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Semi Annual Report September 2014 - Annual Reports

This is the accessible text file for semi annual report issued by Office of the Inspector General in September 2014.

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The Library of Congress Office of the Inspector General Semiannual Report to the Congress September 2014

September 30, 2014

Message From the Inspector General

In the last six months, we issued reports on the Open World Leadership Center's FY13 financial statements audit and physical security at the Library's Landover Warehouse facility. We also continued a facilities planning review; oversaw an audit of information technology system certification and accreditation efforts; worked with the United States Attorney's Office on an investigation of a former Library contractor; and on July 28th, 2014, the Librarian appointed me as the new Inspector General.

This semiannual report features images of the Library of Congress's Magna Carta exhibitions. The Magna Carta first visited the Library when it was entrusted to the Library of Congress for safekeeping during World War II, on November 28, 1939. The Library will welcome back the Magna Carta with a new exhibit that opens on the 75th anniversary of the Library's first exhibit and commemorates the 800th anniversary of the signing of the document. This Magna Carta is one of four copies from 1215 that exist today and is on loan from the Lincoln Cathedral in England. To learn more about the history of the Library and the Magna Carta visit the Library's exhibition Web site at: www.loc.gov/exhibits/.

Front Cover: The Dome of the Library of Congress with a View of the Capitol and Magna Carta Background Overlay.

Photograph: Carol Highsmith, Between 1980 and 2006.
Photograph: Courtesy of Lincoln Cathedral, London, England

Above: Lord Lothian, British Ambassador to the United States and Librarian of Congress Archibald MacLeish Transferring the Magna Carta to the Library of Congress in 1939.

Photograph: Harris and Ewing, Photographers
Repository: Prints and Photographs Division, The Library of Congress.

During the next six months, we will report on the Library's processing of born-digital collection items in the eDeposit program; use of the life cycle systems development process; an information technology consulting services contract; and collections policy management of the Prints and Photographs division. We will also oversee and report on the work of two information technology contractors conducting audits of Information Technology Steering Committee governance and the Library's digitization efforts. Additionally, we will report on the results of the Library's Financial Hosting Environment and fiscal year (FY) 2014 financial statements audit.

The Library implemented eleven of our recommendations from prior semiannual periods, including three recommendations from reports that were not for public release.

We are pleased to report that between FY 2002 and FY 2014 the OIG has identified $62,550,770 in funds questioned or put to better use.

Our publicly released reports are available online at www.loc.gov/about/oig. We appreciate the cooperative spirit Library staff have shown during our reviews.

Kurt W. Hyde Inspector General

Table of Contents

  • Profiles page 1
  • Inspector General Appointed page 5
  • Top Management Challenges page 6
  • Audits, Surveys, and Reviews page 13
  • Landover Center Annex Building Security page 13
  • Certification and Accreditation page 13
  • Open World Leadership Center FY2013 Financial Statements page 14
  • Other OIG Audit Activities page 15
  • Contracting Officer's Representative Best Practices and Fraud Indicators Alert page 15
  • Information Technology Contract Management Oversight Memorandum page 15
  • Investigations page 16
  • Significant Criminal, Civil, and Administrative Investigations page 17
  • Referrals and Assistance to Other Law Enforcement Agencies page 17
  • Follow-up on Investigative Issues from Prior Semiannual Repor page 18
  • Other OIG Investigation Activities page 18
  • OIG Hotline Web Page Upgrade page 18
  • AIGI Presents at Institute of Internal Auditors page 18
  • Review of Legislation and Regulations page 19
  • Unimplemented Recommendations page 21
  • Implemented and Closed Recommendations page 27
  • Funds Questioned or Put to Better Use page 29
  • Instances Where Information or Assistance Requests Were Refused page 30
  • Status of Recommendations Without Management Decisions page 30
  • Significant Revised Management Decisions page 30
  • Significant Management Decisions with Which OIG Disagrees page 30
  • Follow-up on Prior Period Recommendations page 30
  • OIG Organizational Chart page 31
  • Hotline Information - Inside Rear Cover

Right: Magna Carta Cum Statutis Angliae This Minature Manuscript of the Magna Carta Dates from the 14th Century. With its Intricate Colored Pen Work and Original Pigskin Wrapper, it is Among the Law Library's Rarest books.

England, 14th Century.

Repository: Law Library, Library of Congress

Profiles

Library of Congress

The Library of Congress (Library) is the research and information arm of the United States' national legislature and the world's largest storehouse of knowledge. The mission of the Library is to support the Congress in fulfilling its constitutional duties and to further the progress of knowledge and creativity for the benefit of the American people. The mission is accomplished through more than 3,300 employees and contractors and more than $800 million in annual appropriated funds and other financing sources.

Founded in 1800, the Library is also the nation's oldest federal cultural institution, holding more than 158 million items on 838 miles of shelves. These items include books, manuscripts, maps, prints and photographs, printed music, sound recordings, films, and microforms. Half of the Library's collections are from outside the United States, representing 470 languages. In addition to its three Capitol Hill buildings and Taylor Street Annex in Washington, DC, the Library operates six overseas offices and stores collections material in purpose-built facilities in Maryland, Illinois, and at the National Audio-Visual Conservation Center in Culpeper, Virginia. More than 52.3 million files representing original source analog items have been digitized and are accessible at www.loc.gov. The Library also holds a rapidly expanding collection of born-digital content.

