Officials within the Department of the Interior (DOI) plan to increase training for DOI program managers and grant recipients to help them comply with the Office of Management and Budget’s uniform guidance provision on real property reporting (§200.329) concerning land purchased with federal grant funds, in response to a recent DOI Office of Inspector General (OIG) audit recommendation.

Multiple DOI programs award grants for the purchase of land. The land purchased does not become federal land; rather, the title is held by the grant recipient, who is also responsible for honoring the specific purpose of the grant, such as conservation or public access. The recipient also is responsible for selecting a real estate appraiser to determine the value of the property, which is then provided to the awarding agency. Awarding agencies review and accept the appraisal as adequate, as long as it meets national uniform appraisal standards.

To determine whether DOI was appropriately tracking information about grants awarded for land purchases, OIG surveyed about 108 grant programs that award funds for land purchases to determine how much land was bought and how the programs operated. Of these, OIG identified 16 programs that met its scope of review, adding that from federal fiscal year (FY) 2014 to FY 2015, these 16 programs awarded 701 grants to purchase land valued at about $815 million.

Following its review, OIG determined that DOI does not have a centralized tracking system for land purchases, and that grant recipients are not consistently complying with the real property reporting provision in the uniform guidance. “Overall, our survey demonstrated both the massive amount of grant funding that DOI programs award for land purchases and the inconsistency with which these programs track data on grants used to purchase land,” OIG stated. “Without an adequate process in place to monitor funds used to purchase land, DOI is potentially exposed to significant risk of wasted funds.”

OIG Findings

Because DOI does not have a standardized method for tracking data on grants awarded for land purchases, such as the number of grants or the value of the land, the agency could not provide OIG information on the complete universe of these awards. OIG queried the grant programs it surveyed about how they tracked data related to land purchases, with most stating that they use bureau-maintained grant files. Other programs used either grantee-maintained physical files or simply “institutional knowledge.” OIG explained that these multiple methods for tracking awards highlighted the need for a comprehensive, standardized system to maintain consistency and uniformity in grant administration across bureaus, as required by OIG policy.

OIG also found that most of these grant recipients were not reporting their land inventories to the awarding agencies, as required by the uniform guidance provision at §200.329, which states that federal awarding agencies or pass-through entities “must require a nonfederal entity to submit reports at least annually on the status of real property in which the federal government retains an interest, unless the federal interest in the real property extends 15 years or longer. In those instances where the federal interest attached is for a period of 15 years or more, the federal awarding agency or pass-through entity, at its option, may require the nonfederal entity to report at various multi-year frequencies (e.g., every two years or every three years, not to exceed a five-year reporting period; or a federal awarding agency or pass-through entity may require annual reporting for the first three years of a federal award and thereafter require reporting every five years).”

OIG explained that only 122 of 278 grant recipients (about 44 percent) that received funds to purchase land had reported to the awarding agency as required. In light of this total, OIG was concerned that the awarding agencies and most grant recipients were either unaware of the requirement, or were in noncompliance. “The reported failure of grantees to provide real property data to their awarding agencies, coupled with the fact that DOI is not tracking the awards centrally, could hamper monitoring efforts to ensure that land is being used properly,” OIG said.

Recommendations and Response

OIG recommended that DOI’s Office of Acquisition and Property Management (PAM) standardize the tracking of grants awarded for land purchases to ensure consistency and uniformity across bureaus. PAM, along with DOI’s Office of Valuation Service, acknowledged that it would be useful to have these data available in a centralized database.

OIG also recommended that DOI develop guidance to inform awarding agencies and grantees of their responsibilities under the real property reporting provision at §200.329. PAM responded that it would be difficult to create a policy that adds an additional burden for nonfederal entities and suggested alternative approaches to ensuring compliance with this provision, including providing training to grants management officers and grant recipients on uniform guidance requirements.

OIG considered the responses to both of its recommendations as unresolved and referred them to DOI’s assistant secretary for policy, management and budget for resolution.

For More Information

The OIG audit is available at https://www.doioig.gov/sites/doioig.gov/files/FinalEvaluationLandAppraisalsPublic.pdf.