Semiannual Report to Congress, Office of Inspector General for the U.S. Department of Labor, Volume 89 (October 1, 2022–March 31, 2023)
Summary
The Department of Labor Office of Inspector General's Semiannual Report to Congress, Volume 89, covers October 1, 2022 to March 31, 2023. The OIG reports 131 investigative reports issued or cases closed, 233 indictments, 270 convictions and more than $74 million in monetary accomplishments. Applying the Employment and Training Administration's estimated 21.52 percent improper payment rate to the approximate $888 billion in pandemic UI expenditures, it says at least $191 billion in pandemic UI payments could have been improper, with a significant portion attributable to fraud. It also reports that OWCP allowed thousands of FECA claimants to receive inappropriate, potentially lethal prescriptions. Among the cases, a Virginia inmate was sentenced to 84 months in prison for obtaining pandemic UI benefits for other inmates.
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 89 October 1, 2022–March 31, 2023
Semiannual Report
to Congress
Office of Inspector General for the U.S. Department of Labor
A Message from the Inspector General
I am pleased to submit our Semiannual Report to Congress
summarizing the activities of the U.S. Department of Labor
(DOL or Department), Office of Inspector General (OIG),
for the 6-month period ending March 31, 2023.
As reflected in our semiannual report, my office continues
to highlight the major issues facing DOL through the OIG’s
independent audits and investigations. The OIG remains committed
to conducting independent and objective oversight to improve DOL
programs relied upon by millions of Americans.
During this reporting period, I testified before the U.S. House
Committee on Ways and Means (February 2023) and the U.S.
House Committee on Oversight and Accountability, Subcommittee
on Government Operations and the Federal Workforce (March 2023)
regarding our oversight of the unemployment insurance (UI) program
during the COVID-19 pandemic. In addition to testifying on the
OIG’s oversight and significant concerns with DOL and the states’ ability to expeditiously and efficiently deploy
program benefits, I highlighted our three most significant challenges—data access, resource limitations, and the
expiring statute of limitations related to UI fraud—in overseeing the UI program.
Data Access
The barriers to the OIG’s ongoing, timely, and complete access to state UI claimant data and wage
records directly and adversely impact our ability to provide independent oversight to help DOL reduce
improper payments in its programs. While DOL has facilitated temporary access to UI claimant data
and wage records, the Department continues to interpret regulations as prohibiting the Employment and
Training Administration (ETA) from requiring State Workforce Agencies (SWA) to provide UI data to the
OIG for all audit and investigative purposes other than those involving specific instances of suspected
fraud. This interpretation and subsequent guidance to SWAs contradict the Inspector General Act of
1978, as amended, which authorizes Inspector General access to DOL grantee information related to
DOL programs, including SWAs’ UI data.
Resource Limitations
The OIG lacks sufficient resources to continue providing the same level of oversight of the UI program
that it has over the last 3 years. Most of the supplemental funding that Congress appropriated to the
OIG during the pandemic to fund oversight of expanded DOL programs and operations will be fully
expended by the first or second quarter of Fiscal Year (FY) 2024. In addition, our FY 2021 and FY 2022
appropriations remained flat and the FY 2023 appropriation was $11 million less than requested. As a
result, the OIG had to cancel 10 audits and is currently in the process of reducing its workforce through
attrition, which will result in fewer investigations and audits of the UI program.
Statute of Limitations
Currently, the statute of limitations for many pandemic-related UI fraud cases will begin to expire in 2025 as
the statutes most often used to prosecute UI fraud have 5-year limitations. We are concerned that, unless
Congress acts to extend the statute of limitations for fraud associated with pandemic-related UI programs, many
Semiannual Report to Congress | October 1, 2022–March 31, 2023 1
groups and individuals that have defrauded the UI program may escape justice. The expansion of the statute
of limitations would provide investigators and prosecutors time to pursue and hold accountable those who
defrauded the UI program and victimized the American people during the pandemic.
Despite these challenges, OIG staff continues to deliver high-quality oversight. In total, during this reporting
period, the OIG issued 15 audit reports with 44 recommendations for corrective action and identified
approximately $321 million in questioned costs. Among our many significant findings, we reported:
• ETA and states need to ensure the use of identity verification service contractors results in equitable
access to UI benefits and secure biometric data;
• The Occupational Safety and Health Administration’s (OSHA) enforcement activities did not
sufficiently protect workers from pandemic health hazards;
• OSHA needs to better address complaints and referrals for increased worker safety;
• Three workers’ compensation programs experienced dramatic increases in the use of telehealth during the
first year of the pandemic compared to the prior year—with the Office of Workers’ Compensation Programs
(OWCP) paying more than $7 million for 34 times more telehealth services; and
• OWCP did not effectively manage pharmaceutical spending in the Federal Employees’ Compensation Act
(FECA) program. We identified up to $321 million in excess spending related to prescription drugs, and
OWCP allowed thousands of FECA claimants to receive inappropriate, potentially lethal prescriptions.
The OIG’s investigative work also yielded impressive results, with a total of 131 investigative reports
issued / cases closed, 233 indictments, 270 convictions, and more than $74 million in monetary
accomplishments. Highlights of this work follow:
• A Virginia inmate was sentenced to 84 months in prison for obtaining pandemic UI benefits for other inmates;
• Two Minnesota women pled guilty to wire fraud for stealing approximately $6 million in pandemic
assistance funds;
• A Houston woman was sentenced in a multi-million-dollar kickback scheme that defrauded federal
health care programs, including those administered by OWCP;
• A California woman was sentenced to 6 years in prison for defrauding health insurers by submitting
claims for Botox injections; and
• A former union vice president was sentenced for his role in a union book selling scheme in which
he abused his position by soliciting and accepting cash bribes from prospective union members in
exchange for securing the bribe payers’ admission to the union.
I would like to thank the OIG staff for their dedication to our important mission. It is a great privilege to
lead such a top-notch group of professionals.
Finally, I appreciate the unwavering support of Congress and the Department 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.
Larry D. Turner
Inspector General
2 Semiannual Report to Congress | October 1, 2022–March 31, 2023
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 | October 1, 2022–March 31, 2023 3
Contents
Selected Statistics . . . . . . . . . . . . . . . . . . . . . . . . . 6 Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Significant Concerns . . . . . . . . . . . . . . . . . . . . . . . 8 Reporting Requirements Under the
Following Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Worker and Retiree Benefit Programs . . . . . . . . 33
Funds Recommended for Better Use . . . . . . . . . 110
Unemployment Insurance Programs . . . . . . . 34
OIG Oversight of the UI Program . . . . . . . . . 34 Questioned Costs . . . . . . . . . . . . . . . . . . . . . . . . 111
Office of Workers’ Compensation Programs . . 62 Final Audit Reports Issued . . . . . . . . . . . . . . . . . . 112
Worker Safety, Health, and Workplace Rights . 67 Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Occupational Safety and Health Unresolved Audit Reports Over
Administration . . . . . . . . . . . . . . . . . . . . . . . . 68 6 Months Old . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Employment and Training Programs . . . . . . . . . 73 Management Decision Made During this
Reporting Period on Audits, Inspections,
Foreign Labor Certification Programs . . . . . . 74 or Evaluations Issued during a Previous
Reporting Period . . . . . . . . . . . . . . . . . . . . . . . . . 116
Labor Racketeering . . . . . . . . . . . . . . . . . . . . . . . 77
Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Departmental Management . . . . . . . . . . . . . . . . . 81
Corrective Actions Taken by
Single Audits . . . . . . . . . . . . . . . . . . . . . . . . . 86
the Department . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Employee Integrity Investigations . . . . . . . . . . . 89
Unimplemented Recommendations . . . . . . . . . . 122
OIG Whistleblower Activities . . . . . . . . . . . . . . . 93
High-Priority Unimplemented
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . 123
OIG Congressional Testimony . . . . . . . . . . . . . . 97
Summary of Reports with Unimplemented
Legislative Recommendations . . . . . . . . . . . . . . 99
Recommendations with Cost Savings /
Funds Put to Better Use . . . . . . . . . . . . . . . . . . . 127
Reports with Unimplemented
Recommendations for Management
Improvement or Disallowed Costs Owed . . . . . . 128
Investigative Statistics . . . . . . . . . . . . . . . . . . . . 133
Peer Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
OIG Hotline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Fiscal Year 2023 Audit Workplan . . . . . . . . . . . . . 137
Acronyms and Abbreviations . . . . . . . . . . . . . . . . 152
Audit Statistics
15 44 $321 Million
Audits and Other Recommendations for in Questioned
Reports Issued Corrective Action Costs
$
OIG Unimplemented Recommendations
OIG recommendations not fully implemented as of September 30, 2022
EBSA 2
ETA 45
MSHA 29
OASAM 57
OCFO 9
OFCCP 1
OSEC 5
OSHA 12
OWCP 2
WHD 4
0 10 20 30 40 50 60 70
6 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Investigative Statistics
Investigative Results Labor Racketeering
Program Fraud
163/131
400
300 270
233
200 163
131 125
100
58 163 investigative
2 cases opened and
0 131 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: $25,421,012
Recoveries
Cost-Efficiencies
Restitutions
Fines/Penalties
Forfeitures
Civil Monetary Actions
$48,983,270
$74,404,283
Total Labor Racketeering
Program Fraud
Semiannual Report to Congress | October 1, 2022–March 31, 2023 7
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
Benefits in the
Protecting the Safety
Office of Workers’
and Health of Workers
Compensation
Programs
Ensuring the Solvency of the
Protecting the Safety and
Black Lung Disability Trust
Health of Miners
Fund
Improving the Performance
Managing and SecuringData
Accountability of Workforce
and Information Systems
Development Programs
8 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
Deploying Unemployment Insurance represents years of work relating to DOL’s UI
Benefits Expeditiously and Efficiently program, including the response to past disasters.
One of these areas was state preparedness,
While Reducing Improper Payments
specifically, the issues of staffing and system
capabilities. Our audit work has confirmed these
The OIG has repeatedly reported significant
issues persisted into the pandemic.3
concerns with the Department and states’1 ability
to deploy UI program benefits expeditiously and
Following the start of the pandemic in the United
efficiently while ensuring integrity and adequate
States in early 2020, unemployment compensation
oversight. We remain particularly concerned
claims rose exponentially to historically unprecedented
about deployment of UI benefits in response to
levels. Prior to the pandemic, numbers of UI claims
emergencies, including natural disasters and
were historically low. On March 14, 2020, the
economic downturns. The OIG has reiterated these
Department reported 282,000 initial unemployment
concerns regarding the economic downturn created
claims. Within 2 to 3 weeks, initial claims rose to
by the COVID-19 pandemic and the hundreds of
10 times pre-pandemic levels, far higher than state
billions of dollars allocated to the UI program.
systems were designed to handle.4 Within 5 months,
through August 15, 2020, the Department reported
Less than a month after the Coronavirus Aid, Relief,
more than 57 million initial claims, the largest increase
and Economic Security (CARES) Act passed, we
since the Department began tracking UI data in 1967.
published an advisory report 2 outlining areas of
concern that the Department and the states should
Deploying Unemployment Insurance Benefits
consider as they implemented the CARES Act
Expeditiously and Efficiently
UI provisions. Our identification of these areas
1
When referring to unemployment insurance, this Rapid deployment of CARES Act funding was critical
Semiannual Report to Congress uses “state” or “State to helping workers in need. As part of the CARES
Workforce Agency” (SWA) to refer to the administrative Act, Congress created three key new programs:
body that administers the program within the state, district, Pandemic Unemployment Assistance (PUA),
or territory. For the 50 states, as well as the U.S. Virgin Pandemic Emergency Unemployment Compensation
Islands, Puerto Rico, and the District of Columbia, that (PEUC), and Federal Pandemic Unemployment
administrative body is a State Workforce Agency. There Compensation (FPUC) (see Figure 1).
are, therefore, 53 State Workforce Agencies. The CARES
Act also provided certain UI benefits to American Samoa, 3
COVID-19: States Struggled to Implement CARES Act
the Commonwealth of the Northern Mariana Islands, Unemployment Insurance Programs, Report No.
the Federated States of Micronesia, Guam, the Marshall 19-21-004-03-315 (May 28, 2021), available at: https://www.
Islands, and the Republic of Palau, provided the territory oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
signs an agreement with the Department. 4
COVID-19: States Struggled to Implement CARES Act
2
Advisory Report, CARES Act: Initial Areas of Concern Unemployment Insurance Programs, Report No.
Regarding Implementation of Unemployment Insurance 19-21-004-03-315 (May 28, 2021), available at:
Provisions, Report No. 19-20-001-03-315 (April 21, 2020), https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-
available at: https://www.oig.dol.gov/public/reports/ 03-315.pdf
oa/2020/19-20-001-03-315.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 9
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
As the OIG’s audit work has shown, quickly suffering lengthy delays in receiving benefits.
deploying funds can result in shortcomings in We found that—from April 1, 2020, to March 31, 2021
the effective and efficient implementation of —only 5 of the 53 SWAs were able to timely
stimulus programs. For example, the OIG had pay benefits, including the FPUC supplement,
audited the Disaster Unemployment Assistance to regular UI claimants.7 As a result, during
program and found the Department had not the year following the passage of the CARES
established adequate controls to ensure Act, more than six million Americans waited a
benefits were paid timely.5 Also, states had month or more for pandemic-related UI benefits.
difficulty ensuring CARES Act programs were Furthermore, states are still challenged in paying
implemented promptly. For the PUA, PEUC, and claimants timely. For the month of January 2023,
FPUC programs, we identified that, on average, only 23 percent of states were paying regular UI
it took states between 25 and 50 days for the claimants timely versus 75 percent before the
first payment to be disbursed after passage of pandemic started. 8
the CARES Act.6
Additionally, we identified that states may
Further in-depth OIG work found continuing have inadvertently applied a racial or gender
programmatic weaknesses led to workers, bias when providing benefits to claimants
unemployed through no fault of their own, and did not provide adequate protections for
claimants’ personal data. Specifically,
5
ETA Should Do More to Assist Vulnerable States
Prepare for Disaster Unemployment Assistance 7
COVID-19: ETA and States Did Not Protect Pandemic-
Program Implementation, Report No. 04-20-002-03-315 Related UI Funds from Improper Payments including Fraud
(September 29, 2020), available at: https://www.oig.dol. or from Payment Delays, Report No. 19-22-006-03-315
gov/public/reports/oa/2020/04-20-002-03-315.pdf (September 30, 2022), available at: https://www.oig.dol.
6
COVID-19: States Struggled to Implement CARES Act gov/public/reports/oa/2022/19-22-006-03-315.pdf
Unemployment Insurance Programs, Report No. 8
Based on OIG analysis of data on ETA’s public reporting
19-21-004-03-315 (May 28, 2021), available at: https://www. on States’ UI Benefit Timeliness and Quality, available at:
oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf https://oui.doleta.gov/unemploy/btq.asp
10 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
to combat imposter claims, 45 percent of states government.13 The reported improper payment rate
hired identity verification service contractors that estimate for the regular UI program has been above
used facial recognition technology. In 2019, the 10 percent for 15 of the last 19 years. In the last 2
National Institute of Standards and Technology’s years, ETA has estimated an improper payment rate
(NIST)9 Information Technology Laboratory of 18.71 percent and 21.52 percent, respectively.
reported10 it found empirical evidence that the
algorithms11 used in current facial recognition
technology have a racial and gender bias. WHAT IS AN IMPROPER PAYMENT?
Furthermore, 15 of 24 (63 percent) state contracts A payment is improper if it should not have
did not include privacy security measures based been made or was to the wrong recipient.
on recommendations by the National Strategy for *
Trusted Identities in Cyberspace12 necessary to Examples include overpayments
protect UI claimants’ biometric data. and underpayments.
*
A improper payment can be unintentional
Reducing Improper Payments Including Fraud
or intentional.
*
For over 20 years, the OIG has reported on Intentional improper payments are more
the Department’s limited ability to measure, commonly referred to as financial fraud.
report, and reduce improper payments in the UI
program, which has experienced some of the
highest improper payment rates across the federal Our recommendations have specifically included
the need for the Department to estimate improper
9
Founded in 1901, NIST is one of the nation’s oldest payments within federally funded temporary
physical sciences laboratories and a non regulatory emergency programs. In August 2020, we
agency. Its mission is to promote U.S. innovation and recommended14 ETA estimate the improper payment
industrial competitiveness by advancing measurement rate for pandemic-related UI programs.
science, standards, and technology in ways that enhance
economic security and improve our quality of life. 13
Fraud is a type of improper payment. The Office of
10
NIST, “NIST Study Evaluates Effects of Race, Age, Sex Management and Budget explains that, at a high level, a
on Face Recognition Software” (December 19, 2019), payment is “improper” if made in an incorrect amount or to the
available at: https://www.nist.gov/news-events/ wrong recipient. Improper payments can result in a money loss
news/2019/12/nist-study-evaluates-effects-race-age-sex- that was either unintentional (accidental) or intentional (fraud).
face-recognition-software Office of Management and Budget, “Transmittal of Appendix
11
An algorithm, according to Cambridge Dictionary, is a set C to OMB Circular A-123, Requirements for Payment Integrity
of mathematical instructions or rules that, especially if given Improvement,” Memorandum (March 5, 2021), last accessed
to a computer, will help to calculate an answer to a problem. September 27, 2022, available at: https://www.whitehouse.
12
The National Strategy for Trusted Identities in gov/wp-content/uploads/2021/03/M-21-19.pdf
Cyberspace is a federal government initiative launched in 14
COVID-19: More Can Be Done to Mitigate Risk to
2011 to encourage private sector actors to adopt measures Unemployment Compensation under the CARES Act, Report
enhancing privacy of personally identifiable information on No. 19-20-008-03-315 (August 7, 2020), available at: https://
the internet, including biometric data. www.oig.dol.gov/public/reports/oa/2020/19-20-008-03-315.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 11
Significant Concerns
In December 2021, consistent with our UI spending.17 While that expenditure
recommendation, ETA reported an improper payment information is likely to be updated, these
rate of 18.71 percent for 2021, which ETA applied to changes enabled us to report on actual
two of the three key pandemic UI programs, PEUC and expenditures rather than on estimated funding.
FPUC. Additionally, in December 2022, ETA reported
an improper payment rate estimate of 21.52 percent, Applying the estimated 21.52 percent
which it also applied to PEUC and FPUC.15 improper payment rate to the approximate
$888 billion in pandemic UI expenditures,
We previously reported that, applying the at least $191 billion in pandemic UI
18.71 percent to an estimated $872.5 billion payments could have been improper
in pandemic-related UI funding, at least payments, with a significant portion
$163 billion in pandemic UI benefits could attributable to fraud.
have been paid improperly, with a significant
portion attributable to fraud. In Congressional With those updates, more than $888 billion in total
testimony in February 2023,16 we reported federal and state UI benefits were paid for benefit
updated information, with two primary changes: weeks during the UI pandemic period.18 Applying
(1) ETA released its annual improper payment the estimated 21.52 percent improper payment
rate estimate for FY 2022 and (2) ETA has rate to the approximate $888 billion in pandemic
recently provided a total for pandemic UI expenditures, at least $191 billion in pandemic
UI payments could have been improper payments,
15
In FY 2022, the Department found the PUA, PEUC, with a significant portion attributable to fraud.
and FPUC programs to be susceptible to significant Further, for Program Year 2021, ETA estimated a
improper payments. The Office of Management and
Budget Memorandum M-21-19 requires the Department to
produce an improper payment and unknown payment rate 17
According to ETA, the data provided reflects CARES
in the FY following the FY in which the risk assessment Act UI program activity through January 23, 2023, with the
determination was made. In the Agency Financial Report, exception of the Temporary Full Federal Funding of the
the Department stated FY 2022 is anticipated to be the First Week of Compensable Regular Unemployment for
last year reporting on these programs as they expired on States with No Waiting Week program, which is through
September 6, 2021. ETA’s reported improper payment December 31, 2022; data provided regarding the regular
rate estimate of 21.52 percent does not include the PUA UI, Unemployment Compensation for Federal Employees,
program. However, it is the most current improper payment and Unemployment Compensation for Ex-Servicemembers
rate from ETA and PUA had significant control weaknesses programs reflect the monthly totals from April 2020 through
that indicate the program will have a comparable or greater September 2021.
improper payment rate. 18
With the exception of PUA, for which claims could be
16
“The Greatest Theft of American Tax Dollars: Unchecked backdated to January 27, 2020, we define the UI pandemic
Unemployment Fraud,” Hearing, Statement for the Record period as March 27, 2020, through September 6, 2021.
of Larry D. Turner, Inspector General, U.S. Department We also note that, according to ETA, it cannot provide
of Labor; House Committee on Ways and Means final total costs of the programs because states are still
(February 8, 2023), available at: https://www.oig.dol.gov/ processing claims that were for weeks of unemployment
public/testimony/02082023.pdf prior to expiration of the programs.
12 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
fraud rate of 8.57 percent,19 which indicates over $1 out of $5 in PUA benefits to likely fraudsters.21
$76 billion was likely paid to fraudsters. Subsequent to our work identifying the fraud
risks, Congress took action under the Continued
Based on our audit and investigative work, the Assistance for Unemployed Workers Act of 2020
improper payment rate for pandemic related UI to require supporting documentation to improve
payments was likely higher than 21.52 percent. states’ abilities to ensure proper claimant eligibility
For example, ETA’s reported improper payment and to mitigate fraud. However, a significant
rate estimates have not included the PUA program. amount of UI benefit money had already been paid
ETA stated it would report the estimated improper to likely fraudsters.
payment rate for PUA in 2022. However, the Office
of Management and Budget (OMB) granted the PUA had control weaknesses that may have
Department an extension to report on PUA in facilitated comparable or greater improper
FY 2023. As of March 31, 2023, the Department has payments. For example, despite ETA providing
not yet reported the PUA improper payment rate. states guidance on areas of improper payments
as early as May 2020, control issues occurred in
PUA’s expanded coverage, for a population some states with PUA forms.22 ETA notified one
of claimants who were traditionally ineligible state in June 2020 that its form did not include
to receive UI benefits,20 presented significant the required questions confirming that claimants
challenges to states. The reliance solely on were able and available to work. However, by then,
claimant self-certifications without documentation that state had paid more than $4 billion in PUA
substantiating the individual’s prior employment benefits, including FPUC. Similarly, in July 2020,
or self-employment during PUA’s first 9 months ETA notified another state that its PUA monetary
rendered the program extremely susceptible determination form did not have a procedure in
to improper payments, including fraudulent place for re-determining the claimant’s weekly
payments. Notably, in the first 6 months after the benefit if the claimant did not provide proof of
CARES Act passed, we found 4 states paid earnings or provided insufficient proof. That state
responded that the problem would be addressed
19
ETA estimated the fraud rate as part of their Benefit by the end of August 2020. However, by the end of
Accuracy Measurement system reporting for the program August, that state had paid more than $25 billion
year July 1, 2020, through June 30, 2021. The Benefit in PUA benefits, including FPUC.
Accuracy Measurement system is designed to determine
the accuracy of paid and denied claims in three major UI 21
COVID-19: ETA and States Did Not Protect Pandemic-
programs: regular State UI, Unemployment Compensation Related UI Funds from Improper Payments including Fraud
for Federal Employees, and Unemployment Compensation or from Payment Delays, Report No. 19-22-006-03-315
for Ex Servicemembers. The fraud rate for 2022 will likely (September 30, 2022), available at: https://www.oig.dol.
be published in October 2023. gov/public/reports/oa/2022/19-22-006-03-315.pdf
20
The new PUA program extended unemployment benefits 22
COVID-19: ETA and States Did Not Protect Pandemic-
to the self-employed, independent contractors, those with Related UI Funds from Improper Payments including Fraud
limited work history, and other individuals not traditionally or from Payment Delays, Report No. 19-22-006-03-315
eligible for unemployment benefits who were unable to (September 30, 2022), available at: https://www.oig.dol.
work as a direct result of COVID-19. gov/public/reports/oa/2022/19-22-006-03-315.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 13
Significant Concerns
As the OIG has reported, the unprecedented infusion of of our UI work. UI investigations now account for
federal funds into the UI program gave individuals and approximately 96 percent of the OIG investigative
organized criminal groups a high-value target to exploit. case inventory, compared to approximately
That, combined with easily attainable stolen personally 11 percent prior to the pandemic. Of the more
identifiable information (PII) and continuing UI program than 200,000 investigative matters opened,
weaknesses identified by the OIG over the last several approximately 157,000 are still under review.
years, allowed criminals to defraud the system.
Because many states were not prepared to process the The volume of UI investigative matters
extraordinary volume of new UI claims and struggled is unprecedented in the OIG’s history.
to implement the new programs, some internal controls Prior to the pandemic, the OIG opened
that had been traditionally used or recommended for approximately 100 UI investigative matters
processing UI claims were not initially applied. annually. Since April 1, 2020, the OIG has
opened over 200,000 investigative matters
This created multiple high-reward targets where an involving the UI program.
individual could make a fraudulent claim with relatively
low risk of being caught. For example, as time went on, When the OIG identifies anti-fraud measures that
one fraudster could have been issued several UI debit may help the program, we share them with the
cards, with tens of thousands of dollars on each card. Department and SWAs as appropriate. For example,
In fact, in an audit, we found 1 claim that was filed from in alert memoranda issued in February 2021,24 in
a 3-bedroom house shared the same physical address June 2021,25 and in September 2022,26 our
as 90 other claims and used the same email address
as 145 other claims.23 In total, the likely fraudster(s) 24
Alert Memorandum: The Employment and Training
received $1,569,762 in unemployment benefits. In the
Administration Needs to Ensure State Workforce Agencies
same audit, we found that, from March 28, 2020, to
Implement Effective Unemployment Insurance Program
September 30, 2020, in 4 states, potentially fraudulent
Fraud Controls for High Risk Areas, Report No.
claims were paid more than 60 percent of the time.
19-21-002-03-315 (February 22, 2021), available at:
https://www.oig.dol.gov/public/reports/oa/2021/19-21-002-
The volume of UI investigative matters is
03-315.pdf
unprecedented in the OIG’s history. Prior to the 25
Alert Memorandum: The Employment and Training
pandemic, the OIG opened approximately 100 UI
Administration Needs to Issue Guidance to Ensure State
investigative matters annually. Since April 1, 2020,
Workforce Agencies Provide Requested Unemployment
the OIG has opened over 200,000 investigative
Insurance Data to the Office of Inspector General, Report
matters involving the UI program. That is an
No. 19-21-005-03-315 (June 16, 2021), available at:
increase of more than 1,000 times in the volume
https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-
03-315.pdf
23
COVID-19: ETA and States Did Not Protect Pandemic- 26
Alert Memorandum: Potentially Fraudulent
Related UI Funds from Improper Payments including Fraud Unemployment Insurance Payments in High-Risk Areas
or from Payment Delays, Report No. 19-22-006-03-315 Increased to $45.6 Billion, Report No. 19-22-005-03-315
(September 30, 2022), available at: https://www.oig.dol. (September 21, 2022), available at: https://www.oig.dol.
gov/public/reports/oa/2022/19-22-006-03-315.pdf gov/public/reports/oa/2022/19-22-005-03-315.pdf
14 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
investigators, auditors, and data scientists collaboratively lieu of recovering overpayments. While the
identified potentially fraudulent UI benefits paid in four Department has provided guidance stating
high risk areas, to individuals with Social Security recovery of fraudulent payments may not be
numbers: (1) filed in multiple states, (2) of deceased waived, we remain concerned that states
persons, (3) of federal inmates, and (4) used to file for may have unintentionally waived or will waive
UI claims with suspicious email accounts (see Figure 2). fraudulent payments. As of March 28, 2023,
As of September 2022, we had identified $45.6 billion states reported waiving more than $4 billion
paid in potential fraud in those high-risk areas. in overpayments.
Figure 2: Four High-Risk Areas for Potential UI Fraud
Multistate Claimants Deceased Persons Federal Prisoners Suspicious Email Accounts
Source: OIG analysis27
We shared our methodology and underlying data After the CARES Act passed, ETA worked quickly
with the Department for further dissemination to to obtain signed state agreements and ensure
the SWAs, and we recommended they establish pandemic-related UI funds were available.
effective controls to mitigate fraud and other Despite this and other efforts, ETA’s guidance and
improper payments to ineligible claimants. We are oversight was not timely enough to prevent historic
currently examining whether states took effective improper payments of UI benefits, including fraud.
measures to address the four high-risk areas. In April 2022, ETA stated28 that a “swift rollout of
a new government benefit program…would be
In Spring 2023, we began to assess the effects of 30 to 48 months.” The OIG agrees with ETA that
ETA’s guidance on waivers and blanket waivers. “states’ ability to provide benefit payments within
In May 2021, ETA provided guidance to states [1 to 2] months for a new, temporary UI program is
on the waiving of recovery of overpayments a very impressive achievement given the extensive,
when the claimant was without fault and if the complex requirements and activities that were
repayment would be contrary to equity and good necessary for implementation.”
conscience as allowable by the CARES Act.
This guidance also outlined limited circumstances However, we are concerned that, given the nature
when the states could use blanket waivers in of emergency situations, states would be unlikely
27
COVID-19: States Struggled to Implement CARES Act 28
COVID-19: ETA and States Did Not Protect Pandemic-
Unemployment Insurance Programs, Report No. Related UI Funds from Improper Payments including Fraud
19-21-004-03-315 (May 28, 2021), available at: https://www. or from Payment Delays, Report No. 19-22-006-03-315
oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf (September 30, 2022), available at: https://www.oig.dol.
gov/public/reports/oa/2022/19-22-006-03-315.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 15
Significant Concerns
to have a lengthy rollout period for emergency access to state UI claims data to assist in detecting
programs. ETA and states must include risk planning and deterring large-scale fraud.
that would identify measures to facilitate the creation
of new programs similar to the ones created in DOL continues to interpret regulations at 20 Code of
response to the pandemic, including steps to ensure Federal Regulations Part 603 as prohibiting ETA from
eligibility procedures and Benefit Payment Control requiring SWAs to provide UI data to the OIG for all
operations continue to function. audit purposes and for investigative purposes, other
than those involving specific instances of suspected
Providing the OIG Access to UI fraud. This interpretation and subsequent guidance to
Claimant Data and Wage Records SWAs contradict the Inspector General Act of 1978,
as amended, which authorizes mandatory Inspector
The barriers to the OIG’s ongoing, timely, and General access to DOL grantee information related
complete access to UI claimant data and wage to DOL programs, including SWAs’ UI data. In our
records from SWAs is a significant concern. June 2021 alert memorandum,29 we recommended
This deficiency directly and adversely impacts ETA amend its regulations to reinforce that SWAs’
the OIG’s ability to provide independent oversight UI information must be provided to the OIG for
and combat fraud, waste, and abuse to help all engagements authorized under the Inspector
DOL reduce improper payments in its programs, General Act of 1978, as amended, including audits,
including regular and temporary UI programs. The evaluations, and investigations.
power and use of data and predictive analytics
enables the OIG to continuously monitor DOL To date, ETA has only implemented temporary
programs and operations to detect and investigate solutions that are not sufficient to resolve the OIG’s
fraud. Continuous monitoring serves as a deterrent recommendation or concerns. ETA announced its
to fraud, allows the OIG to promptly discover areas intent to amend its regulations to allow the OIG’s
of weakness, and enables DOL management ongoing access by February 2025. ETA has also
to timely correct problems. The OIG’s ability to required sharing of state UI data as a condition
proactively detect UI fraud through our audit and of the fraud prevention grants offered under the
investigative activities continues to be significantly American Rescue Plan Act of 2021 (ARPA), which
hampered by the OIG’s lack of direct access to UI will provide such access through 2025. However, all
claimant data and wage records. states would need to receive the grants to provide
the necessary access. ETA stated it was able to
Prior to and during most of the pandemic period, require SWAs to provide UI data to the OIG due to
DOL required SWAs to disclose UI data only for temporary authority created by the CARES Act and
specific fraud investigations. DOL asserted it lacked
the authority to require SWAs to provide UI data to
29
Alert Memorandum: The Employment and Training
the OIG for audits and investigations. As a result, Administration Needs to Issue Guidance to Ensure State
the OIG was forced to take the unprecedented step Workforce Agencies Provide Requested Unemployment
of using Inspector General subpoenas to obtain this Insurance Data to the Office of the Inspector General,
critical data. DOL’s interpretation of its regulations Report No. 19-21-005-03-315 (June 16, 2021), available
hindered the OIG’s ongoing, timely, and complete at: https://www.oig.dol.gov/public/reports/oa/2021/19-21-
005-03-315.pdf
16 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
subsequent pandemic related legislation. Because
of DOL’s interpretation of the CARES Act, ETA’s
guidance has limited OIG access to the pandemic
period and expiration of the fraud prevention grants,
which is contrary to the Inspector General Act of
1978, as amended.
