Federal Reports

During our audit period, Palmetto was a subsidiary of Blue Cross Blue Shield of South Carolina (BCBS South Carolina), whose home office is in Columbia, South Carolina. Palmetto administers Medicare operations under the MAC contracts for Medicare Parts A and B Jurisdiction 1 and Jurisdiction 11 effective October 25, 2007, and May 21, 2010, respectively, as well as other CAS-covered and FAR-covered contracts. Currently, Palmetto is the Medicare Parts A and B contractor for Jurisdictions J and M (formerly Jurisdiction 11). Palmetto also continues to perform Railroad Retirement Board contract operations under a specialty MAC contract awarded on November 27, 2012. During our audit period, CMS and BCBS South Carolina entered into an agreement called the “Advance Agreement Regarding the Computation of Nonqualified Defined Benefit Pension Plan Costs for the Periods Beginning January 1, 2015” (agreement). This agreement allowed BCBS South Carolina to change its accounting methodology from a pay-as-you to an accrual method. This agreement also closed costs prior to January 1, 2015. Starting with January 1, 2015, the Excess Plan would, under the terms of this agreement, have three Medicare segments: (1) Palmetto, (2) Companion Data Services, LLC (CDS), and (3) Partial Medicare. This report addresses Palmetto’s compliance with the pension segmentation language under the provisions of Federal requirements and its Medicare contracts. We are addressing the Excess Plan Medicare segment pension assets for the CDS and Partial Medicare segments in separate audits. BCBS South Carolina sponsors the Excess Plan. The purpose of the Excess Plan is to provide benefits in excess of the limits imposed by the Employee Retirement Income Security Act of 1974 for participants in BCBS South Carolina’s qualified defined-benefit plan.

The Office of Inspector General (OIG) is commencing the Fiscal Year 2021 Financial Statement Audit. The objective of the audit is to express an opinion on whether the financial statements are fairly presented, in all material respects, in accordance with the U.S. generally accepted accounting principles for Federal entities. For Federal entities not covered by the Chief Financial Officers Act (CFO Act), the Accountability of Tax Dollars Act of 2002 (ATDA) requires those Federal agencies and entities to prepare and submit audited financial statements to the Office of Management and Budget (OMB) and Congress.

The Office of Inspector General (OIG) is issuing this Management Alert regarding serious concerns with the control environment and the tracking of performance results in the Shuttered Venue Operators Grant (SVOG) program requiring immediate attention and action.SBA should take immediate action to reduce or eliminate risks by strengthening existing controls and implementing internal controls to address potential misuse of federal funds. Strong controls will ensure the SVOG program can effectively help eligible small business owners and entities that have suffered economic injury because of the COVID-19 pandemic.To address serious concerns and potential deficiencies in internal controls of the Shuttered Venue Operators Grant program, we suggest the Administrator:1. Reassess the audit risk plan to identify vulnerabilities, commensurate with the expected volume of applications and average award amount, to strengthen internal controls and reduce risk of misuse of federal funds.2. Clearly establish 2 CFR 200 criteria for the program to ensure compliance during the implementation and oversight phases.3. Implement required performance measures to determine the impact of program funds.4. Ensure sufficient resources are available to implement and oversee the SVOG program.

Contact OIGTo obtain further information about this Classified or Sensitive but UnclassifiedReport, please contact the OIG Office of Counsel atOIGCounsel@oig.treas.gov, (202) 927-0650, or by mail at Office of TreasuryInspector General, 1500 Pennsylvania Avenue, Washington DC.

We issued this to review the Social Security Administration’s telephone services during the COVID-19 pandemic, specifically during June 2020.

