Semiannual Report to Congress, Office of Inspector General for the U.S. Department of Labor, Volume 86 (April 1 – September 30, 2021)
Summary
Volume 86 of the Department of Labor Office of Inspector General's Semiannual Report to Congress covers April 1 to September 30, 2021. Acting Inspector General Larry D. Turner writes that a large part of the OIG's pandemic work has been in the unemployment insurance (UI) program, where its investigators have identified and stopped numerous multistate, multimillion-dollar UI frauds. In the period it reviewed how the pandemic affected the Wage and Hour Division, the Employment and Training Administration and the Office of Workers' Compensation Programs. The report says OIG investigations since the start of the pandemic have led to more than 450 indictments and 130 convictions, and that alert memoranda issued in February and June 2021 identified $17 billion of potentially fraudulent UI benefits.
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Semiannual Report to Congress
Office of Inspector General for the U.S. Department of Labor
Volume 86 April 1 – September30, 2021
–
Contents
Significant Concerns 8 Employee Integrity Investigations 62
Worker and Retiree Benefit Programs OIG Whistleblower Activities 64
Unemployment Insurance Programs 20
Office of Workersʼ Compensation Programs 37
Legislative Recommendations 68
Worker Safety, Health, and Workplace Rights
Appendices
Occupational Safety and Health Administration42
Funds Recommended for Better Use 77
Wage and Hour Programs 45
Questioned Costs 78
Bureau of International Labor Affairs 47
Final Audit Reports Issued 79
Unresolved Audit Reports Over 6 Months Old 81
Employment and Training Programs Corrective Actions Taken by the Department 82
Employment and Training Administration Unimplemented Recommendations 86
Programs 50 Investigative Statistics 97
OIG Hotline 99
Fiscal Year 2022 Audit Workplan 100
Labor Racketeering 54
Departmental Management 58
Single Audits 61
Semiannual Report to Congress: April 1 – September 30, 2021 1
Message from the Acting Inspector General
I continue to be impressed by the Office of Inspector General (OIG) staff’s hard work and
dedication. Their commitment to the mission and the important work of our office is evident
by their sustained accomplishments during this difficult time. As the federal agency with
primary oversight of the U.S. Department of Labor (DOL), the OIG remains committed to
assisting DOL and Congress meet the challenges resulting from the pandemic. We remain
diligently focused on protecting taxpayer funds from fraud, waste, and abuse, and ensuring
that DOL programs function efficiently and effectively.
Throughout this report, we highlight several audits and investigations involving the
COVID-19 pandemic. This work is consistent with our comprehensive Pandemic Response
Oversight Plan that we created to address known and expected risks resulting from the
pandemic. Specifically, during this reporting period, we reviewed how the pandemic
affected the operations of the Wage and Hour Division, the Employment and Training
Administration, and the Office of Workers’ Compensation Programs. These reports
highlighted inefficiencies and concerns promulgated by the OIG in previous reports, which
have been exacerbated by the pandemic. A short summary of each pandemic-related report
is included herein, and the full publications and additional information about how we are
conducting oversight and responding to the pandemic are available via the OIG’s Pandemic
Response Portal.
A large part of our work on the pandemic has been in the unemployment insurance
(UI) program. To date, as part of our investigative work, we have identified and stopped
numerous multistate, multimillion-dollar UI fraud schemes targeting the program. The
OIG is committed to safeguarding this essential program and will continue to alert the
Department, the public, and our law enforcement and State Workforce Agency partners of
any threats to the integrity of the UI system.
We also took advantage of this unprecedented opportunity to develop cross-cutting
operations and innovative partnerships between components within the OIG. Our work
has benefitted from this increased, holistic approach by merging the concerns highlighted
in audit reports and investigations to provide comprehensive recommendations to DOL.
The OIG is also a member of the Pandemic Response Accountability Committee, which
was created to detect and prevent fraud, waste, abuse, and mismanagement of the trillions
of dollars in funds provided by the Coronavirus Aid Relief and Economic Security Act and
other legislation. As part of this effort, we are working with our OIG partners to identify
major risks that cut across DOL programs and agency boundaries.
2 Semiannual Report to Congress: April 1 – September 30, 2021
In addition to our extensive work relating to the pandemic, the OIG continues to conduct
audits to review the effectiveness, efficiency, economy, and integrity of DOL programs
and operations, and investigations into alleged violations of federal laws relating to DOL
programs, personnel, and operations. This report highlights our office’s significant audit and
investigative accomplishments during the reporting period, and several significant concerns.
We will continue to work constructively with DOL leadership and Congress on our shared
goals to identify improvements to DOL programs and operations and to protect the interests
and benefits of the nation’s workers, retirees, and taxpayers during this unprecedented time.
Larry D. Turner
Acting Inspector General
Semiannual Report to Congress: April 1 – September 30, 2021 3
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 nonfinancial
resources.
Semiannual Report to Congress: April 1 – September 30, 2021 5
Audit Statistics Second Half FY 2019
15 42 $34 Billion
Audits and Other Recommendations for in Funds Put to
Reports Issued Corrective Action Better Use
$
OIG Unimplemented Recommendations
OIG recommendations not fully implemented as of September 30, 2021
EBSA 2
ETA 33
MSHA 31
OASAM 59
OASP 2
OCFO 40
OFCCP 1
OSEC 1
OSHA 12
OWCP 13
WHD 11
0 10 20 30 40 50 60
6 Semiannual Report to Congress: April 1 – September 30, 2021
InvestigativeStatistics Second Half FY 2019
Investigative Results Labor Racketeering
Program Fraud
269 / 64
500
418
400
300
204
200 182
157
108
100
51 Over 260
8 investigative cases
0 opened and over 60
r r s s ry ts cases closed
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 $1,973,405
Recoveries
Cost-Efficiencies
Restitutions $30,697,016
Fines/Penalties
Forfeitures
Civil Monetary Actions
$32,670,421
Total Labor Racketeering
Program Fraud
Semiannual Report to Congress: April 1 – September 30, 2021 7
Significant Concerns
Significant Concerns
The OIG has identified the following areas of significant concern that cause the Department to be at
particular risk of 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 UI Benefits Securing and
Expeditiously While Protecting Information
Reducing Improper Management Systems
Payments
Improving the
Providing OIG Access
Performance
to UI Claimant Data
Accountability of
and Wage Records
Workforce Development
Programs
Protecting the Safety Maintaining the
and Health of Workers Integrity of Foreign
Labor Certification
Programs
Protecting the Safety Protecting the
and Health of Miners Security of Employee
Benefit Plan Assets
Ensuring a Safe Return
to Onsite Instruction at
Job Corps Centers and Managing Medical
Implementing Distance Benefits in OWCP
Learning
Ensuring the Safety of Ensuring the Solvency
Students and Staff at of the Black Lung
Job Corps Centers Disability Trust Fund
Improving Job Corps’
Procurement Process
8 Semiannual Report to Congress: April 1 – September 30, 2021
Significant Concerns
Deploying Unemployment Insurance for 14 of the last 18 years. To date, DOL has
Benefits Expeditiously While not estimated an improper payment rate for UI
benefits provided in response to the COVID-19
Reducing Improper Payments
pandemic. According to DOL officials, they are
Over the years, the OIG has repeatedly reported currently following the Office of Management
significant concerns with the ability of DOL and and Budget’s guidance to evaluate and develop
State Workforce Agencies (SWA) to deploy estimations of improper payments for the
program benefits expeditiously and efficiently Pandemic Unemployment Assistance (PUA)
while ensuring integrity and adequate oversight, and Pandemic Emergency Unemployment
particularly in response to national emergencies Compensation (PEUC) programs. Assuming an
and disasters. The OIG has reiterated these improper payment rate of 10 percent or higher
concerns following the economic downturn for extended federal benefits under the CARES
created by the COVID-19 pandemic and the Act and subsequent legislation, at least $87
unprecedented levels of federal funding allocated billion of the estimated $872 billion in UI program
to the unemployment insurance (UI) program, funds could be paid improperly, with a significant
which is currently estimated at approximately portion attributable to fraud. The OIG’s substantial
$872 billion. pandemic audit and investigative work indicate
that UI program improper payments, including
The extraordinary increase in UI funding has fraudulent payments, will be much higher than
resulted in more than 1,000 times the amount of 10 percent. For example, the alert memorandum
investigative work involving the UI program. Since we issued on June 16, 2021, identified $17 billion
the start of the pandemic, the OIG has opened in potential fraudulent payments in four high-risk
more than 27,000 complaints and investigations areas. This is up from the $5.4 billion we identified
relating to UI benefits paid under the Coronavirus in an alert memorandum issued on February 22,
Aid, Relief, and Economic Security (CARES) Act 2021, for the same high-risk areas.
and subsequent legislation. Further, the OIG is in
the process of reviewing an additional 128,000 Our prior audit work revealed that the Department
UI fraud complaints from the National Center has not done enough to formally assess the
for Disaster Fraud. As a result of the surge in various strategies available to combat improper
complaints, UI investigations now account for 92 payments. Since the onset of the COVID-19
percent of the OIG’s investigative case inventory, pandemic, DOL has issued a significant amount
compared to 12 percent prior to the pandemic. of guidance, additional funding, and technical
assistance to states in order to support fraud
For many years, the OIG has reported on the prevention and combat improper payments.
Department’s limited ability to measure, report, Despite these efforts, improper payments
and reduce improper payments in the UI program. stemming from fraudulent activity continue to
Historically, the UI program experienced some pose a significant threat to the integrity of the
of the highest improper payment rates among UI program, as identity thieves and organized
federal government benefit programs. The criminal groups have found ways to exploit
reported improper payment estimate for the program weaknesses. For example, benefits
regular UI program has been above 10 percent paid via non-state-issued prepaid debit cards
Semiannual Report to Congress: April 1 – September 30, 2021 9
Significant Concerns
help provide anonymity to those who submit funding ($100 million) to states to support fraud
fraudulent claims. Such issues are exacerbated prevention and combat fraud in PUA and PEUC
by the significant funding increase in response to programs.
the COVID-19 pandemic, resulting in the need for
greater oversight and scrutiny. In addition to these efforts, the Department is
providing up to $260 million in equity grants
Under the Continued Assistance for Unemployed to states to promote equitable access to
Workers Act of 2020, Congress did include Unemployment Compensation (UC) programs.
additional provisions to mitigate the risk of States may use these funds, in part, to develop
improper payments—requiring applicants to strategies to improve public awareness of the UC
provide additional evidence to support their initial program in order to improve claimant outreach
eligibility for UI benefits for the PUA program. and customer service processes, implement
However, the Department needs to continue its strategies to reduce backlogs, and improve
ongoing work with states to implement strategies access for workers in communities that may have
designed to reduce UI improper payments for historically experienced barriers to access. States
emergency programs similar to the CARES Act can also use the funds to improve service delivery
and share best practices identified among states. to provide a better experience and so recipients
These strategies include: can receive their first benefit payments sooner
and continue to receive subsequent benefits. We
• providing guidance to states on how to deploy plan to evaluate the effectiveness of this new
resources efficiently and expeditiously; program as part of our FY 2022 Audit Workplan.
