INSPECTOR GENERAL’S SEMIANNUAL REPORT TO CONGRESS

Appalachian Regional Commission

April 1, 2014–September 30, 2014
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TABLE OF CONTENTS 

 Page 

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii 

 I. Introduction .................................................. 1 

 II Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

Appalachian Regional Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

Office of Inspector General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 

 III. OIG Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

Audits, Inspections, Evaluations & Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

Investigations . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. 7 

Other . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 7 

 IV. Reporting Fraud, Waste, and Abuse . . .. . . . . . . . . . . . . . . . . . . . . .... . . . . . 8 

 V. Legislative & Regulatory Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 

 

 VI. Dodd-Frank Legislation ................. ............................. 8 

 VII. OIG Audit Community Wide Issues ..............................................9 

 

 

Appendices 

A. Schedule of Reports Issued April 1, 2014 thru September 30, 2014 

B. Schedule of Audits, Inspections, Evaluation and Review Reports of Questioned or 

Unsupported Cost 

C. Schedule of Audit, Inspection, Evaluation and Review Reports with Recommendations 

that Funds be put to Better Use and Summary of Management Decision 

D. Definition of Terms Used 

i 
EXECUTIVE SUMMARY 

ARC grant operations represent the most significant part of ARC’s programs. For this reporting period 

our activities included the issuance of twenty five reports, follow-up on significant recommendations in 

prior reports, and monitoring contractor performance of grant reviews. This included 19 grant audits 

issued during the reporting period and six reports dealing with management issues. 

Agency action to improve grant follow-up including use of the Basic Agency Management Report 

(BAMR) provides additional information about grant status and permits an improved assessment of 

grants needing follow-up. 

Follow-up on older Basic Agency grants in prior reports disclosed de-obligations of $1,167,353 in five 

cases. Continued emphasis is appropriate for older open grants for which no disbursements have been 

made, grants with no additional disbursements for lengthy periods, open grants with expired 

performance periods and grants for which the BAMR reports noted additional potential de-obligations of 

$2.4 million. 

For older ARC administered grants no disbursements were noted in 5 of 9 cases included in prior reports 

and de-obligations of $111,701 were reported in two cases. 

Twenty HUD old administered grants with balances totaling $599,503 that should be de-obligated 

remained open and continued emphasis is needed to assure HUD de-obligates these funds so that the 

funds can be used for other projects. 

Individual grant reviews disclosed that grants were generally implemented in accordance with applicable 

regulations and project objectives. Finding and recommendations pertained to matching funds, progress 

reports, financial systems, internal controls and identified questioned and un-supported costs. 

A peer review of the ARC OIG was conducted by another OIG during this reporting period. The report 

contained no significant deficiencies and cited monitoring of contractors as a best practice. 

In December 2013 OMB issued an updated Designated Federal Entity (DFE) list that identified the 

Federal Co-Chair and the Governors of the thirteen Appalachian States as the ARC Agency Head. The 

legislation provides that the Agency Head can terminate the Inspector General with a two thirds vote. 

No problems have resulted from the implementation of this provision that was contained in Dodd-Frank 

legislation. 

The IG continues to emphasize OIG wide issues impacting efficiency, effectiveness and creditability of 

OIG audit units. 

ii 
PURPOSE AND REQUIREMENTS OF THE 

OFFICE OF INSPECTOR GENERAL SEMIANNUAL REPORT 

The Inspector General Act of 1978 requires the IG to keep the Federal Co-Chair and Congress fully and 

currently informed about problems and deficiencies in the Commission's operations and the necessity for 

corrective action. In addition, the Act specifies that semiannual reports will be provided to the Federal 

Co-Chair by April 30 and October 31 and to Congress 30 days later. 

The Federal Co-Chair may transmit comments to Congress along with the report but may not change 

any part of the report. The specific requirements prescribed in the Act, as amended (Public Law 100-

504), are listed below. 

