The American Recovery and Reinvestment Act of 2009 (Recovery Act) 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 conducting aggressive Recovery Act oversight involving the coordinated efforts of auditors, investigators, and inspectors. Through this multidisciplinary effort, the OIG has provided advice to Department granting agencies regarding best practices in the awarding and monitoring of grants, trained Department grant managers on fraud risks, reached out to state and local agency Recovery Act recipients of Department grant funds, audited and evaluated the Department’s use of Recovery Act funding, and conducted investigations of allegations of misuse of Recovery Act funds by Department grant recipients.
In particular, since the enactment of the Recovery Act in February 2009, the OIG has trained 5,280 federal, state, and local program managers and participants on Recovery Act fraud awareness, conducted 104 outreach sessions with state and local agencies, and initiated 27 audits and reviews of Recovery Act funds. In addition, the OIG is conducting 8 investigations of allegations pertaining to the Department’s Recovery Act programs. During this semiannual reporting period, the OIG issued 15 reports on the Recovery Act grant management activities of the Department as well as state and local entities, including an interim report designed to provide timely feedback to Department managers on matters of immediate concern regarding topics such as recipient reporting and grant award activities.
Our reviews found that from enactment of the Recovery Act in February 2009 through September 2010, the Department has obligated more than 99 percent of its $4 billion in Recovery Act funds. Moreover, as of the end of August 2010, the Department had expended about 52 percent of its Recovery Act funds. The Department has handled this increased workload without any significant increase in staff.
Our reviews have also found that, in general, the Department’s grant management staff has issued the Recovery grant funds in a timely, fair, and objective manner. However, our reports also identified several areas in which the Department could improve its grant management practices. We provide a summary below of our findings from our audit work.
The OIG’s Audit Division examined the COPS selection process for the COPS Hiring Recovery Program (CHRP), a grant program using funding provided by the Recovery Act. The $1 billion program provides grant funding to state, local, and tribal law enforcement agencies in order to hire and rehire law enforcement officers. COPS received 7,272 applications requesting CHRP grant funding. In July 2009, COPS announced the selection of 1,046 grantees (approximately 14 percent of the total applicants), funding 4,699 officer positions.
The OIG audit found that COPS developed the CHRP and selected grantees to receive grant funding in a timely and transparent manner, consistent with the requirements established in the Recovery Act. However, we identified inaccuracies in the scoring formulas used by COPS to select grantees. These inaccuracies resulted in the allocation of grants to 45 entities that should not have received grants, while another 34 entities that should have received grants did not. In addition, we identified six grantees that received more officer positions than they should have, and six grantees that received fewer officer positions than they should have. In total, the inaccuracies we identified affected the allocation of approximately $16 million in CHRP funds. Our report identifies the specific jurisdictions that were affected by the inaccuracies in the COPS scoring formulas.
In response to the inaccuracies we identified, COPS has corrected the scoring formulas so that the correct formulas can be used in the future when making grant awards. In addition, COPS stated it modified its FY 2010 hiring grant allocation process to ensure that those entities that were negatively affected due to scoring inaccuracies would receive appropriate grant funding.
The audit also concluded that COPS could improve its coordination with OJP, such as by sharing information on grant management documentation and on the identification and management of high-risk grantees. In addition, the report emphasized that COPS should encourage grant recipients to participate in training so that they are fully aware of how to meet grant requirements and conditions.
In total, the report contained seven recommendations to COPS to help improve its grant management processes, including recommendations to remedy those agencies negatively affected by the scoring inaccuracies, to improve the grantee selection processes, and to improve coordination with OJP relating to the oversight of Department grantees. COPS agreed with our recommendations and is taking steps to implement them.
The OIG’s Audit Division issued an audit report examining the Department’s administration of the Edward Byrne Memorial Grant Program (Byrne Program), which provides grants to states, tribes, and local governments to support a broad range of law enforcement activities. The Byrne Program consists of the Justice Assistance Grant (JAG) Program and the Byrne Competitive Grant Program. Byrne JAG Program funds are awarded non-competitively based on a formula established by law. Byrne Competitive Grant Program funds are awarded using a competitive application process. The Department received $2.2 billion in Recovery Act funds for the Byrne Program in FY 2009, which was more than the total Byrne JAG funds in the preceding 4 fiscal years.
Our audit found that, despite the large workload increase, OJP generally managed the $2 billion in Recovery Act funds for the Byrne JAG Program in accordance with guidelines and established grant management practices. We found that OJP made the formula awards to states, territories, and local governments in a prompt and reasonable manner, and that it acted quickly to develop the solicitations, set reasonable deadlines for submitting applications, timely reviewed applications against solicitation requirements, and promptly made awards.
However, we found some grantees who had received Byrne JAG Recovery Act funds had submitted application packages missing complete program narratives, project abstracts, and budget documents, but still received awards.
