APPALACHIAN REGIONAL COMMISSION

Inspector General’s 

Semiannual Report to Congress

April 1, 2013–September 30, 2013
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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 

Audits, Inspections, Evaluations & Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 

Investigations . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 12 

Other . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 12 

 IV. Reporting Fraud, Waste, and Abuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

 V. Legislative & Regulatory Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

 

 VI. Dodd-Frank Legislation ................. ..............................15 

 VII. OIG Audit Issues ...............................................16 

 

 

Appendices 

A. Schedule of Reports Issued April 1, 2013 thru September 30, 2013 

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 nine reports, follow-up on significant recommendations in 

prior reports, and monitoring contractor performance of grant reviews. This included 22 grant audits 

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

Grant management reviews emphasized ARC follow-up on older open Child Agency and ARC 

Administered grants and applicable policies and procedures. 

Our follow-up review of older open grants administered by Child Agencies identified the need for 

continued emphasis on timely follow-up on grants with limited activity. Sixty five grants (open for over 

24 months) were identified without any disbursement activity since grant approval with the longest 

being 96 months. ARC funds of $19,775,295 were approved for these grants, including $5,677,118 for 

18 grants with no ARC disbursements at least four years after approval. 

Our review of ARC administered grants identified substantial progress with respect to inactive older 

grants. The ARC grant management system identified 14 grants totaling $1,467,679 for which no 

disbursements were noted during the 24 months since approval. 

Other issues relating to timely follow-up of open grants status included identifying grants with expired 

end dates and increased use of controls available to initiate action on inactive grants, including increased 

use of ARC guidelines that allow for action on projects not started within 18 months of approvals. 

Headquarters and program issues related to funding of technical assistance grants, guidance for State 

administered grants and additional performance issues for Local Development District and State 

Technical Assistance grants. State funding requests for technical assistance funds were substantially 

reduced in several cases based on recommendations. 

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

regulations and project objectives. Recommendations pertained to technical assistance grant funding, 

accounting systems, progress reports, timekeeping, performance measures, contracting, classification of 

expenditures and separation of grant accounts. 

Decisions and/or OMB guidance with respect to implementing certain sections of Dodd-Frank 

Legislation have not been issued. The primary issues are the designation of full Commissions/ Boards 

as Agency Heads at designated Federal Entities (DFEs), such as ARC, who’s Commission, consists of 

primarily Non-Federal Officials and the status of Federal OIG staff, including the IG. 

The IG continues to chair 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 updating of the Strategic Plan for the National Intergovernmental Audit Forum. 

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 14 

 

Section 5(a)(1) Problems, abuses, and deficiencies Pages 8-11

Section 5(a)(2) Recommendations with respect to problems, abuses, and deficiencies Pages 8-11

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 questioned costs 

App C 

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

of questioned costs 

App D 

* 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 52 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 2013 was $64.9 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 with respect to approximately two billion dollars of 

funds remaining available prior to the new legislation. 

2 

 
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 

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, to administer and monitor construction related 

grants. 

3 
ARC ORGAN

4

IZATION CHART
 5 
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. 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 IG for Tax Administration for legal services. 

We use other OIG offices to provide investigative services as needed. 

7 
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. 

Headquarters reviews focused on older open grants that were inactive including no initial disbursements, 

for at least 24 months, funding of State Technical Assistance (TA) grants, State Administered grants and 

Local Development District (LDD) and State TA grant performance measures. 

A follow-up review of older open grants approved by ARC but administered by other a basic agencies 

(child agency) disclosed progress with respect to follow-up actions and controls to identify grant status 

and potential actions. De-obligations or reduced budget requests of approximately $411,000 resulted 

from ARC follow-up actions and grantee reduced budget requests. Actions are pending with respect to 

approximately $766,000 identified by a basic agency as subject to de-obligation. 

