Federal Reports

A Mechanical Inspector based in Beech Grove, Indiana, violated Amtrak policies by posting images and material characterized as disturbing, offensive, and inappropriate on a publicly available social media site. The former employee admitted to posting images which promoted Nazi ideologies on a social media website which identified him as a company employee. We also found that he was arrested in November 2016 for Driving Under the Influence and did not report his arrest to the company as required by company policy. The employee resigned on September 9, 2020, in lieu of a disciplinary hearing and is not eligible for rehire.

The Office of the Inspector General conducted a review of the Treasury organization to identify factors that could impact Treasury’s organizational effectiveness. Our report identified behaviors that had a positive impact on Treasury. These included interactions with team members and leadership. We also identified risks to operations that, although minimal, could impede Treasury’s effectiveness if unaddressed. While interviews with Treasury personnel indicated effective performance of job responsibilities, we identified risks, including (1) uncertainty in business model changes for one Treasury department and (2) risks related to effective service to business partners.

We audited the Tennessee Valley Authority’s (TVA) Economic Development (ED) loan program to determine if TVA ED loans were executed and administered in accordance with TVA policies and procedures. Our audit scope included 59 loans with outstanding balances of approximately $47.5 million as of December 31, 2019.We found that TVA ED loans were generally executed and administered in accordance with TVA policies and procedures. However, we found instances where loans were originated subsequent to the expiration date of (1) credit analyses, and/or (2) loan commitment periods. We also found that loan program guidance could be improved by incorporating the ED loan program guidelines into TVA Standard Programs and Processes 24.015, Economic Development Loan Programs. We made two recommendations to TVA management to (1) ensure credit analyses and/or loan commitments are current when new loans are issued and (2) update TVA Standard Programs and Processes 24.015, Economic Development Loan Programs to include ED loan program guidelines.

We audited selected controls of U.S. Department of Housing and Urban Development’s New Core Interface Solution application as part of the internal control assessments for the fiscal year 2019 financial statement audit. Our objective was to review the controls for compliance with Federal information system security and financial management requirements.The OIG has determined that the contents of this audit report would not be appropriate for public disclosure and has therefore limited its distribution to those officials listed on the report distribution list.

As part of the Office of Inspector General’s (OIG) effort to provide oversight of the U.S. Department of Housing and Urban Development’s (HUD) relief efforts provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), we reviewed HUD’s responses to inquiries regarding forbearance and foreclosure relief. The objective of our review was to evaluate the accuracy of HUD’s responses to inquiries from borrowers, industry partners, and the general public regarding forbearance and foreclosure relief provided by the CARES Act. We found that HUD could improve its customer service to borrowers, industry partners, and the general public by providing more direct, accurate, and complete responses to their inquiries.

OIG performed agreed-upon procedures for assessing information reported by USDA’s NFC.

What We Looked AtThis report presents the results of our quality control review (QCR) of an audit of the Department of Transportation’s (DOT) Enterprise Services Center (ESC) controls. ESC provides financial management services to DOT and other agencies, and operates under the direction of DOT’s Chief Financial Officer. The Office of Management and Budget (OMB) requires ESC, as a management services provider, to either provide its user organizations with independent audit reports on the design and effectiveness of its internal controls, or allow user auditors to perform tests of its controls. We contracted with KPMG LLP to conduct this audit subject to our oversight. The objectives of the review were to determine whether (1) management’s descriptions of ESC’s systems are fairly presented, (2) ESC’s controls are suitably designed, and (3) ESC’s controls are operating effectively throughout the period of October 1, 2019 through June 30, 2020. KPMG will do additional testing and issue a follow-up letter to our office for the period July 1, 2020, through September 30, 2020. We performed a QCR on KPMG’s report and related documentation. What We FoundOur QCR disclosed no instances in which KPMG did not comply, in all material respects, with generally accepted Government auditing standards. RecommendationsDOT concurs with KPMG’s three recommendations. The quality control review and attachments have been marked as For Official Use Only to protect sensitive information exempt from public disclosure under the Freedom of Information Act, 5 U.S.C. § 552. To receive a copy of the report, please contact our Freedom of Information Act Office.

