Internal Controls Must be Strengthened to Promote Procurement Integrity (AUD-2021-01), issued December 8, 2020

Following the former PBGC Procurement Department Director’s guilty plea in May 2020, we found he steered the contract in the bribery case by including overly restrictive personnel requirements in the solicitation and then increased its value to $3.3 million through out-of-scope modifications. His actions were enabled by internal control weaknesses; specifically, inadequate oversight of PD procurements and a lack of a control mechanism to ensure that PD sent all requisite contract actions for legal reviews. Although PBGC quickly began requiring that more contract actions receive legal review after the PD Director resigned in February 2020, it does not have a mechanism to ensure PD complies with this requirement. Finally, although we did not identify other contracts that the former PD Director fraudulently steered, we found internal control deficiencies allowed PD to avoid competition requirements when awarding five other contracts, three of which were for PD support. Four of the contracts were awarded on a sole-source basis, including three using small business set-aside programs.

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