We audited National Heritage Area Program funds awarded by the National Park Service (NPS) to the State of Mississippi's Department of Marine Resources (DMR) after a prior audit (“Management of the Coastal Impact Assistance Program, State of Mississippi,” Report No. ER-IN-MOA-0013-2011) noted possible irregularities with Program-funded subawards that DMR provided to various nonprofit organizations to support the activities of the Mississippi Gulf Coast National Heritage Area (MGCNHA). As a result, we audited funds awarded to DMR under cooperative agreement number H5041110008 to determine whether DMR complied with Federal laws, regulations, and the terms of the cooperative agreement regarding its management of funds provided to subrecipients.
As a result of several mismanaged subawards, we questioned $126,840—the entire amount awarded under the cooperative agreement. We determined that poor oversight by NPS provided an opportunity for former DMR and MGCNHA managers to dispense Program funds to hand-picked subrecipients. We found that NPS did not have policies and procedures focusing on oversight, enforce single audit requirements, or publicly report Program awards and subawards.
NPS quickly addressed and resolved the questioned costs associated with our audit and withheld all fiscal years 2013 and 2014 funding from DMR, pending MGCNHA's implementation of adequate bylaws and internal controls. We recommended that NPS develop and enforce control policies related to purchases of real property and to detect conflicts of interest, require DMR to complete single audits in accordance with the cooperative agreement, and enforce public reporting of Federal assistance awards. NPS concurred or partially concurred with all three of our recommendations.