What We Looked AtWe performed a quality control review (QCR) on the single audit that RSM US LLP performed for the City of Fayetteville’s (City) fiscal year that ended June 30, 2018. During this period, the City expended approximately $6.8 million from the U.S. Department of Transportation’s (DOT) grant programs. RSM determined that DOT’s major programs were the Airport Improvement Program and the Federal Transit Cluster. Our QCR objectives were to determine (1) whether the audit work complied with the Single Audit Act of 1984, as amended, and the Office of Management and Budget’s Uniform Guidance, and the extent to which we could rely on the auditors’ work on DOT’s major programs, and (2) whether the City’s reporting package complied with the reporting requirements of the Uniform Guidance. What We FoundRSM’s audit work complied with the requirements of the Single Audit Act, the Uniform Guidance, and DOT’s major programs. We found nothing to indicate that RSM’s opinion on each of DOT’s major programs was inappropriate or unreliable. However, we identified deficiencies in the City’s reporting package that required correction and resubmission.

The Medicaid Program and the State Agency’s Waiver The 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.  Generally, States administer their Medicaid programs in accordance with a CMS-approved State plan.  However, section 1115 of the Social Security Act authorizes the Secretary of Health and Human Services to approve demonstration projects, under a waiver to the State plan, to assist in promoting the objectives of the Medicaid program.  These waivers give States flexibility to design and improve their programs to better serve Medicaid populations. The State agency administers Oregon’s Medicaid program through a waiver initially approved by CMS in 1994.  The goal of the waiver was to expand eligibility and contain costs through managed care.  Initially, various types of managed-care organizations, such as those providing physical, mental, and dental health care, contracted directly with the State agency.  However, in a 2012 waiver amendment, with the establishment of CCOs, the State agency integrated those lines of care under the CCO umbrella. Coordinated Care Organizations A CCO is a network of different types of participating providers (e.g., physical, mental, and dental health-care providers and those that provide addiction treatment) that have agreed to work together in their local communities to serve low-income beneficiaries who receive health care coverage through Medicaid.  CCOs are similar to traditional managed-care organizations but have some key differences, such as more active roles by providers and community members in governance.  CCOs are also accountable for health care access and quality.  In addition to the goal of improving access to care and quality of care, CCOs focus on prevention and helping people manage chronic conditions, such as diabetes, to help reduce unnecessary emergency-room visits and give people support to be healthy.  In 2016 and 2017, 16 CCOs operated in Oregon.

We audited the costs claimed by the State of Wisconsin, Department of Natural Resources (Department), under grants awarded by the U.S. Fish and Wildlife Service (FWS) through the Wildlife and Sport Fish Restoration Program (Program). The audit included claims totaling $103 million on 27 grants that were open during the State fiscal years that ended June 30, 2017, and June 30, 2018. The audit also covered the Department’s compliance with applicable laws, regulations, and FWS guidelines, including those related to the collection and use of hunting and fishing license revenues and the reporting of program income. We found that the Department generally ensured that grant funds and hunting and fishing license revenue were used for allowable fish and wildlife activities and complied with applicable laws and regulations, FWS guidelines, and grant agreements.

Generation Z (Gen Z), currently between 8 and 23 years old, is often branded as a digitally native generation. Because they are still relatively young, little is known about Gen Zers’ engagement with physical mail. More research is vital as older Gen Zers begin to enter college and the labor market, and the Postal Service will have increasing opportunities to educate and boost this generation’s awareness of mail as they become adults. The OIG surveyed Gen Zers and found that, despite their Internet connectivity and access to technology, they are familiar with the Postal Service and a majority agreed the Postal Service is relevant to them. Gen Zers also reported being engaged with mail; the majority both send and receive greeting cards, letters, and packages. As well, nearly half said they share the responsibility of checking and sorting mail with their parents.

During the COVID-19 pandemic, the Bureau of Safety and Environmental Enforcement (BSEE) continued to fulfill its mission by performing safety and environmental inspections for offshore oil and gas operations. We reviewed the actions BSEE’s three regions—the Gulf of Mexico Region, Pacific Region, and Alaska Region—have taken to protect inspectors and offshore employees from COVID-19 and evaluated any impacts the virus had on inspections BSEE conducted since March 2020. We found that BSEE:• Developed, communicated, and updated COVID-19 guidance for all personnel involved with offshore inspections• Continued to complete its required inspections• Adapted its practices and remotely witnessed operators’ blowout preventer (BOP) tests by accessing the operators’ software systemsWe learned that BSEE did not provide the inspectors with guidance on how to witness the BOP remotely. As of July 15, 2020, BSEE officials informed us that they were developing this guidance.Considering the COVID-19 exposure risks for personnel conducting offshore inspections and the potential impact on safety, it is imperative that BSEE continue to update its COVID-19 guidance, work with operators to limit the risks to its inspectors, and finalize its guidance on conducting remote witnessing of operators’ BOP tests.