• using analytics to close IT security and
process gaps as well as to tighten controls for Providing the OIG Access to UI
benefit integrity;
Claimant Data and Wage Records
• establishing performance measures for
activities to ensure timely delivery of benefits The OIG’s lack of direct access to UI claimant
to those in need; and data and wage records from SWAs is of significant
• developing the required reporting to improve concern because this deficiency directly and
effectiveness and accountability. adversely impedes the OIG’s ability to combat
fraud, waste, and abuse and provide independent
In addition, the Department needs to provide oversight to help DOL reduce improper payments
timely oversight to ensure that states in employee benefit programs, including UI and
are effectively carrying out these critical Disaster Unemployment Assistance. For a number
responsibilities. of years, OIG audits and investigations have been
impeded by the lack of access to UI claimant data
We are aware that the Department is making and wage records from SWAs. The COVID-19
multiple, strategic investments into the UI system. pandemic and its detrimental consequences
Specifically, the Department is providing up to to U.S. unemployment greatly amplified that
$140 million to support states with fraud detection challenge. In response to an alert memorandum,
and prevention in all UI programs. DOL officials the Employment and Training Administration
said they are also providing another round of (ETA) published a new Unemployment Insurance
10 Semiannual Report to Congress: April 1 – September 30, 2021
Significant Concerns
Program Letter (UIPL) in August 2021 requiring programmatic controls as well as the integrity of
states to provide the OIG with UI data related benefit payments.
to the CARES Act and subsequent pandemic
UI legislation. However, the new UIPL limits the Protecting the Safety and Health of
OIG’s access to UI data for audits and evaluations Workers
only to CARES Act UI and other temporary UI
programs enacted in response to the pandemic The Occupational Safety and Health
that expired in September 2021, and not to all UI Administration (OSHA) is responsible for the
programs. ETA has required sharing of state UI safety and health of 130 million workers employed
data as a condition of the fraud prevention grants at more than 8 million establishments, and OSHA
offered under the American Rescue Plan Act, must ensure that employers are providing the
which will provide such access through December level of protection required under relevant laws
31, 2023. Once again the OIG is unable to provide and policies. The OIG remains concerned about
effective oversight of the UI program because of a OSHA’s ability to target its compliance activities to
lack of access to all UI data. areas where it can have the greatest impact.
The OIG must have easy and expeditious access OSHA carries out its compliance responsibilities
to state UI claimant and wage records to conduct through a combination of self-initiated and
appropriate audit and investigative oversight complaint-based inspections. However, because
of UI funds. In support of the OIG’s oversight of resource limitations, the program only reaches
activities, the OIG needs the authority to access a fraction of the regulated entities. Consequently,
UI claimant data and wage records from SWAs OSHA must target the most egregious or
to verify claimants’ eligibility for UI benefits, persistent violators to protect the most vulnerable
including both initial eligibility (and amounts) and worker populations. OSHA faces challenges
continuing eligibility. Direct and timely access to ensure that workplaces where workers are
to these records will permit the OIG to identify exposed to safety and health violations are
claimants who appear to be receiving benefits sufficiently covered.
while also earning wages. Further, direct and
timely access to UI data will allow the OIG to Moreover, since the start of the pandemic, OSHA
use our data analytics program to identify and has received an influx of complaints. It received 15
investigate complex identity theft and multistate percent more complaints in 2020, but performed
fraud schemes, as we have successfully done 50 percent fewer (13,164 fewer, to be precise)
during the pandemic. The OIG could also use UI inspections compared to a similar period in 2019.
data to assess the outcomes of UI reemployment Therefore, the risk that OSHA may not ensure the
programs. level of protection that workers need at various job
sites has increased. In addition, due to COVID-19
Granting the OIG access to UI claimant data concerns, where an on-site inspection is
and wage records from SWAs would provide the warranted but cannot be performed safely, OSHA
OIG with a valuable source of information for has turned to remote-only inspections. OSHA’s on-
both audits and investigations. Similarly, sharing site presence during inspections has historically
this information with DOL could help improve resulted in timely mitigation efforts for at least a
Semiannual Report to Congress: April 1 – September 30, 2021 11
Significant Concerns
portion of the hazards identified. However, with silica content in respirable dust. Respirable
many OSHA inspections done remotely during crystalline silica can cause deadly and incurable
the pandemic, workplace hazards may remain chronic diseases, such as silicosis and black lung
unidentified, thereby leaving more employees disease.
vulnerable.
Improving the Performance
While OSHA has issued several guidance Accountability of Workforce
documents to enhance safety provisions during
Development Programs
the pandemic, guidance does not carry the weight
of OSHA rules or standards. In June 2021, more The OIG has concerns about the Department’s
than a year into the pandemic, OSHA issued an ability to ensure that its investment in workforce
emergency temporary standard that only covered development programs is successful in advancing
the health care industry. This emergency standard participants’ skills and placing them in suitable
will expire in December 2021 unless OSHA takes employment. The high unemployment rate
action to make it a permanent standard. We are caused by the pandemic makes it more important
concerned whether this emergency temporary than ever that the Department’s workforce
standard is sufficient to protect all workers and development programs assist job seekers and
whether OSHA has the adequate resources for employers in finding and filling available jobs
enforcement. In addition, in September 2021, and assist workers in developing the right skills
President Biden issued an executive order to to fill new job openings. The Department’s ability
write a rule requiring employers with at least 100 to obtain accurate and reliable data to measure,
workers to require employees to get vaccinated or assess, and make decisions regarding the
produce weekly test results showing that they are performance of grant recipients, contractors, and
virus free. states in meeting the programs’ goals is critical.
Protecting the Safety and Health of The Department needs to ensure that its
Miners investments in credential attainment align with
local employers’ needs and are having the desired
The Mine Safety and Health Administration’s impact on participants’ ability to obtain or advance
(MSHA) ability to complete mine inspections in a job. In a 20181 audit that followed up on the
while safeguarding the health of miners and the employment status of a sample of Job Corps
agency’s staff during the COVID-19 pandemic is a students 5 years after they left the program,
concern for the OIG. We are also concerned with we found that Job Corps faced challenges in
the high incidence of powered haulage accidents demonstrating the extent to which its training
in mines, which accounted for about half of all
mine fatalities in 2017 and 2018 and a quarter
of all mine fatalities in 2019. Powered haulage
continues to represent a significant share of
accidents. MSHA also needs to develop strategies
to address lung disease in coal mining states, ¹DOL-OIG, “Job Corps Could Not Demonstrate
particularly by updating regulations regarding Beneficial Job Training Outcomes,” (March 30, 2018;
Report No. 04-18-001-03-370).
12 Semiannual Report to Congress: April 1 – September 30, 2021
Significant Concerns
programs helped those participants obtain distance learning. Since the summer of 2020,
meaningful jobs appropriate to their training. Job Corps has procured and distributed laptops
and mobile hotspots to students to participate in
In March 2018, ETA announced the National distance learning. Finally, the OIG is concerned
Health Emergency Grant program to help with the potential learning gaps, such as those
communities address the economic and caused by delays to in-person instruction, that
workforce-related impacts of the opioid crisis. occurred because of the temporary suspension of
Research suggests that opioid dependency Job Corps instructional programs at the onset of
has been a leading cause of workforce exits the pandemic and with how Job Corps intends to
for workers ages 25 to 54. To date, ETA has remediate these potential learning gaps.
approved up to $133 million in grants to address
the opioid crisis. It is vital that the Department Ensuring the Safety of Students and
monitor the performance of the discretionary Staff at Job Corps Centers
grants it has awarded for the delivery of services
to employers and workers affected by the opioid In addition to the safety challenges posed by
crisis. the COVID-19 pandemic, controlling on-campus
violence and other criminal behavior remains
Ensuring a Safe Return to On-Site a substantial challenge for Job Corps centers.
The OIG audits from 20152 and 20173 revealed
Instruction at Job Corps Centers
that some Job Corps centers failed to report and
and Implementing Distance Learning
investigate serious misconduct, such as drug
During the Pandemic abuse and assaults. The audits also disclosed that
The OIG is concerned about the ability of some Job Corps centers downgraded incidents
Job Corps to effect a safe return to in-person of violence to lesser infractions, creating an
learning during the COVID-19 pandemic. Job unsafe environment for students and staff. The
Corps released a program instruction notice in follow-up work we completed in December 20174
September 2020 to help guide centers as they and our ongoing review of Job Corps’ corrective
began a phased reopening. Preventing outbreaks actions showed that Job Corps has taken steps
of COVID-19 at centers across the United States to improve center safety and security. However,
will pose a significant challenge for Job Corps. the OIG has concerns with the process Job Corps
Job Corps centers are mostly residential, with
²DOL-OIG, “Job Corps Needs to Improve Enforcement
students and some staff living on campus. While
and Oversight of Student Disciplinary Policies to Better
Job Corps has implemented its distance learning
Protect Students and Staff at Centers,” (February 27,
programs, the OIG is concerned with two issues
2015; Report No. 26-15-001-03-370).
related to distance learning. First, many Job Corps
³DOL-OIG, “Review of Job Corps Center Safety and
programs, such as, plumbing and carpentry, are
Security,” (March 31, 2017; Report No. 26-17-001-03-
intensively hands-on and may not successfully
370).
transition to a virtual training model. Second,
⁴DOL-OIG, “Job Corps Took Action to Mitigate Violence,
many Job Corps students may not have access
Drugs and Other Student Misconduct at Centers, But
to the equipment or high-speed Internet services
More Needs to Be Done,” (December 29, 2017; Report
they need in order to effectively participate in
No. 26-18-001-03-370).
