- -

OF 

INSPECTOR GENERAL 

U.S.DEPARTMENT OF THE INTERIOR 

AUDIT

The Chicago Horticultural Society 

Should Improve Its Financial 

Management System to Receive 

Federal Funds

Report No.: 2017-FIN-053 Revised April 2020

This is a revised version of the report prepared for public release.
 

 

OFFICE OF 

INSPECTOR GENERAL 

U.S.DEPARTMENT OFTHE INTERIOR 

Memorandum 

To: Eric Pagal 

Procurement Chief, Bureau of Land Management 

From: Chris Stubbs 

Director, Financial and Contract Audits 

Subject: Reissuance of Final Report – The Chicago Horticultural Society Should Improve 

Its Financial Management System to Receive Federal Funds 

Report No. 2017-FIN-053 

This is a corrected final report of our audit of costs claimed by the Chicago Horticultural 

Society (CHS) under Grant No. L15AC00032 with the Bureau of Land Management (BLM). 

Attachment 1 provides our scope and methodology. 

A recent peer review found that we had originally miscalculated the questioned costs for 

the CHS’ process for hiring interns (see “Failure to Follow Public Land Corps Act Regulations 

When Hiring Interns” on page 4). We originally questioned $189,902 of interim salaries, and the 

peer review found we should have included travel and housing stipend costs associated with the 

seven ineligible interns. The new questioned cost total of $208,570 includes a more accurate 

reflection of actual labor costs (intern wages, benefits, indirect costs, and recruiting program 

costs), housing stipends, and travel costs. This is the only finding that has been revised in this 

reissued report. 

The objective of our audit was to determine whether the interim costs claimed by the 

CHS between May 1, 2015, and August 31, 2017, were allowable and allocable and complied 

with applicable Federal regulations, BLM policies and procedures, and contract terms and 

conditions. 

Including the revised amount, we identified questioned costs totaling $549,205 that were 

not allowable and allocable. We issued six Notices of Findings and Recommendations (NFRs) to 

the CHS at the end of our fieldwork and offered 13 recommendations to the CHS to address the 

deficiencies. Based on the CHS’ responses to our NFRs, we revised our recommendations, and 

in this final report, we offer 10 recommendations to improve the CHS’ compliance with 

applicable Federal regulations, BLM policies and procedures, and contract terms and conditions. 

Office of Audits, Inspections, and Evaluations | Washington, DC 
 

 

 

 

 

 

Background 

The Disaster Relief Appropriations Act of 2013 appropriated $786.7 million to the U.S. 

Department of the Interior (DOI) in part to restore and rebuild national parks, national wildlife 

refuges, and other Federal public assets and to increase the resilience and capacity of coastal 

habitat and infrastructure to withstand storms and reduce damage caused by them. To help fulfill 

these objectives, the BLM established the Seeds of Success East program—the first large-scale, 

coordinated seed banking effort in the eastern United States. 

Under the Seeds of Success East program, the BLM awarded a $3,114,325 grant to the 

CHS for the collection and banking of seeds. The CHS then sub-awarded the work to collect and 

bank the seeds to three entities: the New England Wild Flower Society, the North Carolina 

Botanical Garden, and the Mid-Atlantic Regional Seed Bank (part of the New York City 

Department of Parks and Recreation). During the period of award, the BLM increased the project 

amount to $3,624,191. Federal regulations require that the BLM fund no more than 75 percent of 

the project’s costs, leaving the CHS to contribute the remaining 25 percent as cost share. Using 

the grant funds, these organizations collected seeds from native plants to restore a variety of 

coastal and inland habitats that had been damaged by Hurricane Sandy in 2012. Much of the 

vegetation in these areas had been inundated by salt water, smothered by sand, or washed out to 

sea by the storm. 

Findings 

We found the CHS did not comply with many of the applicable Federal regulations, BLM 

policies and procedures, and contract terms and conditions. Specifically, we identified the 

following deficiencies: 

• Inadequate oversight of subaward recipients

• Failure to follow Federal regulations when hiring interns

• Ineligible payroll and training costs

• Unapproved changes to the budget

• Unsupported intern recruitment costs

• Inaccuracies in the CHS accounting system

These deficiencies occurred because CHS had a loss of institutional knowledge, 

misunderstood which BLM employees could authorize changes to the agreement, and 

disregarded a requirement. We also questioned a total of $549,205 of the costs claimed. 