NHS is a subsidiary of Blue Cross Blue Shield of North Dakota (BCBS North Dakota) (formerly Noridian Mutual Insurance Company), whose home office is in Fargo, North Dakota. NHS administered Medicare Part A, Medicare Part B, and Medicare Durable Medical Equipment (DME) contract operations under MAC contracts for Medicare Parts A and B Jurisdictions E and F and Medicare DME Jurisdictions A and D. In addition, NHS held the Pricing, Data Analysis and Coding (PDAC) contract. Both BCBS North Dakota and NHS sponsor nonqualified plans called the Noridian Mutual Insurance Company Restoration Savings Plan and Noridian Healthcare Solutions, LLC, Restoration Savings Plan. The purpose of these plans is to provide deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974. NHS claimed nonqualified costs using the pay-as-you-go basis of accounting. This report addresses the allowable restoration costs claimed by NHS under the provisions of its MAC contracts and CAS- and FAR-covered contracts. The disclosure statement that NHS submits to CMS states that NHS uses pooled cost accounting. Medicare contractors use pooled cost accounting to calculate the indirect cost rates (whose computations include pension, postretirement benefit, Supplemental Executive Retirement Plan, and Restoration Plan costs) that they submit on their ICPs. Medicare contractors use the indirect cost rates to calculate the contract costs that they report on their ICPs. In turn, CMS uses these indirect cost rates in determining the final indirect cost rates for each contract. The Medicare contracts require NHS to calculate nonqualified costs in accordance with the FAR and CAS 412 and 413. The FAR and the CAS require that the costs for nonqualified plans be measured under either the accrual method or the pay-as-you-go method. Under the accrual method, allowable costs are based on the annual contributions that the employer deposits into its trust fund. For nonqualified plans that are not funded through the use of a funding agency, costs are to be accounted for under the pay-as-you-go method. This method is based on the actual benefits paid to participants, which are comprised of lump-sum payments and annuity payments. At CMS’s request, Kearney and Company (Kearney) performed an audit of the ICPs that NHS submitted for CYs 2015 and 2016. The objectives of the Kearney audit were to determine whether costs were allowable in accordance with the FAR, the Department of Health and Human Services Acquisition Regulation, and the CAS. For our current audit, we relied on the Kearney audit findings and recommendations when computing the allowable restoration costs discussed in this report. We incorporated the results of the Kearney audit into our computations of the audited indirect cost rates, and ultimately the restoration costs claimed, for the contracts subject to the FAR. CMS will use our report on allowable restoration costs, as well as the Kearney audit report, to determine the final indirect cost rates and the total allowable contract costs for NHS for CYs 2015 and 2016. The cognizant Contracting Officer will perform a final settlement with the contractor to determine the final indirect cost rates. These rates ultimately determine the final costs of each contract.

EAC OIG, through the independent public accounting firm of Brown and Company, LLC, audited EAC's Purchase Card Program in accordance with the Government Charge Card Abuse Prevention Act of 2012.

The VA Office of Inspector General (OIG) reviewed community-based outpatient clinic (CBOC) closures that occurred due to the COVID-19 pandemic to evaluate the impact on patient care. The OIG virtually interviewed Veterans Health Administration (VHA) staff at 140 facilities that oversaw the 1,031 CBOCs that were operational prior to the World Health Organization’s pandemic declaration.Of these CBOCs, 173 were closed to face-to-face visits on or after February 1, 2020. Reasons for closure fell into four categories including (a) safety of patients and staff, (b) need for consolidation of resources, (c) lack of staff and personal protective equipment, and (d) small size of CBOC or proximity to other CBOCs or facilities.Clinicians of closed CBOCs triaged patients care needs and provided care options. The four most reported options used were telephone visit, VA Video Connect, rescheduled appointment for a later date, or an outpatient visit at the parent facility. Based on survey responses and interviews with facility leaders, the OIG concluded that, generally, patient care needs were not interrupted.Facility personnel frequently noted several impacts of the COVID-19 pandemic on CBOC operations:• Patient trust scores increased on the Veteran Signals survey.• Patients voiced appreciation of available care options.• Virtual care visits increased, which may positively affect patient access long-term.• Process changes such as drive-through testing and care services for pharmacy, laboratory, immunizations, prosthetics, and audiology were implemented.Other responses identified challenges encountered implementing virtual care and mitigating risk of patient and staff exposure to COVID-19, including problems with bandwidth and technical issues when using VA Video Connect at rural sites and limitations in housekeeping resources.Insights gained and shared related to CBOC closures can provide valuable information for VHA to incorporate into contingency planning for future emergencies and facilitate long term changes in care delivery.The OIG made no recommendations.

The Federal Information Security Modernization Act of 2014 (FISMA) requires Inspectors General toperform an annual independent evaluation of their agency’s information security programs and practices to determine the effectiveness of those programs and practices. HHS OIG engaged Ernst &Young LLP (EY) to conduct this audit.

While its financial situation has been described as unsustainable, the services the Postal Service provides are of tremendous value to the public and businesses. We identified 9 critical services the Postal Service provides beyond general mail processing and delivery for which it is either uncompensated or undercompensated. These services generally benefit two groups: the government or business customers.

During the Peak Season Hiring audit (Project Number 20-316), we found that the U.S. Postal Service mishandled personally identifiable information (PII) for veteran employees on an internal system. The purpose of this management alert is to bring these issues to management’s attention and make recommendations for corrective action.

As required by the Inspector General Act of 1978 (as amended), this Semiannual Report summarizes the activities of the Department of Transportation Office of Inspector General for the preceding 6-month period.

This report was issued in conjunction with the Office of Inspector General for the Railroad Retirement Board's Semiannual Report to the Congress. It was incorporated by reference in the corresponding Semiannual Report which is available at the link below.

Action Development Process goals are to deliver actions that are based on sound science, promote economic efficiency, and are implementable and enforceable.

