Room 7898 C HCHB

1401 Constitution Avenue, N.W.

Washington, D.C. 20230

www.oig.doc.gov

Office of Inspector General
 

Semiannual Report to Congress
 

September 2009 
Defend Its Systems and Data Against Increasing Cyber Security Threats . . . . . . . . . . . . . . . . . . . . . 

NOAA Environmental Satellites: Effectively Manage Technical, Budgetary, and Governance
 

Issues Surrounding the Acquisition of NOAA’s Two Environmental Satellite Programs . . . . . . . . . . . 

Recovery Act: Meet the Challenges of Accountability and Transparency with
 

Compliance, Reporting, Spending, Oversight, and Effective Program Performance . . . . . . . . . . . . . 

U.S. Patent and Trademark Office: Address the Patent Office’s Resource and
 

Quality Control Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Other Issues Requiring Significant Management Attention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Recovery Act Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Work in Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agency Overviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Department-Wide Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Bureau of Industry and Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Economics and Statistics Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

National Institute of Standards and Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

National Oceanic and Atmospheric Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

National Telecommunications and Information Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

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

Office of Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Other OIG Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Tables and Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

This report summarizes the work we completed and 

initiated during this semiannual period on a number 

of critical departmental activities. Over the last 6 

months, our office issued 13 audit, evaluation, and 

inspection reports addressing programs overseen by 

the Bureau of Industry and Security, Census Bureau, 

National Institute of Standards and Technology, 

National Telecommunications and Information 

Administration, and National Oceanic and 

Atmospheric Administration. Our investigative 

activities this reporting period resulted in six criminal 

convictions and more than $58 million in fines, 

restitution, and judgments. 

As expected of an activity of such significance and 

substantial cost, the 2010 Census was a major focus 

of our efforts (including Congressional testimony, in 

September) and will remain so, particularly as Census 

Day (April 1, 2010) approaches. Our Recovery Act 

oversight work, another high-visibility area for us, 

centered on a risk assessment of Commerce’s 

Recovery Act programs, development of a risk-based 

oversight plan, and pre-award operational reviews of 

Recovery Act grants. 

of Public Administration (NAPA) to conduct 

organizational assessment of our office. While 

assessment identified areas for improvement, it 

highlighted several of our “core strengths,” includ

our reputation for independence, our high perce

value by Congress and other stakeholders, and 

staff. As we begin implementing NA

recommendations, I am confident that we can sup

the Administration’s directive for transparency 

accountability more effectively than ever. 

We look forward to working with the Departm

and with Congress in the months ahead to m

the many challenges facing the Department. 

thank the Secretary, senior officials throughout 

Department, and members of Congress and t

staffs for their support of our work during 

reporting period and for their receptiveness to 

recommendations for improving Comm

operations. 

1 

inspectors general to identify the top management 

challenges facing their departments. For FY 2010, 

Commerce OIG has identified five top management 

challenges that require significant attention from the 

Department. Of these, three are continued with 

updates from our November 2008 Top Management 

Challenges Facing the Department of Commerce report: 

meeting the requirements of an accurate decennial 

census, continuing to improve the Department’s 

ability to cope with cyber threats, and managing the 

acquisition of National Oceanic and Atmospheric 

Administration’s (NOAA) environmental satellites. 

The challenge to meet Recovery Act requirements is a 

new addition, as is the U.S. Patent and Trademark 

Office’s (USPTO) resource and quality control 

challenge. OIG has also identified five additional 

challenges that pertain to Commerce’s internal 

processes and organization. All of these challenges are 

discussed below. 

1. Decennial Census: Mitigate Issues with 

2010 Decennial While Addressing 

Future Census Challenges 

Over the past year, OIG reports and congressional 

testimony have detailed the challenges faced by the 

Census Bureau as it executes the 2010 decennial 

count of U.S. residents. The mission of the 2010 

decennial census—to succeed in counting each of the 

over 300 million people in more than 130 million 

households in the United States only once, in the 

right place—is a daunting task. Census has built an 

extensive communications campaign and partnership 

program to spread the message of a prompt and 

accurate decennial response, but it ultimately must 

rely on the American public to return decennial 

forms without delay. 

Top 5 Management Challenges 

1. Decennial Census: Mitigate Issues with 

2010 Decennial While Addressing Future 

Census Challenges 

2. Information Technology Security: 

Continue Enhancing the Department’s 

Ability to Defend Its Systems and Data 

Against Increasing Cyber Security Threats 

3. NOAA Environmental Satellites: Effectivel

Manage Technical, Budgetary, and Governanc

Issues Surrounding the Acquisition of NOAA

Two Environmental Satellite Programs 

4. Recovery Act: Meet the Challenges of 

Accountability and Transparency with 

Compliance, Reporting, Spending, 

Oversight, and Effective Program Performan

5. U.S. Patent and Trademark Office: Addre

the Patent Office’s Resource and Quality 

Control Issues 

With a life-cycle cost estimate now projected to t

$14.7 billion, the 2010 census is a mas

undertaking. The most costly operation of 

decennial is nonresponse follow-up. In 

operation, estimated to cost $2.7 billion, cen

takers must visit every household that does not ret

a census form to record answers to the questions 

the form. To accomplish this, the bureau must 

and train more than 450,000 temporary worker

well as lease and equip 494 local offices. While 

bureau cannot predict with certainty the pub

response rate and thus the total number 

households that will have to be visited in n

response follow-up, costs will increase by ten

millions of dollars for every percentage point of 

public that census takers have to visit. 

3 
the bureau as the “nerve center” of its field offices, the 

PBOCS is used to define enumerator assignments 

and to provide current information on enumerator 

productivity. Along with nonresponse follow-up 

actions, the PBOCS is also needed to support 

operations such as those in rural areas where Census 

leaves a form for households to mail back (known as 

update/leave), interviews to enumerate group 

residences, and counting at transient locations such 

as parks or campgrounds. 

Census is on a very tight schedule to complete the 

PBOCS. The system must work compatibly with 

other 2010 census systems and run within the 

infrastructure provided by the FDCA contractor, 

adding significant integration and deployment 

challenges. Census will be conducting a load test of 

the PBOCS, although given the highly compressed 

schedule, the system will undergo less testing than 

desirable. Once deployed, this system has no margin 

for error. Without an effectively functioning PBOCS, 

hundreds of thousands of nonresponse follow-up 

enumerators may not be able to receive their 

assignments, and bureau management may not be 

able to monitor the operation’s progress. Such 

problems, for which no documented contingency 

plans currently exist, would seriously jeopardize the 

decennial schedule and further drive up decennial 

costs. As a core requirement presenting a high level of 

uncertainty so late in the decennial life cycle, the 

PBOCS represents one of the most significant 

decennial challenges facing the Department. 

Calendar year 2010 is also a critical time for the 2020 

census. The bureau must begin to develop its plans 

for 2020 even though its workforce is already 

stretched thin by 2010 operations. The bureau must 

work with the Department to apply lessons learned 

Cyber attacks and security threats are on the rise, 

the Department must improve its ability to cope w

them. Commerce continues to work to enha

security but, while progress has been made, ther

still more to be done. 

While IT security has numerous facets, OIG 

focused on the adequacy of implemented cont

and the certification and accreditation (C&

processes, including continuous monitoring, for 

approximately 300 systems at the Department. O

the years, our work has shown that the Departm

and USPTO must improve these processes to en

that they consistently confirm system and d

security. This includes improving the assessmen

security controls and promptly correcting signifi

vulnerabilities. Continuous monitoring is critica

maintaining adequate security and requires 

ongoing awareness of changing threats 

vulnerabilities, plus an understanding 

modifications made to IT systems, so that nee

enhancements can be made to security controls. 

Other key aspects of the Department’s IT secu

challenge include maintaining and enforcing effec

IT security policies and preventing, detecting, 

responding to IT security incidents. The Departm

also must ensure continuity of operations, disa

recovery, and IT contingency plans are relev

maintained, and tested so they can be u

successfully in the event of a disruption. Bec

contractors provide support to all aspects of 

security at Commerce, the Department needs 

make certain they receive clear direction and c

oversight. The daunting challenge of IT securit

increased by the decentralized administra

management structure of the Department, wh

gives its Chief Information Officer limited autho

4 
toward obtaining appropriate clearances for IT security 

personnel. A key recommendation for enhancing the 

skills of the IT security workforce was that the 

Department require IT security certifications for 

personnel with significant IT security responsibilities. 

3. NOAA Environmental Satellites: 

Effectively Manage Technical, Budgetary, 

and Governance Issues Surrounding 

the Acquisition of NOAA’s Two 

Environmental Satellite Programs 

NOAA is modernizing its environmental monitoring 

capabilities, in part by acquiring two critical satellite 

systems: the National Polar-orbiting Operational 

Environmental Satellite System (NPOESS) and the 

Geostationary Operational Environmental Satellite-R 

Series (GOES-R). Highly complex acquisitions like 

these have a history of cost overruns, schedule delays, 

and reduced performance capabilities. The NPOESS 

and GOES-R projects have already experienced these 

problems. They require careful management and 

oversight to minimize further disruption to the 

programs and to prevent any gaps in satellite coverage. 

The NPOESS project, managed jointly by NOAA, 

NASA, and the Department of Defense, has faced 

several setbacks. The initial project plan called for the 

purchase of six satellites at a cost of $6.5 billion, with 

a first launch in 2008. By mid-2006, problems with a 

key sensor raised costs and delayed the date of the first 

launch to 2013, even as the number of satellites in the 

system was reduced from six to four. By December 

2008, the NPOESS total life-cycle cost was revised to 

$14 billion. NOAA announced in March 2009 that it 

would delay the first launch to 2014 because of 

continuing problems with the sensor. 

provided by the three agencies. Further delays in 

NPOESS program could result in considerable g

in climatological data and have serious consequen

for the safety and security of the United States. 

Budget increases, capability reductions, and de

have also plagued the GOES-R project. 

projected cost has increased from $6.2 billion 

$7.7 billion, a major sensor was removed, 

number of satellites to be purchased was redu

from four to two, and the launch readiness date 

the first two satellites has slipped by 6 months. 