The follow-up review identified 65 grants with ARC funding approximating $19.9 million for which no 

initial disbursements had been made since grant approval at least 24 months prior to September 30, 

2013. The periods ranged from 24-96 months since approval and included 18 grants with ARC funds of 

$5,677,118 for which no ARC funds had been disbursed at least four years since grant approval and 

obligation. 

Nine cases with initial disbursements having balances of $304,868 but no reported disbursements for 14 

to 74 months were also noted. 

For ARC administered grants, 14 grants with obligations totaling $1,457,679 were noted as having no 

disbursements with grant approval ranging from 24 to 71 months prior to September 30, 2013. 

We recognize that basic agency grants are construction related and in many cases project starts are 

delayed by many factors. However, we used 24 months as a reasonable period for obtaining grant status 

for ARC and Basic Agency administered and assessing the need for any additional action in line with 

ARC guidelines that provide that, at the request of a State, the Commission may revoke or revise its 

approval of any project not underway within 18 months after the date of approval of such a project. 

ARC action, including initiation of an annual Basic Agency Monitoring Report (BAMR), provides an 

improved basis for effective follow-up on grants with no ARC disbursements, including assessments 

about potential grant actions such as cancellation and de-obligations. Also this report identifies long unliquidated obligations, justifications for lengthy delays and continued need for ARC funds. 

We recognize that basic agency administered grants with no disbursements for lengthy periods, such as 

four years after approval, make up a tiny percentage of ARC grants but recommend particular attention 

to these grants to identify the potential to use the obligated funds for other needed projects. 

For ARC administered grants, adherence to end dates was noted as particularly important since, without 

timely, justified and documented extensions, expenditures incurred after identified end dates are 

generally considered un-allowable expenses. Follow-up actions had been initiated on 25 of 45 grants 

8 
with expired end dates noted in our prior report and the 20 grants for which actions were not initiated 

had ARC balances approximating one million dollars. 

A management review identified a need for improved approval and obligation of ARC grants for State 

Technical Assistance grants that provide funding for States to implement economic development 

initiatives. Annual approvals and obligations are often finalized despite States having large amounts of 

available funds from prior year grants. In three instances States significantly reduced TA budget 

requests or de-obligated funds approximating $260,000 subsequent to budget discussions during on-site 

audit work. 

ARC also authorizes States to administer construction related grants with four states currently utilizing 

this authority. Our recommendation centered on ARC developing formal guidance with respect to State 

administration of the approved grants. 

ARC recently established performance measures for Local Development District and Technical 

Assistance grants and recommendations included identification of additional performance measures for 

these grants, entering of grant information in ARC.Net and inclusion of these grants in the universe for 

validation by ARC staff assigned to validating grantee performance measures results. 

Audits of 22 grants with values totaling about six million dollars reported overall implementation of 

grants in accordance with policies, procedures and regulations. Recommendations emphasized funding 

requests in line with needs, timely payment requests, accounting system improvements including 

availability of time keeping records, separation of grant approvals, contract completion, support for 

reclassification of expenditures, timely progress reports and implementation and reporting on 

performance measures. 

ARC Financial Statement Audit 

The financial statement audit for FY 2012 was issued with a clean opinion. The prior four reports have 

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

The Financial Statement audit for FY 2013 is in progress and timely completion is expected. 

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 

9 
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 is the current coordinator/chair of this group that meets periodically to discuss such issues and 

recommends actions/best practices to facilitate smaller OIG operations. 

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 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 all of 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. 

10 
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 

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. No.111-203) amended the 

Inspector General Act changing the entity head of ARC from the Federal Co-Chair to the 

Commission. The Office of Management & Budget (OMB) has not yet provided guidance on these 

changes through the required notice and publication of the List of Designated Federal Entities (DFEs) 

which are to be published annually under the IG Act. This Act provides that the Inspector General report 

to the full Commission that includes the Federal Co-Chair and 13 Appalachian Governors. 

