U.S. Department of Commerce

Office of Inspector General

Semiannual Report to Congress

September 2015
OFFICE OF 

INSPECTOR GENERAL

Oversight Areas

Office of the Secretary

Bureau of Economic Analysis

Bureau of Industry and Security 

Economic Development Administration 

Economics and Statistics Administration 

First Responder Network Authority

International Trade Administration 

Minority Business Development Agency 

National Institute of Standards and Technology

National Oceanic and Atmospheric Administration

National Technical Information Service 

National Telecommunications and 

Information Administration 

U.S. Census Bureau

U.S. Patent and Trademark Office 

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Inspector General . . . . . . . . . . . . . . . . . . . . . . . . . . .202.482.4661

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Inspector General
U.S. Department of Commerce

Office of Inspector General

Semiannual Report to Congress

September 2015
TABLE OF 

CONTENTS

01 FROM THE INSPECTOR GENERAL

02 TOP MANAGEMENT CHALLENGES FACING THE DEPARTMENT

08 OVERSIGHT AREAS

08 DEPARTMENT-WIDE MANAGEMENT 

16 ECONOMIC DEVELOPMENT ADMINISTRATION

18 ECONOMICS AND STATISTICS ADMINISTRATION

24 NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

28 NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

36 NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

38 UNITED STATES PATENT AND TRADEMARK OFFICE 

42 WORK IN PROGRESS

46 STATISTICAL DATA

54 REPORTING REQUIREMENTS

57 ACRONYMS AND ABBREVIATIONS
1

FROM THE 

ACTING INSPECTOR GENERAL

I am pleased to present the Department of Commerce Office of Inspector General’s 

Semiannual Report to Congress for the 6 months ending September 30, 2015.

This report summarizes work we initiated and completed during this semiannual 

period on a number of critical Departmental activities. Over the past 6 months, our 

office completed 21 audits, inspections, responses to Congressional requests, 

and public investigative reports, as well as 2 Congressional testimonies addressing 

programs and personnel associated with the Economic Development Administration, 

Economics and Statistics Administration, National Institute of Standards 

and Technology, National Oceanic and Atmospheric Administration, National 

Telecommunications and Information Administration, U.S. Patent and Trademark 

Office, and the Department itself.

In October 2015, we issued our annual report identifying what we consider from our

oversight perspective to be the top management challenges facing the Department

in fiscal year 2016, a summary of which begins on page 2. We will continue to work

closely with the Department and with Congress to meet these and other challenges

facing Commerce, especially as it tackles the ambitious strategies and initiatives 

outlined in America Is Open for Business, its strategic plan for fiscal years 2014 

through 2018.

We thank Secretary Pritzker, senior officials throughout the Department, and members 

of Congress and their staffs for their support of our work and for their receptiveness 

to our recommendations to improve Commerce programs and operations.

DAVID SMITH
2 Office of Inspector General | Semiannual Report to Congress | September 2015

TOP MANAGEMENT 

CHALLENGES FACING 

THE DEPARTMENT

The Reports Consolidation Act of 2000 requires federal inspectors 

general to identify the top management challenges facing their departments. 

In June 2015, OIG issued to the Department of Commerce and its agencies 

a memorandum that previewed what we would discuss in further detail in our 

forthcoming report for fiscal year (FY) 2016, Top Management Challenges 

Facing the Department of Commerce. In the memorandum, we identified 

cross-cutting issues aligned with the Department’s strategic plan for 

FYs 2014–18. We issued a draft report on August 25, 2015. (Our final report 

was issued on October 6, 2015.)

1. TRADE AND INVESTMENT

Expand the U.S. economy through increased exports and inward foreign investment 

that lead to more and better American jobs

The International Trade Administration (ITA), Bureau of Industry and Security (BIS), and Economic 

Development Administration (EDA) have roles in supporting the infrastructure for U.S. economic 

growth. The top challenges we identify for this priority area are management and organizational 

issues at ITA following its recent consolidation; the continued BIS migration of export licensing 

functions to the Department of Defense’s USXPORTS system; and Departmental and bureau 

oversight of grant recipient programs.

• Promptly addressing remaining issues from ITA’s consolidation. ITA must resolve challenges 

such as developing revised performance plans and providing appropriate training for affected 

employees, developing an employee engagement plan, and assessing the level of resources 

throughout ITA headquarters.

• Migrating export licensing functions to USXPORTS. BIS had originally planned to 

decommission its legacy export licensing system, Export Control Automated Support System, 

and migrate to USXPORTS by 2012. Instead, BIS opted to enhance its own internally 

developed system for internal export licensing and enforcement functions. 

• Executing Departmental and bureau oversight of grant recipients. The Department and 

its bureaus with grant programs must incorporate the Office of Management and Budget 

(OMB)’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for 

Federal Awards—which went into effect during the first quarter of FY 2015—mandating how 

grants are awarded, administered, and audited.
3

2. INNOVATION

Foster a more innovative U.S. economy—one that is better at inventing, improving, and 

commercializing products and technologies 

The U.S. Patent and Trademark Office (USPTO) is responsible for protecting the work of 

innovators by ensuring the integrity of their intellectual property (IP) rights through the timely and 

quality review and issuance of patents and trademarks. It faces various challenges in improving the 

timeliness and quality of patent application examinations and appeal decisions. USPTO also faces 

challenges in advocating for international agreements and policies to protect and enforce IP rights. 

The First Responder Network Authority (FirstNet) faces challenges in its efforts to implement a 

nationwide interoperable public safety broadband network.

• Improving process time and quality of patent application examination. Last year, USPTO 

temporarily redirected its resources to reduce its backlog of requests for continued 

examination (RCEs). While USPTO has made progress in reducing the RCE backlog and 

pendency of unexamined patent applications, it still faces challenges in reducing the patent 

application backlog and improving patent examination quality.

• Improving decision timeliness and quality at the Patent Trial and Appeal Board (PTAB). Since 

September 2012, PTAB has been increasing the size of its staff to address both the appeals 

inventory and new proceedings under the America Invents Act. Despite the high rates of 

increase in PTAB personnel and spending on patent trials and appeals, USPTO is still facing 

challenges in reducing the ex parte appeal backlog and pendency.

• Advocating for protection and enforcement of IP rights. USPTO’s Office of Policy and 

International Affairs IP rights attaché program advocates directly with host governments to 

improve IP policies, laws, and regulations for the benefit of U.S. stakeholders and provide 

support for U.S. companies abroad with IP issues. Critical challenges with carrying out the 

program include budget uncertainty from fluctuations in fee revenue; international politics; 

regional instability in the Middle East; and the USPTO’s lack of authority to rate attaché 

performance.

• Implementing a nationwide public safety broadband network. The Middle Class Tax Relief 

and Job Creation Act of 2012 established FirstNet as an independent authority to implement 

a nationwide interoperable public safety broadband network. As FirstNet makes progress in 

establishing an organizational structure and performing consultation and outreach, remaining 

challenges include adequacy of funding, effective consulting, internal control and staffing, and 

other organizational issues.

• Addressing the increasing demand for radio frequency spectrum. In June 2010, the President 

directed the Department of Commerce, working through the National Telecommunications 

and Information Administration (NTIA), to make 500 megahertz (MHz) of federal and nonfederal spectrum available by 2020 to support wireless broadband needs. To meet the 2020 

deadline, NTIA needs to incorporate lessons learned into actual strategies—as well as identify 

the availability of, and more efficient use of, radio frequency spectrum. Also, the termination 

of the Federal Spectrum Management System presents a challenge to NTIA’s capability to 

manage spectrum, as it will still need a technological system that can modernize, automate, 

and integrate key spectrum management functions.

Top Management Challenges Facing the Department
4 Office of Inspector General | Semiannual Report to Congress | September 2015

3. ENVIRONMENT

Help communities and businesses prepare for and prosper in a changing environment

The Department’s objectives under this goal include advancing our understanding and prediction 

of changes in the environment; building a weather-ready nation; and fostering healthy and 

sustainable marine resources, habitats, and ecosystems. As the lead agency for addressing 

this goal, the National Oceanic and Atmospheric Administration (NOAA) must meet several 

challenges, including costly, complex satellite system acquisitions and potential gaps in satellite 

data; preparation for processing next-generation satellite observational data; and the competing 

needs of fisheries stakeholders.

• Keeping satellite acquisition programs on schedule. Acquisition and development delays 

could lead to gaps in NOAA’s satellite coverage, potentially degrading its ability to produce 

actionable environmental information. The Joint Polar Satellite System (JPSS) program’s 

challenge is to keep the JPSS-1 satellite development on track to meet its launch 

commitment—while taking steps to implement a newly proposed Polar Follow-On program. 

The Department must also ensure that the Geostationary Operational Environmental 

Satellite-R Series (GOES-R) program continues to meet requirements and manage 

development challenges. The launch of the first GOES-R satellite has been delayed to 

October 2016, increasing the potential for the GOES fleet to be without ensured coverage 

should an operational satellite fail.

• Preparing to process observational data from new satellite missions. NOAA may need to defer 

or even eliminate planned operational capabilities as it completes complex integration testing 

for the GOES-R and JPSS-1 missions, in order to launch both satellites as soon as possible 

and mitigate potential data gaps. Post-launch test activities, as well as validation of data flows 

and products, will need to be closely monitored to ensure timely processing for user availability.

• Prioritizing national goals for more cost-effective collection of fishing data. To increase 

efficiency and oversight, NOAA’s National Marine Fisheries Service (NOAA Fisheries) has 

considered using emerging electronic technologies, such as video monitoring, to increase 

coverage and reduce human observer costs—as well as contribute to a more cost-effective 

and sustainable collection of fishing data. However, NOAA Fisheries has not yet developed 

a nationwide strategic plan; each region continues to develop its own, with current objectives 

detailed across multiple policy documents.

4. DATA 

Maximize the positive impacts of Commerce data on society

The Department plays a key role in the 21st century information-driven economy, providing 

data that benefit businesses, governments, and the public. The Census Bureau, a major source 

of the Department’s data, faces challenges as it prepares for the 2020 decennial census and 

continues to provide a stream of timely demographic, housing, social, and economic information 

for states and local areas. Also, the Digital Accountability and Transparency Act of 2014 (DATA 

Act) compels federal departments and agencies to expand data capabilities and support a dataenabled economy.

• Delivering a timely 2020 Census that maintains or improves data quality, but costs less than 

the 2010 Census. The Bureau continues to face challenges in achieving cost savings goals 

while fully using resources needed to achieve design decisions and research and testing 

goals. Moreover, the Bureau still needs to develop a defined schedule for achieving key 

milestones in order to complete the operational development and systems testing phase and 

begin readiness testing and execution by FY 2019.
5

• Effectively recording, collecting, and using financial data to guide programmatic decisions. 

To effectively manage a program of the size, complexity, and cost of the 2020 Census—and 

assess the return on investment of research and testing—Bureau managers need to develop 

detailed and supportable cost estimates to use as benchmarks for success. The estimates 

should then be compared to actual costs to assess the return on investment of research and 

testing. The Bureau must also improve its cost estimation and accounting practices to provide 

stakeholders assurance that budget requests are justified and will yield expected results.

• Developing, testing, and implementing a cost-effective, secure 2020 Census IT infrastructure. 

With less than 5 years remaining until Census Day (April 1, 2020),the Bureau has a tight 

timeline to successfully deploy an enterprise solution for IT infrastructure. Yet, the Bureau 

faces challenges of defining and integrating multiple requirements into the enterprise solution; 

developing the system, either in-house or using external expertise; deploying the solution 

in advance of the decennial census for its existing surveys; and ensuring scalability to meet 

workload demands of the decennial census. With the July 2015 departure of the Bureau’s 

Chief Information Officer, this critical program is facing a gap in leadership.

• Overcoming public resistance to the American Community Survey. The Bureau’s challenge 

with respect to the American Community Survey is to balance the federal need for quality 

data against a common public opinion that the survey’s questions are intrusive. It remains to 

be seen whether the Bureau’s current efforts to meet this challenge—identifying opportunities 

to revise references to mandatory participation, asking some questions on a periodic basis, 

and directing some questions to a smaller subset of respondents—will suffice.

• Achieving the mandate for government-wide data standards of the DATA Act. The DATA Act 

requires federal agencies to make available detailed information on their spending and use 

of federal funds and to report it by specific categories. The data reported will include how 

much funding an agency receives from Congress and how much agencies spend on specific 

projects and awards. Due to the Department’s legacy information systems, providing reliable 

and consistent agency program information and meeting the goals of the DATA Act will be a 

significant challenge.

5. OPERATIONAL EXCELLENCE 

Strengthen the Department’s capacity to achieve its objectives, maximize return on its 

program investments, and deliver quality, timely service

Achieving operational excellence is essential for the Department to achieve mission-focused 

objectives and maximize value to its customers. This objective focuses on the high-priority, 

cross-cutting initiatives that the Department’s leadership believes are the most critical to mission 

success. The top challenges we identify for this priority area concern the following:

• Improving IT controls on the Department’s financial data. Specifically, the Department’s 

financial systems continue to have deficient access controls, configuration management, and 

segregation of duties. It is essential that the Department focus on improvements in these 

areas to ensure that financial data processed on the Department’s systems have integrity, are 

securely maintained, and are only available to authorized users.

• Identifying a long-term replacement for Commerce Business Solutions (CBS). The lack of 

centralized and integrated financial management systems creates reporting and oversight 

challenges for the Department, including the ability to effectively report financial data and 

monitor financial activity across its operating units. Plans are in progress to replace the 

CBS legacy financial management system. However, there have been significant challenges 

with this project, including delays in identifying a viable solution for a replacement. As a 

result, CBS will need to be operational Department-wide through FY 2022. It will also be 

Top Management Challenges Facing the Department
6 Office of Inspector General | Semiannual Report to Congress | September 2015

costly to maintain CBS; it is not set up for data analytics, data archiving, or enterprise data 

warehousing—all of which will be provided by a new business application solution. Additional 

challenges to finding a viable replacement for CBS include the use of a shared-service 

provider, the need to interface separate component systems, and uncertainty of funding that 

will be adequate to bring the replacement project to timely completion.