Our objective was to determine whether the Social Security Administration (SSA) completed follow-up actions to resolve issues for Old-Age, Survivors and Disability Insurance (OASDI) beneficiaries whose benefits it withheld using the miscellaneous suspense code.

Our objective was to assess the Social Security Administration's (SSA) rejection of State-submitted Electronic Death Registration (EDR) reports and determine whether these rejections resulted in the Agency (1) improperly paying deceased beneficiaries and representative payees and (2) not posting death information to the Numidents of deceased non-beneficiaries.

The Internal Security Division needs to improve standardized guidance for investigative operations, requirements for evidence and firearms, accountability for law enforcement sensitive equipment, case file management, reports, and documentation, and compliance with the Department of Homeland Security’s Management Directive 0810.1. We recommended the Office of the Chief Security Officer, Internal Security Division develop policies and procedures applicable to current mission standards, improve processes and procedures for documenting and storing evidence, enforce policies and procedures for weapons, and establish protocols for documenting investigative activities. We made 20 recommendations that will improve the Internal Security Division’s operations. OCSO concurred with all 20 recommendations.

As part of our oversight activities, we are conducting audits of Medicaid school-based services claimed by States. Prior OIG and State audits found that Connecticut did not monitor the School Based Child Health (SBCH) program to ensure that Medicaid-eligible children received services in accordance with their Individualized Education Programs (IEPs), that written parental consent forms were obtained or maintained, or that services did not exceed those authorized in a child’s Individual Education Plan. We selected Hartford Public Schools (HPS) for review because it is one of the largest school districts in the State.Our objective was to determine whether Connecticut claimed Federal Medicaid reimbursement for school-based child health services submitted by HPS in accordance with Federal and State requirements.We reviewed Medicaid school-based health services that were provided by HPS and claimed by the State Department of Social Services (DSS) for Federal reimbursement. We selected a random sample of 100 student-months for which DSS claimed Medicaid services during State fiscal year 2018. We reviewed IEP documentation and provider notes to determine whether prescribed services were properly delivered, documented, and billed.

Our review confirmed that the U.S. Fish and Wildlife Service took sufficient action to implement Recommendation 1.

We audited the U.S. Fish and Wildlife Service (FWS) to determine whether it ensured that donations and revenues collected by friends organizations were accounted for and spent in accordance with governing laws.We found that the FWS did not ensure its friends organizations fully accounted for and spent donations and revenues in accordance with governing laws and its own friends program policy. Specifically, we found that the FWS did not maintain the information necessary to manage the friends program. We determined that the FWS was not aware of the number of friends organizations operating across the Nation and did not monitor the amount of donations collected and spent. In addition, the FWS was unable to ensure friends organizations had the necessary documents required to participate in the friends program, such as evidence of nonprofit status. The program is at risk for misuse and mishandling of funds, and undetected violations of partnership agreements and program regulations.We make six recommendations that, if implemented, will help strengthen the FWS’ friends program. The FWS concurred with all six recommendations in its response to our draft report. We consider one recommendation resolved and implemented and five recommendations resolved but not implemented. We will refer the recommendations to the Assistant Secretary for Policy, Management and Budget to track implementation. The FWS’ response also included six financial and program management control initiatives that should further enhance its oversight of friends organizations. We commend the FWS for taking extra measures to improve this important program.

We reviewed the seven recommendations from our 2016 evaluation report titled Bureau of Indian Affairs’ Southern Ute Agency’s Management of the Southern Ute Indian Tribe’s Energy Resources to verify whether the Bureau of Indian Affairs’ Southern Ute Agency implemented them.We confirmed that the recommendations have been resolved and implemented.

OIG consolidated the relevant results and common control issues of six SFSP audits at FNS and four States and determined whether any additional controls were needed to enhance SFSP efficiency and effectiveness.

This report presents the results of the System and Organization Controls 1 Type 2 examination conducted in accordance with Statement on Standards for Attestation Engagements No. 18 for the United States Department of Agriculture’s (USDA) Financial Management Services’ (FMS) description of its financial systems used to process user entities financial transactions throughout the period October 1, 2019 to June 30, 2020. The report contains an unmodified opinion on the description and controls that were suitably designed to provide reasonable assurance that the control objectives would be achieved.

