A PROGRESS REPORT TO

THE PRESIDENT

Fiscal Year 1995

President’s Council on Integrity and Efficiency

Executive Council on Integrity and Efficiency
Foreword

We are proud to present the third joint annual report of the President’s Council on Integrity and

Efficiency (PCIE) and the Executive Council on Integrity and Efficiency (ECIE). This report

highlights the accomplishments of the Inspectors General (IGs) during Fiscal Year (FY) 1995.

The impact of the combined Councils in dollars alone was impressive during the year. Based on

recommendations from the IGs, agency managers agreed to change their spending plans for $10.4

billion, which they can now put to better use. Also as a result of IG recommendations, managers

agreed to cancel, or seek reimbursement of, $2.3 billion in questioned costs.

IG investigations recovered $1.5 billion from companies and people who had defrauded the

Government. In addition, investigative work resulted in 14,122 successful prosecutions of

wrongdoers and 4,234 debarments, exclusions, and suspensions of firms or individuals doing

business with the Government.

The narrative of the report emphasizes two principal themes: how the IGs serve as "agents of

positive change" and how they make effective use of "multidisciplinary teams." Areas in which

PCIE and ECIE members served as agents of positive change ranged from disaster assistance and

health care programs, to safety and security concerns, science and technology, and financial

matters. IGs from both Councils used multidisciplinary teams for projects dealing with, for

example, housing and food stamp programs, and nonconforming or unapproved parts for

equipment, as well as schemes to defraud the Government.

These efforts demonstrate how the IGs are not merely riding the train of "Reinventing

Government," but are also helping to stoke the engine. At the same time, the IGs remain vigilant

in fulfilling their statutory mandate to prevent and detect fraud, waste, and abuse.

We would like to thank the IG at the Department of Agriculture for the prompt and professional

coordination of this year’s report.

June Gibbs Brown Thomas D. Blair

Vice Chair Vice Chair

President’s Council on Executive Council on

Integrity and Efficiency Integrity and Efficiency
Contents

Page

Foreword

Report of the President’s Council on Integrity and Efficiency

Introduction 1

PCIE Committee Accomplishments 3

OIG Work in FY 1995 6

Audits and Inspections--Summaries of Statistical Accomplishments 41

Investigations--Summaries of Statistical Accomplishments 46

Current Membership 51

Membership Addresses and Hotline Numbers 52

Report of the Executive Council on Integrity and Efficiency

Introduction 53

OIG Work in FY 1995 55

Audits 63

Investigations 67

Current Membership 70

Membership Addresses and Hotline Numbers 71
REPORT OF THE

PRESIDENT’S COUNCIL

ON INTEGRITY AND

EFFICIENCY
Introduction

The President’s Council on Integrity and Efficiency

The President’s Council on Integrity and Efficiency (PCIE) is an interagency committee charged

with promoting integrity and effectiveness in Federal programs. The PCIE is chaired by the

Deputy Director for Management of the Office of Management and Budget (OMB) and is

composed principally of the 28 Presidentially appointed/Senate confirmed (PAS) Inspectors

General (IGs). The following officials are also members of the PCIE:

• the Vice Chairperson of the Executive Council on Integrity and Efficiency (ECIE);

• the Controller of the Office of Federal Financial Management at the OMB;

• the Assistant Director of the Criminal Investigative Division of the Federal Bureau of

Investigation (FBI);

• the Director of the Office of Government Ethics;

• the Special Counsel of the Office of Special Counsel; and

• the Deputy Director of the Office of Personnel Management (OPM).

The PCIE is focused on two primary objectives: mounting collaborative efforts to address

integrity, economy, and effectiveness issues that transcend individual Federal agencies; and

increasing the professionalism and effectiveness of IG personnel throughout the Government.

The PCIE was established by Executive order in 1981. The Executive order was revised and

reissued in 1992 to reflect changes that had been made in the Inspector General Act of 1978 (IG

Act), as amended. The PCIE membership was expanded to include additional PAS IGs; and the

ECIE, consisting principally of the competitively appointed IGs at designated Federal entities,

was established. The PCIE and the ECIE share the same overall mission and objectives.

The Fiscal Year 1995 PCIE Annual Progress Report to the President

Under the original and revised Executive orders, the Chairperson of the PCIE has an obligation

to report to the President on the activities of the PCIE. Since 1981, the Chairperson has met that

obligation through issuance of PCIE progress reports.

This PCIE progress report focuses on two main areas of accomplishment in the narrative section.

The first theme is that of IGs being "agents of positive change," with Government accountability

as the underlying emphasis. Also highlighted are Office of Inspector General (OIG) projects

conducted by multidisciplinary teams (i.e., teams combining auditors, investigators, inspectors,

and/or evaluators, as well as others in some cases), and the benefits of this approach to the

agency as well as the OIG staff. Such efforts reflect a continuing commitment by the IGs to

improve program management in their agencies while at the same time fulfilling their legislative

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mandate to prevent and detect fraud, waste, and abuse. During FY 1995, PCIE members typically

employed multidisciplinary teams in about 12 percent of their work, ranging from very seldom

to one-third of the time.

The report also includes summary statistical sections on audits and inspections, as well as

investigations. Overall (including audits performed for the IGs by the Defense Contract Audit

Agency (DCAA)), in FY 1995, IG audits and inspections resulted in:

• more than $26 billion in recommendations that funds be put to better use; and

• nearly $6 billion in questioned costs.

In acting on IG audit and inspection recommendations, as well as DCAA recommendations in

audits performed for the IGs, agency managers:

• agreed with more than $10 billion in recommendations that funds be put to better use; and

• disallowed nearly $2.3 billion of questioned costs.

Summary statistics related to investigations are also presented by individual IGs. Overall, in

FY 1995, IG investigations led to:

• 4,041 successful prosecutions;

• 4,197 debarments, exclusions, and suspensions of persons or firms doing business with the

Federal Government;

• 2,217 personnel actions involving Federal employees; and

• more than $1.2 billion in investigative recoveries.

At the conclusion of the PCIE report, a list of current PCIE members and their addresses, as well

as hotline numbers, is provided.

The report was compiled from narratives, statistics, and other information submitted by the

membership of the PCIE.

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PCIE Committee Accomplishments

The PCIE, in conjunction with the ECIE, maintains committees to examine important issues in

improving the effectiveness of the OIGs and in fighting fraud, waste, and abuse across the

Federal agencies. The following entries highlight the Fiscal Year 1995 activities of the PCIE

committees.

Audit Committee (Chair: Valerie Lau, Inspector General, Department of the Treasury)

The Audit Committee issued a report entitled "Implementing the Electronic Benefits Transfer

(EBT) System - A Report on the Current Status of Control Systems" consolidating findings from

previous OIG work that can affect nationwide implementation of EBT. Some of the cross-cutting

issues addressed include data retention and security areas such as user identification and

safeguards over EBT cards. Recommendations covered strengthening controls over access to EBT

systems, improved controls over inventories of unissued cards and other safeguards to prevent

improper use of issued cards. The Federal EBT Task Force found that overall the report was a

very positive effort and commended the PCIE and the OIGs involved for their work. The Task

Force indicated agreement on most of the recommendations and invited the PCIE to have a

representative on the Task Force Policy group and the EBT career executive group.

The USDA IG took the lead for this coordinated effort and was assisted by the IGs for DOD,

DoED, HHS, DOL, TREAS, VA, OPM, RRB, and SSA.

Investigations Committee (Chair: Charles Masten, Inspector General, Department of Labor)

During FY 1995, the PCIE Investigations Committee was successful in securing an agreement

with the DOJ and the FBI to enter into a pilot project with seven Inspectors General to grant

blanket deputation of law enforcement authority to OIG Special Agents. Previously, OIG Special

Agents had generally received these deputations on a "case by case" basis, with the OIGs having

to submit a request to DOJ for deputation for each individual agent on each individual case. The

pilot project allowed the participating OIGs to have a "blanket deputation" to be administered by

the IG, who would regularly report on deputations usage to the DOJ. The pilot program cut down

on administrative workload and enhanced investigative effectiveness -- while maintaining

appropriate oversight of the use of law enforcement authorities by OIG Special Agents.

The basic law enforcement authorities for which OIG Special Agents were deputized include:

executing warrants for an arrest; executing search warrants; seizing evidence; carrying firearms;

and making arrests, without warrants, for any violation committed in the presence of the Special

Agent. The seven agencies involved in this program are the: DOL, HUD, STATE, DOT, VA,

SSA, and SBA.

Integrity Committee (Chair: William J. Esposito, Assistant Director, Criminal Investigative

Division, Federal Bureau of Investigation)

On March 22, 1996 the President signed Executive Order 12993, "Administrative Allegations

Against Inspectors General." The order empowers the FBI to investigate certain non-criminal

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allegations against IGs and their staff. It also defines the legal authority for the PCIE to review

allegations and investigative reports regarding IGs and their staff. This order is an important step

forward in formalizing and improving the existing system for reviewing allegations against IGs.

During Fiscal Year ’96, the Integrity Committee will focus on formalizing the implementing

procedures for the Executive Order. The Integrity Committee will also work on providing

integrity-related training to the Inspector General community.

This will, of course, be in addition to the Committee’s role in reviewing allegations against IGs

and their senior staff. In Fiscal Year 1995, the Committee met five times, opening 26 cases and

bringing 28 cases to closure. The Integrity Committee expects to see a marked increase in new

cases during Fiscal Year 1996 due to the visibility of the Executive Order.

IG Performance Measures Task Force (Co-Chairs: John Layton, Inspector General,

Department of Energy and June Gibbs Brown, Inspector General, Department of Health and

Human Services)

The task force culminated its work by drafting a brochure entitled "PCIE/OIG Guidance on Goals

and Performance Measures." This brochure is intended to be used or modified by individual OIGs

as a guide in developing their own goals and performance measures. The brochure is based on

an analysis of the 3-5 top goals established by each of the individual OIGs for the next 12-24

months. The task force analyzed the goals, considering similarities and singularities of the

individual offices, and developed a composite of goals that were both process and

outcome-oriented.

For example, the report lists "Focus OIG operations on major agency issues and programs to

promote economy, efficiency, and effectiveness, and thereby have a positive impact on the

agency’s program and operations" as a general outcome oriented goal. Possible measures for that

goal then might include "OIG monetary/non-monetary program improvement recommendations

implemented by management."

Professional Development Committee (Chair: David Williams, Inspector General, Social

Security Administration)

The committee conducts half day training seminars for OIG staff. These "Forums" are always

well attended and provide training opportunities on a variety of topics in the audit, investigations,

and inspections fields. There were six Forums during FY 1995, including "Blinded by the Light

-- Fraud Detection in Cyberspace," which showcased emerging computer investigative techniques;

and "The Unified Field Theory of Management," which described how existing management

related initiates and legislation (such as audits of financial statements, the National Performance

Review, and the Government Performance and Results Act) build into a unified approach to

effective Federal management.

The committee also began publication of The Journal of Public Inquiry, a semiannual magazine

featuring articles of interest to the Inspector General community. The second issue was well

underway by the end of the year. Articles include "Let me Task Your Wares: Acquisition

Reform" and "Reinventing the Hotline -- Using the Power of the Internet."

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Finally, the Committee conducted a survey of in-house training available within the PCIE

community. The survey results indicated that many OIGs were eager to share their training with

other OIGs. The Committee arranged for training opportunities to be announced via IGnet.

Legislation Committee (Jeffrey Rush, Inspector General, Agency for International Development)

The Committee keeps the IGs informed on pending legislation affecting the IG community. When

requested, representatives from the Committee attend or participate in Congressional hearings,

coordinate with OMB, and prepare responses or comments for PCIE consideration on pending

legislation.

Issues coming before the committee in the last year have included: working with the

Subcommittee on Government Management, Information and Technology to prepare for the

committee’s August 1, 1995 hearing on IG Act implementation; and engaging OMB in

discussions on how best to address the OIGs in application of the Paperwork Reduction Act.

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OIG Work in FY 1995

As a result of the Vice President’s National Performance Review (NPR), the Inspectors General

crafted a vision statement which says: "We are agents of positive change striving for continuous

improvement in our agencies’ management and program operations, and in our own offices." One

of the specific avenues the IGs have explored to improve their own operations and effectiveness--

with positive results--has been the increased use of multidisciplinary teams in performing reviews.

This section highlights examples which demonstrate the OIGs’ commitment to being agents of

positive change and employing multidisciplinary teams to their best advantage.

Agency for International Development

Agents of Positive Change

Reengineering of the U.S. Agency for International Development (USAID)

The IG was a ready partner in assisting the Agency in engaging in an intensive reform effort,

unparalleled in its history. When the Vice President of the United States selected USAID as one

of only two agencies to be a "reinvention laboratory" under the NPR, the Administrator identified

a general framework for major reform of the U.S. development assistance program.

OIG efforts have contributed to reform measures which are underway. Two of these efforts are

summarized below.

• Program Performance Information for Strategic Management Systems (PRISM)--In an attempt

to enhance USAID’s ability to measure progress in terms of program results, the Agency

initiated the implementation of an agencywide system, PRISM, for monitoring and reporting

on program performance in 1991. A series of audits on the implementation of PRISM showed

that USAID’s missions have made considerable progress in meeting the requirements for

measuring results, although the Agency still needs to ensure that specific quantifiable

indicators are established and that reporting systems are in place to evaluate progress through

measuring project results.

• Information System Plan (ISP)--USAID is undertaking a new and aggressive effort to change

the way it manages its data and information, as described in the ISP. A primary tenet of ISP

is that corporate data will be managed at the Agency level. The OIG has been working with

Agency management in this effort by reviewing the ISP’s management control systems as

these systems are being developed. OIG audits to determine the accuracy of the data to be

transferred into the corporate data base identified systemic weaknesses that, if not corrected,

would negatively impact the integrity of the corporate data base. In addition, the OIG

performed an audit of the Agency’s systems development efforts that identified potential data

compatibility problems that could undermine the very foundation of the ISP’s systems

integration concept.

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Multidisciplinary Teams

USAID Assistance for the Haitian Presidential Election

Recently, some concerns were raised about the use of U.S. funding to help assure a smooth

electoral process in Haiti. A team consisting of auditors from two headquarters divisions,

including a certified public accountant from the Financial Audit Division and an experienced

performance audit manager from the Headquarters Liaison and Coordination Division, was

assembled to conduct an on-site review of financial transfers to the Haitian Presidential Election

Council.

The team also worked in close conjunction with a team of auditors from the U.S. General

Accounting Office (GAO), further broadening the expertise involved in the exercise. Briefings

with the Agency, at which all team members were present before arrival in Haiti, also contributed

to the pooling of information.

The team was subsequently able to review several problem areas where accountability was

lacking, while also keeping the deficiencies in perspective so as to not jeopardize the overall

assistance effort.

Department of Agriculture

Agents of Positive Change

Electronic Benefits Transfer

In 1993, Vice President Gore’s Report of the NPR, From Red Tape to Results, called for the

rapid development of a nationwide system to deliver Government benefits electronically. At least

12 Federal and State benefit programs could use electronic benefits transfer (EBT) to replace

paper delivery methods. These include food assistance programs under the Department of

Agriculture (USDA) and cash benefit programs under the Department of Defense, Department

of Education, Department of Health and Human Services, Department of Labor, Department of

Veterans Affairs, Office of Personnel Management, Railroad Retirement Board, and Social

Security Administration. The PCIE designated the USDA OIG as the lead agency to consolidate

findings and identify concerns related to the nationwide development of EBT. The OIG report

brought to the forefront issues that needed to be addressed before EBT goes nationwide. The OIG

is continuing to work in a coordinated review effort with the PCIE and Federal EBT Task Force

as EBT systems are planned and brought on-line at the national and State level. The PCIE has

designated the USDA OIG to coordinate review of EBT systems at the State level and the

Department of the Treasury OIG to coordinate review of EBT systems at the Federal level.

Joint Investigations Prove Successful

Current congressional and public debate about welfare reform has focused national attention on

the Food Stamp Program (FSP) and its vulnerability to fraud and abuse. The OIG continues to

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concentrate substantial investigative resources to uncover fraud in the FSP. As part of the OIG

commitment to ensure that food stamps get to the people who really need them, the OIG ran

"Operation Checkout," an intensified nationwide enforcement action involving multiple joint

operations with local, State, and Federal law enforcement agencies. Over a 7-week period, this

operation brought to fruition 106 indictments, arrests, and convictions related to over $22 million

in FSP fraud. The OIG will continue with similar operations in order to restore and preserve the

integrity of the FSP.

Financial Statement Audits

The USDA OIG has established a close working relationship with financial managers in the

Department as a result of OIG financial statement audits. The OIG provides technical advice to

the Department through OIG participation on the USDA Financial Statement Coordinating

Committee. The committee addresses issues related to financial statement presentation,

preparation, and accounting standards. The OIG provides technical guidance in such areas as

credit reform, elimination entries, overview and supplemental information, and accounting

standards. The OIG has worked closely with the Department to identify deficiencies in existing

financial systems and propose possible solutions. For example, as a result of OIG’s initial audit

of the USDA consolidated financial statements, the OIG identified material internal control

weaknesses and deviations from accounting standards in USDA financial systems. To correct

these weaknesses, the Department initiated the Financial Information System Vision and Strategy

project to implement a single integrated financial management system designed to meet all

standards. The OIG has been involved in the project from the beginning either by serving on

various project working groups or conducting special reviews in areas such as security. OIG

involvement in this project has mutually benefited the OIG and the Department through

development of a system that will enhance the reliability and the auditability of financial

information.

Multidisciplinary Teams

Multidisciplinary Teams Identify Ineligible and Questionable Stores Authorized to Accept

Food Stamps

Because of continuing reports about stores violating requirements for participating in the FSP,

the OIG performed a nationwide sweep of authorized stores to determine if they met USDA’s

eligibility criteria. Experience has shown that stores not meeting the criteria are often prone to

traffick in food stamps, paying cash for less than the face value of the stamps and then receiving

full value for the stamps when deposited at their bank. Seventy teams, each consisting of an

auditor and investigator, visited 5,162 stores during May and June 1995 in 7 locations:

Washington, D.C.; St. Louis, Missouri; Alameda County, California; and selected areas in Cook

County, Illinois; New York City, Borough of Manhattan; Dade County, Florida; and Dallas and

Tarrant Counties, Texas.

The OIG found that 857 of the stores visited were clearly not eligible to participate in the FSP

because they had little or no staple foods, were out of business, did not exist, or had more than

1 assigned authorization number. The OIG questioned the eligibility of another 450 stores

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because they had limited inventories of staple food items or because their inventories did not

appear to support their food stamp redemptions. Since then, the OIG has participated with

USDA’s program personnel to carry out a similar sweep of 2,100 stores in Los Angeles,

California. Other similar sweeps are planned for additional locations around the country. To date,

USDA has withdrawn the authorizations of 1,400 stores.

