was increased by the inherent activity and concers resulting from a change in Administration.
Consequently, ARC OIG time was diffused between ECIE and ARC activities during this
reporting period; and the OIG appreciates the support of ARC management with respect to the
IG's involvement as the ECIE Vice Chair.

The Inspector General continues to serve on the PCIE Task Force on Single Audit which recently
issued its draft report and recommendations for comment. The draft report highlights new and
revised single audit policy and procedures that should ensure improved and more meaningful
single audit reports. The Inspector General made presentations at several seminars with respect
to the study. Of particular importance to the ARC OIG were issues relating to single audit
coverage of nonmajor programs; the adequacy of audit coverage, especially the sufficiency of
testing relating to compliance with laws and regulations; and presentation of results in formats
and language understandable to the report recipients and the public. The recommendations of
the task force, if adopted, should substantially improve the single audit process and better identify
the realistic expectations of single audit, which in tum could reduce the criticisms of single audit
especially with respect to providing Federal managers with information needed in connection with
their program and oversight responsibilities.

The Inspector General led three ECIE external quality review (peer review) teams during this
reporting period in line with requirements for performance of such reviews by all ECIE members.
These reviews emphasized compliance with generally accepted auditing standards.


PURPOSE AND REQUIREMENTS OF THE
OFFICE OF INSPECTOR GENERAL SEMIANNUAL REPORT

The Inspector General Act of 1978 requires the Inspector General to keep the Federal Co—
Chairman 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 Chairman by April 30 and October 31 and to
Congress 30 days later.

The Co-Chairman 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.

; :

Section 4(a)(2) Review of legislation and regulations Page 7
Section 5(a)(1) Significant problems, abuses, and deficiencies Page 3
Section 5(a)(2) Recommendations with respect to significant problems, Page 3

abuses, and deficiencies

Section 5(a)(3) Prior significant recommendations not yet implemented *
Section 5(a)(4) Matters referred to prosecutive authorities *
Section 5(a)(5) Summary of instances where information was refused *

and 6(b)(2)

Section 5(a)(6) Listing of audit reports showing number of reports and App A
dollar value of questioned costs

Section 5(a)(7) Summary of each particularly significant report a

Section 5(a)(8) Statistical table showing number of reports and dollar value App B
of questioned costs

Section 5(a)(9) Statistical table showing number of reports and dollar value App C
of recommendations that funds be put to better use

Section 5(a)(10) Summary of each audit issued before this reporting period i
for which no management decision was made by end of
the reporting period

Section 5(a)(11) Significant revised management decisions 7

iti


APPENDIX D

DEFINITIONS OF TERMS USED

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

Questioned Cost

Unsupported Cost

Disallowed Cost

Funds Be Put To Better Use

Management Decision

Final Action

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.

A cost which the OIG questioned because the cost was not
supported by adequate documentation at the time of the
audit.

A questioned cost that management, in a management
decision, has sustained or agreed should not be charged to
the Commission.

A recommendation made by the OIG that funds could be
used more efficiently if management took actions to
implement and complete the recommendation.

Management's evaluation of the findings and
recommendations included in the audit report and the
issuance of a final decision by management concerning its
Tesponse 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.

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.


including business development revolving loan funds with large unobligated balances has been
substantially reduced. ARC conferences, training, and seminars have emphasized accountability,
financial management systems, and allowable costs. For example, upcoming training directed
at Local Development District (LDD) officials and financial managers will emphasize cost
allocation plans, use of financial information, use of audit reports, and applicable cost principles.
These activities, while sponsored by ARC, provide a Governmentwide benefit since many of the
grantees receiving ARC funds also receive substantial funds from other Federal entities. Thus,
actions to improve ARC grantee operations, including controls, systems, and implementation of
applicable grant requirements, will have residual benefits.

The ARC OIG will continue to address these issues, including periodic followup on the extent
of actions initiated and results obtained, and, as noted below, will report on issues needing
continued attention.

