Summary of Hurricane Sandy Audit and Inspection Reports and Management Advisories

April 23, 2018

2017-FIN-057

Inspection / Evaluation

For this inspection, we summarized the common themes and problems in award acquisition and management across 19 products—9 contract audits, 3 grant audits, 1 inspection, and 6 management advisories—that we issued to bureau officials over 4 years, ending July 31, 2017, related to awards made for Hurricane Sandy recovery. Across the 12 audit reports, we audited $70.9 million in claimed costs and identified $14 million in questioned costs (19.75 percent of the total). The management and process weaknesses we identified during those cost audits were included in the inspection report and management advisories that we also issued. Overall we found deficient pre-award practices and deficient post-award oversight across the individual bureau contracting offices, as well as weaknesses in departmental oversight. The deficient pre-award practices that we identified are— Inadequate background research and risk assessment; Inadequate competition and deficient contractor selection; and Deficient contractor or grantee accounting system. Deficient post-award oversight by the bureaus resulted in problems related to: Real property/equipment purchase and rental; Records for time, labor, and travel; and Required reports. We also determined that the DOI did not have its own comprehensive emergency acquisition policy and guidance, during or since Hurricane Sandy recovery efforts. Further, the DOI did not use emergency acquisition guidance available from the Office of Management and Budget or disseminate it to the bureaus (as directed in the guidance). As a result, when disaster struck, the bureaus had no standing emergency acquisition response teams, no specific disaster response training, and no standardized forms or processes for awarding or maintaining contracts and grants to support emergency response. In addition to summarizing common findings, this report presents a list of actions planned by the bureaus to improve their award processes and agreement oversight. Further, we made suggestions to help the DOI improve pre-award practices, post-award oversight, and departmental oversight for awards related to disaster recovery. Such improvements are needed to avoid contracting inefficiencies during future emergency response that could needlessly subject Federal funds to fraud, waste, and abuse.

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$14008879

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