Treasury OIG: Semiannual Report to Congress, October 1, 2021 – March 31, 2022 (OIG-CA-22-014)
Summary
The Department of the Treasury Office of Inspector General's Semiannual Report to Congress OIG-CA-22-014 covers October 1, 2021 through March 31, 2022. It states that the Office of Audit issued 44 products and identified $567,448 in monetary benefits, and that work by the Office of Investigations resulted in 10 indictments and 10 convictions. The highlights report a letter to the Chairman of the Apache Tribe of Oklahoma identifying $500,000 in questioned costs over the tribe's use of Coronavirus Relief Fund proceeds to secure a loan. They also describe an individual who negotiated a stolen and altered Treasury check and submitted fraudulent Paycheck Protection Program applications to obtain over $600,000, and who was sentenced to 30 months in prison.
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“Treasury OIG: Semiannual Report to Congress, October 1, 2021 – March 31, 2022 (OIG-CA-22-014).”
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Semiannual Report to Congress
October 1, 2021 – March 31, 2022
OIG-CA-22-014
Office of Inspector General
Department of the Treasury
Highlights
During this semiannual reporting period, the Office of Audit issued 44 products. The office also
identified $567,448 in monetary benefits. Work by the Office of Investigations resulted in 10
indictments and 10 convictions. Some of our more significant results for the period are described
below:
• Our Office of Audit issued a letter to the Chairman of the Apache Tribe of Oklahoma
concerning the tribe’s use of Coronavirus Relief Fund (CRF) proceeds to secure a loan. We
determined that the Apache Tribe’s explanation for using the CRF proceeds for the loan did
not comply with the Coronavirus Aid, Relief, and Economic Security Act and we identified
$500,000 in questioned costs.
• In an engagement overseen by our office, RMA Associates (RMA), a certified independent
public accounting firm, found that certain bureaus did not take cash discounts resulting in
lost cost savings and that the Financial Crimes Enforcement Network, the United States Mint
(Mint), the Bureau of Engraving and Printing, and the Office of the Comptroller of the
Currency lacked comprehensive policies and procedures for taking cash discounts when
processing invoice payments with eligible discounts. RMA identified $67,448 in funds that
could be put to better use.
• Our Office of Audit performed an audit of the Department of Homeland Security (DHS) U.S.
Customs and Border Protection’s (CBP) Merchandise Transported In-Bond (In--Bond) Program
to meet our biennial requirement to report on the effectiveness of measures taken by CBP to
protect revenue in accordance with Section 112 of the Trade Facilitation and Trade
Enforcement Act of 2015. Our audit found CBP’s policies and procedures to be inadequate
with respect to the monitoring and tracking of merchandise transported in-bond and
collecting respective duties, taxes, and fees, and we issued 20 recommendations related to
our concerns.
• Our joint investigation with the General Services Administration Office of Inspector General
(OIG), Defense Criminal Investigative Service, Army Criminal Investigation Division, and the
Department of Homeland Security OIG revealed that an individual violated the Trade
Agreements and Buy American Acts. The U.S. Attorney’s Office (USAO) for the Northern
District of New York prosecuted the individual, who was sentenced to 3 months in prison,
24 months of probation, and a $100 special assessment for wire fraud. Additionally, the
subject executed a $702,000 civil settlement agreement to resolve his civil liability for
submission of false claims.
• Our investigation revealed that an individual negotiated a stolen and altered Treasury check
and submitted fraudulent Paycheck Protection Program applications to obtain over $600,000
in program proceeds. The USAO for the District of New Jersey prosecuted the individual,
who was sentenced to 30 months in prison, 36 months of probation, $137,000 in
restitution, $484,000 in forfeitures, and a $200 special assessment.
• Our office recovered 185 stolen coins from a Mint employee, 3 of which had been handed
out as souvenirs. Our report to the Mint resulted in a 14 -day suspension of the employee.
Treasury Office of Inspector General Semiannual Report—March 2022 i
Message from the Deputy Inspector General
During this reporting period, the Department of the Treasury (Treasury or the
Department) Office of Inspector General (OIG) has continued its oversight of programs
established to provide economic relief in response to the Coronavirus Disease 2019
(COVID-19) pandemic. In collaboration with the Pandemic Response Accountability
Committee (PRAC), OIG is working to apply advanced data analytics techniques in its
oversight of the Coronavirus Relief Fund (CRF), a $150 billion program to help state,
local, and Tribal governments respond to the pandemic.
Partnering with the PRAC, OIG developed a risk scoring model to prioritize oversight of
the entities receiving CRF dollars at the prime and sub-recipient level. This risk-based
approach employs data reported by CRF entities and leverages additional, external data
sources to develop a library of 20 plus risk scenarios and summary risk scores. The
risk information for 800 plus prime recipients and 70,000 plus sub-recipients is
navigated using a visualization dashboard and is used to help OIG know where to
focus oversight resources.
With the assistance of the PRAC, OIG is also applying Robotic Process Automation
(RPA) techniques to assist in monitoring the CRF program. Without RPA, OIG auditors
would spend 1500-1600 hours each quarter conducting data and checklist validations,
primarily using manual processes and sampling. Utilizing RPA, OIG has reduced those
hours by one-third. Also with RPA, OIG will fully or partially automate sub-processes
used to monitor and ensure CRF recipients comply with reporting and record-retention
requirements.
In addition to its broad pandemic oversight duties, the OIG continues its quality
oversight of the Treasury’s operations and programs to further assist the Department
in performing its mission. And we continue to perform all this work in a virtual
environment, made possible by the hard work, flexibility, and professionalism of the
OIG staff. We will continue to execute our legislatively required audits and reviews, as
well as other risk-based reviews we determine to be valuable in assisting Treasury.
Richard K. Delmar
Deputy Inspector General
Treasury Office of Inspector General Semiannual Report—March 2022 ii
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Contents
Highlights .......................................................................................... i
Message from the Deputy Inspector General......................................... ii
Treasury Office of Inspector General Overview ..................................... 1
Management and Performance Challenges ............................................ 5
Office of Audit – Significant Audits and Other Products ......................... 7
Financial Management ..............................................................................................7
CARES Act Oversight ............................................................................................. 11
CARES Act Compliance Monitoring .......................................................................... 12
Cyber/Information Technology ................................................................................. 12
DATA Act ............................................................................................................. 14
Consolidated Appropriations Act, 2021 .................................................................... 16
Domestic Assistance Program .................................................................................. 18
Procurement .......................................................................................................... 19
Resource Management ............................................................................................ 20
RESTORE Act ........................................................................................................ 21
Office of Investigations – Significant Investigations ............................. 23
CARES Act Investigations ....................................................................................... 23
Other Significant Investigations................................................................................ 23
Treasury OIG Accomplishments and Activities .................................... 27
Statistical Summary......................................................................... 29
Summary of Treasury OIG Activities ......................................................................... 29
Metrics Used for Office of Investigations Activities ....................................................29
Reports with Unimplemented Recommendations ........................................................30
Closed Investigations of Senior Government Employees Not Publicly Disclosed .............45
Summary of Instances of Whistleblower Retaliation ...................................................45
Summary of Attempts to Interfere With Treasury OIG Independence, Including Instances
Where Information or Assistance Request was Refused ..............................................46
Listing of Audit Products Issued ............................................................................... 47
Audit Reports Issued With Questioned Costs ............................................................. 51
Audit Reports Issued With Recommendations that Funds Be Put to Better Use ..............52
Treasury Office of Inspector General Semiannual Report—March 2022 iv
Contents
Reports for Which No Management Comment was Returned Within 60 Days ................53
Reports Issued Over 6 Months for Which No Management Decision Has Been Made......53
Significant Revised Management Decisions ............................................................... 53
Significant Disagreed Management Decisions ............................................................ 53
Peer Reviews ......................................................................................................... 54
Other Reporting Requirements and Requests ...................................... 55
References to the Inspector General Act ............................................ 59
Abbreviations.................................................................................. 61
Treasury Office of Inspector General Semiannual Report—March 2022 v
Treasury Office of Inspector General Overview
The Department of the Treasury’s (Treasury or the Department) Office of Inspector
General (OIG) was established pursuant to the 1988 amendments to the Inspector
General Act of 1978. Treasury OIG is headed by an Inspector General appointed by
the President with the advice and consent of the Senate.
Treasury OIG performs independent, objective reviews of Treasury programs and
operations, except for those of the Internal Revenue Service (IRS), the Troubled Asset
Relief Program (TARP), and certain pandemic-related loans, loan guarantees, and other
investments, and keeps the Secretary of the Treasury and Congress fully informed of
problems, deficiencies, and the need for corrective actions. The Treasury Inspector
General for Tax Administration and the Government Accountability Office (GAO)
perform oversight related to the IRS. A Special Inspector General and GAO perform
oversight related to TARP. The Special Inspector General for Pandemic Recovery and
GAO perform oversight of loans, loan guarantees, and other investments under the
Coronavirus Economic Stabilization Act of 2020.
Treasury OIG also performs independent oversight of programs and operations funded
by the Gulf Coast Restoration Trust Fund established within Treasury by the Resources
and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the
Gulf Coast States Act of 2012 (RESTORE Act). In addition to performing oversight of
Treasury-related activities, Treasury OIG performs oversight of programs and
operations administered by the Gulf Coast Ecosystem Restoration Council (Council),
established as an independent Federal entity, and the Gulf Coast Ecosystem
Restoration Science, Observation, Monitoring, and Technology Program (Science
Program) administered by the National Oceanic and Atmospheric Administration
(NOAA). With regard to the Council and the Science Program, Treasury OIG keeps the
appointed Chairperson of the Council, the NOAA Science Program Administrator, and
Congress fully informed of problems, deficiencies, and the need for corrective actions.
Treasury OIG has four components: (1) Office of Audit; (2) Office of Investigations;
(3) Office of Counsel; and (4) Office of Management. Treasury OIG is headquartered in
Washington, DC. Treasury OIG also has an audit office in Boston, Massachusetts.
The Office of Audit, under the leadership of the Assistant Inspector General for Audit,
performs and supervises financial and performance audits, attestation engagements,
and evaluations. The Assistant Inspector General for Audit also serves as the Special
Deputy Inspector General for Small Business Lending Fund (SBLF) Program Oversight.
Treasury Office of Inspector General Semiannual Report—March 2022 1
Treasury Office of Inspector General Overview
Under the Assistant Inspector General for Audit, there are four deputies. The first
deputy is primarily responsible for financial sector audits to include audits of banking
supervision, manufacturing of currency and coins, resource management,
procurement, alcohol and tobacco excise tax revenue collection activities, SBLF
programs, and the State Small Business Credit Initiative (SSBCI) authorized by the
American Rescue Plan Act of 2021 (ARP). The second deputy is primarily responsible
for financial management and transparency audits to include financial audits of
Treasury and the Council performed by Treasury OIG staff and contractors; audits of
Government-wide collection, payment, and debt programs and operations; audits of
anti-money laundering/terrorist financing, foreign sanctions, intelligence programs and
operations, and international programs; and audits of Emergency Rental Assistance
(ERA) and Homeowners Assistance Fund (HAF) programs authorized by the
Consolidated Appropriations Act, 2021 (CAA, 2021) and ARP. The third deputy is
primarily responsible for cybersecurity and financial assistance audits to include audits
of Treasury and the Council information systems performed by Treasury OIG staff and
contractors; RESTORE Act programs and operations; the Emergency Capital
Investment Program (ECIP) and the Community Development Financial Institutions
(CDFI) Rapid Response Program (RRP) authorized by the CAA, 2021; and the State
and Local Fiscal Recovery Funds authorized by ARP. The fourth deputy is primarily
responsible for the Coronavirus Relief Fund (CRF) and the Air Carrier Worker Support
programs authorized by the Coronavirus Aid, Recovery, and Economic Security Act
(CARES Act).
The Office of Investigations, under the leadership of the Assistant Inspector General
for Investigations, performs investigations and conducts initiatives to detect and
prevent fraud, waste, and abuse in programs and operations across Treasury OIG’s
jurisdictional boundaries, and investigates threats against Treasury personnel and
assets in designated circumstances as authorized by the Inspector General Act. The
Office of Investigations also manages the Treasury OIG Hotline to facilitate reporting
of allegations involving these programs and operations.
The Office of Counsel, under the leadership of the Counsel to the Inspector General,
provides legal advice to the Inspector General and all Treasury OIG components. The
office represents Treasury OIG in administrative legal proceedings and provides a
variety of legal services, including (1) processing Freedom of Information Act and
Giglio 1 requests; (2) conducting ethics training; (3) ensuring compliance with financial
disclosure requirements; (4) reviewing proposed legislation and regulations;
1
Giglio information refers to material that may call into question the character or testimony of a
prosecution witness in a criminal trial.
Treasury Office of Inspector General Semiannual Report—March 2022 2
Treasury Office of Inspector General Overview
(5) reviewing administrative subpoena requests; and (6) preparing for the Inspector
General’s signature, cease and desist letters and monetary assessments against
persons and entities misusing the Treasury seal and name. The Office of Counsel also
responds to media and Congressional inquiries and serves as the Whistleblower
Protection Coordinator for Treasury.
The Office of Management, under the leadership of the Assistant Inspector General for
Management, provides administrative services to maintain the Treasury OIG
administrative infrastructure, including facilities, human resources, information
technology, procurement, records management, and security.
Treasury OIG’s fiscal year 2022 appropriation was $42.3 million, which includes up to
$2.8 million of 2-year funding for the RESTORE Act programs. Treasury OIG’s
oversight of SSBCI and SBLF programs is funded on a reimbursable basis. In addition
to the annual fiscal year appropriation, Treasury OIG carried over additional multi-year
and no-year funding from the previous fiscal year for oversight of pandemic relief
programs, which included $25.5 million for CRF, $6.5 million for ERA, and
$2.6 million for HAF programs. As of March 31, 2022, Treasury OIG had 229 full-time
staff.
Treasury Office of Inspector General Semiannual Report—March 2022 3
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Management and Performance Challenges
The Reports Consolidation Act of 2000 requires that the Department of the Treasury
(Treasury or the Department) Inspector General annually provide information on the
most serious management and performance challenges facing Treasury and the Gulf
Coast Ecosystem Restoration Council (Council). The following is a synopsis of our
annual assessments which are available, in their entirety, on the Treasury Office of
Inspector General website.
