[Final Audit Report on Costs Claimed by the Tennessee Wildlife Resources Agency, under Federal Assistance Grants from the U.S. Fish and Wildlife Service from July 1, 2000, to June 30, 2002]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. R-GR-FWS-0027-2003

Title: Final Audit Report on Costs Claimed by the Tennessee Wildlife
       Resources Agency, under Federal Assistance Grants from
       the U.S. Fish and Wildlife Service from July 1, 2000, to
       June 30, 2002

  

Dated:  January 8, 2004

**********DISCLAIMER********** 
This file contains an ASCII representation of an OIG report. No attempt has been made to display graphic images or illustrations. Some tables may be included, but may not resemble those in the printed version. A printed copy of this report may be obtained by referring to the PDF file or by calling the Office of Inspector General, Division of Acquisition and Management Operations at (202) 219-3841. 
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AUDIT REPORT

Memorandum

To:  Director, U.S. Fish and Wildlife Service

From:  Joe Ansnick, Director of External Audits

Subject:  Final Audit Report on Costs Claimed by the Tennessee Wildlife Resources Agency, under Federal Assistance Grants from the U.S. Fish and Wildlife Service from July 1, 2000, to June 30, 2002 (No.  R-GR-FWS-0027-2003)

Introduction

      This report presents the results of our audit of costs claimed by the Tennessee Wildlife Resources Agency (Agency) under Federal Assistance grants from the U.S. Fish and Wildlife Service (FWS) for the period July 1, 2000, to June 30, 2002.

Background and Scope

      The Pittman-Robertson Wildlife Restoration Act, as amended (16 U.S.C. 669) and the Dingell-Johnson Sport Fish Restoration Act, as amended (16 U.S.C. 777) (the Acts), authorize FWS to provide Federal Assistance grants to states to enhance their sport fish and wildlife programs.  The Acts provide for FWS to reimburse the states up to 75 percent of the eligible costs incurred under the grants.  The Acts specify that state hunting and fishing license revenues cannot be used for any purpose other than the administration of the stateï¿½s fish and game agencies. 

      As requested by FWS, we have performed a financial and compliance audit of Federal Assistance grants to the State of Tennessee.  The objective of our audit was to evaluate: (1) the adequacy of the Agencyï¿½s accounting system and related internal controls; (2) the accuracy and eligibility of the direct and indirect costs claimed under the Federal Assistance grant agreements with FWS; (3) the adequacy and reliability of the Agencyï¿½s hunting and fishing license fees collection, certification, and disbursement process; and (4) the adequacy of the Agencyï¿½s asset management system and related internal controls with regard to purchasing, maintenance, control and disposal; and (5) the adequacy of the Stateï¿½s compliance with the Actsï¿½ assent legislation requirements.  The audit was also to include an analysis of other issues considered sensitive and/or significant by FWS.  The audit work at the Agency covered claims totaling approximately $40 million on FWS grants that began after June 30, 2000, and were open during the Stateï¿½s fiscal years ended June 30, 2001 and 2002 (see Appendix 1).

      Our audit was performed in accordance with the government auditing standards issued by the Comptroller General of the United States.  Accordingly, we included such tests of records and other auditing procedures that were considered necessary under the circumstances.  Our tests included an examination of evidence supporting selected expenditures charged by Agency to the grants; interviews with employees to ensure that all personnel costs charged to the grants were supportable; and a review of Agency's use of fishing and hunting license revenues to determine whether the revenues had been used for program purposes.  We did not evaluate the economy, efficiency, and effectiveness of Agencyï¿½s operations.
        
      Our audit was performed at Tennessee Wildlife Resources Agency headquarters in Nashville, Tennessee.  We also conducted work at several wildlife management areas, hatcheries, and marinas (see Appendix 4). 