Department of Commerce

Agents of Positive Change

National Telecommunications and Information Administration (NTIA) and National

Institute of Standards and Technology (NIST)

In light of concerns about the abilities of the NTIA and NIST programs to properly administer

substantial additional funds and grants, the Department of Commerce OIG conducted reviews of

their grant approval processes. One review looked at NTIA’s implementation of the

Telecommunications and Information Infrastructure Assistance Program, raising concerns about

the lack of award processing guidelines, the proposal evaluation process, the selection criteria,

and potential conflicts of interest. Another review disclosed that NIST’s Advanced Technology

Program needed to improve the documentation of its selection criteria. In both instances, after

being informed of the OIG concerns, agency officials took prompt actions to get the programs

on the right track.

Also, under a cooperative arrangement with NIST, the OIG conducted a series of accounting

system surveys of selected recipients of the Manufacturing Extension Partnership program. The

surveys found that most of the grantees had some problems with their financial management

systems. Almost without exception, the recipients agreed with the OIG findings and took actions

to implement the recommendations. The joint NIST-OIG initiative has proven beneficial to all

parties by promoting:

• Speedy correction of financial management deficiencies and financial reporting errors,

• on-site training on Federal cost principles and financial requirements for first-time recipients,

and

• early identification of weak recipients and termination of those with insufficient resources to

meet matching share requirements.

Multidisciplinary Teams

Year 2000 Census

An example of a formal multidisciplinary effort involved a recent assessment of the Census

Bureau’s readiness for the 2000 decennial census. The OIG decided that reviewing this massive,

complex undertaking required a special team with staff from various offices and disciplines.

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Because of the cross-cutting nature of the effort, the Deputy Inspector General served as Project

Director. The Project Manager and two team members were information technology experts from

the OIG’s Office of Systems Evaluation. The other team member was a program analyst from

the Office of Audits with extensive knowledge of Census Bureau issues. In addition, the project

had a panel of three high-level advisors--the Assistant Inspector General for Systems Evaluation,

the Deputy Assistant Inspector General for Auditing, and an Office of Audits division director

who is an economist with considerable experience with Census issues.

The team members and advisors conferred frequently throughout the review and reporting

process, attending periodic meetings, consulting when questions arose, reviewing report drafts,

and meeting with Census Bureau officials to explain the review results. These results, which

identified weaknesses in the Bureau’s planning process and organizational structure, were

presented in a report to the Bureau and in testimony before the Congress. Because of the

extensive involvement of top officials and staff with varied expertise from throughout the OIG,

the office was able to produce a report that did justice to the complexity and significance of its

subject while also ensuring that it represented the views of all concerned OIG units.

Corporation for National and

Community Service

Agents of Positive Change

The Corporation for National and Community Service (CNCS) OIG concentrates on risks related

to the Corporation’s newly established AmeriCorps programs and strives to involve CNCS

management to the extent possible. The CNCS OIG redirected its audit plan to include surveys

of grantees in their initial year of receiving AmeriCorps funding to determine their capability to

comply with Federal fiscal accounting and reporting requirements and to safeguard Federal funds.

The OIG began these reviews in the belief that it is more effective to assess the vulnerability of

grantee systems, and prevent the loss of Federal funds, than to try to recover misspent funds after

a grant has been terminated. Overall, the OIG concluded that the reviews are an important risk

assessment mechanism and CNCS management concurs. The OIG is currently conducting several

reviews that were specifically requested by Corporation officials.

An outgrowth of OIG efforts to involve CNCS management was the utilization of joint

OIG/management teams for audit followup. For example, an audit of AmeriCorps grantee City

Year of Boston found significant deficiencies related to fiscal oversight, and that during

FYs 1993 and 1994, City Year’s accounting system and financial management controls did not

meet Federal standards. A team composed of OIG and CNCS management officials made audit

followup visits in January and September 1995 to assess the grantee’s progress in correcting

deficiencies reported in the audit and resolving other issues identified during the audit. These

team visits revealed that significant progress was made in installing a new financial management

system and in correcting many of the deficiencies reported. CNCS management was an active

participant in encouraging required corrective actions by the grantee.

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Multidisciplinary Teams

Audit and Investigation of the ACORN Housing Corporation

Because of concerns raised by members of Congress and in the press that ACORN Housing

Corporation (AHC), a Corporation grantee, was inappropriately engaging in lobbying and

protests, Corporation management asked the OIG to examine certain activities and financial

records relating to the CNCS AmeriCorps grant to AHC. The audit included interviews of AHC’s

project staff and AmeriCorps members. Because of the sensitivity, the number of interviews

required, and the tight timeframes for completion, the OIG utilized experienced investigators, well

trained in interview techniques, to conduct these interviews. These investigators also assisted the

auditors in examining a significant volume of travel vouchers to address specific audit concerns.

Investigator involvement contributed significantly to the quality and response time for the audit.

As a direct result of investigators participating in this audit, the OIG received hotline complaints

that eventually led to a separate investigation of AHC’s activities. Both the audit and

investigation culminated in the termination of the AHC grant, and in testimony by CNCS

management and the OIG before Congress. The testimony reflected a cooperative approach to

assess and terminate a grant in which Federal dollars were misused.

Department of Defense

Agents of Positive Change

Identification of Faulty Gearboxes Basis of $88 Million Settlement With DoD Contractor

An investigation by the Department of Defense (DoD) OIG, Army, and Navy criminal

investigators found that a Defense contractor sold faulty gearboxes that were used in the Navy

F/A-18 aircraft and the Army multiple launch rocket system. The contractor falsely certified to

the DoD that the gearboxes were fully inspected when, in fact, many required inspections were

not performed. The contractor also admitted to routinely not performing required inspections and

tests, knowingly falsifying quality records, selling defective parts to the Government, using faulty

test equipment, and making unauthorized repairs without advising the Government. Over 100

gearboxes were subjected to teardown and inspection during the investigation; all failed

inspection and each contained numerous defective components. Over 100 aborted F/A-18

missions, several in-flight fires, and loss of an F/A-18 during the Persian Gulf War were

attributable to the faulty gearboxes. The investigation resulted in the contractor pleading guilty

and being ordered to pay an $18.5 million criminal fine.

In addition, a DoD OIG audit team supported the Department of Justice (DOJ) negotiations to

settle the civil suit against the contractor for supplying defective parts. The auditors provided the

analytical support that was the basis of an $88 million settlement, the largest single payment by

a Defense contractor caught selling substandard products to the Department. The auditors

estimated the Government incurred costs of $90.6 million as a result of the defects. The estimates

were based on analyses of over 2,000 pages of contractor monthly costs of production reports

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covering 1988 through 1994. The DOJ attorneys used the OIG estimates to negotiate the civil

settlement and the auditors actively supported the DOJ attorneys in negotiations with the

contractor, presenting the cost accounting concepts used to develop the Government’s estimates.

Because of the investigation, and the later audit support, the Department was able to detect and

remove seriously defective and potentially life threatening equipment from its inventory, thus

saving millions of dollars in potential repairs and replacement of equipment while ensuring the

effective operation and safety of vital military hardware and personnel.

Fraudulent Medical Billings

The Department avoided paying millions of dollars in false medical claims because of a

successful investigation by DoD OIG criminal investigators of fraudulent medical billings to the

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). The investigation

revealed a pervasive scheme in which customers were lured through the use of diagnostic vans

and aggressive telephone solicitations. Patients were promised medical tests and examinations for

little or no cost. The patients assigned all rights to insurance payments to the defendants’

laboratories and clinics. False claims for inflated or unrendered services were then submitted to

CHAMPUS and other Federal and private medical programs in amounts estimated at almost

$1 billion. The court issued fines, penalties, and forfeiture orders to various individuals that

totaled almost $94 million.

Multidisciplinary Teams

Operation Mongoose

Operation Mongoose is a Deputy Secretary of Defense-approved project to develop and operate

a fraud detection and prevention unit to minimize fraud attacks against the financial assets of

DoD. The project is staffed by auditors, criminal investigators, program analysts, and financial

managers from the Defense Finance and Accounting Service, the Defense Manpower Data Center,

and the OIG. The Under Secretary of Defense (Comptroller) provides executive oversight and

direction.

In the area of payments to retirees, the team worked with the OIG criminal investigators and the

U.S. Secret Service to verify the identity of current retirement payment recipients in overseas

locations. In a recent visit to Puerto Rico, an initial estimate of the savings from the verification

effort was established at $350,000 with potentially another $8 million for deceased annuitants.

Other Operation Mongoose efforts identified duplicate vendor payments, erroneous payroll

payments, and questionable transportation payments.

At the joint request of the IG and the Comptroller of the Department of Defense, the PCIE and

the Chief Financial Officers Council jointly sponsored a conference on using computers to detect

and prevent fraud against Government programs. The conference brought together the most

knowledgeable personnel from the audit, information systems, investigative, legal, and financial

communities. The conference results will help promote further interagency automated fraud

detection projects and followup measures.

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Department of Education

Agents of Positive Change

Audit Efforts

The Department of Education (ED) OIG’s focus on providing timely, critical advice to address

high-risk, high-priority areas yielded important findings and recommendations in postsecondary

education during FY 1995. The OIG reported that accrediting agencies, which are required by

law to assess the quality of vocational training programs, have made little progress in establishing

and implementing performance standards to measure student achievement. As a result, there is

no assurance that the billions of dollars in loans and grants that are spent annually on vocational

training are effectively used to provide the skills necessary for students to obtain gainful

employment. The OIG provided the Department with recommendations for corrective measures

to address this critical situation.

In May 1995, the OIG hosted a planning conference that focused on ways to assure that the

Department’s assets are safeguarded as guaranty agencies leave the Federal Family Education

Loan program and the Department’s shift to direct lending increases. During the conference, the

OIG invited ED staff members, congressional staff, and a representative from the National

Council of Higher Education Loan Programs to assist in identifying areas of audit for FYs 1996-

97. The participants identified a number of issues that are being incorporated in the OIG

workplan.

Investigative Efforts

In the last year, three investigations--involving a truck-driver training school in Texas, a Boston

trade school official, and the owner of a business college in Puerto Rico--resulted in a total of

more than $2.4 million in criminal and civil seizures. Another case, involving a training

corporation in Pompano Beach, Florida, resulted in summary judgments totaling $13 million. In

this case, an OIG investigation developed evidence that the corporation failed to make required

refunds to lenders when students dropped out of or withdrew from its programs, thereby inflating

the amounts paid to lenders by the Department of Education when the students subsequently

defaulted. Summary judgments of nearly $9.5 million were entered against the corporation for

failure to implement regulations for institutional refunds and repayments, and against the

corporation’s former owners for more than $3.5 million for unjust enrichment. The judgment

against the corporation allows it to credit any amount recovered by the Government from the

corporation’s owners.

Multidisciplinary Teams

A joint audit/investigative team out of Dallas and Austin, Texas, was formed to address the issues

surrounding a school whose owner was suspected of masterminding a scheme to defraud the

Department of Education of approximately $2.6 million. Auditors and agents coordinated the

planning of the investigation to maximize their individual contributions. They jointly planned and

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executed a search warrant for evidence; designed and implemented a plan for extensive document

analysis; located and interviewed numerous witnesses; and worked with the special prosecutor

and assistant U.S. attorney to collect and present sufficient evidence to a Federal grand jury to

result in indictments.

The team’s efforts resulted in the seizure of over $2.2 million in assets and the indictment of the

school’s owner, its secretary/treasurer/financial aid director and 7 corporations on 43 counts of

mail fraud, conspiracy to defraud the U.S. Government, obstructing a Federal audit, false

statements, money laundering, aiding and abetting, conspiracy to defraud the Government with

respect to claims, and false claims against the United States. The school entered a plea of guilty

to charges of obstructing a Federal audit and aiding and abetting, and agreed to pay a fine of

$100,000 and make restitution of $1.2 million.

Department of Energy

Agents of Positive Change

During FY 1995, the Department of Energy (DOE) OIG prepared to successfully execute an audit

of DOE s consolidated financial statements. This required development of a strategic plan; the

establishment of a multiregion organizational structure with concomitant shifts in audit resources;

the training of some 120 auditors; establishing an effective working relationship with the

Department s Chief Financial Officer and staff; the development of audit programs for

14 accounts; the establishment of a cooperative audit strategy with management and operating

contractors internal auditors; and initiating accounts and automated data processing (ADP)

system reviews at DOE field and headquarters locations.

The following is a list of OIG results accomplished during FY 1995 which have given DOE

opportunities for positive change.

• DOE revised its program approach to site characterization at Yucca Mountain as a result of

OIG audit recommendations. The revision reflects DOE s awareness of cost and schedule

risks under the current program.

• As a result of an OIG audit, DOE management initiated corrective measures to ensure costs

equal benefits in changes to the Hanford Site Characterization Program.

• An OIG audit found that Department management systems for controlling cost overruns on

work-for-others projects at Los Alamos National Laboratory needed strengthening.

• An audit recommended that the Department incorporate management techniques and

performance measurement mechanisms in its cooperative research and development

agreements.

• An inspection helped to increase management s awareness that the Western Area Power

Administration did not publicly advertise or solicit bids from other companies before

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awarding power purchase contracts under a program that averages more than $250 million

per year.

• An audit identified for management $12 million that could be saved over 5 years and an

additional $1.2 million that could be saved annually through improvements to the

Department s Commercial Laboratory Quality Assurance Evaluation Program.

• Greater emphasis is being placed on cases of criminal or civil violations of U.S. laws. Cases

with the best potential for successful prosecution were given priority in the assignment of

resources. As a result, the Office of Investigations increased to 68 percent the number of

cases presented for prosecution being accepted. The previous 4-year average of cases

presented for prosecution being accepted was 44 percent.

Environmental Protection Agency

Agents of Positive Change

• An audit found that the Environmental Protection Agency (EPA) had serious problems

meeting environmental, safety, and health regulations at its laboratories, placing the health and

safety of EPA employees and their surrounding environment at risk. Agency actions in

response include establishing a team to assist managers in correcting these problems, and

updating senior managers on the status of corrective actions.

• In the Superfund program, EPA agreed to review, update, and apply current cost factors used

for remedial study, design, and action at hazardous waste sites. An OIG audit had found that

EPA used outdated cost factors which may have substantially underestimated response costs

and budgets for cleaning up Superfund sites. EPA also plans to correct the incompatibility

of management information systems, improving managers’ ability to monitor the Superfund

program.

• An audit found that EPA often executed Economy Act Interagency Agreements rather than

using its own procurement process, without adequately considering the costs, because it was

easier to do so. Also, EPA did not bill other Federal agencies for indirect costs related to

performing work or furnishing materials as required, at a potential loss to EPA of $5 million

to $23 million for the period examined. The Agency has agreed to take corrective actions to

include establishing indirect cost rates and requiring independent Government cost estimates.

• An audit found that through improved contract competition and oversight, contract costs could

be potentially reduced by $55 million. EPA has issued policies and procedures to improve

its subcontracting practices, and is drafting policies to reduce the amount and clarify the

conditions for use of equipment that can be provided to contractors.

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Multidisciplinary Teams

• An OIG team of auditors, attorneys, and engineering assistance staff responded to allegations

of EPA malfeasance and punitive harassment in enforcement actions against an oil and gas

supplier. This team effort enabled a comprehensive review of the technical, legal, and

programmatic aspects of the case.

• An OIG engineering assistance staff member joined with investigators in reviewing a referral

from a regional office regarding a construction grants project. The team uncovered evidence

of violations of the Clean Water Act, inaccurate final construction drawings, inferior

construction practices, and potential false claims. The team presented a case against an

engineering firm, a construction contractor, and former grantee officials to Department of

Justice attorneys for prosecutive action.

• A joint team combining OIG investigators and auditors completed a case involving an

individual who had committed felony theft from a nonprofit organization receiving Federal,

State, and private grant funds to monitor activities at Superfund sites. The individual was

convicted and sentenced to jail.

• A joint OIG audit and investigation determined that an EPA contractor had failed to disclose

a quotation for pollution liability insurance during the negotiation and award of a multiyear

EPA Superfund contract. However, the contractor continued to receive payments from EPA

for pollution self-insurance even after the contractor purchased pollution liability insurance.

Under a civil settlement agreement, the contractor agreed to pay the Government $2.8 million

plus interest over 3 years.

Federal Deposit Insurance Corporation

Agents of Positive Change

• An OIG audit served to focus Federal Deposit Insurance Corporation (FDIC) management’s

attention on unresolved issues related to the FDIC’s implementation of the cross-guaranty

provision of the Federal Deposit Insurance Act. This provision allows FDIC to assess

surviving commonly controlled banks for the losses incurred by the deposit insurance funds

from the failure of a related bank. However, after 5 years of having this authority, responsible

FDIC divisions had not resolved whether this provision should be applied to chain bank

activities and to banks removed from common ownership just before the failure of a related

bank. As a result of the OIG audit, the responsible FDIC divisions will collectively decide

these policy issues.

• The OIG issued a memorandum to the Transition Committee summarizing significant

conditions contained in audits of the conversion of Federal Savings and Loan Insurance

Corporation (FSLIC) assets to FDIC asset management and financial information systems.

The Transition Committee is charged with overseeing the transfer to FDIC of certain

functions, records, and assets in liquidation as of the sunset of the Resolution Trust

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Corporation (RTC). The memorandum illustrated problems that occurred when FDIC assumed

FSLIC assets and contained recommendations stemming from this experience which could

substantively enhance the Transition Committee’s efforts to ensure an orderly transfer to

FDIC of RTC’s assets at its sunset.

Government Accountability

• When bank examinations detect safety and soundness concerns, FDIC obtains a commitment

from bank management to take corrective action. To ensure that bank management honors

this commitment, the agency has established a program of quarterly reporting by banks and

subsequent on-site followup. The OIG audited the agency’s process for ensuring bank

compliance with supervisory and enforcement actions. The OIG found the agency’s on-site

visits to be very effective as a followup tool, but consistent use was not made of the quarterly

reports. To improve the timeliness and effectiveness of the followup process, agency

management agreed to a more consistent and active use of the banks’ quarterly reports. This

action will serve to improve accountability regarding supervisory and enforcement actions on

the part of the banks and the FDIC.

Multidisciplinary Teams

• In 1995, at the request of the FDIC Chairman and the Congress, the OIG completed an

investigation into alleged conflicts of interest by an FDIC contract law firm. The

investigation, which was coordinated with an Office of Independent Counsel and another

OIG, utilized the knowledge and experience of OIG investigators, auditors, and legal staff to

investigate the allegations. The investigators conducted interviews, took sworn statements, and

subpoenaed records. The auditors reviewed fee bills and compliance with policies and

procedures. The legal staff identified ethics criteria, conducted a qualitative review of the law

firm’s legal services to the FDIC, and served as liaison with the Office of Independent

Counsel and the Congress. The OIG was able to complete the investigation more quickly

using this multidisciplinary team approach. Further, the team was able to combine the

investigative evidence and audit findings into one report so that Federal prosecutors,

Congress, and FDIC management had to review only one OIG document prior to deciding

on the appropriate course of action for the law firm.

