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FRB OIG — Semiannual Report to Congress

May 13, 2015 Comments off

Semiannual Report to Congress
Source: Federal Reserve System, Office of Inspector General

The OIG is responsible for keeping Congress informed of our work. We issue our Semiannual Report to Congress on April 30 and October 31 of each year, summarizing our activities, accomplishments, and ongoing work on audits and investigations. These reports keep both Congress and the agencies that we oversee abreast of our significant findings, progress that the agencies have made, and our recommended areas for further improvement.

HHS OIG — FDA Has Made Progress on Oversight and Inspections of Manufacturers of Generic Drugs

May 11, 2015 Comments off

FDA Has Made Progress on Oversight and Inspections of Manufacturers of Generic Drugs
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
OIG received a Congressional request expressing concerns about the safety and quality of generic drugs produced by foreign manufacturers and requesting that OIG evaluate whether FDA is achieving parity in inspections of foreign and domestic manufacturers. In 2012, nearly 80 percent of prescriptions filled in the United States were for generic drugs. But in recent years, several recalls of generic drugs have raised concerns about FDA’s oversight of manufacturers.

HOW WE DID THIS STUDY
We analyzed FDA data for inspections and registered manufacturers of generic drugs for 2011-2013 to determine the number and types of inspections. We also analyzed FDA data to determine whether manufacturers listed on approved applications had registered with FDA as required. We also analyzed FDA records and interviewed FDA staff to determine the extent to which it is progressing toward achieving parity in domestic and foreign inspections and more efficient processes for inspections.

WHAT WE FOUND
FDA increased its preapproval inspections of manufacturers of generic drugs by 60 percent between 2011 and 2013. However, it did not conduct all of the preapproval inspections requested by its own generic drug application reviewers during this time period. The graphic below illustrates the distribution of generic manufacturers and surveillance inspections worldwide (for more information, see Table 4 in the report).
In 2013, FDA conducted surveillance inspections of all generic manufacturers that it had identified as high risk. FDA also reported progress towards achieving parity in inspections of foreign and domestic manufacturers of generic drugs and ensuring compliance with generic manufacturer registration. Finally, FDA has created some policies and procedures to request manufacturer records in lieu or in advance of an inspection, but has not yet used these procedures to request records.

Declines in Postal Service Mail Volume Vary Widely Across the U.S.

April 30, 2015 Comments off

Declines in Postal Service Mail Volume Vary Widely Across the U.S.
Source: U.S. Postal Service, Office of Inspector General

Declining First-Class Mail (FCM) volumes pose a major financial challenge to the U.S. Postal Service because FCM contributes by far the largest proportion of revenue to the Postal Service’s bottom line. Between fiscal years 1995 and 2013, FCM single-piece volume dropped by 61 percent. But a close analysis of the decrease reveals significant variations in this decline by geographic area. In some areas, for instance, the percent of volume lost was even greater than 61 percent, but in other areas, it was almost zero. Additionally, the rate of decline is slowing or has stopped even in many of the areas that have lost the most mail volume, suggesting a new base level of demand for FCM has been reached in those regions.

As the Postal Service plans for its future, it must keep in mind that the needs of its customers vary at least as widely as these differences in mail volumes. Because there is no average mail customer, strategic planning designed around average mail volume data will inevitably result in inefficient solutions. The Postal Service would benefit by examining the widely varying levels of demand for FCM and using that information to develop its operational and customer service plans.

USPS OIG — Domestic Merchandise Returns and Forwarding

April 24, 2015 Comments off

Domestic Merchandise Returns and Forwarding (PDF)
Source: U.S. Postal Service, Office of Inspector General

The package delivery market is an important and growing segment of the U.S. economy. American businesses and consumers spent more than $68 billion in 2013 to ship packages domestically. As part of this package activity, merchandise sometimes needs to be returned to the merchant or forwarded to a different address designated by the recipient. A recent study conducted from April to June 2013 showed that just over 5 percent of business volume (over 500 million pieces) was returned using a carrier shipping service. The domestic returns business is worth an estimated $3 billion annually and is expected to approach $4 billion by 2016.

The U.S. Postal Service is active in the returns market, having generated about [redacted] in returns-related revenue in fiscal year (FY) 2014. The potential of this market was recently acknowledged when the vice president, New Products and Innovation, stated, “Returns play an important role in our efforts to grow our package business.” The Postal Service has also released its new “Already There” advertising campaign aimed at promoting the ease of its return services. In addition, the Postal Service generated about [redacted] in forwarding-related revenue in FY 2014. To support this growing market, the Postal Service offers a variety of merchandise return and forwarding products and services and continues to develop additional services to keep up with eCommerce, digital innovations, and changing customer preferences.