Unless DOL implements a permanent solution
ensuring the OIG’s complete and timely access to
UI program data and information by the end of 2025, In support of the OIG’s oversight activities,
the Department’s interpretation of its regulations the OIG needs access to UI claimant data and
will renew impediments to the OIG’s access wage records from SWAs to verify claimants’
experienced prior to and during the pandemic and eligibility for UI benefits, including both initial
may necessitate additional subpoenas. eligibility (and amounts) and continuing
eligibility. Timely access to these records will
While the OIG and ETA agree that changing facilitate the OIG’s efforts to identify claimants
regulations requires notice and comment who are part of large-scale fraud schemes
rulemaking, an immediate and legally sound or are receiving benefits improperly due to
interim solution is available to ETA. In the alert systemic program weaknesses. Further, timely
memorandum issued September 21, 2022,30 access to UI data will allow the OIG to use
the OIG highlighted DOL’s authority to amend our data analytics program to identify and
its interpretation of its regulations without investigate complex identity theft and multistate
changing the regulations themselves. ETA fraud schemes as we have successfully done
could immediately amend its interpretation during the pandemic. The OIG could also use
of its regulations to be consistent with the those records to assess program outcomes
Inspector General Act of 1978, as amended. for UI reemployment programs, as well as
Specifically, ETA can issue guidance to inform other training programs, such as YouthBuild
SWAs that they must timely provide UI data and Job Corps, where employment and wage
without any constraints to the OIG for audits increases are important factors in determining a
and investigations consistent with the Inspector program’s success.
General Act of 1978, as amended. The historic
levels of improper payments that the OIG has Congress should consider legislative action to
identified, including potential fraud, support the expressly authorize DOL and the OIG to have
conclusion that the OIG’s continued access to ongoing, timely, and complete access to UI
state UI data is imperative. claimant data and wage records for our oversight
responsibilities. Ongoing, timely, and complete
30
Alert Memorandum: Potentially Fraudulent access to SWA UI claimant data and wage records
Unemployment Insurance Payments in High-Risk Areas systems would further enable the OIG to quickly
Increased to $45.6 Billion, Report No. 19-22-005-03-315 identify large-scale fraud and expand its current
(September 21, 2022), available at: https://www.oig.dol. efforts to share emerging fraud trends with ETA and
gov/public/reports/oa/2022/19-22-005-03-315.pdf states to strengthen the UI program and deter fraud.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 17
Significant Concerns
Extending the Statute of Limitations As previously stated, during the pandemic, the
associated with Pandemic Related volume of the OIG’s UI investigative matters
increased more than 1,000 times. Prior to the
Unemployment Insurance Fraud
pandemic, the OIG opened approximately 100 UI
fraud investigative matters each year. Between
We are concerned that, unless Congress acts to
March 1, 2020, and August 1, 2022, the OIG
extend the statute of limitations for fraud associated
opened more than 200,000 investigative matters
with pandemic-related UI programs, many groups
involving UI fraud. We continue to receive, on
and individuals that have defrauded the UI program
average, 200 to 300 new pandemic-related UI fraud
may escape justice. As the primary federal law
complaints each week from the National Center for
enforcement agency responsible for providing
Disaster Fraud. As a direct result of the exponential
oversight of the UI program, the OIG has vigorously
increase in pandemic-related UI fraud referrals,
pursued pandemic-related UI fraud. In fact, in
OIG investigators are now carrying the largest case
September 2022, the OIG announced31 that OIG
inventory in the OIG’s history. We are currently
investigations have resulted in more than 1,000
dedicating the majority of our investigative resources
individuals being charged with crimes involving UI
to addressing pandemic related UI fraud matters.
fraud since March 2020. Since then, that number
has risen to more than 1,300 individuals charged.32
Pandemic-related UI fraud referrals that we receive
often include complex schemes involving criminal
Even with the OIG’s tireless efforts, the current
enterprises and bad actors who use sophisticated
statute of limitations associated with UI fraud means
techniques to maintain their anonymity. For
federal law enforcement may still fall short in fully
instance, in one pandemic-related UI fraud
investigating and prosecuting the most egregious
investigation into the theft of over $4 million in UI
cases of UI fraud, especially given the volume
benefits from a SWA, conspirators orchestrated
and complexity of UI fraud matters we are tasked
a scheme to file UI claims using stolen identities,
to investigate. Currently, the statute of limitations
which were often associated with elderly citizens.33
for many of these cases will expire in 2025 as the
The conspirators then opened bank accounts using
statutes most often used to prosecute UI fraud have
the stolen identities for the sole purpose of having
5-year limitations.
fraudulent UI proceeds deposited into them. They
withdrew the fraudulent proceeds and purchased
31
“Labor Watchdog’s Pandemic Work Results in More money orders made out to themselves and to an
Than 1,000 Individuals Charged with UI Fraud and online vehicle auction company. The conspirators
$45.6 Billion Identified in Potentially Fraudulent Pandemic then laundered the UI funds by using the money
UI Benefits,” press release (September 22, 2022),
available at: https://www.oig.dol.gov/public/Press%20 33
Department of Justice, U.S. Attorney’s Office, Northern
Releases/DOL-OIG%20Pandemic%20Work%20 District of Alabama, “Georgia Resident Pleads Guilty
Results%20in%20More%20Than%201000%20 to COVID-19 Unemployment Fraud Targeting Several
Individuals%20Charged%20with%20UI%20Fraud.pdf States,” press release (June 8, 2022), available at:
32
For more details about OIG investigations, please https://www.justice.gov/usao-ndal/pr/georgia-resident-
visit: https://www.oig.dol.gov/OIG_Pandemic_Response_ pleads-guilty-covid-19-unemployment-fraud-targeting-
Portal.htm. several-states
18 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
orders to purchase salvaged automobiles in the limitations expires. Absent congressional action, the
United States and ship them to Nigeria. They also statute of limitations will begin to expire in early 2025.
facilitated the transfer of conspiracy proceeds to
overseas bank accounts in Nigeria. This complex In August 2022, an extension of the statute of
fraud investigation spanned both domestic and limitations was implemented for crimes involving
foreign jurisdictions. The defendants have been the U.S. Small Business Administration’s Paycheck
convicted of conspiracy to commit wire fraud. Protection Program and Economic Injury Disaster
Loan program.34 Congress should likewise consider
This complex fraud investigation spanned extending the statute of limitations for existing laws
both domestic and foreign jurisdictions. when pandemic-related UI programs are defrauded.
The defendants have been convicted of The expansion of the statute of limitations would
conspiracy to commit wire fraud. provide investigators and prosecutors time to pursue
and hold accountable those who defrauded the UI
Criminal investigations like this one require program and victimized the American people during
significant resources and time. Additional resources the pandemic.
from Congress allowed the OIG to hire more
criminal investigators and significantly expand the Further, for similar reasons, Congress could
number of staff reviewing UI fraud matters. We also consider extending the federal statute of limitations
leveraged additional federal resources by partnering for states to pursue administrative recoveries in
with the U.S. Department of Justice (DOJ) and other cases of proven overpayments including fraud and
federal law enforcement agencies on the National with appropriate due process.
Unemployment Insurance Task Force, the COVID-19
Fraud Enforcement Task Force, and the COVID-19 Protecting the Safety and Health
Fraud Enforcement Strike Force teams to investigate of Workers
and prosecute UI fraud.
OSHA is responsible for the safety and health of
While these investigative resources helped us approximately 130 million workers employed at
address the incredible volume of UI fraud matters, more than 8 million worksites. OSHA must ensure
the process of collecting and cleaning the SWA employers are providing the level of protection
data required a significant amount of time. Also, required under relevant laws and policies. The OIG
unfortunately, the OIG is in the process of reducing remains concerned about OSHA’s ability to target its
staffing to pre pandemic levels due to limited compliance activities to areas where it can have the
resources and the near exhaustion of supplemental greatest impact.
funding. We leveraged the UI data we were able
to collect to identify those matters that posed the OSHA carries out its compliance responsibilities
greatest risk to the UI program; however, to most through a combination of self-initiated inspections
effectively and efficiently investigate these matters,
we need additional time, data, and resources. 34
The White House, “Bills Signed: H.R. 7334 and H.R.
The OIG anticipates identifying and investigating 7352,” (August 5, 2022), available at: https://www.
pandemic-related UI fraud until the statute of whitehouse.gov/briefing-room/legislation/2022/08/05/bills-
signed-h-r-7334-and-h-r-7352/
Semiannual Report to Congress | October 1, 2022–March 31, 2023 19
Significant Concerns
and those resulting from complaints and referrals. health violations from complaints and referrals were
In FY 2022, OSHA conducted 31,856 inspections, corrected in a timely manner.
including 16,718 unprogrammed inspections.
Unprogrammed inspections result from employee Additionally, we found36 OSHA’s enforcement
complaints, injuries/fatalities, and referrals. OSHA activities did not sufficiently protect workers from
must target the most egregious or persistent pandemic health hazards. In an audit of OSHA’s
violators to protect the most vulnerable worker enforcement activities during the pandemic, we found
populations. OSHA has since increased its number OSHA did not issue citations to enforce the standard
of inspectors—from 750 in 2021 to 931 as of for recording and reporting occupational injuries and
March 31, 2023. However, OSHA continues to be illnesses in 15 percent of sampled fatality inspections.
challenged with reaching the number of worksites An employer reporting a fatality late, not evaluating
for which it is responsible. work relatedness of exposure, or failing to report a
fatality altogether impacts OSHA’s ability to provide
In a recent audit,35 we found OSHA did not prompt assistance.
consistently ensure complaints and referrals were
adequately addressed nor did it regularly enforce Further, OSHA lacks complete information on
hazard abatement timelines. Specifically, we found COVID-19 infection rates at worksites. OSHA only
OSHA did not consistently involve the complainant requires employers to report a work-related fatality,
and/or witnesses in the investigation or inspection inpatient hospitalization, amputation, or loss of an
processes. It has no policy requiring Compliance eye. It is up to employers to determine if an injury
Safety and Health Officers, those responsible or illness is work-related, which is generally far
for performing inspections and investigations, to simpler in an amputation case than in the case of an
interview or otherwise involve the complainant after airborne illness. Finally, OSHA closed inspections
the complaint is filed. without ensuring it received and reviewed all items
requested from employers to demonstrate alleged
However, that person may have key insights to COVID-19 health hazards had been mitigated.
ensure alleged hazards are being addressed. Due to the lack of citations, incomplete information
OSHA interviewed the complainant in 50 percent on infection rates at worksites, and insufficient
of sampled complaints. In all sampled cases evidence of hazard mitigation, there is a heightened
where OSHA interviewed the complainant and/ risk that workers suffered unnecessary exposure to
or witnesses, each person was only interviewed the virus.
once. Additionally, OSHA did not consistently follow
procedures in its Field Operations Manual involving To protect workers from pandemic health hazards,
documentation of decision points, indicating a OSHA’s enforcement activities can be improved
possible inadequacy in its inspection processes. (see Figure 3).
Finally, OSHA did not regularly ensure safety and
36
COVID-19: OSHA’s Enforcement Activities Did Not
35
OSHA Needs to Better Address Complaints and Referrals Sufficiently Protect Workers from Pandemic Health
for Increased Worker Safety, Report No. 02-23-01-10-105 Hazards, Report No. 19-23-001-10-105 (October 31, 2022),
(March 6, 2023), available at: https://www.oig.dol.gov/ available at: https://www.oig.dol.gov/public/reports/
public/reports/oa/2023/02-23-001-10-105.pdf oa/2023/19-23-001-10-105.pdf
20 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
Figure 3: OSHA’s Enforcement Activities Can Be Improved
Source: OIG analysis
Protecting the Safety and Health with mine personnel to emphasize best safety practices
of Miners and training. MSHA also issued safety guidance
intended to help prevent accidents associated with
The Mine Safety and Health Administration’s (MSHA) working with, on, or near powered haulage equipment.
ability to decrease the number of powered haulage Likewise, within the past year, MSHA implemented
accidents in mines and develop strategies to protect its Enhanced Enforcement Program to help improve
miners from lung disease are concerns for the OIG. safety and health in the mining industry. The OIG
will continue to monitor MSHA’s efforts to decrease
While powered haulage fatalities decreased in 2022, powered haulage accidents.
from 2018 through 2022, powered haulage accidents
remained the leading cause of mining fatalities (see MSHA also needs to develop strategies to address
Figure 4). lung disease in coal mining states, particularly by
updating regulations regarding silica content in
On September 9, 2021, MSHA released a proposed respirable dust.37 Respirable crystalline silica can
rule requiring mines to have written safety programs
for mobile and powered haulage equipment. In 37
MSHA Needs to Improve Efforts to Protect Coal
addition, in November 2021, MSHA launched an Miners from Respirable Crystalline Silica, Report No.
enforcement initiative focused on powered haulage by 05-21-001-06-001 (November 12, 2020), available at: https://
issuing guidance on preventing accidents and meeting www.oig.dol.gov/public/reports/oa/2021/05-21-001-06-001.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 21
Significant Concerns
Figure 4: Number and Percentage of Mining Fatalities by Class, 2018-2022
Source: MSHA’s Accident Injuries public dataset
cause deadly and incurable chronic conditions, pneumoconiosis,38 MSHA has implemented an
such as black lung disease. MSHA’s allowable limit outreach campaign to increase their awareness of
for silica has remained unchanged for more than their Part 90 right to exercise the option to work
50 years, even as the acceptable limit for silica in a less dusty area of the mine and suffer no loss
exposure for workers other than miners has been in pay. However, the OIG continues to monitor
significantly decreased by OSHA regulations. MSHA’s progress toward adopting a rule for a
lower silica exposure limit.
MSHA has transmitted a proposed rule addressing
miners’ exposure to silica to OMB for interagency Improving the Performance
review. While we recognize the progress, the OIG Accountability of Workforce
remains concerned about MSHA’s inability to publish
Development Programs
the proposed rule as it has started and restarted its
rulemaking efforts for silica regulations at least six
The OIG has concerns about the Department’s ability
times since 1996.
to ensure its investments in workforce development
programs are successful in advancing participants’
In June 2022, MSHA announced a Silica
Enforcement Initiative to better protect miners
from health hazards related to repeated
38
Pneumoconioses are a group of lung diseases,
overexposures to respirable crystalline silica. such as black lung and silicosis, caused by the lungs’
For coal miners who have already developed reaction to inhaling certain dusts. The main cause of the
pneumoconioses is workplace exposure.
22 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
skills and placing them in suitable employment. In 2022, ETA awarded a total of $171 million in
The pandemic highlighted the importance of the Apprenticeship Building America grant funds to
Department’s workforce development programs 39 grantees. This grant program advances the
assisting job seekers and employers in finding Department’s efforts to expand and modernize
and filling available jobs and assisting workers in Registered Apprenticeship by increasing the
developing the right skills to fill new job openings. number of programs and apprentices, diversifying
The Department’s ability to obtain accurate and the industries that use Registered Apprenticeship
reliable data to measure, assess, and make decisions and improving the access to and performance
regarding the performance of grant recipients, of Registered Apprenticeship Programs for
contractors, and states in meeting the programs’ underrepresented and underserved communities.
goals is critical.
The Department needs to ensure its investments
in credential attainment align with local employers’
needs and are having the desired impact on
participants’ ability to obtain or advance in a job.
In a 2018 audit39 that followed up on the employment
status of a sample of Job Corps students 5 years
after they left the program, we found that Job
Corps faced challenges in demonstrating the
extent to which its training programs helped those
participants obtain meaningful jobs appropriate to A 2021 audit 40 found ETA did not sufficiently plan
their training. and execute the American Apprenticeship Initiative
grant program. Despite progress in achieving some
In March 2018, ETA announced the National Health of the program’s goals, the report found systemic
Emergency Grant program to help communities weaknesses throughout the grant program, in the
address the economic and workforce-related execution of the grants as well as in the planning
impacts of the opioid crisis. Research suggests that and award processes. We are concerned that these
opioid dependency has been a leading cause of issues and challenges continue to exist.
workforce exits for workers ages 25 to 54.
To date, ETA has approved up to $143 million in As expressed in a March 2022 advisory report,41
grants to address the opioid crisis. It is vital that the OIG continues to be concerned about three
the Department monitor the performance of the
discretionary grants it has awarded for the delivery 40
ETA Did Not Sufficiently Plan and Execute the American
of services to employers and workers affected by Apprenticeship Initiative Grant Program, Report No.
the opioid crisis. 05-21-004-03-375 (September 30, 2021), available at: https://
www.oig.dol.gov/public/reports/oa/2021/05-21-004-03-375.pdf
39
Job Corps Could Not Demonstrate Beneficial Job 41
Advisory Report: ETA’s Management of Workforce
Training Outcomes, Report No. 04-18-001-03-370 Development Grants: Key Concerns, Report No.
(March 30, 2018), available at: https://www.oig.dol.gov/ 09-22-001-03-001 (March 31, 2022), available at: https://www.
public/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 | October 1, 2022–March 31, 2023 23
Significant Concerns
areas in particular where our body of work has completed in December 201744 and our review of
identified weaknesses: awarding grants, reviewing Job Corps’ corrective actions showed Job Corps
grant recipients’ use of funds, and measuring has taken steps to improve center safety and
grant recipient performance. While ETA has security by establishing stronger internal controls
taken action to address many prior years’ findings and security measures, including the installation
and recommendations related to eligibility, of security cameras, perimeter fencing, and better
effectiveness, and compliance and monitoring, lighting at centers. However, student misconduct
it must also proactively monitor key areas and concerns continue.
continue to assess for these weaknesses to ensure
they do not reoccur. The OIG continues to monitor various
safety initiatives and actions taken by
Ensuring the Safety of Students and Job Corps to keep students and staff safe.
Staff at Job Corps Centers
A March 2021 OIG audit report45 showed the current
Ensuring the safety and health of students and staff process does not provide Job Corps centers the
at Job Corps centers continues to be a concern due appropriate tools and resources to properly evaluate
to ongoing issues with on campus violence. Job applicants for substance abuse and mental health
Corps centers are mostly residential, with students issues as they enter the program and does not ensure
living on campus. centers have the necessary resources to mitigate
them. While ETA stated it increased nursing and
Preventing on campus violence and other mental health consultants’ hours at every center
potentially criminal behavior remains a challenge to help address these concerns, it determined
for Job Corps centers. OIG audits from 2015 42 and pre-enrollment behavioral assessments, of the
201743 found that some Job Corps centers failed type the OIG identified, are not feasible legally or
to report and investigate serious misconduct, programmatically and pre-enrollment academic
such as drug abuse and assaults. The audits readiness screening of prospective students does
also determined that some Job Corps centers not align with the program’s eligibility criteria,
downgraded incidents of violence to lesser nondiscrimination obligations, and overall purpose to
infractions, creating an unsafe environment serve a diverse collection of youth. The OIG continues
for students and staff. The follow-up work we to monitor various safety initiatives and actions taken
by Job Corps to keep students and staff safe.
42
Job Corps Needs to Improve Enforcement and 44
Job Corps Took Action to Mitigate Violence, Drugs,
Oversight of Student Disciplinary Policies to Better Protect
and Other Student Misconduct at Centers, But More
Students and Staff at Centers, Report No. 26-15-001-03-370
Needs to Be Done, Report No. 26-18-001-03-370
(February 27, 2015), available at: https://www.oig.dol.gov/
(December 29, 2017), available at: https://www.oig.dol.
public/reports/oa/2015/26-15-001-03-370.pdf
gov/public/reports/oa/2018/26-18-003-03-370.pdf
43
Review of Job Corps Center Safety and Security, Report 45
Job Corps Should Improve Its Pre-Admission Evaluation
No. 26-17-001-03-370 (March 31, 2017), available at:
Process, Report No. 05-21-001-03-370 (March 25, 2021),
https://www.oig.dol.gov/public/reports/oa/2017/26-17-001-
available at: https://www.oig.dol.gov/public/reports/
03-370.pdf
oa/2021/05-21-001-03-370.pdf
24 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
Maintaining the Integrity of Foreign same rules created challenges regarding DOL’s
Labor Certification Programs responsibilities. Additionally, DOL continues to have
limited authority over the H-1B and PERM programs,
The DOL foreign labor certification (FLC) programs which challenges the goal of protecting the welfare
are intended to permit U.S. employers to hire foreign of the nation’s workforce.
workers to meet their workforce needs while protecting
U.S. workers’ jobs, wages, and working conditions. The statute limits DOL’s ability to deny H-1B
DOL’s administration of FLC programs under current applications and to investigate potential violations.
laws has been a concern for the OIG for decades. Our Specifically, DOL may only deny incomplete
work has shown these visa programs, in particular the and obviously inaccurate H-1B applications
H-1B program for workers in specialty occupations, and has only limited authority to conduct H-1B
to be susceptible to significant fraud and abuse from investigations in the absence of a complaint.
perpetrators, including immigration agents, attorneys, DOL recently established a process for
labor brokers, employers, and organized criminal information-sharing between U.S. Citizenship
enterprises. Over the last decade, the OIG, along and Immigration Services and the Wage and
with federal partners, has conducted more than Hour Division related to Secretary-initiated H-1B
194 criminal investigations related to fraud in FLC investigations. The PERM program itself is
programs. Of particular concern, OIG investigations persistently vulnerable to employers not complying
have uncovered criminal misuse of FLC programs with its qualifying criteria. Therefore, both the
to engage in human trafficking—with victims being PERM and H-1B programs remain prone to fraud.
exploited for economic gain.
With various new DOL rules going into effect
In 2003, the OIG issued a white paper46 outlining since 2003, there have been opportunities for
vulnerabilities that existed in four FLC programs, the PERM, H-2A, and H-2B visa programs
permanent employment certification program to change. For example, these new rules
(PERM), H-1B, H-2A, and H-2B. In 2020, we issued implemented employer attestation programs,
a similar report47 that found rulemaking since 2003 which allow employers to agree to the conditions
had revamped the PERM, H-2A, and H-2B visa of employment without providing supporting
programs and addressed some of the vulnerabilities documentation to validate their agreements.
cited in audits and investigations by the OIG and However, DOL has identified instances in which
the Government Accountability Office (GAO). Those employers are not complying with the conditions of
employment, thereby reinforcing how susceptible
46
Overview and Assessment of Vulnerabilities in the these programs are to fraud.
Department of Labor’s Alien Labor Certification Programs,
Report No. 06-03-007-03-321 (September 30, 2003), Also, DOL has established a risk-based process
available at: https://www.oig.dol.gov/public/reports/ to determine which H-2A and H-2B applications to
oa/2003/06-03-007-03-321.pdf audit. The selection process identifies appropriate
47
Overview of Vulnerabilities and Challenges in Foreign risk factors based on adjudication experience and
Labor Certification Programs, Report No. 06-21-001-03-321 available H-2A and H-2B application processing
(November 13, 2020), available at: https://www.oig.dol. data. DOL implemented the process and started
gov/public/reports/oa/2021/06-21-001-03-321.pdf the audits at the end of March 2021.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 25
Significant Concerns
Because the process is still early in its implementation, Protecting the Security of Employee
it is difficult for ETA to determine whether the Benefit Plan Assets
applications audited were those most likely to result in
violations eligible for employer debarment. The OIG remains concerned about the Employee
Benefits Security Administration’s (EBSA) ability to
FLC vulnerabilities have also been protect the integrity of pension, health, and other
exploited to facilitate labor trafficking, benefit plans of about 152 million workers, retirees,
a subset of human trafficking. and their families under the Employee Retirement
Income Security Act of 1974. In particular, the
FLC vulnerabilities have also been exploited to OIG is concerned about the statutory limitations
facilitate labor trafficking, a subset of human on EBSA’s oversight authority and inadequate
trafficking. For example, in a recent OIG resources to conduct compliance and enforcement.
investigation, four individuals were sentenced as A decades-long challenge to EBSA’s compliance
part of a federal racketeering conspiracy, which program, the Employee Retirement Income
victimized Mexican agricultural workers admitted Security Act provisions allow billions of dollars in
to the United States under the H-2A temporary pension assets to escape full audit scrutiny.
visa program. The investigation revealed the In 2013, we reported48 that as much as $3 trillion
conspirators committed racketeering offenses, in pension assets, including an estimated $800
including subjecting H-2A workers to forced labor, billion in hard-to-value alternative investments,
harboring and concealing workers, visa fraud, and held in otherwise regulated entities such as banks,
fraud in foreign labor contracting. The conspirators received limited-scope audits that provided weak
used coercive means to obtain thousands of hours assurance to participants regarding the financial
of physically demanding agricultural labor from health of their plans.
the victimized H-2A workers, all for lesser pay.
The coercive means used included confiscating EBSA needs to focus its limited available
the workers’ passports; subjecting the workers resources on investigations that are most likely to
to crowded, unsanitary, and degrading living result in the prevention, detection, and correction
conditions; isolating the workers and limiting their of Employee Retirement Income Security Act
ability to interact with anyone other than employees; violations, particularly given the number of benefit
and subjecting workers to debt manipulation. plans EBSA oversees relative to the number
of investigators it employs. Finally, EBSA lacks
Without statutory authority to ensure program the authority under the Federal Employees’
integrity, the Department generally cannot verify Retirement System Act to effectively oversee
employers’ attestations to the H-1B certifications hundreds of billions in federal employee Thrift
unless a complaint is filed or the Department utilizes
a Secretary-initiated investigation. As foreign
workers are generally reluctant to file complaints 48
EBSA Needs to Provide Additional Guidance and
for fear of retaliation and losing their jobs, the Oversight to ERISA Plans Holding Hard-to-Value
Department’s process is unlikely to result in Alternative Investments, Report No. 09-13-001-12-121
verification action being taken. (September 30, 2013), available at: https://www.oig.dol.
gov/public/reports/oa/2013/09-13-001-12-121.pdf
26 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
Savings Plan assets.49 The Federal Employees’
Retirement System Act requires EBSA to conduct
regular compliance audits to determine whether
the Federal Retirement Thrift Investment Board,
an independent agency, is fulfilling its fiduciary
duties and properly safeguarding Thrift Savings
Plan participants’ assets.
However, EBSA has no legal authority to compel
the Federal Retirement Thrift Investment Board to
implement its recommendations, which includes
enforcing its recommendations to improve the
Thrift Savings Plan’s cybersecurity posture.
As a significant portion of the Thrift Savings Plan’s
infrastructure was recently transferred to an outside
third-party vendor, we are concerned about the
threat cybersecurity breaches pose to the Thrift Our prior audit work regarding the FECA program
Savings Plan. More generally, identifying and has consistently identified serious internal control
mitigating cyber threats requires a high degree of weaknesses related to OWCP’s management
technical expertise. Cyber threats potentially place of pharmaceuticals. In our March 2023 report,50
trillions of dollars in other Employee Retirement we found OWCP did not effectively manage
Income Security Act-covered retirement plan assets pharmaceutical spending in the FECA program from
at risk. FY 2015 through FY 2020. Specifically, OWCP did
not pay the best available prices for prescription
Managing Medical Benefits in the drugs and we identified up to $321 million in excess
spending during the audit period. In addition,
Office of Workers’ Compensation
OWCP did not effectively monitor pharmaceutical
Programs
policy changes to ensure implementation, resulting
in claimants receiving thousands of inappropriate
The OIG has concerns about OWCP’s ability
prescriptions and potentially lethal drugs, including
to effectively manage the use and cost of
1,330 prescriptions for fast-acting fentanyl after
pharmaceuticals in the Federal Employees’
issuing a policy that restricted its use.
Compensation Act (FECA) program and about
rising home health care costs in the Energy
We also found OWCP failed to timely identify and
Employees Occupational Illness Compensation
address emerging issues and did not perform
Program Act (Energy) program. The Department
needs to ensure the medical benefits it provides
50
OWCP Did Not Ensure Best Prices and Allowed
to FECA claimants and energy workers are safe,
Inappropriate, Potentially Lethal Prescriptions in the
effective, medically necessary, and cost effective.
FECA Program, Report No. 03-23-001-04-431
49
The total value of Thrift Savings Plan assets fluctuates (March 31, 2023), available at: https://www.oig.dol.gov/
over time and is affected by market volatility. public/reports/oa/2023/03-23-001-04-431.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 27
Significant Concerns
sufficient oversight of prescription drugs that In March 2021,51 consistent with our prior audit
are highly scrutinized and rarely covered in recommendations, OWCP implemented a pharmacy
workers’ compensation programs. As a result, benefit manager responsible for FECA pharmaceutical
OWCP spent hundreds of millions of dollars transactions, including pricing for prescription drugs.
on drugs that may not have been necessary or In addition, OWCP is in the process of expanding
appropriate for FECA claimants. To strengthen pharmacy benefit manager coverage to the
its management of FECA’s pharmaceutical Energy and Black Lung Benefits programs.
program, OWCP needs to implement processes
that ensure competitive prices for prescription 51
Pharmacy Benefit Managers are third-party administrators
drugs (see Figure 5), improve its monitoring of of prescription drug programs, primarily responsible for:
pharmaceutical policy changes, and allow the developing and maintaining formularies, which include an
agency to identify emerging issues before they approved listing of prescriptions; negotiating discounts
become critical problems. and rebates with drug manufacturers; and processing and
paying prescription drug claims.
Figure 5: Tools to Ensure Competitive Prices for Prescription Drugs
Source: OIG graphic representation of Harper, Rains, Knight & Company, P.A. analysis
28 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
While using a pharmacy benefit manager may Department of the Treasury’s general fund almost
improve OWCP’s management of pharmaceuticals, every year since 1979. According to DOL’s
it does not relieve OWCP from its management FY 2022 Agency Financial Report, the Trust Fund
responsibilities. OWCP needs to provide adequate had to borrow approximately $2.56 billion to cover
oversight over the pharmacy benefit manager to its expenditures, which included debt and interest
ensure the pharmaceutical benefits it provides are payments. As of September 30, 2022, the Trust
safe, effective, medically necessary, and economical. Fund was carrying close to a $6.26 billion deficit
balance, which is projected to grow to $10.11 billion
In the Energy program, with an aging claimant (in constant dollars) by September 30, 2047.
population and an increased demand for home health
care services, there is a risk of providers exploiting
these benefits through unethical practices. Since
2010, home and residential health care costs paid by
the Energy program have grown from almost $100
million to approximately $860 million, representing
approximately 74 percent of total medical benefits
paid by the program in FY 2022. OWCP needs to
continue its efforts to analyze home health care
billing for abusive practices and to identify and refer
allegations involving potential fraud or abuse to the
OIG for further investigation.
Ensuring the Solvency of the Black
Lung Disability Trust Fund
The excise tax that funds the Trust Fund is levied on
Miners and their dependent survivors receive lifetime
domestic sales of coal mined in the United States.
benefits when awarded under the Black Lung
On August 16, 2022, the Inflation Reduction Act of
Benefits Act. Mine operators pay these benefits
2022 made permanent the temporary increased
when possible, and the Black Lung Disability Trust
excise tax rates of $1.10 per ton of underground
Fund (Trust Fund) pays the benefits when a miner’s
mined coal and $0.55 per ton of surface-mined coal,
former employer does not or cannot assume liability.
with a cap of 4.4 percent of the sales price. However,
The OIG’s primary concern is that the current annual
we remain concerned the permanent tax increases
income of the Trust Fund (primarily from an excise
are still not sufficient to ensure solvency of the Trust
tax on coal) is not sufficient to cover annual benefit
Fund. The Department has proposed a new rule
obligations to meet administrative costs and to
to strengthen security requirements for coal mine
service past debt.
operators requesting authorization to self-insure
liabilities that it believes would decrease the potential
The Trust Fund expenditures have consistently
burden of those liabilities on the Trust Fund should
exceeded revenue, and the Trust Fund has
the operator become insolvent.
essentially borrowed with interest from the U.S.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 29
Significant Concerns
Managing and Securing Data and In addition, we continue to have concerns with the
Information Systems Department’s information security program in the
following areas:
We remain concerned about the Department’s • cybersecurity oversight,
ability to manage and safeguard its data and • supply chain,
information systems. The Department’s agencies
• cloud/third party,
rely on information technology (IT) systems to
obtain and create vast amounts of information • end user/remote security, and
and data in carrying out their missions, and • emerging technology and security requirements,
included in these data are the PII and personal such as zero trust architecture.
health information of the public, including federal
employees. The Department moved to an IT Securing the Department’s information systems
shared services model that centralized IT for remains a concern as we continue to identify
approximately 70 percent of its information recurring deficiencies in the Department’s efforts
systems under the Office of the Assistant to manage and implement security controls
Secretary for Administration and Management. throughout its information security program.
While we have seen some improvements in the While the Department has moved information
Department’s IT management, we continue to systems to its IT shared services model to improve
have concerns with its governance structure and management and security of the systems, the
information security program. Department has not adequately implemented
information security controls and technology tools
These deficiencies continue to hinder required to manage and monitor IT security.
the Department in identifying security
weaknesses; protecting its systems In our FY 2022 audit of DOL’s information security
and data; and detecting, responding to, program,52 we again identified deficiencies in all
and recovering from incidents. five of the information security functional areas
(as defined by the NIST Cybersecurity Framework)
We continue to be concerned with limits on the and in the performance of security control
Chief Information Officer’s (CIO) authority, both assessments, account management controls,
by structural design and by lack of representation configuration management, and contingency
in enterprise level discussions. The Department’s testing. These deficiencies continue to hinder the
CIO is not fully empowered to ensure the Department in identifying security weaknesses;
Department’s IT governance is effectively protecting its systems and data; and detecting,
implemented as the CIO reports to the Assistant responding to, and recovering from incidents.