• Addressing persistent IT security issues. These include the Department implementing basic 

security measures required by NIST’s risk management framework; remediating critical and 

high-risk vulnerabilities as it implements its enterprise cybersecurity monitoring and operations 

initiative; improving the quality and thoroughness of system security control assessments; 

and continuing to strengthen its incident detection and response capabilities through its 

Enterprise Security Oversight Center initiative.

• Improving the quality and thoroughness of system security control assessments. Federal 

agencies are required to establish a monitoring program to manage information security risks 

on a continuous basis, including overseeing the security controls in their information systems. 

A recent audit report we issued determined that independent assessors did not conduct 

sufficiently rigorous assessments of critical security controls for five NOAA National Weather 

Service (NWS) systems. Our audit found that, regarding these assessments, (1) results 

lacked supporting evidence, (2) assessors drew conclusions that contradicted collected 

evidence, (3) all control requirements were not evaluated, and (4) not all types of IT products 

were assessed. Consequently, these assessments likely did not provide authorizing officials 

an accurate implementation status of these systems’ security controls.

• Continuing to strengthen its incident detection and response capabilities. In early FY 2015, 

NOAA was the victim of a serious cyber-attack resulting in an interruption of services that 

provide essential data for vital weather forecasts and warnings. As a result, we initiated an 

audit of NOAA’s IT security practices related to this latest cyber-attack. Separately, OIG has 

identified significant concerns with Department-wide cybersecurity. The Department must 

address persistent security deficiencies that make the Department vulnerable to cyberattacks, improve the quality of security control assessments, and strengthen its incident 

detection and response capabilities. 

• Managing high-risk contracts. In recent years, our audit work has identified opportunities 

for the Department to improve its management of high-risk cost-reimbursable contracts—

and save taxpayer dollars. A government-wide initiative calls for federal agencies to 

reduce spending on high-risk contracts, such as time-and-materials and labor-hour, cost 

reimbursement, and noncompetitive contracts. The Department still faces challenges in 

contract oversight and administration of these contracts.

• Needing a sufficiently staffed and qualified acquisition workforce. In a September 3, 2013, 

memorandum, the Office of Federal Procurement Policy’s Administrator acknowledged that 

the federal government needs talented and trained individuals who can plan, manage, and 

oversee acquisitions. The Department considers the scarcity of talent a critical challenge 

in managing its acquisition workforce due to its procurement of a variety of products and 

services, such as highly specialized satellite equipment, broadband technology, and coastal 

and ocean resources. A legislative hiring cap that limits the number of employees hired within 

some operating units and limited career development and advancement opportunities are 

obstacles the Department faces in acquiring such talent. The Department needs to continue 

its aggressive recruitment efforts to attract and retain the best qualified acquisition workforce 

at entry- and mid-level positions.

• Accuracy procurement data reporting. The Department needs to improve its process 

for entering accurate and reliable data into the Federal Procurement Data System-Next 

Generation (FPDS-NG) in order to provide a comprehensive view into the details of contract 
7

spending—and increase the Department’s transparency and accountability regarding how it 

spends taxpayer dollars.

• Improving premium-class travel compliance with the Federal Travel Regulation. The 

Department also faces challenges as it addresses operational issues related to the use of 

premium-class travel. Our office’s recent audit found that the Department does not implement 

effective controls over the management of premium-class travel, resulting in additional costs 

spent to upgrade travel to premium-class that may not have been warranted. The Department 

must take actions to address the reported deficiencies, ensuring adequate controls over 

premium-class travel justification, approval, and reporting are in place and functioning in 

compliance with the Federal Travel Regulation.

• Creating a Department-wide culture of accountability. Challenges include the following:

l Detecting and preventing time and attendance abuse. In FYs 2014–2015, OIG 

concluded several investigations involving time and attendance abuse by employees, 

with significant findings in several operating units. 

l Supporting OIG independence, publication decisions, and access to records. On 

August 5, 2014, the previous Department of Commerce Inspector General joined 

46 other IGs in the federal government in signing a letter to members of Congress 

affirming the importance of OIG access and independence. To achieve this, the 

Department’s senior leadership must create a culture that supports OIG’s oversight 

function by encouraging all employees to cooperate with OIG audits, inspections, 

and investigations. 

OIG continues to encounter issues with Department officials refusing access or claiming 

privilege over documents required to facilitate reviews. Examples include the following:

l The Department’s Office of General Counsel recommending the refusal of OIG 

access to documents required for an audit.

l NOAA attempts to prevent release of OIG IT security audit findings. 

l Blocked access to Commerce badging data for Census Bureau headquarters.

Top Management Challenges Facing the Department
DEPARTMENT-WIDE MANAGEMENT

The U.S. Department of Commerce works to help American 

companies become more innovative and successful at home and more 

competitive abroad. It creates the conditions for economic growth and 

opportunity by promoting innovation, entrepreneurship, competitiveness, 

and stewardship. 

The Department accomplishes its mission by providing national and 

local weather services; developing key economic and demographic 

data (including the Census); advancing technological and scientific 

innovation; protecting and restoring environmental resources; promoting 

international trade; and supporting local, regional, and national economic 

development. These activities affect U.S. business and industry daily and 

play a critical role in the nation’s economic well-being.
9

COMPLETED WORKS (BY OVERSIGHT AREA) 

During this reporting period, OIG completed 21audit/inspection reports, public investigative 

reports, and responses to Congressional requests, as well as 2 Congressional testimonies.

a Completed work concerning NTIA includes one audit report regarding FirstNet.

INCORPORATING CONTRACT AUDITS INTO CONTRACT ADMINISTRATION PLANNING 

AND PERFORMANCE AT THE DEPARTMENT OF COMMERCE (OIG-15-027-M)

We explored the value of following Federal Acquisition Regulation (FAR) guidance in planning, 

designing, and executing Departmental audits of contractors. While the Department’s Office 

of the Chief Financial Officer currently evaluates acquisition activities and programs according 

to the Commerce Acquisition Regulation (CAR), we note that amounts budgeted for audits 

of the Department’s contractors are inadequate and therefore do not allow the Department 

to identify potential cost savings. We are also concerned with a lack of coordination between 

the Department and its bureaus when planning for audits of its contractors. To improve the 

effectiveness and efficiency of the entire Department’s contract administration, we offered 

recommendations to the Director of Acquisition Management.

We recommended that the Director of Acquisition Management

• work with bureau procurement officials to (a) identify contracts that may benefit from the use 

of audit support services and (b) consult with DCAA and/or independent public accounting 

firms about available audit support services and associated costs for the services, and

• update the Commerce Acquisition Manual to include additional contract administration 

functions identified in Federal Acquisition Regulation 42.302.

FY 2014 COMPLIANCE WITH IMPROPER PAYMENT REQUIREMENTS (OIG-15-029-I)

The Improper Payments Information Act of 2002 (IPIA) requires federal agencies to (1) identify 

programs susceptible to improper payments; (2) estimate improper payment amounts for such 

programs; and (3) report these estimates, along with actions taken to reduce improper payments 

for programs with estimates that exceed $10 million in improper payments. The Improper 

8

Department-wide NOAA NTIAa EDA ESA NIST

1

4

1

5

1

3

USPTO

Department-Wide Management
10 Office of Inspector General | Semiannual Report to Congress | September 2015

Payments Elimination and Recovery Act of 2010 and Improper Payments Elimination and 

Recovery Improvement Act of 2012 amended IPIA by expanding on the previous requirements 

and broadening recovery requirements for overpayments. Broadly defined, improper payments 

are those the federal government has made in the wrong amount, to the wrong entity, or for the 

wrong reason.

We initiated this engagement to review the Department’s compliance with IPIA, as required by 

the Office of Management and Budget’s (OMB’s) government-wide implementation guidance. 

Specifically, we (1) assessed whether the Department complied with all applicable reporting 

requirements, and (2) evaluated the accuracy and completeness of its reporting, as well as its 

performance in reducing and recapturing improper payments.

Our review of the actions taken by the Department to comply with IPIA and OMB requirements 

identified that the Department can further improve the risk assessment process. Specifically, 

we found that the risk assessment process could be improved in the following three areas: 

consideration of required risk factors; inclusion of payments to employees; and documentation 

of significant changes in legislation and funding of its programs and activities.

We recommended that the Deputy Chief Financial Officer and Director for Financial Management 

strengthen the risk assessment process by 

• adding assessment areas that result in consideration of all OMB required risk factors and 

providing guidance on topic requirements or factors that should be addressed within each 

area of the risk assessment;

• establishing a policy or procedure to ensure that changes and updates to laws and 

regulations affecting improper payment requirements are identified and implemented timely, 

including providing notification of such changes to bureaus; and

• providing bureaus with guidelines to determine what constitutes significant changes in 

legislation and funding within the Department’s programs and activities and requesting timely 

notification of such changes so that program and activity risk assessment can be performed 

in the next annual cycle.

INACCURATE REPORTING OF UNDEFINITIZED ACTIONS IN THE FEDERAL 

PROCUREMENT DATA SYSTEM–NEXT GENERATION (FPDS-NG) (OIG-15-033-A)

Undefinitized actions (UAs) are contract actions, issued as letter contracts and other instruments, 

for which the contract terms, specifications, or prices are not agreed upon before performance 

begins. UAs are restricted for use to meet an urgent requirement of an agency and are for use only 

after it has been determined that no other alternative contracting method will fulfill the urgent need.

We initiated this audit to determine whether contracting officials effectively managed and executed 

UAs. However, NOAA and NIST FPDS-NG data were not sufficiently reliable to identify the 

universe of UAs. Consequently, this report addresses the miscoding of UAs in FPDS-NG and 

contract file maintenance. We found that the Department needs to improve (a) its process for 

entering accurate and reliable data into FPDS-NG and (b) its controls to properly maintain and 

safeguard contract files.

We recommended that the Department’s Director of Acquisition Management

• Issue guidance to senior bureau procurement officials reemphasizing the importance of 

entering, reviewing, and approving the accuracy of information entered into the contract 

action reports to ensure the integrity of the data in FPDS-NG.
11

• Issue guidance to senior bureau procurement officials reemphasizing the importance of 

maintaining contract files in accordance with federal and Department policies.

We recommended that the Director of the NOAA Acquisition and Grants Office and the Associate 

Director of the NIST Management Resources Office

• Ensure contracting officers properly code contract actions identified in this report.

• Implement strong internal controls and oversight processes and procedures to ensure that 

contract actions are properly coded in FPDS-NG and contract files contain all required 

contract documentation.

DEPARTMENT MUST STRENGTHEN CONTROLS OVER PREMIUM-CLASS TRAVEL 

JUSTIFICATION, APPROVAL, AND REPORTING (OIG-15-034-A)

We initiated an audit of premium-class travel spending at the Department to evaluate controls 

and how they have been implemented. Specifically, we assessed whether the Department has 

established effective controls over related approvals, justifications, and documentation in order 

to comply with applicable laws, regulations, and policies.

We found the following:

• Premium-class travel was not always properly supported and/or justified.

• Unauthorized officials approved use of premium-class travel. 

• Premium-class travel reported to the General Services Administration was 

inaccurate/incomplete. 

We recommended that the Chief Financial Officer and Assistant Secretary for Administration do 

the following: 

• Revise relevant Departmental directives, such as Department Administrative Order 215-10, 

to include policies and procedures on the use of premium-class travel accommodations due 

to a medical necessity. 

• Develop a standardized training protocol for reasonable accommodation coordinators. 

• Revise the Department’s Travel Handbook to

l provide the operating units with clarification on what constitutes an acceptable written 

justification when using the 14-hour rule for premium-class travel; 

l emphasize that a CD-334 is required in every premium-class travel instance at all 

operating units, as well as documentation to support premium-class travel justifications 

used (where appropriate); and 

l identify the Department and operating unit-level officials who may authorize the use of 

premium-class travel and determine how to handle instances when authorized officials 

are unavailable. 

• Develop a process for operating units to certify the accuracy of the travel data reported 

annually to GSA, as well as a process for centralizing operating unit premium-class 

travel records. 

Department-Wide Management
12 Office of Inspector General | Semiannual Report to Congress | September 2015

• Request from the U.S. Department of State periodic reports of the premium-class travel taken 

by overseas Department of Commerce staff and include any premium-class travel in the 

Department’s annual report to GSA.

NONFEDERAL AUDIT RESULTS FOR THE 6-MONTH PERIOD ENDING JUNE 30, 2015 

(OIG-15-042-M)

OIG’s report contained an analysis of findings identified in nonfederal audit reports reviewed 

between January 1 and June 30, 2015, submitted by nonprofit and government grantees pursuant 

to OMB Circular A-133 and by for-profit grantees pursuant to program guidelines. The analysis 

noted trends in the types of findings reported and summarized findings by Departmental program.

AUDITS OF COMMERCE FUND RECIPIENTS BY NONFEDERAL 

INDEPENDENT AUDITORS (REVIEWED BY OIG DURING THE 6 MONTHS 

ENDING SEPTEMBER 30, 2015)

In addition to undergoing OIG-performed audits, certain recipients of Department of Commerce 

financial assistance are periodically examined by independent public accountants. For-profit 

organizations that are audited in accordance with Government Auditing Standards include 

those that receive National Institute of Standards and Technology awards from the Technology 

Innovation Program. Some for-profit organizations are audited in accordance with other specific 

audit guides. For example, Broadband Technology Opportunities Program (BTOP) awards are 

audited in accordance with the NTIA Program-Specific Audit Guidelines for the Broadband 

Technology Opportunities Program.