Treasury
In an October 14, 2021, memorandum to Secretary of the Treasury,
Janet Yellen, Acting Inspector General Richard Delmar reported the following six
challenges facing the Department, of which one was new.
• Coronavirus Disease 2019 (COVID-19) Pandemic Relief
• Transition of New Administration (new)
• Cyber Threats
• Anti-Money Laundering/Terrorist Financing and Bank Secrecy Act
Enforcement
• Efforts to Promote Spending Transparency and To Prevent and Detect
Improper Payments
• Information Technology Acquisition and Project Management
Gulf Coast Ecosystem Restoration Council
In an October 8, 2021, letter to the Honorable Michael Regan, Administrator of
the U.S. Environmental Protection Agency, as Chairperson of the Council,
Acting Inspector General Richard Delmar reported three challenges, all of which
are repeat challenges.
• Loss of Key Leadership Over Administration of Gulf Coast Restoration
Activities
• Federal Statutory and Regulatory Compliance
• Grant and Interagency Agreement Compliance Monitoring
Treasury Office of Inspector General Semiannual Report—March 2022 5
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Office of Audit – Significant Audits and Other Products
Financial Management
Treasury’s Consolidated Financial Statements
KPMG LLP (KPMG), a certified independent public accounting firm working under a
contract with and supervised by our office, issued an unmodified opinion on the
Department of the Treasury’s (Treasury or the Department) fiscal years 2021 and
2020 consolidated financial statements. KPMG reported (1) a significant deficiency in
internal control over cash management information systems and a significant
deficiency in internal control over Federal debt information systems at the Bureau of
the Fiscal Service (Fiscal Service), collectively representing a significant deficiency for
Treasury as a whole, and (2) a significant deficiency in internal control over unpaid tax
assessments and a significant deficiency in internal control over financial reporting
systems at the Internal Revenue Service (IRS), collectively representing a significant
deficiency for Treasury as a whole. KPMG also reported that Treasury’s financial
management systems did not substantially comply with certain requirements of the
Federal Financial Management Improvement Act of 1996 (FFMIA) related to Federal
financial management systems requirements. KPMG found no other instances of
reportable noncompliance with laws, regulations, contracts, and grant agreements
tested. (OIG-22-012)
In connection with its audit of Treasury’s consolidated financial statements, KPMG
issued a management report, which provided the specific findings and
recommendations pertaining to the significant deficiency in internal control over cash
management and the related noncompliance with FFMIA’s Federal financial
management systems requirements at Fiscal Service that were summarized in the
auditors' report. (OIG-22-026) Additionally, KPMG issued a management letter
recommending improvements to strengthen information technology and financial
reporting controls with respect to (1) timely removal of terminated users from the
Financial Analysis and Reporting System (FARS), (2) vulnerability program
management implementation, (3) Departmental Offices (DO) information technology
privileged user access review, (4) FARS audit log review, (5) timely completion of the
Core trial balance to Treasury Information Executive Repository (TIER) reconciliation by
Fiscal Service and monitoring by DO, (6) review over the TIER Fund Symbol Reference
Report, and (7) review over the Federal Employees’ Compensation Act liability
allocation. (OIG-22-014)
Treasury Office of Inspector General Semiannual Report—March 2022 7
Office of Audit – Significant Audits and Other Products
Other Treasury Financial Audits
The Chief Financial Officers Act of 1990, as amended by the Government
Management Reform Act of 1994, requires annual financial statement audits of
Treasury and any component entities designated by the Office of Management and
Budget (OMB). In this regard, OMB designated IRS for annual financial statement
audits. The financial statements of certain other Treasury component entities are
audited either pursuant to other requirements, their materiality to Treasury’s
consolidated financial statements, or as a management initiative. The table below
shows the audit results for fiscal years 2021 and 2020.
T r e a s u r y - a u d i t e d f i n an c i a l s t a t e m e nt s a n d r e l a t ed a u d it s
Fiscal year 2021 audit results Fiscal year 2020 audit results
Material Material
weak- S i g n i fi c a n t weak- S i g n i fi c a n t
E n t it y Opinion nesses deficiencies Opinion nesses deficiencies
Government Management Reform Act/Chief Financial Officers Act requirements
Department of the Treasury U 0 2 U 0 2
Internal Revenue Service (A) U 0 2 U 0 2
Other required audits
Office of Financial Stability
(TARP) (A) U 0 0 U 0 0
Bureau of Engraving and
Printing U 0 0 U 0 1
Community Development
Financial Institutions Fund U 0 0 U 0 0
Office of D.C. Pensions U 0 1 U 0 1
Federal Financing Bank U 0 0 U 0 0
Treasury Forfeiture Fund U 0 0 U 0 0
U.S. Mint
Financial Statements U 0 0 U 0 0
Custodial Gold and Silver
Reserves U 0 0 U 0 0
Other audited accounts/financial statements that are material to Treasury’s financial statements
Bureau of the Fiscal Service
Schedule of Federal Debt
(A) U 0 1 U 0 1
Exchange Stabilization Fund U 0 0 U 0 0
Management-initiated audits
Office of the Comptroller of
the Currency U 0 0 U 0 0
Alcohol and Tobacco Tax and
Trade Bureau U 0 0 U 0 0
U.S. Gold Reserves Held by
Federal Reserve Banks U 0 0 U 0 0
(U) - Unmodified opinion and (A) - Audited by the Government Accountability Office.
Treasury Office of Inspector General Semiannual Report—March 2022 8
Office of Audit – Significant Audits and Other Products
In connection with the fiscal year 2021 financial statement audits, the auditors issued
management letters on certain matters involving deficiencies in internal control at the
United States Mint (Mint) (OIG-22-017), the Bureau of Engraving and Printing (BEP)
(OIG-22-022), and the Alcohol and Tobacco Tax and Trade Bureau (OIG-22-025).
Gulf Coast Ecosystem Restoration Council’s Financial Statements
The audit of the Gulf Coast Ecosystem Restoration Council’s (Council) financial
statements is also required by the Chief Financial Officers Act of 1990, as amended
by the Accountability of Tax Dollars Act of 2002. RMA Associates, LLC (RMA), a
certified independent public accounting firm working under a contract with and
supervised by our office, issued an unmodified opinion on the Council’s fiscal years
2021 and 2020 financial statements. RMA did not identify any matters involving
internal control and its operation that are considered material weaknesses.
Additionally, RMA did not identify any instances of reportable noncompliance with
laws, regulations, contracts, and grant agreements tested. (OIG-22-011)
Attestation Engagements
KPMG, under a contract with and supervised by our office, completed the reports
described below in support of the audit of Treasury’s fiscal year 2021 consolidated
financial statements and the financial statement audits of certain other Federal
agencies.
Reports on the Processing of Transactions by Fiscal Service
KPMG examined general computer investment and redemption processing, and
monitoring controls used for processing various Federal agencies’ transactions
by Fiscal Service’s Federal Investments and Borrowings Branch, and general
computer trust funds management processing and monitoring controls used for
processing various Federal and State agencies’ transactions by the Fiscal
Service’s Funds Management Branch for the period beginning August 1, 2020,
and ending July 31, 2021. KPMG found, in all material respects, that the
controls were fairly presented in the description of controls for these activities
and suitably designed. KPMG also found that controls tested operated
effectively throughout the period. (OIG-22-001, OIG-22-002)
Treasury Office of Inspector General Semiannual Report—March 2022 9
Office of Audit – Significant Audits and Other Products
Federal Financial Management Improvement Act
The following instances of noncompliance with the Federal Financial Management
Improvement Act of 1996, were reported in connection with the audit of Treasury’s
fiscal year 2021 consolidated financial statements.
Type of
C o n d it i on n o n c o m p li a n c e
Treasury continues to have deficiencies in IRS financial management systems. Federal financial
Specifically, IRS did not consistently design, implement, and operate information system management system
controls and security programs over its financial management systems in accordance requirements
with the Federal financial management systems requirements. (First reported in fiscal
year 1997)
Treasury has deficiencies in Fiscal Service Government-wide cash and Federal debt Federal financial
management information systems. Specifically, Fiscal Service did not consistently design, management system
implement, and operate information system controls and security programs over its cash requirements
management and Federal debt information systems in accordance with the Federal
financial management systems requirements. (First reported in fiscal year 2018)
The status of these instances of noncompliance, including progress in implementing
remediation plans, will be evaluated as part of the audit of Treasury’s fiscal year 2022
consolidated financial statements.
Treasury Office of Inspector General Semiannual Report—March 2022 10
Office of Audit – Significant Audits and Other Products
CARES Act Oversight
Title VI of the Social Security Act, as amended by Title V of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act), established the Coronavirus Relief
Fund (CRF) for Treasury to distribute $150 billion to the 50 States, qualifying units of
local government, the District of Columbia, U.S. Territories, and Tribal Governments
for necessary expenditures due to the public health emergency with respect to the
Coronavirus Disease 2019 (COVID-19). The Consolidated Appropriations Act, 2021,
extended the covered period for recipients of CRF payments to use funds between
March 1, 2020 and December 31, 2021. Further, Treasury issued updated CRF
guidance to revise the covered period for CRF. Obligations for CRF could be incurred
through December 31, 2021, and were expected to be paid by September 30, 2022.
As part of our ongoing oversight of the CRF payments, we issued the following report
during this semiannual reporting period.
Apache Tribe of Oklahoma’s Use of Coronavirus Relief Fund to
Secure a Bank Loan
We issued a letter to the Chairman of the Apache Tribe of Oklahoma concerning
the tribe’s use of CRF proceeds to secure a loan in the amount of $500,000.
Tribe officials informed us that $500,000 in CRF proceeds were used to open a
money market account at Liberty National Bank, as collateral for a loan. The
loan proceeds were then used to make payments on a delinquent loan owed to
Wells Fargo Bank, thus freeing up limited funds to pay the Apache Tribe’s bills
and provide services during the pandemic. Tribal officials also noted that they
were forced to close the Tribe’s Golden Eagle Casino for nearly 4 months
resulting in the Apache Tribe not being able to provide some of the services that
were planned in the most recent budget as of March 27, 2020.
We determined that the Apache Tribe’s use of $500,000 in CRF proceeds for
the loan in question did not comply with the CARES Act and Treasury’s CRF
Guidance for State, Territorial, Local, and Tribal Governments. We also
determined that using CRF proceeds as collateral for the loan with Liberty
National Bank due to the lack of casino revenue was not an allowable use of
funds. The Apache Tribe was not consistent with Treasury’s Guidance and
Frequently Asked Questions in effect at the time the money market account
was opened.
We required the $500,000 used to secure the loan with Liberty National Bank
be returned to the Apache Tribe’s CRF account to be used for eligible
Treasury Office of Inspector General Semiannual Report—March 2022 11
Office of Audit – Significant Audits and Other Products
obligations by December 31, 2021. (OIG-CA-22-006, Redacted) $500,000
Questioned Costs
CARES Act Compliance Monitoring
The CARES Act assigned us with responsibility for monitoring and oversight of the
receipt, disbursement, and use of CRF proceeds. To carry out our monitoring
responsibilities, we developed a portal via GrantSolutions, a grants management
system under U.S. Department of Health and Human Services, for CRF recipients to
report expenditure data on a quarterly basis. To date, CRF data has been collected up
to and through March 31, 2022. This data is displayed on the Pandemic Response and
Accountability Committee’s website (https://www.pandemicoversight.gov/). During
this reporting period, we also issued the following memoranda pertaining to CRF
reporting, (1) the Coronavirus Relief Fund Prime Recipient Quarterly GrantSolutions
Submissions Closeout Procedures Guide (OIG-CA-22-010), and (2) Coronavirus Relief
Fund Risk Analytics Dashboard Procedures (OIG-CA-22-012).
Cyber/Information Technology
FISMA
The Federal Information Security Modernization Act of 2014 (FISMA) requires
Inspectors General to perform an annual, independent evaluation of their agency’s
information security program and practices. During this semiannual reporting period,
we issued reports on Treasury’s and the Gulf Coast Ecosystem Restoration Council’s
(Council) compliance with FISMA.
Fiscal Year 2021 Audit of Treasury’s Information Security Program
for its Collateral National Security Systems
KPMG, working under a contract with and supervised by our office, performed
an audit of Treasury’s information security program and practices for its
collateral National Security Systems for the period July 1, 2020 through
June 30, 2021. For fiscal year 2021, KPMG reported that Treasury established
and maintained its information security program and practices for its collateral
National Security Systems for the 5 Cybersecurity Functions and 9 FISMA
Metric Domains. However, the program was ineffective according to U.S.
Department of Homeland Security (DHS) criteria. KPMG identified 5 deficiencies
within all 5 of the Cybersecurity Functions and within 8 of the 9 FISMA metric
domains. KPMG made 11 recommendations to responsible officials to address
Treasury Office of Inspector General Semiannual Report—March 2022 12
Office of Audit – Significant Audits and Other Products
the identified deficiencies. Treasury management agreed with the
recommendations and prepared planned corrective actions that were responsive
to the intent of KPMG’s recommendations. Due to the sensitive nature of these
systems, this report was designated Sensitive But Unclassified. (OIG-22-004,
Sensitive But Unclassified)
Fiscal Year 2021 Audit of Treasury’s Information Security Program
for its Unclassified Systems
KPMG, working under a contract with and supervised by our office, performed
an audit of Treasury’s information security program and practices for its
unclassified systems for the period July 1, 2020 through June 30, 2021. The
Treasury Inspector General for Tax Administration (TIGTA) performed the annual
FISMA evaluation of the IRS’ unclassified systems. For fiscal year 2021, KPMG
reported that Treasury’s information security program and practices for its
unclassified systems were established and maintained for the 5 Cybersecurity
Functions and 9 FISMA Metric Domains. However, the program was ineffective
according to DHS criteria. KPMG identified 10 deficiencies within 4 of the 5
cybersecurity functions and within 7 of the 9 FISMA metric domains. KPMG
made 22 recommendations to responsible officials to address the identified
deficiencies. Treasury management agreed with the recommendations and
prepared planned corrective actions that were responsive to the intent of
KPMG’s recommendations. Due to the sensitive nature of these systems, this
report was designated Sensitive But Unclassified (OIG-22-005, Sensitive But
Unclassified)
Fiscal Year 2021 Evaluation of the Gulf Coast Ecosystem
Restoration Council’s Information Security Program
RMA Associates (RMA), a certified independent public accounting firm working
under a contract with and supervised by our office, performed this year’s annual
FISMA evaluation of the Council’s information security program and practices
for the period July 1, 2020 through June 30, 2021. RMA reported that the
Council’s information security program and practices were established and
effective for the period. Accordingly, RMA did not make any recommendations
to the Council. (OIG-CA-22-003)
Cybersecurity Act
Section 107 of the Cybersecurity Information Sharing Act (CISA), under Title 1 of the
Cybersecurity Act of 2015, requires Inspectors General of the Office of the Director of
National Intelligence and the departments of Commerce, Defense, Energy, Homeland
Treasury Office of Inspector General Semiannual Report—March 2022 13
Office of Audit – Significant Audits and Other Products
Security, Justice, and the Treasury, in consultation with the Inspector General of the
Intelligence Community and the Council of Inspectors General on Financial Oversight,
to jointly report to Congress on the actions taken by the respective agencies over the
recent 2-year period to carry out the cybersecurity information sharing provisions of
CISA. During this semiannual reporting period, we issued a report covering Treasury’s
cybersecurity information activities for calendar years 2019 and 2020 in support of
the biennial joint report to Congress.
