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Archive for the ‘Office of Inspector General’ Category

DOG OIG — Development and Implementation of Sexual Assault Evidence and Criminal Records Retention Policy

July 18, 2014 Comments off

Development and Implementation of Sexual Assault Evidence and Criminal Records Retention Policy
Source: U.S. Department of Defense, Office of Inspector General

Objective
We initiated this review as required by the “National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2014.” Our objective was to review the Military Criminal Investigative Organizations’[1] (MCIO) progress in implementing DoD policy on the retention of and access to evidence and criminal records relating to sexual assault of service members as required by “The National Defense Authorization Act for Fiscal Year 2012,” and Department of Defense Instruction (DODI) 5505.18, “Investigation of Adult Sexual Assault in the Department of Defense,” January 25, 2013, Incorporating Change 1, May 1, 2013.

Findings
DoD has developed policy for retaining and accessing evidence and criminal records for sexual assault victims as required by NDAA FY 2012. The MCIOs have issued Service-specific policies and procedures to implement Federal law and DoD guidance.

Recommendations
None.

Management Comments
No written response to this report was required.

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DOJ OIG — An Assessment of the 1996 Department of Justice Task Force Review of the FBI Laboratory

July 17, 2014 Comments off

An Assessment of the 1996 Department of Justice Task Force Review of the FBI Laboratory (PDF)
Source: U.S. Department of Justice, Office of Inspector General

This is the third review by the Office of the Inspector General (OIG) since 1997 related to alleged irregularities by the Federal Bureau of Investigation (FBI) Laboratory (Lab). 2 The first two OIG reports focused on alleged FBI Lab deficiencies, the conduct of individuals brought to our attention by a whistleblower, and remedial actions the FBI took in response to our recommendations. This report addresses how the Criminal Division Task Force (Task Force), created by the Department in 1996 and whose mission was redefined in 1997, managed the identification, review, and follow-up of cases involving the use of scientifically unsupportable analysis and overstated testimony by FBI Lab examiners in criminal prosecutions. We analyzed the Task Force’s review of cases involving 13 FBI examiners the Task Force determined had been criticized in the 1997 OIG report. We included in our review a close examination of cases handled by 1 of the 13 examiners, Michael Malone, the Lab’s Hairs and Fibers Unit examiner whose conduct was particularly problematic.

Although the Task Force made a diligent effort to manage a complex review of thousands of cases, we found the following serious deficiencies in the Department’s and the FBI’s design, implementation, and overall management of the case review process…

VA OIG — Review of the Special Initiative To Process Rating Claims Pending Over 2 Years

July 15, 2014 Comments off

Review of the Special Initiative To Process Rating Claims Pending Over 2 Years (PDF)
Source: U.S. Department of Veterans Affairs, Office of Inspector General

On April 19, 2013, the Veterans Benefits Administration (VBA) began a Special Initiative to process all claims pending over 2 years. VA Regional Office (VARO) staff were to issue provisional ratings for cases awaiting required evidence and complete these older claims within 60 days. Our review focused on whether (1) provisional ratings resulted in veterans receiving benefits more quickly and helped eliminate the backlog, and (2) older claims were accurately. The Special Initiative rating process was less effective than VBA’s existing rating process in providing benefits to veterans quickly. Further, VBA removed all provisional claims from its pending inventory, despite more work being needed to complete them. This process misrepresented VBA’s actual workload of pending claims and its progress toward eliminating the overall claims backlog. At the end of June 2013 following completion of the Special Initiative, VBA reported 516,922 rating claims pending in its backlog, but only 1,258 rating claims pending over 2 years. We estimated 7,823 provisionally rated claims had been removed from the inventory though they still awaited final decisions. These claims represented less than 2 percent of VBA’s reported backlog, but about 12 percent of claims completed under the Initiative. VAROs did not prioritize finalization of the provisionally rated claims once they were issued. We estimated 6,860 provisional ratings were still waiting for final decisions as of January 2014, 6 months after the Initiative had ended. Because VBA did not ensure existing controls were functioning as needed to effectively identify and manage provisionally rated claims, some veterans may never have received final rating decisions if not for our review. Additionally, VBA did not accurately process 77 (32 percent) of 240 rating decisions we reviewed under this Initiative. Generally, these errors occurred because VAROs felt pressured to complete these claims within VBA’s 60 day deadline. We estimated VARO staff inaccurately processed 17,600 of 56,500 claims, resulting in $40.4 million in improper payments during the Initiative period. We recommended the Under Secretary for Benefits establish controls for all provisionally-rated claims, reflect these claims in VBA’s pending workload statistics, expedite finalization of provisional ratings, and review for accuracy all claims that received provisional ratings under the Special Initiative. The Under Secretary for Benefits concurred with our recommendations. Management’s planned actions are responsive and we will follow up as required on all actions.