Prior Audit Coverage

      On March 31, 1998, we issued audit report No. 98-E-390, ï¿½Audit of U.S. Fish and Wildlife Service Federal Aid Grants to the State of Tennessee for Fiscal Years Ended June 30, 1994 and 1995.ï¿½  The State of Tennessee, Division of State Audit, issued reports dealing with centralized statewide controls on the Departments of Personnel and Finance and Administration covering fiscal years ending June 30, 1997, through June 30, 2000.  We reviewed these reports and followed up on all findings to determine whether they had been resolved prior to our review.  We determined that they had been resolved. 
        
Results of Audit

      Our review disclosed that, except for the issues identified below, the Agencyï¿½s accounting system and related internal controls adequately and accurately accounted for grant and license fee receipts and disbursements; the direct and indirect costs were accurately reported and claimed; and the asset management system accurately identified and tracked personal and real property with regard to acquisition, maintenance, control, and disposal except for the issues relating to reporting of program and project activities and claiming of Federal Assistance grant costs identified below.  The State also had adequate legislation that assented to the provisions of the Acts and prohibited the use of license fees for anything other than the administration of the Agency.

* Costs of $515,956 (Federal share $386,967) were questioned because the costs were incurred outside of the project period ($206,426), not supported by appropriate documentation ($165,141), and incurred before the project period began ($144,389).

* The Agencyï¿½s license certifications were incorrect resulting in an overstatement of 39,000ï¿½hunting and 96,000 fishing license holders in fiscal year 2000, and 39,500 hunting and 87,800 fishing license holders in fiscal year 2001.

* The Agency did not always ensure that Federal Assistance funds were drawn down based on incurred expenses.

* The Agency was unable to account appropriately for employee retirement and Federal Insurance Contributions Act (FICA) deductions for selected employees in pay periods sampled.  In addition, the Agency did not accurately allocate the cost of salaries, benefits, and longevity payments to Federal Assistance cost centers for the pay period ending November 15, 2000.

* Improvements are needed in the Agencyï¿½s reporting of program income, indirect cost allocation, and asset management.

      The Agency responded to a draft of this report on October 30, 2003, addressing each of the findings listed below.  Based on the Agencyï¿½s responses, we modified the findings and recommendations as necessary to clarify the issues and to incorporate any additional information provided.  We have included its responses after our recommendations to resolve each finding.  The FWS did not respond to the draft of this report.

A.  Questioned Costs

      1.  Out of Period Costs.  Costs of $206,426 charged to Grants FWE-6-18 ($86,805) and FWE-6-19 ($119,621) were questioned because they were incurred prior to the period covered by the grant agreements (see Appendix 2 for a schedule of all out-of-period costs).  Office of Management and Budget Circular A-87, Attachment A, Section C.1.d states in part that to be allowable under Federal awards, costs must conform to any limitations or exclusions set forth in the Circular, Federal laws, and terms and conditions of the Federal award.  The Code of Federal Regulations (CFR) 43 CFR ï¿½12.63 (a) states that, ï¿½Where a funding period is specified, a grantee may charge to the award only costs resulting from obligations of the funding periodï¿½ï¿½  For example:

      The Agency received two invoices from ENSAFE dated April 11, 2001, for $6,279, and May 25, 2001 for $2,539 for professional services provided to the Environmental Services Project (Project Number 7700) under Grant FWE-6-18 (which covered the period July 1, 2000, through June 30, 2001).  However, these fiscal year 2001 obligations were paid on April 12, 2002, and the costs claimed under Grant FWE-6-19 (which covered the period July 1, 2001, through June 30, 2002).  

      The Agency issued a sub-grant to the Roane County Government on October 17, 2000, for $20,000 to construct two concrete boat ramps, one courtesy dock, and one weigh-in shelter under the Boating Access Project (Project Number 6950).  The Agency obligated funds for the project in the Stateï¿½s fiscal year 2000.  The project period began on January 1, 2000, and was expected to extend through June 30, 2001, but only fiscal year 2000 funds were obligated for the project.  However, when the sub-grantee submitted its invoice on November 21, 2000, the Agency paid the invoice and claimed the costs under Grant FWE-6-18, which was for fiscal year 2001, which had a July1, 2000, through June 30, 2001, period of performance.