We audited the effectiveness of selected business process application-level general controls and data management controls over the Government National Mortgage Association (Ginnie Mae) Financial Accounting System (GFAS) and its subledger database (SLDB) component as part of the internal control assessments required for the fiscal year 2019 financial statements audit under the Chief Financial Officer’s Act of 1990. We also assessed selected controls for compliance with U.S. Department of Housing and Urban Development (HUD) information technology (IT) policies and Federal information system security and financial management requirements.The OIG has determined that the contents of this audit report would not be appropriate for public disclosure and has therefore limited its distribution to those officials listed on the report distribution list.

For a covered outpatient drug to be eligible for Federal reimbursement under the Medicaid program’s drug rebate requirements, manufacturers must pay rebates to the States for the drugs. However, a prior OIG review found that States did not always invoice and collect all rebates due for drugs administered by physicians.Our objective was to determine whether Vermont complied with Federal Medicaid requirements for invoicing manufacturers for rebates for physician-administered drugs.

In 2016, the Centers for Medicare & Medicaid Services (CMS) updated its life safety and emergency preparedness regulations to improve protections for all Medicare and Medicaid beneficiaries, including residents of long-term-care facilities (commonly called nursing homes). Updates included requirements that nursing homes have expanded sprinkler systems and smoke detector coverage; an emergency preparedness plan that is reviewed, trained on, tested, and updated at least annually; and provisions for sheltering in place and evacuation.

This report presents the results of the System and Organization Controls 1 Type 2 examinationconducted in accordance with Statement on Standards for Attestation Engagements No. 18 forthe United States Department of Agriculture’s (USDA) Financial Management Services’ (FMS)description of its financial systems used to process user entities financial transactions throughoutthe period October 1, 2019 to June 30, 2020.

GAO's policy and procedures generally promote competition when soliciting offers and awarding contracts, and follow the Federal Acquisition Regulation when competition is not possible.However, the OIG identified gaps in GAO's policy, procedures, and internal control specific to non-competed contracts. These include gaps in documentation for key roles and responsibilities, errors in reported competition data, and deficiencies in key control activities, such as acquisition planning and the review of contractor proposals. OIG is making five recommendations intended to address these gaps in awarding non-competitive contracts.

In 2016, the Centers for Medicare & Medicaid Services (CMS) updated its life safety and emergency preparedness regulations to improve protections for all Medicare and Medicaid beneficiaries, including those residing in long-term care facilities (commonly known as nursing homes). The updates included requirements that nursing homes have expanded sprinkler systems and smoke detector coverage; an emergency plan that is reviewed, trained on, tested, and updated at least annually; and provisions for sheltering in place and evacuation. Our objective was to determine whether Illinois ensured that selected nursing homes in the State that participated in the Medicare or Medicaid programs complied with CMS requirements for life safety and emergency preparedness.

The OIG investigated allegations that a Bureau of Land Management (BLM) State Director used their Government position for the financial gain of two personal friends. We found no evidence that the State Director misused their Government position or violated any ethics regulations.

We found that Florida established and implemented systems of internal control thatprovided reasonable assurance that Restart program funds were allocated appropriatelyand sufficiently ensured that LEAs and nonpublic schools used Restart program funds forallowable and intended purposes, as described in the Finding.

The Office of the Inspector General conducted a review of the Enterprise Planning (EP) organization to identify factors that could impact EP’s organizational effectiveness. We identified behaviors that positively affected EP. These included leadership actions, relationships with team members, recognition programs, and a positive ethical culture. We also identified a risk to operations that, although minimal, if left unaddressed, could hinder EP’s effectiveness. This risk was related to effective collaboration with business partners.

The VA Office of Inspector General (OIG) examined whether the Veterans Health Administration (VHA) effectively used data from its National Surgery Office (NSO) to identify and address problems affecting operating room efficiency. The audit focused on four elements needed for efficient and timely surgeries: clinical service staff, sterile processing and logistics services, the environmental management service, and resource management. The OIG found that leaders of VHA’s regional networks and medical facilities did not consistently use NSO data to improve operating room efficiency. The audit team estimated (under non-pandemic conditions) that greater regional and facility oversight of surgical support elements would improve operating room efficiency and reduce surgical cancellations by 8,600 over five years, save an estimated $30 million, and improve surgical services for about 7,200 patients. Problems at less efficient facilities persisted for at least two years because regional and facility leaders did not effectively monitor operating room efficiency and follow up when less efficient facilities did not resolve underlying problems in surgical support elements. The surgical workgroups for the less efficient facilities focused primarily on surgical outcomes, while VHA’s more efficient facilities focused on both surgical outcomes and operating room efficiency. VHA concurred with the OIG’s six recommendations, including developing an oversight mechanism to ensure that regional networks monitor and hold medical facilities accountable for addressing persistent problems in operating room efficiency and surgical support elements. Other recommendations address periodic assessments of operating room efficiency data to identify medical facilities with persistent problems, clarifying and refining selected NSO performance measures, identifying best practices and implementing them when appropriate at less efficient facilities, and more broadly sharing efficiency data across medical facility service lines. One recommendation was closed at publication and all others will be monitored until completed.

