Semi-Annual Report to Congress for the Period of April 1, 2007 to September 30, 2007
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Office of the Inspector General
[Excerpt] I am pleased to submit this Semiannual Report to Congress, which highlights the most significant activities and accomplishments of the Department of Labor (DOL), Office of Inspector General (OIG), for the six-month period ending September 30, 2007. During this reporting period, our investigative work led to 281 indictments, 197 convictions, and $363.3 million in monetary accomplishments. In addition, we issued 55 audit and other reports and questioned $22 million in costs and identified several millions in other monetary impact from unemployment compensation overpayments identified through Hurricane Katrina oversight audits. OIG audits made significant recommendations to address vulnerabilities in worker safety and health. For example, our audit of MSHA’s Accountability program, which is the internal peer review program to ensure that mine inspection responsibilities are performed effectively, raised major concerns about the program’s effectiveness. We found that some of the peer reviews did not include site visits to mines and only looked at paper records on inspections conducted. In addition, we found that District Managers were allowed to select work to be reviewed in their own districts, creating a conflict of interest. Our audit of the resolution of workplace hazards identified by the OSHA Consultation Program in three states found that program officials seldom ensured that interim protection was in place before granting employers’ requests for extensions to correct serious hazards, and employers who did not complete corrective actions in a timely manner were seldom referred for enforcement action. Our investigations continue to combat labor racketeering involving the monies in union-sponsored benefit plans. An OIG investigation into the Genovese crime family’s control of the drywall industry in and around New York City resulted in a contractor being sentenced to 33 months’ imprisonment and ordered to pay more than $2 million in restitution. Another labor racketeering investigation resulted in the sentencing of the former owner of a home care services company. This individual was sentenced to 46 months’ imprisonment for embezzlement from the company’s medical and pension plans. In addition, he was ordered to pay criminal restitution in excess of $3 million. The OIG also participated in a multi-agency task force investigation of Purdue Frederick that resulted in a combined total of $634 million in restitution, forfeiture, fines, a civil settlement, and monitoring costs for fraudulently marketing a prescription pain medication, OxyContin. Our investigation found that DOL was billed in excess of $42 million for OxyContin that was prescribed to Federal beneficiaries receiving medical care. The OIG continued to provide oversight of the DOL’s response to Hurricane Katrina. We issued separate management letters regarding two states’ controls to ensure individuals who received Hurricane-related disaster unemployment assistance (DUA) benefits were eligible. We also issued management letters on a state’s controls over its new debit card benefit payment method, and its use of the National Directory of New Hires to timely identify claimants who had obtained employment and may therefore have been ineligible for continued benefits. Our audits of DUA eligibility and use of the National Directory of New Hires identified potential benefit overpayments of $87.2 million and $51.2 million, respectively. The OIG remains committed to promoting the economy, integrity, effectiveness, and efficiency of DOL. I would like to express my sincere gratitude to a professional and dedicated OIG staff for their significant achievements during this reporting period.
Office of the Inspector General; Department of Labor; audit; employee integrity; fraud; Congress