 Reporting Requirements 

Section 4(a)(2) Review of legislation and regulations Page 

 

Section 5(a)(1) Problems, abuses, and deficiencies Pages 

Section 5(a)(2) Recommendations with respect to problems, abuses, and deficiencies Pages 

Section 5(a)(3) Prior significant recommendations not yet implemented * 

Section 5(a)(4) Matters referred to prosecutive authorities * 

Section 5(a)(5) 

and 6(b)(2) 

 Summary of instances where information was refused * 

Section 5(a)(6) Listing of audit reports showing number of reports and dollar 

value of questioned costs 

App A 

Section 5(a)(8) Statistical table showing number of reports and dollar value 

of questioned costs 

App B 

Section 5(a)(8) Statistical table showing number of reports and dollar value 

of recommendations that fund be put to better use 

App C 

 

* None. 

iii
I. INTRODUCTION

The Inspector General Act Amendments of 1988, (Pub. L. No. 100-504) provides for the establishment 

of an Office of Inspector General (OIG) at Designated Federal Entities (DFEs), including the ARC. The 

ARC OIG became operational on October 1, 1989, with the appointment of an IG and provision of 

budgetary authority for contracted audit and/or investigation activities. 

II. BACKGROUND

A. APPALACHIAN REGIONAL COMMISSION 

The Appalachian Regional Development Act of 1965, (Pub.L. No. 89-4) established the Appalachian 

Regional Commission. The Act authorizes a Federal/State partnership designed to promote long-term 

economic development on a coordinated regional basis in the 13 Appalachian States. The Commission 

represents a unique experiment in partnership among the Federal, State, and local levels of Government 

and between the public and private sectors. It is composed of the Governors of the 13 Appalachian 

States and a Federal representative who is appointed by the President. The Federal representative serves 

as the Federal Co-Chair with the Governors electing one of their numbers to serve as the States' CoChair. 

 - Through joint planning and development of regional priorities, ARC funds are used to assist and 

encourage other public and private resources to address Appalachia's unique needs. Program direction 

and policy are established by the Commission (ARC Code) with the vote of a majority of the State 

members and the affirmative vote of the Federal Co-Chair. Emphasis has been placed on highways, 

infrastructure development, business enterprise, energy, human resources, and health and education 

programs. 

 - To ensure that funds are used effectively and efficiently, and to strengthen local participation, 

ARC works with the Appalachian states to support a network of multicounty planning and development 

organizations, or local development districts (LDDs), throughout the Region. The 73 LDDs cover all 

420 counties in Appalachia. The LDDs’ roles include identification of priority needs of local 

communities and assisting with participation in ARC progress. 

 - Administratively, the Commission has a staff of 51 persons that includes 45 Commission 

employees responsible for program operations, and the office of the Federal Co-Chair that includes the 

three person OIG staff. The Commissions’ administrative expenses, including salaries, are jointly 

funded by Federal and State funds. 

 - The Commission's appropriation for FY 2014 was $80.3 million. 

Although Congress changed the funding method for the Appalachian Development Highway System 

(ADHS) in July 2012, ARC continues to support and participate in completion of the ADHS including 

fulfilling planning and approval responsibilities. 

ARC’s non-ADHS funds are distributed to state and local entities in accordance with an allocation 

formula intended to provide fair and reasonable distribution of available resources. ARC staff has 

responsibilities for program development, policy analysis and review, grant development, technical 

1 

 
assistance to States, and management and monitoring. In order to avail itself of federal agency expertise 

and administrative capability in certain areas, ARC often relies on other departments and agencies for 

program administration, especially with respect to highways and infrastructure projects. For example, 

the Appalachian Regional Development Act authorizes the Secretary of Transportation to administer the 

Commission's highway programs, with the Commission retaining responsibility for priorities, highway 

locations, and fund allocations. ARC relies on Child Agencies, including the Departments of 

Agriculture and Housing and Urban Development (HUD), Economic Development Administration 

(EDA) and the Tennessee Valley Authority (TVA), to administer and monitor construction related 

grants. 

