GAO-04-618R Review of Allegations at HHS OIG 

United States General Accounting Office

Washington, DC 20548 

April 30, 2004 

The Honorable Charles E. Grassley 

Chairman 

The Honorable Max Baucus 

Ranking Minority Member 

Committee on Finance 

United States Senate 

Subject: HHS OIG: Allegations of Misspending Were Unsubstantiated 

The Department of Health and Human Service’s (HHS) Office of Inspector General 

(OIG) plays a vital role in auditing and investigating allegations of fraud and abuse in 

federal health and welfare programs. Because it independently evaluates various 

programs, activities, and functions, the OIG must act with integrity at all times. In the 

fall of 2003, anonymous allegations charged that certain officials in the HHS OIG’s 

Office of Evaluation and Inspections (OEI) sponsored training and management 

meetings for nonwork purposes and improperly renovated a regional office. 

The allegations primarily focused on the actions of the Acting OEI Deputy Inspector 

General in relation to specific events that took place from July through September 

2003. The allegations charged that she (1) sponsored training at a Florida resort to 

facilitate vacation time for staff, (2) scheduled several follow-up training meetings as 

a way of providing staff with leisure time, and (3) held a managers’ meeting in New 

York as a pretext for participants to attend a retirement celebration for one of OEI’s 

managers. A fourth allegation charged that the Acting OEI Deputy Inspector General, 

along with an Acting OEI Regional Inspector General, improperly renovated and 

refurnished office space in one of OEI’s regions. At your request, this report 

examines these allegations. 

To perform our work, we examined documentation—such as meeting agendas, 

approval documents, and travel vouchers—related to the allegations; conducted 

interviews with OIG officials, including managers and participants in events related 

to the allegations; and reviewed relevant HHS and OIG conference planning and 

procurement policies and the General Services Administration (GSA) office 

renovation guidelines.1 We determined OEI officials’ rationale for their decisions, 

steps taken to plan or approve various events, and the extent of involvement by those 

accused of wrongdoing. Our work assessed the allegations that meetings were held 

 

1

GSA is responsible for managing federal property and procurements and promulgating guidance and 

regulations for both activities. 
2 GAO-04-618R Review of Allegations at HHS OIG

for nonwork purposes and that OEI regional office renovations were improper. We 

did not conduct a comprehensive review of OEI’s compliance with laws and 

regulations applicable to these activities. We performed our work from November 

2003 through April 2004 in accordance with generally accepted government auditing 

standards. 

In summary, we found no basis for the allegations against the Acting OEI Deputy 

Inspector General and an Acting Regional Inspector General regarding the 

sponsorship of training and other meetings and the completion of office renovations. 

We found that those responsible for organizing OEI training and management 

meetings followed HHS and OIG requirements for planning and approving these 

activities. Further, we did not find evidence to support the allegations that the 

training included leisure activities during business hours at the Florida training, the 

follow-up training meetings, and the New York meeting. According to the agendas 

and to OIG officials, the Florida and follow-up training meetings provided staff with 

details on organizational goals and evaluation skills, and served as an exchange of 

information on analytical approaches. Likewise, attendees at the New York 

managers’ meeting concentrated on OEI management-related issues. With respect to 

allegations of inappropriate renovations in one of OEI’s regional offices, documents 

that we reviewed indicated that OEI officials followed applicable GSA and OIG 

policies to reconfigure office space and purchase furniture. In commenting on a draft 

of this report, the OIG agreed with our findings. 

Background 

OEI, one of five components within the HHS OIG, conducts short-term management 

evaluations of HHS programs.2

 OEI is headed by a Deputy Inspector General (DIG), 

and has staff in Washington, D.C.; Baltimore, Maryland; and eight regional offices. 

Each regional office is headed by a Regional Inspector General (RIG). 

Over the past 2 years, the HHS OIG was the subject of concern in regard to its 

leadership and operations. During this time, numerous management changes 

occurred. This included the resignation of the then Inspector General on 

March 4, 2003, and her subsequent departure from the agency on June 1, 2003. In 

addition, in July 2003, a new Acting DIG was assigned to lead OEI.3 It was in the 

midst of this uncertainty and change that OEI initiated the following events that were 

related to the allegations. 