2007 evaluation found that weaknesses in overs

contributed to these problems. Since our rev

NOAA has finalized a GOES-R management con

plan and the Department has been working on a 

oversight policy. NOAA and the Department 

need to develop effective interim overs

procedures to manage costs and prevent fur

setbacks. 

4. Recovery Act: Meet the Challenges 

of Accountability and Transparency 

with Compliance, Reporting, 

Spending, Oversight, and Effective 

Program Performance 

The American Recovery and Reinvestment Ac

2009 requires an unprecedented degree 

transparency and accountability and sets out spe

responsibilities for agency staff in managing Reco

Act funds and program operations. Comm

operating units must spend funds expediently w

little time to prepare for the many new and expan

programs, grants, and contracts established un

the act. 

5 
Federal agencies receiving Recovery Act funds must 

report key information such as awards, obligations, 

outlays, and major activities on a weekly basis. Fund 

recipients need to report on the projects and activities 

created and their completion status, as well as job 

creation and retention. Ensuring accurate and timely 

data poses challenges, such as the manual nature of 

the reporting processes, the need to maintain data 

integrity, the risk of inconsistent or incomplete 

reporting from dissimilar operating units, and 

the brief time allotted for their review of recipient 

reporting. As funds are distributed, Commerce 

must ensure that they are used effectively for their 

intended purpose. 

Finally, National Telecommunications and 

Information Administration’s (NTIA) Broadband 

Technology Opportunity Program (BTOP) aims to 

award approximately $4.5 billion in grants in less 

than 18 months, a level of grant activity no 

Commerce operating unit has ever before 

undertaken. Among its challenges in the near term, 

BTOP needs a rigorous review process to make sure 

applicants clearly identify and rank gaps in 

broadband coverage, as well as submit proposals 

targeting areas of greatest need. 

5. U.S. Patent and Trademark Office: 

Address the Patent Office’s Resource 

and Quality Control Issues 

A decade ago, Congress gave USPTO independent 

control of its management and administrative 

functions as a performance-based organization. With 

these flexibilities came measurable goals, 

performance targets, and expectations that USPTO 

disclosed in a timely fashion. 

USPTO faces the immense challenges of addres

these persistent problems of long waiting periods 

application backlogs while also ensuring that qua

remains integral to the patent review process

addition to reforming and reengineering the var

components of the patent application proc

USPTO’s IT systems need to be updated to pro

greater management oversight and ability to pro

complex cases. Recent initiatives included hi

additional patent examiners to address the back

however, simply adding to the workforce with

making improvements to processes and qua

control may not be enough. 

Further, USPTO must address challenges with 

funding mechanisms and fee structure. USPTO 

funded entirely by application and maintenance 

paid by patent and trademark applicants and own

Congress is also involved in this process by set

many of the fees legislatively and establishin

ceiling, through the appropriations process, as to 

maximum amount of fees USPTO may collect 

given year. OIG’s November 2008 Top Managem

Challenges Facing the Department of Commerce rep

suggested that USPTO’s unique financing struc

could become increasingly risky, but the rec

economic downturn, the decrease in fees collected 

USPTO during this time, and the resulting bud

difficulties faced by USPTO show that 

vulnerabilities are becoming critical more qui

than expected. USPTO must cons

administrative, regulatory, and legislative solution

addressing these challenges. 

6 
gq, g

serious shortage of staff with the skills and training 

necessary to do this critical work. The Department 

must build up the size and skills of its grants and 

contracts workforce and improve its oversight 

processes to make sure grants and contracts are issued 

effectively and program offices are ensuring that 

funds are properly spent. 

The Department has been described as a “holding 

company” of 12 autonomous operating units, most 

of which have independent business models, cultures, 

and practices. This diversity can create obstacles to 

the Department’s efforts to integrate administrative 

processes. Commerce needs to standardize and 

centralize management and oversight in order to save 

time and money while making operations among its 

operating units more efficient. In a related challenge, 

the Department and its operating units must develop 

cooperative processes for planning, managing, and 

overseeing major system acquisitions. 

fisheries. Nevertheless, balancing its compe

mandates for maintaining and improving marine 

coastal ecosystems while supporting ma

commerce and transportation remains an acu

difficult challenge. 

Finally, the Department’s headquarters, the Gen

Services Administration (GSA)-owned Herbert 

Hoover Building in Washington, D.C., is undergo

an extensive renovation. The renovation will 

about 13 years and is estimated to cost alm

$960 million to complete. The project is b

funded mostly by GSA, but the Department h

primary interest in ensuring the renovation 

completed on schedule, within budget, and fre

fraud. To meet this goal, Commerce and GSA n

to provide comprehensive oversight throughout 

project’s life cycle. 

7 
RECOVERY ACT OVERSIGHT
 

Introduction

On February 17, 2009, the President signed the

Recovery Act into law. The Recovery Act requires an

unprecedented amount of transparency and

accountability and sets out specific responsibilities for

OIG to provide oversight of the Department’s

activities and its spending of funds appropriated by

the act. The Department of Commerce—five

operating units, plus OIG—received nearly $8 billion

under the Recovery Act, almost doubling the

Department’s FY 2009 appropriations (see Figure 1):

The act allocated funds to operating units, as well as

to OIG for oversight, as follows (see Figure 2):

Figure 1. Commerce Recovery Act Allocations

Compared with FY 2009 Appropriations

Figure 2. Commerce Recovery Act Allocations, by Operating Unit

8
construction projects for NIST facilities and grants for 

others to build research facilities. The bulk of the 

National Oceanic and Atmospheric Administration’s 

(NOAA) operations, research, and facilities funds 

($170 million) will support habitat restoration, while 

the single largest procurement, acquisition, and 

construction outlay (also $170 million) will support 

complex climate computing/modeling programs. 

Recovery Act support for the National 

Telecommunications and Information Administration 

(NTIA) includes a smaller share for the digital 

television converter box program (the majority of 

which has already been disbursed). The larger share 

will fund NTIA’s endeavor to stimulate demand and 

facilitate greater use of broadband. 

spending plans, program plans, and o

documentation—we risk-assessed Commer

Recovery Act activities and developed an FY 2

risk-based oversight plan. 

Program start-up operations have involved mini

spending activity. Department program managem

has attempted to balance the Recovery Act’s call 

expediency with its demand for accountability 

transparency, thus focusing on implemen

additional controls to ensure Commerce meets th

unique Recovery Act requirements. As of the en

FY 2009, Commerce has obligated approxima

$1.4 billion in funds and spent approxima

$570 million (see Figure 3). However, with NT

Figure 3. Commerce Operating Units’ Recovery Act Spending (in Millions) in FY 2009 

9 
pg g g

reporting data completeness and accuracy—we could 

find stresses in some of the manual reporting processes 

currently in place at the operating unit level. For 

example, additional automation will be important to 

manage the increased volume of grant and contract 

agency reporting, as well as the completion of quarterly 

recipient reporting. This automation should add 

efficiencies to the reporting process and decrease the 

risks of reporting errors and delays. Finally, operating 

units must maintain adequate staffing levels to ensure 

effective program operations and compliance with 

additional Recovery Act requirements. 

FY 2009 Accomplishments: Highlights 

OIG’s active role in outreach, as well as assessing 

programs’ controls from their creation, helps characterize 

our FY 2009 Recovery Act oversight as proactive— 

extensive national effort has reached over 3,

Commerce employees involved in procurem

grants, and program management—as well as cur

and potential recipients of Recovery Act contr

and grants from Commerce operating units. 

Topics included: 

■ Transparency and Accountability in
 

Grants Management 


■ Transparency and Accountability in
 

Contract Management 


■ Fraud Indicators Training 

■	 Introduction to Federal Suspension
 

and Debarment 


■ Construction Cost Estimating Workshop 

■ Transparency and Accountability in
 

Broadband Grants
 

Activity Results 

Outreach and Training ● More than 3,000 Commerce employees trained and potential recipients brie

in more than 80 onsite and video training sessions and briefings 

Monitoring Obligations 

and Spending 

● Review of departmental obligation and spending reports to monitor program 

operations and spending status 

Audit and Evaluation ● Commenced an audit of operating unit data quality reviews of recipient report

● Commenced an evaluation of controls over operating unit reporting on 

Recovery.gov 

Operational Reviews ● Commenced review of NIST and NOAA pre-award phases of competitive 

grant processes 

● Commenced review of NTIA’s BTOP pre-award grant processes 

Recovery Accountability 

and Transparency Board 

(RATB) Initiative 

● Led a RATB initiative to review staffing and qualifications of grants and 

contracts workforce 

Flash Report ● One flash report, providing best practices gleaned from previous American 

relief and recovery initiatives 

10 
effectiveness of the controls and ensures they are 

working as designed. 

We are also auditing the Commerce agencies to 

determine whether they have established effective 

processes to perform data quality reviews of 

information reported by recipients and awardees of 

Commerce Recovery Act funding. The review—part 

of a broader federal Recovery Act review requested by 

the RATB—will help determine whether operating 

units have a process in place to identify omissions and 

errors, as well as to encourage recipients to make 

timely changes to their reporting as needed. 

● Initiated pre-award operational reviews (NIST, 

NOAA, NTIA) 

We began a review of the solicitation, selection, and 

pre-award processes for Recovery Act grants awarded 

by NIST and NOAA to determine whether they were 

awarded competitively in accordance with 

Commerce and Recovery Act requirements. Based on 

our findings, we will recommend areas of 

improvement for (1) NIST on its documentation of 

the selection process; (2) NOAA on its risk 

management of applicants; and (3) Commerce on its 

pre-award guidance on background checks. 