Treasury’s Cybersecurity Information Sharing
We concluded that Treasury’s activities to share cyber threat indicators and
defensive measures during calendar years 2019 and 2020 were adequate and
aligned with provisions of CISA. Specifically, the Government Security
Operations Center and Office of Cybersecurity and Critical Infrastructure
Protection (1) designed and implemented sufficient policy, procedures, and
practices to ensure the sharing of cyber threat indicators and defensive
measures, including the removal of personally identifiable information not
directly related to a cybersecurity threat; (2) did not share classified cyber threat
indicators and defensive measures with the private sector that required
authorization and accounting of the security clearances; (3) took appropriate,
adequate, and timely actions to disseminate cyber threat indicators shared with
the Federal Government; (4) shared specific aspects of cyber threat indicators
that had been shared with the Federal Government; and (5) had no barriers
affecting the sharing of cyber threat indicators and defensive measures,
although there were reported challenges in receiving cyber information from the
Financial Services Sector and other Federal agencies. Accordingly, we did not
make any recommendations to Treasury. (OIG-22-013)
DATA Act
Treasury and OMB led the Government-wide implementation of the Digital
Accountability and Transparency Act of 2014 (DATA Act). As part of our oversight of
the DATA Act implementation, we conducted a series of audits reviewing Treasury’s
and the Gulf Coast Ecosystem Restoration Council’s (Council) efforts to meet their
responsibilities under the DATA Act. The following reports were issued during this
semiannual reporting period.
Treasury Office of Inspector General Semiannual Report—March 2022 14
Office of Audit – Significant Audits and Other Products
Treasury Submitted Higher Quality Non-IRS Data in Its Fiscal Year
2020 Third Quarter DATA Act Submission, However Improvements
are Still Needed
Williams, Adley & Company-DC, LLP (Williams Adley), a certified independent
public accounting firm working under a contract with and supervised by our
office, noted two instances where Treasury did not use data elements in
accordance with the DATA Act Information Model Schema and assessed
Treasury’s non-IRS data as higher quality for the third quarter of fiscal year
2020. This is an improvement over fiscal year 2019, first quarter data, which
was assessed at moderate. Although Treasury’s completeness, timeliness, and
accuracy rates all showed significant improvements, Williams Adley still noted
issues regarding Treasury’s non-IRS financial assistance awards. Specifically,
Williams Adley noted (1) the Treasury Executive Office for Asset Forfeiture
(TEOAF) did not report Equitable Sharing financial assistance awards for
publication on USAspending.gov; (2) Treasury recorded noncompliant Award
Descriptions for its financial assistance awards in the audited period;
(3) Treasury incorrectly recorded Primary Place of Performance for financial
assistance awards provided to Native American Tribal Governments; and
(4) Treasury financial assistance awards for the CRF were not recorded timely.
Williams Adley recommended that Treasury, (1) continue working with TEOAF
to ensure proper submission of Equitable Sharing financial assistance awards on
USAspending.gov; (2) implement procedures and issue guidance to clarify what
constitutes an appropriate Award Description; (3) develop a process to ensure
financial assistance awards to Tribes are properly recorded, and train personnel
and distribute guidance to Treasury personnel on the proper process for looking
up census codes for Tribes and recording them correctly in the Financial
Assistance Broker System; (4) perform an analysis of the issues encountered in
recording the CARES Act financial assistance awards timely and develop
lessons learned based on this analysis; and (5) develop procedures and perform
training to ensure personnel are better prepared for future emergency funding
events and Treasury’s increased role as a grant-making agency. Treasury
management generally concurred with all recommendations and outlined
corrective actions that met the intent of Williams Adley’s recommendations.
(OIG-22-008)
TIGTA performed a separate audit of the IRS’ efforts to report financial and
payment information as required by the DATA Act. The results of Williams
Adley’s audit and TIGTA’s audit were used to assess Treasury’s efforts, as a
whole, to comply with the DATA Act. Treasury’s fiscal year 2020 third quality
data was of excellent quality. The DATA Act error rates for the third quarter
fiscal year 2020 were 1.42 percent for completeness, 5.36 percent for
Treasury Office of Inspector General Semiannual Report—March 2022 15
Office of Audit – Significant Audits and Other Products
accuracy, and 15.54 percent for timeliness. This was an improvement over the
results of the fiscal year 2019, first quarter audit, where Treasury’s data was
found to be of moderate quality. (OIG-22-009)
The Gulf Coast Ecosystem Restoration Council Met DATA Act
Reporting Requirements, but Improvements are Needed
The Council’s fiscal year 2020, fourth quarter data submission met the
standards for completeness, accuracy, timeliness, and overall, was of excellent
quality. While the Council’s data was of excellent quality, we found errors in
certain data elements. Specifically, the Council’s File C included a grant award
that was not in its File D2 submission. Therefore, the grant award was
incorrectly reported in the Council’s File C submission for fiscal year 2020,
fourth quarter. In addition, we found errors in certain procurement data
elements made by the Council’s shared service provider, the Administrative
Resource Center (ARC). Specifically, the Action Date and the Period of
Performance Start Date for one contract included in File D1 did not match the
contract.
We recommended that the Council’s Executive Director ensure that the Senior
Accountable Officer (SAO): (1) update the Council’s “Financial Policies and
Procedures Handbook” and other applicable policies and procedures to
incorporate the new grant management systems and to clarify that all
obligations, including grant awards, must be processed in Oracle within
3 business days. The SAO should also ensure that Council staff is adequately
trained on all updated guidance; (2) continue to work closely with ARC to
reduce timing errors for future DATA Act submissions; (3) document and
implement additional procedures for Council staff to review periodic data
element reports prior to the SAO asserting to the completeness, accuracy,
timeliness, and quality of the Council’s DATA Act submission; and (4) continue
to improve oversight of ARC’s future DATA Act submissions to ensure the
accuracy of the Council’s procurement data, which reaffirmed our
recommendation from our prior DATA Act audit report. Treasury management
concurred with all recommendations. Management’s planned corrective actions
met the intent of our recommendations. (OIG-22-007)
Consolidated Appropriations Act, 2021
We are required to submit a report twice a year to Congress and Treasury on the
oversight provided for programs established under Title V, Subtitle B in Division N of
the Consolidated Appropriations Act, 2021 (CAA, 2021). During this semiannual
reporting period, we reported on the Community Development Financial Institutions
Treasury Office of Inspector General Semiannual Report—March 2022 16
Office of Audit – Significant Audits and Other Products
(CDFI) Fund’s implementation of the CDFI Rapid Response Program (RRP) and on
Treasury’s implementation of the Emergency Capital Investment Program (ECIP).
Community Development Financial Institutions Fund’s
Implementation of the CDFI Rapid Response Program
We found that CDFI Fund management took actions to provide emergency
funding to CDFIs to respond to economic challenges that resulted from the
COVID-19 pandemic. The CDFI Fund made appropriated funds available on
February 25, 2021, meeting the mandated deadline of no later than 60 days
after enactment of CAA, 2021 on December 27, 2020. CDFI Fund management
followed OMB’s Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards, 2 CFR 200 (Uniform Guidance) to make
the funds available and design the framework for a program that could comply
with CAA, 2021.
The CDFI Fund also established internal controls over CDFI RRP in accordance
with the Government Accountability Office’s Standards for Internal Control in
the Federal Government to include: (1) a process for CDFIs to apply for CDFI
RRP awards conforming to CAA, 2021; and (2) a CDFI RRP Application
evaluation process (including award determinations) to meet the legislative
requirements. The CDFI RRP Application evaluation process complied with the
Uniform Guidance. Furthermore, the CDFI Fund established performance goals
and developed the Assistance Agreement template for the CDFI RRP that
included general terms and conditions in accordance with the Uniform Guidance.
We also found the Assistance Agreement template was missing the “Award
Terms and Conditions for Recipient Integrity for Performance Matters” in the
terms and conditions of award. CDFI Fund officials noted the discrepancy and
revised the Assistance Agreement template to include this award term and
condition on June 11, 2021, before awarding any CDFI RRP grants on June 15,
2021.
We recommended the Director of the CDFI Fund ensures reviews of all other
CDFI Fund Assistance Agreements are performed to confirm that the “Award
Term and Condition for Recipient Integrity and Performance Matters” has been
incorporated. CDFI Fund management concurred with our recommendations.
Management’s corrective action plan met the intent of our recommendation.
(OIG-22-023)
Treasury Office of Inspector General Semiannual Report—March 2022 17
Office of Audit – Significant Audits and Other Products
Treasury’s Implementation of the Emergency Capital Investment
Program
We found that Treasury officials established ECIP, but did not begin accepting
applications and issuing rules to set required restrictions on executive
compensation, share buybacks, and dividend payments by the 30-day statutory
deadline of January 26, 2021. Treasury officials worked to develop the
program, but did not launch the ECIP Application Portal until March 4, 2021, to
allow for consultation with the Federal banking regulators. Furthermore,
Treasury had not completed key documentation such as policies and procedures
to include a post-investment compliance and monitoring plan to fully implement
and administer investments under ECIP.
We acknowledged Treasury’s efforts to complete critical components of ECIP
and begin accepting applications for the new program. In designing the program,
Treasury officials (1) created and staffed a new program office, (2) conducted
outreach with stakeholders, (3) issued application guidance materials and signed
a memorandum of understanding (MOU) with the Federal banking regulators,
and (4) developed the ECIP Application Portal to accept applications and
coordinate reviews with Federal and State banking regulators. Treasury officials
planned to make investment decisions within 120 days of the September 1,
2021, application deadline. On December 14, 2021, Treasury announced that
186 financial institutions were approved for ECIP capital investments totaling
$8.7 billion.
We recommended that the Deputy Assistant Secretary for Community and
Economic Development ensure that the Interim Director of ECIP finalizes policies
and procedures and key documentation to govern full program implementation
and administration of ECIP investments, as well as, effective internal control
over the program. Treasury generally concurred with our recommendation, and
Treasury management’s planned corrective actions met the intent of our
recommendation. (OIG-22-028)
Domestic Assistance Program
We issued the following report on the CDFI Fund’s New Markets Tax Credit (NMTC)
allocations awarded to Community Development Entities (CDE) in Wisconsin during
this semiannual reporting period.
Treasury Office of Inspector General Semiannual Report—March 2022 18
Office of Audit – Significant Audits and Other Products
Wisconsin Housing and Economic Development Authority New
Markets Tax Credit Allocations
We found Wisconsin Housing and Economic Development Authority (WHEDA)
CDEs used their NMTC allocations and proceeds to make Qualified Low Income
Community Investments and designate Qualified Equity Investments in
accordance with their Allocation Agreements and applicable Federal regulations.
We also found that the CDFI Fund’s MOU with the IRS for NMTC program
administration was outdated.
We recommended that the Director of the CDFI Fund, (1) include as part of
Allocation Agreements a requirement that CDEs establish and adhere to written
policies and procedures governing the selection of entities for NMTC program
investments or loans; (2) request that the IRS establish guidance for CDEs to
assess “reasonable expectations” that an entity receiving an investment or loan
will satisfy the requirements to be a Qualified Active Low Income Community
Business throughout the entire investment period; (3) ensure that deficiencies
identified in WHEDA’s administration of NMTC allocations are considered as
part of the CDFI Fund’s future awards; (4) update the MOU with the IRS to
include compliance monitoring of the NMTC program with current processes and
systems and language permitting CDFI Fund requests of specific Treasury
Regulation §1.45D-1 compliance reviews by the IRS; and (5) update the MOU
with the IRS to incorporate improved communication strategies for any
completed Treasury Regulation §1.45D-1 compliance reviews. CDFI Fund
management concurred with our recommendations. Management’s planned
corrective actions met the intent of our recommendations. (OIG-22-027)
Procurement
Williams Adley, working under a contract with and supervised by our office, issued the
following report on BEP’s transition from a paper-based contract filing system,
Lektriever, to an electronic file management system during this semiannual reporting
period.
Bureau of Engraving and Printing’s eFiling System
Williams Adley found that BEP did not have (1) formal and documented standard
operating procedures (SOP) related to access controls for the eFiling system;
(2) BEP’s contract award file checklist was incomplete compared to the
requirements of Federal Acquisition Regulation (FAR) 4.802 (a)(1)(2)(3) and FAR
4.803. The checklist was missing 11 of the 66 items listed; and (3) file cabinets
Treasury Office of Inspector General Semiannual Report—March 2022 19
Office of Audit – Significant Audits and Other Products
were not created in the eFiling system for some of the contracts and some file
cabinets created had incomplete contract documentation.
Williams Adley recommended that BEP, (1) define, document, and implement
formal SOPs related to access controls including user provisioning,
deprovisioning, and periodic review for the eFiling system; (2) revise the
checklist to include all records and documents required in FAR 4.802 (a)(1)(2)(3)
and detailed in FAR 4.803; and (3) perform periodic internal reviews to ensure
that contract award files within the eFiling system are complete, accurate, and
in compliance with the FAR and BEP’s internal policies. BEP management
concurred with all recommendations. Management’s planned corrective actions
met the intent of Williams Adley’s recommendations. (OIG-22-032).