Secretary for Administration and Management
not the Secretary or Deputy Secretary of Labor
as required by law. Furthermore, the CIO position
52
FY 2022 FISMA DOL Information Security Report: DOL’s
does not have sufficient authority or representation Information Security Program Not Remaining Current With
on key senior level management boards. Security Requirements, Report No. 23-23-001-07-725
(February 10, 2023), available at: https://www.oig.dol.gov/
public/reports/oa/2023/23-23-001-07-725.pdf
30 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Significant Concerns
Further, we are still concerned the remaining
systems and agencies that are not part of the IT
shared services environment are not receiving the
governance and oversight required to sufficiently
secure all of DOL’s data and information systems.
While Supply Chain Risk Management has been
an ongoing concern, cyberattacks, such as the
2020 SolarWinds attack,53 which took advantage
of the supply chain process, have increased
awareness throughout the industry and the federal Our recent reviews identified inadequate oversight
government. During our annual information of continuous monitoring reviews and third-party
security testing and follow up on prior year systems. Also, prior year recommendations
recommendations, we determined that DOL has regarding validation of annual third-party and cloud
not finalized its Supply Chain Risk Management service provider assessments and continuous
policies, procedures, and strategies. monitoring training remain unimplemented.
The Department continues to move its information While the Department has been changing its work
systems to a shared services model and expand and IT landscape to significantly expand remote and
its use of cloud and third-party providers for telework operations for its employees, we remain
its information systems, infrastructure, and concerned with DOL’s ability to meet evolving
services. We remain concerned with the required endpoint security requirements. DOL needs to
level of oversight and management of DOL’s ensure the security between all connection points is
systems and services. We continue to identify sufficiently controlled and managed.
deficiencies in the Department’s oversight of
information systems managed and/or operated The adequacy of implementing new security
by a third-party on behalf of the Department. As technologies and requirements at DOL is also of
DOL continues this transition, the Department’s concern. Our prior reviews identified that DOL
retention of specialized knowledge and expertise has not yet timely implemented current security
needed to protect and manage its systems, requirements according to federal laws, regulations,
including the contracted ones, remains at risk. and guidance establishing new and tougher
security practices and standards.
53
The SolarWinds attack involved hackers
compromising a single supplier’s software product, These areas represent ongoing risks to the
in this case SolarWinds. This product was widely confidentiality, integrity, and availability of DOL’s
utilized in commercial and government networked information systems, which are necessary to
computers. The compromised software was support the Department’s mission. DOL needs to
then distributed via regular channels without the implement the necessary strategies and tools to
awareness of the suppliers or users, creating a provide effective management and security for its
“backdoor” to the system and allowing an intruder data and information systems as well as to support
remote access to an infected computer. the execution of its mission.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 31
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
program is the Department’s largest income-maintenance program. This multi-billion-dollar program
provides unemployment benefits to eligible workers who become unemployed through no fault of
their own. The program is generally administered by states with oversight from DOL’s Employment
and Training Administration.
OIG OVERSIGHT OF THE UI claimants meet eligibility requirements. It is
PROGRAM equally important that the program has sufficient
controls in place to quickly determine that benefits
BACKGROUND are or were paid to the right person in the correct
amount. Each SWA:54
The OIG has remained committed to meeting the • administers a separate UI program under its
challenges created by the COVID-19 pandemic jurisdiction’s laws, but follows uniform guidelines
and to assisting DOL and Congress in improving established by federal law;
the efficiency and integrity of the UI program.
• establishes requirements for eligibility, benefit
Strengthening the UI program to prevent fraud
amounts, and the length of time that benefits can
before it occurs and to detect it when it does are
be paid; and
key objectives to ensure that unemployed workers
expeditiously receive much needed benefits while • manages the personnel and system resources to
safeguarding tax dollars directed toward that goal. administer its respective programs.
Recovering improper payments creates challenges
for all involved. Strengthening programs to prevent In normal circumstances, UI benefits are generally
improper payments in the first place is critical funded by state employer taxes with administrative
for program integrity and good stewardship of costs funded by the federal government. Extensions
taxpayer funding. 54
When referring to UI, this Semiannual Report
to Congress uses “state” or “SWA” to refer to the
OVERVIEW OF THE UI PROGRAM administrative body that administers the UI program within
the state, district, or territory. For the 50 states, as well as
A joint federal-state program, unemployment the U.S. Virgin Islands, Puerto Rico, and the District of
insurance is the first economic line of defense Columbia, that administrative body is a SWA. There are,
against the collective impact of unemployment therefore, 53 SWAs. The CARES Act also provided certain
and acts as a safety-net for individuals who UI benefits to American Samoa, the Commonwealth of
lose their jobs through no fault of their own. the Northern Mariana Islands, the Federated States of
The UI program requires states to make benefit Micronesia, Guam, the Marshall Islands, and the Republic
payments in a timely manner, providing needed of Palau, provided the territory signs an agreement with
assistance to unemployed workers while ensuring the Department.
34 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
and expansions of coverage and benefits, such as represents years of work relating to DOL’s UI
those provided by the CARES Act and subsequent program, including the response to past disasters.
legislation, are also normally funded in whole or in One of these areas was state preparedness,
part by the federal government. specifically, the issues of staffing and system
capabilities. Our audit work has confirmed these
ETA is the federal agency responsible for issues persisted into the pandemic.56
providing program direction and oversight.
The OIG conducts independent oversight of the UI Deploying Benefits Expeditiously
program through audits to strengthen the integrity and Efficiently
and efficiency of the program and through criminal
investigations to detect and deter large-scale Rapid deployment of CARES Act funding was
fraud. The OIG’s federal criminal investigations critical in helping workers in need. Staff at
are time- and resource-intensive and one of ETA and states struggled during the COVID-19
the last lines of defense in safeguarding the UI pandemic as SWAs worked to ensure timely
program from fraud. and accurate UI benefits in a time of national
emergency. Anticipating and addressing the
OIG SIGNIFICANT CONCERNS increased risk that came with the expanded
funding was also vital to meeting the intent of
The OIG has repeatedly reported significant the CARES Act. As the OIG’s prior audit
concerns with DOL and states’ ability to work has shown, quickly deploying funds can
deploy program benefits expeditiously and result in shortcomings in the effective and
efficiently while ensuring integrity and adequate efficient implementation of stimulus programs.
oversight. We remain particularly concerned For example, a 2011 audit report57 found states
about deployment of UI benefits in response to took over a year to spend most of the American
emergencies, including natural disasters and Reinvestment and Recovery Act of 2009
economic downturns. The OIG has reiterated (Recovery Act) funding available for emergency
these concerns regarding the economic downturn staffing and at least 40 percent of funding for
created by the pandemic and the hundreds of this purpose was unspent after 15 months.
billions of dollars allocated to the UI program.
Less than a month after the CARES Act passed, 56
COVID-19: States Struggled to Implement CARES
we published an advisory report55 outlining Act Unemployment Insurance Programs, Report No.
areas of concern that ETA and the states should 19-21-004-03-315 (May 28, 2021), available at: https://
consider as they implemented the CARES Act www.oig.dol.gov/public/reports/oa/2021/19-21-004-03-
UI provisions. Our identification of these areas 315.pdf
57
Recovery Act: DOL Could Have Better Monitored the
55
Advisory Report, CARES Act: Initial Areas of Concern Use of Re-employment Services Funds to Adhere to
Regarding Implementation of Unemployment Insurance Standards for Transparency and Accountability, Report
Provisions, Report No. 19-20-001-03-315 (April 21, 2020), No. 18-11-005-03-315 (March 31, 2011), available at:
available at: https://www.oig.dol.gov/public/reports/ https://www.oig.dol.gov/public/reports/oa/2011/18-11-005-
oa/2020/19-20-001-03-315.pdf 03-315.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 35
Worker and Retiree Benefit Programs
In addition, a separate audit on the Recovery initial and continued program eligibility. Further, we
Act58 found $1.3 billion of the $7 billion DOL found the risk of improper payments including fraud
provided to states for UI modernization, including was even higher under PUA because claimants could
IT modernization, would likely not have been self-certify their eligibility for benefits.
spent before the period of availability expired.
To access these funds, states had to meet certain Our subsequent reports identified continued
modernization criteria; once accessed, the funds programmatic weaknesses that led to workers
could be spent for several purposes including to unemployed through no fault of their own suffering
modernize IT systems. Of the funds spent from the lengthy delays in receiving benefits. For example,
$7 billion, states did not always take advantage of the OIG had audited the Disaster Unemployment
the opportunity to modernize their IT systems. Assistance program in 2020 and found the
Department had not established adequate controls
To implement the new UI programs authorized by to ensure benefits were paid timely.60 Further, states
the CARES Act, states needed sufficient staffing without modernized IT systems faced additional
and system resources to manage the extraordinary difficulty in promptly implementing the CARES Act
increases in the number of claims and payments. programs. For example, for the PEUC program, we
Our pandemic audit work has confirmed that ETA and identified that it took 49 states, on average, 50 days
states continued to face challenges in these areas as to implement the program.61 However, states with
they endeavored to implement the new temporary modernized IT were able to implement the PEUC
UI programs, including PUA, PEUC, and FPUC. program 15 days faster. Similarly, modernized states
implemented the PUA program 8 days faster.
We also issued audit reports that advised ETA to
establish methods to detect and recover improper We also found that—from April 1, 2020, to
payments, including fraudulent payments, and March 31, 2021—only 5 of the 53 SWAs were
reported on the pandemic program that posed the able to timely pay benefits, including the FPUC
greatest risk to the UI system: PUA. PUA’s expanded supplement, to regular UI claimants. As a result,
coverage, for a population of claimants who were during the year following the passage of the CARES
traditionally ineligible to receive UI benefits,59 Act, more than six million Americans waited a month
presented significant challenges to states as they or more for CARES Act UI benefits. Furthermore,
designed and implemented processes to determine states are still challenged in paying claimants timely.
58
Recovery Act: More Than $1.3 Billion in Unemployment 60
ETA Should Do More to Assist Vulnerable States
Insurance Modernization Incentive Payments Are Unlikely Prepare for Disaster Unemployment Assistance Program
to Be Claimed by States, Report No. 18-10-012-03-315 Implementation, Report No. 04-20-002-03-315
(September 30, 2010), available at: https://www.oig.dol. (September 29, 2020), available at: https://www.oig.dol.
gov/public/reports/oa/2010/18-10-012-03-315.pdf gov/public/reports/oa/2020/04-20-002-03-315.pdf
59
The new PUA program extended unemployment 61
Also, the 12 states we selected for in-depth analysis
benefits to self-employed, independent contractors, were generally unable to demonstrate they met the
those with limited work history, and other individuals not payment promptness standard ETA established for regular
traditionally eligible for unemployment benefits who were UI payments, which is to pay 87 percent of claimants
unable to work as a direct result of COVID-19. within 14 to 21 days.
36 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
For the month of January 2023, only 23 percent states on the waiving of recovery of overpayments
of states were paying regular UI claimants timely when the claimant was without fault and if the
versus 75 percent before the pandemic started.62 repayment would be contrary to equity and good
conscience. This guidance also outlined limited
Additionally, we identified that states may have circumstances when the states could use blanket
inadvertently applied a racial or gender bias when waivers in lieu of recovering overpayments. While the
providing benefits to claimants and did not provide Department has provided guidance stating recovery
adequate protections for claimants’ personal data. of fraudulent payments may not be waived, we are
Specifically, to combat imposter claims, 45 percent of concerned that states may have unintentionally
states hired identity verification service contractors waived or will waive fraudulent payments. As of
that used facial recognition technology. In 2019, March 28, 2023, states reported waiving more than
NIST’s63 Information Technology Laboratory reported $4 billion in pandemic-related overpayments.
it found empirical evidence that the algorithms64 used The OIG has planned work to assess the effects of
in current facial recognition technology have a racial the guidance on waivers and blanket waivers.
and gender bias. Furthermore, 15 of 24 (63 percent)
of state contracts did not include privacy security History of Improper Payments,
measures based on the National Strategy for Trusted
including Fraud
Identities in Cyberspace65 necessary to protect
UI claimants’ biometric data.
For more than 20 years, the OIG has reported
on the Department’s challenges to measure,
Moreover, in an effort to expeditiously and efficiently
report, and reduce improper payments in the UI
provide UI benefits, states improperly paid billions
program, which has experienced some of the
of dollars. In May 2021, ETA provided guidance to
highest improper payment rates across the federal
government. The reported improper payment rate
62
Based on OIG analysis of data on ETA’s public reporting
estimate for the regular UI program has been above
on States’ UI Benefit Timeliness and Quality, available at:
10 percent for 15 of the last 19 years. In the last
https://oui.doleta.gov/unemploy/btq.asp
2 years, ETA has estimated an improper
63
Founded in 1901, NIST is one of the nation’s oldest
payment rate of 18.71 percent and 21.52 percent,
physical sciences laboratories and a non regulatory
respectively. Further, ETA estimated a fraud rate
agency. Its mission is to promote U.S. innovation and
of 8.57 for Program Year 2021, or a 170 percent
industrial competitiveness by advancing measurement
increase over the prior year’s fraud rate.66
science, standards, and technology in ways that enhance
economic security and improve our quality of life. 66
ETA estimated the fraud rate as part of their Benefit
64
An algorithm, according to Cambridge Dictionary, is a set Accuracy Measurement system reporting for the program
of mathematical instructions or rules that, especially if given year July 1, 2020, through June 30, 2021. The Benefit
to a computer, will help to calculate an answer to a problem. Accuracy Measurement system is designed to determine
65
The National Strategy for Trusted Identities in the accuracy of paid and denied claims in three major UI
Cyberspace is a federal government initiative launched in programs: regular State UI, Unemployment Compensation
2011 to encourage private sector actors to adopt measures for Federal Employees, and Unemployment Compensation
enhancing privacy of personally identifiable information on for Ex Servicemembers. The fraud rate for 2022 is likely to
the internet, including biometric data. be published in October 2023.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 37
Worker and Retiree Benefit Programs
The UI program requires states to make benefit A PERFECT STORM
payments while ensuring claimants meet eligibility
requirements. A state may determine a payment is Following the start of the pandemic in the United
improper after a claimant receives benefits based on States in early 2020, unemployment compensation
new information that was unavailable when the benefit claims rose exponentially to historically unprecedented
payment was approved or as a result of the requirement levels. Prior to the pandemic, numbers of UI claims
that claimants be provided with due process prior to were historically low. On March 14, 2020, the
stopping payment of benefits. The leading causes of Department reported 282,000 initial unemployment
improper payments have historically been: claims. Within 2 to 3 weeks, initial claims rose to
• Claimants Do Not Meet Work Search 10 times pre-pandemic levels, far higher than state
Requirements67 – Claimants who fail to systems were designed to handle.69 Within 5 months,
demonstrate they meet state requirements for through August 15, 2020, the Department reported
work search; more than 57 million initial claims, the largest increase
since the Department began tracking UI data in 1967.
• Benefit Year Earnings – Claimants who
continue to claim benefits after they return to
Following the start of the pandemic
work or who misreport earnings during a week in
in the United States in early 2020,
which benefits are claimed;
unemployment compensation claims
• Employers Do Not Timely Report Employees’ rose exponentially to historically
Separation – Employers or their third-party unprecedented levels.
administrators who fail to provide timely and
adequate information about why individuals The CARES Act provided significant funding to the
separated from their employment; and UI program, which resulted in hundreds of billions
• Fraud – Claims based on fraudulent schemes, of dollars in additional payments. New UI programs
such as those perpetrated during the pandemic.68 under the CARES Act meant more workers
qualified.70 Further, unemployed workers received
67
The Middle Class Tax Relief and Job Creation Act of 2012 a supplement per week in addition to their regular
amended the Social Security Act to require that individuals benefit amount and individuals who exhausted
receiving UI benefits must be able to work, available to their regular unemployment benefits were provided
work, and actively seeking work as a condition of eligibility additional weeks of unemployment compensation.
for regular compensation for any week. Accordingly, Also, certain UI claims could be backdated to
states generally require that unemployed workers the beginning of the eligibility period. With the
demonstrate they were actively seeking work. Work search
overpayments occur when states pay UI claimants who do 69
COVID-19: States Struggled to Implement CARES Act
not demonstrate that they were actively seeking work. Unemployment Insurance Programs, Report No.
68
ETA has included fraud as an element of the leading 19-21-004-03-315 (May 28, 2021), available at: https://www.
causes rather than as a separate cause. From July 2016 oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
to March 2020, the other three causes resulted in over 70
The PUA program covered workers not typically covered
$9 billion in improper payments. Of this total, more than by UI who could self-certify that they were able to and
$3 billion was attributable to fraud. Since the pandemic available for work but unemployed due to COVID-19-
started, fraud has significantly increased. related reasons.
38 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
The expanded coverage offered under the PUA
program posed significant challenges to states as
they implemented processes to determine initial
and continued program eligibility for participants.
The reliance solely on claimant self-certifications
without documentation substantiating the
individual’s prior employment or self-employment
during the program’s first 9 months rendered the
PUA program extremely susceptible to improper
payments, including fraud. In March 2022 before
the U.S. Senate Committee on Homeland Security
and Governmental Affairs,73 in February 2023
before the U.S. House Committee on Ways and
Means,74 and in March 2023 before the U.S. House
UI debit cards seized during a search warrant Committee on Oversight and Accountability,75 the
were associated with over 180 fraudulent UI claims OIG provided oral and written testimony that spoke
resulting in more than $3 million in fraud. to the continuation of many of these concerns
and challenges.
legislative extensions, claimants could receive up
to 79 weeks of pandemic-related UI payments.
In June 2020, the OIG provided a member briefing71 73
“Pandemic Response and Accountability: Reducing
and a statement for the record72 to Congress Fraud and Expanding Access to COVID-19 Relief through
highlighting challenges DOL and states faced Effective Oversight,” Hearing, Statement for the Record
in administering and overseeing the UI program of Larry D. Turner, Inspector General, U.S. Department
as well as the substantially increased fraud risk. of Labor; Senate Committee on Homeland Security and
Governmental Affairs (March 17, 2022), available at:
71
“Subcommittee on Government Operations Briefing https://www.oig.dol.gov/public/testimony/20220317.pdf
with the Inspector General for the Department of Labor,” 74
“The Greatest Theft of American Tax Dollars: Unchecked
Member Briefing, Opening Statement of Scott S. Dahl, Unemployment Fraud,” Hearing, Statement for the Record
Inspector General, U.S. Department of Labor; House of Larry D. Turner, Inspector General, U.S. Department
Committee on Oversight and Reform; Subcommittee on of Labor; House Committee on Ways and Means
Government Operations (June 1, 2020), available at: (February 8, 2023), available at: https://www.oig.dol.gov/
https://www.oig.dol.gov/public/testimony/20200601.pdf public/testimony/02082023.pdf
72
“Unemployment Insurance During COVID-19: 75
“Waste, Fraud, and Abuse Go Viral: Inspectors General
The CARES Act and the Role of Unemployment Insurance on Curing the Disease,” Hearing, Statement for the Record
During the Pandemic,” Hearing, Statement for the of Larry D. Turner, Inspector General, U.S. Department of
Record of Scott S. Dahl, Inspector General, U.S. Labor; House Committee on Oversight and Accountability,
Department of Labor; Senate Committee on Finance Subcommittee on Government Operations and the Federal
(June 9, 2020), available at: https://www.oig.dol.gov/public/ Workforce (March 9, 2023), available at: https://www.oig.
testimony/20200609.pdf dol.gov/public/testimony/03092023.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 39
Worker and Retiree Benefit Programs
As the OIG reported, the unprecedented infusion of In August 2020, we recommended77 that ETA
federal funds into the UI program gave individuals estimate the improper payment rate for pandemic
and organized criminal groups a high-value target UI programs. In December 2021, consistent with
to exploit. That, combined with easily attainable our recommendation, ETA reported an improper
stolen PII and continuing UI program weaknesses payment rate of 18.71 percent for 2021, which
identified by the OIG over the last several years, ETA applied to two of the three key pandemic
allowed criminals to defraud the system. Because UI programs, PEUC and FPUC. Additionally, in
many states were not prepared to process the December 2022, ETA reported an improper payment
extraordinary volume of new UI claims and rate of 21.52 percent, which it also applied to PEUC
struggled to implement the new UI programs, some and FPUC.78
internal controls that had been traditionally used or
recommended for the processing of UI claims were We previously reported that, applying the
not initially applied. 18.71 percent to an estimated $872.5 billion in
federal pandemic UI funding, at least $163 billion
This created multiple high-reward targets where in pandemic UI benefits could have been paid
an individual could make a fraudulent claim with improperly, with a significant portion attributable to
relatively low risk of being caught. For example, as fraud. In our February 2023 testimony, we reported
time went on, one fraudster could have been issued updated information, with two primary changes:
several UI debit cards, with tens of thousands of (1) ETA released its annual improper payment rate
dollars on each card. In fact, in an audit, we found estimate for FY 2022 and (2) ETA has recently
1 claim that was filed from a 3-bedroom house shared
the same physical address as 90 other claims and 77
COVID-19: More Can Be Done to Mitigate Risk to
used the same email address as 145 other claims.76 Unemployment Compensation under the CARES Act,
In total, the likely fraudster(s) received $1,569,762 in Report No. 19-20-008-03-315 (August 7, 2020), available
unemployment benefits. In the same audit, we found at: https://www.oig.dol.gov/public/reports/oa/2020/19-20-
that, from March 28, 2020, to September 30, 2020, in 008-03-315.pdf
4 states, potentially fraudulent claims were paid more 78
In FY 2022, the Department found the PUA, PEUC,
than 60 percent of the time. and FPUC programs to be susceptible to significant
improper payments. OMB Memorandum M-21-19 requires
Estimating the overall improper payment rate for the Department to produce a statistically valid improper
the pandemic UI programs is critical for the efficient payment and unknown payment rate in the fiscal year
operation of the program. ETA and the states, following the fiscal year in which the risk assessment
under their program operating responsibilities, determination was made. In the Agency Financial Report,
must determine the improper payment rate, the Department stated FY 2022 is anticipated to be the
including the fraud rate, for pandemic UI programs. last year reporting on these programs as they expired on
September 6, 2021. ETA’s reported improper payment
76
COVID-19: ETA and States Did Not Protect Pandemic- rate estimate of 21.52 percent does not include the PUA
Related UI Funds from Improper Payments including Fraud program. However, it is the most current improper payment
or from Payment Delays, Report No. 19-22-006-03-315 rate from ETA and PUA had significant control weaknesses
(September 30, 2022), available at: https://www.oig.dol. that indicate the program will have a comparable or greater
gov/public/reports/oa/2022/19-22-006-03-315.pdf improper payment rate.
40 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
provided a total for pandemic UI spending.79 payment rate for PUA in 2022. However, OMB
While that expenditure information is likely to be granted the Department an extension to report
updated, these changes enabled us to report on on PUA in FY 2023. As of March 31, 2023, the
actual expenditures rather than on estimated funding. Department has not yet reported the PUA improper
payment rate.
With those updates, more than $888 billion in total
federal and state UI benefits were paid for benefit As previously mentioned, PUA had control
weeks during the UI pandemic period.80 Applying weaknesses that may have facilitated comparable
the estimated 21.52 percent improper payment or greater improper payments. The reliance solely
rate to the approximate $888 billion in pandemic UI on claimant self certifications without documentation
expenditures, at least $191 billion in pandemic UI substantiating the individual’s prior employment
payments could have been improper payments, with or self-employment during PUA’s first 9 months
a significant portion attributable to fraud. Further, for rendered the program extremely susceptible to
Program Year 2021, ETA estimated a fraud rate of improper payments including fraud. Notably, in the
8.57 percent, which indicates over $76 billion was first 6 months after the CARES Act passed, we
likely paid to fraudsters. found 4 states paid $1 out of $5 in PUA benefits
to likely fraudsters.81 Subsequent to our work
Based on our audit and investigative work, the identifying the fraud risks, Congress took action to
improper payment rate for pandemic UI programs require supporting documentation to improve states’
was likely higher than 21.52 percent. For example, abilities to ensure proper claimant eligibility and to
ETA’s reported improper payment rate estimates mitigate fraud. However, a significant amount of UI
have not included estimates for the PUA program. benefit money had already been paid improperly.
ETA stated it would report the estimated improper
For example, despite ETA providing states
79
According to ETA, the data provided reflects CARES guidance on areas of improper payments as early
Act UI program activity through January 23, 2023, with the as May 2020, control issues occurred in some
exception of the Temporary Full Federal Funding of the states with PUA forms.82 ETA notified one state
First Week of Compensable Regular Unemployment for in June 2020 that its form did not include the
States with No Waiting Week program, which is through required questions confirming that claimants are
December 31, 2022; data provided regarding the regular able and available to work. However, by then,
UI, Unemployment Compensation for Federal Employees,
and Unemployment Compensation for Ex-Servicemembers 81
COVID-19: ETA and States Did Not Protect Pandemic-
programs reflect the monthly totals from April 2020 through Related UI Funds from Improper Payments including Fraud
September 2021. or from Payment Delays, Report No. 19-22-006-03-315
80
With the exception of PUA, for which claims could be (September 30, 2022), available at: https://www.oig.dol.
backdated to January 27, 2020, we define the UI pandemic gov/public/reports/oa/2022/19-22-006-03-315.pdf
period as March 27, 2020, through September 6, 2021. 82
COVID-19: ETA and States Did Not Protect Pandemic-
We also note that, according to ETA, it cannot provide Related UI Funds from Improper Payments including Fraud
final total costs of the programs because states are still or from Payment Delays, Report No. 19-22-006-03-315
processing claims that were for weeks of unemployment (September 30, 2022), available at: https://www.oig.dol.
prior to expiration of the programs. gov/public/reports/oa/2022/19-22-006-03-315.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 41
Worker and Retiree Benefit Programs
that state had paid more than $4 billion in PUA June 2021,84 and in September 2022,85 our
benefits, including FPUC. Similarly, in July 2020, investigators, auditors, and data scientists
ETA notified another state that its PUA monetary collaboratively identified potentially fraudulent UI
determination form did not have a procedure in benefits paid in four high risk areas, to individuals
place for re-determining the claimant’s weekly with Social Security numbers: (1) filed in multiple
benefit if the claimant did not provide proof of states, (2) of deceased persons, (3) of federal
earnings or provided insufficient proof. That state inmates, and (4) used to file for UI claims with
responded that the problem would be addressed suspicious email accounts. As of September 2022,
by the end of August 2020. However, by the end of we had identified $45.6 billion in potential fraud paid
August, that state had paid more than $25 billion in those high-risk areas (see Table 1).
in PUA benefits, including FPUC.
84
Alert Memorandum: The Employment and Training
When the OIG identifies anti-fraud measures that Administration Needs to Issue Guidance to Ensure State
may help the program, we share them with the Workforce Agencies Provide Requested Unemployment
Department and SWAs as appropriate. For example, Insurance Data to the Office of Inspector General, Report
in alert memoranda issued in February 2021,83 in No. 19-21-005-03-315 (June 16, 2021), available at:
https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-
83
Alert Memorandum: The Employment and Training 03-315.pdf
Administration Needs to Ensure State Workforce Agencies 85
Alert Memorandum: Potentially Fraudulent
Implement Effective Unemployment Insurance Program Unemployment Insurance Payments in High-Risk Areas
Fraud Controls for High Risk Areas, Report No. Increased to $45.6 Billion, Report No. 19-22-005-03-315
19-21-002-03-315 (February 22, 2021), available at: https:// (September 21, 2022), available at: https://www.oig.dol.
www.oig.dol.gov/public/reports/oa/2021/19-21-002-03-315.pdf gov/public/reports/oa/2022/19-22-005-03-315.pdf
Table 1: Potential Fraud in Four High-Risk Areas, March 2020-April 2022
High-Risk Area Total Number of Claimants* Total Potential Fraud Reported through April 2022
Multistate Claimants 2,011,191 $28,967,047,154
Deceased Persons 205,494 $139,483,136
Federal Prisoners** 46,985 $267,382,013
Suspicious Emails 2,281,136 $16,265,578,304
Totals*** 4,544,806 $45,639,490,607
*Claimants can represent more than one claim.
**Federal prisoner data was only available for analysis for the period March 2020 through October 2020.
***Totals do not include duplicates that were identified in one or more areas.
Source: OIG analysis of data from SWAs, the U.S. Department of Justice, Federal Bureau of Prisons, and the
U.S. Social Security Administration.
42 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
We shared our methodology and underlying data case inventory, compared to approximately
regarding the potential fraud in these high-risk areas 11 percent prior to the pandemic.
with the Department for further dissemination to
the SWAs, and we recommended they establish In response to the extraordinary increase in
effective controls to mitigate fraud and other oversight demands, the OIG hired additional
improper payments to ineligible claimants. We are criminal investigators; increased the caseload
currently examining whether states took effective of investigators already onboard; deployed
measures to address the four high-risk areas. federal and contract staff to review DOL and
states’ efforts; and strengthened our data
In its December 2022 report,86 GAO included analytics program. In addition, we took several
these findings in support of the determination other actions to augment our efforts, including
that substantial levels of fraud and potential fraud the following:
occurred during the pandemic. GAO noted that the • initiated the development of a National UI
Department has not yet developed an antifraud Fraud Task Force,87 alongside DOJ;
strategy or addressed the most significant fraud
• collaborated with DOJ on the strategic
risks in the program. GAO also reported that all
assignment of 12 term-appointed assistant
six of its October 2021 recommendations to ETA
United States attorneys assigned solely to
for UI fraud risk assessment remain open. GAO
prosecute UI fraud;
is currently attempting to determine an estimate
of fraud in the UI program, having reported a • established a multi-disciplinary Pandemic
potential minimum of $60 billion in pandemic related Rapid Response Team within the OIG;
fraudulent UI payments. • appointed a National UI Fraud Coordinator to
manage our national investigative response
OIG PANDEMIC INVESTIGATIVE WORK to UI fraud;
• appointed seven Regional UI Fraud
The volume of UI investigative matters currently
Coordinators to partner with SWAs and
under review is unprecedented in the OIG’s
federal, state, and local law enforcement on
history. Prior to the pandemic, the OIG opened
UI fraud matters in their geographic areas
approximately 100 UI investigative matters
of responsibility;
annually. Since April 1, 2020, the OIG has
opened over 200,000 investigative matters • leveraged resources from the Council of
concerning UI fraud. That is an increase of more the Inspectors General on Integrity and
than 1,000 times in the volume of UI work that Efficiency, Pandemic Response Accountability
we are facing. UI investigations now account for Committee (PRAC);
approximately 96 percent of the OIG investigative • collaborated with state auditors to help
develop their audit strategies for the
86
GAO, Unemployment Insurance: Data Indicate CARES Act UI programs;
Substantial Levels of Fraud during the Pandemic; DOL
Should Implement an Antifraud Strategy, Report No. 87
More information on the National UI Fraud Task Force is
GAO-23-105523 (December 22, 2022), available at: available at: https://www.justice.gov/coronavirus/national-
https://www.gao.gov/products/gao-23-105523 unemployment-insurance-fraud-task-force
Semiannual Report to Congress | October 1, 2022–March 31, 2023 43
Worker and Retiree Benefit Programs
• joined the DOJ COVID-19 Fraud Enforcement program, the OIG has vigorously pursued COVID-19
Task Force;88 pandemic related UI fraud. In fact, we announced
• implemented an extensive outreach and education in September 2022 that OIG investigations had
program targeted to SWAs, the Department, resulted in more than 1,000 individuals being
financial institutions and their associations, law charged with crimes involving UI fraud since
enforcement agencies, and the public to inform March 2020.91 This number has risen.
and raise awareness regarding fraud trends, best
practices, red flags, and more;89 and As of March 2023, our pandemic investigations
have resulted in upwards of 700 search warrants
• joined DOJ’s Pandemic Fraud Strike Force
executed and over 1,300 individuals charged with
Teams initiative.90
crimes related to UI fraud. These charges resulted
in more than: 700 convictions; 13,000 months of
As the primary federal law enforcement agency
incarceration; and over $920 million in investigative
responsible for providing oversight of the UI
monetary results. We have also referred over
29,000 fraud matters that do not meet federal
88
DOJ Office of Public Affairs, “Attorney General prosecution guidelines back to the states for
Announces Task Force to Combat COVID-19 Fraud,” further action.
press release (May 17, 2021), available at: https://www.
justice.gov/opa/pr/attorney-general-announces-task-force- In one recent OIG investigation, a YouTube rapper
combat-covid-19-fraud was sentenced to 77 months in prison and was
89
The OIG has issued or assisted in issuing the following ordered to pay more than $700,000 in restitution for
alerts: UI fraud consumer protection guide, UI fraud his role in a UI fraud scheme, which caused more
investigations guide, UI fraud alert for state/local law than 90 fraudulent PUA claims to be filed with the
enforcement, UI text message phishing alert, UI fraud California Employment Development Department
and phishing alert, UI fraud and identity theft alert, and (EDD). The rapper previously bragged about his
UI detection and mitigation alert for financial institutions. ability to defraud the EDD in a music video posted
These are available at: https://www.oig.dol.gov/OIG_ on YouTube and in postings on his Instagram
Pandemic_Response_Portal.htm. account. In the music video called “EDD,” he
90
The OIG joined the DOJ and other federal law boasted about using the fraudulently obtained debit
enforcement partners as participants on the DOJ’s cards and getting rich quickly.