OIG evaluated the effectiveness of SBA’s process for verifying socially disadvantaged eligibility of 8(a) firms owned by enrolled members of a federally or state-recognized Indian tribe.The 8(a) program has several eligibility requirements for individually owned firms, including that the business be at least 51 percent owned, controlled, and managed by U.S. citizens who are socially and economically disadvantaged. Socially disadvantaged individuals include members of certain designated groups or any individuals who have been subjected to racial, ethnic, or cultural bias because of their identities as members of a group without regard to their individual qualities. Native Americans are one of the designated groups which includes Alaska Natives, Native Hawaiians, or enrolled members of a federally or state-recognized Indian tribe.We found that SBA adequately verified the socially disadvantaged eligibility of 8(a) firms owned by enrolled members of a federally or state-recognized Indian tribe for the majority of the applications we reviewed, despite SBA not having documented verification procedures.However, we also found two firms SBA admitted into the 8(a) program although owners were members of tribes not federally or state recognized. Program officials used subjective and inconsistent processes and unofficial information to determine whether Indian tribes were state recognized. These firms received $10.9 million in 8(a) set-aside obligations from FY 2015 through FY 2020 at the expense of eligible disadvantaged firms in the 8(a) program. We recommended that SBA document the process and procedures for verifying that Indian tribes named by individually owned firms claiming socially disadvantaged status as enrolled members are federally or state recognized and train staff on the verification procedures. We also recommended SBA review the two firms we identified that were owned by individuals who were members of Indian tribes not federally or state recognized and take prompt action to remove firms found to be ineligible. Both recommendations from this report are now closed. Socially disadvantaged individuals include members of certain designated groups or any individuals who have been subjected to racial, ethnic, or cultural bias because of their identities as members of a group without regard to their individual qualities. Native Americans are one of the designated groups which includes Alaska Natives, Native Hawaiians, or enrolled members of a federally or state-recognized Indian tribe.

This snapshot presents a summary of pandemic-related impacts to 30 of the Agency's major programs and projects at the end of fiscal year 2020 with an estimated impact of approximately $1.6 billion of the $3 billion total in COVID impact reported by NASA.

NASA Exchange and Morale Support Activities operate cafeterias, gift shops, and recreation facilities at 12 locations around the countries. The NASA Office of Inspector General reviewed financial statement reports for the exchanges.

We investigated an allegation that a program manager with the West Virginia Department of Environmental Protection (WVDEP) misused Water-Use Data and Research (WUDR) grant funds awarded by the U.S. Geological Survey (USGS) to pay WVDEP employees who did not perform work related to the grant.Our investigation determined that from February 2018 through January 2020, the WVDEP incorrectly compensated an employee using $24,550 in WUDR grant funds. This employee unknowingly received WUDR funds toward his salary and benefits but did no work in support of the grant. We did not find evidence that the WVDEP intentionally misused the grant funds. Instead, the evidence suggested that the incorrect allocation of funds occurred because of management errors within the WVDEP.As a result of our investigation, the WVDEP corrected its internal WUDR grant funding allocations to accurately reflect the personnel who performed the WUDR grant functions during this time. Our investigation also confirmed that the WVDEP completed the work set forth in the WUDR grant as required and there was no financial loss to the Government.

The Hospital is a 599-bed short-term, acute care, for profit hospital, located in Las Vegas, Nevada. According to CMS’s National Claims History (NCH) data, Medicare paid the Hospital approximately $245 million for 15,000 inpatient and 25,308 outpatient claims from January 1, 2017, through December 31, 2018 (audit period).Our audit covered about $41 million in Medicare payments to the Hospital for 2,117 claims that were potentially at risk for billing errors. We selected for review a stratified random sample of 100 claims (85 inpatient and 15 outpatient) with payments totaling $2.4 million. Medicare paid these 100 claims during our audit period.We focused our audit on the risk areas that we identified as a result of prior OIG audits at other hospitals. We evaluated compliance with selected billing requirements.

This audit report shows the FCC determined that the agencywide charge card program’s risk of illegal, improper, or erroneous use was low and did not plan to include an audit or inspection of the FCC's purchase card and travel card programs in the OIG’s fiscal year 2021 and 2022 work plan.

The VA Office of Inspector General (OIG) conducted a national review to evaluate colonoscopy care delivered in Veterans Health Administration (VHA) multispecialty community-based outpatient clinics (CBOC). This review focused on quality indicators for CBOC colonoscopy providers’ practice evaluations, the extent to which CBOC colonoscopy procedure quality assurance monitoring occurred, CBOC emergency care preparations, and facility and national quality assurance monitoring.The OIG determined that VHA’s required colonoscopy quality indicators were not monitored in a standardized way that allowed for verification of the quality of colonoscopies performed by CBOC providers.Further, the OIG determined that colonoscopy quality indicator data was not analyzed for CBOC providers in a way that facilitated comprehensive quality assurance. CBOC, facility, and VHA leaders could not consistently identify gaps in colonoscopy quality at the CBOCs due to lack of standardized monitoring processes.CBOC staff managed potential risks associated with colonoscopy procedures and complied with VHA requirements for monitoring patients during colonoscopies, having emergency medical equipment available, and having an after-hours medical emergency policy.VHA’s colorectal cancer screening directive lacked requirements for monitoring compliance with VHA’s colonoscopy quality indicators, and the OIG identified potential recurring gaps in colonoscopy quality monitoring.The OIG identified limitations in VHA’s National Gastroenterology Program Office’s ability to monitor colonoscopies for quality assurance because of variations in quality indicator data collection and lack of consistency in implementation of endoscopy software as a data collection tool.The OIG made three recommendations to the Under Secretary for Health related to requirements for colonoscopy quality indicators in professional practice evaluation, colonoscopy quality assurance monitoring, and evaluating and recommending endoscopy software for standardized implementation for quality assurance monitoring.