Resource Management
During this semiannual reporting period, RMA, under a contract with and supervised
by our office, issued the following report on Treasury's design and implementation of
policies and procedures related to cash discounts, as well as on the application of
those policies through execution of payments to vendors and contractors made during
fiscal year 2020.
Treasury's Use of Cash Discounts
RMA found that Treasury bureaus and offices included in its review, took cash
discounts totaling $89,431 for 576 of the 652 transactions where cash
discounts were offered during fiscal year 2020. However, Fiscal Service, the
Financial Crimes Enforcement Network (FinCEN), the Mint, BEP, and the Office
of the Comptroller of the Currency (OCC) did not take cash discounts for the
remaining 76 transactions, or 12 percent, resulting in a loss of cost savings of
$22,483. RMA also found that FinCEN, the Mint, BEP, and OCC lacked
comprehensive policies and procedures for taking cash discounts when
processing invoice payments with eligible discounts.
RMA recommended that the Commissioner of the Fiscal Service ensure Fiscal
Service, (1) maintain adequate controls on internal processes related to payment
approvals and (2) follow Fiscal Service’s SOP and/or guidance relating to cash
discounts including, but not limited to, Contracting Officer’s Representatives
(COR) approving invoices with discounts timely.
RMA recommended that the Director of BEP and the Comptroller of the
Currency, ensure that BEP and OCC respectively, (1) develop, revise, and/or
finalize SOPs for taking full advantage of cash discounts when offered and
Treasury Office of Inspector General Semiannual Report—March 2022 20
Office of Audit – Significant Audits and Other Products
applicable, as required by Section 2060 of the Treasury Financial Manual (TFM);
(2) maintain adequate controls on internal processes related to payment
approvals; (3) ensure that CORs approve invoices with discounts timely; and
(4) distribute SOPs and guidance relating to cash discounts to BEP and OCC
management, staff, Contracting Officers (CO), and CORs and provide training,
as necessary.
RMA recommended that the Director of the Mint ensure that the Mint,
(1) develop, revise, and finalize SOPs for taking cash discounts to ensure the
process is adequately documented and personnel are instructed to take full
advantage of cash discounts when offered and applicable, as required by
Section 2060 of the TFM; (2) maintain adequate controls on internal processes
related to payment approvals; (3) ensure that CORs approve invoices with
discounts timely; (4) encourage vendors to submit their invoices within a
reasonable time of the discount period that allows the Mint to take cash
discounts when offered; (5) encourage vendors to use the Invoice Processing
Platform when submitting their invoices for the processing of payment of
invoices with discounts to be more efficient; (6) participate in required training,
as necessary; and (7) distribute SOPs and guidance relating to cash discounts to
Mint’s management, staff, COs, and CORs, and provide training, as necessary.
RMA recommended that the Director of FinCEN ensure that FinCEN,
(1) develop, revise, and finalize SOPs for taking cash discounts to ensure the
process is adequately revised and documented to take full advantage of cash
discounts when offered, and when applicable, as required by, Section 2060 of
the TFM; (2) maintain adequate controls on internal processes related to
payment approvals; (3) ensure that CORs approve invoices with discounts
timely; (4) participate in required training, as necessary; and (5) distribute SOPs
and guidance relating to cash discounts to FinCEN’s management, staff, COs,
and CORs, and provide training, as necessary.
Fiscal Service, the Mint, BEP, OCC, and FinCEN management concurred with all
recommendations, and planned corrective actions to meet the intent of RMA’s
recommendations. A total of $67,448 was estimated as funds be put to better
use over a 3-year period. (OIG-22-031) $67,448 Funds Put to Better Use
RESTORE Act
As part of our ongoing oversight of the RESTORE Act programs, we are assessing
Treasury’s and the Gulf Coast Ecosystem Restoration Council’s (Council) activities
funded by the act. RMA, under a contract with and supervised by our office, issued
the following report during this semiannual reporting period.
Treasury Office of Inspector General Semiannual Report—March 2022 21
Office of Audit – Significant Audits and Other Products
TCEQ Complied with RESTORE Act Land Acquisition Requirements
RMA found that the Texas Commission on Environmental Quality’s (TCEQ) and
its subrecipients (Texas Parks and Wildlife Department, The Nature
Conservancy, and Houston Parks Board) complied with land acquisition
requirements stipulated in Section 1607 of the RESTORE Act, applicable Federal
laws, regulations, and the award agreements. Specifically, TCEQ and its
subrecipients appropriately used RESTORE Act funds to acquire land in
accordance with Section 1607 of the RESTORE Act, Treasury Regulations for
the Gulf Coast Restoration Trust Fund, OMB’s Uniform Guidance, the Notice of
Awards, and the RESTORE Council Financial Assistance Standard Terms and
Conditions. RMA did not make any recommendations to the Council.
(OIG-22-030)
Treasury Office of Inspector General Semiannual Report—March 2022 22
Office of Investigations – Significant Investigations
CARES Act Investigations
Business Owner Submitted Fraudulent Documents to Receive Coronavirus
Relief Funds
Our investigation revealed that a home healthcare company owner submitted
fraudulent documents to the Louisville, Kentucky government to obtain $17,000 in
Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Coronavirus Relief
Funds. Criminal prosecution of the individual was presented and declined by the United
States Attorney’s Office (USAO) for the Western District of Kentucky.
Other Significant Investigations
Fraudulent Federal Reserve Document Submitted to OFAC
Our office initiated an investigation upon receipt of a Congressional inquiry received
through the Department of the Treasury’s (Treasury or the Department) Office of
Foreign Assets Control (OFAC). An individual submitted a fraudulent Federal Reserve
document and requested assistance to process a purported outstanding claim with
OFAC for the repatriation of $2.3 trillion (USD) from Oman on behalf of a third party.
Criminal prosecution of the subject was presented to and declined by the USAO for
the District of Arizona. On February 22, 2022, we provided this information to the
Congressional Office.
Government Contractor Agrees to Civil Settlement and is Sentenced for
Violations of the Trade Agreements Act and the Buy American Act
Through Wire Fraud
Our joint investigation with the General Services Administration Office of Inspector
General (OIG), Defense Criminal Investigative Service, Army Criminal Investigation
Division, and the Department of Homeland Security (DHS) OIG revealed that an
individual violated the Trade Agreements and Buy American Acts. The subject
imported Chinese goods, purported the goods to be U.S.-made, and sold the goods to
Federal agencies. After successful prosecution by the USAO for the Northern District
of New York, the individual was sentenced to 3 months in prison, 24 months of
probation, and a $100 special assessment for wire fraud. Additionally, the subject
Treasury Office of Inspector General Semiannual Report—March 2022 23
Office of Investigations – Significant Investigations
executed a $702,000 civil settlement agreement to resolve his civil liability for
submission of false claims.
New Jersey Subject Sentenced for Obtaining Funds from a Stolen and
Altered Treasury Check and Paycheck Protection Program Fraud Scheme
Our investigation, initiated upon receipt of information from the Bureau of the Fiscal
Service, revealed that an individual negotiated a stolen and altered Treasury check and
submitted fraudulent Paycheck Protection Program applications to obtain over
$600,000 in program proceeds. After successful prosecution by the USAO for the
District of New Jersey, the individual was sentenced to 30 months in prison,
36 months of probation, $137,000 in restitution, $484,000 in forfeitures, and a
$200 special assessment.
Mint Employee Steals Government Property
Our office initiated an investigation after being notified that a United States Mint
(Mint) employee stole error coins from a Mint facility. We recovered 185 coins from
the employee, 3 of which had been handed out as souvenirs. We provided a report to
the Mint, resulting in a 14 -day suspension for the employee. Criminal prosecution of
the employee was presented and declined by the USAO for the District of Colorado.
Leak of Confidential Supervisory Information by OCC Employee
Unsubstantiated
Our investigation was initiated upon receipt of information from the Office of the
Comptroller of the Currency (OCC) that an OCC employee leaked confidential
supervisory information to an employee of an OCC -regulated bank during a
re-examination. Our investigation found this type of information is commonly released
to a bank prior to a re-examination, and the allegation was determined to be
unsubstantiated. On March 21, 2022, we provided an informational report to the OCC.
Malware Not Detected as a Result of OIG Forensic Examination
Our office received notification from Treasury’s Office of Counterintelligence, that two
employee laptops were infected with malware during official international travel. We
obtained the laptops from the office and conducted a comprehensive forensic
examination of each laptop. We did not identify any evidence of malware and returned
the laptops to the office.
Treasury Office of Inspector General Semiannual Report—March 2022 24
Office of Investigations – Significant Investigations
Following is information related to significant investigative activities from prior
semiannual periods.
Subjects Sentenced for Theft of Treasury Checks
Our joint investigation with the U.S. Postal Inspection Service, Internal Revenue
Service Criminal Investigation, and Treasury Inspector General for Tax Administration
revealed that at least 12 subjects deposited 99 stolen Treasury checks at various
branches of the same bank in Arizona, Colorado, Kansas, and Missouri. The estimated
loss to the bank was over $447,000. The case was prosecuted by the USAO for the
Western District of Missouri.
Update: Our joint investigation concluded with eight subjects sentenced to
258 months in prison, 120 months of probation, 216 months of supervised release,
$1.5 million in restitution, and $1,700 in special assessments.
Treasury Office of Inspector General Semiannual Report—March 2022 25
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Treasury OIG Accomplishments and Activities
CIGIE Award Ceremony
Department of the Treasury (Treasury or the Department) Office of Inspector General
(OIG) staff members were recognized with a prestigious award at the 24th Annual
Council of the Inspectors General on Integrity and Efficiency (CIGIE) Awards Ceremony
on October 12, 2021, in Washington, DC. The annual ceremony recognized the
outstanding accomplishments of the Federal Inspectors General workforce.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Audit and
Monitoring teams were recognized for excellence in carrying out their responsibilities
under the CARES Act. Andrea Smith, Audit Director for the CARES Act Directorate II
Monitoring Group, accepted the award on behalf of the group. Other Treasury OIG
staff recognized with the award were Deborah Harker, Assistant Inspector General for
Audit; Donna Joseph, Deputy Assistant Inspector General for Audit; Andrew Berke,
Senior Advisor; Eileen Kao, Audit Director; John Tomasetti, Audit Director;
Daniel Gerges, Audit Director; Jeneba Moiwo, Audit Manager; Kevin King, Audit
Manager; Dionne Smith, Audit Manager; Tsvetina Pashaliyska, Audit Manager;
Thomas Schweinefuss, Audit Manager; Kimleon Turner, Audit Manager;
Rafael Cumba, Audit Manager; Perry Chen, Auditor-In-Charge; Adrianne Gilbert,
Auditor-In-Charge; Chris Culbreath, Auditor-In-Charge; Kenna Stroop, Auditor-In-
Charge; Tiffany Figueroa, Auditor-In-Charge; Tiffany Sanders, Auditor-In-Charge;
Veleria Tettey, Auditor-In-Charge; Raymond Brooks, Auditor; Daisy Guzman, Auditor;
Emilie Kane, Auditor; Andrew Malcolm, Auditor; Sean Cornett, Auditor; Rachel Gerard,
Auditor; Ernest Galloway, Auditor; Nicole Browne, Auditor.
Treasury OIG Leadership Roles
Treasury OIG professionals serve on various important public and private professional
organizations supporting the Federal audit community. Examples of participation in
these organizations include the following:
Deborah Harker, Assistant Inspector General for Audit, serves as the Co-Chair of the
CIGIE Federal Audit Executive Council’s Digital Accountability and Transparency Act
(DATA Act) Working Group Governance Committee. Ms. Harker also represents CIGIE
on the Chief Financial Officers Council, Leveraging Data as a Strategic Asset Working
Group. In addition, Ms. Harker represents Treasury OIG on the National Association of
State Auditors, Comptrollers, and Treasurers COVID-19 Accountability Work Group.
Treasury OIG Accomplishments and Activities
Pauletta Battle, Deputy Assistant Inspector General for Financial Management and
Transparency Audits, chairs the Federal Audit Executive Council’s DATA Act Working
Group, which educates Inspectors General and Government financial communities on
the DATA Act oversight process. The Working Group consists of approximately 200
members representing at least 48 OIGs.
Donna Joseph, Deputy Assistant Inspector General for Cyber and Financial Assistance
Audits, serves as the National Single Audit Coordinator for Treasury, and is a member
of the American Institute of Certified Public Accountants’ National Governmental
Accounting and Auditing Update Conference planning committee.
Treasury Office of Inspector General Semiannual Report—March 2022 28
Statistical Summary
Summary of Treasury OIG Activities
October 1, 2021 through March 31, 2022
Number or
OIG Activity Dollar Value
Office of Counsel Activities
Regulation and legislation reviews 22
Instances where information was refused 0
Office of Audit Activities
Reports issued and other products 44
Disputed audit recommendations 0
Significant revised management decisions 0
Management decision in which the Inspector General disagrees 0
Monetary benefits (audit)
Questioned costs $500,000
Funds put to better use $67,448
Total monetary benefits $567,448
Office of Investigations Activities*
Criminal and judicial actions (including joint investigations)
Investigative reports issued 98
Cases referred for prosecution and/or litigation 51
Individuals referred for criminal prosecution to the Department of Justice 63
Individuals referred for criminal prosecution to state and local authorities 1
Cases accepted for prosecution and/or litigation 6
Arrests 0
Indictments/informations 10
Convictions (by trial and plea) 10
Senior Staff Cases Closed During SAR Period with Misconduct Allegations 1
*During the reporting period, subjects were sentenced to 414 months of prison time, 900 months of
probation, 8 days of community service, and ordered to pay fines, restitution, and court fees in the
amount of $1.2 million, and seizures and forfeitures in the amount of $1.2 million.
Metrics Used for Office of Investigations Activities
Department of the Treasury (Treasury or the Department) Office of Inspector General
(OIG) investigative statistics listed above were obtained through reports drawn from
Treasury OIG’s Office of Investigations case management system.