Recommendation
      
      We recommend that the FWS, resolve the $206,426 (Federal share $154,819) in out of period costs claimed on Grants FWE-6-18 and FWE-6-19.

Agency Response

      Agency officials concurred with the finding and requested that the questioned costs be resolved by applying them to the overmatch for Grants FWE-6-18 and FWE-6-19.

Office of Inspector General Comments
      
      FWS should resolve the finding and implement the recommendation.
      
      2.  Unsupported Costs.  Costs of $165,141 charged to Grants FWE-6-18 ($18,845), FWE-6-19 ($10,000), and V-5 ($136,296) were questioned because the Agency could not provide the necessary documentation to support the costs claimed (see Appendix 3 for a schedule of all unsupported costs).  The Agency is required by 50ï¿½CFR ï¿½ 80.19 to maintain current and complete financial records in accordance with Office of Management and Budget Circular A-102.  The Agency did not produce documentation to support its claim for labor, materials, or contracts.  For example:

      The Agency claimed costs of $13,750 under Grant FWE-6-18 for the purchase of land for Project Number 2490 (Duck River Wildlife Management Area Coordination).  However, the only documentation provided for the acquisition was an invoice dated March 15, 2002, which stated ï¿½Land Purchase, Non-Wetland, Linda Weaver, Maury Countyï¿½$13,750.ï¿½  The Agency should have supported this transaction with a deed, an appraisal, survey, and other documentation to support the land acquisition.

      The Agency claimed costs of $10,000 under Grant FWE-6-19 for services provided by Tennessee Technological University for the Aquatic Education Project.  However, the documentation provided by the Agency was for a state-funded research project.  The Agency was not able to provide proper documentation prior to the completion of fieldwork.
      
      The Agency claimed costs of $136,296 for labor ($24,220) and other direct costs ($112,076) under the Clean Vessel Program (Grant V-5) that were not supported by appropriate documentation.  Sub-grantees did not maintain time sheets to verify the hours claimed for its employees and the hourly rate claimed was not the rate paid to employees.  Sub-grantees claimed hourly rates ranging from $20 to $40 per hour, but paid employees from $6.00 to $11.00 per hour.  In addition, in at least two cases, marina managers, who were the subgrantees, completed work but were not paid anything for their work.  Regarding other direct costs, these claims represented procurement actions that were not completed in accordance with applicable State procurement regulations (such as documenting that competition was obtained or by providing an invoice to show the unit price paid for sub-grantee provided materials) as required by 43 CFR ï¿½ï¿½12.60 (a). 

Recommendation
      
      We recommend that the FWS resolve the $165,141 (Federal share $123,856) in unsupported costs by requiring the Agency to provide appropriate support for the questioned costs under Grants FWE-6-18, FWE-6-19, and V-5.

Agency Response

      The Agency stated that the $13,750 in costs for Grant FWE-6-18 were not for the purchase of land but rather an outstanding interest (salvage rights) for a house on property owned by the State.  Since this was not a land acquisition, the real property acquisition rules do not apply.

      The $10,000 costs claimed under Grant FWE-6-19 was for aquatic education type work and payment was made from the Aquatic Education project.  A copy of an invoice was provided. 

      The Agency contends that the labor of the marina owners increased the value of the businesses owned by them, which they accepted as payment.  Field inspection confirmed that work was completed and equipment was purchased, so not to allow payment due to lack of documentation is an untenable position.  Agency contends that each sub-grantee should be credited with a reasonable value for the work performed and the equipment purchased.

Office of Inspector General Comments

      FWS should consider the Agencyï¿½s response, resolve the finding, and implement the recommendation.