OIG HHS — Questionable Billing for Medicare Part B Clinical Laboratory Services

July 11, 2014 Comments off

Questionable Billing for Medicare Part B Clinical Laboratory Services
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
Medicare is the largest payer of clinical laboratory (lab) services in the nation. From 2005 to 2010, Part B Medicare enrollment increased by 10 percent, while spending for lab services increased by 29 percent. In 2010, Medicare payments for all Part B lab services totaled $8.2 billion. We conducted this study to identify questionable billing patterns among Medicare lab services.

HOW WE DID THIS STUDY
We based this study on an analysis of Part B claims for lab services with dates of service in 2010. Labs submit claims for each lab service provided for Medicare beneficiaries. Each claim contains information about the lab provider, the ordering physician, the beneficiary, and the lab service. We developed 13 measures to describe labs’ billing patterns and to identify labs with questionable billing patterns. We calculated and analyzed the distribution of the measures for each lab. We then calculated a statistical threshold for the 13 measures and determined whether a lab’s billing was unusually high for each measure. Additionally, we calculated the total number of claims and total allowed amount associated with certain measures of questionable billing.

WHAT WE FOUND
In 2010, over 1,000 labs exceeded the thresholds (i.e., had unusually high billing) for 5 or more measures of questionable billing for Medicare lab services. For example, a lab might have an unusually high percentage of claims with ineligible and/or invalid ordering-physician numbers, or an unusually high allowed amount per ordering physician. Almost half of the labs that exceeded the thresholds for five or more measures of questionable billing-compared to 13 percent of all labs-were located in California and Florida, areas known to be vulnerable to Medicare fraud. Some labs that exceeded the thresholds for fewer than five measures also exhibited billing that may warrant further review. Medicare allowed $1.7 billion across all labs for claims associated with questionable billing.

WHAT WE RECOMMEND
There may be some labs that have legitimate reasons for exceeding certain thresholds. However, collectively, these findings call for stronger oversight of labs and identify specific issues with Medicare payments for lab services that need to be addressed to more effectively safeguard Medicare. Therefore, we recommend that CMS (1) review the labs identified as having questionable billing and take appropriate action, (2) review existing program integrity strategies to determine whether these strategies are effectively identifying program vulnerabilities associated with lab services, and (3) ensure that existing edits prevent claims with invalid and ineligible ordering-physician numbers from being paid. CMS concurred with all recommendations.

DOD OIG — Procedures to Ensure Sufficient Rare Earth Elements for the Defense Industrial Base Need Improvement

July 10, 2014 Comments off

Procedures to Ensure Sufficient Rare Earth Elements for the Defense Industrial Base Need Improvement
Source: U.S. Department of Defense, Office of Inspector General

Objective
We determined whether DoD effectively planned for life-cycle sustainment of rare earth elements (REE) for the defense industrial base (DIB). Specifically, we determined whether DoD effectively implemented procedures to maintain a sufficient and available supply of REEs for the DIB.

Finding
DoD lacked a comprehensive and reliable process to assess REE supply and demand. Specifically, Defense Logistics Agency, Strategic Materials Division officials did not ensure that its modeling and simulation contractor used: REE supply forecasts that considered market and environmental risks; complete REE demand survey results; and verified economic consumption data to forecast REE demand.

This occurred because the Defense Logistics Agency, Strategic Materials Division did not have adequate verification and validation procedures in place to ensure realistic supply and demand inputs and did not require that the contractor use an accredited model to forecast REE supply and demand.

As a result, DoD may not have identified all REEs with expected shortfalls, increasing the risk that those shortfalls will adversely affect critical weapons systems production in the DIB, and overall DoD readiness.

Recommendations
We recommend that the Director, Defense Logistics Agency–Strategic Materials Division:

  • develop and implement a verification and validation plan for REE supply and demand forecasting model inputs;
  • develop and implement procedures to ensure that future shortfall analyses compare DoD demand and supply for REEs under the same scenarios;
  • develop and implement procedures for obtaining DoD REE consumption data by leveraging Service acquisition executive participation and other techniques as appropriate;
  • develop and implement an accreditation plan for theforecasting model’s intended use; and
  • ensure that current and future contracts for models, simulations and associated data include verification, validation and accreditation procedures in the contract requirements.

