Federal Reports

DOL-OIG Investigations Newsletter Vol. 37 covering October 1 - November 30, 2021

This report contains information about recommendations from the OIG's audits, evaluations, reviews, and other reports that the OIG had not closed as of the specified date because it had not determined that the Department of Justice (DOJ) or a non-DOJ federal agency had fully implemented them. The list omits information that DOJ determined to be limited official use or classified, and therefore unsuitable for public release.The status of each recommendation was accurate as of the specified date and is subject to change. Specifically, a recommendation identified as not closed as of the specified date may subsequently have been closed.

The U.S. Environmental Protection Agency’s Office of Inspector General, Administrative Investigations Directorate, has identified several concerns regarding the U.S. Chemical Safety and Hazard Investigation Board’s compliance with U.S. Office of Personnel Management regulations and CSB board orders related to Senior Executive Service employee annual performance appraisals for appraisal years 2020 and 2021.

We found the fund’s financial statements, except for accounts receivable and earned revenue, to be fairly presented.

An Amtrak electrician based in Chicago, Illinois, was terminated from employment on December 28, 2021, following his administrative hearing. Our investigation found that the former employee violated company policies by failing to report his prior guilty pleas and conviction on his initial application and background check form and also failed to disclose his alcohol-related arrest while employed with the company. Additionally, our investigation found that the employee violated company policy by engaging in outside employment while on medical leave and lying to our agents during his interview.

A Chef in the Ops Transportation Department based in New York City was terminated on December 28, 2021, after an administrative hearing. The former employee failed to report two drug-related arrests and one drug-related conviction to the company. Company policy requires employees to notify the company as soon as practicable after an arrest, or within 48 hours after the arrest. The employee was also untruthful with us when asked about the arrests during our investigation.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

This report summarizes the results of our fiscal year (FY) 2021 Federal Information Security Modernization Act (FISMA) evaluation and assesses the maturity of controls used to address risks in each of the nine information security areas, called domains. We assessed the effectiveness of information security programs on the required maturity model spectrum, which is a rating scale for information security. We rated the Denali Commission’s overall program of information security as “not effective.” We made four recommendations for improvements. Denali Commission management agreed with all four recommendations and outlined corrective action plans to address identified vulnerabilities.

The previously-issued audit report containing the Annual Financial Statements of the Federal Prison Industries, Inc. (FPI) for fiscal year (FY) 2021, dated December 2021, was withdrawn and removed from the OIG’s website and Oversight.gov as a result of material misstatements in FPI’s financial statements that were discovered in FY 2023. The report now linked to this page contains the auditor’s report on the FPI’s restated financial statements for FY 2021.

We found the fund’s financial statements to be fairly presented and free of material misstatement.

We found the fund’s financial statements to be fairly presented and free of material misstatement.

Amtrak (the company) contracted with the independent certified public accounting firm of Ernst & Young LLP to audit its consolidated financial statements as of September 30, 2021, and for the year then ended, and to provide a report on internal control over financial reporting and on compliance and other matters. Because the company receives federal assistance, it must obtain an audit performed in accordance with generally accepted government auditing standards.As required by the Inspector General Act of 1978, we monitored the audit activities of Ernst & Young to help ensure audit quality and compliance with auditing standards. Our monitoring focused on two Ernst & Young reports and disclosed no instances in which Ernst & Young did not comply, in all material respects, with generally accepted government auditing standards. We reached this conclusion by monitoring Ernst & Young’s audit activities, which included reviewing its reports, auditor independence and qualifications, audit plans, detailed testing results, summary work papers, and quality controls. We also attended key meetings.

Fiscal Year 2021 Independent Evaluation of the SEC’s Implementation of the Federal Information Security Modernization Act of 2014, Report No. 570

An Amtrak road foreman based in LaJunta, Colorado, was terminated from employment on December 21, 2021, after our investigation found that the former employee violated company policies by failing to report a March 2021 arrest for driving under the influence as required by company policy and lying to our agents during her interview. In addition, the employee used her position in a supervisory role to direct other employees to lie and provide false statements to our agents. Three additional employees were issued final disciplinary warnings and received suspensions of one week without pay.