° A survey was conducted to determine the extent of physician and provider
compliance with provisions of an ARC-administered program intended to
facilitate placement of foreign physicians in Appalachian areas designated as a
Health Profession Shortage Area by the United States Public Health Service. Our
contacts with 18 physicians and 8 employers generally reflected support for and
compliance with program objectives and provisions. We recommended program
improvements including clarification of eligible work areas and type of care to be
provided, feedback to ARC on problem situations, and appropriate or possible
actions when noncompliance is identified.

° Grant reviews identified several issues that will require grantee and continuing
ARC action to ensure consistent implementation and/or interpretation of grant
provisions and ARC policies and procedures. These issues included:

~-Clarification of requirements with respect to submission of progress reports
noted in grant agreements. We noted continued instances of quarterly and/or final
reports not being submitted or not submitted timely and grantee explanations that
grant requirements are unrealistic and/or verbal approvals for changed reporting
were obtained from ARC. Timely reporting to provide necessary information and
documentation of reporting waivers was recommended.

--Internal controls and accounting systems relative to ensuring match
requirements are met, especially in cases where grantees use subrecipients who
have matching requirements, need to be emphasized. We noted that grantees
accepted unverified subrecipient information about the extent of matching
contributions.

~~Clarification of requirements and implementation of procedures with respect to
cost allocation and indirect cost rates was recommended in several grant reviews.
We noted that indirect costs were not always charged in accordance with approved
rates and that the inclusion of indirect costs in grantee budget submissions was not
always consistent with ARC procedures identifying entities eligible for indirect
costs.


I. INTRODUCTION

The Inspector General Act Amendments of 1988 (P.L. 100-504) provided for the establishment
of an Office of Inspector General at 34 designated Federal entities, including the ARC. The
Appalachian Regional Commission (ARC) Office of Inspector General became operational on
October 1, 1989, with the appointment of an Inspector General and provision of budgetary
authority for contracted audit and/or investigation activities.

I. BACKGROUND
A. APPALACHIAN REGIONAL COMMISSION

The ARC was established by the Appalachian Regional Development Act of 1965 (P.L. 89-4).
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-Chairman with the Governors electing one of
their number to serve as the States' Co-Chairman.

° 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 is established by the
Commission (ARC Code) by the vote of a majority of the State members and the
affirmative vote of the Federal Co-Chairman. Emphasis has been placed on
highways, infrastructure development, business enterprise, and human resources
programs.

oO Administratively, the Office of the Federal Co-Chairman, with a staff of 11, and
the Commission, with a staff of 55, are responsible for ARC operations. The
States maintain an Office of States' Representative (3 persons) that has primarily
liaison responsibilities. All personnel are located in Washington, DC. The
Commission staff's administrative expenses, including salaries, are funded jointly
by Federal and State funds; the States’ Representative staff is funded entirely by
the States; and the Federal Office staff is funded entirely from Federal funds.

° The Commission's appropriation for FY 1993 is $190 million, which is divided
approximately $130.8 million for highway projects, $55.8 million for non-
highway projects, and $3.4 million for administrative expenses. ARC is
authorized through a current appropriation.

° Program funds are distributed to State and local entities in line with an allocation
formula intended to provide fair and reasonable distribution of available resources.
ARC staff have responsibilities for program development, policy analysis and


Section 5(a)(12) Significant management decisions with which the Inspector is
General disagrees

* None.

** See references to Sections 5(a)(1) and 5(a)(2) for discussion of significant reports.


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) 673-5319 in the Washington metropolitan area
or write to:

Office of Inspector General
Appalachian Regional Commission
1666 Connecticut Avenue, NW, Rm 215

Washington, DC 20235

Information can be provided anonymously.
Federal Government employees are protected from reprisal,

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


Funding and Staffing

The OIG Funding level for FY 1992 was $380,000. For FY 1992, approximately 31 percent was
expended for contract audit services, 52 percent, for salaries and benefits; 7 percent, for travel;
and 10 percent, for all other activities (training, equipment, space, supplies, etc.). The OIG
funding level represents about 35 percent of the total funds available to the Office of the Federal
Co-Chairman. FY 1993 funding for OIG is $380,000, with the division of expenditures
continuing at the approximate percentages as noted for FY 1992.

