Semiannual Report to Congress, Office of Inspector General for the U.S. Department of Labor, Volume 88 (April 1 – September 30, 2022)
Summary
The Department of Labor Office of Inspector General's Semiannual Report to Congress, Volume 88, covers April 1 to September 30, 2022. The OIG says it passed the milestone of more than 1,000 individuals charged with crimes involving unemployment insurance (UI) fraud since the pandemic began in March 2020. An Alert Memorandum identified $45.6 billion in potentially fraudulent UI payments to Social Security numbers filed in multiple states, of deceased persons, used with suspicious email accounts or of federal prisoners. The OIG issued 10 audit and other reports with 18 recommendations and identified $29.6 billion in funds that could be put to better use. It reports 166 investigative cases closed and reports issued, 310 indictments, 216 convictions and more than $55 million in monetary accomplishments.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Volume 88 April 1 – September 30, 2022
Semiannual Report
to Congress
Office of Inspector General for the U.S. Department of Labor
A Message from the Inspector General
It is my honor and distinct privilege to submit this Semiannual
Report to Congress summarizing the activities of the U.S.
Department of Labor (DOL), Office of Inspector General (OIG),
for the 6-month period ending September 30, 2022.
The semiannual report reflects our team’s exceptional
work. The OIG’s workforce—comprising auditors, analysts,
investigators, attorneys, and other professionals—is dedicated
to promoting the economy, efficiency, effectiveness, and
integrity of DOL’s programs. The OIG remains committed
to conducting independent and objective oversight work to
improve DOL programs relied upon by millions of Americans.
Despite significant resource constraints and challenges during
the COVID-19 pandemic, OIG staff has continued to produce
extensive, high-quality oversight work during this reporting
period. For example, on September 22, 2022, we announced
that our investigations had reached the milestone of more than 1,000 individuals charged with crimes
involving unemployment insurance (UI) fraud since the beginning of the pandemic in March 2020. We
also issued an Alert Memorandum that identified $45.6 billion in potentially fraudulent UI payments in
four specific high-risk areas, such as to federal prisoners and deceased persons.
In total, during this reporting period, the OIG issued 10 audit and other reports with 18
recommendations for corrective action and identified $29.6 billion in funds that could be put to better
use. Among our many significant findings, we reported the following:
• We identified a cumulative total of $45.6 billion in potentially fraudulent UI payments to individuals
with Social Security numbers: (1) filed in multiple states, (2) of deceased persons, (3) used to file UI
claims with suspicious email accounts, and (4) of federal prisoners;
• We estimated that $30.4 billion of the $71.7 billion in Pandemic Unemployment Assistance and
Federal Pandemic Unemployment Compensation benefits were paid improperly in 4 states tested,
with an estimated $9.9 billion of that paid to likely fraudsters;
• We reported that states have either not submitted required Coronavirus Aid, Relief, and Economic
Security Act UI program reports to the Employment and Training Administration (ETA) or reported
zero activity, impacting ETA and Congressional decision-making that could mitigate future
overpayments and fraud risk; and
• We determined the Office of Workers’ Compensation Programs’ (OWCP) Workers’ Compensation
Medical Bill Process System data were of undetermined reliability due to a lack of internal controls
and audit limitations. In FY 2021 alone, OWCP paid approximately $1.9 billion in medical benefits
for 3 OWCP programs.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 3
The OIG’s investigative work also yielded impressive results, with a total of 166 investigative cases
closed and reports issued, 310 indictments, 216 convictions, and more than $55 million in monetary
accomplishments. Highlights of this work include:
• Two Michigan residents were sentenced to more than a combined 10 years in prison and ordered to
pay almost $700,000 in restitution for their roles in a $3.8 million pandemic-related UI fraud scheme;
• A Maryland man was sentenced to more than 7 years in prison and ordered to pay approximately
$1.8 million in restitution for his role in orchestrating a $1.5 million pandemic-related UI and
aggravated identity theft schemes;
• A Nigerian national was sentenced to 96 months in prison and ordered to pay more than $486,000
in restitution to his victims for his role in pandemic-related UI and elder fraud schemes;
• A former California chiropractor was sentenced to nearly 70 months in prison and ordered to pay
approximately $1.3 million in restitution to her victims for defrauding health insurance companies out
of more than $2 million.
These are just a few examples of the exceptional work done by our dedicated staff. I want to express
my gratitude to them for their significant achievements during this reporting period.
We are continuing to work on many important audits. For more details, see our Audit Workplan for FY
2023, located in an appendix to this report.
I look forward to continuing to work constructively with the Department and Congress on our shared
goals of identifying improvements to DOL programs and operations and of protecting the interests and
benefits of the nation’s workers and retirees during this unprecedented time.
Larry D. Turner
Inspector General
4 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
OIG Fiscal Year 2022–2026 Strategic Plan
OIG Mission
We serve the American people, DOL, and Congress by providing independent and
objective oversight of Departmental programs through audits and investigations, and by
combatting the influence of labor racketeering in the workplace.
Core Values
Excellence
We deliver relevant, quality, timely, high-impact products and services, through a
workforce committed to accountability and the highest professional standards.
Integrity
We adhere to the highest ethical principles and perform our work in an honest and
trustworthy manner.
Independence
We are committed to being free of conflicts of interest through objectivity and impartiality.
Service
We are a unified team, vigilant to duty through dedicated public service.
Transparency
We promote an environment of open communication through information sharing,
accountability, and accurate reporting.
Strategic Goals
Goal 1: Deliver timely, relevant, and high-impact results.
Goal 2: Foster an internal OIG culture that drives high performance and
engagement.
Goal 3: Promote responsible stewardship of OIG financial and non-financial
resources.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 5
Contents
Selected Statistics. ................................................8 Appendices...........................................................89
Reporting Requirements Under the
Following Acts........................................................90
Significant Concerns. ..........................................10
Funds Recommended for Better Use.....................92
Questioned Costs. .................................................93
Worker and Retiree Benefit Programs. ..............29
Final Audit Reports Issued.....................................94
Unemployment Insurance Programs......................30
Other Reports. .......................................................95
Office of Workers’ Compensation Programs..........57
Unresolved Audit Reports Over 6 Months Old.......96
Employee Benefit Plans. ........................................59
Corrective Actions Taken by the Department.........98
Unimplemented Recommendations.....................102
Worker Safety, Health, and Workplace Rights...61
High-Priority Unimplemented
Occupational Safety and Health Administration.....62
Recommendations. ..............................................103
Summary of Reports with Unimplemented
Employment and Training Programs. ................63 Recommendations with Cost Savings / Funds
Put to Better Use..................................................107
Employment and Training Administration
Programs................................................................64 Reports with Unimplemented Recommendations
for Management Improvement or Disallowed
Foreign Labor Certification Programs....................65 Costs Owed..........................................................108
Investigative Statistics.......................................... 113
Labor Racketeering..............................................67 Peer Review......................................................... 115
Departmental Management.................................69 OIG Hotline. ........................................................ 116
Single Audits. .........................................................75
Fiscal Year 2023 Audit Workplan......................117
OIG Whistleblower Activities. .............................77
Legislative Recommendations. ..........................81
Audit Statistics
10 18 $29.6 Billion
Audits and Other Recommendations for in Funds Put to
Reports Issued Corrective Action Better Use
$
OIG Unimplemented Recommendations
OIG recommendations not fully implemented as of September 30, 2022
EBSA 2
ETA 40
MSHA 31
OASAM 68
OCFO 20
OFCCP 1
OSEC 5
OSHA 17
OWCP 6
WHD 7
0 10 20 30 40 50 60 70
8 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
InvestigativeStatistics
Investigative Results Labor Racketeering
Program Fraud
154 / 166
400
310
300
216
200 166
154 134
100
50 154 investigative
5 cases opened and
0 166 cases closed
r r s s ry ts
s d
se ose
s d
se ene fo tion fo tion e nt i on to en
a a d u d c t u
C Cl C Op rre ec rre l A ict
m ic at rm
fe ros e fe ivi d o nv St eba
e
R P R /C In C D
s es ses min
a a d
C C A
Monetary Accomplishments
$
These include $2,341,864
Recoveries
Cost-Efficiencies
Restitutions
Fines/Penalties
Forfeitures
Civil Monetary Actions
$52,729,200
$55,071,064
Total Labor Racketeering
Program Fraud
Significant Concerns
Significant Concerns
The OIG has identified the following areas of significant concern that cause the Department to be at
particular risk for fraud, mismanagement, waste, abuse, or other deficiencies. The identified areas of concern
reflect continuing matters as well as emerging issues. Most of these issues appear in our annual Top
Management and Performance Challenges report, which can be found in its entirety at www.oig.dol.gov.
Deploying Unemployment
Insurance Benefits Ensuring the Safety of
Expeditiously and Efficiently Students and Staff at
While Reducing Improper Job Corps Centers
Payments
Providing the OIG Access to Maintaining the Integrity
UI Claimant Data and Wage of Foreign Labor
Records Certification Programs
Extending the Statute
of Limitations associated Protecting the Security
with Pandemic-Related of Employee Benefit
Unemployment Insurance Plan Assets
Fraud
Managing Medical
Protecting the Safety Benefits in the Office of
and Health of Workers Workers’ Compensation
Programs
Ensuring the Solvency of the
Protecting the Safety and
Black Lung Disability Trust
Health of Miners
Fund
Improving the Performance
Securing and Managing Data
Accountability of Workforce
and Information Systems
Development Programs
Ensuring Pandemic Safety
Improving Job Corps’
at Job Corps Centers and
Procurement Process
Addressing Learning Gaps
10 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
Deploying Unemployment Insurance Within 2 to 3 weeks, initial claims rose to 10 times
Benefits Expeditiously and Efficiently pre-pandemic levels, far higher than state systems
were designed to handle.2 Within 5 months, through
While Reducing Improper Payments
August 15, 2020, the Department reported 57.4 million
initial claims, which was the largest increase since
The Office of Inspector General (OIG) has
the Department began tracking UI data in 1967.
repeatedly reported significant concerns with the
Department of Labor (DOL or Department) and
Deploying Unemployment Insurance Benefits
states’1 ability to deploy unemployment insurance
Expeditiously and Efficiently
(UI) program benefits expeditiously and efficiently
while ensuring integrity and adequate oversight. We
Rapid deployment of Coronavirus, Aid, Relief,
remain particularly concerned about deployment of
and Economic Security (CARES) Act funding was
UI benefits in response to emergencies including
critical to helping workers in need. As part of the
natural disasters and economic downturns. Most
CARES Act, Congress created three key new
recently, the OIG reiterated these concerns
programs: Pandemic Unemployment Assistance
regarding the economic downturn created by the
(PUA), Pandemic Emergency Unemployment
COVID-19 pandemic and the unprecedented levels
Compensation (PEUC), and Federal Pandemic
of federal funding allocated to the UI program,
Unemployment Compensation (FPUC) (see
estimated at approximately $872.5 billion.
Figure 1).
Following the start of the pandemic in the United
As the OIG’s prior audit work has shown, quickly
States in early 2020, unemployment compensation
implementing new programs in the midst of
claims rose exponentially to historically
extraordinary increases in initial claims can result
unprecedented levels. Prior to the pandemic, the
in shortcomings in the effective and efficient
numbers of UI claims were low. On March 14, 2020,
implementation of stimulus programs. For example,
the Department reported 282,000 initial claims.
the OIG had audited the Disaster Unemployment
Assistance (DUA) program and found the
1
When referring to unemployment insurance, this
Department had not established adequate controls
Semiannual Report to Congress uses “state” or “State
to ensure benefits were paid timely.3 Furthermore,
Workforce Agency” to refer to the administrative body
states had difficulty ensuring CARES Act programs
that administers the program within the state, district,
or territory. For the 50 states, as well as the U.S. Virgin
Islands, Puerto Rico, and the District of Columbia, that
2
COVID-19: States Struggled to Implement CARES Act
administrative body is a State Workforce Agency. There Unemployment Insurance Programs, Report No. 19-21-
are 53 State Workforce Agencies, including the 50 states, 004-03-315 (May 28, 2021), available at:
the U.S. Virgin Islands, Puerto Rico, and the District https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-
of Columbia. The CARES Act also provided certain UI 03-315.pdf
benefits to American Samoa, the Commonwealth of
3
ETA Should Do More to Assist Vulnerable States
the Northern Mariana Islands, the Federated States of Prepare for Disaster Unemployment Assistance Program
Micronesia, Guam, the Marshall Islands, and the Republic Implementation, Report No. 04-20-002-03-315 (September
of Palau, provided the territory signs an agreement with 29, 2020), available at: https://www.oig.dol.gov/public/
the Department. reports/oa/2020/04-20-002-03-315.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 11
Significant Concerns
Figure 1: Three Key Pandemic-Related UI Programs
PUA PEUC FPUC
PUA provided UI PEUC provided FPUC provided a weekly
benefits to individuals additional weeks to supplement to UI benefits
who were not individuals who had from 03/27/20 to 07/31/20
traditionally eligible for exhausted their regular ($600) and from 12/28/20
UI benefits. UI benefits. to 09/06/21 ($300).
Source: CARES Act and related extensions
were implemented promptly. For the PUA, PEUC, Reducing Improper Payments Including Fraud
and FPUC programs, we identified that, on average,
it took states between 25 and 50 days for the first For over 20 years, the OIG has reported on the
payment to be disbursed after passage of the Department’s limited ability to measure, report, and
CARES Act.4 reduce improper payments in the UI program, which
has experienced some of the highest improper payment
Further in-depth OIG work found continuing rates across the federal government.6 The reported
programmatic weaknesses led to workers improper payment estimate for the regular UI program
unemployed through no fault of their own suffering has been above 10 percent for 15 of the last 19 years.
lengthy delays in receiving benefits. We found that— Our recommendations have specifically included the
from April 1, 2020, to March 31, 2021—only 5 of the need for the Department to estimate improper payments
53 State Workforce Agencies (SWA) were able to within federally funded temporary emergency programs.
timely pay benefits, including the FPUC supplement,
to regular UI claimants.5 As a result, during the year In August 2020, we recommended7 the Employment
following the passage of the CARES Act, more than and Training Administration (ETA) estimate the
six million Americans waited a month or more for
pandemic-related UI benefits. Furthermore, states
6
Fraud is a type of improper payment. The Office of
Management and Budget explains that, at a high level, a
are still challenged in paying claimants timely. For
payment is “improper” if made in an incorrect amount or
the month of August 2022, only 8 percent of states to the wrong recipient. Improper payments can result in
were paying regular UI claimants timely versus 75 a money loss that was either unintentional (accidental)
percent before the pandemic started. or intentional (fraud). Office of Management and Budget,
“Transmittal of Appendix C to OMB Circular A-123,
4
COVID-19: States Struggled to Implement CARES Act Requirements for Payment Integrity Improvement,”
Unemployment Insurance Programs, Report No. 19-21- Memorandum (March 5, 2021), last accessed September
004-03-315 (May 28, 2021), available at: https://www.oig. 27, 2022, available at: https://www.whitehouse.gov/wp-
dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf content/uploads/2021/03/M-21-19.pdf
5
COVID-19: ETA and States Did Not Protect Pandemic- 7
COVID-19: More Can Be Done to Mitigate Risk to
Related UI Funds from Improper Payments including Unemployment Compensation under the CARES Act,
Fraud or from Payment Delays, Report No. 19-22-006-03- Report No. 19-20-008-03-315 (August 7, 2020), available
315 (September 30, 2022), available at: https://www.oig. at: https://www.oig.dol.gov/public/reports/oa/2020/19-20-
dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf 008-03-315.pdf
12 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
improper payment rate for pandemic-related UI
programs. In December 2021, consistent with
our recommendation, ETA reported an improper WHAT IS AN IMPROPER PAYMENT?
payment rate of 18.71 percent for 2021, which ETA
applied to two of three key pandemic UI programs,
A payment is improper if it should not have
FPUC and PEUC. ETA stated it will report on the
been made or was to the wrong recipient.
third program, PUA, in 2022.
*
Examples include overpayments
Applying the 18.71 percent to the estimated
and underpayments.
$872.5 billion in pandemic-related UI funding,8
*
at least $163 billion in pandemic UI benefits could
A improper payment can be unintentional
have been paid improperly, with a significant
or intentional.
portion attributable to fraud. Based on our audit
*
and investigative work, the improper payment
Intentional improper payments are more
rate for pandemic-related UI payments is likely
commonly referred to as financial fraud.
higher. For example, our in-depth analysis of
4 states9 found that, in the 6 months after CARES
Act passage, an estimated $30.4 billion of the
$71.7 billion in PUA and FPUC benefits were paid (PII) and continuing UI program weaknesses
improperly (42.4 percent). We estimated $9.9 billion identified by the OIG over the last several years,
of that was paid to likely fraudsters (13.8 percent). allowed criminals to defraud the system. Because
many states were not prepared to process the
As the OIG has reported, the unprecedented extraordinary volume of new UI claims and
infusion of federal funds into the UI program gave struggled to implement the new programs, some
individuals and organized criminal groups a high- internal controls that had been traditionally used or
value target to exploit. That, combined with easily recommended for processing UI claims were not
attainable stolen personally identifiable information initially implemented.
In one audit, we found that, from March 28, 2020,
8
ETA’s reported improper payment rate estimate of 18.71
to September 30, 2020, in 4 states, likely fraudulent
percent does not include the PUA program. However,
claims were paid 60.5 percent of the time. For
it is the most current improper payment rate from ETA.
example, we identified 1 claimant who filed a claim
Furthermore, PUA had control weaknesses that may have
from a 3-bedroom house that shared the same
facilitated comparable or greater improper payments.
physical address as 90 other claims and used
Therefore, applying ETA’s rate to all of the estimated $872.5
the same email address as 145 other claims.10
billion in CARES Act UI funding including PUA would equate
to at least $163 billion in improper payments.
9
COVID-19: ETA and States Did Not Protect Pandemic- 10
COVID-19: ETA and States Did Not Protect Pandemic-
Related UI Funds from Improper Payments including Related UI Funds from Improper Payments including
Fraud or from Payment Delays, Report No. 19-22-006-03- Fraud or from Payment Delays, Report No. 19-22-006-03-
315 (September 30, 2022), available at: https://www.oig. 315 (September 30, 2022), available at: https://www.oig.
dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 13
Significant Concerns
In total, the likely fraudster(s) received $1,569,762 in The OIG is currently reviewing an
unemployment benefits. In addition, our investigative unprecedented volume of UI investigative
work has shown that one fraudster could have matters. Prior to the pandemic, the OIG opened
been issued several UI debit cards, with tens of approximately 120 UI investigative matters
thousands of dollars on each card. annually. Since the pandemic started, the OIG
has opened over 190,000 investigative matters
PUA’s expanded coverage, for a population of involving the UI program. That is an increase
claimants who were traditionally ineligible to receive of more than 1,000 times in the volume of
UI benefits,11 presented significant challenges UI work we are facing. UI investigations now
to states. The reliance solely on claimant self- account for approximately 96 percent of the
certifications without evidence of eligibility and wages OIG investigative case inventory, compared to
during PUA’s first 9 months rendered the program approximately 11 percent prior to the pandemic.
extremely susceptible to improper payments including
fraudulent payments. Notably, in the first 6 months The OIG has identified13 $45.6 billion of
after the CARES Act passed, we found 4 states paid potentially fraudulent UI benefits paid from March
$1 out of $5 in PUA benefits to likely fraudsters.12 2020 through April 2022 in four specific high-
Congress addressed the self-certification issue under risk areas, to individuals with Social Security
the Continued Assistance for Unemployed Workers numbers: (1) filed in multiple states, (2) of
Act of 2020, requiring individuals receiving PUA to deceased persons, (3) of federal prisoners, and
substantiate their employment. However, a significant (4) used to file UI claims with suspicious email
amount of UI benefit money had already been paid to accounts (see Figure 2).
likely fraudsters.
Figure 2: Four High-Risk Areas for Potential UI Fraud
Multistate Claimants Deceased Persons Federal Prisoners Suspicious Email Accounts
Source: OIG analysis14
11
The new PUA program extended unemployment benefits 13
Alert Memorandum: Potentially Fraudulent
to the self-employed, independent contractors, those with Unemployment Insurance Payments in High-Risk Areas
limited work history, and other individuals not traditionally Increased to $45.6 Billion, Report No. 19-22-005-03-315
eligible for unemployment benefits who were unable to (September 21, 2022), available at: https://www.oig.dol.
work as a direct result of COVID-19. gov/public/reports/oa/2022/19-22-005-03-315.pdf
12
COVID-19: ETA and States Did Not Protect Pandemic- 14
COVID-19: States Struggled to Implement CARES Act
Related UI Funds from Improper Payments including Unemployment Insurance Programs, Report No. 19-21-
Fraud or from Payment Delays, Report No. 19-22-006-03- 004-03-315 (May 28, 2021), available at:
315 (September 30, 2022), available at: https://www.oig. https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-
dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf 03-315.pdf
14 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
We shared our methodology and underlying data15 In April 2022, ETA stated that a “swift rollout of a
regarding the potential fraud in these high-risk areas new government benefit program…would be 30
with the Department for further dissemination to to 48 months.” We agree that “states’ ability to
the SWAs, and we recommended they establish provide benefit payments within [1 to 2] months for
effective controls to mitigate fraud and other a new, temporary UI program is a very impressive
improper payments to ineligible claimants. achievement given the extensive, complex
requirements and activities that were necessary for
After the CARES Act passed, ETA worked quickly implementation.” However, we are concerned that,
to obtain signed state agreements and ensure given the nature of emergency situations, states
pandemic-related UI funds were available. Despite would be unlikely to have a lengthy rollout period
this and other efforts, ETA’s guidance and oversight for emergency programs. ETA and states must
was not timely enough to prevent historic improper include risk planning that would identify measures to
payments of UI benefits including fraud. facilitate the creation of new programs similar to the
ones created in response to the pandemic, including
For example, in July 2020, ETA notified California steps to ensure eligibility procedures and Benefit
that its PUA monetary determination form did not Payment Control operations continue to function.
have a procedure in place for re-determining the
claimant’s weekly benefit if the claimant did not Providing the OIG Access to UI
provide proof of earnings or provided insufficient Claimant Data and Wage Records
proof. California responded that the problem
would be addressed by the end of August 2020. The OIG’s lack of ongoing, timely, and complete
However, by the end of August, California had access to UI claimant data and wage records
paid approximately $25.4 billion in PUA benefits, from SWAs is of significant concern because this
including FPUC.16 deficiency directly and adversely impedes the
OIG’s ability to provide independent oversight and
15
Data provided to DOL for further dissemination to combat fraud, waste, and abuse to help DOL reduce
the SWAs included data related to more than 3 million improper payments in its programs, including regular
suspicious claimants associated with over $16 billion that and temporary UI programs.
the OIG identified in our alert memorandum dated June
16, 2021. The over $16 billion did not include about $915 Prior to August 2021, DOL required SWAs
million in potential fraud that was identified under more to disclose UI data only for specific fraud
than one area. As soon as is practical, the OIG will share investigations. DOL asserted it lacked the authority
further data related to additional suspicious claimants to require SWAs to provide UI data to the OIG for
identified in a subsequent alert memorandum with DOL so audits. As a result, the OIG was forced to take the
that it can disseminate this information to the SWAs. The unprecedented step of using Inspector General
methodology has not changed. (IG) subpoenas to obtain this critical data. DOL’s
16
COVID-19: ETA and States Did Not Protect Pandemic- interpretation of its regulations hindered the OIG’s
Related UI Funds from Improper Payments including ongoing, timely, and complete access to state UI
Fraud or from Payment Delays, Report No. 19-22-006-03- claims data to assist in detecting and deterring
315 (September 30, 2022), available at: https://www.oig. large-scale fraud.
dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 15
Significant Concerns
Specifically, DOL continues to interpret regulations reminded states of the OIG’s authority under the IG
at 20 Code of Federal Regulations (C.F.R.) Part 603 Act and strongly encouraged states to comply with
as prohibiting ETA from requiring SWAs to provide OIG requests. ETA also informed us it is considering
UI data to the OIG for all audit and investigative comprehensive updates to 20 C.F.R. Part 603. We
purposes, except those involving specific instances met with ETA numerous times and requested a
of suspected fraud. This interpretation and written plan with projected timelines. ETA provided
subsequent guidance to SWAs contradict the a plan to the OIG in July 2022. The projected
Inspector General Act of 1978, as amended (IG Act), timeline creates a 14-month gap between when the
which authorizes mandatory OIG access to DOL grants requiring OIG access end on December 31,
grantee information, including SWAs’ UI data. 2023, and the publication of updated regulations
anticipated to be effective in February 2025.
In our June 2021 alert memorandum,17 we
recommended ETA amend 20 C.F.R. § 603.5 The OIG would not have complete and timely
and § 603.6(a) through the rulemaking process access, as authorized under the IG Act, to SWAs’ UI
to reinforce that SWAs’ UI information must data during the 14-month timeframe. ETA stated it
be provided to the OIG for all IG engagements is exploring options for interim solutions to address
authorized under the IG Act, including audits, the gap. However, the OIG does not have specific
evaluations, and investigations. To date, ETA has information regarding the Department’s plans to
implemented only a temporary solution. On August update the regulations or implement other temporary
3, 2021, ETA issued Unemployment Insurance solutions to close the gap, which may prevent us
Program Letter (UIPL) No. 04-17, Change 1, from identifying additional potentially fraudulent UI
requiring SWAs to disclose UI data to the OIG for benefit payments. DOL needs to take expedited
audits and investigations during the period January actions to adapt its regulations. In the interim, ETA
27, 2020, to September 6, 2021. ETA also awarded needs to issue updated guidance to notify SWAs of
fraud prevention grants to states conditioned the OIG’s authority to access information for both
on requiring OIG access to their UI data for audits and investigations without interruption.
investigative and audit purposes through December
31, 2023. However, ETA’s actions are not sufficient The OIG must have complete and timely access to
to resolve the OIG’s recommendation or concerns. SWAs’ UI claimant and wage records to conduct
appropriate audit and investigative oversight of UI
In response to our recommendation, ETA has taken funds. As outlined in our September 2022 alert
limited actions to support the OIG having access memorandum,18 disclosure limitations regarding
to UI data. For example, it published guidance that UI potential fraud data contradict the IG Act. The
delays since 2020 in providing the OIG timely
17
Alert Memorandum: The Employment and Training access to UI data have led to interruptions in
Administration Needs to Issue Guidance to Ensure State
Workforce Agencies Provide Requested Unemployment 18
Alert Memorandum: Potentially Fraudulent
Insurance Data to the Office of the Inspector General, Unemployment Insurance Payments in High-Risk Areas
Report No. 19-21-005-03-315 (June 16, 2021), available Increased to $45.6 Billion, Report No. 19-22-005-03-315
at: https://www.oig.dol.gov/public/reports/oa/2021/19-21- (September 21, 2022), available at: https://www.oig.dol.
005-03-315.pdf gov/public/reports/oa/2022/19-22-005-03-315.pdf
16 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
identifying potentially fraudulent payments much management to timely correct problems. To
earlier in the pandemic. underscore this point, based on the data obtained
by the OIG, our auditors, investigators, and data
In support of the OIG’s oversight activities, the scientists in our Office of Audit and Office of
OIG needs access to UI claimant data and wage Investigations worked collaboratively to identify
records from SWAs to verify claimants’ eligibility $45.6 billion in potential UI fraud19 paid in the four
for UI benefits, including both initial eligibility (and specific high-risk areas, such as to multistate
amounts) and continuing eligibility. Timely access claimants and deceased persons.
to these records will facilitate the OIG’s efforts to
identify claimants who appear to be part of large- Extending the Statute of Limitations
scale fraud schemes or receiving benefits improperly associated with Pandemic-Related
due to systemic program weaknesses. Further, timely
Unemployment Insurance Fraud
access to UI data will allow the OIG to use our data
analytics program to identify and investigate complex
identity theft and multistate fraud schemes, as we
have successfully done during the pandemic. The OIG
could also analyze UI data to assess the effectiveness
of UI reemployment programs’ outcomes.
Congress should consider legislative action to
authorize DOL and the OIG to have unfettered
access to UI claimant data and wage records for
our oversight responsibilities. Unfettered access to
As the primary federal law enforcement agency
SWA UI claimant data and wage records systems
responsible for providing oversight of the UI
would further enable the OIG to quickly identify
program, the OIG has vigorously pursued COVID-19
large-scale fraud and expand its current efforts to
pandemic‑related UI fraud. In fact, IG Larry D.
share emerging fraud trends with ETA and states to
Turner recently announced that OIG investigations
strengthen the UI program and deter fraud.
have resulted in more than 1,000 individuals being
charged with crimes involving UI fraud since March
The power and use of data and predictive
2020.20 Even with these efforts, the current statute
analytics enables the OIG to continuously monitor
DOL programs and operations to detect and 20
“Labor Watchdog’s Pandemic Work Results in More
investigate fraud. Continuous monitoring serves
Than 1,000 Individuals Charged with UI Fraud and $45.6
as a deterrent to fraud, allows the OIG to promptly
Billion Identified in Potentially Fraudulent Pandemic UI
discover areas of weakness, and assists DOL
Benefits,” press release (September 22, 2022), available
at: https://www.oig.dol.gov/public/Press%20Releases/
19
Alert Memorandum: Potentially Fraudulent DOL-OIG%20Pandemic%20Work%20Results%20in%20
Unemployment Insurance Payments in High-Risk Areas More%20Than%201000%20Individuals%20Charged%20
Increased to $45.6 Billion, Report No. 19-22-005-03-315 with%20UI%20Fraud.pdf. For more details about OIG
(September 21, 2022), available at: https://www.oig.dol. investigations, please visit: https://www.oig.dol.gov/OIG_
gov/public/reports/oa/2022/19-22-005-03-315.pdf Pandemic_Response_Portal.htm.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 17
Significant Concerns
of limitations associated with UI fraud means a SWA, conspirators orchestrated a scheme to file
federal law enforcement may still fall short in fully UI claims using stolen identities, which were often
investigating and prosecuting the most egregious associated with elderly citizens.21 The conspirators
cases of UI fraud, especially given the volume then opened bank accounts using the stolen
and complexity of UI fraud matters we are tasked identities for the sole purpose of having fraudulent
to investigate. Currently, the statute of limitations UI proceeds deposited into them. They withdrew the
for many of these cases will expire in 2025 as the fraudulent proceeds and purchased money orders
statutes most often used to prosecute UI fraud have made out to themselves and to an online vehicle
5-year limitations. auction company. The conspirators then laundered
the UI funds by using the money orders to purchase
We are concerned that, unless Congress acts to salvaged automobiles in the United States and ship
extend the statute of limitations for fraud associated them to Nigeria. They also facilitated the transfer of
with pandemic‑related UI programs, many groups conspiracy proceeds to overseas bank accounts in
and individuals that have defrauded the UI program Nigeria. This complex fraud investigation spanned
may escape justice. both domestic and foreign jurisdictions. The
defendants have been convicted of conspiracy to
The volume of open fraud matters is unprecedented commit wire fraud.
for the OIG. Prior to the pandemic, the OIG opened
approximately 100 UI fraud investigative matters Criminal investigations, such as the one previously
each year. Between March 1, 2020, and August referenced, conducted to bring these bad actors
1, 2022, the OIG opened more than 190,000 to justice require significant resources and time.
investigative matters involving UI fraud. That Additional resources from Congress have allowed
represents over a 1,000 times increase of UI fraud the OIG to hire more criminal investigators and
matters the OIG has managed. We continue to significantly expand the number of staff reviewing
receive, on average, 200 to 300 new pandemic- UI fraud matters. We have also leveraged
related UI fraud complaints each week from the additional federal resources by partnering with
National Center for Disaster Fraud. As a direct result the U.S. Department of Justice (DOJ) and other
of the exponential increase in pandemic-related UI federal law enforcement agencies on the National
fraud referrals, OIG investigators are now carrying Unemployment Insurance Task Force, the COVID-19
the largest case inventory in the OIG’s history. Fraud Enforcement Task Force, and the COVID-19
We are currently dedicating the majority of our Fraud Enforcement Strike Force teams to investigate
investigative resources to addressing pandemic- and prosecute UI fraud.
related UI fraud matters.
