U.S. Department of Labor OIG, CIGIE Top Management and Performance Challenges Facing Multiple Federal Agencies (02/03/2021) (2020-04-21)
Summary
A February 2021 report of the Council of the Inspectors General on Integrity and Efficiency (CIGIE), Top Management and Performance Challenges Facing Multiple Federal Agencies, summarizing challenges that Federal Inspectors General identified in their recent top challenges reports. It lists Information Technology Security and Management (73 percent of respondents), Human Capital Management (50 percent) and Financial Management (48 percent) as the most common, followed by Homeland Security, Disaster Preparedness, and COVID-19, procurement, grant and performance management. The report states that 75 agencies had an IG and that 15 individuals from Federal OIGs drafted it. Its IT chapter cites OIG findings at DHS, DOD, OPM, HUD and other agencies, and it notes a separate PRAC report on COVID-19 challenges.
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“U.S. Department of Labor OIG, CIGIE Top Management and Performance Challenges Facing Multiple Federal Agencies (02/03/2021) (2020-04-21).”
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Top Management and
Performance Challenges Facing
Multiple Federal Agencies
February 2021
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
Table of Contents
INTRODUCTION ........................................................................................................................................................ 1
APPROACH TO THIS REPORT .......................................................................................................................................... 1
A NOTE ABOUT THE CORONAVIRUS DISEASE 2019 (COVID-19) ....................................................................................... 1
BACKGROUND ON INSPECTORS GENERAL ........................................................................................................................ 1
CHALLENGE INFORMATION TECHNOLOGY SECURITY AND MANAGEMENT ........................................................... 3
KEY AREAS OF CONCERN .............................................................................................................................................. 3
Safeguarding Sensitive Data and Information Systems .................................................................................. 3
IT Modernization ................................................................................................................................................. 4
Continuity of Operations ..................................................................................................................................... 5
Building and Maintaining an IT Workforce ........................................................................................................ 5
CHALLENGE HUMAN CAPITAL MANAGEMENT......................................................................................................... 7
KEY AREAS OF CONCERN .............................................................................................................................................. 7
Recruiting and Retaining Highly Skilled Staff ................................................................................................... 7
Providing Adequate Training .............................................................................................................................. 8
Leadership Continuity ......................................................................................................................................... 8
CHALLENGE FINANCIAL MANAGEMENT .................................................................................................................. 9
KEY AREAS OF CONCERN .............................................................................................................................................. 9
Adequate Budgets .............................................................................................................................................. 9
Financial Management..................................................................................................................................... 10
Risk of Improper Payments .............................................................................................................................. 10
CHALLENGE HOMELAND SECURITY, DISASTER PREPAREDNESS, AND COVID-19 ............................................. 11
KEY AREAS OF CONCERN ............................................................................................................................................ 11
Countering Terrorism and Homeland Security Threats .................................................................................. 11
Protecting and Promoting U.S. Technological Dominance and Economic Competitiveness ...................... 12
Preparing and Responding to Disasters.......................................................................................................... 13
Maintaining Continuity of Operations During a Global Pandemic ................................................................. 14
CHALLENGE PROCUREMENT MANAGEMENT ........................................................................................................ 16
KEY AREAS OF CONCERN ............................................................................................................................................ 16
Contract Award Process ................................................................................................................................... 16
Contract Oversight ............................................................................................................................................ 18
Invoice and Payment Review ........................................................................................................................... 19
Training and Retaining Procurement Personnel............................................................................................. 19
CHALLENGE GRANT MANAGEMENT ...................................................................................................................... 21
KEY AREAS OF CONCERN ............................................................................................................................................ 21
Ensuring Funds Are Awarded Properly ............................................................................................................ 21
Overseeing the Use of Grant Funds ................................................................................................................. 21
Ensuring Grant Investments Achieve Intended Results ................................................................................. 21
Obtaining Timely and Accurate Financial and Performance Information ..................................................... 21
Threats Posed by Foreign Government Talent Recruitment Programs ......................................................... 22
CHALLENGE PERFORMANCE MANAGEMENT AND ACCOUNTABILITY ................................................................... 23
KEY AREAS OF CONCERN ............................................................................................................................................ 23
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
Operational Leadership and Management Challenges ................................................................................. 23
Internal Control Deficiencies ............................................................................................................................ 24
Enterprise Risk Management .......................................................................................................................... 25
Working With External Stakeholders ............................................................................................................... 25
Collecting and Using Performance-Based Metrics ......................................................................................... 26
ABBREVIATIONS AND ACRONYMS ......................................................................................................................... 27
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
INTRODUCTION
Each year, Federal Inspectors General (IGs) teams assigned to each of the identified top
identify and report on the top management challenges. These mini teams consolidated
and performance challenges (hereinafter information from top challenges reports
referred to as top challenges) facing their across Federal OIGs to create this report.
respective agencies pursuant to the Reports
Consolidation Act of 2000. This report A Note About the Coronavirus
represents the second time the Council of the
Disease 2019 (COVID-19)
Inspectors General on Integrity and Efficiency
(CIGIE) has created a summary of the top Several IGs identified the COVID-19 pandemic
Federal agency challenges identified by their as a challenge their agencies faced both
respective Offices of Inspector General (OIGs). in the past year and looking forward. In
addition, many IGs included COVID-19 when
Approach to This Report describing other top challenges within their
agencies. For example, COVID-19
Under the auspices of CIGIE, this report complicated agencies’ efforts to manage
summarizes top challenges that were finances, complete procurements, or
identified by Federal IGs as part of their distribute grants. In this report, as
recent top challenges reports. In response to appropriate, we discuss COVID-19 as an
a data call from CIGIE, IG offices identified agency challenge and also describe how
top challenges facing their respective COVID-19 affected other agency challenges.
agencies from a list of commonly occurring
challenges. IGs could also provide open- Separately, the Pandemic Response
ended responses that were not on that list. Accountability Committee (PRAC) has created
The resulting top challenges are as follows: a report summarizing top challenges specific
to the COVID-19 pandemic. We have worked
with the PRAC to ensure our respective efforts
• Information Technology Security are complementary.
and Management (73 percent of
respondents) Background on Inspectors General
• Human Capital Management
(50 percent) In accordance with the Inspector General Act
• Financial Management (48 percent) of 1978, as amended (IG Act), virtually all
• Homeland Security, Disaster Federal agencies have an IG. As of the writing
Preparedness, and COVID-19 of this document, 75 agencies had an IG;
(47 percent) about half of these IGs were presidentially
appointed and Senate confirmed, and the
• Procurement Management
other half were appointed by the agency head.
(43 percent)
The 75 IGs collectively make up CIGIE, which,
• Grant Management (43 percent)
in addition to creating reports that address
• Performance Management and
matters of mutual concern to IGs, provides
Accountability (42 percent)
training for OIG employees; develops policies,
professional standards, best practices, and
A group of 15 individuals from across various
common approaches for the work of OIGs;
Federal OIGs drafted this report, with smaller
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
coordinates reviews by OIGs on issues that whistleblower, and OIGs are responsible for
span multiple agencies; and, through its protecting whistleblowers from such
Integrity Committee, receives, reviews, and retaliation. The IG Act also requires OIGs to
refers for investigation allegations of report instances of whistleblower retaliation in
wrongdoing made against IGs, designated their Semiannual Reports to Congress.
staff members of those IGs, and the Special
Counsel and Deputy Special Counsel of the IGs are nonpartisan and are selected without
Office of Special Counsel. regard to political affiliation. As such, IGs
typically remain in office when presidential
The role of IGs, according to the IG Act, is to administrations change, a practice that has
prevent and detect fraud, waste, and abuse been followed for more than 40 years. In
and to promote economy, efficiency, and addition, IGs maintain their independence, in
effectiveness within agency programs and both fact and appearance, to provide credible
operations. IGs are unique in that they have a oversight. Agency heads may not prevent IGs
dual reporting responsibility both to their from initiating, carrying out, or completing any
agency head and to Congress. In this audit, evaluation, investigation, or special
reporting, IGs keep each party fully and review, except in limited circumstances.
currently informed about problems and
deficiencies in their agencies’ programs and Under the IG Act, IGs are given broad statutory
operations and the necessity for and progress authorities, including access to all agency
of corrective action. To assist with this records and information. Agencies must not
reporting, IGs have mandatory reporting prevent IGs from gaining access to records
requirements that include Semiannual and information necessary to complete any
Reports to Congress, annual audits of agency audit, evaluation, investigation, or special
financial statements, annual evaluations of review. Efforts on the part of an agency to
information security programs and practices, prevent access to records or information
annual reports on agency improper payments, requires IGs to alert Congress and possibly
and annual discussions of the top challenges create a 7-day letter. Section 5(d) of the IG
within their agencies. Act requires IGs to alert their agency heads of
particularly serious or flagrant problems,
To facilitate the reporting of fraud, waste, and abuses, or deficiencies, and then the agency
abuse to OIGs, each agency’s website head must pass that information, with any
homepage must contain a direct link to the comments, to the appropriate committees
agency’s OIG website. In addition, the IG Act and subcommittees in Congress within 7
explicitly prohibits government personnel from calendar days.