The objective of our review was to identify opportunities for the Postal Service to grow its merchandise returns and forwarding revenue. To that end, we researched global trends, reviewed actions of foreign posts, met with Postal Service managers and returns companies, and examined prior U.S. Postal Service Office of Inspector General reports.

Postal Service Revenue: Is the Glass Half Empty or Half Full?

April 16, 2015 Comments off

Postal Service Revenue: Is the Glass Half Empty or Half Full?
Source: U.S. Post Office, Office of Inspector General

We have all read the negative headlines of U.S. Postal Service’s looming financial demise. However, in its new paper, U.S. Postal Service Revenue: Is the Glass Half Empty or Half Full?, the OIG finds that the Postal Service may be turning a corner. An increase in parcel volume, significant cost reductions, and the exigent price increase are collectively driving an improvement in the Postal Service’s financial health.

Nevertheless, the Postal Service still faces numerous challenges, including the continued and persistent decline in First-Class Mail volume, an ever-increasing number of delivery points, and an increased need to make investments for its future. While significant, these challenges are not insurmountable. In order to further improve its financial position, the Postal Service will need to focus on increasing the revenue yield of its traditional products wherever market forces and conditions allow, including taking advantage of the growing parcel market. In addition, the Postal Service would benefit from diversifying into other areas of business, especially logistics and financial services.

Review of the Use of Confidentiality Agreements by Department of State Contractors

April 9, 2015 Comments off

Review of the Use of Confidentiality Agreements by Department of State Contractors (PDF)
Source: U.S. Department of State, Office of Inspector General

All of the 30 contractors with the largest dollar volume of Department of State contracts used some variation of a confidentiality agreement or confidentiality policy. Some of the contractors had policies or agreements that might have some chilling effect on employees who are considering whether to report fraud, waste, or abuse to the government, such as nondisparagement clauses or provisions requiring notice to the company after receiving an inquiry from a government official. However, none of the companies reported that they had ever enforced any of these provisions against an employee or former employee who disclosed wrongdoing to the government. All 30 contractors also reported that they had a policy in place that encourages the reporting of fraud or legal and ethical violations and provides one or more ways for employees to do so.

From its review of the contractor responses and relevant legal and social science literature, OIG found that several practices are useful in encouraging employees to report fraud, waste, or abuse. These include use of an internal hotline with anonymous option; display of hotline posters in the workplace; a policy that advises employees of their right to contact the government directly if they have knowledge of fraud, waste, or abuse; notification to employees of the statutory protections against retaliation; and a corporate policy that endorses cooperation with a government audit or investigation.

Audit of VA’s Drug-Free Workplace Program

March 31, 2015 Comments off

Audit of VA’s Drug-Free Workplace Program
Source: U.S. Department of Veterans Affairs, Office of Inspector General

We conducted this audit to assess how effectively VA’s Drug-Free Workplace Program identifies and addresses illegal drug use among VA employees. VA needs to improve management of its Drug-Free Workplace Program. VA selected about 3 of every 10 applicants for pre employment drug testing before hiring these individuals into Testing Designated Positions (TDPs) in fiscal year (FY) 2013. We estimate that of the nearly 22,600 individuals VA reported hiring into TDPs in FY 2013, about 15,800 were hired without a pre-employment drug test. VA facilities tested about 68 percent of the 3,420 employees selected for random drug testing in FY 2013. We identified at least 19,100 employees in TDPs who were not subject to the possibility of monthly random drug testing.

In addition, VA erroneously designated as many as 13,200 employees in non-TDPs for drug testing in FY 2014. Further, only 17 (33 percent) of the 51 employees who tested positive for drugs as a result of reasonable suspicion of on-the-job drug use or after a workplace accident or injury were referred to VA’s Employee Assistance Program.

These issues occurred because VA does not support that all tentative selectees for TDPs need to be drug tested before being hired. VA also does not effectively monitor local facility compliance with random employee drug testing requirements. Furthermore, VA lacks adequate oversight to ensure the accuracy of drug testing data and that consistent personnel actions are taken when employees test positive for drugs. As a result, VA has little assurance that this program is performing as intended to identify and eliminate illegal drug use in its workforce.

Since VA’s workforce is expected to grow significantly with the passage of the Veterans Access, Choice, and Accountability Act of 2014, VA needs to take actions to address weaknesses in its Drug-Free Workplace Program immediately. We recommended the Deputy Assistant Secretary for Human Resources Management implement processes to ensure full compliance with VA’s pre-employment applicant drug testing and random employee drug testing requirements, and improve program integrity by ensuring the accurate coding of employees in TDPs.

The Acting Deputy Assistant Secretary for Human Resources Management concurred with our recommendations and provided an acceptable action plan. We will follow up on the implementation of the corrective actions.

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