Federal Reports

In FY 2018, S&T did not always adhere to DHS and internal purchase card policies and procedures. Of 421 purchase card transactions selected for review, we identified 394 transactions that did not have required supporting documentation, separation of key transaction duties, approvals and other required signatures, or compliance with other risk-based procedures. According to S&T officials, these issues were due to shortfalls in program oversight and training, as well as outdated policy. We identified $63,213 in questionable costs associated with purchase card transactions. We made four recommendations to improve S&T’s adherence to DHS policies and procedures for its Bankcard Program. S&T concurred with the four recommendations.

FEMA did not ensure Louisiana adequately managed and provided oversight of PA grants to make certain they complied with Federal regulations. Specifically, Louisiana had a backlog of 600 incomplete projects beyond their approved completion dates. We attributed this to the State not conducting regular site visits to assess subrecipients’ ongoing projects, identify and resolve issues as they arose, or ensure prompt project completion. In addition, FEMA had a backlog of 2,150 completed grant projects it had not closed out due to inadequate oversight of its Region 6 staff to ensure they promptly carried out this responsibility. As of the fourth quarter of 2018, the combined backlog of 2,750 grant projects represented nearly $6.6 billion in obligated funds. By May 2020, FEMA had reduced the backlog, but the significant number of remaining projects could lead to delays reimbursing applicants as well as deobligating funds that could be put to better use. We made three recommendations to FEMA to strengthen its oversight of project completion and closeout processes to ensure they are timely and compliant. FEMA concurred with one recommendation and did not concur with two. However, FEMA’s responses resulted in all three recommendations being considered open and unresolved.

OIG evaluated whether APHIS’ controls over select agents adequately reduced the threat to public, animal, and plant safety, and animal and plant products.

Allan Lummer, Farshad Sassounian, Sidney Cobos and Ashkan Kohanpour, medical marketers based in Los Angeles, were sentenced in United States District Court, Central District of California, in July 2021 for aiding and assisting in the preparation of a false tax return. Sassounian, Cobos, and Kohanpour were each sentenced to six months in prison and ordered to pay $24,147.50 in restitution. Lummer was sentenced to two years’ probation for his role in the scheme.Our investigation found that the four defendants aided in the preparation and presentation of a false tax return to the Internal Revenue Service for Pharmacy Acquisition LLC. The defendants knew the tax return falsely claimed a deduction for expenses that were actually distributions made to them, as owners of the pharmacy. Further, our investigation found that Pharmacy Acquisition LLC provided medically unnecessary compounded drug prescriptions to Precise Compounding Pharmacy that were reimbursed by health care benefit programs, including Amtrak’s plan. As a result of the scheme, Amtrak’s insurance providers were fraudulently charged approximately $22,000.

As part of our annual audit plan, we audited costs billed to the Tennessee Valley Authority (TVA) by The L.E. Myers Co. (LE Myers) under Contract No. 9070 for construction and modification services for TVA's Transmission and Power Supply Program. The contract provided for TVA to compensate LE Myers for these services on either a cost-reimbursable or fixed price basis. Our audit objective was to determine if costs were billed in accordance with the terms and conditions of Contract No. 9070. Our audit scope included about <br> $35.5 million in cost-reimbursable expenses billed to TVA from September 1, 2018, through December 31, 2019. In summary, we determined LE Myers overbilled TVA $120,152, including (1) a net $93,695 in unsupported and incorrect craft labor charges, (2) $13,955 in unsupported travel costs, and (3) $12,502 in unsupported equipment costs. In addition, we found that (1) LE Myers did not submit an electronic billing file to the TVA Office of Inspector General in the format and frequency provided for in the contract's terms, and (2) TVA did not revise the contract's equipment rate schedule to include a piece of equipment approved for use by TVA's Contract Manager.(Summary Only)

To ensure the U.S. Equal Employment Opportunity Commission’s (EEOC) social mediaprogram is effective at helping EEOC achieve its objectives—to 1) promote EEOC’s educationand outreach activities, 2) encourage greater use of the EEOC website, and 3) increase publicaccess to information about rights and responsibilities under the laws EEOC enforces—theEEOC Office of the Inspector General (OIG) hired Hager Sharp to evaluate the program.