We examined six audit reports during this semiannual period to determine whether they contained 

audit findings related to departmental programs. The Department acts as an oversight agency 

and monitors the audited entity’s compliance with Government Auditing Standards, or programspecific reporting requirements. We identified 4 reports with material findings related to the 

Department.

NONFEDERAL AUDITS REVIEWED BY OIG DURING THE 6 MONTHS 

ENDING SEPTEMBER 30, 2015

Program-Specific

Report Category Audits Total

Pending Review (April 1, 2015) 6 6

Received 0 0

Examined 6 6

Pending Review (September 30, 2015) 0 0

The following table shows a breakdown by bureau of approximately $600 million in Department 

funds audited through program-specific guidelines. 
13

NONFEDERAL AUDITS BY BUREAU

Agency Funds Audited ($)

National Institute of Standards and Technology 7,166,145

National Telecommunications and Information Administration 592,585,545

Total 599,751,701

The audits identified a total of $444,517 in the federal share of questioned costs. The 4 reports 

with material findings are listed in table 7-a on page 53.

IG LETTER TO SENATE REGARDING FOIA REQUESTS (OIG-15-037-M)

In an August 14, 2015, letter to The Honorable Ron Johnson, Chairman, Committee on 

Homeland Security and Governmental Affairs, U.S. Senate, the OIG responded to Senator 

Johnson’s June 23, 2015, request to analyze the involvement of non-career officials in the 

Department of Commerce Freedom of Information Act (FOIA) response process for the period of 

January 1, 2007, to present. The Senator’s letter specifically requested that we determine whether 

non-career official involvement resulted in any undue delay of response to any FOIA request or 

the withholding of any document or portion of any document that would have otherwise been 

released. The request also asked that we seek a certification from our Department’s chief FOIA 

officer regarding these items. 

In summary, nothing came to our attention that suggested non-career officials’ involvement 

resulted in either undue delays or withholding of information. Our inquiry and review did not 

reveal more than limited roles for non-career officials in the Department’s FOIA process. Noncareer officials provide responsive records when in possession of such records and may serve 

as members of the Coordinated Review Team (CRT), which reviews responses to selected 

FOIA requests prior to release. We found that, although the CRT review contributed to delays in 

providing responses to a small number of FOIA requests, neither the FOIA offices nor the CRT 

tracked non-career officials’ involvement in the process. Further, because membership of the CRT 

includes both career and non-career officials, we could not identify specific non-career individuals 

contributing to delays. 

ALLEGED MISCONDUCT AND WASTE OF GOVERNMENT RESOURCES BY 

A SENIOR OFFICIAL (14-0153)

In August 2015, OIG released an investigative report revealing that a senior Department official 

misused government computer equipment, which was used to view and/or store pornographic 

material, among other issues. In particular,

• The evidence revealed that the senior official misused government computer equipment, 

including permitting members of her household to access and use such equipment, 

which resulted in inappropriate use of such equipment to view and/or store pornographic, 

sexually suggestive, and racially offensive materials. Additionally, for a period of approximately 

6 months, the senior official maintained no less than seven government-issued computer 

resources at her private residence, including two desktop computers, three laptop computers, 

and at least two iPad tablets, suggesting she was, at a minimum, indifferent to her obligation 

to conserve government property and resources. 

Department-Wide Management
14 Office of Inspector General | Semiannual Report to Congress | September 2015

• The evidence showed that, in connection with official travel, the senior official selected a 

flight itinerary that benefitted her personally—permitting her to seek reimbursement from the 

government for expenses associated with her own personal, nonofficial travel plans—despite 

the fact she was presented with viable alternatives that would have reduced the cost to the 

government. 

• A review of Department records revealed numerous discrepancies between the arrival and 

departure times the senior official listed in her official time and attendance records and the 

actual arrival and departure times indicated by Department security badge records.

OIG’s investigation revealed a troubling pattern of conduct that was abusive of government 

resources and evidenced a disregard for conservation of such resources, as well as misconduct 

by the senior official in response to OIG’s investigation. This included evidence that the senior 

official failed to comply with a preservation order issued by OIG, which resulted in impeding OIG’s 

access to information and materials relevant to its investigation, as well as credible evidence that 

the senior official’s belief that one of her subordinates cooperated with OIG’s investigation was a 

significant factor in the senior official’s proposal to take disciplinary action against the subordinate.

OIG’s report makes recommendations to address the senior official’s past conduct as well as the 

risk that similar issues may arise with other employees in the future:

• The Department should consider taking appropriate administrative action with respect to the 

senior official in light of the conduct discussed in this report.

• The office that issued government-owned computer devices to the senior official 

should evaluate and make appropriate changes to its policies concerning requests for 

government-owned equipment to be used at home, as well as evaluate its personal property 

recordkeeping to ensure it complies with Department policies and procedures.

• The Sponsoring Division should evaluate and make appropriate changes to its policies and 

practices concerning its organization of conferences to ensure they sufficiently protect 

against any appearance of impropriety that may arise with respect to expenditure of 

government funds to support such conferences. Additionally, the Sponsoring Division should 

provide training regarding the Federal Travel Regulations and Department travel policies to all 

staff responsible for arranging, requesting, and approving travel requests in connection with 

its programs, as well as ensure that all Department employees traveling in connection with its 

programs receive similar training.

• The Department should consider issuing formal guidance regarding application of the14-Hour 

Rule in circumstances when a traveler takes leave at a layover location.

CONGRESSIONAL TESTIMONY

ACTING IG’S TESTIMONY ON THE DEPARTMENT OF COMMERCE’S FAILURE TO 

COMPLY WITH ITS LEGAL OBLIGATIONS TO ENSURE IG ACCESS TO RECORDS

(OIG-15-039-T)

On August 5, 2015, Acting IG David Smith testified before a hearing of the Committee on 

the Judiciary, United States Senate, on “‘All’ Means ‘All’: The Justice Department’s Failure to 

Comply with Its Legal Obligation to Ensure Inspector General Access to All Records Needed for 

Independent Oversight.” The hearing pertained to a recent opinion issued by the U.S. Department 

of Justice Office of Legal Counsel (OLC) and its impact on the ability of OIGs to carry out their 

mission. In his testimony, the acting IG provided a specific example of how the opinion affected 

the Department of Commerce OIG even before it was released.
15

He discussed how, earlier this year, we began an audit of the International Trade Administration’s 

Enforcement and Compliance business unit’s efforts to ensure it was conducting quality and 

timely trade remedy determinations. However, both ITA and OGC raised concerns that providing 

us access to the business proprietary information we requested as part of an audit would be a 

violation of the Tariff Act of 1930, as amended—and, in conjunction with18 U.S.C. §1905 (Federal 

Trade Secrets Act), could expose the Department to potential criminal litigation and penalties.

The Office of General Counsel (OGC) reached out to OLC for guidance on the matter. According 

to OGC, OLC said it would issue an opinion, expected imminently, to provide a framework to 

advise on this subject. In light of the potential criminal penalties, OGC concluded it was advisable 

to wait until the opinion was released. Subsequently, OGC stated that—while ITA may be able 

to release data to our office for an investigation particular to a specific proceeding—there is no 

exception in the Tariff Act applicable to an audit.

OGC asserted that Tariff Act amendments that came into effect after 1978, when the IG Act was 

passed, did not reflect an OIG’s authority to access the information. The acting IG discussed how, 

after 2 months of trying to get access to the information, we had no choice but to terminate the 

stalled audit because of the Department’s refusal to provide the requested information.

Conflicting laws hamper OIGs’ ability to fulfill their missions under the IG Act “(A) to promote 

economy, efficiency, and effectiveness in the administration of, and (B) to prevent and detect fraud 

and abuse in, such programs and operations.” The Tariff Act and the Trade Secrets Act were cited 

as the reason for denying OIG access to records. However, the IG Act authorizes OIGs “to have 

access to all records, reports, audits, reviews, documents, papers, recommendations, or other 

material available to” their departments; this access should pertain to all government records. 

Department-Wide Management
ECONOMIC DEVELOPMENT 

ADMINISTRATION

The U.S. Economic Development Administration’s mission is 

to lead the federal economic development agenda by promoting 

innovation and competitiveness, preparing American regions for 

growth and success in the worldwide economy. Its investment policy 

is designed to establish a foundation for sustainable job growth and the 

building of durable regional economies throughout the United States. 

This foundation builds on two key economic drivers: innovation and 

regional collaboration.
17

EDA FACES CHALLENGES IN EFFECTIVELY MONITORING ITS REVOLVING LOAN 

FUNDS (OIG-15-031-A)

The Revolving Loan Fund (RLF) program, established in 1975, is designed to provide grants 

to state and local governments, political subdivisions, and nonprofit organizations to operate 

a lending program that offers low-interest loans to businesses that cannot get traditional bank 

financing. Grant recipients are required to manage their RLF according to their RLF administrative 

plan, a document that describes the lending strategy and administrative procedures for a specific 

RLF project. As of September 2013, EDA had awarded approximately $555 million in grants for 

the 558 RLF programs then operating. Those awards had a capital base of approximately 

$843 million, including recipient contributions.

In response to our 2007 report on the program, EDA developed and began using the RLF 

Management System (RLFMS) in April 2010. We conducted a June 2015 audit of EDA’s RLF 

program as part of our fiscal year 2014–15 audit and evaluation plan to assess EDA’s current 

oversight of RLF projects in three of the six regional offices. Our objective was to determine 

whether EDA effectively responds to performance problems and changes to distressed or 

underserved communities within the RLF program.

We found that EDA did not aggressively respond to noncompliant RLFs, exposing agency 

funds to misuse and economic loss. For instance, the agency had not: addressed persistent 

noncompliance with capital utilization requirements; consistently required corrective action 

plans or set milestones to address RLFs with high loan default rates; or ensured grantee 

compliance with semiannual reporting requirements. Further, at least two EDA regional offices 

do not use single audit report results to monitor RLF performance. Finally, the agency had not 

required grantees to submit updated RLF plans. In addition to these issues, we also identified 

approximately $46 million in RLF funds that could have been put to better use.

We recommended that the Assistant Secretary for Economic Development direct the appropriate 

EDA regional officials to do the following:

• Reimplement RLFMS or a replacement system that includes standard grantee reporting, 

program monitoring, and file maintenance.

• Develop an improved process for monitoring grantee sequestrations of excess funds, 

default rates, and semiannual reporting requirements, as well as timely corrective actions for 

noncomplying RLFs.

• Document determinations on whether RLFs with multiple periods of excess funds should be 

terminated, transferred, or consolidated—or have funds partially deobligated or transferred 

from them.

• Develop a staffing plan to balance the workload of RLF administrators.

• Develop an improved process for identifying required single audits and enforcing the 

consequences of noncompliance.

• Identify projects with RLF plans more than 5 years old and document determinations on 

whether those plans require modifications—including determinations on whether a need for 

the RLF still exists in a particular location or whether funds should be transferred.

• Document considerations and potential consequences of possible RLF program

adjustments, including defederalization of funds, transferring funds to other EDA programs, 

and sunset provisions.

• Evaluate conditions related to the grantee identified in this report that executed a loan 

exceeding the maximum amount allowed in its RLF plan.

Economic Development Administration
ECONOMICS AND STATISTICS 

ADMINISTRATION

The Economics and Statistics Administration analyzes economic 

activity, formulates policy options, and produces a major share of the 

U.S. government’s economic and demographic statistics. ESA has one 

constituent operating unit and two primary operating units.

Office of the Chief Economist—Provides the Department with 

expertise on key economic forces affecting the U.S. economy, delivering 

timely, relevant, and credible economic analysis and advice 

to government leaders and the public.

Census Bureau—Publishes a wide variety of statistical data about the 

nation’s people and economy, conducting approximately 200 annual 

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 accounts (summarized by the gross 

domestic product), as well as aggregate measures of international, 

regional, and state economic activity.
19

2020 CENSUS: THE 2014 CENSUS TEST MISSES AN OPPORTUNITY TO VALIDATE 

COST ESTIMATES AND ESTABLISH BENCHMARKS FOR PROGRESS (OIG-15-044-A)

Our audit of the 2014 Census Test had two objectives: (1) evaluate whether 2013 test results 

informed 2014 testing strategies and (2) examine whether projects’ testing strategies included in 

the 2014 Census Test responded to the Bureau’s original research questions. In addition to our 

original objectives—and because the Bureau is committed to conducting the 2020 Census at a 

lower per-household cost (adjusted for inflation) than the 2010 Census—we assessed the cost 

estimation practices that the Bureau was using to estimate the amount of cost savings that will 

result from the new design innovations being developed for the 2020 Census.

We found that the Decennial Program has not developed a cost model that complies with best 

practices, as recommended in prior audit reports, and that the calculations used to estimate the 

$5.1 billion in potential savings are not well-supported. In addition, the Bureau’s current cost 

estimation is not sufficiently robust to be updated as design decisions are determined to be 

viable or eliminated. Neither the self-response component nor the nonresponse component of the 

2014 Census Test produced cost data that can be used to validate cost-savings estimates for 

stakeholders, compare costs of various design strategies, or make informed design decisions.

In reviewing the projects included in the 2014 Census Test, we found that project teams neither 

(1) created approved baselined project plans, nor (2) followed project plan management and 

change control protocols, which require all changes to the baselined plan to be documented and 

approved. Additionally, six of the seven project teams did not develop sufficiently quantifiable 

(or otherwise measurable) success criteria that could be used to validate potential cost savings, 

establish benchmarks for success, or perform a cost-benefit analysis of test results.

