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Office of Inspector General
 

Budget and Administration Inspector General 

Human Resources Deputy 

Information Technology Inspector General 

Associate Deputy 

Inspector General 

Chief of Staff 

Office of Audit 

and Evaluation 

Economic and Systems Acquisition Audits Statistical Program and IT Security Assessment 
Office of Inspector General
 

Semiannual Report to Congress
 

March 2010 
gy y

g 

Department’s Ability to 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 Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

American Recovery and Reinvestment Act: Meet the Challenges
 

of Accountability and Transparency with Effective Oversight of
 

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

United States Patent and Trademark Office: Address the
 

Patent Office’s Resource and Process Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

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

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

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

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

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

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

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

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

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

United States Patent and Trademark Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Statistical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

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

Acronyms and Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

This report summarizes work we completed and initiated during this semiannual period on a number 

of critical departmental activities. Over the past 

6 months, our office issued 20 audit and evaluation 

reports addressing programs overseen by the Census 

Bureau, National Institute of Standards and 

Technology (NIST), National Oceanic and 

Atmospheric Administration (NOAA), and National 

Telecommunications and Information Administration. We also worked closely with independent 

auditors to ensure a timely audit of the Department’s 

FY 2009 consolidated financial statements, resulting 

in an unqualified audit opinion for the 11th consecutive year. 

Our investigative activities during this semiannual 

period resulted in $4 million in fines, restitution, and 

judgments. This amount included more than 

$527,000 in restitution that a former United States 

Patent and Trademark Office (USPTO) employee 

and her co-conspirator were ordered to pay for their 

part in an embezzlement scheme. The defendants 

were each sentenced to 18 months in federal prison 

for their crime. 

We also issued our annual report on the Top 

Management Challenges Facing the Department of 

Commerce. These challenges include the 2010 

Census, information technology (IT) security, acquisition of NOAA’s environmental satellites, accountability and transparency of Recovery Act spending, 

and resource and process issues facing USPTO. 

During the semiannual period, we carried out con

report was NOAA

s fisheries enforcement progr

and operations. At the request of the Under Secre

of Commerce for Oceans and Atmosphere, we ev

ated the policies and practices of the Office of 

Enforcement within NOAA’s National Ma

Fisheries Service and NOAA’s Office of Gen

Counsel for Enforcement and Litigation. In Janu

2010, we reported that NOAA needs to exercise 

stantially greater management and oversight o

regional enforcement operations, as well as stren

en policy guidance, procedures, and internal cont

to address a common industry perception tha

civil penalty assessment process is arbitrary 

unfair. NOAA responded with a comprehen

action plan to address our recommendations. We 

continue to work with NOAA to track its progre

successfully implementing our recommendations 

to conduct follow-up work. 

We look forward to working with the Departm

and with Congress in the months ahead to meet 

many challenges facing Commerce. We thank 

Secretary, senior officials throughout the Departm

and members of Congress and their staffs for t

support of our work during this reporting period 

for their receptiveness to our recommendations 

improving Commerce operations. 

Todd J. Zinser 

1 

inspectors general to identify the top management 

challenges facing their departments. For FY 2010, 

Commerce OIG identified five challenges that 

require significant Departmental attention and four 

additional challenges that pertain to internal processes and organization. Most of our audit and evaluation 

efforts this fiscal year concentrate in these areas. In 

planning our FY 2011 work, we are, for the first 

time, conducting a formal risk assessment of 

Commerce activities to identify those most in need 

of oversight. 

These challenges are discussed below and reflect 

updates made since their initial publication in 

January 2010. 

1. Decennial Census: Mitigate Issues with 

the 2010 Decennial While Addressing 

Future Census Challenges 

The mission of the 2010 Census—to succeed in 

counting each of the over 300 million people in more 

than 130 million households in the United States 

once, only once, and in the right place—is a massive 

undertaking with many moving parts. With a projected life-cycle cost estimate of $14.5 billion, the bureau 

must integrate 44 separate operations (with a total of 

some 9,400 program- and project-level activities). 

U.S. residents have by now received their forms, and 

the Census Bureau has built an extensive communications campaign and partnership program to 

encourage a prompt and accurate decennial response. 

The rate at which responses are returned will be critical in determining the overall cost of the census. 

Households that do not mail back forms will be visited by an enumerator during nonresponse follow-up 

(NRFU) operations. The most expensive decennial 

operation, NRFU is now estimated to cost $2.3 bilTop 5 Management Challenges 

1. Decennial Census: Mitigate Issues with th

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: 

Effectively Manage Technical, Budgetary, 

and Governance Issues Surrounding the 

Acquisition of NOAA’s Two Environmental 

Satellite Systems 

4. Recovery Act: Meet the Challenges of 

Accountability and Transparency with 

Effective Oversight of Program Performanc

Compliance, Spending, and Reporting 

5. United States Patent and Trademark 

Office: Address the Patent Office’s Resourc

and Process Issues 

lion. The bureau cannot predict with certainty 

public’s response rate and thus the total numbe

housing units that will have to be visited during 

phase. Census estimates that costs will increase 

about $85 million for every percentage poin

addresses that census takers have to visit. 

While much of the bureau’s plan appears to be 

schedule, the efficiency and accuracy of NRFU a

some risk, and final decennial costs remain uncert

The bureau’s ability to manage NRFU effectively, 

thus control its cost, hinges on two systems: 

paper-based operations control system (PBOCS) 

the Decennial Applicant, Personnel, and Pay

System (DAPPS). Described by the bureau as 

“nerve center” of its field offices, PBOCS man

3 
(group quarters enumeration, service-based enumeration, and enumeration of transitory locations). Both 

systems have experienced problems in testing and, 

more importantly, during field operations. 

Census is on a very tight schedule to complete the 

PBOCS capabilities needed for NRFU and to resolve 

existing problems. Once NRFU begins, the system 

has no margin for error. Yet PBOCS development 

and testing remain behind schedule, and frequent 

outages and slow performance are impacting early 

operations. If not revamped for NRFU, these problems place the schedule and cost of this massive operation at serious risk. As a core requirement with a 

high level of uncertainty late in the decennial life 

cycle, PBOCS is one of the most significant decennial challenges facing the Department. While DAPPS 

also experienced outages and slow performance in 

early operations, a recent hardware upgrade appears 

to have significantly improved performance. 

To contain decennial costs, better management of 

census fieldwork is essential. We found inefficiencies 

in wages, travel, and training during the address canvassing operation. Given the significantly larger scale 

of NRFU, Census must have effective internal controls in place and ensure that managers meticulously 

follow them during this operation. 

Calendar year 2010 is also a critical time for the 2020 

Census. The bureau must begin to develop its 2020 

decennial Census plans even though its workforce is 

already stretched thin by 2010 operations. Our work 

throughout the decade demonstrates that Census needs 

to identify more cost-effective approaches to the decennial and seriously consider using such alternatives as 

administrative records, the Internet, and targeted address 

canvassing. These and other possible approaches could 

contain costs while increasing accuracy and efficiency. 

security, but more work is needed. The an

Performance and Accountability Report has repo

IT security as a material weakness since FY 20

Based on our FY 2009 FISMA assessments, we a

recommended—and the Department agreed—

the material weakness remain until more impr

ments are made. 

We completed two United States Patent 

Trademark Office assessments during this repor

period. While both revealed improvements, we 

not have sufficient evidence of consistent, effec

security practices to support removing USPTO’

security material weakness. However, USPTO’s m

agement concluded that IT security issues had b

resolved and did not report the material weaknes

its FY 2009 Performance and Accountability Repor

Our evaluations have focused on the Departm

process for planning, implementing, and asses

security controls, including continuous monitor

for the more than 300 systems employed by var

operating units (including USPTO), each with 

own management structure. We found deficiencie

security planning (including defining security requ

ments and implementing controls), assessments (l

ing risks inadequately understood), vulnerab

remediation (through required plans of action 

milestones), and continuous monitoring. In re

years we have increased our efforts to independe

assess technical security controls and have consist

ly found vulnerabilities requiring remediation. 

We also found, in an FY 2009 audit, that 

Department needs to improve the developm

guidance, and performance management of its 

security workforce. The Department has taken p

tive steps in response, including plans to enha

employee development and training as well a

4 
capabilities, in part by spending an estimated total of 

nearly $20 billion on two critical satellite systems: the 

Joint Polar Satellite System (JPSS) and the 

Geostationary Operational Environmental SatelliteR Series (GOES-R). Both JPSS’ predecessor program, the National Polar-orbiting Operational 

Environmental Satellite System (NPOESS), and 

GOES-R have a history of cost overruns, schedule 

delays, and reduced performance capabilities. 

As a result of the fall 2009 decision to significantly 

restructure the NPOESS program, JPSS was established as NOAA’s component of the polar environmental satellite system, which is designed to provide 

global environmental data to monitor Earth, support 

the nation’s economy, and protect lives and property. 

JPSS is intended to meet a portion of the requirements originally established under the NPOESS program. NPOESS was managed jointly by NOAA, the 

National Aeronautics and Space Administration 

(NASA), and the Department of Defense, with 

NOAA and Defense equally sharing NPOESS costs. 

Under the restructuring, NOAA/NASA and Defense 

will acquire satellites separately. The life-cycle cost 

estimate for JPSS is $11.9 billion. 

At its 1995 inception, NPOESS planned to purchase 

six satellites at a $6.5 billion cost, with a first launch 

in 2008. But problems with a key sensor raised costs 

and delayed the date of the first launch, even as the 

number of satellites in the system was reduced to 

four. In March 2009, with estimated life-cycle costs 

totaling $14 billion, the first launch was delayed to 

2014 because of continuing sensor problems; the 

NASA-led NPOESS Preparatory Project (NPP) 

launch date was also delayed, from 2010 to 2011. 