Management Comments and Our Response

The Director, Defense Logistics Agency, Acquisition Directorate generally addressed the recommendations; however, comments on Recommendation 2 partially addressed the recommendation. Therefore, we are requesting additional comments on Recommendation 2 by August 4, 2014.

Laws Prohibit the Use of HHS Grant Funds for Lobbying, but Limited Methods Exist To Identify Noncompliance

July 9, 2014 Comments off

Laws Prohibit the Use of HHS Grant Funds for Lobbying, but Limited Methods Exist To Identify Noncompliance
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
This evaluation responded to a congressional request for OIG to review grantees’ use of Department of Health and Human Services (HHS) funds and awarding agencies’ implementation and oversight regarding the prohibitions on the use of grant funds for lobbying activities.

HOW WE DID THIS STUDY
This evaluation included 13 grantmaking agencies (awarding agencies) within HHS. We collected and reviewed departmental and awarding agency directives in place for fiscal years (FYs) 2011 and 2012. We conducted structured telephone interviews with each agency’s Chief Grants Management Officer and/or his or her designated staff. We asked about awarding agencies’ notifications to grantees of the prohibitions on the use of grant funds for lobbying. We also asked about awarding agencies’ mechanisms for identifying grantees that may have violated lobbying prohibitions and the mechanisms in place for reviewing allegations of lobbying. We conducted surveys with a sample of grantees from five awarding agencies regarding their awareness of the lobbying prohibitions.

WHAT WE FOUND
All awarding agencies reported using Federal and departmental sources of guidance regarding the prohibitions on the use of grant funds for lobbying. Through grant applications, notices of award, and/or training, all awarding agencies informed grantees of the prohibitions. For all sampled grant awards, grantees reported being aware of the lobbying prohibitions. However, limited methods exist to identify noncompliance. HHS awarding agencies found two instances of noncompliance in FYs 2011 and 2012.

WHAT WE RECOMMEND
We recommend that ASFR facilitate Departmentwide information sharing among awarding agencies about methods to identify the use of grant funds for prohibited lobbying activities. We also recommend that ASFR centralize on its Web site the guidance pertaining to the prohibitions on the use of grant funds for lobbying. ASFR concurred with our recommendations.

If It Prints, It Ships: 3D Printing and the Postal Service

July 8, 2014 Comments off

If It Prints, It Ships: 3D Printing and the Postal Service (PDF)
Source: U.S. Postal Service, Office of Inspector General

Highlights

  • 3D printing is in the initial stages of transforming major parts of our economy, such as aerospace and healthcare. It also promises to revolutionize the way consumers get customized goods by making them cheaper and more accessible.
  • Prominent industry forecasts show the 3D printing market exploding over the next several years.
  • 3D printing could lead to an increase in packages delivered by the Postal Service worth $485 million in new annual revenue, based on analysis of commercial package volume data.
  • Emerging 3D printing businesses could use the ubiquitous first- and last-mile postal network to connect with their customers.
  • The Postal Service could partner with 3D printing businesses, perhaps using excess space in postal facilities, to help streamline the fast delivery of 3D printed goods.

HHS OIG — Marketplaces Faced Early Challenges Resolving Inconsistencies With Applicant Data

July 2, 2014 Comments off

Marketplaces Faced Early Challenges Resolving Inconsistencies With Applicant Data
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
This evaluation examines how the Federal and State health insurance marketplaces ensured the accuracy of information submitted by applicants for enrollment in qualified health plans and for advance payment of premium tax credits and cost sharing reductions. This evaluation complements a separate Office of Inspector General report (A-09-14-01000) issued in response to the mandate in the Continuing Appropriations Act, 2014, by providing an analysis of how and the extent to which marketplaces resolved inconsistencies between applicants’ self-attested information and the data received through the Federal Data Hub or from other data sources.

HOW WE DID THIS STUDY
We requested data on inconsistencies for October through December 2013 from all marketplaces although four did not provide any. We conducted interviews or site visits with the staffs at the Federal marketplace and all 15 State marketplaces between January and March 2014. We reviewed each marketplace’s policies and procedures for resolving inconsistencies.