We recommended that the Director of the Census Bureau do the following:

• Obtain and keep a record of documentation that supports the cost estimation process and 

results.

• Implement a sufficiently robust cost modeling system, which includes all vital component 

variables, and incorporates cost updates as design decisions are reached, or quantifies the 

effect on the cost of design alternatives as needed.

• Prior to testing activities, ensure that the cost information that will be collected is reliable and 

can be used to validate life-cycle estimates.

• Develop an improved process for research project teams to document and maintain a 

complete history throughout each project’s life cycle, and prepare updated project plans prior 

to the start of tests.

• Develop test success criteria that are in compliance with the guidelines recommended by the 

Government Accountability Office (GAO) and the Census Bureau.

CONTROL DEFICIENCIES RELATED TO THE OVERTIME APPROVAL PROCESS AT A 

CENSUS BUREAU REGIONAL OFFICE (OIG-15-040-M)

We identified some overtime approval irregularities during a recent regional office site visit. 

Although this memorandum pertained to one regional office, we believe our findings and 

recommendations have broader, bureau-wide application. Specifically, our audit of the Census 

Bureau’s Regional Office Realignment and Field Management Reforms included a site visit to a 

regional office to review survey operations. During our site visit, we noted potential issues related 

to the approval of overtime. We expanded our testing to determine whether overtime charges 

were properly approved and monitored, and identified control deficiencies. Although the issues 

Economics and Statistics Administration
20 Office of Inspector General | Semiannual Report to Congress | September 2015

described in this memo were outside the scope of our current audit, we believe they are significant 

and should be addressed by Census management. Failure to address these deficiencies could 

result in unallowable overtime charges being processed through the payroll system.

We recommended that the Census Director make the following changes to improve control over 

the authorization and monitoring of overtime charges: 

• Ensure that the authority to approve overtime is re-delegated, as deemed appropriate, 

in writing. 

• Establish a process for ensuring that requests for overtime are completed in full and that they 

include the signature of the requestor, approver, and individual providing verification of funds 

available, when a form CD-81 is used. 

• Establish procedures for ensuring that hours charged in WebTA are less than or equal to the 

overtime hours approved. 

REVIEW OF A CENSUS BUREAU SOLE SOURCE AWARD FOR EXECUTIVE SEARCH 

SERVICES (14-0408) 

On March 3, 2014, OIG was contacted by an executive search firm (Complainant), which alleged 

that the Census Bureau had improperly awarded a sole source contract for executive search 

services. The Complainant asserted that the sole source award and justification in support of the 

award were improper because several other firms were capable of providing the executive search 

services sought by Census.

On June 3, 2015, OIG issued a report of its investigation into the matter. OIG’s investigation 

found that the Census Bureau, in attempting to recruit top talent to fill a critical position at the 

agency, failed to adhere to several rules and regulations related to federal contracting and 

recruiting. Specifically, the OIG found the following:

• The Census Bureau did not comply with the Competition in Contracting Act (CICA) of 1984 

and the Federal Acquisition Regulation (FAR) when it awarded a sole source contract to the 

executive search firm.

• The Census Bureau did not comply with federal regulations governing the use of commercial 

recruiting firms.

• The acceptance of voluntary services from the executive search firm implicated the 

Antideficiency Act.

• The Census Bureau Director did not comply with Department policy by receiving services 

from the executive search firm without a contract in place.

• The Census Bureau Director did not comply with Department policy and government-wide 

guidance by using personal email to conduct official government business.

• A senior Census Bureau executive did not comply with federal regulations in the procurement 

process that led to the contract award to the executive search firm.

• The Census Bureau’s Acquisition Division failed to perform its oversight function and did not 

appropriately advise Census Bureau officials with respect to the acquisition.
21

In light of the findings contained in this report, OIG recommended the following:

• The Department should consider appropriate action regarding the officials involved with the 

compliance matters discussed in the report.

• The Department should evaluate whether an Antideficiency Act violation occurred.

• The Census Acquisition Division should remind its staff that they are the first line of defense 

in the acquisition process, and it is their job to enforce the acquisition rules regardless of 

the value of the contract or who is seeking the product or service. The U.S. Census Bureau 

should provide training to its acquisition staff regarding sole source awards to ensure that all 

future awards are made in compliance with CICA and the FAR.

• The U.S. Census Bureau should consider a requirement that the Department’s Office of 

General Counsel review all sole source awards requiring a justification for legal sufficiency 

prior to award of the contract.

ALLEGED TIME AND ATTENDANCE FRAUD AND OTHER MISCONDUCT BY 

EMPLOYEES IN THE CENSUS HIRING AND EMPLOYMENT CHECK OFFICE (14-0790) 

On September 15, 2015, OIG issued a report to the U.S. Census Bureau presenting its findings 

of widespread misconduct in the Census Hiring and Employment Check (CHEC) Office. 

The evidence obtained over the course of OIG’s investigation established that many current 

and former CHEC employees engaged in pervasive misconduct over several years, including 

widespread time and attendance abuse, misuse of office, and repeated attempts to retaliate 

against a perceived whistleblower.

OIG’s investigation resulted from a hotline complaint alleging that certain CHEC Office employees 

had been fraudulently reporting their time and attendance. Specifically, the complaint alleged that 

six CHEC Office employees had regularly recorded and received pay for time not actually worked 

since at least 2010. OIG referred the complaint to Census and required the Bureau to notify 

the OIG of the disposition of the complaint. Census reported to OIG that it found “significant 

misconduct related to the receipt of pay for time not worked on the part of each employee” named 

in the initial complaint. The Bureau further stated that it expanded its review to include three 

additional employees and found that those employees also engaged in the same misconduct. The 

Bureau proposed the removal (i.e., termination) of all nine employees.

Due to the criminal implications of the conduct at issue, OIG opened this investigation into 

the fraudulent reporting of time and attendance by the subject employees. OIG’s preliminary 

analysis not only confirmed significant discrepancies in time and attendance recording by the 

identified employees, but also indicated that the problem was much broader than a specific 

group of employees. OIG therefore expanded the scope of its investigation to include 40 current 

and former employees in the CHEC Office. Further, during the course of our investigation, OIG 

uncovered evidence of additional misconduct by certain CHEC employees, including the misuse 

of official position, whistleblower retaliation, and interfering with OIG’s investigation.

Based on the findings in this report, the OIG made several recommendations regarding the 

misconduct and to address the problematic culture in the CHEC Office: 

• Consider taking administrative action against CHEC Office employees as the Bureau deems 

necessary and appropriate, including the recovery of funds paid for time not worked. 

• Consider a change in CHEC Office leadership and personnel. 

Economics and Statistics Administration
22 Office of Inspector General | Semiannual Report to Congress | September 2015

• Review the Bureau’s Alternative Work Schedule (AWS) and telework programs to ensure 

proper internal controls are in place and functioning correctly. 

• Consider improving time and attendance policies and training. 

• Consider providing comprehensive training regarding the federal rules governing hiring, 

including the ethics regulations that prohibit using public office for private gain and granting 

preferential treatment. 

• Consider providing IT security training to discourage the sharing of passwords.

• Consider revising or developing CHEC Office policies and procedures to ensure adequate 

quality control mechanisms are in place.

• Consider conducting a review of CHEC Office contracts and procedures.

NATIONAL INSTITUTE OF 

STANDARDS AND TECHNOLOGY

The National Institute of Standards and Technology promotes 

U.S. innovation and industrial competitiveness by advancing 

measurement science, standards, and technology in ways that enhance 

economic security and improve our quality of life. NIST carries out its 

mission via three programs:

NIST Laboratories—Conduct research that advances the nation’s 

technology infrastructure and is needed by U.S. industry to continually 

improve products and services.

Hollings Manufacturing Extension Partnership—Works with 

small- and mid-sized U.S. manufacturers through a nationwide network 

of 350 field offices to help them create and retain jobs, expand into new 

markets and new products, increase profits, and save time and money. 

Baldrige Performance Excellence Program—Promotes 

performance excellence among U.S. manufacturers, service companies, 

educational institutions, health care providers, and nonprofit 

organizations through outreach programs and the annual Malcolm 

Baldrige National Quality Award.
25

AUDIT OF NIST QUALITY SYSTEM FOR MEASUREMENT SERVICES (OIG-15-038-M)

The National Institute of Standards and Technology implemented the Quality System for 

Measurement Services (QSMS) in 2003. The QSMS contains specific policies and procedures 

established to meet NIST’s technical standards, such as acceptance of requests for measurement 

services; technical procedures for calibrations; reference material certification measurements; 

staff qualifications, responsibilities, and training; control of technical records; and document 

development approval and control. For reference materials, it contains procedures for candidate 

material selection, identification, preparation, storage, and characterization. NIST has engaged 

in a process of continually improving its quality system through internal audits and a formalized 

process to track non-conformities. Non-conformities and related corrective actions are tracked by 

NIST management. The QSMS procedures are documented in the NIST Quality Manual. 

As part of our FY 2015 work plan, we reviewed NIST’s QSMS at the Boulder and Gaithersburg, 

Maryland, locations. The objective of our audit was to determine whether NIST Boulder manages 

its laboratories and divisions in accordance with QSMS policies and procedures. After assessing 

risk through documentation reviews, quality system staff interviews, and examinations of 

responses to questionnaires completed by staff of the four NIST divisions we queried, we did not 

identify significant risks to the QSMS. Therefore, we concluded our test work related to this audit 

assignment. However, we did identify four areas for improvement as follows: 

• Time spent on quality management is not tracked.

• There is no designated backup for the NIST Quality Manager.

• NIST has not established a formal QSMS training program.

• Required internal audits have not been performed.

We recommended that the NIST Director and the Acting Associate Director for 

Laboratory Programs:

• Create a code in the time-and-attendance system to track time spent on QSMS activities and 

add language to NIST quality manuals making this a requirement. 

• Formally appoint a backup for the NIST Quality Manager in case the manager is not available 

to facilitate the QSMS responsibilities. 

• Establish a formal NIST quality training program for the staff who engage in QSMS activities. 

• Ensure that all QSMS laboratories perform internal audits every 2 years as required. 

NIST POLICE OFFICER ADMITS TO ATTEMPTING TO 

MANUFACTURE METHAMPHETAMINE

On August 21, 2015, the U.S. Attorney’s Office for the District of Maryland announced that a 

former police officer at NIST pleaded guilty to attempting to manufacture methamphetamine in a 

laboratory room on the NIST campus in Gaithersburg, Maryland, which resulted in an explosion.

According to the plea agreement, on July 18, 2015, the officer, a lieutenant with the NIST police 

force, reported to work at NIST. In the evening, the officer entered a room inside a NIST building 

in order to use equipment to manufacture methamphetamine under a chemical fume hood. While 

attempting to manufacture methamphetamine, the individual caused an explosion that damaged 

four of the room’s windows. The shatterproof windows were found at distances ranging from 22 to 

33 feet from the building. The individual suffered burns on his head and arm. 

National Institute of Standards and Technology
26 Office of Inspector General | Semiannual Report to Congress | September 2015

The individual faces a maximum sentence of 20 years in prison. A U.S. District Judge has 

scheduled sentencing for November 2015. OIG investigated this matter alongside the Federal 

Bureau of Investigation (FBI), U.S. Drug Enforcement Administration (DEA), and the Montgomery 

County (Maryland) Police Department. 

DIRECTOR OF CENTER FOR MANUFACTURING AND TECHNOLOGY PLEADS GUILTY 

TO FRAUD

On June 11, 2015, the U.S. Attorney’s Office for the District of South Carolina announced that 

a former director of the University of South Carolina’s Center for Manufacturing and Technology 

(CMAT) pleaded guilty to wire fraud, a violation of 18 U.S.C. § 1343. 

As director of CMAT, the individual submitted fraudulent documentation that allowed CMAT to 

obtain federal grant money through the Manufacturing Extension Partnership, a grant program at 

NIST. The fraudulent documentation indicated that work was completed for CMAT when it had 

not been. Additionally, the individual approved contracts and payments to shell corporations that 

were controlled by friends, family members, and herself for work that was not completed. In total, 

the former director submitted approximately $336,000 worth of fraudulent documentation to the 

University, the government, and to the entity responsible for administering the grant money.

This matter was investigated by OIG with assistance from the FBI.

NATIONAL OCEANIC AND 

ATMOSPHERIC ADMINISTRATION

The National Oceanic and Atmospheric Administration mission is to 

understand and predict changes in Earth’s environment, as well as conserve 

and manage coastal and marine resources to meet our nation’s economic, 

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

National Environmental Satellite, Data, and Information Service—

Observes the environment by operating a national satellite system.

National Marine Fisheries Service—Conducts a program of 

management, research, and services related to the protection and rational use 

of living marine resources.

National Ocean Service—Provides products, services, and information 

to promote safe navigation, support coastal communities, sustain marine 

ecosystems, and mitigate coastal hazards. 

National Weather Service—Reports the weather of the United States and 

provides weather forecasts and warnings to the general public.

Office of Oceanic and Atmospheric Research—Conducts research 

related to the oceans and Great Lakes, the lower and upper atmosphere, 

and the earth.

Office of Marine and Aviation Operations—Manages and operates 

NOAA ships and aircraft, which play a critical role in the collection of 

oceanographic, atmospheric, hydrographic, and fisheries data.
29

AUDIT OF THE GEOSTATIONARY OPERATIONAL ENVIRONMENTAL SATELLITE–R 

SERIES: LEADERSHIP MUST PROACTIVELY ADDRESS INTEGRATION AND TEST 

RISKS TO MAINTAIN REVISED LAUNCH SCHEDULE (OIG-15-030-A)

NOAA’s Geostationary Operational Environmental Satellites (GOES) have provided data for 

weather observation, research, and forecasting since 1975. The GOES-R series of satellites 

will incorporate the first technological advance in GOES instrumentation since the launch of the 

GOES I-M series, which began in 1994—and will have a longer expected operational life of a 

minimum of 8 years, versus 5 years, for previous GOES series.