2 
I 

Inadequate Oversight of Subaward Recipients—Questioned Costs of $218,212 

CHS Did Not Require Subawardees To Document Costs Before Reimbursement—$216,087 

The CHS did not require its subawardees to provide support for any of the invoices 

submitted for payment. Even though Federal regulations require that all grant charges be 

adequately documented (2 C.F.R. 200.403(g)) and that documentation be provided in a timely 

manner (2 C.F.R. 200.336(a)), the CHS was unable to provide any support for expenditures that 

we selected for testing from the subawards to the Mid-Atlantic Regional Seed Bank (MARS-B) 

and the New England Wild Flower Society (NEWFS) throughout the entirety of the audit and 

only provided limited support for North Carolina Botanical Garden (NCBG). 

• MARS-B: In response to the NFRs we sent to the CHS, the CHS provided some

support for costs associated with MARS-B, but MARS-B failed to provide enough

support to clear all costs. In one instance, an individual authorized his own payment

voucher for $1,665 and in five instances there was no proof of payment to individuals

provided for $8,264.

• NEWFS: The CHS told us it was unable to provide any support for the NEWFS

because the documentation that was provided to it by the NEWFS was disorganized

and would take several months to process. We therefore questioned the full amount of

$108,653 for the NEWFS as unsupported costs.

• NCBG: The CHS sent support from the NCBG in response to our NFRs, but it did not

sufficiently document $84,648 in payroll costs, $160 for unallowable room rates, and

$12,697 of unallowable indirect costs. For example, the support did not clarify hours

worked, rates of pay per hour, or what deductions were removed.

Overcharge of Indirect Costs by Subawardee—$2,125 

The CHS management did not obtain an approved indirect cost rate for any of the 

subrecipients (for description of indirect costs, see the finding titled “Improper Indirect Cost 

Base Used” on page 6) prior to award. Federal regulations (2 C.F.R. § 200.331(a)(4)) require the 

subawardee to have “an approved federally recognized indirect cost rate negotiated between the 

subrecipient and the Federal Government or, if no such rate exists, either a rate negotiated 

between the pass-through entity and the subrecipient, or a de minimis indirect cost rate.” 

The MARS-B did not require a rate letter as it opted to accept the 10 percent de minimis 

rate. The NCBG had an approved indirect cost rate, but the CHS did not get a copy until we 

brought it to the CHS’ attention. The NEWFS charged an unapproved percent indirect cost

rate; therefore, we questioned $2,125 as unallowable for the difference between the two rates. 

3 
Failure To Follow Public Land Corps Act Regulations When Hiring Interns- Questioned Costs 

o/$208,570 

The CHS claimed $208,570 in expenses for interns who were older than the allowed age 

limit in the Public Land Cmps Act of 1993. The Act and grant agreement require the CHS to hire 

interns aged 16 to 25; we found, however, that 7 of the 33 interns hired were older than 25 years 

(16 U.S.C. § 1723). We asked CHS officials why they failed to follow the intern age limit. They 

said they were unaware they employed interns outside of the required age limit. They also told us 

the CHS did not have a mechanism in its internal controls that disqualified candidates because of 

age but has since created one to ensure interns are within the age limits. During another 

interview, the same CHS officials told us that the age limit made it difficult to find and hire 

qualified candidates, and they admitted that they knowingly hired interns outside the age limit 

because they were unable to find qualified candidates. 

fu addition, a BLM program manager told us the CHS found the public law confusing 

because in 2016 the age range changed to 16 through 30 (inclusive) and the CHS was unsure 

whether the change would affect its program. Of the seven interns hired who were over the age 

limit, however, four were older than 3~ fore, the CHS still violated the regulation. fu total, 

the CHS claimed~ in~ .... in benefits, ~ direct charges, - in 

"recrnitment" program costs, ~ in housing stipends, ~ in travel for the seven 

ineligible interns. 