retaliating against an employee who acts as a
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
CHALLENGE
Information Technology Security and Management
The information technology (IT) security and and sensitive data are protected. Given the
management challenge includes top immense responsibilities that Federal
challenges related to the protection of Federal agencies are charged with, failure to meet this
IT systems from intrusion or compromise by challenge can have significant consequences
external or internal entities and the planning in a number of ways, including by exposing
and acquisition of replacing or upgrading IT individuals’ personal information and
infrastructure. This is a long-standing, compromising national security. For instance,
serious, and ubiquitous challenge for Federal in December 2020, the Department of
agencies because agencies depend on Homeland Security (DHS) Cybersecurity and
reliable and secure IT systems to perform their Infrastructure Security Agency (CISA) issued
mission-critical functions. The security and Emergency Directive 21-01 regarding the
management of government IT systems compromise of commercial software used by
remain challenges due to significant multiple Federal agencies. CISA’s emergency
impediments faced by Federal agencies, directive stated the exploitation poses an
including resource constraints and a shortage “unacceptable risk to Federal Civilian
of cybersecurity professionals. 1 Executive Branch agencies” based on the
compromised products’ widespread use to
Key Areas of Concern monitor traffic on major Federal network
systems, high potential for a compromise of
Key areas of concern related to IT security and agency information systems, and grave impact
management include safeguarding sensitive of a successful incursion.
data and information systems, networks, and
assets against cyber-attacks and insider The national security impact of cyber-attacks
threats; modernizing and managing Federal IT extends beyond Federal information systems
systems; ensuring continuity of operations; into critical public and private infrastructure.
and recruiting and retaining a highly skilled The DHS OIG reported that DHS still faces
cybersecurity workforce. challenges in improving the quality of cyber
threat information it shares across Federal
Safeguarding Sensitive Data and and private-sector entities. CISA’s lack of
Information Systems progress in improving the quality of
Federal information systems continue to be information it shares was attributed to a
targets of cyber-attacks of increasing number of factors, such as limited numbers of
complexity. In the face of this ever-present participants sharing cyber indicators with
threat, Federal agencies face challenges in CISA, delays in receiving cyber threat
ensuring that information systems are secure
1 U.S. Government Accountability Office, Financial Audit: Statements of the U.S. Government, GAO-17-283R
Fiscal Years 2016 and 2015 Consolidated Financial (12 January 2017), p. 5.
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
intelligence standards, and insufficient CISA in response to cyber vulnerabilities previously
office staff. identified. The DOD OIG determined that the
DOD Components that were reviewed did not
Weak controls over information systems can consistently mitigate vulnerabilities or include
also result in cyber-attacks and fraud unmitigated vulnerabilities in plans of action
committed against members of the public. and milestones. The U.S. Government
The Department of Education (ED) OIG Accountability Office (GAO) also reported that
identified a cyber-crime scheme targeting DOD has not completed tasks associated with
Federal student financial assistance funds. cyber hygiene initiatives dating back to 2015,
This scheme involved the use of phishing to including some that were supposed to be
obtain a student’s login credentials and then completed in 2016 and 2018.2 The Office of
using this information to access the school’s Personnel Management (OPM) OIG identified
systems to change the student’s direct 92 open recommendations from its annual
deposit information. The OIG issued a Federal Information Security Management Act
memorandum that informed ED that the lack and related information systems audits.
of two-factor authentication contributed to this Several of these recommendations refer to
incident and recommended that ED take steps internal control weaknesses identified as far
to advise schools of this threat. back as 2008.
Some OIGs expressed concern over agencies’ IT Modernization
progress on improving the maturity of their Outdated or obsolete IT systems can impede
information security programs. The budgeting for long-term IT enhancements,
Department of State (DOS) OIG reported that lead to overspending, cause unnecessary IT
although DOS has taken steps to improve its support efforts, potentially reduce system
information security program, the OIG’s reliability, and affect an agency’s ability to
annual assessment of the Department’s fulfill its mission.
information security program, as in prior
years, identified numerous control Many OIGs found that their respective
weaknesses that affected program agencies were using legacy IT systems to
effectiveness and increased DOS’s perform core functions and responsibilities.
vulnerability to cyber-attacks and The Department of Housing and Urban
cybersecurity threats. Similarly, the FDIC OIG’s Development (HUD) OIG noted that the agency
annual information security assessment found continues to manage most of its operations
control weaknesses that limited the with outdated legacy systems that cannot be
effectiveness of the FDIC’s information adapted to handle the increasingly complex
security program and practices and placed the tasks required to fulfill HUD’s mission. In
confidentiality, integrity, and availability of the addition, these aging systems are no longer
FDIC’s information systems and data at risk. supported by vendors, placing HUD’s IT
The AmeriCorps OIG reported that efforts to systems at an increased risk of failure and
improve IT security have stagnated, with exploitation because critical updates to fix
maturity measures at the second lowest level, vulnerabilities are often no longer available.
unchanged since FY 2017.
HUD OIG also noted that over the past
In 2020, the Department of Defense (DOD)
5 years, HUD has dedicated a significant
OIG issued a follow-up report on corrective
amount of its IT budget—between 70 and
actions taken by DOD Components
2 U.S. Government Accountability Office, Cybersecurity:
DOD Needs to Take Decisive Actions to Improve Cyber
Hygiene, GAO-20-241 (13 April 2020).
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
95 percent of its $280 million (on average) unsuccessful efforts to develop a new grants
annual IT budget—on operations and management IT system to replace its
maintenance. With each successive year outdated legacy structure.
since 2012, HUD has continued to spend
more on operating and maintaining legacy Continuity of Operations
systems in place of efforts to develop, In the event that an IT system is compromised
modernize, and enhance its IT systems. —whether by cyber-attack, environmental
Outdated IT systems can also impact the anomaly, or some other incident—it is
security of the agency. The DOJ OIG stated imperative that vital IT systems are available
that the agency’s COVID-19 pandemic in a timely fashion to support the continuity of
response highlighted how some of DOJ’s IT operations of Federal agencies. As such, it is
services are fragmented or need critical that agencies prepare for the worst by
modernization to perform optimally. DOJ OIG having a developed-and-tested IT contingency
also stated that IT gaps highlight the need for plan in place to ensure that an emergency or
the Department to focus on its enterprise IT crisis will not unduly impact agency programs
capabilities to improve the day-to-day mission or operations.
capabilities of the Department and better
position it to perform during a crisis. Nevertheless, some OIGs have noted
deficiencies with agency IT contingency
The cost of maintaining legacy IT systems has planning. The HUD OIG reported that
also inhibited efforts to develop and concerns and risks associated with HUD’s
implement updated IT systems, as agencies supply chain have not been incorporated into
are forced to grapple with limited budgets its contingency planning program.
and competing priorities. In particular, the Specifically, within the current infrastructure,
Social Security Administration (SSA) OIG there are risks associated with the following:
stated that the SSA spent much of its IT alternative suppliers of system components,
funding—$2 billion in FY 2020—on operating alternative suppliers of systems and services,
and maintaining existing systems. The SSA denial of service attacks to the supply chain,
OIG also stated that SSA has taken an and planning for alternative processes if
incremental approach to IT modernization by critical systems are unavailable. The DOS OIG
replacing system components rather than reported that deficiencies related to
whole systems. However, the SSA OIG noted developing, testing, and training on
that this approach is no longer viable because contingency plans were found to be persistent
technology is advancing faster than SSA can in several embassies, which failed to
incrementally modernize. complete or annually test unclassified and
classified IT contingency plans. Department
In addition, the failure to improve and standards require management to develop
modernize IT systems can threaten national and test IT contingency plans annually for
security. The DHS OIG found that the slow effectiveness and to determine the embassy’s
performance of a critical pre-screening readiness to execute them during unplanned
system greatly reduced U.S. Customs and system outages or disruptions.
