Federal Reports

Our objective for this report was to assess the extent to which the company is incorporating its injury claims financial data into its Safety Management System (SMS).We found that the company has made significant progress implementing its SMS, and, as of December 2020, the company’s SMS aligns with federal requirements and with other passenger transportation industry safety programs. The company, however, has lost several key staff in the safety department since August 2019. While the company has started to assess and replace some of these positions, until it fully assesses the skillsets needed for the program’s next phase and ensures they are in place, the company cannot be sure it will be able to implement the program to its desired outcomes.We recommended that the company continue to assess the current staffing needs of the Safety department and address any significant gaps in capacity and key skillsets that could impact the company’s ability to execute the SMS to its desired outcomes.

The Tipton, IA, Post Office is located in the Iowa, Nebraska, South Dakota District of the Central Area. Metered mail is any mail class or product with postage printed with a Postal Service approved postage meter or PC Postage product/system. Unused metered indicia are postage amounts (which may include fees) already imprinted onto any mailpiece, shipping label or meter strip (stamp) that was never mailed. Such meter indicia are considered for refund only if complete, legible, and valid. OIG data analytics identified the Tipton, IA, Post Office meter refunds totaling about $183,970 from April 1, 2019 to November 30, 2020, the eighth highest in the nation. We noted that there is a major mailer located in Tipton, IA. Our objective was to determine whether meter refunds were properly issued, supported, and processed.

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.