The Railroad Retirement Board's 12(o) Lien Process Does Not Have Sufficient Controls to Identify, Monitor, and Collect Liens

Submitting OIG:

Railroad Retirement Board OIG

Date Issued:

Wednesday, August 9, 2023

Agency Reviewed / Investigated:

Railroad Retirement Board

Submitting OIG-Specific Report Number:

23-05

Location(s):

Agency-Wide

Type of Report:

Audit

Questioned Costs:

$358,800,000

Funds for Better Use:

Number of Recommendations:

Report updated under NDAA 5274:

View Document:

Attachment	Size
Audit-Report-23-05.pdf	1.83 MB

Recommendation Number	Recommendation Status	Significant Recommendation
1	Open	No
The Office of Programs should develop and document a comprehensive set of controls over the entirety of the 12(o) lien process and consolidate those controls into a singular location so that they are both easily referenced and tested.
2	Open	No
The Office of Programs should implement a comprehensive tracking system for 12(o) liens to ensure that all 12(o) liens are identified, monitored, and collected.
3	Open	No
The Office of Programs should develop a system that calculates and tracks the portion of sickness payments subject to be recovered from potential 12(o) liens.
4	Open	No
The Office of Programs should develop policies and procedures to validate that employees are accurately differentiating between infirmaries and Railroad Unemployment Insurance Act benefits subject to 12(o) liens and those not subject to 12(o) liens for beneficiaries.
5	Open	No
The Office of Programs should develop controls to ensure that Railroad Unemployment Claims System codes are properly updated after the report of settlement.
6	Open	No
The Office of Programs should update its policies and procedures to address the two 12(o) lien requirements defined in Code of Federal Regulations Title 20 Section 341.8, Termination of sickness benefits due to a settlement, dated September 8, 2006.
7	Open	No
The Office of Programs should formally request that railroads stop using outdated forms in the 12(o) lien process to ensure consistency and accuracy of all transactions with outside entities, and to promote a uniform 12(o) lien process.
8	Open	No
The Office of Programs should work with the Bureau of Field Service, to update the Field Operating Manual to correctly reference the financial management system at the time of this audit, Financial Management Integrated System, and remove references to obsolete systems, such as the Program Accounts Receivable System.
9	Open	No
The Office of Programs should update the Division of Program Operations Manual to correctly reference the financial management system at the time of this audit, Financial Management Integrated System, and remove references to obsolete systems, such as the Program Accounts Receivable System.
10	Open	No
The Office of Programs should develop controls to independently verify the outcome of a claimant’s settlement.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

Open

The Office of Programs should develop and document a comprehensive set of controls over the entirety of the 12(o) lien process and consolidate those controls into a singular location so that they are both easily referenced and tested.

Open

The Office of Programs should implement a comprehensive tracking system for 12(o) liens to ensure that all 12(o) liens are identified, monitored, and collected.

Open

The Office of Programs should develop a system that calculates and tracks the portion of sickness payments subject to be recovered from potential 12(o) liens.

Open

The Office of Programs should develop policies and procedures to validate that employees are accurately differentiating between infirmaries and Railroad Unemployment Insurance Act benefits subject to 12(o) liens and those not subject to 12(o) liens for beneficiaries.