The Library's core organizational components are:

  • The Office of the Librarian,
  • Library Services,
  • The U.S. Copyright Office,
  • The Congressional Research Service,
  • The Law Library,
  • The Office of Strategic Initiatives, and
  • The Office of Support Operations.

The Office of the Librarian provides leadership and executive management to the Library, overseeing the implementation and management of the Library's mission to support the Congress in fulfilling its constitutional duties and to further the progress of knowledge and creativity for the benefit of the American people.

Library Services performs the traditional functions of a national library: acquisitions, cataloging, preservation, and reference services for both digital and conventional collections. It operates the National Library Service for the Blind and Physically Handicapped and the American Folklife Center, among other programs.

The U.S. Copyright Office administers the copyright laws of the nation and registers copyrightable material; its deposits of intellectual material such as books, music, and movies substantially contribute to the Library's collections.

The Congressional Research Service supports the legislative process by providing exclusively to Congress, objective, confidential assessments of public-policy issues and legislative options for addressing those issues.

The Law Library assists Congress and the legislative process by supporting comprehensive research on foreign, comparative, international, and U.S. law, and other legal reference services.

The Office of Strategic Initiatives directs the national program for long- term preservation of digital cultural assets, leads a collaborative institution- wide effort to develop consolidated digital future plans, and integrates the delivery of information technology (IT) services.

The Office of Support Operations provides centralized leadership and oversight of infrastructure services and includes: Human Resources Services, Integrated Support Services, the Office of Security and Emergency Preparedness, and the Office of Opportunity, Inclusiveness, and Compliance.

In FY 2013, services provided by the Library included:

  • Fulfilling 513,946 reference requests;
  • Circulating 25 million disc, cassette, and Braille items to more than 800,000 blind and physically handicapped patrons;
  • Registering 496,599 copyright claims;
  • Receiving 15,000 items daily and adding more than 12,000 items daily to its collections;
  • Responding to more than 636,000 congressional reference requests and delivering to Congress more than 1 million research products and approximately 23,000 volumes from the Library's collections; and
  • Providing to Congress access to more than 9,000 reports on legislative issues and preparing more than 2,900 tailored analyses.

The Library of Congress also recorded 84 million visits and 519 million page-views of its primary source files on its Web site, and received 1.6 million on-site visitors.

Office of the Inspector General

The Library of Congress Office of the Inspector General (OIG) was established in 1988 as a non-statutory office deriving its authority from the Librarian of Congress. The OIG became statutory with the passage of The Library of Congress Inspector General Act of 2005, with a mandate to:

  • Independently conduct and supervise audits and investigations of fraud, waste, and abuse, relating to the Library,
  • Lead, coordinate, and recommend policies to promote economy, efficiency, and effectiveness, and
  • Keep the Librarian of Congress and the Congress fully and currently informed about problems and deficiencies relating to the administration and operations of the Library.

The Inspector General (IG) is a member of the Council of the Inspectors General on Integrity and Efficiency (CIGIE), a unified council of all federal statutory IGs. This Semiannual Report to the Congress is a part of the OIG's statutory reporting requirements and is organized to address the major functions of the office including:

  • Significant audits, investigations, and other activities of the OIG,
  • Review of legislation and regulations affecting the Library, and
  • Library decisions on OIG recommendations and the status of implementation, along with any resulting monetary benefits.

The Audits Division conducts in-depth reviews that address the efficiency, effectiveness, and economy of the Library's programs, activities, and functions; provides information to responsible parties to improve public accountability; facilitates oversight and decision-making; and initiates corrective action as needed.

The Audits Division also contracts with an independent accounting firm that addresses whether financial statements fairly present financial positions, results of operations, and budgetary resources. The firm also assesses whether the Library and other entities have adequate financial reporting internal control systems that comply with applicable laws and regulations.

The Investigations Division addresses alleged or suspected wrongdoing by agency employees, contractors, or others responsible for handling federal resources. Violations of Library regulations or fraud committed against the Library can result in administrative sanctions and criminal or civil prosecution. Contact information for the OIG Hotline is located on the inside back cover of this report.

Our staff are educated and certified in various disciplines. We are, collectively, four certified public accountants, one attorney, one certified internal auditor, two certified information systems auditors, one certified computer examiner, one access data certified examiner, one certified forensic accountant, four seized computer evidence recovery specialists, four special agents, and other highly qualified staff.

OIG reports are available at www.loc.gov/about/oig.

Right: Christopher Saxton (B . 1542). London Area Map in An Atlas of England and Wales. London, England, 1579. Runnymede, where the Magna Carta was sealed in 1215, was situated between London, which was under the control of the barons, and King John's castle in Windsor.

Repository: Geography and Map Division, Library of Congress

Inspector General Appointed

On July 28, 2014, the Librarian of Congress appointed Kurt W. Hyde as Inspector General of the Library of Congress.

A certified public accountant, Mr. Hyde has extensive experience in the fed- eral government, public, and private sectors. Mr. Hyde holds a bachelor of science degree in Accounting from Virginia Polytechnic Institute and State University (Virginia Tech).

