Audit Report

OIG-18-049

RESTORE ACT

St. Bernard Parish’s Internal Control over Federal Awards

August 1, 2018

Office of

Inspector General

Department of the Treasury
This Page Intentionally Left Blank
Contents

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page i 

Audit Report

Results in Brief............................................................................................. 1 

Background ................................................................................................. 3 

 RESTORE Act............................................................................................3 

 St. Bernard Parish ......................................................................................5 

Audit Results ............................................................................................... 6 

Grant Time Keeping Was Not Tracked Consistently ..................................... 7 

Grant Personnel Knowledge and Experience Was Limited and Federal Grant 

Training Was Lacking .............................................................................. 9 

 

 Recommendation ................................................................................... 11 

 

Appendices

Appendix 1: Objective, Scope, and Methodology........................................ 13

Appendix 2: St. Bernard Parish Management Response ............................... 17

Appendix 3: Treasury Management Response .............................................19

Appendix 4: Background on the Gulf Coast Restoration Trust Fund................20

Appendix 5: Major Contributors to This Report............................................23

Appendix 6: Report Distribution................................................................ 24

Abbreviations

CAO Chief Administrative Officer

CAO Manual Chief Administrative Officer Policy, Procedure, and Practices 

Manual

Clean Water Act Federal Water Pollution Control Act

FEMA Federal Emergency Management Agency

GAO Government Accountability Office

HMGP Hazardous Mitigation Grants Program

MYIP Multiyear Implementation Plan

OIG Office of Inspector General

OMB Office of Management and Budget

RESTORE Act Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast 

 States Act of 2012
Contents

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page ii 

St. Bernard Parish St. Bernard Parish, Louisiana

Treasury Department of the Treasury

Trust Fund Gulf Coast Restoration Trust Fund

Uniform Guidance Uniform Administrative Requirements, Cost Principles, and 

Audit Requirements for Federal Awards
OIG Audit

Report

The Department of the Treasury

Office of Inspector General

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 1 

August 1, 2018 

David A. Lebryk 

Fiscal Assistant Secretary 

This report presents the results of our audit of St. Bernard Parish, 

Louisiana’s (St. Bernard Parish) internal controls to administer 

grants under the Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast States Act 

of 2012 (RESTORE Act).1

1 Pub. L. 112-141, 126 Stat. 588-607 (July 6, 2012)

We performed this audit as part of our 

ongoing oversight of programs and activities funded under the 

RESTORE Act. Our audit objective was to assess St. Bernard 

Parish’s internal control over the administration of Federal awards 

in accordance with Federal laws, regulations, and the Department 

of the Treasury’s (Treasury) grant application requirements. The 

scope of our audit comprised St. Bernard Parish’s internal control in 

place during September 2014 through September 2017 as it 

related to the administration of Federal awards. Appendix 1 

provides more detail of our audit objective, scope, and 

methodology.

Results in Brief

In brief, we concluded that St. Bernard Parish had designed and 

implemented a system of internal control2

2 Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit 

Requirements for Federal Awards, “Internal control(s) means a process, implemented by a non-Federal 

entity, designed to provide reasonable assurance regarding the achievement of objectives in the 

following categories: (a) Effectiveness and efficiency of operations; (b) Reliability of reporting for 

internal and external use; and (c) Compliance with applicable laws and regulations.”

to administer Federal 

Awards but did not maintain all controls in place as required by the 

Office of Management and Budget‘s (OMB) Uniform Administrative 

Requirements, Cost Principles, and Audit Requirements for Federal 

Awards (Uniform Guidance),

3

3 OMB’s Uniform Guidance (2 CFR Part 200) became effective December 26, 2014. 

Treasury’s RESTORE Act Financial 

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 2 

Assistance Standard Terms and Conditions and Program-Specific 

Terms and Conditions, and Treasury’s RESTORE Act Direct 

Component Guidance and Application to Receive Federal Financial 

Assistance. While we found no matters of concern involving St. 

Bernard Parish’s controls to administer grants in the areas of 

budgeting, cash management, disbursements, financial reporting, 

inventory management, procurement, and performance monitoring, 

we noted two control deficiencies4

4 Government Accountability Office (GAO), Government Auditing Standards, 6.21, “A deficiency in 

operation exists when a properly designed control does not operate as designed, or when the person 

performing the control does not possess the necessary authority or qualifications to perform the control 

effectively.” (GAO-12-331G; December 2011).

in the area of program 

management. Specifically, grant time keeping was not consistently

tracked and grant personnel had limited knowledge and experience 

to administer Federal awards and lacked Federal grant training.