COVID-19 Strike Force Teams initiative, announced on
September 14, 2022. These Strike Force teams operated 91
“Labor Watchdog’s Pandemic Work Results in More Than
out of U.S. Attorneys’ Offices in the Southern District of 1,000 Individuals Charged with UI Fraud and $45.6 Billion
Florida, the District of Maryland, and a joint effort between Identified in Potentially Fraudulent Pandemic UI Benefits,”
the Central and Eastern Districts of California. They press release (September 22, 2022), available at: https://
used dedicated special agents from the OIG to focus on www.oig.dol.gov/public/Press%20Releases/DOL-OIG%20
significant fraud schemes with an international nexus. DOJ, Pandemic%20Work%20Results%20in%20More%20
“Department Announces COVID-19 Fraud Strike Force Than%201000%20Individuals%20Charged%20with%20
Teams,” press release (September 14, 2022), available UI%20Fraud.pdf. For more details about OIG investigations,
at: https://www.justice.gov/opa/pr/justice department please visit: https://www.oig.dol.gov/OIG_Pandemic_
announces covid 19-fraud-strike-force-teams Response_Portal.htm.
44 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
Working with Domestic and
International Law Enforcement Partners
Early in the pandemic, the OIG worked with the
DOJ to create the National UI Fraud Task Force,
a nine-agency federal task force focused on law
enforcement intelligence sharing, deconfliction, joint
national and regional messaging, and the effective
use of investigative and prosecutorial resources. The
National UI Fraud Task Force has also worked closely
with partners at the International Organized Crime
Intelligence and Operations Center (IOC-2) to develop
a deconfliction process to coordinate investigative
information across federal law enforcement agencies.
Through data analytics and a leads generation
process, the National UI Fraud Task Force and
IOC-2 partner agencies have identified significant
fraud committed against the UI program by domestic
and international criminal organizations. Many of
During the execution of a UI fraud search warrant, OIG these include street-level criminal organizations with
agents recovered a ballistic vest, UI debit cards, and deadly ties to illegal guns and drugs. These investigations
weapons, including three ghost guns, which are privately are ongoing and actively being investigated through
made, non-serialized firearms that are untraceable. the National UI Fraud Task Force, the COVID-19
In another OIG investigation, a Federal Bureau of Fraud Enforcement Task Force, and the COVID-19
Prisons inmate, already incarcerated on an unrelated Strike Force Teams initiative.
fraud conviction, was sentenced to 41 months in prison
in connection with a scheme to defraud multiple SWAs The OIG has been very engaged on DOJ’s
and the U.S. Small Business Administration of more COVID-19 Fraud Enforcement Task Force.
than $2.2 million in COVID-19 pandemic assistance. We have representation on its subcommittees
The inmate conspired with multiple individuals to involving communication, forfeiture, corporations
submit more than 240 fraudulent UI benefit claims to and large business fraud, and data, and we co-chair
over 20 SWAs. The inmate also successfully obtained the task force’s Criminal Enterprise Subcommittee.
a fraudulent Paycheck Protection Program loan of
more than $20,000. The inmate participated in the The OIG has also participated in other initiatives.
scheme within the confines of the Federal Correctional For example, since 2020, the OIG has supported
Complex in Allenwood, Pennsylvania, and members DOJ’s annual Money Mule Initiative,92 which aimed
of the conspiracy transferred portions of the fraud 92
More information about DOJ’s Money Mule Initiative
proceeds to the inmate via wire transfer into the
is available at: https://www.justice.gov/civil/consumer-
inmate’s prison commissary account.
protection-branch/money-mule-initiative
Semiannual Report to Congress | October 1, 2022–March 31, 2023 45
Worker and Retiree Benefit Programs
to raise awareness about and suppress money mule mule activity and erroneous 1099-G forms that
activity. Money mules are people who, at someone were issued to victims of UI fraud. The OIG has
else’s direction, receive and move money obtained also worked with the PRAC, DOJ, and the Secret
from victims of fraud. The OIG conducted extensive Service to create a web-based survey where
internal and external outreach regarding money financial institutions can more broadly report UI and
mules and identified and targeted money mules in other types of pandemic fraud. This information
coordination with DOJ and other partner agencies. is being collected by the PRAC, analyzed by its
partners, and, if appropriate, sent to field personnel
In addition, the OIG issued alerts to financial for further action.
institutions about UI fraud both on its own and jointly
with its partners, such as the U.S. Secret Service The OIG, through its membership in IOC-2, has
(Secret Service), the Financial Crimes Enforcement also been engaged with several allied national
Network, and the National UI Fraud Task Force. police agencies to strategize about pandemic-
One such joint OIG/Secret Service alert 93 served related fraud and how to best establish practices to
as a framework for the recovery of millions of share information. The issue of pandemic fraud has
dollars of fraudulent UI funds being held by financial not only been an issue for the United States, but it
institutions. Later, in 2021, the OIG authored a has also negatively impacted our foreign partners’
National UI Fraud Task Force alert issued through pandemic programs. We have conducted outreach
the Financial Crimes Enforcement Network, to and education related to pandemic fraud, including
financial institutions requesting they identify funds UI fraud, with our Five Eyes partner countries as
they froze due to suspicion of fraud. The OIG participants on the International Public Sector
created a process with DOJ and the Secret Service Fraud Forum.94
to collect that data and work with those financial
institutions to return fraudulent funds to SWAs. The OIG, IOC-2, and our federal law enforcement
The OIG and its law enforcement partners are partners have identified numerous instances of
working with hundreds of financial institutions in international organized criminal groups engaged in
response to our request. UI fraud. We will continue to work with our domestic
and international law enforcement partners on
The PRAC has also played a pivotal role in these matters.
amplifying the ability of OIGs to share information
and conduct internal and external outreach to 94
Five Eyes is an intelligence alliance. The Five Eyes
stakeholders that have been impacted by pandemic countries include Australia, Canada, New Zealand, the
fraud. For example, the OIG worked with the United Kingdom and the United States. The International
PRAC on social media tool kits related to money Public Sector Fraud Forum consists of representatives
from organizations from the Five Eyes countries, whose
93
Secret Service and OIG, “Detection and Mitigation of collective aim is to share best and leading practices in
Unemployment Insurance Fraud Guidance for Financial fraud management and control across public borders.
Institutions,” July 6, 2020, available at: https://www.neach. International Public Sector Fraud Forum guidance is
org/Portals/0/USSS-DOL%20OIG%20UI%20Advisory%20 available at: https://www.gov.uk/government/publications/
7_6_2020.pdf international-public-sector-fraud-forum-guidance.
46 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
OIG PANDEMIC OVERSIGHT WORK 4-phased pandemic response oversight plan will
include recommendations for DOL to strengthen and
In April 2020, shortly after CARES Act enactment, enhance programs prior to the start of emergencies.
we published our Pandemic Response Oversight We published two plan updates in Spring 2021 and
Plan95 detailing how the OIG would conduct its Spring 2022, with another planned for FY 2023.
pandemic oversight, with a significant focus on the
UI program. We designed our four-phased plan to At the start of the pandemic, we examined past
provide recommendations to DOL to address current audits including those related to the Recovery
and emerging vulnerabilities with the pandemic Act and the Disaster Unemployment Assistance
response and to prevent similar vulnerabilities from program,96 and we assessed comparable lessons
hampering preparedness for future emergencies learned. As a result, in April 2020, we issued the
(see Figure 6).
Figure 6: 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
Phases 1 and 2, which are complete, focused on
DOL’s plans, guidance, and initial implementation
96
Examples include: Recovery Act: DOL Could Have Better
of administration and oversight activities. Phase Monitored the Use of Re-employment Services Funds to
3 audit work, assessing program results and Adhere to Standards for Transparency and Accountability,
emerging issues, is ongoing. Our Phase 4 Report No. 18-11-005 03 315 (March 31, 2011), available
work plans include summarizing our pandemic at: https://www.oig.dol.gov/public/reports/oa/2011/18-
response oversight work and reporting on lessons 11-005-03-315.pdf; Recovery Act: States Challenged
learned related to UI, worker safety and health, in Detecting and Reducing Unemployment Insurance
and employment and training. The results of our Improper Payments, Report No. 18-16-005-03-315
(August 2, 2016), available at: https://www.oig.dol.gov/
95
Our Pandemic Response Oversight Plan (updated public/reports/oa/2016/18-16-005-03-315.pdf; and Audit of
March 21, 2022) is available at: https://www.oig.dol. Florida Disaster Unemployment Assistance Grant Number
gov/public/oaprojects/Updated%20Pandemic%20 1359 - DR (March 26, 2004), Report No. 04-04-004-03-315
Response%20Oversight%20Plan%202022%20for%20 (March 26, 2004), available at: https://www.oig.dol.gov/
Publication.pdf. public/reports/oa/2004/04-04-004-03-315.pdf.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 47
Worker and Retiree Benefit Programs
previously noted advisory report97 identifying six self-certification in the PUA program. In our
initial areas of concern for ETA and the states view, reliance on such self-certifications
to consider while implementing CARES Act UI rendered the PUA program highly vulnerable
provisions: to improper payments including fraud.
1. state preparedness, specifically the issues of Subsequent to our work, Congress took action
staffing and system capabilities, to require claimants to submit documentation
2. initial eligibility determination, substantiating employment or self employment
3. benefit amount, to improve states’ abilities to ensure proper
4. return to work, claimant eligibility and to mitigate fraud through
5. improper payment detection and recovery, and the Consolidated Appropriations Act, 2021.
6. program monitoring. • In August 2020, we reported99 states did not use
existing tools effectively to combat fraud and
Our identification of these areas represents at least other improper payments. We also stated ETA
16 years of work relating to DOL’s UI program, should work with the OIG to obtain access to
including the responses to past disasters. The state claimant data that could be used to identify
advisory report outlined years of weaknesses and disrupt fraudulent schemes that threaten the
and recommendations identified by the OIG to integrity of UI programs, including those under
strengthen the UI program. Many of these issues the CARES Act.
came to fruition. DOL and states must apply
• In May 2021, we reported100 that DOL and states
lessons learned during the COVID-19 pandemic to
struggled to implement the three pandemic UI
correct additional weaknesses identified prior to the
programs that posed the greatest risk for fraud,
next disaster.
waste, and abuse: PUA, PEUC, and FPUC.
Specifically, DOL’s guidance and oversight did
We have issued several subsequent reports,
not ensure states: implemented the programs
including alert memoranda addressing urgent
and paid benefits promptly, performed required
concerns, involving the UI program, such as
and recommended improper payment detection
the following:
and recovery activities, or reported accurate
• In May 2020, we issued an alert memorandum98 and complete program activities. This occurred
describing our concerns regarding claimant primarily because states’ IT systems were not
modernized, staffing resources were insufficient
97
Advisory Report: CARES Act: Initial Areas of Concern
Regarding Implementation of Unemployment Insurance
Provisions, Report No. 19-20-001-03-315 (April 21, 2020), 99
COVID-19: More Can Be Done to Mitigate Risk to
available at: https://www.oig.dol.gov/public/reports/ Unemployment Compensation Under the CARES Act,
oa/2020/19-20-001-03-315.pdf Report No. 19-20-008-03-315 (August 7, 2020), available
98
Alert Memorandum: The Pandemic Unemployment at: https://www.oig.dol.gov/public/reports/oa/2020/19-20-
Assistance Program Needs Proactive Measures to Detect 008-03-315.pdf
and Prevent Improper Payments and Fraud, Report No. 100
COVID-19: States Struggled to Implement CARES
19-20-002-03-315 (May 26, 2020), available at: https:// Act Unemployment Insurance Programs, Report No.
www.oig.dol.gov/public/reports/oa/2020/19-20-002-03- 19-21-004-03-315 (May 28, 2021), available at: https://www.
315.pdf oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
48 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
to manage the increased number of new claims, improper target rate published in FY 2020, and
and, according to state officials, ETA’s guidance did not report an improper payment rate of less
was untimely and unclear. than 10 percent.
• In November 2021, we issued101 the Department
a qualified opinion, for the first time in 25
years, on its consolidated financial statements
and reported one material weakness related
to pandemic-related UI funding. There were
two primary causes for this issue: (1) the
Department being unable to support more than
$47 billion it estimated for UI claims in appeal
or unprocessed as of September 30, 2021, and
(2) unreliable reporting of more than $4 billion in
UI benefit overpayments due to certain states’
non-reporting of UI overpayment activity.
• In July 2022, we reported102 that the
Department did not meet the requirements
for compliance with the Payment Integrity
Information Act of 2019 for FY 2021. The • In August 2022, we issued an alert
Payment Integrity Information Act of 2019 memorandum103 describing our concerns
requires federal agencies to identify programs regarding states either not submitting
susceptible to significant improper payments, required CARES Act UI program reports to
estimate the improper payments for those ETA or reporting zero activity. We found the
programs, and report on actions to reduce reporting to be deficient for the eight reports
the improper payments in those programs. we examined. For the PUA program, which
While DOL met three of the six compliance was highly susceptible to improper payments
requirements for UI programs, we found DOL including fraud, seven states reported
did not meet the other three requirements: it zero overpayments for all months during
did not publish all improper payment estimates, the entire program period of March 2020
did not demonstrate improvement from the through September 2021. Without accurate
state performance information, Congress
and ETA are not able to: fully assess state
101
FY 2021 Independent Auditor’s Report on the DOL activities, mitigate the risk of overpayments
Financial Statements, Report No. 22-22-003-13-001 including fraud, identify program weaknesses,
(November 19, 2021), available at: https://www.oig.dol.
gov/public/reports/oa/2022/22-22-003-13-001.pdf 103
Alert Memorandum: The Employment and Training
102
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 | October 1, 2022–March 31, 2023 49
Worker and Retiree Benefit Programs
or establish lessons learned that may be • In September 2022, we reported105 ETA
leveraged to improve states’ performance under and states did not protect pandemic related
similar, future temporary programs. UI funds from historic levels of improper
• As of September 2022, we have issued payments including fraud nor from payment
three alert memoranda104 that identified a delays. We attributed this to four causes: lack
total of $45.6 billion in potentially fraudulent of eligibility testing, untimely oversight, PUA
UI benefits paid from March 2020 through self-certification, and the 3-month suspension
April 2022 in the four specific high-risk areas of a primary oversight tool. Additionally,
previously mentioned, to individuals with DOL’s interpretation of its regulations on
Social Security numbers: (1) filed in multiple data access hindered the OIG’s timely and
states, (2) of deceased persons, (3) of federal complete access to UI claims data to assist in
prisoners, and (4) used to file UI claims with detecting and deterring fraud. We estimated
suspicious email accounts. In the second that, in the initial 6 months after the CARES
and third memoranda, we recommended ETA Act passed, 4 states paid $30.4 billion in PUA
implement immediate measures to ensure and FPUC benefits improperly including $9.9
ongoing OIG access to UI claims data for billion paid to likely fraudsters. Further, based
audit and investigative purposes and expedite on our analysis of ETA’s timeliness reports, at
regulatory updates to require ongoing least 6.2 million American workers nationwide
disclosures of UI information to the OIG for waited a month or more for pandemic-related
audits and investigations of federal programs. UI benefits during the year after the CARES
Act passed.
• In December 2022, for the second straight
104
(1) Alert Memorandum: The Employment and Training year, we issued106 the Department a qualified
Administration (ETA) Needs to Ensure State Workforce opinion on its consolidated financial statements
Agencies (SWA) Implement Effective Unemployment and reported one material weakness related
Insurance Program Fraud Controls for High Risk Areas, to pandemic-related UI funding. There were
Report No. 19-21-002-03-315 (February 22, 2021), two primary causes for this issue: (1) the
available at: https://www.oig.dol.gov/public/reports/ Department was unable to support $7.9 billion
oa/2021/19-21-002-03-315.pdf; it estimated in remaining pandemic-related
(2) Alert Memorandum: The Employment and Training UI claims in appeal or unprocessed as of
Administration Needs to Issue Guidance to Ensure State
Workforce Agencies Provide Requested Unemployment 105
COVID-19: ETA and States Did Not Protect Pandemic-
Insurance Data to the Office of Inspector General, Report
Related UI Funds from Improper Payments including Fraud
No. 19-21-005-03-315 (June 16, 2021), available at:
or from Payment Delays, Report No. 19-22-006-03-315
https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-
(September 30, 2022), available at: https://www.oig.dol.
03-315.pdf; and
gov/public/reports/oa/2022/19-22-006-03-315.pdf
(3) Alert Memorandum: Potentially Fraudulent 106
FY 2022 Independent Auditor’s Report on the DOL
Unemployment Insurance Payments in High-Risk Areas
Financial Statements, Report No. 22-23-002-13-001
Increased to $45.6 Billion, Report No. 19-22-005-03-315
(December 13, 2022), available at: https://www.oig.dol.
(September 21, 2022), available at: https://www.oig.dol.
gov/public/reports/oa/2023/22-23-002-13-001.pdf
gov/public/reports/oa/2022/19-22-005-03-315.pdf
50 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
September 30, 2022, and (2) the Department OIG RECOMMENDATIONS
was unable to support the $3.5 billion it
estimated in remaining pandemic-related UI The OIG has made several recommendations to
benefit overpayment receivables. DOL and Congress to improve the efficiency and
integrity of the UI program. While action has been
taken to resolve some recommendations, further
action is needed to close them. Summaries of
key recommendations that remain open follow.
Additionally, we have highlighted three high
priority recommendations for Congress at the end
of the section.
OIG Recommendations to DOL
OIG Access to Claim and Wage Data
• In March 2023, we issued an alert • Implement immediate measures to ensure
memorandum107 describing our concerns ongoing OIG access to UI claimant data
regarding the identity verification service and wage records for all audit and
contractors that states hired to combat imposter investigative purposes
claims being filed with stolen or synthetic108
• Expedite regulatory updates to require
identities. Approximately 45 percent of states
ongoing disclosures of UI information to
hired identity verification service contractors
the OIG for all audits and investigations of
that used facial recognition technology.
federal programs
However, facial recognition technology has
a demonstrated racial and gender bias.
Staffing and Systems for Prompt Payments
Additionally, some states did not include privacy
during Emergencies
security measures based on recommendations
by the National Strategy for Trusted Identities in • Continue to work with states to develop,
Cyberspace necessary to protect UI claimants’ operate, and maintain a modular set of
biometric data. technological capabilities (i.e., staffing and
replacing legacy IT systems) to modernize the
delivery of UI benefits to sufficiently manage
107
Alert Memorandum: ETA and States Need to Ensure
and process sudden spikes in claims volume
the Use of Identity Verification Service Contractors Results
during emergencies or high unemployment
in Equitable Access to UI Benefits and Secure Biometric
Data, Report No. 19-23-005-03-315 (March 31, 2023), • Conduct a study to assess:
available at: https://www.oig.dol.gov/public/reports/ o the technological needs of the UI programs
oa/2023/19-23-005-03-315.pdf to determine the capabilities that need to be
108
A synthetic identity is a false identity created from a upgraded or replaced,
combination of real and fake information.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 51
Worker and Retiree Benefit Programs
o the features necessary to effectively respond • Examine the effectiveness of the Benefit
to rapid changes in the volume of claims in Accuracy Measurement109 system contact
times of emergency or high unemployment, verification process to ensure it reflects the
o the capabilities needed to ensure effective current methods claimants use to seek work
and equitable delivery of benefits, and
Coordination with Congress
o the capabilities to minimize fraudulent activities
• Work with Congress to establish legislation requiring
• Develop standards for providing clear and
SWAs to cross-match in high-risk areas, including
reasonable timeframes to implement temporary
with individuals with Social Security numbers: filed
programs to establish expectations for prompt
in multiple states, of deceased persons, of federal
benefit payments to claimants
prisoners, and with suspicious email accounts
Controls for Improper Payments
OIG Recommendations to Congress
• Establish effective controls, in collaboration
with SWAs, to mitigate fraud and other improper In addition, the OIG encourages Congress to consider
payments to potentially ineligible claimants, and adopt DOL proposals to aid the Department’s
including multistate claimants, claimants who efforts to combat improper payments in the UI
used Social Security numbers of deceased program. In its FY 2024 Congressional Budget
persons and federal prisoners, and claimants Justification,110 the Department proposed provisions
with suspicious email accounts designed to provide new and expanded tools and
• Include CARES Act UI transactions in the controls for states to help ensure workers are properly
Benefit Accuracy Measurement system paid and to prevent improper payments, including
or develop an alternative methodology to fraud in the UI system.
reliably estimate improper payments for
those programs 109
The Benefit Accuracy Measurement system, commonly
• For DOL financial statements, design and known as BAM, is a quality control statistical survey used
implement controls to ensure management’s to identify errors and support corrective action in the
reviews of [UI program] estimates are performed state UI system. It usually focuses on the three major UI
at a sufficient level of detail and adequate programs: regular UI, Unemployment Compensation for
documentation is maintained to assess the Federal Employees, and Unemployment Compensation
reasonableness of the estimates for Ex-service members. The data are an estimate of the
total improper payments in the UI program, in each state
and the nation as a whole, based on a statistically valid
Guidance and Assistance to States
examination of a sample of paid and denied claims.
• Assist states with claims, overpayment, and 110
U.S. Department of Labor, FY 2024 Congressional
fraud reporting to create clear and accurate Budget Justification, Employment and Training
information. Then, use the overpayment and Administration, State Unemployment Insurance and
fraud reporting to prioritize and assist states with Employment Service Operations, available at: https://
fraud detection and recovery www.dol.gov/sites/dolgov/files/general/budget/2024/CBJ-
2024-V1-07.pdf
52 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
These are similar to DOL proposals included in prior Highlighted High-Priority
DOL budget requests that would help address UI Recommendations for Congress
program integrity and the high improper payment rates
• Extend the statute of limitations for fraud
in the UI program. The proposals from the President’s
involving pandemic-related UI programs
FY 2024 budget request include the following:
• Ensure DOL and the OIG have ongoing, timely,
• require SWAs to cross-match UI claims against
and complete access to UI claimant data and
the National Directory of New Hires;
wage records
• require SWAs to cross-match UI claims with
• Ensure effective payment integrity controls to
a system(s)…that contains information on
reduce improper payments in all UI programs
individuals who are incarcerated;
including temporary ones, such as broader
• require states to disclose information to the OIG; requirements for mandatory cross-matching
• allow SWAs to retain up to 5 percent of
recovered fraudulent UI overpayments for DOL’S PROGRESS
program integrity use;
• require SWAs to use [UI] penalty and interest The Department has emphasized the progress it
collections solely for UI administration; and has made in addressing challenges with the UI
program. According to DOL, it has instituted efforts
• permit the Department to collect and store
to focus on program integrity when implementing
states’ UI claimant data.
the pandemic-related UI programs. These efforts
include establishing agreements with states to
These legislative proposals are consistent with
comply with all applicable requirements to receive
previous OIG reporting to improve the UI program.
funds, issuing operating guidance, and providing
technical assistance to SWAs individually and through
The OIG has also recommended that
webinars. DOL has included requirements for SWAs
Congress ensure DOL and the OIG have
to focus on program integrity in its guidance relevant
ongoing, timely, and complete access to
to UI funds. In addition, DOL has reinforced the need
UI claimant data and wage records for our
for SWAs to actively work with the OIG to address
respective oversight responsibilities.
fraud in the UI program. As previously mentioned,
GAO recently reported that DOL has yet to develop
The OIG has also recommended that Congress
an antifraud strategy to ensure it addresses the
ensure DOL and the OIG have ongoing, timely,
most significant fraud risks facing the UI system.111
and complete access to UI claimant data and wage
The Department reported that this process is underway
records for our respective oversight responsibilities.
using GAO’s fraud risk framework to strengthen the
In addition, in our November 2022 Semiannual
Department’s existing fraud risk management activities.
Report to Congress, the OIG recommended that
Congress extend the statute of limitations for 111
GAO, Unemployment Insurance: Data Indicate
fraud involving pandemic-related UI programs and
Substantial Levels of Fraud during the Pandemic; DOL
authorize OIG participation in asset forfeiture funds
Should Implement an Antifraud Strategy, Report No.
to combat UI fraud and other crimes.
GAO-23-105523 (December 22, 2022), available at:
https://www.gao.gov/products/gao-23-105523
Semiannual Report to Congress | October 1, 2022–March 31, 2023 53
Worker and Retiree Benefit Programs
The Department has facilitated the OIG’s access access to UI programs, the Tiger Teams initiative
to UI data but only for benefit weeks covered by to consult with states in improving UI systems and
CARES Act programs and related extensions. processes, and the opportunity to participate in its
In addition, ETA has required grant recipients to UI IT Modernization Project Claimant Experience
share state UI data with the OIG as a condition of Pilot.113 The Department stated that two states
receiving fraud prevention grants offered under began the Claimant Experience Pilot and the
ARPA. However, the grant period requiring OIG Office of Unemployment Insurance Modernization
access to this data ends on December 31, 2025, is working with states on technology and process
and all states would need to receive the grants improvement projects and sharing those with the
to provide the necessary access. The Inspector rest of the UI system.
General is authorized to have timely access without
such constraints to this data under the Inspector OIG ONGOING AND PLANNED WORK
General Act of 1978, as amended, and needs
access to all UI program data to more effectively The OIG’s efforts to strengthen and protect the
do its job. UI program continue. In addition to working with
our law enforcement partners to combat fraud in
On August 31, 2021, the Department announced the program, we will be issuing additional audit
the establishment of the Office of Unemployment reports covering critical areas of concern and
Insurance Modernization to work with state and opportunities for improvement in the UI program.
federal partners to modernize and reform the Planned and in-progress114 Phase 3 audit
UI system.112 According to DOL, the Office of work includes:
Unemployment Insurance Modernization will • ETA’s efforts to ensure UI program integrity;*
provide oversight and management of the $2 billion
• DOL’s oversight of emergency UI administrative
allotted to UI initiatives by ARPA to prevent and
transfers to states;*
detect fraud, promote equitable access, ensure
timely benefit payments, and reduce backlogs. • ETA and state efforts to detect and recover
overpayments;*
The Department also noted it has announced and • adequacy of state IT resources;*
provided grant opportunities to states, including
• adequacy of state staffing resources;*
funds for pilot states to engage community-based
organizations to help workers learn about UI • effectiveness of programs for nontraditional
benefits and related services. These opportunities claimants;*
also support state agencies in delivering timely • effectiveness of the Temporary Full Federal
benefits to workers. DOL stated it has also made Funding program;*
progress on providing further grant opportunities, • effectiveness of the Short-Time Compensation
such as for: fraud prevention, promoting equitable program;*
112
For information about the strategic vision outlined 113
For more details, Training and Employment Notice
in August 2021 UI modernization plans, a fact sheet No. 16-21 is available at: https://www.dol.gov/sites/dolgov/
is available at: https://oui.doleta.gov/unemploy/pdf/ files/ETA/advisories/TEN/2021/TEN_16-21.pdf.
FactSheet_UImodernization.pdf. 114
Audits in progress are marked with an asterisk (*).
54 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
• effectiveness of the Mixed Earners Alert Memorandum: ETA and States
Unemployment Compensation program;* Need to Ensure the Use of Identity
• effectiveness of the Emergency Unemployment Verification Service Contractors
Relief for State and Local Governmental Results in Equitable Access to UI
Entities, Certain Nonprofit Organizations, and
Benefits and Secure Biometric Data
Federally Recognized Indian Tribes program;*
• PRAC Case Study Project on federal pandemic We issued an alert memorandum on urgent equity
response funds in select geographic areas;* and security concerns in the UI program because
• ETA and states’ efforts to address multistate these areas are a crucial part of effective and efficient
claimants;* distribution of UI benefits, especially in times of crisis.
Resulting from the economic impact of the COVID-19
• ETA and states’ efforts to address claimants
pandemic, UI programs have become a target for
using the Social Security numbers of deceased
fraud with significant numbers of imposter claims being
persons;*
filed with stolen or synthetic117 identities. To combat
• ETA and states’ efforts to address claimants imposter claims, almost half of the SWAs reported
using the Social Security numbers of federal hiring identity verification service contractors that
prisoners;* used facial recognition technology. However, we are
• ETA and states’ efforts to address claimants with concerned that the use of identity verification service
suspicious email accounts;* contractors may not result in equitable and secure
• concerns over data warehousing and analytics access to UI benefits in the processing of UI claims.
to prevent UI fraud;* Our concerns are based on the following risks.
• mandatory audit of DOL’s FY 2022 Compliance
Regarding equity, in 2019, NIST’s Information
with the Payment Integrity Information Act of
Technology Laboratory reported it found empirical
2019;*115
evidence that the algorithms118 used in current facial
• DOL and states’ oversight of UI claimants return recognition technology have a racial and gender
to work; bias. To assess identity, facial recognition systems
• ARPA Equity Grants; and perform facial detection, which identifies the location
of key facial features such as the eyes and nose.
• impact of waivers on UI overpayments, fraud
Facial recognition results depend on how the
investigations, and recoveries.
systems are designed, developed, tested, deployed,
and operated. There is no single, standardized
For more information about the OIG’s work, please
system design for facial recognition technologies.
visit our online Pandemic Response Portal.116
117
A synthetic identity is a false identity created from a
115
A large portion of this annual audit focuses on UI.
combination of real and fake information.
116
Our Pandemic Response Portal is available at: https://
118
An algorithm, according to Cambridge Dictionary, is a
www.oig.dol.gov/OIG_Pandemic_Response_Portal.htm.
set of mathematical instructions or rules that, especially if
given to a computer, will help to calculate an answer to
a problem.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 55
Worker and Retiree Benefit Programs
Expanding on its 2019 findings, NIST issued a 2022 Strategy for Trusted Identities in Cyberspace122
study119 that found further bias, stating that it has necessary to protect UI claimants’ biometric data,123
become apparent that false negative120 inequities which is a form of PII.124 We identified 5 primary
are substantially due to poor photography of certain issues with the contracts between the SWAs and
groups including under-exposure of dark-skinned 10 different identity verification service contractors
individuals. Claimants that do not have advanced (see Table 2).
technological skills or use outdated technology
are less likely to be able to submit a high-quality Contractors that use facial recognition technology
photograph and pass facial recognition eligibility have access to a large amount of highly-sensitive PII.
procedures. Further, in June 2022, the GAO The risks associated with a biometric data breach
reported121 findings of racial disparity in benefit raise serious privacy concerns for both the public
receipt in the PUA program. and the government. Compared to a username or
password, which could be changed after a breach,
Regarding security, our review of agreements
between SWAs and identity verification service 122
The National Strategy for Trusted Identities in
contractors indicated that up to 15 of 24 (63 percent) Cyberspace is a federal government initiative launched in
states had contracts that did not include the privacy 2011 to encourage private sector actors to adopt measures
security measures recommended by the National enhancing privacy of PII on the internet, including
biometric data.
119
Face Recognition Vendor Test (FRVT) Part 8: 123
NIST defines biometrics as the measurement of
Summarizing Demographic Differentials. NISTIR 8429 physiological characteristics like—but not limited to—
(July 2022), https://nvlpubs.nist.gov/nistpubs/ir/2022/NIST. fingerprints, iris patterns, or facial features that can be
IR.8429.ipd.pdf used to identify an individual.
120
NIST assesses the accuracy of facial recognition 124
The Department of Labor defines PII as the following:
algorithms by measuring the two classes of error the any representation of information that permits the identity
software can make: false positives and false negatives. of an individual to whom the information applies to be
A false positive means the software wrongly considered reasonably inferred by either direct or indirect means.
photographs of two different individuals to show the same Further, PII is defined as information: (i) that directly
person. A false negative means the software failed to match identifies an individual (e.g., name, address, social security
two photographs that, in fact, show the same person. number or other identifying number or code, telephone
In the context of UI benefits, a false positive would mean number, email address…) or (ii) by which an agency
an ineligible claimant would be identified as a legitimate intends to identify specific individuals in conjunction with
claimant for benefits and a false negative would mean an other data elements, i.e., indirect identification. (These
eligible claimant would be identified as a non-legitimate data elements may include a combination of gender, race,
claimant for benefits. birth date, geographic indicator, and other descriptors).
121
Government Accountability Office, Pandemic Additionally, information permitting the physical or online
Unemployment Assistance: Federal Program Supported contacting of a specific individual is the same as [PII].