Pandemic-related UI fraud referrals that we receive 21
Department of Justice, U.S. Attorney’s Office, Northern
often include complex schemes involving criminal District of Alabama, “Georgia Resident Pleads Guilty to
enterprises and bad actors who use sophisticated COVID-19 Unemployment Fraud Targeting Several States,”
techniques to maintain their anonymity. For instance, press release (June 8, 2022), available at: https://www.
in a recent pandemic-related UI fraud investigation justice.gov/usao-ndal/pr/georgia-resident-pleads-guilty-
into the theft of over $4 million in UI benefits from covid-19-unemployment-fraud-targeting-several-states
18 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
While these investigative resources have helped us required under relevant laws and policies. The OIG
address the incredible volume of UI fraud matters, remains concerned about OSHA’s ability to target its
the process of collecting and cleaning the SWA data compliance activities to areas where it can have the
required a significant amount of time. We are now greatest impact.
leveraging the UI data we have been able to collect
to identify those matters that pose the greatest OSHA carries out its compliance responsibilities
risk to the UI program; however, to most effectively through a combination of self-initiated inspections
and efficiently investigate these matters, we need and those resulting from complaints and referrals.
additional time and data. The OIG anticipates In Fiscal Year (FY) 2021, OSHA conducted 24,333
identifying and investigating pandemic-related UI inspections, including 13,749 unprogrammed
fraud until the statute of limitations expires, which, inspections. Unprogrammed inspections result
absent congressional action, will generally be no from employee complaints, injuries/fatalities, and
later than September 2025. referrals. OSHA must target the most egregious or
persistent violators to protect the most vulnerable
In August 2022, an extension of the statute of worker populations. The number of OSHA
limitations was implemented for crimes involving inspectors has steadily decreased from a high of
the U.S. Small Business Administration’s (SBA) 860 in 2014 to 750 in 2021. As a result of resource
Paycheck Protection Program (PPP) and Economic limitations, the program only reaches a fraction of
Injury Disaster Loan (EIDL) program.22 Congress the worksites.
should likewise consider extending the statute of
limitations for existing laws when pandemic-related Additionally, employers who underreport injuries
UI programs are defrauded. The expansion of the create further challenges for OSHA in determining
statute of limitations would provide investigators and the most hazardous worksites. OSHA has lacked
prosecutors time to effectively and efficiently pursue complete information on COVID-19 infection rates at
and hold accountable those who defrauded the UI worksites because it does not require employers to
program and victimized the American people during report all COVID-19 cases among workers. OSHA
the pandemic. only requires employers to report a work-related
fatality, inpatient hospitalization, amputation, or loss
Protecting the Safety and Health of an eye. This limitation impacts OSHA’s ability
of Workers to focus its inspection and compliance efforts to
ensure that industries and worksites where workers
The Occupational Safety and Health Administration are exposed to safety and health violations are
(OSHA) is responsible for the safety and health of sufficiently covered.
approximately 130 million workers employed at more
than 8 million worksites, and OSHA must ensure While OSHA has issued several guidance
employers are providing the level of protection documents to enhance safety provisions during the
pandemic, guidance does not carry the weight of
OSHA rules or standards. Although OSHA withdrew
22
The White House, “Bills Signed: H.R. 7334 and H.R.
the Vaccination and Testing ETS as an enforceable
7352,” (August 5, 2022), available at: https://www.
standard, agency officials stated they are prioritizing
whitehouse.gov/briefing-room/legislation/2022/08/05/bills-
signed-h-r-7334-and-h-r-7352/
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 19
Significant Concerns
resources to focus on finalizing a permanent the last several years. According to MSHA, it is
COVID-19 health care standard. focusing on powered haulage safety by issuing
guidance on preventing accidents and meeting
Protecting the Safety and Health with mine personnel to emphasize best safety
of Miners practices and training. On September 9, 2021,
MSHA released a proposed rule requiring mines
The Mine Safety and Health Administration’s to have written safety programs for mobile and
(MSHA) ability to complete mine inspections while powered haulage equipment. The OIG will continue
safeguarding the health of miners and the agency’s to monitor MSHA’s efforts to decrease powered
staff during the COVID-19 pandemic is a concern haulage accidents.
for the OIG. Some MSHA inspectors self-identified
as being at high risk during the pandemic, which MSHA also needs to develop strategies to address
meant they were no longer required to perform lung disease in coal mining states, particularly by
mine inspections. The reduction in the number of updating regulations regarding silica content in
inspectors able to conduct inspections, coupled respirable dust.23 Respirable crystalline silica can
with the logistical challenges of the pandemic, is a cause deadly and incurable chronic conditions,
concern for the OIG. such as black lung disease. MSHA’s allowable limit
for silica has remained unchanged for more than
50 years, even as the acceptable limit for silica
exposure for workers other than miners has been
significantly decreased by OSHA regulations.
In June 2022, MSHA announced a Silica
Enforcement Initiative to better protect miners from
health hazards related to repeated overexposures
to respirable crystalline silica. For coal miners who
have already developed pneumoconiosis,24 MSHA
has implemented an outreach campaign to increase
their awareness of their Part 90 right to exercise the
option to work in a less dusty area of the mine and
suffer no loss in pay. However, the OIG continues to
23
MSHA Needs to Improve Efforts to Protect Coal Miners
from Respirable Crystalline Silica, Report No. 05-21-001-
06-001 (November 12, 2020), available at: https://www.oig.
We are also concerned with the high incidence
dol.gov/public/reports/oa/2021/05-21-001-06-001.pdf
of powered haulage accidents in mines, which
24
Pneumoconioses are a group of lung diseases,
accounted for almost half of all mine fatalities
such as black lung and silicosis, caused by the lungs’
in 2021 and have been continuing a trend in
reaction to inhaling certain dusts. The main cause of the
which powered haulage accidents account for a
pneumoconioses is workplace exposure.
disproportionate share of overall fatalities over
20 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
monitor MSHA’s progress toward adopting a rule for address the economic and workforce-related
a lower silica exposure limit. impacts of the opioid crisis. Research suggests
that opioid dependency has been a leading cause
Improving the Performance of workforce exits for workers ages 25 to 54. To
Accountability of Workforce date, ETA has approved up to $143 million in
grants to address the opioid crisis. It is vital that
Development Programs
the Department monitor the performance of the
discretionary grants it has awarded for the delivery
The OIG has concerns about the Department’s
of services to employers and workers affected by
ability to ensure its investments in workforce
the opioid crisis.
development programs are successful in advancing
participants’ skills and placing them in suitable
As expressed in a March 2022 advisory report,26
employment. The COVID-19 pandemic continues
the OIG continues to be concerned about three
to highlight the importance of the Department’s
areas in particular where our body of work has
workforce development programs assisting job
identified weaknesses: awarding grants, reviewing
seekers and employers in finding and filling available
grant recipients’ use of funds, and measuring
jobs and assisting workers in developing the right
grant recipient performance. While ETA has
skills to fill new job openings. The Department’s
taken action to address many prior years’ findings
ability to obtain accurate and reliable data to
and recommendations related to eligibility,
measure, assess, and make decisions regarding the
effectiveness, and compliance and monitoring,
performance of grant recipients, contractors, and
it must also proactively monitor key areas and
states in meeting the programs’ goals is critical.
continue to assess for these weaknesses to ensure
they do not reoccur.
The Department needs to ensure its investments
in credential attainment align with local employers’
needs and are having the desired impact on Ensuring Pandemic Safety at Job
participants’ ability to obtain or advance in a job. In Corps Centers and Addressing
a 2018 audit 25 that followed up on the employment Learning Gaps
status of a sample of Job Corps students 5 years
after they left the program, we found that Job The OIG is concerned about the ability of Job
Corps faced challenges in demonstrating the Corps to mitigate the risk and spread of COVID-19
extent to which its training programs helped those across its centers. Like many other educational
participants obtain meaningful jobs appropriate to institutions, keeping up with evolving safety and
their training. health guidance, new COVID-19 variants, and
varying vaccine rates across the country will make it
In March 2018, ETA announced the National Health a challenge for Job Corps to maintain low COVID-19
Emergency Grant program to help communities case rates at its centers. Job Corps centers are
25
Job Corps Could Not Demonstrate Beneficial Job
26
Advisory Report: ETA’s Management of Workforce
Training Outcomes, Report No. 04-18-001-03-370 (March Development Grants: Key Concerns, Report No. 09-22-
30, 2018), available at: https://www.oig.dol.gov/public/ 001-03-001 (March 31, 2022), available at: https://www.
reports/oa/2018/04-18-001-03-370.pdf oig.dol.gov/public/reports/oa/2022/09-22-001-03-001.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 21
Significant Concerns
mostly residential, with students and some staff review of Job Corps’ corrective actions showed Job
living on campus. While Job Corps had transitioned Corps has taken steps to improve center safety
to distance learning programs during the height and security by establishing stronger internal
of the COVID-19 pandemic, it has now resumed controls and security measures, which included the
in-person instruction. The OIG is also concerned installation of security cameras, perimeter fencing,
with the potential learning gaps, such as those and better lighting at centers.
caused by delays to in-person instruction, that
occurred because of the temporary suspension
of Job Corps instructional programs and how
Job Corps intends to remediate any gaps.
Ensuring the Safety of Students and
Staff at Job Corps Centers
In addition to the safety challenges posed by the
COVID-19 pandemic, averting on-campus violence
and other potentially criminal behavior remains a
challenge for Job Corps centers. OIG audits from
201527 and 201728 found that some Job Corps
centers failed to report and investigate serious
misconduct, such as drug abuse and assaults.
The audits also determined that some Job Corps However, student misconduct concerns continue,
centers downgraded incidents of violence to and a March 2021 OIG audit report30 showed
lesser infractions, creating an unsafe environment the current process does not provide Job Corps
for students and staff. The follow-up work we centers the appropriate tools and resources to
completed in December 201729 and our ongoing properly evaluate applicants for substance abuse
and mental health issues as they enter the program
and does not ensure centers have the necessary
27
Job Corps Needs to Improve Enforcement and
resources to mitigate them. While ETA told us that
Oversight of Student Disciplinary Policies to Better Protect
it increased nursing and mental health consultants’
Students and Staff at Centers, Report No. 26-15-001-03-
hours at every center to help address these
370 (February 27, 2015), available at: https://www.oig.dol.
concerns, it determined pre-enrollment behavioral
gov/public/reports/oa/2015/26-15-001-03-370.pdf
assessments, of the type the OIG identified,
28
Review of Job Corps Center Safety and Security, Report
are not feasible legally or programmatically and
No. 26-17-001-03-370 (March 31, 2017), available at:
pre-enrollment academic readiness screening
https://www.oig.dol.gov/public/reports/oa/2017/26-17-001-
of prospective students does not align with the
03-370.pdf
29
Job Corps Took Action to Mitigate Violence, Drugs, and
30
Job Corps Should Improve Its Pre-Admission Evaluation
Other Student Misconduct at Centers, But More Needs to
Process, Report No. 05-21-001-03-370 (March 25, 2021),
Be Done, Report No. 26-18-001-03-370 (December 29,
available at: https://www.oig.dol.gov/public/reports/
2017), available at: https://www.oig.dol.gov/public/reports/
oa/2021/05-21-001-03-370.pdf
oa/2018/26-18-003-03-370.pdf
22 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
program’s eligibility criteria, nondiscrimination the OIG and the GAO. Those same rules created
obligations, and overall purpose to serve a diverse challenges regarding DOL’s responsibilities.
collection of youth. The OIG continues to monitor Additionally, DOL continues to have limited
various safety initiatives and actions taken by Job authority over the H-1B and PERM programs, which
Corps to keep students and staff safe. challenges the goal of protecting the welfare of the
nation’s workforce.
Maintaining the Integrity of Foreign
Labor Certification Programs The statute limits DOL’s ability to deny H-1B
applications and to investigate potential violations.
The DOL foreign labor certification (FLC) Specifically, DOL may only deny incomplete
programs are intended to permit U.S. employers to and obviously inaccurate H-1B applications
hire foreign workers to meet their workforce needs and has only limited authority to conduct H-1B
while protecting U.S. workers’ jobs, wages, and investigations in the absence of a complaint. DOL
working conditions. DOL’s administration of FLC has recently established a process to begin utilizing
programs under current laws has been a concern the Secretary-initiated H-1B investigations. The
for the OIG for decades. OIG investigations have PERM program itself is persistently vulnerable to
shown these visa programs, in particular the H-1B employers not complying with its qualifying criteria.
program for workers in specialty occupations, Therefore, both the PERM and H-1B programs
to be susceptible to significant fraud and abuse remain prone to fraud.
from perpetrators, including certain immigration
agents, attorneys, labor brokers, employers, and With various new DOL rules going into effect since
organized criminal enterprises. 2003, there have been opportunities for the PERM,
H-2A, and H-2B visa programs to change. For
In 2003, the OIG issued a white paper31 outlining example, these new rules implemented employer
vulnerabilities that then existed in four FLC attestation programs, which allow employers to
programs, permanent employment certification agree to the conditions of employment without
program (PERM), H-1B, H-2A, and H-2B, and, in providing supporting documentation to validate their
2020, we issued a similar report.32 We found the agreements. However, DOL has identified instances
post-2003 rules revamped the PERM, H-2A, and in which employers are not complying with the
H-2B visa programs, and addressed some of the conditions of employment, thereby reinforcing how
vulnerabilities cited in audits and investigations by susceptible these programs are to fraud.
31
Overview and Assessment of Vulnerabilities in the Finally, DOL has established a risk-based process
Department of Labor’s Alien Labor Certification Programs, to determine which H-2A and H-2B applications
Report No. 06-03-007-03-321 (September 30, 2003), to audit. The new selection process identifies
available at: https://www.oig.dol.gov/public/reports/ appropriate risk factors based on adjudication
oa/2003/06-03-007-03-321.pdf experience and available H-2A and H-2B application
32
Overview of Vulnerabilities and Challenges in Foreign processing data. DOL has implemented the process
Labor Certification Programs, Report No. 06-21-001-03- and started the audits. Because the process is still
321 (November 13, 2020), available at: https://www.oig. early in its implementation, it is difficult for ETA to
dol.gov/public/reports/oa/2021/06-21-001-03-321.pdf determine whether the applications audited were
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 23
Significant Concerns
those most likely to result in violations eligible for plans EBSA oversees relative to the number of
employer debarment. investigators it employs. Finally, EBSA lacks the
authority under the Federal Employees’ Retirement
Protecting the Security of Employee System Act (FERSA) to effectively oversee
Benefit Plan Assets more than $726 billion in federal employee Thrift
Savings Plan (TSP) assets.34 FERSA requires
The OIG remains concerned about the Employee EBSA to conduct regular compliance audits to
Benefits Security Administration’s (EBSA) ability to determine whether the Federal Retirement Thrift
protect the integrity of pension, health, and other Investment Board (the Board), an independent
benefit plans of about 152 million workers, retirees, agency, is fulfilling its fiduciary duties and properly
and their families under the Employee Retirement safeguarding TSP participants’ assets.
Income Security Act (ERISA) of 1974. In particular,
the OIG is concerned about the statutory limitations However, EBSA has no legal authority to compel
on EBSA’s oversight authority and inadequate the Board to implement its recommendations, which
resources to conduct compliance and enforcement. includes enforcing its recommendations to improve
A decades-long challenge to EBSA’s compliance the TSP’s cybersecurity posture. As a significant
program, ERISA provisions allow billions of dollars portion of the TSP’s infrastructure was recently
in pension assets to escape full audit scrutiny. transferred to an outside third-party vendor, we are
In 2013, we reported33 that as much as $3 trillion concerned about the threat cybersecurity breaches
in pension assets, including an estimated $800 pose to the TSP. More generally, identifying and
billion in hard-to-value alternative investments, mitigating cyber threats requires a high degree of
held in otherwise regulated entities such as banks, technical expertise. Cyber threats potentially place
received limited-scope audits that provided weak trillions of dollars in other ERISA-covered retirement
assurance to participants regarding the financial plan assets at risk.
health of their plans.
Managing Medical Benefits in the
EBSA needs to focus its limited available resources Office of Workers’ Compensation
on investigations that are most likely to result in Programs
the prevention, detection, and correction of ERISA
violations, particularly given the number of benefit The OIG has concerns about the ability of the
Office of Workers’ Compensation Programs
33
EBSA Needs to Provide Additional Guidance and (OWCP) to effectively manage rising home health
Oversight to ERISA Plans Holding Hard-to-Value care costs in the Energy Employees Occupational
Alternative Investments, Report No. 09-13-001-12-121 Illness Compensation Program Act (Energy
(September 30, 2013), available at: https://www.oig.dol. Workers) program and about the use and cost
gov/public/reports/oa/2013/09-13-001-12-121.pdf of pharmaceuticals in the Federal Employees’
34
The total value of TSP assets fluctuates over time and is Compensation Act (FECA) program. The Department
affected by market volatility. For example, the asset value needs to make sure it has controls in place to ensure
was $827 billion as of December 31, 2021, according to that the medical benefits it provides to energy
TSP financial statements, as compared to $726 billion as workers and FECA program claimants are safe,
of August 31, 2022, according to EBSA. effective, medically necessary, and cost-effective.
24 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
compounded drug spending from almost $256
million in FY 2016 to less than $176,000 in FY 2020
and reduced opioid spending from over $86 million
in FY 2016 to approximately $29 million in FY 2020,
according to data the agency provided. However,
given the high risk of fraud related to prescription
payments, OWCP needs to proactively analyze and
monitor FECA program costs to promptly detect
and address emerging issues before they manifest
into material concerns.
Consistent with prior audit recommendations by
the OIG, OWCP imposed restrictions on opioid
prescriptions in September 2019. In addition, in
March 2021, OWCP contracted with a pharmacy
benefit manager that will be responsible
In the Energy Workers program, with an aging for pharmaceutical transactions, including
claimant population and an increased demand for implementation of FECA eligibility determinations
home health care services, there is a potential and pricing for prescription drugs. OWCP needs
for providers to exploit these benefits through to provide adequate oversight over the pharmacy
unethical practices. Since 2010, home and benefit manager to ensure the most cost-effective
residential health care costs paid by the Energy and safe pharmaceutical benefits.
Workers program have grown from almost $100
million to approximately $801 million, amounting Ensuring the Solvency of the Black
to approximately 73 percent of all medical benefits Lung Disability Trust Fund
paid by the program in FY 2021. OWCP needs to
continue its efforts to analyze home health care Miners and their dependent survivors receive
billing for abusive practices and to identify and refer lifetime benefits when awarded under the Black
allegations involving potential fraud or abuse to the Lung Benefits Act. Mine operators pay these
OIG for further investigation. benefits when possible, and the Black Lung
Disability Trust Fund (Trust Fund) pays the benefits
In the FECA program, we are currently conducting when a miner’s former employer does not or
an audit to determine if OWCP effectively managed cannot assume liability. The OIG’s primary concern
pharmaceutical spending from FY 2015 to FY is that the current annual income of the Trust
2020. Past audits have identified internal control Fund (primarily from an excise tax on coal) is not
weaknesses related to OWCP’s management of sufficient to cover annual benefit obligations to
pharmaceuticals. For example, OWCP allowed meet administrative costs and to service past debt.
increases in billing statements for compounded The Trust Fund expenditures have consistently
drugs to go undetected and failed to identify exceeded revenue and it has essentially borrowed
the overuse of opioids. After implementing new with interest from the U.S. Department of the
policies, OWCP significantly decreased total Treasury’s (Treasury) general fund almost every
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 25
Significant Concerns
year since 1979. According to DOL’s FY 2021 Securing and Managing Data and
Agency Financial Report, the Trust Fund had Information Systems
to borrow approximately $2.3 billion to cover its
expenditures, which included debt and interest We remain concerned about the Department’s ability
payments. As of September 30, 2021, the Trust to safeguard and manage its data and information
Fund was carrying close to a $6.1 billion deficit systems. The Department’s agencies rely on its
balance, which is projected to grow to nearly $13 information technology (IT) systems to obtain and
billion (in constant dollars) by September 30, 2046. create vast amounts of information and data in
carrying out their missions, and included in these
The excise tax that funds the Trust Fund is data are the PII and personal health information
levied on domestic sales of coal mined in of the public, including federal employees. The
the United States. On January 1, 2022, the Department moved to an IT shared services model
temporary increased tax rates of $1.10 per ton that centralized IT for approximately 70 percent
of underground-mined coal and $0.55 per ton of of its information systems under the Office of
surface-mined coal sold were reduced to the rates the Assistant Secretary for Administration and
originally set when the Trust Fund was established Management (OASAM). While we have seen some
in 1978 at $0.50 per ton of underground-mined improvements in the Department’s IT management,
coal and $0.25 per ton of surface-mined coal. On we continue to have concerns with the Department’s
August 16, 2022, the Inflation Reduction Act of information security program in the following areas:
2022 made permanent the temporary increased
• cybersecurity oversight,
excise tax rates on underground and surface-
mined coal. However, we remain concerned the • supply chain,
permanent tax increases are still not sufficient to • cloud/third party,
ensure solvency of the Trust Fund.
• end user/remote security, and
• emerging technology and security requirements,
such as zero trust architecture.
26 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Significant Concerns
Securing the Department’s information systems The Department continues to move its information
remains a concern as we continue to identify systems to a shared services model and expand
recurring deficiencies in the Department’s efforts to its use of cloud and third-party providers for its
manage and implement security controls throughout information systems, infrastructure, and services.
its information security program. While the DOL’s ability to provide oversight and management
Department has moved information systems to its required of these systems and services remains
IT shared services model to improve management a concern. We continue to identify deficiencies in
and security of the systems, the Department has the Department’s oversight of information systems
not adequately implemented information security managed and/or operated by a third-party on behalf
controls and technology tools required to manage of the Department. As DOL continues this transition,
and monitor IT security. the Department’s ability to provide the oversight and
to retain the specialized knowledge and expertise
Recurring deficiencies were identified in four of required to protect and manage its systems,
the five information security functional areas (as including the contracted systems, remains at risk.
defined by the National Institute of Standards and Our recent reviews identified inadequate oversight
Technology Cybersecurity Framework) and occurred of continuous monitoring reviews and third-party
in the performance of security control assessments, systems. Also, prior year recommendations
account management controls, configuration regarding validation of annual third-party and cloud
management, and maintenance of system security service provider assessments and continuous
plans. These deficiencies continue to hinder the monitoring training remained unimplemented.
Department in identifying security weaknesses;
protecting its systems and data; and detecting, As employees return to the office, the Department is
responding to, and recovering from incidents. changing its work and IT landscape to significantly
Furthermore, we are still concerned that the expand remote and telework operations for its
remaining systems and agencies not a part of the IT employees. This expansion continues to raise our
shared services are not receiving the governance concern with DOL’s ability to secure the changing
and oversight required to sufficiently secure all of and expanding endpoint security requirements.
DOL’s information and systems. In the past few years, more DOL employees are
teleworking and more computers are connected
While Supply Chain Risk Management remotely or connected as a service to primary
(SCRM) has been an ongoing concern, recent office locations. DOL needs to ensure the endpoint
cyberattacks, such as the 2020 Solar Winds security between all connection points is sufficiently
attack, which took advantage of the supply chain controlled and managed.
process, have increased awareness and related
concerns throughout the industry and the federal The Department’s ability to adequately implement
government. During our annual information new security technologies and requirements are
security testing and follow-up on prior year also of concern. As federal laws, regulations,
recommendations, we determined that DOL has and guidance require new and tougher security
not adequately defined SCRM policies, procedures, practices and standards, our recent reviews
and strategies. identified DOL has not timely implemented current
security requirements.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 27
Significant Concerns
These areas of concern represent ongoing risks
to the confidentiality, integrity, and availability of
DOL’s information systems, which are necessary
to support the Department’s mission. Our concern
is whether DOL, with its current IT governance
structure, can implement the necessary strategies
and tools to provide sufficient capability and
effective security for the Department’s data and
information systems as well as to support the
execution of its mission.
Improving Job Corps’ Procurement
Process
Job Corps spends over $1.7 billion annually to
operate 121 centers and is currently transitioning
center operations from cost reimbursement to
fixed-price contracts. The Department believes
that this transition will lower government financial
risk, reduce the administrative burden, generate
more pre-award efficiencies, and encourage more
competition for contracts. Increased competition
among contractors should lead to better contractor
performance and improved services, including those
for centers’ safety and security.
We are concerned about the transition to fixed-
price contracting because prior OIG work in this
area found Job Corps procurement processes did
not ensure the best value for taxpayers, including
whether certain services were provided.35
To address these concerns, the Department
indicated it has taken significant steps to define
contract requirements, increase competition, and
improve contract oversight.
35
Job Corps National Contracting Needs Improvement
to Ensure Best Value, Report No. 26-13-004-03-370
(September 27, 2013), available at: https://www.oig.dol.
gov/public/reports/oa/2013/26-13-004-03-370.pdf
28 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree
Benefit Programs
Worker and Retiree Benefit Programs
Unemployment Insurance Programs
Enacted more than 80 years ago as a federal-state partnership, the unemployment insurance (UI) program
is the Department’s largest income-maintenance program. This multibillion-dollar program provides
unemployment benefits to eligible workers who become unemployed through no fault of their own. The
UI program is generally administered by states with oversight from DOL’s Employment and Training
Administration (ETA).
OIG OVERSIGHT OF THE UI • administers a separate UI program under its
PROGRAM jurisdiction’s laws, but follows uniform guidelines
established by federal law;
BACKGROUND • establishes requirements for eligibility, benefit
amounts, and the length of time that benefits can
The OIG has remained committed to meeting the be paid; and
challenges created by the COVID-19 pandemic
• manages the personnel and system resources to
and to assisting DOL and Congress in improving
administer its respective programs.
the efficiency and integrity of the UI program.
Strengthening the UI program to prevent fraud
UI benefits are generally funded by state employer
before it occurs and to detect it when it does are
taxes with administrative costs funded by the federal
key objectives to ensure that unemployed workers
government. The UI program requires states to make
expeditiously receive much-needed benefits while
weekly benefit payments in a timely manner while
safeguarding tax dollars directed toward that goal.
ensuring claimants meet eligibility requirements.
Extensions and expansions of coverage and benefits,
OVERVIEW OF THE UI PROGRAM
The UI program is a joint federal-state program
36
When referring to UI, this Semiannual Report
that is the first economic line of defense against the to Congress uses “state” or “SWA” to refer to the
collective impact of unemployment and acts as a administrative body that administers the program within
safety-net for individuals who lose their jobs through the state, district, or territory. For the 50 states, as well as
no fault of their own. The UI program is required to the U.S. Virgin Islands, Puerto Rico, and the District of
make timely benefit payments to provide needed Columbia, that administrative body is a SWA. There are
assistance to unemployed workers. It is equally 53 SWAs, including the 50 states, the U.S. Virgin Islands,
important that the program have sufficient controls in Puerto Rico, and the District of Columbia. The CARES
place to quickly determine that benefits are or were Act also provided certain UI benefits to American Samoa,
paid to the right person in the correct amount. the Commonwealth of the Northern Mariana Islands,
Each SWA:36 the Federated States of Micronesia, Guam, the Marshall
Islands, and the Republic of Palau, provided the territory
signs an agreement with the Department.
30 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
such as those provided by the CARES Act and meeting the intent of the CARES Act. As the OIG’s
subsequent legislation, are normally funded by the prior audit work has shown, quickly deploying
federal government. funds can result in shortcomings in the effective
and efficient implementation of stimulus programs.
ETA is the federal agency responsible for providing UI For example, a 2011 audit report37 found states
program direction and oversight. The OIG conducts took over a year to spend most of the American
independent oversight of the UI program through Reinvestment and Recovery Act of 2009 (Recovery
audits to strengthen the integrity and efficiency of Act) funding available for emergency staffing and
the program and through criminal investigations to at least 40 percent of funding for this purpose was
detect and deter large-scale fraud. The OIG’s federal unspent after 15 months.
criminal investigations are time- and resource-
intensive and one of the last lines of defense in In addition, a separate audit on the Recovery
safeguarding the UI program from fraud. Act38 found $1.3 billion of the $7 billion DOL
provided to states for UI modernization, including
OIG SIGNIFICANT CONCERNS IT modernization, would likely not have been spent
before the period of availability expired. To access
The OIG has repeatedly reported significant concerns these funds, states had to meet certain UI law
with DOL and states’ ability to deploy program modernization criteria; once accessed, the funds
benefits expeditiously and efficiently while ensuring could be spent for several purposes including to
integrity and adequate oversight. We have been and modernize IT systems. Of the funds spent from the
remain particularly concerned about deployment of UI $7 billion, states did not always take advantage of
benefits in response to emergencies including natural the opportunity to modernize their IT systems.
disasters and economic downturns. Most recently,
the OIG reiterated these concerns regarding the To implement the new UI programs authorized
economic downturn created by the pandemic and the by the CARES Act in March 2020, states needed
unprecedented levels of federal funding allocated to sufficient staffing and system resources to manage
the UI program, currently estimated at approximately the extraordinary increases in the number of claims
$872.5 billion. and payments. Our pandemic audit work has
confirmed the Department and states continued to
Deploying Benefits Expeditiously and
37
Recovery Act: DOL Could Have Better Monitored the
Efficiently
Use of Re-employment Services Funds to Adhere to
Standards for Transparency and Accountability, Report
Rapid deployment of CARES Act funding was
No. 18-11-005-03-315 (March 31, 2011), available at:
critical in helping workers in need. The OIG
https://www.oig.dol.gov/public/reports/oa/2011/18-11-005-
unequivocally acknowledges that staff at ETA and
03-315.pdf
states struggled during the COVID-19 pandemic
38
Recovery Act: More Than $1.3 Billion in Unemployment
as SWAs worked to ensure timely and accurate
Insurance Modernization Incentive Payments Are Unlikely
UI benefits in a time of national emergency.
to Be Claimed by States, Report No. 18-10-012-03-315
Anticipating and addressing the increased risk
(September 30, 2010), available at: https://www.oig.dol.
that came with the expanded funding was vital to
gov/public/reports/oa/2010/18-10-012-03-315.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 31
Worker and Retiree Benefit Programs
face challenges in these areas as they endeavored
to implement the new temporary UI programs
authorized by the CARES Act.
Less than a month after the CARES Act passed,
we published an advisory report39 outlining areas of
concern that ETA and the states should consider as
they implemented the UI provisions included in the
CARES Act. Our identification of these areas represents
years of work relating to DOL’s UI program, including
the response to past disasters. One of these areas was
state preparedness, a long-standing concern underlying
many issues noted in prior OIG reports, specifically the
issues of staffing and system capabilities.
We also advised ETA to establish methods to detect
and recover improper payments, including fraudulent
payments. We reported on the program that posed unemployed through no fault of their own suffering
the greatest risk, the PUA program. PUA’s expanded lengthy delays in receiving benefits. For example,
coverage, for a population of claimants who were the OIG had audited the DUA program and found the
traditionally ineligible to receive UI benefits,40 Department had not established adequate controls
presented significant challenges to states as they to ensure benefits were paid timely.41 Furthermore,
designed and implemented processes to determine states had difficulty ensuring CARES Act programs
initial and continued program eligibility. Further, we were implemented promptly. For the PUA, PUEC,
found the risk of improper payments including fraud and FPUC programs, we identified that it took, on
was even higher under PUA because claimants could average, 38 days for the first payment to be made
self-certify their eligibility for UI. after the CARES Act passed. Also, we identified
delays in the first payments for two other pandemic
Our subsequent reports identified continued UI programs: it took 25 days for the FPUC program
programmatic weaknesses that led to workers and 50 days for the PEUC program.42
39
Advisory Report, CARES ACT: Initial Areas of Concern 41
ETA Should Do More to Assist Vulnerable States
Regarding Implementation of Unemployment Insurance
Prepare for Disaster Unemployment Assistance Program
Provisions, Report No. 19-20-001-03-315 (April 21,
Implementation, Report No. 04-20-002-03-315 (September
2020), available at: https://www.oig.dol.gov/public/reports/
29, 2020), available at: https://www.oig.dol.gov/public/
oa/2020/19-20-001-03-315.pdf
reports/oa/2020/04-20-002-03-315.pdf
40
The new PUA program extended unemployment benefits 42
Also, the 12 states we selected for in-depth analysis
to self-employed, independent contractors, those with
were generally unable to demonstrate they met the
limited work history, and other individuals not traditionally
payment promptness standard ETA established for regular
eligible for unemployment benefits who were unable to
UI payments, which is to pay 87 percent of claimants
work as a direct result of COVID-19.
within 14 or 21 days.
32 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
We also found that—from April 1, 2020, to March 31, claimants be provided with due process prior to
2021—only 5 of the 53 SWAs were able to timely pay stopping payment of benefits. The leading causes of
benefits, including the FPUC supplement, to regular improper payments have historically been:
UI claimants. As a result, during the year following • Claimants Do Not Meet Work Search
the passage of the CARES Act, more than six million Requirements43 – Claimants who fail to
Americans waited a month or more for CARES Act demonstrate they meet state requirements for
UI benefits. Furthermore, states are still challenged work search;
in paying claimants timely. For the month of August
• Benefit Year Earnings – Claimants who continue
2022, only 8 percent of states were paying regular
to claim benefits after they return to work, or
UI claimants timely versus 75 percent before the
who misreport earnings during a week in which
pandemic started.
benefits are claimed;
History of Improper Payments, • Employers Do Not Timely Report Employees’
Separation – Employers or their third-party
Including Fraud
administrators who fail to provide timely and
adequate information about why individuals
For more than 20 years, the OIG has reported on
separated from their employment; and
the Department’s challenges to measure, report,
and reduce improper payments in the UI program, • Fraud – Claims based on fraudulent schemes,
which has experienced some of the highest improper such as those perpetrated during the pandemic.44
payment rates across the federal government. The
reported improper payment estimate for the regular A PERFECT STORM
UI program has been above 10 percent for 15 of the
last 19 years. Following the start of the pandemic in the United States
in early 2020, unemployment compensation claims rose
The UI program requires states to make weekly exponentially to historically unprecedented levels. Prior
benefit payments in a timely manner while ensuring to the pandemic, numbers of UI claims were historically
claimants meet eligibility requirements. A state may low. On March 14, 2020, the Department reported
determine a payment is improper after a claimant 282,000 initial claims. Within 2 to 3 weeks, initial claims
receives benefits based on new information that rose to 10 times pre-pandemic levels, far higher than
was unavailable when the state approved the benefit state systems were designed to handle.45 Within 5
payment or as a result of the requirement that
44
ETA has included fraud as an element of the leading
43
The Middle Class Tax Relief and Job Creation Act of causes rather than as a separate cause. From July 2016
2012 requires that individuals receiving UI benefits must to March 2020, the other three causes resulted in over
be able to work, available to work, and actively seeking $9 billion in improper payments. Of this total, more than
work as a condition of eligibility for regular compensation $3 billion was attributable to fraud. Since the pandemic
for any week. Accordingly, states generally require that started, fraud has significantly increased.
unemployed workers demonstrate they were actively 45
COVID-19: States Struggled to Implement CARES Act
seeking work. Work search overpayments occur when Unemployment Insurance Programs, Report No. 19-21-
states pay UI claimants who do not demonstrate that they 004-03-315 (May 28, 2021), available at: https://www.oig.
were actively seeking work. dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 33
Worker and Retiree Benefit Programs
months, through August 15, 2020, the Department expanded coverage offered under the PUA program
reported 57.4 million initial claims, the largest increase posed significant challenges to states as they
since the Department began tracking UI data in 1967. implemented processes to determine initial and
continued program eligibility for participants. The
The CARES Act provided significant funding reliance solely on claimant self-certifications without
to the federal-state UI program, which resulted evidence of eligibility and wages during the program’s
in hundreds of billions of dollars in additional first 9 months rendered the PUA program extremely
payments. New UI programs under the CARES susceptible to improper payments, including fraud.
Act meant more workers qualified.46 Further,
unemployed workers received a supplement The unprecedented infusion of federal funds into the
per week in addition to their regular benefit UI program gave individuals and organized criminal
amount and individuals who exhausted their groups a high-value target to exploit. That, combined
regular unemployment benefits were provided with easily attainable stolen PII and continuing UI
additional weeks of unemployment compensation. program weaknesses identified by the OIG over the
Also, certain UI claims could be backdated to last several years, allowed criminals to defraud the
the beginning of the eligibility period. With the system. Because many states were not prepared to
legislative extensions, claimants could receive up process the extraordinary volume of new UI claims
to 79 weeks of pandemic-related UI payments. and struggled to implement the new UI programs,
some internal controls that had been traditionally
In June 2020, the OIG provided a member briefing47 used or recommended for the processing of UI
and a statement for the record48 to Congress claims were not initially implemented.
highlighting challenges DOL and states faced in
administering and overseeing the UI program as This created a high-reward target where an individual
well as the substantially increased fraud risk. The could make a fraudulent claim with relatively low risk
of being caught. For example, as time went on, one
46
The PUA program provided UI benefits to those not fraudster could have been issued several UI debit
traditionally eligible for UI who were unable to work as a cards, with tens of thousands of dollars on each card.
direct result of the public health emergency. In a different case, we found 1 claim that was filed from
47
Member Briefing before the U.S. House of a 3-bedroom house shared the same physical address
Representatives, Committee on Oversight and Reform, as 90 other claims and used the same email address
Subcommittee on Government Operations, “Opening as 145 other claims.49 In total, the likely fraudster(s)
Statement of Scott S. Dahl, Inspector General, U.S. received $1,569,762 in unemployment benefits. In the
Department of Labor” (June 1, 2020), available at: https:// same audit, we found that, from March 28, 2020, to
www.oig.dol.gov/public/testimony/20200601.pdf September 30, 2020, in 4 states, potentially fraudulent
48
Testimony before the U.S. Senate Committee on claims were paid 60.5 percent of the time.