NPP was planned as a risk-reduction effort to test 

NPOESS’ new instruments in flight, but will now be 

used operationally as a gap filler between the current 

program. Defense is evaluating the best approach 

maintaining continuity of its polar satellites. It is 

ical that NOAA and Defense implement their s

lite programs on schedule to reduce the risk of 

in coverage. 

Budget increases, capability reductions, and de

have also plagued the GOES-R program. The proj

ed cost has increased from $6.2 billion to $7.7 bill

a major sensor was removed; the number of satellit

be purchased was reduced from four to two; and 

launch readiness dates for the first two satellites h

slipped by 6 months to October 2015 and Febr

2017. The GOES-R system is intended to offe

uninterrupted flow of high-quality data for short-ra

weather forecasting and warning, as well as provide 

mate research data through 2028. Working w

NASA, NOAA is responsible for managing the en

program and for acquiring the ground segment, w

is used to control satellite operations and to gene

and distribute instrument data products. 

According to program documentation, ov

GOES-R program acquisition is on track and wi

budget to meet the revised launch sched

However, any further delays in the satellite’s lau

readiness will increase NOAA’s risk of not meetin

requirement to have an on-orbit spare and two o

ational GOES satellites available to monitor 

Pacific and Atlantic basins in 2015. 

Both the JPSS and GOES-R programs will cont

to require close oversight to minimize further dis

tion to programs and prevent any satellite cove

gaps, which could compromise the United St

ability to forecast weather and monitor climate. S

a compromise would have serious consequences 

the nation’s safety and security. 

5 
priorities include agency and recipient reporting, the 

Broadband Technology Opportunities Program 

(BTOP), and NIST and NOAA construction contracts and grants. 

The sheer amount of Recovery Act money received 

by Commerce, coupled with the act’s unique requirements, makes ensuring appropriate spending—while 

also providing economic stimulus as quickly as possible—a particular challenge. Commerce operating 

units must spend funds appropriately with little time 

to prepare for the many new and expanded programs, 

grants, and contracts established under the act. 

As of March 31, 2010, the Department had obligated approximately $2.8 billion and spent approximately $890 million. Although spending volumes are 

relatively low, all funds must be obligated by 

September 30, 2010. The need to distribute funds 

quickly to communities and businesses increases the 

risks of fraud, waste, and abuse in both Recovery Actfunded activities and those Commerce operations 

with more traditional funding mechanisms. Recovery 

Act operating units need sufficient resources to 

ensure that programs deliver as intended, while providing oversight to guard against misuse of funds. 

The Recovery Act substantially increases the 

Department’s contracting and grants workload, particularly at NIST and NOAA, whose grants and contracts offices must manage not only the more than 

$1.4 billion they received under the Recovery Act, 

but the $4.7-billion BTOP program as well. NTIA 

relies on NIST and NOAA for grants administration 

because it does not have its own staff and systems for 

this purpose. Such increases place added pressure on 

these operating units to hire and retain qualified 

personnel. 

operational controls of the primary (source) gra

contracts, and/or financial systems for Census, 

Economic Development Administration (ED

NIST, NOAA, and NTIA to determine whether t

controls ensure that the Commerce reports posted 

Recovery.gov are complete, accurate, and relia

Generally, the Commerce systems we reviewed 

adequate data input/edit controls. However, the 

of automated data transmission or interfaces from 

grants systems to Commerce’s financial system co

lead to errors. 

Without additional automation, it will be more d

cult for Commerce operating units to effecti

manage their own reporting with the increased 

ume of grants and contracts. Ensuring complete 

accurate recipient reporting will also be diffic

Additional automation would add reporting pro

efficiencies and would decrease the risks of repor

errors and delays. 

OIG identified several concerns in the BTOP 

award process and expressed concern with whe

NTIA has identified and obtained needed resou

to execute a grant program of BTOP’s magnitud

the Recovery Act’s timeframe. According to the 

BTOP must spend all of its $4.7 billion in g

funding by September 30, 2010. Over the nex

months, NTIA must address several challenges 

concurrently monitors first-round grant awards 

issues new awards. Challenges include (1) coordi

ing with other federal organizations supporting c

tract and grants management and (2) overse

contractors implementing BTOP. In the next sem

nual period, we will issue a report detailing our c

cerns with BTOP’s program management 

pre-award process. 

6 
patent examination efficiency and quality. 

Since FY 2000, the number of patent examiners has 

more than doubled, from 2,900 to 6,200. But the 

length of time to process a patent has increased 40 

percent from 25 to 35 months. Further, the backlog 

of applications awaiting review increased 139 percent, from 308,000 to 736,000. 

Over the years, USTPO has increased the number of 

patent examiners to address the growing backlog; 

however, simply adding to the workforce will not suffice. USPTO must consider how to reform and 

reengineer various components of the patent application process and must update its IT systems to ensure 

timely and high-quality application review. 

USPTO must also address funding mechanisms and 

fee structure challenges. USPTO is now funded 

entirely by application, maintenance, and other fees 

paid by patent and trademark applicants and owners. 

Congress sets many of the fees legislatively and establishes a ceiling, through the appropriations process, 

for the maximum amount of fees USTPO can spend 

in a given year. For FY 2011, the Administration proposes a 15-percent increase in certain patent fees to 

generate additional revenue to cover operating 

expenses. It also proposes that USTPO have authority to set fees and to establish an operating reserve to 

manage operations on a multiyear basis. 

In November 2008, our Top Management Challenges 

report suggested that USTPO’s unique financing 

structure could become increasingly risky. 

Subsequent downturns in the U.S. and global 

economies quickly showed the structure’s vulnerabilities. In the President’s FY 2009 budget, USPTO esti

ly mandated appropriation ceiling. 

Potential fee shortfalls and fluctuations introd

inherent instability to the funding structure. T

unstable structure increases the risk to USTPO’s a

ity to operate effectively in current and future y

and its capacity to ensure that America’s intellec

property system encourages investment in innova

and contributes to a strong global economy. M

immediately, USTPO may not be able to proces

many patent applications, which will add to 

backlog instead of working toward reducing it

effect, fewer maintenance fees will be available to 

lect in the future because fewer patents are b

issued today. 

The Under Secretary of Commerce for Intellec

Property, who is also the Director of USPTO, 

publicly acknowledged these and other difficultie

5-year plan in the President’s FY 2011 budget 

forth bold goals, such as reducing the time it take

initial patent application review to 10 months (f

the present 26 months) by FY 2013. Similarly

FY 2014, USPTO’s goal to decide a patent app

tion is 20 months, down from the present 35. 

Other Issues Requiring Significant 

Management Attention 

Centralized Management and Oversight 

The Department must continue to centralize m

agement and oversight to make Departmental op

tions more efficient, consistent, and productive. 

Department’s operating units have long-standing 

independent business models, cultures, and pract

This decentralized structure has hind

7 
curement systems. Additionally, the Department’s 

Office of Acquisition Management has only limited 

authority over the agency’s grants and procurement 

offices, which further contributes to the 

Department’s inconsistent management approaches 

and adds to difficulty overseeing operations and programs effectiveness. 

Contracts and Grants Management Workforce 

Sufficient contracts and grants management workforce staffing has been a long-standing issue for the 

Department. Now, primarily as a result of the 

Recovery Act, the Department and its operating units 

issue more grants and contracts than ever. 

According to Department data, more than 1,500 

Commerce employees hold certifications in various 

acquisition positions. While the Department does 

not track the number of grants personnel, we recently conducted a survey of the sufficiency and qualifications of the Recovery Act acquisition and grants 

workforce. Based on our survey, the grants workforce 

for the five Commerce operating units receiving 

Recovery Act funding totaled over 800 employees. 

This includes grant officers, grants program managers, and grants specialists. 

Despite these numbers, however, a serious shortage of 

skilled, specially trained staff hampers the 

Department’s ability to appropriately issue and oversee grants and contracts. To ensure that grants and 

contracts are issued effectively and funds are properly spent, the Department must build up the size and 

skill of this workforce and improve its oversight 

processes. 

realignment is intended to provide additional str

gic guidance and leadership direction for NO

stewardship responsibilities, including fisheries. 

One of the key mission components is managem

research, and services related to the protection 

rational use of living marine resources. Our 2008 

Management Challenges report discussed NO

need to balance conservation and commercial fish

Over the past year, we have issued two reports 

demonstrate, in particular, the difficulty of achie

this balance. In the first report, we evaluated a s

of issues regarding the work and scientific method

the National Marine Fisheries Service’s (NM

Northeast Fisheries Science Center. The sec

report, recently completed, assesses the policies 

practices of the Office of Law Enforcement wi

NMFS and NOAA’s Office of General Counsel 

Enforcement and Litigation. 

Commerce Headquarters Renovation 

The Department’s headquarters, the General Serv

Administration (GSA)-owned Herbert C. Ho

Building in Washington, D.C., is undergoing 

extensive renovation. The renovation will take ab

13 years and is estimated to cost almost $960 mill

The project is being funded mostly by GSA and 

Recovery Act. Because of its scale, the renovation 

the potential to disrupt Commerce operations 

affect its workforce. Accordingly, the Department 

a primary interest in ensuring that the renovatio

completed on time, within budget, and free of fr

To meet this goal, Commerce and GSA need to 

vide comprehensive oversight throughout the 

ject’s life cycle. 

8 
out specific responsibilities for OIG to oversee the

Department’s Recovery Act activities and spending. 

