Federal Reports

The VA Office of Inspector General (OIG) conducted a healthcare inspection to evaluate concerns regarding deficiencies identified in the practice of a fee basis radiologist (subject radiologist), and the facility’s oversight of the subject radiologist’s performance during the six month tenure in 2014. Facility leaders did not complete the credentialing and privileging of the subject radiologist per Veterans Health Administration requirements. Specifically, the references used to approve the subject radiologist’s request for privileges did not include a reference from peers and a most recent employer. Facility managers did not provide adequate oversight of the subject radiologist and did not timely complete a focused professional performance evaluation. Facility leaders did not take timely administrative action in response to inaccurate interpretations of radiology imaging and clinical documentation. Facility managers and leaders failed to timely complete the subject radiologist’s Exit Memorandum, required by Veterans Health Administration to comply with state licensing boards reporting requirements, during the mandatory reporting period of seven days after the employee’s separation from the facility; and failed to report the results to the facility professional standards board until August 2018, three years after the assigned target date. The Patient Safety Manager was never notified while the review of cases was being conducted, nor after the results were issued. Facility leaders did not timely submit an issue brief to the Veterans Integrated Service Network, as is required for significant clinical incidents negatively affecting patients. On January 25, 2019, the Facility Director issued notices to eight state licensing boards citing that the subject radiologist failed to meet generally accepted standards of clinical practice. Two disclosures were made to patients. The OIG made four recommendations related to credentialing and privileging requirements, state licensing board reporting, reporting of adverse events, and potential administrative actions.

Pursuant to the VA Choice and Quality Employment Act of 2017, the OIG conducted a review to identify clinical and non-clinical Veterans Health Administration (VHA) occupations experiencing the largest staffing shortages at each VA medical facility. In this sixth staffing report, the OIG team evaluated facility leader-identified severe occupational staffing shortages and compared them to last year's data. The team also explored the impact of medical center director vacancies on VHA facilities. The OIG found that 96 percent of VHA facilities identified at least one severe occupational staffing shortage. The most frequently cited shortages were in the Medical Officer and Nurse occupations. The lack of qualified applicants and non-competitive salary were the two most frequently noted reasons for severe occupational staffing shortages. As with last year’s report, Psychiatry was the most commonly reported medical specialty in the Medical Officer occupational series. Human Resources Management was the most commonly reported non-clinical occupation with severe staffing shortages. Effective and stable leadership at VA medical centers is critical to the overall success of the facilities. The OIG found more than 46 facilities annually experienced at least one change in medical center directors since 2015. Both VISN and medical center directors expressed the view that vacancies in the medical center director position negatively affected facility operations. Directors also shared concerns about the non-competitive salary and career risks associated with that position. The OIG made two recommendations to the Under Secretary for Health to ensure completion of all open action plans related to recommendations from previous staffing reports and to identify a plan of action that will address the underlying causes of severe occupational staffing shortages as discussed in this review.

Our report contains 20 recommendations directed to the post and headquarters. We recommend that the post improve processes related to bills of collection and Volunteer payments and improve controls over property management, PSC contracts, purchase of medical supplies, and fuel and toll costs. Additionally, we recommend that the post comply with policies and guidance related to sub-cashier advances and system access roles.

Our report contains 12 recommendations directed to the post and headquarters. We recommend that the post reassess the country agreement. We also recommend that the post monitor and document the accountability-of-funds transfer to the alternate cashier, as well as liquidate interim advances and issue BOCs in a timely manner. In addition, we recommend that the post ensure the Volunteers’ pro-rated living allowance calculations are accurate and that lease agreements contain necessary information.