To see our report, click on the link below

HHS-OIG'S Semiannual Report to Congress describes OIG's work identifying significant risks, problems, abuses, deficiencies, remedies, and investigative outcomes relating to the administration of HHS programs and operations that were disclosed during the semiannual reporting period October 1, 2020, through March 31, 2021.

This report summarizes work that we initiated and completed during this semiannual period on a number of critical Departmental activities. Over the past 6 months—in addition to issuing our annual Top Management and Performance Challenges Facing the Department of Commerce—our office issued 20 products related to our audit, evaluation, inspection, and public investigative work. These products addressed programs and personnel associated with the Bureau of Industry and Security (BIS), U.S. Census Bureau, U.S. Economic Development Administration (EDA), First Responder Network Authority (FirstNet Authority), International Trade Administration (ITA), United States Patent and Trademark Office (USPTO), and the Department itself. This report also describes our investigative activities addressing programs and personnel associated with the National Oceanic and Atmospheric Administration (NOAA) and the Department itself.

In June 2020, we received letters from members of Congress, including the chairpersons of the House Committee on Financial Services and Oversight and Investigation Subcommittee, expressing concern that the U.S. Department of Housing and Urban Development (HUD) imposed a new, nonpublic, and legally erroneous policy that prohibited issuing Federal Housing Administration (FHA)-insured loans to Deferred Action for Childhood Arrivals (DACA) recipients. The letters included a concern that HUD had made DACA borrowers ineligible by changing residency requirements within the FHA Single Family Housing Policy Handbook (HUD Handbook 4000.1) in violation of the Administrative Procedures Act. In response to the letters from Congress, we announced an evaluation with the following objectives in December 2020.To determine1. whether HUD provided lenders with uniform and accurate guidance regarding borrower residency requirements outlined in HUD Handbook 4000.1 and2. how HUD oversees residency eligibility requirements for single-family borrowers.In January 2021, HUD announced that DACA recipients that are legally permitted to work in the United States may apply for FHA-insured mortgages, effective January 19, 2021. HUD shared its announcement through its FHA INFO email subscription so that FHA-approved lending partners would be aware of the change. HUD also posted the announcement to its waiver database website. To prepare to respond to inquiries from the public, HUD updated two Frequently Asked Questions (FAQ) files, and created an additional FAQ file in its FHA Resource Center to reflect the announcement. HUD plans to update HUD Handbook 4000.1 to reflect the announced eligibility change by approximately April 2021.As a result of HUD’s policy update, we have closed our evaluation.

What We Looked AtThe Federal Aviation Administration's (FAA) Next Generation Air Transportation System (NextGen) is a multibillion dollar infrastructure project aimed at modernizing our Nation's aging air traffic system to provide safer and more efficient air traffic management. Since 2006, our office and others have identified a number of challenges to implementing NextGen programs and capabilities, which have led to program delays and lower usage of new capabilities. Given these concerns, the FAA Reauthorization Act of 2018 mandated that the Office of Inspector General (OIG) study the potential impacts of a significantly delayed, diminished, or completely failed delivery of NextGen. Our audit objectives were to (1) compare the current expected benefits of NextGen with the initial projections and identify the reasons for revising those projections and (2) identify lessons learned from developing and implementing significant air traffic modernization programs.What We FoundNextGen's actual and projected benefits have not kept pace with initial projections due to implementation challenges, optimistic assumptions, and other factors. FAA's most recent business case projects total NextGen benefits to be over $100 billion less than the Joint Planning and Development Office's original estimate, and benefits actually achieved to date have been minimal and difficult to measure. FAA's projections were optimistic about traffic growth and did not account for risk factors. We also found that significant declines in air traffic due to COVID-19 have further extended the timeframe for realizing expected NextGen benefits. In addition, prior OIG NextGen-related work has identified lessons that FAA could use to improve NextGen delivery. For example, while FAA has collaborated with industry to prioritize, implement, and measure benefits of NextGen programs, there are still opportunities for improving transparency, which will be critical to secure industry's long-term investment. Further advancing NextGen will depend on resolving complex implementation challenges, including effectively prioritizing programs, integrating interdependent capabilities, and harnessing controller automation tools to achieve benefits.Our RecommendationsFAA concurred with our three recommendations to improve NextGen delivery and other future National Airspace System modernization efforts, and provided appropriate actions and completion dates. Accordingly, we consider all recommendations resolved but open pending completion of the planned actions.