Before joining the Library of Congress, Mr. Hyde was the Deputy Inspector General for Audit and Evaluations at the Special Inspector General for the Troubled Asset Relief Program, a sophisticated, white collar law enforce- ment agency established to prevent waste, fraud, and abuse in the $700 billion program. Similarly, he was the Deputy Assistant Inspector General for the Resolution Trust Corporation during the savings and loan financial crisis in the 1990s. Other government service entailed executive and man- agement positions at the Department of Transportation Office of Inspector General and the Government Accountability Office.

In the private sector, Mr. Hyde was a partner in the government services practice at a Big 5 accounting and consulting firm where he advised the Centers for Medicare and Medicaid on their implementation of Medicare Advantage and other government clients on customer centric solutions. He also consulted to non-profits, including New Leaders for New Schools whose mission is to develop transformational leaders for primary and sec- ondary schools.

Top Management Challenges

This section provides a collective summary of issues covered by OIG that, in our view, represent long-term challenges for the Library of Congress.

COLLECTIONS STORAGE

A major component of the Library's mission is to properly store and preserve its collections. During the last semiannual period, we conducted a review of the Library's processing, storage, and accessibility of materials and found that it poses a serious and growing challenge for the Library. As of September 30, 2012, eighteen percent of the collections were in arrearage and not readily available to researchers. Some items, received as far back as the 1980s, remain unprocessed.

In addition to accessibility, the rate of collection impacts storage facilities and the condition of the materials. As the Library adds about 250,000 books and periodicals to the collections each year, the space shortage will increase. The Library's three Capitol Hill buildings are collectively at 110 percent of their capacity, causing premature damage and deterioration to some of the buildings and its materials. The floors in the stacks of the Jefferson and Adams buildings are now used to store the general collections, and the Library is forced to double- and triple-shelve materials. Further exacerbating the storage issue is the lack of secure storage for some rare and valuable collection materials. The Law Library and the Music and Asian Divisions, among others, have been forced to store some of their rare materials in less-than-optimal conditions from a security and preservation point of view.

In 2002, collections storage modules at the Library's Fort Meade location were to provide space for the growing collections. Additional modules were completed in 2005 and 2009 and include both general collection items and special collection materials such as maps, globes, manuscripts, prints and photographs, and sheet music. They are nearly filled to capacity. The FY 2014 appropriation included funding for construction of a fifth module, however, the resulting space will not accommodate the growing collections. The House included language to provide funding for high-density shelving at the Library's Packard Campus in Culpeper, Virginia for FY 2015. At the time of this report, the funding has not been appropriated.

The Library is addressing the overflow through a number of interim measures. In 2014, a revised collections policy was implemented, whereby the Library retains only one copy of most new U.S. monographs received for the General Collections and existing additional copies already in the General Collections are now being considered for withdrawal. New duplicate volumes and withdrawn books are made available to nonprofit book distribution organizations through the Duplicate Materials Exchange Program and the Surplus Books Program. The Library is also pursuing alternative methods of shelving at its Capitol Hill facilities and working with the Architect of the Capitol to lease additional storage space.

INFORMATION TECHNOLOGY INFRASTRUCTURE

In 2009, we issued an audit report that focused broadly on the Library's plan for managing its IT infrastructure investments. The audit looked at:

  1. whether the Library's IT Strategic Plan aligned with its overall strategic plan,
  2. the validity and integrity of the IT plan,
  3. the appropriateness and effectiveness of the Library's IT organizational structure and placement, and
  4. the extent to which relevant recommendations made by the National Research Council in a 2000 report were implemented by the Library.

We made a series of recommendations about:

  1. maturing the Library's IT strategic planning process,
  2. making IT investments from a cost/benefit and institution-wide perspective,
  3. considering organizational changes,
  4. implementing an enterprise architecture program for planning future technology, and
  5. improving customer service.

In late 2011, we issued a follow-up report, finding that the Library was implementing our recommendations, but the progress was slower than anticipated. The implementation of these recommendations has been delayed several times and pushed out to FY 2015.

In FY 2014, we engaged CliftonLarsonAllen, LLP (CliftonLarsonAllen) to perform a review of the Library's Alternate Computing Facility, the Systems Development Lifecycle, and Certification and Accreditation. CliftonLarsonAllen identified issues similar to those we identified in our previous reports of the Library's IT infrastructure investments. Also in FY 2014, the OIG awarded a task order to assess the Library's current digitization plan and it's impact on the stratgic planning, enterprise architecture, budgeting, performance management, and IT governance infrastucture processes. Additionally, we issued a second task order to determine whether the design of the Library's internal control system provides assurance that oversight by the Information Technology Steering Committee is sufficient to identify and oversee qualifying IT systems.

In 2014, the U.S. House of Representatives Legislative Branch Subcommittee on Appropriations tasked the Government Accountability Office (GAO) with evaluating, among other items, the Library's strategic planning, governance structure, security, and capital planning and investment control processes for IT. As part of this evaluation, GAO will also review the Copyright Office's proposed modernization upgrade. GAO anticipates issuing their results in March 2015.

