Semi-Annual Report to Congress for the Period of April 1, 2011 to September 30, 2011

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[Excerpt] I am pleased to submit this Semiannual Report to Congress, which highlights the most significant activities and accomplishments of the U.S. Department of Labor (DOL), Office of Inspector General (OIG) for the six-month period ending September 30, 2011. During this reporting period, our investigative work led to 226 indictments, 172 convictions, and $50.9 million in monetary accomplishments. In addition, we issued 40 audit and other reports which, among other things, recommended that $677.1 million in funds be put to better use. OIG audits and investigations continue to assess the effectiveness, efficiency, economy, and integrity of DOL’s programs and operations. We also continue to investigate the influence of labor racketeering and/or organized crime with respect to internal union affairs, employee benefit plans, and labor-management relations. In the employment and training area, an OIG audit of Recovery Act funds spent on green jobs found that with 61 percent of the training grant periods having elapsed, grantees have achieved just 10 percent of their job placement goals. We recommended that the Employment and Training Administration (ETA) evaluate the program and obtain estimates of the need for the remaining $327 million of unspent grant funds. Another OIG audit found that ETA needs to better ensure that the Job Corps’ outreach and admissions service providers enroll only eligible students. If ETA’s recent and planned changes to the Job Corps’ student enrollment process are effectively implemented, then we estimate that nearly $165 million in funds could be put to better use by ensuring only eligible students are enrolled. Another audit estimated that up to $124 million in Workforce Investment Act funding was spent on training participants who did not obtain training-related employment, or information was insufficient to make the determination that training-related employment was obtained. An OIG investigation found a pattern of misconduct involving the Veterans’ Employment and Training Services (VETS) Assistant Secretary and two other senior VETS officials, which reflected a consistent disregard of Federal procurement rules and regulations. The Assistant Secretary and his Chief of Staff resigned following the issuance of our report. Our investigations continued to identify vulnerabilities and fraud in DOL programs. For example, an investigation resulted in two business owners being sentenced to more than three years in prison and ordered to forfeit $2.8 million as a result of their roles in an H-1B visa fraud conspiracy. Another investigation resulted in the owner of a medical practice group being sentenced to serve more than a year in prison and ordered to pay more than $2.5 million in restitution for fraudulent billings that were submitted to DOL’s Office of Workers’ Compensation Programs, Medicaid, Medicare, and private insurance companies. OIG investigations also continue to combat labor racketeering in the workplace. For example, one major investigation resulted in the sentencing of the former secretary-treasurer of the District Council of Carpenters to 11 years in prison and restitution of $5.7 million for receiving prohibited payments from contractors to allow the underpayment of contributions to the union-sponsored benefit plans, resulting in financial harm to union members. Another OIG investigation led to a former Plumbers Union worker being sentenced to three and one-half years in prison, among other things, after pleading guilty to charges of theft from an employee benefit plan and embezzlement of approximately $412,000 in union dues. The OIG remains committed to promoting the integrity, effectiveness, and efficiency of DOL. I would like to express my gratitude to the professional and dedicated OIG staff for their significant achievements during this reporting period. I look forward to continuing to work with the Department to ensure the integrity of programs and that the rights and benefits of worker and retirees are protected.

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Office of the Inspector General; Department of Labor; audit; employee integrity; fraud; Congress
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