The OIG reviewed the Veterans Benefits Administration’s (VBA) processing of mail and benefit claims during the COVID-19 pandemic. Specifically, the review team examined whether VBA staff documented the date of receipt for benefits-related correspondence as required by new guidance during the national state of emergency and continued mail operations at VA facilities to ensure benefit claims were processed. Based on its sample analysis, the OIG found VBA staff did not properly apply date of receipt documentation guidance for an estimated 98 percent of 3,200 claims established from April 7 through April 20, 2020. The date of receipt is important because it may be used to establish when veterans become entitled to benefit payments. Veterans could be underpaid if staff record an incorrect date of receipt. However, VBA staff were not always aware of all aspects of documentation guidance and had not received training on it. VBA staff did continue to process mail received at VA facilities, with the postal service forwarding all regional office mail to a scanning facility starting March 31, 2020. Offices that did not have mail automatically forwarded were to have staff available to process incoming mail. The team surveyed regional office staff and found that the majority of regional offices used these methods to continue mail operations. Representatives from veterans service organizations also confirmed that mail operations continued at their offices in Detroit and Los Angeles, where they are colocated with VBA staff. VBA concurred with the OIG’s three recommendations to: (1) ensure VBA staff understand date of receipt guidance for claims received during the pandemic and implement those actions; (2) make certain that claims received and completed from March 1, 2020, had the correct date of entitlement; and (3) evaluate existing guidance for recording the date of receipt for claims without a postmark.

As part of our annual audit plan, we performed an audit to determine the effectiveness of the Tennessee Valley Authority’s (TVA) process for managing heavy equipment provided to contractors through TVA’s Equipment Support Services (ESS) group. ESS provides heavy equipment and other equipment support services to business units across TVA and charges specific projects for the equipment which is provided. ESS’s customers include (1) TVA organizations obtaining services directly or (2) contractors performing work for the TVA organizations. In summary, we determined TVA was not effectively managing contractors’ use of equipment provided by ESS. Specifically, we found:• ESS provides equipment to contractors on TVA projects that have cost reimbursable payment terms. Although ESS does not bill the contractors for the equipment (i.e., ESS charges a TVA project, not the contractor), certain contractors bill TVA for the ESS equipment even though their contract with TVA provides that TVA can only be billed for actual equipment costs. Even though the contractors subsequently provide credits or refunds to TVA for the equipment, it is administratively difficult for TVA to ensure it receives reimbursement for all the costs billed by the contractor.• ESS provides equipment to certain contractors on TVA projects that have fixed price or fixed unit rate payment terms. However, TVA’s Standard Programs and Processes (SPP) do not provide guidelines or processes for TVA to determine the cost effectiveness of providing ESS equipment on fixed price/fixed unit rate projects or to ensure TVA receives the appropriate reductions on the fixed price/fixed unit rates.

What We Looked AtEffective evacuations of aircraft during emergencies can help save lives. Two aircraft accidents involving evacuations—one in September 2015 involving a British Airways aircraft and another in October 2016 involving an American Airlines aircraft—resulted in no fatalities, and highlighted the importance of effective aircraft evacuation standards. Federal Aviation Administration (FAA) regulations require that aircraft manufacturers demonstrate that all passengers and crew can evacuate an aircraft within 90 seconds by conducting live demonstrations of simulated evacuations or through a combination of analyses and testing. Our audit objective was to assess FAA’s process for developing and updating aircraft emergency evacuation standards, including how changes in passenger behavior, passenger demographics, and seating capacity affect the standards.What We FoundFAA’s process for updating its evacuation standards lacks data collection and analysis on current risks. FAA largely updates evacuation standards only after accidents and it conducted its last update based on an accident in 1991. FAA also has not conducted sufficient research on passenger behaviors—such as evacuations with carry-on bags and the presence of emotional support animals—and seat dimensions to show how they affect evacuation standards. Furthermore, FAA does not collect comprehensive evacuation data to identify needs for regulation updates, and allows manufacturers to use decade-old data in evacuation analyses. FAA’s Safety Management System requires FAA programs to collect and analyze comprehensive data using systematic procedures and policies for the management of safety risk. However, FAA has not established a systematic process to obtain and evaluate data from accidents and demonstrations. As a result, FAA is inhibiting its ability to identify current evacuation risks and updates to its aircraft emergency evacuation standards.RecommendationsWe made two recommendations to help FAA improve its data collection and analysis for developing and updating aircraft emergency evacuation standards. FAA concurred with both recommendations. 

