INSPECTOR GENERAL’S SEMIANNUAL REPORT TO CONGRESS

Appalachian Regional Commission

April 1, 2015–September 30, 2015
Cover Photo 

View of New River from Hawk's Nest State Park overlook in Ansted, West Virginia.

Photo by: Dennis Adams
October 30, 2015 

MEMORANDUM FOR THE FEDERAL CO-CHAIR 

 

Subject: Semiannual Report to Congress 

In accordance with the requirements of the Inspector General Act Amendments of 1988, Public Law 

100-504, the Inspector General Reform Act of 2008, Public Law 110-409, and the Dodd-Frank Wall 

Street Reform and Consumer Protection Act, Public Law 111-203. I am pleased to submit the Office of 

Inspector General’s Semiannual Report to Congress. 

This Semiannual Report to Congress summarizes the activities of our office for the 6-month period 

ending September 30, 2015. During this fiscal period, we issued nineteen reports, followed-up on open 

recommendations and monitored contractor performance. 

During this period, the Inspector General continued to serve as a member of the Council of the 

Inspectors General on Integrity & Efficiency (CIGIE), its Audit and Inspections and Evaluations 

Committees and small OIG group. 

The Inspector General Act of 1978, as amended by the Inspector General Act Amendments of 1988, 

provides that this report be forwarded to appropriate Congressional committees within 30 days and that 

you provide whatever additional comments you consider appropriate. 

I appreciate the Commission’s cooperation with the Office of Inspector General in the conduct of our 

operations. 

Sincerely, 

Hubert Sparks 

Inspector General 

Enclosure 
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 . . .. . . . . . . . . . . . . . . . . . . . . .... . . . . . 7 

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

 

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

 VII. OIG Audit Community Wide Issues ................................................8 

 

 

Appendices 

A. Schedule of Reports Issued April 1, 2015 thru September 30, 2015 

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 aspect of ARC programs. For this reporting period 

our activity included issuance of nineteen reports including eleven grant audits and eight management 

evaluation reports, follow-up on prior recommendations and monitoring of contractor grant audits. 

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. 

Continuing agency action included grant follow-up and pro-active efforts to address recommendations, 

including older grants identified for follow-up and potential deobligations. Follow-up on prior 

recommendations disclosed de-obligations of $3.3 million with respect to grants identified for follow-up 

in prior reports which involved funds for better use in connection with needed projects in the 

Appalachian Region. This included $424,173 related to older grants administered by the Department of 

Housing and Urban Development (HUD) for ARC. Additional grants were recommended for follow-up. 

There remains a need for closing of old grants administered by the Department of Housing and Urban 

Development (HUD) for the ARC and we identified grants with potential de-obligations of $612,166. 

ARC has repeatedly urged HUD to provide information necessary to use these funds for other needed 

projects. 

Actions were initiated with respect to recommendations to reuse and improve monthly reports dealing 

with the status of grantee progress reports and address grants for which performance dates expired and 

grantee expenditures after expiration dates could be considered ineligible. 

Continued ARC emphasis and action with respect to timely grant applications, approvals and obligations 

was noted. 

The OIG completed and issued a modified audit peer review report of the Postal Regulatory 

Commission and actively participated in the Council of Inspectors General on Integrity and Efficiency 

and its Audit and Inspection and Evaluation Committee. 

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 

applicable Dodd-Frank 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. 

Within the OIG community and the Council of Inspectors General on Integrity and Efficiency (CIGIE) 

the IG continues to emphasize OIG wide issues impacting efficiency, effectiveness and credibility of 

OIG audit operations. 

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 12 

 

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

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

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 - OIG

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 - ARC

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 programs. 

 - Administratively, the Commission has a staff of 50 persons that includes 43 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 2015 was $90 million and is proposed for $95 million 

for FY 2016. 

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 

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

1 
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 (USDA) and Housing and Urban Development (HUD), and the Economic Development 

Administration (EDA). Also utilization of State agencies to administer construction related grants is 

being emphasized. 

2 
3 
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 OIG. 

Funding and Staffing

The OIG funding level for FY 2015 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 conducted 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 2015 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. During the reporting period eleven grants audits and eight management reports were issued. 

Follow-up on prior reports and recommendations identified approximately $2.9 million in de-obligations 

pertaining to grants identified in prior reports and for which these funds became available for use on 

other needed Appalachia projects. 

Audits of eleven grants with total ARC funding of about $4,456,999 million reported overall 

implementation of grants in accordance with policies, procedures and regulations. Findings and 

recommendations were related to financial systems and internal controls, untimely progress reports, 

documentation and support for matching funds and indirect costs, and identification of performance 

results. 

ARC follow-up with the Department of Housing and Urban Development (HUD) with respect to older 

grants administered by HUD for ARC resulted in deobligations totaling $424,173. 

Follow-up reports identified additional older open ARC grants with no or limited disbursements for 

which additional follow-up was recommended. ARC actions included additional follow-up based on 

information available in Basic Agency Monitoring Reports (BAMR) and implementation of controls that 

enable project coordinators to better track grant status. Deobligations in five cases totaled $1,579,293. 