Unallowable Payroll and Training Costs- Questioned Costs of $100,090 

Unallowable Payroll Costs- $75,547 

The CHS provided us payroll documentation for administrntive employee labor hours 

charged to the grant that were estimated labor hours rather than actual hours worked. Federal 

regulations state that costs charged to Federal awards must be adequately suppo1ied, and labor 

estimates detennined before services are perfo1med do not qualify as suppo1i for payroll charges 

(2 C.F.R. §§ 200.403(g) and 200.430(i)(l)(viii)). The CHS does not directly charge any of its 

administrative employees to the grant agreement; instead, it uses a cost allocation systemEffort Allocation Repo1i ing System-that applies a fixed percentage of the employee's full 

sala1y to the CLM futernship Program, which the CHS then allocates to each project, including 

this one. Hence, a fixed percentage of the employee's salaiy is chai·ged to the agreement 

regai·dless of how many hours the employee spends working on agreement tasks. Because the 

CHS used estimated hours instead of actual hours worked, we question $75,547 in payroll costs. 

Unallowable futern Training Costs- $24,543 

The CHS claimed $24,543 in training costs for interns who did not attend a training 

event. This amount reflects the costs that were claimed from May 2015 to August 2017, the 

scope of our audit. Because many interns in the CLM programs attend the same training, the 

CHS chai·ged the same amount to all CLM projects per intern hour for all CLM interns, 

including the interns working on this agreement. The charges for the training are commingled 

with other CLM program costs and are directly allocated by intern hour. When we told the CHS 

4 
 

 

about the mischarge, it stated that it reduced the amount drawn down from the account to 

compensate for the mischarge. 

Unapproved Changes to the Budget—Questioned Costs of $21,224 

Improper Cost Share Calculation—$9,760 

The CHS used labor and fringe-benefit costs as part of its cost share even though the 

BLM did not approve it in the grant agreement’s budget. Federal regulations require that the 

CHS provide 25 percent of the project’s total cost, also known as cost share (16 U.S.C. § 1729 

Funding). Both Federal regulations and the terms and conditions of the award state that the 

grantee is required to receive approval to make changes to its cost share (2 C.F.R. § 

200.308(c)(7)). The CHS said it did not request such approval because it did not think it was 

required. Without consenting to the CHS’ use of labor and fringe-benefit costs as part of its 

matching share, the BLM cannot effectively oversee grant costs. 

CHS Paid for Unapproved Travel—$6,864 

The CHS paid $6,864 for its senior director’s and consultants’ travel expenses that were 

not included in the approved grant budget, which only included travel estimates for the curator 

and for interns. The CHS stated that this travel was approved by the BLM program office, but 

the grant agreement and the award letter provided to the CHS by the BLM grants management 

office (GMO) clarified that changes to the budget could only be approved by the BLM GMO. As 

a result, the GMO was unaware of the additional travel and was unable to determine whether the 

cost was reasonable. 

CHS Paid an Unauthorized Contractor—$4,600 

The grant budget authorized the CHS to subaward work to three contractors, but the CHS 

paid $4,600 to a fourth contractor that had not been authorized by the BLM GMO. Although the 

CHS stated that the GMO’s authorization was not required to hire a fourth contractor, Federal 

regulations do require GMO approval for hiring a contractor, regardless of the cost (2 C.F.R. 

200.308(c)(6)). As a result, the GMO was unaware of the hiring and was unable to determine 

whether the cost was reasonable and the hiring appropriate. 

Unsupported CLM Internship Program Recruitment Costs—Questioned Costs of $1,109 

The CHS did not provide support for any of the $1,109 in CLM Internship Program costs 

(which are, in this case, recruitment costs that include such items as advertisements and program 

flyers) charged to the grant for calendar years 2015 and 2017. The CHS provided support for 

2016 and there were no questioned costs associated with that year, but Federal regulations 

require that all grant charges be adequately supported (2 C.F.R. §§ 200.403(g)). 