Florida training: For about 15 years, OEI has sponsored a national training 

event, such as the one held in Florida, on an annual or biennial basis. OEI 

management considers this training to be very important in enhancing 

 

2

The other four components are the Office of Audit Services, the Office of Investigations, the Office of 

Counsel to the Inspector General, and the Office of Management and Policy.

3

In March 2004, a permanent OEI DIG was selected. At that time the Acting OEI DIG was expected to 

return to her prior duties in another OIG component.
3 GAO-04-618R Review of Allegations at HHS OIG

analysts’ evaluation skills.4 In 2002, a planning committee was formed to 

organize and conduct the July 2003 training. The committee, which consisted 

of 12 OEI staff from the Washington, D.C., and Baltimore offices and each of 

the eight regions, was cochaired by two analysts. The committee was 

responsible for making logistical decisions, such as selecting a site for the 

training, and developing the agenda. 

Follow-up training meetings: In the spring of 2003, OEI’s Career 

Development Steering Committee5 recommended holding inter-regional 

meetings to improve communication and the exchange of information among 

OEI staff. As follow-up to the Florida training, three inter-regional meetings, 

which lasted about 2 days each, took place from July through September 2003, 

involving OEI staff and RIGs. The Chicago/Dallas meeting took place in 

Bridgman, Michigan; the New York/Philadelphia meeting took place in Long 

Branch, New Jersey; and the Kansas City/San Francisco meeting took place in 

Tucson, Arizona. 

New York managers’ meeting: In August 2003, OEI held a regional managers’ 

meeting in its New York regional office. The stated purpose of the meeting 

was for the Acting OEI DIG, RIGs, Assistant RIGs, and certain managers from 

OEI headquarters to address various issues, including OEI’s work plan, the 

timeliness of OEI reports, and the way OEI reports should be written. 

Office space renovation: In the spring of 2003, the Acting OEI RIG in Atlanta 

ordered the renovation of office space after concluding that the work 

environment needed to be improved. A secure storage closet and four 

enclosed team leader offices with floor-to-ceiling walls were constructed. In 

addition, furniture was purchased for these new offices. 

Allegations of Misspending 

Were Unsubstantiated 

We did not find evidence supporting the allegations against either the Acting OEI DIG 

or the Acting OEI RIG in Atlanta. According to the agendas, the 2003 OEI national 

training and the subsequent training meetings were not designed to provide OEI staff 

with leisure time. Our review also confirmed that the regional managers’ meeting 

held in New York addressed management issues. We found nothing to support the 

allegation that this meeting was a pretext for holding a retirement party for the New 

York OEI RIG. Lastly, we did not find any basis for questioning the Atlanta regional 

office's renovation; the stated needs of that office supported the renovation. 

 

4

Prior to 2001, only OEI analysts attended this training. In 2001, OEI expanded the training to include 

administrative staff. 

5

OEI’s Career Development Steering Committee is tasked with identifying and enhancing the range of 

skills required to perform OIG evaluations. 
4 GAO-04-618R Review of Allegations at HHS OIG

2003 OEI National Training 

Focused on Enhancing Analysts’ Skills 

Contrary to allegations that the Acting OEI DIG conducted training in 2003 to offer 

leisure time to her staff, our review indicated that OEI’s July 2003 national training, 

held in St. Petersburg, Florida, provided staff with 3 and a half days of instruction on 

programmatic issues and evaluation skills. According to OEI documents related to 

the 2003 training, its objectives were to enhance OEI’s methods for gathering and 

presenting evidence and to build a sound collaborative foundation within OEI in 

order to produce high-quality evaluations. Our review of training evaluations 

completed by OEI attendees, as well as our interviews with several OEI participants, 

indicated that the training was tightly scheduled with meetings and classes. 

