Federal Reports

Introduction

This management alert presents issues the U.S. Postal Service Office of Inspector General identified during the Counterfeit Postage Program audit. Our objective is to promptly notify the U.S. Postal Service about an identified deficiency in the detection of counterfeit package labels.

Background

The Postal Service is a self-funded entity that primarily finances its operations through postage sales, with package delivery comprising a major portion of its services. During fiscal year 2025, the Postal Service shipped 6.8 billion packages, generating $32.6 billion in revenue. The Postal Service offers both domestic and international shipping services for purchase through multiple channels, including third party vendors, its Click-N-Ship online service, and over the retail counter at local post offices. Foreign postal operators also sell shipping labels for packages that are shipped from other countries and are sent to the United States. 

A former executive of a Chicago-area non-profit organization has been sentenced to a year in federal prison for misappropriating nearly $1.9 million through a pair of fraud schemes.

The VA Office of Inspector General (OIG) conducted a healthcare inspection to assess the coordination and scheduling of community care for a patient with a lung mass suspicious for cancer at the VA Fayetteville Coastal Healthcare System (system) in North Carolina. The inspection followed a complaint that the patient experienced delays in diagnosis and treatment between December 2023 and May 2024. The OIG substantiated delays in ordering diagnostic imaging and scheduling community care, which may have reduced the opportunity for earlier diagnosis and treatment of lung cancer.

The patient’s primary care provider did not act on a radiologist’s recommendation for a chest computed tomography (CT) scan for over 15 months after an abnormal chest x-ray in March 2022. After a CT scan confirmed a lung mass, a pulmonologist requested expedited community care, but staff delayed scheduling the appointment for more than five months. The OIG found no explanation for the delay, despite documented handoffs and reminders. 

Contributing factors included leadership turnover, lack of a community care oversight council, and absence of procedures to prioritize high-risk consults for serious conditions.

System leaders also missed opportunities to address the patient’s delayed care and broader programmatic deficiencies. Leaders did not follow VA policy for investigating the complaint, initiate timely peer reviews, or complete an institutional disclosure. Efforts to address a backlog of unscheduled consults were fragmented and ineffective. The OIG concluded system leaders did not ensure timely care and oversight. 

The OIG made eight recommendations. In response, VA leaders shared plans to review consult management practices and the system’s backlog, ensure implementation of a community care oversight council, management of high-priority consults, quality management tracking processes, staff training, and attempts to disclose the adverse event.

Why We Did This Report

The U.S. Environmental Protection Agency Office of Inspector General performed this audit to determine whether the EPA’s annual appropriations and Infrastructure Investment and Jobs Act, or IIJA, funds in the Clean Water State Revolving Fund, or CWSRF, Program are at risk from procurement fraud related to construction bidding processes. 
 

Summary of Findings

Federal dollars flowing through the CWSRF Program are at risk of procurement fraud in the construction bidding process. This risk primarily stems from two factors. First, the CWSRF Program’s structure as a partnership between the EPA and the states means that the states are primarily responsible for administering the state-level programs and projects. Second, the Uniform Guidance provides that loans from a pass-through entity to a subrecipient, such as loans made under a state revolving fund program, are not subject to the procurement standards.

On October 10, 2023, the North Carolina General Assembly enacted the Clean Energy and Energy Efficiency Portfolio Standard (CEPS) requiring rural electric cooperatives and municipal electric suppliers in North Carolina to meet 10 percent of their energy needs through clean energy resources or energy efficiency measures.  Additionally, North Carolina CEPS requires a percentage of retail sales be attributed to solar, poultry, and swine resources.  The Tennessee Valley Authority’s (TVA) renewable energy certificates (REC) portfolio management process includes obtaining and retiring RECs to meet the requirements set forth in CEPS on behalf of its four local power companies (LPC) in the state.  By September 1 of each year, TVA is required to file an annual compliance report for the prior year.  Also, at that time, TVA files its compliance plans for the calendar year in which the plan is filed and the following 2 years.  Due to increased power demand from data centers in North Carolina, we performed an evaluation to determine if TVA has adequate RECs to meet regulatory requirements in North Carolina for LPCs.

We found that TVA appropriately retired enough RECs to achieve compliance with North Carolina CEPS in 2024 and has enough RECs to meet the general, solar, and swine requirements for compliance year 2025.  However, there is a risk that TVA will not be able to meet the poultry requirement for 2025.  TVA has taken action to reduce this risk by submitting a request for offers in 2025 to purchase poultry RECs.  Additionally, our review of the 2024 CEPS Compliance Report identified an understatement of RECs to be carried forward for use in future years.

SEC OIG Cash Awards Program for SEC Employees

We found that a company diverted geothermal resources from a Federal lease without authorization, generated power, and failed to pay royalties.