      3.  Pre-award Costs.  Costs totaling $144,389 charged to Grants F-76 ($100,000) and F77 ($44,389) were questioned because the costs were incurred prior to the award and effective starting dates of the grants.  Office of Management and Budget (OMB) Circular No.ï¿½A-87, Attachment B.32 states that, pre-award costs, ï¿½Are allowable only to the extent that they would have been allowable if incurred after the date of the award and only with the written approval of the awarding agency.ï¿½  The Agency was not given written approval to incur costs prior to the award of the grant, and the grant period of performance did not include the period covered by the claimed costs.  

      Grant F-76 was awarded to the Agency on April 20, 2001, for $100,000 (Federal share $75,000).  The grant period was designated as March 1, 2001, to December 31, 2001.  The grant agreement stipulated that the State match would be provided by the City of Chattanooga.  The agreement called for the City to renovate a boat ramp, parking lot, and access road at the existing Rivermont Park.  However, the first invoice, dated January 5, 2000, for $34,978, included invoices from vendors that occurred from as early as February 10, 1996, to April 13, 1998.  The second invoice from the City, dated July 24, 2000, for $40,022 (combined with the first invoice totaled the Federal share of $75,000) included the invoice from the contractor, dated June 19, 2000, for $105,000 to complete the project.  All of the claims submitted by the City represented pre-award costs because they were incurred by the City of Chattanooga prior to the period of performance of Grant F-76.

      Grant F-77 was awarded to the Agency on July 10, 2001, for $100,000 (Federal share $75,000) to construct two boat ramps, courtesy docks, weigh-in shelters, and to pave the parking lot at the existing boat ramp at Holly Park.  The grant period was designated as February 15, 2001, to June 30, 2002.  Amendment No. 1 extended the grant period until June 30, 2003.  The grant agreement stipulated that the City of Soddy-Daisy would provide the State share ($25,000).  The cityï¿½s first invoice was submitted on September 24, 2001, for $62,632.  However, the claimed costs included $29,455 for materials and supplies and $14,934 for labor costs that were incurred from November 30, 2000, to February 15, 2001, which was before the effective date of the grant agreement and the grant period of performance.  The grant agreement did not contain any provision that would have allowed costs that were incurred prior to the grantï¿½s period of performance.
      
Recommendation
      
      We recommend that the FWS resolve the $144,389 in questioned costs for Grants F-76 ($100,000, Federal share $75,000) and F-77 ($44,389, Federal share $33,292).

Agency Response

      The Agency stated that although the work done by third parties was outside of the grant periods, all Agency payments and reimbursements were made within the grant period.  The Agency provided schedules indicating the dates when grant periods began and ended and when the Agency processed invoices, made payments and claimed reimbursement.

Office of Inspector General Comments

      Costs incurred prior to the effective date of the award are ineligible.  FWS should resolve the finding and implement the recommendation.

B.  Additional Findings

      1.  License Certification.  The number of licenses reported was overstated in fiscal years 2000 and 2001 because the state did not use consistent numbers each year and because duplication percentages (factors used to eliminate duplicate license holders in the annual license certification counts) were not applied to the total license count.
      
      According to 50 CFR ï¿½ 80.10 (c), license holders shall be counted over a period of 12 months.  The calendar year, fiscal year, or other licensing period may be used, provided it is consistent from year to year.  The Agency did not use consistent license figures in the calculation numbers submitted to FWS for fiscal years 2000 and 2001.  Although the number of sales that were included in the Remote Easy Access License (REAL) System was used in all instances, the totals differed when taken from different divisions within the Agency.  The Agency official who prepared the certifications used the figures from the Revenue Division to arrive at the total number of licenses sold, but utilized the figures from the Management Systems Division (which captures sales for a period up to five days different than the Revenue Division) to arrive at all the other numbers necessary for certification (eliminations for duplicates and life expectancies).  The Revenue Division reconciled to the dollar amount in the Management Systems Division each fiscal year, but sales were counted in the Revenue Division when the sales deposits were made.  