Finance, Hearing Title: “Unemployment Insurance
during COVID-19: The CARES Act and the Role 49
COVID-19: ETA and States Did Not Protect Pandemic-
of Unemployment Insurance During the Pandemic,” Related UI Funds from Improper Payments including
Testimony of Scott S. Dahl, Inspector General (June Fraud or from Payment Delays, Report No. 19-22-006-03-
9, 2020), available at: https://www.oig.dol.gov/public/ 315 (September 30, 2022), available at: https://www.oig.
testimony/20200609.pdf dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf
34 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
Estimating the overall improper payment rate for areas, to individuals with Social Security numbers:
the pandemic UI programs is critical for the efficient (1) filed in multiple states, (2) of deceased persons,
operation of the program. ETA and the states, (3) of federal prisoners, and (4) used to file UI claims
under their program operating responsibilities, with suspicious email accounts.52
must determine the improper payment rate,
including the fraud rate, for pandemic UI programs. OIG PANDEMIC INVESTIGATIVE WORK
In August 2020, we recommended that ETA
estimate the improper payment rate for pandemic The volume of UI investigative matters currently
UI programs. In December 2021, consistent with under review is unprecedented. Prior to the
our recommendation, ETA reported an improper pandemic, the OIG opened approximately 100
payment rate of 18.71 percent for 2021, which ETA UI investigative matters annually. Since the
applied to two of three key pandemic UI programs, pandemic started, the OIG has opened over
PEUC and FPUC. ETA states it will report the third 190,000 investigative matters concerning UI
program, PUA, in 2022. fraud. That is an increase of more than 1,000
times in the volume of UI work that we are facing.
Applying the 18.71 percent to the estimated $872.5 UI investigations now account for approximately
billion in pandemic UI funding,50 at least $163 billion 96 percent of the OIG investigative case
in pandemic UI benefits could have been paid inventory, compared to approximately 11 percent
improperly, with a significant portion attributable to prior to the pandemic.
fraud. Based on our audit and investigative work, the
improper payment rate for pandemic UI programs is In response to the extraordinary increase in
likely higher.51 oversight demands, the OIG hired additional
criminal investigators, increased the caseload of
For example, the OIG has identified $45.6 billion of investigators already onboard, deployed federal
potentially fraudulent UI benefits paid from March and contract staff to review DOL and states’ efforts,
2020 through April 2022 in four specific high-risk and strengthened our data analytics program. In
addition, we took several other actions to augment
50
ETA’s reported improper payment rate estimate of 18.71 our efforts, including the following:
percent does not include the PUA program. However,
• initiated the development of a National
it is the most current improper payment rate from ETA.
Unemployment Insurance Fraud Task Force
Furthermore, PUA had control weaknesses that may have
(National UI Fraud Task Force),53 alongside DOJ;
facilitated comparable or greater improper payments.
Therefore, applying ETA’s rate to all of the estimated
$872.5 billion in CARES Act UI funding including PUA 52
Alert Memorandum: Potentially Fraudulent
would equate to at least $163 billion in improper payments. Unemployment Insurance Payments in High-Risk Areas
51
For example, COVID-19: ETA and States Did Not Increased to $45.6 Billion, Report No. 19-22-005-03-315
Protect Pandemic-Related UI Funds from Improper (September 21, 2022), available at: https://www.oig.dol.
Payments including Fraud or from Payment Delays, gov/public/reports/oa/2022/19-22-005-03-315.pdf
Report No. 19-22-006-03-315 (September 30, 2022), 53
More information on the National UI Fraud Task Force is
available at: https://www.oig.dol.gov/public/reports/ available at: https://www.justice.gov/coronavirus/national-
oa/2022/19-22-006-03-315.pdf unemployment-insurance-fraud-task-force.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 35
Worker and Retiree Benefit Programs
• collaborated with DOJ on the strategic Department, financial institutions and their
assignment of 12 term-appointed assistant associations, law enforcement agencies, and the
United States attorneys assigned solely to public to inform and raise awareness regarding
prosecute UI fraud; fraud trends, best practices, red flags, and
• established a multi-disciplinary Pandemic Rapid more;55 and
Response Team within the OIG; • joined DOJ’s Pandemic Fraud Strike Force
• appointed a National UI Fraud Coordinator to Teams (strike force program) initiative.56
manage our national investigative response to
UI fraud; When the OIG identifies anti-fraud measures that
may help the program detect and stop fraud, we
• appointed seven Regional UI Fraud Coordinators
share them with the Department and states as
to partner with SWAs and federal, state, and
appropriate. For example, in alert memoranda issued
local law enforcement on UI fraud matters in
in February 2021,57 in June 2021,58 and in September
their geographic areas of responsibility;
• leveraged resources from the Council of the
Inspectors General on Integrity and Efficiency
56
The OIG joined the DOJ and other federal law
(CIGIE), Pandemic Response Accountability enforcement partners as participants on the DOJ’s new
Committee (PRAC); COVID-19 Strike Force teams initiative, announced on
September 14, 2022. These Strike Force teams will
• collaborated with states’ auditors to help
operate out of U.S. Attorney’s Offices in the Southern
develop their audit strategies for the CARES
District of Florida, the District of Maryland, and a joint effort
Act UI programs;
between the Central and Eastern Districts of California.
• joined the DOJ COVID-19 Fraud Enforcement They will use dedicated special agents from the OIG to
Task Force;54 focus on significant fraud schemes with an international
• implemented an extensive outreach and nexus. DOJ, “Department Announces COVID-19 Fraud
education program targeted to SWAs, the Strike Force Teams,” press release (September 14,
2022), available at: https://www.justice.gov/opa/pr/justice
department announces covid 19-fraud-strike-force-teams
54
DOJ Office of Public Affairs, “Attorney General 57
Alert Memorandum: The Employment and Training
Announces Task Force to Combat COVID-19 Fraud,” Administration Needs to Ensure State Workforce Agencies
press release (May 17, 2021), available at: Implement Effective Unemployment Insurance Program
https://www.justice.gov/opa/pr/attorney-general- Fraud Controls for High Risk Areas, Report No. 19-21-002-
announces-task-force-combat-covid-19-fraud 03-315 (February 22, 2021), available at: https://www.oig.
55
The OIG has issued or assisted in issuing alerts and dol.gov/public/reports/oa/2021/19-21-002-03-315.pdf
guides including a: UI fraud consumer protection guide, 58
Alert Memorandum: The Employment and Training
UI fraud investigations guide, UI fraud alert for state/local Administration Needs to Issue Guidance to Ensure State
law enforcement, UI text message phishing alert, UI fraud Workforce Agencies Provide Requested Unemployment
and phishing alert, UI fraud and identity theft alert, and Insurance Data to the Office of Inspector General, Report
UI detection and mitigation alert for financial institutions. No. 19-21-005-03-315 (June 16, 2021), available at:
More information is available at: https://www.oig.dol.gov/ https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-
OIG_Pandemic_Response_Portal.htm. 03-315.pdf
36 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
2022,59 our investigators, auditors, and data scientists
collaborated to identify the $45.6 billion of potentially
fraudulent UI benefits paid in the 4 high-risk areas
previously noted. We shared our methodology and
underlying data60 with the Department for further
dissemination to the SWAs, and we recommended
they establish effective controls to mitigate fraud
and other improper payments to ineligible claimants.
We plan to examine whether states took effective
measures to address the four high-risk areas.
As of September 2022, our UI investigations
have resulted in more than: 600 search warrants
executed, 1,000 individuals charged with crimes
related to UI fraud, and $865 million in investigative
monetary results. We have also referred over 19,000
fraud matters that do not meet federal prosecution
guidelines back to the states for further action.
In one recent OIG investigation, 11 members and
associates of the Brooklyn-based Woo Gang were
charged with a multi-million-dollar pandemic UI Department (EDD) employee was sentenced to
fraud scheme.61 In another recent OIG investigation, more than 5 years in prison for fraudulently obtaining
a former California Employment Development nearly $4.3 million in pandemic relief UI funds.62
59
Alert Memorandum: Potentially Fraudulent 61
DOJ, U.S. Attorney’s Office, Eastern District of New
Unemployment Insurance Payments in High-Risk Areas
York, “11 Members and Associates of the Brooklyn-Based
Increased to $45.6 Billion, Report No. 19-22-005-03-315
Woo Gang Charged with Multi-Million Dollar COVID-19
(September 21, 2022), available at: https://www.oig.dol.
Unemployment Insurance Fraud,” press release, February
gov/public/reports/oa/2022/19-22-005-03-315.pdf
17, 2022, available at: https://www.oig.dol.gov/public/
60
Data provided to DOL for further dissemination to
Press%20Releases/11_Members_and_Associates_of_
the SWAs included data related to more than 3 million
the_Brooklyn-Based_Woo_Gang_Charged_with_Multi-
suspicious claimants associated with over $16 billion that
Million_Dollar_COVID.pdf
the OIG identified in our alert memorandum dated June 62
DOJ, U.S. Attorney’s Office, Central District of California,
16, 2021. The over $16 billion did not include about $915
“One-Time EDD Employee Sentenced to More Than 5
million in potential fraud that was identified under more
Years in Prison for Fraudulently Obtaining Nearly $4.3
than one area. As soon as is practical, the OIG will share
Million in COVID Relief Funds,” press release (February
further data related to additional suspicious claimants
4, 2022), available at: https://www.oig.dol.gov/public/
identified in a subsequent alert memorandum with DOL
Press%20Releases/One-Time_EDD_Employee_
so that it can disseminate this information to the SWAs.
Sentenced_to_More_Than_5_Years_in_Prison_for_
The methodology has not changed.
Fraudulently_Obtaining_Nearly.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 37
Worker and Retiree Benefit Programs
Working with Domestic and DOJ’s annual Money Mule Initiative,63 which aimed
International Law Enforcement to raise awareness about and suppress money
mule activity. The OIG conducted extensive internal
Partners
and external outreach regarding money mules and
identified and targeted money mules in coordination
Early in the pandemic, the OIG worked with the
with DOJ and other partner agencies.
DOJ to create the National UI Fraud Task Force,
a nine-agency federal task force focused on law
In addition, the OIG issued alerts to financial
enforcement intelligence sharing, deconfliction,
institutions about UI fraud both on its own and jointly
joint national and regional messaging, and the
with its partners, such as the U.S. Secret Service
effective use of investigative and prosecutorial
(Secret Service), the Financial Crimes Enforcement
resources. The National UI Fraud Task Force has
Network (FinCEN), and the National UI Fraud Task
also worked closely with partners at the International
Force. One such joint OIG/Secret Service alert64
Organized Crime Intelligence and Operations
served as a framework for the recovery of millions of
Center (IOC 2) to develop a deconfliction process to
dollars of fraudulent UI funds being held by financial
coordinate investigative information across federal
institutions. Later, in 2021, the OIG authored a
law enforcement agencies. Through data analytics
National UI Fraud Task Force alert issued through
and a leads generation process, the National UI
FinCEN to financial institutions requesting they
Fraud Task Force and IOC-2 partner agencies have
identify funds they froze due to suspicion of fraud.
identified significant fraud being committed against
The OIG created a process with DOJ and the Secret
the UI program by domestic and international criminal
Service to collect that data and work with those
organizations. Many of these include street-level
financial institutions to return fraudulent funds to
criminal organizations with ties to illegal guns and
SWAs. The OIG and its law enforcement partners are
drugs. These investigations are ongoing and actively
working with more than 350 financial institutions in
being investigated through the National UI Fraud Task
response to our request.
Force, the COVID-19 Fraud Enforcement Task Force,
and the COVID-19 Strike Force team initiative.
The PRAC has also played a pivotal role in amplifying
the ability of OIGs to share information and conduct
The OIG has been very engaged on DOJ’s COVID-19
internal and external outreach to stakeholders that
Fraud Enforcement Task Force. We have representation
have been impacted by pandemic fraud. For example,
on DOJ’s COVID-19 Fraud Enforcement Task Force
subcommittees involving communication, forfeiture, 63
Money mules are people who, at someone else’s
and data, and we co-chair the task force’s criminal
direction, receive and move money obtained from victims
enterprise subcommittee. Recently, the OIG also joined
of fraud. More information about DOJ’s Money Mule
the DOJ strike force program.
Initiative is available at: https://www.justice.gov/civil/
consumer-protection-branch/money-mule-initiative.
The OIG has also participated in other initiatives that 64
Secret Service and OIG, “Detection and Mitigation of
have fallen outside the framework of the National
Unemployment Insurance Fraud Guidance for Financial
UI Fraud Task Force, DOJ’s COVID-19 Fraud
Institutions,” July 6, 2020, available at:
Enforcement Task Force, and strike force program.
https://www.neach.org/Portals/0/USSS-DOL%20OIG%20
For example, in 2020 and 2021, the OIG supported
UI%20Advisory%207_6_2020.pdf
38 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
the OIG worked with the PRAC on social media tool OIG PANDEMIC OVERSIGHT WORK
kits related to money mule activity and erroneous
1099-G forms that were issued to victims of UI In April 2020, shortly after CARES Act enactment, we
fraud. The OIG has also worked with the PRAC, published our Pandemic Response Oversight Plan66
DOJ, and the Secret Service to create a web-based detailing how the OIG would conduct its pandemic
survey where financial institutions can more broadly oversight, with a significant focus on the UI program.
report UI and other types of pandemic fraud. This We designed our four-phased plan to provide
information is being collected by the PRAC, analyzed recommendations to DOL to address current and
by its partners, and, if appropriate, sent to field emerging vulnerabilities with the pandemic response
personnel for further action. and to prevent similar vulnerabilities from hampering
preparedness for future emergencies (see Figure 3).
The OIG, through its membership in IOC-2, has
also been engaged with several allied national Phases 1 and 2, which are complete, focused on
police agencies to strategize about pandemic- DOL’s plans, guidance, and initial implementation of
related fraud and how to best establish practices to administration and oversight activities. Phase 3 audit
share information. The issue of pandemic fraud has work, assessing program results and emerging issues, is
not only been an issue for the United States, but it ongoing. Our Phase 4 work plans include summarizing
has also negatively impacted our foreign partners’ our pandemic response oversight work and reporting on
pandemic programs. We have conducted outreach lessons learned related to UI, worker safety and health,
and education related to pandemic fraud, including and employment and training. We have published two
UI fraud, with our Five Eyes partner countries as plan updates, most recently on March 21, 2022.
participants on the International Public Sector
Fraud Forum.65 At the start of the pandemic, we examined past audits
including those related to the Recovery Act and
The OIG, IOC-2, and our federal law enforcement the DUA program,67 and we assessed comparable
partners have identified numerous instances of 66
Pandemic Response Oversight Plan (updated March
international organized criminal groups engaged in 21, 2022), available at: https://www.oig.dol.gov/public/
UI fraud. We will continue to work with our domestic oaprojects/Updated%20Pandemic%20Response%20
and international law enforcement partners on Oversight%20Plan%202022%20for%20Publication.pdf
these matters. 67
Examples include: Recovery Act: DOL Could Have Better
Monitored the Use of Re-employment Services Funds to
65
Five Eyes is an intelligence alliance. The Five Eyes Adhere to Standards for Transparency and Accountability,
countries include Australia, Canada, New Zealand, the Report No. 18-11-005-03-315 (March 31, 2011), available
at: https://www.oig.dol.gov/public/reports/oa/2011/18-
United Kingdom and the United States. The International
11-005-03-315.pdf; Recovery Act: States Challenged in
Public Sector Fraud Forum consists of representatives
Detecting and Reducing Unemployment Insurance Improper
from organizations from the Five Eyes countries, whose Payments, Report No. 18-16-005-03-315 (August 2,
collective aim is to share best and leading practices in 2016), available at: https://www.oig.dol.gov/public/reports/
fraud management and control across public borders. oa/2016/18-16-005-03-315.pdf; and Audit of Florida Disaster
International Public Sector Fraud Forum guidance is Unemployment Assistance Grant Number 1359 - DR
available at: https://www.gov.uk/government/publications/ (March 26, 2004), Report No. 04-04-004-03-315 (March 26,
2004), available at: https://www.oig.dol.gov/public/reports/
international-public-sector-fraud-forum-guidance.
oa/2004/04-04-004-03-315.pdf.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 39
Worker and Retiree Benefit Programs
Figure 3: The OIG’s Four-Phased Design for Pandemic Oversight
Phases 1 and 2 Phase 3 Phase 4
OIG Highlights Known Vulernabilities OIG Examines Phase 2 Issues OIG Evaluates DOL Preparedness
and Focuses on Key Issues and Emerging Issues for Future Emergencies
DOL Plans, Guidance, and DOL Intermediate and Final
DOL Lessons Learned
Initial Implementation Program Results
Source: OIG Pandemic Response Oversight Plan
lessons learned. As a result, in April 2020, we issued • In May 2020, we issued an alert memorandum69
the previously noted advisory report68 identifying describing our concerns regarding claimant self-
six initial areas of concern for ETA and the states certification in the PUA program. In our view,
to consider while implementing CARES Act UI reliance on such self-certifications rendered
provisions: (1) state preparedness (specifically the PUA program highly vulnerable to improper
the issues of staffing and system capabilities), (2) payments and fraud. Subsequent to our work,
initial eligibility determination, (3) benefit amount, Congress took action to require supporting
(4) return to work, (5) improper payment detection documentation to improve states’ abilities to ensure
and recovery, and (6) program monitoring. Our proper claimant eligibility and to mitigate fraud.
identification of these areas represents at least 16 • In August 2020, we reported70 states did not use
years of work relating to DOL’s UI program, including existing tools effectively to combat fraud and
the responses to past disasters. The advisory report other improper payments. We also stated ETA
summarized dozens of OIG recommendations to should work with the OIG to obtain access to
implement corrective action in these areas. state claimant data that could be used to identify
and disrupt fraudulent schemes that threaten the
We have issued several subsequent reports, integrity of UI programs, including those under the
including alert memoranda for urgent concerns, CARES Act.
and other reports involving the UI program, such as
• In May 2021, we reported71 that DOL and
the following:
states struggled to implement the three
68
Advisory Report, CARES Act: Initial Areas of Concern 70
COVID-19: More Can Be Done to Mitigate Risk to
Regarding Implementation of Unemployment Insurance
Unemployment Compensation under the CARES Act,
Provisions, Report No. 19-20-001-03-315 (April 21,
Report No. 19-20-008-03-315 (August 7, 2020), available
2020), available at: https://www.oig.dol.gov/public/reports/
oa/2020/19-20-001-03-315.pdf at: https://www.oig.dol.gov/public/reports/oa/2020/19-20-
69
Alert Memorandum: The Pandemic Unemployment 008-03-315.pdf
Assistance Program Needs Proactive Measures to Detect
71
COVID-19: States Struggled to Implement CARES Act
and Prevent Improper Payments and Fraud, Report No. Unemployment Insurance Programs, Report No. 19-21-
19-20-002-03-315 (May 26, 2020), available at: https://www. 004-03-315 (May 28, 2021), available at: https://www.oig.
oig.dol.gov/public/reports/oa/2020/19-20-002-03-315.pdf dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
40 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
pandemic UI programs that posed the susceptible to significant improper payments,
greatest risk for fraud, waste, and abuse: estimate the improper payments for those
PUA, PEUC, and FPUC. Specifically, DOL’s programs, and report on actions to reduce
guidance and oversight did not ensure the improper payments in those programs.
states: implemented the programs and paid While DOL met three of the six compliance
benefits promptly, performed required and requirements for UI programs, we found DOL
recommended improper payment detection did not meet the three others. DOL did not
and recovery activities, and reported accurate publish all improper payment estimates as
and complete program activities. This occurred required, did not demonstrate improvement
primarily because states’ IT systems were from the improper target rate published in FY
not modernized, staffing resources were 2020, and did not report an improper payment
insufficient to manage the increased number rate of less than 10 percent as required.
of new claims, and, according to state officials, • In August 2022, we issued an alert
ETA’s guidance was untimely and unclear. memorandum74 describing our concerns
• In November 2021, we issued72 the Department a regarding states either not submitting
qualified opinion, for the first time in 25 years, on required CARES Act UI program reports to
its consolidated financial statements and reported ETA or reporting zero activity. We found the
one material weakness related to UI COVID-19 reporting to be deficient for the eight reports
funding. There were two primary causes for this we examined. For the PUA program, which
issue: (1) the Department being unable to support was highly susceptible to improper payments
$47.3 billion it estimated for UI claims in appeal including fraud, seven states reported zero
or unprocessed as of September 30, 2021, and overpayments for all months during the
(2) unreliable reporting of $4.4 billion in UI benefit entire program period of March 2020 through
overpayments due to certain states’ non reporting September 2021. Without accurate state
of UI overpayment activity. performance information, Congress and ETA
• In July 2022, we reported73 that the are not able to: fully assess state activities,
Department did not meet the requirements mitigate the risk of overpayments and fraud,
for compliance with the Payment Integrity identify program weaknesses, or establish
Information Act (PIIA) for FY 2021. PIIA lessons learned that may be leveraged to
requires federal agencies to identify programs improve states’ performance under similar,
future temporary programs.
72
FY 2021 Independent Auditor’s Report on the DOL
Financial Statements, Report No. 22-22-003-13-001
(November 19, 2021); available at: https://www.oig.dol.
gov/public/reports/oa/2022/22-22-003-13-001.pdf 74
Alert Memorandum: Employment and Training
73
The U.S. Department of Labor Did Not Meet the Administration Needs to Ensure State Workforce Agencies
Requirements for Compliance with the Payment Integrity Report Activities Related to CARES Act Unemployment
Information Act for FY 2021, Report No. 22-22-007-13-001 Insurance Programs, Report No. 19-22-004-03-315
(July 1, 2022), available at: https://www.oig.dol.gov/public/ (August 2, 2022), available at: https://www.oig.dol.gov/
reports/oa/2022/22-22-007-13-001.pdf public/reports/oa/2022/19-22-004-03-315.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 41
Worker and Retiree Benefit Programs
• As of September 2022, we have issued three • In September 2022, we reported76 ETA and
alert memoranda75 that identified a total of $45.6 states did not protect pandemic related
billion in potentially fraudulent UI benefits paid UI funds from historic levels of improper
from March 2020 through April 2022 in the four payments including fraud nor from payment
specific high-risk areas previously mentioned, delays. We attributed this to four causes: lack
to individuals with Social Security numbers: (1) of eligibility testing, untimely oversight, PUA
filed in multiple states, (2) of deceased persons, self-certification, and the 3-month suspension
(3) of federal prisoners, and (4) used to file UI of a primary oversight tool. Additionally, DOL’s
claims with suspicious email accounts. We interpretation of its regulations on data access
previously recommended in our June 2021 alert hindered the OIG’s timely and complete access
memorandum that ETA amend 20 C.F.R. Part 603 to UI claims data to assist in detecting and
and update its guidance to provide the OIG with deterring fraud. We estimated that, in the initial
access to SWA UI data for all IG engagements 6 months after the CARES Act passed, 4 states
authorized under the IG Act. In September 2022, paid $30.4 billion in PUA and FPUC benefits
we recommended ETA implement immediate improperly (42.4 percent) including $9.9 billion
measures to ensure ongoing OIG access to UI paid to likely fraudsters (13.8 percent). Notably,
claims data for audit and investigative purposes in the same 4 states, $1 in $5 initially paid in
and expedite regulatory updates to require PUA benefits went to likely fraudsters. Further,
ongoing disclosures of UI information to the OIG based on our analysis of ETA’s timeliness
for audits and investigations of federal programs. reports, the time required to implement the
new UI programs and the volume of claims
resulted in at least 6.2 million American
75
(1) Alert Memorandum: The Employment and Training workers nationwide waiting a month or more for
Administration (ETA) Needs to Ensure State Workforce pandemic-related UI benefits during the year
Agencies (SWA) Implement Effective Unemployment after the CARES Act passed.
Insurance Program Fraud Controls for High Risk Areas,
Report No. 19-21-002-03-315 (February 22, 2021),
OIG RECOMMENDATIONS
available at: https://www.oig.dol.gov/public/reports/
oa/2021/19-21-002-03-315.pdf; (2) Alert Memorandum:
The OIG has made several recommendations to
The Employment and Training Administration Needs to
DOL and Congress to improve the efficiency and
Issue Guidance to Ensure State Workforce Agencies
integrity of the UI program. While action has been
Provide Requested Unemployment Insurance Data to
taken to resolve some recommendations, further
the Office of Inspector General, Report No. 19-21-005-
action is needed to close them. Summaries of key
03-315 (June 16, 2021), available at: https://www.oig.dol.
recommendations that remain open follow.
gov/public/reports/oa/2021/19-21-005-03-315.pdf; and (3)
Alert Memorandum: Potentially Fraudulent Unemployment
Insurance Payments in High-Risk Areas Increased to 76
COVID-19: ETA and States Did Not Protect Pandemic-
$45.6 Billion, Report No. 19-22-005-03-315 (September Related UI Funds from Improper Payments including
21, 2022), available at: https://www.oig.dol.gov/public/ Fraud or from Payment Delays, Report No. 19-22-006-03-
reports/oa/2022/19-22-005-03-315.pdf 315 (September 30, 2022), available at: https://www.oig.
dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf
42 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
OIG Recommendations to DOL Controls for Improper Payments
• Establish effective controls, in collaboration with
OIG Access to Claim and Wage Data SWAs, to mitigate fraud and other improper
• Implement immediate measures to ensure ongoing payments to potentially ineligible claimants,
OIG access to UI claims data for all audit and including multistate claimants, claimants who used
investigative purposes Social Security numbers of deceased persons and
federal prisoners, and claimants with suspicious
• Expedite regulatory updates to require ongoing
email accounts
disclosures of UI information to the OIG for audits
and investigations of federal programs • Include in the UI improper payment estimate:
(1) overpayments related to work search formal/
• Take immediate action to require the National
informal warnings, and (2) payments to claimants
Association of State Workforce Agencies to refer
who provide no or insufficient documentation to
information to ETA and the OIG on suspected fraud,
support eligibility with respect to work search
waste, abuse, mismanagement, or misconduct
• Include CARES Act UI transactions in the BAM
Staffing and Systems for Prompt Payments during or develop an alternative methodology to reliably
Emergencies estimate improper payments for those programs
• Continue to work with states to develop, operate, • Develop policies and procedures to coordinate
and maintain a modular set of technological with SWAs to obtain the necessary [UI program]
capabilities (i.e., staffing and replacing IT legacy information needed [for DOL financial statements]
systems) to modernize the delivery of UI benefits to support related balances and assumptions and
that is sufficient to manage and process sudden to perform benchmarking and/or other analyses to
spikes in claims volume during emergencies or validate new assumptions
high unemployment
Guidance and Assistance to States
• Create a rapid response team consisting of
federal and state officials capable of providing • Assist states with claims, overpayment, and fraud
technical and other assistance to states impacted reporting to create clear and accurate information,
by major disasters and then use the overpayment and fraud reporting
to prioritize and assist states with fraud detection
• Conduct a study to assess: the technological needs
and recovery
of the UI programs to determine the capabilities
that need to be upgraded or replaced, the features • Examine the effectiveness of the Benefit
necessary to effectively respond to rapid changes in Accuracy Measurement (BAM)77 program contact
the volume of claims in times of emergency or high 77
BAM is a quality control statistical survey used to
unemployment, the capabilities needed to ensure identify errors and support corrective action in the state UI
effective and equitable delivery of benefits, and the system. It usually focuses on the three major UI programs:
capabilities to minimize fraudulent activities regular UI, Unemployment Compensation for Federal
Employees, and Unemployment Compensation for Ex-
• Develop standards for providing clear and
service members. The BAM data are an estimate of the
reasonable timeframes to implement temporary total improper payments in the UI program, in each state
programs to establish expectations for prompt and the nation as a whole, based on a statistically valid
benefit payments to claimants examination of a sample of paid and denied claims.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 43
Worker and Retiree Benefit Programs
verification process to ensure it reflects the access to UI claimant data and wage records for our
current methods claimants use to seek work respective oversight responsibilities and authorize OIG
• Inform states that formal and informal warnings participation in asset forfeiture funds to combat UI
are not permissible under federal work search law fraud and other crimes. Further, we are recommending
that Congress extend the statute of limitations for fraud
Coordination with Congress involving pandemic‑related UI programs.
• Work with Congress to establish legislation requiring
DOL’S PROGRESS
SWAs to cross-match in high-risk areas, including
to individuals with Social Security numbers: filed
DOL has instituted efforts to focus on program
in multiple states, of deceased persons, of federal
integrity when implementing the CARES Act and
prisoners, and with suspicious email accounts
other pandemic-related UI programs. These efforts
include establishing agreements with states to
OIG Recommendations to Congress comply with all applicable requirements to receive
funds, issuing operating guidance, and providing
In addition, Congress should consider legislative technical assistance to SWAs individually and
proposals included in prior DOL budget requests and through webinars. DOL has included requirements
pass legislation to improve UI program integrity. The for SWAs to focus on program integrity in guidance
DOL proposals include the following: relevant to pandemic related UI funds. In addition,
• allow the Secretary of Labor greater authority to DOL has reinforced the need for SWAs to actively
require SWAs to implement UI corrective actions work with the OIG to address fraud in the UI program.
related to performance and integrity;
• require SWAs to cross-match UI claims against The Department has facilitated the OIG’s access
the National Directory of New Hires; to UI data but only for benefit weeks covered by
CARES Act programs and related extensions. In
• require SWAs to cross-match UI claims with the
addition, ETA has required grant recipients to share
U.S. Social Security Administration’s prisoner
state UI data with the OIG as a condition of the fraud
database and other repositories of prisoner
prevention grants offered under ARPA, which will
information;
provide such access through December 31, 2023.
• allow SWAs to retain 5 percent of UI overpayment However, three states did not receive the grants,
recoveries for program integrity purposes; and and the data provided to the OIG will be incomplete.
• require SWAs to use UI penalty and interest The OIG needs access to all UI program data to
collections solely for UI administration. effectively do its job.
These legislative proposals are consistent with On August 31, 2021, the Department announced
previous OIG findings and recommendations to the establishment of the Office of Unemployment
improve the UI program. Insurance Modernization (OUIM) to work with state
and federal partners to modernize and reform the UI
In addition, the OIG recommended to Congress that system. Operating within the Office of the Secretary,
it ensure DOL and the OIG have ongoing, timely OUIM works in conjunction with ETA, the Office of
44 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
the Chief Information Officer (OCIO), and OASAM to On December 2, 2021, the Department issued
develop and support implementation of the strategic Training and Employment Notice No. 16-21, which
vision outlined in the UI modernization plans78 provides information on grant awards totaling up
released on August 11, 2021. According to DOL, to $600,000 made to states selected as partners
OUIM will provide oversight and management of the to participate in the UI IT Modernization Project-
$2 billion allotted to UI initiatives by ARPA to prevent Claimant Experience Pilot.79
and detect fraud, promote equitable access, ensure
timely benefits payments, and reduce backlogs. OIG ONGOING AND PLANNED WORK
Since the enactment of ARPA, the Department The OIG’s efforts to strengthen and protect the UI
has announced grant opportunities to states in program continue. In addition to working with our
UIPLs, including funds for pilot states to engage law enforcement partners to combat fraud in the
community-based organizations to help workers program, we will be issuing additional audit reports
learn about UI benefits and related services and to covering critical areas of concern and opportunities
support state agencies in delivering timely benefits for improvement in the UI program. Planned and
to workers (UIPL No. 11-22). The Department has in-progress80 Phase 3 audit work includes:
also announced and made progress on implementing • ETA’s efforts to ensure UI program integrity;*
further grant opportunities, such as the following:
• DOL’s oversight of emergency UI administrative
• As of September 20, 2022, the Department transfers to states;*
had awarded $134 million in fraud prevention
• ETA and states’ efforts to detect and recover
grants to 50 states to support states with fraud
overpayments;*
detection and prevention, including identity
verification and overpayment recovery activities • adequacy of states’ IT resources;*
(UIPL No. 22-21); • adequacy of states’ staffing resources;*
• As of September 21, 2022, the Department had • effectiveness of programs for nontraditional
awarded over $150 million in grant funding to claimants;*
29 states of up to $260 million for activities that
• effectiveness of the Temporary Full Federal
promote equitable access to UI programs
Funding program;*
(UIPL No. 23-21); and
• effectiveness of the Short-Time Compensation
• As of September 30, 2022, the Department’s
program;*
Tiger Team initiative has worked with 24 states
under the up to $200 million grants opportunity • effectiveness of the Mixed Earners
to support states in improving UI systems and Unemployment Compensation (MEUC) program;*
processes after a consultative assessment
with a team of experts provided by DOL
(UIPL No. 02-22).
79
For more details, TEN No. 16-21 is available online
78
For more details, a fact sheet about the UI modernization at: https://www.dol.gov/sites/dolgov/files/ETA/advisories/
plans is available online at: https://oui.doleta.gov/ TEN/2021/TEN_16-21.pdf.
unemploy/pdf/FactSheet_UImodernization.pdf. 80
Audits in progress are marked with an asterisk (*).
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 45
Worker and Retiree Benefit Programs
• effectiveness of the Emergency Unemployment payments including fraud. Shortly after the CARES
Relief for Governmental Entities and Non-Profit Act passed, we issued an advisory report82 that
Organizations program;* identified concerns about state preparedness. In our
• PRAC Case Study Project on federal pandemic May 2021 CARES Act UI audit,83 we found states
response funds in select geographic areas;* struggled to pay claimants and to protect funds
from improper payments. As part of our continuing
• concerns over use of third-party identification
pandemic response oversight work, we conducted
contractors;*
a performance audit to determine whether ETA and
• DOL and states’ oversight of UI claimants return states ensured UI benefits were paid only to eligible
to work; individuals promptly.