The TVA has administered, under the terms of a Memorandum of Understanding with the Commission 

that provided for reimbursement of services, about 80 open ARC grants, primarily in the southern states 

of the Region. TVA has recently indicated that they intend to curtail or reduce their administration 

services after this fiscal year, which will put additional pressure on the management of ARC’s grant 

program. ARC is coordinating with other Basic Agencies to administer construction grants and 

emphasizing State authority to administer these grants. 

2 
ARC ORGANIZATION CHART
 
B. OFFICE OF INSPECTOR GENERAL

 

The ARC OIG is an independent Federal audit and investigative unit that reports directly to the Agency 

Head. 

Role and Authority

The Inspector General Act of 1978, (Pub.L. No. 95-452), as amended in 1988, states that the IG is 

responsible for (1) audits and investigations; (2) review of legislation; and (3) recommendation of 

policies for the purpose of promoting economy and efficiency in the administration of, or preventing and 

detecting fraud and abuse in, the program and operations of the establishment. In this regard, the IG is 

responsible for keeping the Agency Head and Congress fully informed about the problems and 

deficiencies in ARC programs and operations and the need for corrective action. The IG has authority to 

inquire into all ARC programs and activities that are federally funded. The inquiries may be in the form 

of audits, surveys, investigations, inspections, evaluations, personnel security checks, or other 

appropriate methods. The two primary purposes of these inquiries are (1) to assist all levels of ARC 

management by identifying and reporting problem areas, weaknesses, or deficiencies in procedures, 

policies, program implementation, and employee conduct and (2) to recommend appropriate corrective 

actions. 

Relationship to Other Principal ARC Offices

The States’ and Federal Co-Chairs, acting together as the Commission, establish policies for ARC's 

programs and its administration. These policies are provided under the ARC Code and implemented by 

the Commission staff, which is responsible for monitoring project performance and providing technical 

assistance as needed. The Federal Co-Chair, as the Federal fiscal officer, is responsible for the proper 

use and protection of Federal funds, for ensuring compliance with applicable Federal laws and 

regulations, and for taking appropriate action on conditions needing improvement, including those 

reported by the OIG. The operation of the OIG neither replaces established lines of operating authority 

nor eliminates the need for the Commission offices to take reasonable measures to protect and enhance 

the integrity and effectiveness of their operations. All Commission offices are responsible for 

monitoring and evaluating the programs entrusted to them and reporting information or incidences 

needing further audit and/or investigation to the IG. 

Funding and Staffing

The OIG funding level for FY 2014 was $642,000. Staffing consists of the Inspector General, an 

Assistant Inspector General for Audit, and a Confidential Assistant. Grant review activities continue to 

emphasize use of contracted services (e.g., independent public accounting firms or other OIG offices) 

supplemented by programmatic and performance reviews directed by OIG staff. 

In order to comply with Pub.L. No. 110-409, the Inspector General Reform Act of 2008, the OIG 

funding for FY 2014 included reimbursement of other IGs for counsel, audit and investigative services 

via Memorandums of Understanding. We use Treasury OIG for Tax Administration for legal services, 

and the Interior OIG for investigation services. 

5 
III. OIG ACTIVITY

A. Audits, Inspections, Evaluations and Reviews

Grant reviews focused on grant implementation and administration in line with ARC and OMB policies 

and procedures. Management reviews focused on headquarters program and grant management 

activities. 

ARC has continued its emphasis on grant follow-up including identification of inactive grants with 

potential for termination and de-obligations. For example, follow-up on prior reports identifying old 

open grants administered by basic agencies disclosed that ARCs initiation of an annual Basic Agency 

Monitoring Report (BAMR) resulted in better identification of project status and initiation of follow-up 

action. Available reports identified five instances where grants balances totaling $1,167,353 in our prior 

report were de-obligated. 

A review of the last available BAMRs identified seven instances with additional potential de-obligations 

of $2,435,000 based on comments such as project withdrawn, do not need grant, should be cancelled, to 

be de-obligated, no work will be done and seeking interim financing. 