Border Protection officers’ ability to identify
passengers who may be of concern, and Building and Maintaining an IT
frequent network outages hindered air and Workforce
marine surveillance operations. The Many Federal agencies face challenges in
AmeriCorps OIG reported the opposite attracting and retaining a highly skilled
problem. Its agency was forced to write off as cybersecurity workforce to fulfill mission-
a total loss $37.7 million invested in two critical activities, including modernizing IT
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
systems and mitigating cyber-attacks. A personnel are in high demand and that the
significant impediment for agencies to private sector can offer higher salaries to
expand the Federal cybersecurity workforce attract talent. In addition, challenges such as
is a shortage of available cybersecurity identifying skill sets necessary to address
professionals. For example, the DOD OIG current and emerging threats and an aging
noted in its top challenges report for FY workforce have also affected Federal
2021 that the congressionally mandated agencies’ ability to recruit, train, and retain
Cyberspace Solarium Commission found that qualified staff. These challenges are
the U.S. Government has a shortage of more discussed in further detail in the Human
than 33,000 cyber personnel.3 Many Capital Management section of this report.
agencies also noted that highly skilled
3 United States Cyberspace Solarium Commission,
United States Cyberspace Solarium Commission Report
(11 March 2020).
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
CHALLENGE
Human Capital Management
The human capital management challenge as large, complex IT systems and scientific
includes top challenges related to recruiting, and satellite equipment. However, the DOC
managing, developing, and optimizing agency OIG cited difficulty in attracting experienced
human resources. Human capital acquisition professionals to work in locations
management remains a significant challenge outside the Washington, DC metropolitan area
that affects the ability of Federal agencies to and the timeliness of filling vacancies as
meet their performance goals and execute critical workforce challenges. Similarly, the
their missions efficiently. GAO first identified U.S. Government Publishing Office (GPO)
strategic human capital management within continues to face challenges in filling the
the Federal government as a high-risk area mission-critical positions needed to transform
in 2001. 4 the agency from print to digital publishing. As
a result, the GPO OIG reported that GPO has
several cadre positions in the critical areas of
Key Areas of Concern
acquisition services, finance, and human
Key areas of concern related to human capital capital that remain vacant. The Treasury
management include recruiting and retaining Department also reported that it has
highly skilled staff, providing adequate several national security and intelligence
training, and leadership continuity. positions that, if approved, could create
vacancies that are difficult to fill because of
Recruiting and Retaining Highly Skilled the expertise required for these positions.
Staff
The inability to attract specialized, highly Several IGs reported that, due to market
skilled staff in mission-critical areas of IT, competition, their agencies faced difficulty in
acquisition, healthcare, national security, and recruiting and retaining highly qualified
intelligence can cause skill gaps that candidates with the right skills, abilities,
significantly affect Federal agencies’ ability to and knowledge to fill vacant positions. The
meet their missions. For example, the Export-Import Bank of the United States
Department of Commerce (DOC) OIG reported (EXIM) OIG recently reported that retaining
that its acquisition workforce is required to highly skilled employees was difficult because
have technical expertise and program EXIM must compete not only with the private
management skills to manage a variety of sector but also with other financial regulatory
highly specialized products and services, such agencies that compensate employees
4 GAO, High-Risk Series: Substantial Efforts Needed to
Achieve Greater Progress on High-Risk Areas, GAO-19-
157SP (6 March 2019), p. 60.
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
pursuant to pay systems based on the Leadership Continuity
Financial Institutions Reform, Recovery, and High turnover of leadership positions, a
Enforcement Act and award higher salaries large number of vacant key leadership
for commensurate GS levels. EXIM positions, and an abundance of executive
management also expressed concerns that and senior management employees eligible
recruitment and retention were more to retire in the next 5 years can affect Federal
challenging as the private sector reimagined agencies’ ability to meet mission-critical
its long-term operations, such as a permanent objectives and statutory responsibilities.
shift to remote work. The DOJ OIG reported Specifically, at the Federal Deposit Insurance
ongoing challenges in recruiting and retaining Corporation (FDIC), 42 percent of current
experienced cyber investigators and attorneys, employees (on board as of 1 June 2020) are
as these individuals are offered higher salaries eligible to retire within the next 5 years. These
in the competitive private sector. DOJ OIG also retirement figures include retirement eligibility
noted in previous reporting that healthcare and of 60 percent of FDIC executives and
cyber professionals are highly sought in the managers. Although these projections
private sector and often receive salaries that are for a future need and the history
cannot be matched by the Federal pay scale. at FDIC shows that employees may not
Similarly, the Defense Intelligence Agency retire on their eligibility date, the wave of
(DIA) OIG reported DIA must develop potential retirements could deplete the FDIC’s
innovative strategies and take advantage of institutional experience and knowledge,
available employee incentives to ensure the especially during a crisis. Conversely, the
agency can compete with the private sector Treasury Department had immediate concerns
for acquiring and retaining talent. over key leadership positions in its Office of
Terrorism and Financial Intelligence (TFI) that
Providing Adequate Training have remained vacant. These key leadership
In addition to recruiting and retaining positions include the under secretary for TFI,
employees, agencies must ensure that staff which has been vacant since October 2019,
are adequately trained. The DOS OIG reported as well as the assistant secretary for terrorist
that underqualified staff developed deficient financing, which became vacant in 2020.
performance work statements that led to The National Labor Relations Board (NLRB)
multiple poorly designed projects and millions OIG noted turnover and vacancies during its
of dollars in wasted funds. The DIA OIG noted audit of the lapse in the FY 2019
that sensitive information was placed at risk appropriation. The NLRB observed that from
for unauthorized disclosure because the around April 2018 to January 2019, the chief
agency had failed to standardize a training financial officer (CFO) position was vacant,
program that ensured that Personnel Security with a manager designated as acting CFO
Program employees understood the while also serving in her permanent position.
adjudication policies, processes, and The Office of the CFO was without a
practices for assessing, validating, and permanent budget officer from around
certifying applicant eligibility for access to January 2019 to April 2019. Vacancies in key
national security information. The DIA OIG leadership positions and retirements could
also reported that standardizing training could potentially result in leadership gaps and a lack
help DIA in identifying, assessing, and of continuity in operations.
mitigating counterintelligence risks to mission-
critical acquisitions.
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
CHALLENGE
Financial Management
The financial management challenge includes to experiencing a 97-percent drop in ridership
challenges related to a broad range of due to the COVID-19 pandemic, placing the
functions, from program planning, budgeting, company in dire financial straits.
and execution to accounting, audit, and
evaluation. Weaknesses in any of these Other OIGs discussed revenue challenges for
functional areas limit an agency’s ability to agencies that rely partially or fully on agency
ensure that taxpayer funds and agency fees and revenues. The GPO OIG identified
revenues are being used efficiently and budget as an issue, noting that the GPO
effectively and constitute a significant risk to receives only 16 percent of its funding from
Federal programs and operations. appropriations. The GPO OIG said the agency
needs to better position itself through
Key Areas of Concern effective advertising and marketing strategies
to generate a new level of visibility. In
Key areas of concern related to financial addition, the U.S. Postal Service OIG identified
management include adequate budgets, the Postal Service’s financial challenges and
financial reporting, and the risk of improper business constraints as top challenges. The
payments, especially as it relates to COVID-19 Postal Service, which is required to be
funding. self-sustaining through postal revenues,
recorded a net loss of $8.8 billion
Adequate Budgets in FY 2019 and continues to be threatened
Several OIGs list stagnant or declining budgets by the change in consumer and business
as a challenge in the upcoming year. For behavior.
example, the OPM OIG lists a potential
shortfall in OPM’s budget as one of its top four In addition, some OIGs reported that a halt in
challenges. This shortfall, which arose from fee collection during periods of the pandemic
the transfer of the background investigation has left some agencies in dire conditions. The
function to DOD, will harm OPM’s ability to DOC OIG noted that the U.S. Patent and
fund necessary projects. In addition, the Trademark Office waived fees for some
Federal Election Commission (FEC) OIG lists customers impacted by COVID-19, which
budget as a top challenge because the created financial difficulties for DOC. In
FEC’s budget remained the same despite a addition, the Nuclear Regulatory Commission
dramatic increase in campaign expenditures (NRC) OIG noted that the Commission
and the number of transactions subject to deferred fee billing from April through June
FEC regulation. The Amtrak OIG also indicated 2020 to mitigate financial impacts on
budgetary concerns, noting that the company licensees.
went from being on track to post its best
financial performance in its 49-year history
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
Financial Management expressed a concern about the risk of
While many OIGs reported improvements in improper payments as a result of COVID-19
agency reporting, several still list financial relief funding. Some OIGs expressed a
reporting as an ongoing challenge. For concern that the pressure to distribute
example, the Railroad Retirement Board (RRB) funding in a timely manner has stressed
OIG listed several issues with the RRB’s systems and may result in some controls
financial reporting, including a lack of being bypassed.