BUILDING DIGITAL COLLECTIONS

As the world's largest library, the Library of Congress must constantly develop and provide access to its universal collections in both print and electronic formats. With the exponential growth of born-digital materials, the Library faces the challenge of collecting and providing long-term preservation and access to these unique works. Born-digital materials represent works that do not natively exist in print or analog form (e.g., an electronic book with no print counterpart).

In July of 2000, the National Academy of Sciences issued the report LC21, A Digital Strategy for the Library of Congress. The report found that the Library lagged significantly in receiving and archiving digital materials and that Library leadership had not internalized, expressed, or equipped the Library with the right tools to implement a long-term strategy for the stewardship of digital materials.

In our 2009 IT Strategic Planning report, we stated that the Library still lacked a unified policy for digitization, which resulted in scattered, sometimes conflicting, efforts by various Service Units to digitize portions of their collections. To date, no Library-wide digitization plan has been issued.

The growth of the Library's digitizing projects has created new challenges related to producing and preserving materials in digital format over the long term. For example, the Library faces issues related to providing access to digital works that are outside of the public domain.

The Library is taking some action. Currently, the Web Governance Board is discussing the content strategy for the Library's Web presence, which includes setting Library-wide priorities for digitization, and the Office of the Librarian has established a new process for handling third-party digitization proposals. More information about the process is available on the Library's public Web site.

As part of our audit focus on this top management challenge, the OIG initiated an audit of the Library's eDeposit program effort. In addition, OIG contracted with HMS Technologies, Inc. (HMS) to audit the Library's digitization efforts in FY 2015. The objectives for this audit are to perform an evaluation of the Library's current efforts to digitize its existing collections to determine whether there is an effective and efficient Library- wide digitization process. The contractor will also review the Library's digitization efforts to assess how they interface with strategic planning, enterprise architecture, budgeting, performance management, and IT governance. HMS will also assess the coordination between the Library Services and Office of Strategic Initiatives (OSI) service units and identify issues that may be negatively affecting the Library's ability to achieve its digitization goals.

PERFORMANCE MANAGEMENT

As a result of several OIG audits, and at the direction of Congress, the Library adopted a planning, budgeting, and management system based on the Government Performance and Results Act (GPRA). In its initial stages, the Library established a GPRA-styled strategic planning process, linked its planning and budgeting to its strategic planning, initiated GPRA- styled annual program plans, and introduced performance management to its workforce. The adoption of a GPRA-styled management approach will allow the Library to better analyze and report its activities and more successfully compete for diminishing discretionary funding.

In passing the GPRA Modernization Act of 2010, Congress made adjustments to assure that agencies more efficiently manage their GPRA efforts, improve the quality of performance metrics, and clearly disclose the accuracy of performance data.

We commend the Library's Strategic Planning Office for measures taken to increase the validity and reliability of performance metrics and the Office of the Chief Financial Officer for including greater detail on the Library's performance goals and targets in the Library's Financial Statements. These efforts support informed management decision-making and transparency in Library programs.

In 2012, the Deputy Librarian launched a new Planning and Budgeting Framework, creating 64 program elements to comprehensively define, for the first time, all of the programs, services, and activities it accomplishes and offers. This approach incorporated a three-year Information Technology Plan, Human Capital Management Plan, and a Facilities Plan that align with service unit performance goals.

The Planning and Budgeting Framework was targeted for implementation in FY 2014. However, the target was not met because the Library delayed the implementation as a result of initiating the Futures Program.

The Futures Program will provide the basis for defining and implementing a new strategic plan for the Library in 2016. The action plan for the Futures Program, originally targeted for completion in June 2014, is not complete and the Office of the Librarian was unable to provide a new target date for its completion.

At the direction of Congress, the Library adopted GPRA-styled performance management. The Library was late in initiating its performance management apparatus compared to other federal agencies and now has experienced a serious roadblock. The current hiatus jeopardizes the progress that has been made and will delay critical improvements in related areas, such as in IT governance, cost management, and infrastructure support of program initiatives.

The need for alignment of critical resources is especially important for cross cutting service units, such as Information Technology Services (ITS), Human Resources Services (HRS), and facilities (Integrated Support Services (ISS)), that support all Library efforts. It is unclear why the Library believes that the initiation of a new strategic plan would inhibit the implementation of sound performance management processes.

Immediately before the printing of this semiannual report, the Librarian issued a working draft of its Strategic Plan Revision and Planning Documents, November 2014, which includes a performance management framewok that further develops the planning and budgeting structure established in October 2012. The imperative will be for the Librarian to ensure this process is finalized and implemented.

CONTRACTING

A series of OIG reports dating back to 2002 document weaknesses in the Library's contracting function. Historically, principal areas of concern include a questionable understanding of federal contracting by participants in the contracting chain (ranging from the service units to the Office of Contracts and Grants Management (OCGM)), poorly trained staff, lack of continuity in leadership in OCGM, an inefficient financial system contracting module, and ineffective contract review quality assurance procedures. These deficiencies may prevent the Library from obtaining the best value in contracts and expose the Library to an unacceptably high risk of inefficiency and waste of funds.

