Federal Reports

In 2019, a confidential complainant alleged that employees of the contractor Signature Performance incorrectly processed claims for non VA care. The VA Office of Inspector General (OIG) conducted this audit to determine whether contractor employees accurately processed these claims.

Business Reply Mail (BRM) is a service offered by the Postal Service that enables a sender to provide a recipient with a convenient, prepaid method for replying to a mailing. Customers request refunds when postage has been applied to the prepaid mailing. To obtain a refund, customers must submit postage affixed BRM, and the required Postal Service (PS) Form 3533, Application for Refund of Fees, Products and Withdrawal of Customer Accounts. The Postal Service assesses fees to process the refunds and deducts them from the customer’s refund amount. OIG data analytics identified Hagerstown, MD, Post Office permit postage refunds totaling about $31,754 for fiscal year (FY) 2020, which is 51 percent of the district’s total. In addition, we identified several months with little or no refund activity. The objective of this audit was to determine whether postage affixed BRM refunds were properly issued, supported, and processed at the Hagerstown, MD, Post Office.

What We Looked AtThe Maritime Administration (MARAD) provides ships from the National Defense Reserve Fleet as training vessels for cadets at the State maritime academies to become licensed mariners. In fiscal year 2015, MARAD began the design of National Security Multi-Mission Vessels (NSMV) to replace five training ships nearing the end of useful life. Congress directed MARAD to use an entity other than itself to contract for NSMV construction using commercial design standards and construction practices and has thus far appropriated approximately $1.3 billion for the NSMV program. Given this significant investment and MARAD’s support of national security, we initiated this audit. Our objective was to assess MARAD’s management of the NSMV Program, including oversight of the vessel construction manager (VCM) contract and use of commercial design standards and commercial construction practices consistent with the best interests of the Federal Government. What We FoundVulnerabilities in MARAD’s NSMV program management may hinder achievement of program goals. Though it has taken some risk mitigation steps, MARAD’s program risk management is inadequate. Its risk assessment lacked complete analysis of important elements such as individual risk likelihood, consequences, and mitigation strategies. It also does not sufficiently update and monitor program risks. These deficiencies could affect the Agency’s ability to achieve timely and cost-effective vessels that meet its needs. Furthermore, MARAD has not reviewed complete versions of three required oversight plans that describe key areas of the VCM’s strategy for managing and overseeing NSMV design and construction. Incomplete plans impede MARAD’s ability to effectively oversee the VCM. Lastly, delays in the VCM contract and shipyard subcontract awards may increase MARAD’s exposure to program risks. Later-than-planned awards reduced the time between first vessel delivery and placement into service from 17 months to 1. This lost cushion increases the possibility that the VCM and shipyard will not have enough time to address issues and that contingency plans for late vessel delivery will be implemented, thus adding cost to the program’s billion-plus dollar investment. RecommendationsMARAD concurred with both recommendations to improve its management of the NSMV Program.

DHS’ Countering Weapons of Mass Destruction’s (CWMD)BioWatch has information sharing challenges that reducenationwide readiness to respond to biological terrorismthreats. According to its mission statement, BioWatch isdesigned to operate a nationwide aerosol detection system.The system is intended to detect potential biological threatagents, identify the agent used, and share information withstakeholders, serving as an early warning system.However, BioWatch does not operate a nationwide earlywarning system. Its biological detection equipment is locatedin just 22 of 50 states (44 percent), which leaves 28 stateswithout coverage. This occurred because BioWatch has notreassessed its strategic posture and designated locationsneeding coverage since 2003. Moreover, BioWatch equipmentin 34 of 35 jurisdictions could not always collect air samplesto test for biological threats because the equipment was notsecured to prevent unplugging or security breaches.Further, BioWatch monitors and detects just 6 of 14(approximately 43 percent) biological agents known to bethreats because it has not updated its biological agentdetection capabilities with the 2017 threat assessmentresults. Also, as of 2018, BioWatch stopped conductingroutine full-scale exercises with its jurisdictions inpreparation for a potential bioterrorism attack. According toBioWatch officials, this occurred because CWMD leadershipdirected BioWatch to no longer conduct these exercises,leaving each jurisdiction discretion to perform its ownexercises.Without implementing changes to address BioWatch’schallenges, the United States’ ability to prepare for, detect,and respond to a potential bioterrorism attack is impeded,which could result in significant loss of human life.

The Patient Protection and Affordable Care Act established health insurance marketplaces in all 50 States and the District of Columbia. The Centers for Medicare & Medicaid Services (CMS) operates the Federal marketplace and is responsible for generating advanced premium tax credits (APTCs) made to qualified health plans (QHPs). We previously audited CMS's interim process for approving financial assistance payments on an aggregate basis for the 2014 benefit year. We determined that CMS did not ensure that payments were made only for confirmed enrollees and in the correct amounts. This audit reviewed CMS's permanent process for authorizing APTCs to QHP issuers on a policy-level basis for the 2018 calendar year.The objectives of this audit were to determine whether CMS: (1) ensured APTCs were allowable; and (2) reported accurate enrollment data to the Department of the Treasury's Internal Revenue Service (IRS) for the IRS to use when reconciling APTCs.

OIG Investigations Newsletter Volume XXXII for the period of December 1, 2020 - January 31, 2021