Treasury Office of Inspector General Semiannual Report—March 2021 29
Statistical Summary
Reports with Unimplemented Recommendations
Issued prior to October 1, 2021
The following list of Treasury OIG reports with unimplemented recommendations is
based on information in Treasury’s automated audit recommendation tracking system,
which is maintained by Treasury management officials, and recommendations tracked
by other Federal organizations related to Treasury OIG’s oversight of the Resources
and Ecosystems Sustainability, Tourist Operations, and Revived Economies of the Gulf
Coast States Act of 2012 (RESTORE Act) programs and activities of the Gulf Coast
Ecosystem Restoration Council (Council) and the National Oceanic and Atmospheric
Administration’s Gulf Coast Ecosystem Restoration Science, Observation, Monitoring,
and Technology Program.
Treasury OIG is reporting 131 open and unimplemented recommendations for
22 reports issued prior to October 1, 2021.
Treasury OIG considers all unimplemented recommendations for reports issued over
6 months to be significant.
Treasury Programs and Operations
Fiscal Report Number Report Title Date
Year Issued
2016 OIG-16-059 General Management: Treasury Has Policies 09/16
and Procedures to Safeguard Classified
Information but They Are Not Effectively
Implemented
1. The Assistant Secretary for Intelligence and Analysis should direct the
Deputy Assistant Secretary for Security to update the Treasury Security
Manual to include procedures requiring the Office of Security Programs to
follow up and obtain all bureau self-inspection reports. Management agreed
with the recommendation.
Fiscal Report Number Report Title Date
Year Issued
2018 OIG-18-018 Terrorist Financing/Money Laundering: OFAC 11/17
Human Resources Practices Need
Improvement
1. The Office of Foreign Assets Control (OFAC) Director should ensure that
Treasury Office of Inspector General Semiannual Report—March 2022 30
Statistical Summary
legacy employees' current position descriptions are evaluated to ensure that
the documented promotion potential of these non-supervisory employees is
consistent with OFAC's current promotion practices. Management agreed
with the recommendation.
Fiscal Report Number Report Title Date
Year Issued
2018 OIG-18-044 Terrorist Financing/Money Laundering: Audit 04/18
of the Office of Intelligence and Analysis’
Authorities and Actions Related to U.S.
Persons’ Financial Information
1. The Under Secretary for Terrorism and Financial Intelligence, as
expeditiously as possible, should ensure that the Office of Intelligence and
Analysis’ (OIA) U.S. Persons Procedures are finalized and submitted for
approval to the Attorney General of the United States.
2. Implement a compliance monitoring program to assess whether intelligence
analysts' activities are conducted in accordance with OIA authorities, and
electronic searches and other queries are performed in a manner that fully
protects the rights of U.S. persons. Management agreed with the
recommendations.
Fiscal Report Number Report Title Date
Year Issued
2019 OIG-19-007 Information Technology: Department of the 10/18
Treasury Federal Information Security
Modernization Act Fiscal Year 2018
Performance Audit
1. Treasury Inspector General for Tax Administration (TIGTA) management
should establish a current enterprise baseline of software and related
configurations for the TIGTA System.
2. Develop and disseminate to TIGTA personnel a TIGTA System Information
System Contingency Plan that addresses purpose, scope, roles,
responsibilities, management commitment, coordination, and compliance to
facilitate the implementation of the contingency planning policy and
associated contingency planning controls. TIGTA should conduct disaster
recovery and business continuity testing for the TIGTA System on the
frequency stipulated by a Business Impact Analysis. Management agreed
with the recommendations.
Treasury Office of Inspector General Semiannual Report—March 2022 31
Statistical Summary
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-002 Information Technology: Department of the 10/19
Treasury Federal Information Security
Modernization Act Fiscal Year 2019
Performance Audit for Collateral National
Security Systems (Sensitive but Unclassified)
1. This recommendation is Sensitive But Unclassified. Management agreed
with the recommendation.
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-003 Information Technology: Department of the 10/19
Treasury Federal Information Security
Modernization Act Fiscal Year 2019
Performance Audit
1. The Bureau of Engraving and Printing (BEP) management should assess and
remediate vulnerabilities identified during Security Content Automation
Protocol configuration baseline compliance and vulnerability scanning within
the required timeframes specified in the BEP Minimum Standard Parameters.
2. Bureau of the Fiscal Service (Fiscal Service) management should protect the
confidentiality and integrity of transmissions by encrypting Fiscal Service
System 2 data in transit as required by National Institute of Standards and
Technology Special Publication 800-53 Revision 4, Security and Privacy
Controls for Federal Information Systems and Organizations.
3. United States Mint (Mint) management should establish a quality control
process to ensure that user access to Mint System 1 and other Mint
information systems follow the access management process requiring the
completed background investigations, signed non-disclosure agreements,
signed rules of behavior, and completion of the security awareness training.
Treasury Office of Inspector General Semiannual Report—March 2022 32
Statistical Summary
4. Mint management should clearly document and formally approve
exemptions to the Mint's access authorization process when a business
justification exists. Management agreed with the recommendations.
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-007 DATA Act: Treasury Continues to Make 11/19
Progress in Meeting its DATA Act Reporting
Requirements
1. Treasury's Assistant Secretary for Management, working as needed with
Treasury's Senior Accountable Official, the Senior Procurement Executive,
reporting entities, the Program Management Office, and the Office of
Management and Budget (OMB) should develop and implement a method
and procedures to submit Treasury Forfeiture Fund financial assistance
award data to the Financial Assistance Broker Submission in accordance
with the reporting submission specifications established by the Digital
Accountability and Transparency Act (DATA Act) Information Model
Schema. Management agreed with the recommendation.
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-022 Financial Management: Management Report 12/19
for the Audit of the Department of the
Treasury's Consolidated Financial Statements
for Fiscal Years 2019 and 2018
1. Fiscal Service management should address the mainframe operating system
vulnerabilities noted in the condition as soon as possible.
2. Develop a tailored mainframe operating system security configuration
baseline that specifies how security configuration options are to be set
based on the selected industry guidance.
3. Ensure that the chief information security officer assign specific
responsibility for providing controls over operating system security,
including access permissions to all system datasets and all security-related
option settings.
4. Develop and document controls over changes and monitor update access to
all key system datasets.
5. Develop and document controls and baseline documentation of mainframe
operating system options specified in the configuration files.
6. Establish which techniques are to be used to control update access to key
system datasets and to control read access to sensitive system datasets
(such as the security software database and the page files), whether a
Treasury Office of Inspector General Semiannual Report—March 2022 33
Statistical Summary
third-party tool is to be used, or tailored change control mechanisms, and
develop procedures and documentation to support their use.
7. Develop procedures to provide assurance that programs installed with the
privileges of the operating system (whether purchased from software
vendors or internally developed) do not introduce security weaknesses.
8. Develop, document, and implement policies, procedures, and controls to
conduct periodic reviews of actual mainframe security software settings
against the security baseline.
9. Develop a mainframe security software risk assessment process using the
Defense Information Systems Agency (DISA) Security Technical
Implementation Guide (STIG) as a guideline.
10. Develop a tailored mainframe security software configuration baseline that
specifies how security configuration options should be set based on the
industry guidance. As part of this action, management should develop and
document a baseline specifying for each possible setting in the security
software control file how the option should be set and who is responsible
for approving the setting.
11. Use the mainframe security software configuration baseline to harden the
mainframe environment, including the Payment Authorization Manager and
Payments, Claims, and Enhanced Reconciliations production.
12. Remove duplicate and excessive permissions in the mainframe security
software database.
13. Perform an annual comparison of each actual setting in the mainframe
security software control file to each setting specified in the baseline to
verify compliance with the baseline.
14. Develop and document procedures for controlling updates to the mainframe
security software control file.
15. Define and document the segregation of functions and privileges based on
the principle of least privilege for mainframe security software and operating
system.
16. Review and establish access permissions to the mainframe system and
security software based on the principle of least privilege access.
17. Review and re-assess each access permission in the mainframe security
software dataset and resource rules on a periodic basis.
18. Develop procedures and documentation to establish the following for each
dataset permission, resource permission, and mainframe security software
privilege: a. Responsibility for approving access and enforcing compliance
with the principle of least privilege; b. Actual access meets the principle of
least privilege; and c. Any discrepancy from approved access will be
Treasury Office of Inspector General Semiannual Report—March 2022 34
Statistical Summary
identified and corrected.
19. Develop, document, and implement policies, procedures, and controls for
comprehensive logging and monitoring of events. Procedures and controls
should include an annual re-assessment of whether logging and reporting is
adequate.
20. Review and determine which profiles, applications, databases, and other
processes on the mainframe will be logged and reviewed.
21. Assess all mainframe logs to determine which logs should be evaluated by
the incident management tool.
22. Establish appropriate alerts and event thresholds for those mainframe logs
required to be evaluated by the external tracking tool.
23. Develop and implement data and analysis tools and processes for identifying
event trends, patterns, spikes, and exceptions.
24. Identify non-security related purposes for logging and monitoring (including
performance tuning, problem management, capacity planning, and
management of service level agreements); assign responsibility for
addressing and integrating them with security uses of logging and
monitoring.
25. Identify the possible sources of log information; determine how each is to
be used for security monitoring; and develop procedures to ensure that each
type of logging which is necessary for effective security monitoring is
activated.
26. Annually assess the effectiveness of security logging and monitoring,
ensuring that the volume of logged events is limited to just those that are
needed for security, and ensuring that monitoring results include effective
identification and response for any violations and for any significant trends
(such as an increase in the number of password resets for a given group of
users or repetition of the same attempted but failed attempt to access a
productions dataset or resource).
27. Identify, document, and assess the mainframe security controls affecting
the system software to fully describe how mainframe security is provided.
These Fiscal Service management controls should include: a. Specific
assignment of responsibility for maintaining operating security, b. Skill
assessment and remediation for operating system security maintenance,
c. Baseline documents for mainframe configuration files, d. Standard
procedures for review and maintenance of operating system security, and
e. Standard procedures to compare actual configuration settings to baseline
documents.
28. Update mainframe documentation to be consistent with Fiscal Service and
Treasury Office of Inspector General Semiannual Report—March 2022 35
Statistical Summary
Treasury Directive Publication 85-01, Department of the Treasury
Information Technology Security Program.
29. Develop procedures and documentation to establish who is responsible and
how effective security is achieved for controls.
30. Implement an oversight process to determine that designated Fiscal Service
personnel review and reevaluate privileges associated with the UNIX
production environment semiannually for privileged accounts.
31. Configure the systems-management software agents to include all UNIX
servers, databases, and users' accounts within the UNIX environment when
generating the users' lists for the semiannual review and recertification
process so that all privileged and non-privileged users' access is reviewed.
32. Update UNIX semiannual account review and recertification procedures to
include quality control steps to validate that systems-management software
is generating complete and accurate account listings for all UNIX servers
and databases privileged and non-privileged user accounts within the UNIX
environment prior to completing the review and recertification process.
33. Finalize policies and procedures to review audit logs of production DB2
servers.
34. Implement an oversight process to ensure that designated Fiscal Service
personnel: a. Review the security logs for the UNIX and DB2 servers hosting
the Payment Information Repository (PIR), Judgment Fund Internet Claim
System (JFICS), and Security Payment System (SPS) applications on a
pre-defined frequency, as indicated in the Fiscal Service Baseline Security
Requirements (BLSR). b. Formally document completion of their reviews and
any escalations to the Information System Security Office, and c. Retain the
audit logs and documentation of their reviews for 18 months, as required by
the BLSR.
35. Periodically review Fiscal Service management's implementation and
operation of the review of the security audit logs for the UNIX and DB2
servers hosting the PIR, JFICS, and SPS applications to determine that
Fiscal Service management completes the reviews on a pre-defined basis,
documents completion of the reviews and escalations, and maintains such
documentation.
36. Establish an effective enforcement process or mechanism to ensure that a.
UNIX and DB2 events and monitoring controls are followed, and b. Fiscal
Service management has confidence it consistently reviews for potential
unauthorized or inappropriate activity.
37. Update its current PIR security procedures to require that management
obtain current PIR developer access requirement listings from the service
Treasury Office of Inspector General Semiannual Report—March 2022 36
Statistical Summary
provider and use them when validating the appropriateness of PIR developer
access during the semiannual access reviews and recertification of the PIR
and UNIX environments.
38. Maintain the documentation used to review and recertify the access of the
known PIR service provider developers evidencing that their access to the
UNIX environments is commensurate with their job functions and
responsibilities.
39. Ensure that developers do not have the ability to make changes to the PIR
production environment.
40. Remove users' access once validated by the Federal Program Agency (FPA)
during the SPS annual user access review.
41. Retain evidence of recertification of all users.
42. Oversee the recertification process and ensure that access corrections are
processed once received from the FPA.
43. Remove and disable the two users' access immediately.
44. Implement a quality control process to ensure that PIR application accounts
defined to the PIR production environment that have been inactive for over
120 days are disabled.
45. Develop and implement documentation to assign responsibility for ensuring
adequacy of UNIX and database security and baseline settings.
46. Update existing UNIX and database configuration security baseline
documents to ensure that these documents fully incorporate and enforce
the components of the DISA STIG. Management should document any
deviations from the STIG and note compensating controls that mitigate the
security risk to an acceptable level.
47. Develop, document, and implement policies, procedures, and controls to
conduct periodic reviews of actual UNIX and database settings against the
security configuration baselines.
48. Provide logging and monitoring of security-related events to include the
retention of evidence of reviews performed.
49. Develop a baseline of essential security settings and specify that baseline as
the standard to be observed.
50. Implement corrective actions to address all vulnerabilities associated with
the baseline enforcement to include removing the three default user
accounts on UNIX servers. Management agreed with the recommendations.
Treasury Office of Inspector General Semiannual Report—March 2022 37
Statistical Summary
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-023 BILL AND COIN MANUFACTURING: BEP 12/19
Improved Governance and Oversight over
Note Development and Production But
Challenges Remain
1. The Director of the BEP should finalize the required 5 year update of the
memorandum of understanding with the Board of Governors of the Federal
Reserve System (Board) to formalize BEP and the Board's responsibilities
and authorities related to notes including activities, procedures, and
obligations related to the annual production, destruction, and research and
development of notes. Management agreed with the recommendation.
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-027 Resource Management: Audit of the 02/20
Department of the Treasury Departmental
Offices Executive Pay Adjustments, Bonuses,
and Awards
1. Treasury's Assistant Secretary for Management should ensure that the
Office of the Deputy Assistant Secretary for Human Resources and Chief
Human Capital Officer (DASHR/CHCO) and the Office of Executive
Resources (OER) develop, implement, and include effective internal controls
within its policies and standard operating procedures (SOP) to ensure
Treasury's Senior Executive Service (SES) basic pay rates are in compliance
with 5 CFR 534.403(a)(3)(b), Suspension of certification of performance
appraisal system and 5 CFR 534.404 (h)(2), Setting pay upon transfer.