We are pleased to report that the Library has begun to take action to address its ongoing contracting weaknesses. Specifically, in 2013, the Library appointed a new OCGM Director, who brings extensive federal contracting and legal experience to the Library. In response to an Office of Management and Budget 2009 memorandum that asked agencies to reduce their use of high-risk contracting authorities, the Director took actions to mitigate the Library's exposure to high-risk contract vehicles.

These actions include heightened oversight where circumstances call for contract strategies involving increased risk, and enhanced development and training programs aligned with Federal Acquisition Certification programs. The Director is also requiring competition advocate reviews for proposed contract actions that limit competition and he has implemented a senior level review process for proposed time and material or labor hour contracts. The reviews consider the justification for the proposed contract type and strategies to avoid or mitigate risk.

As the Library takes steps to optimize competition and reduce contract risk, the OIG will continue to monitor and report on contracting activities and associated weaknesses.

Right: This Charter was Granted by the Russian Empress Catherine II and is Similar in Content to the English Magna Carta. Initially only Intended for Nobility, the Charter Contained Ideas of Liberty that were Later Intepreted and Extended to Others. The Printing at Right is Hand Written in Gold and Surrounded by Engraved Coats of Arms of the Provinces of the Russian Empire.
St. Petersburg, Russia, 1785.
Repository: Law Library of Congress

11 September 2014 Semi-Annual report to the Congress

Audits, Surveys, and Reviews

Office of Support Operations Landover Center Annex Building Security Audit Report No. 2014-PA -105 September 2014

OIG conducted an audit to assess the effectiveness of building security at the Library's Landover Center Annex (Landover). The Library uses Landover as a multipurpose facility for storing collections, warehousing non-collections materials, receiving and processing deliveries destined for Capitol Hill, and processing collections bound for other Library facilities.

Management agreed with all of our findings and recommendations, but we are not including details about this audit in our semiannual report because of the sensitive nature of the information contained in the report. The report was not issued for public release, but OIG will continue to monitor Library progress on our recommendations as part of our future semiannual reporting process.

Information Technology Services

Certification and Accreditation Policies and Procedures Audit Report No. 2013-I T -102 October 2014

Certification and accreditation (C&A) is a systematic process for testing and evaluating information systems to determine whether they meet specified security requirements. The Library's IT Security Directive-01 requires each system and application to undergo a C&A every three years and whenever a significant change occurs affecting a system or application.

In order to evaluate the efficiency and effectiveness of the Library's current C&A practice, we engaged CliftonLarsonAllen to perform an audit of the Library's C&A process to determine its compliance with policies and industry standards and to identify opportunities for cost savings. In its report, Clif- tonLarsonAllen noted three internal control and operating issues and made recommendations accordingly. Management agreed with all the recommen- dations with one exception.

We have not included details about this audit in this semiannual report be- cause of the sensitive nature of the information contained in the report. The report was not issued for public release, but OIG will continue to monitor Li- brary progress on CliftonLarsonAllen's recommendations as part of our future semiannual reporting process.

Open World Leadership Center Fiscal Year 2013 Financial Statements Audit Report No. 2013-F N -103 July 2014

The mission of the Open World Leadership Center (Open World) is to enhance understanding and capabilities for cooperation between the United States and the countries of Eurasia. Open World conducts one of the largest U.S. exchange programs for Eurasia, through which nearly 7,000 volunteer American families in all 50 states have hosted thousands of emerging leaders from former Soviet Republic countries.

Open World is an independent entity in the legislative branch governed by a board of trustees. Board members consist of members of Congress and private citizens. Serving the board of trustees is an audit committee comprised of three members with extensive experience in Congress, federal agency operations, finance, and accounting. The audit committee provides oversight by assuring that Open World management appropriately carries out its responsibilities for internal control, financial reporting, compliance with laws and regulations, ethics, and economies and efficiencies.

Under contract with the OIG, the accounting firm CliftonLarsonAllen audited Open World's FY 2013 financial statements and issued its Independent Auditor's Report. The audit included Open World's balance sheets and the related statements of net cost, changes in net position, and combined statements of budgetary resources for FY 2013. The auditors concluded that the financial statements were presented fairly in all material respects, and in conformity with U.S. generally accepted accounting principles. The firm's auditors also performed tests of compliance with laws and regulations and considered internal controls over financial reporting. In its audit of Open World, CliftonLarsonAllen found no material weaknesses in financial reporting internal controls and no reportable noncompliance with the laws and regulations it tested.

1 The audit was completed and the draft report was issued during this semiannual period, but the final management responses were received shortly after the semiannual cut-off.

Other OIG Audit Activities

Investigations

Non-Audit Services

COR Alert

During this semiannual period, the OIG issued an alert to Library manag- ers and Contracting Officer's Representatives (COR) titled Poor Practices, Fraud Indicators, and Related Mitigating Contract Processes Contract Administration. The alert is a tool that illustrates best practices in contract administration and lists several fraud indicators. This was the first of a se- ries of COR Alerts that the OIG plans to release to assist CORs in manag- ing their contracts.