reporting on improper payments related to the
Railroad Medicare program and material For example, the VA OIG expressed concern
weaknesses with RRB financial reporting, that the pandemic-related funding has
including ineffective controls, an inability to worsened existing problems with the lack of
communicate with the National Railroad internal oversight and poor planning and has
Retirement Investment Trust’s auditors, and resulted in some controls being circumvented
social insurance valuation. Independent to adjust for emergency conditions. In
auditors have declined to issue any opinion on addition, the VA OIG noted that the pandemic
AmeriCorps’ financial statements since 2017, has increased the number of bad actors
with nine material weaknesses persisting from looking to take advantage of the lack of
year to year. The corporation has entered into controls. The Department of Transportation
a shared services agreement with the (DOT) OIG said the DOT had recently reduced
Treasury Department for financial its improper payment rate to under 1 percent
management services to improve but has concerns that the increased workload
performance in this area. In addition, the U.S. from COVID-19 payments results in less time
Department of Veterans Affairs (VA) OIG being spent on each review, making it more
reported that, due to the complex and difficult to detect and avoid improper
disjointed architecture of the VA’s legacy payments. Therefore, it said the DOT should
financial management system, it has difficulty strengthen its procedures to reduce the risk of
meeting the increasingly demanding financial improper payments.
management reporting requirements. In
March 2019, the GAO’s High-Risk List In addition to pandemic funding, normal
specifically mentioned in the DOD Financial operations can result in improper or other
Management area that DOD financial questionable payments. The ED OIG noted
management staff remain insufficient in that the multitude of Federal, State, nonprofit,
number, qualifications, and expertise. Finally, and private entities involved in student
the DHS OIG noted that many key DHS financial assistance programs creates
financial systems do not comply with Federal challenges in efforts to address fraud, waste,
financial management system requirements. and abuse. The Department of Interior (DOI)
As such, the limitations of financial systems’ OIG found that the National Parks Service
functionality add substantially to DHS’s misused donations from philanthropic
challenges in addressing systemic internal partners at 26 of 30 parks visited as part of
control weaknesses and hinder DHS’s ability an evaluation. Finally, the DOJ OIG conducted
to ensure proper financial planning payments investigations that resulted in two individuals
and appropriate internal controls related to pleading guilty in 2019 to charges related to
funding for the Coronavirus Aid, Relief, and providing $1 million of adulterated meat to
Economic Security Act (CARES Act). 32 Bureau of Prisons institutions and three
companies and two individuals being
Risk of Improper Payments debarred in August 2020 for 3 years by the
DOJ’s Debarment Official for knowingly
While the COVID-19 pandemic has led to or
providing adulterated food products in
exacerbated many challenges covered in other
connection with more than $500,000 in
sections of this report, it has also negatively
contract awards.
impacted financial management. Many OIGs
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
CHALLENGE
Homeland Security, Disaster Preparedness,
and COVID-19
The homeland security, disaster to DHS OIG, DHS continues to be challenged
preparedness, and COVID-19 challenge is a to properly plan and provide adequate
new top challenge related to preventing and guidance, oversight, and monitoring of
disrupting terrorist attacks, protecting against programs and operations to counter terrorism
man-made and natural hazards and disasters, and homeland security threats. For example,
and responding to and recovering from a secure and resilient electoral process is a
incidents that occur. This new challenge vital national interest and one of the agency’s
reflects the evolving environment affecting the highest priorities. Although DHS improved
United States and Federal agencies charged coordination efforts to secure the nation’s
with executing missions related to homeland systems used for voting, it should take
security and disaster preparedness and additional steps to protect the broader
recovery. In 2020, the worldwide outbreak of election infrastructure, which includes polling
COVID-19 placed significant strain on Federal and voting locations, election technologies,
agencies, and the pandemic continues to and related storage facilities. The agency also
challenge their efforts to maintain operations needs to mitigate risks associated with
while protecting the health and safety of the physical security, terrorism threats, and
Federal workforce and the American public. targeted violence to the election
infrastructure, and to identify dependencies
Key Areas of Concern on external stakeholders that impede mission
performance. On Election Day, DHS officials
Key areas of concern related to homeland stated that there was no evidence of a major
security, disaster preparedness, and cyber-attack on the elections and that it would
COVID-19 include countering terrorism and continue to monitor hacking attempts and
defending the homeland against security cyber intrusions and coordinate information
threats, protecting and promoting U.S. sharing with State and local officials.
technological dominance and economic
competitiveness, and maintaining continuity Among agencies’ highest priorities are
of operations during a global pandemic. countering threats posed by foreign and
domestic terrorism. DOJ OIG states that
Countering Terrorism and Homeland domestically the United States faces threats
Security Threats by both homegrown violent extremists (HVEs)
Protecting the nation’s critical infrastructure and domestic violent extremists (DVEs).
and deterring adversaries, competitors, and According to a DOJ OIG report, the Federal
terrorists require Federal agencies to Bureau of Investigation (FBI) has not taken
coordinate efforts to manage risks. According sufficient action to resolve certain
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
weaknesses in its process for assessing coordinate, collaborate, and gather and
potential HVEs and lacks comprehensive analyze intelligence information requires a
strategies to mitigate emerging challenges stable cadre of experienced staff.
related to assessing potential HVEs. The FBI
has recognized publicly that it believes HVEs Protecting and Promoting U.S.
and DVEs currently present the greatest Technological Dominance and
terrorist threat to the United States. Economic Competitiveness
Furthermore, General Services Administration The United States must develop new concepts
(GSA) OIG findings related to safeguarding and capabilities to protect the homeland,
Federal facilities and providing secure work maintain and advance economic prosperity,
environments demonstrate an ongoing need and effectively lead as a global superpower.
for GSA’s attention in these areas, as Federal The evolving security environment, dominated
buildings have faced a range of security by the rise of China and Russia and the
threats during the recent unrest in many cities persistent threat of Iran and North Korea, is
throughout the country, with some buildings challenging how Federal agencies perceive
becoming targets for violence and property security threats. The National Security
damage. The Mark O. Hatfield Federal Strategy of 2017 stated, “China and Russia
Building in Portland OR has been a frequent challenge American power, influence, and
focal point of violent protests since the killing interests, attempting to erode American
of George Floyd. security and prosperity” through growing
political, economic, and military
Combating terrorism, whether on the
competitiveness. 5
battlefield or through anti-money-laundering
and combating terrorist financing operations, Promoting the development of new and
remains critical to addressing this challenge. emerging technologies is critical for the U.S.
According to the DOD OIG, DOD will also be Government, American industries, and the
challenged to ensure that it maintains American people. Emerging technologies,
sufficient capacity and capability to counter such as artificial intelligence (AI), machine
and defeat persistent threats from violent learning, and fifth generation (5G)
extremist organizations around the world. As technologies, have the potential to
DOD has incrementally reduced the personnel revolutionize how information is collected and
and resources that it has deployed for analyzed, while also exposing the same
counterterrorism missions around the world information to manipulation or exploitation by
over the last several years and has shifted to malicious nation-state or nongovernmental
address the reemergence of actors. According to the DOD OIG, DOD must
nation-state actors, DOD will need to prioritize be more agile and rapidly develop, secure,
its counterterrorism objectives by leveraging and deploy new and innovative technologies
interagency and international partners to secure the competitive advantage and
effectively, establishing clear priorities, and counter similar technology. DOD must also
maximizing investments. Depriving terrorist ensure that it is balancing the need to
organizations of financing is critical to leverage this new technology with identifying
defending the homeland. Additionally, and evaluating any ethical risks or unintended
Treasure OIG noted that the ability of the consequences resulting from its use. The
Treasury Department’s TFI to effectively Intelligence Community OIGs also recognized
5 National Security Strategy of the United content/uploads/2017/12/NSS-Final-12-18-2017-
States of America, December 2017, 0905.pdf), p. 2.