According to the agenda, the training offered nine general meetings and 28 breakout 

sessions, covering 15 different topics. In addition, three managers’ meetings were 

held to discuss issues related to OEI’s structure, product quality, and overall 

performance. 

The planning committee responsible for organizing the training selected the Florida 

location because, after evaluating 10 candidate sites, it determined that the Florida 

location would be the most conducive to accomplishing the objectives of the 2003 

training. For example, the Florida site offered many amenities, such as a large 

number of meeting rooms, soundproof walls, and responsive hotel staff—all 

necessary to ensure the effectiveness of the training. According to the two cochairs 

of the planning committee, these features were particularly important, given that the 

training was a large event with numerous breakout sessions. They further stated that 

the Florida location met three other important criteria. First, the OEI DIG at the time 

asked that the training be held in an eastern location, and the planning committee 

members agreed because the previous two training events were held in western 

states. Also, this hotel was in proximity to the airport and accommodations were 

offered at the federal government per diem rate.

We found that some OEI officials were concerned about the perception of holding the 

2003 OEI national training at a Florida resort, even though the training was scheduled 

for July, during off-season. One senior OEI official told us that OEI management is 

always cautious about holding training at locations that may give an impression that 

federal funds are being used to finance leisure activities for employees.6

 Whereas 

Thursday afternoon traditionally had been reserved for an off-site networking event, 

the committee replaced this time with additional training sessions at the hotel. In 

addition, the chairman of OEI’s Career Development Steering Committee, who was 

responsible for approving certain key decisions made by the planning committee, 

discussed his concern with the OEI DIG at the time and a senior OIG official in the 

 

6

According to HHS guidance on domestic travel policies, “meeting sponsors shall not hold meetings at 

resort areas to which the general public is attracted because of recreational facilities, unless that area 

is the location best suited for the purpose of the meeting in terms of program needs and cost factors.” 

(HHS Chapter 1-20, Travel Manual, 1-20-20, part G.) 
5 GAO-04-618R Review of Allegations at HHS OIG

Office of Management and Policy.7 They concluded that holding the training at the 

chosen location was appropriate—especially in light of the additional training that 

replaced the networking session. 

Finally, while the allegations contended that the Acting OEI DIG decided to hold the 

2003 OEI national training in Florida, the event was actually approved by this 

official’s predecessor. After the planning committee evaluated the candidate sites in 

the summer of 2002, it presented its recommendation to the former OEI DIG, who 

approved the Florida location. OEI then signed a contract with the hotel in August 

2002. Due to budget uncertainties in the fall and winter of 2002,8 the training was 

canceled and later reinstated in April 2003 when the budget issues were resolved. 

The entire planning and approval process for the Florida training—including the 

initial cancellation and reinstatement—took place during the former OEI DIG’s 

tenure. The Acting OEI DIG cited in the allegation did not assume her duties until a 

week before the Florida training occurred. 

Follow-up Meetings Designed for 

Skills and Teamwork Training

Our review of the three meeting agendas and interviews with an attendee from each 

of the three inter-regional meetings indicated that the meetings were designed for 

training, sharing of ideas, and teamwork, as opposed to providing leisure time. 

Attendees included RIGs and analysts from the participating regions. The 

Chicago/Dallas meeting agenda included exercises on developing evaluation 

objectives, an analysis plan, and appropriate methodology. The New 

York/Philadelphia meeting agenda identified topics such as improving 

communication within OEI, methods of analyzing data, the process of reviewing OEI 

draft reports to ensure accuracy and timeliness of OEI products, and OEI staff skills. 

The Kansas City/San Francisco agenda focused on various items, including how the 

two regions perform their evaluation work, evidence necessary for their evaluations, 

review of OEI products to ensure quality, and presentations on health policy issues. 

Each meeting agenda also included a closing session discussing future inter-regional 

collaboration among the participants. According to OEI officials, the need for such 

meetings was emphasized at the July 2003 Florida training when staff from several 

regions suggested that additional regional coordination and exchange of information 

would assist OEI in meeting its goals and objectives. An OEI RIG reported that the 

meetings were held outside participating regional offices to ensure that attendees 

were able to focus on the established meeting objectives without interference from 

their day-to-day office responsibilities. 