Semiannual Report to Congress: April 1 – September 30, 2021 13
Significant Concerns
uses to evaluate incoming applicants with respect issued a similar report.7 We found that, although
to substance abuse and mental health issues. the post-2003 rules revamped the PERM, H-2A,
A March 20215 OIG audit report showed that and H-2B visa programs, as well as addressed
the current process does not provide Job Corps some of the vulnerabilities cited in audits and
centers the appropriate tools and resources to investigations by the OIG and the Government
properly evaluate applicants for these challenges Accountability Office, those same rules created
as they enter the program and does not ensure challenges regarding DOL’s responsibilities.
centers have the necessary resources to mitigate Additionally, DOL continues to have limited
them. The OIG continues to monitor various safety authority over the H-1B and PERM programs
initiatives and actions taken by Job Corps to keep which challenges the goal of protecting the
students and staff safe. welfare of the nation’s workforce.
Maintaining the Integrity of Foreign The statute limits DOL’s ability to deny H-1B
Labor Certification Programs applications. Specifically, DOL may only deny
incomplete and obviously inaccurate H-1B
The DOL foreign labor certification (FLC) applications, and has only limited authority to
programs are intended to permit U.S. employers conduct H-1B investigations in the absence
to hire foreign workers to meet their workforce of a complaint. The PERM program itself
needs while protecting U.S. workers’ jobs, wages, is persistently vulnerable to employers not
and working conditions. DOL’s administration of complying with its qualifying criteria. Therefore,
FLC programs under current laws has been a both the PERM and H-1B programs remain highly
concern for the OIG for decades. Investigations prone to fraud.
have shown these visa programs, in particular
the H-1B program for workers in specialty With various new DOL rules going into effect
occupations, to be susceptible to significant fraud since 2003, there have been opportunities for
and abuse from perpetrators, including dishonest the PERM, H-2A, and H-2B visa programs
immigration agents, attorneys, labor brokers, to change. For example, these new rules
employers, and, most often, organized criminal implemented employer attestation programs,
enterprises. which allow employers to agree to the conditions
of employment without providing supporting
In 2003, the OIG issued a white paper6 outlining documentation to validate their agreements.
vulnerabilities that then existed in four FLC However, DOL has identified instances in which
programs, Permanent Employment Certification employers are not complying with the conditions
(PERM), H-1B, H-2A, and H-2B, and, in 2020, we of employment, thereby reinforcing how
susceptible these programs are to fraud.
⁵DOL-OIG, “Job Corps Should Improve Its Pre-
Admission Evaluation Process,” (March 25, 2021;
Finally, DOL has established a risk-based
Report No. 05-21-001-03-370).
process to determine which H-2A and H-2B
⁶DOL-OIG, “Overview and Assessment of
Vulnerabilities in the Department of Labor’s Alien Labor ⁷DOL-OIG, “Overview of Vulnerabilities and Challenges
Certification Programs,” (September 30, 2003; Report in Foreign Labor Certification Programs,” (November
No. 06-03-007-03-321). 13, 2020; Report No. 06-21-001-03-321).
14 Semiannual Report to Congress: April 1 – September 30, 2021
Significant Concerns
applications to audit. The new selection process in federal employee Thrift Savings Plan (TSP)
identifies appropriate risk factors based on assets. FERSA requires EBSA to conduct regular
adjudication experience and available H-2A compliance audits to determine whether the
and H-2B application processing data. DOL has Federal Retirement Thrift Board, an independent
implemented the process and started the audits. agency, is fulfilling its fiduciary duties and properly
Because the process is still new, it is difficult for safeguarding TSP participants’ assets.
ETA to determine whether the applications audited
were those most likely to result in violations Managing Medical Benefits in the
eligible for debarment.
Office of Workers’ Compensation
Programs
Protecting the Security of Employee
Benefit Plan Assets The OIG has concerns about the ability of the
Office of Workers’ Compensation Programs’
The OIG remains concerned over the Employee (OWCP) to effectively manage rising home health
Benefits Security Administration’s (EBSA) ability care costs in the Energy Employees Occupational
to protect the benefit plans of about 158 million Illness Compensation Program Act (Energy
workers, retirees, and their families under the Workers) program, as well as about the use and
Employee Retirement Income Security Act of cost of pharmaceuticals in the Federal Employees’
1974 (ERISA). In particular, the OIG is concerned Compensation Act (FECA) program. The
about the statutory limitations on EBSA’s Department needs to make sure it has controls
oversight authority and inadequate resources in place to ensure that the medical benefits it
to conduct compliance and enforcement. A provides to energy workers and FECA program
decades-long challenge to EBSA’s compliance claimants are safe, effective, medically necessary,
program, ERISA provisions allow billions of and cost-effective.
dollars in pension assets to escape full audit
scrutiny. We have previously found that as much In the Energy Workers program, with an aging
as $3.3 trillion in pension assets, including an claimant population and an increased demand
estimated $800 billion in hard-to-value alternative for home health care services, there is a potential
investments, held in otherwise regulated entities for providers to exploit these benefits through
such as banks, received limited-scope audits unauthorized or unnecessary billing. Since 2010,
that provided few assurances to participants home health care costs paid by the Energy
regarding the financial health of their plans. EBSA Workers program have grown from $100 million to
needs to focus its limited available resources more than $675 million, amounting to 74 percent
on investigations that are most likely to result of all medical benefits paid by the program in
in the deterrence, detection, and correction of FY 2020. OWCP needs to continue its efforts
ERISA violations, particularly given the number to analyze home health care billing for abusive
of benefit plans EBSA oversees relative to the practices and to identify and refer allegations
number of investigators it employs. Finally, involving potential fraud or abuse to the OIG for
EBSA lacks the authority under the Federal further investigation.
Employees' Retirement System Act (FERSA)
to effectively oversee more than $790 billion
Semiannual Report to Congress: April 1 – September 30, 2021 15
Significant Concerns
Past audits of the FECA program have identified past debt. According to DOL’s Agency Financial
internal control weaknesses related to OWCP’s Report, as of September 30, 2021, the BLDTF
management of pharmaceuticals. For example, was carrying close to a $6.1 billion deficit balance,
OWCP allowed increases in billing statements for which is projected to grow to nearly $13 billion (in
compounded drugs to go undetected and failed constant dollars) by September 30, 2046.
to identify the overuse of opioids. Given the high
risk of fraud related to prescription payments, The excise tax that funds the BLDTF is levied on
OWCP needs to analyze and monitor FECA domestic sales of coal mined in the United States
program costs to promptly detect and address (coal exports and lignite are not subject to this
emerging issues before they manifest into material tax). From January 1 through December 31, 2019,
concerns. the tax rates were reduced to the rates originally
set when the trust fund was established in 1978:
Consistent with prior audit recommendations by $0.50 per ton of underground-mined coal or $0.25
the OIG, OWCP imposed restrictions on opioid per ton of surface-mined coal. Even though this
prescriptions in September 2019. In addition, in rate reverted to higher, pre-2019 levels effective
March 2021, OWCP contracted with a Pharmacy January 1, 2020, the temporary tax rate reduction
Benefits Manager (PBM) that will be responsible plus the reduction in coal production will result
for pharmaceutical transactions, including in decreased cash inflows to the BLDTF. The
implementation of FECA eligibility determinations Congressional Research Service reported in 2019
and pricing for pharmaceutical drugs. OWCP that “the decline in the excise tax rates will likely
needs to provide adequate oversight over the put additional financial strain on a trust fund that
PBM to ensure that it is providing the most cost- already borrows from the general fund to meet
effective and safe medical benefits. OWCP should obligations.”8 Moreover, the tax rate will once
also continue to monitor the COVID-19 pandemic again revert to the lower, 2019 levels beginning in
and potential impacts on its ability to provide January 2022, putting further strain on the BLDTF.
timely and effective benefits to injured workers.
Securing and Protecting Information
Ensuring the Solvency of the Black Management Systems
Lung Disability Trust Fund
We remain concerned about the Department’s
Miners and their dependent survivors receive ability to safeguard its data and information
lifetime benefits when awarded under the Black systems. While the Department implemented a
Lung Benefits Act. Mine operators pay these new IT governance model, we continue to report
benefits when possible, and the Black Lung deficiencies in its efforts and ability to identify
Disability Trust Fund (BLDTF) pays the benefits vulnerabilities, to protect information systems and
when a miner’s former employer does not or data, and to recover from security incidents. The
cannot assume liability. The OIG’s primary most recent deficiencies we identified were in four
concern is that the current annual income of the
BLDTF (primarily from an excise tax on coal) is ⁸ Congressional Research Service, “The Black Lung
not sufficient to cover annual benefit obligations Program, the Black Lung Disability Trust Fund, and the
to meet administrative costs, and to service Excise Tax on Coal: Background and Policy Options,”
(January 18, 2019; Report No. R45261).