Accordingly, we recommend that the Fiscal Assistant Secretary 

considers St. Bernard Parish’s control deficiencies over grant 

timekeeping and employees’ lack of knowledge, experience, and 

training on Federal grants as part of Treasury’s oversight and 

administration of St. Bernard Parish’s awards. This consideration 

should also be part of Treasury’s risk assessments required by the 

Uniform Guidance for future awards. 

As part of our reporting process, we provided St. Bernard Parish 

management an opportunity to comment on a draft of this report.

In a written response, St. Bernard Parish management

acknowledged both findings. As to grant timekeeping, management 

stated that St. Bernard Parish is working diligently on educating 

and training its employees on the importance of time tracking, and 

the significance of following its grant time keeping policy. 

Management also noted that all time sheets are up-to-date and that 

the Director of Public Works does not complete grant time sheets 

as they are not seeking reimbursement for his salary. His position 

and duties will be monitored to determine if a change is required. 

St. Bernard Parish will continually review the timekeeping policy 

and procedures and update as needed. With respect to grant

personnel’s lack of knowledge, experience, and training on Federal 

grants, St. Bernard Parish management explained that the Grants 

Department was re-established with the new administration in 

2016 as this department was considered important to the 

development of St. Bernard Parish. There was staff turnover which 

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 3 

delayed progress, but management expressed its commitment to 

continuing to develop and improve processes that will result in an 

efficient and effective department. Furthermore, management 

stated its dedication to educating all employees and encouraging 

them to search governmental or outside resources for additional 

training, and giving employees opportunities to excel and stay upto-date on policies and procedures. The response also provided 

updates to the Grant Manager’s and other grant personnel’s 

training from 2016 through mid-June 2018 to include training 

provided by Treasury5

5

 Reference to training provided by “Treasury OIG” in St. Bernard Parish’s management response was 

training provided by Treasury’s Office of Gulf Coast Restoration. OIG did not and does not provide 

training to entities subject to audit oversight.

and scheduled training on Uniform Guidance. 

It was also noted that the Grant Specialist was replaced by an 

internal employee with Federal grant experience. St. Bernard 

Parish’s response is provided in its entirety in appendix 2 of this 

report.

We also provided a draft of this report with St. Bernard Parish 

management’s response incorporated to Treasury management. In 

a written response, Treasury management agreed with the report

findings. Treasury management further noted that it will consider 

St. Bernard Parish’s control deficiencies over grant timekeeping and 

employees’ lack of knowledge, experience, and training on Federal 

grants as part of Treasury’s oversight and administration of their

awards. This consideration also will be part of Treasury’s risk 

assessments required by the Uniform Guidance for future St. 

Bernard Parish awards. We found that management’s response 

meets the intent of our recommendation. Treasury management’s 

response, in its entirety, is included as appendix 3 of this report.

Background

RESTORE Act

The RESTORE Act established the Gulf Coast Restoration Trust 

Fund (Trust Fund) within Treasury to provide funds for 

environmental and economic restoration of the Gulf Coast region 

that was damaged by the 2010 Deepwater Horizon oil spill. 

Deposits into the Trust Fund will be comprised of 80 percent of all 

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 4 

civil and administrative penalties paid after July 6, 2012, under the 

Federal Water Pollution Control Act (the Clean Water Act).6

6 33 U.S.C. § 1251 et seq. 

Treasury is responsible for administering grants made under the 

Direct Component of the Trust Fund. 

Under the Direct Component, 35 percent of the Trust Fund will be 

made available to the Gulf Coast States (Alabama, Florida, 

Louisiana, Mississippi, and Texas) in equal shares in the form of 

grants for the purpose of economic and ecological restoration. For 

the State of Louisiana, 70 percent of the funds will be provided to 

the State and 30 percent will be provided to eligible coastal 

parishes7

7 Coastal zone parishes means the parishes of Ascension, Assumption, Calcasieu, Cameron, Iberia, 

Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John 

the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, and Vermilion in the State of 

Louisiana. 

based on a formula described in the RESTORE Act. Under 

this component, each eligible applicant must prepare a Multiyear

Implementation Plan (MYIP) before submitting an application for 

funding, unless it is applying for planning assistance funds to 

develop its MYIP. Direct Component funds can be spent on: (a) 

restoration and protection of the natural resources, ecosystems, 

fisheries, marine and wildlife habitats, beaches, and coastal 

wetlands of the Gulf Coast Region; (b) mitigation of damage to 

fish, wildlife, and natural resources; (c) implementation of a 

federally approved marine, coastal, or comprehensive conservation 

management plan, including fisheries monitoring; (d) workforce 

development and job creation; (e) improvements to or on state 

parks located in coastal areas affected by the Deepwater Horizon 

oil spill; (f) infrastructure projects benefitting the economy or 

ecological resources, including port infrastructure; (g) coastal flood 

protection and related infrastructure; (h) promotion of tourism in 

the Gulf Coast Region, including promotion of recreational fishing; 

(i) promotion of the consumption of seafood harvested from the 

Gulf Coast Region; (j) planning assistance; and (k) administrative 

costs. Details of the Trust Fund components are provided in 

appendix 4.