We are also preparing to review BTOP to (1) assess 

how effectively NTIA is implementing it, including 

management controls, contractor oversight, and 

program office staffing; (2) evaluate the proposal preaward process that NTIA is using to ensure effective 

and fair application and award processes; and (3) 

evaluate the integrity and reliability of the online 

application system. 

required review to determine the adequacy of staf

levels, qualifications, and training of person

responsible for Recovery Act contracts and grants

● Issued a flash report on balancing expedienc

with accountability 

Our flash report entitled “Commerce Experie

with Past Relief and Recovery Initiatives Prov

Best Practices and Lessons Learned on How 

Balance Expediency with Accountability” (A

19692) reviews our reports on past relief and recov

initiatives, as well as recent reports by other overs

entities. Consolidating the best practices 

recommendations relevant to Commerce’s Recov

Act investments, this flash report provide

convenient summary of approaches for achiev

accountability while spending Recovery Act fu

expeditiously. 

Looking Ahead 

We are currently completing our FY 2010 plan. I

we will continue to prioritize the higher-

initiatives, as well as uncover new oversight priori

Outreach and training will remain priorities. 

NTIA’s BTOP is one higher-risk program that 

continue to receive significant focus. Plans for BT

oversight in FY 2010 include a review of pre-aw

activities, including NTIA organizational staff

contractor management, pre-award operations, 

systems processing. We will evaluate the effective

of programming, the fairness of the application 

award process, and the integrity and reliability of 

online application system. In audit work, OIG 

turn significant attention to reviewing BTOP p

award processes. To assess whether effective proce

11 
provisions, the National Environmental Policy Act, 

and performance bonds. We also plan to conduct a 

performance review to help assess agency oversight of 

projects, which can ensure successful and timely 

completion of construction projects. 

(especially related to IT controls over data reporte

Recovery.gov) and operating units’ limited data qua

reviews of expenditures reported by Recovery 

fund recipients. 

12 
WORK IN PROGRESS
 

The following Office of Inspector General audits and

evaluations were initiated or underway during this

reporting period:

Recovery Act Oversight

2010 Census Group Quarters Validation

(GQV) Operation’s Impact on Producing

a High­quality Address List

Review the GQV operation and evaluate the quality

of the final group quarters list for coverage and

geographic accuracy, and monitor GQV expenditures

associated with the Recovery Act.

2010 Census Partnership Program and

Recovery Act Spending

Continue oversight of the 2010 partnership program

with Census. Monitor program activities and

associated Recovery Act spending for the duration of

the decennial census. Examine partnership specialist

roles and activities and thes use of program materials,

and assess partner satisfaction.

Agency Reporting Integrity Under the

Recovery Act

Assess the effectiveness of key data edit and interface

controls that mitigate the risk of erroneous data input

and incomplete data transmission in the Commerce

operating unit systems that provide data for reporting

on Recovery.gov.

Agency Processes for Performing

Limited Data Quality Reviews of

Recipient Reporting

Audit the data quality review processes of agencies

receiving Recovery Act funding. Assess whether

processes will adequately identify material omissions

and/or reporting errors.

Review of NTIA’s Organizational and

Pre­award Processes for Broadband

Technology Opportunities Program

Review BTOP to (1) assess how effectively NTIA is

implementing the program, (2) evaluate proposal

pre­award review measures to ensure effective and fair

application and award processes, and (3) evaluate

integrity and reliability of the online application

system.

Review of the Solicitation, Selection, and

Pre­Award Processes for Recovery Act

Grants Awarded by NIST and NOAA

Review the solicitation, selection, and pre­award

processes for Recovery Act grants awarded by NIST

and NOAA to determine whether grants were awarded

competitively in accordance with Commerce

requirements. Based on findings, suggest best practices

or areas of improvement for NIST’s FY 2009 Recovery

Act competition and future NOAA competitions for

work not related to the Recovery Act.

Survey of Federal Contract and Grants

Personnel Qualifications

Coordinate survey efforts within the inspector

general community to determine the adequacy of

staffing levels, and the qualifications of and training

provided to federal contract and grants personnel

working on Recovery Act projects.

Department­Wide Management

Department­Wide Oversight of Grants

Identify relevant oversight activities currently in place

designed to prevent and detect fraud at the

Department’s grants­management offices and

determine (1) whether adequate oversight activities

and controls exist to prevent and detect potential

fraud, and (2) if those oversight activities and

controls are consistent with the Department’s Grants

13
Census Bureau 

2010 Address Canvassing 

Continue to assess the outcome of the 2010 address 

canvassing operation, which took place from March 

30 through July 10, 2009, by determining whether 

the operations succeeded in appropriately updating 

Census’s master address lists and maps. 

Address Canvassing Payroll 

Evaluate the accuracy and integrity of payroll 

processing for Census address canvassers, including 

supervision and rules concerning overtime. During 

its address canvassing operation, decennial staff and 

approximately 140,000 temporary workers collected 

addresses and geographic information using 

handheld computers to update the address file and 

maps and to process daily payroll submissions. 

Analysis of Field Data Collection 

Automation Problems 

Analyze FDCA problems to determine their causes 

and how best to avoid them in the future. Specifically 

examine why cost estimates increased while the scope 

of the contract decreased, why funds were unavailable 

for the contract to proceed as planned, and what 

went wrong with requirements definition and system 

development and testing. 

Distribution of Communications 

Campaign Promotional Materials to 

Census Partners 

Evaluate whether the promotional materials that were 

developed as part of the Census Communications 

Campaign and delivered to the 12 regional offices to 

distribute to their partnership organizations met 

contract requirements for quality and timeliness and 

were appropriate for their target audiences. 

Reviews of Address Canvassing Lister 

Travel Claims 

Review the travel claims submitted by address lis

in support of the Census 2010 address canvas

operation. Evaluate the causes of budget variances 

listers’ time and mileage and other expenses incu

during address canvassing to help identify h

Census can better control costs during nonrespo

follow-up operation. 

Review of Communications 

Campaign Contract 

Review contract requirements, plans, deliverab

timelines, and funding, and follow up with sepa

audits of any problem areas we identify as poten

areas for audit. The contract provides for 

integrated marketing and communications camp

in support of the 2010 Census, with the goa

improving the mail response rate, accuracy of 

count, and cooperation of enumerators. 

Decennial Response Integration System 

(DRIS) 

Assess contract requirements, deliverables, fund

and timelines, and review award fees and any o

contract changes made to accommodate the bure

decision to conduct paper nonresponse follow-up 

identify potential areas for audit. The cont

provides for the design, building, test

implementation, and maintenance of systems 

infrastructure needed to (1) provide assistance to 

public by telephone and (2) receive, capture, organ

and standardize census data provided by respond

through paper questionnaires and the telephone. 

14 
gpyg 

procedures related to review and approval of PSP 

purchases. Census partner organizations purchase 

products and services designed to promote awareness 

of the 2010 Census, especially among traditionally 

hard-to-count groups. 

Additional Projects 

See page 13 for descriptions of two other 

Census-related works-in-progress funded by the 

Recovery Act. 

National Institute of Standards 

and Technology 

California and Ohio Manufacturing 

Extension Partnership (MEP) 

Cooperative Agreements 

Determine whether recipients of MEP cooperative 

agreements have complied with all applicable terms, 

conditions, and NIST operating guidelines. NIST 

awards these agreements to organizations to operate 

MEP centers, which offer technical and business 

management experience to manufacturers. The 

federal share cannot exceed 33 percent of allowable 

project costs. 

National Oceanic and 

Atmospheric Administration 

FISMA Evaluation of NOAA Satellite 

Information System C&A 

Evaluate the C&A of the National Environmental 

Satellite, Data, and Information Service’s 

Environmental Satellite Processing Center system to 

determine whether the system and its information are 

General Counsel Office for Enforcement 

Litigation. Focus on (1) evaluating enforcem

operations in a regulatory environment; (2) asses

processes used to establish priorities with respec

enforcement actions and penalties; and (3) review

overall accounting and management practices app

to the enforcement function, as well as the us

funds NOAA receives through penalties. 

Pacific States Marine Fisheries 

Commission 

Audit two NOAA cooperative agreements and th

contract task orders awarded to the Commission

addition to performance, compliance, and c

incurred audits of the cooperative agreements 

task orders, the comprehensive audit also include

audit of 7 years of indirect cost rates and rel

proposals and four cost-reimbursable subcontract

U.S. Historical Climatology Network’s 

(USHCN) Data Quality and 

Modernization Efforts 

Review the USHCN to determine what im

NOAA’s efforts to modernize the network will h

on its climate data collection and report

Interview users to see if they understand, or 

concerned about, the quality issues at hand. Ascer

what corrective actions NOAA has taken and if 

actions have been effective. 

15 
progress these states have made in acquiring and 

deploying interoperable communications with PSIC 

grant funds and whether their use of the funds is 

meeting all federal requirements. 

Second Annual Audit of the PSIC 

Grant Program 

Begin second annual audit of the PSIC grant 

program, assess NTIA’s administration of the 

program, and report results to Congress, also as 

required by the Implementing Recommendations of 

the 9/11 Commission Act of 2007. 

U.S. Patent and Trademark Office 

FISMA Evaluations of USPTO C&A 

Evaluate C&A activities for the Patent Cooperation 

Treaty Search Recordation System and Enterprise 

UNIX Services System as part of our 

responsibilities under FISMA. We evaluated 

stated in accordance with generally accep

accounting principles. These audits are perform

by an independent public accounting firm un

OIG oversight. 

Patent Budget Projections 

Evaluate USPTO’s budget process, including 

method of projecting income, expenses, 

potential budget shortfalls. Determine whe

USPTO has retained documentation supporting 

budget-development process, and whether proje

funding shortfalls are based on valid evidence. 

Patent Quality Assurance Process 

Determine the effectiveness of USPTO’s pa

quality assurance process in ensuring that establis

standards of patent examination quality are met, 

whether the process complies with applic

departmental, operating unit, and federal la

regulations, policies, procedures, and guidelines. 

16 
’

MNGMN

The United States Department of Commerce creates the conditions for economic growth 

opportunity by promoting innovation, entrepreneurship, competitiveness, and stewardship. 

Department has three stated strategic goals: 

Goal 1: Provide the information and tools to maximize U.S. competitiveness. 

Goal 2: Foster science and technological leadership by protecting intellectual property, enhan

technical standards, and advancing measurement science. 