16 Semiannual Report to Congress: April 1 – September 30, 2021
Significant Concerns
of the five information security functional areas services, we continue to identify deficiencies
as defined by the National Institute of Standards in the Department’s oversight of information
and Technology Cybersecurity Framework. These systems managed by DOL’s program agencies
deficiencies continue to hinder the Department and systems operated by a third-party on behalf
from identifying security weaknesses, from of the Department. As the Department continues
protecting its systems and data, and from this transition, we are concerned with the
detecting, responding to, and recovering from Department’s ability to provide the necessary IT
incidents. For example, DOL has not: system oversight and to retain the specialized
knowledge and expertise required to protect and
• implemented effective strategies and manage its systems, including the contracted
programs to identify system security systems.
vulnerabilities and ensure that appropriate
actions are being taken; Since this issue was first identified in 2011,
• provided adequate oversight of its information the Department has been unable to implement
systems, including those that are either owned an effective asset management system. The
or operated by contractors or other federal Department maintains a significant number of
entities on behalf of DOL; or desktops, laptops, tablets, and mobile devices
• accurately identified its information system for its employees. In addition, the Department
inventory, as well as its hardware and software maintains servers, routers, storage devices,
asset inventory. and other IT hardware. The Department
indicated that it implemented an enterprise asset
The Department’s agencies rely on IT systems management system in FY 2020 and is in the
to obtain and create vast amounts of information process of ensuring data quality. However, the
and data in carrying out their missions. Included Department needs to provide evidence of such
in these data are the personally identifiable implementation, and more work needs to be done
information and personal health information of to effectively track and protect its assets through
members of the public and federal employees. their life cycle. Without effective asset inventory
Securing these data is a concern because processes, the Department is unable to account
DOL’s data integrity is constantly at risk from for and secure its data and equipment.
external and internal threats, and we continue to
identify deficiencies in the Department’s efforts These deficiencies represent ongoing risks to the
to protect its information systems. In addition, confidentiality, integrity, and availability of DOL’s
we determined that the Department has not information systems, which are necessary to
adequately planned for or implemented the support the Department’s mission. Our concern
technology tools required to manage and monitor is whether DOL can implement the necessary
IT security. strategies and tools to provide sufficient capability
and effective security for the Department’s data
As the Department is moving its information and information systems as well as support the
systems to a shared services model and execution of its mission. Finally, we continue
expanding its use of cloud and third-party to be concerned that the position of the Chief
providers for its information infrastructure and Information Officer does not report directly to
Semiannual Report to Congress: April 1 – September 30, 2021 17
Significant Concerns
the agency head. Realigning the organization to create a direct reporting relationship would provide the
position with greater independence and authority to implement and maintain an effective information
security program.
Improving the Job Corps’ Procurement Process
Job Corps spends about $1 billion on goods and services annually for approximately 120 centers
nationwide and is currently transitioning center operations from cost reimbursement to fixed-price
contracts. The Department believes that this transition will lower government risk, reduce the administrative
burden, generate more pre-award efficiencies, and encourage more participants to compete for contracts.
Increased competition among contractors should lead to better contractor performance with fewer staffing
shortages and improved services, including those for centers’ safety and security.
We are concerned about the transition to fixed-price contracting because prior OIG work in this area
found that the procurement processes by Job Corps did not ensure the best value for taxpayers. As the
Department moves to fixed-price contracting, the Department must continue to ensure that its contract
requirements are well-developed, that contract competition is fair, that contractor payments align with
performance metrics and related outcomes, and that sound post-award oversight is used to quickly
ameliorate deficiencies and poor performance.
18 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit
Programs
Worker and Retiree Benefit Programs
Unemployment Insurance Programs
Enacted more than 80 years ago as a federal-state partnership, the unemployment insurance (UI)
program is the Department’s largest income-maintenance program. This multibillion-dollar program
provides unemployment benefits to eligible workers who become unemployed through no fault of their
own. Although the program’s framework is determined by federal law, the benefits for individuals depend
on state law and, generally, state funding of benefits that are administered by state workforce agencies
in jurisdictions covering the 50 states, the District of Columbia, and U.S. territories, under the oversight
of DOL’s Employment and Training Administration (ETA). The federal government pays the program’s
administrative expenses.
DOL-OIG Oversight of the • administers a separate UI program under
Unemployment Insurance Program its laws, but follows uniform guidelines
established by federal law;
Background • establishes requirements for eligibility, benefit
amounts, and the length of time that benefits
As the federal agency with primary oversight of can be paid; and
DOL, the OIG remains committed to meeting • manages the personnel and system resources
the challenges created by the coronavirus to administer their respective programs.
(COVID-19) pandemic and assisting DOL and
Congress in improving the efficiency and integrity UI benefits are generally funded by state
of the UI program. Strengthening the UI program employer taxes with administrative costs funded
to prevent improper payments, including fraud, by the federal government. Extensions and
and to detect and recover improper payments that expansions of coverage and benefits, such as
have been made, is key to ensuring unemployed those provided by the Coronavirus Aid, Relief, and
workers expeditiously receive much needed Economic Security (CARES) Act and subsequent
benefits while safeguarding tax dollars directed legislation, are also normally funded by the federal
toward that goal. government. DOL’s ETA is the federal agency
responsible for providing program direction
The UI program is a joint federal-state program and oversight. The OIG conducts independent
that acts as an initial economic safety net when oversight of the UI program through audits to
individuals lose their jobs through no fault of their strengthen the integrity and efficiency of the
own. Each state workforce agency (SWA): program and criminal investigations to detect and
combat large-scale fraud.
20 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
DOL-OIG UI Oversight Work program. In our view, reliance on such self-
certifications rendered the PUA program highly
In April 2020, we published our Pandemic vulnerable to improper payments and fraud.
Response Oversight Plan detailing how the OIG The OIG’s alert memorandum informed recent
would conduct its oversight, with a significant COVID-19 legislation, which included provisions to
focus on the UI program. The plan was updated in improve SWAs’ abilities to ensure proper claimant
April 2021. We structured the work for completion eligibility and to mitigate fraud.
in four phases. Phases 1 and 2 focused on DOL’s
plans and initial implementation of administration In June 2020, the OIG provided a member briefing
and oversight activities. Phase 3 audit work will and a statement for the record to Congress
consist of assessments of program results during highlighting challenges DOL and SWAs face in
the pandemic, including the impact on agency administering and overseeing the UI program. As
operations; it is ongoing with audit work focused the OIG reported, the unprecedented infusion of
on significant issues the OIG identified during federal funds into the UI program gave individuals
Phase 2, the pandemic’s impact on agency and organized criminal groups a high-value target
operations at the national and state levels, and to exploit. That target, combined with easily
agency activities not previously covered during attainable stolen personally identifiable information
Phases 1 and 2. Phase 4 audit work will consist and continuing UI program weaknesses that have
of roll-up reports based on lessons learned from already been identified by the OIG over the last
audit work in Phases 1 through 3. several years, allowed criminals to defraud the
system.
At the start of the pandemic, we examined past
audits related to the American Recovery and
Reinvestment Act of 2009 and the Disaster
Unemployment Assistance program, and we
assessed comparable lessons learned as they
were applicable to the UI program. As a result,
in late April 2020, we issued an advisory report
outlining our initial concerns regarding the
implementation of the UI program provisions
under the CARES Act. The report summarized
dozens of OIG recommendations to implement Indeed, following the passage of the CARES Act,
corrective action in these areas. fraud against the UI program exploded. Working
with our federal and state partners, we have been
Since then, we have issued several other able to identify billions in potential UI fraud
reports and alerts involving the UI program. For nationwide. Since the start of the pandemic, the
example, our assessment of DOL’s CARES OIG has opened more than 27,000 investigative
Act implementation plan resulted in an alert matters relating to UI benefits paid under the
memorandum in May 2020, describing our CARES Act and subsequent legislation. We are in
concerns regarding claimant self-certification in the process of reviewing an additional 132,000
the Pandemic Unemployment Assistance (PUA) complaints from the National Center for Disaster
Semiannual Report to Congress: April 1 – September 30, 2021 21
Worker and Retiree Benefit Programs
Fraud. As a result of the surge in complaints, UI Department, financial institutions and their
investigations now account for 92 percent of the associations, law enforcement agencies, and
OIG’s investigative case inventory, compared with the public to inform and raise awareness
12 percent prior to the pandemic. regarding fraud trends, best practices, red
flags, and more.
In response to the extraordinary increase in
oversight demands, the OIG hired additional Since the start of the pandemic, OIG
criminal investigators; increased the caseload of investigations have led to more than
investigators already on-board; deployed federal 450 indictments and 130 convictions. In a recent
and contract staff to review DOL and SWAs’ OIG case, U.S. v. Leelynn Danielle Chytka, in the
efforts; and strengthened our data analytics Western District of Virginia, a defendant pleaded
program. In addition, we took several other guilty for her role in a scheme that fraudulently
actions to augment our efforts, including the stole more than $499,000 in UI benefits using the
following: identities of individuals ineligible for UI, including a
number of prisoners.
• initiated the development of a National
UI Fraud Task Force, alongside the U.S. Our efforts to date have directly resulted in the
Department of Justice (DOJ); identification and recovery of more than $160
• collaborated with DOJ on the strategic million in fraud involving the UI program. We have
assignment of 12 term-appointed Assistant also assisted other federal and state agencies
United States Attorneys assigned solely to identify and recover more than $565 million in
prosecute UI fraud; fraudulent UI benefits. Moreover, in the alert
• established a multi-disciplinary Pandemic memoranda we issued in February and in June
Rapid Response Team within the OIG; 2021, our investigators and auditors collaborated
• appointed a national UI fraud coordinator to to identify $17 billion of potentially fraudulent UI
manage our national investigative response to benefits paid to individuals with social security
UI fraud; numbers filed in multiple states, to individuals with
• appointed seven regional UI fraud social security numbers of deceased persons and
coordinators to partner with the SWAs and of federal inmates, and to individuals with social
federal, state, and local law enforcement on security numbers used to file for UI claims with
UI fraud matters in their geographic areas of suspicious email accounts. We recommended
responsibility; that the Department and SWAs establish effective
• leveraged resources from the Council of controls to mitigate fraud and other improper
the Inspectors General on Integrity and payments to ineligible claimants, including the four
Efficiency, Pandemic Response Accountability high-risk areas identified in the memoranda.