2. DASHR/CHCO and OER calculate the overpayment amounts for the two
Departmental Office (DO) SES members whose pay was set higher than
allowed by regulation.
3. DASHR/CHCO and OER complete Office of Personnel Management (OPM)
data calls in accordance with OPM's applicable instructions and guidance to
ensure all required employees, such as those who have left Treasury, are
properly reported.
4. DASHR/CHCO finalizes and approves Treasury's SES Pay and Awards
policy, and then periodically reviews it for continued relevance,
effectiveness, and transparency in making pay decisions and awarding
bonuses, assesses staffing levels, workforce skills, and respective budgets
to determine whether additional personnel should and can plausibly be
incorporated into future strategic planning to ensure OER can meet its goals
Treasury Office of Inspector General Semiannual Report—March 2022 38
Statistical Summary
and mission.
5. DASHR/CHCO finalizes and approves Treasury's SES Pay and Awards
policy, and then periodically reviews it for continued relevance,
effectiveness, and transparency in making pay decisions and awarding
bonuses.
6. OER documents the processes and SOP, with appropriate detail, followed in
administering Treasury DO SES member performance ratings, pay
adjustments, and bonuses.
7. OER oversees the process regarding exceptions to the 12-month rule.
8. OER includes information regarding the approval process for waiver requests
for exceptions to the 12-month rule in the instructions provided to bureau
heads and DO policy offices. This information should be consistent with
Federal regulations and Treasury's SES Pay and Awards policy.
9. OER submits Treasury's respective data call report to OPM by the due dates
established by 5 CFR 534.405, Performance awards, and before any
established deadlines per OPM's annual data call memorandum.
Management agreed with the recommendations.
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-029 Gulf Coast Restoration: Jefferson Parish's 03/20
Internal Control over Federal Awards
1. & 2. The Fiscal Assistant Secretary should ensure that deficiencies identified in
Jefferson Parish, Louisiana's (Jefferson Parish) controls over Federal awards
are considered as part of the Treasury's oversight of future awards as well
as risk assessments of Jefferson Parish as required by the Uniform
Administrative Requirements, Cost Principals, and Audit Requirements for
Federal Awards (2 CFR Part 200) (Uniform Guidance). This recommendation
is counted as two recommendations because it applies to both findings in
the report. Management agreed with the recommendations.
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-030 Bill and Coin Manufacturing: The United 03/20
States Mint Numismatic Order Management
System is Meeting User Needs But
Improvements to Oversight are Needed
1. The Mint Director ensures the Numismatic and Bullion Directorate retains
evidence of its monitoring activities outlined in the contract's Quality
Assurance Surveillance Plan to better document the Mint's oversight of the
contractor's compliance with contract requirements.
Treasury Office of Inspector General Semiannual Report—March 2022 39
Statistical Summary
2. Perform analyses to determine the feasibility and potential impact of
proposed actions to improve numismatic sales, perform additional studies to
enhance future sales, and report the results to stakeholders. Management
agreed with the recommendations.
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-036 Interim Audit Update – Coronavirus Relief 05/20
Fund Recipient Reporting
1. Treasury management should support our office in accomplishing our
monitoring and oversight responsibilities in the following ways: (1) assist in
communications with Coronavirus Relief Fund (CRF) recipients on matters
that include, but are not limited to, communications of reporting and record
keeping requirements and other audit inquiries, as needed; (2) ensure that
Treasury maintains communication channels with recipients to obtain and
address post payment inquiries regarding specific payments; and
(3) continue to update CRF guidance and disseminate to recipients as
needed. Management agreed with the recommendation.
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-040 BILL AND COIN MANUFACTURING: Audit of 06/20
Bureau of Engraving and Printing’s
Implementation of Security Features and
Meaningful Access for the Blind and Visually
Impaired into New Note Design
1. The Director of BEP in collaboration, as necessary, with members of the
United States Currency Program:
Continue to improve the Banknote Development Process and Technology
Development Process guidance, including refining procedures to reflect
lessons learned during its Catalyst note series redesign.
2. Ensure the Advanced Counterfeit Deterrence Steering Committee charter is
updated in a timely manner, and as needed, to ensure roles, responsibilities,
and current practices, such as the attendance of Advanced Counterfeit
Deterrence Steering Committee monthly meetings by appropriate personnel,
are clearly defined and communicated to its members. Management agreed
with the recommendations.
Treasury Office of Inspector General Semiannual Report—March 2022 40
Statistical Summary
Fiscal Report Number Report Title Date
Year Issued
2020 OIG-20-042 MANUFACTURING AND REVENUE: Mint 08/20
Controls Over Raw Materials and Coin
Exchange Programs Need Improvement
1. The U.S. Mint Director should conduct regular reviews of the suppliers’
quality systems to ensure that the suppliers are acting in the best interest of
the Mint. This includes regular site visits or periodic reviews of the suppliers’
quality system documentation.
2. Consider sampling and testing the material after blanking in order to assess
the material quality throughout the coil.
3. Verify incoming raw material weights to ensure that the Mint is receiving the
raw materials paid for.
4. Strengthen and finalize SOPs for all coin exchange programs before
accepting any redemptions. This would include using tests and subject
matter experts to authenticate the genuineness of coins redeemed, as well
as working with the Board to develop appropriate interagency procedures to
assure the integrity of the coin redemption process for uncurrent coins.
5. Follow all SOPs, including but not limited to, procedures related to sampling,
inspecting, and testing coins; and appropriately document redemptions.
Additionally, ensure that adequate background investigations are conducted
on bulk redeemers and decisions to allow participation into the Mutilated
Coin Redemption Program are based on relevant data from the background
investigation. The Mint should add criteria, such as obtaining financial
statements for analyses of the potential bulk redeemers and performing site
visits at their premises, as part of the background investigation process for
entry into the program. The Mint should document how this criteria was
met, and if these steps were not performed, the reasons why.
6. Ensure that all coins returned to the Mint and removed from circulation are
destroyed timely and sufficiently accounted for. Management agreed with
the recommendations.
Fiscal Report Number Report Title Date Issued
Year
2021 OIG-21-010 INFORMATION TECHNOLOGY: 11/20
Department of the Treasury Federal
Information Security Modernization
Act Fiscal Year 2020 Performance
Treasury Office of Inspector General Semiannual Report—March 2022 41
Statistical Summary
Audit for Collateral National Security
Systems (Sensitive But Unclassified)
1-8. This recommendation is Sensitive But Unclassified. Management agreed with
the recommendations.
Fiscal Report Number Report Title Date Issued
Year
2021 OIG-21-013 FINANCIAL MANAGEMENT: Audit of 12/20
the Office of D.C. Pensions' Financial
Statements for Fiscal Years 2020
and 2019
1. Office of D.C. Pensions management should fully develop existing policies
and procedures to document a process for reviewing, investigating, and
resolving unusual or suspicious activity identified during the audit log review,
as well as maintaining evidence of such review, investigation, and
resolution. Management agreed with the recommendation.
Fiscal Report Number Report Title Date Issued
Year
2021 OIG-21-020 FINANCIAL MANAGEMENT: 12/20
Management Letter for the Audit of
the Department of the Treasury's
Financial Statements for Fiscal Years
2020 and 2019
1. DO Information Technology management should ensure that the configured
schedule/frequency of Financial Analysis and Reporting System backups is
implemented in accordance with the minimum backup frequency required by
DO and Treasury policy.
2. Ensure that system-generated logs of backups, including failures, are
retained for the examination period and can be provided upon request.
3. Assist management in mitigating the risk of potential noncompliance with
the Federal Managers Financial Integrity Act if (1) results of testing were not
documented or (2) controls were not consistently tested by the components,
management should enforce guidance on how to improve A123
documentation and implementation of internal controls. Additionally,
management should perform a more detailed review of the sufficiency of the
component submissions, follow up with all inconsistencies, and have
documentation readily available to substantiate the conclusion that was
reached. Management agreed with the recommendations.
Treasury Office of Inspector General Semiannual Report—March 2022 42
Statistical Summary
Fiscal Report Number Report Title Date Issued
Year
2021 OIG-21-021 FINANCIAL MANAGEMENT: 02/21
Management Report for the Audit of
the Department of the Treasury's
Consolidated Financial Statements
for Fiscal Years 2020 and 2019
1. Fiscal Service management should complete its periodic review of the PIR
user access within the annual timeframe in accordance with the PIR System
Security Plan (SSP).
2. Address resource constraints and prioritize efforts to perform reviews within
the annual timeframe in accordance with the PIR SSP.
3. Retain evidence to demonstrate PIR auditable events are reviewed on a
weekly basis as required by the PIR Security Log SOP.
4. Consider resource constraints and prioritize efforts to perform timely audit
logging reviews in accordance with policy and procedures.
5. Review the current population of JFICS accounts and disable application
user access that has been inactive for greater than 120 days.
6. Design and implement a control to automatically disable the JFICS
application user accounts after 120 days of inactivity.
7. Retain evidence to demonstrate that access is disabled in a timely manner in
accordance with the JFICS SSP.
8. Perform a review of the current system environment against the
Configuration Management Database (CMDB) to ensure that all information
system components are inventoried.
9. Perform a risk assessment over the subject matter and determine the
appropriate personnel to be responsible for monitoring and updating the
CMDB.
10. Update policy and procedures related to the above recommendations and
disseminate the documentation to enforce such policy and procedures.
11. Conduct a review of the UNIX Mid-Tier production servers to validate that
backups are scheduled for all servers based on the frequency defined in the
Enterprise Information Technology Infrastructure SSP for the full fiscal year.
12. Perform a risk assessment over the subject matter and determine the
appropriate personnel to be responsible for developing a Plan of Action &
Milestones (POA&M) or formal risk acceptance for vulnerabilities identified.
Treasury Office of Inspector General Semiannual Report—March 2022 43
Statistical Summary
13. Disseminate policy and procedures related to the use of a POA&M or formal
risk acceptance to the appropriate personnel determined above to enforce
the respective vulnerability management requirements. Management agreed
with the recommendations.
Fiscal Report Number Report Title Date Issued
Year
2021 OIG-21-025 Interim Audit Update - Air Carrier and 03/21
Contractor Certifications for Payroll
Support Program
1. As expeditiously as possible, Treasury management should review payments
issued under Payroll Support Program 1 (PSP1) to ensure awarded amounts
are allowable per the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act) and Treasury guidance.
2. As expeditiously as possible, Treasury management should remedy the
incorrect amounts awarded under PSP1. Management agreed with the
recommendations.
Fiscal Report Number Report Title Date Issued
Year
2021 OIG-21-026 BILL AND COIN MANUFACTURING: 04/21
Audit of Physical Security at U.S.
Mint Production Facilities (Sensitive
But Unclassified)
1-17. This recommendation is Sensitive But Unclassified. Management agreed with
the recommendations.
Fiscal Report Number Report Title Dates Issued
Year
2021 OIG-21-028 FINANCIAL MANAGEMENT: Audit of 05/21
Treasury's Compliance With the PIIA
Requirements for Fiscal Year 2020
1. Treasury's Risk and Control Group (RCG) should work with Fiscal Service
management to revise its controls over the review and approval process to
verify the quantitative risk assessment includes sufficient supporting
documentation to substantiate Fiscal Service's improper payment amount
derived from its non-statistical sampling methodology.
2. Treasury’s RCG should Work with Fiscal Service and Mint management to
provide evidence of sufficient review and approval on the program-specific
risk assessments indicating management responses to risk assessment
questions are complete and accurate. Management agreed with the
recommendations.
Treasury Office of Inspector General Semiannual Report—March 2022 44
Statistical Summary
Closed Investigations of Senior Government Employees Not
Publicly Disclosed
October 1, 2021 through March 31, 2022
Treasury OIG closed one investigation involving a senior Government employee during
the period that was not publicly disclosed. The investigation determined that the
allegation of misconduct against the senior Government employee was
unsubstantiated.
Case Number Allegation/Disposition
USM-22-0004-I Treasury OIG initiated an investigation upon receipt of an
anonymous complaint alleging a Mint SES employee committed
an ethics violation. The employee consented to an interview for
a publication by a current contractor involved in a recompete
process. The investigation determined the allegation was
unsubstantiated because the SES’s employee’s participation in
the interview was approved by the Mint’s Office of Corporate
Communications per Mint and Treasury policy. On
November 23, 2021, a report was provided to the Mint for
their information. The matter was not referred to the
Department of Justice.
Unsubstantiated
Summary of Instances of Whistleblower Retaliation
October 1, 2021 through March 31, 2022
There was one case of whistleblower retaliation opened and established to report for
the period.
Treasury Office of Inspector General Semiannual Report—March 2022 45
Statistical Summary
Summary of Attempts to Interfere With Treasury OIG
Independence, Including Instances Where Information or
Assistance Request was Refused
October 1, 2021 through March 31, 2022
There were no attempts made to resist, delay, or restrict Treasury OIG access to
records or other information and no instances where an information or assistance
request was refused during this reporting period.