WHAT WE FOUND
During the period of our review, marketplaces were unable to resolve most inconsistencies, which they reported most commonly as citizenship and income. Each applicant can have multiple inconsistencies. Inconsistencies do not necessarily indicate that an applicant provided inaccurate information or is enrolled in a qualified health plan or is receiving financial assistance through insurance affordability programs inappropriately. Specifically, the Federal marketplace was unable to resolve 2.6 million of 2.9 million inconsistencies because the CMS eligibility system was not fully operational. The abilities of State marketplaces to resolve inconsistencies varied. Four State marketplaces reported that they were unable to resolve inconsistencies, seven reported that they resolved inconsistencies without delay, one reported that it resolved only some inconsistencies, and three reported that their State Medicaid offices resolved inconsistencies. We also found that data on inconsistencies are limited. For example, the Federal marketplace could not determine the number of applicants who had at least one inconsistency. Finally, marketplaces faced challenges resolving inconsistencies despite having policies and procedures in place.

WHAT WE RECOMMEND
CMS should develop and make public a plan on how and by what date the Federal marketplace will resolve inconsistencies. CMS should conduct additional oversight of State marketplaces to ensure that they are resolving inconsistencies according to Federal requirements. CMS concurred with both of our recommendations.

USPS OIG — Monitoring of Government Travel Card Transactions: Management Advisory Report

July 1, 2014 Comments off

Monitoring of Government Travel Card Transactions: Management Advisory Report (PDF)
Source: U.S. Postal Service, Office of Inspector General

Background
Citibank issues VISA branded SmartPay 2® cards to U.S. Postal Service employees for use on official travel. The Postal Service has travel card coordinators who monitor employee card use to identify transactions that could indicate misuse such as nontravel related purchases or unauthorized cash advances. There were 44,104 government travel cards issued to Postal Service personnel as of January 15, 2014. From April 1, 2012, through March 31, 2013, employees made 247,419 purchases totaling about $44.9 million and 8,793 cash advances totaling about $1.6 million.

Our objective was to determine whether Postal Service travel card coordinators were effectively monitoring government travel card transactions. Specifically, we evaluated the internal controls managed by the travel card coordinators, but did not determine the appropriateness of individual travel card transactions.

What The OIG Found
Postal Service travel card coordinators need to more effectively monitor cash advances. We judgmentally selected 1,832 cash advances for review based on noncompliance with Postal Service travel policy. We found travel coordinators did not identify for further review 1,260 transactions, totaling $215,466, that potentially did not comply with travel policy.

In addition, travel card coordinators for the U.S. Postal Inspection Service and Postal Service Headquarters need to better monitor purchases. We judgmentally selected 486 purchase transactions based on potential noncompliance with travel policy and the amount of the transaction. We found 282 purchases totaling $55,516 that were not identified by coordinators for follow up with employees’ managers. We also determined the Postal Service did not process cardholder personnel changes in a timely manner to allow coordinators to monitor travel card transactions.

Although individual employee cardholders are responsible for repayment of all cash advances and payment for all items purchased with their travel cards, effective monitoring of travel card transactions reduces the risk of credit card delinquencies or negative publicity when employees misuse their travel cards.

HHS OIG — Special Fraud Alert: Laboratory Payments to Referring Physicians

June 26, 2014 Comments off

Special Fraud Alert: Laboratory Payments to Referring Physicians (PDF)
Source: U.S. Department of Health and Human Services, Office of Inspector General

This Special Fraud Alert addresses compensation paid by laboratories to referring physicians and physician group practices (collectively, physicians) for blood specimen collection, processing, and packaging, and for submitting patient data to a registry or database. OIG has issued a number of guidance documents and advisory opinions addressing the general subject of remuneration offered and paid by laboratories to referring physicians, including the 1994 Special Fraud Alert on Arrangements for the Provision of Clinical Laboratory Services, the OIG Compliance Program Guidance for Clinical Laboratories, and Advisory Opinion 05-08. In these and other documents, we have repeatedly emphasized that providing free or below-market goods or services to a physician who is a source of referrals, or paying such a physician more than fair market value for his or her services, could constitute illegal remuneration under the anti-kickback statute. This Special Fraud Alert supplements these prior guidance documents and advisory opinions and describes two specific trends OIG has identified involving transfers of value from laboratories to physicians that we believe present a substantial risk of fraud and abuse under the anti-kickback statute.

