We completed an audit of the interim costs claimed by Coastal Environmental Group (CEG) on two contracts between September 2013 and July 2014. These contracts were awarded to CEG in September 2013 from the U.S. Fish and Wildlife Service's (FWS) Super Storm Sandy funds to support debris removal and disposal efforts at two wildlife refuges. In our audit, we identified $564,750 in unsupported costs for the Long Island National Wildlife Refuge in New York (Contract No. INF13PC00214) and $1,444,286 in unsupported costs for the Edwin B. Forsythe National Wildlife Refuge in New Jersey (Contract No. INF13PC00195), for a total of $2,009,036 in questioned costs. FWS has responded separately to our cost audit report. This management advisory highlights management issues identified during the cost audit.
During our audit, we found that FWS should have used a more effective process to select the contractor and to monitor performance throughout the contract. As a result, FWS did not prevent or detect numerous problems, including severe financial capability problems, poor internal controls, nonpayment of vendors and subcontractors, labor violations, past performance problems, issues with related parties, and deficient Federal contract experience. In this management advisory, we detail our concerns surrounding FWS' contractor selection process, the inadequate documentation FWS relied on when paying the contractor, and FWS' insufficient contract monitoring. We make two recommendations to FWS to improve its contracting practices.