Goal 3: Observe, protect, and manage the Earths resources to promote environmental stewardship

The Department has also established a Management Integration Goal that is equally important to all opera

units: Achieve organizational and management excellence. 

Commerce Should Take Steps 

to Strengthen Its Information 

Technology Security Workforce 

(CAR-19569-1) 

With the threat of cyber attacks looming over 

government and private-sector computer networks, 

the Department of Commerce has become 

increasingly concerned about the safety of its sensitive 

information. OIG initiated this audit to address the 

Department’s need for an IT security workforce with 

the skills to protect the Department’s IT systems 

against cyber attacks. We assessed the Department’s 

efforts to develop and maintain an effective IT security 

workforce because we have long identified information 

security as a top challenge for management. 

Our audit focused on the IT security personnel at 

nine Commerce operating units: Bureau of Industry 

and Security, Census, International Trade 

Administration, National Institute of Standards 

Technology, NOAA’s National Environme

Satellite Data and Information Service and 

National Weather Service, National Telec

munications and Information Administrat

Office of the Secretary, and U.S. Patent 

Trademark Office. 

We reviewed the IT security employees’ special

training, certification, security clearances, 

professional development efforts. Our sam

consisted of the IT security workforce responsible 

11 information systems in various operating un

We chose systems that we believed the Departm

and operating units would place particular emph

on staffing with experienced and trai

professionals because of the security requirement

the information they handle. 

In our audit, we discovered that the Departm

needs to devote more attention to the developm

and guidance of its IT security personnel who pro

17 
instances in which IT security responsibilities were 

not included in employees’ formal performance 

plans. Also, personnel with significant security roles 

were not always formally notified of their duties. 

●	 Finally, we found that some IT security personnel 

in the operating units we audited did not have the 

level of security clearance Department policy 

requires. The IT security workforce on the front 

line of protecting the Department’s assets should 

have levels of clearance commensurate with their 

responsibilities. 

To develop and maintain an effective IT security 

workforce, we recommended Commerce implement 

a Department-wide plan that will address the 

deficiencies identified in this audit. We advised 

Commerce to make necessary revisions to its current 

IT security policy to support the plan. The plan 

should include actions to 

●	 enhance the professional development of personnel 

with significant IT security responsibilities, 

including developing and implementing a 

requirement for IT security certifications; 

●	 identify essential training, ensure workforce 

members receive appropriate role-based and 

security awareness training, and track the training 

that has been taken; 

●	 formally document the roles and duties of 

employees having significant IT security 

responsibilities and include IT security as a critical 

element in their performance plans; and 

establishing certification requirements, 

professionalizing the workforce through appropr

educational requirements. The Department ag

with our audit findings and made a commitmen

address our recommendations immediately. 

Nonfederal Audit Activities 

In addition to undergoing OIG-performed aud

certain recipients of Commerce financial assista

are periodically examined by state and l

government auditors and by independent pu

accountants. OMB Circular A-133, Audits of St

Local Governments, and Non-Profit Organizations, 

forth the audit requirements for most of these aud

For-profit organizations that receive Advan

Technology Program (ATP) funds from NIST 

audited in accordance with Government Audi

Standards and NIST Program-Specific Au

Guidelines for ATP Cooperative Agreements, issued 

the Department. 

We examined 147 audit reports during 

semiannual period to determine whether t

contained any audit findings related to Comm

programs. For 70 of these reports, the Departm

acts as oversight agency and monitors the aud

entity’s compliance with OMB Circular A-133 

NIST’s program-specific reporting requireme

The other 77 reports are from entities for wh

other federal agencies have oversight responsibi

We identified 9 reports with findings related to 

Department of Commerce. 

18 
The following table shows a breakdown by operating 

unit of approximately $331 million in Commerce 

funds audited. 

Bureau Funds 

Economic Development Administration $51,706,651 

Minority Business Development Agency 792,760 

National Institute of Standards and Technology* 30,094,372 

National Oceanic and Atmospheric Administration 19,919,182 

National Telecommunications and Information Administration 1,524,798 

Multi-Agency 227,090,897 

Total $331,128,660 

* Includes $23,307,034 in ATP program-specific audits. 

We identified a total of $1,277,948 in federal 

questioned costs. In most reports the subject 

programs were not considered major programs; thus 

the audits involved limited transaction and 

compliance testing against laws, regulations, and 

grant terms and conditions. The nine reports with 

Commerce findings are listed in Appendix B-1. 

(Regional Offices of Audits) 

19 

’

NDUSRND SCUR

The Bureau of Industry and Security is primarily responsible for administering and enforcing 

nations system for controlling exports of sensitive dual-use goods and technologies. BIS’ m

functions include formulating and implementing export control policy; processing export lic

applications; conducting various policy, technical, and economic analyses; promulgating regulati

conducting industry outreach; and enforcing the Export Administration Act and regulations. BIS has 

primary organizational units: 

Export Administration implements U.S. export control and nonproliferation laws and policies through exp

licensing, commodity classifications, and advisory opinions; technical, economic, foreign availability, 

policy analyses; promulgation of regulations; and industry outreach. It also conducts various defense indu

activities and enforces industry compliance with arms control treaties. 

Export Enforcement participates in reviews of export license applications and conducts criminal 

administrative investigations relating to the export control portions of the Export Administration Act 

regulations. It also administers and enforces the antiboycott provisions of the act and regulations. 

Federal Information Security 

Management Act of 2002: Two 

Reviews Uncover Deficiencies 

and Vulnerabilities 

FISMA requires federal agencies to identify and 

provide security protection of information collected 

or maintained by them or on their behalf. 

Inspectors general are required to annually evaluate 

agencies’ information security programs and 

practices. These evaluations must include testing of 

a representative subset of systems and an assessment, 

based on that testing, of the entity’s compliance 

with FISMA and applicable requirements. During 

this semiannual period, we conducted reviews of 

two IT systems at BIS. 

FY 2009 FISMA Assessment o

BIS Information Technology 

Infrastructure (OSE-19574) 

Continuous monitoring is a critical p

accreditation aspect of the security certification 

accreditation process. Effective continu

monitoring requires configuration management 

control of information system components, secu

impact analyses of changes to the system, assessm

of security controls, and status reporting. We sou

to determine whether, due to continu

monitoring, (1) officials are kept informed about 

status and effectiveness of security controls; (2) 

promptly mitigates any deficiencies; and (3) BIS 

resolved deficiencies we noted in our FY 2

evaluation. Our review covered our assessment of 

continuous monitoring of BIS’ IT infrastruc

system since its accreditation in 2006. 

21 
reaccredit this IT system. Thus, BIS should not have 

reported to the Office of Management and Budget 

and the Department that annual assessments of 

security controls were conducted or that the system 

was certified and accredited. BIS’ then-chief 

information officer stated that budget constraints 

precluded BIS from taking appropriate actions. 

Until such protections are in place, this system will 

remain vulnerable. 

We are making many specific recommendations 

aimed at putting into place a system in which 

changes are documented, monitoring of selected 

security controls is continuous, and authorizing 

officials are informed of and address risks. 

providing sufficient information about the status 

effectiveness of security controls, and the system 

its information are adequately protected. 

We found that the C&A did not meet Departmen

FISMA requirements. Security plann

deficiencies—in particular, the lack of defi

security requirements—undermined the certifica

team’s ability to assess controls accurately 

completely. We found that (1) key security plann

activities necessary for C&A were not perform

(2) secure configuration settings were not defined 

IT products prior to the security control assessm

(3) the security control assessment was not adequ

(4) the authorizing official’s accreditation deci

violated Department and BIS IT security policy 

FISMA guidance, (5) reporting procedures requ

by Department IT policies were not followed, 

(6) vulnerabilities existed that required remediati

We are making many specific recommendations aim

at improving BIS’ C&A process, and bringing it 

conformance with both FISMA and departme

requirements. We are also recommending that 

address the vulnerabilities that we found in our on

assessment of security controls. 

22 
’

’

ADMINISTRATION
 

The Economics and Statistics Administration analyzes economic activity, formulates policy opti

and produces a major share of U.S. government economic and demographic statistics. The c

economist monitors and analyzes economic developments and directs studies that have a bearing 

the formulation of economic policy. ESA has two principal organizational units: 

Census Bureau is the country s preeminent statistical collection and dissemination agency. It publishes a w

variety of statistical data about the nations people and economy, conducting approximately 200 annual surv

in addition to the decennial census of the U.S. population and the quinquennial census of industry. 

Bureau of Economic Analysis prepares, develops, and interprets the national income and product accou

(summarized by the gross domestic product), as well as aggregate measures of international, regional, and s

economic activity. 

Census 2010: Cost, 

Performance, and Quality 

Issues an Ongoing Focus of 

OIG Activities 

An accurate decennial census is required for 

congressional apportionment and redistricting, the 

annual distribution of more than $400 billion in 

federal funds to states and localities, and government 

and business planning and decision making. 

Accordingly, our oversight of the 2010 census has 

been an ongoing priority. We began our work in 

2002 with a report on lessons learned, Improving Our 

Measure of America: What Census 2000 Can Teach Us 

in Planning for 2010. Since that time, we have 

issued more than 20 reports highlighting continuing 

weaknesses in key decennial areas, including 

contracting, maps and address lists, systems 

development, and enumerating hard-to-count 

populations. Our recent and ongoing work, 

described in the summaries below, identifies 

problems, indicates where oversight is needed, 

provides lessons learned for future census activiti

Observations and Address 

Listers’ Reports Provide Serio

Indications That Important 

Address Canvassing 

Procedures Are Not Being 

Followed (OIG-19636-01) 

To conduct the 2010 census, the Census Bureau 

contact, via mail or in person, more than 130 mil

housing units, occupied or vacant, and will rely on 

master address file and maps to do so. During 

address canvassing operation, decennial s

collected addresses and geographic information 

update the address file and maps. This operation 

$444 million, almost 25 percent over bud

(excluding the cost of handheld compute

employed approximately 140,000 temporary wor

23 
listers were following Census procedures. 

Findings 

Limited in number and not conducted on a 

statistically drawn sample, our observations cannot 

be considered representative of the entire operation. 