The Department of Commerce—five operating units

and OIG—received $7.9 billion under the act, which

nearly matches the Department’s annual appropriation (see Figure 1). As of March 31, 2010, the

Department had obligated approximately $2.8 billion and spent approximately $890 million (see

Figure 2). Operating units believe they are on track to

meet the Recovery Act deadline of September 30,

2010, to obligate funds.

Our oversight program focuses on the highest-risk

aspects of the Recovery Act, including the Broadband

9

Figure 1: Commerce Stimulus Funding by

Operating Unit

NTIA . . . . . . . . . . . . . . . . . . . . . . $5.3 billio

Census . . . . . . . . . . . . . . . . . . . . . . 1.0 billio

NOAA . . . . . . . . . . . . . . . . . . . . . 830 millio

NIST . . . . . . . . . . . . . . . . . . . . . . 610 millio

EDA . . . . . . . . . . . . . . . . . . . . . . .150 millio

OIG . . . . . . . . . . . . . . . . . . . . . . . .16 millio

Total . . . . . . . . . . . . . . . . . . . . . $7.9 billio

Figure 2: Commerce Operating Units’ Recovery Act Spending as of March 31, 2010

Data as reported on Recovery.commerce.gov. Per OMB standards, interagency transfers of $358M and a DTV rescission of $128M ar

not included and would impact obligation amounts. 

NOAA 

Procurement, Acquisition, and Construction

NOAA

Operations, Research, and Facilities

NIST

Construction of Research Facilities

NIST

Scientific and Technical Research and Services

NTIA

DTV Converter Box Program

NTIA

Broadband Technology Opportunities Program

Census

2010 Census

EDA

Total Disbursements

Total Obligations

$0 $250,000,000 $500,000,000 $750,000,000 $1,000,000,000

Economic Development Assistance Program

$12M

$58M

$58M

$214M

$8M

$195M

$21M

$113M

$332M

$338M

$25M

$1.18 

$427M

$539M

$7M

$148M
■ Monitored quarterly recipient reporting 

Outreach and Training 

■ Trained more than 650 Commerce employees and briefed potential grant recipients in 

18 sessions on: 

■ Transparency and accountability in grants 

management 

■ Transparency and accountability in 

broadband grants 

■ Fraud prevention 

■ Fraud indicators 

Congressional Communications 

■ IG’s letter to Senator Pryor on Recovery Act 

oversight activities, February 19, 2010 

■ IG’s letter to Senators Mikulski and Shelby on 

status of NTIA’s BTOP, January 22, 2010 

■ Congressional briefings on Recovery Act programs, including BTOP and NOAA/NIST 

contract and grant awards 

Audit and Evaluation 

Published Reports 

■ More Automated Processing by Commerce 

Bureaus Would Improve Recovery Act 

Reporting (ARR-19779) 

■ Commerce Has Implemented Operations t

Promote Accurate Recipient Reporting, bu

Improvements Are Needed (ARR-19847) 

■ Improvements Recommended for Commerc

Pre-Award Guidance and NIST and NOA

Processes for Awarding Grants (ARR-19841) 

■ Review of Contracts and Grants Workforc

Staffing and Qualifications in Agencie

Overseeing Recovery Act Funds (for Recover

Accountability and Transparency Board) 

Selected Work In Progress 

■ Continued review of pre-award grant 

processes for NTIA’s BTOP 

■ Commenced review of performance 

measurement of certain NIST and NOAA 

Recovery Act programs 

■ Commenced review of Commerce 

headquarters renovation 

Visit www.oig.doc.gov/recovery/ for more information about OIG Recovery Act activities. 

10 
omissions in reporting is vital to data integrity. 

OIG reviewed key IT and operational controls of the 

primary grants, contracts, and/or financial systems 

for Census, EDA, NIST, NOAA, and NTIA to determine whether their controls ensure that the

Commerce reports posted on Recovery.gov are complete, accurate, and reliable. Generally, the

Commerce systems reviewed had adequate data

input/edit controls. However, the lack of automated

data transmission from the grants systems to

Commerce’s financial system could lead to errors. 

“Without additional automation, it will 

become more difficult for Commerce 

agencies to effectively manage their own 

reporting as the volume of grants and 

contracts increases ...” 

IG testimony before a U.S. Senate 

Appropriations Subcommittee, March 4, 2010 

We reported our findings in More Automated 

Processing by Commerce Bureaus Would Improve

­

e 

­

­

e

Recovery Act Reporting (ARR-19779) and recommend

ed additional automation to add efficiencies to th

reporting process and decrease the risks of reporting

errors and delays. Operating units are making appro

priate system enhancements to address our recom

mendations. (For more information about thes

findings, see page 19.) 

OIG’s report on recipient reporting, Commerce Has 

Implemented Operations to Promote Accurate Recipient 

Reporting, but Improvements Are Needed (ARR–19847), 

Award Guidance and NIST and NOAA Processes 

Awarding Grants (ARR-19841), we recommended 

the Commerce Office of Acquisition Managem

(OAM) revise its grants manual so that grant-mak

operating units at Commerce have standard guida

and procedures to follow, for both Recovery 

awards and all other discretionary awards. We 

made recommendations specific to NIST 

NOAA. (For more information about these findi

see page 20.) 

“The report plays an important role in 

ensuring that the Board and the IG com

munity understand the potential weaknesses that may exist in the oversight of 

the [Recovery Act] ... I greatly appreciat

the leadership your staff demonstrated i

structuring the review and reporting on 

the results.” 

Board Chairman Earl E. Devaney, 

in a letter to the IG, March 22, 2010 

At the request of the Recovery Accountability 

Transparency Board, OIG led a government-w

review to determine whether programs that aw

Recovery Act contracts and grants have the pro

level of workforce staffing, qualifications, and tr

ing. The report, Review of Contracts and Gr

Workforce Staffing and Qualifications in Agen

Overseeing Recovery Act Funds, reveals that the a

tional workload generated by the Recovery Act 

created a strain on the contracts and grants workf

and that the government lacks a standard certi

11 
Of the $7.9 billion the Department received through

the Recovery Act, NTIA received $5.3 billion, of

which $4.7 billion was for BTOP. BTOP’s objective

is to develop and expand broadband services in

underserved and unserved areas by deploying infrastructure, enhancing capacity at public computer

centers, and promoting sustainable broadband adoption projects. As of March 31, 2010, NTIA had obligated approximately $1.18 billion, and some

$25 million in BTOP funds had been expended.

NTIA has embarked on its second, and final, round

of grant awards. All awards must be obligated by

September 30, 2010. 

BTOP remains a high-risk program. As the largest

Recovery Act program at Commerce with multiple

inherent risks, BTOP will continue as a high priority

throughout the life of the Recovery Act. OIG has

closely monitored its processes and implementation

thus far. We will review NTIA’s BTOP-related postaward activities, including the program’s processes for

monitoring grants and determining site visits, its

grant recipient project reporting, and the technical 

assistance it provides to recipients. In addition to 

these monitoring activities, we will identify additional oversight priorities as necessary. 

“BTOP, which aims to award approximately $4.5 billion in grants in less than 

18 months, represents a level of grant 

activity that no Commerce operating unit 

has ever undertaken.” 

IG letter to Senators Barbara Mikulski and 

Richard Shelby, January 22, 2010 

■	 NTIA’s inconsistent documentation of impor

information such as policies, procedures, staff r

and key management decisions could lead to in

ciency and miscommunication. 

■ The first round of BTOP grant application proc

ing exposed several problems with the online g

intake system, which affected efficiency and u

experiences. 

■	 A shortage of volunteer peer reviewers meant 

application review for the first round was dela

As NTIA manages the second-round process 

handles post-award activities for first-round g

recipients, it must be careful to obtain eno

reviewers for the workload. 

■ NTIA will need to closely monitor grantees du

post-award operations to ensure they comply w

the National Environmental Policy Act. 

We briefed NTIA senior management on our res

on January 6, 2010. By letter dated January 21

responded to a request from Senator Barb

Mikulski, chairwoman of the Senate Appropriat

Subcommittee on Commerce, Justice, Science, 

Related Agencies, to summarize our observat

about NTIA’s BTOP challenges. 

We will issue a review of the program’s managem

and pre-award process in early April 2010. As pa

our continued proactive BTOP oversight, we 

review the adequacy of NTIA’s systems, plann

and resources for performing post-award activitie

12 
13 

Recovery Act Oversight 

Review of NTIA’s Program Management 

and Pre-Award Processes for BTOP 

Review BTOP to (1) assess how effectively NTIA 

is implementing the program, (2) evaluate proposed 

pre-award review measures to ensure effective 

and fair application and award processes, and 

(3) evaluate integrity and reliability of the online 

application system. 

Performance Measurement of Certain 

NIST and NOAA Recovery Act Programs 

Review policies, procedures, plans, and metrics related to monitoring and reporting the progress of certain Recovery Act programs. Assess relevant 

information management systems that support 

Recovery Act performance measurement tracking 

and reporting. 

Review of the Management of the 

Herbert C. Hoover Building (HCHB) 

Renovation Project 

Gain an understanding of the HCHB renovation 

scope and management plan, including internal controls/oversight mechanism, project cost(s), milestones, current challenges, and project management 

coordination efforts with GSA. Review the project 

plans, awards, and milestones; interview relevant officials; and evaluate best practices and lessons learned. 

Census Bureau 

Safeguarding Confidential Decennial 

Respondent Data 

Evaluate the bureau’s ability to safeguard secure confidential electronic data supplied by decennial 

Incident Detection and Response 

Capabilities 

Determine Census’s cyber attack detection 

response capabilities and monitor the bureau’s ab

and efforts to find, analyze, contain, eradicate, re

er from, and properly report incidents such as den

of service, malicious code attacks, unauthor

access, and inappropriate use of data. 