5 
 

 

Inaccuracies in the CHS Accounting System 

Timekeeping System for Interns Does Not Provide Reasonable Assurance of Accuracy Before 

Payroll Disbursement 

The CHS did not provide reasonable assurance that intern timesheets accurately reflected 

the hours claimed before payment. Interns submit timesheets electronically to the CHS and for 

supervisors’ review for discrepancies, but there is no step in the CHS’ payroll procedure 

requiring an electronic signature from the supervisor to confirm the accuracy of time charged. 

Federal regulations require that “charges to Federal awards for salaries and wages must be based 

on records that accurately reflect the work performed” and can “be supported by a system of 

internal control which provides reasonable assurance that the charges are accurate, allowable, 

and properly allocated” (2 C.F.R. § 200.430(I)(1)(i)). As a result, we were unable to determine 

whether the hours claimed by the interns were accurate. Because significant costs associated with 

this agreement depend on the hours claimed by the interns (the CHS charges the CLM program 

costs, CLM management costs, intern wages and benefits, and a portion of the indirect costs per 

intern hour), it is imperative that the hours claimed by the interns be accurately reflected. 

Improper Indirect Cost Base Used 

At the beginning of the audit, we determined that the CHS used an incorrect base when 

calculating indirect costs; hence, it overcharged its indirect costs to the grant agreement. The 

CHS can charge a percentage of costs that are related to the agreement to pay for indirect costs 

that cannot be directly charged. Federal regulations and the agreement allow the CHS to include 

all direct costs, less capital expenditures, in the indirect cost base calculation, including up to the 

first $25,000 charged under each subaward (2 C.F.R. § 200, Appendix III(C)(2)). The CHS, 

however, included all direct costs in its indirect cost base, including all subawardee costs, which 

led to an overstatement of $224,977 in indirect costs. The CHS was unable to explain how this 

happened because the employee who set up the calculation in the system left the organization. 

Although the CHS corrected the calculation and submitted to the BLM an updated Standard 

Form 425 (SF-425), the Federal Financial Report, the CHS’ inability to explain how the 

miscalculation occurred indicates that the same or similar problems could occur again. 

Inaccurate Budget Submission 

Because the CHS claimed costs on multiple occasions that were not reflected in the 

approved budget, the BLM requested that the CHS submit a revised budget, which the CHS did 

in February 2018. The new, detailed budget should have incorporated all costs already incurred 

along with proposed future costs for the rest of the grant agreement. The new budget stated that 

BLM’s portion of the costs would be $2,717,810 and projected CHS’ share of the cost to be 

$798,975. The BLM is only allowed to provide 75 percent of the project’s total cost, so the CHS’ 

required portion would have to be $905,937 (16 U.S.C. § 1729). As indicated in the budget, the 

CHS would only be providing 22 percent of the cost, $106,962 below the required amount. In 

addition, according to the CHS’ accounting system, the CHS charged and received compensation 

for $1,315 in travel costs for the curator that it did not include in the revised budget. 

6 
 

 

 

 

 

 

 

 

 

 

 

 

CHS officials told us that they did not know why the calculations were off and that the 

individual who revised the budget left the organization. Because of the miscalculation of the cost 

share and the misrepresentation of actual costs claimed, the revision submitted to the BLM did 

not provide an accurate depiction of the budget. Without a correct budget, the BLM will not be 

able to effectively oversee the costs to the grant agreement. 

Conclusion and Recommendations 

We found $549,205 (see Attachment 2) in questioned costs. The CHS’ accounting system 

and procedures are not able to manage Federal funds. Specifically, the CHS did not have proper 

oversight of subaward recipients, failed to follow regulations when hiring interns, claimed 

employee payroll based on estimated hours worked, claimed unapproved and unallowable costs 

on the budget, was unable to support program costs, applied an inaccurate indirect cost base 

when calculating indirect costs, could not provide reasonable assurance for intern timesheets, and 

submitted an incomplete and inaccurate budget to BLM. 