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 5 

St. Bernard Parish 

St. Bernard Parish is located in the coastal zone, (as defined in 

section 304 of the Coastal Zone Management Act of 1972)

8

8 16 U.S.C. § 1453 as amended through Pub. L. No. 109-58, the Energy Policy Act of 2005. 

of the 

southeastern part of Louisiana and is eligible to receive a direct

distribution of the State of Louisiana’s Direct Component funds. St. 

Bernard Parish is estimated to receive $10.8 million based on 

payments from Transocean defendants,9

9 Transocean defendants include Transocean Deepwater Inc., Transocean Offshore Deepwater Drilling 

Inc., Transocean Holdings LLC, and Triton Asset Leasing GmbH.

Anadarko Petroleum 

Corporation, and the BP Exploration & Production Inc. 

settlements.

10

10 Treasury, Projected BP Annual Deposits into The Gulf Coast Restoration Trust Fund Pursuant to the 

Consent Decree Accepted on April 4, 2016 by the Eastern Federal District Court of New Orleans

(Published September 2, 2016).

Of this amount, approximately $2.8 million has been 

made available11

11 The “amount made available” represents St. Bernard Parish’s portion of the Trust Fund deposits from 

all penalty payments plus interest available for award, and not necessarily the amount awarded to date. 

to St. Bernard Parish as of April 9, 2018.12

12 Current Trust Fund allocations, including funds available and funds obligated or transferred by 

RESTORE Act component are publicly available on the U.S. Treasury Restore Act homepage: 

https://www.treasury.gov/services/restore-act/Pages/home.aspx

St. Bernard Parish is a local governmental subdivision which 

operates under a home rule charter13

13 “Home Rule Charter for St. Bernard Parish, Louisiana” (2016). The Louisiana State Constitution of 

1974, Article VI, Local Government, Part 1, provides the structure and principles for the Home Rule 

Charter and Plans of Government.

and is authorized to exercise 

any power and perform any function necessary, requisite, or proper 

for the management of its local affairs. The legislative power of the 

parish government is vested in the St. Bernard Parish Council, an 

elected body consisting of seven councilmen. The St. Bernard 

Parish also has an elected President who heads the executive 

branch. The President is the chief executive officer of the St. 

Bernard Parish Government and exercises general executive and 

administrative authority over all departments, offices, and 

agencies, with exceptions noted in the home rule charter.

During 2015 and 2016, St. Bernard Parish went through several 

organizational and leadership transitions. In 2015, the President 

lost his re-election bid. During the transition to the next 

administration, several management positions were left vacant. In 

November 2015, a new President was elected and took office on 

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 6 

January 21, 2016. The new President hired staff for several key 

positions, to include: Chief Administrative Officer (CAO), Finance 

Director, Information Technology Director, and Public Works 

Director. The new administration also made organizational changes 

including hiring an Internal Auditor, creating the Coastal Affairs 

Department, and establishing the Grants Department. The Internal 

Auditor, who reports to both the CAO and the St. Bernard Parish 

Council, was hired to assess known deficiencies and internal 

controls. The Coastal Affairs Department is responsible for the 

project management of RESTORE Act grants, and the Grants 

Department which is a branch of the Finance Department, is 

responsible for administering all other aspects of St. Bernard

Parish’s awards, with the support of other parish personnel and 

outside consultants. 

With the assistance of a consultant, St. Bernard Parish submitted 

its RESTORE Act planning assistance grant application to Treasury 

in January 2016, but then withdrew the application in April 2016. 

On May 30, 2017, Treasury approved St. Bernard Parish’s 

submitted MYIP, which included four projects totaling $1.9 million. 

In February 2018, Treasury awarded a total of $1,055,750 to St. 

Bernard Parish for the “Paris Road Corridor” ($824,000) and the 

“Nunez Community College Fisheries Workforce Development” 

($231,750) projects. 