Committee;
• collaborated with States’ auditors to help In addition, we recently issued a report detailing
develop their audit strategies for the CARES our review of DOL and SWAs’ implementation
Act UI programs; and of the three key new UI programs that posed
• implemented an extensive outreach and the greatest risk for fraud, waste, and abuse:
education program targeted to SWAs, the PUA, Pandemic Emergency Unemployment
22 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
Compensation (PEUC), and Federal Pandemic 10.6 percent, of the $26.2 billion in UI benefits
Unemployment Compensation (FPUC). To paid for the period July 1, 2018, through June 30,
perform our review, we selected 12 states based 2019, were paid improperly. The chief cause was
on a risk-assessment process that included overpayments, with states paying $878 million
several risk factors, including the states’ improper to UI claimants who had not complied with state
payment rates, fraud allegations received, work search requirements in accordance with
average weekly UI claims, previous audit findings, the Middle Class Tax Relief and Job Creation
as well as congressional and public interest. Act of 2012. In part, the Act requires individuals
We also administered surveys to the states that to actively seek work in order to be eligible for
were not included in the in-depth analysis. Our UI benefits in a given week. We found ETA and
review found that DOL and the states struggled to state strategies did not consistently reduce UI
implement the three key CARES Act UI programs. overpayments related to work search, primarily
because states had varying work search laws
Specifically, DOL’s guidance and oversight did and requirements, with some more stringent
not ensure states: implemented the programs than others. For example, one state uses a
and paid benefits promptly; performed required system that approves a payment after it detects a
and recommended improper payment detection claimant has accessed the system and selected
and recovery activities; and reported accurate at least two job postings per week. In our review
and complete program activities. This occurred of system records for Program Year (PY) 2018,
primarily because states’ IT systems were not we determined that, on average, a claimant
modernized; staffing resources were insufficient could complete one valid work search contact
to manage the increased number of new claims; in as few as 11 seconds, which does not appear
and according to state officials, guidance from to be sufficient time to conduct a valid work
ETA was untimely and unclear. In addition, many search. We also found ETA’s improper payment
states did not perform required or recommended estimates inappropriately excluded certain types
improper payment detection and recovery of overpayments for the UI program. Contrary to
activities: 40 percent of states did not perform federal law and Office of Management and Budget
required detection cross-matches, 88 percent requirements, ETA did not include the benefits
did not perform the recommended detection paid to claimants who had not substantiated
cross-matches, and 38 percent did not perform compliance with states’ work search requirements
required recovery activities. Further, 42 percent in its UI improper payment rate calculations.
of states did not report CARES Act UI program UI claimants in at least 17 states received
overpayments to ETA as required. States that did state formal warnings after failing to conduct or
report overpayments understated the total amount document adequate work searches. As a result, UI
reported by an estimated 89 percent. improper payments were understated by billions
of dollars in Agency Financial Reports (AFR) for
Also, in September 2021, we issued a report on FY 2017 through FY 2020. For example, ETA
our assessment of DOL and states’ strategies to excluded $2 billion (58.8 percent) of the $3.4
reduce UI overpayments related to work search– billion work search overpayments identified by
the leading cause of improper payments prior states’ Benefit Accuracy Measurement (BAM)
to the pandemic. ETA estimated $2.9 billion, or staff during PY 2018. As such, the estimated 13.1
Semiannual Report to Congress: April 1 – September 30, 2021 23
Worker and Retiree Benefit Programs
percent improper payment rate reported in the NASWA’s IDH through additional guidance and
FY 2018 AFR would have been more accurately regular communication with SWAs.
reported at 19.8 percent. Similarly, in FY 2019,
work search overpayments were understated by DOL-OIG UI Recommendations
$1.5 billion, and the reported improper payment
rate of 10.6 percent would have been more The OIG has made several recommendations
accurately reported at 15.9 percent. to improve the efficiency and integrity of the UI
program. Specifically, DOL needs to:
DOL’s Progress
• facilitate the OIG’s access to UI claim data
While concerns persist within the UI program, for audit and investigative oversight purposes
DOL has instituted efforts to focus on program through the issuance of Unemployment
integrity when implementing the CARES Act Insurance Program Letters and regulatory
and other pandemic-related UI programs. changes;
These efforts include making multiple, strategic • continue to work with states to develop,
investments to combat fraud and promote equity, operate, and maintain a modular set of
putting agreements in place with states to comply technological capabilities;
with all applicable requirements to receive • further enhance SWA participation in and use
funds, issuing operating guidance, and providing of the IDH operated by NASWA;
technical assistance to SWAs individually and • work with SWAs to ensure that sufficient
through webinars. DOL has included requirements staffing and system resources are in place to
for SWAs to focus on program integrity in manage sudden increases in the number of UI
guidance related to pandemic-related UI funds. In claims and payments to meet the continued
addition, DOL has reinforced the need for SWAs requirements of the CARES Act and of similar
to actively partner with the OIG to address fraud in future legislation;
the UI program. • identify and implement strategies designed
to reduce the UI improper payment rate,
Further, the UI Integrity Center, established including sharing best practices identified
by DOL through a cooperative agreement and among SWAs;
operated by the National Association of State • ensure that SWAs are enforcing UI claimants’
Workforce Agencies (NASWA), has continued to requirements to meet the conditions of UI
develop the Integrity Data Hub (IDH) to serve as eligibility, including: (1) being available for
a secure portal for SWAs to cross-match public work, (2) actively seeking work, and (3)
and private sources of data, including new tools accepting suitable and safe work when
that will help prevent improper payments. DOL offered;
is working with NASWA’s Integrity Center to • create a rapid response team consisting of
further enhance SWA participation in and use of federal and state officials capable of providing
technical and other assistance to SWAs
impacted by major disasters;
• establish effective controls, in collaboration
with SWAs, to mitigate fraud and other
24 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
improper payments to ineligible claimants, • inform states that formal and informal warnings
including UI benefits paid to: multi-state are not permissible under federal law;
claimants, claimants who used social security • include in the UI improper payment estimate:
numbers of deceased individuals and of (1) overpayments related to work search
potentially ineligible federal inmates, and formal/informal warnings and payments
claimants with suspicious email accounts; to claimants who provide no or insufficient
• work with Congress to establish legislation documentation to support eligibility with
requiring SWAs to cross-match in high-risk respect to work search; and
areas, including the four areas identified in the • incorporate the impact of UI improper
February 22, 2021, alert memorandum; payments related to temporary programs, such
• conduct a study to assess the technological as those created by the CARES Act, into the
needs of the UI programs to determine traditionally estimated improper payment rate
the capabilities that need to be upgraded calculations.
or replaced; the features necessary to
effectively respond to rapid changes in the In addition, Congress should consider legislative
volume of claims in times of emergency or proposals included in prior budget requests and
high unemployment; the capabilities needed pass legislation to improve UI program integrity.
to ensure effective and equitable delivery These legislative proposals are consistent with
of benefits; and the capabilities to minimize previous OIG findings and recommendations to
fraudulent activities; improve the UI program. The proposals include
• assist states with claims, overpayment, and the following:
fraud reporting to create clear and accurate
information, and then use the overpayment • allow the Secretary of Labor greater authority
and fraud reporting to prioritize and assist to require SWAs to implement UI corrective
states with fraud detection and recovery; actions related to performance and integrity;
• develop standards for providing clear • require SWAs to use NASWA’s IDH and the
and reasonable timeframes to implement State Information Data Exchange System;
temporary programs to establish expectations • require SWAs to cross-match UI claims
for prompt benefit payments to claimants; against the National Directory of New Hires;
• develop and implement cause-level reduction • require SWAs to cross-match UI claims with
targets to gauge and monitor the effectiveness the U.S. Social Security Administration’s
of strategies implemented by states to reduce prisoner database and other repositories of
work search overpayments; prisoner information;
• examine the effectiveness of BAM’s contact • allow SWAs to retain 5 percent of UI
verification process to ensure it reflects the overpayment recoveries for program integrity
current methods claimants use to seek work; purposes; and
• require SWAs to use UI penalty and interest
collections solely for UI administration.
Finally, Congress should consider legislative
action to allow DOL and the OIG to have direct
Semiannual Report to Congress: April 1 – September 30, 2021 25
Worker and Retiree Benefit Programs
access to UI claimant data and wage records • DOL efforts to ensure SWAs met full federal
for its oversight responsibilities. Real-time direct funding of first week compensation program
access to SWA UI claimant data and wage requirements;
records systems would further enable the OIG to • reimbursement flexibility to employers
quickly identify large-scale fraud and expand its under the Emergency Unemployment Relief
current efforts to share emerging fraud trends with for Government Entities and Non-profit
state workforce partners in order to strengthen Organizations;
the UI program and likely prevent fraud before • DOL and SWAs’ efforts to ensure UI claimants
it occurs. In addition, the data analytics based comply with return to work requirements;
on the direct access would further enable our • SWAs’ implementation of the Mixed Earners
auditors to identify program weaknesses and Unemployment Compensation Program;
recommend corrective actions that will improve • DOL controls to ensure states met the Short-
the timeliness of UI benefit payments and the Time Compensation program requirements;
integrity of the UI program. • DOL and SWAs’ effectiveness in identifying UI
claimants who refused to return to work; and
DOL-OIG Ongoing and Planned UI Work • DOL and states’ use of Equity Grants in
addressing the potential racial and ethnic
The OIG's efforts to strengthen and protect the disparities in the UI program.
UI program continue. In addition to working with
our law enforcement partners to combat fraud For more information about the OIG's work,
in the program, we will be issuing additional please visit our Pandemic Response Portal.
reports covering critical areas of concern and
opportunities for program improvement. These will COVID-19: States Struggled
include reports on:
to Implement CARES Act
Unemployment Insurance Programs
• the capability of SWAs’ legacy IT systems
to process UI benefit claims timely and On March 27, 2020, Congress passed the CARES
accurately; Act with the intent to provide expanded UI benefits
• the effectiveness of SWAs’ controls to ensure to workers who were unable to work as a direct
UI benefit payments are timely and made to result of the COVID-19 pandemic. The expanded
only eligible claimants; UI benefits required ETA to implement major
• DOL and SWAs’ efforts to prevent and detect changes to the existing UI system, including three
overpayments; programs that posed the greatest risk for fraud,
• the impact of CARES Act and subsequent waste, and abuse: PUA, PEUC, and FPUC.
legislation provisions on nontraditional UI
claimants; The COVID-19 pandemic was historic in its
• SWAs’ use of pandemic UI administrative impact on the UI system. ETA officials reported
funds; that states faced the combined challenges of (1)
• the sufficiency of SWAs’ staffing resources managing and processing an unprecedented
to support implementation of pandemic UI increase in claims volume at an unprecedented
programs; pace, (2) making the statutory changes to existing
26 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
UI programs, and (3) implementing the three new key CARES Act UI programs. In addition, states had to
develop new systems in order to implement the new programs, which resulted in backlogs in processing
claims for weeks and, in some cases, months. As of January 2, 2021, federal funding to states for these
three UI programs was $392 billion.