• ETA and states’ efforts to address multistate
claimants; We found ETA and states did not ensure pandemic-
related UI benefits were paid only to eligible
• ETA and states’ efforts to address claimants
individuals promptly. Of the 4 states we tested,
using the Social Security numbers of deceased
we estimated that, from March 28, 2020, through
persons;
September 30, 2020, $30.4 billion of the $71.7 billion
• ETA and states’ efforts to address claimants in PUA and FPUC benefits was paid improperly
using the Social Security numbers of federal (42.4 percent).84 For comparison, in the 3 years
prisoners; leading up to the pandemic (April 1, 2017, to March
• ETA and states’ efforts to address claimants with 31, 2020), ETA estimated the 4 states averaged an
suspicious email accounts; improper payment rate of 15.6 percent annually, with
• ARPA Equity Grants; and 2.8 percent attributable to fraud. Nationwide, for the
last 18 years, ETA has estimated the UI improper
• impact of waivers on UI overpayments, fraud
payment rate between 9.17 percent and 13.03
investigations, and recoveries.
percent (see Figure 4).
For more information about the OIG’s work, please
We estimated $9.9 billion of that was paid to likely
visit our Pandemic Response Portal.81
fraudsters (13.8 percent). For example, 1 claim
COVID-19: ETA and States Did Not 82
Advisory Report, CARES Act: Initial Areas of Concern
Protect Pandemic-Related UI Funds Regarding Implementation of Unemployment Insurance
from Improper Payments Including Provisions, Report No. 19-20-001-03-315 (April 21,
Fraud or from Payment Delays 2020), available at: https://www.oig.dol.gov/public/reports/
oa/2020/19-20-001-03-315.pdf
With the CARES Act UI program expansions, 83
COVID-19: States Struggled to Implement Cares Act
ETA and states were required to prioritize prompt Unemployment Insurance Programs, Report No. 19-21-
payments of UI benefits while also balancing the 004-03-315 (May 28, 2021), available at: https://www.oig.
need for expediency with steps to mitigate improper dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
84
The percentages of improper payments identified in this
audit applied only to the four states tested and were not
81
Our Pandemic Response Portal is available at: https://
projected to the nation.
www.oig.dol.gov/OIG_Pandemic_Response_Portal.htm.
46 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
Figure 4: Comparison of Improper Payment (IP) Rates, Pre-Pandemic Annual
Averages and 4 States in First 6 Months of CARES Act
50%
42.4%
40%
30%
20%
15.6%
13.0%
9.2%
10%
0%
Lowest National IP Rate (2003-2020)
Highest National IP Rate (2003-2020)
4 States Annual IP Rate (3-Year Average)
4 States CARES Act IP Rate (3/27/20-9/30/20)
Source: ETA reports and OIG analysis of case files
that was filed from a 3-bedroom house shared the UI claims data to assist in detecting and deterring
same physical address as 90 other claims and used fraud. ETA provided guidance on areas of improper
the same email address as 145 other claims. In payments as early as May 2020. However, ETA’s
total, the likely fraudster(s) received $1,569,762 in monitoring reports demonstrated its oversight
unemployment benefits. We found that, from March addressed issues after billions had already been
28, 2020, to September 30, 2020, the 4 states paid paid. ETA and states must be prepared for disasters
likely fraudulent claims 60.5 percent of the time. before they occur.
Notably, $1 in $5 initially paid in PUA benefits went to
likely fraudsters. Federal guidance required states to prioritize
expediency, but we found many Americans faced
While the four states were able to initiate pandemic- lengthy delays in receiving UI payments. States
related UI programs and ETA was able to offer continued to be challenged by the increase in claims’
guidance and perform monitoring, improper volume while implementing the new UI programs.
payments reached historic levels. We attributed this From March 28, 2020, through March 14, 2021, the 4
to four causes: lack of eligibility testing, untimely states were able to pay 86 percent of PUA claimants
oversight, PUA self-certification, and the 3-month timely; however, they took more than 30 days to pay
suspension of a primary oversight tool. Additionally, 14 percent of all reported PUA claimants. Also, during
DOL’s interpretation of its regulations on data access the year after the CARES Act passed, 48 of 53 SWAs
hindered the OIG’s timely and complete access to were unable to timely pay regular UI claims, and,
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 47
Worker and Retiree Benefit Programs
based on our analysis of ETA’s timeliness reports, at numbers: (1) filed in multiple states, (2) of deceased
least 6.2 million American workers nationwide waited persons, (3) of federal prisoners, and (4) used
a month or more for pandemic related UI benefits. to file UI claims with suspicious email accounts.
Delays in UI payments have real, long-lasting effects Despite ETA’s concurrence to implement the OIG’s
on Americans such as the inability to pay bills and prior recommendations from these memoranda,
food scarcity. sufficient action has not been taken or implemented
that would help mitigate and deter even more
We made five recommendations to ETA to improve potentially fraudulent payments from occurring. In
oversight to minimize payment delays and improper addition, since the 2021 alert memorandum, the
payments including fraud. OIG has identified an additional $29.6 billion in
potentially fraudulent payments within three of the
For more information, go to https://www.oig.dol.gov/ areas88 previously analyzed. We also continue to
public/reports/oa/2022/19-22-006-03-315.pdf, Report experience delays in obtaining UI data from SWAs,
No. 19-22-006-03-315 (September 30, 2022). which impedes our ability to perform our statutory
duty to effectively and timely conduct audits and
Alert Memorandum: Potentially investigations of the UI program.
Fraudulent Unemployment Insurance
In analyzing data covering pandemic benefits paid
Payments in High-Risk Areas
during the period of March 2020 through April 2022,
Increased to $45.6 Billion
we identified a total of $45.6 billion paid in potentially
fraudulent UI benefits (see Table 1).
In February85 and June86 2021, the OIG issued alert
memoranda to ETA that cumulatively identified
Potential fraud is a significant concern that requires
more than $16 billion87 in potentially fraudulent
ETA’s immediate attention and action. Since March
UI pandemic benefits paid in four specific high-
2020, we have worked to gain timely access to
risk areas, to individuals with Social Security
SWAs’ UI data in an effort to prevent and detect
fraud, waste, and abuse in the UI program. The
85
Alert Memorandum: The Employment and Training OIG encountered difficulties obtaining data before
Administration (ETA) Needs to Ensure State Workforce and after ETA issued guidance directing SWAs to
Agencies (SWA) Implement Effective Unemployment
Insurance Program Fraud Controls for High Risk Areas, 87
The two alert memoranda to ETA identified a cumulative
Report No. 19-21-002-03-315 (February 22, 2021), total of nearly $17 billion, including about $915 million in
available at: https://www.oig.dol.gov/public/reports/ potential fraud that was identified under more than one
oa/2021/19-21-002-03-315.pdf area, resulting in more than $16 billion paid in potentially
86
Alert Memorandum: The Employment and Training fraudulent UI benefits.
Administration Needs to Issue Guidance to Ensure State 88
For this current alert memorandum and analysis, the
Workforce Agencies Provide Requested Unemployment OIG did not have access to data from DOJ’s Bureau
Insurance Data to the Office of Inspector General, Report of Prisons to determine the increase in potentially
No. 19-21-005-03-315 (June 16, 2021), available at: fraudulent payments. Therefore, the $45.6 billion only
https://www.oig.dol.gov/public/reports/oa/2021/19-21-005- includes the federal prisoner amount reported in our
03-315.pdf June 2021 alert memorandum.
48 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
Table 1: Potential Fraud in 4 High-Risk Areas through April 2022
High-Risk Area Total Potential Fraud Reported through April 2022
Multistate Claimants $28,967,047,154
Deceased Persons $139,483,136
Federal Prisoners89 $267,382,013
Suspicious Emails $16,265,578,304
Total $45,639,490,607
Source: OIG analysis of data from SWAs, DOJ’s Bureau of Prisons, and the U.S. Social Security Administration
disclose UI data to the OIG. These issues included informed us it is considering comprehensive updates
SWAs not providing access for each request until to 20 C.F.R. Part 603; however, the projected
subpoenas were issued to each SWA, the OIG timeframe for the updated regulations is February
receiving data months after the request, the OIG 2025, creating a 14-month gap from the December
receiving unusable and incomplete data, and some 31, 2023, expiration of the grants that temporarily
SWAs having difficulty creating a data connection or expanded OIG access.90 During this period, the OIG’s
encrypting data. access to state UI data will again be impeded, in
violation of the IG Act.
Unfettered access to SWAs’ UI data would help
mitigate the delays we experienced when requesting The OIG emphasizes the importance of ETA
data and enable the OIG to more efficiently conduct implementing prior and current recommendations
fieldwork and issue reports timely. Unfettered access from the OIG, aimed at reducing, mitigating, and
to UI data would also significantly reduce the time preventing potentially fraudulent payments to
and resources that SWAs expend on recurring data ineligible claimants. Without effective controls and
transfers to the OIG. amended federal regulations and guidance, the UI
program is exposed to substantial risks, including the
Although ETA has taken temporary steps to facilitate cost of improper payments to ineligible claimants.
the OIG’s access to state UI data through December Establishing effective controls over identified high-
31, 2023, the OIG needs a permanent solution for risk areas will help to prevent similar or even greater
timely and effective access to SWAs’ UI data. In amounts of fraud when the next crisis occurs.
response to an OIG recommendation, ETA has
90
ETA, Unemployment Insurance Program Letter
89
The OIG did not have access to federal prisoner data No. 22-21, Grant Opportunity to Support States with
to conduct additional analysis for this memorandum. The Fraud Detection and Prevention, Including Identity
amount remains the same as what we reported in the Verification and Overpayment Recovery Activities, in All
June 2021 alert memorandum. In the June 2021 alert Unemployment Compensation (UC) Programs, (August 11,
memorandum, the OIG utilized UI data from March 2020 2021), available at: https://www.dol.gov/sites/dolgov/files/
through October 2020. ETA/advisories/UIPL/2021/UIPL_22-21_acc.pdf
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 49
Worker and Retiree Benefit Programs
We made three recommendations to ETA including subsequent legislation from the inception of the
implementing immediate measures to ensure programs in March 2020 through their expiration in
ongoing OIG access to UI claims data and expediting September 2021.
regulatory updates to require ongoing disclosures of
UI information to the OIG for audits and investigations We found deficient reporting of the UI programs
of federal programs. authorized by the CARES Act and subsequent
legislation. Through its guidance, ETA required the 53
For more information, go to https://www.oig.dol.gov/ SWAs to submit 14 different reports with information
public/reports/oa/2022/19-22-005-03-315.pdf, Report about their CARES Act UI activities. Some states
No. 19-22-005-03-315 (September 21, 2022). did not report UI program information in one or more
reporting periods and others reported zero activity.93
Alert Memorandum: The Employment For example, 12 to 26 states did not report or reported
and Training Administration Needs zero overpayment activity for the FPUC, PEUC, and
MEUC programs. Also, 20 states did not submit reports
to Ensure State Workforce Agencies
for monthly MEUC data at any time from January 2021
Report Activities Related to CARES Act
through the program’s expiration in September 2021.
Unemployment Insurance Programs
Furthermore, in UIPL 17-20, ETA informed states—
Complete and accurate state data for CARES Act
with respect to PEUC program reporting—that only
UI programs is necessary for the Department to
reports with non-zero data needed to be submitted.
assess CARES Act UI activities and to mitigate
We identified multiple instances in which states did
the risk of overpayments, including fraud. Since
not submit PEUC reports or the PEUC information
April 2020, ETA has issued 11 UIPLs that specified
required within applicable reports. These states may
required state reporting guidelines for pandemic
or may not have had non-zero data. However, the
related UI programs. However, the OIG had already
absence of the required information could not be
identified the issue of states’ non reporting or
considered a reporting issue according to UIPL 17-20
incorrect reporting of overpayments in CARES Act
and poses a risk that information needed to assess the
UI programs, which was one of the two issues that
PEUC program will not be obtained.
ultimately resulted in DOL receiving its first qualified
opinion on its consolidated financial statements in 92
These two reports were: (1) COVID-19: States
25 years.91 Because we identified the same concern
Struggled to Implement CARES Act Unemployment
in two separate reports,92 we examined the extent to
Insurance Programs, Report No. 19-21-004-03-315 (May
which states complied with all reporting requirements
28, 2021), available at: https://www.oig.dol.gov/public/
for UI programs authorized by the CARES Act and
reports/oa/2021/19-21-004-03-315.pdf; and (2) FY 2021
Independent Auditor’s Report on the DOL Financial
91
The OIG did not have access to federal prisoner data Statements, Report No. 22-22-003-13-001 (November 19,
to conduct additional analysis for this memorandum. The 2021), available at: https://www.oig.dol.gov/public/reports/
amount remains the same as what we reported in the oa/2022/22-22-003-13-001.pdf.
June 2021 alert memorandum. In the June 2021 alert 93
We were unable to determine whether zero was a
memorandum, the OIG utilized UI data from March 2020 default for missing data or a state actually reported zero
through October 2020. activity (with the exception of two reports).
50 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
Although the due dates for these reports have The investigation revealed that Hawkins was a State of
passed, it is important for ETA to obtain the Michigan Unemployment Insurance Agency (Michigan
missing reports and correct information to assess UIA) contract employee hired as a UI examiner.
UI program activities and mitigate the risk of Hawkins’s duties included reviewing, processing,
overpayments including fraud. Complete and and verifying the legitimacy of UI claims. In spring
accurate information can be used to identify 2020, Hawkins worked with Richardson and Taylor
program weaknesses and establish lessons who entered numerous false claims into the Michigan
learned that may be leveraged to improve states’ UIA’s system, many of which were filed using stolen
performance under future temporary programs. identities. Once the claims were filed, Richardson and
Furthermore, ETA’s unsuccessful efforts to obtain Taylor communicated with Hawkins, who then released
the missing information that was critical to its FY payment on the claims in exchange for bribes. Hawkins
2021 financial statement audit could have a negative used her insider access to fraudulently release payment
impact on the opinion DOL receives for FY 2022. on more than 700 claims, including the false claims filed
by Richardson and Taylor. In total, the scheme resulted
We made two recommendations to ETA to: (1) continue in the fraudulent disbursement of approximately $3.8
to identify states that have not complied with its reporting million of pandemic-related UI federal and state funds.
requirements for CARES Act UI programs and work
with them to ensure missing reports and information This is a joint investigation with the FBI, the Internal
are submitted before the commencement of DOL’s FY Revenue Service-Criminal Investigation Division
2022 financial statement audit and (2) continue to verify (IRS-CI), Secret Service, United States Postal
the accuracy of reports that cite no activity and ensure Inspection Service (USPIS), and the Michigan UIA.
corrections are made where warranted. United States v. Johnny Richardson and Micahia
Taylor (E.D. Michigan)
For more information, go to https://www.oig.dol.gov/
public/reports/oa/2022/19-22-004-03-315.pdf, Report Nigerian National Sentenced in
No. 19-22-004-03-315 (August 2, 2022). Maryland to 96 Months in Prison for
Unemployment Insurance and Elder
Michigan Residents Sentenced for Fraud Schemes
Role in $3.8 Million Unemployment
Insurance Fraud Scheme On July 12, 2022, Oluwaseyi Akinyemi, also known
as “Paddy Linkin” and “Joseph Kadin,” was sentenced
On April 13, 2022, Johnny Richardson was sentenced to 96 months in prison for his role in a pandemic-
to 97 months in prison and Micahia Taylor was related UI fraud scheme and a separate advance-fee
sentenced to 30 months in prison for conspiring with fraud scheme that targeted elderly victims via social
State of Michigan contract employee Brandi Hawkins. media. Akinyemi was also ordered to pay more than
Hawkins was previously sentenced for her role in the $486,000 in restitution to his victims.
conspiracy. The multi-million dollar UI fraud scheme
aimed at defrauding the State of Michigan and the Beginning in 2020, Akinyemi and his co-conspirators
U.S. Government of pandemic-related UI funds. filed fraudulent UI claims under the names of living
Richardson and Taylor were also ordered to pay and deceased victims. They used Akinyemi’s Maryland
almost $700,000 in restitution. residence and the home address of a client for whom
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 51
Worker and Retiree Benefit Programs
Akinyemi provided at-home nursing care as the mailing Raji also fraudulently used mailing addresses in
addresses to receive the UI debit cards associated the State of Maryland to receive UI debit cards
with the fraudulent claims. In total, Akinyemi and his funded from various states and directed the use of
co-conspirators used the identities of 19 individuals to the fraudulently obtained UI debit cards to engage
file fraudulent UI claims with multiple states, including in point-of-sale and ATM transactions. In total,
Maryland, with an intended loss of $250,000. he admitted that he was involved in the filing of
fraudulent UI claims that used the stolen identities
In a separate scheme, from July 2018 to April 2019, of more than 50 people and caused more than
Akinyemi and at least one co conspirator engaged in $900,000 in losses to the UI program.
an elder fraud scheme. He and his co-conspirators
targeted elderly victims on social media platforms and In a separate fraud conspiracy, from October 2018
impersonated the victims’ friends in order to convince to November 2020, Raji conspired with multiple
victims to send money. As part of the scheme to individuals charged in the District of Maryland in a
defraud, they presented themselves as agents of scheme to defraud several businesses, individuals,
real and fictitious government programs that offered and financial institutions of more than $750,000.
supposed financial benefits to qualifying individuals. Raji’s co-conspirators used fake identification
documents to open bank accounts. Raji then used
This is a joint investigation with Homeland Security the accounts to receive the proceeds from the
Investigations (HSI). United States v. Oluwaseyi various fraud schemes. Additionally, in July 2020,
Akinyemi (D. Maryland) Raji received and used funds from the submission of
a fraudulent PPP loan.
Maryland Man Sentenced to More Than
7 Years in Prison for Orchestrating In April and May 2022, co-defendants Adewumi
Abioye and Lukman Salam were sentenced to 27
$1.5 Million Unemployment Insurance
months and 30 months in federal prison, respectively,
and Aggravated Identity Theft Schemes
for conspiracy to commit wire fraud for their roles
in the scheme. Additional co-defendants Hameed
On May 20, 2022, Idowu Raji was sentenced to 94
Adesokan, Olatunde Vincent, Akolade Ojo, and
months in federal prison for conspiracy to commit
Damilola Lawal will be sentenced later this year in
access device fraud and aggravated identity theft
related cases.
in relation to multiple financial schemes. The court
also ordered Raji to pay approximately $1.8 million
This is a joint investigation with HSI, the Diplomatic
in restitution.
Security Service (DSS), and USPIS. United States v.
Idowu Raji (D. Maryland)
In 2020, Raji conspired with other individuals to
traffic and use unauthorized access devices to
fraudulently obtain more than $900,000 in UI and
Two Bronx Residents Sentenced for
other pandemic-related benefits. In furtherance of Role in Fraudulent Unemployment
the UI fraud scheme, he arranged for the delivery Insurance Benefit Scheme
of fraudulent UI debit cards to his co-conspirators,
provided instructions on the use of the cards, and On May 11, 2022, Elvin German was sentenced
then obtained a portion of the fraudulent UI benefits. to 48 months in prison and Vanessa Gomez was
52 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
sentenced to 6 months of home confinement. They members and associates engaged in acts involving
were jointly ordered to pay restitution of more than murder, assault, intimidation, narcotics trafficking,
$1.4 million, and Gomez was ordered to forfeit access device fraud, identity theft, obstruction of
approximately $54,000. Both were sentenced justice, and other crimes. Tywon Spann, also known
pursuant to guilty pleas for conspiring to commit wire as “Weez,” was sentenced to 81 months in prison
fraud and conspiracy to commit theft of government after pleading guilty to racketeering conspiracy in
funds. The charges stemmed from stealing the furtherance of a criminal enterprise, conspiracy to
identities of approximately 255 individuals and using commit fraud, aggravated identity theft, use of one or
those identities to file fraudulent pandemic-related UI more unauthorized access devices, and possession
claims in the State of New York. of 15 or more unauthorized access devices. Eriaius
Bentley was sentenced to 12 months and 1 day in
German and Gomez engaged in a scheme to obtain prison following a previous guilty plea to conspiracy
pandemic-related UI benefits by fraudulently filing to commit fraud and aggravated identity theft.
and verifying applications using the names and
Social Security numbers of more than 250 other Spann, Bentley, and others conspired to conduct
people. The State of New York’s DOL was alerted to and participate in the criminal enterprise through a
the suspicious activity with the applications, which pattern of racketeering activity that included narcotics
indicated the applications were either submitted trafficking, wire fraud, and identity theft. In pleading
and/or verified on a weekly basis from the same guilty, Spann and Bentley admitted to unlawfully
internet protocol (IP) address. Further investigation obtaining the PII of others in order to submit false
revealed that German owned a dog named Benji, applications for UI benefits. More than $420,000 in
whose name was the answer to the security UI benefits were paid to Robles Park members in
question for many of the fraudulent applications. As the form of bank debit cards issued in the names of
a result of the scheme, the State of New York’s DOL victims who did not give permission to use their PII.
authorized the release of more than $1.4 million in
pandemic-related UI benefits. This is a joint investigation with the FBI and the
Tampa Police Department. United States v. Tywon
This is a joint investigation with the Secret Service Spann (M.D. Florida), United States v. Eriaius Bentley
and the New York City Police Department. United (M.D. Florida)
States v. Elvin German and Vanessa Gomez (S.D.
New York) Former Washington State Employee
Sentenced for Stealing Unemployment
Two Members of “Robles Park” Assistance Benefits in Exchange for
Criminal Enterprise Sentenced for Kickbacks
Their Roles in an Unemployment
Insurance Fraud Scheme On September 16, 2022, Reyes De La Cruz, a former
employee of State of Washington’s Employment
On June 21, 2022, and on June 1, 2022, two Security Department (ESD), was sentenced to 60
members of the Robles Park criminal enterprise, months in prison for his role in a scheme to exploit
who previously entered guilty pleas, were sentenced. the State of Washington ESD’s and to fraudulently
Robles Park is a criminal organization whose
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 53
Worker and Retiree Benefit Programs
distribute more than $300,000 in pandemic-related UI identity theft. While employed by Massachusetts
benefits. De La Cruz previously pled guilty to charges DUA, she abused her position and her access to the
of wire fraud, bribery by an agent of an organization PUA claims system to submit fraudulent PUA claims
receiving federal funds, and aggravated identity theft. using stolen PII. Additionally, Pacheco submitted
claims on behalf of herself and her husband, who
Between July 2020 and March 2021, De La Cruz was incarcerated in Texas at that time and was
used his access to the State of Washington’s ESD ineligible to receive PUA funds. She also induced a
UI claims database to defraud the benefits system in friend to continue her PUA fraud scheme after she
multiple ways. In at least 10 instances, he accepted was charged and arrested.
bribes in exchange for fraudulently facilitating
UI benefits payments for his friends, family, or This is a joint investigation with the HSI, USPIS, and
acquaintances by making false entries into the claims the Massachusetts DUA. United States v. Pacheco et
database. In many cases, the individual did not al. (D. Massachusetts)
qualify for UI benefits, but De La Cruz manipulated
the claims database so the claimants received lump- Georgia Resident Pled Guilty to
sum retroactive payments that sometimes amounted Defrauding the Illinois Department of
to tens of thousands of dollars. The claimants
Employment Security of More Than
then paid him a portion of the lump sum ranging
$4 Million
from $500 to $6,500. In total, De La Cruz received
approximately $20,000 in kickback payments.
On June 8, 2022, Olushola Afolabi pled guilty to
conspiracy to commit wire fraud for his role in
This is a joint investigation with the FBI. U.S. v. De La
a scheme to defraud the Illinois Department of
Cruz (W.D. of Washington)
Employment Security of more than $4 million in state
and federal UI benefits.
Former Massachusetts Department of
Unemployment Assistance Employee From September 2020 through July 2021, Afolabi
Sentenced to 42 Months in Prison for and co-conspirators orchestrated a scheme to
COVID-19 Fraud Scheme file fraudulent UI claims using stolen identities,
which were often associated with elderly Illinois
On April 27, 2022, Tiffany Pacheco, a former residents. The co-conspirators opened Green
Commonwealth of Massachusetts Department of Dot bank accounts using the stolen identities
Unemployment Assistance (Massachusetts DUA) for the sole purpose of having fraudulent UI
employee, was sentenced to 42 months incarceration proceeds deposited into them. Afolabi and his co-
and ordered to pay over $199,000 in restitution to conspirators then used the Green Dot debit cards
Massachusetts DUA. to withdraw cash and purchase money orders
made out to themselves and to an online vehicle
In April 2020, Pacheco was hired by Massachusetts auction company. Afolabi and his co-conspirators
DUA, shortly after her release from federal prison then laundered the UI funds by using the money
following an unrelated conviction for aggravated orders to purchase salvaged automobiles in the
54 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
United States that they then shipped to Nigeria. Federal Inmate Pled Guilty to Role
Afolabi also facilitated the transfer of conspiracy in Stealing More Than $2.2 Million in
proceeds to overseas bank accounts in Nigeria.
Unemployment Insurance Benefits
This is a joint investigation with the Secret Service.
On May 10, 2022, Cortney Shields, a Bureau of
United States v. Olushola Afolabi, et al. (N.D. Alabama)
Prisons inmate, pled guilty to one count of conspiracy
to commit wire fraud, in connection with a scheme to
Maryland Man Pled Guilty for Role in defraud multiple SWAs and the SBA out of more than
$2.7 Million Unemployment Insurance $2.2 million in pandemic-related UI funds.
Fraud Scheme Involving More Than
600 Victims From approximately May 2020 through July 2021,
Shields conspired with multiple individuals to
On July 13, 2022, Sylvester Atekwane pled guilty submit more than 240 fraudulent UI benefit claims
to conspiracy to commit wire fraud for his role in to more than 20 SWAs. He fraudulently obtained
a $2.7 million pandemic-related UI fraud scheme more than $2.2 million in UI benefits, primarily from
that involved more than 600 victims. As part of his the states of Michigan and California. Shields also
guilty plea, he will be required to pay $250,000 successfully obtained a fraudulent PPP loan of more
in restitution. than $20,000. He participated in the scheme within
the confines of the Federal Correctional Complex in
From February 2020 to February 2021, Atekwane and Allenwood, Pennsylvania, where he was serving a
others collected the names, dates of birth, and Social sentence on an unrelated fraud case. Members of the
Security numbers of victims in order to impersonate conspiracy transferred portions of the fraud proceeds
those victims and submit fraudulent UI benefit claims to Shields via wire transfer into his Bureau of Prisons
using their identities. In at least one instance, Atekwane commissary account.
used his position as a caregiver to unlawfully access
victims’ PII to fraudulently obtain UI benefits. This is a joint investigation with the FBI, the United
States Postal Service (USPS) OIG and USPIS.
As part of the scheme, Atekwane notified co- United States v. D-1 Cortney Shaquan Shields
conspirators once UI debit cards were received at (E.D. Michigan).
his address or at nearby apartments. He and others
then collected the UI prepaid debit cards, activated Former Federal Employee Pled Guilty
them, and withdrew cash from ATMs using the debit to $2 Million Unemployment Insurance
cards. Throughout the scheme, at least $150,000 Fraud Scheme
in fraudulently obtained UI benefits from 61 victims
were sent directly to Atekwane’s address or to On July 26, 2022, Heather Huffman, who is a
nearby apartments. former registered nurse with the U.S. Department of
Veterans Affairs (VA), and several co-conspirators,
This is a joint investigation with the USPIS, HSI, and pled guilty to participating in a conspiracy to defraud
Treasury-OIG. United States v. Sylvester Atekwane multiple SWAs of pandemic-related UI benefits.
(D. Maryland) Heather Huffman, Sheldon Huffman, Anthowan
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 55
Worker and Retiree Benefit Programs
Daniels, and Dorothea Rosado pled guilty to During the course of the conspiracy, Huffman used
conspiracy to commit mail fraud and wire fraud. VA assets to further the scheme by using her work
Additionally, the Huffmans and Rosado pled guilty to computer to submit the false UI applications to SWAs.
aggravated identity theft. Daniels pled guilty to being In total, Huffman and co-conspirators fraudulently
a felon in possession of a firearm because a firearm obtained more than $2 million in UI benefits.
was discovered in a car operated by him during the
execution of a search warrant in this case. This is a joint investigation with the VA-OIG. United
States v. Huffman, et al. (E.D. Virginia)
YouTube Rapper Pled Guilty to
Unemployment Insurance Fraud
On July 6, 2022, YouTube rapper Fontrell Antonio
Baines, also known as “Nuke Bizzle,” pled guilty to
mail fraud charges related to his role in a pandemic-
related UI fraud scheme. Baines also pled guilty to
unlawful possession of a firearm and ammunition by
a convicted felon.
From July to September 2020, Baines assisted
in executing a scheme to submit, or cause to be
submitted, fraudulent UI benefit applications in the
names of others, including identity theft victims.
Baines utilized addresses he had access to in
Beverly Hills and Los Angeles to take possession of
and use the fraudulently obtained State of California
EDD UI debit cards. This scheme caused more than
From April 2020 through at least March 2021, 90 fraudulent PUA claims to be filed with the State
Heather Huffman worked with Sheldon Huffman, of California’s EDD. Baines’s scheme resulted in
Daniels, and Rosado to defraud the Virginia attempted losses that exceeded $1 million and actual
Employment Commission, the State of Washington’s losses of more than $700,000.
ESD, and the State of California’s EDD by submitting
false and misleading UI applications in the names Baines also bragged about his ability to defraud the
of identity theft victims including inmates of various State of California’s EDD in a music video posted on
correctional facilities. Once the fraudulent UI YouTube and in postings on his Instagram account.
applications were approved, the co conspirators He even used the fraudulently obtained UI debit
would file weekly false certifications of unemployment cards in a music video called “EDD” and boasted
status, resulting in the receipt of additional UI benefits about the scheme.
from the SWAs. The co-conspirators then received
and shared the prepaid debit cards containing the This is a joint investigation with the USPIS. United
fraudulently received UI benefits. States v. Baines (C.D. California)
56 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
Office of Workers’ Compensation Programs
The Office of Workers’ Compensation Programs (OWCP) administers four major workers’ compensation
programs: the Federal Employees’ Compensation Act (FECA) program, the Energy Employees Occupational
Illness Compensation Program, the Longshore and Harbor Workers’ Compensation program, and the Coal
Mine Workers’ Compensation program.
FECA is the largest of the programs and provides workers’ compensation coverage to millions of federal,
postal, and other employees for work-related injuries and illnesses. Benefits include wage replacement,
payment for medical care, vocational rehabilitation, and survivor benefits.
Alert Memorandum: The Office of in GAO’s Standards for Internal Control in the Federal
Workers’ Compensation Programs’ Government95 in three areas: (1) medical bill processing
service oversight, (2) FECA’s biweekly data set
Workers’ Compensation Medical
processing, and (3) the program integrity unit. OWCP’s
Bill Process System Data Were of
oversight processes and controls were not sufficient to
Undetermined Reliability ensure the reliability of its medical bill processing data.
In FY 2021, OWCP paid approximately $1.9 billion in
OWCP did not perform its own independent
medical benefits to three OWCP programs: Energy
verification and validation testing during the
Employees Occupational Illness Compensation, Coal
migration, implementation, and operation phases
Mine Workers’ Compensation, and FECA. Reliable
of the medical bill processing service, instead
and accurate medical bill processing information is
relying on the contractor’s quality assurance testing
crucial for OWCP and its claimants when making
and reporting activities. Many of OWCP’s specific
medical decisions, providing claims services, tracking
oversight controls remained undocumented or were
injury claims, and working to return claimants
insufficiently documented. Evidence of OWCP’s lack
back to work. As such, we conducted an audit to
of internal controls is recorded in the communications
determine the extent to which OWCP’s processes
and controls resulted in the sufficient management of 94
GAO, Assessing Data Reliability, GAO-20-283G
the collection, processing, and reporting of accurate (December 2019), available at: https://www.gao.gov/
medical bill processing data. assets/gao-20-283g.pdf
95
GAO’s Standards for Internal Control in the Federal
OWCP processes and controls for the Workers’ Government states “Internal control comprises the
Compensation Medical Bill Process system were found plans, methods, policies, and procedures used to fulfill
the mission, strategic plan, goals, and objectives of the
insufficient to provide assurance that the collection,
entity. Internal control serves as the first line of defense
processing, and reporting of the data were reliable in safeguarding assets. In short, internal control helps
for our testing. Using GAO’s guidance, we made the managers achieve desired results through effective
determination that OWCP’s medical bill processing stewardship of public resources.” GAO 14-704G
data were of undetermined reliability.94 Specifically, (September 2014), OV1.03, available at: https://www.gao.
we found OWCP lacked internal controls as defined gov/products/gao-14-704g
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 57
Worker and Retiree Benefit Programs
of issues exchanged with the contractor shortly after other systems, program management and staff, and
the medical bill processing system went live on April other stakeholders.97
27, 2020. In these communications, OWCP identified
evidence of insufficient testing and significant For more information, go to https://www.oig.dol.gov/
issues with documentation and reporting errors. public/reports/oa/2022/23-22-002-04-001.pdf, Report
These communications also further demonstrated No. 23-22-002-04-001 (September 26, 2022).
that documentation of internal controls remained
incomplete or unimplemented. Doctor and Office Manager Convicted
of Health Care Kickback Conspiracy
We also identified OWCP lacked controls over a
key data set: FECA’s biweekly data file.96 OWCP did On September 21, 2022, Dr. Steven J. Valentino,
not provide any procedural documentation required an orthopedic surgeon operating out of the greater
to correctly process system data, and we noted Philadelphia area, and his office manager, Michele
the mapping of data fields and business rules were Miller, were convicted by a federal jury of conspiracy
undocumented and undeterminable in relation to to pay and receive health care kickbacks in exchange
system functions. As a result, we determined the for the referral of prescription medications, including
process lacked controls to ensure the reliability of the medications prescribed under OWCP.
data set. In addition, OWCP did not have program
integrity unit policies and procedures in place to Evidence presented at trial demonstrated that Valentino
identify potential fraud. and Miller participated in an incentivized prescribing
scheme involving injured federal workers and Medicare
Inaccurate data resulting from insufficient OWCP beneficiaries. Valentino and Miller received kickbacks
processes and controls may result in untimely or for referring, ordering, and arranging for medications—
the denial of medical treatment, impacting claimants including expensive compound medications—to be
and their dependents. Additionally, insufficient filled by a Houston pharmacy. Between May 2013 and
management and oversight along with unreliable data July 2017, the pharmacy billed OWCP and Medicare
could increase risks of overpayments, over-treatment, approximately $2.5 million and was paid approximately
billing code errors, or fraud. OWCP and other federal $1.1 million for prescriptions referred, ordered, and
agencies should be aware of the undetermined arranged by Valentino and Miller in exchange for illegal
reliability of OWCP’s medical bill processing data. health care kickbacks.