Audit Results 

As a Federal grant recipient, St. Bernard Parish must comply with 

requirements stipulated in the Uniform Guidance, which requires 

that a recipient “establish and maintain effective internal control

over the Federal award that provides reasonable assurance that the 

non-Federal entity is managing the Federal award in compliance 

with Federal statutes, regulations, and the terms and conditions of 

the Federal award.” The Uniform Guidance further requires that 

these internal control(s) should be in compliance with the 

Government Accountability Office's (GAO) Standards for Internal 

Control in the Federal Government.

14

14 GAO, Standards for Internal Control in the Federal Government, provides the overall framework for 

establishing and maintaining an effective internal control (GAO-14-704G; September 2014). 

Internal control requirements 

are further reaffirmed in Treasury’s RESTORE Act Financial 

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 7 

Assistance Standard Terms and Conditions and Program-Specific 

Terms and Conditions and RESTORE Act Direct Component 

Guidance and Application to Receive Federal Financial Assistance. 

We concluded that St. Bernard Parish had designed and 

implemented a system of internal control to administer RESTORE 

Act grants in the areas of budgeting, cash management, 

disbursements, financial reporting, inventory management, 

procurement, and performance monitoring, but did not maintain all 

controls in place in the area of program management. Specifically, 

we noted the following two control deficiencies in program 

management related to inconsistent tracking of time charged to 

grants and grant personnel’s limited knowledge and experience to 

administer Federal awards and lack of Federal grant training. 

Finding 1 Grant Time Keeping Was Not Tracked Consistently 

We found that St. Bernard Parish employees were inconsistent in 

tracking their time worked on grants, and as a result, did not fully 

comply with the Uniform Guidance related to time charged to 

Federal awards. While St. Bernard Parish had an overarching time 

keeping policy in its Chief Administrative Officer Policy, Procedure, 

and Practices Manual (CAO Manual),15

15 The Chief Administrative Officer Policy, Procedure, and Practices Manual is a summary document of 

requirements that St. Bernard Parish departments follow. Each department prepared and maintains their 

own departmental manual.

it did not have a mechanism 

for employees to record time worked on grants. Prior to January 

2017, employees were informally tracking time spent on grants 

using personal notebooks. After informing the Parish President and 

CAO about the Uniform Guidance requirements for recording time 

accurately, St. Bernard Parish implemented the “Grant Time and 

Attendance Weekly Report” in January 2017. However, as 

discussed below, employees did not consistently follow the 

requirement to complete this report. 

The Uniform Guidance requires that charges to Federal awards for 

salaries and wages must be based on records that accurately 

reflect the work performed. These records must: (1) be supported 

by a system of internal control which provides reasonable 

assurance that the charges are accurate, allowable, and properly 

allocated; (2) be incorporated into the official records of the non-

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 8 

Federal entity; (3) reasonably reflect the total activity for which the 

employee is compensated by the non-Federal entity, not exceeding 

100 percent of compensated activities; and (4) support the 

distribution of the employee’s salary or wages among specific 

activities or cost objectives if the employee works on more than 

one Federal award; a Federal award and non-Federal award; an 

indirect cost activity and a direct cost activity; two or more indirect 

activities which are allocated using different allocation bases; or an 

unallowable activity and a direct or indirect cost activity. 

St. Bernard Parish addressed the Uniform Guidance requirements in 

its CAO Manual, as well as, implemented the “Grant Time and 

Attendance Weekly Report” in January 2017. St. Bernard Parish’s 

CAO Manual requires the following:

• tracking the payroll and allocated costs charged to a specific 

grant account; 

• ensuring all time charges are supported by timesheets that 

have been approved by the supervisor; 

• tracking the payroll for employees who are working on a 

single award and attesting to the fact that the employee

worked solely on that program for the period covered by the 

grant; 

• verifying that salaries for employees working on multiple 

grants are supported by timesheets accounting for the total 

time worked and do not cross over multiple grants; 

• calculating an indirect cost rate at two percent of project 

costs in the event that the rate is not specified in the award 

agreement; and

• verifying salaries of employees used for meeting match or 

cost share. 

The “Grant Time and Attendance Weekly Report” is a time tracking 

spreadsheet that requires employees who work on grants to track 

time worked on a grant, time worked on other tasks, and time for 

holidays or leave. The employee signs the report and the supervisor

and the director review and approve the report each week. In 

January 2017, the Grant Manager provided training on the “Grant 

Time and Attendance Weekly Report” to all employees working on 

grants. 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 9 

We reviewed the time tracking spreadsheet for the 31 

personnel who worked on grants covering the period January 8, 

2017 through May 7, 2017. We noted that 55 of the 537 required 

“Grant Time and Attendance Weekly Reports” (approximately 10 

percent) were missing for 7 grant funded employees. This included

the Director of Public Works who never turned in timesheets for 

time worked on grants for the entire period reviewed. When we 

inquired about the missing “Grant Time and Attendance Weekly 

Reports,” the Grant Manager told us that training was provided and 

employees knew that timesheets were required, but some staff still 

did not do them. At the time of our audit, St. Bernard Parish did 

not have a federally negotiated indirect cost rate as it did not 

charge indirect costs to Federal awards.

