INSPECTOR GENERAL’S SEMIANNUAL REPORT TO CONGRESS

Appalachian Regional Commission

October 1, 2013–March 31, 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

 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 Issues .............................................. 8 

 

 

Appendices 

A. Schedule of Reports Issued October 1, 2013 thru March 31, 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 eighteen reports, follow-up on significant recommendations in 

prior reports, and monitoring contractor performance of grant reviews. This included 13 grant audits 

issued during the reporting period, four reports dealing with management issues, and the FY 2013 

Financial Statement Audit. 

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 without any disbursements that were noted in our prior report 

disclosed de-obligations of $699,560 in seven 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 for $2.6 million. 

For older ARC administered grants no disbursements were noted in 9 of 14 cases included in prior 

reports and de-obligations of $36,722 were reported in three cases. 

Twenty-three HUD old administered grants with balances totaling $904,124 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, DavisBacon monitoring, progress reports and questionable costs. 

We noted the Tennessee Valley Authority (TVA) that administers ARC infrastructure grants under a 

Memorandum of Understanding has advised they will no longer administer such grants which can have 

a significant impact on ARC projects in the southern states unless alternative actions are identified, 

including administration and monitoring of about 80 open grants. 

OMB issued the updated Designated Federal Entity (DFE) in December 2013 that confirmed DoddFrank legislation that established entire Commission/Boards, as the Agency Head. The legislation 

provides that Agency Heads can terminate the IG with a two thirds vote of the Agency Head. 

The IG, until February 2014 chaired a group of smaller OIGs to address issues that have particular 

impact on these offices. The IG is also an active member of the Council of Inspectors General and its 

Audit and Inspections and Evaluations Committees and actively participated with respect to OMB’s 

major grant reform initiative and Congressional initiatives with respect to small OIGs including 

testimony about independent oversight of smaller entities. 

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 8 

 

Section 5(a)(1) Problems, abuses, and deficiencies Pages 6-9 

Section 5(a)(2) Recommendations with respect to problems, abuses, and deficiencies Pages 6-9 

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 56 persons that includes 49 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 $64.8 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 

1 

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

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, Commerce and Economic Development Administration and the Tennessee Valley 

Authority (TVA), to administer and monitor construction related grants. 

The TVA currently administers, under the terms of a Memorandum of Understanding with the 

Commission that provides 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. We encourage ARC to continue current discussions with TVA aimed at assuring 

effective monitoring of active grants and the acceptance of administrative responsibility by TVA at least 

for pending grants that would be difficult to place with another agency. Also, we recommend ARC 

explore other alternatives to assure administration of future infrastructure grants in the impacted states. 

2 
ARC ORGAN

3

IZATION CHART
 4
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 2013 was $609,000 after sequestration and $658,000 for FY 14. 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 2013 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. Consequently the number of grants previously identified as having no activity for lengthy 

periods was substantially reduced. Available reports identified seven instances where grants balances 

totaling $699,560 in our prior report were de-obligated. BAMR reports also noted seven additional 

grants where de-obligations of about $2.6 million could result and 20 additional grants where follow-up 

was appropriate due to potential problems that could impact project completion. 

In seven other instances of open basic agency grants totaling $255,892, no additional ARC 

disbursements were noted for 21 to 78 months. 

Continued follow-up on old open ARC open grants is appropriate. Nine of fourteen grants identified in 

our prior report remained without any disbursements from 30 to 77 months since approved. Grant funds 

totaled $994,819. Also, there were no additional disbursements noted in 3 of 4 cases in our prior report. 

Balances of these grants totaled $285,741 and periods between disbursements ranged from 28 to 70 

months. In three cases de-obligations of $36,722 were noted. 

ARC follow-up has achieved limited success with respect to obtaining necessary information from HUD 

in order to de-obligate funds for use on other needed projects. For example, de-obligations of $151,763 

applicable to two of 22 grants in our prior semi-annual report were noted. The remaining 20 open grants 

and two additional grants for which construction was reported completed between 2005 and 2011 have 

balances of $904,124 that are subject to de-obligation. 

Twenty open grants with balances had expired performance periods that could result in ineligible costs if 

expenditures are made after the expired performance periods. 

Audits of 13 grants with values totaling about $4.3 million dollars reported overall implementation of 

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

accounting system improvements, documentations and support for matching funds, monitoring of DavisBacon, performance measures reporting, eligibility of some costs and viability of one project. 

ARC Financial Statement Audit 

The financial statement audit for FY 2013 was issued with a clean opinion. The prior five reports have 

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

6 
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). The next audit peer 

review of ARC OIG is scheduled for FY 2014. 

The current audit peer review process, as legislatively mandated, assesses compliance with auditing 

standards but does not address issues impacting the efficiency and effectiveness of audit operations 

which comprises the largest segment of OIG offices. 

