American taxpayers deserve to see their tax dollars spent efficiently and effectively. The Corporation for National and Community Service (CNCS) is entrusted with annual appropriations to the tune of $1 billion, and the Corporation has a responsibility to ensure that each and every taxpayer dollar is accurately accounted for and benefits its intended recipients.
American taxpayers deserve to see their tax dollars spent efficiently and effectively. The Corporation for National and Community Service (CNCS) is entrusted with annual appropriations to the tune of $1 billion, and the Corporation has a responsibility to ensure that each and every taxpayer dollar is accurately accounted for and benefits its intended recipients.
Instead, CNCS has exhibited extreme mismanagement and government waste. Managing grants is the core function of the Corporation, and yet it repeatedly fails in this capacity. In fact, the Corporation is so poorly run that its primary purpose – grant oversight – is categorized as a management challenge by the agency's own Office of Inspector General.
Delayed Action by Corporation Costs Taxpayers Dearly. The OIG noted the delay of Corporation action jeopardizes collection of large recoveries of improper payments. In one case identified by the OIG, the Corporation took more than 14 months to take action on $660,000 in unsupported federal costs, despite the grantee’s deteriorating financial condition. The grantee eventually declared bankruptcy. Nearly half of the questioned costs were incurred after the issuance of an A-133 audit with findings of material weaknesses further demonstrating the Corporation’s inaction putting federal taxpayer dollars at risk. (2008-2011) (SAR 14-01, SAR 12-02, OIG 12-15)
Lack of Oversight of VISTA Project Allows Impermissible Use of Funds. In 2015, an OIG investigation into a VISTA project found more than $700,000 in federal funds used for unallowable or impermissible service activities. A Corporation State Program Specialist provided a grantee inaccurate guidance that allowed VISTA members to serve in staff positions. The program specialist further approved 13 VISTA assignment descriptions that impermissibly allowed VISTA members to perform direct service. When VISTA members made complaints about these assignments the employee withheld this information from the project site and her supervisors and took no meaningful action. The Corporation allowed the employee to retire prior to taking disciplinary action. (2014) (SAR 15-01, OIG 2014-021)
Lack of Coordination Between AmeriCorps Programs. VISTA unknowingly renewed a grant one day after AmeriCorps terminated its grant to the same program due to a lack of systems for sharing critical information. The program then charged VISTA for unsupported student labor, paid workers $115,000 without undergoing background checks, and overdrew AmeriCorps for more members than were enrolled. (2013) (SAR 15-02)
Failed Due Diligence of Grantee Pre-Award Financial Assessment. A subgrantee misapplied federal funds to pay prior debts and previous expenses. Shortly thereafter, the IRS seized its assets for delinquent tax debts and the organization was dissolved. The OIG found no evidence that a pre-award financial assessment was completed, which the OIG contends would have identified the serious financial issues the program was facing. (1997) (SAR 98-2, OIG 97-008)
Grants Management is a Management Challenge for the Corporation. “CNCS continues to struggle to provide effective oversight of its grant portfolio, leaving these funds unnecessarily vulnerable to waste, fraud, mismanagement and abuse.” This is the assessment of the how the Corporation is managing its core mission of administering $750 million in grants annually as reported by the OIG when it listed strengthening grant oversight and monitoring as a management challenge in its FY 2017 Management Challenges. (2017)
Corporation Retroactively Expands Grant Scope. From 2007 to 2014, a national grantee improperly assigned 74 AmeriCorps members and unilaterally modified the scope of its grant without prior approval from the Corporation, as required by the AmeriCorps grant provisions. This resulted in the program disbursing over $649,000 in living allowance payments and certifying over $212,000 in education awards related to unauthorized activities. Even though the Corporation’s grants officer and program officer both were unaware of the activity and viewed it as outside the scope of the approved grant, the Corporation retroactively expanded the grant’s scope and refused to disallow the costs. The OIG expressed serious concerns over the merits of this decision including how it would affect the actions of other grantees. (2007-2014) (SAR 14-02)
Corporation Encourages Fraud. The OIG found a Corporation National Service Trust officer instructed a former AmeriCorps member and a college official to backdate documents and submit fraudulent education award vouchers. The AmeriCorps member received expired education award benefits, and several Corporation employees misled their supervisors. (2010[1]) (SAR 10-01)
Waste of Taxpayer Resources. At an NCCC site, OIG investigators found several storage rooms containing uniforms, program equipment, and supplies in total disarray. Over $300,000 of new uniforms were mixed in with dirty and contaminated items. The lack of inventory controls and oversight by campus officials resulted in a significant loss to the government, which not only included the contaminated supplies and uniforms, but also the cost to remediate the mold infested storage rooms. (2009[2]) (SAR 09-01)
Significant Risks Due to Inadequate Controls. The OIG found that a lack of meaningful safeguards against waste, fraud, and mismanagement led to significant risks in the fixed grant program. For example, the Corporation continued to fund a grantee for three years even as the grantee never maintained the contemplated level of enrollment, its financial condition deteriorated, and its debt to the Corporation increased by hundreds of thousands of dollars each year. By the end of the three-year grant, the grantee owed the Corporation over $1 million and ended up declaring bankruptcy. (2009-2013) (SAR 13-02)
Improper Payments. CNCS remains unable to comply with the Improper Payments Elimination and Recovery Act of 2010 (IPERA). The OIG has consistently found significant flaws with the Corporation’s IPERA process and indicates it will be at least two more years before the Corporation complies with the law. (2010-2017) (SAR 16-02, OIG 16-04) (Issue continues - see FY 2017 management challenges)
[1] Estimated based on which Semi Annual Report it first appeared, as the OIG report does not disclose exact date.
[2] Estimated based on which Semi Annual Report it first appeared, as the OIG report does not disclose exact date.
