Federal Reports

Section 11(d)(9) of the Inspector General Act of 1978, as amended, requires the Council of the Inspectors General on Integrity and Efficiency to submit to Congress and the President an annual report on the activities of the Integrity Committee. For more informatoin about the Integrity Committee, please visit the link below.

Generic drug price increases exceeded the specified statutory inflation factor applicable to brand-name drugs for 22 percent of the quarterly average manufacturer prices we reviewed. If the provision for brand-name drugs were extended to generic drugs, the Medicaid program would receive additional rebates. We calculated that Medicaid would have received a total of $1.4 billion in additional rebates for the top 200 generic drugs, ranked by Medicaid reimbursement, from 2005 through 2014. The additional rebates for the top 200 generic drugs increased most years, from more than $39 million in 2005 to more than $464 million in 2014.

The Office of Inspector General evaluated NASA’s management and prioritization of its space technology projects to meet future mission needs.

The availability of child care after an emergency or disaster is an important part of recovery efforts because it ensures that children are safe while parents make efforts to rebuild their lives and communities. When Superstorm Sandy made landfall on October 29, 2012, it caused widespread flooding that substantially disrupted child care services in New Jersey and New York. Lessons learned from these States' experiences in responding to and recovering from Superstorm Sandy could help ACF to improve nationwide emergency preparedness for child care. In February 2011, ACF recommended that each State develop a statewide disaster plan for child care, and legislation enacted in November 2014 requires each State to do so.

The Office of Inspector General (OIG) administers the Medicaid Fraud Control Unit (MFCU or Unit) grant awards, annually recertifies the Units, and oversees the Units' performance in accordance with the requirements of the grant. As part of this oversight, OIG conducts periodic reviews of all Units and prepares public reports based on these reviews. These reviews assess Unit performance in accordance with the 12 MFCU performance standards and Unit compliance with applicable Federal requirements.

For the period October 2007 through September 2014, we determined that the South Carolina Department of Health and Human Services (State agency) incorrectly claimed Affordable Care Act Medicaid expenditures totaling $59,149,483 as Indian Health Service expenditures; however, there is no monetary recovery because these expenditures were eligible for 100-percent reimbursement.

Terminal dues, which posts use to pay one another for international deliveries of letters and small packages, have generally been set below domestic postage rates. As a result, the terminal dues system fails to cover many postal operators’ processing and delivery costs for international inbound mail and thus hinders competition. Our research shows the terminal dues system creates definite winners and losers among posts and retailers, and comprehensive reform of the system is needed.

Audit report and management letter for the FY 15 financial statements.

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During the financial statement audit, we assessed the PBGC information security infrastructure for technical weaknesses in PBGC’s computer systems that may allow employees or outsiders to cause harm to, and/or impact, PBGC’s business processes and information. Critical and High severity vulnerabilities increased from prior years. Moreover, the agency must better prepare for end‐of‐service‐life transition. This report includes six recommendations. This work was conducted by CliftonLarsonAllen LLP under contract with the OIG.The Office of Inspector General has determined that this report is for official use only. The report detailing the vulnerability assessment has been redacted in its entirety because it contains privileged and confidential information.

To see our report, click on the link below

Nebraska Methodist Hospital (the Hospital) (operating in Omaha, Nebraska) complied with Medicare billing requirements for 119 of the 138 inpatient and outpatient claims we reviewed. However, the Hospital did not fully comply with Medicare billing requirements for the remaining 19 claims, resulting in net overpayments of $111,000 for calendar years 2012 and 2013. Specifically, 17 inpatient claims had billing errors, resulting in net overpayments of $86,000, and 2 outpatient claims had billing errors, resulting in overpayments of $25,000. These errors occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors.

The OIG audited corporate card transactions totaling $17.3 million for the period March 1, 2014, through August 31, 2014, to determine if appropriate policies and controls were in place to mitigate the risk of charge card fraud and abuse. We found policies could be strengthened and appropriate controls put in place to mitigate the risk of charge card fraud and abuse. We also found there was no documentation to explain the various database tables or the contents of corporate card data fields in the Employee Reimbursement System (ERS). Additionally, potential cost savings may not be achieved due to insufficient tax-related data and confusion within the organization and among vendors regarding TVA's tax status. Our recommendations to TVA management included: (1) requiring annual training for approvers, (2) implementing multiple ERS modifications to strengthen automated controls and enhance compliance with policies, (3) reviewing potentially duplicate and ineligible transactions identified to determine if TVA was due reimbursement, (4) performing periodic review of ERS data to identify potentially ineligible charges, (5) evaluating the appropriateness of delegation of supervisory approval, (6) formally documenting ERS, and (7) determining which corporate card transactions are exempt from state and local taxes. TVA management agreed to or has taken actions to address some, but not all of our recommendations to mitigate the risk of charge card fraud and abuse.