(https://www.whitehouse.gov/wp-
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
the transformative powers of technologies and collectively to respond to a wildfire, which
identified managing AI as an emerging heightens the risk of exposure to COVID-19.
challenge, especially as Federal agencies
explore the use of AI to improve processes. These disaster-related conditions also have a
Maintaining an economic advantage is also significant impact on military readiness and
critical to homeland security. Agencies such infrastructure. Mitigating the impacts of
as DOC that are challenged with helping U.S. changing climate patterns and extreme
companies be more competitive abroad while weather events on personnel readiness and
also protecting U.S. national security interests military infrastructure requires DOD to consider
must continue to evaluate and improve issues during facility design and investment
processes for quickly adjudicating company decisions and helps to build resiliency among
requests. According to the DOC OIG, DOC DOD personnel and on installations, ultimately
must strengthen confidence in intellectual ensuring continuity in the wake of disasters.
property rights by improving the process and
must ensure that remedies against imports Consequently, revisions to agencies’ workforce
that threaten national security are evaluated planning models have also become a priority
in a transparent, timely manner that does not to help strategically allocate and align agency
adversely affect American businesses. staff and resources with mission and critical
According to the Treasury Department OIG, the priorities, and for safe reintegration in the
Treasury’s Office of International Affairs COVID-19 environment. Agencies with an
expects an increase in its foreign investment international presence, such as the U.S.
transaction reviews due to the expanding Agency for International Development (USAID),
jurisdiction of the Committee on Foreign must also develop plans and procedures to
Investment in the United States, and is guide the reentry of their domestic and
aggressively hiring staff and implemented a overseas workforce as pandemic conditions
new Case Management System to meet the allow.
increasing workload. Maintaining the United
States’ competitiveness in the global In March 2020, the Peace Corps responded to
marketplace and its leadership position on the COVID-19 pandemic by suspending
the global stage and protecting American all volunteer activities and evacuating nearly
technological advances are critical high-risk 6,900 volunteers from about 60 countries
challenges facing Federal agencies. of service. For the first time in its nearly
60-year history, the Peace Corps does
Preparing and Responding to Disasters not have a single active volunteer. The agency
Changing climate patterns, extreme weather faces the tremendous challenge
events, and global pandemics have long-term of planning for the resumption of its overseas
impacts on agencies’ personnel and their volunteer programs in the environment of
ability to execute their missions, and the uncertainty that the COVID-19 pandemic
economy. The COVID-19 pandemic further has created. While lack of volunteers in the
impacts agencies that have significant field minimizes previously identified challenges
involvement in addressing other national to volunteer health and safety, these
disasters. For example, the DOI OIG noted unresolved challenges may become more
that DOI subagencies deploy firefighters every complex as the Peace Corps begins to redeploy
year to support wildfire response, which volunteers amid the pandemic and as new
requires significant collaboration across a challenges arise.
wide range of Federal agencies, States, tribes,
local land managers, and other stakeholders.
Fire camps can include a large number of
personnel living together and working
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
Maintaining Continuity of Operations As mass telework continues, agencies are
During a Global Pandemic overcoming some of these challenges, but
The CARES Act was signed into law on their pandemic response has highlighted how
27 March 2020 as a result of the COVID-19 some of the agencies’ IT services are
pandemic. The CARES Act provided many fragmented or need modernization to perform
agencies grant funding to ensure the optimally. IT challenges are discussed in
continuity of operations; fund State, local, further detail in the Information Technology
and tribal efforts to prevent, prepare for, and Security Management section of this
and respond to COVID-19; and combat report.
COVID-19-related fraud, scams, and violations
of Federal antitrust and other laws. Agencies that require employees to be
Consequently, the additional responsibilities physically present to fulfill their duties, given
resulting from the CARES Act pose new the nature of their work, have faced
challenges for Federal agencies, as they must heightened risk of exposure to COVID-19.
effectively oversee and monitor new grant Many Federal agencies and personnel
programs and take additional proactive steps expressed concerns with the availability of
to create and sustain a culture of fraud staff, as well as personal protective
prevention and awareness and appropriately equipment (PPE), if there were an outbreak of
distribute CARES Act funding, while also COVID-19 in their facility. This is especially
continuing to execute their normal agency true for agencies such as DHS and DOJ, which
missions. must be concerned not only with possible staff
exposure to COVID-19 but also with preventing
Responding to the rapidly evolving COVID-19 the spread of the virus among individuals
pandemic has presented immediate and detained in their custody. For example, the
significant challenges for Federal agencies, pandemic amplified pre-existing medical and
most notably in their responsibility to keep correctional staffing shortages at the Federal
their staff, contractors, visitors, and Bureau of Prisons, which negatively affected
workspaces as safe as possible while also some institutions ability to timely and
overcoming internal and external thoroughly respond to COVID-19 and
technological challenges. Many agencies implement strategies to mitigate the impact of
have taken steps to ensure the continuity of the pandemic on inmates and staff.
government operations by allowing maximum
work-life flexibilities, such as 100-percent Many agencies also face challenges to ensure
telework, unrestricted work schedules, and stability and full and effective functioning of
other employee assistance programs. Even its components during COVID-19. For
with these flexibilities, many agencies example, DHS recently faced the prospect of
reported increased pressure on employees furloughing almost 70 percent of its U.S.
caused by issues outside of the workplace, Citizenship and Immigration Services
which created challenges in maintaining workforce reportedly due to decreased
operations and mission success. Many revenues related to COVID-19. A return to
agencies faced internal and external normal operating procedures requires
technological challenges, including IT congressional intervention to sustain the
connectivity, which has impacted employee agency through FY 2021. Pandemics such as
productivity. As many agencies pivoted to COVID-19 also negatively impact the combat
large-scale work-from-home operations, the readiness of DOD forces by limiting travel and
increase in remote access to IT systems also large-scale exercises, while also stressing
increased the risk of security breaches. supply chains and challenging DOD’s ability to
maintain the readiness of its stockpiles and
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
protect the health, safety, and security of DOD COVID-19 pandemic funding through frauds
personnel and their families. Law and other scams that harm the public, while
enforcement agencies, such as those in DOJ, continuing to combat their non-COVID-related
face increased demands in identifying and responsibilities.
prosecuting opportunists attempting to exploit
15
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
CHALLENGE
Procurement Management
The procurement management challenge Contract Award Process
encompasses the entire procurement process, Several OIGs identified problems related to
including contract award and post-award the contract award process, such as having
contract administration. 6 Given that the sufficient controls in place to prevent fraud,
Federal government awarded more than estimating costs inappropriately or
$586 billion in contracts in FY 2019, ineffectively, and mismanaging the
approximately 40 percent of its total competitive bidding process. The GSA OIG, for
discretionary budget, 7 the challenges that example, noted that the agency failed to
agencies face in procurement management update its suspension and debarment listing.
put billions of taxpayer dollars at increased When this occurs, Federal agencies can
risk of fraud, waste, abuse, and unknowingly execute contract actions,
mismanagement. Moreover, because many including new contract awards, with
Federal agencies rely strongly on contractors contractors who have been suspended or
to perform their missions, the failure of an debarred. The GSA OIG also found several
agency to properly manage its procurement instances where excluded contractors were
functions could also impede the agency’s incorrectly listed on GSA’s eTools 8 and one
ability to execute its mission. instance where an agency purchased services
off a GSA Multiple Award Schedule contract
Key Areas of Concern from an excluded contractor. The DOT OIG
uncovered challenges in correctly developing
Key areas of concern related to procurement
independent cost estimates, conducting price
management include weaknesses with the
and cost analyses, and requiring adequate
contract award process, managing and
justification for single bids. After assessing
overseeing contractor performance, reviewing
the Federal Aviation Administration’s (FAA’s)
invoices and payments, and training and
competitive award practices for major
retaining procurement personnel.
acquisition program contracts, the DOT OIG
recommended that the FAA could put up to
$4.9 billion in Federal funds to better use by
improving its ability to establish fair,
6 Although some Federal agencies define the term 7 This information comes from GAO. It does not reflect
“procurement” narrowly as the act of buying goods and the likely significant increase in contract spending as a
services for the government and use the term result of COVID-19 spending in 2020. The contract
“acquisitions” to refer to the broader concept of the spending increase over FY 2018 is approximately
initiation, design, development, test, contracting, 5.8 percent and $132 billion more than contract
production, and deployment of systems, supplies, or spending in 2015.
8 GSA’s electronic tools (eTools) help manage an
services to satisfy government needs, we use the terms
interchangeably for the purposes of this report. agency’s GSA procurement transactions, place orders, or
learn about business opportunities.