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ), Washington, DC, and the U.S. Attorney’s Offices for the District of Kansas and the Northern District of Texas in the civil investigation of PrimeLending, a PlainsCapital company. The investigation was of PrimeLending’s origination, underwriting, and quality control of Federal Housing Administration (FHA)-insured mortgage loans between 2008 and 2012. PrimeLending has its principal place of business in Dallas, TX. On October 23, 2018, PrimeLending entered into a settlement agreement with the Federal Government to pay more than $6.75 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation of certain civil claims the Government stated it had against PrimeLending. The United States contends that for 79 FHA-insured loans, PrimeLending failed to follow all HUD requirements in connection with its origination, underwriting, and quality control. Specifically, the United States contends that between January and December 2008, PrimeLending failed to ensure that the 79 loans qualified for FHA insurance, improperly incentivized underwriters, and failed to perform quality control reviews as required by HUD regulations. The settlement was neither an admission of liability or wrongdoing by PrimeLending nor a concession by the United States that its claims were not well founded. Of the $6.75 million settlement, HUD FHA received more than $3.37 million.PrimeLending also entered into an indemnification agreement with HUD to pay more than $6.74 million in restitution to indemnify FHA for the portion of losses associated with 160 FHA-insured loans that were not eligible for FHA insurance because of alleged material underwriting defects. These 160 FHA-insured loans were originated by PrimeLending between January 1, 2009, and December 31, 2012. The indemnification agreement did not constitute an admission of liability or fault on the part of either PrimeLending or HUD.

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ), Washington, DC, in the civil investigation of Quicken Loans, Inc. The investigation was of Quicken’s origination, underwriting, endorsement, and related certifications of Federal Housing Administration (FHA)-insured mortgage loans between September 1, 2007, and December 31, 2011. Quicken has its principal place of business in Detroit, MI. On June 3, 2019, Quicken entered into a settlement agreement with the Federal Government to pay $32.5 million. The United States contends that Quicken knowingly approved loans that violated FHA rules while falsely certifying compliance with those rules. Between 2007 and 2011, Quicken allegedly submitted claims for hundreds of improperly underwritten FHA-insured loans. The settlement was reached through mediation. The settlement was neither an admission of liability by Quicken nor a concession by the United States that its claims were not well founded.

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted HUD’s Office of Program Enforcement in a civil investigation of Pacific Horizon Bancorp, Inc., and two former loan officers at Pacific Horizon. Pacific Horizon has its principal place of business in La Crescenta, CA.Based on OIG’s civil investigation, on April 2, 2019, HUD notified Pacific Horizon and the two loan officers that it believed they were liable under the Program Fraud Civil Remedies Act of 1986 for violating HUD requirements in connection with four FHA-insured loans for Pacific Horizon and two FHA-insured loans for the loan officers. To avoid the time and expense of further administrative proceedings and to reach a satisfactory resolution of the matter, all of the involved parties entered into settlement agreements. The agreements did not constitute an admission of liability or fault on the part of any party. On July 1, 2019, Pacific Horizon entered into an agreement to pay $325,000 plus accrued interest to HUD. On July 11, 2019, the two loan officers entered into an agreement and collectively agreed to pay a total amount of $15,000 to HUD.

This report presents the OIG’s assessment of GAO’s compliance with Federal Information Security Modernization Act of 2014 (FISMA) requirements.FISMA requires federal agencies to develop, document, and implement an agency-wide information security program for the information and systems that support their operations and assets, including those provided or managed by another agency or contractor. Although GAO, as a legislative branch agency, is not subject to FISMA, its management has chosen to use FISMA as a set of best practices for its information security program. While GAO has defined an information security program that is generally aligned with FISMA the OIG identified several opportunities for GAO to improve the implementation of its information security program and to ensure alignment with federal best practices.The OIG identified opportunities for GAO to strengthen its risk management program. Specifically, GAO needs to better document a key element of its risk management program, complete impact assessments for all systems, and update it procedures to ensure that standard contract language aligns with NIST guidelines as appropriate.In addition to improvements in risk management, there are also opportunities for GAO to better protect its systems. Information system vulnerabilities, especially those designated as high and critical, need to be remediated in a timely manner. Further, baseline configurations, which help ensure consistent secure deployment of hardware and software, had not been documented for all existing environments.GAO also has opportunities to improve its disaster recovery program. Contingency plan testing did not occur in fiscal year 2018 and one high-impact system did not have a contingency plan defined. Finally, GAO did not complete a business impact analysis which helps to inform contingency planning decisions.The OIG made eight recommendation to strengthen GAO's information security program and practices.