Federal Reports

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In planning and performing our audit of the financial statements of the United States Capitol Police (USCP or the Department) as of and for the year ended September 30, 2016 (FY 2016), in accordance with auditing standards generally accepted in the United States of America, we considered USCP's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements and on internal control over financial reporting.

We found that the Rehabilitation Services Administration (RSA) did not have adequate internal controls to provide reasonable assurance that data State vocational rehabilitation agencies submitted in their RSA-911 reports were accurate and complete. We found that RSA’s monitoring procedures did not require program staff to determine whether State vocational rehabilitation agencies had established and implemented adequate internal controls that provided reasonable assurance that their data were accurate and complete, nor did the procedures require program staff to perform any testing of the data during monitoring visits. We also found that RSA did not require State vocational rehabilitation agencies to certify that the data submitted were accurate and complete. Lastly, we found that although RSA’s edit check programs provided some level of assurance regarding the completeness of State vocational rehabilitation agency submitted data, RSA had not properly documented its procedures on the use of these programs.

17-AUD-06 was issued on November 15, 2016 without management's response. The response was received on December 7, 2016. We assessed management's response and action plan.

Housing Works, Inc., operating in Brooklyn, New York, did not comply with all applicable Federal requirements and grant terms related to its Affordable Care Act (ACA)-funded New Access Point grant. Specifically, a Housing Works subsidiary (1 of 14 subsidiary nonprofit organizations overseen by Housing Works) did not track and account for these ACA-funded New Access Point grant expenditures separately from other Federal and non-Federal operating expenses and did not reconcile actual grant expenditures to its approved budgeted amounts used to draw down Federal funds. The Housing Works subsidiary followed Federal procurement standards and claimed allowable New Access Point grant costs of $150,000 for the purchase of a mobile health unit. However, we could not determine whether the remaining $1.2 million in grant costs claimed by the Housing Works subsidiary were allowable.

From April 1 through December 31, 2010, the California Department of Health Care Services (State agency) did not always comply with Federal Medicaid requirements for billing manufacturers for rebates for physician-administered drugs dispensed to enrollees of Medicaid managed-care organizations (MCOs). For the 20 MCOs we reviewed, the State agency billed for rebates for physician-administered drugs dispensed by 7 MCOs. However, the State agency did not bill for rebates for physician-administered drugs dispensed by the remaining 13 MCOs.

This report identifies management and performance challenges facing the Corporation. We selected these challenges considering past and ongoing audit, review, and investigative work, as well as discussions with CNCS management regarding existing vulnerabilities. We also considered new activities that could pose challenges because of their breadth and complexity.

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At the request of the Tennessee Valley Authority (TVA) Supply Chain, the OIG examined the cost proposal submitted by a company for engineering and management services for hydroelectric power train and associated systems. Our objective was to determine if the company's cost proposal was fairly stated for a planned $90 million contract. In our opinion, the markup rates included in the company's proposal were fairly stated. However, we estimated that TVA could avoid about $2.88 million on the $90 million contract by (1) utilizing TVA personnel to purchase materials needed for the scope of work rather than having this company procure necessary materials, and (2) ensuring the markup rates applied to affiliate company subcontract labor costs are limited to rates applied to this company's labor costs. In addition, we found the contract's compensation terms and related attachments were inconsistent with the methodology TVA intends to use to compensate the company.(Summary Only)

Corporation management reported VISTA Project Sponsor Georgia Center for Nonprofits (GCN), Atlanta, GA, improperly utilized its VISTA members when it directed members to perform staff functions and changed clients for their services.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires CMS to phase in a Competitive Bidding Program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Under this program, suppliers compete to become Medicare contract suppliers for selected DMEPOS items, including diabetes test strips provided via mail order. Additionally, the Medicare Improvements for Patients and Providers Act (MIPPA) requires mail order suppliers to demonstrate in their bids that they can provide at least 50 percent, by volume, of the types of diabetes test strips provided to Medicare beneficiaries. MIPPA requires OIG to determine the market shares of the types of diabetes test strips before each round of competitive bidding. CMS uses OIG's data to help ensure contracted suppliers' bids adhere to the 50-percent rule.

This is our final report on OIG’s audit of NOAA’s National Weather Service’s (NWS) oversight of service contracts, document retention, and reporting. Our objective was to evaluate whether NWS has adequate controls in place to ensure compliance with applicable laws and regulations for personnel support acquired through service contracts.