Emphasis was also placed on follow up on grants for which the latest BAMR noted issues such as bids 

to high, estimated completion in early 2014, hope to bid in 2014, design not started, preparing to bid, 

etc. that reflected a need to determine the project status. Also, recommendations included following up 

on grants with no ARC disbursements 24 months since approval, grants with zero balances and potential 

for closings and de-obligations with small balances or no recent disbursements. 

Follow-up on ARC administered grants identified that 5 of 9 grants with balances totaling $203,500 

remained without reported disbursements as of September 30, 2014. The periods since grant approval 

ranged from 39 to 83 months. In four cases actions were initiated, including two de-obligations totaling 

$111,701. 

Two of three grants with limited activity and balances totaling $235,241 remained without additional 

payments and the last payments were made in 2002 and 2009 respectfully. In one case the grant was 

closed with de-obligation of $50,000. 

For twelve of thirteen cases previously identified the open grants retained expired performance periods. 

Payments for expenditures made after expired dates can result in ineligible costs. The open grants with 

expired performance dates had balances of $835,642. Controls should be established to identify expired 

performance dates and actions such as supportable extensions or identifying ineligible expenditures 

should be initiated. 

ARC follow-up to obtain necessary information from HUD to permit de-obligation of funds has had 

limited success. During the reporting period two grants identified in prior reports with balances of 

$350,000 were de-obligated. However, 20 grants for which the projects were reported as completed 

between 2005 and 2011 remain open with balances of $599,503 that could be used for other projects in 

Appalachia. 

With respect to de-obligations of inactive grants the amounts de-obligated are considered funds to better 

use and available for use on other projects in Appalachia. 

6 
Audits of 19 grants with total ARC funding of about $8.4 million reported overall implementation of 

grants in accordance with policies, procedures and regulations. Findings and recommendations were 

related to ineffective financial systems and internal controls, untimely progress reports, documentation 

and support for matching funds and indirect costs, and identification of performance results. 

Questioned/unsupported costs totaling $930,243 were identified in grant audits. These costs resulted 

from claimed costs not being adequately documented, ineligible costs, costs incurred prior to grant 

approval and deficient accounting systems. Follow-up action is in process and it is anticipated the 

majority of costs will be resolved by grantees providing documentation to justify claimed expenses. 

ARC Financial Statement Audit 

The financial statement audit for FY 2014 is in progress. The prior five years reports have been issued 

with a clean audit opinion since ARC adopted federal financial reporting rules in 2007. 

Peer Review 

Offices of the Inspectors General (OIGs) are required to perform (and undergo) reviews of other OIG 

offices every three years to ensure policies and/or procedural systems are in place that provide 

reasonable assurance of compliance with government auditing standards (GAS). A peer review of 

ARC-OIG was conducted during this reporting period. The report contained no significant deficiencies 

and identified contractor monitoring as a best practice. 

B. INVESTIGATIONS

The Inspector General Act of 1978, as amended, provides that the IG may receive and investigate 

complaints or information concerning the possible existence of an activity constituting a violation of 

law, rules, or regulations; mismanagement; gross waste of funds; or abuse of authority. The OIG does 

not employ criminal investigators and utilizes other OIGs to perform needed investigations. Also, the 

results of investigations may be referred to the appropriate Federal, State, or local prospective authorities 

for action. 

During the reporting period follow up on a prior administrative investigation identified that ARC 

implemented significant controls to identify receipt of equipment, including computers, and track 

issuance, use and disposition of high risk equipment. 

An in process investigation pertains to follow-up on an internal grantee audit that identified about $1 

million in questionable use of ARC funds by the grantee due to use of ARC funds to support other 

programs and cover administrative expenses. ARC is finalizing an agreement that will result, over a 

period of years, replacement of ARC funds diverted for non-ARC purposes. 