Noridian Healthcare Solutions, LLC, and MedicareNHS 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. Nonqualified PlansBCBS North Dakota sponsors nonqualified plans called the Supplemental Retirement Program for Certain Employees of Blue Cross Blue Shield of North Dakota (SERP plan) and the Noridian Select Retirement Plan for Select Approved Employees of Noridian Mutual Insurance Company (Select plan). The purpose of the SERP plan 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. The purpose of the Select plan is to provide benefits for select executive employees who are unable to participate in certain other programs. Select plan benefits are accrued similarly to benefit accrual under the SERP plan. NHS claimed nonqualified costs (for both plans) using the pay-as-you-go basis of accounting. This report addresses the allowable nonqualified costs claimed by NHS under the provisions of its MAC contracts and its 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, nonqualified, 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. Accounting Methodologies 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. Incurred Cost Proposal AuditsAt CMS’s request, Kearney and Company (Kearney) and Davis Farr, LLP (Farr), performed audits of the ICPs that NHS submitted for CYs 2014 through 2016. The objectives of the Kearney and Farr ICP audits were to determine whether costs were allowable in accordance with the FAR, the U.S. Department of Health and Human Services Acquisition Regulation, and the CAS. For our current audit, we relied on the Kearney and Farr ICP audit findings and recommendations when computing the allowable nonqualified costs discussed in this report. We incorporated the results of the Kearney and Farr audits into our computations of the audited indirect cost rates, and ultimately the nonqualified costs claimed, for the contracts subject to the FAR. CMS will use our report on allowable nonqualified costs, as well as the Kearney and Farr ICP audit reports, to determine the final indirect cost rates and the total allowable contract costs for NHS for CYs 2014 through 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.

The Unaccompanied Alien Children ProgramThe UAC Program funds temporary shelter care and other related services for children in ORR custody. For project periods with services beginning during FYs 2014 and 2015, ORR awarded grants totaling $2.1 billion to providers for the care and placement of children. The UAC Program is separate from State-run child welfare and traditional foster care systems. Applicable Federal RequirementsFederal regulations establish uniform administrative requirements for awards to nonprofit organizations. For grant awards made on or after December 26, 2014, 45 CFR part 75 establishes uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities. Southwest Key had three cooperative agreements—90ZU0148, 90ZU0149, and 90ZU0153—that were in effect from October 1, 2014, through September 30, 2017. However, our audit period included awards made after December 26, 2014, to which Part 75 applied. Southwest Key Programs Southwest Key is a nonprofit organization based in Austin, Texas. For nearly 20 years, Southwest Key has participated in the UAC Program. In FY 2016, Southwest Key was awarded approximately $236 million in grants for residential services for children in the UAC Program and claimed approximately $231 million in Federal funds to care for children in its custody, which included approximately 25,000 children who were released directly to parents, family members, or other adults who are able to provide for their care; aged out of the program; ran away; or transferred to another facility. During FY 2016 Southwest Key operated a total of 26 residential shelter programs in Arizona (8), California (3), and Texas (15).

This audit involved individuals eligible for Medicare who were covered under traditional Medicare in one year but chose to enroll in Medicare Advantage (MA) the following year (transferred enrollees). The Centers for Medicare & Medicaid Services (CMS) maps certain diagnosis codes into Hierarchical Condition Categories (HCCs). For transferred enrollees who, while covered under traditional Medicare, receive a diagnosis that maps to an HCC, CMS makes higher payments to MA organizations for the following year.Through data mining and discussions with medical professionals, we have identified several diagnosis codes that were at high risk of being miscoded and resulting in inaccurate payments. For this audit, we focused only on selected acute stroke diagnosis codes (which map to the Ischemic or Unspecified Stroke HCC) that were reported on one physician’s claim without being reported on a corresponding inpatient claim.Our objective was to determine whether selected acute stroke diagnosis codes submitted by physicians under traditional Medicare that CMS later used to make payments to MA organizations on behalf of transferred enrollees complied with Federal requirements.We reviewed 582 of 8,437 transferred enrollees (that we selected with a stratified random sample) who received one instance of a high-risk acute stroke diagnosis code during 2014 or 2015. We had reviews performed to determine whether the medical records supported the submitted diagnosis codes. We relied on these reviews as the basis for our conclusions.