Due to the expanded benefits and associated risks, we conducted a performance audit to determine
how DOL and states implemented the key UI programs of the CARES Act. We found that DOL and
states struggled to implement the three key CARES Act UI programs. Specifically, DOL’s guidance and
oversight did not ensure that states implemented the programs and paid benefits promptly; performed
required and recommended improper payment detection and recovery activities; and reported accurate
and complete program activities. This occurred primarily because states’ information technology systems
were not modernized; staffing resources were insufficient to manage the increased number of new claims;
and, according to state officials, guidance from ETA was untimely and unclear. As a result, unemployed
individuals experienced financial hardships due to delays in receiving benefits (Figure 1).
Figure 1. Issues Caused by Delays in Receiving Unemployment Benefits
Inability to Increased credit High interest
pay bills card debt rate borrowing
Depleted Food Homelessness
savings scarcity
Source: Aggregated information from media reports
As of January 2, 2021, we estimated at least $39.2 billion in improper payments, including fraud, were at
risk of not being detected and recovered, and could have been put to better use. Across the country, news
and law enforcement agencies have reported unprecedented levels of UI fraud. In our February 22, 2021,
CARES Act alert memorandum,9 we estimated that potential fraud could range into the tens of billions of
⁹DOL OIG, “Alert Memorandum: The Employment and Training Administration (ETA) Needs to Ensure State
Workforce Agencies (SWAs) Implement Effective Unemployment Insurance Program Fraud Controls for High Risk
Areas,” (February 22, 2021; Report No. 19-21-002-03-315).
Semiannual Report to Congress: April 1 – September 30, 2021 27
Worker and Retiree Benefit Programs
dollars. For example, OIG components’ work identified more than $5.4 billion of potentially fraudulent UI
benefits in the four high risk areas shown in Figure 2.10
Figure 2. Potentially Fraudulent Activities
Suspicious and
Multi-State Deceased Social Federal Disposable Email
Claimants Security Numbers Prisoners Accounts
$3,537,090,855 $58,749,938 $98,322,434 $2,029,572,986
Source: OIG analysis of state data
In addition, ETA did not provide adequate oversight to prevent states from inaccurately reporting
overpayments and fraudulent payments. Without this critical oversight and transparency, ETA could not
ensure that its management of billions of dollars in supplemental program funding achieved the desired
outcome and sufficiently met the requirements of the CARES Act. Nor could ETA adequately monitor
criminal and civil actions involving fraudulent payments, including the age of outstanding overpayments.
Further, ETA may not be able to accurately identify trends, weaknesses, or vulnerabilities in the CARES Act
UI programs.
We made four recommendations to ETA to improve management oversight of the UI program. ETA agreed
with our recommendations and indicated that the agency has already taken action to implement some of
the recommendations.
For more information, go to https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf, Report
No. 19-21-004-03-315 (May 28, 2021).
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 General
With approximately $872.5 billion in UI funds authorized to assist American citizens with pandemic-
related employment issues and challenges, DOL-OIG needs direct access to claim and wage data from
SWAs to expeditiously and efficiently combat fraud. The Inspector General Act of 1978, as amended (IG
Act) authorizes the OIG to obtain UI information for all purposes (e.g., audit and investigative) to prevent
and detect fraud, waste, and abuse within the UI program. We found that DOL’s interpretation of federal
10
The $5.4 billion covers the period of March 2020 through October 2020. To prevent double counting, more than
$313 million in UI claims filed using two or more of the methods noted in this report were counted only once.
28 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
regulations and ETA’s subsequent guidance Previously, the OIG identified $5.4 billion in
to SWAs resulted in two primary disclosure potential fraud.11 Our analysis covering March
limitations that contradict the IG Act. In addition, 2020 to October 2020, increased the potential
the interpretation and guidance increased the fraud identified to almost $17 billion in the
risk that billions of dollars in potentially fraudulent same four areas: individuals with social security
claims would not be detected and improper numbers filed in multiple states, individuals with
payments not be stopped. social security numbers of deceased persons,
individuals with social security numbers of federal
First, we found that, contrary to the IG Act and inmates, and individuals with social security
federal regulations, Unemployment Insurance numbers used to file claims with suspicious
Program Letter (UIPL) 04-17 limits the mandatory email accounts. Our previous memorandum
sharing by SWAs of UI information to only those recommended establishing effective controls in
circumstances in which the OIG is conducting the four areas, which would help prevent similar or
an investigation into a particular instance of even greater amounts of fraud.
suspected UI fraud. DOL’s guidance to SWAs
has restricted the OIG’s ability to effectively and The OIG recommended that ETA amend its
efficiently supervise audits of activities carried regulations to reinforce that UI information must
out by DOL for the purpose of preventing and be provided for all OIG engagements authorized
detecting fraud and abuse—the OIG’s statutory under the IG Act, including audits, evaluations,
duty and responsibility required under the IG Act. and investigations. In addition, the OIG
recommended that ETA issue a new UIPL within
Second, UIPL 04-17 requires SWAs to enter into 15 days and also revise UIPL 04-17, clarifying
agreements with the OIG before any disclosures that UI information must be provided without a
of confidential UI information, which also subpoena, with direct notification from the OIG to
contradicts the IG Act and federal regulations SWAs, and that, consistent with federal law and
and creates unnecessary delays. Because of this regulation, the new UIPL advise SWAs that no
requirement, to obtain the UI data to date, the data sharing agreements are required. In addition,
OIG has had to issue two rounds of subpoenas the OIG recommended that ETA and the OIG
to each of the 54 SWAs. The subpoena process meet to develop a permanent approach for access
is resource- and time-intensive and results in by the OIG to UI data.
the delayed detection of potentially fraudulent
claims. Specifically in this case, the delays The OIG appreciates that ETA has committed
associated with subpoena issuance versus direct to corrective action that will partially address
unencumbered access to data resulted in 3 to our concerns. In response to the draft report,
4 month delays, respectively, and equated to ETA stated that it would issue new guidance
the lack of detection and prevention of billions
11
DOL-OIG, “Alert Memorandum: The Employment
of dollars in potentially fraudulent claims at the
and Training Administration (ETA) Needs to Ensure
earliest opportunity. Moreover, the follow up by
State Workforce Agencies (SWAs) Implement Effective
SWAs to confirm actual fraud is also delayed,
Unemployment Insurance Program Fraud Controls for
potentially allowing billions of dollars to be paid on
High Risk Areas,” (February 22, 2021; Report No. 19-
fraudulent claims during the delays.
21-002-03-315).
Semiannual Report to Congress: April 1 – September 30, 2021 29
Worker and Retiree Benefit Programs
requiring SWAs to disclose UI information to Alert Memorandum: The
the OIG for audit purposes through the end of Employment and Training
the period covered by the CARES Act and has
Administration Does Not Require
done so. However, the IG Act requires that the
the National Association of State
IG have access to all records applicable to DOL
programs and operations. This requirement
Workforce Agencies to Report
includes SWAs provision of UI information to the Suspected Unemployment Insurance
OIG for all purposes at all times, without time Fraud Data to the Office of Inspector
period limitations. The OIG’s use of UI information General or the Employment and
cannot be constrained by ETA as any purported Training Administration
limitation to OIG activities by an agency would
also contradict the IG Act. The DOL Office of During ongoing criminal investigations of UI fraud
the Solicitor’s interpretations and ETA’s issued related to pandemic relief funds, the OIG became
guidance will continue to (1) restrict the OIG’s aware of an urgent concern. NASWA represents
independence; (2) impede the OIG’s access to all 50 state agencies as well as D.C. and U.S.
critical UI information; and (3) hamper the OIG’s territories (collectively, “SWAs” herein), with a
timely accomplishment of its mission. mission to help the SWAs “accomplish their goals,
statutory roles, and responsibilities.” NASWA’s
We made five recommendations to remove any responsibilities include managing the UI Integrity
data access restrictions stated or implied in Center for Excellence’s (UI Integrity Center) IDH,
the regulations and UIPLs and require SWAs a centralized platform that brings SWAs together
to comply with requests for UI data from the to compare and analyze UI claims data for
OIG without subpoenas. In addition to access enhanced detection and prevention of fraud and
to historical UI data from the systems of SWAs, improper payments. However, the OIG found that
the OIG’s access to real-time UI data could help ETA does not require NASWA to share suspected
prevent further, billions from being lost to fraud. In UI fraud data with either ETA or the OIG.
their response, ETA committed to corrective action
that will partly address our concerns. All DOL employees, contractor personnel, and
grantees must report suspected fraud, per the
For more information, go to https://www.oig.dol. Department of Labor Manual Series (DLMS)
gov/public/reports/oa/2021/19-21-005-03-315. 8. On September 7, 2017, ETA entered into a
pdf, Report Number: 19-21-005-03-315 (June 16, cooperative agreement with NASWA for the UI
2021). Integrity Center, a project that was incorporated
into DOL awards provided to NASWA’s Center for
Employment Security Education and Research.
When asked how they ensured that NASWA
complied with the DLMS requirement to report
suspected fraud, ETA officials responded that
the agreement with NASWA includes reference
to Uniform Guidance, 2 CFR Parts 200 and
2900. However, the agreement does not meet
30 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
the requirements of DLMS 8-106 (D)(3), which requirements in accordance with the Middle Class
requires all DOL agency heads, supervisors, and Tax Relief and Job Creation Act of 2012. In part,
managers to advise grantees of the following the act requires individuals to actively seek work
requirement: DLMS requires all DOL employees, in order to be eligible for UI benefits in a given
contractor personnel, and grantees to “report week. As work search–related overpayments
promptly, in writing when possible,…allegations have generally been the top cause of improper
that they reasonably believe constitute fraud, payments for the federal-state UI program since
waste, abuse, mismanagement, or misconduct.” FY 2012, we conducted this audit to determine
to what extent ETA and state strategies reduced
ETA is improperly relying on 2 CFR 200.113 UI overpayments related to work search and to
to satisfy this requirement when it does not determine if ETA ensured that states reported
fully encompass the intended scope of the work search information accurately.
DLMS. Additionally, 2 CFR Part 2900 relates
to assessment of risk posed by applicants, but We found that ETA and state strategies did
does not address a grantee’s obligation to report not consistently reduce UI overpayments
suspected fraud, waste, abuse, mismanagement, related to work search. We also found that
or misconduct to DOL or the OIG. ETA inappropriately excluded certain types
of overpayments from its improper payment
We made two recommendations to ensure that estimates for the UI program.