Federal Emergency Management Agency

Agents of Positive Change

Audit Division

During FY 1995, the Audit Division for the Federal Emergency Management Agency (FEMA)

OIG continued to work closely with Agency personnel. The audit staff provided technical

assistance, advice, and support to several working groups involved in major initiatives that will

improve FEMA programs and operations. Some of the working groups that the audit staff assisted

included the following.

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• The working groups for developing and implementing the new National Emergency

Management Information System.

• The working group for developing and implementing the new Integrated Financial

Management Information System.

• The Information Resources Board, which provides oversight and guidance for all information

technology efforts.

In addition, audit staff served on emergency response teams that respond to Presidentially

declared disasters and worked closely with FEMA management in closing out old disasters.

Investigations Division

Immediately following the Northridge, California, earthquake, OIG investigators were on the

scene to proactively organize a multiagency task force to address fraud against FEMA and other

disaster assistance agencies. OIG investigators met with representatives of the U.S. attorney’s

office to coordinate arrest warrants and indictments, and participated in a press conference along

with representatives from other Federal law enforcement agencies. The investigators also

presented fraud awareness briefings to program personnel, and distributed hotline posters

encouraging the reporting of fraud.

As a result of this effort, in excess of 4,100 hotline complaints have been received, resulting in

the arrest and indictment of 44 individuals. In addition, $16.5 million has been identified in

questionable grants which have been placed in debt collection process with $7 million collected

thus far.

General Services Administration

Agents of Positive Change

Advisory Reinvention Options

The President, the Congress, and the American public have challenged the Executive Branch to

reinvent itself into a leaner, more efficient Government. In response, the OIG completed a

comprehensive analysis of the General Services Administration’s (GSA) major programs and

activities to complement the agency’s effort to identify savings and reengineering opportunities.

The OIG brought its most experienced and knowledgeable auditors together to prepare a special

"fast track" report on the promising possibilities that exist for boldly restructuring GSA’s

operations, including privatization, delegation to other agencies, and streamlining of existing

programs. The report identified potential annual governmentwide savings of $1.6 billion.

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Multidisciplinary Teams

Pursuing Procurement Fraud

The GSA OIG uses an interdisciplinary approach to vigorously pursue high-potential procurement

fraud cases, including defective pricing and price reduction cases, against GSA contractors. Early

involvement by OIG investigators, auditors, and attorneys--with their specialized disciplines--has

enabled the OIG to more expeditiously review and refer to the contracting officers those matters

more appropriate for administrative action, which allows the OIG to focus its collective efforts

on pursuing fraud cases. With this interdisciplinary approach, the OIG has accelerated the

evidence collection process and improved the Government’s position

when seeking criminal and civil remedies. In FY 1995, the OIG, using a multidisciplinary

approach, referred 20 cases to DOJ for action under the civil False Claims Act. Additionally, in

FY 1995, DOJ together with the OIG entered into agreements with GSA contractors resulting in

more than $9 million in Government contracts-related civil fraud recoveries.

Department of Health and Human Services

Agents of Positive Change and Multidisciplinary Teams

Operation Restore Trust

The single best example of the Department of Health and Human Services (HHS) OIG

commitment to promoting positive change and the use of multidisciplinary teams was the

implementation of Operation Restore Trust (ORT). Announced by the President on May 3, 1995,

ORT is a 2-year partnership of Federal and State agencies working together to protect the health

care trust funds more effectively through shared intelligence and coordinated enforcement, and

to enhance the quality of care for the programs’ beneficiaries. In this joint project, OIG is

working with the Health Care Financing Administration (HCFA) and the Administration on

Aging (AoA) to prevent and detect fraud and abuse in three rapidly growing sectors of the health

care industry: home health agencies, nursing facilities, and durable medical equipment suppliers.

The project initially targeted five States which together account for 40 percent of the Nations’

Medicare and Medicaid beneficiaries.

As the project’s coordinator, OIG assembled teams that include investigators from its Office of

Investigations and the States’ Medicaid Fraud Control Units; auditors and evaluators from both

OIG and HCFA; quality assurance specialists from the State surveyors and durable medical

equipment regional coordinators; State long-term care ombudsmen through AoA; and prosecutors

from the Department of Justice and the State attorneys general. These teams are conducting

financial audits of providers, criminal investigations and referrals to Federal and State

prosecutors, civil and administrative sanctions and recovery actions, and surveys and inspections

of nursing facilities. The collective experience of these teams also will be used to recommend

to HCFA and the Congress program adjustments to prevent future fraud and to reduce waste and

abuse.

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The OIG also enlisted the support and participation of the public and the industries that the

initiative targeted. A hotline was established to receive allegations of fraud and abuse on a

confidential basis. To further educate the public and health care providers, OIG continued its

practice of issuing special fraud alerts to identify and describe fraudulent and abusive health care

practices. Moreover, a voluntary disclosure program was initiated on a pilot basis under the

auspices of ORT. Through this pilot program, OIG and DOJ established procedures whereby

home health and nursing home suppliers and providers in the five States may come forward with

full disclosure of potential fraud and abuse.

The ORT began with 135 investigations that met the parameters of the project. By the end of the

fiscal year, 84 other investigations had been initiated, for a total of 219 cases involving more than

760 subjects. Fifty-three are joint investigations with other law enforcement agencies, including

the Federal Bureau of Investigation, the United States Postal Service, the Railroad Retirement

Board OIG, the Defense Criminal Investigation Service, and State attorneys general offices.

By the end of the fiscal year, OIG had obtained 20 criminal convictions, 8 civil judgments and

7 indictments in cases that were a direct result of the ORT initiative. In addition, OIG collected

a total of more than $31.9 million in fines, recoveries, settlements, and civil monetary penalties

during this same period. The first two exclusions of ORT providers from the Medicare and

Medicaid programs for convictions of health care fraud were processed.

The OIG released 13 final inspection reports under ORT in FY 1995 covering such issues as

home health agencies, Medicaid estate recoveries, nutrition payments, and payments for

incontinence supplies and wound care supplies. Also during this period, OIG issued 8 final audit

reports on home health agency eligibility and cost reports, skilled nursing facilities, and hospice

eligibility. Based on the results of these completed reviews as well as others ongoing, OIG has

identified millions of dollars in Medicare overpayments which HCFA is in the process of

recouping. This process has also produced multiple recommendations that will continue to save

the Medicare trust fund millions of dollars in the future.

Federal/State Partnership for Joint Audits

In FY 1993, OIG formed partnerships with State auditors and evaluators, as well as staff at

HCFA to identify opportunities for curbing Medicaid costs and to produce savings at both the

Federal and State levels. The OIG has shared the methods and results of its Medicare and

Medicaid projects to provide State auditors with leads for cost savers. To date, OIG has

established partnerships with nine States and is working with another seven States to form

partnerships.

The joint effort is producing promising results. In June 1995, the National State Auditors

Association, using OIG audit approaches and guidelines, completed an eight State partnership

audit of the Medicaid prescription drug program. State audits of Medicaid laboratory services

have identified potential State and Federal recoveries of $9 million.

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Department of Housing

And Urban Development

Agents of Positive Change

Operation Safe Home

The Department of Housing and Urban Development (HUD) OIG continued to serve as an "agent

of positive change" during FY 1995 through Operation Safe Home, a campaign initiated in

February 1994 to combat crime affecting HUD housing. The following activities were some of

those performed under the Safe Home umbrella.

Violent Crime Prevention Initiatives

• In HUD developments and surrounding schools in Detroit, Michigan, the OIG coordinated

the Bureau of Alcohol, Tobacco, and Firearms’ (BATF) Project Reach-Out and the Gang

Resistance Education and Training, both of which are community policing programs.

• In Atlanta, Georgia, the OIG continued its participation in the Drug Abuse Resistance

Education Program at Cook Elementary School, the third location in the City funded under

a DOJ Weed and Seed grant. All three locations are immediately adjacent to public housing

properties.

Witness Relocation Efforts

• At the request of the gang investigator in the district attorney’s office, a witness who

provided testimony about gang members operating in public housing developments was

relocated. The gang members were convicted on drug charges.

• At the request of the FBI and the U.S attorney’s office, a witness and her family were

relocated when the witness received a death threat after providing testimony related to drugs

and violent crime in a HUD-assisted complex.

• A witness who provided information concerning a gang suspected of shootings and cocaine

trafficking around assisted housing developments was relocated.

Combatting Equity Skimming in FHA Insured Multifamily Housing

The multifamily equity skimming aspect of Operation Safe Home combines aggressive,

affirmative litigation with proactive initiatives to stop owners and management agents from

diverting much needed funding away from rental housing projects to their personal use. Through

the combined efforts of the Offices of Inspector General, Housing, and General Counsel, equity

skimming cases are being developed and presented to U.S. attorneys for affirmative litigation,

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balancing the most effective combination of criminal prosecution, civil suits, and out-of-court

settlements, and keeping in mind the best interests of the residents and HUD.

Considering the previous lack of enforcement in this area, accomplishments under Operation Safe

Home have been very significant. Since the inception of Operation Safe Home, 39 civil

settlements and judgments totaling in excess of $30 million have been completed.

Reinvention of HUD

The OIG has been an active participant in and advisor to departmental and Congressional efforts

to redesign HUD’s program delivery structure. The OIG’s specific efforts have included the

following.

• Issuance of a December 1994 report on Opportunities for Terminating, Consolidating, and

Restructuring HUD Programs.

• Advice and counsel to the Secretary and his principal staff on the development of HUD’s

Reinvention Blueprint proposal and corresponding legislative specifications.

• Continuing identification of opportunities--above and beyond those included in the

Reinvention Blueprint--for HUD to absorb budget cuts by eliminating statutory functions not

essential to the Department’s core mission.

• Continuing focus on HUD’s progress against management problems, including analysis of

how areas are impacted by reinvention proposals.

• Support and testimony for congressional oversight committee hearings on HUD problems and

reinvention needs.

Department of the Interior

Agents of Positive Change and Multidisciplinary Teams

• Based on audit findings that questioned claimed contractor costs totaling over $3 million,

Department of the Interior (DOI) OIG investigators opened fraud investigations for inflated

claims for goods and services. By coordinating their efforts, OIG auditors and investigators,

through examinations of extensive financial and contractual data, documented the questionable

claim and identified fictitious and fraudulent billings by the contractor. The documentation

developed by the team was critical in the referrals to authorities for pursuing civil recoveries

and criminal prosecution.

• In a hotline allegation of procurement irregularities, OIG auditors and investigators found

weak controls in the award and administration of a contract and potentially fraudulent billing

practices. The results of the team’s inquiry were provided to the respective bureau, which

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strengthened internal controls and decided not to renew the contract options. The joint effort

resulted in the contractor’s claim of over $200,000 being disallowed.

• Over a 5-month period, an OIG auditor provided technical assistance to the Indian Self

Determination Negotiated Rulemaking Committee. The Committee was established pursuant

to the Indian Self-Determination Act Amendments of 1994 (Public Law 103-413), which

significantly enhanced Indian participation in the planning, conduct, and administration of

programs operated by the Departments of the Interior and Health and Human Services for the

benefit of Indians. The Committee was established to provide a means for tribes to

participate in advising the Secretaries on the development of proposed regulations to

implement the Act. DOI representatives to the Committee asked OIG to participate in

workgroups established to address areas of financial, procurement, and property management;

programmatic reports and data requirements, and conflicts of interest. OIG’s participation in

these areas was requested because of its familiarity with tribal administration of Federal

programs obtained through its role as the cognizant Federal agency for indirect cost

negotiations and audits of tribal organizations.

• Over a 6-month period, an OIG auditor participated as a full-time member on a National Park

Service project team that had been assembled by the Park Service to correct financial

accounting system weaknesses and deficiencies that were previously reported by OIG. In

addition to the OIG auditor, the team was composed of systems analysts, programmers,

accountants, and financial managers from within the Park Service and a staff member from

the Department’s Office of Policy, Management, and Budget. As part of its objective, the

team developed a corrective action plan that outlined: (1) The specific financial system tools

that would be required for correcting known problems and for preventing additional problems

in the financial accounting and reporting system; (2) actions needed for making corrections

in these systems; and (3) needed resources and timeframes for accomplishing corrective

actions. OIG’s participation on this team was requested because of its knowledge of and

familiarity with problems with the Park Service’s financial accounting systems.

Department of Justice

Agents of Positive Change

• At the request of the Deputy Attorney General, the DOJ OIG performed a special review of

the effect of the U.S. Marshals Service (USMS) reorganization plan on seized assets

management. Although the review identified potential benefits from the reorganization,

including streamlined management, empowered employees, measurable performance plans,

and improved customer service, it also found that the reorganization could result in

insufficient staff levels, loss of program expertise, and reduced oversight of the seized assets

program. Subsequently, USMS management agreed to, among other things, retain its current

positions in seized assets functions, hire additional personnel to perform seized asset

functions, and perform annual program reviews of each seized asset district. Fulfillment of

these commitments will address the major concerns raised in the OIG review.

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• Inspectors participated in the Immigration and Naturalization Service (INS) Growth

Management Working Group by providing technical assistance to INS personnel based on

insights developed through an inspection of INS’ ability to manage the large influx of new

border patrol agents requested in FY 1996.

• The Audit Division continues to work with Department management to address new and

potentially complex issues associated with INS’ effort to implement concurrently 12 major

automation initiatives. There are at least six contracts, totaling almost $525 million, involved

in this project with life cycle costs estimated to exceed $1 billion. At the Attorney General’s

suggestion, the INS Commissioner is working with the OIG and the Justice Management

Division to monitor the effective use of INS’ automation resources to identify and avoid

potential problems in the implementation of these major procurement and automation issues.

Multidisciplinary Teams

• The Violent Crime Control and Law Enforcement Act of 1994 (Crime Act) substantially

increased the number and dollar amounts of DOJ law enforcement grants to communities

across the country. The OIG has committed its resources, personnel, and diverse capabilities

to improving the operation of the grant programs created by the Crime Act. Specifically, OIG

auditors, inspectors, investigators, and senior managers have worked with the Police Hiring

Supplemental Program Task Force, the Office of Justice Programs, the Office of Community

Oriented Policing Services, and the Associate Attorney General’s Crime Act Implementation

Group. The partnership was based on a common desire to assure that these programs be as

well run and fiscally secure as possible.

• Members of the Investigative Division and Office of General Counsel have worked with the

Office of Investigative Agency Policies to develop uniform DOJ policies on use of crises

management resources, conduct of post-shooting reviews, uses of deadly force, disclosure of

impeachment information relating to Government witnesses in criminal trials, and other

issues.

Department of Labor

Agents of Positive Change

Mine Safety

During this reporting period, the OIG at the Department of Labor (DOL) continued to place a

high priority on the investigation of unscrupulous DOL employees and others who fail to

properly exercise their official responsibilities in exchange for personal gain. Particular attention

has been directed to alleged corruption by Mine Safety and Health Administration (MSHA)

Inspectors. MSHA is responsible for ensuring the safety of all the Nation’s mines. MSHA

develops and promulgates safety and health standards, ensures compliance with such standards,

assesses civil penalties for violations, and investigates mine accidents. Most of the MSHA

corruption investigations involved allegations that inspectors extorted money from mine owners

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or accepted money or other items of value in exchange for not properly performing their official

inspection duties.

These MSHA integrity investigations are part of an OIG initiative which, since 1986, has resulted

in the conviction and/or removal from employment of 14 Federal and 2 State mine inspectors.

These results demonstrate the OIG and MSHA commitment to ensure that nothing but the highest

integrity in such inspection programs is acceptable. They also serve as a warning to those

individuals willing to disregard their official responsibilities in favor of personal gain that they

will be sought out and prosecuted for their actions.

As a direct result of these investigations, MSHA has requested OIG assistance in improving its

integrity program by studying the policies and procedures of other regulatory agencies at the

Federal, State, and local levels. In addition, the OIG is assisting MSHA management in the

development of a special ethics training program to be provided to all Federal mine inspectors.

Recently, the OIG created an instructional videotape outlining the issue of ethics for mine

inspectors.

Job Corps

Another area to which the OIG has devoted significant resources is the Job Corps Program. This

program is authorized under the Job Training Partnership Act and funded at almost $1 billion per

year. The Job Corps Program is a residential education and training program to assist

disadvantaged youth to become more employable and productive citizens.

During this reporting period, the OIG issued several audit reports on different aspects of this

program including: student outcomes, center conditions and environment, and the implementation

of Job Corps’ "Zero Tolerance for Violence and Drugs Policy."

The OIG also worked extensively with the Department and the Congress on several initiatives

to ensure improvements in program performance. For example, OIG and Job Corps senior

management met to discuss the need for changes in the management and oversight of the

program and to agree on the necessary course of action. Among the areas considered were the

need to: 1) Refine Job Corps’ performance measurement system; 2) improve poor performing

centers; 3) improve contracting procedures; and 4) improve screening and recruitment of

participants.

In addition, the Inspector General testified before several Congressional committees on some of

the issues that have been identified through OIG audits as hindering Job Corps’ overall

performance. In particular, the IG testified that the performance of most Job Corps Centers

remains constant from year to year and that the lowest ranked centers are virtually always the

same without any measurable improvements. The audit recommended that the issue of poor

performing centers and of necessary center repairs (estimated by Job Corps to total some

$400 million) be addressed before the program is expanded with additional expensive centers,

as proposed by the Administration.

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National Aeronautics and

Space Administration

Agents of Positive Change and Multidisciplinary Teams

Over $1.2 Million Recovered and More Than $3.5 Million in Costs Avoided

An OIG investigation into alleged defective pricing involving a leasing arrangement for a

supercomputer resulted in the recovery of over $1.2 million and a cost avoidance of more than

$3.5 million. A DCAA audit found that a contractor did not inform NASA negotiators that it was

planning to buy and then assign the computer equipment to a subcontractor. The DCAA audit

found that the contractor received excessive profits because the interest rate it quoted to the

Government was higher than that charged by the subcontractor.

NASA officials calculated the damages to the Agency as $2.9 million including overpayments,

interest, and penalties. A modification was made to the contract which resulted in a recovery of

over $1.2 million in overpayments and interest. Future payments were scheduled at the lower

interest rate, which resulted in an estimated $1 million cost avoidance by contract end.

The former vice president of the company was indicted by a Federal Grand Jury. The indictment

charged that he was responsible for causing the company to withhold accurate cost and pricing

data from NASA. It charged him with 10 counts of fraudulently causing the contractor to bill

costs to and obtain payment from NASA, 9 counts of mail fraud, and 2 counts of filing false

statements. He was suspended from contracting with the Government pending resolution of the

charges.

Following a jury trial, the vice president was found guilty on all 21 counts in the indictment. An

agreement was reached between the contractor and NASA under the terms of which the company

agreed to pay the agency an additional $2.2 million to settle the remaining issues in the case. The

agreement also recognized that the contractor had implemented actions to preclude a recurrence

of the mischarging.

The former vice president was sentenced to 18 months in prison, fined $1,100, and placed on

probation for 3 years following his release from prison. The official was also debarred for

3 years.

