Federal Reports

This audit assessed the extent to which the Smithsonian Institution Office of Contracting and Personal Property Management and Smithsonian Enterprises have effective controls to manage revenue generating contracts.

Joshua Pearson, a marketer from St. George, Utah, pleaded guilty on October 22, 2019, in U.S. District Court, Central District of California, to receipt of illegal kickbacks related to a health care fraud scheme. As part the scheme, Pearson received kickbacks from Sheridan Medical for patient referrals for compounded drugs—drugs that were medically unnecessary. A marketer from Sheridan Medical and the owner of Fusion Rx Compounding Pharmacy, both in Los Angeles, were also charged for their role in the scheme. The Amtrak health insurance plan was fraudulently billed $17,000 as a result of the scheme. Criminal judicial proceedings for all three defendants are pending.

The Office of the Inspector General previously conducted a review of Human Resources (Evaluation Report 2016-15445-05, issued September 26, 2017) to identify operational and cultural strengths and areas for improvement that could impact Human Resources’ organizational effectiveness. Our report identified several operational and cultural areas for improvement and included recommendations for addressing those areas. In response, we received Human Resources’ management decision on December 4, 2017. The objective of this follow-up review was to assess actions taken to address concerns identified in the initial organizational effectiveness evaluation. In summary, we determined actions taken by Human Resources appear to have addressed the areas for improvement identified during our initial organizational effectiveness review.