We made one recommendation to the Director of This is a joint investigation with USPS-OIG and the
the Office of Workers’ Compensation Programs: to U.S. Department of Health and Human Services-OIG.
implement internal controls that ensure the quality United States v. Valentino, et al. (E.D. Pennsylvania)
of OWCP’s medical bill processing data when it
is collected, processed, and shared with OWCP’s 97
GAO’s Standards for Internal Control in the Federal
Government states, “documentation is a necessary part of
96
These biweekly data sets contain medical bill payment an effective internal control system.” Thus, implementation
and claimant information that is provided to federal includes documentation. GAO 14-704G (September 2014),
agencies and their OIGs for use in managing FECA claims, OV4.08, available at: https://www.gao.gov/products/gao-
monitoring costs, and conducting reviews for fraud. 14-704g
58 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Worker and Retiree Benefit Programs
Employee Benefit Plans
The Employee Benefits Security Administration (EBSA) is responsible for ensuring the security of retirement,
health, and other workplace-related benefits of America’s workers and their families. EBSA works to educate
and assist the nearly 152 million workers, retirees, and family members who are covered by nearly 747,000
private retirement plans, 2.5 million health plans, and 673,000 other welfare benefit plans that, together, hold
estimated assets of $12.0 trillion, as well as plan sponsors and members of the employee benefits community.
Former Chiropractor Sentenced to This was a joint investigation with Amtrak-OIG, the
Nearly 6 Years in Federal Prison California Department of Insurance, EBSA, the FBI,
and Office of Personnel Management-OIG. United
On April 12, 2022, former chiropractor Susan Poon States v. Poon (C.D. California)
was sentenced to 70 months in federal prison
for stealing from health insurers by fraudulently Union Attorney Sentenced for
submitting more than $2 million in billings for Obstructing a DOL Investigation
chiropractic services and medical diagnoses that
were not rendered. In addition, she submitted billings On July 8, 2022, Charles Johnston, who is a former
for office visits that never occurred and falsely attorney for the Plumbers and Pipefitters Labor Union
prescribed medical devices as part of the scheme. Plans, was sentenced to 12 months of probation
Poon was ordered to pay approximately $1.3 million in and a $50,000 fine. In November 2021, he was
restitution to her victims. convicted following a 4-day trial of obstructing a
DOL investigation regarding the administration of the
From January 2015 to April 2018, Poon schemed to Plumbers and Pipefitters Local 520 Pension Plan.
defraud health insurance companies, including the
Teamsters Western Region and Local 177 Health In September 2014, DOL served a subpoena for
Care Plan, by submitting false reimbursement claims records on the union’s pension plan in connection with
for services that were never performed. Poon also an investigation it was conducting into the pension
submitted fraudulent prescriptions containing medical plan’s financial activities. Johnston informed the DOL
diagnoses of individuals who she had never met, investigator that, as the attorney for the pension plan,
including toddlers and children. he would produce the records. Johnston concealed
and withheld emails and documents related to an
Poon claimed to have met with and treated patients internal audit of the union’s pension plan from DOL.
who were dependents of plan participants. These The audit findings, which Johnston received through
dependents included the spouses and children a series of meetings and email communications,
of Costco Wholesale Corporation (Costco) and reported miscalculations of both pension and health
United Parcel Service (UPS) employees. She and welfare benefits. When DOL asked whether he
unlawfully took and used the dependent’s PII in her had produced all the requested documents, Johnston
reimbursement requests and prescriptions. Poon lied and stated he had done so.
obtained the PII by attending health fairs at various
UPS warehouses and Costco locations and soliciting This was a joint investigation with EBSA and the FBI.
such information from employees. United States v. Charles Johnston (M.D. Pennsylvania)
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 59
Worker Safety, Health,
and Workplace Rights
Worker Safety, Health, and Workplace Rights
Occupational Safety and Health Administration
The mission of the Occupational Safety and Health Administration (OSHA) is to ensure safe and healthful
working conditions for workers by setting and enforcing workplace safety and health standards and by
providing training, outreach, education, and assistance.
New Jersey Man Sentenced for In furtherance of their fraud scheme, the brothers,
Conspiring with Brother, an OSHA who initially demanded higher sums of cash,
ultimately charged the contractors $4,000 to $6,000
Compliance Officer, to Extort
each for the safety training. Paul Idrovo collected the
Contractors
cash and provided the contractors with fraudulent
computer generated safety and health certificates
On September 21, 2022, Paul Idrovo was sentenced
that falsely stated the employees had received
to 36 months of federal probation and ordered to
OSHA-certified safety training from “Jose Diaz”
pay restitution in the amount of $19,600. Idrovo
and “Paul Mejia.” Paul Idrovo shared portions of the
was sentenced after pleading guilty to conspiracy
extortion payments with Alvaro Idrovo.
to defraud the United States and to commit
extortion through his brother’s position as an OSHA
This is a joint investigation with the FBI. United States
compliance safety and health officer (CSHO).
v. Alvaro Idrovo, et al. (D. New Jersey)
Paul Idrovo was previously charged in September
2020 along with his brother—Alvaro Idrovo, former
CSHO—with conspiring to commit an offense against
the United States based on the extortion of a New
Jersey contractor.
According to court documents and statements
made in open court, while acting in an official
capacity as a CSHO, Alvaro Idrovo misrepresented
to contractors in the State of New Jersey that they
were facing significant OSHA fines and penalties
if they did not obtain OSHA safety training from a
specific individual. Alvaro Idrovo would provide the
contractors with the phone number for the required
trainer, allegedly named “Jose Diaz” or “Paul Mejia,”
when, in fact, the phone number actually belonged
to Paul Idrovo, posing under these names to conceal
the brothers’ relationship.
62 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
62 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Employment and
Training Programs
Employment and Training Programs
Employment and Training Administration
Programs
The Employment and Training Administration (ETA) provides employment assistance, labor market
information, and job training through the administration of programs authorized by the Workforce
Innovation and Opportunity Act (WIOA) for adults, youth, dislocated workers, and other targeted
populations. WIOA grant funds are allocated to state and local areas, based on a formula distribution, and
to governmental and private entities through competitive grant awards.
Maryland Man Sentenced for Computer To obtain the POE, Cuomo and other members
Fraud and His Role in Identity Theft of the conspiracy pretended to be the debtors,
created thousands of false online UI applications
Ring that Targeted State Governments
in the debtors’ names and with the debtors’ PII,
including Social Security numbers, and completed
On August 11, 2022, Guy Cuomo, who is also known
the applications to the point where each debtor’s
as “John Monaco,” was sentenced to 45 months
last known place of employment appeared.
in prison for computer fraud, misuse of a Social
After confirming the debtors worked for the
Security number, aggravated identity theft, and
relevant employers, Paymerica sold the POE for
related conspiracy charges for his role in a scheme
approximately $90 per debtor. In approximately
to sell information unlawfully obtained from the State
3 years, Paymerica made nearly $1 million selling
of New York’s DOL and other SWAs. In September
the stolen POE.
2022, co-defendants Sarah Bromfield, Rebecca
Fogle, and Shamair Brison were sentenced to time
The fraud scheme involved attempts to obtain the
served and terms of supervised release for their
POE for as many as 200,000 people from all 50
roles in this case.
states, and Paymerica sold the POE of at least
12,000 individuals. Trowbridge was previously
The evidence at Cuomo’s trial demonstrated that
sentenced to 39 months in prison and fined $30,000
Cuomo worked for and managed companies owned
for his role in the fraud scheme.
by Jason “J.R.” Trowbridge in Frederick, Maryland,
including Paymerica Corporation. Paymerica
This is a joint investigation with the State of New
researched where purported debtors worked and
York’s DOL, Office of Special Investigations.
sold their employer information, which was known
United States v. Guy Cuomo, aka John Monaco
as place-of-employment (POE) information, to debt
(N.D. New York)
collectors and companies selling this information to
debt collectors. In the debt-collecting industry, the
process is known as “skiptracing.”
64 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Employment and Training Programs
Foreign Labor Certification Programs
ETA administers a number of foreign labor certification (FLC) programs that allow U.S. employers to
employ foreign workers to meet domestic worker shortages, PERM, H-1B, H-2A, and H-2B. The PERM
program allows an employer to hire foreign nationals to work in the U.S. on a permanent basis, while the
H-1B, H-2A, and H-2B programs are for temporary employment in the U.S. The H-1B program allows
employers to hire foreign workers on a temporary basis in specialty occupations or as fashion models.
The H-2A program allows employers to hire foreign workers for temporary agricultural jobs, in contrast
to the H-2B program which is for temporary non-agricultural jobs. ETA ensures the admission of foreign
workers into the United States on a PERM, H-2A, or H-2B visa will not adversely affect job opportunities,
wages, and working conditions of U.S. workers. The OIG also investigates labor trafficking cases that
involve fraud against FLC programs.
Guatemalan National Pleads Guilty to They made the children work extended hours with the
Forced Labor of Two Minors threat of physical harm if they did not comply.
On August 23, 2022, Olga Choc Laj pled guilty to This is a joint investigation with FBI and HSI. United
two counts of forced labor for her involvement in the States v. Santos Teodoro Ac Salazar and Olga Choc
labor trafficking of two minors. Laj (N.D. Illinois)
From February 2019 through February 2020, Choc Florida Individuals Convicted of
Laj, along with a co-conspirator, devised a scheme Racketeering Conspiracy Involving the
to unlawfully enter the United States with minors Forced Labor of Mexican Agricultural
to facilitate entry into the United States. Choc Laj H-2A Workers
and the co-conspirator, who are both Guatemalan
citizens, coordinated with smugglers and third parties On April 6, 2022, and July 26, 2022, Christina Gamez
to locate two minors in Guatemala and used those and Efrain Cabrera Rodas, respectively, pled guilty to
children to facilitate their entry into the United States. a federal racketeering conspiracy, which victimized
Mexican agricultural workers admitted to the United
Additionally, Choc Laj and the co-conspirator States under the H-2A temporary visa program.
obtained fraudulent identity documents for one of the
minors, falsely representing the minor as an adult. Gamez and Rodas worked for Los Villatoros
The minor was made to work at businesses and as Harvesting (LVH), a labor contracting company
a domestic servant from 2019 to February 2020; the employing Mexican H-2A workers harvesting fruits
other minor worked as a domestic servant from 2019 and vegetables in the states of Florida, Kentucky,
to February 2020. Choc Laj and the co conspirator Indiana, Georgia, and North Carolina. Gamez
did not pay the minors for their domestic work or worked as a bookkeeper, manager, and supervisor
permit them to attend school or leave the residence. while Cabrera Rodas worked as a recruiter,
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 65
Employment and Training Programs
manager, and supervisor. The investigation revealed
that Gamez and Rodas conspired with LVH’s
owners to commit racketeering offenses, including
subjecting H-2A workers to forced labor, harboring,
visa fraud, and fraud in foreign labor contracting.
Gamez and Rodas admitted they and their co-
conspirators used coercive means to obtain
thousands of hours of physically demanding
agricultural labor from the victimized H-2A workers,
all for lesser pay. The coercive means used included
confiscating the workers’ passports; subjecting the
workers to crowded, unsanitary, and degrading
living conditions; isolating the workers and limiting
their ability to interact with anyone other than
LVH employees; and subjecting workers to debt
manipulation. Gamez also admitted that, while
working for LVH, she knowingly prepared and sent
falsified records to federal investigators to conceal
aspects of the criminal enterprise.
This is a joint investigation with the Palm Beach
County Human Trafficking Task Force (including
the FBI, HSI, and the Palm Beach County Sheriff’s
Office), and DSS. United States v. Moreno, et al.
(M.D. Florida)
66 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
66 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Labor
Racketeering
Labor Racketeering
Labor Racketeering
Under the Inspector General Act of 1978, as amended, the OIG is responsible for investigating labor
racketeering and the influence of organized criminal enterprises involving unions, employee benefit plans,
and labor-management relations.
Labor racketeering refers to the infiltration, exploitation, or control of a union, employee benefit plan, employer
entity, or workforce, carried out through illegal, violent, or fraudulent means. OIG labor racketeering investigations
focus largely on individuals and organized criminal enterprises engaged in embezzlement, extortion, violence
against union members or employers, and other related criminal activities.
Our investigations continue to identify fraudulent payments from employers to union representatives in order
to gain favorable labor agreements for the employer. Our investigations have also identified complex financial
and investment schemes used to defraud union affiliated benefit plans, resulting in millions of dollars in
losses to plan participants.
United Auto Workers Local 412 Former Illinois State Senator
Financial Secretary-Treasurer Sentenced for Fraudulently Receiving
Sentenced to 57 Months in Prison for Salary and Benefits from Labor Union
Embezzlement and Money Laundering
On June 21, 2022, Thomas E. Cullerton, a former
On July 26, 2022, Timothy Edmunds, a former Illinois State Senator, was sentenced to 12 months
United Auto Workers (UAW) Local 412 Financial in prison and ordered to pay more than $245,000
Secretary-Treasurer, was sentenced to 57 months in in restitution for fraudulently receiving salary and
prison and ordered to pay approximately $2 million benefits from Teamsters Joint Council 25.
in restitution and approximately $1 million in fines
based on his convictions for embezzling union funds In early 2013, Cullerton was hired as a purported union
and laundering the proceeds. organizer and remained on the payroll until February
2016. For approximately 3 years, while serving as a
Edmunds admitted he embezzled approximately $2 state senator, he was compensated by the Teamsters
million from UAW Local 412 and laundered it through Joint Council 25 with a salary, monthly allowances for
a secondary bank account he personally controlled. his car and cellular phone, annual bonuses, and union-
He used the embezzlement proceeds to gamble sponsored pension and health benefits. Cullerton
and to purchase luxury clothing, firearms, cocaine, admitted he performed little or no work during those
and high-end automobiles. In an effort to conceal 3 years. He fraudulently obtained approximately
his embezzlement, Edmunds provided fake bank $169,000 in salary and bonuses, approximately
statements to international UAW auditors and caused $57,000 in health and pension contributions, and
false labor management reports to be filed with DOL. approximately $21,000 in reimbursed medical claims
from Teamsters Joint Council 25 and its members.
This is a joint investigation with the FBI, DOL’s Office
of Labor Management Standards, and the IRS-CI. This is a joint investigation with the FBI. United
United States v. Timothy Edmunds (E.D. Michigan) States v. Thomas E. Cullerton (N.D. Illinois)
68 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
68 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Departmental
Management
Departmental Management
Departmental Management
The OIG performs oversight work involving the Department’s operations, financial management, and IT services.
The U.S. Department of Labor Did Not six PIIA compliance requirements in relation to
Meet the Requirements for Compliance the FECA and UI programs.
with the Payment Integrity Information
For Requirement 3, DOL reported FPUC, PEUC,
Act for FY 2021
and regular UI collectively as one program for
FY 2021. DOL also utilized the improper payment
The OIG contracted with the independent
rate derived from the UI program to calculate the
certified public accounting firm KPMG LLP
improper payments for the combined FPUC and
(KPMG) to conduct a performance audit related
PEUC outlays of the UI program.
to DOL’s compliance with the Payment Integrity
Information Act of 2019 (PIIA), as defined in
KPMG concluded DOL met all six requirements
Title 31 of the United States Code (U.S.C.),
for FECA and three of six requirements for UI.
section 3351.2, for the FY ended September 30,
See Table 2 for the requirements not met for UI.
2021. PIIA requires federal agencies to identify
programs susceptible to significant improper
However, DOL’s reporting did not take into account
payments, estimate the improper payments for
that a portion of FPUC outlays were associated
those programs, and report on actions to reduce
with PUA claims rather than regular UI claims.
the improper payments in those programs.
The impact of including the portion of FPUC activity
KPMG’s objective to evaluate DOL’s compliance
related to PUA claims could not be determined
with PIIA included determining whether DOL met
because the PUA improper payment rate was not
Table 2: Criteria for PIIA Requirements Not Met for
the Unemployment Insurance Program
Requirement
Criteria
#
Published improper payment estimates for all programs and activities identified under
3
section 3352(a) in the accompanying materials to the annual financial statement (if required)
Published improper payments reduction targets established under section 3352(d) that
DOL may have in the accompanying materials to the financial statement for each program
5
or activity assessed to be at risk, and has demonstrated improvements and developed a
plan to meet the reduction targets
Reported an improper payment rate of less than 10 percent for each program and activity
6
for which an estimate was published under section 3352(c)
Source: Requirements of PIIA as defined in Title 31 of U.S.C., section 3351.2
70 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Departmental Management
Figure 5: DOL’s Reported UI Payments and Accuracy Rates, FY 2021
Source: DOL FY 2021 information reported on PaymentAccuracy.gov
required to be reported for FY 2021. DOL indicated were either unknown or improper (see Figure 5).
it had discussed this approach with the Office of For Requirement 6, DOL’s combined rate did
Management and Budget (OMB) and obtained not fall below the 10 percent threshold for the UI
approval. However, these discussions did not include program improper payment rate. KPMG found
sufficient specific information about the approach. DOL needed continued improvements to meet the
KPMG found DOL needed improvements in the required PIIA threshold.
development of improper payment rate estimates.
98
OMB explains that, for purposes of PIIA implementation,
KPMG also determined Requirements 5 and 6 were all program outlays will fall in one of three possible
payment type categories: proper, improper, or unknown.
not met for the UI program. For Requirement 5,
Unknown payments are those that result from instances
KPMG noted the UI program did not demonstrate
where an agency is unable to determine whether the
improvement from the improper payment target
payment falls into the proper or improper category.
rate published in FY 2020 as the overall improper
OMB, “Transmittal of Appendix C to OMB Circular A-123,
payment rate increased. Compared to 9.17 percent
Requirements for Payment Integrity Improvement,”
reported in FY 2020, DOL reported an 18.71 percent Memorandum (March 5, 2021), last accessed September
improper payment rate and an unknown payment98 27, 2022, available at: https://www.whitehouse.gov/wp-
rate of 0.21 percent99 in FY 2021 for the UI program. content/uploads/2021/03/M-21-19.pdf
Based on those rates, more than $78 billion of the 99
An unknown payment rate was not required to be
$413 billion in total UI program payments for the year reported for FY 2020.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 71
Departmental Management
KPMG made two recommendations to ETA to: revise effectiveness to provide reasonable assurance that the
the methodology used to calculate the improper control objectives were achieved for the audit period.
payment information for the FPUC program and
maintain the current focus on increasing technical This report, No. 22-22-009-04-431 (September 30,
assistance and funding to states to demonstrate 2022), contains sensitive information and will not be
improvement on the rate. released publicly.
For more information, go to https://www.oig.dol.gov/ Risk Assessment of DOL’s Purchase
public/reports/oa/2022/22-22-007-13-001.pdf, Report and Travel Card Programs
No. 22-22-007-13-001 (July 1, 2022).
The Government Charge Card Abuse Prevention Act
Service Auditors’ Report on the of 2012 (Charge Card Act) was designed to prevent
Integrated Federal Employees’ recurring waste, fraud, and abuse of charge cards
Compensation System for the Period government wide. We contracted with KPMG to assist
October 1, 2021, through June 30, 2022 with the risk assessment of DOL’s purchase and travel
card programs for the period July 1, 2020, through
The OIG contracted with KPMG to perform an September 30, 2021, pursuant to the Charge Card
examination of the integrated Federal Employees’ Act. To perform the risk assessment, key program
Compensation System (iFECS) transaction objectives were assessed for the purchase and
processing for application and general controls, travel card programs. Various methods of review and
and to determine if iFECS application and general analytical testing were used to assess the residual
controls, as described in the report, were fairly risks100 as of September 30, 2021, assign a risk impact
presented, suitably designed, and effectively and risk likelihood level,101 and then assign a risk level
operating for the period October 1, 2021, through ranging from very low to very high (see Figure 6).
June 30, 2022. Based on the results of the assessment, the risk of
illegal, improper, or erroneous use of DOL’s purchase
The controls and control objectives included in and travel cards is very low to moderate.
the description are those that the management of
OWCP’s Division of Federal Employees’, Longshore For the purchase card program, two objectives had a
and Harbor Workers’ Compensation and OASAM moderate risk level, one had a low risk level, and three
believe are likely to be internal controls for financial had a very low risk level. For the travel card program,
reporting relevant to user entities of the FECA three objectives had a moderate risk level, two had a
Special Fund and iFECS throughout the period. low risk level, and one had a very low risk level.
KPMG examined the suitability of the design and 100
Residual risk is the exposure remaining from an inherent
operating effectiveness of the controls and control risk after action has been taken to manage it, using the
objectives. KPMG concluded in all material respects same assessment standards as the inherent assessment.
101
Risk impact is the likely magnitude that the risks
that the description fairly presented the claims
would have on the key objective, and risk likelihood is
processing system, and that the related controls
the level of possibility that a risk will occur that effects
were suitably designed and operating with sufficient
the key objective.
72 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Departmental Management
Figure 6: Definitions of Risk Impacts and Likelihoods
Risk Level Risk Impact Definition Risk Likelihood Definition
The degradation of an activity or role is Risk event is almost certain to occur.
severe, impacting the ability to meet one or Likelihood of occurrence is 90-100 percent.
Very High more strategic goal or objective, produce
key deliverables, or reach required levels of
performance to meet the mission.
The degradation of an activity or role is Risk event is highly likely to occur.
major, requiring immediate escalation or Likelihood of occurrence is 50-90 percent.
High
management intervention to reach required
levels of performance of key functions.
The degradation of an activity or role Risk event is possible to occur. Likelihood
Moderate is moderate with material impact on of occurrence is 25-50 percent.
performance of key functions.
The degradation of an activity or role is Risk event is unlikely to occur. Likelihood of
Low minor. It is noticeable and may affect occurrence is 10-25 percent.
performance of key functions.
The degradation in activity or role Risk event occurrence is remote. Likelihood
is negligible and is not expected to of occurrence is 0-10 percent.
Very Low
significantly affect performance of
key functions.
Source: DOL OIG Framework for Enterprise Risk Management, Version 3.0, May 31, 2022
For more information, go to https://www.oig.dol. data. The federal government collects geospatial
gov/public/reports/oa/2022/22-22-008-50-598.pdf, data to help in decision making and to support
Report No. 22-22-008-50-598 (August 31, 2022). many functions, including national security, law
enforcement, health care, environmental protection,
DOL Made Progress in Implementing and natural resources conservation.
Geospatial Data Act Requirements, But
The GDA established the Federal Geographic
More Needs to Be Done
Data Committee (FGDC) as the lead federal
entity for developing, implementing, and reviewing
The Geospatial Data Act of 2018 (GDA) was signed
the policies, practices, and standards related to
into law on October 5, 2018, to foster efficient
geospatial data. Federal agencies have 5 years from
management of geospatial data, technologies, and
the date the FGDC establishes each data standard
infrastructure through enhanced coordination among
to complete implementation of GDA requirements.
federal, state, local, and tribal governments, along
Additionally, the GDA mandates that, once every
with the private sector and academia. Geospatial
2 years, the IG must perform an audit of agency
data is information tied to a location on Earth, such
compliance with the requirements. We performed
as maps, satellite imagery, and census and housing
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 73
Departmental Management
our audit to determine to what extent the agency had within DOL’s collection process. Our audit identified
fulfilled the GDA requirements to date and followed drone data that should have been identified as
up on our previous audit report102 recommendations. geospatial data being maintained and shared.
We found DOL made progress in addressing We also found DOL reporting of data characteristics
the 13 specific requirements of the GDA. DOL to Data.gov was not effectively managed or
initiated action on and met 3 requirements: the overseen by the Chief Data Officer due to lack of
coordination, declassified data, and appointment of standardization. Furthermore, DOL had no plans
contact requirements. DOL also made progress on for long-term funding or allocations for geospatial
implementing the remaining 10, but more remains to projects or to purchase data quality standards.
be done in order to meet all 13 GDA requirements. Finally, DOL’s progress is impacted by the FGDC
and OMB not yet issuing required guidance and
DOL must continue to make progress in regulations pertinent to the GDA.
implementing the GDA requirements and establishing
effective controls over identifying geospatial data In regard to the recommendations we made in our
within agency systems. The Department’s progress prior report, DOL performed corrective actions to
to date has been hindered by several factors. This close both recommendations. In the current report,
includes: inconsistent data collection processes, we made three recommendations to the Chief
lack of identified funding for licensing of data quality Data Officer to implement processes regarding
standards, lack of agency coordination and reporting, agency geospatial data, update policies and
and lack of guidance and regulations from the FGDC procedures, and develop a plan to sufficiently fund
and OMB. For example, MSHA and OSHA systems the implementation and oversight of data quality
contained geospatial data that was not identified standards throughout DOL and for its contracts.
102
DOL Needs to Do More to Implement the Geospatial
For more information, go to https://www.oig.dol.gov/
Data Act of 2018, Report No. 23-20-004-01-001
public/reports/oa/2022/23-22-003-01-001.pdf, Report
(September 30, 2020), available at: https://www.oig.dol.
No. 23-22-003-01-001 (September 30, 2022).
gov/public/reports/oa/2020/23-20-004-01-001.pdf
74 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Departmental Management
Single Audits
A single audit provides an organization-wide examination of an entity expending federal assistance funds
received for its operations. The audit is typically conducted annually by an independent certified public
accountant, and its objective is to provide assurance to the U.S. government regarding the management and
use of funds by recipients such as states, schools, universities, and nonprofits.
Quality Control Review of Single Audits identified AARP Foundation as a high-risk auditee
in the summary documentation, when, in fact, the
Under Uniform Guidance,103 cognizant federal organization has met all the criteria to be considered
agencies must oversee the implementation of single a low-risk auditee. We recommended Grant
audit requirements. DOL is currently cognizant Thornton LLP correctly calculate and report the Type
for six entities, and the OIG periodically performs A/B threshold and edit summary documentation
quality control reviews (QCR) of the entities’ single to ensure it supports the results of the audit work
audits. During this reporting period, we conducted performed and the conclusions reached on low-risk
two QCRs: one on the Single Audit of the American auditee status.
Association of Retired Persons (AARP) Foundation
for the Year Ended December 31, 2021, and the
other on the Single Audit of the State of Hawaii for
the FY Ended June 30, 2020.
Quality Control Review for the Single
Audit of AARP Foundation for the Year
Ended December 31, 2021
We determined Grant Thornton LLP’s audit work
on the Single Audit of the AARP Foundation for the
year ended December 31, 2021, generally met the
requirements of generally accepted government
auditing standards (GAGAS), generally accepted Quality Control Review for the Single
auditing standards (GAAS), and OMB Uniform Audit of the State of Hawaii for the
Guidance. However, Grant Thornton LLP incorrectly Fiscal Year Ended June 30, 2020
calculated and reported the Type A/B threshold
and needs to improve the editing of summary We determined that Accuity LLP’s audit work on
documentation. Grant Thornton LLP incorrectly the Single Audit of the State of Hawaii for the FY
103
Uniform Guidance refers to 2 C.F.R. Part 200, OMB’s ended June 30, 2020, was acceptable and met the
“Uniform Administrative Requirements, Cost Principles, requirements of applicable standards, including
and Audit Requirements for Federal Awards.” GAGAS, GAAS, and OMB Uniform Guidance.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 75
OIG Whistleblower
Activities
OIG Whistleblower Activities
OIG Whistleblower Activities
Whistleblower Protection Coordinator Inspector General has been designated to serve
as the WPC. Pursuant to this designation, the
DOL employees, contractors, subcontractors, WPC has:
and grantees perform an important service by • Provided input into training that was presented
reporting evidence of wrongdoing, including to, and required to be completed by, all DOL
misconduct, fraud, waste, and abuse, in DOL employees, entitled “Prohibited Personnel
programs. Whistleblowers should never be Practices, Whistleblower Protection”;
subjected to, or threatened with, retaliation for
• Provided live training to all DOL supervisors
having engaged in a protected communication
and managers entitled “Responding to
or protected activity. The OIG plays a vital role
Whistleblower Retaliation Complaints/
in ensuring that DOL employees and employees
Overview of Prohibited Personnel Practices –
of DOL grantees and contractors are informed of
Annual Training”;
their rights and protections against retaliation for
“blowing the whistle.” This work is done by the • Developed training for new employees titled
OIG Whistleblower Protection Coordinator (WPC) “Whistleblower Rights and Protections for
Program, which is housed in the OIG’s Office of DOL Employees” that is included in all DOL
Legal Services. employees’ New Employee Orientation;
• Updated the DOL OIG public facing
Pursuant to Section 2 of the Whistleblower website titled “Whistleblower Protection
Protection Coordination Act of 2018 (S.1869, Coordinator,” which is available to all DOL
June 25, 2018), every inspector general’s office and OIG employees, to provide information on
is required to designate a WPC. According whistleblower protections and options for DOL
to Section 2, the WPC (1) educates agency employees and employees of DOL contractors
employees about prohibitions against retaliation and grantees;
for protected disclosures; (2) educates agency • Established a dedicated e-mail address
employees who have made or are contemplating (OIGWhistleblower@oig.dol.gov) to receive
making a protected disclosure about their and respond to whistleblower-related inquiries
rights and the remedies against retaliation for from DOL employees;
protected disclosures, including the means
• Worked with DOL to help obtain recertification
by which employees may seek review of any
of its 2302(c) program (October 2019);
allegation of reprisal, as well as about the
roles of the OIG, the Office of Special Counsel • Obtained the OIG’s recertification of its 2302(c)
(OSC), the Merit Systems Protection Board, program (June 2020); and
and any other relevant entities; and (3) provides • Monitored whistleblower retaliation
general information about the timeliness of such complaints received by the OIG, as well
cases, the availability of any alternative dispute as whistleblower retaliation investigations
mechanisms, and avenues for potential relief. conducted by the OIG.
Within the OIG, an Associate Counsel to the
78 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
OIG Whistleblower Activities
Whistleblower Retaliation basis, refer such allegations to the OSC for
Investigations review and investigation.
The OIG can initiate its own investigations into Further, pursuant to 41 U.S.C. § 4712, the OIG
allegations of improper or illegal retaliation is required, with some exceptions, to investigate
brought by DOL employees or, on a discretionary whistleblower retaliation allegations made by
employees of DOL contractors or grantees.
Whistleblower Retaliation Investigations
April 1, 2022–September 30, 2022
Pending DOL employee complaint investigations 1
Reports related to DOL employee whistleblower retaliation complaints sent to the appropriate
2
agencies within the Department
Pending grantee/contractor employee complaint investigations 5
Reports pending with DOL 1
Decision issued by the DOL OASAM 2
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 79
Legislative
Recommendations
Legislative Recommendations
Legislative Recommendations
The Inspector General Act of 1978, as amended, requires the OIG to review existing or proposed legislation
and regulations and to make recommendations in the Semiannual Report to Congress concerning their
impact both on the economy and efficiency of the Department’s programs and on the prevention of fraud,
waste, and abuse. The OIG continues to propose the following legislative actions to increase efficiency and
protect the Department’s programs.
Allow DOL and the OIG Access to amend its regulations through rulemaking to reinforce
Unemployment Insurance Claimant that UI information must be provided to the OIG for all
IG engagements.
Data and Wage Records
In response to our recommendation, ETA implemented
Congress should consider legislative action to
a temporary solution. In August 2021, ETA issued
ensure DOL and the OIG have unfettered access to
Unemployment Insurance Program Letter (UIPL) No.
State Workforce Agencies’ (SWA) unemployment
04-17, Change 1, requiring SWAs to disclose UI data
insurance (UI) claimant data and wage records for our
to the OIG for audits and investigations during the
respective oversight responsibilities. The Department
pandemic period. ETA also awarded fraud prevention
has stated that, outside of the temporary authority
grants to states conditioned on requiring OIG access
provided by the CARES Act, it lacks the authority to
to their UI data for investigative and audit purposes
require SWAs to provide the OIG with access to UI
through December 31, 2023.
claimant data and wage records unless the OIG is
conducting an investigation into a particular instance
The OIG met with ETA numerous times and requested
of suspected UI fraud.
a written plan with projected timelines. ETA provided a
written plan in July 2022. While the plan does consider
Contrary to the Department’s view on the matter, the
comprehensive updates to the unemployment
Inspector General Act of 1978, as amended (IG Act),
compensation confidentiality regulation, the projected
authorizes the OIG’s access to information related to
timeline results in a 14-month gap between when
the Department’s programs, unless Congress enacts
the grants requiring OIG access ends on December
a law that expressly refers to the OIG and limits the
31, 2023, and the publication of updated regulations
OIG’s right of access. Furthermore, in a June 2021
projected to be effective in February 2025. The OIG
alert memorandum,104 the OIG recommended that
would not have access to SWAs’ UI data during the
the Employment and Training Administration (ETA)
14 month timeframe. ETA stated it is exploring options
104
Alert Memorandum: The Employment and Training for interim solutions to address the gap. However,
Administration Needs to Issue Guidance to Ensure State the OIG does not have specific information regarding
Workforce Agencies Provide Requested Unemployment the Department’s plans to update the regulations or
Insurance Data to the Office of Inspector General, Report No. implement other temporary solutions to close the gap,
19-21-005-03-315 (June 16, 2021), available at: https://www. which may prevent us from effectively accomplishing
oig.dol.gov/public/reports/oa/2021/19-21-005-03-315.pdf our UI program oversight.
82 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Legislative Recommendations
This lack of unfettered access to data has Unfettered access to SWAs’ UI claimant data
severely hampered the OIG’s ability to oversee and wage records systems would assist in the
the UI program. To overcome this and effectively Department’s programmatic oversight responsibilities
oversee UI benefits provided in response to the to identify improper payments and weak controls.
pandemic, the OIG issued multiple IG subpoenas This access is also vital to the OIG’s oversight
to all SWAs, seeking UI claimant data. OIG responsibility and would enable the OIG to quickly
data scientists then had to ensure the data was identify and investigate large-scale fraud. It would
complete, consistent, and in a common format also allow the OIG to expand its current efforts to
to analyze and identify potential fraud and share emerging fraud trends with ETA and SWAs to
programmatic weaknesses. The repeated use of strengthen the UI program and help deter fraud. In
IG subpoenas to obtain UI data on a recurring addition, conducting data analytics from such access
basis is time-consuming and inefficient. Unfettered would further enable our auditors to identify program
access would alleviate that time and resource weaknesses and recommend corrective actions that
burden and align with the IG Act. would improve the timeliness of UI benefit payments
and the integrity of the UI program.