16

16 In one case, indirect costs were charged to a non-RESTORE Act award, but the Federal awarding 

agency determined the indirect cost rate of one percent. 

Therefore, St. Bernard 

Parish had never used the indirect cost rate calculation of two 

percent of total project costs as noted in the CAO Manual. Officials 

told us that they will work with Federal awarding agencies to 

determine whether to charge indirect costs to Federal awards, and

as such, determine the appropriate rate. It should be noted that St. 

Bernard Parish will have to comply with any Treasury terms and 

conditions in RESTORE Act awards related to indirect costs

including the three percent cap on administrative costs.

Accordingly, the parish may need to track time charged for other 

personnel in addition to grant-funded employees. 

Without employees fully complying with St. Bernard Parish’s time 

keeping policy and tracking procedures, there is no reasonable 

assurance that time charged to grants is accurate, allowable, and 

properly allocated. Furthermore, St. Bernard Parish will potentially 

lose the full benefit of funding under a grant if staff do not submit 

accurate time records as required. That is, St. Bernard Parish would 

be unable to request reimbursement under a grant without the 

time-keeping records of employees. 

Finding 2 Grant Personnel Knowledge and Experience Was Limited 

and Federal Grant Training Was Lacking

We found that the Grants Department personnel had limited 

knowledge and experience to administer Federal awards and lacked 

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 10 

Federal grant training. The Grants Department was created in 

January 2016 and was initially comprised of a Grant Manager and 

a contracted grant consultant. In April 2016, a new Grant Manager 

came onboard, and at the time of our interviews in May 2017, the 

Grants Department consisted of a Grant Manager, a Grant 

Specialist III, and a Grant Specialist I17

17 There was no Grant Specialist II position created when the Grants Department was expanded.

who were selected by the 

CAO from existing St. Bernard Parish personnel. The CAO selected 

the Grant Manager and the Grant Specialist III based on their prior 

experience supporting the Federal Emergency Management Agency 

(FEMA) and the Hazardous Mitigation Grants Program (HMGP)

grants. However, the Grant Manager’s experience was limited to 

the close out of the FEMA grant and project management of the 

HMGP grant. The Grant Specialist III’s experience was limited to 

tracking grant invoices only. The Grant Specialist I had no prior 

grant experience and the position was presented as a new 

opportunity. When we inquired of the CAO about training, it was 

noted that there was a lot of cross training parish-wide between 

directors and managers. According to Treasury’s records, the Grant 

Manager had received two grants management classes, in April

2016 and July 2017. Nevertheless, when we interviewed the 

Grant Manager and two grant staff in May 2017, we were told that 

they had not received specialized Federal grants-related training 

and were not familiar with the Uniform Guidance. 

Prior to establishing the Grants Department in January 2016, St. 

Bernard Parish relied on consulting firms to manage grants. The 

consultants submitted performance data on prior Federal awards 

and were responsible for monitoring compliance with laws and 

regulations. At the time of the audit, St. Bernard Parish still relied 

on consultants for their large grants. 

According to GAO’s Standards for Internal Control in the Federal 

Government, Principle 4, Demonstrate Commitment to 

Competence, management is responsible for establishing

“expectations of competence for key roles to help the entity 

achieve its objectives. Competence is the qualification to carry out 

assigned responsibilities. It requires knowledge, skills, and abilities, 

which are gained largely from professional experience, training, and 

certifications.” In addition, “personnel need to possess and 

 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 11 

maintain a level of competence that allows them to accomplish 

their assigned responsibilities, as well as understand the 

importance of effective internal control.” 

In January 2017, the Grants Department developed the St. Bernard 

Parish Government Policy and Procedure Guidelines for Grants 

Department, which defines competency and performance standards 

for grant personnel. The guidelines require grant personnel to: (1) 

have the ability to interpret complex grant funding requirements, 

submissions, and budget projections; (2) have the ability to 

interpret Federal, state, and local government laws and regulations 

regarding grant administration; (3) have the ability to review the 

work of others to ensure conformance to standards; (4) maintain 

up-to-date knowledge and expertise in Federal, state, and local 

agencies’ regulations and policies; and (5) stay abreast of new 

laws and OMB guidance. 