We recommend that the BLM: 

1. Resolve the questioned costs of $549,205 

2. Determine whether the CHS requires its subawardees to submit invoices quarterly and 

new subaward organizations to submit supporting documentation with reimbursement 

requests 

3. Assist the CHS to develop a procedure that requires it to obtain indirect cost rate 

letters or negotiate an indirect rate with subawardees prior to award 

4. Monitor internships to confirm they are only provided to individuals aged 16 through 30 

5. Confirm the CHS corrected the Effort Allocation and Reporting System to track the 

actual hours its administrative employees work on the CLM programs and correctly 

charge the grant agreement 

6. Determine if the CHS has created a step in its financial system to ensure that interns 

are not automatically charged for training, regardless of their attendance 

7. Confirm that the CHS created a step to obtain proper approvals when revising its 

match calculation 

8. Confirm that the CHS created a step to obtain proper approvals when revising its 

budget after incurring additional travel expenses and when hiring new contractors 

9. Determine if the CHS created a step in the intern timekeeping system that provides 

reasonable assurance that the time claimed is accurate before payroll is disbursed 

10. Help the CHS resolve the inaccuracies of the revised budget 

7 
 

Based on the responses received from CHS (see Attachment 3), we determined that 4 of 

our 10 recommendations have been resolved and 2 of those 4 have been implemented (see 

Attachment 4). 

The legislation creating the Office of Inspector General requires that we report to 

Congress semiannually on all audit, inspection, and evaluation reports issued; actions taken to 

implement our recommendations; and recommendations that have not been implemented. 

If you have any questions regarding this report, please call me at 202-208-5745. 

Attachments (4) 

8 
 

 

 

 

 

 

 

Attachment 1 

Scope and Methodology 

Our audit scope included $3,007,933 in costs claimed by the Chicago Horticultural 

Society (CHS) under Grant No. L15AC00032, provided by the Bureau of Land Management 

(BLM). We reviewed transactions charged to the grant from its effective date of May 1, 2015, to 

August 31, 2017. Our review tested internal controls and assessed CHS’ compliance with 

Federal regulations, BLM policies and procedures, and grant terms and conditions. 

We conducted our audit in accordance with Generally Accepted Government Auditing 

Standards. Those standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and conclusions based on our 

audit objectives. We believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. 

To accomplish our audit objectives, we: 

• Reviewed Federal grant regulations, BLM policies and procedures, the terms and 

conditions for grant L15AC00032, and the CHS’ policies and procedures 

• Gained an understanding of the CHS’ internal controls over payroll processing, 

purchasing, program management, drawdown of Federal funds, and subawardee 

oversight 

• Interviewed key officials, including the BLM grant officer, BLM program manager, 

and CHS staff 

• Reviewed the CHS’ documentation supporting compliance with criteria regarding 

payroll, drawdowns, and purchases 

• Reviewed the Code of Federal Regulations pertaining to claimed costs 

• Verified that the CHS drew down Federal funds in accordance with appropriate 

regulations and the grant terms and conditions 

• Reviewed the CHS’ Fiscal Year 2016 Office of Management and Budget Single Audit 

Report 

• Conducted a site visit to the CHS office in Glencoe, IL 

The CHS provided us with a computer-generated ledger and support for the Standard 

Form 425 (SF-425), Federal Financial Report. To test the veracity of the computer-generated 

documentation provided, we performed several analytical tests on the data. We compared the 

general ledger to the SF-425 to verify if the amounts represented captured all agreement costs. 

We used the computer-generated data to test labor costs, other direct costs, and drawdowns. 

9 
 

Attachment 1 

We also evaluated the internal controls over transactions recorded in the CHS’ 

accounting and payroll systems and tested their operation and reliability. We did not project the 

results of the tests to the total population of recorded transactions. 

To perform our test, we selected a judgmental sample of 135 expenditures and 15 

subawardee invoices (5 from each subawardee) that the CHS had submitted to the BLM for 

payment under the grant. These expenditures totaled $428,688 and represented 19 percent of all 

costs charged to the grant (excluding the CHS cost share). We asked CHS officials to provide us 

with supporting documentation to demonstrate that the costs were allowable and allocable. The 

documentation provided included invoices, timesheets, direct allocation computations, receipts, 

and travel vouchers. 