HHS OIG — Performance Data for the Senior Medicare Patrol Projects: June 2014 Performance Report

June 26, 2014 Comments off

Performance Data for the Senior Medicare Patrol Projects: June 2014 Performance Report
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
This memorandum report presents performance data for the Senior Medicare Patrol (SMP) projects, which receive grants from the Administration for Community Living (ACL) to recruit and train retired professionals and other senior citizens to recognize and report instances or patterns of health care fraud. (ACL was established in 2012, bringing together the Administration on Aging (AoA) and two other offices.) In July 2010, AoA requested that OIG continue to collect and report performance data for the projects to support its efforts to evaluate and improve their performance. OIG currently reports this performance data on an annual basis.

HOW WE DID THIS STUDY
We based this review on data reported by the SMP projects. In addition, we requested and reviewed documentation from the projects for expected recoveries of funds for the Medicare and Medicaid programs. We also requested and reviewed documentation for actual savings to beneficiaries and others that were attributable to the projects, as well as for cost avoidance. We did not review documentation for the other performance measures.

WHAT WE FOUND
In 2013, the 54 SMP projects had 5,406 active volunteers, a 5-percent increase from 2012. These volunteers conducted 148,235 one-on-one counseling sessions, a 31-percent increase from 2012. They also conducted 14,924 group education sessions in 2013, compared to 14,748 in 2012.

In 2013, expected Medicare and Medicaid recoveries that were attributable to the projects were 9.1 million, a 50-percent increase from 2012. However, total savings to beneficiaries and others decreased from $133,971 in 2012 to $41,718 in 2013. Finally, cost avoidance on behalf of Medicare, Medicaid, beneficiaries, and others increased by 26 percent, from $113,692 in 2012 to $143,282 in 2013.

We continue to emphasize that it is not always possible to track referrals to Medicare contractors or law enforcement from beneficiaries who have learned to detect fraud, waste, and abuse from the projects. Therefore, the projects may not be receiving full credit for savings attributable to their work. In addition, the projects are unable to track the substantial savings derived from a sentinel effect whereby fraud and errors are reduced by Medicare beneficiaries’ scrutiny of their bills.
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USPS OIG — Delivery Vehicle Fleet Replacement

June 25, 2014 Comments off

Delivery Vehicle Fleet Replacement (PDF)
Source: U.S. Postal Service, Office of Inspector General

BACKGROUND
The U.S. Postal Service uses more than 190,000 vehicles to collect and deliver mail, including about 142,000 long-life vehicles that are nearing or exceeding their expected service life. As the fleet ages, maintenance costs will increase and older models will be retired as they become too costly to maintain or repair.

Our objectives were to assess the Postal Service’s acquisition strategy for the next generation of collection and delivery vehicles and identify features recommended for these vehicles.

WHAT THE OIG FOUND:
The Postal Service has an acquisition strategy, but has not fully developed or implemented it. The short-term plan developed in 2011 included acquiring 25,000 vehicles costing about $500 million to meet operational needs and replace some of the aging fleet. The long-term plan included purchasing the next generation of delivery vehicles beginning in fiscal year (FY) 2017. However, this plan lacked details, such as vehicle requirements, specifications, and green technology features. Despite 3 years of effort, neither plan has been approved or fully funded. In January 2014, the Postal Service received approval to purchase 3,509 vehicles to meet a contractual rural carrier vehicle commitment as a stop gap measure.

These conditions occurred due to financial constraints. Our analysis of the delivery vehicle inventory and motorized routes showed the Postal Service could sustain delivery operations nationwide until FY 2017. On the other hand, it could experience vehicle shortfalls if there are unexpected decreases in vehicle inventory or increases in motorized routes. In addition, aging vehicles are typically repaired when they break down, even though it would sometimes be more cost effective to replace them.

In designing new delivery vehicles, management must consider federal fleet regulations, emerging vehicle technologies, and fleet best practices. For example, growth in the package market could help dictate the design and technologies selected for a new vehicle. Moreover, replacing vehicles could take more than 10 years. Thus, the Postal Service should act quickly to implement a plan to meet operational needs, achieve sustainability goals, and reduce maintenance costs.

WHAT THE OIG RECOMMENDED:
We recommended the vice president, Delivery and Post Office Operations, continue to pursue short-term annual vehicle acquisitions and formalize a long-term plan to replace the fleet that includes requirements and specifications for the next generation of delivery vehicles.