Contingent Workers Amid Historic Demand, but DOL This information can be maintained in paper, electronic,
Should Examine Racial Disparities in Benefit Receipt, or other media. Guidance on the Protection of Personally
GAO-22-104438 (June 7, 2022), https://www.gao.gov/ Identifiable Information, last accessed November 15, 2022,
products/gao-22-104438 https://www.dol.gov/general/ppii
56 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
Table 2: States with Missing Contract Elements that May Affect Security
No. of States No. of States
with Missing that use Facial
Missing Element(s) % of Total
Contract Recognition
Elements Technology
No clear identification whether the contractor
18 24 75%
would use one to one or one to many matching*
Did not address the requirements for
15 24 63%
data storage**
Did not address the requirement for destroying
13 24 54%
or disposing of data collected**
No indication of the identity standards for
10 24 42%
facial recognition**
No indication of the method for compliance,
6 24 25%
audit, or verification**
* The use of one-to-one and one-to-many matching are not recommended National Strategy for Trusted Identities in
Cyberspace privacy protection measures. However, NIST identified separate bias issues associated with the different
types of matching. Therefore, states should ensure the matching type is clearly identified in contracts.
** These contract elements were based upon the privacy security measures recommended by the National Strategy for
Trusted Identities in Cyberspace.
Source: OIG review of identity verification service contracts
biometric data is at greater risk from a data breach. claimants entitled to receive UI benefits and of not
The nature of biometric data means that it cannot adequately safeguarding claimants’ PII. We made
be changed. three recommendations to ETA to provide additional,
specific guidance and to require SWAs to test their
These risks must be addressed and mitigated by systems for bias and design mitigation procedures.
appropriate oversight and guidance from ETA. While
ETA has issued guidance on identity verification and For more information, go to https://www.oig.dol.
also on UI benefit equity, ETA has provided minimal gov/public/reports/oa/2023/19-23-005-03-315.pdf,
guidance125 that specifically addresses facial Report No. 19-23-005-03-315 (March 31, 2023).
recognition technology in administering UI benefits.
Without comprehensive guidance, SWAs are at Los Angeles Man Sentenced to
risk of using technology that discriminates against More Than 24 Years in Prison for
$5.5 Million COVID Unemployment
125
The guidance where ETA refers to facial recognition Insurance Benefits Scam, Tax Fraud,
technology can be found in its Unemployment Insurance and Drug Trafficking
IT Security Guide, which refers SWAs to NIST Special
Publication 800-76-2. That publication contains technical On March 6, 2023, Edward Kim was sentenced to
specifications for biometric data for the performance of 292 months in federal prison for fraudulently
Personal Identity Verification cards. obtaining approximately $5.5 million in COVID-related
Semiannual Report to Congress | October 1, 2022–March 31, 2023 57
Worker and Retiree Benefit Programs
UI benefits by: using the identities of State of Federal Inmate Sentenced for Role
California prison inmates and other third parties; in Stealing More Than $2.2 Million in
trafficking fentanyl and methamphetamine; and
Pandemic Assistance Benefits
seeking to fraudulently obtain more than $356,000
in Economic Impact Payments. He was also ordered
On October 20, 2022, Cortney Shields, a Federal
to pay approximately $5.4 million in restitution to the
Bureau of Prisons inmate, was sentenced to
California EDD and more than $16,000 in restitution
41 months in prison, to be served consecutive
to the Internal Revenue Service.
to his current sentence on an unrelated fraud
conviction, in connection with a scheme to
From May 2020 to March 2021, Kim and his co-
defraud multiple SWAs and the U.S. Small
conspirators submitted more than 450 fraudulent
Business Administration of more than $2.2 million
UI claims to the California EDD using the names,
in COVID-19 pandemic assistance.
Social Security numbers, dates of birth, and other
PII of inmates and other victims who they knew
From approximately May 2020 through July 2021,
were ineligible for benefits. In furtherance of the
Shields conspired with multiple individuals to
scheme, Kim and his co-conspirators submitted
submit more than 240 fraudulent UI benefit claims
applications to the California EDD for UI benefits
to over 20 SWAs. He fraudulently obtained more
that falsely represented that the inmates and
than $2.2 million in UI benefits, primarily from
others were unemployed due to the pandemic.
the States of Michigan and California. Shields
He also entered false occupations on the claims
also successfully obtained a fraudulent Paycheck
and created various email addresses to monitor the
Protection Program loan from the U.S. Small
status of the applications. He knowingly listed false
Business Administration of more than $20,000.
mailing addresses on the applications, including his
Shields participated in the scheme within the
current and former addresses, in order to receive
confines of the Federal Correctional Complex in
California EDD UI debit cards containing UI funds.
Allenwood, Pennsylvania, where he was serving
Kim then utilized the California EDD UI debit cards
a sentence on an unrelated fraud case. Members
to withdraw the fraudulent funds at various
of the conspiracy transferred portions of the fraud
ATMs and bank branches. In total, he and his
proceeds to Shields via wire transfer into his
co-conspirators received approximately $5.5 million
Federal Bureau of Prisons commissary account.
in fraudulently obtained UI funds.
This is a joint investigation with the Federal Bureau
This is a joint investigation with the Internal
of Investigation (FBI), United States Postal Service
Revenue Service, Homeland Security
(USPS)-OIG, and U.S. Postal Inspection Service.
Investigations, the California EDD, the California
United States v. D-1 Cortney Shaquan Shields
Department of Corrections and Rehabilitation
(E.D. Michigan)
– Special Service Unit, the La Habra Police
Department, and the Hawaii Police Department.
United States v. Edward Kim (C.D. California)
58 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
Minnesota Women Plead Guilty to than $4.7 million to be paid to herself and others in
Wire Fraud for their Roles in Stealing the form of fraudulent UI benefits and small business
loan proceeds. Hughes fraudulently applied for more
Approximately $6 Million in Pandemic
than $2.4 million in pandemic-related funds, causing
Assistance Funds
more than $1.2 million to be paid to herself and
others in the form of fraudulent UI benefits and small
On October 13, 2022, Takara Hughes pled guilty
business loan proceeds.
to one count of wire fraud for fraudulently applying
for more than $2.4 million in pandemic-related
This is a joint investigation with the FBI and the
UI benefits and small business loans for herself
U.S. Postal Inspection Service. United States v.
and others.
Tequisha Solomon, and United States v. Takara
Hughes (D. Minnesota)
On December 13, 2022, Tequisha Solomon pled
guilty to one count of wire fraud for fraudulently
applying for more than $7.1 million in pandemic-related
YouTube Rapper Sentenced to
UI benefits and small business loans for herself 77 Months in Prison for Role in
and others. Unemployment Insurance
Fraud Scheme
Between June 2020 and January 2022, Solomon
and Hughes participated in a scheme to defraud On December 7, 2022, YouTube rapper Fontrell
pandemic-related assistance programs through the Antonio Baines, who is also known as “Nuke
filing of false UI applications and fraudulent U.S. Small Bizzle,” was sentenced to 77 months in prison
Business Administration loan applications in their and was ordered to pay more than $700,000 in
own names. Additionally, as part of the fraud scheme, restitution. He previously pled guilty to mail fraud
Solomon and Hughes also submitted numerous charges related to his role in a pandemic-related
fraudulent pandemic-related benefit claims on behalf UI fraud scheme.
of other people and charged a fee for submitting
those claims. Solomon and Hughes fraudulently From at least July 2020 to September 2020, he
submitted more than 200 and 40, respectively, false assisted in executing a scheme to submit, or cause
UI applications on behalf of others with various to be submitted, fraudulent UI benefit applications in
SWAs, including the California EDD and the State the names of others, to include identity theft victims.
of Minnesota’s Department of Employment and Baines utilized addresses to which he had access
Economic Development. Hughes also submitted at in Beverly Hills and Los Angeles, California, to take
least 30 fraudulent small business loan applications on possession of and use fraudulently obtained California
behalf of others for U.S. Small Business Administration EDD UI debit cards. This scheme caused more than
Economic Injury Disaster Loans and Paycheck 90 fraudulent PUA claims to be filed with the California
Protection Program loans, which were based upon EDD, resulting in attempted losses of more than
fake revenue figures and other falsifications. $1.2 million and actual losses of at least $700,000.
In total, Solomon fraudulently applied for more than Baines bragged about his ability to defraud the EDD
$7.1 million in pandemic-related funds, causing more in a music video posted on YouTube and in postings
Semiannual Report to Congress | October 1, 2022–March 31, 2023 59
Worker and Retiree Benefit Programs
on his Instagram account. In the music video called This is a joint investigation with the Internal
“EDD,” he boasted about using the fraudulently Revenue Service and U.S. Postal Inspection
obtained debit cards and getting rich quickly. Service. United States v. Juan Carlos Castro
Gonzalez (S.D. New York)
This is a joint investigation with the U.S. Postal
Inspection Service and the California EDD. United Michigan Man Sentenced for Role in
States v. Baines (C.D. California) Using Identities of Prison Inmates to
File Fraudulent Unemployment Claims
Bronx Man Sentenced to 40 Months
in Prison for Role in Pandemic-Related On December 2, 2022, Terrell Mason was
Unemployment Insurance and sentenced to 57 months in prison and was ordered
Tax Fraud Schemes to pay approximately $423,000 in restitution for
his role in a UI fraud scheme aimed at defrauding
On January 3, 2023, Juan Carlos Castro Gonzalez the State of Michigan and the federal government
was sentenced to 40 months in prison and was of the United States of funds earmarked for
ordered to pay more than $570,000 in restitution. unemployment assistance during the COVID-19
He previously pled guilty for his role in pandemic- pandemic. Mason previously pled guilty to
related UI and tax fraud schemes. The UI fraud committing wire fraud and aggravated identity theft
scheme resulted in more than $500,000 in actual for filing fraudulent UI claims.
losses and over $3.3 million in intended losses.
Mason used the identities of inmates in custody
From July 2019 to August 2021, Castro Gonzalez of the Federal Bureau of Prisons and the
worked with others to obtain fraudulent tax refunds Michigan Department of Corrections, knowing
and Economic Impact Payments from the Internal they were ineligible for such benefits.
Revenue Service, which were benefits under the He obtained the PII from the inmates themselves
CARES Act. Additionally, between June 2020 and based on his representations that he would
August 2021, he worked with others to fraudulently help repair their credit. Mason also purchased
obtain UI benefits. In furtherance of the scheme, inmates’ PII from websites on the dark web.
Castro Gonzalez submitted eligibility certifications His filing of fraudulent UI claims, and subsequent
to the New York State Department of Labor for false verification of the inmates’ continued
UI benefit applications that had been fraudulently eligibility, caused the Michigan Unemployment
submitted using the names and Social Security Insurance Agency to continue making benefit
numbers of victims who were unaware that such payments to the fraudulent accounts.
applications had been made using their personal
information. Once the applications were approved, This is a joint investigation with the Michigan
the funds were sent to specified bank accounts Unemployment Insurance Agency-Fraud
or to pre-paid debit cards, at least some of which Investigation Unit and the FBI. United States of
were controlled and received by Castro Gonzalez. America v. Terrell Dwayne Mason (E.D. Michigan)
60 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
Virginia Inmate Sentenced to 84 Former Mail Carrier and
Months in Prison for Role in Obtaining Co-Conspirator Sentenced in
Pandemic Unemployment Insurance Unemployment Insurance
Benefits for Other Inmates Fraud Scheme
On November 10, 2022, Bubble A. Jones, a former On December 12, 2022, Stephen Glover, a former
Virginia Department of Corrections inmate, was USPS mail carrier, and Travis McKenzie were
sentenced to 84 months in federal prison. He and his sentenced for their roles in a mail fraud scheme
family member co defendants were ordered to pay, that involved fraudulently obtaining more than
jointly and severally, nearly $300,000 in restitution to $250,000 in UI benefits. Glover was sentenced
the Virginia Employment Commission for their roles in to 41 months in prison and ordered to pay
a pandemic-related UI fraud scheme. approximately $151,000 in restitution. McKenzie
was sentenced to 41 months in prison and ordered
Between June and November 2020, Jones was to pay approximately $448,000 in restitution.
an inmate at the Nottoway Correctional Center in
Burkeville, Virginia, when he conspired with his From August 2020 to June 2021, Glover and
daughter, Kanaejah Parker, and her mother, Tamara McKenzie defrauded the California EDD out of
Parker, to execute a scheme to defraud the Virginia hundreds of thousands of dollars of COVID-related
Employment Commission by filing at least 27 UI funds by fraudulently applying for UI benefits.
fraudulent UI applications using inmates’ PII. Jones Glover provided McKenzie with addresses on
provided the PII of other inmates to the Parkers, his mail route, which were then used as mailing
and they then filed fraudulent UI applications addresses on the fraudulent UI applications filed
using the information. When the applications were with the California EDD using stolen identities.
processed and benefits paid out, Jones and the Based on the fraudulent claims, the California
Parkers provided some of the fraudulent benefits to EDD mailed out pre-loaded UI debit cards to the
inmates and maintained a portion for themselves. addresses listed on the applications and Glover
The fraudulent applications included false physical would then intercept the mail containing the cards.
addresses, telephone numbers, email addresses, In total, Glover admitted to stealing approximately
and last reported employers. 40 pieces of mail with an attempted loss of more
than $270,000. McKenzie admitted to possessing
Additionally, on December 1, 2022, co-defendants more than 300 pieces of stolen mail with an
Tamara Parker and Kanaejah Parker were attempted loss of more than $570,000. Both Glover
sentenced to 24 months and 46 months in federal and McKenzie admitted to withdrawing thousands
prison, respectively, after entering guilty pleas for of dollars of fraudulently obtained UI funds in cash
their roles in the scheme. from ATMs.
This is a joint investigation with the U.S. This is a joint investigation with the USPS-OIG and
Department of Homeland Security-OIG and the the California EDD. United States v. Glover et al.,
Secret Service. United States v. Jones et al. (C.D. California)
(E.D. Virginia)
Semiannual Report to Congress | October 1, 2022–March 31, 2023 61
Worker and Retiree Benefit Programs
Office of Workers’ Compensation Programs
The Office of Workers’ Compensation Programs (OWCP) administers four major workers’ compensation
programs: Federal Employees’ Compensation Act (FECA), Energy Employees Occupational Illness
Compensation (Energy), Black Lung Benefits, and Longshore and Harbor Workers’ Compensation.
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.
OWCP Did Not Ensure Best Prices and Rains, Knight & Company, P.A. (HRK) to determine
Allowed Inappropriate, Potentially Lethal whether OWCP effectively managed pharmaceutical
spending in the FECA program.
Prescriptions in the FECA Program
HRK found OWCP did not effectively manage
As a fundamental part of its responsibility to provide
pharmaceutical spending in the FECA program
workers’ compensation coverage to more than 2.6
from FY 2015 through FY 2020. Specifically,
million federal and postal workers, OWCP serves as
OWCP did not pay the best available prices for
a steward for taxpayer funds. OWCP must ensure it
prescription drugs. HRK identified up to $321.26
pays the best available prices for prescription drugs
million in excess spending during the audit period
in the FECA program and that the costs represent
(see Figure 7).128
appropriate care for helping workers heal from
illness and injury and return to work when they are
OWCP did not have a process to ensure its pricing
able to do so. In FY 2015 and FY 2016, a sharp
was competitive with other comparable payers in
increase in pharmaceutical126 spending for the FECA
the industry. For example, OWCP did not compare
program raised concerns. Subsequent OIG work
its pricing to publicly available pricing benchmarks.
found OWCP had not done enough to ensure it
Prescription drug prices vary widely in the market,
paid the best prices for prescription drugs.127 While
and using multiple pricing lists to compare and
OWCP significantly decreased spending on opioids
identify the lowest prices is a pricing strategy that
and compounded drugs, we remained concerned
can reduce overall pharmaceutical spending and
about OWCP’s ability to manage the cost, as
aid in saving taxpayer dollars. In addition, OWCP
well as the use, of pharmaceuticals in the FECA
program. Therefore, we contracted with Harper, 128
In addition to the comparison between prices OWCP
paid and a Commercial Maximum Allowable Cost list,
126
Relating to medicinal drugs, or their preparation, use, HRK also compared the prices OWCP paid to two publicly
or sale. available pricing lists: (1) the Affordable Care Act Federal
127
OWCP Must Continue Strengthening Management of Upper Limit and (2) the National Average Drug Acquisition
FECA Pharmaceuticals, Including Opioids, Report No. Cost. Through these comparative analyses, HRK also
03-10-002-04-431 (May 14, 2019), https://www.oig.dol.gov/ identified excess spending in the amounts of, respectively,
public/reports/oa/2019/03-19-002-04-431.pdf $85.96 million and $161.64 million.
62 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
Figure 7: Excess FECA Pharmaceutical Spending Using a
Commercial Maximum Allowable Cost List, FY 2015–FY 2020
Source: OIG graphic representation of HRK comparative analysis
did not capitalize on additional ways to reduce Table 3: Transmucosal Immediate-Release
pharmaceutical spending, such as taking advantage Fentanyl Prescriptions without a Required
of manufacturer rebates. Cancer Diagnosis, FY 2015–FY 2020129
Transmucosal Immediate-Release
Further, OWCP had issued significant policy
Fiscal Year Fentanyl Prescriptions without
and process changes related to claimant Required Cancer Diagnosis
prescriptions intended to improve claimant 2015 487
safety and save costs, but it did not effectively 2016 351
monitor pharmaceutical policy changes to 2017 230
ensure implementation. OWCP’s lack of effective 2018 153
monitoring resulted in claimants receiving 2019 78
thousands of inappropriate prescriptions and 2020 31
potentially lethal drugs, which could have caused TOTAL 1,330
serious harm to claimants. For example, OWCP Source: HRK analysis of FECA pharmaceutical data
paid for more than 98 percent (1,330 of 1,348) of
prescriptions for fast acting fentanyl—an extremely 129
As the audit period did not include data prior to FY
potent, potentially lethal, and extremely addictive 2015, we do not know how many more fast-acting fentanyl
synthetic opioid—without evidence of required prescriptions OWCP may have approved and paid for in
cancer diagnoses (see Table 3). contravention of FECA Bulletin 11-05 in the more than
3 years between May 2011 and September 2014.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 63
Worker and Retiree Benefit Programs
Additionally, OWCP paid for more than 25,000 non compensation programs. As a result, OWCP
maintenance early-fill prescriptions130 and nearly spent hundreds of millions of dollars on drugs that
500 convenience kits—which package multiple may not have been necessary or appropriate for
medications or items together although the individual FECA claimants. Finally, HRK found OWCP lacked
items can be purchased at a lower cost—without prior sufficient clinical expertise and guidelines to ensure
authorization. For example, in FY 2016, OWCP paid appropriate pharmaceutical decisions, which could
a total of $86 for the two ingredients in a DermacinRx negatively impact claimants’ health, recovery, and
ZRM Pak when purchased individually but paid $2,098 return to work.
for the same ingredients when packaged together in a
kit, meaning that OWCP unnecessarily paid $2,012 for HRK made 10 recommendations to OWCP to
packaging or “convenience” alone (see Figure 8). strengthen management of pharmaceuticals
in the FECA program, specifically regarding:
HRK also found OWCP failed to timely identify evaluating alternate pricing methodologies,
and address emerging issues and did not perform ensuring implementation of and adherence to
sufficient oversight of prescription drugs that are policies, identifying emerging issues by developing
highly scrutinized and rarely covered in workers’ and implementing an ongoing pharmaceutical
monitoring program, ensuring sufficient clinical
130
Non-maintenance prescriptions are prescriptions that expertise among FECA staff, and using evidence
do not treat chronic or long-term conditions. Early fill based clinical guidelines to inform prescription drug
prescriptions are prescriptions filled before 75 percent of the coverage policies.
prescription timeline has elapsed. Filling non-maintenance
prescriptions early resulted in OWCP paying for prescriptions For more information, go to https://www.oig.dol.
at a higher frequency and volume than necessary, and gov/public/reports/oa/2023/03-23-001-04-431.pdf,
early-fills can increase the risk of possible misuse or abuse. Report No. 03-23-001-04-431 (March 31, 2023).
Figure 8: Proportion of Ingredients Cost in One Convenience Kit,
DermacinRx ZRM Pak
Source: OIG graphic representation of HRK comparative analysis
64 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker and Retiree Benefit Programs
Insights on Telehealth Use and compensation programs experienced dramatic
Program Integrity Risks in DOL increases in the use of telehealth during the first
year of the pandemic compared to the prior year—
Workers’ Compensation Programs
with OWCP paying more than $7 million for
during the Pandemic
34 times more telehealth services. Claimants in the
FECA program used approximately 95 percent of
The PRAC131 consists of the 20 Inspectors General
these services. Routine appointments with primary
who provide transparent oversight for pandemic relief.
care providers or specialists and behavioral health
The PRAC was created by the CARES Act to support
services comprised the vast majority (93 percent)
and coordinate independent oversight of more than
of telehealth services used by claimants.
$5 trillion in pandemic relief programs and spending.
Recognizing how critical telehealth has been to the
OWCP had identified potential program integrity
federal COVID-19 response, the PRAC Health Care
risks associated with telehealth, finding that
Subgroup—which includes six federal OIGs who
providers could bill for services or supplies that
oversee agencies that provide or reimburse for health
were not rendered, bill for services that are not
care services—worked together to provide insights to
necessary, upcode their billing,133 treat claimants
stakeholders about the nature of telehealth and its use
without required supervision, and/or bill without
across federal health care programs. In support of this
appropriate billing codes. OWCP had also found
effort, we conducted an evaluation to: (1) examine the
many of the bills for telehealth services did not
use of telehealth across DOL workers’ compensation
include proper telehealth modifier codes.134
programs during the first year of the COVID-19
pandemic and (2) identify emerging risks related to the
Our analysis of OWCP’s telehealth data confirmed
use of telehealth. Specifically, we evaluated telehealth
that 35 percent of the telehealth services
services provided by OWCP’s FECA, Black Lung
provided during the pandemic lacked telehealth
Benefits, and Energy programs.
modifier codes. The Black Lung Benefits program
expressed concern that it may not be able to
As a result of the pandemic, the FECA, Black Lung
identify and monitor telehealth service-related bills
Benefits, and Energy programs instituted new
if medical providers are not consistently using the
policies that expanded access to telehealth for
telehealth modifier codes. OWCP should consider
injured workers by allowing routine medical care
developing additional guidance for providers to
to be provided through telehealth by certain types
ensure the modifier codes are appropriately and
of medical care practitioners.132 All three workers’
consistently used on medical bills.
131
For more information, visit: https://www.
pandemicoversight.gov. 133
Upcoding is when a health care service is billed at a
132
Prior to the pandemic, only the FECA program allowed higher level of complexity or duration than was provided
telehealth. Although telehealth was not specifically or needed.
authorized prior to the pandemic, the Energy program paid 134
Modifier codes are two-digit numbers, characters,
for the services if appropriate for the medical condition. or alpha-numeric combinations that provide additional
The Black Lung Benefits program did not provide information on a claim. For example, some modifier codes
telehealth as an allowable service. are used to identify telehealth services.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 65
Worker and Retiree Benefit Programs
As this PRAC study135 was meant to examine the use The marketer sometimes paid the physician an illegal
of telehealth services across federal programs, we did kickback for the prescriptions. Other times, Undavia
not develop or provide recommendations to OWCP. would directly pay the physician an illegal kickback. In
total, Undavia received approximately $22 million from
For more information, go to https://www.oig.dol. Tricare, OWCP, and the Civilian Health and Medical
gov/public/reports/oa/2023/19-23-002-04-001.pdf, Program of the U.S. Department of Veterans Affairs.
Report No. 19-23-002-04-001 (December 13, 2022).
This is a joint investigation with the USPS-OIG,
Houston Pharmacist Sentenced in Department of Defense’s Defense Criminal
Multi-Million-Dollar Kickback Scheme Investigative Service, Drug Enforcement
Administration, FBI, and Internal Revenue Service.
On October 11, 2022, Khyati Undavia, a pharmacist United States v. Khyati Undavia (S.D. Texas)
who controlled and operated Memorial Pharmacy was
sentenced to 27 months in prison and ordered to pay Louisiana Physician Sentenced to 48
approximately $12 million in restitution, which she paid Months in Prison and Ordered to Pay
at the time of sentencing. The sentencing is a result of More Than $800,000 to Victims in Workers’
Undavia’s conviction for her role in a conspiracy to pay Compensation Fraud Conspiracy
and receive kickbacks that defrauded federal health
care programs, including those administered by OWCP. On February 15, 2023, Louisiana physician, Robert
Clay Smith, was sentenced to 48 months in prison
From December 2012 through December 2018, and was ordered to pay approximately $827,000 in
Undavia hired employees to market Memorial restitution to workers’ compensation insurers for his
Pharmacy to physicians as a place to submit role in a conspiracy to commit wire fraud, health care
compounded drug prescriptions. She paid kickbacks fraud, and violations of federal anti-kickback laws.
through the marketers to physicians in order to
induce them to write prescriptions and submit them From 2013 until 2017, Smith conspired with an
to Memorial Pharmacy on behalf of their patients. Arkansas-based company to dispense pain creams and
This practice was in lieu of providing the prescription patches to his workers’ compensation patients, for which
directly to the patient, which would have allowed the he received a split of the profits. The company acted
patient to select a pharmacy of their choice. as the billing agent for Smith, sending the claims to
DOL, OWCP, and private insurers. He admitted that, by
In some instances, patients were never seen by an successfully billing insurers at markups of 15 to
actual physician. Instead, physicians would authorize the 20 times the medication costs, the company paid him
prescriptions for beneficiaries that a marketer provided. 50 to 55 percent of the collected profits. Additionally,
Smith did not have a license to dispense medication from
135
The PRAC’s full report, Insights on Telehealth Use
his clinic, which is required under State of Louisiana law.
and Program Integrity Risks Across Selected Health
Care Programs during the Pandemic (December 2022),
This is a joint investigation with the U.S. Department of
is available at: https://www.oversight.gov/report/PRAC/
Veterans Affairs-OIG, Department of Defense’s Defense
Insights-Telehealth-Use-and-Program-Integrity-Risks-
Criminal Investigative Service, and USPS-OIG. United
Across-Selected-Health-Care-Programs.
States v. Robert Clay Smith (W.D. Arizona)
66 Semiannual Report to Congress | October 1, 2022–March 31, 2023
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.
COVID-19: OSHA’s Enforcement to provide prompt assistance to identify the hazard
Activities Did Not Sufficiently and confirm the hazard has been timely abated to
prevent further illness or loss of life.
Protect Workers from Pandemic
Health Hazards
In one of the sampled cases, an employee died
from COVID-19 and the employer failed to report
The COVID-19 pandemic has presented OSHA with
the fatality to OSHA. According to the file, the
significant worksite enforcement and inspection
employer’s Public Health Emergency Officer
challenges in its operations and efforts to safeguard
determined the “COVID-19 infection and subsequent
workers. OSHA has the overall responsibility for
death was 50 percent more likely a workplace
ensuring safe and healthful working conditions for
exposure and the most likely exposure route was
130 million workers employed at more than 8 million
inhalation of infective droplets during a shared
worksites in the United States. Worksite inspections
lunch break with coworkers less than 6 feet apart.”
are an important part of OSHA’s enforcement
Nonetheless, OSHA did not issue a citation for lack
function and are integral to reducing worker injuries,
of reporting nor did the file contain documentation
illnesses, and fatalities. Previous OIG work identified
of the rationale for not doing so. Furthermore, in our
a significant reduction in OSHA inspections
evaluation of survey results,136 we noted 52 percent
during the pandemic while complaints significantly
of OSHA inspectors indicated it has been harder to
increased. Given these risks, we performed an audit
issue citations for COVID-19 work-related hazards
to determine whether OSHA’s enforcement activities
than non-COVID-19 work-related hazards during the
helped protect U.S. workers from COVID-19
pandemic (see Figure 9).
health hazards.
Employers failing to promptly report a fatality
We found OSHA’s enforcement activities did not
violates the standard, and OSHA should
sufficiently protect workers from COVID-19 health
issue citations when an employer violates a
hazards. Because OSHA had not established
standard or document its reasons for not issuing
controls to ensure citations were issued, OSHA
citations. OSHA citations are public record and
did not issue citations to enforce the standard
may, therefore, also encourage employers to
for recording and reporting occupational injuries
and illnesses in 15 percent of sampled fatality 136
We surveyed 710 Compliance Safety and Health
inspections. An employer reporting a fatality late, not
Officers to evaluate their experiences conducting
evaluating work relatedness of exposure, or failing
inspections during the pandemic; 235 responded.
to report a fatality altogether impacts OSHA’s ability
Highlighted results can be found in the report’s Exhibit.
68 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker Safety, Health, and Workplace Rights
Figure 9: COVID-19 versus Non-COVID-19 Citation Issuance Experience
Source: OIG analysis of Compliance Safety and Health Officer survey results
promptly report fatalities and prevent and correct because it does not require employers to report
hazards voluntarily. Moreover, evidence of all COVID-19 cases among workers. OSHA
previous violations is a determining factor when only requires employers to report a work-related
OSHA decides whether to schedule a follow-up fatality, inpatient hospitalization, amputation,
inspection. If OSHA improves its enforcement for or loss of an eye. Also, it is up to employers to
recording and reporting fatalities, it may better determine if an injury or illness is work-related,
protect workers from serious hazards, such as which is generally far simpler in an amputation
COVID-19 exposure. case than in the case of an airborne illness.
Survey results indicated that 53 percent of
We also found OSHA lacks complete information OSHA inspector respondents encountered such
on COVID-19 infection rates at worksites challenges (see Figure 10).
Figure 10: Challenges Experienced in Establishing Work-Relatedness
for COVID 19 Hospitalizations and/or Fatalities
Source: OIG analysis of Compliance Safety and Health Officer survey results
Semiannual Report to Congress | October 1, 2022–March 31, 2023 69
Worker Safety, Health, and Workplace Rights
However, COVID-19 is spreadable regardless of the through conducting inquiries and inspections of
origin of infections; no matter where an employee potential hazards. For FY 2019 and FY 2020,
contracted the virus, COVID-19 cases in the inspections from complaints and referrals were
worksite endanger workers. Requiring employers to slightly greater than 40 percent of OSHA’s total
notify all employees of positive cases at the worksite inspections. A complainant expressed concern
is necessary to ensure safe and healthful working that OSHA may not be adequately considering
conditions. Last, we found OSHA closed inspections the statements of complainants and witnesses
without ensuring it received and reviewed all items when responding to complaints and referrals.
requested from employers to demonstrate alleged If OSHA does not adequately consider complainant
COVID-19 health hazards had been mitigated. This or witness statements, hazardous conditions may
issue occurred because OSHA does not have a go unidentified and unabated, further endangering
tool to ensure it receives and reviews all requested workers. We contracted with an independent certified
documentation prior to closing inspections. OSHA public accounting firm (Firm) to conduct an audit to
needs to ensure its recordkeeping procedures determine to what extent OSHA ensured complaints
require Compliance Safety and Health Officers to and referrals were adequately and timely addressed.
capture the most accurate and complete information
on worksite hazards so that they can make The Firm concluded OSHA did not consistently
well-informed decisions on how to protect workers. ensure complaints and referrals were adequately
addressed nor regularly enforce hazard abatement
Due to the lack of citations, incomplete information on timelines. Specifically, the Firm found OSHA did
infection rates at worksites, and insufficient evidence not consistently involve the complainant and/or
of hazard mitigation, there is a heightened risk that witnesses in the investigation or inspection process.
workers suffered unnecessary exposure to the virus. OSHA has no policy requiring Compliance Safety
To protect workers from pandemic health hazards, and Health Officers to interview or otherwise involve
OSHA’s enforcement activities can be improved. the complainant after the complaint is filed, yet that
We made five recommendations to OSHA regarding person may have key insights to ensure alleged
improving its enforcement actions, standards, hazards are being addressed. Of the 76 complaint
guidance, and training to better protect workers from cases reviewed, OSHA interviewed the complainant
exposure to COVID-19 and for future pandemics. in 38 instances (50 percent). In all sampled cases
where OSHA interviewed the complainant and/or
For more information, go to https://www.oig.dol. witnesses, each person was only interviewed once.
gov/public/reports/oa/2023/19-23-001-10-105.pdf,
Report No. 19-23-001-10-105 (October 31, 2022). The Firm also found OSHA’s files did not contain
clear reasoning as to why it did not conduct an
OSHA Needs to Better Address inspection for 11 out of 30 sampled cases where a
Complaints and Referrals for Increased complaint or referral met its criteria for conducting an
inspection. Of the 30 sampled case files where an
Worker Safety
inspection was not performed, 11 (37 percent) lacked
documentation to support OSHA’s consideration of its
Part of the way OSHA ensures safe and healthful
nine criteria for not conducting an inspection.
working conditions for workers nationwide is
70 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Worker Safety, Health, and Workplace Rights
For example, one complaint alleged an employer failed and decision approvals within case files, and
to provide personal protective equipment; however, the (3) controls to ensure enforcement of abatement
case file lacked documentation in support of OSHA’s deadlines for employers. As a result, OSHA may
decision that an inspection was not warranted. have conducted incomplete inspections and workers
Further, the letters to the employer and to the may have been exposed to hazardous working
complainant on this decision in the case file were not conditions for an extended period of time.
signed by the area director, indicating the possibility
that they may not have been sent. Procedures The Firm made three recommendations to OSHA
requiring a review of case files for completeness could to strengthen the agency’s processes to ensure it
improve OSHA’s support for its decisions as required adequately addresses complaints and referrals.
by OSHA’s Field Operations Manual and further help
to protect worker safety and health. For more information, go to https://www.oig.dol.
gov/public/reports/oa/2023/02-23-001-10-105.pdf,
Also, OSHA did not regularly ensure safety and health Report No. 02-23-001-10-105 (March 6, 2023).
violations from complaints and referrals were corrected
in a timely manner. For example, on February 4, 2020, Philadelphia Contractor Sentenced to
OSHA received a complaint concerning workers Prison for Bribing OSHA Inspector
not having cave-in protection to prevent them from
being crushed by falling soil. OSHA instructed the On November 1, 2022, Tony Ren, owner of Hua Da
employer to abate this condition by April 8, 2020. Construction, was sentenced to 3 months in prison
The employer did abate the condition, but did not and was ordered to pay approximately $50,000 in
supply documentation to verify the abatement until fines following a conviction at trial of bribing a public
July 2, 2020, 85 days after the deadline. In total for this official from OSHA.
case, we found employees were possibly unprotected
for 149 days from the receipt of the complaint until In October 2017, an OSHA official conducted an
verification of the abatement. inspection of a Hua Da Construction worksite in
Philadelphia, Pennsylvania, in response to an
Without timely abatement, employees may imminent hazard report. During the inspection, an
be left possibly unprotected for an extended official observed numerous violations of OSHA
period of time. Further, without documentation standards including debris in passageways, electrical
of hazard abatement, OSHA could not support issues, holes in the floor, and gas tanks with
that the employer complied with Section 5 of the broken pressure gauges. On two separate dates in
Occupational Safety and Health Act of 1970, which November 2017, Ren offered cash bribes to an OSHA
requires employers to furnish places of employment official in exchange for the official falsifying the
free from recognized hazards causing or likely to inspection results, deleting previous violations from
cause death or serious physical harm. OSHA’s computer system, and agreeing not to report
the violations so that Ren could avoid the substantial
OSHA lacks: (1) a methodology to determine when financial penalties that would follow.
complainants and witnesses should be interviewed
and the appropriate amount of their involvement, This is a joint investigation with OSHA. United
(2) a process for documenting supervisory reviews States v. Ren (E.D. Pennsylvania)
Semiannual Report to Congress | October 1, 2022–March 31, 2023 71
Employment and
Training Programs
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, CW-1, H-1B, H-2A, and H-2B.