Initial OIG operations included authorization for an Inspector General and a Confidential
Assistant. A senior auditor was employed in the latter half of FY 1991; no additional staff have
been employed. Grant review activities will 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. Investigative assistance is provided by other
OIG offices on an as-needed basis. This approach has been deemed the most appropriate to date
in view of the nature of ARC operations. However, with the initiation of an OIG regionwide
Hotline, a need for increased investigative resources and assistance may develop. The OIG will
monitor this situation as well as the efficiency and effectiveness of the use of contracted services.

WI. OG ACTIVITY
A. AUDITS

During the reporting period, twelve reports were issued, including eleven grant reviews and
one program survey report. Five grant reviews were in process at the end of the reporting period,
and followup action to resolve open recommendations was being emphasized. The division of
OIG resources results in audit work being performed by a combination of permanent and
contractor staff. Emphasis continues to be placed on surveys of ARC operations and programs,
completion of grant audits, audit planning, and audit resolution and followup. During the
reporting period, the Inspector General continued to participate on a PCIE study of single audit;
and a draft report containing recommendations for improving single audit was issued by PCIE
for general comment. As Vice Chair of the Executive Council on Integrity and Efficiency
(ECIE), which is comprised of 34 statutorily designated Office of Inspectors General and
nonstatutory Inspectors General, the Inspector General was heavily involved with efforts to ensure
implementation of ECIE responsibilities for effective and efficient OIG Operations.

During the term of the OIG operations at ARC, various recommendations, based on audit testing,
have been made to ARC management with respect to improving program operations in such areas
as accountability, fund obligations and deobligations based on project activity, addressing old and
inactive grants, and implementation of cost principles including travel regulations.

OIG followup tests and reviews of statistical information have reflected positive ARC actions to
address these issues and resulting improvements in program operations. For example, the number
of open grants have been substantially reduced based on targeted review of old grants and
coordination with other agencies administering ARC grants to obtain updated status reports and
information. Timely use of funds has been emphasized; and the number of funded projects,

5


APPALACHIAN REGIONAL COMMISSION

INSPECTOR GENERAL'S

SEMIANNUAL REPORT

TO CONGRESS

OCTOBER 1, 1992 - MARCH 31, 1993


IV. AUDIT PLANNING

Emphasis, in the second half of FY 1993, will be placed on audit followup to determine the
extent to which specific report recommendations are addressed and to assess actions completed
or necessary with respect to overall issues or causes resulting from individual reports. During
the remainder of FY 1993, audit work will also include individual grant audits in about five
states; headquarters surveys, and followup testing in areas such as staff monitoring and followup
On open grants with completed budget periods, administrative expenses, grant extensions, and
enterprise development programs.

Also, emphasis will continue to be placed on programmatic and performance reviews. Limited
resources generally preclude substantive testing of a specific subject or function, but audit
planning includes identification of program subjects that can be tested in conjunction with audits
of individual grants. For example, the survey of the J-1 waiver program, which assists the
placement of physicians in Appalachia, was conducted by inclusion of visits to providers and
physicians located in areas close to individual grantee operations. This type of review provides
expanded and overall information with respect to a particular subject, and the benefits to
management are deemed sufficient to continue this type of work despite a resource induced
reduction in the number of individual grant audits and/or the testing of financial and compliance
issues.

In a similar vein, Government emphasis on accountability and performance measures will be
incorporated in audit planning. Audit effort during the initial years of ARC OIG operations has
concentrated on financial management, including use of funds, and testing grantee compliance
with grant requirements, including fund control and expenditure. While financial and compliance
testing will continue, it is anticipated that testing and evaluation of performance in terms of
individual grants achieving intended objectives and overall benefits derived from ARC activities
will be the subject of increased audit attention.