Without fully implementing web analytics, the EPA could be without vital usage information to meet the needs of the public, regulatory agencies, industries, and other stakeholders when conveying environmental issues.

We audited costs claimed and grant compliance by the South Carolina Department of Natural Resources under grants awarded by the FWS. We found deficiencies in internal controls resulting in our findings of late submission of Federal Financial Reporting. The FWS concurred with the two recommendations, and we consider them resolved and implemented.

We contracted with the independent public accounting firm of CliftonLarsonAllen LLP (CLA) to audit the financial statements of FHA as of and for the fiscal years ended September 30, 2021 and 2020, and to provide reports on FHA’s 1) internal control over financial reporting; and 2) compliance with laws, regulations, contracts, and grant agreements in its financial reporting. Our contract with CLA required that the audit be performed in accordance with U.S. generally accepted government auditing standards, Office of Management and Budget audit requirements, and the Financial Audit Manual of the U.S. Government Accountability Office and the Council of the Inspectors General on Integrity and Efficiency.In its audit of FHA, CLA reported:The consolidated financial statements as of and for the fiscal year ended September 30, 2021, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles.One material weakness and one significant deficiency in internal control over financial reporting, based on the limited procedures that it performed.A material weakness existed related to FHA controls over financial accounting and reporting. A significant deficiency existed related to FHA econometric modeling activities used to estimate the agency’s loan guarantee liability.No reportable noncompliance issues for fiscal year 2021 with provisions of applicable laws, regulations, contracts, and grant agreements tested and no other matters.We will provide a replacement report for posting, once HUD publishes its Agency Financial Report, which will include this report and the audited financial statements.

The objectives of our review were to review States’ initial 45-day GEER Fund reports to determine how States plan to allocate funds to entities within the three authorized categories: local educational agencies (LEA), institutions of higher education (IHE), and education-related entities, and the criteria upon which these decisions were based; and review GEER Fund annual reports to identify changes to and progress made from the initial plans in the 45-day reports.We found that within the three authorized entity categories, 45 States (87 percent) planned to allocate GEER funds to LEAs, 39 States (75 percent) planned to allocate funds to IHEs, and 36 States (69 percent) planned to allocate funds to other education-related entities. Further, we found that 41 States (79 percent) planned to allocate GEER funds among more than one entity category. Of the remaining 11 States, 5 States (10 percent) planned to allocate funds to only LEAs, 3 States (6 percent) to only IHEs, and 2 States (4 percent) to only other education-related entities. One State did not include information that specified its intended allocation of funds by entity category.

The VA Office of Inspector General (OIG) audited the accuracy of data used to measure VA’s capacity to provide specialty health care to veterans. The data will be used to identify gaps in care and implement recommendations for modernizing or realigning VA facilities to fill those gaps, as required by the VA MISSION Act of 2018. Using data from interviews with over 1,800 officials, the Veterans Health Administration (VHA) Office of Strategic Planning and Analysis assessed the capacity to provide health care in each of VA’s 96 geographic market areas. The OIG looked for areas where the risk of materially inaccurate data was highest and focused its audit on the accuracy of three specialty care data components: workload, wait times, and provider clinical time allocations. The OIG concluded that only the workload data inaccuracies were significant enough to affect management decisions. The OIG estimated VHA’s reported fiscal year 2019 workload for 12 specialties across all care providers was overstated by 10.7 percent, which amounts to about 563 full-time equivalent physician positions based on the average workload. This overstatement of workload could result in an inefficient use of taxpayer dollars and diminish access to care for veterans if it leads VA officials to not place staffing resources where they are needed. Without a clear understanding of the work performed, VHA cannot be sure management decisions are based on verifiable, documented services provided that will result in the most efficient allocation of taxpayer funds. The OIG recommended that the acting under secretary for health perform additional analyses to ensure materially accurate specialty care workload data are used to implement recommendations from the Asset and Infrastructure Review Commission.