This report found that SBA awarded the CARES Act entrepreneurial development cooperative agreements and grants in accordance with applicable federal laws, regulations, and guidance. We found program officials established performance goals and identified performance indicators. To more effectively ensure performance goals are achieved as intended, SBA should clearly define the performance goals and set performance targets.We recommended that SBA enforce standard operating procedures requiring defined performance goals and include performance targets in all future SBDC and WBC cooperative agreements and grants. We also recommended that SBA collect and analyze the CARES Act entrepreneurial development cooperative agreement recipient’s performance results and establish a goal-setting process for technical assistance programs established for future disasters. SBA management agreed with both recommendations.

This report presents the results of our self-initiated audit to assess the management of Highway Contract Route (HCR) irregularities due to contractor failure at the New Jersey International (NJI) Network Distribution Center (NDC).

A management official and a company Inspector violated Amtrak policies by accepting gifts and favors from a construction contractor who was awarded a $58 million contract by the company. The management official received gifts from the contractor, including three trips to Philadelphia, and drinks and entertainment at a gentleman’s club. His employment with the company was terminated on February 1, 2021. The Inspector received gifts from the contractor, which included a furnace for his church, a suit, and a pair of shoes. His employment with the company was terminated on March 30, 2021.

We investigated allegations that Nathan Shumaker, a service supervisor employed with Alliance Energy Services, LLC, knowingly discharged oil from the offshore platform known as Vermillion 124F into the Gulf of Mexico (GOM) in 2016.Black Elk Trust operated the Vermillion 124F platform located on a Federal lease in the GOM and hired Montco Oilfield Contractors, LLC, to perform work on the offshore platform. Montco hired Alliance as a subcontractor to perform plugging and abandonment operations associated with the platform.We conducted a joint investigation with the Environmental Protection Agency’s Criminal Investigation Division and found that Shumaker discharged oil mixed with produced water into the GOM from a “gas buster” tank located on the Vermillion 124F platform. Shumaker discharged the fluid over the objection of another concerned employee. Shumaker also discussed the discharge with Thomas Wharton, Montco’s company representative in charge of the platform and the individual who had ultimate work authority. Because of his position, Wharton was legally responsible for reporting the discharge to Federal authorities, but he failed to do so.The U.S. Attorney’s Office, U.S. Department of Justice, prosecuted this matter in the United States District Court for the Western District of Louisiana. As a result, Shumaker pleaded guilty to a violation of 33 U.S.C § 1319(c)(1)(A), “Negligent Violation of the Clean Water Act,” and on December 14, 2020, he was sentenced to 1 year of probation, issued a $2,500 fine, and issued a $25 special assessment. Wharton pleaded guilty to a violation of 33 U.S.C. § 1321(b)(5), “Failure to Notify Authorities Under the Oil Pollution Act,” and on December 7, 2020, he was sentenced to 24 months of probation, issued a $10,000 fine, and issued a $100 special assessment.

We audited the U.S. Department of the Interior’s (DOI’s) Interior Business Center (IBC), which manages procurements for over 50 Federal and State client agencies, to determine whether its internal control system was sufficient to ensure that it followed the Federal Acquisition Regulation (FAR) or other applicable regulations when awarding procurements on behalf of its clients.We found that the IBC had deficiencies in the internal controls designed to ensure that procurement files are complete and accurate. Due to these deficiencies, the IBC did not have an adequate internal control system to ensure that it followed the FAR when awarding procurements. Thirty-three percent of the 85 procurement files we reviewed for our audit had missing or incomplete supporting documentation, or the files themselves were missing.Our report offers four recommendations to help the IBC improve its preaward practices and oversight.

We evaluated the U.S. Department of the Interior’s (DOI’s) and the U.S. Geological Survey’s (USGS’) implementation of Phase 1 of the Continuous Diagnostics and Mitigation (CDM) program for a USGS system. Our evaluation revealed control deficiencies for hardware and software asset management and configuration management. Specifically, the DOI did not require bureaus and offices to maintain accurate hardware asset inventories for information systems, which prevented them from monitoring key security metrics through the DOI’s CDM dashboard. We also found that the DOI did not implement software blacklists or whitelists to help ensure that unapproved, unsupported, or potentially malicious software was not present on system computing devices. Further, we found that the USGS failed to require systems to operate with only those ports, protocols, and services necessary for essential operations, which increased their vulnerability to attack, and that the USGS did not timely mitigate vulnerabilities on USGS-owned system assets.