A medical loss ratio (MLR) is the percentage of premium dollars an insurer spends to provide medical services and healthcare quality improvement activities for its members compared to the premium dollars it uses to pay for administrative expenses. This report is part of a series of Office of Inspector General reviews conducted to determine whether the Medicaid program could achieve savings if States required Medicaid managed care organizations (MCOs) to meet a minimum MLR standard and pay remittances if the MLR standard was not met.

Florida's Agency for Health Care Administration (State agency) did not always stop making capitation payments after a beneficiary's death, despite its efforts to identify and recover any overpayments. Of the 124 capitation payments in our random sample selected from payments to beneficiaries whose dates of death (DODs) preceded the payment date, the State agency recovered 10 payments prior to the start of our audit and 1 was not recoverable. For the remaining 113 capitation payments, the State agency made overpayments totaling $192,000 ($112,000 Federal share). During the course of our audit, the State agency adjusted 34 of the 113 payments totaling $64,948. On the basis of our sample results, we estimated that the State agency made overpayments to managed care organizations (MCOs) totaling $26.2 million ($15.4 million Federal share) during our audit period. These overpayments amount to approximately 2 percent of the $1.3 billion that the State agency paid to MCOs from July 1, 2009, through November 5, 2014, on behalf of deceased Medicaid beneficiaries.

During this period, we completed 35 investigations involving fraud or corruption related to the Department’s programs and operations, securing more than $27 million in settlements, fines, recoveries, forfeitures, and savings. In addition, as a result of our investigative work, criminal actions were taken against a number of people, including school officials and service providers who cheated the students they were in positions to serve. We also issued 11 audit and other reports that contained recommendations to improve program operations.

The Inspector General Act of 1978 (Public Law 95-452), as amended, requires that the Inspector General report semiannually to the head of the Department and the Congress on the activities of the office during the 6-month periods ending March 31 and September 30. The semiannual reports are intended to keep the Secretary and the Congress fully and currently informed of significant findings and recommendations by the Office of Inspector General.

The objectives of this audit were to assess whether (1) costs associated with the development of the New Stuyahok bulk fuel facilities were allowable, allocable, and reasonable; and (2) the project was developed as intended and operating successfully.

The Administration for Children and Families (ACF) awarded approximately $4.8 million in Disaster Relief Act funds to Visiting Nurse Service of New York (VNSNY), a not-for-profit home health care agency that operated Head Start and Early Head Start programs in New York, New York. The funds were for program expenses directly related to Hurricane Sandy, including nearly $800,000 for repairs and renovations at one of VNSNY's two locations. Of the $760,000 in Disaster Relief Act costs that we reviewed, $375,000 complied with applicable Federal requirements. However, VNSNY claimed some Disaster Relief Act costs that did not comply with applicable Federal requirements. Specifically, VNSNY improperly claimed costs totaling $385,000 that were not directly related to Hurricane Sandy. VNSNY used Disaster Relief Act funds for Head Start program normal operating costs (i.e., rent and rent-related costs, renovation and supplies costs) that were not directly related to Hurricane Sandy. In addition, VNSNY budgeted Disaster Relief Act costs totaling $2.5 million that were not appropriate, including fireproofing and Head Start program costs that were not directly related to Hurricane Sandy and construction costs that were not appropriate once VNSNY abandoned its plan to repair and renovate one of its locations. These deficiencies occurred because ACF (1) inappropriately authorized VNSNY to budget and claim Disaster Relief Act grant funds for costs that were not directly related to Hurricane Sandy and (2) did not require VNSNY to revise its budget in accordance with Federal requirements.

The Minnesota marketplace did not always allocate costs for establishing a health insurance marketplace and expend establishment grant funds in accordance with Federal requirements.

Financial Statements ending September 2016

The report summarizes the FTC OIG’s activities and accomplishments during the second half of the FY 2016 reporting period.

Under a contract monitored by the National Credit Union Administration Office of Inspector General, KPMG LLP, an independent certified public accounting firm, performed an audit of NCUA’s closing package schedule, as of September 30, 2016. This transmits KPMG’s report on its audit of the NCUA’s closing package schedule, which includes other assets and contributed capital of the NCUA and the related notes.

Federal regulations require a payment reduction in the outpatient prospective payment system for the replacement of an implanted device if (1) the device is replaced without cost to the provider or the beneficiary, (2) the provider receives full credit for the cost of the replaced device, or (3) the provider receives partial credit equal to or greater than 50 percent of the cost of the replacement device (42 CFR § 419.45(a)).