2010 Census Field Operations Oversig

Monitor census enumerator operations and l

Census offices processes for conformity to speci

tions, accuracy, and management efficiency. T

work will involve almost 100 members of our 

observing field operations at over 70 of the 494 l

Census offices. 

Fourth Census Quarterly Report 

Report on the progress of the 2010 Census w

respect to cost, schedule, and risk, as mandated 

the explanatory statement that accompanied 

Supplemental Appropriations Act of 2008 (P.L. 

252). 

Economic Development 

Administration 

Trade Task Group 

Audit cooperative agreements between EDA and 

Seattle-based Trade Task Group to determ

whether costs claimed under these agreements 

reasonable, allowable, and allocable and whether 

quate internal controls are in place for the selectio

consultants. 

15 
National Oceanic and 

Atmospheric Administration 

Pacific States Marine Fisheries 

Commission 

Audit two NOAA cooperative agreements and three 

contract task orders awarded to the Commission. In 

addition to performance, compliance, and costincurred audits of the agreements and task orders, the 

comprehensive audit includes an audit of 12 costreimbursable contracts awarded under the two cooperative agreements and 7 years of Commission

k

o 

s 

d 

d 

. 

a 

d 

t 

ll

e 

s 

e 

.

indirect cost rates and related proposals. 

U.S. Historical Climatology Network’s 

Data Quality and Modernization Efforts 

Review the U.S. Historical Climatology Networ

(USHCN) to determine whether NOAA’s efforts t

modernize the system will correct data quality issue

with current USHCN sites. 

NOAA Enforcement Activities 

Continue our nationwide review of the policies an

practices of NOAA’s Office of Law Enforcement an

General Counsel for Enforcement and Litigation

Focus on (1) evaluating enforcement operations in 

regulatory environment; (2) assessing processes use

to establish priorities with respect to enforcemen

actions and penalties; and (3) reviewing overa

accounting and management practices applied to th

enforcement function, as well as the use of fund

NOAA receives through penalties. 

Evaluation of Acquisition of Facilities for

the Marine Operations Center–Pacific 

Review the procurement of facilities that will hous

Marine Operations Center–Pacific operations

System transition and the progress of 

Geostationary Operational Environmental Satel

R Series Program. 

National Telecommunications an

Information Administration 

Second Annual Audit of the Public 

Safety Interoperable Communications 

(PSIC) Grant Program 

Conduct second annual audit of the PSIC grant 

gram. Assess NTIA’s administration of the prog

and report results to Congress, as required by sec

2201 of Implementing Recommendations of 

9/11 Commission Act of 2007 (Title XXII, Pub

110-53). 

Audits of PSIC Grants 

Continue audits of a sample of PSIC grant

required by the Implementing Recommendatio

the 9/11 Commission Act of 2007. Determine 

progress recipient states have made to acquire 

deploy interoperable communications with P

grant funds and whether their use of funds meet

federal requirements. 

United States Patent and 

Trademark Office 

Patent Quality Assurance Process 

Determine the effectiveness of USPTO’s patent q

ity assurance process in ensuring that establis

patent examination quality standards are met, 

whether the process complies with applicable dep

mental, bureau, and federal laws, regulations, p

cies, procedures, and guidelines. 

16 
17 

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

promoting innovation, entrepreneurship, competitiveness, and stewardship. The Department has 

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, enhanc

standards, and advancing measurement science. 

Goal 3: Observe, protect, and manage Earth’s resources to promote environmental stewardship. 

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

Achieve organizational and management excellence. 

evaluation’s scope included the primary (sou

grant, contract, and/or financial systems for Cen

EDA, NIST, NOAA, and NTIA. 

Generally, the 11 Commerce systems we review

which included both source and supporting syste

had adequate data input/edit controls. However, 

lack of automated data transmission from the t

operating unit grant systems to the Comm

Business System (CBS), the financial system of rec

from which all Recovery Act reporting origin

could potentially lead to errors. Approximately 

billion (or 65 percent) of Commerce Recovery 

funds will be provided through grants; thus, m

robust controls such as system-to-system interf

should be employed to reduce the reliance on ma

al controls. Further, an automated process would 

more efficient as volumes increase. 

Regarding reporting integrity on Recovery.gov, 

noted that while the overall amounts on we

financial and activity reports were reasonably a

More Automated Processing by 

Commerce Bureaus Would 

Improve Recovery Act Reporting 

(ARR-19779) 

Updated Recovery Act guidance provided by OMB 

on April 3, 2009, spelled out, among other requirements, each department’s responsibility to post financial and activity reports as well as funding

notification reports on the public web portal

Recovery.gov. Although OMB provided specific directions and data requirements in its initial guidance, 

during our fieldwork the reporting templates were 

updated to capture additional required information 

such as expenditures, transfers, or reimbursable agreements between federal agencies. 

This evaluation assessed the adequacy of key IT and 

operational controls to determine whether the controls ensure that the Commerce reports posted on 

Recovery.gov are complete, accurate, and reliable. The 

19 
operating units systems and CBS. These interfaces 

would process grant activity more efficiently and 

ensure source systems reconcile to the financial system of record. Manual reconciliations can then 

supplement or provide a secondary level of control. 

■	 The Commerce Recovery Act Implementation 

Office evaluate ways to further automate report 

generation and ensure that consistent processes are 

used across operating units. In addition,

l

y

.

Commerce should consider implementing a centra

data repository to generate all Recovery Act data. A

central repository could serve other purposes even

after full implementation of the Recovery Act. 

Commerce Has Implemented 

Operations to Promote Accurate 

Recipient Reporting, but 

Improvements Are Needed 

(ARR–19847) 

Commerce and its operating units have proactivel

ensured that Recovery Act recipients recognize and

meet reporting requirements and deadlines

Commerce Recovery Act implementation officials 

provided policy, guidance, and oversight to grant and 

contracts officials to facilitate department-wide standard review processes. Operating unit officials established policies and procedures to support compliance 

with requirements, contacted recipients by telephone 

and e-mail, provided recipients with training on 

Recovery Act reporting, and offered recipients tools 

such as checklists to help guide them through the 

reporting process. 

As requested by the Recovery Accountability and 

Transparency Board, we completed this audit in early 

October 2009, prior to the first full, finalized review 

processes evolve, as our findings detailed. 

We recommended that Commerce and its opera

units continue to fine-tune their review 

cedures by: 

■ providing guidance on what constitutes a mat

omission and significant error in the recipi

reported data and documenting this in their p

cies and procedures; 

■ ensuring that operating units implement an a

mated means of data review, especially for la

programs with a high volume of recipient rep

ing; and 

■ updating and revising policies and procedures as 

process matures and more recipient reporting c

lenges emerge—especially in the areas of sub-re

ient reporting and job creation and retention. 

Improvements Recommended fo

Commerce Pre-Award Guidance 

and NIST and NOAA Processes 

for Awarding Grants (ARR-19841

The Recovery Act appropriated $180 million 

NIST for a competitive grant program to const

research science buildings. NIST issued four g

awards of approximately $56 million for unfun

meritorious proposals previously submitted un

the FY 2008 competition and will award appr

mately $120 million under a new competition 

FY 2010. 

From its Recovery Act appropriation, NOAA allo

ed up to $167 million for the Habitat Conserva

and Restoration Program, a competitive finan

20 
competition requirements. 

We found that the Commerce Office of Acquisition 

Management (OAM) has not revised its grants manual to clarify the operating units’ responsibility for 

conducting individual background screenings on 

applicants and recipients of Commerce grants and 

cooperative agreements. As a result, NIST and 

NOAA did not have standard procedures to follow 

for conducting individual background screenings for 

the Recovery Act funds. 

Based on our findings, we recommended that: 

■ NIST improve its documentation of the evaluation 

board selection process to ensure that its financial 

assistance award decisions are clearly documented. 

■ NOAA’s grants office review prior audit reports as 

part of its evaluation of an applicant’s past performance to determine whether special award conditions 

are warranted, and include special award conditions 

to mitigate risks of making an award to an organization with known performance problems. 

■ OAM revise the grants manual so that the grantmaking operating units at Commerce have standard guidance and procedures to follow to conduct 

individual background screenings. Once the policy 

is developed, OAM should work with Commerce 

operating units receiving funds, including NIST 

and NOAA, to determine whether Recovery Act 

awards need individual background screenings 

based on the new policy, and how the Department 

can best obtain these screenings. Operating units 

should follow the policy for both Recovery Act 

awards and all other discretionary awards. 

26 agencies—including the Department 

Commerce—completed by one or more contr

and grants offices within those agencies. Altho

the scope of this survey addressed programs and o

ations beyond the Department of Commerce

findings reflect and are applicable to Departme

operating units. 

Survey results indicated that agencies governm

wide have been staffing up to meet Recovery 

demands. Agencies receiving Recovery Act fund

reported that from April through June 2009, 

assigned more than 22,000 professional staff to t

Recovery Act contracts and grants work (out 

total of nearly 99,000 such personnel). Staffing le

in the acquisitions and grants workforce are expe

to increase to just under 25,000 and remain at 

level through June 2010. 

Survey responses indicate that the additional work

has strained a significant portion of the contracts 

grants workforce charged with making Recovery 

awards. Although agencies are prioritizing Reco

Act work and, in many instances, hiring additi

staff or realigning work to assist, the added work

has exacted a price. Contract and grant awards 

being delayed, as is other work. Employees are wor

overtime, and oversight and monitoring of award

especially non-Recovery Act contracts and grants—

expected to decline as many agencies attempt to im

ment Recovery Act requirements while carrying 

their ongoing programs and operations. 