In order to maximize use of available resources directed at reviewing ARC activities, increased
emphasis has been placed on nonstandard reporting formats including memorandum, letter, and
survey reports. Although such reporting formats reduce the time and resources necessary for
review completion, the results and information included in such reports is based on evidence and
supporting documentation consistent with generally accepted auditing standards.

The OIG will also be alert for new or revised areas of ARC operations based on the priorities
and emphasis of a new administration. Audit planning will include consideration of such
initiatives with the overall goal being to ensure coverage of high priority, including high dollar,
areas in order to assist management fulfill responsibilities for effective and efficient program
Operations.

Vv. OIG HOTLINE
During the reporting period, a regionwide toll-free Hotline was established 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

6


~-Several reviews disclosed that Federal Travel Regulations were not always
followed and ARC emphasis, including reference to applicable travel regulations
in contract and grant agreements or supplemental provisions, is necessary.

Co) A program issue relating to ARC funding, or partial funding, of statewide studies
or reports by states where the Appalachian region encompasses only a part of the
State was noted in two grant reviews as was the need for identifying and
accounting for expenditures that could be related to the ARC program. This issue
will be followed up with ARC officials.

° In one instance, we questioned costs approximating $26,897 with respect to costs
included in the indirect cost pool, including building use and equipment charges.
The primary issue involves the arm's length provisions and appearances when
grantees establish or participate in entities whose primary functions are directly
related to obtaining and financing space for use by the grantee organization. We
did not pursue this issue at other ARC grantees since the US Department of
Commerce Office of Inspector General has an ongoing review of this area at
Economic Development Districts, which in many cases are similar to ARC LDDs.

° Followup is continuing to reach audit resolution with respect to a prior audit that
questioned substantial costs due to insufficient documentation to support matching
costs, program income, indirect costs, travel, and activities that did not appear
consistent with the achievement of grant objectives. The grantee has made
substantial efforts to obtain necessary information or explanations, and we expect
resolution during the forthcoming reporting period.

B. INVESTIGATIONS

The Inspector General Act of 1978, as amended, provides that the Inspector General may receive
and investigate complaints or information concerning the possible existence of an activ ity
constituting a violation of law, rules, or regulations or mismanagement, gross waste of funds, or
abuse of authority. The OIG does not employ special investigators. Should the need arise, the
matter would be referred to the Federal Bureau of Investigation or assistance would be contracted
with another Federal Office of Inspector General. The results of investigations may be referred
to the appropriate Federal, state, or local prosecutive authorities for action.

There were no independent ARC OIG investigations during this period, but a planned grant audit
was coordinated with an ongoing investigation by a state agency. However, with the initiation
of an OIG Hotline and notification to grantees and other interested parties, as well as the
Presidential initiative dealing with reinventing Government and inv iting public comment through
OIG Hotlines, it is anticipated that the OIG investigation workload will increase. In this repard,
several citizens’ concerns have been received by ARC officials in the past two months and tumed
over to the ARC OIG for followup.

in


review, grant development, technical assistance to States, and management and
oversight.

° In order to avail itself of Federal agency expertise and administrative capability
in certain areas, the 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.
Under this arrangement, the Commission retains responsibility for priorities,
highway locations, and fund allocations.

B. OFFICE OF INSPECTOR GENERAL

The ARC Office of Inspector General is an independent audit and investigation unit. The OIG
is headed by an Inspector General who reports directly to the Federal Co-Chairman.

Role and Authority

The Inspector General Act of 1978 (P.L. 95-452), as amended in 1988, states that the Inspector
General 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 Inspector General is responsible for keeping the Federal
Co-Chairman and Congress fully informed about the problems and deficiencies in ARC programs
and operations and the need for corrective action. The Inspector General 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, 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.

ati i inci : ice:

The States and the Federal Co-Chairman, acting together as the Commission, establish policies
for ARC's programs and its administration. These policies are codified in 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-Chairman, 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 operations of the OIG neither
replace established lines of operating authority nor eliminate 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 Inspector General.