Nevertheless, we found inconsistencies that, if left 

unaddressed, may negatively impact the quality of 

the 2010 census address list and may cause Census to 

incur additional costs in subsequent quality control 

and enumeration operations. 

Our field observations and information 

independently provided to us by address listers show 

that listers were not consistently following certain key 

procedures conveyed in the Census address 

canvassing manual and during three days of rigidly 

scripted training. When listers encounter a structure 

in the field, they must determine if that structure 

contains living quarters. Through interviews with 

occupants, they determine whether the structure is a 

single residence, contains separate housing units, or is 

a group quarters such as a nursing home, college 

residence hall, group home, or shelter. The lister also 

determines whether addresses should be added to or 

deleted from the address list. 

We found that listers did not consistently knock on 

doors, and we observed listers map-spotting addresses 

from their cars instead of collecting a map spot at or 

near the main entrance of a structure, as instructed. 

This failure of listers to correctly use the handhelds’ 

GPS capability—a key component of Census’s more 

than $800 million Field Data Collection Automation 

pressure to complete their assignments withi

limited time frame and to minimize or av

overtime. 

Recommendations 

In April, we recommended to Census tha

immediately communicate with its field office

reinforce the need to follow documented procedu

Census responded rapidly by issuing an e-mai

field staff and conducted a teleconference with 

regional directors about the issue. To promote 

accurate address list and contain costs, we l

recommended that Census 

●	 conduct an analysis of assignment areas wh

listing operations were completed materially ah

of schedule to determine whether early comple

of production may indicate areas where proced

were not followed. These areas should rec

special attention using additional quality con

checks in ongoing and upcoming add

canvassing quality control operations. 

●	 finalize the contingency plan for improving add

list quality in the event that the results of 

address canvassing operation are found to 

deficient. 

●	 analyze the costs and benefits of 100 perc

address canvassing in planning for the 2

decennial census, and consider whether alterna

more effective strategies for developing the add

list are feasible. 

24 
blocks containing over 720 addresses. Although 

Census worked with its FDCA contractor to improve 

the handhelds’ performance, it considered the risk 

associated with blocks containing 1,000 addresses or 

more too high based on performance testing results. 

This problem required Census to rapidly develop an 

alternative method for canvassing large blocks. 

Although large blocks represent only about two 

percent of all addresses, the large block canvassing 

operation, carried out between January and June 

2009, gave us an early opportunity to review a 

decennial field operation and to determine whether 

large block address canvassing procedures, 

technology, and operations were effective. We 

conducted our review at eight Census field offices 

around the country and found several issues related 

to Census’s approach to the operation. 

Findings 

Need for a Quickly Developed Contingency Plan 

Increased the Opportunity for Errors 

Census had no contingency plan for the inadequate 

performance of the handhelds noted in dress 

rehearsal. It quickly considered three options, 

including the use of pencil and paper, for listing large 

blocks and finalized a plan only 4 months prior to the 

start of the large block field operation. The option 

chosen was to use ALMI, a software program in use 

at Census field operations since 2003. Census 

conducted three tests of the ALMI software in 2008, 

but none of these tests simulated the entirety of 

events that occur during a decennial operation. 

The bureau did not fully understand the magnitude 

of the large block effort until late October 2008, less 

than 3 months before the start of the operation in 

The primary address canvassing procedures inclu

the use of handhelds and required listers to knock 

doors and attempt to make contact at every struc

that contained a living quarters. However, for 

large block operation, listers needed only to cond

interviews at housing units with missing ho

numbers or with the managers of large multi-

apartments and mobile home parks. We obser

instances where the combination of not walking 

route and not talking to residents increased 

possibility of missing housing units or other liv

quarters. 

Further, the short battery life of the ALMI lap

created the potential for further inconsistencies w

primary address canvassing procedures. Some lis

took time away from orderly canvassing to ch

batteries at a public facility; others drove their 

around their assignment areas and plugged 

laptops into a car outlet. Driving rather than walk

was not consistent with the prescribed proced

and precluded a thorough canvassing. 

Delayed Quality Control Operation Prevented E

Identification of Poorly Performing Listers 

The large block operation included a quality con

process intended to identify listing errors and 

scheduled to follow closely after production lis

operations. The purpose of this timing was to qui

check a sample of completed assignments in orde

improve accuracy by identifying poorly perform

listers and providing them with additional trainin

other remedies as needed. The bureau’s decision 

use the ALMI software for quality control, altho

never designed to accommodate certain decen

practices, exposed a software problem that dela

the start of quality control for several weeks. Lis

could continue making errors before their work 

25 
quarters in subsequent operations. However, the 

ALMI laptops did not have GPS capability and the 

maps included on the laptops were based on 

tabulation geography that included invisible lines 

(i.e., boundaries not based on physical features). The 

lack of GPS capability and the use of tabulation 

geography in large block canvassing caused a number 

of accuracy-related problems for listers. 

Extending the Use of the Handhelds to Subsequent 

Operations Could Improve the Quality of the 

Decennial Census 

Incorrect placement of housing unit map spots 

jeopardizes Census’s ability to ensure that living 

quarters are recorded within the correct census block. 

This, in turn, affects the efficiency and accuracy of 

enumerating the population and its tabulation in 

geographic areas. Continued use of the handhelds’ 

GPS capability as a locating device could improve 

quality and reduce costs of operations in rural areas, 

where addresses are generally more difficult to find. 

Contingency Planning 

Problems associated with the large block operation 

underscore the need for a well thought-out 

contingency plan covering all of the critical 

operations coming up in the decennial calendar. 

Because Census does not have completed 

contingency plans for all critical operations, it needs 

to have these plans well developed and documented 

so, if needed, they can be implemented with as little 

impact as possible to the accuracy, efficiency, and 

stability of the 2010 Census. 

py

to determine if housing units have been misse

incorrectly located; and 

● consider using handhelds for their GPS loca

capacity for operations such as update/le

update/enumerate, and non-response follow-u

take greater advantage the technology develo

under the FDCA contract and achieve a m

accurate address list and enumeration. 

2010 Census: First Quarterly 

Report to Congress 

(OIG-19791-01) 

Since first conducted in 1790, the constitution

mandated decennial census field activities h

largely been paper-based operations. The 2

Census plan included significant expansion 

automation, using handhelds to verify addre

(address canvassing), conduct in-person surveys w

households that did not return their questionna

(nonresponse follow-up), and collect data from 

nationwide sample to evaluate the accuracy of 

decennial count (coverage measureme

Nonresponse follow-up is the most expensive 

labor-intensive operation of the decennial cen

Increasing costs and automation problems promp

the bureau’s decisions to abandon the handhelds 

nonresponse follow-up and coverage measurem

operations but still use them for address canvassi

The Supplemental Appropriations Act of 2008 g

Census an additional $210 million to help c

spiraling 2010 decennial costs stemming from 

bureau’s problematic efforts to automate major f

operations via handhelds, major flaws in its c

estimating methods, and other issues. The 

26 
tracking schedule activities, cost, and riskmanagement activities. 

In our review, we discovered that inherent weakness 

in its systems and information for tracking schedule 

activities, cost, and risk-management activities have 

long hampered the bureau’s ability to effectively 

oversee decennial progress. The overarching problem 

is that these systems and information are not 

integrated in a manner that allows for effective 

program management measured against earned value 

metrics. As a result, Census does not have a direct 

link between the schedule of specific activities, the 

cost of those activities, and the work actually 

accomplished. This ability to generate earned value 

measures makes it difficult to forecast cost overruns 

and underruns. 

The bureau implemented a risk-management process 

that was an improvement over the prior decennial, 

which lacked a formal risk-management process, but 

issues remain. Specific limitations that impact the 

bureau’s management of the decennial census 

include: 

●	 not using critical path management, 

●	 no thorough up-front review of project start and 

end dates, 

●	 limited integration of major contractor activities, 

●	 no integration of schedule activities and budget 

plan/expenditure information, 

In addition, we found that Census did not clearly 

accurately report on the status of the IT security 

associated with the FDCA system, which includes 

handheld computers, and ceased reporting it as a 

issue in the Monthly Status Report, even though 

issue had not been adequately resolved. 

Our recommendations, which we forwarded 

Census in a separate document, included 

●	 strengthening its process for preparing 

reviewing Monthly Status Reports to ensure 

they fully and accurately report all key issues 

significant risks, as well as other relev

information; 

●	 using its project management software with 

2020 Census to integrate planned budget 

expenditure information with schedule activitie

better track the status of available funds, fore

impending overruns and underruns so that fu

can be reallocated promptly, and improve 

transparency of decennial status to overs

officials and stakeholders; and 

●	 developing a robust and transparent process for 

2020 Census to document significant decisions 

trade-offs in order to understand estimated cos

27 
---
SNDRDS ND CNOOG

The National Institute of Standards and Technology promotes U.S. innovation and indus

competitiveness by advancing measurement science, standards, and technology in ways that enha

economic security and improve quality of life. NIST manages four programs: the Techno

Innovation Program, the Manufacturing Extension Partnership program, the Baldrige National Qua

Program, and NIST Research Laboratories. 

The University of Texas at 

Arlington Manufacturing 

Extension Partnership Award 

No. 70NANB5H1005 

(DEN-18573) 

Congress established the MEP program in 1988 to 

offer technical and business management assistance 

to manufacturers, with the goal of improving their 

profitability, productivity, and global competitiveness. The program, operated by NIST, provides 

partial federal funding to nonprofit organizations to 

operate MEP centers that offer an array of services to 

business and industry clients. The funding is made 

available through cooperative agreements that require 

nonfederal matching funds from state or regional 

partners to support center operations. Today there is 

at least one center in every state and a total of 

59 MEP centers located across the country. 

The University of Texas at Arlington (UTA) received 

a NIST cooperative agreement in March 2005 to 

continue operating the Texas Manufacturing 

Assistance Center—a network of seven centers 

operating throughout the state. The award, as 

amended, provided funding for 33 months 

(December 2004-August 2007). Total estimated costs 

of the project were $42 million. The federal share 

capped at $14 million (33 percent) of allowable co

We audited the MEP to determine whether 

claimed costs were allowable under the terms of 

agreement and whether the recipient had comp

with all other MEP operating guidelines, aw

terms, and conditions. We also examined c

submitted to UTA by two subrecipient

Texas Engineering Extension Service 

Southwest Research Institute—that recei

cooperative agreement funding from the MEP 

operate centers. 