C. OTHER

Smaller OIG Groups 

Smaller OIG offices have some significantly different operational concerns than larger OIG offices in 

trying to maintain effective and efficient oversight of agency programs. One challenge involves the 

significant human and capital resources being allocated to the ever growing number of mandated 

reviews. The IG is an active member of the group that meets periodically to discuss such issues and 

7 
recommends actions/best practices to facilitate smaller OIG operations. The IG testified with respect to 

potential legislation dealing with small OIGs and entities not included in the IG Act. 

Requests for Information 

Each year we receive and comply with requests for information from various governmental entities 

compiling statistics on OIG offices or their audited agencies. CIGIE requests information for its annual 

OIG profile update and compilation of OIG statistics. The yearly compilation summarizes the results of 

audit and inspection activities for of all federal OIG offices. 

Appalachian Development Highway System (ADHS) Audits 

Since Fiscal Year 1999, ADHS has been funded by the Highway Trust Fund, which is administered in 

part by the U.S. Department of Transportation (DOT). ARC retains certain programmatic 

responsibilities, but the funding source is the Highway Trust Fund. Under current legislation the ADHS 

is a part of a larger Surface Transportation Program grant to Appalachian states, with the states using the 

funding at their own discretion. 

Implementation of OIG Reform Act 

The OIG has implemented the requirements of Pub.L. No. 110-409 the Inspector General Reform Act of 

2008. A Memorandum of Agreement for Counsel Services is in place with the Treasury Inspector 

General for Tax Administration and for investigative services is in place with the Interior Inspector 

General. 

IV. REPORTING FRAUD, WASTE, AND ABUSE

A region wide toll-free hotline is maintained to enable direct and confidential contact with the ARC 

OIG, in line with governmental and longstanding OIG initiatives as identified in the IG Act of 1978; to 

afford opportunities for identification of areas subject to fraud, waste, or abuse. Also, in accordance 

with the Inspector General Reform Act of 2008, the ARC OIG implemented another communication 

channel allowing anonymous reporting of fraud, waste or abuse via a link on our website’s home page. 

The web link is, http://ig.arc.gov/. 

V. LEGISLATIVE AND REGULATORY REVIEW

The OIG reviews legislation germane to ARC, OIG and the OIG community. Our comments are 

provided, as appropriate to agency officials, and/or to the CIGIE for incorporation with comments from 

all other OIGs. 

VI. DODD-FRANK LEGLISATION – Reporting to Full Commission 

OMB issued an updated list of Designated Federal Entity (DFE) Agency Head in December 2013 that 

confirmed legislation identifying the 13 Appalachian Governors as part of the Appalachian Regional 

Commission (ARC) Agency Head (Commissioners) designations. No problems have been experienced 

with respect to implementation of the legislation. 

8 
VII. OIGs Audit Community Wide Issues

OIG audit units have provided very valuable services to the taxpayers including significant monetary 

benefits and major program improvements. However, as with any organization, improvements are 

possible and within the OIG community the IG continues to emphasize various areas where OIG audit 

performance and credibility can be significantly improved by addressing the following issues. 

- Develop peer review guides to assess OIG audit efficiency and effectiveness that highlights 

key operational elements, such as planning, field work, report timeliness, staff utilization and 

training, supervision, audit follow-up and actual results. The required peer review of 

compliance with audit standards does not address these key operational elements that 

determine OIG efficiency and effectiveness. 

- Identify outcome based performance measures that, over a multi-year period, provide for 

reporting of actual savings in relation to the multi billions of potential savings reported 

annually based primarily on questioned and undocumented costs with low actual savings 

potential. OIG Semi-Annual reports identify agreed with disallowances and tracking and 

reporting agency actions such as establishment of claims and recoveries appears practical and 

reasonable. 

- A recent OIG survey of OIG metrics noted that 13 of 14 respondents to a question as to how 

they measured return on investment responded the basis was agreed with recommendations. 

A better basis for identifying the return on investment appears appropriate, such as 

implemented recommendations and actual rather than potential savings. 

