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Audit of Internal Controls in Place to Identify, Record, and Track Indian Health Service Sanitation Facilities Construction Program Costs

Announced on  | Last Modified on  | Project Number: A-05-22-00021
Status
Completed
Agency
Indian Health Service

OBJECTIVE

Under the Infrastructure Investment and Jobs Act, Congress allocated $3.5 billion to the Indian Health Service (IHS) Sanitation Facilities Construction (SFC) Program to provide American Indian and Alaska Native (AI/AN) homes and communities with essential water supply, sewage disposal, and solid waste disposal facilities. The IHS Sanitation Deficiency System (SDS) is an inventory of sanitation projects developed to address existing sanitation deficiencies in AI/AN communities. As of December 31, 2021, the SDS showed 1,513 sanitation projects totaling $3.4 billion in eligible costs and $735 million in ineligible costs. Ineligible costs are the costs associated with serving commercial, industrial, or agricultural establishments, including nursing homes, health clinics, schools, hospitals, hospital quarters, and non-AI/AN homes. Our audit will determine whether IHS has internal controls to: (1) identify, record, and track project costs in the SDS and (2) ensure that appropriated funds are not used for ineligible SFC project costs.

TIMELINE

  • July 18, 2022
    Announced
  • May 30, 2025
    Complete

    Audit of Internal Controls in Place to Identify, Record, and Track Indian Health Service Sanitation Facilities Construction Program Costs has been marked as complete. This audit resulted in 5 recommendations.

REPORT PUBLISHED

Indian Health Service's Controls Over Sanitation Facilities Construction Program Projects Funded Under the Infrastructure Investment and Jobs Act Could Be Improved (A-05-22-00021)

Although IHS had internal controls in place to track projects in the SDS, some weaknesses existed to identify and record projects in that system and to ensure that IIJA funds were only used for eligible project costs.

Specifically, IHS did not implement controls for identifying which projects to fund and did not properly record some projects in the SDS with the required documentation. In addition, we found that IHS did not effectively validate home eligibility or include all necessary information in the SDS to support the calculation of eligible costs. Finally, although we found IHS did have guidance and processes in place to prorate eligible and ineligible Tier 1 construction costs, we found IHS did not have formal guidance or an established process to prorate the eligible and ineligible shares of Tier 1 design costs or Tier 2 and 3 planning costs.

25-A-05-067.01 to IHS - Open Unimplemented
Update expected on 11/29/2025
We recommend that the Indian Health Service consider additional project prioritization procedures to fund the highest priority SFC projects based on readiness.

25-A-05-067.02 to IHS - Open Unimplemented
Update expected on 11/29/2025
We recommend that the Indian Health Service reinforce compliance with established procedures for recording and documenting projects in the SDS prior to funding them.

25-A-05-067.03 to IHS - Open Unimplemented
Update expected on 11/29/2025
We recommend that the Indian Health Service validate the eligibility of homes and users by regularly reviewing and updating the HITS data.

25-A-05-067.04 to IHS - Open Unimplemented
Update expected on 11/29/2025
We recommend that the Indian Health Service strengthen documentation controls to appropriately ensure that all information is entered in the SDS to identify the ineligible portion of Tier 1 construction projects.

25-A-05-067.05 to IHS - Open Unimplemented
Update expected on 11/29/2025
We recommend that Indian Health Service develop formal guidance for the proration of Tier 1 design costs and Tier 2 and 3 planning costs between eligible and ineligible homes or users.

View in Recommendation Tracker
Work Plan Type
Office of Audit Services
HHS Agencies
Indian Health Service
Issue Areas
Departmental Operational Issues Financial Stewardship Public Health Issues
Target Groups
-
Financial Groups
Grants