The VA Office of Inspector General (OIG) Vet Center Inspection Program provides a focused evaluation of aspects of the quality of care delivered at vet centers. This report focuses on Pacific district 5 zone 2 and four selected vet centers—Fresno, High Desert, and Santa Cruz County in California; and Honolulu, Hawaii. The OIG inspection focused on six review areas—leadership and organizational risks; quality reviews; COVID-19 response; suicide prevention; consultation, supervision, and training; and environment of care.Generally, district leaders were knowledgeable about healthcare quality improvement and shared actions taken during the past 12 months in response to VA All Employee Survey results. District 5 zone 2 Vet Center Service Customer Feedback survey results exceeded national scores in four of the six categories.The OIG conducted an analysis of vet center quality reviews required to ensure compliance with policy and procedures and made four recommendations for clinical and administrative quality reviews.The COVID-19 response review showed that supplies were adequate and safety practices, including wearing of masks and practicing safe social distancing, were used throughout the zone. Overall, employees’ responses indicated that communication from district leaders and Vet Center Directors was adequate to ensure the safety of clients and staff.The suicide prevention review included a zone-wide evaluation of electronic client records and a focused review of four selected vet centers. The OIG issued eight recommendations—seven specific to electronic client records and one for selected vet centers’ suicide prevention and intervention processes.The consultation, supervision, and training review evaluated the four vet centers. The OIG identified concerns with external clinical consultation, supervision, and training, and issued four recommendations.The environment of care review evaluated the four vet centers. The OIG made one recommendation.The OIG issued a total of 17 recommendations for improvement to the District Director.

To view the survey, click here: https://experience.arcgis.com/experience/3fc1a22086fc4568b9747cae1289775b

CFTC Financial Statements Audit: Fiscal Year (FY) 2021

We did not substantiate a Complainant’s allegations of whistleblower retaliation against the National Park Service.

Kevin Nelson, a resident of New York, was sentenced in U.S. District Court, Eastern District of New York, on December 16, 2021, to two years’ imprisonment and ordered to pay $287,805 in restitution to Amtrak. He pleaded guilty to Aggravated Identity Theft for his involvement in an Amtrak eVoucher scheme on August 30, 2021. Nelson and his co-conspirators used stolen credit card and personal information to make unauthorized purchases of Amtrak tickets and then cancelled or exchanged those tickets for eVouchers. Subsequently, they sold the fraudulently obtained eVouchers on the internet. The approximate loss to Amtrak from the scheme was $450,000.

This insights report provides a contextual understanding of the cross-cutting challenges states faced within their unemployment insurance (UI) programs and highlights the substantial work that has been done by State Auditors to ensure their states’ UI programs are functioning effectively. This report examines four common insights across 16 State Auditor Offices: (1) UI workloads surged for states; (2) the claims surge exploited internal control weaknesses; (3) uncommon and varying fraud schemes began to occur as the amount of federal funding expanded; and (4) state workforce agencies experienced information technology system challenges

The Veterans Health Administration (VHA) uses contractors to provide oxygen services to veterans who need respiratory care in their homes. The OIG examined whether VHA’s oversight of the home oxygen program ensured (1) patients received reevaluation of their need for home oxygen and home visits were conducted as required, and (2) contractor performance was monitored and invoicing and payments were checked for accuracy.The OIG found that prescribing providers did not always reevaluate home oxygen patients timely and medical facility staff did not always conduct home visits for the required number of patients. As a result, VHA lacked an essential component for ensuring patient safety and high quality vendor service. In addition, contract monitoring by contracting officers and their representatives was inadequate, caused by a lack of oversight and differing interpretations of guidance. Payments, however, were generally processed accurately.During the audit, the team also found that VHA paid for services using expired contracts for two facilities: the Charlie Norwood VA Medical Center in Augusta, Georgia, and the Ralph H. Johnson VA Medical Center in Charleston, South Carolina.The OIG made six recommendations to the under secretary for health. These included implementing guidance for managing home oxygen consults, clarifying reevaluation timelines, updating responsibilities for home visit oversight, and requiring network contracting office oversight of contracting officers to ensure completion of evaluation and quality monitoring elements and to properly designate contracting officer’s representatives. The OIG also recommended clearly communicating the processes staff should use to achieve the contract monitoring requirements in the Federal Acquisition Regulation. Regarding the expired contracts, the OIG recommended reviewing the identified orders for home oxygen services that were paid without an awarded contract and submitting a request for ratification for any unauthorized commitments to VHA’s head of contracting activity.