10 
Attachment 2 

Monetary Impact of Questioned Costs for Grant No. L15AC00032 

Reason Questioned Costs 

Inadequate support provided for subawardees $216,087 

Interns hired outside Public Law requirements 208,570 

Unallowable payroll costs: estimated hours used as actual costs 75,547 

Cost for training not attended 24,543 

Improper cost share calculation 9,760 

Travel not in the approved grant budget 6,864 

Contractor not in the approved grant budget 4,600 

Overcharge of indirect costs by subawardee 2,125 

Unsupported Conservation and Land Management program costs 1,109 

Total questioned costs $549,205 

11 
 

 

 

 

Attachment 3 

Recommendations, CHS Management Responses, and OIG Replies 

We recommend that the Bureau of Land Management (BLM) work with Chicago 

Horticultural Society (CHS) to: 

1. Resolve the questioned costs of $549,205 

CHS Response: 

The CHS concurred with $26,668 in questioned costs, the costs associated with the 

overcharge of indirect costs by subawardees and the costs associated with the 

inappropriately charged intern training costs. The CHS did not concur with any other 

questioned costs. 

OIG Reply: 

We consider this recommendation unresolved and unimplemented. 

2. Determine whether the CHS requires its subawardees to submit invoices 

quarterly and new subaward organizations to submit supporting documentation 

with reimbursement requests 

CHS Response: 

While the CHS did not concur with this finding, it did say that going forward it will 

require its subawardees to submit invoices quarterly and new subawardees to submit 

supporting documentation with reimbursement requests. 

OIG Reply: 

We consider this recommendation resolved and implemented. 

3. Assist the CHS to develop a procedure that requires it to obtain indirect cost rate 

letters or negotiate an indirect rate with subawardees prior to award 

CHS Response: 

The CHS partially concurred with this finding, stating that it obtained one indirect cost 

approval letter for one subawardee and that a second subawardee claimed the 10 percent 

de minimis rate per Federal regulations. The CHS concurred that it did not obtain an 

indirect cost approval letter from the New England Wild Flower Society, which claimed 

more than the allowable rate without an approval letter. The CHS claimed a refund is due 

to the BLM for the difference between de minimis rate and the rate charged, and that the 

CHS had not drawn down funds for expenses incurred to provide this refund. 

OIG Reply: 

The CHS did not obtain the indirect cost rate letters prior to this audit as it should have 

per Federal regulations, which resulted in an overcharge to the grant by one subawardee. 

Because the CHS did not mention how it intends to ensure that it obtains indirect cost rate 

letters from all its subawardees in the future, we consider this recommendation resolved 

but unimplemented. 

12 
 

 

 

 

 

Attachment 3 

4. Monitor internships to confirm they are only provided to individuals aged 16 

through 30 

CHS Response: 

The CHS did not concur with this finding, stating that it had been aware of the age 

requirement and did not find it confusing. The CHS told us, “There were a few situations 

that resulted in the hiring of interns over 25,” noting that six of the seven were hired 

because there were no qualified applicants within the age range left to hire and that the 

seventh was hired accidentally. The CHS stated that it needed to hire interns over the age 

limit to accomplish the seed collection objective. The CHS placed a control on future 

applicants and communicated with agency contracts that all interns hired must be within 

the age restrictions with no exceptions. 

OIG Reply: 

The CHS management disregarded the grant agreement’s age requirement to meet the 

grant’s seed collection requirement. It is not appropriate to ignore part of an agreement to 

satisfy another part. The Public Land Corps Act approves funding for the grant 

specifically to provide youth with employment opportunities, not to collect seeds. 

Though the CHS stated that it has new controls in place to ensure it will not happen 

again, it did not share with us what those new controls are, so we consider this 

recommendation resolved but unimplemented. 

5. Confirm the CHS corrected the Effort Allocation and Reporting System (EARS) 

to track the actual hours its administrative employees work on the CLM 

programs and correctly charge the grant agreement 

CHS Response: 

The CHS did not concur with this finding, stating that the report generated by the EARS 

is based on actual hours worked by management. The CHS recognized that the annual 

reconciliation and return of overages must be performed on a timelier basis, and it has 

taken steps to evaluate and improve the process of budgeting. 

