Office of Inspector General Audit Tips for FEMA Public Assistance - PowerPoint PPT Presentation

Office of Inspector General Audit Tips for FEMA Public Assistance Grant Recipients and Subrecipients National Hurricane Conference John E. McCoy II, Assistant Inspector General for Audit

Office of Inspector General Overview  DHS OIG Mission Statement  Office of Audits (OA) Mission  How We Select Grant Audits  Types of Grant Audits  Most Common Audit Findings  Audit Tips for Managing Disaster-Related Project Costs  Key Points to Remember www.oig.dhs.gov or follow us on Twitter @DHSOIG 2

OIG Mission Statement The OIG conducts and supervises independent audits, investigations, and inspections of the programs and operations of DHS, and recommends ways for DHS to carry out its responsibilities in the most effective, efficient, and economical manner possible. We also seek to deter, identify and address fraud, abuse, mismanagement, and waste of taxpayer funds invested in Homeland Security. www.oig.dhs.gov or follow us on Twitter @DHSOIG 3

Office of Audits Mission – The Inspector General examines, evaluates and, where necessary, critiques operations and activities, recommending ways for the Department of Homeland Security to carry out its responsibilities in the most effective, efficient, and economical manner possible. As such, through independent audits and program analyses, the Office of Audits:  Protects the public interest by bringing about positive change in the performance, accountability, and integrity of its programs and operations.  Seeks out best practices that will improve the effectiveness and efficiency of component agencies; helps program managers achieve the desired results and operate in accordance with laws and regulations www.oig.dhs.gov or follow us on Twitter @DHSOIG 4

Office of Audits HOW DO WE SELECT AUDITS?  The OIG considers several factors in determining which activities to audit. These factors include:  the risk of fraud, waste, and abuse of Federal funds;  statutory and regulatory requirements;  current or potential dollar magnitude;  requests from congressional, FEMA, State and local officials; and  reports/allegations of impropriety or problems in implementing FEMA programs. www.oig.dhs.gov or follow us on Twitter @DHSOIG 5

Office of Inspector General  Types of Grant Audits  Public and Individual Assistance Grants  Mitigation Grants  Proactive Approach  Emergency Management Oversight Teams (EMOT)  Management Alerts  Capacity Audits  Early Warning Audits  Traditional Audits  Capping Report www.oig.dhs.gov or follow us on Twitter @DHSOIG 6

Office of Inspector General  Life Cycle Audit Approach  Capacity Audits  Occur during the recovery phase  Shortly after subgrantees selections  Focus on subgrantee capacity to o Account for FEMA funds o Procure contracts properly  Comply with insurance requirements  Capacity Audit Recommendations  Provide subgrantee greater oversight  Seldom question costs www.oig.dhs.gov or follow us on Twitter @DHSOIG 7

Office of Inspector General  Life Cycle Audit Approach (continued)  Early Warning Audits  During the recovery phase  Focus on subgrantee o Initial compliance with CFRs o Early detection of non compliance should enable subgrantees to get into compliance  Early Warning Audits Recommendations  Address deficiencies while they can be corrected  Provide subgrantee greater oversight www.oig.dhs.gov or follow us on Twitter @DHSOIG 8

Office of Inspector General  Life Cycle Audit Approach (continued)  Traditional Disaster Grant Audits  Occur during the close out/completion phase  Gauge the effectiveness of grantee and subgrantee compliance  Traditional Audits Findings  Funds put to better use  Questioned costs and/or eligibility  Duplicate costs  Fraud www.oig.dhs.gov or follow us on Twitter @DHSOIG 9

Office of Inspector General Management Alerts • Observations and Concerns with FEMA’s Housing Assistance Program for Hurricane Harvey Efforts in Texas (OIG-17-121-MA) • FEMA Faces Significant Challenges Ensuring Recipients Properly Manage Disaster Funds (OIG-18- 33) • Lessons Learned from Prior DHS-OIG Reports Related to FEMA’s Response to Texas Disasters and Texas’ Management of FEMA Grant Funds (OIG-18-21) www.oig.dhs.gov or follow us on Twitter @DHSOIG 10

Office of Inspector General Management Alerts (OIG 18-29) Lessons Learned from Prior Reports on Disaster-related Procurement and Contracting Traditional Audits (OIG-18-39) Audit of FEMA Public Assistance Grant Funds Awarded to Volunteer Energy www.oig.dhs.gov or follow us on Twitter @DHSOIG 11

Most Common Audit Findings  Grants Management Issues  Improper Contracting  Unsupported Costs  Poor Project Accounting www.oig.dhs.gov or follow us on Twitter @DHSOIG 12

Most Common Audit Findings  Ineligible Costs  Direct Administrative Costs  Obtain and Maintain Insurance www.oig.dhs.gov or follow us on Twitter @DHSOIG 13

Audit Tips for Managing Disaster-Related Project Costs (OIG-17-120-D) This report provides an overview of—  OIG responsibilities;  Federal statutes, regulations, and guidelines applicable to disaster grants;  Frequent audit findings; and  Key points to remember when administering FEMA grants. www.oig.dhs.gov or follow us on Twitter @DHSOIG 14

Audit Tips for Managing Disaster-Related Project Costs Using this report should assist disaster assistance applicants:  document and account for disaster-related costs;  minimize the loss of FEMA disaster assistance funds;  maximize financial recovery; and  prevent fraud, waste, and abuse of disaster funds. www.oig.dhs.gov or follow us on Twitter @DHSOIG 15

Audit Tips for Managing Disaster-Related Project Costs Applicable Federal Statutes and Regulations Include the Following:  Robert T. Stafford Disaster Relief and Emergency Assistance Act  44 Code of Federal Regulations (CFR)  2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards www.oig.dhs.gov or follow us on Twitter @DHSOIG 16

Audit Tips for Managing Disaster-Related Project Costs Applicable FEMA Guidelines Include:  Public Assistance Program and Policy Guide (FEMA First Issued in January 2016 and Recently Updated)  FEMA 329, Debris Estimating Field Guide (September 2010),  Hazard Mitigation Assistance (HMA) Unified Guidance, and  Public Assistance Policy on Stafford Act Section 705 (FP-205- 081-2, March 31, 2016) www.oig.dhs.gov or follow us on Twitter @DHSOIG 17

Key Points to Remember 1. Designate a person to coordinate the accumulation of records. 2. Establish a separate and distinct account for recording revenue and expenditures, and a separate identifier for each distinct FEMA project. 3. Ensure that the final claim for each project is supported by amounts recorded in the accounting system. 4. Ensure that each expenditure is recorded in the accounting books and is referenced to supporting source documentation (checks, invoices, etc.) that can be readily retrieve d www.oig.dhs.gov or follow us on Twitter @DHSOIG 18

Key Points to Remember 5. Research insurance coverage and seek reimbursement for the maximum amount. Credit the appropriate FEMA project with that amount. 6. Check with your Federal Grant Program Coordinator to ensure the final project claim does not include costs that another Federal agency funded or should have funded. 7. Ensure that materials taken from existing inventories for use under FEMA projects are documented by inventory withdrawal and usage records. www.oig.dhs.gov or follow us on Twitter @DHSOIG 19

Key Points to Remember 8. Ensure that expenditures claimed under the FEMA project are reasonable and necessary, are authorized under the scope of work, and directly benefit the project. 9. Ensure that costs claimed as Direct Administrative Costs do not include indirect costs allocated across multiple projects. www.oig.dhs.gov or follow us on Twitter @DHSOIG 20

Questions www.oig.dhs.gov or follow us on Twitter @DHSOIG 21