 

7

Within OIG, the Office of Management and Policy oversees and assists various OIG components in 

policy development and implementation and in budget formulation and execution. 

8

At the time, HHS was operating under a continuing resolution, which restricted its spending to levels 

equal to or below spending levels in the previous year. 
6 GAO-04-618R Review of Allegations at HHS OIG

We found that the Acting OEI DIG’s involvement in approving the inter-regional 

meetings was limited, contrary to the allegation. Upon learning about the meetings, 

she reported that she agreed with the concept of the regions pairing up to plan 

follow-up meetings. However, we found that the OEI RIGs in each of the 

participating offices approved the substance and logistics of these meetings, 

including the travel orders for regional staff who attended, and the Acting OEI DIG 

authorized the travel orders for the RIGs who attended. 

New York Regional Managers’ Meeting 

Focused on OEI Work Issues

 

We found no support for the allegation that the New York meeting was held as a 

pretext for participants to attend a retirement celebration. The Acting OEI DIG 

initiated and approved this meeting in New York to address with RIGs and Assistant 

RIGs, and certain managers from OEI headquarters, issues raised at the Florida 

training. In addition, she explained that she needed to meet with the managers to 

develop OEI’s annual work plan, which was due approximately 1 month after the 

New York meeting. While leisure activities were not incorporated into the workday, a 

retirement dinner was held one evening for New York’s OEI RIG. Attendees reported 

using their own funds for the dinner and contributing their own money to purchase a 

gift for the retiring RIG. Our review of participants’ travel vouchers and statements 

by several OEI managers revealed no evidence that federal funds were used for these 

purposes. 

Renovation of an OEI Regional Office 

Followed Applicable Policies

The Acting OEI DIG named in the allegation was not involved in the planning and 

approval of renovations in the Atlanta regional office. In addition, we found nothing 

to substantiate the allegation that the actions were inappropriate. Instead, we found 

that the decision to renovate the office was supported by office needs. The Acting 

OEI RIG advised us that he approved the renovations because the Atlanta office did 

not provide secure storage for sensitive documents and because the region needed 

additional team meeting rooms. According to documentation we reviewed, the 

region's existing storage areas were inadequate and not conducive to housing 

documents for an ongoing investigation—materials were stored in basement space 

that was susceptible to flooding and was not readily accessible to OEI.9

 Officials also 

stated that furniture needed to be purchased for the new offices because the existing 

cubicle furniture was not suitable for team meetings. We found that the Acting RIG 

consulted with the administrative officer for cost estimates and renovation plans, and 

then obtained the necessary approvals and oversight from GSA for the refurbishing 

and furniture purchase. All displaced furnishings were transferred to another federal 

agency. 

 

9

According to a regional memo, several boxes of records had been destroyed by previous flooding. 
7 GAO-04-618R Review of Allegations at HHS OIG

Agency Comments 

In commenting on a draft of this report, the HHS OIG concurred with our findings. 

HHS OIG comments are reprinted in the enclosure. 

- - - - - 

As agreed with your office, unless you publicly announce its contents earlier, we plan 

no further distribution of this report until 30 days after its date. We will then send 

copies of this report to the Secretary of HHS and the Acting Principal Deputy 

Inspector General of HHS and other interested parties. We will make copies available 

to others upon request. In addition, the report will be available at no charge on 

GAO’s Web site at http://www.gao.gov. 

If you or your staff have questions about this report, please contact me at (312) 220-

7600. Shirin Hormozi, Pauline Seretakis, Sari B. Shuman, and Behn Kelly made key 

contributions to this report. 

Leslie G. Aronovitz 

Director, Health Care—Program 

 Administration and Integrity Issues 

Enclosure 
Enclosure Enclosure 

8 GAO-04-618R Review of Allegations at HHS OIG 

Comments for the Department of Health and Human Services 

Office of Inspector General 

(290335) 
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