Alert to Management of High Risk Contract Issues

The OIG also issued a memorandum to ITS and the OCGM regarding high-risk labor-hour contracts. Under a labor-hour contract, the Govern- ment pays fixed-hour labor rates that include wages, overhead, general ad- ministrative costs, and profit. The contractor makes a good faith effort to meet the government's needs within the ceiling price and the government assumes risk on cost overruns. Because these contracts do not include a positive profit incentive to the contractor for cost control or labor efficien- cy, appropriate government monitoring of contractor performance is re- quired to give reasonable assurance that efficient methods and effective cost controls are being used. Although our work is still on-going, we identified some high-risk labor charging activities that, with changes to the contract, can be eliminated or mitigated. We formally alerted management of our initial findings and management made immediate improvements.

During the reporting period, we opened 24 investigations and closed 24. We forwarded two investigations to Library management for administrative action. Two investigations were forwarded to the Department of Justice for criminal prosecution; one was declined and one is pending. Investigation case and Hotline activities are detailed below.

Left: Robin Hood Defies King John, Who is Seen with the Magna Carta in Frederick Warde's Production of Runnymede by Wm. Greer Harrison. Cincinnati and New York: Strobridge Lithograph Co., ca. 1895.

Repository: Prints and Photographs Division, Library of Congress

Significant Criminal, Civil, and Administrative Investigations

Split Purchases

An anonymous letter was sent to the OIG Investigations Division stat- ing that at the end of Fiscal Year 2013, the Office of Support Operations (OSO) had misused their Government purchase cards by engaging in split purchases to buy computer equipment. An investigation determined that a senior employee within OSO knowingly directed the purchase card hold- ers to make the split purchases, totaling nearly $40,000. Management has requested an additional investigation be conducted into related issues.

Misuse of Government Property and Time

OIG received an allegation from Library management that an employee was operating a personal business and using government resources while on duty. Forensic analysis of the employee's work e-mail account and com- puter activity indicated that the employee worked on this business using a government computer during official work hours. In addition, as part of this business, the employee attempted to acquire Personally Identifiable In- formation from other Library employees through e-mail solicitation. The employee resigned prior to management's final determination.

Referrals and Assistance to Other Law Enforcement Agencies

The OIG received a request to assist the Department of Labor OIG in a case involving a potential copyright holder.

We also assisted the U.S Marshals Service to locate a felon wanted in the state of Washington for charges involving a hate crime and assault. The in- dividual was a Library patron and was arrested in a Library reading room. The felon was extradited to Washington State to stand trial.

The OIG acted as the liaison between the Library and the Federal Bureau of Investigations (FBI) for a Distributed Denial of Service attack that hit the Library's Copyright servers in 2010. A Distributed Denial of Service attack is an attempt by two or more people to make a machine or network unavail- able to its intended users. Sentencing is scheduled and the FBI asked OIG to assist in gathering victim impact statements in September.

Follow-up on Investigative Issues from Prior Semiannual Reports

Stolen Civil War Photograph Returned

We reported in our March 2014 Semiannual Report to the Congress that a Civil War photograph donated to the Library may have been stolen proper- ty. An OIG investigation confirmed the theft and revealed that the person likely responsible for the original theft was deceased. The OIG referred the matter to the Office of the Librarian who returned the photograph to its original owner, the Ohio Historical Society.

Pirated Talking Books

We investigated the Internet sales of pirated copies of several talking books produced by the National Library Service for the Blind and Physically Handicapped. As a result of our investigation and coordination with the Department of Homeland Security and the East Midlands Regional Asset Recovery Team in Nottingham, England, a British citizen was arrested for violations of Copyright and Patent laws. The OIG continues to support the East Midlands Regional Asset Recovery Team in their prosecution of this international case.

Other OIG Investigations Activities

OIG Hotline Web Page Upgrade

OIG Investigations upgraded its Hotline to conform with the Hotlines of other agencies' OIGs. The migration from an e-mail to a web form will greatly diminish the amount of spam received, allowing OIG to more efficiently monitor and effectively address incoming complaints.

Assistant Inspector General for Investigations Presents at Institute of Internal Auditors

At the request of the Inspector General for the House of Representatives, the Library's Assistant Inspector General for Investigations presented at an Institute of Internal Auditors continuing professional education seminar. The presentation, When Audits Become Investigations, was presented to an audience of over 250 internal auditors.

Review of Legislation and Regulations

Table 3 : Review of Library of Congress Regulations (LCRs) and Directives
Reviewed Comments by the Office of the Inspector General
LCR 2113 Voluntary Services Agreement We suggested that service units provide a copy of each Voluntary Service Agreement to HRS, or another designated office, to create a master file for all agreements with an efficient means for access and filing. We also suggested that volunteers working at a Library facility for a period of more than 2 days have an Employee Suitability Check.
LCR 1615-1 Asset Control of Accountable Property Owned by the Congress We suggested that the Chief Financial Officer and Service Unit heads identify additional non- capitalized property for tracking and inventory purposes. Further, we recommended Service Unit heads receive a report on inventory variances. We also suggested that all reports of missing or stolen property be reported to the Office of the Inspector General. We recommended that the LCR include a policy on the disposal of personal property.

Above and Right: Sir Edward Coke, The Second Part of the Institutes of the Laws of England. London, England, 1681. The Second Part of Coke's Institutes contains Coke's Famous Interpretation of the Magna Carta which Placed that Medieval Charter Squarely in the Center of English Constitutional law.