The overall GOES-R program is managed by NOAA with two integrated NOAA/National 

Aeronautics and Space Administration (NASA) offices—the ground segment project and the flight 

segment project—as well as integrated supporting offices such as program systems engineering 

and program contracts. In September 2014, at a joint NOAA/NASA Program Management 

Council (PMC) meeting, NOAA leadership approved delaying the first GOES-R satellite’s launch 

date from October 2015 to March 2016, due to late delivery of some flight segment components, 

and authorized the program to enter into the system assembly, integration and test, launch phase. 

(Since the issuance of report OIG-15-030-A, the launch of the first GOES-R satellite has been 

delayed to October 2016.) 

Our objectives were to assess the adequacy of GOES-R development activities as the program 

completes the ground system and fabrication of flight instruments and the spacecraft, and 

transitions to system integration and test, per NOAA and NASA standards. We also monitored 

NOAA’s progress in developing and vetting with stakeholders a comprehensive set of trade-off 

approaches to mitigate launch delays and its oversight of GOES-R systems engineering.

We found that

• A GOES-R launch delay has increased the length of a potential on-orbit backup satellite gap 

for the GOES constellation.

• The ground segment project initially lacked experienced lead engineering managers and 

consistent contracting office support.

• Planning and communications deficiencies forced two costly re-plans of core ground system 

development.

We recommended that the NOAA Administrator

• Establish a communications mechanism among Department of Commerce, NASA, and 

GOES-R spacecraft and ground system contractors’ leadership, to foster rapid identification 

and resolution of system integration and test issues that could impact the GOES-R 

launch date.

• Establish a communications process that ensures stakeholders (including Congress) are 

provided with current GOES-R product availability schedules, leading up to and after launch. 

• Ensure that future National Environmental Satellite, Data and Information Service (NESDIS) 

programs leverage NASA, or other organizations’ ground systems engineering expertise early 

in the development cycle.

• Direct NOAA’s Acquisition and Grants Office (AGO) to provide reporting metrics regarding 

GOES-R ground segment contracting actions or changes at monthly joint NOAA/NASA 

PMC meetings.

National Oceanic and Atmospheric Administration
30 Office of Inspector General | Semiannual Report to Congress | September 2015

• Direct NESDIS and NOAA AGO to re-examine GOES-R contracting division staffing 

approach effectiveness.

• Ensure that future NESDIS acquisition programs have consistent and adequate contracting 

officer and specialist support.

• Direct NESDIS to provide reporting metrics regarding core ground system schedule delays at 

monthly joint NOAA/NASA PMC meetings.

COST ESTIMATES, LONG-TERM SAVINGS, MILESTONES, AND ENTERPRISE 

ARCHITECTURE POLICY ARE NEEDED FOR COMMON SATELLITE GROUND SYSTEM 

PROGRAM (OIG-15-032-I)

To reduce costs and accelerate deployment of capabilities, NOAA is transitioning to an 

Enterprise Architecture (EA) approach for developing ground system capabilities supporting its 

environmental satellites. NOAA’s program for implementing this approach is known as the Ground 

Enterprise Architecture Services (GEARS) program. NOAA’s environmental satellite programs 

are managed by the National Environmental Satellite, Data, and Information Service (NESDIS). 

In collaboration with the National Aeronautics and Space Administration (NASA), NESDIS is 

responsible for seven major satellite programs with satellites that operate in geostationary, lowEarth (e.g., polar), and other orbits.

Our objectives for this review were to determine (1) the progress of NOAA’s planning efforts and 

milestones for implementing a common satellite ground system architecture (i.e., an EA), and 

(2) whether NOAA’s plans and efforts provide adequate consideration for system redundancy, 

security, and scalability. Our review covered NOAA’s efforts from June 2013 to April 2015 and its 

plans to implement the architecture in the future.

We found that 

• EA planning is underway, but cost estimates are needed to determine appropriate investment 

reviews and reporting.

• Planning is following best practices, but return on investment and plans and milestones 

beyond 2016 are yet to be determined.

• NESDIS is mostly compliant with EA guidance, but improvements are needed to enhance 

institutional commitment, quality assurance, information sharing, and IT security planning.

We recommended that the NOAA Administrator

• Develop a GEARS program cost estimate based on a defined time frame.

• Identify OMB, Department, and NOAA review and reporting requirements applicable to the 

program cost estimate.

• Identify and regularly communicate anticipated GEARS return on investment, milestones, and 

performance measures to NOAA, the Department, and Congressional stakeholders.

• Direct NESDIS to establish an EA policy.

• Direct NESDIS to establish an executive committee with adequate experience and training 

to review GEARS technical implementation, and ensure its members are included in the 

development and approval of plans.
31

• Establish an independent review team with adequate EA expertise to review GEARS.

• Direct NESDIS to implement an EA repository during planning.

• Direct NESDIS to identify methods and milestones for including IT security architects in 

GEARS development and determine milestones for management review of plans.

• Direct NESDIS to identify IT security weaknesses in legacy systems to be integrated or 

replaced by GEARS and ensure mitigations are included in GEARS transition plans.

INVESTIGATION INTO ENVIRONMENTAL STEWARDSHIP ON A NOAA RESEARCH 

VESSEL (14-0505) 

On September 1, 2015, OIG issued a report of its investigation based on a complaint by a 

former National Oceanic and Atmospheric Administration (NOAA) employee (complainant). The 

complainant alleged he was terminated for reporting that a NOAA research vessel violated the 

Federal Water Pollution Control Act (Clean Water Act or CWA), 33 U.S.C. §§ 1251 et seq., by 

routinely discharging oily bilgewater directly into the ocean. Our investigation included a review of 

a fuel spill from this same ship because of the overall implications on environmental stewardship 

practices.

OIG’s investigation uncovered no evidence of retaliation against the complainant—but did 

discover numerous underlying violations by personnel from the engineering staff. Some officials 

initially argued that NOAA vessels fell within the CWA exemption for “public vessels,” and thus the 

improper discharges were not a violation of law. The OIG report details the specifics of how the 

public vessel exception was misapplied.

The investigation noted a general lack of oversight concerning engineering operations by 

several NOAA Commissioned Officer Corps on this ship, as well as a culture that discouraged 

environmental compliance efforts. Contributing factors to the incidents reported include 

stagnation and lack of rotation in the engineering staff.

In the report, OIG made recommendations that are abridged below:

• NOAA should take steps to replace aging vessels with more modern vessels designed to 

comply with current regulatory requirements when funding is available.

• For all ships in the NOAA Research Fleet, configuration changes should be tracked from 

inspection to inspection and among the different classes of ship to ensure NOAA Fleet 

Inspections personnel understand what changes have been made aboard each ship, aboard 

ships of the same class, and between each inspection.

• Shipboard Environmental Compliance Officers (ECOs) should be authorized to thoroughly 

and rigorously inspect engineering operations that may have an impact on environmental 

compliance. NOAA policy should strongly emphasize that commissioned NOAA Corps 

officers have priority rank over any civilian position, particularly in areas that involve safety and 

environmental compliance,especially over the engineering department. 

• NOAA should consider making the Chief Marine Engineer (CME) position a NOAA 

Commissioned Corps officer, and establish a career track that extends to the Marine 

Engineering career field.

• NOAA should rotate the shipboard engineering crew at least once every 5 years to avoid 

stagnation and encourage re-evaluation of procedures on an ongoing basis.

National Oceanic and Atmospheric Administration
32 Office of Inspector General | Semiannual Report to Congress | September 2015

• NOAA should ensure no nepotism exists among ship crews, either real or perceived, and take 

steps to rotate staff to address these potential issues. 

• NOAA should provide additional training to its entire staff, including management and 

Commissioned Corps officers, on the importance of disclosing violations of law, policy and/or 

mismanagement to OIG, consistent with Department Administrative Order 207-10.

• NOAA should implement a compliance program whereby it provides additional environmental 

compliance training to all Office of Marine and Aviation Operations employees.

• NOAA should consider discipline for any employees involved in submitting false statements to 

the Environmental Protection Agency, or for falsifying Engineering Logs or Oil Record Books. 

NOAA should consider discipline for employees and NOAA Corps officers involved in the 

improper discharge of bilgewater in violation of Vessel General Permit requirements.

• NOAA should consider taking corrective action with employees and NOAA Corps officers 

involved in activities resulting in the fuel spill.

MEMBER OF CONGRESS AND ASSOCIATES INDICTED

On July 29, 2015, the U.S. Attorney’s Office for the Eastern District of Pennsylvania indicted a 

member of Congress and four of his associates for participating in a racketeering conspiracy. 

The indictment, which named Congressman Chaka Fattah Sr. and four others, cited 29 counts 

including bribery, money laundering, bank fraud, and false statements to a financial institution. 

The indictment alleged that, in connection with his failed 2007 campaign to serve as mayor of 

Philadelphia, Fattah and certain associates perpetuated several schemes to extinguish campaign 

debts by issuing sham contracts and grants. One scenario included $130,000 owed to a political 

consultant to whom Fattah and his associates allegedly arranged for the award of federal grant 

funds. According to the allegations in the indictment, Fattah directed the consultant to apply for a 

$15 million grant (which ultimately the consultant did not receive) on behalf of a then non-existent 

nonprofit entity. In exchange for Fattah’s efforts to arrange the award of the funds to the nonprofit, 

the consultant allegedly agreed to forgive the debt owed by the campaign.

Another of the five schemes with which Fattah and associates are charged is one OIG discovered 

and investigated, related to grant fraud involving the Educational Advancement Alliance, a 

recipient of a NOAA grant. The indictment alleged that the Educational Advancement Alliance 

obtained $50,000 in federal grant funds to support a conference on higher education, even 

though the conference never took place. Instead, the grant funds were used to pay $20,000 to a 

political consultant and $10,000 to an attorney. Other funds were converted for personal use. 

This matter was investigated by the FBI, IRS, and OIGs from the Departments of Justice and 

Commerce, as well as NASA OIG. While indictments and other charging documents indicate 

serious matters, all defendants are presumed innocent until proven otherwise.

ALLEGED CONTRACTING MISCONDUCT AND EXERTION OF IMPROPER INFLUENCE 

INVOLVING A SENIOR NATIONAL WEATHER SERVICE OFFICIAL (12-0447) 

On June 2, 2015, OIG issued a report detailing our investigation into allegations of impropriety 

involving a senior official at NWS who became a consultant to the agency immediately upon his 

retirement from federal service. Based on evidence obtained over the course of the investigation, 

OIG identified a number of problems related to the retention of this senior official as a consultant 

that indicated several agency officials lacked an understanding of key government contracting and 

ethics regulations. 
33

As for the actions of the senior official himself, OIG concluded that he was personally and 

substantially involved in the procurement of his own post-retirement consulting services. This 

involvement implicated numerous federal laws and regulations, including the criminal conflict-ofinterest statute found in 18 U.S.C. § 208. Specifically, the evidence obtained over the course 

of our investigation established that the senior official, while still holding his position as a federal 

employee, engaged in 

• drafting and editing the applicable statement of work for his post-retirement 

consulting position;

• participating with NWS officials in setting what labor category and rates would be used to 

pay for his consulting services; and

• signing the task management plan that created the consulting position he would take upon 

his retirement on behalf of the contractor that would be employing him.

Additionally, evidence established that this senior official took inappropriate steps to arrange for 

NWS to pay approximately $50,000 worth of his post-retirement housing expenses. In particular, 

while still holding his government position, the official instructed his direct subordinate to 

facilitate his post-retirement use of a National Marine Fisheries Service housing contract intended 

to accommodate high-ranking government employees on temporary assignments to NOAA 

headquarters.

Evidence obtained by OIG also established that, after he became a contractor himself, the 

subject contacted several NWS officials in an attempt to secure another contract position at the 

agency for one of his immediate family members. We concluded that the senior official’s actions 

in attempting to influence the NWS staff were improper, and some of those actions may have 

implicated 18 U.S.C. § 201, the criminal statute prohibiting bribery of public officials. 

As a result of our investigation and initial briefings with NOAA’s senior leadership regarding the 

evidence, NOAA took immediate action to stop work on the senior official’s task order in early 

2012. In total, this senior official’s post-retirement work as a consultant cost the government 

$471,875.34. OIG did not issue formal recommendations in this report; however, we are seeking 

the suspension and debarment of the senior official from any future contracting work.

While our inquiry focused on the activities of the senior official specifically named in the 

complaints that prompted our investigation, we nonetheless concluded that several government 

officials beyond the subject of our investigation share responsibility for the events we investigated. 

In particular, evidence indicated that (1) the subject acted at the direction, and with the approval, 

of his supervisor at all times and (2) the subject’s consulting arrangement was facilitated and 

approved by other officials with responsibility for ensuring integrity in government contracting.

Further, evidence from witness testimony during our investigation indicates that hiring former 

employees as consultants to do work similar to what they performed prior to retirement may well 

be a common practice. With this in mind, OIG is now taking steps to assess how common it is for 

NOAA employees to return as contractors after leaving full-time employment—including an audit, 

initiated in June 2015, of NWS awarding and administration of procurement actions that support 

its workforce. Our audit will seek to determine whether (1) existing contract control measures are 

functioning properly and (2) NOAA should implement additional safeguards to prevent abuses 

such as those uncovered by this investigation.

National Oceanic and Atmospheric Administration
34 Office of Inspector General | Semiannual Report to Congress | September 2015

CONGRESSIONAL TESTIMONY

OIG TESTIMONY ON INVESTIGATING CONTRACT MISCONDUCT AT THE NATIONAL 

WEATHER SERVICE (12-0447-T)

On July 15, 2015, Mark Greenblatt (Deputy Assistant Inspector General for Compliance 

and Ethics, OIG) testified before a hearing of the House Committee on Science, Space, and 

Technology about post-employment consulting practices at NOAA’s National Weather Service 

(NWS). 