UTA claimed costs totaling $21 million for 

period September 2005 through March 2007, 

received federal reimbursements of $6.6 million. 

questioned $1,619,280 of these costs, as follows: 

●	 $1,533,055 in costs submitted to UTA 

subrecipient Texas Engineering Extension Ser

for, among other things, services from contrac

that the contracting firms provided as part of t

normal course of business, not as a result of t

MEP association; activities the extension ser

could not document as having been incurred 

part of MEP-funded work; and indirect costs 

exceeded the approved budget. 

29 
erroneously claimed certain indirect costs, totaling 

$63,412, as in-kind contributions. 

We recommended that NIST disallow $1,619,280 in 

questioned costs and recover $94,120 in excess 

federal funds. 

Federal Information Security 

Management Act of 2002: 

Two Reviews Find Compliant 

IT Security 

FISMA requires federal agencies to identify and 

provide security protection of information collected 

or maintained by it or on its behalf. Inspectors 

general are required to annually evaluate agencies’ 

information security programs and practices. These 

evaluations must include testing of a representative 

subset of systems and an assessment, based on that 

testing, of the entity’s compliance with FISMA and 

applicable requirements. 

During this semiannual period, we assessed the 

certification and accreditation of two NIST 

IT systems. 

FY 2009 FISMA Assessment of 

the Manufacturing Engineering 

Laboratory Managed 

Infrastructure (OSE-19511) 

In general, our review of the certification and 

accreditation of NIST’s Manufacturing Engineering 

Laboratory Managed Infrastructure was positive. 

Due in part to the departmental Chief Information 

applications; (3) some certification weaknesses 

control assessments; and (4) vulnerabilities uncov

by our assessments that require remediation. 

Our recommendations concern documentat

conformance with NIST guidance, the applicatio

security controls to all relevant IT products, 

remediation of vulnerabilities identified by OIG. 

FY 2009 FISMA Assessment o

Application Systems and 

Databases (OSE-19512) 

Our assessment of the C&A of NIST’s Applica

Systems and Databases system noted so

deficiencies with security planning prior to 

certification phase. However, NIST’s C&A proces

in particular, its assessment of security controls—

produce sufficient information for the authori

official to make a credible, risk-based decision 

approve system operation. At the same time, NIS

security planning process needs improvement, se

configuration settings had not been established fo

IT products, some minor improvements are neces

in control assessments, and we found spec

vulnerabilities requiring remediation. 

We are making several recommendations, includ

those dealing with security planning steps, correc

of identified deficiencies, conformance with N

guidance, post-remediation testing, and continu

monitoring. 

30 
’ 

’

MOSRC DMNSRON

The National Oceanic and Atmospheric Administration mission is to understand and predict chan

in Earths environment and conserve and manage coastal and marine resources to meet our nati

economic, social, and environmental needs. NOAA does this through six line offices: 

National Weather Service reports the weather of the United States and provides weather forecasts and warn

to the general public. 

National Ocean Service provides products, services, and information that promote safe navigation, supp

coastal communities, sustain marine ecosystems, and mitigate coastal hazards. 

National Marine Fisheries Service conducts a program of management, research, and services related to 

protection and rational use of living marine resources. 

National Environmental Satellite, Data, and Information Service observes the environment by operatin

national satellite system. 

Office of Oceanic and Atmospheric Research conducts research related to the oceans and Great Lakes, the lo

and upper atmosphere, space environment, and the Earth. 

Office of Program Planning and Integration develops and coordinates NOAAs strategic plan, supp

organization-wide planning activities, guides managers and employees on program and performa

management, and integrates policy analyses with decision-making. 

Concerns over NOAA’s that eventually resulted in a series of grants tota

Oversight of Grants and 

Contract with Finger Lakes 

Production International, 

Incorporated 

(Final Report No. CAR-19201)

o

e

t 

a

ak

a

po

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N

96

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We

vi

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8 

t

er

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 f

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le- i

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ry 

es e

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31 

In August 2002, Finger Lakes entered into a s

source contract with NOAA’s Office of Oc

Exploration to produce 86 radio spots at a cos

$100,000 over a 6-month period ending in Janu

2003. After the contract expired, Finger L

applied for and received a financial assistance aw

$490,000 in funding to continue producing NO

sored radio spots over a 2-year period. 

ber 2006, Finger Lakes sought payment f

AA in the amount of $526,000 for 456 

radio spots produced over a 4-year period. 

audited NOAA’s oversight of its grants 

ract with Finger Lakes to determine whe

nal control weaknesses were evident through

AA’s business dealings with Finger Lakes. 

ound that weaknesses in internal controls w

ent throughout NOAA’s business dealings w

er Lakes. NOAA’s relationship with 
Specific examples of NOAA’s actions include: 

●	 Inappropriate Notification of a Grant Award. The 

then-director of NOAA’s Office of Exploration 

inappropriately notified Finger Lakes of a grant 

award in advance of the grants officer’s official 

notification. 

●	 Inadequate Grants Management. Both the grants 

management office and the program office failed to 

convey to Finger Lakes key information about 

requirements for tracking and reporting incurred 

costs. 

●	 strengthens grants and procurement inte

controls to include stronger oversight of prog

officials’ interactions with current and prospec

grant and contract recipients, and prov

additional guidelines and training for these offi

to ensure they understand their appropriate ro

and 

●	 revisits the circumstances surrounding the rev

and approval of the scripts produced by Fin

Lakes under joint Smithsonian/NOAA sponsor

and determines whether NOAA’s actions resu

in an unauthorized commitment of $50,000. 

32 
COMMUNCONS ND

INFORMATION ADMINISTRATION

The National Telecommunications and Information Administration serves as the executive bran

principal advisor to the President on domestic and international telecommunications and informa

policy issues. NTIA manages the federal use of the electromagnetic spectrum; provides grants 

national information and public broadcasting infrastructure projects; and performs telecommunicat

research and engineering. It works to enhance citizens’ access to cable television, telephone, and o

telecommunications services; and educates state and local governments and other entities on ways to 

information technology and telecommunications more effectively. 

Public Safety Interoperable 

Communications Grant 

Awards: OIG Begins Required 

Financial Audits 

The Digital Television and Public Safety Act of 2005 

authorized NTIA, in consultation with the 

Department of Homeland Security (DHS), to 

implement the PSIC program—a $1 billion onetime, formula-based matching grant program 

intended to enable public safety agencies to establish 

interoperable emergency communications systems 

using reallocated radio spectrum. NTIA required a 

minimum 20 percent matching share from 

nonfederal sources for the acquisition and 

deployment of communications equipment and for 

management and administration costs. The award 

period runs from October 1, 2007, to September 30, 

2010, by which time all funds must be expended. 

The Implementing Recommendations of the 9/11 

Commission Act of 2007 requires the Commerce 

Inspector General to conduct financial audits, over 4 

years, of a representative sample of at least 25 st

or territories receiving PSIC grants. During 

semiannual period, we audited costs claimed by g

recipients in Louisiana (our first audit under 

requirement) and Texas to determine whether t

complied with NTIA PSIC grant guidelines and 

DHS award terms and conditions. 

Louisiana PSIC Grant Award 

No. 2007-GA-H7-0014 

(DEN-19427) 

On September 30, 2007, NTIA awarded 

$19,672,287 PSIC grant to the state of Louisi

The governor of Louisiana designated the Govern

Office of Homeland Security and Emerge

Preparedness (GOHSEP) as Louisiana’s s

administrative agency to apply for and admin

PSIC funds. 

Our audit covered the award period of Octobe

2007, through December 31, 2008, during wh

time GOHSEP claimed total costs of $7,749,964

33 
by the September 30, 2010, PSIC program 

deadline. 

●	 met the minimum 20 percent matching share 

requirement in place from nonfederal sources for 

acquiring and deploying interoperable equipment, 

and managing and administering the projects, as 

required by The Digital Television Transition and 

Public Safety Act, the PSIC Program Guidance and 

Application Kit, and the award’s special conditions. 

●	 complied with grant terms and conditions by 

improving the timeliness of its financial reporting, 

complying with the cash drawdown requirement 

for drawing down funds 30 days prior to 

expenditure or a disbursement, and complying 

with the 80 percent pass-through requirement by 

passing through $16.7 million, about 85 percent, 

of the $19.7 million of PSIC federal funds to 

64 parishes. 

●	 claimed costs of $7,749,964 in its December 31, 

2008, financial status report, which were 

determined reasonable, allowable, and allocable 

according to PSIC grant regulations. 

We made no formal recommendations in our report, 

but did identify ways to further enhance internal 

controls. 

●	 We suggested that GOHSEP’s interoperability 

program office record the matching share in its 

grant management system, which was 

implemented prior to the end of our fieldwork. 

●	 Although our review of GOHSEP’s financial status 

reports determined two of five reports were not 

On September 30, 2007, NTIA awarded 

$12,042,417 PSIC grant to the state of Nevada. 

governor of Nevada designated the Departmen

Public Safety’s Division of Emergency Managem

(DEM) as Nevada’s state administrative agency 

apply for and administer PSIC funds. 

Our audit covered the award period of Octobe

2007, through December 31, 2008, during wh

time DEM claimed total costs of $605,113. 

general, we found DEM to be in compliance w

requirements and on track to complete the projec

time because it 

●	 prepared an investment justification detailing 

individual communications projects that 

intended to achieve meaningful and measur

improvements in interoperability and fill g

identified in the statewide communicati

interoperability plan and anticipates completin

investments on schedule by the September 

2010, PSIC program deadline; 

●	 complied with grant terms and conditions 

submitting all of its financial status reports wi

the required 30-day time period and comply

with the 80 percent pass-through requiremen

passing through $9.9 million, about 82 percen

the $12 million in PSIC federal funds; 

● claimed costs of $605,113 in its December 

2008, financial status report, which w

determined reasonable, allowable, and alloc

according to PSIC grant regulations; and 

●	 implemented several notable best practices in 

administration of the PSIC program. 