While agencies are generally assigning a quali

acquisitions and grants workforce to the Reco

Act, some concern exists that training may be dela

over the coming year as agencies continue to add

their increased workloads. The compliance of 

contracting workforce with Office of Fed

21 
both Recovery Act and non-Recovery Act work, and 

make adjustments as necessary to ensure that all contracts and grants are properly awarded and monitored. 

We also recommended that agencies assess training 

and certification issues for their contracting personnel. In particular, agencies should: 

■	 ensure contracting personnel meet continuous 

learning requirements to maintain their 

certifications, 

■ identify contracting officer’s (technical) representatives (COTRs/CORs) working on Recovery Act 

contracts who do not meet certification and/or 

continuous learning requirements, and take corrective action, and 

■ determine whether program managers working on 

major acquisitions under the Recovery Act are certified, and take appropriate steps to certify those 

who are not. 

Absent government-wide standards for grants management personnel, agencies have established their 

own requirements, which we view as a best practice. 

FY 2009 Financial Statement 

Audits (FSD-19652) 

Independent auditor KPMG found that the 

Department’s consolidated financial statements were 

fairly presented in all material respects and in conformity with U.S. generally accepted accounting 

principles. KPMG found one instance of material 

noncompliance with laws, regulations, or contracts: 

one of NOAA’s real property agreements contained 

an indemnification clause, which is a violation of the 

KPMG also audited the Department’s special-

pose financial statements and determined its com

ance with financial reporting requirements in 

Treasury Financial Manual. The Trea

Department uses the audited statements to pre

its Financial Report of the U.S. Government. In 

unqualified opinion on the special-purpose st

ments, KPMG reported no material weaknesse

internal controls and no instances of noncomplia

We requested that the Department provide us 

audit action plan to address the report’s findings 

delineate the actions the Department plans to tak

correct the IT deficiency. We also asked 

Department to provide the rationale or legal b

behind its decision should it choose not to im

ment KPMG’s recommendations. 

Nonfederal Audit Activities 

In addition to undergoing OIG-performed au

certain Commerce financial assistance recipients 

periodically examined by state and local gov

ment auditors and by independent public acco

ants. OMB Circular A-133, Audits of States, L

Governments, and Non-Profit Organizations, 

forth audit requirements for most of these au

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, issue

the Department. 

We examined 147 audit reports during this sem

nual period to determine whether they conta

audit findings related to Commerce programs. Fo

22 
g (, ) 

Received 86 9 9

Examined 120 27 14

Pending (March 31, 2010) 36 4 4

The following table shows a breakdown by operating 

unit of approximately $400 million in Commerce 

funds audited. 

Agency Funds 

Economic Development Administration $53,265,27

International Trade Administration 267,66

Minority Business Development Agency 655,08

National Institute of Standards and Technology 1 57,684,62

National Oceanic and Atmospheric Administration 129,852,21

National Telecommunications and Information Administration 3,975,07

Multi-Agency 150,174,49

Not Identified by Agency 3,947,27

Total $399,821,70

1 Includes $55,432,901 in ATP program-specific audits. 

We identified a total of $4,196,902 in federal questioned 

costs and $3,816,000 in funds to be put to better use. 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 11 reports with 

Commerce findings are listed in Appendix B-1. 

23 

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. The bureau publi

a wide variety of statistical data about the nation’s people and economy, conducting approximately 200 an

surveys, 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 national income and product acco

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

economic activity. 

2010 Census: Quarterly Report to 

Congress, December 2009 

(OIG-19791-2) 

Census is moving forward with important decennial 

operations and activities, including completing two 

major operations: address canvassing and group quarters validation. Our December 2009 quarterly report 

noted several risks to the 2010 decennial, including 

scheduling delays, cost overruns, and complications 

associated with the development of a paper-based operations control system (PBOCS). 

Census must develop PBOCS to manage field operations, since increasing costs and automation problems prompted the bureau to abandon handheld 

computers in early operations in favor of paper. The 

compressed schedule renders PBOCS a major risk to 

the decennial census. 

For FY 2010, Census requested about $674 million 

in contingency funds for key operations and activiThe Supplemental Appropriations Ac

of 2008 and the 2010 Census 

(P.L. 110-252) 

The Supplemental Appropriations Act of 200

gave the Census Bureau an additional $210 mi

lion to help cover spiraling 2010 decennial cos

stemming from the bureau’s problematic effor

to automate major field operations, major flaw

in its cost-estimating methods, and other issue

The act’s explanatory statement required th

bureau to submit to Congress a detailed plan an

timeline of decennial milestones and expend

tures, as well as a quantitative assessment of asso

ciated program risks, within 30 days. OIG mu

provide quarterly reports on the bureau’s progre

against this plan. 

ties, almost 9 percent of its total 2010 Census bu

request. The contingency fund, formulated with 

advice of Department and Census officials, is b

25 
majority of its time has been spent on contingency 

planning, the bureau’s Risk Review Board (RRB) did 

not review risk ratings in detail at weekly meetings, as 

required by Census’s risk management plan. The 

RRB is working on a plan to help Census management complete its contingency plans and actively 

monitor its risk management activities. 

This report did not provide specific recommendations. However, we will continue to monitor specific 

2010 Census operations and activities, such as: 

■	 Given the importance of PBOCS in managing 

Census’s fieldwork operations workload, and the 

short timeframe available for system development, 

we will continue to monitor and report on 

PBOCS development and testing in subsequent 

quarterly reports. 

■	 Because of the address canvassing cost overrun, 

Census is currently revising nonresponse follow-up 

(NRFU) cost assumptions, especially the projected 

mail response rate. We will evaluate NRFU planning 

efforts, operational effectiveness, and data quality. 

■ Census used Recovery Act funds to hire additional 

partnership positions in hard-to-count areas. While 

we recognize Census’s relatively quick recruitment 

and hiring, we will monitor the adequacy of management and supervisory controls over the partnership workforce. 

2010 Census: Quarterly Report to 

Congress, February 2010 

(OIG-19791-3) 

About 9,400 key operations and activities make up 

the Census 2010 program. With such a complex, 

time-sensitive undertaking, it remains vitally impor

development of training manuals and techn

support guides. 

■ The bureau conducted two operational load tes

computer networks supporting decennial op

tions. The tests showed that the networks 

devices were able to successfully handle peak lo

but revealed PBOCS and other IT performa

problems. 

■	 While Census stayed within budget during 

review period, spending among local Census of

(LCOs) remains a concern. The address canvas

operation was 25 percent over budget, and 

analysis of travel costs for the operation found w

disparities in wages and mileage reimbursemen

some of the LCOs. 

■ Census has issued a revised cost estimate of $2.33 

lion for NRFU. Any NRFU cost reductions are 

ly to be partially offset by an estimated increas

$137 million for the vacant/delete check operati

■ Census’s RRB has taken a proactive role in over

ing risk management activities. The RRB has i

ated a monthly review of the 25 identified risk

the bureau’s risk register. The RRB is review

contingency plans for 13 of the risks. At the tim

our report, the RRB had finalized four plans, w

appear to be adequate to cover the actions Ce

would need to take should the risks materialize

This report did not provide recommendati

Rather, we forwarded the Census Bureau a sepa

document recommending that the following act

be taken: 

■ Senior executives with the authority to set pr

ties—such as reallocating resources to where 

are most needed, resolving conflicting priori

26 
be implemented to support operations. 

■ Enhance technical support staff and procedures to 

expeditiously resolve problems in the field. 

FY 2009 FISMA Assessment of 

Field Data Collection Automation 

System (OAE-19728) 

On April 17, 2009, the Field Data Collection 

Automation (FDCA) system was granted an interim 

authorization to operate, allowing the system to operate under specific terms and conditions while vulnerabilities were assessed and corrected. On June 17, 

2009, the authorizing official granted FDCA full 

authorization to operate, even though at the time 

Census had made only minimal progress in correcting system weaknesses. We found that the authorizing official should have extended the interim 

authorization to operate rather than issuing a full 

authorization. 

Our review also found that FDCA’s system security 

plans and security control assessments were generally 

adequate but need improvement. The bureau has not 

established, implemented, and assessed secure configuration settings for all IT products that are part of 

FDCA. We made recommendations intended to provide increased assurance that the system and its information will be adequately protected for the duration 

of the census. 

FY 2009 Financial Statement 

Audits (FSD-19651) 

Independent auditor KPMG found that Census’s balance sheet was fairly presented in all material respects 

and in conformity with U.S. generally accepted 

y g

programs and practices. These evaluations mu

include testing of a representative subset of sy

tems and an assessment, based on that testing

of the entity’s compliance with FISMA an

other applicable requirements. 

accounting principles. KPMG found no instance

material noncompliance with laws, regulations

contracts. The audit results indicate that Cen

internal control structure facilitates the prepara

of reliable financial and performance information

KPMG’s IT review found that while Census 

taken positive steps to correct previous IT findi

there are still weaknesses related to IT controls 

porting the bureau’s financial management syste

Although these weaknesses are not considered a 

nificant deficiency in Census’s IT controls, 

requested that Census provide us an audit action 

to address the report’s findings and delineate 

actions it plans to take to correct the IT vulnera

ties. We also asked that Census provide the ratio

or legal basis behind its decision should it choose 

to implement KPMG’s recommendations. 

Congressional Testimony 

During the reporting period, the Inspector Gen

and the Associate Deputy Inspector General testi

on various aspects of the 2010 Census at hear

before the House Committee on Oversight 

Government Reform (March 25, 2010, and Octo

21, 2009) and the Senate Committee on Home

Security and Governmental Affairs (February 

2010, and October 7, 2009). Their statements 

available at www.oig.doc.gov. 