      In addition, 50 CFR ï¿½ 80.10 (c) (5) requires that individuals holding more than one license to hunt or fish be counted no more than once and any duplications must be eliminated.  Sampling or other statistical techniques may be used for this purpose.  The Agency used duplication percentages to certify the actual number of license holders only for the sales of temporary licenses, not for all licenses sold.  Since the duplication percentages were based on numbers maintained by the Management Systems Division instead of the Revenue Division, the percentages used to calculate licenses were also inaccurate.  
      
      Since the Management Systems Division is responsible for maintaining the official point-of-sale numbers from the REAL System, we recalculated the certification figures by utilizing the original figures from REAL, applying the duplication percentages to all of the licenses sold and adding the lifetime licenses.  In this way, we arrived at the number of licenses that should have been reported to FWS.  Based on our analysis, we found that the number of licenses reported was overstated by 39,000 hunting and 96,000 fishing license holders in fiscal year 2000 and 39,500 hunting and 87,800 fishing license holders in fiscal year 2001.
      
Recommendations
      
      We recommend that the FWS:  

      a. Require the Agency to use the same source of information covering the same 12-month period when calculating the number of hunting and fishing licenses sold.

      b. Work with the Agency to establish a methodology that results in an accurate count of unduplicated license holders.

Agency Response

	The Agency concurred with the finding and recommendation but disagreed with the number of license holders cited by the auditors.  The Agency recalculated the number of license holders and documented 18,039 fewer anglers and 60,630 more hunters than originally certified for fiscal year 2000.  For fiscal year 2001, 70,769 additional anglers and 87,809 additional hunters were documented.  Schedules supporting these calculations were attached.

Office of Inspector General Comments

      We reviewed the methodology the Agency used to recalculate the number of license holders cited in its response.  The Agency numbers were based on two REAL queries for Fishing License Sales and two similar queries for Hunting License Sales (one with duplicates and one without duplicates).  In addition, for fiscal year 2000, the Agency included licenses sold during the prior fiscal year which it contends should also have been counted. 
      
      Our calculations were based on four REAL queries provided by the Agency for Total Active Resident License Sales, Resident License Sales (no duplicates), Non-Resident License Sales, and Non-Resident License Sales (no duplicates).
      
      FWS should work with the Agency to determine which methodology results in the most accurate count of unduplicated license holders.  Accordingly, we modified our Recommendation B.1.b. 

      2.  Drawdowns.  We found that all Federal Assistance drawdowns were made on a reimbursable basis and for the most part, all amounts billed to the FWS were for actual costs incurred by the Agency for the correct project.  However, Agency made two drawdowns from Federal Assistance that were not supported by actual costs incurred during the actual draw periods amounting to $92,000.  According to 50 CFR ï¿½ 84.47 (a), allowable costs are limited to costs necessary and reasonable to achieve approved grant objectives and meet the applicable Federal cost principles in 43 CFR ï¿½ 12.62 (b).  Both draws came from the boater access portion of the Comprehensive Grant (FWE-6-19).  The expenditures were for a project that was unrelated to the Federal Assistance grant.  Accordingly, we questioned the $92,000 because they were not supported by actual costs incurred and because they were for costs associated with a boating access project that was not included in the scope of Grant FWE-6-19.

Recommendation
      
      We recommend that the FWS resolve the $92,000 in unsupported costs drawn down against Grant FWE-6-19.

Agency Response

      Agency officials concurred with the finding and requested that the questioned costs be resolved by applying them to the overmatch for Grant FWE-6-19.

Office of Inspector General Comments

      FWS should resolve the finding and implement the recommendation.
      