34 
vehicles in an interest-bearing account. As a result, 

we determined imputed interest of $5,348 is due to 

the U.S. Department of the Treasury. 

We recommended that the NTIA Assistant 

Secretary for Communications and Information, in 

return imputed interest of $5,348 to the U

Department of Treasury. 

35 

The mission of the Office of Inspector General is to improve the programs and operations of 

Department of Commerce through independent and objective oversight. Through our aud

inspections, performance evaluations, and investigations, we propose innovative ideas and construc

solutions that lead to positive changes for the Department. By providing timely, useful, and reli

information and advice to departmental officials, the administration, and Congress, our work helps imp

Commerce management and operations as well as its delivery of services to the public. 

Office of Investigations 

Former U.S. Patent and 

Trademark Office Employee 

and Co-conspirator Pled 

Guilty in $500,000 

Embezzlement Scheme 

On August 27, 2009, a former financial analyst for the 

USPTO pled guilty on charges of conspiracy to commit 

wire fraud in violation of 18 USC § 1349, in 

connection with an embezzlement scheme. This 

followed the August 10, 2009, guilty plea of her coconspirator, who was not affiliated with the federal 

government. The former USPTO employee managed 

an account into which USPTO customers deposited 

funds for the purpose of paying expenses incurred in 

processing their patent and trademark applications. 

From 1998 to 2005, the former employee transferred 

funds from this account to accounts controlled by the 

co-conspirator. The former employee fraudulently 

concealed the transfers by making them look like refund 

payments to USPTO customers. Her co-conspirator 

then paid a portion of the stolen funds back to her in 

cash. The former employee engaged in 32 fraudulent 

transfers from USPTO totaling $534,338.55. Twentyseven of the transactions, accounting for $451,252.17, 

involved the co-conspirator. 

According to the terms of the plea agreements, 

two conspirators are equally responsible for pay

the full amount of the ordered restitution to the U

Treasury. The former employee and her 

conspirator are scheduled for sentencing in the U

District Court for the Eastern District of Virgini

November 2009. Irregularities in refunds being m

from the deposit account were first detected by 

management in USPTO’s Office of Finan

Management. They reported the irregularities 

auditors from our Office of Audit and Evaluation

ensuing investigation conducted by our Office 

Investigations uncovered the full extent of 

conspiracy and fraudulent acts which were repo

to the U.S. Attorney’s Office for the Eastern Dis

of Virginia for prosecution. (Washington Field Off

Employee Suspended for 

Violation of Security 

Procedures 

In April 2009, a Department of Commerce emplo

was suspended for 7 days for attempting to b

weapons into the Department’s Washing

headquarters building and intentionally circumven

the security screening process. In July 2008, 

employee was randomly selected for a secu

screening upon entering the facility. At the time

possessed a knife, an expandable baton, and Oleor

Capsicum spray. Shortly after the inspection be

37 
(Washington Field Office) 

NOAA Employee Pled Guilty, 

Sentenced on Wire Fraud 

In our March 2009 Semiannual Report, page 51, we 

reported that a NOAA Corps shipboard employee 

was fired for misuse of his government purchase 

card. During a November 2008 search warrant, the 

employee’s personal racing motorcycle was seized 

and found to contain approximately $18,000 in 

aftermarket parts, purchased using his government 

purchase card. On April 1, 2009, the employee was 

indicted on one count of theft of government 

property in violation of 18 USC § 641 and 8 counts 

of wire fraud in violation of 18 USC §1343. On June 

9, 2009, the employee pled guilty to one felony count 

of wire fraud. Per the terms of the plea agreement, the 

other 8 counts of the indictment were dismissed. On 

September 29, 2009, the former employee was 

sentenced to 4 months’ home detention and 

32 additional months of probation, and ordered to 

pay a $100 special assessment, a $1,000 fine, and 

$251.27 in restitution. That restitution supplements 

a prior administrative repayment of $17,472.17, 

previously made by the subject to NOAA. (Silver 

Spring Resident Office) 

Former Bureau of Industry 

and Security Special Agent 

Arrested, Convicted, and 

Sentenced for Misuse 

of Position 

As reported in our September 2007 Semiannual Report, 

page 50, a former criminal investigator with the BIS 

deported, and accessed the Treasury Enforcem

Communications System, a secure, individu

password-protected law enforcement tracking data

usable only in the performance of official duties. W

questioned by investigators and supervisors, the for

agent lied about the number of occasions on which 

accessed the investigative computer database 

personal reasons. 

On April 28, 2009, the subject was arrested an

superseding information was filed, on which 

former agent pled guilty to one count of violating 

USC § 1030, which prohibits the misuse 

government computer databases. He was senten

on August 12, 2009, to three years’ probation an

pay a $1,000 fine and $25 special assessment

special conditions of probation, he agreed 

participate in psychological counseling at his o

expense and to have no contact with the woman 

had threatened. (Atlanta Field Office) 

Arrests, Indictments, 

Convictions, and Sentences 

Continued in International 

Telemarketing Fraud Case 

Results continue from our joint, internatio

investigation, previously reported in mult

Semiannual Reports, of a major internatio

telemarketing fraud scheme perpetrated by ca

falsely identifying themselves as employees of 

Department of Commerce and other fed

agencies. Callers told victims they had won h

sweepstakes prizes in a national lottery sanctioned 

the U.S. government. The victims were instructe

use commercial wire transfer services to s

payments of $1,500 to $4,500 to Costa R

38 
to federal prison as ordered. Two other participants 

pled guilty to charges related to their participation in 

the fraud scheme, bringing the total convictions for 

this 6-year investigation to 39. Sentences were 

handed down against nine of the convicted subjects. 

The sentences imposed ranged from 3 to 50 years and 

monetary restitution was ordered totaling 

$38,166,392 for this reporting period, along with 

over $20 million in financial forfeitures, fines, and 

special assessments. (Atlanta Field Office) 

Other OIG Activities 

Principal Assistant Inspector 

General for Audit and 

Evaluation Testified on 

Oversight of 2010 Decennial 

Census and Integrated 

Communications Campaign 

On September 22, 2009, the principal assistant 

inspector general for audit and evaluation testified 

before a subcommittee of the House Oversight and 

Government Reform Committee on the Census 

Bureau’s management of the 2010 decennial census 

and its integrated communications campaign. Her 

testimony before the Information Policy, Census, and 

National Archives Subcommittee also covered 

findings from OIG’s first quarterly report to 

Congress on the 2010 census. 

Her testimony summarized continued weaknesses in 

key Census operations, the identification of which 

has been an ongoing OIG priority and the subject of 

more than 20 OIG reports and reviews since 2002. 

these activities include promotional materials, m

advertising, and outreach with national, regio

tribal, and local governments, business, 

nonprofit organizations. 

It also summarized the findings of our first quart

report to Congress, a requirement contained in 

Supplemental Appropriations Act of 2008, wh

gave the bureau an additional $210 million to h

cover spiraling 2010 decennial costs. OIG fo

problems with program management systems, 

management, and reporting transparency. 

The testimony concluded by listing five major a

we will watch in the future: 

● the bureau’s evaluation of the quality of the ma

address file and its plans for any subsequ

improvement actions; 

● the communications campaign’s effectiveness 

providing promotional materials and adverti

that are timely, on message, and within budget

● the effectiveness of the vastly increased partner

staff to promote outreach efforts to hard-to-co

populations; 

●	 the bureau’s progress in developing the autom

paper-based operations control system—neede

manage enumerator assignments and track t

progress—on a highly compressed schedule; an

●	 components of the enumeration process, includ

nonresponse follow-up. 

(View the complete testimony at www.oig.doc.gov

39 
A. Report Types this Period 

A-1. Performance Audits 

43 

43 

A-2. Financial Assistance Audits 43 

A-3. Evaluations and Inspections 

B. Processed Audit Reports 

44 

45 

B.1. Processed Reports with Audit Findings 46 

APPENDIXES 

Table 1. Investigative Statistical Highlights for this Period 

Criminal Investigative Activities 

Arrests 3 

Indictments and informations 5 

Convictions 6 

Personnel actions 3 

Fines, restitution, judgments $58,154,43

Allegations Processed 

Accepted for investigation 18 

Referred to operating units 36 

Evaluated but not accepted for investigation or referral 27 

Total 81 

Audit Resolution and Follow-Up
 

The Inspector General Act Amendments of 1988

R

a

t

f

a

,

.

s

D

m

u

o

o

c

require us to present in this report those audits issued

before the beginning of the reporting period (April 1

2009) for which no management decision had been

made by the end of the period (September 30, 2009)

Nine audit reports remain unresolved for thi

reporting period (see page 47). 

40 

epartment Administrative Order 213-5, A

esolution and Follow-up, provides procedures 

anagement to request a modification to an appro

dit action plan or for a financial assistance recip

 appeal an audit resolution determination. 

llowing table summarizes modification and ap

tivity during the reporting period. 
Table 3. Audit and Evaluation Statistical Highlights for this Period 

Questioned Costs $1,812,310 

Value of audit recommendations that funds be put to better use 5,348 

Value of audit recommendations agreed to by management 414,736 

Table 4. Audits with Questioned Costs 

Questioned Unsupport

Category Number Costs Costs 

A. Reports for which no management decision 

had been made by the beginning of the 

reporting period 14 $27,616,026 $5,475,953 

B. Reports issued during the reporting period 8 1,812,310 77,881 

Total reports (A+B) requiring a management 

decision during the period1 22 29,428,336 5,553,834 

C. Reports for which a management decision 

was made during the reporting period2 6 1,294,995 487,055 

i. Value of disallowed costs 247,449 99,850 

ii. Value of costs not disallowed 1,065,797 405,456 

D. Reports for which no management decision 

had been made by the end of the 

reporting period 16 28,133,341 5,066,779 

1 	Two audit reports included in this table are also included among reports with recommendations that funds be put to better use 

(see table 4). However, the dollar amounts do not overlap. 

