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Semi-Annual Report to Congress for the Period of April 1, 2017 to September 30, 2017

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[Excerpt] I proudly submit to Congress and the Department this Semiannual Report, 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, 2017. Our audits and investigations continue to assess the effectiveness, efficiency, economy, and integrity of DOL’s programs and operations, including those performed by its contractors and grantees. We also continue to investigate the influence of labor racketeering and organized crime in internal union affairs, employee benefit plans, and labor-management relations, and have partnered with other law-enforcement agencies on human trafficking matters. During this reporting period, the OIG issued 11 audits and other reports that, among other things, recommended that more than $11.2 million in funds be put to better use. Among our many significant findings, we reported the following: The Office of Workers’ Compensation Programs (OWCP) needed better controls over compounded prescription drugs. OWCP was not effectively managing the use and cost of compounded pharmaceuticals in the Federal Employees’ Compensation Act (FECA) program. The Employment and Training Administration violated the bona fide needs rule by using $22.1 million of Job Corps funds for program years 2012 and 2013 for services actually provided in program years 2013 and 2014. The Occupational Safety and Health Administration lacked adequate contractor information to ensure it followed up on all contract-worker fatalities and catastrophes at employers participating in its Voluntary Protection Programs. Adding 3 judges in the Office of Administrative Law Judges would reduce the time required to eliminate the current backlog of black lung case appeals by 21 percent; adding 6 judges would reduce the time by 28 percent. We continue to work on many important audits. For more details, I invite you to review our recently issued audit work plan for FY 2018, which can be found in the appendix of this report. The OIG’s investigative work also yielded impressive results, with a total of 126 indictments, 135 convictions, and more than $67.2 million in monetary accomplishments. Highlights of this work include the following: Two Texas executives were sentenced to 300 months and 120 months in prison, respectively, and were ordered to pay more than $26 million in restitution to OWCP for FECA fraud for billing fraudulent claims. An immigration consultant was sentenced to 36 months in prison and ordered to pay more than $200,000 in fines and forfeiture for smuggling more than 100 foreign nationals into the United States with a scheme to defraud DOL’s H-2A visa program. Three former nonprofit executives in Los Angeles pled guilty to stealing millions of dollars in public funding and another pled no contest to embezzlement charges involving a Workforce Innovation Act grantee nonprofit organization. A Chicago-area woman was sentenced to 48 months in prison and ordered to pay more than $6.8 million in restitution for an unemployment insurance fraud scheme. These are just a few examples of the exceptional work done by our dedicated OIG staff. I would like to express my gratitude to them for their significant achievements during this reporting period. In addition, in August 2017, the OIG and DOL’s Employment and Training Administration, Wage and Hour Division, and Office of the Solicitor developed protocols regarding the referral of criminal fraud matters in the Foreign Labor Certification (FLC) Program to the OIG in such a way as to avoid duplication of effort and ensure efficiency in combating fraud in the FLC Program. I look forward to continuing to work constructively with the Department and the Congress on our shared goals of identifying improvements to DOL programs and operations, and protecting the interests and benefits of workers and retirees.

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


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