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Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
reasonable, and realistic contract pricing. readily gather, analyze, and report portfolio-
Other OIGs identified challenges in drafting wide contract information.
adequate performance work statements due
to a lack of technical knowledge on the part of Oversight is also required to determine if
contracting officer representatives and other applicable laws and regulations are being
procurement personnel. For example, the followed and if the contractor is complying
DOS OIG reported that poorly drafted with contract requirements. Critically
performance work statements for several important to the oversight process is the
overseas construction projects resulted in need to adequately document contractor
major structural deficiencies, which required performance to properly support award fee
millions of dollars in repairs. determinations and suitability of the
contractor for future contract award. OIGs
Insufficient award management also creates identified challenges with monitoring,
opportunities for fraud. While agencies take assessing, and documenting contractor
steps to curb fraud, waste, and abuse, the performance, as well as compliance with the
COVID-19 pandemic has created novel Federal Acquisition Regulation (FAR). The
opportunities for bad actors, particularly DOC OIG, for example, found that inadequate
because of the need to facilitate rapid controls and an ineffective process for
purchases of essential goods and services. detecting and following up on contract
For example, the VA OIG found that the VA has performance deficiencies have led to
struggled to expand its supply chain fast procurement officials not complying with the
enough to curtail the spread of COVID-19, and FAR. In an audit of DOJ contracts awarded
many companies have sought contracts for from FY 2013 through FY 2019, a time in
PPE and other medical supplies worth millions which DOJ awarded more than $54 billion in
of dollars that they cannot actually fulfill. VA contracts, the DOJ OIG found frequent
OIG investigators collaborating with other law noncompliance with the FAR due to
enforcement authorities arrested a Georgia inadequate execution of contract oversight
resident for attempting to sell millions of responsibilities, insufficient quality assurance
nonexistent respirator masks and other PPE practices, and failure to maintain
totaling more than $750 million to the VA in documentation to support procurements.
exchange for large up-front payments. A Further, the ED OIG found that ED did not
USAID OIG investigation exposed fraud and track all identified instances of loan servicer
conflicts of interest affecting a $4.7-million noncompliance and rarely held loan servicers
USAID-funded agriculture program in Uganda. accountable for noncompliance with
The USAID OIG’s investigation uncovered a requirements. The ED OIG also noted that
conflict of interest involving consultancy information ED collected was not always
contracts, as well as evidence that the project sufficient to ensure that loan servicers
accountant falsified records to substantiate complied with requirements for servicing
payments. federally held student loans.
Contract Oversight OIGs also reported challenges with the award
In addition to the contract award process, fee process. Award fees are provided to the
Federal agencies also face challenges in contractor based on a judgmental evaluation
maintaining robust oversight of contract by the government, sufficient to provide
portfolios and contract execution and motivation for excellence in contract
performance. The FDIC OIG reported that the performance. The Pension Benefit Guaranty
FDIC Board and management were Corporation (PBGC) OIG, for instance, found
challenged to oversee contracts on a portfolio that procurement personnel had not
basis because a contracting system did not appropriately designed performance metrics
18
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
for key factors required for an aggregate personnel did not verify that invoiced prices
measure of contractor performance. In complied with contract terms, resulting in
addition, the PBGC OIG found that $3.4 million in questioned costs. Internal
procurement personnel awarded the controls such as these are used to provide
contractor the award fee after considering only reasonable assurance that objectives are met
one of the three factors (cost, schedule, and and related risks are mitigated. The ability to
performance) that the FAR requires. As a determine whether knowledgeable
result, the OIG’s audit concluded that the procurement personnel complete the
$5.1 million award fee payment was appropriate verifications aids in reducing the
unsupported. Similarly, the National likelihood of ensuring only appropriate costs
Aeronautics and Space Administration (NASA) are paid. However, establishing the ability to
OIG found that, for a significant number of monitor invoice and payment data requires
years, NASA used unclear, outdated criteria to advanced planning. For instance, the NASA
determine award fees, which resulted in OIG reported that due to the co-mingling of
paying one of its prime contractors key development activities, NASA had
$863 million—which amounted to 91.4% of difficulty separating and tracking individual
its available award fees over the period in expenditures. Similarly, the FDIC OIG found
question—despite significant performance that the agency did not capture the necessary
shortfalls, as well as substantial cost and data to properly track invoices and payments.
schedule growth. Weaknesses identified by These deficiencies heighten the risk of fraud,
OIGs within contract oversight continue to waste, and abuse and also may hinder the
hinder the Federal government’s ability to ability of an agency to complete its mission as
ensure that goods and services were received finite resources may be lost to
within contract terms and in accordance mismanagement.
within Federal laws and regulations.
Training and Retaining Procurement
Invoice and Payment Review Personnel
OIGs have continued to report instances The effectiveness of the procurement process
where agencies fail to appropriately review depends on retaining and developing a
invoices and track associated payments to competent workforce that can handle complex
ensure that the government received the acquisitions. The OIGs for the FDIC, GSA,
goods and services for which it had DOC, HUD, DOJ, and DOS found that some
contracted and paid. OIGs reported Federal contracting officers and other
challenges within several areas of the invoice procurement personnel lacked sufficient
and payment review process, including a lack training in procurement regulations, resulting
of thorough invoice review, inadequate in problems we have described earlier within
documentation to support payments, and a this section. Further, some agencies found
failure to track expenditures in detail. For difficulty in keeping personnel trained and
example, a DOS OIG report evaluating certified in crucial procurement and technical
invoicing practices for four task orders totaling skills necessary for high-value and complex
more than $151 million found limited procurements. The DOS OIG found that nearly
supporting documentation for the selected 50 percent of its reports issued from FY 2017
invoices. The OIG could not verify that all through FY 2019 that reported inadequate
reviewed invoices were processed properly contract oversight cited issues with the
because procurement personnel for three of training and experience of procurement
the four task orders did not maintain records personnel. The DOC OIG found that it is an
of their invoice reviews. Additional work by ongoing challenge to hire and retain
the DOS OIG revealed that procurement
19
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
procurement personnel with the needed skill Without highly skilled procurement
sets, especially given the high attrition rate personnel, the Federal government will
and the heavy workload for such personnel. continue to experience significant
The HUD OIG likewise reported that hiring challenges in procurement planning,
additional procurement personnel remains a oversight, and administration of
challenge for HUD due to high attrition rates, government contracts sufficient to
the heavy workload, and budget constraints. ensure contractual and legal
compliance.
20
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
CHALLENGE
Grant Management
The grant management challenge Management section of this report, agencies
encompasses the entire grant-making process need to recruit, train, and retain an adequate
and includes agencies’ oversight of awards as number of qualified staff to properly
well as recipients’ internal controls and administer and oversee grants to prevent
reporting. Deficiencies in these areas can funds from being awarded to improper
lead to misspent funds, improper payments, recipients or for unintended purposes. It is
and ineffective programs. Federal agencies important for agencies to follow appropriate
spent more than $939 billion through grants processes and maintain sufficient
in FY 2020—an increase of more than documentation so that the agency and the
$200 billion relative to FY 2019. This public can determine why an award was
increase is largely attributable to funding from made. The lack of such processes and
the CARES Act, which dramatically increased documentation prevents an agency from being
the number and size of pandemic relief grant able to demonstrate that grants are being
programs for which many agencies are awarded to further program goals and could
responsible, often with limited to no staffing frustrate attempts to recoup improper or
increases. These factors have created a fraudulent grant awards.
complex landscape of grant programs for
grantees to understand and for agencies to New programs created under CARES Act
implement, oversee, and evaluate. authorities have exacerbated this challenge
and stretched already strained staff due to a
Key Areas of Concern significant influx of grant funds and
accelerated award timetables. The DOC, for
Key areas of concern related to grant example, received more than $1.9 billion
management include ensuring funds are through the CARES Act to aid communities
awarded properly, overseeing the use of grant affected by the pandemic. This amount is
funds, ensuring grant investments achieve close to the entire amount that DOC awarded
intended results, obtaining timely and in grants in FY 2019—$2.2 billion. As the DOC
accurate financial and performance OIG reported, the need to ensure that these
information, and threats posed by foreign funds are distributed promptly, fairly, and for
government talent recruitment programs. authorized purposes will place increased
demands on DOC’s workforce, oversight
Ensuring Funds Are Awarded Properly processes, business practices, and financial
Given the breadth and scope of grant management systems. The awarding of
programs, agencies face the challenge of pandemic relief, contracts, and grants
ensuring that agency staff are aware of and efficiently, effectively, and for intended
abide by all relevant rules in awarding funds. purposes is also a top challenge that the DOT
As discussed in the Human Capital OIG identified. The OIG pointed to previous
21
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
reviews, which identified issues with the it can result in funds not being used for their
qualifications and training of DOT staff who intended purposes. In a positive
awarded funds and the recipient staff. development, the AmeriCorps OIG noted that
AmeriCorps has made significant progress in
Overseeing the Use of Grant Funds developing and implementing a detailed grant
Recipients must use grant funds only for the risk model to guide all phases of grants
specific purposes intended in the grant award management, a longstanding OIG
and must adhere to parameters and recommendation.
guidelines established by law and regulation.
Due to the large number of grants, agencies Ensuring Grant Investments Achieve
face challenges in developing and maintaining Intended Results
robust grant management systems that can Assessing which grant programs achieve their
provide the level of oversight needed to goals and objectives is an ongoing challenge
ensure grantees use funds solely for for Federal agencies and Congress in
authorized purposes. Many agencies, and determining how to spend limited resources.
their recipients, also face challenges in Agencies must continue to meet the challenge
maintaining adequate documentation. of establishing outcome-focused measures for
Moreover, with the COVID-19 pandemic, their grant programs. As discussed in the
agencies face the challenge of developing Performance Management and Accountability
means to effectively oversee grants when section of this report, agencies must ensure
many agency employees, grant recipients, and that objective performance measurement
sub-awardees are working remotely. requirements are incorporated into grant
agreements. When such measures are not
The Department of Health and Human included or are not clearly defined, the
Services (HHS) is the largest grant-making government faces an increased risk that
agency in the Federal government, awarding money may be wasted or that grants
about $244.7 billion in FY 2020 (excluding programs are not achieving their intended
the Centers for Medicare & Medicaid results.