ETA requires NASWA to report suspected fraud
data and works with the OIG to develop a long- Although ETA provided 39 states with $9.5 million
term solution. ETA has expressed its commitment between FYs 2011 and 2016 to develop and
to work with the OIG to combat UI fraud and implement strategies to reduce work search–
improper payments and modified its agreement related overpayments, ETA and state strategies
with NASWA. did not achieve consistent and sustainable
reductions in work search overpayment rates
For more information, go to https://www.oig.dol. for Program Years (PYs) 2013 to 2019. Instead,
gov/public/reports/oa/2021/19-21-006-03-315.pdf, the rates fluctuated between 2.8 percent and 5
Report Number: 19-21-006-03-315 (July 1, 2021). percent of total UI payments and did not reflect a
trend of continuous improvement. The agency was
Unemployment Insurance unable to consistently reduce these overpayments
Overpayments Related to Work mainly because states had varying work search
laws and requirements, with some more stringent
Search Underscore the Need for
than others. For example, under one state’s
More Consistent State Requirements
requirements, a system approves a payment after
ETA estimated that $2.9 billion, or 10.6 percent, of it detects a claimant has accessed the system
the $26.2 billion in UI benefits paid for the period and clicked on at least two job postings per week.
of July 1, 2018, through June 30, 2019, were paid The system also records the amount of time the
improperly. The chief cause was overpayments, claimant spends searching for work online. In
with states paying $878 million to UI claimants our review of system records for PY 2018, we
who had not complied with state work search determined, on average, that a claimant could
Semiannual Report to Congress: April 1 – September 30, 2021 31
Worker and Retiree Benefit Programs
complete one valid work search contact in as few as 11 seconds, which does not appear to be sufficient
time to conduct a valid work search. States need to recognize that less stringent work search requirements
could result in ineffective and meaningless efforts to improve claimants’ chances of gaining employment.
As the leading cause of UI improper payments, work search overpayments factored into the UI program’s
not meeting the standard set by the Improper Payment Information Act of 2002, as amended, an improper
payment rate of less than 10 percent of total UI benefits paid in a given PY. The estimated UI improper
payment rates published in the Department’s Agency Financial Reports (AFR) from FY 2014 to FY 2019
ranged between 10.6 percent and 13.1 percent, and the rate of work search–related overpayments
averaged nearly 34 percent of the improper payment rate.
Contrary to federal law and Office of Management and Budget requirements, ETA did not include the
benefits paid to claimants who had not substantiated compliance with states’ work search requirements in
its UI improper payment rate calculations. UI claimants in at least 17 states received state formal warnings
after failing to conduct or document adequate work searches. As a result, UI improper payments were
understated by billions of dollars in AFRs for FY 2017 through FY 2020. For example, ETA excluded $2
billion (58.8 percent) of the $3.4 billion work search overpayments identified by states’ BAM staff during PY
2018. As such, the estimated 13.1 percent improper payment rate reported in the FY 2018 AFR would have
been more accurately reported at 19.8 percent. Table 2 shows the impact that excluding formal warnings
had on UI overpayments and improper payments for FY 2017 through FY 2020.
Table 2: Impact of Excluding Formal Warnings (FYs 2017–2020)
FY 2017 FY 2018 FY 2019 FY 2020
Reported UI $30,675,108,501 $27,949,217,692 $26,178,396,907 $20,448,076,675*
Dollars Paid
Reported IP** Rate 12.48% 12.95% 10.61% 9.17%
Reported IPs $3,827,946,790 $3,620,043,228 $2,777,261,644 $1,874,378,574
Reported OP*** 12.09% 12.54% 10.21% 8.72%
Rate
Reported OPs $3,707,543,452 $3,504,125,686 $2,673,556,320 $1,783,417,628
OPs Understated 6.18% 7.28% 5.71% 2.56%
Adjusted IPs $5,603,607,059 $5,537,189,819 $4,167,776,117 $2,398,430,116
IP Rate Adjusted to 18.28% 19.81% 15.92% 11.28%
Include FWs****
Source: ETA
*UI benefits paid in the first 9 months of the program year,
**IP = Improper Payment, ***OP = Overpayment, ****FWs = Formal Warnings
32 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
We made four recommendations to ETA to relationships with banks across the nation, and
improve efforts to reduce and accurately report UI that it had assisted well-known large companies in
overpayments related to work search. ETA agreed obtaining SBA loans. They offered a money-back
with our recommendations, but disagreed with the guarantee, but in fact employed various fraudulent
OIG’s characterization of how the agency reported methods to deny refunds.
UI improper payments as being understated in
recent years. Smith also committed fraud in connection
with emergency unemployment benefits by
For more information, go to https://www.oig.dol. submitting a fraudulent application to the Virginia
gov/public/reports/oa/2021/04-21-001-03-315. Employment Commission for unemployment
pdf, Report No. 04-21-001-03-315 (September 29, compensation, including $600 per week in
2021). federal pandemic unemployment compensation
authorized under the CARES Act. As a result,
Virginia Beach Man Sentenced for Smith obtained $9,600 in federal pandemic
$1.2 Million Small Business Loan unemployment compensation of which he was not
entitled.
Scam, UI Scheme
On April 9, 2021, Ronald A. Smith was sentenced This was a joint investigation with the FBI, the
to 120 months in prison for his role in an United States Postal Inspection Service (USPIS),
Internet-based loan scam that defrauded nearly and SBA–OIG. United States v. Ronald A. Smith
1,700 owners and prospective owners of small and Terri Beth Miller (E.D. Virginia)
businesses out of $1,076,000, and for fraudulently
collecting unemployment benefits during the Former Stockton Man Sentenced
COVID-19 pandemic. Smith’s wife, Terri Beth to More than 6 Years in Prison for
Miller, was sentenced on April 16, 2021, to 60
Unemployment Benefits Fraud and
months in prison, for her role in the small business
Identity Theft
loan scheme.
Robert Maher, formerly of Stockton, California,
Smith and Miller set up an Internet-based was sentenced to 6 years and 3 months in prison
company, Business Development Group, for his involvement in a UI fraud scheme.
which offered, in exchange for an advance fee,
assistance to individuals in preparing applications Between November 2010 and February 2018,
to obtain loans guaranteed by the Small Business Maher and his co-defendant created fictitious
Administration (SBA). From August 2012 through companies and fictitious employees by using
February 2018, Smith and Miller solicited potential the real identities of persons with and without
customers on the basis of false, fraudulent, and their knowledge. Maher and his co-defendant
misleading statements and representations, then filed claims with the California Employment
including the claims that the company was Development Department (EDD), falsely stating
headquartered at the Trump Building in New York that the employees had been laid off or fired. The
City with additional offices in Las Vegas, that it resulting unemployment benefits were deposited
was affiliated with the SBA, that it had favorable onto debit cards mailed to addresses controlled by
Semiannual Report to Congress: April 1 – September 30, 2021 33
Worker and Retiree Benefit Programs
Maher or his associates. In all, Maher and his co- UI benefits debit cards issued by the California
defendant filed at least 72 fraudulent claims for UI EDD in Dean’s hotel room and on his person. The
benefits, seeking a total of more than $700,000, debit cards were in different names; none were in
of which EDD paid out approximately $609,000. Dean’s name. In addition, law enforcement found
This is a joint investigation with the FBI and EDD’s a fake driver’s license and a notebook containing
Investigation Division. U.S. v. Herron et al.— personal identifying information (PII) of multiple
Robert Joseph Maher (E.D. California) individuals, which had been used to apply for UI
benefits. Nearly $239,000 in UI benefits were
California Woman Sentenced to approved for claims associated with the recovered
More than 3 Years for Stealing EDD debit cards.
COVID-19 Relief Funds
United States v. Delashaun Dean (District of
Cara Marie Kirk-Connell was sentenced to 37 Nevada)
months in federal prison for fraudulently obtaining
more than $500,000 in COVID-19-related Mobile Man and Others Sentenced
unemployment benefits by using the stolen in Scheme to Defraud COVID-19
personal information of dozens of individuals
Benefit Programs
obtained from the “darknet.”
On July 2, 2021, Karderrius Phelion, of Mobile,
From May to October 2020, Kirk-Connell used Alabama, was sentenced to 30 months in prison
personal information, such as dates of birth and and ordered to pay restitution of approximately
Social Security numbers that she knew had been $118,000, including almost $18,000 to the
stolen and accessed via the darknet to apply for Minnesota Department of Employment and
UI benefits from the California EDD. Economic Development. On the same date,
Kashunte Tate was sentenced to 6 months in
This was a joint investigation with the IRS Criminal prison and ordered to pay $8,000, in restitution,
Investigation Division (IRS–CI) and USPIS. United and Khadijah Tate was sentenced to 60 days in
States v. Cara Marie Kirk-Connell (C.D. California) prison and ordered to pay more than $16,000 in
restitution. On June 25, 2021, Courtney Phelion
Arizona Man Sentenced to Federal was sentenced to 60 days in prison and ordered
Prison for Stealing Pandemic to pay $80,000 in restitution, and Brittany Bettison
was sentenced to 90 days in prison.
Unemployment Funds
Delashaun Dean of Arizona was sentenced to 30 Phelion and his co-conspirators defrauded the
months in federal prison for possessing multiple SBA via the Economic Injury Disaster Loan
unemployment benefits debit cards, all in different Program and attempted to obtain more than
names, and intending to fraudulently obtain nearly $300,000 in unlawful funding. Phelion utilized the
$239,000 in benefits. identity of his deceased great-grandmother to
obtain two credit cards, in violation of the federal
Between October 3 and October 5, 2020, the Las aggravated identity theft statute. Furthermore,
Vegas Metropolitan Police Department found 15 while Phelion worked for Highlights Technologies
34 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
as a contracted SBA loan processor, he In May 2020, Muraina used stolen PII from
fraudulently received PUA benefits from the State Washington state residents to submit false claims
of Minnesota. Phelion defrauded the State of for UI benefits in Washington. Muraina submitted
Minnesota of more than $17,000 in pandemic- fraudulent UI claims in the names of approximately
related UI benefits. fifty identity theft victims over a 1-week span,
ESD-WA issued more than $280,000 in fraudulent
This is a joint investigation with the SBA-OIG and UI benefits. Muraina then directed fraudulent
Department of Homeland Security, Homeland funds from his UI benefit scheme and tax fraud
Security Investigations (DHS-HSI). U.S. v. scheme to be deposited into bank accounts set up
Karderrius Phelion. (S.D. Alabama) by co-conspirators, including Kalembo, who was
convicted in 2017, of conspiracy to commit wire
Two Georgia Men Sentenced to and bank fraud in the Northern District of Georgia.