Treasury Office of Inspector General Semiannual Report—March 2022 46
Statistical Summary
Listing of Audit Products Issued
October 1, 2021 through March 31, 2022
Office of Audit
Letter to the Honorable Michael Regan, Administrator, Environmental Protection
Agency and Chairperson, Gulf Coast Ecosystem Restoration Council: 2022
Management and Performance Challenges (OIG-CA-22-001, 10/8/2021)
Management And Performance Challenges Facing the Department of the Treasury
FY 2022 (OIG-CA-22-002, 10/14/2021)
FINANCIAL MANAGEMENT: Report on the Bureau of the Fiscal Service Federal
Investments and Borrowings Branch’s Description of its Investment and Redemption
Services and the Suitability of the Design and Operating Effectiveness of its Controls
for the Period August 1, 2020 to July 31, 2021 (OIG-22-001, 10/14/2021)
FINANCIAL MANAGEMENT: Report on the Bureau of the Fiscal Service Funds
Management Branch’s Description of its Trust Funds Management Services and the
Suitability of the Design and Operating Effectiveness of its Controls for the Period
August 1, 2020 to July 31, 2021 (OIG-22-002, 10/14/2021)
INFORMATION TECHNOLOGY: The Gulf Coast Ecosystem Restoration Council Federal
Information Security Modernization Act of 2014 Evaluation Report for Fiscal Year
2021 (OIG-CA-22-003, 10/20/2021)
FINANCIAL MANAGEMENT: Audit of the United States Mint’s Schedules of Custodial
Deep Storage Gold and Silver Reserves as of September 30, 2021 and 2020
(OIG-22-003, 10/22/2021)
INFORMATION TECHNOLOGY: Department of the Treasury Federal Information
Security Modernization Act Fiscal Year 2021 Performance Audit for the Collateral
National Security Systems (OIG-22-004, 10/27/2021) Sensitive But Unclassified, Not
Publicly Disclosed
CYBERSECURITY/INFORMATION TECHNOLOGY: Department of the Treasury Federal
Information Security Modernization Act Fiscal Year 2021 Performance Audit
(OIG-22-005, 10/28/2021) Sensitive But Unclassified, Not Publicly Disclosed
Treasury Office of Inspector General Semiannual Report—March 2022 47
Statistical Summary
FINANCIAL MANAGEMENT: Audit of the Department of the Treasury’s Schedules of
United States Gold Reserves Held by Federal Reserve Banks as of September 30,
2021 and 2020 (OIG-22-006, 10/29/2021)
GULF COAST RESTORATION–DATA Act: Council Met DATA Act Reporting
Requirements but Improvements Are Needed (OIG-22-007, 11/3/2021)
DATA ACT: Treasury Submitted Higher Quality Non-IRS Data in Its Fiscal Year 2020
Third Quarter DATA Act Submission, However Improvements are Still Needed
(OIG-22-008, 11/8/2021)
Audit of Treasury’s Reporting Under the DATA Act–Summary Results (OIG-22-009,
11/8/2021)
FINANCIAL MANAGEMENT: Audit of the Federal Financing Bank's Financial
Statements for Fiscal Years 2021 and 2020 (OIG-22-010, 11/10/2021)
FINANCIAL MANAGEMENT: Audit of the Gulf Coast Ecosystem Restoration Council’s
Financial Statements for Fiscal Years 2021 and 2020 (OIG-22-011, 11/15/2021)
FINANCIAL MANAGEMENT: Audit of the Department of the Treasury’s Consolidated
Financial Statements for Fiscal Years 2021 and 2020 (OIG-22-012, 11/15/2021)
Quarterly Summary Memorandum to the Lead Inspector General, Department of
Defense: Overseas Contingency Operations–Summary of Work Performed by the
Department of the Treasury Related to Terrorist Financing and Anti-Money Laundering
for Fourth Quarter Fiscal Year 2021 (OIG-CA-22-005, 11/22/2021)
CYBERSECURITY/INFORMATION TECHNOLOGY: Audit of the Department of the
Treasury's Cybersecurity Information Sharing (OIG-22-013, 11/23/2021)
FINANCIAL MANAGEMENT: Management Letter for the Audit of the Department of
the Treasury's Consolidated Financial Statements for Fiscal Years 2021 and 2020
(OIG-22-014, 12/1/2021)
FINANCIAL MANAGEMENT: Audit of the Office of D.C. Pensions' Financial
Statements for Fiscal Years 2021 and 2020 (OIG-22-015, 12/7/2021)
FINANCIAL MANAGEMENT: Audit of the United States Mint’s Financial Statements
for Fiscal Years 2021 and 2020 (OIG-22-016, 12/7/2021)
Treasury Office of Inspector General Semiannual Report—March 2022 48
Statistical Summary
FINANCIAL MANAGEMENT: Management Letter for the Audit of the United States
Mint’s Financial Statements for Fiscal Years 2021 and 2020 (OIG-22-017, 12/7/2021)
FINANCIAL MANAGEMENT: Audit of the Office of the Comptroller of the Currency's
Financial Statements for Fiscal Years 2021 and 2020 (OIG-22-018, 12/10/2021)
FINANCIAL MANAGEMENT: Audit of the Department of the Treasury Forfeiture Fund's
Financial Statements for Fiscal Years 2021 and 2020 (OIG-22-019, 12/15/2021)
FINANCIAL MANAGEMENT: Audit of the Community Development Financial
Institutions Fund’s Financial Statements for Fiscal Years 2021 and 2020 (OIG-22-020,
12/15/2021)
FINANCIAL MANAGEMENT: Audit of the Bureau of Engraving and Printing's Financial
Statements for Fiscal Years 2021 and 2020 (OIG-22-021, 12/20/2021)
FINANCIAL MANAGEMENT: Management Letter for the Audit of the Bureau of
Engraving and Printing’s Financial Statements for Fiscal Years 2021 and 2020
(OIG-22-022, 12/20/2021)
CORONAVIRUS DISEASE 2019 PANDEMIC RELIEF PROGRAMS: Audit of the
Community Development Financial Institutions Fund's Implementation of the CDFI
Rapid Response Program (OIG-22-023, 12/21/2021)
FINANCIAL MANAGEMENT: Audit of the Alcohol and Tobacco Tax and Trade Bureau's
Financial Statements for Fiscal Years 2021 and 2020 (OIG-22-024, 12/21/2021)
FINANCIAL MANAGEMENT: Management Letter for the Audit of the Alcohol and
Tobacco Tax and Trade Bureau's Financial Statements for Fiscal Years 2021 and 2020
(OIG-22-025, 12/21/2021)
FINANCIAL MANAGEMENT: Management Report for the Audit of the Department of
the Treasury’s Consolidated Financial Statements for Fiscal Years 2021 and 2020
(OIG-22-026, 12/22/2021)
Apache Tribe of Oklahoma's Use of Coronavirus Relief Fund Payment
(OIG-CA-22-006, 12/28/2021) Redacted, Questioned Costs $500,000
Memorandum for the Honorable Richard K. Delmar, Treasury Deputy Inspector
General: Joint Purchase and Integrated Card Violation Report (April 1, 2021–
September 30, 2021) (OIG-CA-22-007, 1/14/2022) Internal Memorandum, Not
Publicly Disclosed
Treasury Office of Inspector General Semiannual Report—March 2022 49
Statistical Summary
Letter to Shalanda Young, Acting Director, Office of Management and Budget: Annual
Report on the Status of the Department of the Treasury’s Implementation of Purchase
and Travel Card Audit Recommendations (OIG-CA-22-008, 1/21/2022)
Letter to Shalanda Young, Acting Director, Office of Management and Budget: Annual
Report on the Status of the Gulf Coast Ecosystem Restoration Council’s
Implementation of Purchase and Travel Card Audit Recommendations
(OIG-CA-22-009, 1/20/2022)
DOMESTIC ASSISTANCE: Audit of Wisconsin Housing and Economic Development
Authority New Markets Tax Credit Allocations (OIG-22-027, 2/2/2022)
Coronavirus Relief Fund Prime Recipient Quarterly GrantSolutions Submissions
Closeout Procedures Guide (OIG-CA-22-010, 2/14/2022)
Quarterly Summary Memorandum to the Lead Inspector General, Department of
Defense: Overseas Contingency Operations–Summary of Work Performed by the
Department of the Treasury Related to Terrorist Financing and Anti-Money Laundering
for First Quarter Fiscal Year 2022 (OIG-CA-22-011, 2/17/2022)
Coronavirus Relief Fund Risk Analytics Dashboard Procedures (OIG-CA-22-012,
3/7/2022)
CORONAVIRUS DISEASE 2019 PANDEMIC RELIEF PROGRAMS: Audit of Treasury’s
Implementation of the Emergency Capital Investment Program (OIG-22-028, 3/8/2022)
FINANCIAL MANAGEMENT: Audit of the Exchange Stabilization Fund's Financial
Statements for Fiscal Years 2021 and 2020 (OIG-22-029, 3/9/2022)
GULF COAST RESTORATION–RESTORE Act: TCEQ Complied with RESTORE Act Land
Acquisition Requirements (OIG-22-030, 3/15/2022)
RESOURCE MANAGEMENT: Audit of the Department of the Treasury’s Use of Cash
Discounts (OIG-22-031, 3/23/2022) Funds Put to Better Use $67,448
CONTRACT AUDIT: Audit of the Bureau of Engraving & Printing's eFiling System
(OIG-22-032, 3/25/2022)
REVENUE COLLECTION: The U.S. Customs and Border Protection's Oversight of the
Merchandise Transported In-Bond Program Needs Improvement to Better Ensure the
Protection of Revenue (OIG-22-033, 3/31/2022)
Treasury Office of Inspector General Semiannual Report—March 2022 50
Statistical Summary
Audit Reports Issued With Questioned Costs
October 1, 2021 through March 31, 2022
Total Total
Total No. Questioned Unsupported
C a t e g or y o f R e p o rt s Costs Costs
For which no management decision had been made by
beginning of reporting period 1 $2,550 $0
Which were issued during the reporting period 1 $500,000 $0
Subtotals 2 $502,550 $0
For which a management decision was made during the
reporting period 1 $2,550 $0
Dollar value of disallowed costs 0 $0 $0
Dollar value of costs not disallowed 1 $2,550 $0
For which no management decision was made by the
end of the reporting period 1 $500,000 $0
For which no management decision was made within 6
months of issuance 0 $0 $0
Questioned costs include expenditures: (1) that are questioned because of an alleged violation of a provision of a
law, regulation, contract, or other requirement governing the expenditure of funds; (2) that, at the time of the
audit, are not supported by adequate documentation (i.e., unsupported costs); or (3) used for the intended
purpose that are unnecessary or unreasonable.
Treasury Office of Inspector General Semiannual Report—March 2022 51
Statistical Summary
Audit Reports Issued With Recommendations that Funds Be Put
to Better Use
October 1, 2021 through March 31, 2022
Total
No. of Revenue
Category Reports Total Savings Enhancement
For which no management decision had been
made by beginning of reporting period 0 $0 $0 $0
Which were issued during the reporting
period 1 $67,448 $67,448 $0
Subtotals 1 $67,448 $67,448 $0
For which a management decision was made
during the reporting period 0 $0 $0 $0
Dollar value of recommendations agreed to
by management 0 $0 $0 $0
Dollar value based on proposed
management action 0 $0 $0 $0
Dollar value based on proposed
legislative action 0 $0 $0 $0
Dollar value of recommendations not
agreed to by management 0 $0 $0 $0
For which no management decision was
made by the end of the reporting period 1 $67,448 $67,448 $0
For which no management decision was
made within 6 months of issuance 0 $0 $0 $0
A recommendation that funds be put to better use denotes funds could be used more efficiently if management took
actions to implement and complete the recommendation including: (1) reduction in outlays; (2) de-obligations of
funds from programs or operations; (3) costs not incurred by implementing recommended improvements related to
operations; (4) avoidance of unnecessary expenditures noted in pre-award review of contract or grant agreements;
(5) any other savings which are specifically identified; or (6) enhancements to revenues of the Federal Government.
Treasury Office of Inspector General Semiannual Report—March 2022 52
Statistical Summary
Reports for Which No Management Comment was Returned
Within 60 Days
As of March 31, 2022
There were no such reports issued for comment over 60 days as of the end of the
reporting period.
Reports Issued Over 6 Months for Which No Management
Decision Has Been Made
As of March 31, 2022
There were no such reports as of the end of this reporting period.
Significant Revised Management Decisions
October 1, 2021 through March 31, 2022
There were no significant revised management decisions during the reporting period.
Significant Disagreed Management Decisions
October 1, 2021 through March 31, 2022
There were no significant disagreed management decisions during the reporting period.
Treasury Office of Inspector General Semiannual Report—March 2022 53
Statistical Summary
Peer Reviews
October 1, 2021 through March 31, 2022
Office of Audit
Audit organizations that perform audits and attestation engagements of Federal
Government programs and operations are required by generally accepted government
auditing standards to undergo an external peer review every 3 years. The objectives of
an external peer review are to determine, during the period under review, whether the
audit organization was complying with its quality control system to provide the audit
organization with reasonable assurance that it was conforming to applicable
professional standards. Federal audit organizations can receive a peer review rating of
Pass, Pass with Deficiencies, or Fail.
The most recent peer review of our office was performed by the U.S. Department of
Health and Human Services (HHS) OIG. In its report dated September 27, 2021, HHS
OIG rendered a Pass rating for our system of quality control in effect for the year
ended March 31, 2021. External audit peer review reports of our office are available
on Treasury OIG’s website. Treasury OIG did not perform any peer reviews of other
Federal audit organizations during this reporting period.
Office of Investigations
Council of the Inspectors General on Integrity and Efficiency (CIGIE) mandates that the
investigative law enforcement operations of all OIGs undergo peer reviews every
3 years to ensure compliance with (1) CIGIE’s investigations quality standards and
(2) the relevant guidelines established by the Office of the Attorney General of the
United States.
In its report dated January 5, 2021, the Federal Housing Finance Agency OIG found
our office to be in compliance with all relevant guidelines for fiscal year 2020. During
this reporting period, our office did not perform a peer review of another OIG.
Treasury Office of Inspector General Semiannual Report—March 2022 54
Other Reporting Requirements and Requests
This section addresses certain reporting requirements of our office that are separate
from the reporting requirements in the Inspector General Act of 1978 (as amended).
The U.S. Customs and Border Protection's Oversight of the
Merchandise Transported In-Bond Program Needs Improvement to
Better Ensure the Protection of Revenue
We performed an audit of the Department of Homeland Security (DHS) U.S.
Customs and Border Protection’s (CBP) Merchandise Transported In-Bond
(In--Bond) Program to meet our biennial requirement to report on the
effectiveness of measures taken by CBP to protect revenue in accordance with
Section 112 of the Trade Facilitation and Trade Enforcement Act of 2015.
We found CBP’s policies and procedures to be inadequate with respect to the
monitoring and tracking of merchandise transported in-bond and collecting
respective duties, taxes, and fees. Specifically, we found (1) DHS’s Cargo
Security and Controls Division’s (CSC) oversight of the In-Bond Program
operations at field offices and ports needs improvement; (2) Ports do not
adequately monitor and track in-bond movements; (3) Automated Commercial
Environment (ACE), the system of record for in-bond merchandise, limitations
impeded data quality for the In-Bond Program; (4) Ports perform limited in-bond
compliance examinations; (5) CBP’s training program for the oversight of in-
bond shipments needs improvement; and (6) CBP’s documented custodial
bonding policy does not adequately protect Customs revenue associated with
in-bond cargo.