Over $173,000 in Lobbying Costs Disallowed

Following an OIG investigation, a NASA Center concurred in an OIG recommendation and

disallowed over $173,000 in costs that had been billed by a contractor to pay for lobbying

expenses. The investigation disclosed that the Center had disallowed similar costs for the previous

2 years based on the findings of a DCAA audit.

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Nuclear Regulatory Commission

Agents of Positive Change

• The Nuclear Regulatory Commission (NRC) had previously initiated a review of the 10 Code

of Federal Regulations 2.206 petition process to assess its effectiveness and credibility, as

well as its comprehension by the general public. The petition process allows any individual

to file a request to modify, suspend, or revoke a license. The OIG reviewed several recurring

issues raised during the staff’s assessment and its implementation of enhancements to address

these issues. The OIG recommended that NRC clarify to the public what a petitioner can

reasonably expect under the Federal regulations.

• The Vice President’s NPR challenged Federal agencies to examine their functions to identify

opportunities for improving operating efficiency and reducing budget expenditures. In support

of this request, NRC established a steering committee to recommend opportunities for

organizational improvement. The OIG was asked to assist this committee, and while doing

so, drew from a large body of previous OIG work to arrive at several suggestions to improve

organizational efficiency by eliminating potential duplicate functions and layers of

management.

• OIG received information that the NRC failed to investigate allegations of wrongdoing and

harassment and intimidation (H&I) at the South Texas Project nuclear plant (STP). These

allegations were provided to the NRC before issuance of a full-power operating license to

STP. The OIG investigation determined that the NRC did not adequately pursue numerous

allegations of wrongdoing and H&I and maintained no documentation concerning how these

allegations were handled or closed.

• The OIG investigated allegations that an employee at the Idaho National Engineering

Laboratory submitted falsified friction test results to the NRC. From this investigation, OIG

concluded that the test results and other documents, submitted as part of an NRC research

contract, were falsified. The employee was charged with seven counts of making false

statements in violation of Title 18, United States Code, Section 1001. As a result of this

investigation, the Commission asked the NRC staff to address the broader ramifications of

this case as to what type of test documentation should be required.

• The OIG investigated the disappearance of computer memory chips from individual

computers throughout the NRC. The OIG identified an NRC contractor employee who stole

numerous pieces of NRC computer equipment. The OIG conducted a separate review to learn

and subsequently explain to the Commission why these thefts were not detected by the NRC.

27
Office of Personnel Management

Agents of Positive Change

OIG Takes a Lead Role Within the Office of Personnel Management (OPM) in

Implementing Administrative Remedies for Benefits Fraud Cases

OPM serves a large, diverse, and worldwide customer population. Its retirement programs cover

most current Federal employees and pay benefits to over 2 million annuitants. The Federal

Employees Health Benefits Program (FEHBP) provides coverage to approximately 8 million

employees, annuitants, and their families. Because of the nature of these programs, most of the

individual financial transactions involving OPM funds--in the form of annuity payments and

health insurance claims--do not entail large sums. However, on an annual basis they amount

collectively to nearly $50 billion, disbursed to millions of recipients. These precise characteristics

also make the payments particularly susceptible to fraud. For example, various studies by industry

groups and the GAO concerning insurance payments to health care providers have placed the

overall rate of fraud nationally as high as 10 to 12 percent of the total dollar amount of claims.

While even a much lower rate of fraud applied to OPM programs would reflect a very large

diversion of funds, OPM has not been aggressive in identifying losses and pursuing their

recovery. To a great extent, this reflects the inadequacy of the legal remedies which were

available to address these problems. The false claims, false statements, and mail fraud statutes,

while nominally applicable, were seldom invoked because of the high burden of proof in criminal

actions and the fact that in many cases the amounts in question did not reach prosecutorial

thresholds. The OIG has taken the lead within OPM in identifying means through which the

problems of fraud could be addressed and has been working actively to implement them. The

OIG recognized that most instances of benefits-related fraud could not be appropriately handled

within the Federal judicial system, but that sanctions authorities were, or could be made, available

to permit such matters to be addressed administratively. As a result, beginning in May 1993, OIG

has been operating a debarment program which removes from participation in the FEHBP those

health care providers who have acted improperly with regard to other Federal programs. To date,

the Administrative Sanctions Branch of the OIG has issued over 4,000 debarment orders. A

beneficial collateral effect of these orders has been to induce those providers whose debarments

were predicated on defaulted health education loans to repay their indebtedness in order to be

reinstated to participation in Federal programs. In the 2 years during which OIG’s debarment

program has been in operation, the collection of such defaulted loans has increased 1,000 percent.

In addition, OIG is seeking congressional action to expand the scope of these administrative

remedies to include financial sanctions for fraud committed against FEHBP. Further, the OIG has

been instrumental in motivating OPM’s development of regulations to implement the Program

Fraud Civil Remedies Act. The OIG’s role in the regulatory framework would be closely limited

to investigative activity, but it is anticipated that the availability of civil remedies would enhance

the OIG’s effectiveness because the agency would have the tangible ability to enforce penalties

for proven violations.

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Office of Quality Management and Innovation Coordinates Organizational Assessment and

Resulting Followup Initiative

As a result of a 1995 agencywide organizational assessment survey, the Office of Quality

Management and Innovation coordinated actions to address the resulting issues and themes that

were developed. Followup actions included employee interviews, assessment discussions, and

team meetings. The review has resulted in several recommendations and suggestions to

management including a timeline to address all themes and/or issues which were identified as

opportunities for improvement. These improvements within the OIG are expected to result in

improved services to the OIG’s customers.

Multidisciplinary Teams

Auditors and Investigators Working Together on Questionable FEHBP Rates

As a direct result of cooperation between the OIG Office of Investigations and the Office of

Audits with the U.S. attorney’s office, during the last 5 years OPM has recovered over

$28 million from health maintenance organizations (HMOs) participating in the FEHBP. The

recoveries have resulted from HMO overcharges that were based on incorrectly certified

information used to compute their annual health insurance premium rates.

For example, in FY 1995 OPM conducted an investigation of an HMO in Virginia Beach,

Virginia. The case involved erroneous rate certifications that were used to establish FEHBP rates

that the Government paid the company for health benefit services. At the completion of an audit

involving contract years 1989, 1990, and 1991, the auditors asked the investigators to review their

findings and determine if there was merit in asking the U.S. attorney’s office to consider civil

prosecution of the health carrier. After several meetings between the audit and investigative

staffs, the case was presented to an assistant U.S. attorney (AUSA). The AUSA accepted the case

and requested that the OIG assist his office in the investigation and subsequent settlement

negotiations with the carrier. In September 1995, a verbal agreement was reached which resulted

in the carrier paying $7 million to the Government. The AUSA, at the time of settlement,

commended the audit and investigative staffs at OPM for their joint efforts in preparing the

original referral, assisting in the investigation, and their participation in the subsequent settlement

negotiations.

Office of Special Counsel

Agents of Positive Change and Multidisciplinary Teams

In FY 1994, the Office of Special Counsel (OSC) reported the trial of a pilot project that was

based upon the use of multidisciplinary teams of investigators and attorneys to handle cases from

the inception of a full field investigation through final disposition of a matter. The results of this

approach have been so positive that OSC has implemented the pilot project on a permanent basis.

29
Under this new approach, OSC has established four multidisciplinary teams of attorneys and

investigators. Cases are assigned to one of the four teams, with one attorney and one investigator

taking primary responsibility for each case. They jointly plan case strategy, assess evidence, and

whenever possible, pursue a mutually agreeable negotiated settlement. When it is necessary to

file an action with the MSPB for purposes of corrective or disciplinary action, both the attorney

and investigator play an integral part in the litigation effort.

During the time OSC has used this new approach to its work, the agency has achieved a record

number of favorable actions (i.e., corrective actions, disciplinary actions, and other systemic

actions such as training). In FY 1995, OSC obtained 175 favorable actions, which represents a

28.6-percent increase over the 136 favorable actions obtained in FY 1994. It should be noted that

FY 1994, which was the first year OSC used its new approach, represented a 35-percent increase

in the number of favorable actions obtained compared to the prior year. Of particular importance

in FY 1995, 120 favorable actions, or 68.5 percent of the total, were obtained in whistleblower

reprisal cases, compared with 58 percent in FY 1994.

Railroad Retirement Board

Agents of Positive Change

During FY 1995, the Railroad Retirement Board (RRB) OIG continued its efforts

to monitor, evaluate, and address important areas that require change in RRB

programs and operations. In January 1995, the OIG provided recommendations

to the RRB’s Board members for revising the agency’s organizational structure

and reengineering its field offices by significantly reducing the number of

locations.

The Board members formed a Reinvention Task Force to evaluate the OIG’s

recommendations. The group rejected the OIG’s proposals for consolidating the

existing 22 bureaus into 5 and reducing the number of field service offices from

86 to 10. In June 1995, the task force issued its findings that proposed smaller

reductions for the field service and a minor consolidation of the RRB’s

organizational structure. The task force also recommended studying the use of

additional technology in its service delivery methods as recommended by the OIG.

The Board has approved a majority of the task force’s 34 recommendations for

improvement, and plans for implementation are currently being developed.

In September 1995, the OIG provided the Board members with additional

rationale for consolidating the RRB’s organizational structure into five bureaus

and for radically reducing the number of field offices. The OIG also recommended

that the Board members initiate a change in the organizational culture of the

agency by eliminating the current micromanagement and delegating decision

making to lower levels.

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Multidisciplinary Teams

• The OIG received hotline complaints from several rail workers who indicated

that some railroad employers were refusing to submit payroll contributions

and employer taxes to the RRB, even though the agency had issued decisions

deeming these employers to be covered under the Railroad Retirement Act and

Railroad Unemployment Insurance Act. The complaints alleged that the

employers had submitted fraudulent reports to the RRB stating they had no

employees. An OIG team composed of audit and investigative staff determined

that the employers did, in fact, have employees, based on information from

other Federal entities and private sources.

The OIG expects this project will result in significant financial benefits for the

RRB. One investigation has identified over $1.5 million in funds owed to the

agency by an individual who owns and operates four rail carriers.

• The OIG is utilizing a joint team of investigators and auditors to expedite the

processing of suspected Medicare fraud cases. In many instances, the OIG

team identifies providers who establish shell billing offices in the Medicare Part

B billing jurisdiction which has the highest utilization level and reimbursement

rates. Providers submit claims in that jurisdiction, misrepresenting the point

of sale. These cases typically involve complex financial situations in which OIG

auditors track the flow of payments made to the suspected providers and

develop supporting documentation. Through the analysis of various assets, the

OIG auditors are able to identify individuals and companies involved in

fraudulent Medicare billings.

Resolution Trust Corporation

Agents of Positive Change and Multidisciplinary Teams

The Resolution Trust Corporation (RTC) reached its sunset on December 31,

1995, and the RTC OIG was merged with the FDIC OIG.

Civil Suit Filed as a Result of Alleged Bid Rigging Scheme

Based on a joint project undertaken by the OIG’s Offices of Audit and

Investigation, RTC filed a civil suit in the District Court of Arizona seeking $20

million in actual damages and $60 million in punitive damages from three

corporations and five individuals, all of whom were involved in RTC’s sale of

WESAV Mortgage Corporation, a wholly owned subsidiary of Western Savings and

Loan, FA (Federal Association), located in Phoenix, Arizona. WESAV was

established in 1987 by Western Savings for the purpose of originating and

servicing mortgages.

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The project was initiated when the OIG’s Office of Investigation received a

complaint that proceeds from the sale of WESAV were significantly less than

expected. The Office of Investigation requested audit assistance in reviewing the

bid and sale documents. OIG auditors and investigators reviewed and analyzed

thousands of documents related to the operation and sale of WESAV and jointly

conducted nearly 100 interviews in completing the project. The skills and

expertise that each of the disciplines--audit and investigations--brought to the

project culminated in findings that could result in significant monetary recoveries

for RTC.

The Office of Audit issued a report in September 1994 focusing on the events and

circumstances surrounding the (1) acceptance and approval of the winning bid,

(2) operations of WESAV during the sales process, (3) closing of the sales

transaction, (4) payment of broker fees, and (5) approval of the sales agreement.

The report recommended that RTC recover a total of $16 million from its sales

broker and financial advisor and $2 million from the purchaser of WESAV. In the

report, OIG auditors stated that RTC’s representatives did not adequately perform

their duties during the sales process. The broker incorrectly calculated the bids

and recommended a bid that was about $14.2 million less than the highest bid.

For its part, the financial advisor did not adequately evaluate the bids and

misrepresented to RTC that the recommended bid was $42.1 million, not the

actual amount of $25.4 million. Other actions taken and mistakes made by RTC

personnel, the subsidiary’s executives, and RTC’s advisors in closing the

transaction also caused RTC to receive less than it should have from the

purchaser.

Prompted by the OIG audit and investigative findings, the suit filed by RTC alleges

that the purchasers and RTC’s sales broker conspired to rig the bidding process

to favor the eventual successful bidder. The suit also alleges that the defendants

manipulated the operations of the company before the sale, to the financial

detriment of RTC and to the advantage of the purchaser. Finally, the suit alleges

that the figures used in closing the transaction were fraudulently manipulated,

causing additional losses to RTC.

Small Business Administration

Agents of Positive Change

Tax Verification Program Yields Results

As the result of a series of investigations in early 1991 involving submission of false tax

information with Small Business Administration (SBA) loan applications, the OIG proposed a

program in which applicants’ tax return information would be verified by the IRS before loan

approval. In October 1994, SBA began verifying tax return data submitted by all loan applicants.

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In FY 1995, approximately $17 million in potential loans was denied because of significant tax

information discrepancies. Since the problem first surfaced in 1991, 53 individuals have been

indicted on criminal charges: 42 have been adjudicated guilty, 1 indictment was dismissed in

negotiation of a spouse’s guilty plea, and 10 others have not yet gone to trial.

Loan Packager Reform Proposals Being Developed

A problem identified by the OIG is the lack of effective regulations governing the business

practices of loan packagers. Packagers have been indicted recently for fraudulently charging fees

for "preparation of SBA loan applications" that were never submitted to any SBA-participating

lender, for concealing the receipt of a 15-percent ownership interest in a small business as a fee

for preparation of the loan package, and for claiming bogus post-disaster business losses in

dozens of economic-injury loan applications. The OIG has, subsequently, developed

recommendations governing the regulation of loan packagers. The agency is now in the process

of promulgating regulations to register loan packagers and brokers and to establish regulations

governing fees paid for assistance in obtaining SBA loans.

Close Cooperation Between the OIG’s Auditing Division and the Office of Minority

Enterprise Development Strengthens Program

SBA OIG’s Auditing Division and the Office of Minority Enterprise Development (OMED) have

worked together over the past year to strengthen the SBA’s Section 8(a) program. Instead of

relying solely on formal audit reports of program deficiencies, the OIG is now working directly

with OMED early in the life of policy and programmatic decisions that have a bearing on

program effectiveness and integrity. As a result, OIG recommendations and ideas are being

considered in a more timely and effective way.

Examples of constructive results include OMED’s expanded efforts to terminate and graduate

Section 8(a) firms no longer eligible for the program, improved monitoring of the competitive

business mix of Section 8 (a) firms, and OMED’s early involvement of OIG in the formulation

of policy initiatives and proposed regulations.

Inspection and Evaluation Division Provides Recommendations to the Surety Bond

Guarantee Program

The OIG’s Inspection and Evaluation Division examined the Surety Bond Guarantee Program and

made recommendations for assisting contractors to become bondable on their own. The OIG also

developed a method for calculating SBA bond loss rates in a manner that would make them more

comparable to the loss rates published by the private surety industry. Finally, the OIG

recommended steps for correcting problems in measuring the program’s performance in

graduating contractors, controlling losses, and making recoveries on defaulted bonds. The OIG

is working closely with senior SBA officials to implement these measures.

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Social Security Administration

The Social Security Administration (SSA) became an independent agency on March 31, 1995,

and at the same time, the SSA OIG was created. The OIG conducts audits, evaluations, and

investigations that address a number of programmatic activities, including: financial management,

examination of the use of computer profiling, and SSA’s customer service. Most significantly,

the OIG found that SSA underpaid at least $159 million to at least 80,000 beneficiaries who

receive retirement and survivors insurance benefits.

Agents of Positive Change

Evaluations

• Social Security Client Satisfaction--The HHS OIG conducted annual client satisfaction surveys

of Social Security beneficiaries since 1987. The 1995 survey, conducted by the SSA OIG,

indicates that 79 percent of the respondents rate service as good or very good. This is a slight

improvement over last year, and the last four ratings indicate a leveling off after a decline

from earlier years. Ratings from non-English speaking clients have steadily risen over the

years, to 84 percent this year. As in previous years, disabled clients’ ratings continue to lower

the overall satisfaction ratings. Staff job performance and courtesy continue to promote

satisfaction, while service delays continue to lower individual satisfaction ratings.

• Monitoring Social Security’s Customer Service--This inspection provided SSA with

information to help SSA achieve its goal, world-class service status. The OIG contacted six

organizations recognized as the best in the business for monitoring the quality of customer

service. The organizations advised that setting standards, identifying and addressing causes

of customer dissatisfaction, and monitoring employee satisfaction are critical aspects in

monitoring customer service. Based on this information, SSA identified the conclusions of

the report as a good example of meeting the terms of Executive Order 12862, "Setting

Customer Service Standards."

Multidisciplinary Teams

Task Forces and Study Groups

• SSA Fraud and Abuse Tactical Plans--The Office of Investigations (OI) worked with the SSA

Deputy Commissioner for Finance, Assessment, and Management (DCFAM) in defining

issues and assigning responsibility for a number of fraud-related tactical plans proposed by

DCFAM.

• Duplicate Social Security Number (SSN) Cards by Telephone--The OI worked with SSA’s

Office of Program Evaluation and Communication staff in providing fraud prevention advice

to the task force developing a pilot project to issue replacement SSN cards by telephone.

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• Customer Satisfaction for FY 1996 Government Performance and Results Act (GPRA) Annual

Performance Plan--Members of the OIG staff presented data from the annual SSA client

satisfaction survey correlating improved service with improved customer satisfaction. This

intercomponent team is designed to predict expected improvements in customer satisfaction

for FY 1996 GPRA annual performance plan measures.

• Electronic Benefits Transfer (EBT) Risk Management Advisory Forum--The OIG has provided

advice to OMB relating to internal controls and other audit and investigative concerns which

should be included in the EBT prototype system. Discussions have centered around fraud

prevention techniques and audit and investigative responsibilities. The OMB EBT Task Force

is looking to the OIG to provide leadership in meeting the goals of the NPR.

Department of State

Agents of Positive Change

In its endeavor to act as an agent for positive change and to encourage accountability, the OIG

at the Department of State has served as a resource for the Department’s Strategic Management

Initiative (SMI). The SMI, which is part of the Department’s reinvention efforts and participation

in the NPR, was tasked to develop "targeted, selective, disciplined, and realistic" goals to position

the Department for a continuous leadership role in the 21st century.

