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Semiannual Report to Congress April 1-September 30, 1996
EPA Office of Inspector General
Semiannual Report to Congress
April 1-September 30, 1996
Section 2 -- Report Resolution
As required by the Inspector General Act, as amended, this section contains information on reports in the resolution process for the semiannual period. This section also summarizes OIG reviews of the Agency's follow-up actions on selected reports completed in prior periods. In addition, information is presented on the resolution of significant reports
issued by the OIG involving monetary recommendations.
Current Period
As of September 30, 1996, EPA had 218 OIG reports requiring resolution, which was one more than the beginning balance of 217 reports six months ago. The number of past due responses
(over six months from report issue date) dropped 13 percent from 126 to 110 during this six-month reporting period. At the end of March 1996, the number of past due responses was 58 percent of the reports to be resolved compared to 50 percent of the reports in the follow-up system as of the end of this reporting period. The costs questioned on the OIG reports for which management decisions were past due as of September 30, 1996, represented 41 percent of total questioned costs to be resolved. This represents a 42 percent decrease from the March 1996
report.
These reports need to be resolved and the funds recovered more expeditiously. While the OIG recognizes that it takes time to reach a management decision on some reports, swift, appropriate resolution allows the government to run better and saves taxpayers the added cost of financing
Agency operations through borrowing.
As of September 30, 1996, Agency management has made no decision on over 70 percent (61 of 87) non-preaward reports over one to nine years old. Two EPA offices--Office of Acquisition Management and Grants Administration Division--accounted for 55 percent (48 of 87) on which
no management decision had been made.
About 21 percent (23 of 110) of the past due reports were preaward audits. This is a 43 percent improvement over the previous 12-month period. EPA is one of the few agencies that reports on resolution of audits conducted on preaward contract proposals. There may be multiple pre-award audits for any particular EPA contract solicitation. Resolution of these audits occurs when the contracting officer makes the contract award. When lengthy negotiations are required or when there is a series of proposals required from the contractor, it is common for these audits to remain in the "unresolved" pre-award stage for longer than 180 days. It is, therefore, crucial for EPA to take every step possible to ensure that pre-award audits are resolved quickly.
Trends
Analyses of the Agency's unresolved reports from March 31, 1994 (94 -1) through September 30, 1996 (96-2) show that the percentage of reports 180 days past due has remained constant. Currently, these reports represent 50.4 percent of reports needing resolution compared to 49.8 percent three years ago. However, the percentage of questioned costs of these reports has dropped to an all-time low of 41.5 percent as of September 30, 1996. Three years ago, the questioned costs of the past due reports needing resolution was 84 percent. Therefore, it appears that EPA management is actively pursuing resolution of the audits with the highest amount of questioned
costs. (See graph below)
We encourage EPA to resolve all audits timely. Only through diligent, timely followup action can deficiencies noted in audit reports be corrected and more responsible recovery of funds be
made.
Status Report On Perpetual Inventory of Reports in Resolution Process For The
Semiannual Period Ending September 30, 1996 (Dollar Values in Thousands)
( Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this report and our previous semiannual report results from corrections made to data in our audit tracking system.)
| No. | Report Issuance | Report Resolution
Costs Sustained |
|||
| Quest.
Costs |
Recommended Efficiencies | To BeRecovered | AsEfficiencies | ||
| A. For which no management decision has been made by the commencement of the reporting period | 217 | $159,891 | $186,776 | ||
| B. Which were issued during thereporting period | 248 | 180,590 | 17,207 | ||
| C. Which were issued during the reporting period that required no resolution | 126 | 0 | 0 | ||
| Subtotals (A + B - C) | 339 | 340,481 | 203,983 | ||
| D. For which a management decision was made during the reporting period | 121 | 31,930 | 141,561 | 17,694 | 12,320 |
| E. For which no management decision decision has been made by the end of the reporting period | 218 | 308,551 | 62,422 | ||
| Reports for which no management decision was made within six months of issuance | 110 | 128,046 | 45,662 | ||
Status of Management Decisions on IG Reports
This section presents statistical information as required by the Inspector General Act Amendments of 1988 on the status of EPA management decisions on reports issued by the OIG involving monetary recommendations. In order to provide uniformity in reporting between the various agencies, the President's Council on Integrity and Efficiency issued guidance on reporting the costs under required statistical tables of sections 5(a)(8) and (9) of the Act, as amended.
As presented, information contained in Tables 1 and 2 cannot be used to assess results of reviews performed or controlled by this office. Many of the reports counted were performed by other Federal auditors or independent public accountants under the Single Audit Act. EPA OIG staff does not manage or control such assignments. In addition, amounts shown as costs questioned or recommended to be put to better use contain amounts which were at the time of the review unsupported by adequate documentation or records. Since auditees frequently provide additional documentation to support the allowability of such costs subsequent to report issuance, we expect that a high proportion of unsupported costs will not be sustained.
EPA OIG controlled reports resolved during this period resulted in $49.2 million being sustained out of $56.8 million considered ineligible in reports under OIG control. This is an
87 percent sustained rate.