      3.  Labor.  The program used by the Agency to allocate personnel costs to Federal Assistance cost centers was developed over ten years ago by an employee who has since retired.  The employee has been re-hired on a part time basis to manage the program, which identifies hours worked by employee and then allocates salaries and benefits to Federal Assistance and state managed projects.  However, we found that the dates for the program must be changed for each pay period to accurately allocate fringe benefits, since different benefits are claimed for the middle of the month (health insurance) and the end of the month (retirement); and if these dates were not changed, the Agencyï¿½s salary claims would be inaccurate.  
      
      According to 50 CFR ï¿½ 80.19, the Agency is required to maintain current, accurate, and complete financial records.  For example, the program for allocation of personnel costs for November 15, 2000, inappropriately retrieved the Agency payroll data file for the pay period ending October 31, 2000, and since there was no one familiar with the program other than the part time employee, the error was not corrected.  As a result, the Agency did not accurately allocate costs for salaries, benefits, and longevity payments to Federal Assistance cost centers for the pay period ending November 15, 2000.
  
      We also found that the Agency was not able to support the amounts reported for retirement or Federal Insurance Contributions Act (FICA) deductions for selected employees.  OMB Circular A-87, Attachment B.11(d)(2) states that the cost of fringe benefits is allowable if they are equitably allocated to all related activities.  However, the Agency was not able to retrieve the appropriate payroll data file to support these fringe benefits from the Stateï¿½s Payroll Division before the end of fieldwork.  As a result, amounts reported by the Agency for FICA and retirement could not be verified.

Recommendations
      
      We recommend that FWS require the Agency to:
      
      a. Implement adequate internal controls to ensure that the amounts allocated to Federal Assistance cost centers for salaries, longevity payments, and fringe benefits are accurate.
      
      b. Revise the methodology used to allocate these costs to the appropriate cost centers to ensure that the allocation program captures all appropriate data.

Agency Response

      Agency officials concurred with the finding but did not propose any corrective action.

Office of Inspector General Comments

	FWS should resolve the finding and implement the recommendation. 

	4.  Program Income.  The Agency reported program income from projects that were not supported by Federal Assistance funds and program income for the wrong grant period.  Program income is defined in 43 CFR ï¿½ 12.65 (b) as gross income received by the grantee directly generated by a grant activity, or earned only as a result of the grant agreement during the grant period.  

      Revenues collected in fiscal year 2001 for land leases held by sharecroppers were included as program income under the Wildlife Restoration project (Grant FWE-6-18) although the land tracts were not supported by Federal Assistance funds, nor was the income earned because of the grant agreement.  In addition, the Agency included revenue received in 2003 as program income collected under the Wildlife Restoration project (FWE-6-19) in fiscal year 2002 and mistakenly included program income for a Sport Fish Restoration project that did not exist.  As a result, program income was overstated by $4,705 in fiscal year 2001 and $90,146 in fiscal year 2002.   

Recommendations
      
      We recommend that FWS require the Agency to: 
      
      a. Review the Financial Status Reports submitted and correct the reporting errors for program income.
      
      b. Institute procedures to prevent these errors from occurring in the future.
      
Agency Response

     The Agency stated that it submitted revised Financial Status Reports to the FWS on April 14, 2003, to reflect the correct program income information.   

Office of Inspector General Comments

      The FWS should determine whether the errors were corrected on the revised Financial Status Reports, resolve the finding, and implement the recommendations.
      
      5.  Application of Incorrect Indirect Cost Rate.  The indirect cost rates developed by the Agency were not applied properly.  According to 50 CFR ï¿½ 80.19, the state must maintain current and complete financial records.  We found that the indirect cost rate on the Financial Status Reports submitted to FWS for Grant FWE-6-18 for Sportfish Restoration and for Grants FWE-6-18 and FWE-6-19 for boating access projects was the approved Wildlife Restoration indirect cost rate.  As a result, the drawdowns for FWE-6-18 and FWE-6-19 were less than the amount eligible.  If the Agency had applied the correct rate, it could have reported excess costs of $145,467 and $810,063. 
      