Repository: The Thomas Jefferson Collection, Library of Congress.

page 19 September 2014 Semi-Annual report to the Congress

Unimplemented Recommendations2

Table 4A : Significant Recommendations from Previous Semiannual Reports for Which Corrective Action Has Not Been Completed
Subject Report No. Issue Date: Office Rec.No. Summary and Status of Recommendation
Office of Contracts and Grants Management
Weaknesses in the Acquisition Function 2011-SP-106
March 2012
Office of Contracts and Grants Management I.A.2 Rewrite the Contracts Operating Instructions (COI) manual deleting those policies that merely restate the Federal Acqui- sition Regulations (FAR) and draft specific guidance geared toward the Library's acquisition activities. Organize the COI so that it is easily accessible. The OCGM Director updated and submitted consolidated contracting policies and proce- dures, Contract Technical Guidance (LCTG), and a Con- tracts Handbook for non-contracting personnel as part of the LCM initiative and is awaiting formal review. The target date for completion is aligned with the launch of the LCM. The target completion date is FY 2015.
Weaknesses in the Acquisition Function 2011-SP-106
March 2012
Office of Contracts and Grants Management I.F.2 Rewrite COI 1003 to be a more comprehensive oversight policy and contract review process. The oversight and re- view process of COI 1003 is in section 4.7203 of the new LCTG. Training was provided to staff based on the updates. The target completion date is dependent on the LCM publi- cation. The target completion date is FY 2015.
Weaknesses in the Acquisition Function 2011-SP-106
March 2012
Office of Contracts and Grants Management II.G.1 Develop directives that clearly set forth the policy and constraints for using LCR 2111. LCR 2111 was revised and incorporated into section 5730-37.102 of the consolidated LCTG. The accompanying Form 52 was also updated and incorporated into section 5730-53.2 of the LCTG, which corresponds to FAR subpart 53.2 Forms. Responsibility for review and award of actions under LCR 2111 was transi- tioned to the Office of Grants Management and full imple- mentation is expected with the publication of the LCM. The target completion date is FY 2015.
Improper Payments II 2011-SP-101 May 2011 Office of Contracts and Grants Management I.2 OCGM and the Office of the Chief Financial Officer (OCFO) should update directives to officially reflect the cur- rent spending limit for micro purchases of $3,000. The Purchase Card Technical Guidance is in draft, awaiting review. It reflects the current micropurchase threshold of $3,000 for supplies and $2,500 for services. The technical guides will be published as part of the LCM. The target completion date is FY 2015.
Office of Opportunity, Inclusiveness, and Compliance
Follow-Up Review of the Office of Opportunity, Inclusiveness, and Com- pliance 2011-PA-106
June 2011
Office of Opportunity, Inclusiveness, and Compliance II.2.b OIC, in collaboration with the Library's Human Capital Management Flexibilities Working Group, should complete the barrier identification and elimination process initiated with the Multi-Year Affirmative Employment Program Plan (MYAEPP) by assessing the success of the plan. The Human Capital Planning Board concluded that eliminating barriers is best accomplished through a master recruitment plan for vacancies. The MYAEPP Revisioning Working Group com- pleted its assessment, and recommended developing a plan that will sustatin a diverse workforce, promote awareness and inclusiveness in the workplace, and highlight the diversity in Library collections and programs. The target completion date is the first quarter of FY15.
Library Services
Top Treasures Security and Preservation Controls 2008-PA-103
January 2009
Library Services I.a Establish criteria for specifically defining top treasure collec- tion items and a clear process to nominate or transfer collection items to the category. Discussions with chiefs of custo- dial divisions about item and collection security are ongoing and being coordinated by the Office of the Librarian. A revised version of the LCR was distributed to service unit heads for ap- proval. The target completion date is the first quarter of FY15.
Surplus Books Program 2010-PA-106
September 2011
Library Services I.c.1 Update LCR 1816 to include designing a serialized docu- ment that is counterfeit resistant, reassigning the responsible office to ensure oversight, documenting accountability, and implementing procedures to more appropriately account for and retire used passes. Revise the LCR to implement a pass designed for specific Surplus Books Program (SBP) use. The Acquisitions & Bibliographic Access Directorate will convene the appropriate Library units to determine how to accomplish the original recommendation or to determine if the original recommendation is no longer feasible. If determined appropri- ate, LCR 1816 will be revised according to procedures in place for the LCM. The target completion date for determination is the second quarter of FY15.
Surplus Books Program 2010-PA-106
September 2011
Library Services II.a.1 SBP management should implement the use of a software application to collect and analyze program operating data. There is no new activity to report because the ITS specialist assigned to the project is still being called to address other assignments. The estimated completion date is the third quarter of FY15.
Office of Strategic Initiatives
Information Technology Strategic Planning Follow-up 2011-IT-103
December 2011
Information Technology Services I.2.C Account for all IT costs, including computer security as part of the IT budgetary process. The Office of the Librarian continues its information resources management plan implementation and IT spending and investment reviews. The results of these reviews and current Library-wide planning will determine whether any organizational or resource allocation changes are warranted. The target implementation date is the first quarter of FY15.
Information Technology Strategic Planning Follow-up 2011-IT-103
December 2011
Information Technology Services I.3.A Separate the IT support functions from OSI and establish the Office of the Chief Information Officer (CIO) from the ITS Directorate and other IT support functions of OSI. The CIO will report directly to the Librarian or Deputy Librarian with duties, responsibilities, and authority consistent with best practices. The Office of the Librarian continues its information resources management plan implementation and IT spending and investment reviews. The results of these reviews and cur- rent Library-wide planning will determine whether any organi- zational or resource allocation changes are warranted. The target implementation date is the first quarter of FY 15.
Information Technology Strategic Planning Follow-up 2011-IT-103
December 2011
Information Technology Services I.5.A Implement service level agreements to manage customer expectations. The current strategic planning process over- seen by the Strategic Planning Office has a provision for ITS to provide support to service units according to their documented requirements. This recommendation is pending further guidance from the strategic planning process with a target completion date in the first quarter of FY 15.
Information Technology Strategic Planning Follow-up 2011-IT-103
December 2011
Information Technology Services I.5.F Develop a set of metrics for ongoing use to measure perfor- mance. These metrics should change and evolve over time. As one area shows improvement new metrics should be de- veloped for other areas. A comprehensive set of metrics was established as part of the new IT help desk contract. ITS is currently aggregating performance results. The target date for completion is the second quarter of FY15.

