formula award programs, and competitively awarded discretionary grant funds in a fair and reasonable manner. However, we had concerns with OVC’s guidance to applicants about reporting requirements on the number of jobs retained based on Recovery Act funding. The OVC addressed our concerns by providing grantees with updated guidance from OMB on measuring and reporting the number of jobs retained based on Recovery Act funding.

Ongoing Work

Selection Process for the COPS Hiring Recovery Program

The OIG is auditing the COPS Hiring Recovery Program, a competitive grant program that provides funding directly to law enforcement agencies to create and preserve law enforcement jobs and enhance community policing efforts.

BJA’s Correctional Facilities on Tribal Lands Grant Program

The OIG is auditing BJA’s Correctional Facilities on Tribal Lands Grant Program to determine if BJA is properly managing these Recovery Act funds in accordance with the Recovery Act, OMB guidelines, other applicable rules and regulations, and sound grant management practices.

Edward Byrne Memorial Justice Assistance Grant Program Recovery Act Awards

The OIG is continuing its audit of OJP’s Edward Byrne Memorial Justice Assistance Grant Program, which allows state and local governments to support activities to prevent and control crime and improve the criminal justice system. This program includes both formula and discretionary awards. The audit also includes an evaluation of OJP’s oversight of its grant programs.

OVW’s Recovery Act Grant Selection Process

The OIG is conducting an audit to determine whether OVW administered, assessed, and awarded Recovery Act grants in accordance with Recovery Act requirements, OMB guidelines, and sound grant management practices.


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