We believe ARC and other economic development Commissions are among the few DFEs that have a 

majority of non-Presidentially (or non-federal) appointed Commission members. Although the DoddFrank legislation provides tenure protection to DFE IG’s, a question remains as to whether some of the 

provisions were intended to apply to Commission’s composed primarily of non-Federal, nonPresidentially appointed members. In addition to surfacing the issue of non-Federal appointees authority 

to employ IG’s, whose primary responsibility is to oversight the use of Federal funds, the related issue 

of the federal versus the non-federal status of the OIG Office, needs Congressional or OMB resolution. 

We have recommended that DFE’s having a majority of non-Presidential appointees as Commission or 

Board members be exempt from the OIG provisions in the Dodd-Frank Act, or if the Agency Head 

remains the full Commission that the OIG Office, including the IG and current Federal OIG Staff, 

remain Federal. 

11 
Pending additional OMB guidance or direction on Dodd-Frank issues that impact the ARC OIG the 

Commission considers the legislated requirement for the entire Commission to be the Agency Head as 

implemented. Decisions with respect to the Federal/non-Federal status of the OIG have been delayed 

until the final effect of the Dodd-Frank legislation has been settled. 

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. 

12 
APPENDIX A 

 SCHEDULE OF AUDIT, INSPECTION, EVALUATION & REVIEW REPORTS 

 ISSUED APRIL 1, 2013 TO SEPTEMBER 30, 2013

 

Report No. Report Title/Description Program Dollars or 

Contract/Grant 

Amount* 

Questioned/ 

Unsupported 

Costs** 

Funds to Better 

Use*** 

13-07 

Home Instruction for Parents of Preschool 

Youngsters (HIPPY) $125,000 

13-12 Upper Cumberland Development District, TN $125,257 

13-14a NW Georgia Regional Commission $421,616 

13-15 Early Steps to School Success $500,000 

13-16 Regional Labor Market Survey, KY $462,773 

13-20 TN Technology University Regional Development 

Initiative 

$500,000 

13-21 SEDA Council of Governments, PA $570,857 

13-22 Mini-grants for Capacity Building, TN $293,678 

13-23 Develop Energy Sources on Mine – Scarred Lands, 

WV 

$400,000 

13-24 NC Technical Assistance $515,169 

13-25 Mississippi University For Women SMART BIZ $300,000 

13-26 Technical Assistance Grant MS $ 244,538 $82,000 
13-27 SC Appalachian Council of Government $179,000 

13-28 Tuskegee Human and Civil Rights Center, AL $200,000 $127,440 

13-29 School Community Oral Health, WV $150,000 

13-30 

Southern Tier East Regional Planning Development 

Board, NY $378,000 

13-31 Utility Asset GIS for Eastern Ohio $250,000 $13,757 

13-32 

Buckeye Hills – Hocking Valley Regional 

Development District, OH $217,000 $3,347 

13-33 Consolidated Technical Assistance Grants 

13-34 NY Technical Assistance $258,285 $79,201 

13-35 Information Security Evaluation 

13-36 Information Security Evaluation 

13-37 Garrett College STEM Program, MD $264,926 $15,500 

13-38 Older Basic Agency Administered Grants $19,775,275 

13-39 Older ARC Administered Grants $1,773,420 

13-40 State Administered Grants 

13-41 

Local Development District and Technical 

Assistance Performance Measures 

13-42 SW Pennsylvania Commission $150,000 $1,970 

13-43 

SW PA Enterprise Development 

$400,000 $7,065 

Total $28,454,794 $165,436 $161,201 
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 

 2 

 

 Subtotals (A + B) 2 

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 $165,436 1 

 

E. Reports for which no 

management decision was made within 

6 months of issuance 

 

 1

 Awaiting necessary documentation from grantee 
 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 

 0 0 

 

B. Which were issued during the reporting period 2 $161,201 

 Subtotals (A + B) 2 $161,201 

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 2 $411,344 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. Actions resulting from ARC follow-up on grants recommended for follow-up in prior reports 

or identified during reporting period. Available funds to be used for additional needed 

projects in Appalachia. Follow-up actions on current period reports will be identified in 

subsequent semi-annual reports.
 

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. 
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