OIG Reply: 

Since the EARS report applies a fixed percentage of all hours worked by management, 

those costs are still estimates and not actual hours spent on work under the grant 

agreement. The CHS’ response regarding the annual reconciliation and taking steps to be 

timelier with the return of overages is not related to this finding. Reconciliation is a 

normal part of the accounting process but is not related to the CHS’ unallowable use of 

estimated hours worked by management. We consider this recommendation unresolved 

and unimplemented. 

6. Determine if the CHS has created a step in its financial system to ensure that the 

agreement is not automatically charged for intern training costs, regardless of 

their attendance 

13 
 

Attachment 3 

CHS Response: 

The CHS did not concur with this finding. It did not attribute the oversight to a system 

failure, but rather to a misunderstanding of the attendance policy for the annual CLM 

workshop. The CHS also stated that it does not believe the questioned costs should be 

included in the finding as it has returned the funds to the BLM by way of drawing less 

from BLM for incurred expenses. 

OIG Response: 

We do not agree that this was a simple misunderstanding of the attendance policy. 

Because the costs are directly allocated per intern hour regardless of who attends, we 

maintain that this error occurred because of the arrangement of the financial management 

system and disbursement of the direct allocations. We consider this recommendation 

unresolved and unimplemented. 

7. Confirm that the CHS created a step to obtain proper approvals when revising 

its match calculation 

CHS Response: 

The CHS did not concur with this finding on ineligible costs. The CHS maintained that it 

was not improper to include these costs in its cost share calculation but plans to work 

with the BLM to determine whether it was appropriate. 

OIG Reply: 

Federal regulations are clear that any deviation from the approved match must be 

approved by the agency (BLM) and that the agreement requires approval from the Grants 

Management Office (GMO) for the change. We consider this recommendation 

unresolved and unimplemented. 

8. Confirm that the CHS created a step to obtain proper approvals when revising 

its budget after incurring additional travel expenses and when hiring new 

contractors 

CHS Response: 

In reference to the unapproved additional travel expenses, the CHS did not concur, 

reiterating that the BLM program office requested that the CHS senior director and the 

contractors travel. The CHS did not concur with the finding that it is required to obtain 

approval when hiring a new contractor. Because the deviation is not greater than 10 

percent of the contract total and a change in scope or objective had not been made, the 

CHS reasoned that it did not require approval modification to hire an additional 

contractor. 

OIG Reply: 

Only the BLM GMO may approve changes to the budget and, regardless of the cost, 

Federal regulations state that contracted work under a Federal award must be 

preapproved. We consider this recommendation unresolved and unimplemented. 

14 
 

 

 

 

 

Attachment 3 

9. Determine if the CHS created a step in the intern timekeeping system that 

provides reasonable assurance that the time claimed is accurate before payroll is 

disbursed 

CHS Response: 

While the CHS did not concur with this finding, it did state that it has implemented an additional 

process to provide the signature of the interns’ supervisor on the intern timesheet. 

OIG Reply: 

Since the CHS is in the process of correcting this discrepancy, we are not questioning 

costs associated with this finding. We consider this recommendation resolved and 

implemented. 

10. Help the CHS resolve the inaccuracies of the revised budget 

CHS Response: 

The CHS did not concur with this finding, stating that it had included actual expenditures 

and actual cost share calculations as of December 2017. The CHS also said it will work 

with BLM to determine whether the changes made to the budget were appropriate. 

OIG Reply: 

It is inaccurate for the CHS to state that it included actual expenditures and actual cost 

share information. As stated in the finding, the cost share information indicates that CHS 

would only pay 22 percent of project costs. In addition, CHS did not include the $1,315 

in travel costs in the revised budget. We consider this recommendation unresolved and 

unimplemented. 

15 
Attachment 4 

Status of Recommendations 

In response to our findings, the Chicago Horticultural Society did not concur with any of our 

recommendations provided in this report. 

Recommendations Status Action Required 

1,5,6,7,8,10 Unresolved and 

unimplemented 

We will refer this 

recommendation to the Assistant 

Secretary for Policy, Management, 

and Budget for resolution. 

3,4 Resolved but 

unimplemented 

We will refer this 

recommendation to the Assistant 

Secretary for Policy, Management 

and Budget for tracking 

implementation. 

2,9 Resolved and 

implemented No action is required. 

16 
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