Services). The HHS OIG emphasized that
ensuring the transparency and accountability For example, a DOS OIG review determined
of HHS funds is critical to making sure HHS that the Global Engagement Center’s (GEC’s)
beneficiaries and the American public get the monitoring and evaluation plans did not
true benefit of the agency’s substantial include all the monitoring and evaluation
financial investment. The CARES Act elements required by the award program and
expanded HHS’s grant programs to support to did not have a direct connection to the
the country’s COVID-19 response, including proposed scope of work. Accordingly, GEC
vaccine development, clinical trials, and was not in a position to ensure that recipients
distribution. Without adequate internal were using the funds as intended and could
controls in place, grant funds may be not demonstrate that the awards were
misspent, duplicate services may occur, and fulfilling GEC’s statutory mandate.
sub-recipients may lack adequate monitoring.
Further, insufficient oversight of grant Obtaining Timely and Accurate Financial
programs poses the risk of significant and Performance Information
improper payments. The NASA OIG found that Without accurate, timely, and complete
when NASA and its recipients lack adequate financial and performance data from
systems of internal controls to ensure proper grantees, agencies cannot determine if funds
administration and management of awards, were spent properly or achieved the intended
21
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
results. As discussed in the Financial have attempted to acquire through talent
Management and Performance Management recruitment programs. These programs target
and Accountability sections of this report, scientists, engineers, academics, researchers,
when such data are inaccurate, delayed, or and entrepreneurs in the United States and
incomplete, agencies face increased risk of offer rewards and attractive opportunities at
improper payments and wasted funds. foreign research institutions in exchange for
Addressing this challenge, the ED OIG has transferring their knowledge and expertise to
highlighted the importance of taking steps to foreign countries. Contracts under these
ensure strong data management practices programs often include provisions prohibiting
across agencies, grantees, and subrecipients. disclosure of these agreements, which puts
The ED OIG has emphasized the need for them directly at odds with grant application
continuous outreach to grantees to reinforce disclosure requirements that are critical to
program requirements and expectations maintaining the integrity of grant programs
around good data. This outreach is and proper oversight. Undisclosed
particularly important regarding new programs involvement in these programs threatens the
related to the COVID-19 pandemic and integrity of agencies’ grant programs and
disaster relief, where ED faces the challenge raises concerns regarding national security,
of collecting, analyzing, and reporting data for conflicts of interest, conflicts of commitment,
many different purposes, such as evaluating and intellectual property theft.
programmatic performance, assessing
financial compliance, and informing The Department of Energy (DOE) OIG, for
management decisions. The Small Business example, identified theft of research and
Administration (SBA) OIG reported that intellectual property funded by DOE as a top
inaccuracies and incomplete financial and challenge, given DOE’s prominent role in
performance reporting inhibit policymakers’ advanced research and development across
and the public’s ability to track Federal multiple scientific disciplines, as well as its
spending effectively, thereby inhibiting key role in nuclear weapons development.
effective oversight. The SBA OIG also noted The National Science Foundation (NSF) OIG
that data inaccuracies negatively affect the also identified challenges related to foreign
agency’s ability to report complete and government talent recruitment programs
accurate information on time, as required by trying to exploit the openness of American
the Digital Accountability and Transparency universities and threatening the integrity of
Act of 2014. U.S. research initiatives. While NSF took
measures to strengthen its policies and
ThreatsPosedby Foreign Government procedures regarding disclosure of foreign
TalentRecruitment Programs involvement in NSF-funded research, NSF and
Many agencies fund grants to support other agencies that fund scientific research,
cutting-edge scientific research and as well as grant recipients, need to continue
development. The enacted FY 2020 Federal to assess and refine their controls in this
budget, for example, included more than area, to include providing adequate staffing
$155.9 billion designated for research and and strengthening certifications and
development. The intellectual property communications with grantees during the life
generated from this research has economic cycle of awards.
and scientific value that foreign governments
22
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
CHALLENGE
Performance Management and Accountability
The performance management and taxpayer rights. In addition, TIGTA remains
accountability challenge includes challenges concerned about the IRS’s inability to
related to managing agency programs and significantly reduce improper payments
operations efficiently and effectively to related to several tax credits. As records
accomplish mission-related goals. Although management is a core program function for
Federal agencies vary greatly in size and the National Archives and Records
mission, they face some common challenges Administration (NARA), the NARA OIG
in improving performance in agency programs identified its need to preserve records and
and operations. improve records management as top
challenges. The AbilityOne OIG reported that
Key Areas of Concern the allocation of roles, responsibilities, and
resources among the Commission senior staff
Key areas of concern related to performance creates challenges in management's ability to
management and accountability include timely implement policies and initiatives,
operational leadership and management effectively execute changes in the program,
challenges, internal control deficiencies, and support program growth.The SBA OIG
enterprise risk management, working with reported that SBA’s management and
external stakeholders, and collecting and monitoring of the 8(a) Business Development
using performance-based metrics. Program needs improvement to ensure that it
is providing effective business development
Operational Leadership and assistance to 8(a) firms and that only eligible
Management Challenges firms are admitted into and remain in the
Mitigating operational leadership and program. Finally, Amtrak OIG reported that
management challenges is critical to ensuring transforming the company in response to the
that an agency can successfully focus on its COVID-19 pandemic will challenge the
mission objectives. The DOT OIG identified Executive Leadership Team members to
improving the FAA’s oversight of aircraft collaborate effectively on decisions that
certification processes and enhancing aviation benefit the company as a whole. At the same
safety oversight while working in a time, leadership must commit to addressing
collaborative environment as top DOT several longstanding, costly management
challenges. The Treasury Inspector General challenges, given both the company’s
for Tax Administration (TIGTA) reported that economic distress and its dependence on
legislative developments related to tax reform significant Federal funding.
and tax policy present challenges for the
Internal Revenue Service (IRS). Another challenge for several agencies was
Implementation of the various tax provisions managing large projects or multiple projects
will result in reprogramming of systems, and simultaneously. The Architect of the Capitol
changes to tax forms, instructions, and (AOC) OIG reported that managing concurrent
publications. The IRS must also balance tax
compliance activities with its efforts to protect 23
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
construction projects continues to be a top abuse are critical concerns for the Food and
challenge for the AOC. In addition, due to the Nutrition Service (FNS). The USDA OIG
lack of a centralized working capital fund, the reported that the FNS needs to improve its
AOC faces many operational redundancies at oversight and quality control processes for the
the jurisdiction level for large construction FNS’s Supplemental Nutrition Assistance
projects and other programs that cross Program, considering the size and importance
multiple funding streams. The NASA OIG of the program, which in FY 2018 served an
reported that NASA’s major projects have average of 39.7 million people each month for
historically cost significantly more and taken a total annual cost of $64.9 billion. Moreover,
much longer to complete than originally strong oversight controls of a large nutrition
planned, which can affect funding and assistance program become even more
schedules for other NASA projects. crucial when FNS responds to natural
disasters. The USDA OIG also reported that in
Agencies also share the challenge of September 2017, Hurricane Irma and
effectively managing records. The AOC OIG Hurricane Maria devastated Puerto Rico, and
also noted that the AOC lacks a sound records although Congress granted $1.27 billion in
management and retention policy. Similarly, supplemental nutrition assistance funding,
the Denali Commission OIG and the Federal FNS and the Administration for Socioeconomic
Labor Relations Authority OIG each reported Development of the Family were not able to
that their relative agencies need to establish distribute essential disaster nutrition grant
a complete oversight or governance process funding to survivors until 6 months after the
for documenting agency policies, procedures, hurricanes because Puerto Rico did not have
and processes that address the proper the authority and was unable to operate a
handling of all hardcopy and electronic disaster nutrition assistance program.
records.