The PERM program allows an employer to hire foreign nationals to work in the United States on a
permanent basis while the CW-1, H-1B, H-2A, and H-2B programs are for temporary employment in
the United States. The CW-1 program allows employers to hire workers on a temporary basis in the
Commonwealth of the Northern Mariana Islands. 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, CW-1, 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.
Florida Man Sentenced to 118 Months labor contracting. Moreno and his co-conspirators
in Prison for his Role in Racketeering used coercive means to obtain thousands of hours
of physically demanding agricultural labor from
Conspiracy Involving Forced Labor
victimized H-2A workers, all for less pay than
required by law. The coercive means used included
On December 28, 2022, Bladimir Moreno was
confiscating the workers’ passports; subjecting the
sentenced for his role in leading a federal
workers to crowded, unsanitary, and degrading living
racketeering and forced labor conspiracy that
conditions; isolating the workers; limiting their ability
victimized Mexican agricultural workers admitted to
to interact with anyone other than Los Villatoros
the United States under the H-2A temporary visa
Harvesting employees; and subjecting workers to
program. He was sentenced to 118 months in prison
debt manipulation. In order to conceal aspects of the
and was ordered to pay restitution of more than
criminal enterprise, he provided false statements and
$170,000 to the victims.
information to federal investigators and directed his
employees to do the same.
Moreno was the owner and manager of Los Villatoros
Harvesting, a labor contracting company that
This is a joint investigation with the Palm Beach
employed Mexican H-2A workers to harvest fruits and
County Human Trafficking Task Force (including the
vegetables in the States of Florida, Kentucky, Indiana,
FBI, Homeland Security Investigations, and the Palm
Georgia, and North Carolina. Through his business,
Beach County Sheriff’s Office) and the Diplomatic
he conspired with others to commit racketeering
Security Service. United States v. Bladimir Moreno
offenses, including subjecting H-2A workers to forced
(M.D. Florida)
labor, harboring, visa fraud, and fraud in foreign
74 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Employment and Training Programs
the co-conspirator did not pay the minors for their
domestic work, nor did they permit them to attend
school or leave the residence. Instead, they made
the children work extended hours under the threat
of physical harm if they did not comply.
This is a joint investigation with the FBI and
Homeland Security Investigations. United States v.
Ac-Salazar (N.D. Illinois)
Wisconsin Businessman Pled Guilty to
Making False Statements Concerning
Employment of H-2B Workers
On January 13, 2023, Alfredo Aguilar pled guilty to
a conspiracy involving false, material statements
made to DOL and U.S. Citizenship and Immigration
Services concerning H-2B workers hired to perform
Illinois Resident Pleads Guilty to forestry work in the United States.
Forced Labor of Two Minor Children
Aguilar co-owned and operated Northwoods Forestry
On November 10, 2022, Santos Ac-Salazar located in Eleva, Wisconsin. Between December 2016
pled guilty to two counts of forced labor for his and June 2018, he and co-conspirators made false
involvement in the labor trafficking of two minor statements under oath and attestations representing
children. Ac-Salazar, along with a co-conspirator, that individuals recruited as H-2B visa workers would
devised a scheme to unlawfully enter the United be employed in the forestry industry in the States
States with minor children. Ac-Salazar and a of Maine and New Hampshire. Aguilar placed H-2B
co-conspirator, both of whom are Guatemalan workers with non-forestry employers, including meat
citizens, coordinated with smugglers and third packing, construction, roofing, agriculture, painting,
parties to locate two minors in Guatemala and fur processing, and landscaping businesses. The
used those children to facilitate their entry into the investigation revealed that the H-2B workers’ pay
United States. was improperly garnished for travel, subsistence,
and equipment costs. Additionally, the H-2B workers
Additionally, Ac-Salazar and the co-conspirator were not paid the correct prevailing wage for the
obtained fraudulent identity documents for one of occupations in which they worked and their hours and
the minors, falsely representing the minor to be an hourly rate reported to the DOL were manipulated.
adult. The minor was made to work at businesses
and as a domestic servant from 2019 through This is a joint investigation with the Wage and Hour
2020. The other minor worked as a domestic Division and the Diplomatic Security Service. United
servant as well from 2019 to 2020. Ac-Salazar and States v. Alfredo Aguilar (W.D. Wisconsin)
Semiannual Report to Congress | October 1, 2022–March 31, 2023 75
Labor
Racketeering
Employee
Labor
Integrity
Racketeering
Investigations
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.
California Woman Sentenced to 6 plans, the defendants calculated a “credit” that
Years in Prison for Defrauding Health patients could use to receive “free” or discounted
cosmetic procedures. In total, the health insurance
Insurers by Submitting Claims for
plans paid at least $1.3 million related to the
Botox Injections
fraudulent claims submitted by Khadem and her
co-conspirators. As part of her sentence, Khadem is
On October 14, 2022, Roshanak Khadem, owner of
required to pay more than $1.2 million in restitution
R&R Med Spa and Nu-Me Aesthetic and Anti-Aging
and $30,000 in fines.
Center, was sentenced to 72 months for conspiring
to defraud health insurance plans, including the
This is a joint investigation with EBSA and the
International Longshore and Warehouse Union
U.S. Office of Personnel Management OIG. United
- Pacific Maritime Association Benefit Plan, by
States v. Roshanak Khadem (C.D. California)
causing millions of dollars in fraudulent claims to be
submitted to provide patients with “free” cosmetic
procedures, including Botox injections.
Owner of Connecticut Insurance Firm
Pled Guilty in $40 Million Scheme to
From January 2012 to April 2016, Khadem and her Steal Client Health Care Funds and
co-conspirators induced patients to visit her clinics Defraud Lenders
to receive free cosmetic procedures, including
facials, laser hair removal, and Botox injections, On February 21, 2023, Anthony Riccardi pled guilty
which were not covered by insurance plans. to conspiracy to commit wire fraud and bank fraud
Khadem and her co conspirators obtained insurance for a widespread scheme to misappropriate and
information from the patients and fraudulently billed steal client health care funds and defraud multiple
insurance companies for unnecessary medical lenders. In connection with the guilty plea, he
services or for services that were never provided. agreed to pay more than $14.8 million in restitution
Using the fraudulent proceeds from the insurance and to forfeit $2 million.
78 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Labor
Employee Racketeering
Integrity Investigations
From at least 2015 and continuing through 2019,
Riccardi was a co-owner and Executive Vice
President of Employee Benefit Solutions, which,
among other things, provided third-party health care
claims administration services to clients that elected
to self-fund their employee health care plans.
Between at least 2015 and continuing through 2019,
Employee Benefit Solutions served as third-party
health care claims administration for the company’s
self-funded employee health care program and
generated bi monthly invoices purportedly for health
America. DeFalco was sentenced to time served, as
care expenses. During this time, the company
well as 36 months supervised release, and ordered
transferred approximately $26 million to Employee
to pay more than $148,000 in restitution.
Benefit Solutions for the payment of health care
claims. However, much of this money was never
From 2017 through June 2019, DeFalco and his
sent to pay the claims. Instead, approximately
co-conspirator, former United Brotherhood of
$17.87 million was misappropriated, most of which
Carpenters and Joiners of America Local 926
was used to pay expenses incurred by Employee
President Sal Tagliaferro, abused their positions
Benefit Solutions or its managers, including home
as union officers of the United Brotherhood of
mortgage expenses and personal credit card
Carpenters and Joiners of America by soliciting
charges relating to boating, luxury cars, and golf.
and accepting cash bribes from prospective union
members in exchange for securing the bribe
Additionally, in mid-2017, Riccardi and his
payers’ admission to the union. Once prospective
co-conspirators began fraudulently applying for
members made the payments, Tagliaferro used his
and receiving millions of dollars in loans under
authority as president of Local 926 to ensure they
the auspices of financing the purchase of billing
were accepted into Local 926 and received union
software for Employee Benefit Solutions.
membership cards even though many such bribe
payers did not have union jobs and were not eligible
This is a joint investigation with EBSA, U.S. Postal
for admission into the union. Hundreds of new
Inspection Service, and the Secret Service. United
members were admitted to Local 926 as a result of
States v. Anthony Riccardi, et al. (S.D. New York)
this scheme. DeFalco and Tagliaferro shared the
bribe payments and made at least $70,000 from the
Former Union Leadership Sentenced scheme. Tagliaferro was previously sentenced for
for Union Book Selling Scheme his role in this scheme.
On October 4, 2022, John DeFalco was sentenced This is a joint investigation with the Office of
for his role in a union book selling scheme. DeFalco Labor-Management Standards and the New York
is the former Vice President of Local 157 of the City Department of Investigation. United States v.
United Brotherhood of Carpenters and Joiners of Tagliaferro (S.D. New York)
Semiannual Report to Congress | October 1, 2022–March 31, 2023 79
Departmental
Management
Departmental Management
Departmental Management
The OIG performs oversight work involving the Department’s operations, financial management, and IT services.
FINANCIAL 2021, in accordance with U.S. generally accepted
accounting principles.
FY 2022 Independent Auditor’s Report
on the DOL Financial Statements KPMG’s opinion on DOL’s consolidated financial
statements is modified, and the opinion on the
The OIG contracted with the independent certified sustainability financial statements is unmodified.
public accounting firm of KPMG LLP (KPMG) to KPMG issued a modified opinion because it
audit DOL’s annual financial statements, which was unable to obtain sufficient appropriate audit
comprise the consolidated financial statements evidence about the methodology and underlying
and sustainability financial statements, as of and assumptions used to estimate certain unemployment
for the fiscal year ended September 30, 2022. insurance balances in FY 2022.
KPMG concluded that DOL complied, in all material
respects, with the requirements of the Federal
Financial Management Improvement Act of 1996
as of September 30, 2022. However, KPMG issued
a modified opinion on the consolidated financial
statements and identified one material weakness on
internal control over financial reporting.
KPMG found the consolidated financial statements
presented fairly, except for the matter described
in its basis for qualification, in all material
respects for the year ended September 30, 2022.
Also, KPMG found the sustainability financial
statements presented fairly, in all material
respects, DOL’s social insurance137 information
as of September 30, 2022, 2021, 2020, 2019, and
2018, and its changes in social insurance amounts
for the years ended September 30, 2022, and In addition, KPMG identified certain deficiencies in
internal control that they considered to be a material
137
Social insurance is defined as income transfer weakness and determined improvements were
programs financed by compulsory earmarked taxes. needed in controls over financial reporting related to
DOL operates the Black Lung Benefits program, which is unemployment trust fund balances and activity.
classified as a social insurance program and is reported in To address these deficiencies, KPMG provided
its sustainability financial statements. three recommendations to the Assistant Secretary
82 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Departmental Management
for Employment and Training and the Deputy KPMG issued an unmodified opinion, meaning
Chief Financial Officer. Management agreed the schedule was presented fairly in all material
with the recommendations and indicated actions respects and in conformity with U.S. generally
have already been taken to improve policies and accepted accounting principles. KPMG also
procedures for internal control. performed certain tests of controls and compliance
with laws and regulations related to the fund. Its
For more information, go to https://www.oig.dol. testing of controls found no deficiencies in internal
gov/public/reports/oa/2023/22-23-002-13-001.pdf, control over financial reporting that it considered
Report No. 22-23-002-13-001 (December 13, 2022). to be significant deficiencies and/or material
weaknesses. KPMG also performed agreed-upon
Management Advisory Comments procedures and identified certain differences as
Identified in an Audit of the a result of performing the procedures over the
actuarial liability and the benefit expense.
Consolidated Financial Statements for
the Year Ended September 30, 2022
For more information, go to https://www.oig.dol.
gov/public/reports/oa/2023/22-23-001-04-431.pdf,
In a separate Management Advisory Comments
Report No. 22-23-001-04-431 (November 3, 2022).
report, KPMG provided additional information to
DOL management on issues identified during the
OIG-contracted financial statement audit that did
District of Columbia Workmen’s
not rise to the level of significant deficiencies. The Compensation Act Special Fund
additional information represented opportunities Financial Statements and Independent
for DOL to improve internal controls or achieve Auditors’ Report
other operating efficiencies. KPMG identified three
new comments and five prior-year comments still The District of Columbia Workmen’s Compensation
present in FY 2022 and noted the resolution of Act of 1928 Special Fund (DCCA Special Fund)
four prior-year comments closed in FY 2022. provides medical benefits, compensation for lost
wages, and rehabilitation services for job-related
For more information, go to https://www.oig.dol. injuries, diseases, or death of certain private-sector
gov/public/reports/oa/2023/22-23-005-13-001.pdf, workers in the District of Columbia. The DCCA
Report No. 22-23-005-13-001 (January 30, 2023). Special Fund also extends benefits to dependents
if any injury resulted in the employee’s death.
Special Report Relating to the Federal The OIG contracted with KPMG to audit the
Employees’ Compensation Act Special financial statements of the DCCA Special Fund as of
September 30, 2021. KPMG issued an unmodified
Benefit Fund
opinion, meaning the financial statements presented
fairly, in all material respects, the financial position
The OIG contracted with KPMG to audit the FECA
of the DCCA Special Fund, and its net costs,
Special Benefit Fund’s Schedule of Actuarial
changes in net position, and budgetary resources
Liability, Net Intra-governmental Accounts
for the years then ended in accordance with
Receivable, and Benefit Expense Fund as of, and
U.S. generally accepted accounting principles.
for the year ended, September 30, 2022.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 83
Departmental Management
As part of its audit, KPMG also considered the compensation for lost wages, and rehabilitation
DCCA Special Fund’s internal control over financial services for job-related injuries and diseases
reporting, but not for the purpose of expressing sustained by private-sector workers in certain
an opinion on the effectiveness of the DCCA maritime and related employment. The Longshore
Special Fund’s internal control over financial Special Fund also extends benefits to dependents
reporting nor to identify all deficiencies that might if any injury results in the worker’s death.
be material weaknesses or significant deficiencies. The OIG contracted with KPMG to audit the
While KPMG did not identify any deficiencies financial statements of the Longshore Special
in internal control over financial reporting that Fund as of September 30, 2021. KPMG issued
it considered to be material weaknesses, it did an unmodified opinion, meaning the financial
identify certain deficiencies in internal control statements presented fairly, in all material
over financial reporting that it considered to be a respects, the financial position of the Longshore
significant deficiency. These deficiencies include Special Fund, and its net costs, changes in net
instances where the claims examiners’ reviews position, and budgetary resources for the years
were not performed in accordance with the then ended in accordance with U.S. generally
relevant procedure manual and also instances accepted accounting principles.
in which the claims examiner did not complete
timely follow-up procedures or suspend benefits As part of its audit, KPMG also considered the
in accordance with the procedure manual. As part Longshore Special Fund’s internal control over
of obtaining reasonable assurance, KPMG also financial reporting, but not for the purpose of
performed certain tests of the DCCA Special Fund’s expressing an opinion on the effectiveness of the
compliance with applicable laws and regulations, Longshore Special Fund’s internal control over
and its test results disclosed no instances of financial reporting nor to identify all deficiencies
noncompliance or other matters required to be that might be material weaknesses or significant
reported under government auditing standards. deficiencies. Given this limitation, KPMG did
not identify any deficiencies in internal control
For more information, go to https://www.oig.dol. over financial reporting that it would consider
gov/public/reports/oa/2023/22-23-004-04-432.pdf, to be material weaknesses or significant
Report No. 22-23-004-04-432 (February 22, 2023). deficiencies. As part of obtaining reasonable
assurance, KPMG also performed certain tests
Longshore and Harbor Workers’ of the Longshore Special Fund’s compliance
Compensation Act Special Fund with applicable laws and regulations and its test
results disclosed no instances of noncompliance
Financial Statements and Independent
or other matters required to be reported under
Auditors’ Report
government auditing standards.
The Longshore and Harbor Workers’
For more information, go to https://www.oig.dol.
Compensation Act Special Fund (Longshore
gov/public/reports/oa/2023/22-23-003-04-432.pdf,
Special Fund) provides medical benefits,
Report No. 22-23-003-04-432 (February 22, 2023).
84 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Departmental Management
INFORMATION TECHNOLOGY General Metrics reported in CyberScope138 are
at least Managed and Measurable (Level 4).
FY 2022 FISMA DOL Information However, KPMG found weaknesses that
demonstrated the information security program
Security Report: DOL’s Information
had not achieved a maturity rating of Managed
Security Program Not Remaining
and Measurable (Level 4) in four of the five FISMA
Current with Security Requirements Cybersecurity Framework Functions: Identify,
Protect, Detect, and Recover (see Table 4).
Under the Federal Information Security
Modernization Act of 2014 (FISMA), the OIG is
KPMG also found DOL’s information security
required to perform annual independent evaluations
program did not fully adhere to applicable FISMA
of the Department’s information security program
requirements, OMB policy and guidance, and NIST
and practices. We contracted with KPMG to conduct
standards and guidelines. Further deficiencies
an independent audit of DOL’s FY 2022 information
were noted in the performance of security control
security program. The objective of this audit was
assessments, account management controls, and
to determine if DOL implemented an effective
contingency planning controls.
information security program for the period October
1, 2021, through June 30, 2022. KPMG determined
In reviewing the results from KPMG’s testing, we
DOL’s information security program was not
are concerned DOL’s entity-wide and system-level
effective for FY 2022.
security policies and procedures have not been
updated to comply with NIST Special Publication
KPMG reported nine findings for DOL’s information
800-53, Revision 5, Security and Privacy Controls
security program. The findings were identified in
all five of the FISMA Cybersecurity Framework 138
CyberScope, operated by the U.S. Department of
Functions and in six of the nine FISMA Metric Homeland Security on behalf of OMB, is a web based
Domains. A security program is considered effective application designed to streamline IT security reporting for
if the majority of the FY 2022 Core Inspector federal agencies.
Table 4: Maturity Levels for Cybersecurity Framework Functions
Cybersecurity Framework Functions Maturity Level
Identify – Risk Management and Supply Chain Risk Management Consistently Implemented (Level 3)
Protect – Configuration Management, Identity and Access
Consistently Implemented (Level 3)
Management, Data Protection and Privacy, and Security Training
Detect – Information Security Continuous Monitoring Defined (Level 2)
Respond – Incident Response Managed and Measurable (Level 4)
Recover – Contingency Planning Consistently Implemented (Level 3)
Source: FY 2022 FISMA Metrics
Semiannual Report to Congress | October 1, 2022–March 31, 2023 85
Departmental Management
for Information System and Organization (NIST KPMG made eight recommendations related to
SP 800-53, Rev. 5). The CIO’s inability to bring control deficiencies within DOL’s information security
DOL into compliance with NIST SP 800-53, Rev. program and cited open prior-year recommendations
5, controls impact all areas of DOL’s information that correspond to recurring findings for FY 2022.
security program, including all metric areas, and To improve and progress the maturity of the
was a cause for the decline in scores from FY 2021. information security program, the CIO should apply
The significant delay139 in implementation heightens these recommendations at the enterprise level.
our concerns about this issue given the CIO has
not documented the risk nor has the CIO accepted We reviewed the Office of the CIO’s management
the risk of DOL information security controls not comments on the findings and our concerns, as
being compliant with NIST SP 800-53, Rev. 5. well as KPMG’s response, and we noted that
With so many control areas at risk, the the Office of the CIO did not provide additional
confidentiality, integrity, and availability of DOL’s evidence. Therefore, based on our oversight of
systems are at risk. KPMG’s work during the audit, we determined the
results remain factually correct and fully supported.
139
The implementation of NIST SP 800-53, Rev. 5, was
due to be completed for new systems by October 1, 2020
For more information, go to https://www.oig.dol.
and for existing systems a year later, by October 1, 2021.
gov/public/reports/oa/2023/23-23-001-07-725.pdf,
DOL currently aims to have these controls in place by
Report No. 23-23-001-07-725 (February 10, 2023).
June 30, 2023.
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 a non federal entity expending $50 million and
less annually has an oversight agency.141 DOL is
Under Uniform Guidance,140 cognizant and oversight currently cognizant for 6 entities and oversight for
federal agencies ensure the implementation of 25 entities.
single audit requirements. A non-federal entity
expending more than $50 million a year in federal
141
According to Uniform Guidance, the designated
awards has a cognizant agency for audit while cognizant agency for audit must be the federal awarding
agency that provides the predominant amount of funding
140
Uniform Guidance refers to 2 Code of Federal directly…to a non-federal entity unless OMB designates a
Regulations Part 200, OMB’s “Uniform Administrative specific cognizant agency for audit. Cognizant agencies for
Requirements, Cost Principles, and Audit Requirements audit are the federal agencies designated to carry out the
for Federal Awards.” responsibilities described in Uniform Guidance §200.513.
86 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Departmental Management
The OIG periodically performs quality control For more information, go to https://www.oig.dol.
reviews of the cognizant and oversight entities’ gov/public/reports/oa/2023/24-23-002-50-598.pdf,
single audits. During this reporting period, we Report No. 24-23-002-50-598 (March 30, 2023).
conducted two quality control reviews: (1) as
the oversight agency for the Single Audit of Quality Control Review for the
Service, Employment, and Redevelopment Jobs Single Audit of State of New Mexico
for Progress National, Inc. for the Year Ended
Workforce Solutions Department for
June 30, 2022; and (2) as the cognizant agency
the Year Ended June 30, 2021
for the Single Audit of the State of New Mexico
Workforce Solutions Department for the Year
The single audit conducted by Moss Adams
Ended June 30, 2021.
LLP covered the following DOL major
programs: COVID-19 unemployment insurance,
Quality Control Review Single unemployment insurance, and Workforce
Audit of Service, Employment, and Innovation and Opportunity Act, totaling
Redevelopment Jobs for Progress $2,635,785,288 in expenditures. We determined
National, Inc. for the Year Ended Moss Adams LLP’s audit work on the Single
June 30, 2022 Audit of the New Mexico Workforce Solutions
Department for the Year Ended June 30, 2021,
The single audit conducted by Garza/Gonzalez generally met the requirements of government
& Associates covered the following DOL major auditing standards, generally accepted auditing
programs: Senior Community Service Employment standards, and OMB Uniform Guidance. However,
program and National Farmworker Jobs program, Moss Adams LLP’s testing could be improved.
totaling $24,841,045 in expenditures. We Specifically, audit documentation provided by
determined that, while the report and audit work Moss Adams LLP in the electronic working paper
performed on Quality Control Review Single Audit file did not contain sufficient information on the
of Service, Employment, and Redevelopment Jobs attributes tested for the Activities Allowed or
for Progress National, Inc. for the Year Ended Unallowed compliance requirement. We also
June 30, 2022, generally met the requirements of noted that Moss Adams LLP did not conduct
government auditing standards, generally accepted internal control and compliance testing of the
auditing standards, and OMB Uniform Guidance, Workforce Innovation and Opportunity Act cluster
Garza/Gonzalez & Associates reported the Type subrecipients’ financial and performance reporting
A/B threshold incorrectly to the Federal Audit as required.
Clearinghouse. This threshold is used to determine
the major programs to be audited. However, our For more information, go to https://www.oig.dol.
review of the audit work found Garza/Gonzales & gov/public/reports/oa/2023/24-23-001-50-598.pdf,
Associates had applied the correct threshold in its Report No. 24-23-001-50-598 (March 7, 2023).
testing procedures. We have discussed this matter
with Garza/Gonzales & Associates, and they have
already taken corrective actions.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 87
Employee Integrity
Investigations
Employee Integrity Investigations
Employee Integrity Investigations
The OIG is responsible for investigating possible misconduct or criminal activities involving senior DOL
employees or individuals providing services to the Department.
SUBSTANTIATED DOL Special Agent Pled Guilty to
UI Fraud Scheme
Federal Safety and Health Officer
Admits Conspiring with His Brother A DOL Special Agent, Thomas Hartley, pled guilty to
to Extort Contractors the charge of mail fraud in connection with multiple
schemes to commit fraud.
On October 12, 2022, Alvaro Idrovo pled guilty
to an information charging him with one count Between April 2020 and September 2021,
of conspiring to defraud the United States and Hartley applied for and collected Pennsylvania
to commit an offense against the United States, unemployment compensation benefits by claiming
specifically, an act of extortion through his he was unemployed, when, in fact, he was
employment with OSHA. employed on full-time active duty with the
New Jersey National Guard. When he applied for
Idrovo was a Compliance Safety and Health unemployment benefits, Hartley failed to disclose
Officer for OSHA when he misrepresented to that he was on military leave from his full-time
contractors at construction sites in the State of federal civilian employment with the DOL.
New Jersey that they were facing significant OSHA He thereby utilized the mail to collect approximately
fines, penalties, and possibly jail if they did not get $60,284 in unemployment compensation funds
allegedly necessary OSHA safety training. Idrovo to which he was not entitled. Hartley’s plea
provided contractors with the phone number for a encompassed a total of $197,366 in fraud including
required trainer. Idrovo’s brother, Paul, posed as the collection of $23,582 in Basic Allowance
the required OSHA trainer using false names. for Housing funds from the Army, $50,000 in
He provided contractors with fraudulent computer- “lost wage” benefits paid by the United Services
generated safety and health certificates, when, in Automobile Association (USAA) insurance, and
fact, no training had been provided. The two men $63,500 from his Thrift Savings Plan account.
charged contractors between $4,000 and $6,000
each in cash for the alleged safety training. Paul This investigation was conducted by the DOL-OIG,
Idrovo was previously sentenced for his role in the Office of Special Investigations, the Army CID, and
fraud scheme. the USAA Insurance Special Investigations Unit.
United States v. Thomas Hartley (M.D. Pennsylvania)
This is a joint investigation with the FBI. United
States v. Idrovo (D. New Jersey)
90 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Employee Integrity Investigations
UNSUBSTANTIATED authority as Secretary of Labor or that he violated
applicable ethics regulations.
Results of Review of Allegations of
As Secretary of Labor, Secretary Walsh had implicit
Ethics Violations by the Secretary
statutory authority to intervene and become involved
of Labor
in labor disputes. The Standards of Ethical Conduct
for Employees of the Executive Branch provisions
The OIG initiated a review after receiving two
requiring impartiality were not violated because
letters from Congress questioning whether: (1) the
Secretary Walsh did not have any financial interests
Secretary of Labor’s participation in certain labor
or pre-existing personal or business relationships
dispute activities violated the Standards of Ethical
with the parties involved in these engagements.
Conduct for Employees of the Executive Branch;
Moreover, his personal involvement as mediator of a
and (2) if he should in the future recuse himself from
labor dispute in his personal capacity did not violate
involvement with the parties involved in those labor
applicable ethics regulations.
disputes should they come before the Department.
Finally, it is the Solicitor of Labor’s role as
On October 27, 2021, Secretary Walsh visited
Designated Agency Ethics Official to advise
a union picket line, and, on December 17, 2021,
the Secretary and other DOL officials on ethics
he served as a mediator of a labor dispute
regulations and to evaluate future actual or apparent
in his personal capacity. After conducting a
potential conflicts. The OIG provided its findings to
thorough review of the facts and the totality of the
the Solicitor of Labor for her review and any action
circumstances involving these events, the OIG
deemed appropriate.
found no evidence that the Secretary exceeded his
Semiannual Report to Congress | October 1, 2022–March 31, 2023 91
OIG Whistleblower
Activities
Semiannual Report to Congress | October 1, 2022–March 31, 2023 93
OIG Whistleblower Activities
OIG Whistleblower Activities
WHISTLEBLOWER PROTECTION
COORDINATOR
DOL employees, contractors, subcontractors, and
grantees perform an important service by reporting
evidence of wrongdoing, including misconduct,
fraud, waste, and abuse, in DOL programs.
Whistleblowers should never be subjected to, or
threatened with, retaliation for having engaged in
a protected communication or protected activity.
The OIG plays a vital role in ensuring that DOL
employees and employees of DOL grantees
and contractors are informed of their rights and
protections against retaliation for “blowing the
whistle.” This work is done by the OIG Whistleblower
Protection Coordinator Program, housed in the
OIG’s Office of Legal Services.
3. provides general information about the
Pursuant to Section 2 of the Whistleblower timeliness of such cases, the availability of any
Protection Coordination Act of 2018 (Section 2), alternative dispute mechanisms, and avenues
every Inspector General’s office is required to for potential relief. Within the OIG, an Associate
designate a Whistleblower Protection Coordinator. Counsel to the Inspector General has been
According to Section 2, the Whistleblower designated to serve as the Whistleblower
Protection Coordinator: Protection Coordinator. Pursuant to this
designation, the Whistleblower Protection
1. educates agency employees about prohibitions
Coordinator has:
against retaliation for protected disclosures;
• provided input into training that is required
2. educates agency employees who have made to be completed by all DOL employees,
or are contemplating making a protected entitled “Prohibited Personnel Practices,
disclosure about their rights and the remedies Whistleblower Protection”;
against retaliation for protected disclosures,
• provided input into training that is required
including the means by which employees may
to be completed by all DOL supervisors
seek review of any allegation of reprisal, as
and managers entitled “Responding to
well as about the roles of the OIG, the Office of
Whistleblower Retaliation Complaints/
Special Counsel, the Merit Systems Protection
Overview of Prohibited Personnel Practices –
Board, and any other relevant entities; and
Annual Training”;
94 Semiannual Report to Congress | October 1, 2022–March 31, 2023
OIG Whistleblower Activities
• developed training for new employees titled • obtained the OIG’s recertification of its
“Whistleblower Rights and Protections for 2302(c) program (June 2020); and
DOL Employees” that is included in all DOL • monitored whistleblower retaliation
employees’ New Employee Orientation complaints received by the OIG as well
and regularly provides this training live to as whistleblower retaliation investigations
Solicitor’s Office’s Honors Attorneys; conducted by the OIG.
• updated the DOL OIG public-facing
website titled “Whistleblower Protection Whistleblower Retaliation Investigations
Coordinator,” which is available to all DOL
and OIG employees, to provide information The OIG can initiate its own investigations into
on whistleblower protections and options allegations of improper or illegal retaliation brought
for DOL employees and employees of DOL by DOL employees or, on a discretionary basis, refer
contractors and grantees; such allegations to the Office of Special Counsel for
• provided live training to all OIG employees review and investigation.
on “Whistleblower Rights and Protections for
OIG Employees”; Further, pursuant to 41 U.S.C. § 4712, the OIG
is required, with some exceptions, to investigate
• established a dedicated e-mail address—
whistleblower retaliation allegations made by
OIGWhistleblower@oig.dol.gov—to receive
employees of DOL contractors or grantees. See
and respond to whistleblower-related
Table 5 for summary of whistleblower investigations
inquiries from DOL employees;
during the reporting period.
