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 5,838 federal, state, and local program managers and participants on Recovery Act fraud awareness, conducted 104 outreach sessions with state and local agencies, and initiated 34 audits and reviews of Recovery Act funds. In addition, the OIG is conducting 11 investigations of allegations pertaining to the Department’s Recovery Act programs. During this semiannual reporting period, the OIG issued six reports on the Recovery Act grant management activities of the Department as well as state and local entities.
From enactment of the Recovery Act in February 2009 through March 25, 2011, the Department has obligated more than 99 percent of its $4 billion in Recovery Act funds. Moreover, as of March 25, 2011, the Department had expended about 63 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 examined the Department’s efforts for monitoring and overseeing Recovery Act and non-Recovery Act grants awarded through OJP. The audit concluded that OJP has made significant improvements in its monitoring and oversight of grants, including grants funded by the Recovery Act. Our audit found that from October 1, 2008, through September 23, 2010, OJP awarded over 13,000 grants totaling more than $7.7 billion, which included over 4,000 Recovery Act grants, totaling about $2.8 billion.
The audit found that OJP’s improvement in monitoring and oversight was primarily due to the establishment of the Office of Audit, Assessment and Management (OAAM) in FY 2005, which conducts and coordinates program assessments of grants awarded by OJP and COPS. The audit notes that initially, OJP made slow progress in staffing OAAM and in ensuring that OAAM’s monitoring efforts were effective. As of January 2008, OAAM had not hired a permanent director and only one of OAAM’s three divisions was close to filling the positions that had been created. The OIG’s assessment was that 2 years after the passage of the act creating OAAM, OJP had not devoted sufficient effort to ensuring that OAAM was adequately staffed to oversee and monitor OJP grants, despite the congressional directive and the importance of OAAM’s mission.
Although OJP did not hire a permanent OAAM director until January 2009, OAAM had filled its allotted positions as of May 2009 with 49 federal and contractor positions. We found that OJP developed a reasonable process for providing monitoring to a high volume of grants, which have allowed them to monitor grants totaling almost 4 times the award amount required to be monitored by law. In FY 2010, OJP completed monitoring grant activity totaling about $3 billion out of about $8.4 billion in open and active grants, or 36 percent, exceeding the 10 percent monitoring level required by the law.
Other improvements included the establishment of a working group to review existing monitoring practices and develop standard monitoring approaches and procedures; the use of grant tools such as the Grants Management System, Grant Monitoring Tool, and the Grant Assessment Tool; updates to the Grant Manager’s Manual; and revisions to site visit documentation and the quality of site visit reports.
During our audit, OJP was in the process of establishing procedures to ensure the quality of its site visits. We reviewed drafts of these procedures and identified concerns, and OJP generally took prompt actions to address those concerns. Despite OJP’s improvements in monitoring and oversight of grants, we found that the OVW and COPS perform certain monitoring and oversight services that are duplicative of the services available through OJP. To eliminate such duplication and to provide uniformity in oversight among Department granting agencies, we believe that the Department should standardize the oversight services provided to the OVW and COPS.
The Department agreed with the 13 recommendations we provided in our report. OJP has completed corrective action on one of the recommendations, and implementation is in process for the others.
The OIG released a report examining the BJA’s award process for training and technical assistance grants under the Recovery Act Correctional Facilities on Tribal Lands Program. The purpose of the review was to determine the BJA’s application evaluation process for awarding approximately $4.7 million under Category V, one of the five program categories providing funding to Indian Tribes. The review also sought to determine whether the grant was awarded in an open and competitive manner. This report identified appearance of conflict of interest concerns about the BJA’s peer review process by identifying a prior relationship between the successful applicant and an internal peer reviewer. The report also identifies concerns related to the openness and competitiveness of the BJA’s award process.
Specifically, the BJA used a peer review panel comprised of one external and two internal reviewers to evaluate two Category V applications and awarded $4,737,942 through Category V Recovery Act funding to Justice Solutions Group (JSG). The OIG found that one internal peer reviewer on the application evaluation panel had a prior professional relationship (while employed by the Department) with JSG prior to serving on the review panel. Although BJA asserted in its response to the report that this prior relationship did not prevent an impartial and objective review of the application, the OIG believes that the use of this particular peer reviewer may have undermined the peer review process as a means for an objective and independent review.
The OIG also found that JSG and its affiliated companies have been the exclusive recipients of grants and cooperative agreements to provide training and technical assistance for correctional facilities on tribal lands since 2001. The Recovery Act Correctional Facilities on Tribal Lands Program solicitation states that priority consideration would be given to Category V applicants that demonstrate specific competencies. It appeared to the OIG that BJA’s priority consideration, as indicated in the Recovery Act Correctional Facilities on Tribal Lands solicitation, was written specifically for JSG and it would be very difficult, if not impossible, for any other applicant of this program to meet the criteria without the support the BJA provided JSG.
As a result, the OIG expressed concern that that the BJA may not have complied with the requirements in the Recovery Act to award grants in a fair manner. The report also states that the BJA should consider strengthening its internal controls to reduce the risk of the appearance of conflicts of interest or favoritism towards a particular grantee.
This review is one of a series of reports issued during the OIG’s ongoing review of the Department’s management and oversight of Recovery Act funds allocated to the BJA’s Recovery Act Correctional Facilities on Tribal Lands Program. The awards made under categories I through IV of the Recovery Act Correctional Facilities on Tribal Lands Program were the subject of a previous OIG report.
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.
- The OIG conducted an audit of a $928,874 Recovery Act Edward Byrne Memorial Justice Assistance Grant Program (JAG) grant awarded by the BJA to the City of Riverside, California (Riverside). The goals of the grant were to replace aging or damaged vehicles in order to reduce operating and maintenance costs while providing a highly visible, more reliable police presence and to retain full-time positions within the Riverside Police Department. Riverside used grant funds for 3 full-time Riverside Police Department employees, 15 police cars, 4 police motorcycles, and emergency equipment for the vehicles. We found that Riverside’s two grant drawdowns matched its accounting system records and generally followed established administrative protocol for drawdowns. However, we also noted some deficiencies. Specifically, fringe benefit costs were inadequately supported and were calculated from a ratio that included unallowable expenditures, which resulted in $74,904 questioned costs. We also noted weaknesses in the accuracy of two financial status reports. Despite those weaknesses, we found that Riverside adequately maintained grant-related financial records and data and was properly managing the use of grant funds.
- The OIG completed an audit of five OVW grants, including one funded by the Recovery Act, totaling $1,932,398, awarded to the Montana Coalition Against Domestic and Sexual Violence (MCADSV). MCADSV represents over 50 programs across Montana that provide direct services to victims and survivors of domestic and sexual violence. We identified several weaknesses with the MCADSV’s grant management practices. Specifically, the grantee made drawdowns in excess of cumulative expenditures; charged unallowable payroll and fringe benefit costs to the grant; transferred funds between budget categories in excess of the allowable 10 percent; did not record or report program income; did not consistently submit accurate financial status reports; did not consistently submit timely or accurate progress reports; and did not form a plan for project sustainability beyond federal funding as required by grant conditions. Our report contained eight recommendations and questioned $59,771. OVW is working with the MCADSV on their implementation of these recommendations.