In addition, our individual audits of 12 Byrne JAG grantees also found deficiencies in the grantees’ use of grant awards in the areas of internal control environment, grant expenditures, property management, monitoring of subrecipients, reporting, and program performance. The deficiencies we identified included some grantees: (1) not segregating duties over payroll functions; (2) not employing sufficient staff with the training and experience to properly manage the grants; (3) not placing equipment items purchased with grant funds into operation until years after purchase; (4) not maintaining property disposal records; (5) not having sufficient staff to adequately manage and oversee subrecipients of Byrne JAG funds; and (6) not submitting timely and accurate financial, progress, and Recovery Act reports. Specific examples of the deficiencies include:
- The City of Atlanta submitted inaccurate or incomplete annual progress reports for Byrne JAG grants. Two reports submitted by the city stated that a total of 1,013 youths had completed nonviolence training, but the city could only provide one sign-in sheet showing that 19 youths attended training. For two other reports the city could not support grant activity associated with youth sports teams and arrests for various types of crimes.
- The Washington, D.C., Justice Grants Administration could not provide supporting documentation for $324,011 in grant expenditures and made $53,495 in unallowable grant expenditures. In addition, the agency did not always award funds to subrecipients with the highest ranking peer review scores and could not provide documentation justifying or supporting the decisions.
- The Indiana Criminal Justice Institute had only one program monitor assigned to oversee 173 subawards of Byrne Program grants from 2007 to 2009. This individual was no longer employed by the grant recipient at the time of our audit, and no other employee had been trained to assume oversight of the grant recipient’s JAG-funded programs.
- Marion County, South Carolina, submitted several required financial reports late or not at all, with one report submitted more than 19 months after it was due. County grant management officials said they had not had a grant manager and were not aware of the requirements for submitting the reports.
While most of the deficiencies we noted in these audits involved the non-Recovery Act Byrne grants, we believe the results are applicable more broadly to management of the annual Byrne Program.
In the Byrne Competitive Grant Program, we also found that the Department made the discretionary awards in a prompt and reasonable manner, but we noted some processes that could be improved. For instance, some grant applications were allowed to continue through the competitive process even though they did not meet one or more of the solicitation requirements, while other applicants were denied further consideration for the same deficiencies. We recommended that the Department establish procedures to ensure that applications are treated consistently when determining whether the applications meet the solicitation requirements.
We also noted deficiencies in the peer review processes used by the Department’s bureaus and offices for evaluating and scoring grant applications, and for fully documenting the basis for award recommendations.
The OIG report made 15 recommendations to help the Department ensure that the Byrne programs are managed fairly and effectively. The Department agreed with 14 of the 15 recommendations and provided an acceptable alternative action for the remaining recommendation.
The OIG’s Audit Division examined the policies and procedures the OVW used to solicit, assess, and award Recovery Act grants. OVW administers $225 million from Recovery Act funding to award grants to state, local, and tribal governments and to non-government organizations to increase services that address violent crimes against women.
Our audit found that the OVW expeditiously announced grant opportunities and provided applicants sufficient time to apply for grant awards. The OVW used a grant selection process that was generally transparent and objective. In addition, the OVW‘s spending plan complied with Recovery Act and programmatic requirements.
However, the audit identified some weaknesses in the OVW’s award selection process. An important part of the OVW’s discretionary award process involves a peer review where individual program experts independently evaluate and score grant applications. The OVW uses the scores to rank applications by program, and those scores are an important factor, but not the only factor, in deciding which organizations should receive an award. Our audit found that in tabulating individual application scores, OVW staff added peer reviewers’ points incorrectly on many occasions.
A significant number of these miscalculations involved applications submitted under the two OVW tribal grant programs. OVW staff incorrectly calculated the peer review scores of 43 out of 77 applications in those two grant programs. The miscalculations resulted in some applications being incorrectly ranked above other applications that should have received higher scores. Our audit recommended that the OVW implement stronger internal controls to avoid future miscalculations in the award selection process.
The audit further revealed that peer reviewers were not always thoroughly screened for potential conflicts of interest before they were allowed to evaluate and score discretionary grant applications. In many instances, peer reviewers attested that they were free from conflicts of interest before they received the list of applicant names they were assigned to review. As a result, reviewers said they were free from conflict before they could possibly know if a conflict existed. While our audit did not identify specific instances where peer reviewers had a conflict of interest, we recommended that the OVW strengthen its conflict of interest procedures.
In addition, OVW award decision documents did not always detail why some higher-scoring applicants did not receive award recommendations. We recommended that the OVW improve its process for documenting its reasons for award decisions.
In total, our report made five recommendations to the OVW to improve future grant selection processes. The OVW agreed to implement all five recommendations.