Medicare-allowed charges for noninvasive ventilators increased from $279.9 million in 2016 to $424.4 million in 2018, an increase of 52 percent. We are concerned about the relationship of these increased costs to prices per noninvasive ventilator, and specifically concerned about whether Medicare-allowed charges are comparable with payment rates of select non-Medicare payers.Our objective was to determine whether Medicare-allowed charges for noninvasive ventilators were comparable with payment rates of select non-Medicare payers.

In 2019, carriers delivered nearly 6 billion packages to every corner of America—more than 19 million every day. This represents an 87 percent increase in the U.S. Postal Service’s package volume since 2013, driven by booming ecommerce sales.

The Office of Inspector General assessed NASA’s management of its planetary science portfolio, which consists of 30 space flight missions in various stages of operation, and examined whether its Planetary Science Division is meeting its goals and priorities.

The Postal Service owns and operates a fleet of over 227,000 vehicles. The Postal Service has 7- and 11-ton cargo vans that Postal Vehicle Service (PVS) drivers use to transport mail between facilities and to load/unload mail from cargo vans. In September 2017, the Postal Service began replacing 7- and 11-ton cargo vans and adding new lift gates. A lift gate is a piece of equipment on the rear of a cargo van that helps load/unload mail transport equipment (MTE) containing mail. When the Postal Service replaced the older cargo vans, transportation managers could choose between a tuck under lift gate (84 inches wide by 50 inches long) or rail lift gate (89 inches wide by 54 inches long). Tuck under lift gates tuck beneath the cargo van while rail lift gates fold against the back of the cargo van when not in use. The Postal Service purchased 1,167 tuck under lift gates and 446 rail lift gates on the 7- and 11-ton cargo vans for an estimated total cost of $6.5 million. Our objective was to evaluate the efficiency and safety of lift gates used on U.S. Postal Service cargo vans.

Audit of the NLRB's lapse of its Fiscal Year 2019 appropriation.

In accordance with our annual plan, the Office of Inspector General (OIG) assessed the USCP Threats Assessment Section (TAS) to determine if (1) the organizational structure and training for the Department's management of threats against Protectees was the most efficient and effective and (2) the Department complied with applicable policies and procedures as well as applicable laws, regulations, and best practices. Our scope included the TAS organizational structure, training, processes, and operations during Fiscal Years 2019 and 2020.

This investigation was initiated after OIG auditors identified irregular transactions paid for with a TVA Purchasing Card. More specifically, the auditors discovered the Purchasing Card was used by a cardholder to make payments to an apartment complex. The subsequent investigation substantiated that the employee used the card to make several monthly rental payments to the apartment complex where she lived. To address this situation and prevent similar improper usage of the Purchasing Card in the future, the OIG made several recommendations. The OIG recommended TVA do the following: (1) Take action to recover from the employee the outstanding balance of the unauthorized transactions, (2) consider disciplinary action against the employee, (3) ensure that all cardholders and approvers in Transmission and Power Supply are current on annual Purchase Card training, and (4) take measures to ensure approving officials are notified when Purchasing Card statements are not reconciled monthly and to suspend cards when there is repeated noncompliance with this requirement.

A Boilermaker/Welder, based in Beech Grove, Indiana, violated Amtrak policies by engaging in outside employment to work for his own companies while on sick leave. We also confirmed that he was conducting and engaging in work for his own companies on days that he requested leave for “union business.” Finally, our investigation found that he did not seek or request written approval from Amtrak to engage in outside employment which, according to the website for his personal business, advertises services for the railroad industry and, as a result, violated the company’s Conflict of Interest Policy. The employee was terminated from his employment on September 15, 2020.