Without relevant experience and training on grants and managing 

Federal awards, St. Bernard Parish has an increased risk of misuse 

or misappropriation of Federal funds and the inability to ensure 

compliance with Federal laws and regulations. 

Recommendation

We recommend that the Fiscal Assistant Secretary considers St. 

Bernard Parish’s control deficiencies over grant timekeeping and 

employees’ lack of knowledge, experience, and training on Federal

grants as part of Treasury’s oversight and administration of St. 

Bernard Parish’s awards. This consideration should also be part of 

Treasury’s risk assessments required by the Uniform Guidance for 

future awards. 

Management Response

Treasury management agreed with our report findings. In a written 

response, management noted that it will consider St. Bernard 

Parish’s control deficiencies over grant timekeeping and employees’ 

lack of knowledge, experience, and training on Federal grants as 

part of Treasury’s oversight and administration of their awards. 

This consideration also will be part of Treasury’s risk assessments 

required by the Uniform Guidance for future St. Bernard Parish 
St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 12 

awards. Treasury management’s response, in its entirety, is 

included as appendix 3.

OIG Comment

Management’s response meets the intent of our recommendation. 

* * * * * *

We would like to extend our appreciation for the cooperation and 

courtesies extended to our staff during the audit. Major 

contributors to this report are listed in appendix 5. A distribution 

list for this report is provided as appendix 6. If you have any 

questions, please contact me at (202) 927-8782 or Eleanor Kang, 

Audit Manager, at (202) 927-8127. 

/s/

Cecilia Howland

Director, Gulf Coast Restoration Audits
Appendix 1

Objective, Scope, and Methodology

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 13

As part of our oversight of programs, projects, and activities 

authorized by the Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast States Act 

of 2012 (RESTORE Act), we initiated an audit of St. Bernard 

Parish, Louisiana’s (St. Bernard Parish) internal control to 

administer RESTORE Act grants. The objective of our audit was to 

assess St. Bernard Parish’s internal control over the administration 

of Federal awards in accordance with Federal laws, regulations, 

and the Department of the Treasury’s (Treasury) grant application 

requirements.

The scope of our audit comprised St. Bernard Parish’s internal 

control in place during September 2014 through September 2017

as it related to the administration of Federal awards. This included 

policies, procedures, and practices with respect to St. Bernard 

Parish’s key controls over budgeting, cash management, 

disbursements, financial reporting, inventory management, 

procurement, program management, and performance monitoring.

The scope of our audit also included the grant time tracking 

spreadsheet that summarized 537 “Grant Time and Attendance 

Weekly Report[s]” for all 31 personnel who were eligible to charge 

time to grants during the period January 8, 2017 through May 7, 

2017. 

We contracted with Williams, Adley and Company-DC LLP, a 

certified independent public accounting firm, to assist us with the 

audit. However, this report and the conclusions therein are the 

responsibility of the Treasury Office of Inspector General. As such, 

we take responsibility for all work performed on our behalf. 

To meet our audit objective, we performed the following 

procedures.

• We reviewed applicable Federal laws, regulations, and 

procedures as follows:

 RESTORE Act, Pub. L. 112-141, July 6, 2012;

 Treasury, Regulations for the Gulf Coast Restoration 

Trust Fund Interim Final Rule, 31 CFR Part 34, 

October 14, 2014 and Regulations for the Gulf Coast 

Restoration Trust Fund Final Rule, 31 CFR Part 34, 

February 12, 2016;
Appendix 1

Objective, Scope, and Methodology

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 14

 Office of Management and Budget, Uniform 

Administrative Requirements, Cost Principles, and 

Audit Requirements for Federal Awards, 2 CFR 200, 

December 26, 2014;

 Treasury, Uniform Administrative Requirements, Cost 

Principles, and Audit Requirements for Federal 

Awards, 2 CFR Part 1000, February 26, 2016;

 Treasury, “RESTORE Act Financial Assistance 

Standard Terms and Conditions and Program-Specific 

Terms and Conditions,” January 2015;

 Treasury, “RESTORE Act Direct Component Guidance 

and Application to Receive Federal Financial 

Assistance,” August 2014; and

 Government Accountability Office’s Standards for 

Internal Control in the Federal Government (GAO-14-

704G; September 10, 2014).