27 

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

petitiveness by advancing measurement science, standards, and technology in ways that enhance 

nomic security and improve quality of life. NIST manages four programs: the Technology Innova

Program, the Manufacturing Extension Partnership program, the Baldrige National Quality Program, 

NIST Research Laboratories. 

State of Ohio Department of 

Development MEP Award 

70NANB5H1188 (DEN-18604) 

In September 2005, NIST awarded an MEP cooperative agreement to the State of Ohio Department of 

Development (ODOD) to continue operating an 

existing MEP center. The award funded the period July 

1, 2005, through June 30, 2006, and was later extended through June 30, 2007. Total estimated project costs 

for the 24-month award period were $27,272,502. 

In May 2007, we initiated an audit of the agreement 

to determine whether the recipient complied with 

award terms and conditions and NIST operating 

guidelines for MEP centers. The audit covered the 

period July 1, 2005, through March 31, 2007, during which time the recipient claimed project costs of 

$20,269,989 and received federal reimbursements 

totaling $6,517,538. 

Our audit questioned $6,781,041 in costs claimed by 

ODOD and cost claims of two grant subrecipients, 

Manufacturing Advocacy and Growth Network 

(MAGNET) and TechSolve, Inc. The costs in quesManufacturing Extension 

Partnership (MEP) Program 

Congress established the MEP program in 198

to offer technical and business managemen

assistance to manufacturers, with the goal o

improving their profitability, productivity, an

global competitiveness. 

Operated by NIST, the program provides pa

tial federal funding to 59 nonprofit organiza

tions (at least one in every state) to operat

MEP centers that offer an array of services t

business and industry clients. The funding 

made available through cooperative agreemen

that require nonfederal matching funds from 

state or regional partners to support cente

operations. 

1 Program income is revenue generated from activities conducted under a financial assistance award. The most common form of 

gram income under an MEP award is fees collected from manufacturers for training or other services provided by the MEP center. 

rules require program income to be used to fund the nonfederal share of allowable costs. Any excess program income must be us

reduce the federal cost share, unless NIST approves carrying the excess forward to pay nonfederal expenses in a subsequent year. 

tion pertained to contractual claims, salaries 

other personnel costs, invalid travel-related cla

and various indirect costs. We also found that 

subrecipients did not report program income1 ge

29 
share of project costs. 

As a result of the questioned costs and excess program 

income, ODOD received $2,057,121 more than it 

should have in federal funds. 

We recommended the chief of NIST’s Grants and 

Agreement Management Division: 

■ disallow $6,781,041 in questioned costs; 

■	 deduct $1,424,266 in excess program income from 

total accepted project costs from ODOD’s subrecipients; and 

■	 recover $2,057,121 of excess federal funds from 

ODOD. 

Missing Audit Reports from NIST 

ATP Grant Recipients (ATL-19891) 

Established in 1990, the Advanced Technology 

Program (ATP) works through partnerships with private-sector grant recipients to develop innovative 

technologies that promise significant commercial 

payoffs and widespread benefits for the nation. ATP 

was set up as a cost reimbursement program that 

granted awards up to 5 years. Some awards require 

that the grant recipients provide matching funds 

while others are fully funded by ATP. The program 

received its final funding in 2007 and is scheduled to 

close out in 2012. 

Under Department and NIST regulations, grant 

recipients must submit independent audits of project 

costs to NIST and OIG. The audits must be conducted at certain intervals during the performance of 

the project and at its completion. NIST’s Grants and 

Agreement Management Division collects and 

met its responsibilities to monitor the ATP award

collecting recipient audit reports and ensuring 

recipients have the required audits conduc

During this time period, NIST identified 213 aw

with project costs totaling $482 million that did 

have audit reports as part of their records. NIST 

not know whether these grant recipients had actu

conducted the audits. By not diligently monito

audit report submissions, NIST did not ensure 

these project costs were properly audited, the

increasing the risk of misuse of federal funds. 

We recommended that the director of NIST req

that agency management collect the missing a

reports and provide OIG with copies, suspend fu

ing to grantees that do not provide missing rep

and ensure that NIST meets its monitoring respo

bilities. NIST needs to improve its managem

oversight procedures, not only to correct ATP p

lems but also to reduce the future risk of misus

federal funds in ATP’s successor program, 

Technology Innovation Program. 

NIST initiated an effort to deal with the mis

reports in 2008 but suspended that effort. 

addressed this issue because of its significance an

emphasize that NIST’s senior management need

ensure that the issue is appropriately resolved. 

Guilty Plea from NIST Grant 

Recipient Under Investigation fo

Grant Fraud 

In 2005, OIG received a complaint alleging th

NIST ATP grantee, Whoola Incorporated, was 

gally diverting funds received from a $2 million

year ATP grant to a sister company. In October 20

the U.S. Attorney’s Office for the Northern Dis

30 
funds. He could face up to 10 years incarceration and 

fines up to $250,000. Sentencing is scheduled to 

occur in May 2010. 

31 

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

in Earth’s environment and conserve and manage coastal and marine resources to meet our nation’s 

nomic, 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 w

ings to the general public. 

National Ocean Service provides products, services, and information to promote safe navigation, sup

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 operati

national satellite system. 

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

lower and upper atmosphere, space environment, and the Earth. 

Office of Program Planning and Integration develops and coordinates NOAA’s strategic plan, supp

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

ment, and integrates policy analyses with decision-making. 

Review of NOAA Fisheries 

Enforcement Programs and 

Operations (OIG-19887) 

NOAA is entrusted with broad statutory enforcement powers to promote compliance and deter violations within the nation’s fisheries, primarily those 

involving the commercial fishing industry. This

calls for the highest degree of oversight by NOAA

leadership to ensure fairness and consistency in

enforcement activities and sanctions, promote program integrity and accountability, and avoid even

the appearance of abuse of authority. Although

33 

NOAA’s enforcement operations have not garn

a great deal of attention from senior managem

they have great potential to affect the fish

industry, the livelihood of individual fisherm

and the public’s confidence in NOAA and 

Department. 

We undertook our review at the request of the Un

Secretary of Commerce for Oceans and Atmosph

who also serves as the Administrator of NOAA. 

had been contacted by five members of 

Massachusetts congressional delegation and state e

ed officials, as well as by both U.S. Senators and m

tiple Representatives from North Carolina, recoun
ment operations within a regulatory environment; 

(2) the process used by OLE and GCEL to establish 

priorities with respect to enforcement actions and 

penalty assessments, and whether such actions and 

penalties are within established legal parameters; and 

(3) the resources applied by NOAA to the enforcement function, including the management and use of 

funds obtained through imposed penalties. 

We found systemic, nationwide issues adversely 

affecting NOAA’s ability to effectively carry out its 

mission of regulating the fishing industry. These 

issues have contributed significantly to a highly 

charged regulatory climate and dysfunctional relationship between NOAA and the fishing industry— 

particularly in the Northeast Region. If not addressed 

by NOAA’s senior leadership, these issues have the 

potential to further strain the tenuous relationship 

that exists in the Northeast Region, and to become 

problematic in NOAA’s other regions. 

Our findings reflected that: 

■	 NOAA senior leadership and headquarters elements need to exercise substantially greater management and oversight of regional enforcement 

operations, to include setting priorities, implementing effective management information systems, and utilizing data to inform management 

decisions and enforcement activities. 

■	 NOAA needs to strengthen policy guidance, procedures, and internal controls in its enforcement 

operations to make the civil penalty assessment 

process more transparent and appear less arbitrary 

and unfair. NOAA also needs to revise applicable 

procedural regulations and penalty schedules to 

provide greater consistency, clarity, and reduce confusion with affected industry parties. 

■ Ensure that NOAA leadership regularly addre

and provides input to enforcement priorities 

strategies with regional management, including 

mal reporting protocols. Given the complexitie

NOAA’s mission and organization, the indu

and the current enforcement climate, its settin

enforcement priorities should involve integra

and coordination with the headquarters fish

management and science center elements, inc

ing the Assistant Administrator for NMFS—

whom OLE reports. Further, NOAA should c

sider reestablishing the position of ombudsma

serve as an interface with the regulated industry

■	 Determine whether NOAA should continue 

approach fisheries enforcement from a crimi

investigative standpoint, and, if another approac

determined to be more appropriate, align O

workforce composition accordingly. In partic

NOAA should determine whether OLE has 

appropriate balance and alignment of unifor

enforcement officers/inspectors and criminal in

tigators, based on mission need. 

■ To promote greater transparency, consistency, 

oversight in NOAA’s enforcement processes 

operations, (a) ensure that GCEL develops, im

ments, and follows an internal operating pr

dures manual that includes comprehen

processes, methods, and justification for determ

ing civil penalty assessments and fine settlem

amounts; (b) institute a mechanism for higher-l

review of civil penalty assessment determinat

by GCEL attorneys in advance; and (c) ensure 

OLE’s National Enforcement Operations Manu

current, including providing sufficient policy g

ance on regulatory and criminal authorities 

procedures. 

34 
■	 NOAA’s Retention of Civil Penalties and Its Asset 

Forfeiture Fund. Fishermen and other industry

sources expressed concern to us that NOAA’s fines 

are excessive, constituting a form of bounty,

because it retains the proceeds from enforcement 

cases. We determined that NOAA has an asset forfeiture fund comprising such proceeds, with an 

agency-reported balance of $8.4 million as of

December 31, 2009. The asset forfeiture fund

account has weak internal controls, and we could 

not readily determine how NOAA has utilized

these funds. We have commissioned a forensic

review of the fund. 

■	 NOAA’s Progress in Addressing OIG’s Results. We will 

review and report on NOAA’s progress in carrying 

out its actions in response to our findings and recommendations. 