We conducted this audit to determine whether the DOI and its bureaus included the required documentation for charge card transactions, properly used fiscal year (FY) 2019 disaster relief funds, and properly allocated FY 2019 disaster relief funds when using U.S. Government charge cards.We found that the Bureau of Reclamation, U.S. Fish and Wildlife Service (FWS), National Park Service (NPS), and U.S. Geological Survey (USGS) had incidents of missing or insufficient documentation to support purchases. We also found the FWS, NPS, and USGS used FY 2019 disaster relief funds to purchase items that were not associated with the allowable uses Congress identified. We question $83,165 in costs allocated to the FY 2019 disaster relief funds. We note that the bureaus properly allocated most FY 2019 Government charge card purchases using disaster relief funds. We also identified two other matters related to charge card use in emergency situations and disaster relief expense reallocations.We make eight recommendations to help the DOI and its bureaus resolve questioned costs and strengthen internal controls over disaster relief funds and the Government charge card program. Based on the DOI’s response to our draft report, we consider four recommendations to be resolved and implemented, three recommendations to be resolved but not implemented, and one recommendation to be unresolved. We will refer four recommendations to the Office of Policy, Management and Budget for resolution and implementation tracking.

This report presents the results of our audit of Agreement Nos. A17AV00656, A16AV00812, and A15AV00702 between the Bureau of Indian Education (BIE) and St. Stephens Indian School Educational Association, Inc., which provided St. Stephens a total of $12.5 million to operate elementary and high school facilities owned by the Bureau of Indian Affairs (BIA) between July 2015 and June 2018.We conducted this audit to determine whether agreement expenses were allowable and St. Stephens complied with applicable laws and regulations, BIE and BIA guidelines, and agreement terms and conditions. We reviewed transactions charged to the agreements totaling $5.8 million.We found multiple instances in which St. Stephens did not use agreement funds for allowable activities and did not comply with applicable Federal regulations and agreement provisions, which led us to identify $442,632 in funds that could be put to better use and question $35,432 of St. Stephens’ claimed costs. In addition, we determined that the BIE did not consistently oversee St. Stephens agreements in accordance with applicable regulations and BIA policy.We make 11 recommendations to help the BIE and the BIA resolve questioned costs and provide better oversight to St. Stephens.

The Federal Information Security Modernization Act (FISMA) requires Federal agencies to have an annual independent evaluation of their information security programs and practices. This evaluation is to be performed by the agency’s Office of Inspector General or by an independent external auditor to determine the effectiveness of such programs and practices. The U.S. Department of the Interior (DOI) contracted with KPMG, an independent public accounting firm, to complete a FISMA audit for fiscal year 2020.KPMG reviewed information security practices, policies, and procedures at the DOI Office of the Chief Information Officer and 11 DOI bureaus and offices. The audit revealed that improvements were needed in the areas of risk management, configuration management, identity and access management, the data protection and privacy program, the security training program, and contingency planning. Based on these findings, KPMG made 32 recommendations intended to strengthen the DOI’s information security program as well as those of the bureaus and offices.The DOI’s Office of the Chief Information Officer has concurred with all 32 recommendations and established a target completion date for each corrective action.

Our ongoing review of the use of Coronavirus Aid, Relief, and Economic Security (CARES) Act funds has identified a significant number of transactions that appear to be impermissible split purchases and that reflect possible misuse of U.S. Department of the Interior (DOI) purchase cards. We are examining some of these transactions as potential fraud. Previous investigative and audit reports from our office have identified gaps in bureau oversight of the DOI’s Government Purchase Card Program.Until effective controls are implemented and enforced consistently throughout all bureaus and offices, the DOI’s Government Purchase Card Program will continue to be at risk for improper purchases and other noncompliance with applicable laws and regulations.In this management advisory we describe findings related to our review of pandemic-related DOI purchase card transactions, specifically (1) a number of transactions that appeared to be prohibited split purchases and (2) ineffective or missing internal controls over purchase card use. We make three recommendations to help the DOI prevent fraud, waste, and mismanagement in its Government Purchase Card Program.

To see our report, click on the link below

The evaluation of AmeriCorps grants awarded to the Maine Commission for Community Service (the Commission) and one of its 14 subgrantees (LearningWorks) identified questioned Federal costs of $254,014, questioned match costs of $592,737, and compliance findings, covering the three years beginning January 1, 2016. The questioned costs arose from insufficient support for the valuations attached to in-kind claimed for contributed classroom and office space and labor donated by participating schools.The Commission and LearningWorks responded jointly to address the report’s findings and recommendations. The Commission agreed to improve its subgrantee monitoring and to train its staff regarding how to support in-kind match contributions. LearningWorks continues to assert that it properly valued and supported the in-kind match donations but nevertheless agreed to improve its documentation. AmeriCorps generally concurred with our recommendations and will resolve the questioned costs during audit resolution. Further, AmeriCorps promised to work with the Commission to strengthen its internal controls surrounding acceptable in-kind documentation from its subgrantees.