USPS OIG — Advertising and Consulting Supplier Selection Process

June 23, 2014 Comments off

Advertising and Consulting Supplier Selection Process (PDF)
Source: U.S. Postal Service, Office of Inspector General

BACKGROUND:
In a January 2013 report, the U.S. Postal Service Office of Inspector General (OIG) found that the U.S. Postal Service did not adequately monitor its two largest advertising contracts. As a result, the Postal Service planned to restructure the contracts to take advantage of competition in the advertising marketplace. In fiscal years 2012 and 2013, the Postal Service awarded about $252 million for advertising and related consulting services.

Supplier selection involves a team evaluating suppliers’ proposals. Team members individually evaluate proposals and then meet to reach a consensus. The team must document the rationale for its consensus decisions. Competing suppliers who disagree with the supplier selection can challenge the contract award.

We conducted this audit to follow up on the OIG’s prior report on the Postal Service’s advertising program. Our audit objectives were to determine whether the Postal Service increased competition for advertising contracts and to assess the supplier selection process.

WHAT THE OIG FOUND:
The Postal Service increased competition for advertising contracts by closing its two largest advertising contracts and competitively awarding contracts to four suppliers. Evaluation teams generally complied with the established guidelines for the supplier selection process by documenting narratives to support their consensus decisions, except for two consulting contract purchases. Specifically, the two evaluations did not include narratives to explain the basis of the competing supplier ratings.

If supplier evaluations are not fully documented and maintained, the Postal Service cannot ensure the transparency and integrity of the supplier selection process and its contract awards may be vulnerable to challenges. As a result, we identified two contract purchases valued at $3.5 million for which evaluations did not contain narratives to support the consensus decisions. This does not necessarily indicate that the Postal Service incurred losses.

WHAT THE OIG RECOMMENDED:
We are not making any recommendations because management took corrective actions to address the need for consensus documentation by releasing an official memorandum and training contracting officials on the technical evaluation policy requirement.

DHS OIG — Radio Frequency Identification Security at USCIS Is Managed Effectively, But Can Be Strengthened

June 18, 2014 Comments off

Radio Frequency Identification Security at USCIS Is Managed Effectively, But Can Be Strengthened (PDF)
Source: U.S. Department of Homeland Security, Office of Inspector General
From Spotlight (PDF):

We determined that United States Citizenship and Immigration Services (USCIS) has effectively managed the implementation of RFID technology We determined that USCIS has effectively managed the implementation of RFID technology measures to minimize the risk of using RFID enabled permanent resident cards. For example, USCIS has granted its card production system the authority to operate, evaluated privacy implications of using the system, and ensured that no personal data is transmitted by permanent resident cards. However, USCIS had not deployed timely security patches on the servers and workstations that support RFID processes, assessed annually on the effectiveness of security controls implemented on the system that produces RFID cards, or ensured employees producing these cards receive the mandatory annual privacy awareness training.

USPS OIG — Postal Inspection Service Mail Covers Program

June 18, 2014 Comments off

Postal Inspection Service Mail Covers Program (PDF)
Source: U.S. Postal Service, Office of Inspector General

BACKGROUND:
In fiscal year 2013, the U.S. Postal Inspection Service processed about 49,000 mail covers. A mail cover is an investigative tool used to record data appearing on the outside of a mailpiece. Law enforcement agencies use this information to protect national security; locate fugitives; obtain evidence; or help identify property, proceeds, or assets forfeitable under criminal law.

A mail cover is justified when it will further an investigation or provide evidence of a crime. The U.S. Postal Service is responsible for recording and forwarding the data to the Postal Inspection Service for further processing. Postal Service and law enforcement officials must ensure compliance with privacy policies to protect the privacy of customers, employees, and other individuals’ information.

Our objective was to determine whether the Postal Service and Postal Inspection Service are effectively and efficiently handling mail covers according to Postal Service and federal requirements.

WHAT THE OIG FOUND:
Opportunities exist to improve controls over the mail covers program. For example, responsible personnel did not always handle and process mail cover requests in a timely manner and documents relating to the covers were not always returned to the program files as required. Of the 196 external mail cover requests we reviewed, 21 percent were approved without written authorization and 13 percent were not adequately justified or reasonable grounds were not transcribed accurately. Also, 15 percent of the inspectors who conducted mail covers did not have the required nondisclosure form on file

Further, the Postal Inspection Service provided evidence for only one periodic review of the mail covers program over the past 3 fiscal years and did not have procedures to ensure annual reviews were performed as required. Finally, the mail cover computer application did not always provide accurate and reliable information because system controls did not ensure completeness, accuracy, and consistency of data. For example, we found 928 mail covers in active status after the cover periods ended.