Data analytics is a vital tool in performing our
oversight function. For example, the OIG’s efforts Extend the Statute of Limitations
resulted in the identification of $45.6 billion in Associated with Pandemic-Related
potentially fraudulent payments in specific high-risk
Unemployment Insurance Fraud
areas.105 The OIG was further able to recommend
programmatic changes to put billions in federal funds
Currently, the statute of limitations for many of the
to better use. In addition, the OIG shared portions of
OIG’s pandemic-related UI fraud investigations will
its methodology with ETA to allow the Department and
expire in 2025 as the statutes most often used to
SWAs to stop fraud before it occurs.
prosecute UI fraud have a 5-year limitation. The U.S.
Small Business Administration faced a similar issue
105
Alert Memorandum: Potentially Fraudulent regarding pandemic-related fraud in the Paycheck
Unemployment Insurance Payments in High-Risk Areas Protection Program (PPP) and Economic Injury
Increased to $45.6 Billion, Report No. 19-22-005-03-315 Disaster Loan (EIDL) program. To address those
(September 21, 2022), available at: https://www.oig.dol. concerns, Congress recently passed legislation to
gov/public/reports/oa/2022/19-22-005-03-315.pdf extend associated statutes of limitations.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 83
Legislative Recommendations
Congress should likewise act to extend the statute under the OIG’s jurisdiction. Statutory authority to
of limitations for fraud associated with pandemic- seize and forfeit illicit funds would allow the OIG to
related UI programs to help ensure investigators and participate in the Treasury and DOJ forfeiture funds,
prosecutors have time to effectively pursue and hold thus enabling the OIG to better combat UI fraud and
accountable those who defrauded the UI programs other crimes in the future.
during the pandemic. To do so, Congress would
likely have to extend the statute of limitations for Enact the UI Integrity Legislative
existing laws when pandemic-related UI programs Proposals
are defrauded. The expansion of the statute of
limitations for pandemic-related UI fraud would In October 2016, the Department submitted a
help ensure many groups and individuals that have legislative package to Congress proposing changes
targeted the program do not escape justice. that would help address UI program integrity and the
high improper payment rates experienced in the UI
Authorize OIG Participation in Asset program. Similar proposals have also been included
Forfeiture Funds to Combat UI Fraud in the President’s budget requests from FY 2018 to
and Other Crimes FY 2021. The OIG encourages Congress to consider
and adopt proposals to aid the Department’s efforts
Legislative authority in the area of asset forfeiture to combat improper payments in the UI program.
would increase the OIG’s ability to effectively and The proposals from the President’s FY 2021 budget
efficiently investigate UI fraud and other crimes request include the following:
and to recover fraudulently obtained funds.106 • allow the Secretary of Labor greater authority to
Asset forfeiture is a critical legal tool that serves a require SWAs to implement UI corrective actions
number of compelling law enforcement purposes. related to performance and integrity;
It is designed to deprive criminals of the proceeds
• require SWAs to cross-match UI claims against
of their crimes, to break the financial backbone
the National Directory of New Hires (NDNH);
of organized criminal syndicates, and to recover
property that may be used to compensate victims • require SWAs to cross-match UI claims with the
and deter criminal activity. Currently, the OIG is not U.S. Social Security Administration’s prisoner
a participant in the U.S. Department of the Treasury database and other repositories of prisoner
(Treasury) or the U.S. Department of Justice (DOJ) information;
forfeiture funds. The lack of authority to participate • allow SWAs to retain 5 percent of UI
in these funds limits the OIG’s ability to effectively overpayment recoveries for program integrity
recover proceeds of UI fraud and other crimes purposes; and
106
According to DOJ, forfeiture “is the legal process by
• require SWAs to use UI penalty and interest
which title to an asset is transferred to the government…
collections solely for UI administration.
because that asset was derived from, used to facilitate, or
involved in criminal conduct in a manner that subjects it
These legislative proposals are consistent with
to forfeiture under an applicable asset forfeiture statute.”
previous OIG findings and recommendations to
DOJ, Asset Forfeiture Policy Manual (2021), available at:
address UI improper payments. To maintain UI
https://www.justice.gov/criminalafmls/file/839521/download
program integrity, the OIG has recommended, as of
84 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Legislative Recommendations
February 2021, establishing legislation that requires with the H-1B requirements. Also, a notice must be
SWAs to cross-match high-risk areas, including provided to the employer to allow a rebuttal of the
UI benefits paid to individuals with Social Security allegations before the investigation begins.
numbers: filed in multiple states, belonging to
deceased persons or federal prisoners, or used to Our concern with the Department’s limited ability
file UI claims with suspicious email accounts. to ensure the integrity of the certification process
is heightened by the results of OIG analyses
Provide Authority to Ensure the and investigations showing that the program
Integrity of the H-1B Program is susceptible to significant fraud and abuse,
particularly by employers and attorneys. For
If DOL is to have a meaningful role in the foreign example, some staffing companies utilize the H-1B
labor certification process for H-1B specialty program without having scheduled jobs already lined
occupation visas, it must have the statutory up. Some employers and attorneys misrepresent
authority to ensure the integrity of that process. their need for workers to DOL, then reassign the
This authority should include the ability to verify extra workers to other companies or require foreign
the accuracy of information provided on labor workers to find their own work. There have also
condition applications, and to initiate its own H-1B been instances when companies illegally generated
investigations more broadly. profit by requiring foreign workers to pay fees and
recurring payments to secure H-1B visas.
Currently, unlike investigations into the H-2A and
H-2B programs, DOL’s authority to investigate Without statutory authority to ensure program
H-1B employers is limited and typically requires a integrity, the Department generally cannot verify
complaint by an aggrieved party. In the absence employers’ attestations to the H-1B certifications
of such a complaint, with limited exceptions, DOL unless a complaint is filed or the Department utilizes
may only initiate its own H-1B investigations if a Secretary initiated investigation, for which DOL
the Secretary (or Acting Secretary) personally developed a process in FY 2021. As foreign workers
certifies there is reasonable cause to believe the are generally reluctant to file complaints for fear of
employer is not in compliance. Even assuming retaliation and losing their jobs, it is unlikely to result
that such personal certification is obtained, the in verification action being taken.
violations DOL is permitted to find in Secretary-
certified investigations are limited to willful, pattern- Amend Pension Protection Laws
or-practice, or substantial violations of the Labor
Condition Application requirements regarding Legislative changes to the Employment Retirement
prevailing wage and benefits, working conditions, Income Security Act of 1974 (ERISA) and criminal
labor disputes, and notification of applications. penalties for ERISA violations would enhance the
protection of assets in pension plans. To this end,
Additionally, such an investigation must be the OIG continues to recommend the following
conducted under specific procedures and may only legislative actions:
be initiated for reasons other than completeness and • Repeal ERISA’s limited-scope audit
obvious inaccuracies by the employer in complying exemption. This exemption excludes pension
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 85
Legislative Recommendations
plan assets invested in financial institutions, • Strengthen criminal penalties in U.S.C. Title
such as banks and savings and loan firms, 18. Three sections of U.S.C. Title 18 serve as the
from audits of employee benefit plans. primary criminal enforcement tools for protecting
Notwithstanding recent changes to auditing pension plans covered by ERISA. Section 664
standards that strengthen limited-scope audits, sets penalties for embezzlement or theft from
these audits prevent independent public employee pension and welfare plans; Section
accountants who are auditing pension plans 1027 sets penalties for making false statements
from rendering an opinion on the plans’ financial in documents required by ERISA; and Section
statements in accordance with professional 1954 sets penalties for giving or accepting bribes
auditing standards. These “no opinion” audits related to the operation of ERISA covered plans.
offer weak assurance of asset integrity either to Sections 664 and 1027 subject violators to up to
plan participants or to the Department. 5 years’ imprisonment, while Section 1954 calls
• Expand the authority of the Employee for up to 3 years’ imprisonment for violators.
Benefits Security Administration (EBSA) The OIG recommends raising the maximum
to correct substandard benefit plan audits penalty up to 10 years for all three violations to
and ensure that auditors with poor records correspond with the 10-year penalty imposed by
do not perform additional audits. Changes Section 669 (for theft from health care benefit
should include providing EBSA with greater programs), which would serve as a greater
enforcement authority over registration, deterrent and, consequently, further protect
suspension, and debarment as well as the ability employee pension plans.
to levy civil penalties against employee benefit
plan auditors. The ability to correct substandard Improve the Integrity of the FECA
audits and take action against auditors is Program
essential as benefit plan audits help protect
participants and beneficiaries by ensuring the Legislative reforms should be considered in the
proper valuation of plan assets and computation following areas to improve the effectiveness and
of benefits. integrity of the Federal Employees’ Compensation
• Require direct reporting of ERISA violations Act (FECA) program:
to DOL. Under current law, a pension plan • Provide statutory access to NDNH and
auditor who finds a potential ERISA violation Social Security wage records. Currently,
is responsible for reporting it to the plan the Department has no access to the NDNH
administrator, but not directly to DOL. To data and can access Social Security wage
ensure that improprieties are addressed, we information only if the claimant gives it
recommend that plan administrators or auditors permission. Granting the Department routine
be required to report potential ERISA violations access to these databases would aid in detecting
directly to DOL. This change would ensure the fraud committed by individuals receiving FECA
timely reporting of violations and would more wage loss compensation but failing to report
actively involve auditors in safeguarding pension income they have earned.
assets as a first line of defense against the • Establish a 3-day waiting period at the
abuse of workers’ pension plans. beginning of the claims process. FECA
86 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Legislative Recommendations
legislation provides for a 3-day waiting period, • Allow the temporary suspension of
which is intended to discourage the filing of questionable medical providers pending
frivolous claims. As currently written, however, the outcome of investigations. While FECA
the legislation places the waiting period at the regulations allow OWCP to exclude a provider
end of the 45-day continuation-of-pay period, through administrative means, OWCP must
thereby negating its purpose. Legislation that give notice to the provider and afford the
passed in 2006 placed the waiting period provider an opportunity for a hearing before
for postal employees immediately after an DOL’s Office of Administrative Law Judges.
employment-related injury. If the intent of the This process and the various procedures
law is to ensure a true waiting period before involved can be lengthy. Legislative changes
an employee applies for benefits, then that are necessary to enable DOL to immediately
period should likewise come immediately after suspend all medical providers who have
an employment-related injury—for all federal been indicted for fraudulent billing practices
workers, not exclusively postal employees. This from providing further medical services
proposal was included in the President’s FY and receiving payments. This proposal was
2021 budget as part of the Office of Workers’ included in the President’s FY 2021 budget as
Compensation Programs’ (OWCP) FECA reform. part of OWCP’s FECA reform.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 87
Appendices
Appendices
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 89
Appendices
Reporting Requirements Under
the Following Acts
The Inspector General Act of 1978, as Amended
REPORTING REQUIREMENT PAGE
Recommendations on existing and proposed legislation and regulations relating to the
Section 4(a)(2) 81
programs and operations of DOL
Description of significant problems, abuses, and deficiencies relating to the administration of
Section 5(a)(1) All
programs and operations
Description of recommendations for corrective action with respect to significant problems,
Section 5(a)(2) All
abuses, and deficiencies
Significant recommendations from previous semiannual reports on which corrective action
Section 5(a)(3) 103
has not been completed
Matters referred to prosecutive authorities and the prosecutions and convictions that have
Section 5(a)(4) 113
resulted
Section 5(a)(5) and Summary of each report made to the head of DOL under section 6(c)(2) (information or
None to report
Section 6(c)(2) assistance requested and unreasonably refused in the judgment of the Inspector General)
List of audit reports, inspection reports, and evaluation reports subdivided according to
Section 5(a)(6) 94
subject matter
Section 5(a)(7) Summary of particularly significant reports All
Statistical tables showing the total number of audit reports, inspection reports, and
evaluation reports and the total dollar value of questioned costs, including unsupported
costs, for reports:
(A) and (D) for which no management decision had been made by the beginning or the end
Section 5(a)(8) 93
of the reporting period;
(B) which were issued during the reporting period; and
(C) for which a management decision was made during the reporting period, including the
dollar value of disallowed and not disallowed costs
Statistical tables on management decisions on recommendations
that funds be put to better use:
(A) and (D) for which no management decision had been made by the beginning or the end
Section 5(a)(9) of the reporting period; 92
(B) which were issued during the reporting period; and
(C) for which a management decision was made during the reporting period, including the
dollar value of disallowed and not disallowed costs
Summary of each audit report, inspection report, and evaluation report issued before the
commencement of the reporting period:
(A) for which no management decision has been made by the end of the reporting period
(including the date and title of each such report), an explanation of the reasons such
management decision has not been made, and a statement concerning the desired
Section 5(a)(10) 94–95
timetable for achieving a management decision on each such report;
(B) for which no establishment comment was returned within 60 days of providing the report
to the establishment; and
(C) for which there are any outstanding unimplemented recommendations, including the
aggregate potential cost savings of those recommendations.
continued on next page
90 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Section 5(a) (11) Description and explanation for any significant revised management decision None to report
Information on any significant management decisions with which the Inspector General
Section 5(a)(12) None to report
disagrees
Information from the Federal Financial Management Improvement Act Section 804(b) —
Section 5(a) (13) instances in which an agency has not met intermediate target dates in a remediation plan, None to report
and the reasons
Peer review reporting:
Section 5(a)(14) (A) results of any peer review conducted by another OIG, or 115
(B) a statement identifying the date of the last peer review conducted
Section 5(a)(15) Outstanding peer review recommendations None to report
Peer reviews conducted by the OIG and recommendations outstanding or not fully
Section 5(a)(16) None to report
implemented
Statistical tables on investigative findings showing total number of:
(A) reports issued;
(B) persons referred to the U.S. Department of Justice for prosecution;
Section 5(a)(17) 113
(C) persons referred to state and local prosecuting authorities; and
(D) indictments and criminal informations that resulted from any prior referral to prosecuting
authorities
Section 5(a)(18) Metrics used for developing the data for the statistical tables 113
Under Section 5(a) (17),
Summary of investigations of senior government employees where allegations of
Section 5(a)(19) None to report
misconduct were substantiated, including the facts, circumstances, status, and disposition
of the matter
Description of whistleblower retaliation cases including information about the official found
Section 5(a)(20) to have engaged in retaliation and what, if any, consequences that establishment imposed 77
to hold that official accountable
Summary of instances of attempted departmental interference with the independence of
the office, including with budgets constraints and incidents in which the establishment has:
Section 5(a)(21) None to report
resisted or objected to oversight activities or restricted or significantly delayed access to
information
(A) Descriptions of inspections, evaluations, audits, and investigations that are closed and
were not disclosed to the public; and
Section 5(a)(22) None to report
(B) Descriptions of investigations conducted by the office involving a senior government
employee that are closed and were not disclosed to the public
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
REPORTING REQUIREMENT PAGE
Section 989(C) Peer review reporting 112
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 91
Appendices
Funds Recommended for Better Use
Funds Put to a Better Use Agreed to by DOL107
Number Dollar Value
of Reports ($ millions)
For which no management decision had been made as of the commencement of the reporting
0 $0
period
Issued during the reporting period 1 $29,600
Subtotal 1 $29,600
For which a management decision was made during the reporting period:
• Dollar value of recommendations that were agreed to by management 0 $0
• Dollar value of recommendations that were not agreed to by management 0 $0
For which no management decision had been made as of the end of the reporting period 1 $29,600
Funds Put to a Better Use Implemented by DOL
Number Dollar Value
of Reports ($ millions)
For which final action had not been taken as of the commencement of the reporting period 3 $39,310
For which management or appeal decisions were made during the reporting period 0 $0
Subtotal 3 $39,310
For which management decision was made during the reporting period:
• Dollar value of recommendations that were actually completed 0 $0
• Dollar value of recommendations that management has subsequently concluded should not or
0 $0
could not be implemented or completed
For which no final action had been taken by the end of the period 3 $39,310
107
The term “recommendation that funds be put to better use” means a recommendation by the OIG that funds could be
used more efficiently or achieve greater program effectiveness if management took actions to implement and complete
the recommendation. This term is defined by the IG Act and includes, among other things, reductions in future outlays;
deobligation of funds from programs or operations; costs not incurred in the future by implementing recommended
improvements related to the operations of the establishment, a contractor, or a grantee; and any other savings specifically
identified, including reverting funds to Treasury to be used for other purposes.
92 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Questioned Costs
Resolution Activity: Questioned Costs108
Questioned
Number
Costs
of Reports
($ millions)
For which no management decision had been made as of the commencement of the reporting
0 $0
period (as adjusted)
Issued during the reporting period 0 $0
Subtotal 0 $0
For which a management decision was made during the reporting period:
• Dollar value of disallowed costs 0 $0
• Dollar value of costs not disallowed 0 $0
For which no management decision had been made as of the end of the reporting period 0 $0
For which no management decision had been made within six months of issuance 0 $0
Closure Activity: Disallowed Costs109
Disallowed
Number
Costs
of Reports
($ millions)
For which final action had not been taken as of the commencement of the reporting period (as
1 $0.09
adjusted)
For which management or appeal decisions were made during the reporting period 0 $0
Subtotal 1 $0.09
For which final action was taken during the reporting period:
• Dollar value of disallowed costs 1 $0.09
• Dollar value of costs not disallowed 0 $0
For which no management decision had been made as of the end of the reporting period 0 $0
For which no management decision had been made within six months of issuance 0 $0
108
As defined by the IG Act, questioned costs include alleged violations of law, regulations, contracts, grants, or
agreements; costs not supported by adequate documentation; or the expenditure of funds for an intended purpose that
was unnecessary or unreasonable.
109
Disallowed costs are costs that the OIG questioned during an audit as unsupported or unallowable and that the
grant/contracting officer has determined the auditee should repay. The Department is responsible for collecting the
debts established. The amount collected may be less than the amount disallowed, and monies recovered usually
cannot be used to fund other program operations and are returned to Treasury.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 93
Appendices
Final Audit Reports Issued
Number of Questioned Costs Funds Put To Better
Report Name
Recommendations ($) Use ($)
Employment and Training Administration
Alert Memorandum: The Employment and Training Administration Needs to Ensure State
Workforce Agencies Report Activities Related to CARES Act Unemployment Insurance 2 $0 $0
Programs; Report No. 19 22 004 03-315; 08/02/22
Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk
3 $0 $29,600,000,000
Areas Increased to $45.6 Billion; Report No. 19-22-005-03-315; 09/21/22
COVID-19: ETA and States Did Not Protect Pandemic-Related UI Funds from Improper
5 $0 $0
Payments Including Fraud or From Payment Delays; Report No. 19 22 006 03 315; 09/30/22
Total (3 Reports)
Office of the Assistant Secretary for Policy
DOL Made Progress in Implementing Geospatial Data Act Requirements, but More Needs to
3 $0 $0
Be Done; Report No. 23-22-003-01-001; 09/30/22
Total (1 Report)
Office of the Chief Financial Officer
The U.S Department of Labor Did Not Meet the Requirements for Compliance with the
2 $0 $0
Payment Integrity Information Act for FY 2021; Report No. 22-22-007-13-001; 07/01/22
Total (1 Report)
Office of Workers’ Compensation Programs
Alert Memorandum: The Office of Workers’ Compensation Programs’ Workers’ Compensation
Medical Bill Process System Data Were of Undetermined Reliability; Report No. 23-22-002-04- 1 $0 $0
001; 09/26/22
Service Auditors’ Report on the Integrated Federal Employees’ Compensation System for the
0 $0 $0
Period October 1, 2021, through June 30, 2022; Report No. 22-22-009-04-431; 09/28/22
Total (2 Reports)
Final Audit Total (7 Reports) 16 $0 $29,600,000,000
94 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Other Reports
Number of
Report Name
Recommendations
Employment and Training Programs
Workforce Innovation and Opportunity Act
Quality Control Review for the Single Audit of the State of Hawaii for the Fiscal Year Ended June 30,
0
2020; Report No. 24-22-003-03-315; 06/08/22
Quality Control Review for the Single Audit of AARP Foundation for the Year Ended December 30, 2021;
2
Report No. 24-22-004-50-598; 09/30/22
Total (2 Reports)
Departmental Programs
Office of the Chief Financial Officer
Risk Assessment of DOL’s Purchase and Travel Card Programs; Report No. 22-22-008-50-598; 08/31/22 0
Total (1 Report)
Other Reports Total (3 Reports) 2
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 95
Appendices
Unresolved Audit Reports Over 6 Months Old
Number of
Questioned
Agency Report Name Unimplemented
Costs ($)
Recommendations
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve;
OIG Negotiating with Agency
Job Corps Should Do More to Prevent Cheating in High School Programs; Report No. 26-19-001-
ETA 4 $0
03-370; 09/25/19
COVID-19: More Can Be Done to Mitigate Risk to Unemployment Compensation Under the
ETA 1 $0
CARES Act; Report No. 19-20-008-03-315; 08/07/20
Alert Memorandum: The Employment and Training Administration Needs to Issue Guidance to
ETA Ensure State Workforce Agencies Provide Requested Unemployment Insurance Data to the Office 2 $0
of Inspector General; Report No. 19-21-005-03-315; 06/16/21
Unemployment Insurance Overpayments Related to Work Search Underscore the Need for More
ETA 1 $0
Consistent State Requirements; Report No. 04-21-001-03-315; 09/29/21
ETA Did Not Sufficiently Plan and Execute the American Apprenticeship Initiative Program; Report
ETA 1 $0
No. 05-21-004-03-375; 09/30/21
MSHA Needs to Provide Better Oversight of Emergency Response Plans; Report No. 05 17 002
MSHA 2 $0
06-001; 03/31/17
MSHA Did Not Evaluate Whether Civil Monetary Penalties Effectively Deterred Unsafe Mine
MSHA 2 $0
Operations; Report No. 23-19-002-06-001; 08/16/19
MSHA Needs to Improve Efforts to Protect Coal Miners from Respirable Crystalline Silica; Report
MSHA 2 $0
No. 05-21-001-06-001; 11/12/20
MSHA Can Improve How Violations Are Issued, Terminated, Modified, and Vacated; Report No.
MSHA 1 $0
05-21-002-06-001; 03/31/21
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist; Report No. 23-16-002-07-725;
OASAM 1 $0
09/30/16
DOL Needs to Do More to Secure Employees’ Personally Identifiable Information in the Travel
OCFO 2 $0
Management System; Report No. 23-20-003-13-001; 09/10/20
continued on next page
96 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
FY 2021 FISMA DOL Information Security Report: Information Security Continuous Monitoring
OCIO 18 $0
Controls Remain Deficient; Report No. 23-22-001-07-725; 01/28/22
OFCCP Did Not Show It Adequately Enforced EEO Requirements on Federal Construction
OFCCP 1 $0
Contracts; Report No. 04-20-001-14-001; 03/27/20
DOL’s IT Governance Lacked the Framework Necessary to Support the Overall Mission; Report
OSEC 1 $0
No. 23-21-002-01-001; 09/30/21
DOL’s IT Governance Lacked the Framework Necessary to Support the Overall Mission; Report
OSEC 1 $0
No. 23-21-002-01-001; 09/30/21
Agency Management Decision or Grant/Contracting Officer’s Final Determination Not Issued By
Close of Period
Total Nonmonetary Recommendations and Questioned Costs 39 $0
Number of Funds Recommended for
Agency Report Name
Better Use ($)
Recommendations
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve;
OIG Negotiating with Agency
Total Funds Recommended for Better Use 0 $0
Total Audit Exceptions and Funds Recommended for Better Use 39 $0
Total Funds Recommended for Better Use 0 $0
Total Audit Exceptions and Funds Recommended for Better Use 39 $0
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 97
Appendices
Corrective Actions Taken by the Department
During this reporting period, we took final action to close recommendations within reports based on
corrective action taken by the Department. The following is a summary of the most significant actions.
OWCP Must Continue Strengthening Management of FECA Pharmaceuticals,
Including Opioids; Report No. 03-19-002-04-431; 05/14/19
Our audit found OWCP had made progress in addressing recommendations from our interim report; however,
OWCP needed to continue to strengthen its management of the use and cost of pharmaceuticals in the FECA
program. While the costs of compounded drugs dropped to $18 million in FY 2018, overall pharmaceutical
costs remained at $262 million, of which 42 percent included opioid prescriptions. OWCP’s policy on opioids
was too permissive, and OWCP did not ensure prescriptions were necessary and safe from overuse or
adverse interaction with other FECA medications.
In response to our audit, OWCP implemented policies to limit access to opioid prescriptions. Previously,
OWCP had allowed physicians to prescribe opioids to new users for up to 60 days. However, subsequent
to our report, OWCP limited individual opioid prescriptions for new users to a 7 day supply to be more in
line with guidelines from the Centers for Disease Control and Prevention. While refills were allowed, OWCP
began requiring a letter of medical necessity for opioid prescriptions that exceeded an initial 28 day supply.
Additionally, through its pharmacy benefit manager, OWCP implemented policies to ensure prescription drugs
were safe and necessary. OWCP implemented drug utilization reviews that, among other things, screen for
situations where a certain drug should not be used due to the harm it could cause as well as identify duplicate
prescriptions and therapeutic overlap. OWCP also implemented prior authorization requirements for certain
classes of drugs and prescriptions that meet certain conditions to ensure they are necessary, such as drugs
that exceed a maximum lifetime day supply, a lifetime quantity, or a maximum number of fills.
Interim Report on Audit of Pharmaceutical Management in DOL Benefit
Programs: OWCP Needs Better Controls Over Compounded Prescription Drugs;
Report No. 03-17-001-04-431; 05/23/17
In FY 2016, OWCP spent over $3.2 billion in FECA program benefits. The cost of prescription drugs in the
FECA program rose from a reported $183 million in FY 2011 to $477 million in FY 2016, an increase of 161
percent. Compounded drugs accounted for most of this growth, escalating from approximately $2 million in
FY 2011 to a reported $263 million in FY 2016. In this interim report, we found OWCP had not effectively
managed the use and cost of compounded drugs, and we identified additional steps OWCP needed take to
improve its overall management of pharmaceuticals in the FECA program.
98 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
In response, OWCP implemented controls to address the escalating costs of compounded drugs by requiring
physicians to provide a letter of medical necessity justifying the need and cost of all compounded drug
prescriptions, which reduced compounded spending in the FECA program by over $215 million in one year.
OWCP also contracted with a pharmacy benefit manager, through which OWCP implemented a number of
policies to improve its management of pharmaceuticals in the FECA program, including the establishment of
a drug formulary and a drug exclusion list. A drug formulary identifies prescription drugs considered effective,
safe, and reasonably cost-effective for a specified medical condition. A drug exclusion list is used to deny
payments for drugs or drug ingredients that are not considered safe, effective, or cost efficient.
In addition, OWCP implemented a policy to approve only generic drugs (unless a physician specifies a
brand-name drug), reduced the reimbursement rate for generic drugs, implemented restrictions on herbal
supplements, and established dollar thresholds to limit high or excessive drug charges. OWCP also improved
its data analytics capabilities and established procedures to take action against suspected fraudulent
providers, such as referring cases to the OIG for investigation and suspending or debarring providers from
doing business with the federal government.
COVID-19: Increased Worksite Complaints and Reduced OSHA Inspections
Leave U.S. Workers’ Safety at Increased Risk; Report No. 19-21-003-10-105;
02/25/21
Our audit found, since the start of the COVID-19 pandemic, OSHA has received a sudden influx of complaints,
and there is an increased risk that OSHA is not providing the level of protection workers need at various job
sites. We also found most of OSHA’s inspections during the pandemic were conducted remotely, which may
allow workplace hazards to go unidentified and unabated longer, leaving employees vulnerable. Furthermore,
while OSHA has issued several guidance documents to enhance safety during the pandemic, guidance is
not enforceable like rules or standards, and OSHA has not issued an Emergency Temporary Standard for
infectious diseases.
OSHA did issue two pandemic-related Emergency Temporary Standards as well as a National Emphasis
Program (NEP). In response to our audit and to improve its enforcement efforts, OSHA published a NEP
directive for COVID-19 on March 12, 2021. OSHA issued an Emergency Temporary Standard on June 21,
2021, to protect health care and health care support service workers from occupational exposure to COVID-19
and updated the NEP on July 7, 2021. OSHA also implemented a code to identify COVID-19 inspections
conducted remotely and instructed regions to retroactively apply the code to all related remote inspections
after February 1, 2020. In addition, OSHA issued a Vaccination and Testing Emergency Temporary Standard
to protect unvaccinated employees of large employers (100 or more employees) from the risk of contracting
COVID-19 by strongly encouraging vaccination. However, on January 13, 2022, the U.S. Supreme Court
stayed the Vaccination and Testing Emergency Temporary Standard. After evaluating the Court’s decision,
OSHA withdrew the Vaccination and Testing Emergency Temporary Standard as an enforceable Emergency
Temporary Standard.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 99
Appendices
The U.S. Department of Labor Digital Accountability and Transparency Act Of
2014 Performance Audit; Report No. 22-22-002-13-001; 11/08/21
The Digital Accountability and Transparency Act of 2014 established standards intended to help taxpayers
and policymakers understand how federal agencies spend taxpayer dollars and improve agencies’ spending
oversight and data centric decision making. The audit found DOL did not submit certain data completely,
accurately, or timely for publication on USASpending.gov.
In response, the Office of the Chief Financial Officer (OCFO) updated its standard operating procedures
to validate each report in accordance with guidelines provided by the Treasury to ensure certain
formatting requirements have been met. Additional verification will be performed before the files are
submitted for publication.
The U.S. Department of Labor Complied with the Payment Integrity Information
Act for FY 2020, but Reported Unemployment Insurance Did Not Represent Total
Program Year Expenses; Report No. 22-21-007-13-001; 08/06/21
PIIA requires federal agencies to identify programs susceptible to significant improper payments, estimate
the improper payments for those programs, and report on actions to reduce the improper payments in these
programs. A performance audit of DOL’s compliance with PIIA for FY 2020 concluded DOL met all the
requirements for compliance with PIIA. However, DOL permitted SWAs to suspend their improper payment
sampling of fourth quarter claims in March 2020. DOL also did not formally request guidance from OMB on
changes to the sampling and estimation plan until October 2020, nor was DOL able to provide evidence of
these discussions.
In response to the audit, OCFO updated its process of collecting information from DOL agencies such that
any known changes to the sampling and estimation plan for applicable programs are certified by the agencies
before OMB’s June 30 deadline. All agencies must complete a Program Inventory and Questionnaire to
determine if any program experienced any significant changes that would trigger a new risk assessment
over the program. OCFO compiles all responses into one central tracker and reviews in conjunction with the
program officials to determine if changes are appropriate and within guidelines. OCFO then works with all
reporting agencies to obtain information in the appropriate format that is required to be reported.
COVID-19: Delays in Providing Disaster Relief Jeopardize $366 Million Disaster
Worker Grant Program; Report No. 19-22-002-03-391; 01/28/22
On March 27, 2020, the CARES Act became law. The CARES Act provided additional funding in the
amount of $345 million for necessary expenses for the dislocated workers assistance national reserve to
prevent, prepare for, and respond to the pandemic. From April to August 2020, ETA awarded 57 grants
totaling $366 million.
100 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
The OIG contracted with an independent certified public accounting firm to conduct a performance audit of the
$366 million and found ETA generally administered the Disaster National Dislocated Worker Grants (DWG)
program in accordance with applicable federal regulations and guidelines. However, there was a significant
delay in the length of time for grant recipients to provide disaster relief employment and training from
approximately 1 to 9 months. With 38 percent of the grant periods elapsed, and minimal grant spending, it is
unlikely that grant recipients will effectively use the funds and deliver services by the end of the grant period.
Moreover, there was a failure to quickly roll out programs and achieve targets for providing training services
and returning participants back to employment. In addition, for the 15 sampled grants, 2 grant recipients
exceeded the 60-day deadline to provide the full application per Training and Employment Guidance Letter
(TEGL) 12-19. ETA’s delay in obtaining the full application while allowing grant recipients to draw funding
increases the risk of unallowable costs being incurred and performance goals not being met.
In response to the firm’s audit, ETA took corrective actions to improve its DWG Program. This response
included issuing TEGL No. 16-21, which:
1. emphasizes the importance of quickly beginning services to support post disaster employment
and economic recovery in Disaster Recovery DWGs, and noting the role of DWG in disaster relief
workforce development;
2. specifies when disaster-relief employment can begin before full application approval; and
3. requires the grant recipient to modify the grant to provide a full and complete application within
60 business days following the award of Disaster Recovery DWG funds requested via an
emergency application.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 101
Appendices
Unimplemented Recommendations
During this reporting period, we encountered two instances of audits or evaluations provided to the
Department for comment that were not responded to within 60 days. However, agencies have provided
management decisions in response to all audits and evaluations issued before the commencement of this
reporting period.
From October 1, 2011, through March 31, 2022, the OIG made 1,699 audit recommendations to the
Department, of which 197 have not been fully implemented. These 197 recommendations include
148 recommendations resulting from audits issued since the end of FY 2020, and, in many cases, the
Department has corrective action plans in place.
RECOMMENDATIONS MADE PRIOR TO APRIL 1, 2022, NOT YET IMPLEMENTED
Unimplemented Recommendations
Total Number of
Fiscal Year
Recommendations Made
Total Number Monetary Impact ($)
2011 319 6 $0
2012 213 1 $0
2013 195 0 $0
2014 128 1 $0
2015 163 2 $0
2016 100 1 $0
2017 112 8 $0
2018 98 2 $0
2019 84 28 $0
2020 105 28 $0
2021 133 79 $39,311,226,638
2022110 49 41 $0
Total 1,699 197 $39,311,226,638
110
FY 2022 shows data for the first half of the fiscal year (October 1, 2021, to March 31, 2022).
102 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
High-Priority Unimplemented
Recommendations
The following table summarizes the unimplemented recommendations the OIG considers to be the
highest priorities for the Department.