Table 5: Whistleblower Investigations, October 1, 2022–March 31, 2023
Investigation Type Number
Pending DOL employee complaint investigations 6
Reports related to DOL employee whistleblower retaliation complaints sent to
0
the appropriate agencies within the Department
Grantee/contractor employee complaints closed after preliminary inquiry 1
Pending grantee/contractor employee complaint investigations 3
Reports pending with DOL 1
Decision issued by DOL’s Office of Assistant Secretary for Administration
1
and Management
Semiannual Report to Congress | October 1, 2022–March 31, 2023 95
OIG Congressional
Testimony
OIG Congressional Testimony
OIG Congressional Testimony
During this semiannual reporting period, the OIG testified before two congressional committees. The full
text of our testimonies is available on our website at: https://www.oig.dol.gov/testimony.htm.
March 9, 2023 – Larry D. Turner, Inspector General, February 8, 2023 – Larry D. Turner,
U.S. Department of Labor, testified before the Inspector General, U.S. Department of
U.S. House of Representatives Committee on Labor, testified before the U.S. House of
Oversight and Accountability, Subcommittee on Representatives Committee on Ways and
Government Operations and the Federal Workforce. Means. The hearing was titled, “The Greatest
The hearing was titled, “Waste, Fraud, and Abuse Go Theft of American Tax Dollars: Unchecked
Viral: Inspectors General on Curing the Disease.”142 Unemployment Fraud.”143
Source: U.S. House of Representatives Committee on Oversight and Accountability
142
Written Statement of Larry D. Turner, Inspector 143
Written Statement of Larry D. Turner, Inspector
General, U.S. Department of Labor, before the General, U.S. Department of Labor, before the
House Committee on Oversight and Accountability, House Committee on Ways and Means on
Subcommittee on Government Operations and the February 8, 2023, available at https://www.oig.dol.gov/
Federal Workforce on March 9, 2023, available at public/testimony/02082023.pdf
https://www.oig.dol.gov/public/testimony/03092023.pdf
98 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Legislative
Recommendations
Legislative Recommendations
Legislative Recommendations
The Inspector The Inspector General Act of 1978, as amended, requires the Office of Inspector General
(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 U.S. Department of Labor’s (DOL or
Department) programs.
In recent Congressional testimonies, Inspector authority to require SWAs to provide the OIG with
General Larry D. Turner highlighted three high-priority access to UI claimant data and wage records except
recommendations for Congressional consideration: when the OIG is conducting an investigation into a
particular instance of suspected UI fraud.
1. Ensure DOL and the OIG have ongoing, timely,
and complete access to UI claimant data and The Inspector General Act of 1978, as amended,
wage records; authorizes the Inspector General’s access to
2. Extend the statute of limitations for fraud information related to the Department’s programs
involving pandemic-related UI programs; and and operations, unless Congress enacts a law
3. Ensure effective payment integrity controls to that expressly refers to the Inspector General
reduce improper payments in all UI programs and limits the Inspector General’s right of access.
including temporary ones, such as broader The Department has not provided the OIG with a
requirements for mandatory cross-matching. federal statute that limits the Inspector General’s
access in this manner. Furthermore, in a June 2021
Details on these and other legislative alert memorandum,144 the OIG recommended
recommendations follow. that the Employment and Training Administration
(ETA) amend its regulations through rulemaking to
Allow DOL and the OIG Access to reinforce that UI information must be provided to the
Unemployment Insurance Claimant OIG for all Inspector General engagements.
Data and Wage Records
This lack of ongoing, timely, and complete access
to data has severely hampered the OIG’s ability
Congress should consider legislative action to
ensure DOL and the OIG have ongoing, timely, and
complete access to State Workforce Agencies’ (SWA) 144
Alert Memorandum: The Employment and Training
unemployment insurance (UI) claimant data and wage Administration Needs to Issue Guidance to Ensure State
records for our respective oversight responsibilities. Workforce Agencies Provide Requested Unemployment
The Department has stated that, outside of the Insurance Data to the Office of Inspector General, Report
temporary authority provided by the Coronavirus No. 19-21-005-03-315 (June 16, 2021), available at:
Aid, Relief, and Economic Security (CARES) Act and https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-
subsequent pandemic-related legislation, it lacks the 03-315.pdf
100 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Legislative Recommendations
to oversee the UI program. To overcome this and
effectively oversee UI benefits provided in response
to the pandemic, the OIG issued multiple Inspector
General subpoenas to all SWAs, seeking UI claimant
data. OIG data scientists then had to ensure the data
was complete, consistent, and in a common format to
analyze and identify potential fraud and programmatic
weaknesses. The repeated use of Inspector General
subpoenas to obtain UI data on a recurring basis is
time-consuming and inefficient. Ongoing, timely, and
complete access for all OIG engagements would
alleviate that time and resource burden and align with
the Inspector General Act of 1978, as amended.
While the OIG and ETA agree that changing
regulations requires notice and comment rulemaking,
an immediate and legally sound interim solution is records from SWAs to verify claimants’ eligibility
available to ETA. In the alert memorandum issued for UI benefits, including both initial eligibility (and
September 21, 2022,145 the OIG highlighted DOL’s amounts) and continuing eligibility. Timely access to
authority to amend its interpretation of its regulations these records will facilitate the OIG’s efforts to quickly
without changing the regulations themselves. identify claimants who are part of large-scale fraud
ETA could immediately amend its interpretation of schemes or are receiving benefits improperly due
its regulations to be consistent with the Inspector to systemic program weaknesses. Further, timely
General Act of 1978, as amended. Specifically, ETA access to UI data will allow the OIG to use our data
can issue guidance to inform SWAs that they must analytics program to identify and investigate complex
timely provide UI data to the OIG for audits and identity theft and multistate fraud schemes as we
investigations without any constraints consistent with have successfully done during the pandemic. The
the Inspector General Act of 1978, as amended. The OIG could also use those records to assess program
historic levels of improper payments that the OIG outcomes for UI reemployment programs, as well as
has identified, including potential fraud, support the other training programs, such as YouthBuild and Job
conclusion that the OIG’s continued access to state Corps, where employment and wage increases are
UI data is imperative. important factors in determining a program’s success.
In support of the OIG’s oversight activities, the To date, ETA has implemented only temporary
OIG needs access to UI claimant data and wage solutions. In August 2021, ETA issued guidance
requiring SWAs to disclose UI data to the OIG
145
Alert Memorandum: Potentially Fraudulent for audits and investigations for the duration of
Unemployment Insurance Payments in High-Risk Areas the pandemic programs. ETA also awarded fraud
Increased to $45.6 Billion, Report No. 19-22-005-03-315 prevention grants to states conditioned on requiring
(September 21, 2022), available at: https://www.oig.dol. OIG access to their UI data for investigative and
gov/public/reports/oa/2022/19-22-005-03-315.pdf audit purposes through December 31, 2025.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 101
Legislative Recommendations
Contrary to DOL’s interpretation of its regulations, programmatic oversight responsibilities to identify
ETA stated it was able to require SWAs to provide UI improper payments and weak controls. It would
data to the OIG due to temporary authority created also allow the OIG to expand its current efforts to
by the CARES Act and subsequent pandemic- share emerging fraud trends with ETA and SWAs
related legislation. to strengthen the UI program and help deter fraud.
Data analytics is a vital tool in performing our
ETA’s actions are not sufficient to resolve the oversight function.
OIG’s recommendations or concerns. Unless DOL
implements a permanent solution ensuring the OIG’s To underscore this point, based on the data
complete and timely access to UI program data and obtained by the OIG, our auditors, investigators,
information by the end of 2025, the Department’s and data scientists collaboratively identified
interpretation of its regulations will renew $45.6 billion dollars in potential fraud paid in
impediments to the OIG’s access experienced prior specific high-risk areas, such as to multistate
to and during the pandemic and may necessitate claimants and deceased persons.146 Also, the OIG
additional subpoenas. shared its methodology and underlying data with
ETA to allow the Department and SWAs to analyze
concerning claims and to strengthen controls to
detect and deter future fraud. The OIG was further
able to recommend programmatic changes to put
billions in federal funds to better use. Conducting
data analytics from such access would further
enable our auditors to identify program weaknesses
and recommend corrective actions that would
improve the timeliness of UI benefit payments and
the integrity of the UI program.
Extend the Statute of Limitations
Associated with Pandemic-Related
Unemployment Insurance Fraud
Currently, the statute of limitations for many of the
To aid in resolving this issue, we previously
OIG’s pandemic-related UI fraud investigations will
requested that Congress consider legislative action
begin to expire in early 2025 as the statutes most
to authorize DOL and the OIG to have unfettered
often used to prosecute UI fraud have a 5-year
access to UI claimant data and wage records for
limitation. The U.S. Small Business Administration
our oversight responsibilities. Unfettered access
to SWAs’ UI claimant data and wage records 146
Alert Memorandum: Potentially Fraudulent
systems—meaning access without restriction Unemployment Insurance Payments in High-Risk Areas
or constraints to the information that is required Increased to $45.6 Billion, Report No. 19-22-005-03-315
for the performance of DOL’s and the OIG’s (September 21, 2022), available at: https://www.oig.dol.
missions—would assist in the Department’s gov/public/reports/oa/2022/19-22-005-03-315.pdf
102 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Legislative Recommendations
faced a similar issue regarding pandemic-related Asset forfeiture is a critical legal tool that serves a
fraud in the Paycheck Protection Program and number of compelling law enforcement purposes.
Economic Injury Disaster Loan program. To address It is designed to deprive criminals of the proceeds
those concerns, Congress recently passed legislation of their crimes, to break the financial backbone
to extend associated statutes of limitations. of organized criminal syndicates, and to recover
property that may be used to compensate victims
Congress should likewise act to extend the statute and deter criminal activity. Currently, the OIG is not
of limitations for fraud associated with pandemic- a participant in the U.S. Department of the Treasury
related UI programs to help ensure investigators and Forfeiture Fund or the U.S. Department of Justice
prosecutors have time to effectively pursue and hold (DOJ) Asset Forfeiture Fund. The lack of authority
accountable those who defrauded the UI programs to participate limits the OIG’s ability to effectively
during the pandemic. To do so, Congress would recover proceeds of UI fraud and other crimes
likely have to extend the statute of limitations for under the OIG’s jurisdiction. Statutory authority to
existing laws when pandemic-related UI programs seize and forfeit illicit funds would allow the OIG to
are defrauded. The expansion of the statute of participate in the U.S. Department of the Treasury
limitations for pandemic-related UI fraud would Forfeiture Fund and the DOJ Asset Forfeiture Fund,
help ensure many groups and individuals that have thus enabling the OIG to better combat UI fraud and
targeted the program do not escape justice. other crimes in the future.
Further, for similar reasons, Congress could Enact the UI Integrity Legislative
consider extending the federal statute of limitations Proposals
for states to pursue administrative recoveries in
cases of proven overpayments including fraud and The OIG encourages Congress to consider and
with appropriate due process. adopt DOL proposals to aid the Department’s efforts
to combat improper payments in the UI program.
Authorize OIG Participation in Asset In its Fiscal Year (FY) 2024 Congressional Budget
Forfeiture Funds to Combat UI Fraud Justification,148 the Department proposed provisions
and Other Crimes designed to provide new and expanded tools and
controls for states to help ensure workers are
Legislative authority in the area of asset forfeiture properly paid and to prevent improper payments,
would increase the OIG’s ability to effectively and including fraud, in the UI system.
efficiently investigate UI fraud and other crimes
and to recover fraudulently obtained funds.147 The Department stated that the proposals
collectively would result in savings of more than
147
According to DOJ, forfeiture “is the legal process by
which title to an asset is transferred to the government… 148
U.S. Department of Labor, FY 2024 Congressional
because that asset was derived from, used to facilitate, or Budget Justification, Employment and Training
involved in criminal conduct in a manner that subjects it Administration, State Unemployment Insurance and
to forfeiture under an applicable asset forfeiture statute.” Employment Service Operations, available at: https://
DOJ, Asset Forfeiture Policy Manual (2021), available at: www.dol.gov/sites/dolgov/files/general/budget/2024/CBJ-
https://www.justice.gov/criminalafmls/file/839521/download 2024-V1-07.pdf
Semiannual Report to Congress | October 1, 2022–March 31, 2023 103
Legislative Recommendations
$2 billion over the 10-year budget window. These the accuracy of information provided on labor
are similar to DOL proposals included in prior DOL condition applications and to initiate its own
budget requests that would help address UI program H-1B investigations more broadly.
integrity and the high improper payment rates in the Currently, unlike investigations into the
UI program. The proposals from the President’s FY H-2A and H-2B programs, DOL’s authority
2024 budget request include the following: to investigate H-1B employers is limited and
• require SWAs to cross-match UI claims against typically requires a complaint by an aggrieved
the National Directory of New Hires; party. In the absence of such a complaint, with
limited exceptions, DOL may only initiate its
• require SWAs to cross-match UI claims with
own H-1B investigations if the Secretary (or
a system(s)…that contains information on
Acting Secretary) personally certifies there is
individuals who are incarcerated;
reasonable cause to believe the employer is
• require states to disclose information to the OIG; not in compliance. Even assuming that such
• allow SWAs to retain up to 5 percent of personal certification is obtained, the violations
recovered fraudulent UI overpayments for DOL is permitted to find in Secretary-certified
program integrity use; investigations are limited. These investigations
are restricted to willful, pattern- or practice-,
• require SWAs to use [UI] penalty and interest
or substantial violations of the Labor Condition
collections solely for UI administration; and
Application requirements regarding prevailing
• permit the Department to collect and store wage and benefits, working conditions, labor
states’ UI claimant data. disputes, and notification of applications.
These legislative proposals are consistent with Additionally, such an investigation must be
previous OIG reporting to improve the UI program. conducted under specific procedures and may only
To maintain UI program integrity, the OIG has be initiated for reasons other than completeness
recommended, as of February 2021, establishing and obvious inaccuracies by the employer in
legislation that requires SWAs to cross-match complying with H-1B requirements. A notice also
high-risk areas, including UI benefits paid to must be provided to the employer to allow a rebuttal
individuals with Social Security numbers: filed in of the allegations before the investigation begins.
multiple states, belonging to deceased persons
or federal prisoners, or used to file UI claims with Our concern with the Department’s limited ability
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
labor certification process for H-1B specialty H-1B program without having scheduled jobs
occupation visas, it must have the statutory already lined up. Some employers and attorneys
authority to ensure the integrity of that process. misrepresent their need for workers to DOL,
This authority should include the ability to verify
104 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Legislative Recommendations
then reassign the extra workers to other companies • Expand the authority of the Employee
or require foreign workers to find their own work. Benefits Security Administration to correct
There have also been instances when companies substandard benefit plan audits and ensure
illegally generated profits by requiring foreign that auditors with poor records do not
workers to pay fees and recurring payments to perform additional audits. Changes should
secure H-1B visas. include providing the Employee Benefits
Security Administration with greater enforcement
Without statutory authority to ensure program authority over registration, suspension, and
integrity, the Department generally cannot verify debarment as well as the ability to levy civil
employers’ attestations to H-1B certifications penalties against employee benefit plan auditors.
unless a complaint is filed or the Department The ability to correct substandard audits and
utilizes a Secretary-initiated investigation, for which take action against auditors is essential as
DOL developed a process in FY 2021. As foreign benefit plan audits help protect participants and
workers are generally reluctant to file complaints for beneficiaries by ensuring the proper valuation of
fear of retaliation and losing their jobs, it is unlikely plan assets and computation of benefits.
to result in verification action being taken. • Require direct reporting of ERISA violations
to DOL. Under current law, a pension plan
Amend Pension Protection Laws auditor who finds a potential ERISA violation
is responsible for reporting it to the plan
Legislative changes to the Employment Retirement administrator, but not directly to DOL. To
Income Security Act of 1974 (ERISA) and criminal ensure that improprieties are addressed, we
penalties for ERISA violations would enhance the recommend that plan administrators or auditors
protection of assets in pension plans. To this end, be required to report potential ERISA violations
the OIG continues to recommend the following directly to DOL. This change would ensure the
legislative actions: timely reporting of violations and would more
• Repeal ERISA’s limited-scope audit actively involve auditors in safeguarding pension
exemption. This exemption excludes pension assets as a first line of defense against the
plan assets invested in financial institutions, abuse of workers’ pension plans.
such as banks and savings and loan firms, • Strengthen criminal penalties in United
from audits of employee benefit plans. States Code Title 18. Three sections of United
Notwithstanding recent changes to auditing States Code Title 18 serve as the primary
standards that strengthen limited-scope audits, criminal enforcement tools for protecting
these audits prevent independent public pension plans covered by ERISA. Section 664
accountants who are auditing pension plans sets penalties for embezzlement or theft from
from rendering an opinion on the plans’ financial employee pension and welfare plans; Section
statements in accordance with professional 1027 sets penalties for making false statements
auditing standards. These “no opinion” audits in documents required by ERISA; and Section
offer weak assurance of asset integrity either to 1954 sets penalties for giving or accepting bribes
plan participants or to the Department. related to the operation of ERISA-covered plans.
Sections 664 and 1027 subject violators to up to
Semiannual Report to Congress | October 1, 2022–March 31, 2023 105
Legislative Recommendations
5 years’ imprisonment while Section 1954 calls
for up to 3 years’ imprisonment for violators.
The OIG recommends raising the maximum
penalty up to 10 years for all three violations to
correspond with the 10-year penalty imposed by
Section 669 (for theft from health care benefit
programs). An increased penalty would serve as
a greater deterrent and, consequently, further
protect employee pension plans.
Improve the Integrity of the FECA
Program
Legislative reforms should be considered in the
following areas to improve the effectiveness and an employee applies for benefits, then that
integrity of the Federal Employees’ Compensation period should likewise come immediately after
Act (FECA) program: an employment-related injury—for all federal
• Provide statutory access to the National workers, not exclusively postal employees. This
Directory of New Hires and Social Security proposal was included in the President’s FY
wage records. Currently, the Department 2021 budget as part of the Office of Workers’
has no access to the National Directory Compensation Programs’ FECA reform.
of New Hires data and can access Social • Allow the temporary suspension of medical
Security wage information only if the claimant providers pending the outcome of criminal
gives it permission. Granting the Department investigations. While FECA regulations allow
routine access to these databases would aid the Office of Workers’ Compensation Programs
in detecting fraud committed by individuals to exclude a provider through administrative
receiving FECA wage loss compensation but means, the Office of Workers’ Compensation
failing to report income they have earned. Programs must give notice to the provider
• Establish a 3-day waiting period at the and afford the provider an opportunity for a
beginning of the claims process. FECA hearing before DOL’s Office of Administrative
legislation provides for a 3-day waiting period, Law Judges. This process and the various
which is intended to discourage the filing of procedures involved can be lengthy. Legislative
frivolous claims. As currently written, however, changes are necessary to enable DOL to
the legislation places the waiting period at the immediately suspend all medical providers who
end of the 45-day continuation-of-pay period, have been indicted for fraudulent billing practices
thereby negating its purpose. Legislation that from providing further medical services and
passed in 2006 placed the waiting period receiving payments. This proposal was included
for postal employees immediately after an in the President’s FY 2021 budget as part of
employment-related injury. If the intent of the the Office of Workers’ Compensation Programs’
law is to ensure a true waiting period before FECA reform.
106 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
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) 99
programs and operations of DOL
Description of significant problems, abuses, and deficiencies relating to the administration
Section 5(a)(1) of programs and operations of the establishment and associated reports and All
recommendations for corrective action made by the Office
Identification of each recommendation made before the reporting period, for which
Section 5(a)(2) corrective action has not been completed, including the potential costs savings associated All
with the recommendation
Section 5(a)(3) Summary of significant investigations closed during the reporting period 57-79
Identification of the total number of convictions during the reporting period resulting from
Section 5(a)(4) 133
investigations
Information regarding each audit, inspection, or evaluation report issued during the
reporting period, including—
(A) a listing of each audit, inspection, or evaluation;
Section 5(a)(5) (B) if applicable, the total dollar value of questioned costs (including a separate category 112
for the dollar value of unsupported costs) and the dollar value of recommendations that
funds be put to better use, including whether a management decision had been made by
the end of the reporting period
Information regarding any management decision made during the reporting period with
Section 5(a)(6) 116
respect to any audit, inspection, or evaluation issued during a previous reporting period
Information from the Federal Financial Management Improvement Act Section 804(b) —
None to
Section 5(a)(7) instances in which an agency has not met intermediate target dates in a remediation plan,
report
and the reasons
Peer review reporting:
Section 5(a)(8) (A) results of any peer review conducted by another OIG, or 135
(B) a statement identifying the date of the last peer review conducted
continued on next page
108 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
None to
Section 5(a)(9) Outstanding peer review recommendations
report
Peer reviews conducted by the OIG and recommendations outstanding or not fully None to
Section 5(a)(10)
implemented report
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)(11) 133
(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)(12) Metrics used for developing the data for the statistical tables 133
Summary of investigations of senior government employees where allegations of
Section 5(a)(13) misconduct were substantiated, including the facts, circumstances, status, and disposition 89
of the matter
Description of whistleblower retaliation cases including information about the official found
Section 5(a)(14) to have engaged in retaliation and what, if any, consequences that establishment imposed 93
to hold that official accountable
Information related to interference by the establishment, including—
(A) a detailed description of any attempt by the establishment to interfere with the
independence of the Office, including—
Section 5(a)(15) (i) with budget constraints designed to limit the capabilities of the Office; and
None to
and (ii) incidents where the establishment has resisted or objected to oversight activities of the
report
Section 6(c)(2) Office or restricted or significantly delayed access to information,
including the justification of the establishment for such action; and
(B) a summary of each report made to the head of the establishment under section 6(c)
(2) during the reporting period
(A) Descriptions of inspections, evaluations, audits, and investigations that are closed and
were not disclosed to the public; and None to
Section 5(a)(16)
(B) Descriptions of investigations conducted by the office involving a senior government report
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 135
Semiannual Report to Congress | October 1, 2022–March 31, 2023 109
Appendices
Funds Recommended for Better Use
Funds Put to a Better Use Agreed to by DOL149
Number Dollar Value
of Reports ($ millions)
For which no management decision had been made as of the commencement of the reporting
1 $29,600
period
Issued during the reporting period $0
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 $39,310
149
The term “recommendation that funds be put to better use” means a recommendation by the OIG that funds could be
used more efficiently or achieve greater program effectiveness if management took actions to implement and complete
the recommendation. This term is defined by the Inspector General Act of 1978, as amended, and includes, among other
things, reductions in future outlays; deobligation of funds from programs or operations; costs not incurred in the future by
implementing recommended improvements related to the operations of the establishment, a contractor, or a grantee; and
any other savings specifically identified, including reverting funds to the U.S. Department of the Treasury to be used for
other purposes.
110 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
Questioned Costs
Resolution Activity: Questioned Costs150
Questioned
Number
Costs
of Reports
($ 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 1 $321
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 1 $321
For which no management decision had been made within six months of issuance 0 $0
Closure Activity: Disallowed Costs151
Disallowed
Number
Costs
of Reports
($ millions)
For which final action had not been taken as of the commencement of the reporting period (as
0 $0
adjusted)
For which management or appeal decisions were made during the reporting period 0 $0
Subtotal 0 $0
For which final action was taken during the reporting period:
• Dollar value of disallowed costs that were recovered 0 $0
• Dollar value of disallowed costs that were written off 0 $0
• Dollar value of disallowed costs that entered appeal status 0 $0
For which no management decision had been made within six months of issuance 0 $0
150
As defined by the Inspector General Act of 1978, as amended, questioned costs include alleged violations of law,
regulations, contracts, grants, or agreements; costs not supported by adequate documentation; or the expenditure of
funds for an intended purpose that was unnecessary or unreasonable.
151
Disallowed costs are costs that the OIG questioned during an audit as unsupported or unallowable and that the
grant/contracting officer has determined the auditee should repay. The Department is responsible for collecting the
debts established. The amount collected may be less than the amount disallowed, and monies recovered usually
cannot be used to fund other program operations and are returned to the U.S. Department of the Treasury.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 111
Appendices
Final Audit Reports Issued
Number of Questioned Costs
Management
Funds Put To Decision Made by
Report Title; Report Number; Date Issued
Recommendations ($)
Better Use ($)
End of Reporting
Period
Employment and Training Administration
Alert Memorandum: ETA and States Need to Ensure the Use of Identity Verification
Service Contractors Results in Equitable Access to Unemployment Insurance 3 $0 $0 No
Benefits and Secure Biometric Data; Report No. 19-23-005-03-315; 3/31/23
Total (1 Report)
Office of the Chief Financial Officer
FY 2022 DOL’s Consolidated Financial Statements Report;
3 $0 $0 Yes
Report No. 22-23-002-13-001; 12/13/22
DOL FY 2022 Management Advisory Comments; Report No. 22-23-005-13-001;
8 $0 $0 Yes
1/30/23
Total (2 Reports)
Office of Chief Information Officer
FY 2022 FISMA DOL Information Security Report; Report No. 23-23-001-07-725;
8 $0 $0 No
2/10/23
Total (1 Report)
Occupational Safety and Health Administration
COVID-19: OSHA’s Enforcement Activities Did Not Sufficiently Protect Workers
5 $0 $0 Yes
from Pandemic Health Hazards; Report No. 19-23-001-10-105; 10/31/22
OSHA Needs to Better Address Complaints and Referrals for Increased Worker
3 $0 $0 No
Safety; Report No. 02-23-001-10-10-105; 3/6/23
Total (2 Reports)
Office of Workers Compensation Programs
Special Report Relating to the Federal Employees' Compensation Act Special No Response
0 $0 $0
Benefit Fund September 30, 2022; Report No. 22-23-001-04-431; 11/3/22 Required152
COVID-19: Insights on Telehealth Use and Program Integrity Risks in DOL
No Response
Workers’ Compensation Programs During the Pandemic; 0 $0 $0
Required
Report No. 19-23-002-04-001; 12/13/22
FY 2021 Longshore and Harbor Workers’ Compensation Act Special Fund
No Response
Financial Statements and Independent Auditors’ Report; 0 $0 $0
Required
Report No. 22-23-003-04-432; 2/22/23
FY 2021 District of Columbia Workmen’s Compensation Act Special Fund
Financial Statements and Independent Auditors’ Report; 2 $0 $0 No
Report No. 22-23-004-04-432; 2/22/23
OWCP Did Not Ensure Best Prices and Allowed Inappropriate, Potentially Lethal
10 $321,261,486 $0 No
Prescriptions in the FECA Program; Report No. 03-23-001-04-431; 3/31/23
Total (5 Reports)
Final Audit Total (11 Reports) 42 $321,261,486 $0
152
No Response Required in the Semiannual Report indicates that no management decision response was required
because the report issued had no recommendations.
112 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
Other Reports
Management Decision
Number of
Report Title; Report Number; Date Issued Made by End of
Recommendations
Reporting Period
Employment and Training Programs
Workforce Innovation and Opportunity Act
Quality Control Review Single Audit of State of New Mexico Workforce
Solutions Department for The Year Ended June 30, 2021; 2 No
Report No. 24-23-001-50-598; 3/7/23
Quality Control Review Single Audit of Service, Employment, and
Redevelopment Jobs for Progress National, Inc. for The Year Ended 0 No Response Required
June 20, 2022; Report No. 24-23-002-50-598; 3/30/23
Total (2 Reports)
Congressional Testimony
Testimony before the U.S. House of Representatives Committee on Ways and Means
The Greatest Theft of American Tax Dollars: Unchecked Unemployment
0 No Response Required
Fraud; Report No. 19-23-003-03-315; 2/8/23
Testimony before the U.S. House of Representatives Committee on Oversight and Accountability Subcommittee on
Government Operations and the Federal Workforce
Waste, Fraud, and Abuse Go Viral: Inspectors General on Curing the
0 No Response Required
Disease; Report No. 19-23-004-03-315; 3/9/23
Total (2 Reports)
Other Reports Total (4 Reports) 2
Semiannual Report to Congress | October 1, 2022–March 31, 2023 113
Appendices
Unresolved Audit Reports Over 6 Months Old
Number of Unimplemented
Questioned
Agency Report Title; Report Number; Date Issued
Recommendations
Costs ($)
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve;
OIG Negotiating with Agency
COVID-19: More Can Be Done to Mitigate Risk to Unemployment Compensation Under
ETA 1 $0
the CARES Act; Report No. 19-20-008-03-315; 08/07/20
Alert Memorandum: The Employment and Training Administration Needs to Issue
ETA Guidance to Ensure State Workforce Agencies Provide Requested Unemployment 2 $0
Insurance Data to the Office of Inspector General; Report No. 19-21-005-03-315; 06/16/21
Unemployment Insurance Overpayments Related to Work Search Underscore the Need
ETA 1 $0
for More Consistent State Requirements; Report No. 04-21-001-03-315; 09/29/21
Alert Memorandum: The Employment and Training Administration Needs to Ensure State
ETA Workforce Agencies Report Activities Related to CARES Act Unemployment Insurance 1 $0
Programs; Report No. 19-22-004-03-315; 08/02/22
Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in
ETA 2 $0
High-Risk 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
ETA Payments Including Fraud or From Payment Delays; Report No. 19-22-006-03-315; 2 $0
09/30/22
MSHA Needs to Provide Better Oversight of Emergency Response Plans;
MSHA 2 $0
Report No. 05-17-002-06-001; 03/31/17
MSHA Did Not Evaluate Whether Civil Monetary Penalties Effectively Deterred Unsafe
MSHA 2 $0
Mine Operations; Report No. 23-19-002-06-001; 08/16/19
MSHA Needs to Improve Efforts to Protect Coal Miners from Respirable Crystalline Silica;
MSHA 2 $0
Report No. 05-21-001-06-001; 11/12/20
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist;
OASAM 1 $0
Report No. 23-16-002-07-725; 09/30/16
continued on next page
114 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
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;
OSEC 1 $0
Report 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 18 $0
Number of Funds Recommended for
Agency Report Title; Report Number; Date Issued
Better Use ($)
Recommendations
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve;
OIG Negotiating with Agency
Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in
ETA 1 $29,581,490,253
High-Risk Areas Increased to $45.6 Billion; Report No. 19-22-005-03-315; 09/21/22
Total Funds Recommended for Better Use 1 $29,581,490,253
Total Audit Exceptions and Questioned Costs 18 $0
Total Funds Recommended for Better Use 1 $29,581,490,253
Total Audit Exceptions and Funds Recommended for Better Use 19 $29,581,490,253
Semiannual Report to Congress | October 1, 2022–March 31, 2023 115
Appendices
Management Decision Made During this
Reporting Period on Audits, Inspections,
or Evaluations Issued during a Previous
Reporting Period
Funds Put to Better Use
Management Decision
Questioned Costs ($)
Number of
Made on Previously
Report Title; Report Number; Date Issued
($)
Recommendations
Issued Audits
Employment and Training Administration
Alert Memorandum: The Employment and Training Administration Needs to
Ensure State Workforce Agencies Report Activities Related to CARES Act 2 $0 $0 Yes
Unemployment Insurance Programs; Report No. 19-22-004-03-315; 08/02/22
Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments
in High-Risk Areas Increased to $45.6 Billion; 3 $0 $29,581,490,253 Yes
Report No. 19-22-005-03-315; 09/21/22
COVID-19: ETA and States Did Not Protect Pandemic-Related UI Funds from
Improper Payments Including Fraud or From Payment Delays; 5 $0 $0 Yes
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
3 $0 $0 Yes
More Needs to 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 Payment Integrity Information Act for FY 2021; 2 $0 $0 Yes
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 1 $0 $0 Yes
Reliability; Report No. 23-22-002-04-001; 09/26/22
Total (1 Reports)
Final Audit Total (6 Reports) 16 $0 $29,581,490,253
116 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
Other Reports
Number of Management Decision
Report Title; Report Number; Date Issued
Recommendations Made
Employment and Training Programs
Workforce Innovation and Opportunity Act
Quality Control Review for the Single Audit of the State of Hawaii for the
0 No Response Required
Fiscal Year Ended June 30, 2020; Report No. 24-22-003-03-315; 06/08/22
Quality Control Review for the Single Audit of AARP Foundation for the Year
2 No
Ended December 30, 2021; 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;
0 No Response Required
Report No. 22-22-008-50-598; 08/31/22
Total (1 Report)
Other Reports Total (3 Reports) 2
Semiannual Report to Congress | October 1, 2022–March 31, 2023 117
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.
COVID-19: MSHA Faces Multiple Challenges in Responding to the Pandemic;
Report No. 19-20-006-06-001; 7/24/2020
On March 28, 2020, the Department of Homeland Security labeled mining among critical infrastructure
industries that states should consider keeping open to help in the U.S. response to the COVID-19 pandemic.
Since mines continued to operate, MSHA continued to perform mine inspections and investigations. Given
the risks to both miners and MSHA’s workforce, we conducted an audit to determine the plans and guidance
MSHA had developed to address challenges created by COVID-19 and to decide to what extent these
challenges affected MSHA’s ability to protect the safety of miners and its workforce.