• We reviewed relevant documents related to St. Bernard 

Parish as follows:

 Direct Component application for Federal financial 

assistance;

 The RESTORE Act Operational Self-Assessments 

dated September 4, 2014, June 23, 2015, June 27, 

2016, and August 21, 2017; 

 Audit reports in accordance with Office of 

Management and Budget’s Circular A-133, Audits of 

States, Local Government and Non-Profit Organization 

for fiscal year 2012 through fiscal year 2016

 “St. Bernard Parish Government Risk and Safety 

Assessment,” dated May 2017;

 “Grant Time and Attendance Weekly Reports” for the 

period January 8, 2017 through May 7, 2017; and

 “Saint Bernard Parish Government 2016 Annual 

Internal Audit Plan.”

• We reviewed St. Bernard Parish’s applicable policies and 

procedures as follows:

 St. Bernard Parish Government Chief Administrative 

Officer Policy, Procedure & Practices Manual, March 

2017;
Appendix 1

Objective, Scope, and Methodology

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 15 

 St. Bernard Parish Government 2016 Finance Policy 

Manual; 

 St. Bernard Parish Government Department of Public 

Works Procurement Guidelines; 

 St. Bernard Parish Government Policy and Procedure 

Guidelines for Grants Department, January 2017;

 St. Bernard Parish Council, “Ordinance SBPC# 1847-

01-17” (Personnel Plan), January 17, 2017; and 

 “Home Rule Charter for St. Bernard Parish, Louisiana” 

(2016). 

• We performed walkthroughs of processes related to Federal 

grants administration for the purpose of assessing St. 

Bernard Parish’s internal control. During the walkthroughs, 

we reviewed documentation to determine if processes were 

being followed as indicated by policies and procedures and in 

accordance with the Uniform Guidance. We performed 

walkthroughs of processes as follows including:

 budgeting;

 cash management;

 disbursements; 

 financial reporting;

 inventory management; 

 procurement;

 program management; and

 performance monitoring.
Appendix 1

Objective, Scope, and Methodology

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 16 

• We interviewed key St. Bernard Parish officials and staff as 

follows: 

 President

 Chief Administrative Officer

 Councilman Co-Chair

 Finance Director

 Assistant Finance Director

 Director of Public Works

 Coastal Affairs Director

 Coastal Advisor

 Grant Manager

 Grant Specialist I 

 Grant Specialist III

 Grant Consultant

 Recovery Manager

 Assistant Recovery Manager

 Fixed Asset Accountant

 Grant Accountant

 Internal Auditor

 Information Technology Manager

We conducted our field work between June 2015 and September 

2017 at St. Bernard Parish’s offices in Chalmette, Louisiana, and at 

the Treasury Office of Inspector General office in Washington, D.C.

We conducted this performance audit in accordance with generally 

accepted government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix 2

St. Bernard Parish Management Response

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 17 
Appendix 2

St. Bernard Parish Management Response

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 18 
Appendix 3

Treasury Management Response

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 19 
Appendix 4 

Background on the Gulf Coast Restoration Trust Fund

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 20 

The Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast States Act 

of 2012 (RESTORE Act) established the Gulf Coast Restoration 

Trust Fund (Trust Fund) within the Department of the Treasury 

(Treasury) to provide funds for environmental and economic 

restoration of the Gulf Coast region that was damaged by the 2010 

Deepwater Horizon oil spill. Deposits into the Trust Fund will 

comprise 80 percent of all civil and administrative penalties related 

to Deepwater Horizon paid under the Federal Water Pollution 

Control Act (Clean Water Act) after July 6, 2012.

Fund Sources

Approximately $5.3 billion has been designated for the Trust Fund 

resulting from settlement agreements between the U.S. 

Department of Justice and the following parties:

• approximately $4.4 billion plus interest from BP Exploration 

& Production Inc.18

18 A $20.8 billion civil settlement between the Department of Justice and BP Exploration & Production 

Inc. was approved on April 4, 2016. Of this amount, $4.4 billion will be deposited into the Trust Fund 

over 15 years. BP made the first Clean Water Act penalty payment to the Department of Justice on 

April 3, 2017, and 80 percent of that payment, or approximately $303 million, was deposited in the 

Gulf Coast Restoration Trust Fund on April 10, 2017. A second payment of approximately $152 million 

was deposited into the Trust Fund on April 9, 2018.

• approximately $800 million plus interest from the 

Transocean defendants19

19 On February 19, 2013, the civil settlement between the Department of Justice and Transocean 

defendants (Transocean Deepwater Inc., Transocean Offshore Deepwater Drilling Inc., Transocean 

Holdings LLC, and Triton Asset Leasing GmbH) was approved. Among other things in the settlement, 

the Transocean defendants paid a $1 billion civil penalty plus interest in three installments. Of this 

amount, $800 million plus interest was transferred to the Trust Fund; the final amount was deposited in 

the Trust Fund in February 2015.