Report Title; Report Number;
Unimplemented Recommendation(s)
Date Issued
Unemployment Insurance Benefits
COVID-19: More Can Be Done to Include CARES Act UI transactions in the Benefit Accuracy Measurement (BAM) or
Mitigate Risk to Unemployment develop an alternative methodology to reliably estimate improper payments for those
Compensation Under the CARES Act; programs;111 Issue guidance directing states to provide access to state UI claimant data,
Report No. 19-20-008-03-315; 08/07/20 in order to prevent and detect fraud
Alert Memorandum: The Employment Establish effective controls, in collaboration with SWAs, to mitigate fraud and other
and Training Administration (ETA) improper payments to ineligible claimants, including the areas identified in the
Needs to Ensure State Workforce memorandum: UI benefits paid to multistate claimants, claimants who used the Social
Agencies (SWA) Implement Effective Security numbers of deceased individuals, potentially ineligible federal inmates, and
Unemployment Insurance Program Fraud claimants with suspicious email accounts; Effective controls will help prevent similar
Controls for High Risk Areas; Report No. or greater amounts of fraud and allow those funds to be put to better use; Work with
19-21-002-03-315; 02/22/21 Congress to establish legislation requiring SWAs to cross-match high-risk areas,
including the four areas identified in the memorandum
COVID-19: States Struggled to Continue to work with states to develop, operate, and maintain a modular set of
Implement CARES Act Unemployment technological capabilities to modernize the delivery of UI benefits that is sufficient to
Insurance Programs; Report No. 19-21- manage and process sudden spikes in claims volume during emergencies or high
004-03-315; 05/28/21 unemployment
Alert Memorandum: The Employment Amend 20 CFR 603.5 and 603.6(a) through the rulemaking process to reinforce that UI
and Training Administration Needs information must be provided to DOL OIG for all IG engagements authorized under the
to Issue Guidance to Ensure State IG Act, including audits, evaluations, and investigations
Workforce Agencies Provide Requested
Unemployment Insurance Data to the
Office of Inspector General; Report No.
19 21 005-03-315; 06/16/21
Alert Memorandum: The Employment Take immediate action to require the National Association of State Workforce
and Training Administration Does Not Agencies to refer information to ETA and the OIG on suspected fraud, waste, abuse,
Require the National Association of State mismanagement, or misconduct, per Department of Labor Manual Series (DLMS)
Workforce Agencies to Report Suspected 8-106(D)(3). Such actions could include modification of ETA’s grant award or issuance
Unemployment Insurance Fraud Data of unemployment insurance program policy guidance to ensure ETA complies with the
to the Office of Inspector General or the notice requirement and its grantees comply with the reporting requirements of the DLMS.
Employment and Training Administration; Continue to work with the OIG and, within 30 days of this memorandum, meet with the
Report No. 19-21-006-03-315; 07/01/21 OIG to develop a permanent approach to OIG access to Integrity Data Hub (IDH) data
111
These programs are: FPUC, PUA, PEUC, the Temporary Full Federal Funding, the Emergency Unemployment Relief
for Government Entities and Nonprofit Organization, and the Temporary Financing of Short-Time Compensation.
continued on next page
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 103
Appendices
Worker Safety
MSHA Needs to Provide Better Oversight Clarify mine operators’ responsibilities for local coordination under the Mine Improvement
of Emergency Response Plans; Report and New Emergency Response (MINER) Act, including coordination and communication
No. 05-17-002-06-001; 03/31/17 between the operator, mine rescue teams, and local emergency response personnel, and
familiarizing local rescue personnel with surface functions that may be required in the
course of mine rescue work
COVID-19: OSHA Needs to Improve Its Clarify mine operators’ responsibilities for local coordination under the Mine Improvement
Handling of Whistleblower Complaints and New Emergency Response (MINER) Act, including coordination and communication
During the Pandemic; Report No. 19-20- between the operator, mine rescue teams, and local emergency response personnel, and
010-10-105; 08/14/20 familiarizing local rescue personnel with surface functions that may be required in the
course of mine rescue work
MSHA Needs to Improve Efforts to Continue to monitor and evaluate the Region II triage pilot and consider extending the
Protect Coal Miners from Respirable triage process to all regions to expedite screening whistleblower complaints
Crystalline Silica; Report No. 05-21-001-
06-001; 11/12/20
COVID-19: Increased Worksite Compare remote inspections to onsite inspections and document analysis of the
Complaints and Reduced OSHA frequency and timeliness of inspectors in identifying and ensuring abatement of worksite
Inspections Leave U.S. Workers’ Safety hazards
at Increased Risk; Report No. 19-21-003-
10-105; 02/25/21
OSHA’s Diminished Enforcement Left Implement a policy for future emphasis programs that minimizes the lapse in
More Workers at Risk for Exposure to enforcement between canceled, revised, or new programs; Establish meaningful goals
Silica; Report No. 02-21-003-10-105; and processes to assess whether OSHA’s outreach events are achieving the desired
09/29/21 results in reaching a targeted number of workers at risk of exposure to silica
COVID-19: To Protect Mission Critical Develop an OSHA outreach plan to be activated during a large-scale safety and health
Workers, OSHA Could Leverage crises such as the COVID-19 pandemic that (a) identifies external federal agencies with
Inspection Collaboration Opportunities enforcement or oversight personnel who are active on worksites and (b) defines how
with External Federal Agencies; Report OSHA will collaborate with those agencies; OSHA should consider incorporating into
No. 19-22-003-10-105; 03/31/22 the plan: a process to identify and document highly visible, safety and health hazards
for large-scale safety and health crises; a plan for how OSHA will conduct related
outreach and training on those hazards and how to refer them to OSHA; and a tracking
system for agency referrals and outcomes of those referrals, using that information to
periodically inform the outreach plan on areas and types of guidance and training the
agencies’ oversight and enforcement personnel need; Explore mechanisms to enhance
collaboration, such as memorandums of understanding or other written agreements using
GAO’s seven key features for collaboration, and incorporate a process to utilize those
mechanisms into the outreach plan
Employment and Training Programs
ETA Did Not Sufficiently Plan and Improve funding opportunity announcements for discretionary grant programs by:
Execute the American Apprenticeship evaluating program goals using the SMART concept or a similar approach, and including
Initiative Grant Program; Report No. 05- required metrics that directly measure the success of each program goal, are clear,
21-004-03-375; 09/30/21 and are easily verifiable; having a scoring element covering completeness of applicant
proposals for items requested in the announcement that reduces in points when the
proposal is missing an element(s), significantly changes the wording of an element(s), or
incorrectly addresses an element(s); and identifying targeted occupations in the Funding
Opportunity Announcement language and/or scoring elements, or requiring submission
of the career pathway to an H-1B occupation as support during apprenticeship program
registrations or apprentice registrations
continued on next page
104 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Employee Benefits
OWCP’S Efforts to Detect and Prevent Develop effective procedures, including seeking legislative authority to conduct matches
FECA Improper Payments Have Not with Social Security Administrative (SSA) retirement records, to ensure that claimants
Addressed Known Weaknesses; Report who receive SSA retirement benefits are identified timely and their FECA benefits are
No. 03-12-001-04-431; 02/15/12 adjusted accordingly
EBSA Did Not Have the Ability to Reduce or eliminate exemption thresholds for small plans
Protect the Estimated 79 Million Plan
Participants in Self Insured Health Plans
from Improper Denials of Health Claims;
Report No. 05-17-001-12-121; 11/18/16
Departmental Management
FISMA Fiscal Year 2015: Ongoing Realign the organizational structure as it relates to the CIO to address organizational
Security Deficiencies Exist; Report No. independence issues
23-16-002-07-725; 09/30/16
Stronger Controls Needed Over Web Establish and maintain a comprehensive inventory of web applications, identifying which
Application Security; Report No. 23-20- applications are public-facing and contain sensitive information. Review and update the
001-07-725; 11/14/19 DOL Plan of Action and Milestones (POA&M) policy to ensure agency corrective actions
and timeframes are implemented; Establish and verify the implementation of Department-
wide policies and procedures specific to associated risks to web applications, securing
web servers, and web application programming112
FY 2019 FISMA DOL Information Security Implement improvements in DOL’s information security program for the following
Report: Implementation of Security Tools areas: Risk Management, Configuration Management, Identity and Access
Hindered by Insufficient Planning; Report Management, Data Protection and Privacy, Information Security Continuous
No. 23-20-002-07-725; 12/23/19 Monitoring, and Contingency Planning
DOL Needs to Do More to Secure Establish and implement procedures to ensure E2 Solutions (E2) account management
Employees’ Personally Identifiable practices enforce DOL’s security policies; Establish and implement procedures to ensure
Information in the Travel Management E2 is managed in compliance with contractual security requirements and DOL computer
System; Report No. 23-20-003-13-001; security policies for contracted information systems
09/10/20
FY 2020 FISMA DOL Information Security Provide training to responsible personnel over the third-party continuous monitoring
Report: Progress Needed to Improve review checklist. Enforce DOL policies and procedures regarding separation of duties
Risk Management and Continuous so developers do not possess the ability to migrate changes to production; Enforce
Monitoring Information Security Controls; DOL security baseline policies with DOL’s Cloud Service Providers (CSP) and develop
Report No. 23-21-001-07-725; 12/22/20113 a security configuration checklist for the CSP; Develop sufficiently defined quantitative
and qualitative metrics that provide meaningful indications of security status and trend
analysis at all risk management tiers; Implement a process for approving deviations from
established configuration settings
112
Corrective actions were evaluated, and a resolution memorandum was issued after September 30, 2022. The revised
status of these recommendations will be reflected in the next Semiannual Report to Congress.
113
Corrective actions were evaluated, and a resolution memorandum was issued after September 30, 2022. The revised
status of these recommendations will be reflected in the next Semiannual Report to Congress.
continued on next page
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 105
Appendices
DOL's IT Governance Lacked the Reorganize the CIO position to have a direct reporting relationship to the Deputy
Framework Necessary to Support the Secretary and independent of ASAM; Ensure the CIO is a lead member with voting rights
Overall Mission Report; Report No. 23- of DOL’s executive strategy and management boards and committees including but
21-002-01-001; 09/30/21 not limited to the Management Review Board, Enterprise Shared Services Governance
Board, COVID-19 Coordination team, and Enterprise Risk Management Council;
Reassess the incorporation of BLS and OCFO as part of IT Shared Services within
2021, and document the reasoning for the decision reached; Establish an MOU or other
agreement between the OCIO and all departmental agencies to establish and state
the roles and responsibilities of IT between each set of respective agencies; Codify the
policies and procedures that define IT governance and key supporting IT elements
Independent Auditors’ Report on Develop policies and procedures to coordinate with SWAs to obtain the necessary
DOL’s FY 2021 Consolidated Financial information needed to support related balances and assumptions, and to perform
Statements; Report No. 22-22-003-13- benchmarking and/or other analyses to validate new assumptions; Amend policies
001; 11/19/21 and procedures to provide specific steps to be performed during the reviews and the
documentation requirements, which should include the specific items reviewed, analyses
performed, and conclusions reached; Maintain documentation of the reviews performed
to assess the reasonableness of the underlying data, assumptions, and formulas used in
the models that is sufficiently detailed to evidence the specific items reviewed, analysis
performed, and conclusions reached; Develop policies and procedures to ensure that
the accounting treatment for significant transactions are appropriately researched
and documented prior to recording the transaction to the general ledger; Enhance
management review controls over the amounts that are presented
Job Corps Safety
COVID-19: Safety and Remote Learning Implement continuous monitoring to ensure centers adhere to Job Corps COVID-19
Challenges Continue for Job Corps; safety protocols (e.g., use of social distancing markers, installation of barriers, and
Report No. 19-22-001-03-370; 11/12/21 reconfiguration of furniture to accommodate social distancing); Identify learning gaps
that occurred during campus closures and procedures Job Corps needs to take to help
students fill in those gaps; Increase oversight of remote instructional programs to ensure
students receive the training and resources to complete their programs in a timely way
Workplace Rights
DOL Did Not Demonstrate It Followed a Develop policies and procedures to document its rationale and supporting evidence for
Sound Process in Promulgating the 2017 key decisions in the development of economic regulatory analysis; Develop policies and
Tip Rule Notice of Proposed Rulemaking; procedures to document its rationale and supporting evidence when DOL determines
Report No. 17-21-001-15-001; 12/11/20 the prescribed regulatory guidance does not apply; Enforce policies and procedures that
require employees to maintain records that document government business; Employees
should not be discouraged from maintaining such records
106 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Summary of Reports with Unimplemented
Recommendations with Cost Savings / Funds
Put to Better Use
Number of
Funds Put to Better Use
Report Name Unimplemented
($)
Recommendations
Employment and Training Administration
Alert Memorandum: The Employment and Training Administration (ETA)
Needs to Ensure State Workforce Agencies (SWA) Implement Effective
Unemployment Insurance Program Fraud Controls for High Risk Areas;
Report No. 19-21-002-03-315; 02/22/21
Establish effective controls, in collaboration with SWAs, to mitigate fraud
and other improper payments to ineligible claimants, including the areas 1 $5,409,966,198
identified in the memorandum: UI benefits paid to multi-state claimants,
claimants who used the Social Security numbers of deceased individuals,
potentially ineligible federal inmates, and claimants with suspicious email
accounts. Effective controls will help prevent similar or greater amounts of
fraud and allow those funds to be put to better use.
COVID-19: States Struggled to Implement CARES Act Unemployment
Insurance Programs; Report No. 19-21-004-03-315; 05/28/21
Continue to work with states to develop, operate, and maintain a modular
1 $33,745,677,576
set of technological capabilities to modernize the delivery of UI benefits that
is sufficient to manage and process sudden spikes in claims volume during
emergencies or high unemployment
ETA Did Not Sufficiently Plan and Execute the American Apprenticeship
Initiative Grant Program; Report No. 05-21-004-03-375; 09/30/21
Improve funding opportunity announcements for discretionary grant
programs by conducting the following: Evaluate program goals using
the SMART concept or a similar approach, and include required metrics
that directly measure the success of each program goal, are clear, and
are easily verifiable; have a scoring element covering completeness
1 $155,582,864
of applicant proposals for items requested in the announcement that
reduces in points when the proposal is missing an element(s), significantly
changes the wording of an element(s), or incorrectly addresses an
element(s); and identify targeted occupations in the FOA language and/
or scoring elements, or require submission of the career pathway to an
H-1B occupation as support during apprenticeship program registrations or
apprentice registrations
Total 3 $39,311,226,638
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 107
Appendices
Reports with Unimplemented
Recommendations for Management
Improvement or Disallowed Costs Owed
The following table lists all OIG reports issued prior to this semiannual reporting period with
recommendations that have not yet been fully implemented (as of September 30, 2022).
Number of
Disallowed Costs
Report Name Unimplemented
Owed ($)
Recommendations
Employee Benefits Security Administration
Limited-Scope Audits Provide Inadequate Protections to Retirement Plan Participants; Report No. 05-14-
1 $0
005-12-121; 09/30/14
EBSA Did Not Have the Ability to Protect the Estimated 79 Million Plan Participants in Self-Insured Health
1 $0
Plans from Improper Denials of Health Claims; Report No. 05-17-001-12-121; 11/18/16
Employment and Training Administration
Investigative Advisory Report – Weaknesses Contributing to Fraud in the Unemployment Insurance
2 $0
Program; Report No. 50-15-001-03-315; 07/24/15
ETA Violated the Bona Fide Needs Rule and the Antideficiency Act; Report No. 26-17-002-03-370;
1 $0
09/21/17
Experience Works, Inc. Misused More Than $4 Million in SCSEP Grant Funds; Report No. 26-18-002-03-
1 $0
360; 09/28/18
continued on next page
108 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Job Corps Should Do More to Prevent Cheating in High School Programs; Report No. 26-19-001-03-370;
5 $0
09/25/19
ETA Had No Reasonable Assurance That $183 Million in H-1B TST Grant Funds Helped Participants Get
1 $0
H-1B Jobs; Report No. 06-19-001-03-391; 09/27/19
COVID-19: More Can Be Done to Mitigate Risk to Unemployment Compensation Under the CARES Act;
2 $0
Report No. 19-20-008-03-315; 08/07/20
ETA Should Do More to Assist Vulnerable States Prepare for Disaster Unemployment Assistance Program
1 $0
Implementation; Report No. 04-20-002-03-315; 09/29/20
Alert Memorandum: The Employment and Training Administration (ETA) Needs to Ensure State Workforce
Agencies (SWA) Implement Effective Unemployment Insurance Program Fraud Controls for High Risk 1 $0
Areas; Report No. 19-21-002-03-315; 02/22/21
COVID-19: States Struggled to Implement CARES Act Unemployment Insurance Programs; Report No.
3 $0
19-21-004-03-315; 05/28/21
Alert Memorandum: The Employment and Training Administration Needs to Issue Guidance to Ensure
State Workforce Agencies Provide Requested Unemployment Insurance Data to the Office of Inspector 3 $0
General; Report No. 19-21-005-03-315; 06/16/21
Alert Memorandum: The Employment and Training Administration Does Not Require the National
Association of State Workforce Agencies to Report Suspected Unemployment Insurance Fraud Data to the
2 $0
Office of Inspector General or the Employment and Training Administration; Report No. 19-21-006-03-315;
07/01/21
Unemployment Insurance Overpayments Related to Work Search Underscore the Need for More
3 $0
Consistent State Requirements; Report No. 04-21-001-03-315; 09/29/21
ETA Did Not Sufficiently Plan and Execute the American Apprenticeship Initiative Grant Program; Report
4 $0
No. 05-21-004-03-375; 09/30/21
COVID-19: Safety and Remote Learning Challenges Continue for Job Corps; Report No. 19-22-001-03-
3 $0
370; 11/12/21
COVID-19: Delays in Providing Disaster Relief Jeopardize $366 Million Disaster Worker Grant Program;
2 $0
Report No. 19-22-002-03-391; 01/28/22
continued on next page
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 109
Appendices
Mine Safety and Health Administration
MSHA Needs to Provide Better Oversight of Emergency Response Plans; Report No. 05-17-002-06-001;
6 $0
03/31/17
MSHA Did Not Evaluate Whether Civil Monetary Penalties Effectively Deterred Unsafe Mine Operations;
2 $0
Report No. 23-19-002-06-001; 08/16/19
MSHA Can Improve its Pre-Assessment Conferencing Program; Report No. 05-19-001-06-001; 09/23/19 9 $0
COVID-19: MSHA Faces Multiple Challenges in Responding to the Pandemic; Report No. 19-20-006-06-
1 $0
001; 07/24/20
MSHA Needs to Improve Efforts to Protect Coal Miners from Respirable Crystalline Silica; Report No. 05-
3 $0
21-001-06-001; 11/12/20
MSHA Can Improve How Violations Are Issued, Terminated, Modified, and Vacated; Report No. 05-21-
10 $0
002-06-001; 03/31/21
Office of the Assistant Secretary for Administration and Management
Ineffective Accounting for Sensitive Information Technology Hardware and Software Assets Places DOL at
6 $0
Significant Risk; Report No. 23-11-001-07-001; 03/31/11
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist; Report No. 23-16-002-07-725; 09/30/16 1 $0
FY 2018 FISMA DOL Information Security Report; Report No. 23-19-001-07-725; 03/13/19114 5 $0
Alert Memorandum: Security Vulnerability Relating to DOL Information Security Property; Report No. 50-
2 $0
19-002-07-725; 06/17/19
Stronger Controls Needed Over Web Application Security; Report No. 23-20-001-07-725; 11/14/19115 3 $0
FY 2019 FISMA DOL Information Security Report: Implementation of Security Tools Hindered By
12 $0
Insufficient Planning; Report No. 23-20-002-07-725; 12/23/19
FY 2020 FISMA DOL Information Security Report: Progress Needed to Improve Risk Management and
18 $0
Continuous Monitoring Information Security Controls; Report No. 23-21-001-07-725; 12/22/20
FY 2021 FISMA DOL Information Security Report: Information Security Continuous Monitoring Controls
18 $0
Remain Deficient; Report No. 23-22-001-07-725; 01/28/22
114
Corrective actions were evaluated, and a resolution memorandum was issued after September 30, 2022. The revised
status of these recommendations will be reflected in the next Semiannual Report to Congress.
115
Corrective actions were evaluated, and a resolution memorandum was issued after September 30, 2022. The revised
status of these recommendations will be reflected in the next Semiannual Report to Congress.
continued on next page
110 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Office of the Chief Financial Officer
Management Advisory Comments Identified in an Audit of the Consolidated Financial Statements for the
2 $0
Year Ended September 30, 2019; Report No. 22-20-005-13-001; 12/19/19
DOL Needs to Do More to Secure Employees’ Personally Identifiable Information in the Travel
2 $0
Management System; Report No. 23-20-003-13-001; 09/10/20
Management Advisory Comments Identified in an Audit of the Consolidated Financial Statements for the
8 $0
Year Ended September 30, 2020; Report No. 22-21-005-13-001; 12/18/20
FY 2021 Independent Auditors’ Report on DOL Financial Statements; Report No. 22-22-003-13-001;
5 $0
11/19/21
Management Advisory Comments Identified in an Audit of the Consolidated Financial Statements for the
9 $0
Year Ended September 30, 2021; Report No. 22-22-004-13-001; 12/20/21
Office of Federal Contract Compliance Programs
DOL Did Not Comply With Improper Payments Elimination and Recovery Act for FY 2017; Report No. 03-
1 0
18-002-13-001; 05/15/18
Management Advisory Comments Identified in an Audit of the Consolidated Financial Statements for the
6 0
Year Ended September 30, 2019; Report No. 22-20-005-13-001; 12/19/19
DOL Needs To Do More To Secure Employees’ Personally Identifiable Information in the Travel
2 0
Management System; Report No. 23-20-003-13-001; 09/10/20
Management Advisory Comments Identified in an Audit of the Consolidated Financial Statements, for the
9 0
Year Ended September 30, 2020; Report No. 22-21-005-13-001; 12/18/20
The U.S. Department of Labor Complied with the Payment Integrity Information Act for FY 2020, but
Reported Unemployment Insurance Did Not Represent Total Program Year Expenses; Report No. 22-21- 1 0
007-13-001; 08/06/21
Office of Federal Contract Compliance Programs
OFCCP Did Not Show It Adequately Enforced EEO Requirements on Federal Construction Contracts;
1 $0
Report No. 04-20-001-14-001; 03/27/20
Office of the Secretary
DOL’s IT Governance Lacked the Framework Necessary to Support the Overall Mission; Report No. 23-
5 $0
21-002-01-001; 09/30/21
continued on next page
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 111
Appendices
Occupational Safety and Health Administration
OSHA Needs to Improve the Guidance for Its Fatality and Severe Injury Reporting Program to Better
1 $0
Protect Workers; Report No. 02-18-203-10-105; 09/13/18
OSHA Procedures for Issuing Guidance Were Not Adequate and Mostly Not Followed; Report No. 02-19-
4 $0
001-10-105; 03/28/19
Review of the Occupational Safety and Health Administration’s Referral to and Reclamation of Debt from
1 $0
the U.S. Department of the Treasury; Report No. 22-20-006-10-001; 03/16/20
COVID-19: OSHA Needs to Improve Its Handling of Whistleblower Complaints During the Pandemic;
2 $0
Report No. 19-20-010-10-105; 08/14/20
Region IX Whistleblower Protection Program Complaints Were Not Complete or Timely; Report No. 02-21-
4 $0
001-10-105; 11/23/20
COVID-19: Increased Worksite Complaints and Reduced OSHA Inspections Leave U.S. Workers’ Safety
1 $0
at Increased Risk; Report No. 19-21-003-10-105; 02/25/21
OSHA’s Diminished Enforcement Left More Workers at Risk for Exposure to Silica; Report No. 02-21-003-
2 $0
10-105; 09/29/21
COVID-19: To Protect Mission Critical Workers, OSHA Could Leverage Inspection Collaboration
2 $0
Opportunities with External Federal Agencies; Report No. 19-22-003-10-105; 03/31/22
Office of Workers’ Compensation Programs
OWCP’S Efforts to Detect and Prevent FECA Improper Payments Have Not Addressed Known
1 $0
Weaknesses; Report No. 03-12-001-04-431; 02/15/12
Alert Memorandum: Vulnerability in OWCP FECA Bill Pay Processing System; Report No. 50-20-001-04-
1 $0
430; 05/07/20
Special Report Relating to the Federal Employees’ Compensation Act Special Benefit Fund, September
2 $0
30, 2020; Report No. 22-21-001-04-431; 10/30/20
Longshore and Harbor Workers’ Compensation Act Special Fund Financial Statements and Independent
1 $0
Auditors’ Report, September 30, 2020, and 2019; Report No. 22-22-005-04-432; 03/31/22
District of Columbia Workmen’s Compensation Act Special Fund Financial Statements and Independent
1 $0
Auditors’ Report, September 30, 2020, and 2019; Report No. 22-22-006-04-432; 03/31/22
Wage and Hour Division
DOL Did Not Demonstrate It Followed a Sound Process in Promulgating the 2017 Tip Rule Notice of
3 $0
Proposed Rulemaking; Report No. 17-21-001-15-001; 12/11/20
COVID-19: The Pandemic Highlighted the Need to Strengthen Wage and Hour Division’s Enforcement
4 $0
Controls; Report No. 19-21-008-15-001; 09/30/21
Totals 194 $0
112 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Investigative Statistics
Division
Total
Totals
Investigative Reports Issued / Cases Closed (includes investigative reports issued, case closing
166
reports, and matters referred for possible civil and/or administrative action):
Program Fraud 143
Labor Racketeering 23
Cases Opened: 154
Program Fraud 151
Labor Racketeering 3
Cases Referred for Prosecution (each case is measured as a singular statistic and may include more
134
than one person or business entity):
Program Fraud 131
Labor Racketeering 3
Cases Referred for Administrative/Civil Action (each case is measured as a singular statistic and may
50
include more than one person or business entity):
Program Fraud 48
Labor Racketeering 2
Persons Referred to the Department of Justice for Criminal Prosecution (includes the number of
155
individuals and business entities referred for prosecution):
Program Fraud 154
Labor Racketeering 1
Persons Referred to State and Local Prosecuting Authorities for Criminal Prosecution (includes
33
the number of individuals and business entities referred for prosecution):
Program Fraud 30
Labor Racketeering 3
Indictments and Criminal Informations That Resulted from Any Prior Referral to Prosecuting
310
Authorities (includes sealed and unsealed indictments):
Program Fraud 294
Labor Racketeering 15
Indictments (includes sealed and unsealed indictments): 310
Program Fraud 294
Labor Racketeering 15
Convictions: 216
Program Fraud 202
Labor Racketeering 14
Statutory Debarments: 5
Program Fraud 2
Labor Racketeering 3
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 113
Appendices
Recoveries, Cost-Efficiencies, Restitutions, Fines/Penalties, Forfeitures, and Civil
$55,071,064
Monetary Actions:
Program Fraud $52,729,200
Labor Racketeering $2,341,864
Recoveries (the dollar amount/value of an agency’s action to recover or to reprogram funds or
$23,093,951
to make other adjustments in response to OIG investigations):
Cost-Efficiencies (the one-time or per annum dollar amount/value of management’s
commitment, in response to OIG investigations, to utilize the government’s resources more $3,303,263
efficiently):
Restitutions/Forfeitures (the dollar amount/value of restitutions and forfeitures resulting from
$26,717,878
OIG criminal investigations):
Fines/Penalties (the dollar amount/value of fines, assessments, seizures, investigative/court
0
costs, and other penalties resulting from OIG criminal investigations):
Civil Monetary Actions (the dollar amount/value of forfeitures, settlements, damages,
$1,955,972
judgments, court costs, and other penalties resulting from OIG criminal investigations):
Total: $55,071,064
114 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
Appendices
Peer Review
The following meets the requirement under Section 5(1)(14)(A)–(B) of the Inspector General Act of 1978,
as amended, and Section 989C of the Dodd–Frank Wall Street Reform and Consumer Protection Act (P.L.
111–203) that the Inspectors General include their peer review results as an appendix to each semiannual
report. Federal audit functions can receive a rating of “pass,” “pass with deficiencies,” or “fail.”
Peer Review of DOL OIG Audit Function
The U.S. Department of Health and Human Services OIG conducted a peer review of the system of
quality control for DOL-OIG’s audit function for the period ending September 2021. The peer review
report, which was issued on September 15, 2022, resulted in an opinion that the system of quality
control was suitably designed and provided reasonable assurance of DOL-OIG’s conforming to
professional standards in the conduct of audits. The peer review covered audit work performed during
the unprecedented COVID-19 pandemic, and DOL-OIG received a clean report with a rating of pass with
no recommendations.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 115
Appendices
OIG Hotline
The OIG Hotline provides a communication link between the OIG and persons who want to report alleged
violations of laws, rules, and regulations; mismanagement; waste of funds; abuse of authority; or danger
to public health and safety. During the reporting period April 1, 2022, through September 30, 2022, a total
of 9,973 complaints were opened in the OIG Hotline’s complaint management system. Of these, 7,320
were complaints received from the National Center on Disaster Fraud. Almost all of these complaints
involve concerns regarding COVID 19 related unemployment benefits. During this reporting period, 11,728
referrals were made for further review and/or action in response to complaints opened in the OIG Hotline’s
complaint management system. Numerous individual complaints involving alleged fraud regarding
COVID-19-related unemployment benefits were referred to both the OIG’s Office of Investigations and
the appropriate State Workforce Agency. During this reporting period, the OIG Hotline received additional
complaints that are awaiting processing.
Complaints Received (by method reported): Totals
Telephone 179
E-mail/Internet 9,757
Mail 36
Fax 0
Walk-In 1
Total 9,973
Contacts Received (by source): Totals
Complaints from Individuals or Non-Governmental Organizations 2,556
Complaints/Inquiries from Congress 1
Referrals from GAO 1
Complaints from Other DOL Agencies 1
Complaints from Other (non-DOL) Government Agencies 7,414
Total 9,973
Disposition of Complaints: Totals
Referred to OIG Components for Further Review and/or Action 40
Referred to DOL Program Management for Further Review and/or Action 44
Referred to Non-DOL Agencies/Organizations 11,644
No Referral Required/Informational Contact 74
Total 11,802
116 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
OIG FY 2023 Audit Workplan
Fiscal Year 2023 Audit Workplan
BUREAU OF LABOR STATISTICS (BLS)
Discretionary Audit
1. BLS Survey Response Rate – In Progress. BLS is the principal federal agency responsible for
measuring labor market activity, working conditions, and price changes in the nation’s economy. The
President, Congress, federal policymakers, public institutions, and private citizens use the economic
information developed by BLS to guide and support decision-making. According to a 2013 study by the
National Research Council, “[f]or many household surveys in the United States, response rates have
been steadily declining for at least the past two decades.” BLS’s Fiscal Year (FY) 2021 operating plan
acknowledges survey response rates have declined over the last few years, and the OIG work to date
confirms overall BLS survey response rates have been declining. It is vital for BLS to incorporate new
methodologies and technology into its data collection process to ensure expected response rates and
reduced respondent burden. A decline in response rates could increase data collection costs and affect
data quality, which may result in unreliable economic information developed by BLS. This audit focuses on
how efficiently and effectively BLS is able to obtain data necessary to produce the economic information it
is required to produce, and if there are other sources to obtain the necessary data.
BENEFITS REVIEW BOARD (BRB)
Discretionary Audit
2. BRB Backlog of Black Lung and Longshore and Harbor Worker Claims. The Benefit Review Board
(BRB) decides appeals from the Office of Administrative Law Judges (OALJ) under the Black Lung
Benefits Act, the Longshore and Harbor Workers’ Compensation Act, and the Longshore and Harbor
Workers’ Compensation Act extensions, including the Defense Base Act (DBA). In FY 2020 and FY 2021,
there was a large influx of DBA cases, which the Department predicts will continue for FY 2022 and FY
2023. According to Department officials, this influx of DBA cases is the most important new challenge
for the OALJ and BRB. In addition, OALJ expects to increase production with additional budget and full-
time employees. In FY 2022, the BRB had a backlog of 648 Black Lung appeal cases with an average
processing time of 16.8 months and a backlog of 97 Longshore/DBA appeal cases with an average
processing time of 12.5 months. The continued increase of Longshore/DBA appeal cases since FY 2020,
along with a continued influx of new Black Lung and non-DBA Longshore appeal cases, could impact
BRB appeal case processing times and increase BRB’s backlog of appeal cases, delaying claimants from
receiving vital benefits. This audit will focus on BRB’s efforts to expeditiously adjudicate Black Lung and
Longshore (DBA and non-DBA) appeals and reduce the backlog of appeal cases.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 117
OIG FY 2023 Audit Workplan
EMPLOYEE BENEFITS SECURITY ADMINISTRATION (EBSA)
Discretionary Audit
3. EBSA Enforcement. During FY 2022, EBSA established health care initiatives to focus limited resources
on enforcement actions related to the sustainability and fraud of Multiple Employer Welfare Arrangements
(MEWA) and emergency services claims, as well as provisions of the American Rescue Plan Act of 2021, or
ARPA (e.g., the continuation of coverage benefits through the Consolidated Omnibus Budget Reconciliation
Act of 1985). EBSA enforcement initiatives seek to detect and correct violations of the Employee Retirement
Income Security Act of 1974, among other federal law violations, and to obtain relief for those violations.
This audit will focus on the effectiveness of EBSA’s enforcement efforts to detect and correct health-related
violations, as well as obtaining relief for those violations.
EMPLOYMENT AND TRAINING ADMINISTRATION (ETA)
Mandatory Audits
Job Corps
4. COVID-19: Job Corps Training Program Performance during the Pandemic. In March 2020, the
COVID-19 pandemic forced Job Corps to quickly shut down its centers and send most of its 29,000
students home. As with most other schools in the United States, Job Corps had not planned for a transition
to a distance learning program when in-person instruction abruptly ceased. We previously reported that
Job Corps’ inability to deliver hands-on training delayed students’ progress and completions, noting that
no students completed technical skills training from April 2020 to April 2021.This audit will focus on the
outcomes for students who received remote learning during the pandemic.
5. COVID-19: Ensuring Job Corps Funds Were Properly and Efficiently Used during the COVID-19
Pandemic. In March 2020, during the COVID-19 pandemic, Job Corps shut down 121 centers and sent
almost 29,000 students home. From about March 2020 to April 2021, student enrollment plummeted 56
percent, and the number of students who completed trades training also dropped to zero. For FY 2020,
Job Corps received approximately $1.7 billion in funding, the same amount as in prior years. While Job
Corps allowed centers to use budget underrun funds to purchase supplies and equipment to deploy
remote learning and to ensure student and staff safety when it reopened centers, there is a risk all these
funds were not used appropriately or efficiently. This audit will review how Job Corps’ funds were spent
from March 2020 through December 2021.