■	 Individual Complaints. During our review we received specific complaints from dozens of fishermen, including alleged abuses of authority by

NOAA enforcement personnel, disparate treatment, and excessive fines. We are examining these 

complaints and the corresponding enforcement

case files to determine whether any additional

action is necessary or recommended, either by our 

office or by NOAA. 

FY 2009 FISMA Assessment of the 

Environmental Satellite Processing 

Center (OAE-19730) 

During our review of one NOAA system, we found 

that NOAA’s National Environmental Satellite, Data, 

and Information Service has not followed the

required process for certification and accreditation of 

revise the system’s accreditation status to an inte

authorization to operate until it has completed t

actions. 

Investigation of NOAA Ship 

Repair Yields Cost Savings, 

Management Improvements 

A June 2009 allegation to OIG of software licen

violations by a NOAA contractor for shipboard c

puter systems led to an investigation that disclose

organizational conflict of interest. As a res

NOAA’s Acquisitions Division excluded the cont

tor’s bids on a major acquisition for NOAA ships

March 2010, NOAA reported savings of $537,3

which represented the difference between the exc

ed contractor’s bid and the bid the winner submi

after NOAA re-solicited the contract. To rectify 

of competition findings, NOAA Marine Operat

instituted a training program with its contrac

officers and contracting officers’ technical represe

tives and tightened the requirements on justificat

for non-competitive awards. 

Congressional Testimony 

The Inspector General testified on NOAA fish

enforcement before the Senate Committee 

Commerce, Science, and Transportation (Marc

2010), House Committee on Natural Resou

(March 3), and House Committee on Oversight 

Government Reform (field hearing in Glouce

Massachusetts, March 2). His statements are avail

at www.oig.doc.gov. 

35 
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 other telec

munications services; and educates state and local governments and other entities on ways to use informa

technology and telecommunications more effectively. 

Arkansas PSIC Grant Award No. 

2007-GS-H7-0012 (DEN-19430) 

On September 30, 2007, NTIA awarded an

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$11,169,402 PSIC grant to the State of Arkansas t

enhance interoperable emergency communication

The original award period ran from October 1, 2007

to September 30, 2010. In November 2009, th

President signed an act extending the award period t

September 30, 2011, by which time all funds mu

be expended. The governor of Arkansas designate

the Arkansas Department of Emergency Manag

ment (ADEM) as Arkansas’s state administrativ

agency to apply for and administer PSIC funds. 

Our audit covered the award period of October 1

2007, through December 31, 2008, during whic

time Arkansas claimed total costs of $1,512,347. W

found that ADEM generally complied with gran

terms and conditions. ADEM asserted that all investments are on schedule to be completed by September 

30, 2010. 

Digital Television Transition 

and Public Safety Act of 2005 

(P.L. 109-171) 

The Digital Television Transition and Public Safet

Act of 2005 authorized NTIA, in consultation wit

the Department of Homeland Security (DHS), t

implement the Public Safety Interoperab

Communications (PSIC) program—a $1 billio

one-time, formula-based matching grant program 

intended to enable public safety agencies to establis

interoperable emergency communications system

using real-located radio spectrum. NTIA required 

minimum 20 percent matching share from nonfed

eral sources for the acquisition and deployment o

communications equipment, and management an

administration costs. 

The Implementing Recommendations of th

9/11 Commission Act of 2007 require OIG t

conduct financial audits, over 4 years, of a rep

resentative sample of at least 25 states or territo

ries receiving PSIC grants. 

36 
administrative agency to apply for and administer 

PSIC funds. We audited costs claimed by PEMA to 

determine whether the recipient complied with 

NTIA PSIC grant guidelines and DHS award terms 

and conditions. 

Our audit covered the award period of October 1, 

2007, through December 31, 2008, during which 

time PEMA claimed total costs of $346,850. In general, we found PEMA to be in compliance with 

requirements. The agency asserted it is on track to 

complete the project on time. 

37 

’

The United States Patent and Trademark Office administers the nations patent and trademark l

Patents are granted and trademarks registered under a system intended to provide incentives to inv

invest in research, commercialize new technology, and draw attention to inventions that would ot

wise go unnoticed. USPTO also collects, assembles, publishes, and disseminates technological information 

closed in patents. 

FY 2009 Financial Statement 

Audits (FSD-19650) 

Independent auditor KPMG found that USPTO’s 

financial statements were fairly presented in all material respects and in conformity with U.S. generally 

accepted accounting principles. KPMG found no 

instances of material noncompliance with laws, regulations, or contracts. The audit results indicate that 

USPTO’s internal control structure facilitates the 

preparation of reliable financial and performance 

information. 

The IT review found that while USPTO has taken 

positive steps to correct previous findings, there are 

still several weaknesses in its IT environment. These 

weaknesses combine to form a significant deficiency 

in USPTO’s IT controls. We requested that USPTO 

provide an audit action plan to address the report’s 

findings and delineate the actions it plans to take to 

correct its IT vulnerabilities. We also asked that 

USPTO provide its rationale or the legal basis behind 

its decision should it choose not to implement 

KPMG’s recommendations. 

FY 2009 FISMA Assessment of t

Enterprise UNIX Services System 

(OAE-19729) 

We found that while this system security plan 

generally adequate, some inaccuracies need to 

addressed. Likewise, security control assessm

were generally adequate but improvements are n

ed. Our control assessment found some vulnera

ties that require remediation. Despite th

deficiencies, the authorizing official received s

cient information to make a credible, risk-b

decision to approve system operation. We rec

mended USPTO resolve the issues we identif

utilizing the system’s plan of action and milesto

accordingly. 

FY 2009 FISMA Assessment of t

Patent Cooperation Treaty Searc

Recordation System (OAE-19731) 

Although we found minor deficiencies, USPT

certification and accreditation (C&A) process 

duced sufficient information to enable the autho

ing officials to make a credible, risk-b

accreditation decision. Our evaluation of the syst

39 
y

.

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gpgg

reported that on August 27, 2009, a former USPTO

financial analyst pled guilty on charges of conspirac

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 he

co-conspirator, who was not affiliated with the fed

eral government. The former USPTO employe

managed an account into which USPTO customer

deposited funds for the purpose of paying expense

incurred in processing their patent and trademark

applications. From 1998 to 2005, the forme

USPTO employee transferred funds from thi

account to accounts controlled by the co-conspira

tor. The former USPTO employee fraudulently con

cealed the transfers by making them look lik

refund payments to USPTO customers. Her co

conspirator then paid a portion of the stolen fund

back to her in cash. The former USPTO employe

engaged in 32 fraudulent transfers from USPTO

totaling $534,338.55. Twenty-seven of the transac

tions, accounting for $451,252.17, involved th

co-conspirator. 

conducted by our Office of Investigations uncov

the full extent of the conspiracy and fraudulent 

which were reported to the U.S. Attorney’s Office 

the Eastern District of Virginia for prosecution. 

Contractor Agrees to Major 

Settlement in Defective 

Products Case 

In August 2006, OIG’s Office of Investigat

received a civil fraud complaint from a whistleblo

alleging that a large contractor, EMC Corporat

knowingly provided USPTO with data storage c

puters containing a defective microchip manu

tured by a subcontractor. The complaint fur

alleged that the corporation concealed informa

regarding the defect, resulting in service interrupt

at USPTO. In October 2009, the contractor and 

U.S. Department of Justice reached a settlem

agreement of $3.5 million, plus interest earned

provided by the False Claims Act, the whistleblo

was awarded 18 percent of the settlement amoun

40 
A. Report Types this Period 44 

A-1. Performance Audits 44 

A-2. Financial Assistance Audits 44 

A-3. Financial Statements Audits 45 

A-4. Evaluations and Inspections 46 

B. Processed Audit Reports 47 

B-1. Processed Reports with Audit Findings 48 

APPENDIXES 

Table 1. Investigative Statistical Highlights for this Period 

Investigative Activities 

Investigations opened 9 

Investigations closed 6 

Arrests 0 

Indictments/Informations 1 

Convictions 1 

Personnel actions 5 

Fines, settlements, restitution, judgments, and all other criminal, civil and 

administrative recoveries $4,027,679 

Hotline complaints processed 225 

Total complaints, all sources 266 

Referrals to operating units 163 

Evaluated but not accepted for investigation or referral 94 

Allegations Processed 

Audit Resolution and Follow-Up 

The Inspector General Act Amendments of 1988 

require us to present in this report those audits issued 

before the beginning of the reporting period

(October 1, 2009) for which no management decision had been made by the end of the period (March 

31, 2010). Seven audit reports remain unresolved for 

this reporting period (see page 49). 

41 

Department Administrative Order 213-5, A

Resolution and Follow-up, provides procedures 

management to request a modification to 

approved audit action plan or for a financial a

tance recipient to appeal an audit resolution dete

nation. The following table summarizes modifica

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

Questioned costs $6,434,64

Value of audit recommendations that funds be put to better use 5,240,26

Value of audit recommendations agreed to by management 1,912,87

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 16 $28,133,341 $5,066,7

B. Reports issued during the reporting period 11 6,434,646 2,497,6

Total reports (A+B) requiring a management 

decision during the period1 27 34,567,987 7,564,39

C. Reports for which a management decision 

was made during the reporting period 15 13,051,167 4,964,1

i. Value of disallowed costs 1,907,522 56,1

ii. Value of costs not disallowed 11,143,645 4,908,0

D. Reports for which no management decision 

had been made by the end of the 

reporting period 12 21,516,820 2,600,2

1 One audit report included in this table is also included among reports with recommendations that funds be put to better use (se

Table 5). However, the dollar amounts do not overlap. 