EXECUTIVE SUMMARY

During this reporting period, 12 reports were issued, including 11 grant reviews and 1 program
survey. Primary recommendations were directed at improved accounting, financial systems, and
internal controls. We also identified ARC actions with respect to issues previously raised by
OIG, including timely use of funds and the large number of old grants that were not closed, and
noted substantial accomplishments in both these areas.

Of particular significance was the continuing responsibilities of the Inspector General as the Vice
Chair of the Executive Council on Integrity and Efficiency (ECIE), which was established by
Executive Order in May 1992 to provide for coordination and cooperation between the 33
designated Office of Inspectors General. This responsibility included participating as a member
of the President's Council on Integrity and Efficiency and required extensive coordination and
liaison between OIGs, OMB, and Congressional sources with respect to OIG activities. The
Inspector General appreciates the support, cooperation, and assistance provided by ARC
management to facilitate performance of ECIE Vice Chair responsibilities.

The Inspector General participated as a member of the PCIE Task Force on Single Audit, which
recently issued a draft report for comment that contained recommendations for improved single
audit work; addressed several seminars on OIG related issues; and led three ECIE peer review
teams during this reporting period.


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SCHEDULE OF AUDIT REPORTS WITH
QUESTIONED OR UNSUPPORTED COSTS

For which no management decision
was made by the commencement of
the reporting period

Which were issued during the
reporting period

Subtotals (A + B)

For which a management decision
was made during the reporting
period

qi) dollar value of disallowed
costs

(ii) dollar value of costs not
disallowed

For which no management decision
has been made by the end of the
reporting period

Reports for which no management
decision was made within 6 months
of issuance

(S$ in thousands)

No. of
Reports*

is)

i)

to

Questioned

— Costs _

$ 396

$ 424

$ 422

$ 396

APPENDIX C

Unsupported

Includes one report, involving $396,000, where a management decision was made to pursue the audit
recommendations; but final management decisions on disallowances cannot be finalized until review

of additional documentation and negotiations between ARC and grantee are completed.


Page

Executive Summary ww. cece ee tect ee ences ii
Purpose and Requirements of the OIG Semiannual REPO wows: mee iv

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Appendices A. Schedule of Audit Reports Issued
October 1, 1992 through March 31, 1993

B. Schedule of Audit Reports with Recommendations that Funds be put
to Better Use

C. Schedule of Audit Reports with Questioned or Unsupported Costs

Dz. Definition of Terms Used


, REGIONAL COMMISSION

OFFICE OF

INSPECTOR GENERAL,

1666 Connecticut Avenue, N.W.
Washington, D.C. 20235
202/673-7822

May 19, 1993
MEMORANDUM FOR THE FEDERAL CO-CHAIRMAN
SUBJECT: Semiannual Report to Congress

In accordance with the requirements of the Inspector General Act Amendments of 1988, Public
Law 100-504, I am pleased to submit the semiannual report of the Office of Inspector General
for the period October 1, 1992, through March 31, 1993.

During this period, operational activities included issuance of 12 individual Teports, including
11 grant reviews and 1 program survey. Primary recommendations were directed at improved
accounting, financial systems, and internal controls. We also identified ARC actions with respect
to issues previously raised by OIG, including timely use of funds and the large number of old
grants that were not closed, and noted substantial accomplishments in both of these areas.

Of particular significance was the continuing responsibilities of the Inspector General as the Vice
Chair of the Executive Council on Integrity and Efficiency (ECIE), which was established by
Executive Order in May 1992 to provide for coordination and cooperation between the
33 designated Office of Inspectors General. This responsibility included participating as a
member of the President's Council on Integrity and Efficiency and required extensive
coordination and liaison between OIGs, OMB, and Congressional sources with respect to OIG
activities. The Inspector General appreciates the support, cooperation, and assistance provided
by ARC management to facilitate performance of ECIE Vice Chair responsibilities.