Insufficient controls could hinder the Postal Inspection Service’s ability to conduct effective investigations, lead to public concerns over privacy of mail, and harm the Postal Service’s brand.

WHAT THE OIG RECOMMENDED:
We recommended management improve controls to ensure responsible personnel process mail covers in a timely manner and conduct periodic reviews of the mail covers program. Also, we recommended management implement system controls to ensure data integrity in the Postal Inspection Service mail cover application.

HHS OIG — Medicare Market Share of Mail Order Diabetes Test Strips From July-September 2013

June 17, 2014 Comments off

Medicare Market Share of Mail Order Diabetes Test Strips From July-September 2013
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
Medicare covers diabetes test strips provided by mail order suppliers and local pharmacies or supplier storefronts. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires CMS to phase in, with several rounds of bidding, a Competitive Bidding Program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Under this program, suppliers compete to become Medicare contract suppliers for selected DMEPOS items. The payment amounts resulting from the competition replace the Medicare fee-schedule amounts for these items.

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) prohibits CMS from awarding Competitive Bidding Program contracts for mail order diabetes test strips to suppliers that do not demonstrate that their bid covers at least 50 percent, by volume, of all types of mail order diabetes test strips. Further, section 154(d)(3)(B) of MIPPA requires OIG to complete a study to determine market shares of diabetes test strips in the Competitive Bidding Program before each round of competitive bidding following Round 1. This report fulfills the MIPPA requirement for the pending third round of competitive bidding.

HOW WE DID THIS STUDY
We determined the Medicare market shares for diabetes test strip types associated with a random sample of Medicare claims for the 3-month period of July to September 2013. Our sample of 1,210 claims was drawn from a population of approximately 505,000 claims for mail order diabetes test strips provided to beneficiaries during this period. To estimate the Medicare market shares, we surveyed suppliers and projected our sample data to the population of mail order diabetes test strips.

WHAT WE CONCLUDED
Twenty-two suppliers submitted at least 43 types of mail order diabetes test strips for the 3-month period of July to September 2013. Two types of diabetes test strips accounted for approximately 45 percent of the Medicare mail order market share. Three types of diabetes test strips accounted for 59 percent of the Medicare mail order market share, and 10 types accounted for 90 percent. CMS may choose to consider these data when determining whether subsequent rounds of suppliers’ mail order diabetes test strip bids comply with the MIPPA 50-percent requirement.

DHS OIG — FEMA Could Realize Millions in Savings by Strengthening Policies and Internal Controls Over Grant Funding for Permanently Relocated Damaged Facilities

June 14, 2014 Comments off

FEMA Could Realize Millions in Savings by Strengthening Policies and Internal Controls Over Grant Funding for Permanently Relocated Damaged Facilities (PDF)
Source: U.S. Department of Homeland Security, Office of Inspector General
From Spotlight (PDF):

FEMA could realize millions of dollars in cost savings by strengthening its policies, procedures, and internal controls over Public Assistance grant funding provided for permanently relocated damaged facilities. FEMA’s present policies and procedures do not effectively address how FEMA should use program income to offset permanently relocated facility costs. For example, such a revised policy could have saved an estimated $17.8 million in project costs. Also, internal controls were not in place to determine when applicants received program income to offset permanently relocated facility costs.

Combined Assessment Program Summary Report – Evaluation of the Controlled Substances Inspection Program at Veterans Health Administration Facilities

June 13, 2014 Comments off

Combined Assessment Program Summary Report – Evaluation of the Controlled Substances Inspection Program at Veterans Health Administration Facilities (PDF)
Source: U.S. Department of Veterans Affairs, Office of Inspector General