Mr. Greenblatt’s testimony provided an overview of our investigation and its findings. He also 

noted additional action that OIG is taking as a result of these findings, including the OIG audit 

initiated in June 2015 of NWS awarding and administration of procurement actions that support 

its workforce. 

Members of the House Committee on Science, Space, and Technology responded to Mr. 

Greenblatt’s testimony with questions focused on a variety of topics, including the following:

• the reasons the Department of Justice declined to pursue this matter for prosecution

• the number of government officials who knew of or were involved in the activity investigated 

by OIG

• whether federal employees receive training on the government ethics violations detailed in 

OIG’s investigative report

• whether any disciplinary action resulted from OIG’s investigation

• whether OIG’s investigation indicates an institutional failure on the part of the NWS when it 

comes to hiring contractors

• whether it is commonplace for federal employees to return to government agencies as 

consultants immediately upon their retirement from federal service, and whether it is typical for 

such employees to write their own consulting contracts

• the financial cost involved in retaining the services of former government employees 

as contractors

Members of the Committee also expressed an interest in learning the outcome of the audit 

initiated by the OIG as a result of its investigative findings, once those results become available.

NATIONAL TELECOMMUNICATIONS 

AND INFORMATION ADMINISTRATION

The National Telecommunications and Information Administration

serves as the executive branch’s principal adviser to the President on 

domestic and international telecommunications and information policy 

issues. NTIA manages the federal use of the electromagnetic spectrum, 

provides grants for national information and public broadcasting infrastructure 

projects, and performs telecommunications research and engineering. It 

works to enhance citizens’ access to cable television, telephone, and other 

telecommunications services, and educates state and local governments and 

other entities on ways to use information technology and telecommunications 

more effectively.
37

AUDIT OF FIRSTNET WORKFORCE AND RECRUITING CHALLENGES, PARTICIPATION 

AND DISCRETIONARY OUTREACH EVENTS, AND INTERNAL CONTROL (OIG-15-036-A)

We initiated an audit of the First Responder Network Authority’s (FirstNet) technical development 

of the Nationwide Public Safety Broadband Network (NPSBN). Our modified objective was to 

assess FirstNet’s efforts and progress to developing the NPSBN—including establishing an 

organizational structure, conducting initial consultation and outreach, and finalizing a network 

design. 

We found that FirstNet 

• faces hiring challenges and places significant responsibility on a few key individuals, and has 

also encountered difficulties in hiring and maintaining staff for other key positions.

• can improve planning for discretionary outreach events designed to educate and engage 

stakeholders in the public safety community throughout the U.S. and territories. 

• is not consistently executing its established controls to provide and document 

adequate review.

• did not meet its original goal of scheduling initial state consultation meetings with each 

jurisdiction, a significant factor in ensuring the successful deployment and implementation of 

the NPSBN.

We recommended that FirstNet’s Acting Executive Director:

• Develop a comprehensive plan, including an execution strategy, to identify how FirstNet will 

use its limited outreach resources to participate in discretionary outreach events throughout 

the country; 

• Establish and implement procedures to monitor progress against this comprehensive plan; 

and

• Instruct personnel to follow established controls and documentation requirements.

National Telecommunications and Information Administration
UNITED STATES PATENT 

AND TRADEMARK OFFICE

The United States Patent and Trademark Office administers the 

nation’s patent and trademark laws. Patents are granted and trademarks 

registered under a system intended to provide incentives to invent, 

invest in research, and commercialize new technology. USPTO also 

collects, assembles, publishes, and disseminates technological 

information disclosed in patents.
39

USPTO NEEDS TO STRENGTHEN PATENT QUALITY ASSURANCE PRACTICES 

(OIG-15-026-A)

In FY 2011 USPTO’s Office of Patent Quality Assurance (OPQA), in response to stakeholder 

concerns about patent quality, expanded its procedures to include assessments of the quality of 

an examiner’s initial search and whether preliminary decisions conformed to best practices. At 

the same time, USPTO also revised how it measured the quality of each examiner’s work product 

through annual performance assessments.

We conducted this audit to assess USPTO’s quality assurance programs. Our audit objectives 

were to (1) determine the sufficiency of USPTO’s quality assurance program’s processes 

to prevent the issuance of low-quality patents and (2) assess the additional quality reviews 

performed to measure examiner performance and ensure that examiners are fully qualified to issue 

patent determinations without supervisory review.

We found that

• USPTO’s performance appraisal plan and related policies are ineffective at measuring 

whether examiners are issuing high-quality patents.

• USPTO’s official quality metrics may underrepresent the true error rate.

• USPTO is not collecting data that could improve patent quality.

• USPTO’s response to patent mortgaging may not discourage abuse.

We recommended that the Undersecretary of Commerce for Intellectual Property and Director of 

the United States Patent and Trademark Office

• Refine supervisory guidance, processes, and performance plans to effectively measure patent 

examiner quality efforts and distinguish levels of performance—including taking steps to avoid 

the disincentives for supervisors to charge errors to examiners when assessing performance 

under the requirements set forth in the examiner performance appraisal plans.

• Strengthen OPQA’s (a) independent quality review procedures to ensure their consistent 

application, particularly with respect to the application of new case law and how errors are 

categorized, and (b) internal audit process, by minimizing the predictable nature of the audit 

steps and allowing for the identification of the informal practices followed by some OPQA 

reviewers.

• Use available databases and systems to collect information on patent applications reviewed 

and errors found, to improve USPTO’s ability to identify quality trends.

• Develop and document additional controls to better detect and monitor the practice of patent 

mortgaging and continue to ensure consistent application of USPTO disciplinary policies that 

address instances of it.

AUDIT OF USPTO’S UNLIQUIDATED OBLIGATION BALANCES (OIG-15-041-A)

Our objective was to evaluate the effectiveness of USPTO’s obligation and deobligation review 

policies and procedures implemented in response to our June 2013 audit report, which reviewed 

the Department’s unliquidated obligation balances as of December 31, 2011. In that report, 

we concluded that Department-wide controls over the management of unliquidated obligations 

needed strengthening. Further, effective management of outstanding obligation balances allows 

agencies to review and deobligate unneeded funds, promoting a better use of federal resources. 

United States Patent and Trademark Office
40 Office of Inspector General | Semiannual Report to Congress | September 2015

In this follow-up audit, we found that overall controls and procedures USPTO implemented in 

response to the report were effective in reducing and managing unliquidated obligation balances 

and that USPTO had achieved the intent of our recommendations. As a result of implementation 

of these procedures and management’s focus on the management of obligation balances, USPTO 

was able to reduce excess unliquidated balances by more than 90 percent since our last review. 

We found that USPTO generally addressed the intent of our original recommendations related to 

the monitoring of outstanding balances. Our conclusion was based on our review of the adequacy 

of procedures and their effectiveness in monitoring and reducing unliquidated obligation balances.

We recommended that the Under Secretary of Commerce for Intellectual Property and Director of 

the U.S. Patent and Trademark Office instruct the Director of USPTO Office of Finance to:

• follow up on the remaining obligations identified in this report to ensure that, if they are no 

longer needed then proper action is taken; and

• update its obligation review policies to conduct quarterly reviews.

ALLEGED TIME AND ATTENDANCE ABUSE BY A PATENT EXAMINER (15-0076) 

In August 2014, two supervisory patent examiners at USPTO walked into their offices and found 

copies of the same anonymous letter, which made allegations about the work performance of 

an examiner (Examiner A). OIG consequently initiated this investigation and issued an August 

19, 2015, report—which substantiated that Examiner A committed at least 730 hours of time 

and attendance abuse, resulting in the payment of approximately $25,500 for hours not worked 

in FY 2014 alone. The number of Examiner A’s unsupported hours in FY 2014 amounted to 

approximately 43 percent of the total hours he certified for the fiscal year.

In light of the evidence obtained over the course of the investigation, OIG concluded that there 

was sufficient evidence to support a finding that Examiner A violated 18 U.S.C. §§ 287, 641, and 

1001, 5 C.F.R. § 2635.101, and USPTO’s policy on work schedules. 

Examiner A resigned from his position immediately prior to a scheduled interview with OIG 

investigators. In an instant message to a co-worker on the day of his resignation, Examiner A 

stated that the Patent Office Professional Association, the union representing patent examiners, 

advised him that he could keep his official personnel file free of any derogatory information if he 

resigned before the OIG interview. At the conclusion of the investigation, Examiner A declined an 

opportunity to review the draft report and provide comments.

In light of the findings contained in the report, the OIG made the following recommendations:

• USPTO management should consider investigating whether Examiner A fraudulently certified 

hours in FY 2015.

• USPTO management should consider consulting with the relevant USPTO officials, including 

legal counsel and Patent Office Professional Association, to implement a plan to legally 

recover—voluntary or involuntarily—the funds Examiner A fraudulently received in FY 2014, 

and any other payments for work that he did not perform during FY 2015.

• USPTO management should consider the feasibility and cost-effectiveness of (1) restoring 

backup tapes containing the virtual private network(VPN) and workstation data from 

FYs 2012 and 2013, (2) investigating whether Examiner A fraudulently certified hours in 

those years, and (3) recovering funds Examiner A fraudulently received, if applicable. In 

assessing these issues, USPTO management should also consider the benefits that such 

restoration would provide in connection with future investigations.
41

• In light of Examiner A’s apparent decision to resign to preserve “a clean slate [with] no 

conduct or performance record,” USPTO management should consider taking action that 

would note these findings in Examiner A’s personnel file.

• USPTO management should consider reassessing the current controls to monitor the time 

and attendance of its employees, providing supervisors with patent examiner schedules, and 

requiring the presence indicator to reflect actual work presence.

• USPTO management, in conjunction with the Office of the Chief Information Officer, should 

consider retaining the data stored in its servers, including VPN and workstation event data, 

for at least a 3-year period, as the current retention period of 1 year severely limits both 

agency and OIG investigations.

• USPTO should consider reinstating its requirement that employees use their USPTO-issued 

ID badges to exit through the access control turnstiles during weekday working hours.

• USPTO should consider implementing a semiannual or annual review of the time and 

attendance of employees who receive an “Unacceptable” annual performance rating.

• USPTO should consider modifying its Performance Appraisal Plan and applicable Human 

Resources policies regarding employees with below standard performance to address 

individuals who receive consecutive “Unacceptable” annual performance ratings.

United States Patent and Trademark Office
42 Office of Inspector General | Semiannual Report to Congress | September 2015

WORK IN 

PROGRESS 

WORK IN PROGRESS (BY OVERSIGHT AREA)

During this reporting period, 32 OIG audit and evaluation projects were initiated or underway.

a All five ESA works in progress concern the Census Bureau.

b The NTIA works in progress concern the Broadband Technology Opportunities Program (BTOP) and FirstNet.

DEPARTMENT-WIDE

Top Management Challenges Facing the Department in FY 2016

To highlight the most significant management challenges facing the Department of Commerce 

(as required annually by the Reports Consolidation Act of 2000).

Audit of FY 2015 FISMA Compliance

To assess the effectiveness of the Department’s information security program and practices—

specifically, the Department’s and selected bureaus’ policies and procedures and selected 

IT systems.

Audit of Department’s FY 2015 Consolidated Financial Statements

To determine whether the financial statements are presented fairly, in all material respects, 

in accordance with generally accepted accounting principles. The audit will also consider the 

Department’s internal control over financial reporting and test compliance with certain provisions 

of laws, regulations, contracts, and grant agreements that could have a direct and material effect 

on the financial statements.

Complying with Uniform Guidance on Fees Under Federal Assistance Awards 

To provide background discussion of how costs were previously considered and the changes 

outlined in the new Uniform Guidance; discuss implementation of the new Guidance, including 

potential issues that may arise; offer recommendations for the Department moving forward. 

4

2

1

4

9

5

Department-wide BIS ESAa ITA NIST NOAA NTIA b USPTO

5

2
43

BUREAU OF INDUSTRY AND SECURITY

Audit of Bureau of Industry and Security’s Continuous Monitoring Strategy 

and Practices

To assess whether BIS’s continuous monitoring strategy and practices—including ongoing 

security control assessments of its critical information systems—provide adequate information 

for authorizing officials to make proper risk-based decisions.

Audit of BIS USXPORTS Adoption and CUESS Implementation

To determine whether BIS is (1) effectively and efficiently managing its transition toward using the 

USXPORTS system to perform export licensing processing and (2) using effective and efficient 

software development practices for CUESS.

ECONOMICS AND STATISTICS ADMINISTRATION

Audit of the Census Bureau’s Regional Office Realignment and 

Field Management Reforms

To determine whether the bureau is meeting, or on pace to meet, its goals of reduced cost and 

improved efficiency and responsiveness, while maintaining data quality across the many surveys 

it conducts annually.

Audit of the 2015 Census Test (Maricopa County, Arizona)

To assess the Census Bureau’s progress for determining whether enumerators are able to use 

mobile devices to collect household data during the 2015 Census Test as well as the status of 

the Bureau’s efforts to overcome policy and legal issues associated with the use of employeeowned mobile devices. We will also assess the effectiveness of the Bureau’s reengineered and 

automated operational control system to manage field work.

Audit of the U.S. Census Bureau’s Efforts to Continuously Update the MAF-TIGER 

Database and the LUCA Program in Preparation for the 2020 Decennial Census

To assess the methods and costs of continuously updating the Master Address File (MAF) 

Topologically Integrated Geographic Encoding Reference System (TIGER) database (MTdb), 

determine how efforts, such as the 2015 Address Validation Test, support the accuracy of the 

MAF, and evaluate preparation of the Local Update of Census Addresses (LUCA) program for 

the 2020 decennial census.