The Inspector General participated as a member of the PCIE Task Force on Single Audit, which
recently issued a draft report for comment that contained recommendations for improved single
audit work; addressed several seminars on OIG related issues; and led three ECIE peer review
teams during this reporting period.

The continued support of the Office of Inspector General by ARC management and utilization
of OIG reports and recommendations have contributed to improved controls and operations. 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 vou consider appropriate.

7 >
Agbidlgdifode

Inspector General

Enclosure


subject to fraud, waste, or abuse. Additionally, and possibly as a result of Government initiatives
with respect to reinventing Government, ARC officials have received several inquiries from
concerned citizens; and the OIG is following up on these concerns.

VI. LEGISLATIVE AND REGULATORY REVIEW

Primary efforts in this area were related to requests for input about potential legislative initiatives
with respect to OIG operations. The ARC OIG supports legislation that would provide improved
protections for IGs, including designated and career IGs by consideration of alternatives such as
removal for cause criteria and term limits. Also, the ARC OIG supports extension of the
Program Civil Fraud Penalties Act to include designated entities, improved protection of
designated IG budgets, comparable pay for designated IGs, and criteria consistent with current
qualification requirements for Presidentially appointed IGs.

vil. OTHER

The Inspector General was selected as the Vice Chair of the Executive Council on Integrity and
Efficiency, which was established by Executive Order in May 1992. The ECIE, which is chaired
by OMB, is comprised of the 33 statutorily designated [Gs and other administratively established
IGs and is intended to promote the efficiency and effectiveness of the IG community. As such,
the Vice Chair serves as a coordinator and liaison for ECIE members in dealings with OMB,
Congress, and the PCIE.

Specific activities, which required considerable resource use during the reporting period, included
coordinating monthly ECIE meetings, conducting committee meetings, transmitting IG related
information to all members, correlating and summarizing ECIE positions on various issues,
representing ECIE members' interests, briefing OMB and Congressional staff, and representing
ECIE at PCIE meetings. During the reporting period, the ECIE, in conjunction with OMB,
issued a document titled "Inspectors General in Designated Federal Entities: Key Statutory
Provisions and Implementing Guidance," which summarizes OIG responsibilities and identifies
some of best practices to ensure a positive relationship between OIG and entity management.
Subjects covered include: selection and appointment; removal or transfer; general supervision
by the entity head; personnel, procurement, and logistical support; budget formulation and
execution; audits and investigations; legislation and regulatory reviews; and IG access to agency
records.

Another important ECIE function during this period was the drafting of an annual report
highlighting ECIE activities and accomplishments. This activity required extensive coordination
with ECIE members in order to address issues of importance or concern to various ECIE
members.

The ECIE Vice Chair responsibilities and workload, although considered of the highest
importance by the ARC OIG, required a substantial expenditure of time and resources in order
to address member issues and ensure ECIE actions in line with the Executive Order. The normal
workload attributable to coordinating and addressing interests and concerns of member entities

7


APPENDIX B

SCHEDULE OF AUDIT REPORTS WITH
RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE

For which no management decision was made by the
commencement of the reporting period

Which were issued during the reporting period

Subtotals (A + B)

For which a management decision was made during the
reporting period

(i) doilar value of recommendations that were
agreed to by management

--based on proposed management action

--based on proposed legislative action

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

For which no management decision has been made by the
end of the reporting period

Reports for which no management decision was made
within 6 months of issuance

No. of Dollar Value
Reports* (S in thousands)
1, $ 175
0 $0
1 $ 175
1 i$ L7Ss#
0 0

Represents inactive funds in a revolving loan fund. ARC revised procedures to permit deobligation of funds
after 3 years, and discussions with agency management continue with respect to voluntary deobligation prior to

3 years where activity is limited.