Table 1 -- Inspector General Issued Reports With Questioned Costs(questioned costs include the unsupported costs) (Dollar Value in thousands)
| Number | Questioned Costs* | Unsupported Costs | |
| A. For which no management decision has been made by the commencement of the reporting period** | 88 | $159,891 | $67,322 |
| B. New reports issued during period | 39 | 180,590 | 17,356 |
| Subtotals (A + B) | 127 | 340,481 | 84,678 |
| C. For which a management decision was made during the reporting period | 39 | 31,930 | 14,166 |
| (i)Dollar value of disallowed costs | 30 | 17,694 | 1,910 |
| (ii)Dollar value of costs not disallowed | 22*** | 14,236 | 12,256 |
| D. For which no management decision has been made by the end of the reporting period | 88 | 308,551 | 70,512 |
| Reports for which no management decision was made within six months of issuance | 58 | 128,046 | 53,156 |
** Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this report and our previous semiannual report results from corrections made to data in our audit tracking system.
*** 9 audit reports totaling $1,059 were not agreed to by management.
Audit Followup
Other Actions in Response to OIG Reports
The OIG's reports and cooperative efforts with program officials frequently have positive results that reach beyond the implementation of specific report recommendations. These results are not normally verified by formal OIG followup reviews. For example, during this reporting period the OIG learned that an OIG report, Environmental Data Quality at DOD Superfund Sites in Region 9, issued on September 26, 1995, is being used by the State of California to reshape its laboratory quality system. The State formed a quality action team as a result of major laboratory fraud, and the team's mission is to improve the State's ability to detect and deter laboratory fraud and avoid making decisions based on faulty analysis. The State team is planning on using many of the OIG's recommendations to improve its programs resulted by laboratory analysis. The OIG report was also used by the U.S. Army Corps of Engineers to improve its national guidance for laboratory data quality.
Table 2 -- Inspector General Issued Reports With Recommendations That Funds Be Put To Better Use
| Number | Dollar Value (in thousands) | |
| A. For which no management decision has been made by the commencement of the reporting period* | 28 | $186,776 |
| B. Which were issued during the reporting period | 13 | 17,207 |
| Subtotals (A + B) | 41 | 203,983 |
| C. For which a management decision was made during the reporting period | 14 | 141,562 |
| (i)Dollar value of recommendations that were agreed to by management | 6 | 12,320 |
| - based on proposed management action | n/a | n/a |
| - based on proposed legislative action | n/a | n/a |
| (ii) Dollar value of recommendations that were not agreed to by management | 6** | 127,858 |
| (iii) Dollar value of non-awards or unsuccessful bidders | 5 | 1,384 *** |
| D. For which no management decision has been made by the end of the reporting period | 27 | 62,422 |
| Reports for which no management decision was made within six months of issuance | 15 | 45,662 |
* Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this report and our previous semiannual report results from corrections made to data in our audit tracking system.
** Six reports were included in C(i) and C(ii). Only the related dollars disallowed were included in C(i), whereas the dollars which were not disallowed were included in C(ii).
*** This amount represents the dollar value of recommendations that funds be put to better use.
Resolution of Significant Reports
Report Resolution
Report Issuance Federal Share
FS Questioned/ to be Recovered/
Report Number Recommended Sustained
Report Date Grantee/Contractor Efficiency Efficiency
D9AGL5-01-0180 NOBIS ENGINEERING NH INEL 0 INEL 0
6100067 UNSP 0 UNSP 0
REPORT DATE 11/28/95 UNUR 0 UNUR 0
RCOM 2,388,583 SUST 2,144,912
P2CWL3-02-0128 HUDSON COUNTY UA NJ INEL 0 INEL 0
5100231 UNSP 13,064,288 UNSP 1,723,932
REPORT DATE 3/28/95 UNUR 0 UNUR 0
RCOM 0 SUST 0
P2CWL4-02-0198 WESTCHESTER CO INEL 1,647,757 INEL 1,634,744
6100076 MAMARONECK NY UNSP 0 UNSP 0
REPORT DATE 12/ 6/95 UNUR 0 UNUR 0
RCOM 0 SUST 0
D9AKL5-06-0054 BROWN & ROOT INEL 0 INEL 0
6100071 ENVIRONMENTAL TX UNSP 0 UNSP 0
REPORT DATE 11/29/95 UNUR 0 UNUR 0
RCOM 10,586,670 SUST 5,040,731
D9AGL5-08-0055 CH2MHILL INC CO INEL 0 INEL 0
6100075 UNSP 0 UNSP 0
REPORT DATE 12/ 2/95 UNUR 0 UNUR 0
RCOM 3,874,743 SUST 3,874,743
E2CWM4-09-0092 LOS ANGELES CITY INEL 10,487,352 INEL 9,989,214
6200002 CA UNSP 0 UNSP 0
REPORT DATE 11/ 7/95 UNUR 0 UNUR 0
RCOM 0 SUST 0
NOTE:
INEL = INELIGIBLE COST
UNSP = UNSUPPORTED COST
UNUR = UNNECESSARY/UNREASONABLE COST
RCOM = RECOMMENDED EFFICIENCIES
SUST = RECOMMENDED EFFICIENCIES SUSTAINED