6. Job Corps Minor Students. Job Corps’ participants upon entry into the program are ages 16 to 24.
The significant age range poses a number of challenges. Given the occurrence of sexual assaults and
harassment that occur on center campuses, there is an inherent risk with having adults up to 27 years
118 Semiannual Report to Congress | April 1, 2022 – September 30, 2022
OIG FY 2023 Audit Workplan
of age cohabitate with minors as young as 16 years old. Some Job Corps minors may: (1) have been
encouraged to enroll by their parents or guardians, (2) not be in the program of their own volition, (3)
not take the program seriously, and (4) disrupt program instruction, which impacts the learning of other
students. Furthermore, minor students may not meet minimum age requirements for certain trades,
affecting their ability to obtain employment in certain fields, such as plumbing and electrical trades,
possibly leading to lower program outcomes and not meeting the intent of the Job Corps program. This
audit will focus on whether Job Corps took appropriate measures to ensure the safety of, mitigate program
disruptions from, and meet the program’s intent for its minor students.
Discretionary Audits
ETA Contract and Grant Programs
7. COVID-19: ETA Grantee Sub-Recipient – In Progress. In March 2020, the COVID-19 pandemic caused
many of ETA’s job training programs to cease operation. This interrupted participants’ job training, hence
potentially preventing them from completing their training and getting a job in the areas in which they were
trained. This audit will focus on how effectively ETA ensured these funds were used as intended.
8. COVID-19: ETA’s Administration of Grant Funds Provided under the CARES Act. ETA obligated
more than $15 billion in federal grant funds, of which $345 million was specifically provided under the
Coronavirus Aid, Relief, and Economic Security (CARES) Act. Over the past decade, we reported
numerous issues with ETA’s management of federal grant funds not achieving performance goals and
identified upwards of $489 million in grant funds that were inefficiently used. This audit will focus on how
effectively ETA ensured these funds were used as intended.
9. ETA’s Administration of Disaster Dislocated Worker Grants. Public Law 116–20 provided ETA with
an additional $50 million for the dislocated workers assistance national reserve for necessary expenses
directly related to the consequences of Hurricanes Florence and Michael, Typhoon Mangkhut, Super
Typhoon Yutu, wildfires, and earthquakes that occurred in calendar year (CY) 2018, and tornadoes
and floods that occurred in CY 2019. Dislocated Worker Grants (DWG) provide resources to states and
other eligible applicants to respond to large, unexpected layoff events causing significant job losses.
Additionally, disaster DWGs provide funding to create temporary employment opportunities to assist with
clean-up and recovery efforts, and employment and training services to eligible grant participants. A prior
OIG DWG report found ETA provided minimal oversight of its state grantees and needs to do more to
ensure grantees help local areas to restore communities timely; ensure out of work participants receive
expeditious disaster relief assistance; maximize the number of participants who obtain employment as
intended by the grants; and ensure disaster relief funds are used efficiently and effectively. This audit will
focus on the extent ETA properly administered the DWG program to provide assistance in the aftermath of
the 2018 and 2019 disasters.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 119
OIG FY 2023 Audit Workplan
Foreign Labor Certification
10. Effectiveness of ETA’s Permanent Labor Certification Program (PERM) Application Processing
Time. The PERM program is based on the premise that employers will hire foreign workers only when:
(1) there are insufficient U.S. workers able, willing, qualified, and available to accept the job opportunity in
the area of intended employment; and (2) the employment of foreign workers will not adversely affect the
wages and working conditions of similarly employed U.S. workers. When submitting a PERM application,
the employer is required to execute recruiting efforts for U.S. workers within 6 months of filing an
application. Based on August 2022 data, once the employer submits the application to ETA, the average
processing time to receive an approved application from DOL is between 8 and 11 months, depending
on ETA’s review process. Due to the lengthy average processing time for applications, there is little
assurance by the time a foreign worker is approved for permanent resident status that a U.S. worker was
still not available and able to perform the same job. This audit will focus on ETA’s PERM application review
process and effectiveness in ensuring U.S. workers were still not available and able to perform the job.
11. Effectiveness of ETA’s Approval of H-2A Applications. The H-2A temporary agricultural program
allows agricultural employers who anticipate a shortage of domestic workers to bring nonimmigrant foreign
workers to the United States to perform agricultural labor or services of a temporary or seasonal nature.
In order to receive the temporary employees, employers self-attest (1) there are no sufficient able, willing,
and qualified U.S. workers available to perform the temporary and seasonal agricultural employment,
and (2) the employment of H-2A workers will not adversely affect the wages and working conditions of
similarly employed U.S. workers. This audit will focus on the effectiveness of ETA’s approval process and
comparing the self-attestations to supporting documentation.
Unemployment Insurance (UI) Program
12. COVID-19: Audit of ETA’s Oversight of UI Integrity of CARES Act Programs – In Progress. States
are responsible for administering their UI programs while DOL provides oversight and direction for the UI
system nationwide. When Congress, through the CARES Act, expanded UI for workers who were suddenly
unemployed because of the pandemic, states were already processing a substantial influx in UI claims.
States then had to implement three new UI programs, resulting in additional major challenges. Resources
stretched, states attempted to pay benefits quickly, and the risk of fraud and increased improper payments
rose significantly. As of March 31, 2021, states and territories had drawn down a total of approximately
$495.2 billion to administer the new UI programs—98 percent of the total drawdown funding
($505.6 billion) for all CARES Act programs. Over the years, ETA has implemented various program
integrity and fraud reduction initiatives; however, these initiatives have offered only a partial solution.
This audit evaluates ETA’s role in managing the integrity of the UI programs under the CARES Act,
including working with states and partners to identify and share best practices and data to reduce fraud.
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13. COVID-19: DOL’s Oversight of Emergency UI Administrative Grants to States – In Progress.
The Families First Coronavirus Response Act provided $1 billion to DOL to provide emergency
administration grants to state UI agencies for the administration of their unemployment compensation
programs. Administrative resources were critical to delivering an effective UI program that was relied
upon by millions of American taxpayers, especially during the pandemic. Funds provided through these
emergency administrative grants could only be used for the administration of the UI program and were
not available for the payment of UI benefits. This audit focuses on the Department’s monitoring of the
emergency administration grants and if these funds were accurately tracked and reported, at both the
state and federal level.
14. COVID-19: Audit of States’ Information Technology Systems Capability in Processing
Unemployment Insurance Claims – In Progress. From March 28, 2020, to August 1, 2020, unemployed
workers submitted more than 57 million initial UI claims and another 502 million continued claims under
regular and CARES Act UI programs. Many states and U.S. territories used antiquated information
technology (IT) systems—some dating from the 1970s—to process the claims influx and implement
the new CARES Act programs. The need for IT modernization had already become apparent during
the economic downturn where some states’ systems failed completely. In October 2020, the National
Association of State Workforce Agencies (NASWA) UI IT Support Center reported only 22 states had
modernized their systems. Using outdated IT systems can cause payment delays and can also increase
improper payments including fraud. This audit will determine to what extent the capability of states’ IT
systems impacted their ability to process timely and accurate UI claims.
15. COVID-19: Audit of CARES Act Impact on Non-traditional Claimants – In Progress. With the
passage of the CARES Act in March 2020, the Department’s UI program was expanded to provide
emergency UI benefits to workers unemployed due to COVID-19. This included non-traditional claimants,
such as self-employed workers, independent contractors, and individuals with limited work histories.
While total expenditure of UI benefits approached $500 billion by mid-2021, it is unclear how effective ETA
and its state partners have been in delivering this assistance to non-traditional claimants. Our audit will
determine if DOL and State Workforce Agencies’ efforts ensured non-traditional claimants received UI
benefits as intended under the CARES Act and the Continued Assistance for Unemployed Workers Act of
2020 (Continued Assistance Act).
16. COVID-19: Audit of DOL and States’ Efforts to Detect and Recover Improper Payments – In
Progress. Under the CARES Act, ETA was required to implement large-scale changes to its existing UI
system, including establishing six new programs. The new programs were intended to provide expanded
UI benefits to workers who were suddenly jobless as a direct result of the COVID-19 pandemic. Given
the challenge of rapidly implementing new programs during a crisis situation, ETA and states faced an
additional hurdle of using controls, previously identified as weak and deficient in published OIG reports
and alert memorandums, to process more than 77 million seasonally adjusted initial jobless claims and
571 million seasonally adjusted continued claims over the course of the pandemic’s first year. According
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to the OIG’s conservative estimate as of January 2, 2021, such circumstances increased the risk of UI
improper payments (including fraud, waste, and abuse) to exceed a total of $40 billion. This audit focuses
on determining if ETA ensured states had adequate controls to prevent, detect, and recover improper
payments stemming from UI benefits under the CARES Act and the Continued Assistance Act.
17. COVID-19: Audit of States’ Use of Staffing to Support Implementation of CARES Act UI Programs
– In Progress. From March 2020, the unprecedented high rate of unemployment resulting from the
COVID-19 pandemic led to challenges for states in processing UI claims, completing mandatory reporting,
and performing required overpayment detection procedures due to insufficient staffing. DOL and states
found themselves unprepared for the circumstances surrounding COVID-19 and struggled to implement
CARES Act UI programs while unemployed workers faced lengthy delays in receiving UI benefits.
The CARES Act provided states with temporary “emergency” flexibility through December 31, 2020, for
additional staffing and to otherwise quickly process unemployment claims, and subsequent legislation
extended these CARES Act UI provisions. This audit focuses on DOL’s efforts to ensure states’ staffing
supported the implementation of UI programs under the CARES Act and its amendments.
18. COVID-19: Audit of the Temporary Full Federal Funding Program – In Progress. Under the CARES
Act, the Temporary Full Federal Funding (TFFF) program paid the cost of the first week of an eligible
claimant’s UI benefits for states with no waiting week. The program also paid the cost of the first week
for those who chose to waive their waiting week requirements. This flexibility allowed eligible claimants
to receive their benefits quickly and get the much-needed relief to offset the effects of the COVID-19
pandemic. As of July 2021, ETA had provided states more than $6.8 billion through the TFFF program.
This audit focuses on DOL’s efforts to ensure states met program requirements and used the TFFF
program as intended by the UI provisions of the CARES Act, the Continued Assistance Act, and ARPA.
19. COVID-19: Emergency Unemployment Relief for Government Entities and Nonprofit Organizations
– In Progress. The CARES Act created the Emergency Unemployment Relief for Government Entities and
Nonprofit Organizations (EURGENO) program. It provided funds to reimburse governmental entities and
certain nonprofits for amounts paid for unemployment between March 13, 2020, and September 6, 2021.
This audit will determine to what extent ETA and states effectively executed the EURGENO program and
ensured compliance with the UI provisions of the CARES Act and its amendments.
20. COVID-19: Short-Time Compensation (STC) Program – In Progress. Passage of the CARES Act
expanded UI program benefits to new and existing programs, including the STC program. The CARES
Act included provisions that increased the federal reimbursement to 100 percent of benefits for states
that have an STC program in their laws and provided for a 50 percent reimbursement for states that
do not have an STC program in their laws but agreed to operate a program on a temporary basis. The
STC program acts as a work share program, with employers reducing the number of hours offered to
employees and the state making up the difference in the form of benefit payments. The CARES Act
provided for an estimated $2.2 billion for benefit reimbursements and administrative costs. Twenty seven
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states have participated in the program and reported benefit reimbursement payments of approximately
$1.1 billion as of July 31, 2021. This audit will determine how states implemented the STC program for the
benefit of unemployed individuals and to meet the intent of the program.
21. COVID-19: Mixed Earners Unemployment Compensation – In Progress. The Mixed Earners
Unemployment Compensation (MEUC) program is a new temporary federal program under the Continued
Assistance Act and ARPA. It provided additional benefits to certain self-employed individuals who are
available for work for the week ending January 2, 2021, through the week ending September 4, 2021. This
audit will determine how states implemented the MEUC program for the benefit of unemployed individuals
and to meet the intent of the program.
22. Pandemic Response Accountability Committee (PRAC) – DOL Programs – Case Study Project
– In Progress. The focus of this oversight project will be to identify the federal pandemic response
program funds provided to select geographic areas, identify the purpose of those funds, and determine
if the federal program spending aligned with the intended goals and objectives. This project is under the
direction of the Pandemic Response Accountability Committee and is being conducted in coordination
with nine other OIGs.
23. COVID-19: Audit of DOL and States Oversight of UI Claimants Return to Work. The CARES Act
and its related extensions provided additional UI benefits to claimants who lost their employment due to
the COVID-19 pandemic. As a result, numerous states ended their participation in the enhanced federal
jobless benefits program ahead of its expiration, citing complaints from businesses that claimed they
were unable to find workers likely due to financial incentives that caused claimants to refuse suitable
employment offers. This audit will focus on DOL’s and states’ compliance with return to work provisions
under the CARES Act.
24. COVID-19: ETA and States’ Efforts to Address Multistate UI Claimants. In September 2022, we
alerted DOL to over $45 billion we had identified in potential fraud paid in four high-risk areas. Multistate
claimants were the largest high-risk area. Through ETA, the OIG provided states with our underlying
methodology as well as specific claimant information for follow-up action. This audit will examine the extent
to which ETA and states have taken action to follow up on potentially fraudulent CARES Act UI claims
identified and referred by the OIG.
25. COVID-19: ETA and States’ Efforts to Address UI Claimants Filing with Social Security Numbers of
Deceased Persons. In September 2022, we alerted DOL to over $45 billion we had identified in potential
fraud paid in four high-risk areas. One high-risk area was UI claimants filing with Social Security numbers
(SSN) of deceased persons. Through ETA, the OIG provided states with our underlying methodology as
well as specific claimant information for follow-up action. This audit will examine the extent to which ETA
and states have taken action to follow up on potentially fraudulent CARES Act UI claims filed with SSNs of
deceased persons identified and referred by the OIG.
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26. COVID-19: ETA and States’ Efforts to Address UI Claimants Filing with Social Security Numbers
of Federal Prisoners. In September 2022, we alerted DOL to over $45 billion we had identified in
potential fraud paid in four high-risk areas. One high-risk area was UI claimants filing with SSNs of federal
prisoners. Through ETA, the OIG provided states with our underlying methodology as well as specific
claimant information for follow-up action. This audit will examine the extent to which ETA and states
have taken action to follow up on potentially fraudulent CARES Act UI claims filed with SSNs of federal
prisoners identified and referred by the OIG.
27. COVID-19: ETA and States’ Efforts to Address UI Claimants Filing with Suspicious Email Accounts.
In September 2022, we alerted DOL to over $45 billion we had identified in potential fraud paid in four high-
risk areas. One high risk area was UI claimants filing with suspicious email accounts. Through ETA, the OIG
provided states with our underlying methodology as well as specific claimant information for follow-up action.
This audit will examine the extent to which ETA and states have taken action to follow up on potentially
fraudulent CARES Act UI claims filed with suspicious email accounts identified and referred by the OIG.
28. COVID-19: Impact of Waivers on UI Overpayments, Fraud Investigations, and Recoveries. On
February 7, 2022, DOL issued Unemployment Insurance Program Letter (UIPL) 20-21, Change 1,
regarding states’ ability to waive the recovery of certain UI overpayments under the CARES Act program.
There are concerns these waivers could adversely impact the pursuit of fraud in the UI program. Also, the
waivers could potentially allow for fraudulent CARES Act UI payments to go uncollected. This audit will
determine the impact of waivers on UI overpayments, fraud investigations, and recoveries.
29. American Rescue Plan Act Equity Grants. ARPA provided $2 billion in funding to DOL to prevent and
detect fraud, promote equitable access, ensure timely payment of benefits, and reduce backlogs. This
includes $260 million in grants to improve claimant outreach and customer service processes, implement
strategies to reduce backlog, and improve access for workers in communities that may historically
experience barriers. These first-of-their-kind grants, referred to as “Equity Grants,” will provide funding
for states to improve public awareness and service delivery as DOL seeks to address potential racial and
ethnic disparities in the administration and delivery of UI benefits in some states. This audit will focus on
DOL’s and states’ effectiveness in addressing the potential racial and ethnic disparities in the UI program.
MINE SAFETY AND HEALTH ADMINISTRATION (MSHA)
Discretionary Audits
30. COVID-19: Impact of COVID-19 MSHA Mandatory Inspections – In Progress. MSHA conducts certain
mandatory inspections to help ensure miners are working in safe environments. Because of workforce
limitations during the COVID-19 pandemic, the number and/or quality of mandatory MSHA inspections
may have declined, putting miners at risk. Between January and December 2020, MSHA conducted
19,487 mandatory inspections at 12,684 mines. This audit will determine if COVID-19 impacted MSHA’s
ability to effectively conduct mandatory inspections.
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31. Mine Rescue Response Plan. When disaster strikes, a well-prepared mine rescue effort can mean
the difference between life and death for trapped miners. Insufficient personnel, equipment, or training
could hamper MSHA’s ability to respond quickly and effectively in mine rescue situations. Prior OIG work
found MSHA had not provided adequate oversight of mine emergency response plans, which included
planning by both mine operators and MSHA. This audit will assess MSHA’s preparedness in responding to
emergencies requiring mine rescue operations.
OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS (OFCCP)
Discretionary Audits
32. OFCCP’s Enforcement of Equal Employment Opportunity Obligations. OFCCP is charged
with protecting America’s workers by enforcing equal employment opportunity and affirmative action
obligations of employers that do business with the federal government. OFCCP focuses on identifying
patterns of systemic discrimination in employer personnel practices, including hiring, promotion,
and compensation, when it conducts compliance evaluations of contractors. OFCCP also monitors
contractors’ and subcontractors’ compliance with affirmative action obligations. With more than $1 trillion
allocated in the Infrastructure Investment and Jobs Act, OFCCP will play a vital role in ensuring these
federal investments create good jobs that provide equal opportunity to all. This audit will focus on the
effectiveness of OFCCP’s enforcement of anti-discrimination and affirmative action obligations through
compliance evaluations.
OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION (OSHA)
Discretionary Audits
33. COVID-19: OSHA’s Adequacy of Plans and Use of Funds under the American Rescue Plan Act –
In Progress. With increased concern regarding the safety and health of workers during the COVID-19
pandemic, OSHA has received a significant rise in complaints. We previously reported OSHA received 15
percent more complaints from February to October 2020 than during a similar period in 2019. To address
the continued impact of COVID-19 on the economy, public health, state and local governments, individuals,
and businesses, on March 11, 2021, Congress passed ARPA. ARPA provided relief to OSHA in the
amount of no less than $100 million. This audit focuses on whether OSHA adequately developed plans
to use ARPA funds to carry out COVID-19 related worker protection activities, and whether OSHA has
controls in place to effectively use ARPA funds to protect workers from COVID-19.
34. Use of Complainant Interviews in OSHA Complaint Inspections – In Progress. OSHA conducts
approximately 9,000 complaint inspections annually and issues citations in 24 percent of those
inspections. Inspectors are not required to interview complainants at any point during the inspection
process, which could result in OSHA having little interaction with complainants and witnesses during
complaint inspections. This audit focuses on OSHA’s use of complainant and witness testimony during a
complaint inspection to ensure the complaint or referral was addressed adequately.
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35. Rising Injury Rates among Online Retailers’ Warehouse Workers – In Progress. High-speed
fulfillment of online orders has become the industry standard, with large online retailers promising
free 2-day, next-day, and even same-day deliveries of orders. To accomplish such speedy deliveries,
warehouses around the nation have been forced to work ever faster, and some have reported increased
pressure to meet production quotas. This may be having a significant impact on the health and safety of
warehouse workers. For example, injury rates among warehouse workers have skyrocketed, with one
organization reporting that injury rates at a leading online retailer are 80 percent higher and also more
severe than at other online retailers’ warehouses. The State of California recently passed legislation to
help protect warehouse workers by empowering state safety regulators to take additional enforcement
actions. This audit will review what, if any, actions OSHA has taken to address the rising injury rates and
severity of injuries at online retailers’ warehouse facilities.
36. COVID-19: OSHA Future Pandemic Planning Adequacy. ARPA provides the amount of no less than
$100 million for OSHA to conduct worker protection activities concerning COVID-19. The COVID-19
pandemic raised specific concerns about the safety and health of workers. Since the start of the
pandemic, OSHA received numerous complaints and requests from Congress and other stakeholders to
issue an Emergency Temporary Standard (ETS). OSHA issued numerous pieces of guidance; however,
the guidance is not enforceable and cannot operate in lieu of an ETS. OSHA intended to spend a portion
of the ARPA funds to provide the necessary staff and technical expertise on the development of an ETS
for COVID-19 and a permanent standard on infectious disease standards. This audit will (1) determine if
OSHA has plans to issue an ETS covering other high-risk industries, (2) review the effectiveness OSHA’s
plans for addressing future pandemics, and (3) evaluate other actions OSHA has taken to safeguard
workers in high-risk industries during the ongoing pandemic.
37. COVID-19: OSHA Effectiveness of the National Emphasis Program (NEP). Due to the COVID-19
pandemic, OSHA received a surge of complaints while garnering the attention of Congress, labor unions,
and the media with requests to act swiftly on behalf of the 130 million workers at more than 8 million
worksites nationwide whom OSHA is responsible for protecting. OSHA launched the NEP on March
12, 2021, to focus on companies that put the largest number of workers at serious risk of contracting
COVID-19, and on employers that engage in retaliation against employees who complain about unsafe or
unhealthful conditions or exercise other rights under the Occupational Safety and Health (OSH) Act. The
audit will focus on OSHA’s efforts to administer the NEP to ensure employees in high-hazard industries or
work tasks are protected from the hazard of contracting COVID-19 and from retaliation.
38. COVID-19: OSHA Effectiveness of Whistleblower Complaint Corrective Actions. OSHA received
a 30 percent increase in whistleblower complaints during the early months of the COVID-19 pandemic.
OSHA enforces whistleblower provisions found in 25 statutes that protect employees from retaliation for
reporting unsafe or unhealthful conditions or otherwise exercising their rights provided under the statutes.
Prior to the pandemic, OSHA averaged 9 months to close a whistleblower complaint investigation, already
much longer than the 30-, 60-, or 90 day statutory timeframes. Potential for even greater delays exist
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with the significant increase of whistleblower complaints received during the pandemic and decrease in
the Whistleblower Protection Programs’ full-time employment. These delays can leave workers to suffer
emotionally and financially. The audit will focus on OSHA’s efforts to implement corrective actions that
improve the Whistleblower Protection Program to ensure workers are protected from retaliation.
OFFICE OF LABOR MANAGEMENT STANDARDS (OLMS)
Discretionary Audit
39. OLMS Compliance Program Targeting Strategy. OLMS conducts audits of labor unions to detect
embezzlements and promote compliance with the Labor Management Reporting and Disclosure Act of
1959. OLMS developed a methodology to focus its audit selection on labor unions whose metrics suggest
potential criminal activity (e.g. embezzlement from unions). In FY 2009, OLMS established a performance
goal to increase the rate at which audits of unions result in the opening of a criminal investigation (the
“fallout” rate). In FY 2021, OLMS fell short of its performance goal in this area, achieving a fallout rate of
15.25 percent despite a target rate of 16.75 percent. This audit will focus on the effectiveness of OLMS’s
targeting strategy in increasing criminal investigations and reducing criminal activity.
OFFICE OF THE ASSISTANT SECRETARY FOR ADMINISTRATION AND
MANAGEMENT (OASAM)
Mandatory Audit
40. Federal Information Security Management Act (FISMA) Audit – Annual. In performing its various
missions, DOL collects and processes sensitive information through approximately 77 major information
systems. FISMA recognizes the significant risks involved with information IT and its important role
in fulfilling agency missions. As such, FISMA sets a framework for securing all federal government
systems by developing security standards and methods for measuring the effectiveness of those security
standards. This audit will focus on the status of the DOL Information Security Program in implementing an
effective framework to secure DOL information systems.
Discretionary Audits
41. IT Modernization – In Progress. IT modernization is critical to preventing security breaches, excessive
costs, missed deadlines, and low-quality IT products and services. DOL recently transitioned to an IT
Shared Services model, providing OASAM greater control over IT and IT funding. This audit focuses on
the management of IT modernization efforts across the Department, including software integration, legacy
systems, and shared services.
42. DOL IT Contingency Planning. IT Contingency Plans are a key component for the recovery and
continuity of operations when disasters (natural disasters or malicious actors) strike an agency or its IT.
The Office of the Chief Information Officer (OCIO) is now the Authorizing Official of DOL’s 65 IT systems
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and is responsible for the continuity of these mission critical systems. As such, the requirements for
contingency plan testing of all those systems now falls to the OCIO staff. Prior FISMA work indicated
the OCIO has problems with contingency planning, including not ensuring sufficient backup testing of
its systems. With incomplete or impartial contingency planning of such a large number of systems under
OCIO responsibility across a variety of agencies and geographic areas, the potential for substantial system
downtime or non-recovery of data when a contingency arises is elevated. The lack of availability of DOL
systems may impact the Department’s ability to fulfill its critical missions and legislative requirements.
This audit will focus on what efforts OCIO is undertaking to maintain and test the contingency plans across
all DOL systems, with particular focus on the 65 systems under OCIO direct control.
43. DOL Wireless Network Environment. DOL’s wireless network has been deployed across all 50 states
at approximately 400 locations within all DOL owned and associated buildings for DOL’s 20,000 users.
Wireless networks are being deployed to replace DOL’s current hardwired (cables) infrastructure. Wireless
technology inherently contains high risks if not properly configured or maintained as the information can
be received by anyone within the range of the wireless device. Without operating secure wireless networks
that include boundary controls between networks and active monitoring, DOL is vulnerable to the breach
of its high-value IT assets, which could cripple DOL operations and result in the loss of highly sensitive
data. Our audit will focus on whether DOL deployed and operated a secure wireless network infrastructure
across all of its agencies and supported and/or funded mission sites. We intend to not only focus on the
policy and procedures but also test the effectiveness of DOL’s implementation through technical testing.
OFFICE OF THE CHIEF FINANCIAL OFFICER (OCFO)
Mandatory Audits
44. DOL Consolidated Financial Statements Audit – Annual. We will determine if DOL’s consolidated
financial statements present fairly, in all material respects, the financial position of DOL as of September
30, 2023. We will consider DOL’s internal controls over financial reporting and test DOL’s compliance with
applicable laws, regulations, contracts, and grant agreements that have a direct and material effect on the
consolidated financial statements.
45. Review of DOL’s Improper Payment Reporting in the Annual Financial Report – Annual. In FY
2021, the UI program and Federal Employees’ Compensation Act (FECA) reported outlays of $413 billion
and $2.9 billion, respectively, with an estimated improper payment rate of 18.71 percent and 2.7 percent,
respectively. Based on DOL’s risk assessments, the UI and FECA programs continue to be considered the
most susceptible to improper payments of all DOL programs. This audit will determine if DOL complied
with the Payment Integrity Information Act of 2019, which required DOL to: (1) conduct a program specific
risk assessment for each required program or activity; (2) publish and meet annual reduction targets for
each program assessed to be at risk for improper payments; and (3) report information on the efforts of
each program to reduce improper payments.
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OFFICE OF WORKERS’ COMPENSATION PROGRAMS (OWCP)
Mandatory Audits
46. Report Relating to the Federal Employees’ Compensation Act Special Benefit Fund – Annual.
We will determine if: (1) the Schedule of Actuarial Liability, Net Intra-Governmental Accounts Receivable,
and Benefit Expense was fairly presented for the year ending September 30, 2023; and (2) internal
controls over financial reporting related to the Schedule were in compliance with laws and regulations that
could have a direct and material effect on the Schedule.
47. Longshore and Harbor Workers’ Compensation Act (LHWCA) Special Fund – Annual. We will
determine if DOL’s LHWCA Special Fund financial statements presented fairly, in all material respects,
the financial position of the LHWCA Special Funds as of September 30, 2022.
48. District of Columbia Workmen’s Compensation Act (DCCA) Special Fund Financial Statement
Audits – Annual. We will determine if DOL’s DCCA Special Fund financial statements presented fairly,
in all material respects, the financial position of the DCCA Special Funds as of September 30, 2022.
49. FECA Statement on Standards for Attestation Engagements No. 18 – Annual. We will determine
if DOL’s Integrated Federal Employees’ Compensation System transaction processing for application
and general controls, as described in the report, were fairly presented, suitably designed, and effectively
operating for the period October 1, 2022, through June 30, 2023.
Discretionary Audits
50. Energy Employees’ Claims Denials – In Progress. From its inception to the end of FY 2020, the Energy
Workers program awarded approximately 127,000 claimants’ compensation and medical benefits totaling
more than $18.52 billion. One of the major functions of the Energy program is to determine whether an
individual qualifies for Part B and/or Part E benefits. As of October 3, 2021, the Energy program had
denied 42 percent of claims filed under Part B and 47 percent of claims filed under Part E. This audit will
determine the extent to which the program ensured denied claims followed appropriate guidelines.
51. Managing Pharmaceutical Spending in FECA – In Progress. Recent OIG audit work found OWCP
had not done enough to ensure it paid the best price for prescription drugs. Specifically, the audits noted
OWCP lacked a pharmacy benefit manager to help contain costs and had not determined if alternative
drug pricing methodologies would be more competitive. This ongoing audit focuses on identifying the
major factors influencing pharmaceutical spending in the FECA program, including any impact from the
COVID-19 pandemic, and determining if OWCP effectively manages pharmaceutical spending in the
FECA program.
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52. PRAC – Telehealth Services in OWCP – In Progress. During the COVID-19 pandemic, federal health
care programs used several strategies, such as telehealth services, so patients could receive medical
services where needed, whether at home or elsewhere. This ongoing project with the PRAC will provide
information on: the types of telehealth services available across OWCP; potential program integrity risks
associated with increased telehealth utilization during the pandemic; and how the pandemic, and resulting
expansion of telehealth, affected patient access for a single service type. This PRAC project is being
performed in coordination with five other IGs.
53. OWCP Pharmacy Benefit Manager (PBM). In March 2021, OWCP implemented a PBM responsible
for pharmaceutical transactions including but not limited to eligibility determinations and pricing for
prescription drugs for the FECA program. In FY 2021, FECA provided almost $3 billion in benefits to more
than 183,000 workers and survivors for work-related injuries or illnesses. This audit will focus on how
effectively OWCP’s PBM reduced opioid related risks, pharmaceutical costs, and fraud.
54. OWCP Medical Bill Payment Processing Data Integrity Follow-Up. In 2020, OWCP launched a new
medical bill payment processing system: the Workers’ Compensation Medical Bill Processing (WCMBP)
system. In 2021, we initiated an audit to assess the processes and controls over OWCP’s medical bill
payment data from this system and other OWCP systems that collect, process, and share the data
necessary to manage the workers’ compensation programs. OWCP was unable to demonstrate the design
and effectiveness of its controls over its medical bill payment processes. Based on this, we ended the
audit and concluded OWCP’s medical bill payment data was of undetermined reliability. Since concluding
our testing, OWCP has stated the issues preventing our continued testing have been remedied. As OWCP,
its programs, and its stakeholders rely on accurate and complete data from this and other OWCP systems,
we decided to follow up on our recommendations and complete our data reliability testing. This audit
will assess OWCP’s processes and controls to determine the reliability of OWCP’s medical bill payment
processing data necessary to manage the Workers’ Compensation Programs.
VETERANS’ EMPLOYMENT AND TRAINING SERVICE (VETS)
Discretionary Audits
55. COVID-19: VETS Jobs for Veterans State Grants (JVSG) Program. The COVID 19 pandemic presented
new challenges for VETS in its mission to prepare America’s veterans and transitioning service members
for meaningful careers; provide them with employment resources and expertise; protect their employment
rights; and promote their employment opportunities. The JVSG program provides individualized career
services to veterans with significant barriers to employment, with the maximum emphasis directed toward
serving veterans who are economically or educationally disadvantaged. The program also conducts
outreach to employers and business associations and engages in advocacy efforts with hiring executives
to increase employment opportunities for veterans and encourage the hiring of disabled veterans. The
audit will focus on how the pandemic impacted the VETS JVSG program, as well as the effectiveness of
the training program during a health crisis.
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56. COVID-19: Effectiveness of Homeless Veterans’ Reintegration Program (HVRP) Grants. HVRP
is the only federal grant to focus exclusively on competitive employment for homeless veterans. Of all
VETS programs, veterans experiencing homelessness were the most difficult population to serve during
the COVID-19 pandemic. Many facilities and partner agencies shut down as a result of the public health
emergency. VETS also experienced challenges pivoting to and providing virtual services to this population
during the pandemic. This audit will focus on the effectiveness of HVRP meeting the homeless veterans’
needs, as well as VETS’s oversight of the program.
WAGE AND HOUR DIVISION (WHD)
Discretionary Audit
57. WHD Enforcement Program. WHD enforces laws that address more than 147.8 million workers with
minimum wage, overtime pay, migrant and seasonal protections, prevailing wages on government-funded
contracts, and other wage protections. To complement its enforcement efforts, WHD uses a variety of
tools to help employers understand their labor responsibilities, for example, issuance of sub regulatory
guidance, compliance videos, outreach events, and the sharing of information on state and federal agency
partnerships. This audit will focus on how WHD has met its enforcement requirements and leveraged its
resources between compliance assistance and enforcement activities.
MULTI-AGENCY
Mandatory Audits
58. Charge Card Risk Assessment – Annual. The Government Charge Card Abuse Prevention Act of 2012
was designed to prevent recurring waste, fraud, and abuse of government charge cards, and requires
agencies to implement safeguards and internal controls to reduce these risks. This audit will determine
if DOL established controls over its purchase and travel card programs to prevent and detect illegal,
improper, or erroneous purchases and payments.
59. Single Audit Compliance, Quality Control Reviews of Single Audit Reports – Annual. We will
determine if selected independent auditors complied with the requirements of the Single Audit Act of 1984
and if there is a need for any follow up work.
Semiannual Report to Congress | April 1, 2022 – September 30, 2022 131
Office of Inspector General, U.S. Department of Labor
200 Constitution Avenue, NW
Room S-5506
Washington, DC 20210
To learn more about the Office of Inspector General’s current and planned work,
please visit www.oig.dol.gov.
Office of Inspector General
United States Department of Labor
Report Fraud, Waste, and Abuse
Contact the Hotline
202.693.6999 800.347.3756
Fax: 202.693.7020
www.oig.dol.gov
The OIG Hotline is open to the public and to federal employees
24 hours a day, 7 days a week, to receive allegations of fraud, waste,
and abuse concerning Department of Labor programs and operations.
OIG Hotline
U.S. Department of Labor
Office of Inspector General
200 Constitution Avenue, NW
Room S-5506
Washington, DC 20210
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