2	 In Category C, lines i and ii do not always equal the total line C because resolution may result in values greater than the original 

recommendations. 

41 
pg p

7,

i. Value of recommendations agreed to by management 167,28

ii. Value of recommendations not agreed to by management 

D. Reports for which no management decision had been made by the 

end of the reporting period 2 1,098,84

1	 Two audit reports included in this table are also included among reports with questioned costs (see table 3). However, the dollar amou

do not overlap. 

2	 In Category C, lines i and ii do not always equal the total line C because resolution may result in values greater than the original 

recommendations. 

Definitions of Terms Used in the Tables 

Questioned cost: a cost questioned by OIG because of (1) an alleged violation of a provision of a 

regulation, contract, grant, cooperative agreement, or other agreement or document governing the expendi

of funds; (2) a finding that, at the time of the audit, such cost is not supported by adequate documentation

(3) a finding that an expenditure of funds for the intended purpose is unnecessary or unreasonable. 

Unsupported cost: a cost that, at the time of the audit, is not supported by adequate documentat

Questioned costs include unsupported costs. 

Recommendation that funds be put to better use: an OIG recommendation that funds could be used m

efficiently if Commerce management took action to implement and complete the recommendation, including 

reductions in outlays; (2) deobligation of funds from programs or operations; (3) withdrawal of interest sub

costs on loans or loan guarantees, insurance, or bonds; (4) costs not incurred by implementing recommen

improvements related to Commerce, a contractor, or a grantee; (5) avoidance of unnecessary expendit

identified in preaward reviews of contracts or grant agreements; or (6) any other savings specifically identified

Management decision: management’s evaluation of the findings and recommendations included in the a

report and the issuance of a final decision by management concerning its response. 

42 
Appendix A-1. Performance Audits 

Funds to Be P

Report Title Report Number Date Issued to Better Us

Office of the Secretary 

Commerce Should Take Steps to Strengthen 

Its IT Security Workforce CAR-19569-9-0001 09/30/09 0 

Appendix A-2. Financial Assistance Audits 

Date Funds to Be Put Amount Amoun

Report Title Report Number Issued to Better Use Questioned Unsuppor

National Institute of Standards and Technology 

The University of Texas at 

Arlington DEN-18573-9-0001 06/29/09 0 534,362 0 

National Telecommunications and Information Administration 

Louisiana Public Safety 

Interoperable 

Communications Grant DEN-19427-9-0001 07/24/09 0 0 0 

Nevada Public Safety 

Interoperable 

Communications Grant DEN-19431-9-0001 09/29/09 5,348 0 0 

43 
Census Bureau 

Observations and Address Listers’ Reports Provide 

Serious Indications That Important Address 

Canvassing Procedures Are Not Being Followed OIG-19636-01 05/04/09 — 

2010 Census First Quarterly Report to Congress OIG-19791-01 08/07/09 — 

Problems Encountered in the Large Block 

Operation Underscore the Need for Better 

Contingency Plans OIG-19171-02 08/07/09 — 

National Institute of Standards and Technology 

FY 2009 FISMA Assessment of Application 

Systems and Databases (NIST 183-06) OSE-19511 08/07/09 — 

FY 2009 FISMA Assessment of Manufacturing 

Engineering Laboratory Managed 

Infrastructure (NIST 820-01) OSE-19512 08/07/09 — 

National Oceanic and Atmospheric Administration 

Concerns Over NOAA’s Oversight of Grants and 

Contract with Finger Lakes Production 

International Incorporated CAR-19201 07/02/09 — 

Office of Inspector General 

Commerce Experience with Past Relief and 

Recovery Initiatives Provides Best Practices and 

Lessons Learned on How to Balance Expediency 

with Accountability ARR-19692 05/06/09 — 

44 
y pgy 

National Institute of Standards and Technology* 20 

National Oceanic and Atmospheric Administration 35 

National Telecommunications and Information Administration 5 

Multi-Agency 33 

Total 147 

* Includes 16 Advanced Technology Program (ATP) program-specific audits. 

45 
Eight Northern 

Indian Pueblos 

Council, Inc., NM ATL-09999-9-3491 07/14/09 0 $21,749 $21,749 

SEDA Council of 

Governments, PA ATL-09999-9-3495 07/14/09 0 0 0 

Community Development 

Corporation of 

Fort Wayne, IN ATL-09999-9-3571 08/14/09 0 892,834 0 

Boston Local Development 

Corporation, MA ATL-09999-9-3535 09/01/09 0 25,990 25,990 

National Institute of Standards & Technology 

Hexatech, Inc., NC ATL-09999-9-3638 09/23/09 0 166,021 0 

Origen Therapeutics, 

Inc., CA ATL-09999-9-3583 09/23/09 0 106,757 0 

National Oceanic & Atmospheric Administration 

Commonwealth of 

Puerto Rico, 

Dept of Natural and 

Environment Resources ATL-09999-9-3471 07/14/09 0 30,142 30,142 

National Telecommunications & Information Administration 

Community Television of 

Southern California ATL-09999-9-3530 09/10/09 0 34,455 0 

46 
allowable, and allocable under contract terms and 

conditions and federal regulations. We found that the 

firm had failed to comply with numerous contract 

and federal requirements, and questioned more than 

$8.5 million in direct labor and reimbursable costs. 

Computer & High Tech 

Management, Inc. 

In our September 2005 Semiannual Report, we 

reported the results of audits of 2 of the 21 task 

orders for another firm providing IT services to 

Census. We sought to determine whether the firm 

had complied with contract terms and conditions 

and federal regulations and had billed Census for 

work performed in accordance with specifications of 

the task order. We found that the firm failed to 

comply with numerous contract and federal 

requirements, which caused us to question more 

than $10.7 million in direct labor and other 

reimbursable costs. We have suspended audit 

resolution on both of these contract audits pursuant 

to an agreement with Census. 

complex, and NIST has not provided us with 

initial audit resolution proposals. (ATL-18567, A

18568, DEN-18135) 

NOAA 

Alaska Eskimo Whaling Commission 

As reported in our March 2009 Semiannual Repo

single audit review of this NOAA grant questio

costs totaling $66,353 in expenditures that were 

adequately documented. This audit rem

unresolved because we requested that NO

postpone its submission of an audit resolu

proposal. (ATL-09999-8-3238) 

47 
5(a)(3) Prior Significant Recommendations Unimplemented 47 

5(a)4 Matters Referred to Prosecutive Authorities 40 

5(a)(5) and 6(b)(2) Information or Assistance Refused 47 

5(a)(6) Listing of Audit Reports 43-4

5(a)(7) Summary of Significant Reports 17-3

5(a)(8) Audit Reports—Questioned Costs 41 

5(a)(9) Audit Reports—Funds to Be Put to Better Use 42 

5(a)(10) Prior Audit Reports Unresolved 49 

5(a)(11) Significant Revised Management Decisions 49 

5(a)(12) Significant Management Decisions with which OIG Disagreed 49 

Section 4(a)(2): Review of Legislation 

and Regulations 

This section requires the inspector general of each 

agency to review existing and proposed legislation 

and regulations relating to that agency’s programs 

and operations. Based on this review, the inspector 

general is required to make recommendations in the 

semiannual report concerning the impact of such 

legislation or regulations on the economy and 

efficiency of the management of programs and 

operations administered or financed by the agency or 

on the prevention and detection of fraud and abuse 

in those programs and operations. Comments 

concerning legislative and regulatory initiatives 

affecting Commerce programs are discussed, as 

appropriate, in relevant sections of the report. 

Section 5(a)(3): Prior Significant 

Recommendations Unimplemented 

This section requires identification of each significant 

recommendation described in previous semiannual 

reports for which corrective action has not b

completed. Section 5(b) requires that the Secre

transmit to Congress statistical tables showing 

number and value of audit reports for which no f

action has been taken, plus an explanation of 

reasons why recommended action has not occur

except when the management decision was m

within the preceding year. 

To include a list of all significant unimplemen

recommendations in this report would 

duplicative. Information on the status of any a

recommendations can be obtained through O

Office of Audit and Evaluation. 

Sections 5(a)(5) and 6(b)(2): 

Information or Assistance Refused 

These sections require a summary of each repor

the Secretary when access, information, or assista

has been unreasonably refused or not provided. Th

were no instances during this semiannual period 

no reports to the Secretary. 

48 
for delivering a decision on each such report. There 

were one NOAA and five Census reports more than 

6 months old. 

Section 5(a)(11): Significant Revised 

Management Decisions 

This section requires an explanation of the reasons 

for any significant revision to a management decision 

made during the reporting period. Department 

Administrative Order 213-5, Audit Resolution and 

Follow-up, provides procedures for revising a 

management decision. For performance audits, OIG 

Section 5(a)(12): Significant 

Management Decisions with Which 

OIG Disagreed 

This section requires information concerning 

significant management decision with which 

inspector general disagrees. Departm

Administrative Order 213-5 provides procedures 

elevating unresolved audit recommendations 

higher levels of Department and OIG managem

including their consideration by an Audit Resolu

Council. During this period no audit issues w

referred to the council. 

49 
AIG for Audit

and Evaluation

AIG for

System Acquisition

and IT Security

AIG for

Audits

AIG for

Economic and

Statistical Program

Assessment

Recovery Act

Oversight

Task Force

Audit

Services

Inspector General................................................... (202) 482-4661

Legislative and Public Affairs................................ (202) 482-4106

Office of Audit and Evaluation ............................. (202) 482-2754

Office of Counsel.................................................. (202) 482-5992

Office of Investigations......................................... (202) 482-0300

Telephone............................................................... (202) 482-4106

E-mail........................................................... oigweb@oig.doc.gov

E-mail............................................................ hotline@oig.doc.gov
Room 7898 C HCHB

1401 Constitution Avenue, N.W.

Washington, D.C. 20230

www.oig.doc.gov