OIG personnel have participated in the SMI working group tasked with examining ways to reduce

employee workload and the task force to implement the Secretary of State’s SMI decisions,

provided suggestions on ways to cut costs and streamline operations, and helped to identify

solutions to the management challenges facing the Department. OIG representatives have

participated as advisers and consultants on SMI teams such as the Advisory Group to the Steering

Committee on Reengineering Logistics; the Information Technology Team User Group to address

SMI recommendations related to information resource management; and working groups devoted

to overseas staffing, personnel classification and compensation, budget formulation, and program

planning.

Other OIG assistance efforts included:

• Working with Bureau of Consular Affairs managers to encourage OPM to establish a

retirement annuity fraud prevention program in Panama, which is projected to save $3 million

annually (OIG received assurances from OPM OIG that similar corrective actions in other

countries could result in additional persion savings);

• establishing a Moscow Oversight Team to provide OIG oversight of the design and

construction of a chancery at Embassy Moscow and to ensure that potential weaknesses are

identified and corrective action taken as the project proceeds; and

• recommending that the Department establish a fee-for-service system for overseas health

units, which could save as much as $13 million annually, and begin recovery of overseas

35
hospitalization costs from employees’ insurance companies which, if fully implemented,

should allow the Department to recover $420,000 to $795,000 per year.

Multidisciplinary Teams

• The Office of Security Oversight is, by its nature, multidisciplinary, being responsible for

both audits and inspections of Department security policies, standards, and programs. Security

oversight inspections often include at least one auditor, and both audit and inspection teams

are staffed with detailees from various security and intelligence agencies. OIG inspectors have

worked with security inspectors to expand the reach of post inspections to include security

aspects.

• The Special Operations Review Team is staffed by auditors, supplemented by inspectors,

investigators, attorneys, program analysts, and other professional experts, on a case-by-case

basis, as necessary to address specific Department problems requiring quick assessment and

resolution. During a 1995 review that resulted in changes to Department medical protocols,

for example, the team included a U.S. Navy physician and an OIG attorney.

Department of Transportation

Agents of Positive Change and Multidisciplinary Teams

OIG Removes Suspected Unapproved Parts From the Spare Parts Inventories of the

Nation s Airlines

Multidisciplinary teams played a key role in OIG s response to the problem of suspected

unapproved parts (SUPs), commonly known as bogus parts, for aircraft in the commercial

aviation industry. As FY 1991 began, OIG was investigating only a few cases involving SUPs.

Those investigations suggested a problem of some magnitude, one which potentially could impact

the safety of air travel both in the United States and abroad. OIG called the SUPs issue to the

attention of the Federal Aviation Administration (FAA). FAA was unwilling to acknowledge

SUPs as a safety problem and responded very slowly to several OIG-initiated requests for action.

OIG took action immediately to evaluate the size and scope of the suspected SUPs problem and

formed multidisciplinary teams composed of staff from its audit, inspections and evaluations, and

investigations divisions. These teams: (i) audited the FAA’s own parts bins and found 39 percent

of the parts sampled were SUPs; (ii) reviewed oversight of foreign-manufactured parts and found

FAA was not engaging in any inspections overseas; (iii) examined the approval process for parts

manufacturers and found no reliable information to ascertain whether parts had the necessary

approvals, and high error rates in what information did exist; (iv) examined domestic and foreign

repair stations and found 43 percent of the parts sampled were SUPs, and of that group,

95 percent of the parts obtained from brokers (as opposed to those from manufacturers) were

SUPs; and (v) found no system existed at FAA to ensure knowledge of aircraft problems did not

fall into a "black hole" and FAA s Service Difficulty Reports were incomplete and omissions

of information are were high as 98 percent. OIG’s investigations division found bogus parts were

36
being brokered into and out of the United States and virtually around the world, including parts

in foreign locations with bogus data plates, bogus identity numbers, and bogus FAA

certifications. As a result of this work, OIG confirmed SUPs as a significant problem in the

commercial aviation industry and established it as the top priority for the OIG.

OIG developed a fraud-awareness training program which included examples of the bogus parts

which OIG agents had seized through the execution of search warrants. The training program was

presented to the airlines, FAA personnel, and special agents from other Federal law enforcement

entities. Because of this proactive effort, OIG s caseload for SUPs jumped from a few dozen to

more than 250. OIG coordinated with other Federal agencies (including the FBI, Defense

Criminal Investigative Service, and U.S. Customs Service) during investigations of cases

involving SUPs and stolen parts, and with U.S. attorneys offices during prosecution of those

cases. OIG s oversight actions raised the visibility of SUPs with the Federal judiciary.

Throughout the past 5 years since bogus parts cases have been targeted, the sentences and fines

have become stiffer as more Federal judges have encountered bogus parts perpetrators and take

a dim view of compromising the safety of flight. The OIG has even reached the unfortunate

milestone of having prosecuted some bogus parts repeat offenders. Because of the OIG s efforts,

the issue achieved national visibility, and Senate hearings addressed the OIG’s work and the

problem. For OIG’s contributions to the field of aviation, the Inspector General received industrywide recognition as 1995 Aerospace Laureate for Government/Military, and the OIG received the

1992 Aerospace Laurel Citation.

Other Federal agencies responded to OIG s SUPs initiatives, as well. For example, FAA formed

a SUPs task force to pursue the issue, and the U.S. Coast Guard examined its aircraft parts

inventories for SUPs, purged suspected parts, and referred numerous cases to OIG for

investigation.

SUPs investigations have found defective parts in every area of aviation from general aviation

in which a fatal crash was attributed to an unapproved part to an investigation which found that

defective parts had been supplied to the defense group responsible for maintaining Air Force One.

Department of the Treasury

Agents of Positive Change

Working in Partnership With the Department

Financial Management

The Department of the Treasury (Treasury) is pivotal to attaining the objectives of the Chief

Financial Officers Act and the requirements of the Government Management and Reform Act

(GMRA). The Treasury collects over 97 percent of the $1.3 trillion in Government revenues and

carries over 99 percent of the current $4.97 trillion national debt. The Treasury also acts as the

primary disbursing agent for 80 percent of the $1.5 trillion in Government outlays. Therefore,

the need for the Department of the Treasury to issue a departmentwide financial statement for

37
fiscal yearend 1996 is one of its highest priorities. The Treasury 1996 consolidated financial

statement is instrumental if the 1997 governmentwide audit mandated by GMRA is to be a

success.

The OIG is advising the Department in meeting this goal. The OIG participates in both the

Department’s Financial Statement Task Force and the Governmentwide Audited Financial

Statement Task Force planning the 1997 audit. This year the OIG was responsible for auditing

the financial statements of three Department bureaus: the U.S. Customs Service; BATF; and the

U.S. Secret Service. The OIG has been working in partnership with these bureaus to help them

improve their financial systems so they may obtain favorable opinions on their audit statements.

Performance and Results

In addition to the important work under the GMRA, the OIG has begun a multiyear effort

working with the Department to implement the GPRA mandates. The OIG is working with

customers "up front" on GPRA. The OIG is performing annual reviews of the implementation

of GPRA as it is phased in, sharing criteria and guidelines that the OIG will be using in reviews

of the Department’s performance in this area before the OIG performs the reviews. Instead of

performing an after-the-fact review of missteps, the OIG will use this proactive approach to help

the Department navigate the GPRA process and provide it with positive timely feedback on what

is working and what is not.

Multidisciplinary Teams

The OIG has had several successes working with multidisciplinary teams both within and outside

the Department. For example, several incidents occurred in 1995 where the security of the White

House was compromised, including the crash of a private plane on the White House South lawn.

To address these incidents, the administration established a multifaceted panel to review White

House security protocol. The team was made up of experts from Treasury (including an OIG

member), DoD, and prominent citizens from the private sector. The White House Security Panel

made important recommendations to improve White House security and the protection of the

President and his family.

Also, the OIG had successes within the OIG using the multidisciplinary approach. As an

example, a team of auditors and investigators scrutinized allegations of contract fraud involving

an international firm doing business with the U.S. Mint. The complicated investigation required

close coordination by the team, which used innovative audit and investigative techniques to

review contract files and personal financial records while carefully weighing the implications of

pertinent national and international law. The result was that the Treasury obtained $1.2 million

in civil recoveries from the contractor and the firm was debarred from doing business with the

Government for 18 months.

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United States Information Agency

Agents of Positive Change

OIG has repeated success in working with United States Information Agency (USIA)

management to correct problems identified during its audit work. For example, OIG audited the

effectiveness of program operations and allowability of costs claimed by the National Council

for International Visitors (National Council). OIG’s audit served as a catalyst to resolve longstanding management and financial issues between the National Council and USIA. OIG found

that USIA had not developed criteria to determine which community-based international visitor

councils should receive subgrants from the National Council, and in what amounts. Consequently,

it was difficult to assess the benefits USIA derived from those subgrants. In addition, OIG

questioned $239,000 of the National Council’s claimed costs as being unallowable or

unsupported. USIA officials agreed with OIG’s program recommendations. Additionally, USIA’s

contracting officer is resolving financial issues.

Multidisciplinary Teams

OIG’s Office of Inspections is responsible for conducting inspections of all USIA programs and

operations. The Office uses multidisciplinary teams consisting of foreign service officers and

auditors. Foreign service officers have knowledge of programmatic issues from various overseas

assignments. Auditors can provide financial management expertise.

OIG has had numerous successes in using multidisciplinary teams to find significant

programmatic and financial deficiencies. One example was the inspection of USIA’s operations

in Mexico. From a programmatic standpoint, OIG found that resources could be realigned to

enhance the post’s capacity to cover American-Mexican border issues. From a financial

standpoint, OIG found that four positions were not needed and recommended their abolishment

for an annual savings of approximately $159,000.

Department of Veterans Affairs

Agents of Positive Change

Several Department of Veterans Affairs (VA) OIG audits reports issued during FY 1995 focused

on Government accountability, with recommendations made for changes to VA operations to

better utilize existing resources and reduce costs. In the area of health care, three nationwide

reviews resulted in recommendations for establishing an improved allocation process for

physician staffing to better utilize about 2,000 full-time physicians with associated costs of over

$180 million; realigning surgical resources costing an estimated $119 million to better match

surgical workload; and adopting Medicare fee schedules for payment of fee-basis care provided

to veterans, with cost reductions estimated to be $33 million annually. Two audits of veterans

benefits programs concluded that VA could save about $8 million by self-insuring against title

39
defects on foreclosed home loans instead of purchasing title insurance and could avoid mortgage

interest costs of almost $7 million by improved use of interest cutoff dates. A review of the

administration of the Servicemen’s and Veterans’ Group Life Insurance Program concluded that

the program costs of the current insurer used by VA could be reduced by about $5 million

annually. In the procurement area, a review of operating supplies at eight VA medical centers

identified approximately $12.8 million in excess supplies that needed to be used before future

purchases were made and an audit of VA’s medical supply acquisition and distribution systems

provided several recommendations to use VA’s vast buying power in centralized contracting. A

third procurement audit identified opportunities to increase sharing and reduce costs by

approximately $3 million through the utilization of Medicare rates for contracting.

The VA OIG’s annual audit of VA’s consolidated financial statements continues to be a catalyst

for positive change in enhancing financial reporting and accountability in the Department of

Veterans Affairs. VA OIG auditors work closely with VA’s Chief Financial Officer (CFO) on

a day-to-day basis to identify accounting control weaknesses and determine appropriate corrective

actions. During FY 1995, the OIG completed its fourth financial statement audit and issued

12 management letters and advisory reports to provide Department managers additional

observations and advice based on ongoing audit work. This coordinated effort has resulted in

correction of three of the five material internal control weaknesses initially identified in OIG’s

first financial statement audit. OIG and CFO staff also worked together to reduce the elapsed

time to complete the annual financial statement audit.

Multidisciplinary Teams

OIG investigators and VA police officers from three large VA medical centers in the Northeast

are part of a special unit, the Specialized Investigations Regional Task Force (SIRTF), established

to investigate allegations of drug diversion, sales of controlled substances, possession of firearms,

and other criminal activities at the medical centers. During FY 1995, the SIRTF disclosed a "drug

supermarket" operating outside a VA regional office which housed a methadone maintenance

clinic. In a joint operation with the Drug Enforcement Administration (DEA), 10 individuals were

arrested and charged with drug trafficking. In another case conducted jointly by the SIRTF and

the DEA, 23 individuals were arrested and charged with illegal sale and/or possession of

narcotics.

A multidisciplinary team approach is used for some OIG reviews conducted to address allegations

received through the Inspector General Hotline. During FY 1995, review staff from the Hotline

and Special Inquiries Division, auditors from the Office of Audit, and an attorney from the Office

of Counselor participated in a review to address an allegation involving VA employees’

involvement with a nonprofit corporation. The review found that the employees were responsible

for award and administration of a contract with the nonprofit corporation and were working for

and receiving compensation from the corporation.

40
Audits and Inspections--

Summaries of Statistical Accomplishments

The greatest part of OIG resources is devoted to audits. OIGs conduct audits using their own

staff; they also supervise, coordinate, or review audits performed by other Federal auditors, State

and local government auditors, and independent public accounting firms under contract to the

Federal Government or auditee.

Inspections are akin to policy and program evaluations and are designed to support the overall

mission of the OIGs to promote economy, efficiency, and effectiveness in program

administration. Inspections differ from audits in their relatively shorter timeframes, their flexible

methodologies, and their use of multidisciplinary teams.

The following tables demonstrate the impact of OIG audits and inspections. The tables summarize

key statistical accomplishments reported in the individual IG semiannual reports to the Congress

for the 6-month periods ending March 31 and September 30, 1995. The statistical

accomplishments relate to recommendations that funds be put to better use; management

decisions on recommendations that funds be put to better use; questioned costs; and management

decisions on questioned costs.

41
Recommendations That Funds Be Put to Better Use

The IG Act defines a recommendation that funds be put to better use as "a recommendation by the Office that funds

could be used more efficiently if management of an establishment took actions to implement and complete the

recommendations, including (A) reductions in outlays; (B) deobligations of funds from programs or operations; (C)

withdrawal of interest subsidy costs on loans or loan guarantees, insurance, or bonds; (D) costs not incurred by

implementing recommended improvements related to the operation of the establishment, a contractor, or grantee; (E)

avoidance of unnecessary expenditures noted in preaward reviews of contract or grant agreements; or (F) any other

savings which are specifically identified." During FY 1995, OIG audits and inspections recommended that more than

$18 billion be put to better use. In conjunction with DCAA, OIGs recommended that a total of more than $26 billion

be put to better use (Table I.)

Table I. Recommendations That Funds Be Put To Better Use

Agency OIG DCAA1 Total

Agency for International Development (AID)

Agriculture (USDA)

Department of Commerce (DOC)

Defense (DoD)

Education (ED)

Energy (DOE)

Environmental Protection Agency (EPA)

Federal Deposit Insurance Corporation (FDIC)

Federal Emergency Mgt. Agency (FEMA)

General Services Administration (GSA)

Health and Human Services (HHS)

Housing and Urban Development (HUD)

Interior (DOI)

Justice (DOJ)

Labor (DOL)

National Aeronautics and Space Admin. (NASA)

Nuclear Regulatory Commission (NRC)

Office of Personnel Management (OPM)

Resolution Trust Corporation (RTC)

Small Business Administration (SBA)

Social Security Administration

Department of State (State)

Transportation (DOT)

Treasury (TREAS)

United States Information Agency (USIA)

Veterans Affairs (VA)

$201,555,157

248,248,823

45,010,864

6,831,661,000

7,928,000

649,733,719

145,266,287

1,850,0002

8,203,988

202,386,876

6,172,551,000

17,567,000

258,847,1453

10,830,458

43,710,479

592,000,000

336,406

112,685,000

62,093,000

33,846,4734

36,860,0005

19,113,337

1,222,819,000

1,100,928,0006

525,206

390,500,0007

--

$1,147,604

2,993,773

7,655,433,664

--

--

184,863,310

--

--

7,682,271

--

174,000

2,515,714

--

--

4,000,000

121,664

--

--

--

--

--

308,186,000

83,982,000

--

13,000,000

$201,555,157

249,396,427

48,004,637

14,487,094,664

7,928,000

649,733,719

330,129,597

1,850,0002

8,203,988

210,069,147

6,172,551,000

17,741,000

261,362,8593

10,830,458

43,710,479

596,000,000

458,070

112,685,000

62,093,000

33,846,4734

36,860,0005

19,113,337

1,531,005,000

1,184,910,0006

525,206

403,500,0007

Total 18,417,057,218 8,264,100,000 26,681,157,218

1

Includes audits performed for the OIGs by DCAA. DCAA is a DoD Agency that provides independent audit

and financial advisory services to DoD components and offers contract audit services to other Federal

agencies.

2

Two audits with Recommendations That Funds Be Put to Better Use are being prorated over 10 semiannual

periods in the amounts of $625,000 and $300,000 per period respectively. The prorated amounts total

$1,850,000 for both semiannual periods during FY 1995.

3

Includes $10,481,770 for Indirect Cost Proposals Negotiated by OIG.

4

Includes cost avoidances in the amount of $4,053,030 resulting from Investigations Division’s activities.

5

On March 31, 1995, SSA became an independent agency. All data reported is for the last half of the fiscal

year.

6

Includes $1,085,516,000 from audits performed by the Internal Revenue Service (IRS) Inspection Service.

7

Also includes $2.2 million savings associated with investigations closed during FY 1995.

42
Management Decisions on Recommendations That Funds Be Put to Better Use

Table II reports on the status of FY 1995 management decisions on OIG audit and inspection recommendations that

funds be put to better use. Agency managers agreed with more than $10 billion in recommendations that funds be

put to better use.

Table II. Management Decisions on Recommendations That Funds Be Put to Better Use

Agency

No

Management

Decision Start

FY 1995

Recommendations Issued in

FY 1995*

Recommendations Agreed

to by

Management**

Recommendations Not

Agreed to by

Management

No Management

Decision

End FY 1995

AID

USDA

DOC

DoD***

ED

DOE

EPA

FDIC

FEMA

GSA

HHS

HUD

DOI

DOJ

DOL

NASA

NRC

OPM

RTC

SBA

SSA****

State

DOT

TREAS

USIA

VA

$3,620,516

3,342,873,875

57,479,811

15,170,997,000

308,671,000

577,380,897

27,005,199

--

3,904,098

106,662,279

2,616,403,000

3,596,000

739,888,981

24,508

47,632,856

--

--

4,400,000

--

127,459

--

24,119,255

61,300,000

142,119,000

1,326,763

41,700,000

$201,555,157

249,396,427

47,841,377

14,487,094,664

7,928,000

649,733,719

330,129,597

1,850,0002

8,203,988

146,162,210

6,172,551,000

17,741,000

261,362,859

10,830,458

109,700

592,000,000

458,070

112,685,000

62,093,000

29,793,443

35,560,000

19,113,337

1,222,810,000

1,184,909,0004

525,206

401,300,000

$202,942,364

414,578,972

24,761,963

3,613,752,000

175,667,000

523,380,624

17,987,199

1,850,0002

1,058,092

200,211,467

1,659,809,000

14,572,000

567,157,017

10,854,966

109,700

540,900,000

458,070

108,880,000

62,093,000

4,055,847

1,860,000

20,321,492

892,398,000

1,121,996,0004

1,704,195

100,500,000

$1,933,309

117,061,357

10,542,181

5,576,419,000

79,777,000

443,264,010

15,758,463

--

5,317,844

14,328,931

470,718,000

2,621,000

94,132,379

--

--

28,600,000

--

8,205,000

--

--

35,000,000

2,560,000

127,397,000

179,846,000

147,774

23,200,000

$300,000

3,062,415,005

70,900,887

21,076,587,000

62,661,000

260,166,1601

206,760,850

--

5,732,150

38,284,093

6,658,427,000

4,144,000

339,962,444

--

43,710,4793

22,500,000

--

--

--

25,865,055

--

20,351,100

265,597,000

25,186,000

--

319,300,000

Total 23,281,232,497 26,253,737,212 10,283,858,968 7,236,829,248 32,508,850,223

*

Total is less than Table I total because some agencies limit tracking of final action to certain classes of

recommendations.