Our audit found MSHA had to suspend or reduce certain types of enforcement activities due to the
pandemic. We recommended the Assistant Secretary for Mine Safety and Health monitor the potential
backlog of suspended and reduced enforcement activities and develop a plan to manage the backlog once
full operations resume.
In February 2023, MSHA personnel notified us they had no backlog remaining from the pandemic and
responded to the OIG’s questions related to potential backlogs for nine specific types of enforcement
activities. We closed this recommendation based on the responses MSHA provided to our questions on
select activity codes that could potentially have a backlog from the pandemic.
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 Worker National Reserve to prevent, prepare for,
and respond to the pandemic. From April to August 2020, ETA awarded 57 grants totaling $366 million.
The OIG contracted with an independent certified public accounting firm (Firm) to conduct a performance
audit of the $366 million and found ETA generally administered the Disaster National Dislocated Worker
Grant 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
118 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
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 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 Dislocated Worker Grants
program. ETA performed monitoring reviews and provided technical assistance to the States of Florida,
New York, Nevada, and Louisiana. Specifically, ETA provided technical assistance, including hosting a series
of peer-to-peer sessions that allowed COVID-19 Dislocated Worker Grants recipients the opportunity to
share with one another their challenges with COVID-19 Dislocated Worker Grants implementation, as well as
possible solutions to attain planned goals, and regular virtual technical assistance meetings. In addition,
ETA approved the following no-cost extensions for the States of:
• Florida – extended the grant period of performance to March 31, 2023;
• Louisiana – extended the grant period of performance to December 31, 2022;
• Nevada – extended the grant period of performance to September 30, 2023; and
• New York – extended the grant period of performance to June 30, 2023.
As of the quarter ending September 30, 2022, the States of:
• Florida has expended 94 percent of its grant award and enrolled 92 percent of its targeted participants;
• Louisiana has expended 49 percent of its grant award and enrolled 23 percent of its targeted participants;
• Nevada has expended 85 percent of its grant award and enrolled 96 percent of its targeted participants; and
• New York has expended 49 percent of its grant award and enrolled 41 percent of its targeted participants.
ETA Should Do More to Assist Vulnerable States Prepare for Disaster
Unemployment Assistance Program Implementation;
Report No. 04-20-002-03-315; 09/29/20
In FY 2017, Hurricanes Harvey, Irma, and Maria devastated parts of the Caribbean Islands and the
United States. The Federal Emergency Management Agency, by way of administration from ETA,
granted approximately $85 million in Disaster Unemployment Assistance program funds to the States
of Florida, Georgia, and Texas, and the islands of Puerto Rico and the U.S. Virgin Islands. The Disaster
Unemployment Assistance program is responsible for providing timely unemployment benefits to individuals
who have become unemployed because of a presidential-declared disaster but are not eligible for regular
unemployment insurance. Our audit found that ETA did not have adequate policies in place to provide
timely oversight or ensure states provided periodic training to staff and developed standard procedures to
substantiate a claimant’s eligibility. In addition, ETA did not establish adequate controls to ensure states paid
only eligible claimants and paid them as promptly as administratively feasible.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 119
Appendices
In response to our audit, ETA developed standard operating procedures for the National Disaster
Unemployment Assistance Rapid Response, establishing a rapid response team that includes Disaster
Unemployment Assistance subject matter experts. ETA also implemented a requirement for states to give
assurance that they will conduct annual training and maintain a standard operating procedures manual for
the Disaster Unemployment Assistance program each fiscal year as part of the State Quality Service Plan.
COVID-19: OSHA Needs to Improve Its Handling of Whistleblower Complaints
During the Pandemic; Report No. 19-20-010-10-105; 08/14/20
The COVID-19 pandemic raised concerns about the safety and health of workers and the protections
afforded to workers who report potential workplace safety violations, including those violations involving
social distancing and personal protective equipment. OSHA’s Whistleblower Protection Program enforces
23 statutes that prohibit employers from retaliating against employees when they report employer violations
of various workplace safety, consumer product, environmental, financial reform, and securities laws.
This is important because, if OSHA finds merit to an employee’s allegations, the employee may be entitled to
reinstatement, back pay, restored benefits, or other remedies.
Our audit found the pandemic significantly increased the number of whistleblower complaints received by
OSHA, thus challenging OSHA with completing investigations timely. Failure to respond to whistleblower
complaints timely may lead to emotional and financial suffering of workers and erosion of key evidence and
witnesses. We made recommendations to OSHA regarding staff vacancies, continued assessment of its
Region II triage pilot, and development of a caseload management plan to evenly distribute whistleblower
complaints among investigators.
In response to our audit, OSHA:
1) Initiated efforts to fill the five whistleblower positions with Alternative Dispute Resolution Coordinators,
as this program has proven to be an effective and viable alternative to the investigative process
and an invaluable asset to OSHA’s Whistleblower Protection Program. The Alternative Dispute
Resolution Coordinators are being placed in regions without a dedicated Alternative Dispute Resolution
Coordinator. Three of the positions have already been filled, and active recruiting is occurring to fill
the others;
2) Monitored, reviewed, and evaluated the procedures in the Region II triage pilot. As a result, OSHA
integrated a portion of the triage pilot into the new Whistleblower Investigations Manual, effectively
extending the triage process to all regions; and
3) Assigned 25 full-time equivalents to the various regional whistleblower programs in proportion to each
region’s need. The distribution of the new full-time equivalents will assist the equitable distribution of
cases. OSHA also implemented various performance measures to help reduce the backlog of cases.
120 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
Region IX Whistleblower Protection Program Complaints Were Not Complete or
Timely; Report No. 02-21-001-10-105; 11/23/20
On July 6, 2018, then-Secretary of Labor Alexander Acosta received a referral from the U.S. Office of
Special Counsel that described allegations against the OSHA Whistleblower Protection Program.
The program investigates complaints of employer retaliation when employees report violations of law by
their employers. The whistleblower in the U.S. Office of Special Counsel’s referral was an investigator
for OSHA from 2010 to 2015. The whistleblower alleged OSHA’s Region IX had breakdowns processing
the complaints it received, which, in turn, resulted in widespread failure to protect complainants.
Our audit found problems with the completeness and timeliness of investigations into whistleblower
complaints submitted to OSHA’s Region IX. We identified that complaints were missing essential elements
when investigating the complaints and that cases exceeded statutory timeframes for investigations by an
average of 634 days. We made recommendations to OSHA regarding case management, monitoring,
and development of guidance.
In response to our audit, OSHA:
1) Created a formula using its Performance Measures and Key Indicators Report and Screening and
Investigation Data Reports to determine 25 full time equivalents were needed to reach an annual
caseload of 25 completed cases per investigator. Using ARPA funding and to decrease a rising backlog,
OSHA assigned 25 full time equivalents to the various regional whistleblower programs in proportion to
each region’s needs;
2) Created investigative procedures in its Whistleblower Investigations Manual pertaining to reasonable
balance between quality and timeliness of its investigations. These procedures reflected the best
practices developed across all OSHA regions;
3) OSHA issued CPL 02-03-010, Whistleblower Protection Program Pilot Procedures. The directive enables
the regions to construct and test new procedures to experiment with greater efficiencies. Upon completion
of the pilot period, a review and evaluation are performed to determine whether it expands into national
policy and, subsequently, into the next Whistleblower Investigations Manual update; and
4) Instituted Quality Review Audits to regularly audit a sampling of cases to review whether investigators
are following procedures and meeting all investigation requirements.
Semiannual Report to Congress | October 1, 2022–March 31, 2023 121
Appendices
Unimplemented Recommendations
During this reporting period, we encountered one instance of audits or evaluations provided to the
Department for comment that were not responded to within 60 days. However, management decisions were
received in response to all audits and evaluations issued before the commencement of this reporting period.
From October 1, 2011, through September 30, 2022, the OIG made 1,717 audit recommendations, of which
166 have not been fully implemented. These 166 recommendations include 105 recommendations resulting
from audits issued since the end of FY 2020, and, in many cases, the corrective action plans are in place.
RECOMMENDATIONS MADE PRIOR TO OCTOBER 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 21 $0
2020 105 19 $0
2021 133 64 $39,311,226,638
2022 67153 41 $29,581,490,253
Total 1,717 166 $68,892,716,891
153
Total includes four recommendations in two Quality Control Review reports that were issued to accounting firms in FY 2022.
122 Semiannual Report to Congress | October 1, 2022–March 31, 2023
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 Mitigate Include CARES Act UI transactions in the Benefit Accuracy Measurement (BAM) or
Risk to Unemployment Compensation develop an alternative methodology to reliably estimate improper payments for those
Under the CARES Act; programs;154 Issue guidance directing states to provide access to state UI claimant data
Report No. 19-20-008-03-315; 08/07/20 to prevent and detect fraud.
Alert Memorandum: The Employment and Establish effective controls, in collaboration with SWAs, to mitigate fraud and other
Training Administration (ETA) Needs to improper payments to ineligible claimants, including the areas identified in the
Ensure State Workforce Agencies (SWA) memorandum: UI benefits paid to multistate claimants, claimants who used the Social
Implement Effective Unemployment Security numbers of deceased individuals, potentially ineligible federal inmates, and
Insurance Program Fraud Controls for claimants with suspicious email accounts; Effective controls will help prevent similar
High Risk Areas; or greater amounts of fraud and allow those funds to be put to better use; Work with
Report No. 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 Implement Continue to work with states to develop, operate, and maintain a modular set of
CARES Act Unemployment Insurance technological capabilities to modernize the delivery of UI benefits that is sufficient to
Programs; manage and process sudden spikes in claims volume during emergencies or high
Report No. 19-21-004-03-315; 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
to the Office of Inspector General or the the notice requirement and its grantees comply with the reporting requirements of the
Employment and Training Administration; DLMS; Continue to work with the OIG and, within 30 days of this memorandum, meet
Report No. 19-21-006-03-315; 07/01/21 with the OIG to develop a permanent approach to OIG access to Integrity Data Hub
(IDH) data
Alert Memorandum: Employment and Continue to identify states that have not complied with ETA’s reporting requirements for
Training Administration Needs to Ensure CARES Act UI programs and work with them to ensure missing reports and information
State Workforce Agencies Report Activities are submitted before commencement of the Department’s FY 2022 financial statement
Related to CARES Act Unemployment audit; Verify the accuracy of reports that cite no activity and ensure corrections are
Insurance Programs; made where warranted.
Report No. 19-22-004-03-315; 08/02/22
154
These programs are: PUA; PEUC; FPUC; Temporary Full Federal Funding; Emergency Unemployment Relief for
Governmental Entities, Certain Nonprofit Organizations, and Federally Recognized Indian Tribes; and Temporary
Financing of Short-Time Compensation.
continued on next page
Semiannual Report to Congress | October 1, 2022–March 31, 2023 123
Appendices
Alert Memorandum: Potentially Fraudulent Implement immediate measures to ensure SWAs are required to provide ongoing
Unemployment Insurance Payments in access to the OIG by amending its current guidance to require disclosures to the OIG
High-Risk Areas Increased to $45.6 Billion;for audits and investigations as necessary, mandatory, and without time limitation for
Report No. 19-22-005-03-315; 9/21/22 the proper oversight of the UI program; Expedite OIG-related amendments to 20 C.F.R.
§ 603.6(a) to make ongoing disclosures of UI information to DOL OIG mandatory by
expressly adding the U.S. Department of Labor, Office of Inspector General (including
its agents and contractors) to the list of required disclosures that are necessary for the
proper oversight of the UI program without distinction as to purpose (e.g., audits versus
investigations); Expedite OIG-related amendments to 20 C.F.R. § 603.5(i) to expressly
make disclosures of UI information to federal officials for oversight, audits,
and investigations of federal programs mandatory.
COVID-19: ETA and States Did Not Protect Use data collected from monitoring and BAM reports to identify the areas of highest
Pandemic-Related UI Funds from Improper improper payments including fraud and create a plan to prevent similar issues in future
Payments Including Fraud or from Payment temporary UI benefit programs; Require states to have written policies and procedures,
Delays; which apply lessons learned during the COVID-19 pandemic, to continue eligibility
Report No. 19-22-006-03-315; 09/30/22 testing and Benefit Payment Control procedures during emergencies or other times of
increased claims volume. These policies and procedures should include strategies to
pay claimants timely; Work with NASWA to update the IDH Participant Agreement to
require state to submit the results of their UI fraud investigations; Work with NASWA to
ensure the IDH cross matches are effective at preventing the types of fraud that were
detected during the pandemic and regularly update using the results of state fraud
investigations; Work with the OIG and states to recover the greatest practicable amount
of the $7,092,604 paid to claimants connected to likely fraudulent claims.
Alert Memorandum: ETA and States Need Provide guidance that ensures SWAs provide upfront, clear, consistent, and fair
to Ensure the Use of Identity Verification alternatives to services that rely on facial recognition technology; Require SWAs that
Service Contractors Results in Equitable use facial recognition technology to test the system for biases and design procedures to
Access to Unemployment Insurance mitigate those effects. SWAs need to report findings from bias testing to ETA regarding
Benefits and Secure Biometric Data; implementation or use of identity verification services that rely on facial recognition
Report No. 19-23-005-03-315; 3/31/23 technology; Provide guidance to SWAs to help ensure that contracts with identity
verification service providers include requirements on the secure storage of data,
destruction of the data once the contract is concluded, and purging of any large datasets
collected by identity verification service providers on a regular basis.
Worker Safety
MSHA Needs to Provide Better Oversight Clarify mine operators’ responsibilities for local coordination under the Mine Improvement
of Emergency Response Plans; and New Emergency Response (MINER) Act, including coordination and communication
Report 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.
MSHA Needs to Improve Efforts to Protect Adopt a lower legal exposure limit for silica in coal mines based on recent scientific
Coal Miners from Respirable Crystalline evidence; Establish a separate standard for silica that allows MSHA to issue citations
Silica; Report No. 05-21-001-06-001; and monetary penalty when violations of its silica exposure limit occur; Enhance its
11/12/20 sampling program to increase the frequency of inspector samples where needed
(e.g., by implementing a risk-based approach).
OSHA’s Diminished Enforcement Left More Implement a policy for future emphasis programs that minimizes the lapse in
Workers at Risk for Exposure to Silica; enforcement between canceled, revised, or new programs; Establish meaningful goals
Report No. 02-21-003-10-105; 09/29/21 and processes to assess whether OSHA’s outreach events are achieving the desired
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 Inspection crises such as the COVID-19 pandemic that (a) identifies external federal agencies with
Collaboration Opportunities with External enforcement or oversight personnel who are active on worksites and (b) defines how OSHA
Federal Agencies; will collaborate with those agencies; OSHA should consider incorporating into the plan: a
Report No. 19-22-003-10-105; 03/31/22 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.
124 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
COVID-19: OSHA’S Enforcement Activities Provide additional training to CSHOs to enforce the recording and reporting standard
Did Not Sufficiently Protect Workers from for fatalities; Update guidance or policy to include supervisory review of inspection files
Pandemic Health Hazards; to ensure they contain adequate support for the reasons regarding citation issuance
Report No. 19-23-001-10-105; 10/31/22 decisions before closing inspections; Develop a plan for a future pandemic or epidemic
to collaborate with external agencies on worksite case data and to use this data to
maximize rapid response and enforcement actions in worksites; As part of OSHA’s
rulemaking on infectious diseases, require employers to notify all employees of all
known positive cases of infectious diseases at the worksite; Develop and implement
a tracking tool to ensure OSHA receives and reviews all items CSHOs request during
inspections to ensure alleged hazards have been mitigated.
OSHA Needs to Better Address Modify the Field Operations Manual to include a policy for mandatory interviews of
Complaints and Referrals for Increased complainants and witnesses or document the rationale for lack thereof and provide
Worker Safety; training to Compliance Safety and Health Officers on the updated requirements.
Report No. 02-23-001-10-105; 03/06/23
Employment and Training Programs
ETA Did Not Sufficiently Plan and Execute Improve funding opportunity announcements for discretionary grant programs by:
the American Apprenticeship Initiative evaluating program goals using the SMART concept or a similar approach, and
Grant Program; including required metrics that directly measure the success of each program goal,
Report No. 05-21-004-03-375; 09/30/21 are clear, 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.
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; who receive SSA retirement benefits are identified timely and their FECA benefits are
Report No. 03-12-001-04-431; 02/15/12 adjusted accordingly.
EBSA Did Not Have the Ability to Protect Reduce or eliminate exemption thresholds for small plans.
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
OWCP Did Not Ensure Best Prices and Implement a process to ensure competitive prices for the FECA program by regularly
Allowed Inappropriate, Potentially Lethal evaluating alternate pricing methodologies and other sources—including publicly
Prescriptions in the FECA Program; available benchmark price lists, state fee schedules, market research, and comparable
Report No. 03-23-001-04-431; 3/31/23 payers—and updating its pricing methodology as appropriate; Implement a process
to review the effectiveness of policy changes, including: (a) documented assessment
of prescription information after any changes in the authorization, approval, and/or
adjudication process; and (b) documented solutions for any performance gaps identified
during the review, including follow-up testing; Implement an ongoing pharmaceutical
monitoring and alert program to identify and closely monitor significant changes in
costs, prescribing patterns, utilization, sources, and new and novel prescription drugs;
Establish internal controls that identify prescription drugs payment and management
issues in near-real-time; Implement a technology solution to perform ongoing
prescription-claim-level reviews in near real-time; Develop and deliver ongoing formal
training for staff involved in making pharmaceutical decisions.
continued on next page
Semiannual Report to Congress | October 1, 2022–March 31, 2023 125
Appendices
Departmental Management
FISMA Fiscal Year 2015: Ongoing Security Realign the organizational structure as it relates to the CIO to address organizational
Deficiencies Exist; independence issues.
Report No. 23-16-002-07-725; 09/30/16
FY 2019 FISMA DOL Information Security Implement improvements in DOL’s information security program for the following areas:
Report: Implementation of Security Tools Risk Management, Configuration Management, Identity and Access Management, Data
Hindered by Insufficient Planning; Protection and Privacy, and Information Security Continuous Monitoring.
Report No. 23-20-002-07-725; 12/23/19
DOL Needs to Do More to Secure Establish and implement procedures to ensure E2 Solutions (E2) account
Employees’ Personally Identifiable management practices enforce DOL’s security policies; Establish and implement
Information in the Travel Management procedures to ensure E2 is managed in compliance with contractual security
System; requirements and DOL computer security policies for contracted information systems.
Report No. 23-20-003-13-001; 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 Risk review checklist; Enforce DOL policies and procedures regarding separation of duties
Management and Continuous Monitoring so developers do not possess the ability to migrate changes to production; Enforce
Information Security Controls; DOL security baseline policies with DOL’s Cloud Service Providers (CSP) and develop
Report No. 23-21-001-07-725; 12/22/20 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.
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; of DOL’s executive strategy and management boards and committees including but
Report No. 23-21-002-01-001; 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.
The U.S. Department of Labor Did Not Maintain the current focus on increasing technical assistance and funding to states to
Meet Requirements for Compliance with improve the improper payment reduction strategies in order to reduce the improper
Payment Integrity Information Act for FY payments estimate rate below the 10 percent threshold and demonstrate improvement
2021; Report No. 22-22-007-13-001; on the rate; Revise the methodology used to calculate the improper payment
07/01/22 information for the FPUC program.
FY 2022 Independent Auditors' Report on Design and implement controls over their respective estimates to ensure management’s
DOL's CFS; Report No. 22-23-002-13-001; review of the estimates are performed at a sufficient level of detail, including the
12/13/22 methodology, underlying data, and assumptions used to develop the estimates;
Maintain documentation of the reviews performed to assess the reasonableness of the
methodology, underlying data, and assumptions used to develop the estimates that is
sufficiently detailed to evidence the specific items reviewed, analysis performed, and
conclusions reached; and provide additional training to the reviewers of the estimates to
reinforce established policies and procedures, as necessary.
FY 2022 FISMA DOL Information Security Update DOL entity-wide and system-level security policies, procedures, and plans to
Report: DOL’s Information Security comply with NIST SP 800-53, Rev. 5; Develop and implement policies and procedures
Program Not Remaining Current with to update DOL’s system repository based on a defined frequency; implement proper
Security Requirements; quality control to ensure change management processes are being performed for
Report No. 23-23-001-07-725; 02/10/23 all systems and equipment on the DOL network; Develop Departmental policies and
procedures that require all DOL agencies to perform data exfiltration tests to identify
gaps in its data exfiltration and network defense; Implement data loss prevention tools
and alerts based on the results of agencies’ data exfiltration tests; verify if systems
have been appropriately authorized in accordance with DOL’s policy; Enhance incident
response activity training to emphasize the importance of submitting required incidents
to the US-CERT within the 1-hour timeframe; implement an automated mechanism to
report incidents to the US CERT within the 1-hour timeframe.
126 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
Summary of Reports with Unimplemented
Recommendations with Cost Savings / Funds
Put to Better Use
Funds Put to Better
Number of
Report Title; Report Number; Date Issued Unimplemented
Recommendations Use ($)
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 1 $5,409,966,198
to ineligible claimants, including the areas identified in the memorandum: UI benefits paid to multistate
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
1 $33,745,677,576
Continue to work with states to develop, operate, and maintain a modular 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
1 $155,582,864
easily verifiable; have 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 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.
Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk Areas
Increased to $45.6 Billion; Report No. 19-22-005-03-315; 09/21/22
Expedite OIG-related amendments to 20 C.F.R. § 603.6(a) to make ongoing disclosures of UI
1 $29,581,490,253
information to DOL OIG mandatory by expressly adding the U.S. Department of Labor, Office of
Inspector General (including its agents and contractors) to the list of required disclosures that are
necessary for the proper oversight of the UI program without distinction as to purpose (e.g., audits
versus investigations).
Total 4 $68,892,716,891
Semiannual Report to Congress | October 1, 2022–March 31, 2023 127
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 March 31, 2023). For
identification of each recommendation made before March 31, 2023, see https://www.oig.dol.gov/
recommendationdashboard.htm.
Number of
Disallowed Costs
Report Title; Report Number; Date Issued Unimplemented
Owed
Recommendations
Employee Benefits Security Administration
Limited-Scope Audits Provide Inadequate Protections to Retirement Plan Participants;
1 $0
Report No. 05-14-005-12-121; 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;
1 $0
Report No. 26-18-002-03-360; 09/28/18
Job Corps Should Do More to Prevent Cheating in High School Programs; Report No. 26-19-001-03-370;
2 $0
09/25/19
continued on next page
128 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
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
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;
3 $0
Report No. 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;
4 $0
Report No. 05-21-004-03-375; 09/30/21
COVID-19: Safety and Remote Learning Challenges Continue for Job Corps;
3 $0
Report No. 19-22-001-03-370; 11/12/21
Quality Control Review: Single Audit of the Center for Workforce Inclusion, Inc. for the Year Ended
2 $0
June 30, 2020; Report No. 24-22-001-50-598; 01/06/22155
COVID-19: Delays in Providing Disaster Relief Jeopardize $366 Million Disaster Worker Grant Program;
1 $0
Report No. 19-22-002-03-391; 01/28/22
Alert Memorandum: The ETA Needs to Ensure SWAs Report Activities Related to CARES Act UI
2 $0
Programs; Report No. 19-22-004-03-315; 08/02/22
Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk Areas
2 $0
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 Payments
5 $0
Including Fraud or From Payment Delays; Report No. 19-22-006-03-315; 09/30/22
Quality Control Review: Single Audit of AARP Foundation for the year ended December 31, 2021;
2 $0
Report No. 24-22-004-50-598; 09/30/22155
155
The Quality Control Review Single Audit Report recommendations are addressed to the accounting firm; however, ETA
funds the grant and are copied during report issuance, hence the addition to the ETA section of the table. The accounting
firm will address the recommendations.
continued on next page
Semiannual Report to Congress | October 1, 2022–March 31, 2023 129
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
MSHA Needs to Improve Efforts to Protect Coal Miners from Respirable Crystalline Silica;
3 $0
Report No. 05-21-001-06-001; 11/12/20
MSHA Can Improve How Violations Are Issued, Terminated, Modified, and Vacated;
9 $0
Report No. 05-21-002-06-001; 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; 03/13/19 2 $0
Alert Memorandum: Security Vulnerability Relating to DOL Information Security Property;
2 $0
Report No. 50-19-002-07-725; 06/17/19
FY 2019 FISMA DOL Information Security Report: Implementation of Security Tools Hindered by
11 $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
17 $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
15 $0
Remain Deficient; Report No. 23-22-001-07-725; 01/28/22
FY 2022 DOL Made Progress in Implementing Geospatial Data Act Requirements, But More Needs to Be
3 $0
Done; Report No. 23-22-003-01-001; 09/30/22
continued on next page
130 Semiannual Report to Congress | October 1, 2022–March 31, 2023
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
3 $0
Year Ended September 30, 2020; Report No. 22-21-005-13-001; 12/18/20
The U.S. Department of Labor Did Not Meet Requirements for Compliance with Payment Integrity
2 $0
Information Act for FY 2021; Report No. 22-22-007-13-001; 07/01/22
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;
5 $0
Report No. 23-21-002-01-001; 09/30/21
continued on next page
Semiannual Report to Congress | October 1, 2022–March 31, 2023 131
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;
4 $0
Report No. 02-19-001-10-105; 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
Region IX Whistleblower Protection Program Complaints Were Not Complete or Timely;
1 $0
Report No. 02-21-001-10-105; 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;
2 $0
Report No. 02-21-003-10-105; 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: The Office of Workers’ Compensation Programs’ Workers’ Compensation Medical Bill
1 $0
Process System Data Were of Undetermined Reliability; Report No. 23-22-002-04-001; 09/26/22
Wage and Hour Division
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 162 $0
132 Semiannual Report to Congress | October 1, 2022–March 31, 2023
Appendices
Investigative Statistics
Division
Total
Totals
Investigative Reports Issued / Cases Closed (includes investigative reports issued, case closing
131
reports, and matters referred for possible civil and/or administrative action):
Program Fraud 119
Labor Racketeering 12
Cases Opened: 163
Program Fraud 153
Labor Racketeering 10
Cases Referred for Prosecution (each case is measured as a singular statistic and may include more
125
than one person or business entity):
Program Fraud 115
Labor Racketeering 10
Cases Referred for Administrative/Civil Action (each case is measured as a singular statistic and may
58
include more than one person or business entity):
Program Fraud 57
Labor Racketeering 1
Persons Referred to the Department of Justice for Criminal Prosecution (includes the number of
128
individuals and business entities referred for prosecution):
Program Fraud 113
Labor Racketeering 15
Persons Referred to State and Local Prosecuting Authorities for Criminal Prosecution (includes
27
the number of individuals and business entities referred for prosecution):
Program Fraud 26
Labor Racketeering 1
Indictments and Criminal Informations That Resulted from Any Prior Referral to Prosecuting
233
Authorities (includes sealed and unsealed indictments):
Program Fraud 216
Labor Racketeering 17
Indictments (includes sealed and unsealed indictments): 233
Program Fraud 216
Labor Racketeering 17
Convictions: 270
Program Fraud 236
Labor Racketeering 34
Statutory Debarments: 2
Program Fraud 1
Labor Racketeering 1
Semiannual Report to Congress | October 1, 2022–March 31, 2023 133
Appendices
Recoveries, Cost-Efficiencies, Restitutions, Fines/Penalties, Forfeitures, and Civil
$74,404,283
Monetary Actions:
Program Fraud $48,983,270
Labor Racketeering $25,421,012
Recoveries (the dollar amount/value of an agency’s action to recover or to reprogram funds or
$5,481,078
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 $1,425,661
more efficiently):
Restitutions/Forfeitures (the dollar amount/value of restitutions and forfeitures resulting from
$57,765,718
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,
$9,731,827
judgments, court costs, and other penalties resulting from OIG criminal investigations):
Total $74,404,283
134 Semiannual Report to Congress | October 1, 2022–March 31, 2023
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.
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 | October 1, 2022–March 31, 2023 135
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 October 1, 2022, through March 31, 2023, a total
of 5,876 complaints were opened in the OIG Hotline’s complaint management system. The majority of
these complaints involve concerns regarding COVID-19-related unemployment benefits. Since the start
of the pandemic, the OIG’s Office of Investigations referred 29,622 complaints to the appropriate State
Workforce Agency for further review and/or action in response to complaints regarding alleged fraud
involving COVID-19-related unemployment benefits. During this reporting period, the OIG Hotline received
additional complaints that are awaiting processing.
*The total number of complaints referred during this reporting period exceeds the number of complaints
received as the OIG Hotline is continuing to analyze and process a backload of complaints regarding
alleged fraud involving COVID-19-related unemployment benefits.
Complaints Received (by method reported) Totals
Telephone 215
E-mail/Internet 5,634
Mail 25
Fax 0
Walk-In 2
Total 5,876
Contacts Received (by source) Totals
Complaints from Individuals or Non-Governmental Organizations 1,891
Complaints/Inquiries from Congress 6
Referrals from GAO 2
Complaints from Other DOL Agencies 11
Complaints from Other (non-DOL) Government Agencies 3,966
Total 5,876
Disposition of Complaints Totals
Referred to OIG Components for Further Review and/or Action 123
Referred to DOL Program Management for Further Review and/or Action 287
Referred to Non-DOL Agencies/Organizations 118
No Referral Required/Informational Contact 232
Total 760
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OIG FY 2023 Audit Workplan
Fiscal Year 2023 Audit Workplan
Annotated with “In-Progress” for those projects that are ongoing.
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.
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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
of age cohabitate with minors as young as 16 years old. Some Job Corps minors may: (1) have been
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OIG FY 2023 Audit Workplan
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.
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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 would 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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OIG FY 2023 Audit Workplan
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
Semiannual Report to Congress | October 1, 2022–March 31, 2023 141
OIG FY 2023 Audit Workplan
the pandemic’s first year. According 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.
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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
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 Progress. 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 Progress. 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
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OIG FY 2023 Audit Workplan
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.
26. COVID-19: ETA and States’ Efforts to Address UI Claimants Filing with Social Security Numbers
of Federal Prisoners – In Progress. 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 Progress. 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
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OIG FY 2023 Audit Workplan
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.
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.
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34. Use of Complainant Interviews in OSHA Complaint Inspections – Completed. 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.
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.
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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 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 Progress.
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.
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OIG FY 2023 Audit Workplan
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
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 – In Progress. 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 – In Progress. 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.
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OIG FY 2023 Audit Workplan
45. Review of DOL’s Improper Payment Reporting in the Annual Financial Report – Annual – In
Progress. 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.
OFFICE OF WORKERS’ COMPENSATION PROGRAMS (OWCP)
Mandatory Audits
46. Report Relating to the Federal Employees’ Compensation Act Special Benefit Fund – Annual – In
Progress. 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 – In
Progress. 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 – In Progress. 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 – In Progress.
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.
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OIG FY 2023 Audit Workplan
51. Managing Pharmaceutical Spending in FECA – Completed. 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 benefits 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.
52. PRAC – Telehealth Services in OWCP – Completed. 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;
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OIG FY 2023 Audit Workplan
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.
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 – In Progress. 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 – In
Progress. 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.
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Appendices
Acronyms and Abbreviations
ARPA American Rescue Plan Act of 2021
California EDD California Employment Development Department
CARES Act Coronavirus Aid, Relief, and Economic Security Act
CIO Chief Information Officer
DCCA Special Fund District of Columbia Workmen’s Compensation Act Special Fund
Department or DOL U.S. Department of Labor
DOJ U.S. Department of Justice
EBSA Employee Benefits Security Administration
Energy Energy Employees Occupational Illness Compensation Program
ERISA Employment Retirement Income Security Act of 1974
ETA Employment and Training Administration
FBI Federal Bureau of Investigation
FECA Federal Employees’ Compensation Act
Firm independent certified public accounting firm
FISMA Federal Information Security Modernization Act
FLC Foreign Labor Certification
FPUC Federal Pandemic Unemployment Compensation
FY Fiscal Year/fiscal year
GAO Government Accountability Office
H-1B visa program for workers in specialty occupations
H-2A visa program for agricultural workers
H-2B visa program for non-agricultural workers
HRK Harper, Rains, Knight & Company, P.A.
IOC-2 International Organized Crime Intelligence and Operations Center
IT information technology
KPMG KPMG LLP
Longshore Special Fund Longshore and Harbor Workers’ Compensation Act, Special Fund
MSHA Mine Safety and Health Administration
NIST National Institute of Standards and Technology
OIG Office of Inspector General
OMB Office of Management and Budget
OSHA Occupational Safety and Health Administration
OWCP Office of Workers’ Compensation Programs
PERM permanent employment certification program
PEUC Pandemic Emergency Unemployment Compensation
PII personally identifiable information
PRAC Pandemic Response Accountability Committee
PUA Pandemic Unemployment Assistance
Recovery Act American Reinvestment and Recovery Act of 2009
Secret Service U.S. Secret Service
SWA State Workforce Agency
Trust Fund Black Lung Disability Trust Fund
UI Unemployment Insurance
USPS United States Postal Service
152 Semiannual Report to Congress | October 1, 2022–March 31, 2023
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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