As a result of the hotline tip, the OIG conducted an audit to determine whether Task Order 12 had effective controls over billing and funding to prevent fraud, waste and abuse. The audit found a number of deficiencies including:
- Required contractor performance reports were not finalized
- There were no official contract or task order modifications for some of the Contracting Officer (CO) and Contracting Officer Representative (COR) changes
- COR appointment memorandums were missing
- COs did not perform required periodic invoice reviews.
The last cited deficiency, failure to perform invoice reviews, gets the most attention and has the highest potential for overbilling the Government. FAR and EPA regulations require that invoices be thoroughly reviewed prior to payment. Despite this requirement, there was not documentation to show that invoices were adequately reviewed prior to payment. As a result, the OIG concluded that EPA did not have reasonable assurance that costs or fee billed under Task Order 12 were allowable, allocable and reasonable. In fact, in its limited sampling, the OIG found more than $5 million in overbilling. Some of the overbilling issues would have been caught had EPA done its required invoice reviews such as where fee was billed at eight percent when the contract limited fee to six percent.
The OIG made seven obvious recommendations (e.g. do a better job, follow regulations, etc) to which the EPA concurred (obviously). The full OIG audit report is available here.