2 These status updates are management assertions and have not been audited.

3 The LCM will include Library-wide handbooks and technical guidance, encompassing the entire body of the Library's governing documents. The Librarian's Office completed its initial review last spring and the Office of the General Counsel and HRS were conducting their reviews at the time of this publication.

Implemented and Closed Recommendations

Table 4B : Significant Recommendations from Previous Semiannual Reports Which Were Implemented or Closed During This Period
Subject Report No. Issue Date: Office Rec.No. Summary and Status of Recommendation
Office of the Librarian
Performance-based Budgeting III 2013-PA-101
March 2013
Library-wide II.1 Incorporate in the financial statements, where applicable, MD&A information about unmet performance targets and related goals, plans, and schedules for achieving them, assessments of practicality and feasibility of the goals, and disclosure of the action that management must take for success. The FY13 Financial Statements included more comprehensive MD&A statements and plans are underway to further improve this section of the financial statements reporting for FY14 and FY15.
Library Services
Surplus Books Program 2010-PA-106
September 2011
Library Services II.c.1 LS management should collect the required data to conduct an analysis to determine whether the Library derives tangible benefits from processing other agencies surplus material transfers BP has not accepted transfers from other agencies since October 2011 and expects to keep that policy in effect. The revised policy was disseminated to the federal library community through a posting on the Surplus Book website, which is the official venue for making announce- ments about the program. The announcement can be found at www.loc.gov/acq/fedsur.html.

4These status updates are management assertions and have not been audited.

Left: Magna Carta Regis Johannis XV. A Beautifully Illustrated Text of the Magna Carta Printed in Gold on White Vellum.
London, England c. 1816-1818

Repository: Law Library, Library of Congress

Funds Questioned or Put to Better Use

Table 5: F Y 02-Present Funds Questioned or Put to Better Use
Funds Questioned and Put to Better Use Ratio: Funds Questiond and Put to Better Use to OIG Discretionary Budget5
$62,550,770 2.6:1
Table 6: Audits with Recommendations for Better Use of Funds
  Number of Audit Reports Total Funds Put to Better Use
No management decision was made by the start of the period:
Issued during the period:
In need of management decision during the period:
Management decision made during the reporting period:
  • Value of recommendations agreed to by management
  • Value of recommendations not agreed to by management
No management decision made by the end of the reporting period:
  • Less than 6 months old:
  • More than 6 months old:
Table 7: Audits with Questioned Costs
  Number of Audit Reports Total Questioned Costs
No management decision was made by the start of the period:
Issued during the period:
In need of management decision during the period:
Management decision made during the reporting period:
  • Value of recommendations agreed to by management
  • Value of recommendations not agreed to by management
No management decision made by the end of the reporting period:
  • Less than 6 months old:
  • More than 6 months old:

5 Total Budget Minus (1) Unreimbursed Cost of Mandatory Financial Statemens Audits, Including the Cost of OIG Staff to Oversee Financial Statement Activity, and (2) Any Unobligated Funds Returned to the Library for Resource Reallocation.

OIG Organizational Chart

  • Inspector General HotlIne
  • Counsel to the IG
  • Deborah Lehrich (Part-time)
  • Inspector General Kurt W. Hyde
  • Administrative Officer Sheetal Gupta
  • Auditor Elizabeth Valentin CPA, CISA
  • Auditor Christine C. Cochrane CPA, CrFA
  • Management Analyst Jennifer R. Bosch
  • Assistant Inspector General for Audits VACANT
  • Senior Lead Auditor John R. Mech CPA
  • Senior Lead Management Analyst Eric Mader
  • Special Agent Hugh D. Coughlin
  • Assistant Inspector General for Investigations Thomas E. Williams CCE, ACE, SCERS
  • Special Agent Pamela D. Hawe (Part-time) SCERS
  • Lead Auditor Walter E. Obando CIA, CISA
  • Management Analyst Sarah Sullivan
  • Management Analyst Michael R. Peters SCERS
  • Special Agent Donald Lyles (Part-time,Temporary) SCERS

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