We found that the Office of Civil Rights generally resolves complaints in a timely and efficient manner and in accordance with applicable policies and procedures. However, we noted that increasing workload and decreasing resources could have a negative impact on complaint resolution over time, and staff may not be able to maintain current levels of productivity if these trends continue.

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, the OIG examined a cost proposal submitted for construction/modification services. Our objective was to determine if the vendor's cost proposal was fairly stated for a planned $100 million contract. In our opinion, the cost proposal (1) overstated the other direct cost (ODC) markup rate in the Gallatin Fossil Plant and Paradise Fossil Plant baseline project prices, (2) overstated the payroll tax rate in the craft labor rate schedule, and (3) included non-manual hourly wage ranges that were not reflective of actual salary costs. We estimated TVA could save about $1.2 million on the planned $100 million contract by negotiating reductions to the proposed ODC markup rate and craft labor payroll tax rate. In addition, we found the contract's compensation terms and related attachments were inconsistent with the methodology TVA intends to use to compensate the contractor.(Summary Only)

We found that the California Department of Rehabilitation did not have adequate data quality controls to ensure that information it reported to Rehabilitation Services Administration (RSA) was accurate, complete, and adequately supported. Specific control weaknesses we identified were (1) lack of an adequate control to prevent staff from changing the date that a participant’s case was closed in its case management system; (2) insufficient requirements that personnel maintain documentation to corroborate key dates for application, eligibility, case closure, and employment data; (3) lack of guidance for determining effective dates for participants’ plans; and (4) insufficient manager oversight to provide assurances that data were accurate and required documentation was maintained. Our testing of data that California Department of Rehabilitation reported to RSA showed that most of the data elements in our review contained significant data errors that could undermine RSA’s ability to effectively evaluate the California Department of Rehabilitation’s performance or a significant unverifiable data rate that would raise questions about the reliability of data that it reported.

ARC approved the grant funding to support a project to upgrade the water and sewer system in Wilkesboro.

ARC awarded the grant to the SC Department of Commerce (DOC) who was responsible for administering the grant under the SC State Basic Agency Administrative Procedures for ARC construction projects.

Englewood Hospital and Medical Center (the Hospital) (operating in New Jersey) claimed Medicare reimbursement for outpatient cardiac and pulmonary rehabilitation services that did not comply with Medicare reimbursement requirements. For 46 of the 100 claims in our random sample, the Hospital improperly claimed Medicare reimbursement. On the basis of our sample results, we estimated that the Hospital improperly received at least $115,000 in Medicare reimbursement for services that did not comply with Medicare requirements. We recommended that the Hospital (1) refund $115,000 to the Federal Government and (2) implement written policies and procedures to ensure that outpatient cardiac and pulmonary rehabilitation services are provided and documented in accordance with Medicare requirements.

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On July 1, 2013, nearly 9 months after Hurricane Sandy made landfall, NIH began awarding Disaster Relief Act funds to New York University School of Medicine (NYU School of Medicine) for the restoration of its medical scientific research activities damaged by Hurricane Sandy. Specifically, for the period July 1, 2013, through September 30, 2015, NIH awarded $127.8 million in Disaster Relief Act funding for Grantee Research Programs to NYU School of Medicine. NYU School of Medicine planned to use the funds to restore experiments and reestablish research programs affected by the loss of bio-specimens, animals, data, and time. As of April 30, 2014, NYU School of Medicine claimed $25.1 million of its Disaster Relief Act grant funds for repair and restoration activities.

For the period October 2007 through September 2014, we determined that the Oregon Health Authority (State agency) incorrectly claimed Affordable Care Act Medicaid expenditures totaling $1.2 billion as Indian Health Service expenditures; however, there is no monetary recovery because these expenditures were eligible for 100-percent reimbursement.

For the period October 2007 through September 2014, we determined that the Alaska Department of Health and Social Services (State agency) overstated the Federal share of Indian Health Service Medicaid expenditures on the CMS-64.9 by $1.4 million. These errors occurred because the State agency did not have adequate review procedures to identify data entry errors in the supporting documents of the CMS-64.

To view the report, please click on the link below.

Hoveround Corporation often did not claim Medicare reimbursement for power mobility devices (PMDs) in accordance with Medicare requirements. Medicare Part B covers PMDs, which include power wheelchairs and power-operated vehicles. High incidences of fraud and improper payments have been historically associated with PMDs. In 2010, Hoveround received almost $50 million for PMD claims, the second-largest Federal reimbursement for PMDs supplied to Medicare beneficiaries.

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The Centers for Medicare & Medicaid Services (CMS) relies extensively on contractors to carry out its basic mission and spends billions of dollars each year in contracts for a variety of goods and services. A contract is closed once the contractor has completed contract requirements and the Government has completed all required administrative actions. Because improper payments may be identified and recovered during the closeout process, it is imperative that contracts are closed within Federal Acquisition Regulation (FAR) timeframes. The closeout process, generally, is the last chance for improper contract payments to be detected and recovered, and delayed closeout poses a financial risk to agency funds.