We made 20 recommendations to the CBP Commissioner to, (1) ensure CSC
officials develop and disseminate performance measures specific to the In-Bond
Program so that CSC, field offices, and port personnel are aware of program
expectations; (2) ensure CSC officials develop written procedures for CSC’s
oversight of port performance relating to the In-Bond Program to include, but
not be limited to, regular data analytics and review of ACE reports; (3) ensure
CSC officials work with Trade Transformation Office (TTO) officials to
implement a central repository to store ACE reports, compliance examination
documentation, and other in-bond related information, including training
materials, maintained by the ports so that CSC can oversee in-bond activity, and
for CSC to regularly notify field offices and ports that these documents are
available in this repository; (4) ensure CSC officials expand the Self-Inspection
Program in-bond Self-Inspection Worksheets (SIW) questions to cover key
program areas, such as the ports’ use of ACE reporting to oversee overdue
Treasury Office of Inspector General Semiannual Report—March 2022 55
Other Reporting Requirements and Requests
in--bond shipments and training for CBP officers on in-bond compliance
examinations and audits; (5) ensure CSC officials provide guidance to the ports
on how to respond to in-bond SIW questions to include scenarios and the
appropriate response given those scenarios; (6) ensure Office of Information
Technology officials assess and address each port’s need for infrastructure and
equipment upgrades to effectively operate and meet information system
requirements; (7) ensure CSC officials issue policies and procedures for ports on
ACE reports they are expected to run regularly to oversee in-bond shipments
and ensure in-bonds are closed out, to include issuing guidance necessary to
monitor shipments in ACE as well as review proof of exports; (8) ensure CSC
officials issue policies and procedures for CSC to regularly review the monitoring
and tracking of in-bond shipments conducted by the ports; (9) ensure CSC
officials update in-bond regulations to require a standardized proof of export to
be uploaded to ACE for all cargo exported; (10) ensure CSC officials provide
TTO officials business requirements after regulations are updated so that TTO
can update ACE to require proof of export for closure of in-bonds that are
exported; (11) ensure Office of Trade officials, with input from CSC officials,
update regulations to support ACE functionality and data quality to modernize
the in-bond process, to include improving the report processing time, improving
the quality of reports, and addressing Commercial Operations Advisory
Committee concerns regarding the system; (12) ensure CSC officials provide
TTO officials with business requirements after regulations are updated so that
TTO can implement changes in ACE to modernize in-bond tracking and
automation processes and enhance data quality to meet user needs; (13) direct
CSC officials to consider updating guidance on compliance examinations to
require ports to examine a statistically valid sample of in-bond shipments so that
cargo reviewed is more representative of all in-bond shipments, to include
guidance for instructions on waivers of examination and for documenting the
justification for these waivers; (14) ensure CSC officials provide the ports with
written policies and procedures to ensure compliance examinations are adequate
and consistent, to include selecting cargo for review, conducting examinations,
documenting the process used for the review and the results, and storing the
records; (15) ensure CSC officials regularly sample and review compliance
examinations conducted by the ports to ensure ports are complying with CBP
policy; (16) ensure CSC and TTO officials formalize standardized in-bond
training for Headquarters’ offices, field offices, and ports to ensure all ports are
operating under national policy, to include training covering key areas such as
compliance examinations and audits, ACE reports, bonding requirements, and
risk assessments of the trade community; (17) ensure CSC and TTO officials
require ACE training related to the oversight of in-bond cargo for all CBP
officers; (18) ensure that CSC and TTO officials coordinate to provide regular
and comprehensive ACE training course offerings related to the oversight of
in--bond cargo to satisfy employee training needs; (19) ensure the Commercial
Treasury Office of Inspector General Semiannual Report—March 2022 56
Other Reporting Requirements and Requests
Operations Revenue & Entry (CORE) Division coordinates with the Revenue
Division and CSC officials to improve custodial bonding to address the risks of
merchandise transported in-bond and update CBP’s bonding policy, including
policy to improve the connectivity between in-bond shipments and respective
duties, taxes, and fees by considering estimated duties when determining the
appropriate bond coverage; and (20) ensure the CORE Division provides general
bond training to include setting the appropriate bond amounts.
CBP management concurred with our recommendations and outlined corrective
actions to address our recommendations. Management also expressed concern
in their management letter response regarding statements made in our report
that, (1) characterized CBP in-bond data as being unreliable; (2) concluded
unreconcilable differences existed with CBP’s number of open and past due
in--bond shipments; and (3) concluded there was no way for us to determine
the magnitude of uncollected revenue. Management stated that CBP devotes
extensive efforts to ensure data integrity and believed that differences in the
number of open and past due in-bond shipments were fully explainable.
Management further stated that sufficient time was not available for program
officials and subject matter experts to fully explain how CBP maintained data
integrity and the reasons for differences.
While CBP management’s planned corrective actions met the intent of our
recommendations, we disagreed with CBP management’s interpretation of the
statements we made in the report regarding unreliable data and the magnitude
of uncollected revenue resulting from in-bond shipments that were not properly
closed out. (OIG-22-033)
Reviews of Bank Failures with Nonmaterial Losses
We conduct reviews of failed banks supervised by the Office of the Comptroller
of the Currency (OCC) with losses to the Federal Deposit Insurance
Corporation’s (FDIC) Deposit Insurance Fund (DIF) that do not meet the
definition of a material loss in the Federal Deposit Insurance Act. The reviews
are performed to fulfill the requirements found in 12 U.S.C. §1831o(k). The
term “material loss” triggers a material loss review if a loss to the DIF exceeds
$50 million (with provisions to increase that trigger to a loss that exceeds
$75 million under certain circumstances). For losses that are not material, the
Federal Deposit Insurance Act requires that each 6-month period, the Office of
Inspector General (OIG) of the Federal banking agency must (1) identify the
estimated losses that have been incurred by the DIF during that 6 month period
and (2) determine the grounds identified by the failed institution’s regulator for
appointing the FDIC as receiver, and whether any unusual circumstances exist
Treasury Office of Inspector General Semiannual Report—March 2022 57
Other Reporting Requirements and Requests
that might warrant an in---depth review of the loss. For each 6month period, we
are also required to prepare a report to the failed institutions’ regulator and the
Congress that identifies (1) any loss that warrants an in--depth review, together
with the reasons why such a review is warranted and when the review will be
completed; and (2) any losses where we determine no in---depth review is
warranted, together with an explanation of how we came to that determination.
There were no banks supervised by OCC that failed during this reporting period.
Overseas Contingency Operations Quarterly Summary Memoranda to
the Department of Defense OIG
During this reporting period, we issued two summary memoranda to the
Department of Defense OIG regarding information we obtained on the
Department of the Treasury’s (Treasury or the Department) activities with
respect to disrupting the Islamic State of Iraq and Syria’s (ISIS) finances. The
memoranda included specific examples of activities to disrupt ISIS’s financing,
information on Treasury programs that combat terrorist financing, and work we
performed or plan to perform to review these programs. (OIG-CA-22-005,
OIG-CA-22-011)
Annual Reports on the Status of Implementation of Purchase and
Travel Card Audit Recommendations
We provided annual reports on the progress made by Treasury and by the Gulf
Coast Ecosystem Restoration Council (Council) in implementing charge card
related audit recommendations in accordance with the Government Charge Card
Abuse Prevention Act of 2012. Our office did not issue any charge card related
audit findings and recommendations to Treasury or the Council and did not have
anything to report for fiscal year 2021. (OIG-CA-22-008, OIG-CA-22-009)
Treasury Office of Inspector General Semiannual Report—March 2022 58
References to the Inspector General Act
Section Requirement Page
Section 4(a)(2) Review of legislation and regulations 29
Section 5(a)(1) Significant problems, abuses, and deficiencies 7-21
Section 5(a)(2) Recommendations with respect to significant problems, abuses, and deficiencies 7-21
Section 5(a)(3) Significant unimplemented recommendations described in previous semiannual 30-44
reports
Section 5(a)(4) Matters referred to prosecutive authorities 29
Section 5(a)(5) Summary of instances where information was refused 46
Section 5(a)(6) List of audit reports 47-50
Section 5(a)(7) Summary of significant reports 7-21
Section 5(a)(8) Audit reports with questioned costs 51
Section 5(a)(9) Recommendations that funds be put to better use 52
Section Summary of each audit, inspection, and evaluation report issued before the 53
5(a)(10)(A) beginning of the reporting period for which no management decision was made
Section Summary of each audit, inspection, and evaluation report issued for which no 53
5(a)(10)(B) management comment was returned within 60 days
Section Summary of each audit, inspection, and evaluation report issued before the 30-44
5(a)(10)(C) beginning of the reporting period for which there are outstanding unimplemented
recommendations, including the aggregate potential cost savings
Section Significant revised management decisions made during the reporting period 53
5(a)(11)
Section Management decisions with which the Inspector General is in disagreement 53
5(a)(12)
Section Instances of unresolved Federal Financial Management Improvement Act 10
5(a)(13) noncompliance
Section Results of peer reviews conducted of Treasury OIG by another OIG 54
5(a)(14)
Section List of outstanding recommendations from peer reviews 54
5(a)(15)
Section List of peer reviews conducted by Treasury OIG, including a list of outstanding 54
5(a)(16) recommendations from those peer reviews
Section Statistics for the period related to the number of (A) investigative reports issued, 29
5(a)(17)(A-D) (B) persons referred to the Department of Justice for criminal prosecution,
(C) persons referred to state and local authorities for criminal prosecution, and
(D) criminal indictments/informations
Section Description of metrics used to develop investigative statistics in Section 5(a)(17) 29
5(a)(18)
Section 5a(19) Summary of each investigation involving a senior Government employee where 45
allegation of misconduct was substantiated
Section 5a(20) Instances of whistleblower retaliation 45
Section 5a(21) Summary of attempts to interfere with Treasury OIG independence 46
Section Description of each inspection, evaluation, and audit that was closed and not 47-50
5a(22)(A) publicly disclosed
Section Description of each investigation closed, involving a senior Government employee, 45
5a(22)(B) that was not publicly disclosed
Section 5(d) Serious or flagrant problems, abuses, or deficiencies N/A
Section 6(b)(2) Report to Secretary when information or assistance is unreasonably refused 46
Treasury Office of Inspector General Semiannual Report—March 2022 59
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Abbreviations
ACE Automated Commercial Environment
ARP American Rescue Plan Act of 2021
ARC Administrative Resource Center
BEP Bureau of Engraving and Printing
Board Board of Governors of the Federal Reserve System
CAA, 2021 Consolidated Appropriations Act, 2021
CARES Act Coronavirus Aid, Relief, and Economic Security Act
CBP Customs and Border Protection
CDE Community Development Entities
CDFI Community Development Financial Intuitions
CIGIE Council of the Inspectors General on Integrity and Efficiency
CISA Cybersecurity Information Sharing Act
CO Contracting Officer
COR Contracting Officer Representative
Council Gulf Coast Ecosystem Restoration Council
COVID-19 Coronavirus Disease 2019
CRF Coronavirus Relief Fund
CSC Cargo Security and Controls Division
DASHR/CHCO Office of the Deputy Assistant Secretary for Human
Resources and Chief Human Capital Officer
DATA Act Digital Accountability and Transparency Act
DHS Department of Homeland Security
DIF Deposit Insurance Fund
DO Departmental Offices
ECIP Emergency Capital Investment Program
FAR Federal Acquisition Regulation
FinCEN Financial Crimes Enforcement Network
Fiscal Service Bureau of the Fiscal Service
FISMA Federal Information Security Modernization Act of 2014
GAO Government Accountability Office
In-bond Merchandise Transported In-Bond
IRS Internal Revenue Service
JFICS Judgment Fund Internet Claim System
KPMG KPMG LLP
MOU memorandum of understanding
Mint United States Mint
NMTC New Markets Tax Credit
OCC Office of the Comptroller of the Currency
OER Office of Executive Resources
Treasury Office of Inspector General Semiannual Report—March 2022 61
Abbreviations
OFAC Office of Foreign Assets Control
OIG Office of Inspector General
OMB Office of Management and Budget
OPM Office of Personnel Management
PIR Payment Information Repository
PRAC Pandemic Response Accountability Committee
RESTORE Act Resources and Ecosystems Sustainability, Tourist
Opportunities, and Revived Economies of the Gulf Coast
States Act of 2012
RMA RMA Associates
RPA Robotic Process Automation
RRP Rapid Response Program
SAO Senior Accountable Officer
SBLF Small Business Lending Fund
Science Program Gulf Coast Ecosystem Restoration Science, Observation,
Monitoring, and Technology Program
SES Senior Executive Service
SPS Security Payment System
SOP standard operating procedures
SSP System Security Plan
TFM Treasury Financial Manual
TIGTA Treasury Inspector General for Tax Administration
Treasury or
the Department Department of the Treasury
TTO Trade Transformation Office
Uniform Guidance Uniform Administrative Requirements, Cost Principals, and
Audit Requirements for Federal Awards (2 CFR Part 200)
USAO U.S. Attorney’s Office
Williams Adley Williams, Adley & Company-DC, LLP
Treasury Office of Inspector General Semiannual Report—March 2022 62
View of the Treasury Building in Washington, DC
Source: Treasury Graphics Branch
Treasury Office of Inspector General Locations
1500 Pennsylvania Avenue, N.W., Room 4436
Washington, DC 20220
875 15th Street, N.W., Suite 200
Washington, DC 20005
408 Atlantic Avenue, Room 330
Boston, Massachusetts 02110
Report Waste, Fraud, and Abuse
Submit a complaint regarding Treasury OIG Treasury Programs and Operations and Gulf Coast Restoration using our
online form: https://oig.treasury.gov/report-fraud-waste-and-abuse
Treasury Whistleblower Ombudsman
For information about whistleblowing and reprisal and about your rights and responsibilities as a Treasury employee or
contractor, please contact the OIG Whistleblower Ombudsman Program at 202-927-0650 or Email:
OIGCounsel@oig.treas.gov
Treasury OIG Website
Access Treasury OIG reports and other information online: https://oig.treasury.gov/
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