Audit of the Census Bureau’s Unliquidated Obligations

To evaluate the effectiveness of the Census Bureau’s obligation and deobligation review policies 

and procedures that were implemented since our 2013 report Monitoring of Obligation Balances 

Need Strengthening (OIG-13-026-A; June 18, 2013).

Audit of the Census Bureau’s Working Capital Fund

To evaluate the budgetary controls over the fund; to assess the controls in place to develop 

reimbursement formulas, the relationship of reimbursements to client services, the appropriateness 

of the level of fund balances, and the extent of compliance with appropriation language.

INTERNATIONAL TRADE ADMINISTRATION

Audit of the Department’s Trade-Related Operations in China

To assess the Department’s trade-related operations in China, including management, 

administrative, and financial arrangements for the Department’s bureaus and units operating in 

China. Audit will focus primarily on the International Trade Administration’s (ITA) U.S. & Foreign 

Commercial Service, the bureau with the largest presence in China, which also accommodates 

personnel from other Departmental bureaus at post.

Work in Progress
44 Office of Inspector General | Semiannual Report to Congress | September 2015

NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

Audit of NIST’s Oversight of Contracts

To determine whether (1) NIST has managed and administered contracts in accordance with 

federal and Departmental guidelines, policies, and procedures, and (2) officials with performance 

monitoring responsibilities possess the requisite training, technical expertise, and certification of 

qualifications.

Audit of NIST’s Management of Unliquidated Obligation Balances

To evaluate the effectiveness of NIST’s obligation and deobligation review policies and procedures 

that were implemented since our 2013 report Monitoring of Obligation Balances Need 

Strengthening (OIG-13-026-A; June 18, 2013).

Audit of Controls over NIST’s Working Capital Fund

To evaluate the budgetary controls over the fund; to assess the controls in place to develop 

reimbursement formulas, the relationship of reimbursements to client services, the appropriateness 

of the level of fund balances, and the extent of compliance with appropriation language.

Audit of NIST Security and Foreign National Access

To determine whether NIST has adequate processes and procedures to ensure that foreign 

nationals have the proper access limitations to NIST facilities and information systems.

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

Audit of the National Marine Fisheries Service’s (NMFS) Observer Program 

To understand how effectively NMFS has evaluated and implemented alternative fishery 

monitoring options, innovations, and methods in the National Observer Program. 

Audit of NOAA’s Polar Satellite Follow-on Planning and JPSS Implementation 

To determine the progress of polar satellite follow-on program planning, monitor ongoing JPSS 

acquisition and development, and assess the extent of potential data gaps.

Audit of the Office of Coastal Protection and Restoration Authority (CPRA) Grant 

Number NMA11NMF4630150

To determine whether CPRA complied with grant terms and conditions and applicable laws and 

regulations, has met the 15 percent matching share requirement, and claimed reasonable and 

allowable costs under the grant award.

Audit of NOAA Hurricane Sandy Disaster Relief Funds 

To determine whether NOAA adequately followed federal and departmental guidelines in awarding 

and monitoring Hurricane Sandy relief funds for repair and replacement of equipment damaged by 

Hurricane Sandy. 

Audit of NOAA’s IT Security Practices 

To determine the significant factors that contributed to the successful cyberattack on NOAA 

information systems and evaluate NOAA’s handling of the detection, analysis, eradication, and 

reporting of the attack, as well as recovery from it. 

Audit of Controls over Contractor Services Used to Support NWS Workforce

To evaluate whether NWS has adequate controls in place to ensure compliance with applicable 

laws and regulations for personnel support acquired through service contracts.

Audit of GOES-R Integration and Test Activities 

To assess the adequacy of NOAA’s Geostationary Operational Environmental Satellite-R Series 

(GOES-R) integration and test activities in preparation for launch and data distribution, per NOAA 
45

and NASA standards. We will also monitor the program’s progress in developing and reporting 

on flight and ground segment contracting actions and changes to minimize cost increases.

Audit of the National Ocean Service (NOS) Sole-Source Contract Regarding 

Gulf Oil Spill

To determine whether the Department’s Office of Acquisition Management effectively evaluated 

the acquisition risk and properly documented the justification of awarding sole-source contracts in 

its response to the Deepwater Horizon oil spill that began on April 10, 2010, in the Gulf of Mexico.

Audit of the NOAA Fisheries Finance Program 

To evaluate the program’s effectiveness and management controls, including those related 

to compliance and loan monitoring.

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

Audit of First Responder Network Authority’s Efforts to Address Federal 

Agency Challenges

To assess FirstNet’s effectiveness in addressing federal agency challenges with respect to the 

development and planned operation of the NPSBN.

Audit of Broadband Technology Opportunities Program (BTOP) Inventory Excess

To review BTOP grantees’ inventory of excess equipment to (1) determine whether grantees 

purchased equipment beyond program needs for commercialization (i.e., whether grantees 

warehoused equipment), (2) assess NTIA’s procedures for identifying recipients maintaining 

excess inventory, and (3) evaluate NTIA’s procedures for disposition of excess BTOP award 

inventory, including construction equipment and vehicles.

U.S. PATENT AND TRADEMARK OFFICE

Audit of USPTO’s Contracts Awarded Using Other Than Full and Open Competition

To determine whether USPTO’s noncompetitive contract awards were properly justified.

Audit of USPTO Office of Trademark’s Activity-Based Information System

To review allocation algorithms and controls of USPTO’s Activity-Based Information (ABI) system 

and determine whether the Office of Trademark’s use of ABI justifies and supports fee changes.

Audit of USPTO’s FY 2015 Financial Statement

To determine whether the financial statements are presented fairly, in all material respects, 

in accordance with generally accepted accounting principles. The audit will also consider 

the USPTO’s internal control over financial reporting and test compliance with certain 

provisions of laws, regulations, and contracts that could have a direct and material effect 

on the financial statements.

Audit of USPTO’s Inventory of Hoteling Employees’ Equipment

To assess the effectiveness of USPTO’s controls over inventory and equipment used by 

hoteling employees 

Audit of the Intellectual Property Rights Attaché Program

To assess the Intellectual Property Rights Attaché Program’s management controls, focusing 

primarily on the effectiveness and efficiency of program management and the validity of 

program expenditures.

Work in Progress
46 Office of Inspector General | Semiannual Report to Congress | September 2015

STATISTICAL DATA

The Inspector General Act Amendments of 1988 require us to present the statistical data 

contained in tables 1–8. 

TABLES Page

1. Office of Investigations Statistical Highlights for This Period 46

2. Audit Resolution and Follow-up 47

3. Audit, Evaluation, and Inspection Statistical Highlights for This Period 48

4. Audits with Questioned Costs 49

5. Audits with Recommendations That Funds Be Put to Better Use 49

6. Report Types for This Period 50

6-a. Performance Audits 51

6-b. Evaluations and Inspections 52

6-c. Published Investigative Reports 52

7. Single Audit and Program-Specific Audits 53

7-a. Processed Reports with Material Audit Findings 53

8. Audits Unresolved for More Than 6 Months 53

TABLE 1. OFFICE OF INVESTIGATIONS STATISTICAL HIGHLIGHTS FOR THIS PERIOD

Investigative activities cover investigations opened and closed by OIG; arrests by OIG 

agents; indictments and other criminal charges filed against individuals or entities as a result of 

OIG investigations; convictions secured at trial or by guilty plea as a result of OIG investigations; 

and fines, restitution, and all other forms of financial recoveries achieved by OIG as a result of 

investigative action.

Allegations processed present the number of complaints from employees, stakeholders, and 

the general public that were handled by our Complaint Intake Unit. Of these, some resulted in 

the opening of investigations; others were referred to bureaus for internal administrative followup. Others were unrelated to Departmental activities or did not provide sufficient information for 

any investigative follow-up and so were not accepted for investigation or referral. Fines and other 

financial recoveries refer only to agreements that a judge accepted.
Statistical Data 47

Allegations Receiveda

Total hotline contacts 961

Of which, are complaints related to Commerce programs 323

Number of hotline referrals to Commerce management 235

Investigative Caseload

Investigations opened this period 28

Investigations closed this period 41

Investigations in progress as of September 30, 2015 90

Prosecutive Actions and Monetary Results

Indictments/Informations 5

Arrests 0

Convictions 3

Monetary Issues Identified (waste, questioned costs, recoveries, and fines.) $1,782,249

Administrative Actions

Suspension/Debarment 2

Disciplinary action 4

a OIG is in the process of implementing a new case management system for investigations, which does not yet have any 

analytics or reporting functionality. As a result, all data included in this table should be considered to be estimated. 

TABLE 2. AUDIT RESOLUTION AND FOLLOW-UP

The Inspector General Act Amendments of 1988 require us to present in this report audits 

issued before the beginning of the reporting period (April 1, 2015) for which no management 

decision had been made by the end of the period (September 30, 2015). Ten audit reports remain 

unresolved for more than 6 months for this reporting period (see table 8, page 53).

Audit resolution is the process by which the Department of Commerce reaches an effective 

management decision in response to audit reports. Management decision refers to 

management’s evaluation of the findings and recommendations included in the audit report and 

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

Department Administrative Order 213-5, Audit and Evaluation Resolution and Follow-up, 

provides procedures for management to request a modification to an approved audit action plan 

or for a financial assistance recipient to appeal an audit resolution determination. The following 

table summarizes modification and appeal activity during the reporting period.
48 Office of Inspector General | Semiannual Report to Congress | September 2015

Report Category Modifications Appeals

Actions pending (April 1, 2015) 0 3

Submissions 0 0

Decisions 0 3

Actions pending (September 30, 2015) 0 0

TABLE 3. AUDIT, EVALUATION, AND INSPECTION STATISTICAL HIGHLIGHTS FOR 

THIS PERIOD

Audits comply with standards established by the Comptroller General of the United States for 

audits of federal establishments, organizations, programs, activities, and functions. 

Evaluations and inspections include evaluations, inquiries, and similar types of reviews that do 

not constitute an audit or a criminal investigation.

Questioned costsa $556,681

Value of audit recommendations that funds be put to better useb $48,180,722

Value of audit recommendations agreed to by managementc $12,243

These amounts include costs questioned by state and local government auditors or independent 

public accountants.

a Questioned cost: This is a cost questioned by OIG because of (1) an alleged violation of a provision of a law, regulation, 

contract, grant, cooperative agreement, or other agreement or document governing the expenditure of funds; (2) a finding 

that, at the time of the audit, such cost is not supported by adequate documentation; or (3) a finding that an expenditure of 

funds for the intended purpose is unnecessary or unreasonable.

b Value of audit recommendations that funds be put to better use: This results from an OIG recommendation 

that funds could be used more efficiently if Department management took action to implement and complete the 

recommendation. Such actions may include (1) reductions in outlays; (2) deobligation of funds from programs or 

operations; (3) withdrawal of interest subsidy costs on loans or loan guarantees, insurance, or bonds; (4) costs not 

incurred by implementing recommended improvements related to the Department, a contractor, or a grantee; (5) avoidance 

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

specifically identified.

c Value of audit recommendations agreed to by management: This is the sum of (1) disallowed costs and (2) 

funds put to better use that are agreed to by management during resolution. Disallowed costs are the amount of costs 

that were questioned by the auditors or the agency action official and subsequently determined—during audit resolution or 

negotiations by a contracting officer—not to be charged to the government.
Statistical Data 49

TABLE 4. AUDITS WITH QUESTIONED COSTS 

See table 3 for a definition of “questioned cost.” An unsupported cost is a cost that is not 

supported by adequate documentation at the time of the audit. Questioned costs include 

unsupported costs.

Questioned Unsupported

Report Category Number Costs ($) Costs ($)

A. Reports for which no management decision 

had been made by the beginning of the 6 885,494 586,994

reporting period

B. Reports issued during the reporting period 5 556,681 112,164

Total reports (A+B) requiring a management 

decision during the period 11 1,442,175 699,158

C. Reports for which a management decision 

was made during the reporting perioda 7 564,290 12,234

i. Value of disallowed costs 12,243 12,193

ii. Value of costs not disallowed 552,056 41

D. Reports for which no management decision 

had been made by the end of the 

reporting period 4 877,885 686,924

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

original recommendations.

TABLE 5. AUDITS WITH RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE 

See table 3 for a definition of “recommendation that funds be put to better use.”

Report Category Number Value ($)

A. Reports for which no management decision had been made by 

the beginning of the reporting period 0 0

B. Reports issued during the reporting period 2 48,180,722

Total reports (A+B) requiring a management decision during the period 2 48,180,722

C. Reports for which a management decision was made 0 0

during the reporting perioda

i. Value of recommendations agreed to by management 0 0

ii. Value of recommendations not agreed to by management 0 0

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

the end of the reporting period 2 48,180,722

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

original recommendations.
50 Office of Inspector General | Semiannual Report to Congress | September 2015

TABLE 6. REPORT TYPES FOR THIS PERIOD

Performance audits are engagements that provide assurance or conclusions based on an 

evaluation of sufficient, appropriate evidence against stated criteria such as specific requirements, 

measures, or defined business practices. Performance audits provide objective analysis so 

that management and those charged with governance and oversight can use the information to 

improve program performance and operations, reduce costs, facilitate decision making by parties 

with responsibility to oversee or initiate corrective action, and contribute to public accountability.

Evaluations and inspections include evaluations, inquiries, and similar types of reviews that 

do not constitute an audit or investigation. An inspection is defined as a process that evaluates, 

reviews, studies, or analyzes the programs and activities of a department or agency to provide 

information to managers for decision making; make recommendations for improvements to 

programs, policies, or procedures; and identify where administrative action may be necessary.