**Management’s estimate of the impact of an OIG recommendation may differ from the OIG valuation. This

is the total of funds that management expects to be able to better use because management decided to

implement audit and inspection recommendations.

***Data in first, third, fourth, and fifth columns include dollar amounts from DCAA audits performed for

other Federal agencies. The DCAA management information system does not separately track final action by

agency.

****On March 31, 1995, SSA became an independent agency. All data reported is for the last half of the

fiscal year.

1

Includes sums for which management decisions on the savings were deferred.

2

Two audits with Recommendations That Funds Be Put to Better Use are being prorated over 10 semiannual

periods in the amounts of $625,000 and $300,000 per period respectively. The prorated amounts total

$1,850,000 for both semiannual periods during FY 1995.

3

An adjustment of $3,812,677 was made during the reporting period.

4

Includes $1,085,516,000 from audits performed by the IRS Inspection Service.

43
Questioned Costs

The IG Act defines a questioned cost as "a cost that is questioned by the Office because of (A)

an alleged violation of a provision of law, regulation, contract, grant, cooperative agreement, or

other agreement or document governing the expenditure of funds; (B) a finding that, at the time

of the audit, such cost is not supported by adequate documentation; or (C) a finding that the

expenditure of funds for the intended purpose is unnecessary or unreasonable."

Table III. Questioned Costs

Agency OIG DCAA1 Total

AID

USDA

CNCS

DOC

DoD

ED

DOE

EPA

FDIC

FEMA

GSA

HHS

HUD

DOI

DOJ

DOL

NASA

NRC

OPM

RTC

SBA

SSA

State

DOT

TREAS

USIA

VA

$53,021,363

1,791,933,488

234,000

14,043,942

421,000

246,813,000

6,428,226

108,717,564

26,079,181

32,696,295

25,209,426

403,507,000

35,013,0002

16,570,583

2,467,088

11,593,440

3,000,000

--

77,891,641

100,091,000

1,252,201

35,077,0003

238,426

113,508,000

2,936,000

4,575,314

8,900,000

$162,121

--

--

16,321

2,604,124,186

--

--

11,035,195

--

--

--

282,000

407,000

353,788

--

--

41,000,000

117,496

--

--

--

--

2,921,893

67,247,000

4,433,000

--

200,000

$53,183,484

1,791,933,488

234,000

14,060,263

2,604,545,186

246,813,000

6,428,226

119,752,759

26,079,181

32,696,295

25,209,426

403,789,000

35,420,0002

16,924,371

2,467,088

11,593,440

44,000,000

117,496

77,891,641

100,091,000

1,252,201

35,077,0003

3,160,319

180,755,000

7,368,000

4,575,314

9,100,000

Total 3,122,218,178 2,732,300,000 5,854,517,178

1

Includes audits performed for the OIGs by DCAA. DCAA is a DoD Agency that provides independent

contract audit and financial advisory services to DoD components and offers contract audit services to other

Federal agencies.

2

As part of the Operation Safe Home Multifamily Equity Skimming efforts, HUD performed audits and

reviews. This number includes the amount of Operation Safe Home results not included in issued audit

reports. Reviews which were not issued audit reports resulted in 15 cases settled for $4,189,000.

3

Includes $77,000 related to the Audit of the Administrative Costs Claimed by the State of Rhode Island

and Providence Plantations Disability Determination Service and $35 million in SSA Field Office Visitor

Workload. On March 31, 1995, SSA became an independent agency. All data reported is for the last half

of the fiscal year.

44
Management Decisions on Questioned Costs

Table IV reports on the status of FY 1995 management decisions to disallow costs questioned by OIGs. Agency

managers agreed with approximately $2.3 billion in questioned costs.

Table IV. Management Decisions on Questioned Costs

Agency

No

Management

Decision

Start FY 1995

Recommendations Issued

FY 1995*

Disallowances

Agreed to by

Management**

Disallowances

Not Agreed to

by

Management

No Management

Decision

End FY 1995

AID

USDA

CNCS

DOC

DoD***

ED

DOE

EPA

FDIC

FEMA

GSA

HHS

HUD

DOI

DOJ

DOL

NASA

NRC

OPM

RRB

RTC

SBA

SSA****

State

DOT

TREAS

USIA

VA

$41,095,251

920,318,055

23,000

9,158,681

9,269,364,000

365,354,000

9,888,435

372,390,987

--

18,966,493

3,155,511

659,904,000

61,131,000

75,157,173

1,945,516

34,875,322

--

164,173

5,054,471

150,000

37,807,000

1,477,150

--

9,584,373

96,642,000

6,778,000

4,335,512

29,900,000

$53,183,484

1,791,933,488

234,000

14,060,263

2,604,545,186

246,813,000

6,428,226

119,752,759

26,079,181

32,696,295

28,842,562

403,789,000

35,420,0001

16,924,371

2,467,088

11,593,440

3,000,000

117,496

77,891,641

--

100,091,000

1,252,201

77,000

238,426

180,755,000

7,368,000

4,575,314

9,100,000

$9,952,861

72,111,776

1,000

3,094,770

1,041,840,000

37,873,000

472,389

120,203,691

26,028,236

11,212,284

20,874,549

681,216,000

43,826,0001

21,533,889

3,995,396

12,576,827

1,000,000

248,458

44,404,379

--

93,690,0002

179,540

--

616,0173

17,602,000

2,297,000

503,337

8,700,000

$30,604,047

14,715,274

15,000

7,802,611

529,145,000

72,373,000

487,865

165,505,594

50,945

15,822,185

6,894,246

37,294,000

19,473,000

14,936,630

--

12,296,120

600,000

--

3,550,043

150,000

23,265,000

349,000

--

--

68,994,000

3,620,000

3,126,001

9,600,000

$21,773,694

2,628,251,972

241,000

12,339,918

10,431,100,000

500,098,000

15,125,528

206,434,461

--

24,628,319

5,596,761

345,183,000

33,252,000

55,611,025

417,208

22,374,240

1,400,000

33,211

34,991,690

--

21,278,000

2,200,811

77,000

3,034,0593

192,023,000

8,229,000

5,281,488

20,700,000

Total 12,034,620,103 5,779,228,421 2,276,053,399 1,040,669,561 14,591,675,385

*

Total is less than Table III total because some agencies limit tracking of final action to certain classes of

recommendations.

**Management’s estimate of the amount that should be disallowed because of OIG recommendations may

differ from the amount questioned by the OIG. This is the total of costs disallowed by management because

management decided to implement audit and inspection recommendations.

***Data in first, third, fourth, and fifth columns include dollar amounts from DCAA audits performed for

other Federal agencies. The DCAA management information system does not separately track final action by

agency.

****On March 31, 1995, SSA became an independent agency. Data reported is for the last half of the fiscal

year.

1

As part of Operation Safe Home Multifamily Equity Skimming efforts, HUD performed audits and reviews.

This number includes the amount of Operation Safe Home results not included in issued audit reports.

Reviews which were not issued audit reports resulted in 15 cases settled for $4,189,000.

2

RTC disallowed more than was initially recommended.

3

Questioned costs of $6,172,723 are under formal judicial appeal.

45
Investigations--

Summaries of Statistical Accomplishments

The IG Act requires IGs to provide policy direction for and to conduct, supervise, and coordinate

investigations relating to their agencies’ programs and operations. The OIG investigations cover

a full range of criminal and administrative issues.

The following tables illustrate the results obtained through OIG investigations in FY 1995. They

summarize the statistical accomplishments reported by the individual Inspectors General in their

semiannual reports to the Congress as of March 31 and September 30, 1995. The

accomplishments--successful prosecutions, administrative sanctions, and investigative recoveries--

include the results of joint investigations. (On average, in FY 1995, OIGs conducted just under

7 percent of their investigations with other OIGs and more than 19 percent with non-OIG

investigative agencies.)

46
Successful Prosecutions

The OIG investigations of contractors, program participants, and Government employees can lead

to criminal and/or civil prosecutions. Those prosecutions result in convictions that carry penalties

such as prison terms, fines, settlements, and recoveries to the Government. During FY 1995,

OIGs working independently, or with other Federal and non-Federal investigative agencies,

obtained 4,041 successful prosecutions, including pretrial diversions (Table V). In the 15 years

since the PCIE was established, OIG investigations have resulted in 62,777 successful

prosecutions.

Table V. Successful Prosecutions

Agency Total

Agency for International Development

Department of Agriculture

Department of Commerce

Department of Defense

Department of Education

Department of Energy

Environmental Protection Agency

Federal Deposit Insurance Corporation

Federal Emergency Management Agency

General Services Administration

Department of Health and Human Services

Department of Housing and Urban Development

Department of the Interior

Department of Justice

Department of Labor

National Aeronautics and Space Administration

Nuclear Regulatory Commission

Office of Personnel Management

Railroad Retirement Board

Resolution Trust Corporation

Small Business Administration

Social Security Administration

Department of State

Department of Transportation

Department of the Treasury

Department of Veterans Affairs

3

859

4

291

164

53

13

5

27

27

620

295

25

99

323

56

6

16

221

47

78

2871

24

105

2592

134

Total 4,0413

1

On March 31, 1995, SSA became an independent agency. All data

reported is for the last half of the fiscal year.

2

Includes 251 successful prosecutions resulting from investigations

conducted by Treasury’s law enforcement bureaus: BATF, U.S.

Customs Service, IRS, and U.S. Secret Service.

3

May include double counts where two OIGs worked jointly on an

investigation and each reported the successful prosecution.

47
Suspensions/Debarments

The OIG investigations can result in suspension or debarment of individuals or entities doing

business with the Federal Government. During FY 1995, a total of 4,197 debarments, exclusions,

and suspensions were imposed on individuals and entities doing business with the Federal

Government (Table VI). Since 1981, OIG investigations have resulted in 34,814 administrative

sanctions against firms or individuals doing business with the Government.

Table VI. Suspensions/Debarments

Agency Total

Agency for International Development

Department of Agriculture

Department of Defense

Department of Education

Department of Energy

Environmental Protection Agency

General Services Administration

Department of Health and Human Services

Department of Housing and Urban Development

Department of Labor

National Aeronautics and Space Administration

Office of Personnel Management

Resolution Trust Corporation

Small Business Administration

Department of Transportation

Department of Veterans Affairs

2

345

316

28

26

44

148

1,478

229

56

50

1,356

43

2

35

39

Total 4,197*

*

May include double counts where two OIGs worked jointly on an

investigation and each reported the suspensions/debarments.

48
Personnel Actions

The OIGs are also responsible for investigating Federal employees suspected of wrongdoing. In

FY 1995, OIG investigations led to 2,217 personnel actions against employees (Table VII). Those

personnel actions included terminations, formal reprimands, suspensions, and demotions.

Table VII. Personnel Actions

Agency Total

Agency for International Development

Department of Agriculture

Department of Commerce

Department of Defense

Department of Education

Department of Energy

Environmental Protection Agency

Federal Deposit Insurance Corporation

Federal Emergency Management Agency

General Services Administration

Department of Health and Human Services

Department of Housing and Urban Development

Department of the Interior

Department of Justice

Department of Labor

National Aeronautics and Space Administration

Nuclear Regulatory Commission

Railroad Retirement Board

Resolution Trust Corporation

Small Business Administration

Department of State

Department of Transportation

Department of the Treasury

United States Information Agency

Department of Veterans Affairs

7

53

44

270

3

441

17

5

11

29

35

14

61

120

79

1292

47

3

263

11

25

41

1,0924

10

41

Total 2,2175

1

Includes 11 from Office of Inspections reports.

2

Includes contractor employees.

3

Includes seven employees who resigned while under investigation.

4

Includes 1,025 personnel actions resulting from investigations

conducted by Treasury’s law enforcement bureaus: BATF, U.S. Customs

Service, IRS, and U.S. Secret Service.

5

May include double counts where two OIGs worked jointly on an

investigation and each reported the personnel actions.

49
Investigative Recoveries

Investigations conducted by OIGs often lead to recovery of money or property. The recoveries

reported here are the total dollar value of repayments, payments ordered, settlements made

pursuant to legal actions and/or administrative monetary penalties. They include recoveries made

during investigations, legally ordered fines and penalties, restitutions and recoveries, out-of-court

settlements, or penalties imposed through administrative proceedings. In FY 1995, OIG

investigative recoveries totaled over $1.2 billion. Those recoveries go to the U.S. Treasury;

program, trust, or operating funds; or other Federal and non-Federal entities victimized.

Table VIII. Investigative Recoveries

Agency Total

Agency for International Development

Department of Agriculture

Department of Commerce

Department of Defense

Department of Education

Department of Energy

Environmental Protection Agency

Federal Deposit Insurance Corporation

Federal Emergency Management Agency

General Services Administration

Department of Health and Human Services

Department of Housing and Urban Development

Department of the Interior

Department of Justice

Department of Labor

National Aeronautics and Space Administration

Nuclear Regulatory Commission

Office of Personnel Management

Railroad Retirement Board

Resolution Trust Corporation

Small Business Administration

Social Security Administration

Department of State

Department of Transportation

Department of the Treasury

Department of Veterans Affairs

$460,811

36,827,772

1,095,990

631,400,000

7,923,1001

4,464,5502

4,300,000

285,302

4,082,578

15,845,429

350,900,000

13,196,718

11,761,286

747,880

20,800,000

29,400,000

137,943

4,152,230

13,239,936

8,421,1023

8,319,572

3,893,3604

597,610

52,195,078

13,519,7185

18,900,000

Total $1,256,867,9656

1

Includes $2.4 million in forfeitures/seizures.

2

Includes $15,111 from the Office of Inspections.

3

Does not include $3,203,862 in asset seizures.

4

On March 31, 1995, SSA became an independent agency. All data reported is for

the last half of the fiscal year.

5

Includes $5,983,399 in investigative recoveries from investigations conducted by

Treasury’s law enforcement bureaus: BATF, U.S. Customs Service, IRS, and U.S.

Secret Service.

6

May include double counts where two OIGs worked jointly on an investigation and

each reported the investigative recoveries.

50
Membership of the President’s Council on Integrity and Efficiency

Chair, PCIE

John A. Koskinen

Deputy Director for Management

Office of Management and Budget

Environmental Protection Agency

John C. Martin

Inspector General

Office of Management and Budget

Controller

G. Edward DeSeve

Office of Federal Financial Management

Vice Chair, PCIE

June Gibbs Brown

Inspector General

Department of Health and Human Services

Federal Bureau of Investigation

William J. Esposito

Assistant Director

Criminal Investigative Division

Office of Personnel Management

Patrick E. McFarland

Inspector General

Lorraine A. Green

Deputy Director

Vice Chair, ECIE

Thomas D. Blair

Inspector General

Smithsonian Institution

Federal Deposit Insurance Corporation*

Gaston L. Gianni, Jr.

Inspector General

Office of Special Counsel

Kathleen Day Koch

Special Counsel

Agency for International Development

Jeffrey Rush, Jr.

Inspector General

Federal Emergency Management Agency

George J. Opfer

Inspector General

Railroad Retirement Board

Martin J. Dickman

Inspector General

Department of Agriculture

Roger C. Viadero

Inspector General

General Services Administration

William R. Barton

Inspector General

Small Business Administration

James F. Hoobler

Inspector General

Central Intelligence Agency

Frederick P. Hitz

Inspector General

Department of Housing and Urban

Development

Susan Gaffney

Inspector General

Social Security Administration

David C. Williams

Inspector General

Department of Commerce

Francis D. DeGeorge

Inspector General

Department of the Interior

Wilma A. Lewis

Inspector General

Department of State

Jacquelyn Williams-Bridgers

Inspector General

Corporation for National and

Community Service

Luise S. Jordan

Inspector General

Department of Justice

Michael R. Bromwich

Inspector General

Department of Transportation

A. Mary Schiavo

Inspector General

Department of Defense

Eleanor J. Hill

Inspector General

Department of Labor

Charles C. Masten

Inspector General

Department of the Treasury

Valerie Lau

Inspector General

Department of Education

Thomas R. Bloom

Inspector General

National Aeronautics and Space

Administration

Roberta L. Gross

Inspector General

United States Information Agency

Marian C. Bennett

Inspector General

Department of Energy

John C. Layton

Inspector General

Nuclear Regulatory Commission

Leo J. Norton

Acting Inspector General

Department of Veterans Affairs

William T. Merriman

Deputy Inspector General

Office of Government Ethics

Stephen D. Potts

Director

* The Resolution Trust Corporation (RTC) reached its sunset on December 31, 1995, and the RTC OIG merged with the Federal Deposit

Insurance Corporation OIG.

Note: The members listed are those as of April 1996.

51
President’s Council on Integrity and Efficiency

Membership Addresses and Hotline Numbers

Office of Management and Budget

Old Executive Office Building

17th St. and Pennsylvania Avenue, N.W.

Washington, D.C. 20503

Environmental Protection Agency

401 M Street, S.W., Rm. NE 3309 (2410)

Washington, D.C. 20460

(202) 260-4977

Office of Government Ethics

Suite 500

1201 New York Avenue, N.W.

Washington, D.C. 20005-3917

Department of Health and Human Svcs.

330 Independence Ave., S.W., Rm. 5250

Washington, D.C. 20201

(800) HHS-TIPS

U.S. Department of Justice

Federal Bureau of Investigation

J. Edgar Hoover Building

935 Pennsylvania Ave., N.W., Room 3833

Washington, D.C. 20535-0001

Office of Personnel Management

1900 E Street, N.W., Room 6400

Washington, D.C. 20415-0001

(202) 606-2423

Smithsonian Institution

955 L’Enfant Plaza, Room 7600,

Mail Stop: 905

Washington, D.C. 20560

(202) 287-3676

Federal Deposit Insurance Corporation

10th Floor, 801 Building

550 17th Street, N.W.

Washington, D.C. 20429-9990

(800) 964-3342

Office of Special Counsel

Suite 300

1730 M Street, N.W.

Washington, D.C. 20036-4505

(202) 653-9125 or (800) 872-9855

Agency for International Development

320 21st Street, N.W., Room 5756 NS

Washington, D.C. 20523-0060

(703) 875-4999

Federal Emergency Management Agency

500 C Street, S.W., Room 505

Washington, D.C. 20472

(800) 323-8603

Railroad Retirement Board

844 North Rush Street, Room 450

Chicago, Illinois 60611-2092

(800) 772-4258

Department of Agriculture

Rm. 117-W, Jamie L. Whitten Fed. Bldg.