- Develop CIGIE guidance to ensure consistent identification of implemented 

recommendations. OIGs use different criteria regarding implemented recommendations, 

ranging from actually confirming the recommendation was implemented, to obtaining 

implantation plans, to accepting agreement with the recommendation as sufficient to consider 

the recommendation implemented. 

- There is a significant need to broaden the core competencies with respect to the classification 

of “auditor”. Currently the GS-511 auditor classification requires 24 credits of accounting or 

an equivalent level of accounting credits or experience. However, the large majority of OIG 

audits performed by OIG audit staff are performance, not financial, related for which 

attributes such as evaluation, analysis, oral and written communications and critical thinking 

skills are far more important than accounting for effective performance auditing. 

- This issue is being addressed in a review by the Office of Personnel Management (OPM) and 

the IG has emphasized the need for a “performance auditor classification” identifying 

qualifications, attributes and skills most applicable to performance auditing such as analyst, 

social science, legal, history, research, economic backgrounds and/or education and attributes 

including critical thinking, oral and written communications, report writing, interviewing, 

analysis, and interpersonal skills. Such a classification would better assure the employment 

of professional staff that met the current and future audit environment. Regardless of OPM 

action a primary need involves OIG Audit recognizing current audit requirements and 

recruiting and employing audit staff best suited to meet these requirements, including 

additional utilization of the management analysis series if necessary. 

9 
APPENDIX A 

 SCHEDULE OF AUDIT, INSPECTION, EVALUATION & REVIEW REPORTS 

 ISSUED APRIL 1, 2014 TO SEPTEMBER 30, 2014

 

Report No. Report Title/Description Program Dollars or 

Contract/Grant 

Amount* 

Questioned/ 

Unsupported 

Costs** 

Funds to Better 

Use*** 

14-20 

Southwest Virginia Cultural Heritage 

Commission/Southwest Virginia Economic 

Development Initiative 

$500,000 $371,105 3 

14-21 South Carolina Department of Commerce $375,000 

14-22 

Webster County Commission Diana Phase I Water 

Main Extension Project $1,500,000 

14-23

West Virginia Development Office Flex-E-Grant 

Program $200,000 

14-24 

Strengthening Healthcare Enterprises in West 

Virginia $526,000 

14-25 

Schuyler County Child Care Coordinating Council, 

Inc. $150,000 $250,836 3

14-26 Friends of Southwest Virginia $500,000 $195,339 3

14-27 Southern Tier West Regional Planning $318,000 

14-28 Campbell County Business Incubator $214,982 

14-29 

Northwest PA Regional Planning and Development 

Commission $400,000 $90,534 

14-30 

Northwest PA Regional Planning and Development 

Commission $98,013 $21,497 

14-31 Nursing & Health Sciences Equipment $500,653 $932 

14-32 J-1 Waiver Program in KY 

14-33 Rattlesnake Ridge Water System $400,000 

14-34 

Literacy Program for Clay, Jefferson & Hale 

Counties $200,000 

14-35 Brushy Fork Institute $1,100,350 
14-36 Powell Valley Utility District $393,477 

14-37 Winston County Schools $300,000 

14-38 New Market Exports for SC SMEs $300,000 

14-39 J-1 Waiver Program NY 

14-40 HUD De-obligations $599,503 $599,503 2 

14-41 Older ARC Administered Grants $872,000 1 

 14-42 Older Basic Agency Administered Grants $30,898,000 1

14-43 Mid-East Association LDD $211,024 

14-44 MOU Updates 

Total $40,557,002 $930,243 $599,503 

1. Value of grants for which follow-up action was tested. 

2. Amount of de-obligation possible based on project completions. 

3. Includes questions/unsupported ARC and matching funds. 
APPENDIX B 

SCHEDULE OF AUDIT, INSPECTION AND EVALUATION REPORTS 

WITH QUESTIONED OR UNSUPPORTED COSTS (THOUSANDS) 