Recommendation
      
      We recommend that the FWS encourage the Agency to use the correct indirect cost rate on its financial status reports.

Agency Response

     The Agency agreed that an error had been made in entering the indirect cost rate for Sport Fish Restoration in Grant FWE-6-18 but indicated that resultant indirect costs were insignificant and did not affect reimbursements because the grant was overmatched.  Indirect costs for boat access in Grants FWE-6-18 and FWE-6-19 were calculated using the lowest rate, which did not affect the Agencyï¿½s ability to draw down all funds from the grants.  

Office of Inspector General Comments

	FWS should resolve the finding and implement the recommendation.
      
      6.  Asset Management.  The Agencyï¿½s Land Inventory and Realty Office did not include the source of funds used to acquire land in an accurate and consistent manner.  Fiscal controls and accounting procedures are required by 43 CFR ï¿½ï¿½12.60(a)(2) to be sufficient to permit the tracing of funds to a level of expenditures adequate to establish that such funds have not been used in violation of the restrictions of applicable statutes.  The land inventory for property purchased with Federal Assistance funds was not accurate and complete.  The Agency was not able to adequately support the funding source for 113,941 acres (or 49.3 percent) of the 231,096 acres originally identified as acquired with Federal Assistance funds.

      In addition, the Agency did not comply with FWS instructions to include a statement in the deed regarding the source of funds used to acquire the land tract at the Cheatham Wildlife Management Area.  When FWS approved the acquisition of the Cheatham tract, a statement regarding the source of funds to purchase the tract was to be included in the title vesting documents as required by State policy.  The Agency did not include the statement regarding Federal Assistance participation in the deed.
      
      The Agency was also unable to identify the specific source of funds used to purchase its equipment, and grant numbers identified in the equipment listing could not be definitively verified as being from a FWS grant.  As a result, the inventory of equipment purchased with Federal Assistance funds was not complete or accurate.  

Recommendations

      We recommend that the FWS require the Agency to:
      
      a. Implement sufficient policies and procedures to verify and document the source of funds used for the purchase of land to ensure compliance with Federal regulations.

      b. Add the required language to the deed for lands acquired with Federal Assistance funds at the Cheatham Wildlife Management Area.
      
      c. Develop procedures to ensure that its equipment inventory is accurate and complete and identifies all equipment purchased with Federal Assistance funds.

Agency Response

      The Agency indicated that the land inventory identified as acquired with Federal Assistance provided to the auditors included all Federally funded land.  The 49.3 percent of the land on the inventory addressed in the finding had been acquired under programs other than Federal Assistance.  The Agency stated that revisions were made to the deed for the Cheatham WMA indicating the source of funding for the acquisition was Federal Assistance funds.  The Agency did not respond to the recommendation pertaining to the equipment inventory.    

Office of Inspector General Comments

      FWS should verify that the land inventory and the deed revisions have been made and resolve the finding and implement the recommendations.


      In accordance with the Departmental Manual (360 DM 5.3), please provide us with your written response by April 9, 2004, to the recommendations included in this report.  Your response should include information on actions taken or planned, including target dates and titles of officials responsible for implementation.  If you have any questions regarding this report, please contact me at (703) 487-5353.


cc:	Regional Director, Region 4
	U.S. Fish and Wildlife Service

APPENDIX 1

TENNESSEE WILDLIFE RESOURCES AGENCY
FINANCIAL SUMMARY OF REVIEW COVERAGE


Grant
Number
Grant
Amount
Claimed
Costs
Questioned Costs

Total
Federal Share
Notes
FWE-6-18
$13,502,818
$16,518,376
$105,650
$79,238

1,2
FWE-6-19
14,293,336
18,249,995
129,621
97,216

1,2
W-4-1
662,551
245,945

W-5-1
956,550
1,073,987

F-74
50,000
0

F-75
4,885,070
3,224,074

F-76
100,000
139,978
100,000
75,000

3
F-77
100,000
62,632
44,389
33,292

3
V-4
288,001
288,000

V-5
248,000
248,000
136,296 
102,222

2
V-6
322,120
0

V-7
517,598
0

Totals
$35,926,044
$40,050,987
$515,956
$386,968

Notes:

1.  Questioned costs pertain to out-of-period costs claimed on the Comprehensive Fish and Wildlife Grant (see Questioned Costs, 1.  Out of Period Costs).  As identified here, the Agency had sufficient excess claimed costs to offset these questioned costs.  See Appendix 2 for details on out-of-period costs.
2.  Questioned costs pertain to costs claimed by the Agency for the Comprehensive grant that were not supported by appropriate documentation (see Questioned Costs, 2.  Unsupported Costs).  As identified here, the Agency had sufficient excess claimed costs to offset these costs.  The remaining unsupported costs are associated with the Clean Vessel Grant and they represent unsupported salary and other direct cost claims.  See Appendix 3 for details on unsupported costs.
3.  Questioned costs pertain to pre-award costs that were not approved by FWS (see Questioned Costs, 3 Pre-award Costs).

APPENDIX 2

TENNESSEE WILDLIFE RESOURCES AGENCY
SCHEDULE OF OUT-OF-PERIOD COSTS
FROM JULY 1, 2000 THROUGH JUNE 30, 2002

Vendor
Project Number
Voucher
Number
Year Obligated
Year Claimed
Amount
Rutherford Farmers
1470
T4081
2000
2001
$49,950
Williams Restoration
6686
T6616
2000
2001
16,855
Tennessee Valley Authority
1440
473
2001
2002
10,000
Ensafe, Inc.
7700
T5607
2001
2002
2,539
Ensafe, Inc.
7700
T56508
2001
2002
6,279
Roane County
6950
2928
2000
2001
20,000
City of Fayetteville 
6950
2272
2001
2002
10,145
Sloanï¿½s Honda
2400
T2965
2001
2002
5,118
D & G Construction
1440
T5158
2001
2002
24,927
Riceland Machine
1440
T6663 and T6664
2001
2002
60,613
Total

$206,426

APPENDIX 3

TENNESSEE WILDLIFE RESOURCES AGENCY
SCHEDULE OF UNSUPPORTED COSTS
FOR THE PERIOD JULY 1, 2000 THROUGH JUNE 30, 2002

Vendor
Grant Number
Project Number
Amount
Ensafe, Inc
FWE-6-18
7700
$5,095
Linda Weaver
FWE-6-18
2490
13,750
Tennessee Tech
FWE-6-19
6553
10,000
Sunset Marina
V-5
N/A
11,228
International Harbor
V-5
N/A
3,750
Mountain Lake
V-5
N/A
12,990
Blue Springs
V-5
N/A
20,413
Bay Side Marina
V-5
N/A
32,102
Gold Point Marina
V-5
N/A
30,597
Whitman Marina
V-5
N/A
17,936
Hidden Harbor
V-5
N/A
5,600
Swannï¿½s Marina
V-5
N/A
1,680
Total

$165,141

APPENDIX 4

TENNESSEE WILDLIFE RESOURCES AGENCY
SITES VISITED

      AEDC Wildlife Management Area
              Normandy Fish Hatchery
              Old Hickory Wildlife Management Area
              Duck River Wildlife Management Area
              Catoosa Wildlife Management Area
              Reelfoot Wildlife Management Area
              Natchez Trace Wildlife Management Area
              Cheatham Wildlife Management Area
              Kentucky Lake/Barkley Lake Wildlife Management Area
              Chuck Swan Wildlife Management Area
              Erwin Fish Hatchery
              Buffalo Springs Fish Hatchery
              Sunset Marina and Resort, Dale Hollow Lake
              Hidden Harbor Marina, Center Hill Lake
              Swannï¿½s Marina, Douglas Lake
              Mountain Lake Marina, Norris Lake