12th Street and Independence Ave., S.W.

Washington, D.C. 20250

(800) 424-9121 or (202) 690-1622

Hearing Impaired (202) 690-1202

General Services Administration

Room 5340

18th and F Streets, N.W.

Washington, D.C. 20405

(202) 501-1780 or (800) 424-5210

Small Business Administration

Room 7150

409 3rd Street, S.W.

Washington, D.C. 20416

(202) 205-7151 or (800) 767-0385

Central Intelligence Agency

Room 2X30

New Headquarters Building

Washington, D.C. 20505

Dept. of Housing and Urban Development

451 7th Street, S.W., Room 8256

Washington, D.C. 20410-4500

(202) 708-4200 or (800) 347-3735

Social Security Administration

6401 Security Blvd., Suite 300

Baltimore, MD 21235

(401) 966-8523

Department of Commerce

Room 7898C

14th Street and Constitution Ave., N.W.

Washington, D.C. 20230

(202) 482-2495 or (800) 424-5197

Hearing impaired (800) 854-8407

Department of the Interior

Mail Stop 5341

1849 C Street, N.W.

Washington, D.C. 20240

(800) 424-5081 or (703) 235-9399

Department of State

Room 6817

2201 C Street, N.W.

Washington, D.C. 20520-6817

(202) 647-3320

Collect Calls Accepted

Corp. for National and Community Service

Suite 8100

1201 New York Avenue, N.W.

Washington, D.C. 20525

(800) 452-8210

Department of Justice

Room 4706, Main Justice Building

10th Street and Constitution Ave., N.W.

Washington, D.C. 20530

(800) 869-4499

Department of Transportation

Room 9210, J-1

400 7th Street, S.W.

Washington, D.C. 20590

(800) 424-9071 or (202) 366-1461

Department of Defense

400 Army Navy Drive, Room 1000

Arlington, Virginia 22202-2884

(800) 424-9098 or (703) 604-8569

Department of Labor

200 Constitution Ave., N.W., Rm. S-5514

Washington, D.C. 20210

(800) 347-3756 or (202) 219-5227

Department of the Treasury

Room 2412, Main Treasury Building

1500 Pennsylvania Avenue, N.W.

Washington, D.C. 20220

(800) 359-3898

Department of Education

600 Independence Avenue, S.W.

Washington, D.C. 20202-1510

(800) 647-8733 or (202) 205-5770

National Aeronautics and Space Admin.

300 E. St., S.W., Room 8V69 (Code W)

Washington, D.C. 20546-0001

(800) 424-9183

United States Information Agency

400 6th Street, S.W., Room 1100

Washington, D.C. 20547

(FTS) 441-7202 or (202) 401-7202

Department of Energy

Room 5D-039, Forrestal Building

1000 Independence Avenue, S.W.

Washington, D.C. 20585

(800) 541-1625 or (202) 586-4073

Nuclear Regulatory Commission

Mail Stop T5 D28

Washington, D.C. 20555

(800) 233-3497

Department of Veterans Affairs

810 Vermont Avenue, N.W.

Washington, D.C. 20420

(800) 488-8244

Note: All hotline numbers listed above were current as of the date of printing of this report.

52
REPORT OF THE

EXECUTIVE COUNCIL ON

INTEGRITY AND

EFFICIENCY
Introduction

The Executive Council on Integrity and Efficiency

The Executive Council on Integrity and Efficiency (ECIE) is charged with promoting integrity

and efficiency in Federal programs and operations. In accomplishing this goal, the ECIE focuses

on two primary objectives: promoting integrity and efficiency and detecting and preventing fraud,

waste, and abuse in Federal programs and operations; and increasing the professionalism and

effectiveness of OIG personnel.

The Deputy Director for Management of the Office of Management and Budget (OMB) is the

Chairman of the ECIE. The ECIE is composed of the civilian Inspectors General (IGs) at

29 designated Federal entities; the IG at the Government Printing Office (GPO); and

• the Vice Chairperson of the President’s Council on Integrity and Efficiency (PCIE),

• the Controller of the Office of Federal Financial Management at the OMB,

• the Assistant Director of the Criminal Investigative Division of the Federal Bureau of

Investigation (FBI),

• the Director of the Office of Government Ethics,

• the Special Counsel of the Office of Special Counsel, and

• the Deputy Director of the Office of Personnel Management.

The ECIE was established on May 11, 1992, by Executive Order 12805. The PCIE consists

primarily of statutory IGs appointed by the President, while the ECIE is composed of statutory

IGs appointed by the heads of the entities they serve. The ECIE and the PCIE share the same

overall mission and objectives.

The ECIE IGs provide leadership for audits, investigations, legislative and regulatory reviews,

and other activities in a variety of large and small Federal entities. The entities at which the ECIE

IGs serve have functions ranging from providing postal services to overseeing science and

research grants, arts endowments, consumer product safety, farm credit, and public broadcasting.

During FY 1995, the ECIE OIGs participated in or conducted:

• audits that identified $1.4 billion in questioned costs and $196.3 million in recommendations

that funds be put to better use; and

• investigations that led to 10,081 successful prosecutions, 37 suspensions or debarments of

persons or firms doing business with the Federal Government, 188 personnel actions, and

over $202 million in investigative recoveries.

53
In acting on audit recommendations during FY 1995, entity managers:

• agreed with $93.6 million in recommendations that funds be put to better use; and

• disallowed $19.1 million in questioned costs.

The FY 1995 ECIE Progress Report to the President

Under the Executive order establishing the ECIE, the ECIE Chairperson is obligated to report the

ECIE activities to the President. In meeting that obligation, this report highlights FY 1995 ECIE

IG accomplishments as "agents of positive change" with Government accountability as the

underlying emphasis, and it also highlights OIG projects conducted by multidisciplinary teams.

This report includes sections regarding ECIE IG audits, investigations, current membership,

addresses, and hotline numbers.

The report was compiled from narratives, statistics, and other information submitted by the

membership of the ECIE.

54
OIG Work in FY 1995

As a result of the Vice President’s National Performance Review, the Inspectors General crafted

a vision statement which says: "We are agents of positive change striving for continuous

improvement in our agencies’ management and program operations, and in our own offices." One

of the specific avenues the IGs have explored to improve their own operations and effectiveness--

with positive results--has been the increased use of multidisciplinary teams in performing reviews.

This section highlights examples which demonstrate the OIGs’ commitment to being agents of

positive change and employing multidisciplinary teams to their best advantage.

Appalachian Regional Commission

Agents of Positive Change

Of particular significance have been coordinated efforts by Appalachian Regional Commission

(ARC) management and the OIG to improve fund management, especially with respect to the

identification of expired grants with potential for fund deobligations. As a result of these efforts,

approximately $4 million has been deobligated and the funds were made available for use on

priority projects. ARC management has implemented controls to ensure timely action on expired

grants and has prioritized this activity.

Multidisciplinary Teams

The OIG uses multidisciplinary teams to maximize the efficient use of scarce resources. Contract

auditors are used to conduct financial reviews, and the review team often includes an ARC OIG

auditor/evaluator with responsibilities for assessing the accomplishment of grant objectives.

Multidisciplinary teams, in conjunction with other OIG offices, have also been used to conduct

inspections and investigations. A primary example was a series of reviews and inquiries dealing

with violations of program provisions by foreign physicians granted approval to work in the

Appalachian Region. The combined audit and investigative work identified substantial program

abuse and violations and triggered management actions to restrict physician approvals and

establish controls to ensure program improvements and oversight.

Equal Employment Opportunity Commission

Agents of Positive Change

OIG activities were conducted with the goal of improving Equal Employment Opportunity

Commission (EEOC) management and program operations, as well as the OIG. Staff members

have been empowered to create products that get a concise message to OIG customers in a timely

fashion. The OIG has also limited compliance work to that which is legislatively mandated and

requested that the DCAA conduct routine contract audits. In addition, where feasible, the OIG

55
serves in a consulting role. For example, as a result of a security assessment of EEOC

headquarters building which OIG conducted in 1994, the agency is developing a national security

plan. OIG has been instrumental in advising management on the implementation of an interim

plan, as well as providing guidance on referral and reporting of security issues and problems.

Management has responded positively to OIG’s efforts in this area.

Multidisciplinary Teams

Since 1991, the OIG has experienced more than a 30-percent decline in its staff. With no future

increase of staff anticipated, cross-training and the use of multidisciplinary teams was

implemented in FY 1995. Since demands for investigative inquiries increased, OIG inspections

staff members were assigned to handle several administrative investigations. One staff member,

experienced in conducting financial and performance audits and inspections, received training at

the Federal Law Enforcement Training Center in Glynco, Georgia.

Under guidance of the Assistant Inspector General for Investigations and Counsel to the Inspector

General, inspectors completed investigations into allegations of ethics violations by a manager

concerning improper loans to a subordinate, improper authorizations of Government vehicle use,

and time and attendance abuse. Administrative actions by management in these matters are

pending. In the ethics violations case, the manager retired.

Federal Communications Commission

Agents of Positive Change

During FY 1995, the OIG at the Federal Communications Commission (FCC) focused resources

toward assisting the FCC in best meeting the challenges impacting the Commission. The FCC

is in the midst of a major reinvention. Not only has the role and mission of the FCC been

subjected to changes in the telecommunications field and the initiation of an ambitious spectrum

auction program, but the agency itself also has moved to reinvent the way it does business. This

has principally manifested itself in the form of new organizational structures, new rules and

regulations, and a heavy capital and institutional investment in automation technologies.

The OIG has moved aggressively toward embracing the concept of being an agent of positive

change. The OIG has worked extensively in the past year toward ensuring the integrity,

effectiveness, and efficiency of the spectrum auction program. The OIG has also performed

significant work in evaluating the security and reliability of FCC computer systems. At a time

when the FCC is aggressively moving to automate many core functions to best meet the needs

of customers, the OIG considers it essential that data be protected against loss or unauthorized

intrusion.

56
Multidisciplinary Teams

To meet this changing mission requirement, the OIG has taken advantage of the education,

training, knowledge, and experience of the staff. This has resulted in staff members with

investigative background working on projects with auditors. Multidisciplinary teams have been

used to examine internal control mechanisms in place to mitigate the potential for unauthorized

computer penetration.

In performing criminal investigations, the OIG has utilized multidisciplinary teams. The nature

of criminal activity is such that most illegalities are inspired by the potential for actual realization

of financial gains. Often criminal activity is facilitated by weaknesses in internal controls in a

program or operational area. As auditors are skilled in examining systemic weaknesses and

recommending corrective action, it is the policy of the OIG that audit resources be extended to

assist the investigative side of the office.

Government Printing Office

Agents of Positive Change and Multidisciplinary Teams

The Government Printing Office (GPO) OIG supports the use of multidisciplinary teams to

accomplish the OIG’s audit and investigative mission. Since FY 1992, GPO OIG has committed

10 percent of planned audit resources to supporting investigative activities, such as

multidisciplinary teams. During FY 1995, approximately 4 percent of the OIG’s audit and

investigative resources were used for such projects.

A description of a significant multidisciplinary project worked on in FY 1995 follows.

GPO Workers’ Compensation Program

The GPO OIG is conducting a major review of the GPO Workers’ Compensation Program

(WCP), which is mandated by the Federal Employees’ Compensation Act (FECA). The U.S.

Department of Labor (DOL) is responsible for administering the FECA Program, which pays

compensation benefits to GPO and other Federal employees. The GPO reimburses DOL about

$6 million annually for FECA Program benefits paid to GPO employees and health-care

providers.

The multidisciplinary project team consists of several auditors and investigators working closely

together to develop audit and investigative findings. The project team is addressing concerns

about fraud, abuse, and mismanagement in the participation and administration of this program.

A major OIG objective is to ensure that management controls are adequate and effective.

This project is being conducted in three phases. An audit report on Phase I was issued during a

prior reporting period. This report dealt with the annual fee for administration of the program that

DOL charges the GPO.

57
A second report on Phase II was issued during this current reporting period. This report assessed

GPO’s compliance with FECA regulations. Phase III is underway and is examining the propriety

of benefit payments.

Legal Services Corporation

Agents of Positive Change and Multidisciplinary Teams

The OIG at the Legal Services Corporation has combined the audit and investigative functions

into a Program Integrity Unit with the mission of promoting integrity through prevention and

detection of fraud, waste, and abuse.

In a recent embezzlement investigation, a multidisciplinary team approach allowed auditors to

concentrate on the review of extensive financial records while investigators concentrated on

conducting interviews, reviewing documents, and pursuing leads.

An inspection of contract service and related expense payments to certain members of

management was led by the audit group, and supplemented by legal counsel and investigators.

This combination proved to be an efficient use of multiple disciplines as the auditors identified

and researched numerous areas of concern with respect to the appropriateness of certain expenses,

and relied on legal counsel’s analysis of the related laws. The investigators provided support in

obtaining external documents through issuance of an Inspector General subpoena.

The use of multidisciplinary teams has the potential of improving the quality of work, and in

some cases has decreased the amount of time expended in completing projects, thus improving

the economy and efficiency of OIG operations.

National Science Foundation

Agents of Positive Change

The National Science Foundation’s (NSF) OIG conducted several investigations of small

businesses that receive grants for scientific research under the Small Business Innovation

Research (SBIR) Program. These investigations were conducted by NSF’s OIG and by OIG

offices at NASA and the Department of Defense, with the NSF OIG serving as the lead agency.

To date, these investigations have resulted in two criminal convictions, one indictment, and

monetary recoveries in excess of $6 million. Consistent with recommendations from the Vice

President’s NPR, the NSF OIG also analyzed the underlying cause of this fraud and

recommended management changes to reduce the vulnerability for fraud. As a result of NSF OIG

recommendations, NSF made over 20 changes in the methods used to operate the SBIR program.

In a March 1995 report entitled Interim Report on the Small Business Innovation Research

Program, the U.S. General Accounting Office endorsed several NSF OIG recommendations for

governmentwide application.

58
Multidisciplinary Teams

The OIG developed an inspections program to evaluate the effectiveness of NSF grants for

science and engineering research and education. NSF inspection teams comprise scientists,

auditors, lawyers, and management analysts. Inspections evaluate the administrative, management,

and programmatic aspects of NSF-funded operations. Inspections are conducted at State research

universities, private research foundations, and private, primarily undergraduate, institutions. OIG

inspections note positive findings and, when appropriate, identify deficiencies. Issues commonly

addressed by these inspections involve: (a) Policies and procedures involving misconduct in

science, such as data fraud and plagiarism; (b) disclosure policies involving potential conflicts

of interest; and (c) the system used to account for cost sharing.

Securities and Exchange Commission

Agents of Positive Change

Negotiated Settlements

An OIG audit is leading to improved controls over negotiated settlements in enforcement cases.

Settlements are a primary method for resolving allegations of securities violations. Among other

changes, funds collection is being enhanced, settlement issues are being considered earlier by the

Securities and Exchange Commission (SEC), and a settlement data base is being developed to

help guide settlement negotiations for the SEC.

Bankruptcy Program

The bankruptcy program is being significantly enhanced as a result of an OIG audit. The overall

intent of this program is to ensure that investors’ rights in bankruptcy cases are protected. The

OIG recommended numerous changes, including delegating additional authority to the staff, using

accountants for analysis of financial disclosure documents, and improving reporting.

Multidisciplinary Teams

The OIG has several staff skilled in both audits and investigations. These staff increase their

effectiveness and benefit the SEC by preparing investigative reports on management control

issues. The focus of these projects is on legal violations (an investigative objective), while testing

of controls (an audit technique) is performed as appropriate. An example follows.

Court Receivers

The OIG recommended enhanced controls over the Commission’s role in the appointment of

receivers in enforcement cases. The recommendations will help prevent conflicts of interest and

better protect investors.

59
Smithsonian Institution

Agents of Positive Change

Smithsonian Magazine

The Smithsonian Institution publishes a magazine as an extension of its mission to increase and

diffuse knowledge. For years, the Smithsonian magazine’s financial performance had been

significantly above industry averages, but recently performance fell to the average level. The OIG

determined that if management would identify the optimum target level for its subscriber base

and take steps to achieve that level, promotion costs could be reduced by $1.8 million a year.

Handbook of North American Indians

As part of a larger audit of the National Museum of Natural History, the OIG identified the need

to establish performance measures for developing the Handbook of North American Indians. For

the last 23 years the Natural History Museum has been developing a comprehensive, multivolume

encyclopedia of North American Indians written from anthropological, historical, and linguistic

perspectives. The project has been beset by slow production, aging manuscripts, and declining

sales. Furthermore, at the best pace experienced during the last 23 years, it will take another 20

years to complete the encyclopedia. Consequently, the OIG recommended that Museum

management reevaluate the feasibility and current practicality of the Handbook project.

Tennessee Valley Authority

Agents of Positive Change and Multidisciplinary Teams

Procurement Reengineering

The OIG has been participating in a major initiative to improve TVA’s contracting process. The

OIG detailed a senior auditor to a full-time position on TVA’s Contract Improvement Team

(CIT), an agencywide group of contracting experts. The OIG also conducted several inspections

on procurement-related topics at the team’s request and completed an audit of TVA’s purchasing

program. The Assistant Inspector General (Audits) is a full-time member of TVA’s Procurement

and Contracting Council, a successor group to the CIT. TVA management has adopted a number

of OIG-recommended improvements to the procurement process, including a suggestion that an

executive-level official be appointed to oversee TVA’s procurement processes and related

information systems.

Health Care Claims Review

OIG auditors and investigators, working in conjunction with an outside consultant, are reviewing

claims under TVA’s $100 million-a-year health benefits plan. The heart of this review is a

computerized analysis which will identify overpayments resulting from duplicate bills, excessive

60
charges, coding manipulation, miscoded services, and billing errors. In addition, OIG investigators

participated in a Health Care Fraud Working Group sponsored by a local U.S. attorney’s office,

while OIG auditors assisted TVA in selecting a contractor to design and implement a new health

and wellness data management system.

United States Postal Service

Agents of Positive Change

Revenue and Asset Protection Program

The United States Postal Service (USPS) Revenue and Asset Protection Program (RAPP) is the

merger of certain audit and criminal investigative expertise under one umbrella to more closely

align Postal Inspection Service/OIG goals with those of the USPS; that is, to protect Postal

Service revenue and assets through audits and criminal investigations. While not exactly falling

within the concept of multidisciplinary teams, members of RAPP have the ability to apply skills

from multiple disciplines and work together toward a common goal. Postal Inspectors with

expertise in the criminal investigative area who find systemic problems during the course of an

investigation provide postal management with reports of the problems found for corrective action.

Such reports are prepared in accordance with generally accepted Government auditing standards.

