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Management Advisories

File Attachment

We issued a management advisory to the Department recommending improvements in DOT’s oversight of hurricane relief funds. The preliminary assessment of risk over the accounting, tracking and financial reporting of hurricane relief and recovery costs concluded that Operating Administrations (OA’s) were instituting processes to comply with the Assistant Secretary's direction to track hurricane-related costs. However, our assessment identified three areas where improved oversight is needed: (1) it appears that the Department may not have adequate controls over the funds used to support transportation-related emergency response activities, creating the risk that violations of appropriations laws could occur. A lack of clarity regarding roles, responsibilities and authority within the Department may be contributing to the funds control problems; (2) with the exception of FAA, the OAs do not have procedures and controls in place to track all administrative costs (primarily salary, travel and supplies) related to hurricane relief. OAs are only attempting to track and account for overtime and travel costs they expect FEMA to reimburse, despite Department guidance calling for them to track all costs. OAs said they are not counting “straight time” worked by employees toward hurricane costs because the employees would have been working anyway; and,(3) the Department needs to develop a methodology to identify administrative costs incurred prior to September 23, when guidance require OAs to track all hurricane-related costs were issued. We concluded that the Department needs to better understand the accounting process used for hurricane emergency response activities, institute effective funds control and determine whether any violations of appropriations law, including the Anti-Deficiency Act, have occurred. The Department has agreed to follow-up promptly to ensure that the OAs properly implement the Assistant Secretary's direction.