A need to revise and improve monthly reports of grantee progress as a management tool and to address 

expired end dates to better preclude grantees from incurring ineligible costs were recommended and 

ARC initiated action on these issues. Addressing expired end dates resulted in deobligations of 

$1,372,119 applicable to 29 grants. 

Continued ARC emphasis and action with respect to timely grant applications, approvals was noted. 

ARC and OIG coordinated on establishing improved report follow-up system that will assure attention 

to and resolution of recommendations on a more timely basis. 

ARC Financial Statement Audit 

The financial statement audit for FY 2015 is in process. The prior six years reports have been issued 

with a clean audit opinion since ARC adopted federal financial reporting rules in 2007 and it is expected 

the FY 2015 report will be issued on schedule. 

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 OIG completed 

and issued a modified audit peer review report of the Postal Regulatory Commission during this 

reporting period. 

6 
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. 

C. OTHER

OIG Working 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 small working group that meets periodically to discuss such 

issues and recommends actions/best practices to facilitate smaller OIG operations. 

The IG also actively participated in OIG Working Groups considering and recommending actions with 

respect to oversight for entities not currently receiving independent oversight and sharing of OIG 

resources. 

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 General Counsel Services are provided by the Treasury Inspector General for Tax 

Administration and investigative services are provided by 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 

7 
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. 

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. 

- 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 considered by the Office of Personnel Management (OPM) and the IG has 

emphasized and recommended a “Performance Auditor” classification. Such a classification would 

identify broader educational and/or experience requirements that would be consistent with competencies 

identified as more closely related to performance auditing such as analysis, oral and written 

communications, interviewing, critical thinking, report writing and interpersonal skills. Such a 

classification would better assure the employment of professional staff that better meet the current and 

future OIG audit environment. Regardless of OPM action a primary need is OIG audit recognizing and 

accepting current audit requirements and recruiting and employing audit staff best suited to meet these 

requirements. An option is support and utilization of an upgraded management analysis series in line 

with prior GAO actions. 

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

8 
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 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 confirming the 

recommendation was implemented, obtaining implantation plans, or accepting agreement with the 

recommendation as sufficient to consider the recommendation implemented. 

9 
APPENDIX A 

 SCHEDULE OF AUDIT, INSPECTION, EVALUATION & REVIEW REPORTS 

 ISSUED APRIL 1 2015 TO SEPTEMBER 30, 2015

 

Report No. Report Title/Description Program Dollars or 

Contract/Grant 

Amount* 

Questioned/ 

Unsupported 

Costs** 

Funds to Better 

Use*** 

15-18 

Mid‐Ohio Valley Regional Planning and

Development Council LDD Admin grant

$74,745 

15-19 

Prairie Belt Power site Elevated water storage tank

and water and wastewater distribution lines grant

$1,460,000 $ 74,847 

15-20 ARC Administered grants $1,230,542 

15-21 Older open Child (Basic) Agency grants $5,173,764 

15-22 

Golden Triangle Planning and

Development District LDD $109,445 $ 525 

15-23 ARC Visa Waiver Program

15-23a Upper Cumberland Entrepreneurial Foundation $450,000 

15-24 Knoxville Entrepreneurial Center $450,000 $84,250 

15-25 University of AL Alabama International Trade

Center $ 234,260 

15-26 Al Department of Economic and Community Affairs $ 128,539 

15-27 Management Reports Summary

15-28 Survey Report on State Administered grants end

dates $4,276,871 

15-29 

Tennessee Department of Economic & Community

Development $1,000,000 

15-30 Tennessee Technology Development Corps $ 250,010 $ 84,289 

15-31 Floyd County Airport North Terminal Expansion

grant

$ 300,000 $201,086 

15-32 Pennsylvania Department of Community and

Economic Development $ 403,364 

15-35 Child/Basic Agency Administered Grants $9,133,282 $1,579,293 1/

15-36 ARC Administered Grants $ 848,683 $1,372,119 1/
15-37 HUD Administered Grants $ 612,166 $ 612,166 2/

Total $26,135,671 $444,997 $3,563,578 

1. Funds deobligated with respect to grants identified for follow-up in prior reports 

2. Includes $424,173 of HUD administered grants identified in prior reports. 
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 

 1 $ 223 $ 222 

 

 Subtotals (A + B) 1 

 

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 

 1 $ 223 $ 222 

 

E. Reports for which no 

management decision was made within 

6 months of issuance 

 
 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 5 

 Subtotals (A + B) 5 $10,000 2/

 

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 $3,564 1/

 

 --based on proposed legislative action 

 

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

 by management 

 

 

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

 of the reporting period 

 

 

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 $2,951,412 in deobligations resulted from grants identified

for follow‐up in prior SAR. 

2. Value of grants recommended for follow‐up.  Management agreement to follow‐up on identified grants including determination of

closing and deobligations.

 
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