Published investigative reports memorialize the evidentiary findings, analysis, and conclusions 

of certain OIG investigations. Investigations are different from evaluations and other types of OIG 

reviews as they are initiated to resolve specific allegations, generally dealing with violations of law, 

regulations, or policies. In investigations, OIG collects evidence through a variety of methods, 

including witness interviews, subpoenas, and document requests, and examines that evidence 

to determine whether allegations are substantiated. OIG publishes certain investigative reports 

in the interest of increased transparency and accountability.

Type Number of Reports Table Number

Performance audits 9 Table 6-a

Evaluations and inspections 6 Table 6-b

Published investigative reports 6 Table 6-c

Total 21
Statistical Data 51

TABLE 6-A. PERFORMANCE AUDITS

 Funds to Be Amount Amount

Report Date Put to Questioned Unsupported

Report Title Number Issued Better Use ($) ($) ($)

Economics and Statistics Administration

2020 Census: The 2014 Census Test OIG-15-044-A 09.30.2015 0 0 0

Misses An Opportunity to Validate Cost 

Estimates and Establish Benchmarks 

for Progress

Economic Development Administration

The Economic Development Administration OIG-15-031-A 06.05.2015 46,458,670 0 0 

Faces Challenges in Effectively Monitoring 

Its Revolving Loan Funds

National Institute of Standards and Technology

Audit of NIST Quality System for OIG-15-038-M 08.14.2015 0 0 0

Measurement Services

National Oceanic and Atmospheric Administration

Audit of the Geostationary Operational OIG-15-030-A 05.28.2015 0 0 0 

Environmental Satellite-R Series: 

Leadership Must Proactively Address 

Integration and Test Risks to Maintain 

Revised Launch Schedule

National Telecommunications and Information Administration

Audit of FirstNet’s Workforce and Recruiting OIG-15-036-A 08.14.2015 0 0 0

Challenges, Participation at Discretionary 

Outreach Events, and Internal Control

Office of the Secretary

Inaccurate Reporting of Undefinitized OIG-15-033-A 06.19.2015 0 0 0

Actions in the Federal Procurement Data 

System-Next Generation

The Department Must Strengthen Controls OIG-15-034-A 08.06.2015 0 112,164 112,164

over Premium-class Travel Justification, 

Approval, and Reporting

U.S. Patent and Trademark Office

USPTO Needs to Strengthen Patent OIG-15-026-A 04.10.2015 0 0 0

Quality Assurance Practices

Audit of USPTO’s Management of OIG-15-041-A 09.04.2015 1,722,052 0 0

Unliquidated Obligation Balances
52 Office of Inspector General | Semiannual Report to Congress | September 2015

TABLE 6-B. EVALUATIONS AND INSPECTIONS

Funds to Be Amount Amount

Report Date Put to Questioned Unsupported

Report Title Number Issued Better Use ($) ($) ($)

Economics and Statistics Administration

Control Deficiencies Related to the OIG-15-040-M 08.19.2015 0 0 0

Overtime Approval Process at a Census 

Bureau Regional Office

National Oceanic and Atmospheric Administration

Cost Estimates, Long-Term Savings, OIG-15-032-I 06.11.2015 0 0 0

Milestones, and Enterprise Architecture

Policy Are Needed for Common Satellite 

Ground System Program

Office of the Secretary

Incorporating Audits into Contract OIG-15-027-M 04.29.2015 0 0 0

Administration Planning and Performance 

at the Department of Commerce

FY 2014 Compliance with Improper OIG-15-029-I 05.15.2015 0 0 0

Payment Requirements

Letter to Senate Committee on Homeland OIG-15-037-M 08.14.2015 0 0 0

Security and Governmental Affairs re: the 

Department’s FOIA Response Process

Nonfederal Audit Results for the 6-Month OIG-15-042-M 09.20.2015 0 0 0 

Period Ending June 30, 2015 

TABLE 6-C. INVESTIGATIVE PUBLIC REPORTS

Report Title Report Number Date Issued

Economics and Statistics Administration

Review of Census Sole Source Award OIG-14-0408 06.03.2015

Alleged Time and Attendance Fraud in the Census Check Office OIG-14-0790 09.15.2015

National Oceanic and Atmospheric Administration

Review of Alleged NWS Contracting Misconduct OIG-12-0447 06.03.2015

OIG Investigation into Environmental Stewardship on OIG-14-0505 09.01.2015

a NOAA Research Vessel

Office of the Secretary

Review of Alleged Misconduct and Waste of Government Resources OIG-14-0153 08.27.2015

by a Senior Official

U.S. Patent and Trademark Office

OIG Investigation into Alleged Time and Attendance Abuse by a OIG-15-0076 08.19.2015

Patent Examiner
Statistical Data 53

TABLE 7. SINGLE AUDIT AND PROGRAM-SPECIFIC AUDITS

OIG reviewed and accepted 6 program-specific audit reports prepared by independent public 

accountants. The reports processed with questioned costs, recommendations that funds be put to 

better use, and/or nonfinancial recommendations are listed in table 7-a.

Agency Audits

National Institute of Standards and Technology 5

National Telecommunications and Information Administration 1

Total 6

TABLE 7-A. PROCESSED REPORTS WITH MATERIAL AUDIT FINDINGS

Funds to Be Amount Amount

Report Date Put to Questioned Unsupported

Report Title Number Issued Better Use ($) ($) ($)

National Institute of Standards and Technology 

Wiss, Janey, Elstner Associates OIG-15-05076 04.28.2015 0 5,775 0

MesoCoat Inc. OIG-15-05086 05.06.2015 0 52,641 0

MesoCoat Inc. OIG-15-05092 05.06.2015 0 230,283 0

Precision Biosciences OIG-15-05080 09.16.2015 0 155,818 0

TABLE 8. AUDITS UNRESOLVED FOR MORE THAN 6 MONTHS

National Institute of Standards and Technology Five nonfederal audits of financial assistance grants awarded to 

Massachusetts Manufacturing Extension Partnership for 

FY2008–2012.

NIST and OIG continue to work to resolve these audits. 

National Institute of Standards and Technology Five nonfederal audits of financial assistance grants awarded to 

Florida Manufacturing Extension Partnership for FY 2008–2012.

NIST and OIG continue to work to resolve these audits.
54 Office of Inspector General | Semiannual Report to Congress | September 2015

REPORTING 

REQUIREMENTS

The Inspector General Act of 1978, as amended, specifies reporting requirements for semiannual 

reports. The requirements are listed below and indexed to the applicable pages of this report. 

Section Topic Page

4(a)(2) Review of Legislation and Regulations 54

5(a)(1) Significant Problems, Abuses, and Deficiencies 8–41

5(a)(2) Significant Recommendations for Corrective Action 8–41

5(a)(3) Prior Significant Recommendations Unimplemented 54

5(a)(4) Matters Referred to Prosecutorial Authorities 46

5(a)(5) and 6(b)(2) Information or Assistance Refused 55

5(a)(6) Listing of Audit Reports 8–41

5(a)(7) Summary of Significant Reports 8–41

5(a)(8) Audit Reports—Questioned Costs 49

5(a)(9) Audit Reports—Funds to Be Put to Better Use 49

5(a)(10) Prior Audit Reports Unresolved 55

5(a)(11) Significant Revised Management Decisions 55

5(a)(12) Significant Management Decisions with Which OIG Disagreed 55

5(a)(14) Results of Peer Review 56

SECTION 4(A)(2): REVIEW OF LEGISLATION AND REGULATIONS

This section requires the inspector general of each agency to review existing and proposed 

legislation and regulations relating to that agency’s programs and operations. Based on this 

review, the inspector general is required to make recommendations in the semiannual report 

concerning the impact of such legislation or regulations on (1) the economy and efficiency 

of the management of programs and operations administered or financed by the agency or 

(2) the prevention and detection of fraud and abuse in those programs and operations. Comments 

concerning legislative and regulatory initiatives affecting Departmental programs are discussed, 

as appropriate, in relevant sections of the report. 

SECTION 5(A)(3): PRIOR SIGNIFICANT RECOMMENDATIONS UNIMPLEMENTED

This section requires identification of each significant recommendation described in previous 

semiannual reports for which corrective action has not been completed. Section 5(b) requires 

that the Secretary transmit to Congress statistical tables showing the number and value of audit 

reports for which no final action has been taken, plus an explanation of why recommended action 

has not occurred, except when the management decision was made within the preceding 

year. Information on the status of any audit recommendations can be obtained through OIG 

upon request.
Reporting Requirements 55

SECTIONS 5(A)(5) AND 6(B)(2): INFORMATION OR ASSISTANCE REFUSED

These sections require a summary of each report to the Secretary when access, information, 

or assistance has been unreasonably refused or not provided. 

We reported to the Secretary about our terminated audit of ITA’s efforts to conduct quality and 

timely trade remedy determinations. Both ITA and the Department’s OGC raised concerns that 

providing us access to the business proprietary information we requested as part of the audit 

would be a violation of the Tariff Act of 1930, as amended—and, in conjunction with the Federal 

Trade Secrets Act, could expose the Department to potential criminal litigation and penalties. 

After 2 months of trying to get access to the information, we had no choice but to terminate the 

stalled audit because of the Department’s refusal to provide the requested information.

In addition, on a semiannual basis, we respond to requests from the U.S. House of 

Representatives Committee on Oversight and Government Reform—as well as a joint request 

from the chairs of the United States Senate Committee on Homeland Security and Governmental 

Affairs and the Committee on the Judiciary—to report on unimplemented recommendations and 

issues related to information access.

SECTION 5(A)(10): PRIOR AUDIT REPORTS UNRESOLVED

This section requires (1) a summary of each audit report issued before the beginning of the reporting 

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

(including the date and title of each such report); (2) an explanation of why a decision has not been 

made; and (3) a statement concerning the desired timetable for delivering a decision on each such 

report. There are 10 nonfederal audit reports concerning two NIST grant recipients, which are more 

than 6 months old for which no management decision has been made. (See table 8.)

SECTION 5(A)(11): SIGNIFICANT REVISED MANAGEMENT DECISIONS

This section requires an explanation of the reasons for any significant revision to a management 

decision made during the reporting period. Department Administrative Order 213-5, Audit and 

Evaluation Resolution and Follow-up, provides procedures for revising a management decision. 

For financial assistance audits, OIG generally must concur with any decision that would change 

the audit resolution proposal in response to an appeal by the recipient. There are no appeals 

pending at the end of this period.

SECTION 5(A)(12): SIGNIFICANT MANAGEMENT DECISIONS WITH WHICH 

OIG DISAGREED

This section requires information concerning any significant management decision with which 

the inspector general disagrees. Department Administrative Order 213-5 provides procedures 

for elevating unresolved audit recommendations to higher levels of Department and OIG 

management, including their consideration by an audit resolution council. During this period, 

no audit issues were referred.
56 Office of Inspector General | Semiannual Report to Congress | September 2015

SECTION 5(A)(14): RESULTS OF PEER REVIEW 

The most recent peer review of the Office of Audit and Evaluation was conducted in 2015 by 

the Office of Inspector General for the Board of Governors of the Federal Reserve System and 

the Consumer Financial Protection Bureau (FRB OIG). FRB OIG’s System Review Report of 

our audit operations is available on our website. We received a pass rating, the highest available 

rating. We have implemented all of FRB OIG’s recommendations for process and policy 

improvements.

On March 2, 2015, OIG’s Office of Investigations received official notification that the system of 

internal safeguards and management procedures for our investigative function was in compliance 

with the quality standards established by CIGIE and the applicable Attorney General Guidelines. 

The peer review was conducted by the Federal Reserve Board OIG.
57

ACRONYMS AND ABBREVIATIONS

BIS Bureau of Industry 

and Security

BTOP Broadband Technology 

Opportunities Program

CHEC Census Hiring and 

Employment Office 

CICA Competition in 

Contracting Act

CIGIE Council of Inspectors General 

on Integrity and Efficiency 

CMAT Center for Manufacturing 

and Technology

CRT Coordinated Review Team

EA Enterprise Architecture

EDA Economic Development 

Administration

ESA Economics and Statistics 

Administration 

FAR Federal Acquisition Regulation

FirstNet First Responder 

Network Authority

FISMA Federal Information Security 

Management Act of 2002

FOIA Freedom of Information Act

GAO Government Accountability 

Office

GEARS Ground Enterprise 

Architecture Services

GOES Geostationary Operational 

Environmental Satellite

GOES-R Geostationary Operational 

Environmental Satellite-R 

Series

IT information technology

ITA International Trade 

Administration

JPSS Joint Polar Satellite System

NASA National Aeronautics and 

Space Administration

NESDIS National Environmental 

Satellite, Data, and 

Information Service

NIST National Institute of Standards 

and Technology

NMFS National Marine Fisheries 

Service

NOAA National Oceanic and 

Atmospheric Administration

NOS National Ocean Service

NPSBN Nationwide Public Safety 

Broadband Network

NTIA National Telecommunications 

and Information Administration

NWS National Weather Service

OGC Office of General Counsel

OIG Office of Inspector General

OLC Office of Legal Counsel

OMB Office of Management 

and Budget

Acronyms and Abbreviations
58 Office of Inspector General | Semiannual Report to Congress | September 2015

OPM Office of Personnel 

Management

OPQA Office of Patent Quality 

Assurance

QSMS Quality Systems for 

Measurement Services

RCE Request for Continued 

Examination

RLF Revolving Loan Fund

USPTO U.S. Patent and 

Trademark Office

U.S. Department of Commerce

Office of Inspector General

1401 Constitution Avenue, NW

Washington, DC 20230

www.oig.doc.gov

OUR MISSION

To improve the programs and operations of the 

Department of Commerce through independent 

and objective oversight.