We identified violations of U.S. Immigration and Customs Enforcement (ICE) detention standards that threatened the health, safety, and rights of detainees. La Palma Correctional Center (LPCC) complied with the ICE detention standard regarding classification. However, detainee reports and grievances allege an environment of mistreatment and verbal abuse, including in response to peaceful detainee protests of the facility’s handling of the pandemic. In addressing the coronavirus disease 2019 (COVID-19), LPCC did not enforce ICE’s precautions including facial coverings and social distancing, which may have contributed to the widespread COVID-19 outbreak at the facility. In addition, LPCC did not meet standards for medical care, segregation, grievances, or detainee communication. We found that the medical unit was critically understaffed, took an average of 3.35 days to respond to detainee sick call requests, and neglected to refill some prescription medications. We also found the facility was not consistently providing required care for detainees in segregation and did not consistently record medication administration and daily medical visits for segregated detainees. Our grievance review revealed that LPCC did not give timely responses to most detainee grievances and, in some cases, did not respond at all. Finally, we found deficiencies in staff-detainee communication practices. Specifically, LPCC did not keep records of detainee requests and ICE did not provide a Deportation Officer visit or call schedule for detainees. We made eight recommendations to ICE’s Executive Associate Director of Enforcement and Removal Operations (ERO) to ensure the Phoenix ERO Field Office overseeing La Palma addresses identified issues and ensures facility compliance with relevant detention standards. ICE concurred with three of the eight recommendations.

Prior OIG work found that Medicare inappropriately paid for services that were billed as being distinct or significant and separately identifiable from other services provided on the same day. Our analysis showed that in 2018, an ophthalmology clinic in California (the Clinic) frequently billed for other services as being unrelated to, distinct from, or significant and separately identifiable from intravitreal (inside the eye) injections of the drugs Eylea and Lucentis.Our objective was to determine whether the Clinic complied with Medicare requirements when billing for intravitreal injections of Eylea and Lucentis and for other services provided on the same day as the injections.

We are proud to present the vision of the AOC OIG for the next five years that includes goals to continue efficiency and effectiveness of our internal processes and strengthens our statutory mission of independent oversight of the AOC’s programs and operations.

The Postal Service is required to maintain a safe and healthy environment for both employees and customers in accordance with its internal policies and procedures and Occupational Safety and Health Administration (OSHA). Our objective was to determine if Postal Service management is adhering to building maintenance, safety and security standards, and employee working condition requirements at post offices.

The EPA’s inspection frequency of Treatment, Storage, or Disposal Facilities with Resource Conservation and Recovery Act units closed with waste in place does not meet the EPA’s statutory requirement or policy.

From March through September 2020, the Postal Service separated pandemic-related expenses from daily operating expenses to determine the financial impact. These pandemic-related expenses included supplies, services, transportation expenses, and sick and annual leave expenses, among others. Some expenses, such as supplies and services, were directly tracked while others, like transportation expenses, were estimated. Our objective was to assess the impact of the pandemic on Postal Service finances.

We audited rent credits that the U.S. Department of Housing and Urban Development (HUD) received from the U.S. General Services Administration (GSA) during fiscal years 2015 through 2018 in exchange for financial contributions for building improvements. We initiated this audit due to concerns we identified while completing a review of HUD’s use of funds approved by Congress for building improvements.[1] Our objective was to determine whether HUD accounted for and managed rent credits, issued by GSA in exchange for HUD’s financial contributions for building improvements, in accordance with applicable requirements.[1] HUD Used Funds for Building Improvements in Accordance With Its Plans and the Approval of the House and Senate Committees on Appropriations, Memorandum 2019-PH-0801, issued November 7, 2018HUD did not properly account for and manage reimbursements totaling nearly $7.8 million that it obtained through rent credits issued to it by GSA in 2017 in exchange for improvements that it made to its headquarters building in 2016. HUD’s Office of Administration used these funds for expenses it incurred in 2017 instead of depositing the funds in the U.S. Treasury general account. This condition occurred because Office of Administration staff improperly considered all rent credits received, regardless of type, as a refund to its current appropriation. The Office of Administration also lacked controls to ensure that its staff complied with HUD’s funds control policy. As a result, HUD exceeded its fiscal year 2017 appropriated funding level by nearly $7.8 million and potentially violated the Antideficiency Act.[2] 2 HUD’s Chief Financial Officer has the sole authority to investigate this potential violation and determine whether HUD was required to deposit the value of rent credits into the U.S. Treasury General Funds. HUD OIG can make a referral to the Chief Financial Officer to investigate the potential violation.We recommend that HUD’s Chief Financial Officer investigate the facts surrounding the potential Antideficiency Act violation involving nearly $7.8 million in rent credits. If it is determined that a violation occurred, HUD should develop corrective action plans or internal process improvements, take appropriate disciplinary actions, and report violations to the appropriate oversight authorities, as required.