 No. of 

Reports 

 Questioned 

Costs 

 Unsupported 

 Costs 

 

A. For which no management 

decision was made by the 

commencement of the reporting period 

 0 

 

B. Which were issued during the 

reporting period 

 6 $930 

 

 Subtotals (A + B) 6 

C. For which a management 

decision was made during the reporting 

period

 

 

(i) dollar value of disallowed 

costs 

 

 

(ii) dollar value of costs not 

disallowed 

 4 $364 1

 

D. For which no management 

decision has been made by the end of 

the reporting period 

 2 $566 

 

E. Reports for which no 

management decision was made within 

6 months of issuance 

 0 

1. Grantee provided supporting documentation. 
 APPENDIX C 

SCHEDULE OF AUDIT, INSPECTION AND EVALUATION REPORTS WITH 

RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE AND SUMMARY OF 

 MANAGEMENT DECISIONS (THOUSANDS) 

 No. of 

Reports 

 

Dollar Value 

 

 

A. For which no management decision was made by the 

 commencement of the reporting period 

 

 

B. Which were issued during the reporting period 3 

 Subtotals (A + B) 3 $3,200 

C. For which a management decision was made during the 

 reporting period 

 

 (i) dollar value of recommendations that were agreed to by 

 management 

 

 --based on proposed management action 3 $3,200 1

 

 --based on proposed legislative action 0 0 

 

 (ii) dollar value of recommendations that were not agreed to 

 by management 

 0 0 

 

D. For which no management decision has been made by the end 

 of the reporting period 

 0 0 

 

E. Reports for which no final management decision was made 

 within 6 months of issuance 

 0 0 

1. Based on management decisions to follow-up on older open grants. Also $1,679,084 in deobligations resulted from grants identified for follow-up in prior SAR.

 

APPENDIX D 
DEFINITIONS OF TERMS USED 

The following definitions apply to terms used in reporting audit statistics: 

Questioned Cost A cost which the Office of Inspector General (OIG) questioned 

because of an alleged violation of a provision of a law, regulation, 

contract, or other agreement or document governing the 

expenditure of funds; such cost is not supported by adequate 

documentation; or the expenditure of funds for the intended 

purpose is unnecessary or unreasonable. 

Unsupported Cost A cost which the OIG questioned because the cost was not 

supported by adequate documentation at the time of the audit. 

Disallowed Cost A questioned cost that management, in a management decision, 

has sustained or agreed should not be charged to the Commission. 

Funds Be Put To Better Use A recommendation made by the OIG that funds could be used 

more efficiently if management took actions to implement and 

complete the recommendation. 

Management Decision Management's evaluation of the findings and recommendations 

included in the audit report and the issuance of a final decision by 

management concerning its response to such findings and 

recommendations, including actions concluded to be necessary. 

Interim decisions and actions are not considered final management 

decisions for the purpose of the tables in this report. 

Final Action The completion of all management actions that are described in a 

management decision with respect to audit findings and 

recommendations. If management concluded that no actions were 

necessary, final action occurs when a management decision is 

issued. 
 

 THE OFFICE OF INSPECTOR GENERAL 

 APPALACHIAN REGIONAL COMMISSION 

 serves American taxpayers 

 by investigating reports of waste, fraud, or abuse 

 involving Federal funds. 

 If you believe an activity is 

 wasteful, fraudulent, or abusive of Federal funds, 

 please call 

 toll free 1-800-532-4611 

 or (202) 884-7667 in the Washington metropolitan area 

 or write to: 

 Office of Inspector General 

 Appalachian Regional Commission 

 1666 Connecticut Avenue, NW, Rm. 700 

 Washington, DC 20009-1068 

 Information can be provided anonymously. 

 Federal Government employees are protected from reprisal, 

 and anyone may have his or her identity held in confidence. 
APPALACHIAN REGIONAL COMMISSION

Office of Inspector General

1666 Connecticut Avenue, NW, Suite 700

Washington, DC 20009-1068