• approximately $127 million plus interest from Anadarko 

Petroleum Corporation20

20 On December 16, 2015, the civil settlement between the Department of Justice and Anadarko 

Petroleum Corporation was approved. Anadarko agreed to civil penalties of $159.5 million. Of this 

amount, approximately $127 million was deposited in the Trust Fund in March 2016. 

 
Appendix 4

Background on the Gulf Coast Restoration Trust Fund

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 21 

RESTORE Act Components

 

The RESTORE Act allocates monies from the Trust Fund into the 

following five components.

• Direct Component – Treasury Administered

 35 percent is to be equally divided among the five 

Gulf Coast States for ecosystem restoration, 

economic development, and tourism promotion 

accordingly:

• Louisiana – 30 percent to the coastal 

parishes based on an allocation formula and 

70 percent to the state;

• Florida – 75 percent to the counties most 

affected by the oil spill and 25 percent to 

the other counties based on an allocation 

formula;

• Mississippi – 100 percent to the Department 

of Environmental Equality;

• Alabama – 100 percent to the Alabama Gulf 

Coast Recovery Council; and

• Texas – 100 percent to the Texas 

Governor’s Office; 

• Comprehensive Plan Component – Gulf Coast Ecosystem 

Restoration Council Administered

 30 percent plus 50 percent of interest earned from 

Trust Fund investments is to be used for 

restoration activities under the Comprehensive 

Plan; 

• Spill Impact Component – Gulf Coast Ecosystem 

Restoration Council Administered

 30 percent is to be divided among the five Gulf 

Coast States according to a formula to implement 

State Expenditure Plans, which require approval by 

the Council;

• National Oceanic and Atmospheric Administration’s 

RESTORE Act Science Program – National Oceanic and 

Atmospheric Administration Administered

 2.5 percent plus 25 percent of interest earned from 

Trust Fund investments is to be used for a science, 
Appendix 4

Background on the Gulf Coast Restoration Trust Fund

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 22 

observation, monitoring, and technology program; 

and

• Centers of Excellence Research Grants Program – 

Treasury Administered

 2.5 percent plus 25 percent of interest earned from 

Trust Fund investments is to be used for research 

on the Gulf Coast Region.

 Availability for St. Bernard Parish

St. Bernard Parish is estimated to receive $10.8 million based on 

payments from Transocean defendants, Anadarko Petroleum 

Corporation, and the BP Exploration & Production Inc. settlements. 

As of April 9, 2018, the Trust Fund had received approximately

$1.4 billion, including related interest. Of that amount, 

approximately $2.8 million has been made available to St. Bernard 

Parish under the Direct Component.21

21 Current Trust Fund allocations, including funds available and funds obligated or transferred by 

RESTORE Act component are publicly available on the U.S. Treasury Restore Act homepage: 

https://www.treasury.gov/services/restore-act/Pages/home.aspx

 

 
Appendix 5

Major Contributors to This Report

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 23 

Eileen J. Kao, Audit Manager

Dionne L. Smith, Auditor-in-Charge

Usman Abbasi, Auditor

Kevin Guishard, Referencer
Appendix 6

Report Distribution

St. Bernard Parish’s Internal Control over Federal Awards (OIG-18-049) Page 24 

Department of the Treasury

Counselor to the Secretary

Under Secretary for Domestic Finance

Fiscal Assistant Secretary

Deputy Assistant Secretary, Fiscal Operations and Policy

Director, Office of Grants and Asset Management

Director, Office of Gulf Coast Restoration

Office of the Deputy Chief Financial Officer, Risk and Control

Group

Office of Strategic Planning and Performance Improvement

Office of Management and Budget

OIG Budget Examiner

 

State of Louisiana

 Legislative Auditor

St. Bernard Parish

Parish President

United States Senate

Committee on Finance 

Committee on Homeland Security and Governmental Affairs

United States House of Representatives 

Committee on Oversight and Government Reform 

Committee on Ways and Means
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Treasury OIG Website

Access Treasury OIG reports and other information online: 

http://www.treasury.gov/about/organizational-structure/ig/Pages/default.aspx

Report Waste, Fraud, and Abuse

OIG Hotline for Treasury Programs and Operations – Call toll free: 1-800-359-3898

Gulf Coast Restoration Hotline – Call toll free: 1-855-584.GULF (4853)

Email: Hotline@oig.treas.gov

Submit a complaint using our online form: 

https://www.treasury.gov/about/organizational-structure/ig/Pages/OigOnlineHotlineForm.aspx