Promoting accountability through careful
Internal Control Deficiencies internal coordination with clear, well-defined
A strong internal control system provides lines of authority is an ongoing challenge for
stakeholders with reasonable assurance that DOS. The EPA OIG reported that the EPA lacks
operations are effective and efficient and that a systematic process for regularly assessing
an agency uses reliable information for the need for policy and procedure updates,
decision-making and is compliant with which may lead managers to implement
applicable laws and regulations. The individual interpretations of Federal guidance
Consumer Product Safety Commission (CPSC) and policies, thereby creating inefficiencies
OIG reported serious issues related to internal and increasing the opportunity for fraud,
control deficiencies in a number of programs waste, abuse, or mismanagement. Similarly,
that call into question the accuracy of some of the U.S. International Trade Commission (ITC)
the statements of assurance. The OIG reported that the absence of standard
Environmental Protection Agency (EPA) OIG procedures results in inconsistencies in how
reported that it cannot be certain the EPA has routine operations are performed, reduces
proper procedures in place to address risks the quality of information produced, increases
and develop plans to mitigate and protect the risk associated with informal decisions
operations from fraud, waste, abuse, and made by management overrides, and often
mismanagement, noting that the agency was results in a lack of documentation to support
not conducting risk assessments for 20 decisions. In addition, the ITC OIG stated that
programs that collectively cost more than managers need to remain mindful on how the
$5.7 billion in FY 2018. changing conditions resulting from the
COVID-19 pandemic may impact the
Similarly, the U.S. Department of Agriculture effectiveness of key internal controls in
(USDA) OIG noted that fraud, waste, and their processes.
24
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
Enterprise Risk Management Working With External Stakeholders
An effective enterprise risk management Efforts to coordinate aid and development
(ERM) approach is necessary for Federal with external stakeholders and quickly
managers to identify, prioritize, and mitigate respond to changing priorities, particularly
the impact of uncertainty on an agency’s when decisions extend beyond an agency’s
overall strategic goals and objectives. The immediate control and authority, are also
AbilityOne OIG reported that the Commission constant challenges. The NRC OIG reported
has failed to establish a ERM program and that the NRC must engage external
that management has made virtually no stakeholders to ensure transparency of
progress in addressing the lack of ERM, resulting changes to its licensing and
which, according to the OIG, leaves oversight processes. In addition, the NRC
Commission management unable to faces challenges with sustained high-level
effectively prioritize and manage risks. The coordination between the agency and
NARA OIG reported that NARA management 39 Agreement States to ensure a consistent
has not made ERM a strategic priority and understanding and implementation of
has not yet implemented an effective ERM regulations associated with the oversight and
program. The CPSC OIG also reported waste of certain radioactive materials and
challenges with its ERM program, noting that limited quantities of special nuclear material.
it is unclear if the agency’s program is The USDA OIG reported that it must make
sufficiently mature to be auditable. The SBA significant progress to address past civil rights
OIG reported that SBA risk management and issues. The USDA OIG found that although
oversight practices need improvement to the state of Florida invested more than
ensure the integrity of loan programs. In $3.3 million in outreach efforts from 2014
FY 2020, SBA did not always conduct planned through 2017, sponsors did not consistently
high-risk lender reviews, recommend ensure that all sites complied with the FNS
appropriate and consistent risk mitigation requirements and guidance related to
actions for the deficiencies identified during outreach, promoted the program effectively, or
the oversight reviews of high-risk lenders, or served meals as announced in the state’s
communicate loan deficiencies noted during media campaign. This outcome resulted in
high-risk lender reviews to SBA approval and the programs’ intended recipients—children
purchase loan centers. In addition, over the from low-income areas—potentially not
course of a decade, the SBA OIG investigated receiving meals. In addition, the USDA OIG
at least 22 cases with confirmed loan agent reported that the Rural Utility Service and
fraud totaling about $335 million. Rural Development can better track their
efforts to administer rural infrastructure
As a result of the COVID-19 pandemic, the programs that provide assistance to eligible
Farm Credit Administration (FCA) OIG reported Native American governments and
that FCA will require more sophisticated risk communities.
evaluation techniques to align with emerging
risk factors and identify and deter The EPA OIG reported multiple issues with
consequences with the greatest potential state implementation and oversight of
impact, which will require using new drinking water programs. In a 2019 report,
technologies and developing new skillsets to the EPA OIG found that the EPA lacked
adapt to oversight challenges. The control complete and nationally consistent
environment must also adapt to address information from states about public water
increasing expectations associated with systems’ compliance with public notice
internal controls, and FCA must respond and requirements and cannot fully monitor
intervene, when necessary, to protect the
Farm Credit System.
25
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
compliance and oversee the implementation global health, education programs in Pakistan,
of this program. In 2018, the EPA OIG and other development projects. While USAID
concluded that EPA Region 5 did not policy calls for rigorous planning, monitoring,
implement proper management controls that and risk assessments to achieve its foreign
could have facilitated more informed and assistance goals, USAID OIG audits and
proactive decisions regarding the city of Flint investigations continue to identify shortfalls—
and Michigan state’s implementation of the particularly in policy implementation—that
Safe Drinking Water Act requirements, such hinder efforts to ensure that U.S. development
as the Lead and Copper Rule. activities can be sustained after assistance
ends.
The USAID OIG reported that USAID actions
have the potential to improve interagency Collecting and Using Performance-Based
coordination, but frequently shifting demands, Metrics
combined with increasingly uncertain budgets
OIGs reported that, while agencies collect
and staffing, will require maximum flexibility to
some performance-based metrics, not all
adapt to and advance U.S. foreign policy and
collect enough or use the information
national security objectives. Further, the
optimally to ensure mission success. For
USAID OIG reported that strong planning and
example, TIGTA reported that the IRS has not
monitoring are essential to advance host
yet developed metrics to quantitatively
country self-reliance and safeguard the
measure its success in detecting and
U.S. Government’s foreign development
preventing identity theft tax refund fraud. The
investments. Building appropriate risk
Legal Services Corporation (LSC) OIG reported
mitigation strategies and accountability
that LSC recognizes the challenge that it must
measures into USAID programs at the start is
collect and effectively use reliable
also necessary to curtail corruption and
performance and accountability data to
exploitation and better ensure that programs
assess and demonstrate LSC’s and its grant
save lives and improve citizens’ well-being.
recipients’ performance and value to ensure
Nevertheless, ongoing imbalances between
accountability and funder support. The DOT
local capacity and desired outcomes—along
OIG noted that DOT will need to apply
with gaps in program planning, monitoring,
sustained management attention to realize
and assessment—continue to compromise
performance-based approaches. Likewise,
countries’ abilities to lead and finance
the OPM OIG noted that OPM’s budget
development activities and services after U.S.
constraints significantly affect its ability to
involvement ends. A lack of sound plans and
complete deeper analytics of the drivers of
monitoring has similarly undermined
healthcare costs and improved prevention of
outcomes of USAID’s efforts to strengthen
fraud and abuse.
health systems, locally led supply chains for
26
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
ABBREVIATIONS AND ACRONYMS
5G Fifth Generation
AI Artificial Intelligence
AOC Architect of the Capitol
CARES Act Coronavirus Aid, Relief, and Economic Security Act
CFO Chief Financial Officer
CIGIE Council of the Inspectors General on Integrity and Efficiency
CISA Cybersecurity and Infrastructure Security Agency
COVID-19 Coronavirus Disease 2019
CPSC Consumer Product Safety Commission
DHS Department of Homeland Security
DOC Department of Commerce
DOD Department of Defense
DOE Department of Energy
DOI Department of Interior
DOJ Department of Justice
DOS Department of State
DOT Department of Transportation
DVE Domestic Violent Extremist
ED Department of Education
EPA Environmental Protection Agency
ERM Enterprise Risk Management
EXIM Export-Import Bank of the United States
FAA Federal Aviation Administration
FAR Federal Acquisition Regulation
FCA Farm Credit Administration
FDIC Federal Deposit Insurance Corporation
FEC Federal Election Commission
FNS Food and Nutrition Service
FY Fiscal Year
GAO Government Accountability Office
GES Global Engagement Center
GPO Government Publishing Office
GSA General Services Administration
HHS Department of Health and Human Services
HUD Department of Housing and Urban Development
HVE Homegrown Violent Extremist
IG Inspector General
IG Act Inspector General Act of 1978
IRS Internal Revenue Service
IT Information Technology
ITC International Trade Commission
LSC Legal Services Corporation
27
Top Management and Performance Challenges Facing Multiple Federal Agencies February 2021
NARA National Archives and Records Administration
NASA National Aeronautics and Space Administration
NLRB National Labor Relations Board
NRC Nuclear Regulatory Commission
NSF National Science Foundation
OIG Office of Inspector General
OPM Office of Personnel Management
PBGC Pension Benefit Guaranty Corporation
PPE Personal Protective Equipment
PRAC Pandemic Response Accountability Committee
RRB Railroad Retirement Board
SBA Small Business Administration
SSA Social Security Administration
TFI Office of Terrorism and Financial Intelligence
TIGTA Treasury Inspector General for Tax Administration
USAID United States Agency for International Development
USDA United States Department of Agriculture
VA Department of Veterans Affairs
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