The IG continues to recommend to the Council of Inspector General and Legislative Staff that OIG peer 

reviews be revised to incorporate assessments of key OIG operational elements such as: planning; timely 

reporting; staff development, including training, utilization and supervision; audit follow-up and 

inclusion of actual monetary results in Semi-Annual and Annual OIG reports based on implementation 

of recommendations 

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. When the need has arisen, the matter has been referred to the Federal 

Bureau of Investigation or assistance was contracted with another Federal OIG. Also, the results of 

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

action. 

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 was the coordinator/chair of this group that meets periodically to discuss such issues and 

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. 

7 
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 new 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. 

Going Green 

ARC management has implemented green measures within the organization's internal operations. 

Examples include a document scanning system that has been linked to ARC’s e-mail system and an 

expansion of ARC net to include operational elements. ARC continues to encourage state partners to 

move to a paperless application process. Reduction in paper utilization can reduce cost, improve the 

timeliness of management decisions through better document storage and retrieval, and helps to reduce 

demands on our earth's ecological systems. Our office, in alignment with management's initiative, is 

committed to “going green” and we continue to work toward that end. 

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. 

8 
VII. OIGs Audit Performance and Credibility Issues

OIGs 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 there are 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 the key operational elements that determine 

OIG efficiency and effectiveness. 

- Identify outcome based performance measures that, over a multi-year period, identify 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 appear to 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. 

The last issue is currently being studied by the OIG community and OIG support for the addition of a 

“performance auditor” classification identifying educational and experience attributes most applicable to 

performance auditing would better assure the employment of professional staff with backgrounds suited 

to the current and future audit environment. 

9 
APPENDIX A 

 SCHEDULE OF AUDIT, INSPECTION, EVALUATION & REVIEW REPORTS 

 ISSUED OCTOBER 1, 2013 TO MARCH 31, 2014

 

Report No. Report Title/Description Program Dollars or 

Contract/Grant 

Amount* 

Questioned/ 

Unsupported 

Costs** 

Funds to Better 

Use*** 

14-01 Kentucky Housing Program $500,000 

14-02 Appalachian Rural Dental Program $500,000 

14-03 Ft. Payne Infrastructure $400,000 $3,876 

14-04 Winber Medical Center $250,000 $221,000 

14-05 KY Department of Local Government $151,723 

14-06 Energy Efficiency in small Alabama Cities $200,000 $30,981 

14-07 Northern Tier Career Center Expansion $300,000 $153,935 

14-08 Glade Center Renovation $226,600 $9,245 

14-09 Financial Statement Audit 

14-10 Edwina-Bridgeport Water Improvement $500,000 $47,200 

14-12 Competitive Improvement Program $450,000 

14-13 Cumberland Plateau LDD $180,000 

14-14 Jasper Water Storage Tank $300,000 
14-15 Open HUD Administered Grants with Potential 

De-obligations 

$1,055,763 $904,124 

14-16 Older Basic Agency Administered Grants $19,000,000 $699,560 1

/2 

14-17 Older ARC Administrative Grants $1,000,000 $36,722 1/ 2

14-18 Administrative Review $14,000 

14-19 Pontotoc County Site Improvement $436,000 

Total $25,464,086 $466,237 $1,640,406 

 1

 Value of grants reviewed for project status 

2

 De-obligations based on prior follow-up recommendations 
APPENDIX B 

SCHEDULE OF AUDIT, INSPECTION, EVALUATION & REVIEW REPORTS 

OF QUESTIONED OR UNSUPPORTED COSTS 

 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 

 

 Subtotals (A + B) 6 $299 $167 

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 

 

 

D. For which no management 

decision has been made by the end of 

the reporting period 

 6 $299 $167 

 

E. Reports for which no 

management decision was made within 

6 months of issuance 

 0 
 APPENDIX C 

SCHEDULE OF AUDIT, INSPECTION, EVALUATION & REVIEW REPORTS WITH 

RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE AND SUMMARY OF 

 MANAGEMENT DECISIONS 

 No. of 

Reports 

 

Dollar Value 

 

 

A. For which no management decision was made by the 

 commencement of the reporting period 

 2 $161 

 

B. Which were issued during the reporting period 3 $1,974 

 Subtotals (A + B) 5 $2,135 

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 5 $2,135 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 $851,413 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. 
On Cover:

New River Gorge Bridge in West Virginia. Photograph by David E. Fattaleh.

Photo courtesy of U.S. Department of Transportation, Federal Highway Administration

(www.fhwa.dot.gov/byways)
Ap

1666 

palachian R

Office of 

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Washington

Regional Co

Inspector G

ut Avenue, N

n, DC 2000

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eneral 

NW, Suite 70

09-1068 

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