Hootan Melamed, a pharmacist based in Los Angeles, California, was sentenced in United States District Court, Southern District of California, on March 29, 2021, to six months in prison and three years’ probation for conspiracy to commit health care fraud. Melamed was also ordered to forfeit $1,816,038.82 in cash and personal property.Our investigation found that Melamed paid kickbacks to medical marketers who referred patients to his pharmacy to fill the patients’ prescriptions for compound creams and other pharmaceuticals. Melamed previously pleaded guilty on November 2, 2020, to the conspiracy charges. As a result of the scheme, Amtrak’s insurance providers were fraudulently charged approximately $22,000. Criminal judicial proceedings for other defendants in this case are pending.

The OIG investigated allegations that Bureau of Indian Affairs (BIA) realty specialists processed and approved 15 land transfer gift deeds from a tribal member to his sister without the proper authority. The complaint also alleged that the deeds contained forged signatures and improperly backdated documents.We confirmed the realty specialists processed the gift deeds for the tribal member, and we found that they did not follow the BIA’s delegation of authority procedures and issued the gift deeds without proper review and approval.The BIA later processed corrections to two of these gift deeds. We established that the tribal member signed the 15 original gift deeds, but we could not determine who signed the corrected documents. We noted significant differences between the signatures on the original documents and the signatures on the corrected documents.We also collected contradictory statements about the corrected documents from the tribal member and the realty specialists involved. In addition, we confirmed that realty specialists improperly backdated the corrections to the gift deeds.The BIA ultimately determined the gift deeds were not properly authorized and voided all the transactions.

The Medicaid ProgramThe Medicaid program provides medical assistance to low-income individuals and individuals with disabilities. The Federal and State Governments jointly fund and administer the Medicaid program. At the Federal level, CMS administers the program. Each State administers its Medicaid program in accordance with a CMS-approved State plan. In Louisiana, the State agency administers the Medicaid program. Although the State agency has considerable flexibility in designing and operating its Medicaid program, it must comply with applicable Federal requirements. The Federal Government pays its share of a State’s Medicaid expenditures based on the FMAP, which varies depending on the State’s relative per capita income (Social Security Act § 1903(a)(1) and 42 CFR § 433.10). The State agency’s regular FMAP was 65.51 percent for Federal fiscal year (FY) 2013, 62.11 percent for FY 2014, and 62.05 percent for FY 2015. Within 30 days after the end of each quarter, States report to CMS expenditures and the associated Federal share on the Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (CMS-64 report). The amounts that States report must represent actual expenditures (42 CFR § 430.30(c)). The State agency uses line items on the CMS-64 report to split expenditures based on the type of services provided. For example, State agencies use line 12 to report home health services expenditures and line 19A to report home and community-based services expenditures.State Balancing Incentive Payments ProgramSection 10202 of the ACA established BIPP, which allowed eligible States to receive an increase in their FMAPs only for eligible Medicaid noninstitutional LTSS expenditures. States that spent less than 50 percent of their total Medicaid LTSS expenditures on noninstitutional LTSS prior to participating in the program were eligible for the BIPP. States that spent less than 25 percent were eligible for a 5-percent increase in their FMAPs; States that spent between 25 percent and 50 percent were eligible for a 2-percent increase in their FMAPs. The State agency received a 2-percent increase to its FMAP. States that received a 2-percent increase in their FMAPs had to spend at least 50 percent of their total Medicaid LTSS expenditures on noninstitutional LTSS by the end of the program. CMS identified specific CMS-64 report line items eligible for the increased FMAP.

On February 9, 2018, the President signed the Bipartisan Budget Act of 2018, which included funds for expenses related to the consequences of Hurricanes Harvey, Irma, and Maria, and for those areas impacted by the 2017 wildfires. The act provided the U.S. Department of the Interior (DOI) with $516 million to support the needs of the National Park Service, U.S. Fish and Wildlife Service, U.S. Geological Survey, Office of Insular Affairs, and Office of Inspector General.This report provides information on the DOI’s status in spending these appropriations as of the end of fiscal year 2020. Specifically, the DOI’s obligations totaled $373,873,585, and its expenditures totaled $121,586,842.

On March 27, 2020, Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted. To date the CARES Act has provided the U.S. Department of the Interior (DOI) with $909.7 million, which includes direct apportionments of $756 million to support the needs of DOI programs, bureaus, Indian Country, and the Insular Areas, and a $153.7 million transfer from the U.S. Department of Education to the BIE.This report presents the DOI’s progress as of January 31, 2021, in spending CARES Act appropriations. Specifically, the DOI’s expenditures to date total $613,068,783, and its obligations total $676,758,983.We are also monitoring the DOI’s progress on reporting milestones established by the CARES Act and the U.S. Office of Management and Budget.