Similarly, Inspectors having audit expertise who find potential criminal activity during the course

of an audit will notify an experienced RAPP Inspector or will proceed with the investigation and

present the results to an appropriate Federal, State, or local prosecutor.

Work in this area is categorized as financial, revenue, or expenditure investigations, and includes

cases involving workers’ compensation fraud and employee or contractor embezzlements. FY

1995 results appear below.

• RAPP investigations (audits) reported to postal management identified approximately

$48 million in revenue deficiencies, and resulted in the arrest of 416 employees for various

offenses.

• Investigations of fraud against the USPS resulted in 117 arrests.

• Workers’ compensation abuse resulted in disciplinary actions against 321 employees, the

arrest of 33, and the removal of 216 employees from the USPS.

• Investigations of workers’ compensation claims led to more than $57 million in long-term

savings to the USPS.

• Financial investigations resulted in the arrest of 260 employees and contractors for

embezzlement.

61
Multidisciplinary Teams

National Audit of International Mail Operations

A joint task force of Postal Inspectors with audit and criminal assignments and postal

management reviewed international mail flowing through the Miami International Airport, Airport

Mail Center, and Processing and Distribution Center in Miami. The objective of the review was

to assist management in improving international service to the Caribbean and Latin American

countries. The audit identified four key areas that accounted for over 50 percent of the dispatch

errors to those countries. The team also found that a major U.S. air carrier responsible for

transporting 60 percent of the mail to those countries was not giving the USPS the proper level

of service.

62
Audits

Most OIG resources are devoted to audits. The following tables demonstrate the impact of OIG

audits. The tables summarize key statistical accomplishments reported in the individual IG

semiannual reports to the Congress for the 6-month periods ending March 31 and September 30,

1995. These statistical accomplishments relate to recommendations that funds be put to better use,

management decisions on recommendations that funds be put to better use, questioned costs, and

management decisions on questioned costs.

Recommendations That Funds Be Put to Better Use

The IG Act defines a recommendation that funds be put to better use as "a recommendation by

the Office that funds could be used more efficiently if management of an establishment took

actions to implement and complete the recommendation, including (A) reductions in outlays; (B)

deobligations of funds from programs or operations; (C) withdrawal of interest subsidy costs on

loans or loan guarantees, insurance, or bonds; (D) costs not incurred by implementing

recommended improvements related to the operations of the establishment, a contractor, or

grantee; (E) avoidance of unnecessary expenditures noted in preaward reviews of contract or

grant agreements; or (F) any other savings which are specifically identified."

During FY 1995, OIG audits recommended that approximately $196.3 million be put to better

use (Table I).

Table I. Recommendations That Funds Be Put to Better Use

Entity Total

Appalachian Regional Commission (ARC)

Consumer Product Safety Commission (CPSC)

Corporation for Public Broadcasting (CPB)

Federal Trade Commission (FTC)

Government Printing Office (GPO)

National Archives and Records Administration (NARA)

National Science Foundation (NSF)

Panama Canal Commission (PCC)

Peace Corps (PC)

Securities and Exchange Commission (SEC)

Smithsonian Institution (SI)

Tennessee Valley Authority (TVA)

U.S. Postal Service (USPS)

$ 2,177,000

3,500

405,000

1,117,000

1,800,000

21,900

17,925,000

99,311

68,513

128,000

9,166,000

13,358,838

150,015,118

Total $196,285,180

63
Management Decisions on Recommendations That Funds Be Put to Better Use

Table II reports on the status of FY 1995 management decisions on OIG audit recommendations

that funds be put to better use. Entity managers agreed with $93.6 million in recommendations

that funds be put to better use.

Table II.

Management Decisions on Recommendations That Funds Be Put to Better Use

Entity

No

Management

Decision

Start

FY 1995

Recommendations Issued

in FY 1995

Recommendations

Agreed to by

Management

Recommendations Not

Agreed to by

Management

No

Management

Decision

End FY 1995

ARC

CPSC

CPB

FTC*

GPO

NARA

NSF

PCC

PC

SEC

SI

TVA

USPS

$ 168,000

--

26,000

--

5,095,078

--

800,000

179,633

--

--

70,000

886,853

36,011,087

$ 2,177,000

3,500

405,000

1,117,000

1,800,000

21,900

17,925,000

99,311

68,513

128,000

9,166,000

13,358,838

150,015,118

$ 2,301,000

3,500

393,000

1,117,000

1,958,609

21,900

7,750,000

165,903

68,513

128,000

3,275,000

9,722,099

66,703,147

$ 10,000

--

38,000

--

139,571

--

1,050,000

36,041

--

--

--

760,152

13,064,801

$ 34,000

--

--

--

4,796,898

--

9,925,000

77,000

--

--

5,961,000

3,763,440

106,258,257

Total $43,236,651 $196,285,180 $93,607,671 $15,098,565 $130,815,595

*

Federal Trade Commission

64
Questioned Costs

The IG Act defines a questioned cost as "a cost that is questioned by the Office because of (A)

an alleged violation of a provision of law, regulation, contract, grant, cooperative agreement, or

other agreement or document governing the expenditure of funds; (B) a finding that, at the time

of the audit, such cost is not supported by adequate documentation; or (C) a finding that the

expenditure of funds for the intended purpose is unnecessary or unreasonable."

Table III. Questioned Costs

Entity Total

Amtrak

Appalachian Regional Commission

Equal Employment Opportunity Commission (EEOC)

Federal Housing Finance Board (FHFB)

Federal Labor Relations Authority (FLRA)

Federal Trade Commission

Government Printing Office*

National Endowment for the Arts (NEA)

National Endowment for the Humanities (NEH)

National Science Foundation**

Panama Canal Commission***

Peace Corps

Pension Benefit Guaranty Corporation (PBGC)

Securities and Exchange Commission

Smithsonian Institution

Tennessee Valley Authority

U.S. Postal Service

$ 22,444,513

123,000

402,733

4,694

16,675

14,000

1,089,499

242,957

228,817

7,082,003

5,159,268

38,388

525,783

436,000

902,478

11,360,223

1,364,415,944

Total $1,414,486,975

*

The GPO also had $64,872 in costs questioned by the Defense Contract

Audit Agency (DCAA).

**The NSF also had $127,862 in costs questioned by DCAA.

***The PCC also had $5,386 in costs questioned by DCAA.

65
Management Decisions on Questioned Costs

Table IV reports on the status of FY 1995 management decisions to disallow costs questioned

by OIGs. Entity managers agreed with over $19.1 million in questioned costs.

Table IV. Management Decisions on Questioned Costs

Entity

No

Management

Decision

Start FY 1995

Recommendations Issued

in FY 1995

Disallowances

Agreed to by

Management

Disallowances

Not Agreed to

by

Management

No

Management

Decision

End FY 1995

Amtrak

ARC

EEOC

FHFB

FLRA

FTC

GPO

NEA

NEH

NSF

PCC

PC

PBGC

SEC

SI

TVA

USPS

$ 39,113

172,000

--

1,000

--

--

2,467,081

306,754

--

6,719,903

968,900

7,459

--

89,000

1,675,762

124,657

45,839,652

$ 22,444,513

123,000

402,733

4,694

16,675

14,000

1,154,371

242,957

228,817

7,209,865

5,164,654

38,388

525,783

436,000

902,478

11,360,223

1,364,415,944

$ 1,813,540

23,000

65,677

3,694

16,675

14,000

2,457,290

8,974

--

2,848,753

1,419,826

21,322

525,783

89,000

1,090,752

5,031,004

3,678,772

--

$ 260,000

274,584

190

--

--

150,653

507,778

--

4,922,831

736,650

--

--

--

300,515

4,123,000

41,818,009

$ 20,670,086

12,000

62,472

1,810

--

--

289,116

32,959

228,817

6,158,529

3,977,078

24,525

--

436,000

1,186,973

2,330,876

1,364,758,815

Total $58,411,281 $1,414,685,095 $19,108,062 $53,094,210 $1,400,170,056

66
Investigations

The IG Act requires that IGs provide policy direction for and conduct, supervise, and coordinate

investigations relating to their entities’ programs and operations. The OIG investigations cover

a full range of criminal and administrative issues.

The following tables illustrate the results obtained through OIG investigations during FY 1995.

They summarize the statistical accomplishments reported by the individual IGs in their

semiannual reports to the Congress as of March 31 and September 30, 1995. The

accomplishments--successful prosecutions, administrative sanctions, and investigative recoveries--

include the results of joint investigations.

Successful Prosecutions

The OIG investigations of contractors, program participants, and Government employees can lead

to criminal and/or civil prosecutions. The prosecutions result in convictions that carry penalties

such as prison terms, fines, settlements, and recoveries to the Government. During FY 1995,

OIGs working independently, or with other Federal and non-Federal investigative agencies,

obtained 10,081 successful prosecutions, including pretrial diversions (Table V).

Table V. Successful Prosecutions

Entity Total

Amtrak

Farm Credit Administration

Government Printing Office

Legal Services Corporation

National Labor Relations Board

National Science Foundation

Panama Canal Commission

Peace Corps

Smithsonian Institution

Tennessee Valley Authority

U.S. Postal Service

8

1

4

4

1

2

4

3

3

13

10,038

Total 10,081

67
Suspensions/Debarments

The OIG investigations can result in the suspension or debarment of individuals or entities doing

business with the Federal Government. During FY 1995, a total of 37 debarments, exclusions,

and suspensions were imposed on individuals and entities doing business with the Government

(Table VI).

Table VI. Suspensions/Debarments

Entity Total

Amtrak

Appalachian Regional Commission

Government Printing Office

National Science Foundation

Tennessee Valley Authority

2

1

28

4

2

Total 37

Personnel Actions

The OIGs are responsible for investigating employees suspected of wrongdoing. During FY 1995,

OIG investigations led to 188 personnel actions against employees (Table VII). The personnel

actions included terminations, formal reprimands, suspensions, and demotions.

Table VII. Personnel Actions

Entity Total

Amtrak

Consumer Product Safety Commission

Farm Credit Administration

Board of Governors of the Federal Reserve System

Federal Trade Commission

Government Printing Office

Interstate Commerce Commission

International Trade Commission

National Archives and Records Administration

National Endowment for the Humanities

National Labor Relations Board

National Science Foundation

Panama Canal Commission

Peace Corps

Pension Benefit Guaranty Corporation

Securities and Exchange Commission

Smithsonian Institution

Tennessee Valley Authority

95

2

1

2

2

15

1

1

6

2

2

3

4

5

2

12

13

20

Total 188

68
Investigative Recoveries

Investigations conducted by OIGs often lead to recovery of money or property. The recoveries

reported here are the total dollar value of repayments, payments ordered, settlements made

pursuant to legal actions, and/or administrative monetary penalties. They include recoveries made

during investigations, legally ordered fines and penalties, restitutions and recoveries, out-of-court

settlements, or penalties imposed through administrative proceedings.

During FY 1995, OIG investigative recoveries totaled over $202 million (Table VIII). The

recoveries go to the United States Treasury; program, trust, or operating funds; or other Federal

or non-Federal entities victimized.

Table VIII. Investigative Recoveries

Entity Total

Amtrak

Federal Trade Commission

Government Printing Office

International Trade Commission

Legal Services Corporation

National Archives and Records Administration

National Labor Relations Board

National Science Foundation

Panama Canal Commission

Peace Corps

Pension Benefit Guaranty Corporation

Securities and Exchange Commission

Smithsonian Institution

Tennessee Valley Authority

U.S. Postal Service

$ 818,500

2,000

433,213

2,267

16,323

13,371

16,506

511,037

355,693

9,932

1,483

3,150

1,560

1,744,632

198,114,045

Total $202,043,712

69
Membership of the Executive Council on Integrity and Efficiency

Chair, ECIE

John A. Koskinen

Deputy Director of Management

Office of Management and Budget

Federal Election Commission

Lynne A. McFarland

Inspector General

National Labor Relations Board

John E. Higgins, Jr.

Acting Inspector General

Vice Chair, ECIE

Thomas D. Blair

Inspector General

Smithsonian Institution

Federal Housing Finance Board

Edward Kelley

Inspector General

National Science Foundation

Linda G. Sundro

Inspector General

Vice Chair, PCIE

June Gibbs Brown

Inspector General

Dept. of Health and Human Services

Federal Labor Relations Authority

Robert G. Andary

Inspector General

Office of Government Ethics

Stephen D. Potts

Director

Amtrak

Fred E. Weiderhold, Jr.

Inspector General

Federal Maritime Commission

Tony P. Kominoth

Inspector General

Office of Management and Budget

G. Edward DeSeve

Controller

Appalachian Regional Commission

Hubert Sparks

Inspector General

Board of Governors of the Federal Reserve

System

Brent L. Bowen

Inspector General

Office of Personnel Management

Lorraine A. Green

Deputy Director

Commodity Futures Trading Commission

A. Roy Lavik

Inspector General

Federal Trade Commission

Frederick J. Zirkel

Inspector General

Office of Special Counsel

Kathleen Day Koch

Special Counsel

Consumer Product Safety Commission

Thomas F. Stein

Inspector General

Government Printing Office

Lewis L. Small

Inspector General

Panama Canal Commission

Peter A. Liehr

Inspector General

Corporation for Public Broadcasting

Lester J. Latney

Inspector General

International Trade Commission

Jane E. Altenhofen

Inspector General

Peace Corps

Charles C. Maddox

Inspector General

Equal Employment Opportunity

Commission

Aletha L. Brown

Inspector General

Legal Services Corporation

Edouard R. Quatrevaux

Inspector General

Pension Benefit Guaranty Corporation

Wayne Robert Poll

Inspector General

Farm Credit Administration

Eldon W. Stoehr

Inspector General

National Archives and Records

Administration

Kelly A. Sisario

Inspector General

Securities and Exchange Commission

Walter Stachnik

Inspector General

Federal Bureau of Investigation

William J. Esposito

Assistant Director

Criminal Investigative Division

National Credit Union Administration

H. Frank Thomas

Inspector General

Tennessee Valley Authority

George T. Prosser

Inspector General

Federal Communications Commission

H. Walker Feaster, III

Inspector General

National Endowment for the Arts

Edward Johns

Inspector General

United States Postal Service

Kenneth C. Weaver

Deputy Chief Postal Inspector

National Endowment for the Humanities

Sheldon L. Bernstein

Inspector General

Note: The members listed are those serving as of April 1996. On Oct. 1, 1995, the Board for International Broadcasting OIG was incorporated

into the U.S. Information Agency OIG. On Dec. 31, 1995, the Interstate Commerce Commission, including the OIG, went of out existence.

70
Executive Committee on Integrity and Efficiency

Membership Addresses and Hotline Numbers

Office of Management and Budget

Old Executive Office Building

Washington, D.C. 20503

Federal Labor Relations Authority

607 14th Street, N.W., 2nd Floor

Washington, D.C. 20424-0001

(800) 331-3572

National Labor Relations Board

1099 14th Street, N.W., Room 9820

Washington, D.C. 20570

(800) 736-2983

Amtrak

Department of Internal Affairs

400 North Capitol Street, N.W.

Washington, D.C. 20001

(202) 906-4600

Federal Maritime Commission

800 North Capitol Street, Room 1072

Washington, D.C. 20573

(202) 523-5865

National Science Foundation

4201 Wilson Boulevard

Arlington, VA 22230

OIG@NSF.GOV (Internet) or

(703) 306-2004

Appalachian Regional Commission

1666 Connecticut Avenue, N.W.

Room 215

Washington, D.C. 20235

(202) 884-7678 or (800) 532-4611

Board of Governors of the Federal Reserve

System

(Stop 300)

20th Street & Constitution Ave., N.W.

Washington, D.C. 20551

(800) 827-3340 or (202) 452-6400

Office of Government Ethics

1200 New York Ave., N.W.

Suite 500

Washington, D.C. 20005

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W., Suite 4092

Washington, D.C. 20581

(202) 418-5510

Federal Trade Commission

6th Street & Pennsylvania Ave., N.W.

Washington, D.C. 20580

(202) 326-2800

Office of Personnel Management

1900 E Street, N.W.

Washington, D.C. 20415

Consumer Product Safety Commission

4330 East West Highway

Bethesda, MD 20814-4408

(301) 504-0573

Government Printing Office

North Capitol & H Streets, N.W.

(Stop: IG)

Washington, D.C. 20401

(800) 743-7574

Office of Special Counsel

1730 M Street, N.W., Suite 300

Washington, D.C. 20036-4505

(202) 653-9125 or (800) 872-9855

Corporation for Public Broadcasting

901 E Street, N.W.

Washington, D.C. 20004-2006

(202) 783-5408

International Trade Commission

500 E Street, S.W. Room 220

Washington, D.C. 20436

(202) 205-2217

Panama Canal Commission

Section 230

APO AA 34011

01-507-523142 or (202) 634-6441

Equal Employment Opportunity

Commission

1801 L Street, N.W., Suite 3001

Washington, D.C. 20507

(202) 663-7020

Legal Services Corporation

750 - 1St Street, N.E., 10th Floor

Washington, D.C. 20002-4250

(800) 678-8868 or (202) 336-8936

Peace Corps

1900 K Street, N.W., Suite 5302

Washington, D.C. 20526

(800) 233-5874 or (202) 606-2483

Farm Credit Administration

1501 Farm Credit Drive, Suite 4100

McLean, VA 22102-5090

(800) 437-7322 or (703) 883-4316

National Archives and Records

Administration

8601 Adelphi Road, Room 1300

College Park, MD 20740-6001

(800) 786-2551 or (301) 713-6667

Pension Benefit Guaranty Corporation

1200 K Street, N.W., Suite 470

Washington, D.C. 20005-4026

(202) 778-8855

Federal Bureau of Investigation

9th Street & Pennsylvania Ave., N.W.

Washington, D.C. 20535

National Credit Union Administration

1775 Duke Street

Alexandria, VA 22314-3428

(703) 518-6357 or (800) 778-4806

Securities and Exchange Commission

450 - 5th Street, N.W., Room 7010

Washington, D.C. 20549

(202) 942-4460

Federal Communications Commission

1919 M Street, N.W., Suite 752

Washington, D.C. 20554

(202) 418-0473

National Endowment for the Arts

1100 Pennsylvania Ave., N.W., Rm. 207

Washington, D.C. 20506

(202) 682-5402

Smithsonian Institution

955 L’Enfant Plaza, Room 7600

Mail Stop: 905

Washington, D.C. 20560

(202) 287-3676

Federal Election Commission

999 E Street, N.W., Room 940

Washington, D.C. 20463

(202) 219-4267

National Endowment for the Humanities

1100 Pennsylvania Ave., N.W., Rm. 801

Washington, D.C. 20506

(202) 606-8423

Tennessee Valley Authority

400 West Summit Hill Drive, Rm. ET 4H

Knoxville TN 37902-1499

(800) 323-3835

Federal Housing Finance Board

777 F Street, N.W., 1st Floor

Washington, D.C. 20006

(800) 408-2900

United States Postal Service

475 L’Enfant Plaza, S.W., Room 3014

Washington, D.C. 20260-2100

(800) 654-8896

Note: All hotline numbers listed above were current as of the date of the printing of this report.

71