42 
the reporting period 1 5,348 

i. Value of recommendations agreed to by management 5,348 

ii. Value of recommendations not agreed to by management 0 

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

end of the reporting period 3 6,333,76

1 One audit report included in this table is also included among reports with questioned costs (see Table 4). However, the dollar 

amounts do not overlap. 

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 law, reg

tion, contract, grant, cooperative agreement, or other agreement or document governing the expenditur

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, includ

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

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

mended improvements related to Commerce, a contractor, or a grantee; (5) avoidance of unneces

expenditures identified in pre-award reviews of contracts or grant agreements; or (6) any other savings spe

cally 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. 

43 
Appendix A-1. Performance Audit 

Report Date Funds to Be Put 

Report Title Number Issued to Better Use 

Office of the Secretary 

Commerce Has Implemented Operations to 

Promote Accurate Recipient Reporting, but 

Improvements Are Needed ARR-19847 10.30.09 0 

Appendix A-2. Financial Assistance Audits 

Report Date Funds to Be Put Amount Amoun

Report Title Number Issued to Better Use Questioned Unsuppor

National Institute of Standards & Technology 

State of Ohio 

Department of 

Development DEN-18604 03.29.10 $1,424,266 $2,237,744 0 

National Telecommunications and Information Administration 

Pennsylvania Public 

Safety Interoperable 

Communications Grant DEN-19429 03.17.10 0 0 0 

Arkansas Public Safety 

Interoperable Communications 

Grant DEN-19430 03.22.10 0 0 0 

44 
FY 2009 Financial Statements FSD-19651-02 11.10.09 0 

Office of the Secretary 

FY 2009 Financial Statements 

Audit Assessment of Information 

Technology Controls Supporting 

Financial Management Systems FSD-19652-01 11.09.09 0 

FY 2009 Special-Purpose 

Financial Statements FSD-19652-03 11.30.09 0 

Patent and Trademark Office 

FY 2009 Financial Statements 

Audit Assessment of Information 

Technology Supporting Financial 

Management Systems FSD-19650-01 11.09.09 0 

FY 2009 Financial Statements FSD-19650-02 11.10.09 0 

45 
2010 Census: Quarterly Report to 

Congress, February 2010 OIG-19791-3 02.16.10 0 

National Institute of Standards and Technology 

Missing Audit Reports from 

NIST ATP Grant Recipients ATL-19891 03.31.10 0 

National Oceanic and Atmospheric Administration 

FY 2009 FISMA Assessment of the 

Environmental Satellite Processing Center OAE-19730 01.06.10 0 

Review of NOAA Fisheries 

Enforcement Programs and Operations1 OIG-19887 01.21.10 0 

Office of the Secretary 

Improvements Recommended for 

Commerce Pre-Award Guidance and 

NIST and NOAA Processes for 

Awarding Grants ARR-19841 10.29.09 0 

More Automated Processing by Commerce 

Bureaus Would Improve Recovery 

Act Reporting ARR-19779 12.18.09 0 

Patent and Trademark Office 

FY 2009 FISMA Assessment of the 

Enterprise UNIX Services System OAE-19729 11.20.09 0 

FY 2009 FISMA Assessment of the 

Patent Corporation Treaty Search 

Recordation System OAE-19731 11.20.09 0 

1 Report issued by the Office of Investigations. 

46 
p

International Trade Administration 1 

Minority Business Development Agency 1 

National Institute of Standards and Technology 1 31 

National Oceanic and Atmospheric Administration 33 

National Telecommunications and Information Administration 3 

Multi-Agency 25 

No Commerce expenditures 3 

Not identified by agency 1 

Total 147 

1 Includes 27 Advanced Technology Program (ATP) program-specific audits. 

47 
Development Agency, NY ATL-09999-10-3632 11.20.09 0 275,000 0 

City of Richmond, IN ATL-09999-10-3658 01.20.10 0 300,000 0 

Central Savannah River 

Area Regional 

Development Center, GA ATL-09999-10-3678 01.20.10 0 424,205 0 

Erie County Industrial 

Development Agency and 

Affiliates, NY ATL-09999-10-3669 02.05.10 3,816,000 0 0 

Franklin County 

Community Development 

Corporation, MA ATL-09999-10-3687 03.11.10 0 22,963 22,963 

National Institute of Standards & Technology 

QD Vision, Inc., MA ATL-09999-10-3455 11.20.09 0 12,938 12,938 

SimQuest International 

LLC, MD ATL-09999-10-3459 11.13.09 0 28,381 0 

National Oceanic & Atmospheric Administration 

North Pacific Marine 

Science Foundation, WA ATL-09999-10-3631 11.05.09 0 25,851 0 

Howard University, DC ATL-09999-10-3578 12.03.09 0 825,029 776,719 

Smithsonian 

Institution, DC ATL-09999-10-3603 12.16.09 0 597,535 0 

48 
Management, Inc., was providing 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 this contract audit pursuant to an 

agreement with Census. 

pq

costs claimed. Resolution has proven to be comp

and NIST has not provided us with the initial a

resolution proposals. (ATL-18567, ATL-185

DEN-18135, DEN-18573) 

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. We have suspended a

resolution on this grant audit pursuant to an ag

ment with NOAA. (ATL-09999-8-3238) 

49 
5(a)(3) Prior Significant Recommendations Unimplemented 50 

5(a)4 Matters Referred to Prosecutive Authorities 41 

5(a)(5) and 6(b)(2) Information or Assistance Refused 50 

5(a)(6) Listing of Audit Reports 44-4

5(a)(7) Summary of Significant Reports 19-4

5(a)(8) Audit Reports—Questioned Costs 42 

5(a)(9) Audit Reports—Funds to Be Put to Better Use 43 

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

5(a)(11) Significant Revised Management Decisions 51 

5(a)(12) Significant Management Decisions with which OIG Disagreed 51 

recommendation described in previous semian

reports for which corrective action has not been c

pleted. Section 5(b) requires that the Secretary tr

mit to Congress statistical tables showing the num

and value of audit reports for which no final ac

has been taken, plus an explanation of the rea

why recommended action has not occurred, ex

when the management decision was made within 

preceding year. 

To include a list of all significant unimplemented 

ommendations in this report would be duplica

I

t

a

t

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y 

s

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e 

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e 

t 

t 

nformation on the status of any audit recommen

ions can be obtained through OIG’s Office of A

nd Evaluation. 

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

or Assistance Refused 

These sections require a summary of each repor

he Secretary when access, information, or assista

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 leg

islation or regulations on the economy and efficienc

of the management of programs and operation

administered or financed by the agency or on the pre

vention and detection of fraud and abuse in thos

programs and operations. Comments concerning leg

islative and regulatory initiatives affecting Commerc

programs are discussed, as appropriate, in relevan

sections of the report. 

Section 5(a)(3): Prior Significant 

Recommendations Unimplemented 

This section requires identification of each significan

50 
why a decision has not been made, and a statement 

concerning the desired timetable for delivering a 

decision on each such report. There were one 

NOAA, four NIST, and two 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 

Management Decisions with Which 

OIG Disagreed 

This section requires information concerning any 

nificant management decision with which the ins

tor general disagrees. Department Administra

Order 213-5 provides procedures for elevating u

solved audit recommendations to higher level

Department and OIG management, including t

consideration by an Audit Resolution Coun

During this period no audit issues were referred. 

51 
Acronyms and Abbreviations March 2010—Semiannual Report to Congress 

ACRONYMS AND ABBREVIATIONS 


ADEM Arkansas Department of 

Emergency Management 

ATP Advanced Technology Program 

BIS Bureau of Industry and Security 

BTOP Broadband Technology 

Opportunities Program 

C&A certification and accreditation 

CBS Commerce Business System 

COR contracting officer’s 

representative 

COTR contracting officer’s technical 

representative 

DAPPS Decennial Applicant, Personnel, 

and Payroll System 

DRIS Decennial Response Integration 

System 

EDA Economic Development 

Administration 

ESA Economics and Statistics 

Administration 

FDA Food and Drug Administration 

FDCA Field Data Collection Automation 

FISMA Federal Information Security 

Management Act 

GCEL Office of General Counsel for 

Enforcement and Litigation 

(NOAA) 

GSA General Services Administration 

GOES-R Geostationary Operational 

Environmental Satellite-R Series 

HCHB Herbert C. Hoover Building 

IG Inspector General 

IT information technology 

JPSS Joint Polar Satellite System 

LCO local Census office 

MEP Manufacturing Extension 

Partnership 

NASA National Aeronautics and Space 

Administration 

NIST National Institute of Standards and 

Technology 

NOAA National Oceanic and Atmospheric 

Administration 

NMFS National Marine Fisheries Service 

NPOESS National Polar-orbiting Operational 

Environmental Satellite System 

NPP NPOESS Preparatory Project 

NRFU Nonresponse Follow-up 

NTIA National Telecommunications and 

Information Administration 

OAM Office of Acquisition Management 

(Department of Commerce) 

OIG Office of Inspector General 

OLE Office of Law Enforcement 

(NMFS) 

OMB Office of Management and Budget 

PBOCS Paper-based Operations Control 

System 

PEMA Pennsylvania Emergency 

Management Agency 

PSIC Public Safely Interoperable 

Communications 

PSP Partner Support Program 

Recovery Act American Recovery and 

Reinvestment Act 

RRB Risk Review Board 

(Census Bureau) 

USHCN U.S. Historical Climatology 

Network 

USPTO United States Patent and 

Trademark Office 

52
Office of Audit

and Evaluation

Systems Acquisition

and IT Security Audits

Economic and

Statistical Program

Assessment

Budget and Administration

Human Resources

Information Technology

Inspector General

Deputy

Inspector General

Associate Deputy

Inspector General

Chief of Staff

Office of Inspector General

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