Federal Reports

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.