The purpose of the review was to determine whether Veterans Health Administration (VHA) facilities complied with requirements related to controlled substances (CS) security and inspections and to follow up on the OIG report Healthcare Inspection – Review of Selected Pharmacy Operations in Veterans Health Administration Facilities (Report No. 07-03524-40, December 3, 2009). OIG performed this review in conjunction with 58 Combined Assessment Program reviews of VHA medical facilities conducted from October 1, 2012, through September 30, 2013. OIG identified opportunities for improvement in: conducting annual physical security surveys and correcting identified deficiencies; completing quarterly trend reports and providing them to facility Directors; conducting monthly CS inspections of non-pharmacy areas; completing non-pharmacy inspection activities; performing emergency drug cache quarterly physical counts and monthly verification of seals; validating completion of required drug destruction activities, accountability of prescription pads stored in the pharmacy, and outpatient pharmacy written prescriptions for schedule II drugs; providing annual CS inspector training. VHA can strengthen policy by defining acceptable reasons for missed CS area inspections and providing guidance on CS Coordinator performance of monthly inspections. OIG made 10 recommendations.

Audit of Contractor Compliance With and Department of State Oversight of the Process Required for Vetting Local Guards

June 13, 2014 Comments off

Audit of Contractor Compliance With and Department of State Oversight of the Process Required for Vetting Local Guards (PDF)
Source: U.S. Department of State, Office of Inspector General

Because of growing security threats at posts worldwide, the Department of State (Dep artment), Bureau of Diplomatic Security (DS), has augmented security at overseas posts through the Local Guard Program (LGP), which engages security contractors to provide local guard force (LGF) personnel to secure access to post s and provide building and residential security . Before any local guards are cleared to begin work at an embassy , the LGP contract requires the security contractor to complete vetting requirements on every prospective guard and submit the results for review and approval by the regional security officer (RSO) or assistant regional security officer (ARSO), as the contracting officer ’s representative (COR) for the LGP contract. The vetting requirements generally include a “police check covering criminal and/or subversive activities, a credit check, proof of successful previous employment with supervisor recommendations, and a personal residence check. ”

In response to the increased role of the LGP, the Office of Inspector General (OIG) conducted this audit to determine whether security contractors had complied with LGP contract requirements for vetting the suitability of local guards at posts overseas and whether RSOs had performed adequate oversight of the local guard vetting process.

OIG found that none of the six security contractors selected for review fully performed all vetting requirements contained in the LGP contract. Inadequate oversight of the local guard vetting process places embassies and personnel at risk.

For example, security contractors did not always comply with LGP contract terms requiring the full vetting of the local guards prior to employment. Nor did the security contractors maintain the personnel files for local guards in accordance with LGP contract requirements ; therefore, OIG could not verify that all vetting requirements had been fulfilled.

USPS OIG — Delivery Operations – Additional Carrier Services

June 10, 2014 Comments off

Delivery Operations – Additional Carrier Services (PDF)
Source: U.S. Postal Service, Office of Inspector General

BACKGROUND:
The U.S. Postal Service’s mail volume declined from about 171 to 160 billion mailpieces from fiscal years (FY) 2010 to 2012. The Postal Service had net losses of $5 billion in FY 2011 and $15.9 billion in FY 2012. It prepared a Five-Year Business Plan to address budget concerns and increase profits. Most of the proposed efforts to reduce budget deficits are cost-cutting initiatives, such as eliminating Saturday delivery, recalculating retirement prefunding obligations, and downsizing the workforce.

But revenue-generating opportunities could also improve the Postal Service’s finances. Taking advantage of the delivery “last mile” by adding carrier services not directly related to mail delivery could increase revenue and enhance the Postal Service brand.

Our objective was to assess opportunities for the Postal Service to add carrier services to delivery operations.

WHAT THE OIG FOUND:
The Postal Service could increase the value of delivery operations, bolster revenue, and address community needs by offering additional carrier services. We identified a variety of services that could generate revenue, such as monitoring services for the elderly, collecting air quality data, verifying identification, delivering prescriptions on the same day, updating maps, and reporting on traffic conditions. Some of these ideas may not be immediately feasible due to legal restrictions, but management should consider them.

Additionally, the Postal Service could generate revenue immediately by selling advertising space on its delivery vehicles. A market analysis the Postal Service conducted during our review estimated revenue potential of about $15 million in FY 2014 and $30 million in FY 2015 from this initiative.

WHAT THE OIG RECOMMENDED:
We recommended the executive vice president, chief marketing and sales officer, in coordination with the vice president, Delivery and Post Office Operations, develop a strategy to identify, evaluate, and offer the most promising additional carrier services, including ways to overcome identified barriers. We also recommended they jointly conduct a pilot test on delivery vehicle advertising and gather sufficient data to support a decision on this concept.

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