The OIG assessed the oversight and stewardship of funds and identified opportunities for cost efficiency at the Marion VA Healthcare System in Illinois. The review focused on four areas:1. Use of the Medical/Surgical Prime Vendor-Next Generation program. The program is a collection of contracts that streamlines purchasing and distribution for certain supplies. The team found that the system was unable to fully achieve the program’s cost savings, in part because some items were in short supply during the pandemic or on back order with the prime vendor.2. Purchase card use. The team did not find staff were improperly splitting purchases to stay below the card purchase limits. Moreover, system staff properly maintained supporting documentation for the sampled transactions and considered contracts instead of purchase cards when appropriate. However, the purchase card program coordinator did not always perform required quarterly audits, and oversight on training for cardholders could be strengthened.3. Open obligations. The team found that the system’s fiscal staff did not always review open obligations for goods and services to determine if they were still valid and necessary. This leaves the system vulnerable to the risk that those funds will be not used in the year they were appropriated, as required.4. Pharmacy operations and cost-savings efforts. The review team found the system had a significant gap between actual and expected drug costs when compared with like facilities. However, it achieved a higher inventory turnover rate than VA’s target rate, which helps reduce the cost of storing inventory.The OIG made eight recommendations for improving cost efficiency. The number of recommendations should not be used, however, to gauge the system’s overall financial health. The intent is for system leaders to use these recommendations as a road map for improvement in the areas reviewed.

The Office of the Inspector General conducted a review of Browns Ferry Nuclear Plant (BFN) Chemistry to identify factors that could impact BFN Chemistry’s organizational effectiveness. During the course of our evaluation, we identified behaviors that had a positive impact on BFN Chemistry, including positive relationships between team members and most management. However, we also identified a minimal behavioral risk related to communication with first-line management. In addition, we identified minimal risks to operations that, if unaddressed, could hinder BFN Chemistry’s effectiveness. These risks related to nonfunctioning equipment and perceptions of inadequate staffing.

The VA Office of Inspector General (OIG) conducted a healthcare inspection at the VA Southern Nevada Healthcare System (facility) in Las Vegas to assess an allegation that the facility failed to diagnose and treat a patient’s cancer. The OIG identified concerns about potential deficiencies in lung cancer screening, prostate cancer surveillance, consult delay, documentation, and the facility’s response to family complaints.The OIG substantiated that providers failed to make a cancer diagnosis and treat the patient’s cancer. Providers did not take steps that would have allowed them to make a diagnosis, including ordering screening tests. In fall 2020, the patient was found to have left lung primary lung cancer with metastasis to brain, liver, and other areas. The patient died three weeks later.The patient had known lung cancer risk factors that warranted annual screening. The OIG did not find evidence beyond 2013 that pulmonology staff followed up, or that after 2017, primary care providers ensured completion of annual screening. Additionally, the OIG determined that primary care providers did not follow up after a radiology finding that a renal nodule had increased in size. The OIG found that after summer 2016, the patient did not have annual testing completed to check for prostate cancer recurrence. The OIG determined that one primary care provider delayed ordering an oncology consult for 25 days, copied and pasted documentation, and did not document an assessment of the patient’s lung nodules, as required. The OIG found that facility staff documented resolution of a family member’s complaint despite not contacting the family.The OIG made five recommendations to the Facility Director related to evaluation of lung cancer screening and follow-up care; follow-up for abnormal radiology findings; surveillance for patients who have undergone prostatectomy; copy and paste practices and documentation; and review of complaint reporting and responding.