OIG Investigations Newsletter Volume XXIX: June 1 - July 31, 2020

This Office of Inspector General (OIG) Comprehensive Healthcare Inspection Program report provides a focused evaluation of the leadership performance and oversight by Veterans Integrated Service Network (VISN) 12: VA Great Lakes Health Care System in Westchester, Illinois, covering leadership and organizational risks and key processes associated with promoting quality care. This inspection focused on Quality, Safety, and Value; Medical Staff Credentialing; Environment of Care; Medication Management: Long-Term Opioid Therapy for Pain; Women’s Health: Comprehensive Care; and High-Risk Processes: Reusable Medical Equipment. The OIG conducted this unannounced visit during concurrent inspections of VISN 12 facilities. The VISN executive leadership team appeared stable, with the Deputy Network Director, Chief Medical Officer, Quality Management Officer, and Human Resources Officer having served together for almost two years. The permanent Network Director was appointed on March 1, 2020. Selected survey scores related to employee satisfaction with the VISN executive team leaders were generally better than VHA averages. Overall patient experience survey scores were better than VHA averages; however, the VISN has an opportunity to help improve patient satisfaction with inpatient and specialty care. Executive leaders seemed to support efforts to improve and maintain patient safety, quality care, and other positive outcomes through utilization management training, improvement of hospital-wide readmission rates, and creation of a workgroup to improve case management and follow-up care. The leadership team was knowledgeable within their scope of responsibility about selected Strategic Analytics for Improvement and Learning metrics. The OIG issued four recommendations for improvement in one area, High-Risk Processes. The OIG recommended that reusable medical equipment inspections are conducted, and results are shared with executive leaders and posted within the required time frame; also, that reusable medical equipment corrective action plans are developed and tracked until closure.

Our objective was to (1) to determine whether the Social Security Administration (SSA) made payments to beneficiaries and/or representative payees who were deceased according to Kentucky's Office of Vital Statistics and (2) identify non-beneficiaries in the State files whose death information did not appear in Agency records.

As of October 2016, the Recovery School District in Louisiana (RSD)had received a $1.5 billion Public Assistance grant from Louisiana, a Federal Emergency Management Agency (FEMA) grantee, for damages resulting from Hurricane Katrina. We examined $1.3 billion for a consolidated project as part of the total amount awarded. In some instances, RSD accounted for and expended portions of the $1.3 billion in Public Assistance grant funds we reviewed according to Federal regulations. However, FEMA improperly awarded $216.2 million to repair or replace more than 292 Orleans Parish school facilities in RSD. We made eight recommendations to FEMA to de-obligate $216.2 million of ineligible costs; follow Federal regulations and FEMA guidelines; and re-evaluate documented proof of assessments for the 35 identified projects and reclassify them, as appropriate, to repair-eligible, and de-obligate the cost difference. FEMA concurred with recommendations 2 through 7 but did not concur with recommendations 1 and 8. We consider recommendations 2 through 7 resolved and open; recommendations 1 and 8 are unresolved and open.

The OIG investigated an allegation that a former Bureau of Land Management (BLM) employee accessed child pornography with a U.S. Government computer.We found no evidence that the employee accessed child pornography. We evaluated the employee’s network traffic, which showed their computer accessed sites hosting suspected child pornography; however, we were not able to determine if the employee accessed the areas of the websites that hosted the suspected child pornography. The employee took certain actions with respect to the hard drive, so we were unable to recover any images or other evidence from the computer. The employee admitted to viewing adult pornography on their Government computer while on duty but denied viewing child pornography.The employee resigned during our investigation after receiving a notice of proposed removal. The U.S. Attorney declined prosecution of this matter.

For a covered outpatient drug to be eligible for Federal reimbursement under the Medicaid program’s drug rebate requirements, manufacturers must pay rebates to the States for the drugs. However, a prior OIG review found that States did not always invoice and collect all rebates due for drugs administered by physicians.Our objective was to determine whether Maine complied with Federal Medicaid requirements for invoicing manufacturers for rebates for physician-administered drugs.

According to the Federal Communications Commission, more than 18 million Americans currently lack basic broadband service. With a physical presence in nearly every community in the country, the U.S. Postal Service is uniquely situated to play a role in helping bring 5G and broadband service to those areas of the country currently unserved or underserved. The OIG found there are several potential partnership opportunities that would allow the Postal Service to help bring high-quality broadband to areas where it is currently lacking. These would include colocation of critical infrastructure at Postal Service facilities, positioning them as digital hubs and leveraging USPS resources to collect valuable data about broadband coverage in remote areas. Such an undertaking would serve to further cement the Postal Service’s already critically important role in American life.

The Office of Inspector General evaluated NASA’s management of the Stratospheric Observatory for Infrared Astronomy (SOFIA) Program relative to cost, technical performance, and scientific return.