The OIG’s Audit Division examined the award process for certain grants made under the Bureau of Justice Assistance (BJA) Recovery and Reinvestment Act Correctional Facilities on Tribal Lands Grant Program. The purpose of these grants is to assist tribes in constructing and renovating correctional facilities that are appropriate for the intended population, supportive of cultural and traditional values, safe and secure, and in compliance with relevant Bureau of Indian Affairs correctional standards. The report concluded that the BJA made category I through IV awards under this program in compliance with established policies and procedures. However, the report noted some concerns with the consistent enforcement of required application materials. The BJA addressed these concerns by placing special conditions on eight awards with incomplete applications.
OIG Audits of Recovery Act Grants
During this reporting period, the OIG audited Recovery Act grants awarded by Department grant-awarding agencies to state and local recipients. Below are examples of our audit findings.
- In an audit of OJP grants awarded to the City of Jackson, Mississippi, including a 2009 Byrne JAG Recovery Act grant, to assist in the prevention of juvenile delinquency and the control and prevention of crime, the OIG found that the City of Jackson generally complied with requirements pertaining to grant drawdowns and budget management and control. However, we found weaknesses in the areas of grant expenditures, matching costs, property management, financial and programmatic reports, grant goals and accomplishments, and monitoring of subrecipients. For example, we found that the City of Jackson charged unallowable and unsupported costs to grant funds and overestimated other grant costs when it prepared its grant applications. The city also provided to its police department $225,540 in laptop computers, global positioning system units, and training equipment that 2 years later remained in a warehouse or had not been installed. Further, some of those property items had become obsolete. The report contained 18 recommendations and over $518,000 in questioned costs. We are concerned that the City of Jackson may not be able to properly manage the over $1.6 million awarded under the Recovery Act. OJP agreed with our findings and agreed to coordinate with the City of Jackson to remedy questioned costs and institute procedures to ensure that grant requirements are properly met.
- The OIG completed an audit this reporting period of three grants totaling over $8.8 million, including a $3.3 million Recovery Act grant, awarded to the Commonwealth of Virginia Department of Criminal Justice Services (DCJS) under the OVW’s Services, Training, Officers, and Prosecution (STOP) grant program. The DCJS distributes STOP funds to localities, state agencies, and nonprofit organizations within the Commonwealth of Virginia to administer programs that address violence against women issues. Our audit found that the DCJS complied in part with STOP program requirements. However, we concluded that the DCJS needs to finalize its risk-assessment policy and ensure that high-risk STOP subgrantees receive adequate oversight. In addition, the DCJS used a budget estimate to allocate direct and indirect costs, and we determined that this method did not properly allocate over $200,000 in costs charged to the 2008 STOP award. The DCJS was also unable to meet specific STOP category allocation requirements that ensure law enforcement agencies and prosecutor offices receive a percentage of subgrantee funds. We made five recommendations for corrective action, questioned approximately $200,000, and identified another approximate $100,000 in funds that should be deobligated. The OVW concurred with each of our recommendations.
- The Nevada Department of Public Safety (DPS) was awarded over $23 million in Byrne JAG grants between FYs 2007 and 2009, including a $13.8 million Recovery Act award. Our audit was limited to $17.86 million due to limited grant activity on the remaining funds. Our audit revealed that the DPS’s Office of Criminal Justice Assistance accurately accounted for and reported program income; transactions reviewed were properly authorized, classified, supported, and charged to the grant; all costs associated with payroll and fringe benefits for the pay periods reviewed were supported and reasonable; and financial status reports were submitted timely and accurately. However, we found weaknesses including a subrecipient that did not comply with regulations regarding the acquisition and disposition of federally-funded property, the lack of a process to independently verify subrecipient program accomplishments, and the lack of written internal controls to ensure that quarterly Recovery Act reports were timely, accurate, and free from omission and errors. The DPS and OJP concurred with our recommendations related to these deficiencies and were taking steps to remedy them.
- The OIG audited Byrne JAG grants totaling over $23 million, including a $21.4 million Recovery Act grant, awarded to the Louisiana Commission on Law Enforcement (LCLE). We reported that the LCLE complied with the special grant conditions we reviewed, properly drew down funds and accounted for and reported program income, and submitted all of the required financial reports. However, we found various program weaknesses, including reimbursements made to subrecipients for unsupported expenditures, incomplete monitoring reports, and lack of verification of quarterly progress reports submitted by subrecipients. OJP agreed with our 10 recommendations and is coordinating with LCLE to improve its grant management.
OJP’s Monitoring and Oversight of Recovery Act and Non-Recovery Act Grants
As part of the OIG’s Recovery Act reviews, we are examining the grant oversight efforts that OJP employs in its management of both Recovery Act and non-Recovery Act grants. Responsibility for grant oversight in OJP is shared between its award-making bureaus and offices, which are responsible for providing programmatic assistance and monitoring; the Office of Audit, Assessment, and Management, which assists with improvements and enhancements of the programmatic oversight; and the Office of the Chief Financial Officer, which conducts financial monitoring and provides financial management assistance to grantees.