The Baltimore Processing and Distribution Center (P&DC) is in the Chesapeake Division of the Eastern processing region and that facility processes letters, flats, and packages. From August 1, 2020, to July 31, 2021, the Baltimore P&DC processed about 1.67 billion mailpieces compared to about 1.74 billion mailpieces during the same period last year — a decrease of about 70 million mailpieces (4 percent). However, during that same period, workhours and overtime at the facility increased by 14.6 and 43.5 percent, respectively.Recently, the OIG audited nine Baltimore delivery units as part of a congressional request to evaluate mail delivery and customer service operations on selected routes. The objective of this separate but related self-initiated audit was to evaluate the efficiency of plant operations at the Baltimore, MD, P&DC. This audit was completed to identify mail processing issues at the Baltimore P&DC that could affect delivery units served by this P&DC.

This final report provides the results of our evaluation of the U.S. Department of Commerce’s (the Department’s) processes for handling hotline complaints referred by the Office of Inspector General (OIG). The objective of our evaluation was to review the Department’s processes for responding to hotline complaint referrals where OIG requests that the Department conduct an inquiry and provide a response detailing its results (also known as H referrals). Overall, we found that the Department lacked an effective process and internal controls over its hotline \ referrals. This report includes recommendations for the Department to implement internal controls for addressing H referrals efficiently and effectively. See appendix A for specific details on our objective, scope, and methodology.

The OCFO cannot provide reasonable assurance that crosscutting risks are identified and mitigated and that Agency resources are directed to the most critical strategic needs.

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), completed an audit to determine whether FHA-insured borrowers properly received the COVID-19-related forbearance.  The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law on March 27, 2020, provided a mortgage payment forbearance option for all borrowers who suffered a financial hardship due to the COVID-19 national emergency.We found that at least one-third of the nearly 335,000 borrowers who were delinquent on their FHA-insured loans and not on forbearance in November 2020, were either not informed or misinformed about the COVID-19 forbearance.  As a result, these borrowers experiencing a hardship due to COVID-19 did not benefit from the COVID-19 forbearance.  We also found that servicers improperly administered the forbearance for at least one-sixth of the nearly 815,000 borrowers on forbearance plans in November 2020.  Servicers also performed excessive communication and collection efforts for borrowers who were already in forbearance. As a result, these borrowers experienced additional burdens from improperly administered forbearance.We recommend that FHA identify borrowers who are delinquent and did not fully benefit from the COVID-19 forbearance and ensure that information about the CARES Act and COVID-19 forbearance is distributed to these borrowers. We also recommend that FHA review the 21 loans in our statistical sample with improperly administered forbearance to ensure that the borrowers were assisted by the servicers, if possible, and ensure that these servicers updated their forbearance procedures to prevent future noncompliance; ensure that the issues found during our audit are incorporated into servicing monitoring reviews to deter future noncompliance and prevent potential loss to the FHA fund; and provide additional guidance to the servicers so that they limit their communication and collection efforts for the borrowers in forbearance.

Independent Auditors' Report on the Government Publishing Office (GPO) fiscal year (FY) 2021 Financial Statements.

In connection with the audit of the U.S. Government Publishing Office fiscal year (FY) 2021 financial statements, attached is the information technology (IT) management letter issued by the independent public accounting firm of KPMG LLP (KPMG).

In connection with the audit of the U.S. Government Publishing Office fiscal year (FY)2021 financial statements, attached is the non-information technology (IT) management letter issued by the independent public accounting firm of KPMG LLP (KPMG).

This audit repoort concluded that the FCC’s information security program was effective and in compliance with FISMA legislation, OMB memoranda, and other applicable guidance. This is the first year that the agency’s information security program has been in compliance, which is a significant accomplishment. The FISMA evaluation report includes seven findings and offers 13 recommendations intended to improve the effectiveness of the FCC’s information security program controls.