Federal Prison for Unemployment
This is a joint investigation with the IRS-CI, U.S.
Fraud and Tax Fraud Scheme
Secret Service, USPIS, and DHS–HSI. United
On August 31, 2021, Bamidele Muraina, a States v. Muraina et al. (N.D. Georgia)
Nigerian hacker, was sentenced to 70 months
in prison and was ordered to pay more than Former California EDD Employee
$260,000 in restitution to the Employment Convicted of Stealing Hundreds
Security Department of Washington (ESD-
of Thousands of Dollars in PUA
WA) and almost $300,000 in restitution to the
Benefits
IRS. Also, on August 31, 2021, Muraina’s co-
conspirator Gabriel Kalembo was sentenced to Nyika Gomez, a former contract employee with
50 months in prison, and Kalembo was ordered to California’s EDD, in San Diego, California pleaded
pay almost $200,000 in restitution to the ESD-WA guilty for her role in a scheme to steal hundreds
and almost $100,000 in restitution to the IRS. At of thousands of dollars in PUA benefits. Gomez
the time of Kalembo’s criminal conduct, he was conspired with her boyfriend, an inmate serving a
on federal supervised release from a prior fraud term of 94 years to life at California State Prison,
conviction in 2017. Sacramento, to submit fraudulent PUA claims to
EDD.
From January 2018 through April 2020, Muraina
hacked into multiple tax preparation and In July 2020, Gomez was employed by an EDD
accounting firms located in several states and contractor as a call center agent where she helped
obtained access to the firms’ accounts with a individuals process their UI claims. In that position,
national tax preparation program designed to steal Gomez received training in EDD’s procedures and
PII from their clients. Muraina then filed more than regulations, and she had access to confidential
275 fraudulent individual income tax returns in information regarding EDD’s UI program.
their names, resulting in Muraina seeking more
than $2.6 million in fraudulent IRS refunds. Gomez used that knowledge to submit fraudulent
unemployment insurance claims using PII she
acquired from California prisoners, with help
Semiannual Report to Congress: April 1 – September 30, 2021 35
Worker and Retiree Benefit Programs
from her inmate boyfriend. With his help, she goods. During the execution of a search warrant
also was able to purchase stolen PII from out- at Hawkins’ residence, agents seized more than
of-state residents, which she used to submit $200,000 in cash.
additional fraudulent unemployment claims.
Gomez submitted UI claims and sought more than This is a joint investigation with the FBI, IRS-CI,
$214,000 in benefits. More than $93,000 was paid USPIS, the U.S. Secret Service, and the State
out on these claims. of Michigan Unemployment Insurance Agency.
United States v. Brandi Hawkins (E.D. Michigan)
This is a joint investigation with EDD’s
Investigation Division, the California Department Inland Empire Woman Pleads Guilty
of Corrections and Rehabilitation-Investigative to Illegally Obtaining COVID-19-
Services Unit; USPIS and DHS–HSI. U.S. v.
Related Jobless Benefits in Prison
Gomez (S.D. California)
Inmates’ Names
Michigan State Contractor and Co- Paris Thomas of San Bernardino, California
Conspirator Pleads Guilty to $3.8 pleaded guilty to her role in defrauding the
Million Pandemic Unemployment California EDD of approximately $477,000 in UI
benefits.
Insurance Fraud Scheme
On June 30, 2021, Brandi Hawkins, a former From June 2020 to December 2020, Thomas
contract employee for the State of Michigan submitted at least 47 fraudulent UI claims to the
Unemployment Insurance Agency, pleaded guilty EDD. Thomas admitted to receiving the names,
to a UI wire fraud scheme that defrauded the Social Security numbers, dates of birth, and other
federal and state government of $3.8 million. On personal identifiable information of California state
July 6, 2021, co-conspirator Johnny Richardson prison inmates and others, which she used to
pleaded guilty to conspiring to commit wire fraud submit applications for UI benefits via the Internet
and money laundering. as if those persons were submitting the claims
themselves. Thomas falsely represented to the
Hawkins was a UI examiner who used her position EDD that the inmates were unemployed because
to fraudulently release payment on more than 700 of the COVID-19 pandemic. In exchange for cash
false PUA claims filed by her co-conspirators. If payments, Thomas provided third parties with
the Michigan Unemployment Insurance Agency the electronic benefit payment debit cards, which
had paid every fraudulent claim, the resulting loss were loaded periodically with UI benefits and EDD
would have been more than $12 million. Some of website login credentials linked to the fraudulent
the fraudulent claims were filed using the identities UI claims.
of individuals without their authorization.
This is a joint investigation with the FBI and EDD’s
Richardson paid bribes to Hawkins in exchange Investigation Division. U.S. v. Thomas (C.D.
for releasing payment on more than $680,000 California)
in claims. Hawkins and Richardson used the
proceeds of their scheme to purchase luxury
36 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
Office of Workersʼ Compensation Programs
The Office of Workers’ Compensation Programs (OWCP) administers four workers’ compensation
programs: the Federal Employees’ Compensation Act (FECA) program, the Energy Employees
Occupational Illness Compensation Program, the Longshore and Harbor Workers’ Compensation Act
program, and the Coal Mine Workers’ Compensation program.
FECA is the largest of the programs and provides workers’ compensation coverage to millions of federal,
postal, and other employees for work-related injuries and illnesses. Benefits include those for wage
loss, medical expenses, vocational rehabilitation, and for survivors for covered employees’ employment-
related deaths.
COVID-19: Pandemic Causes Delays timeliness of adjudicating claims declined by 15
in FECA Claims Adjudication percent during the audit period (Figure 3). We also
found that changes the FECA program made to
Among its responsibilities, OWCP administers opioid management have not negatively impacted
the FECA program, which provides coverage to opioid use among claimants; overall, opioid use
more than 2.6 million federal and postal workers. continued to decline throughout the audit period.
By June 16, 2020, less than 5 months after the
declaration of a public health emergency in The decline in the FECA program’s ability to
response to the COVID-19 pandemic, OWCP had timely adjudicate claims was primarily driven
received 2,866 COVID-19 FECA claims, including by COVID-19 claims, which initially required
48 death claims. As a result of this sudden influx significantly more time to adjudicate than other
in claims, OWCP anticipated a potential strain on claims. On average, the FECA program required
resources and claims processing delays. Delays 48 days to adjudicate COVID-19 claims compared
in claims adjudication could result in delayed to 9 days for other claims. Although the average
benefit payments and hardship for claimants. number of days to adjudicate COVID-19 claims
improved throughout the audit period, lowering
As part of its response, the FECA program from 178 days in March 2020 to 37 days in
developed a contingency plan, which included December 2020, the FECA program still required
reallocating resources from opioid management to five times as much time, on average, to adjudicate
COVID-19 claims adjudication. The OIG assessed COVID-19 claims than it required to adjudicate
(1) to what extent the COVID-19 pandemic other claims. As a result, 46 percent of COVID-19
impacted the FECA program’s ability to timely claims remained unadjudicated as of March 31,
adjudicate claims and (2) if the changes the FECA 2021, as opposed to only 20.5 percent of the other
program made to opioid management impacted 93,139 FECA claims received.
opioid use among claimants. We found that the
COVID-19 pandemic has had a negative impact According to FECA program officials, adjudication
on the FECA program’s ability to timely adjudicate of COVID-19 claims took longer because the
claims. Specifically, the FECA program’s
Semiannual Report to Congress: April 1 – September 30, 2021 37
Worker and Retiree Benefit Programs
Figure 3. Timely Adjudicated FECA Claims,
Pre-pandemic Period Compared to Audit Period
90%
Pre-pandemic
75%
Audit Period
Period Claims Claims
Adjudicated Adjudicated
program afforded extended opportunities to of calendar year 2021 and, if necessary, update
COVID-19 claimants for submission of evidence to its contingency plan to ensure that claims are
support their claims, since COVID-19 was a novel adjudicated as promptly as possible while
virus. Establishing causality between exposure continuing to consider potential negative impacts
to COVID-19 and the claimants’ employment on opioid-affected claimants. OWCP agreed with
was part of this problem. While the adjudication the report recommendations.
delays were not necessarily caused by the FECA
program, any delay could potentially cause For more information, go to https://www.oig.dol.
hardship for claimants. gov/public/reports/oa/2021/19-21-007-04-431.
pdf, Report No. 19-21-007-04-431 (September 23,
Further, the Institute for Health Metrics and 2021).
Evaluation projected in July 2021 that the current
increase in COVID-19 infections will continue DEEOIC Could Do More to Prevent
through November 2021. Based on 2020 data, Improper Payments of Home Health
these increases could potentially rise rapidly in
Care Costs
December 2021 and January 2022. If this occurs,
there is a risk that the FECA program could face The Energy Employees Occupational Illness
unplanned challenges, since their contingency Compensation Program Act of 2000 authorizes
plan was last updated in January 2021 and was compensation and medical benefits for certain
based on projections through April 2021. work-related illnesses acquired by nuclear
energy workers and allotted to them and their
We recommended that OWCP require the FECA survivors. From FY 2001 to FY 2020, home
program to review Institute for Health Metrics health care represented the majority of all medical
and Evaluation projections in the fourth quarter benefits—$3 billion out of $5 billion total—paid to
38 Semiannual Report to Congress: April 1 – September 30, 2021
Worker and Retiree Benefit Programs
claimants in the Energy Employees Occupational this issue. Completed guidance could help the PIU
Illness Compensation Program (Energy Workers consistently and appropriately follow procedures.
program). In addition, OWCP’s Division of Energy
Employees Occupational Illness Compensation Despite forming the PIU in 2016 as a control to
(DEEOIC) reported a total of more than $1 help it detect and prevent improper payments,
million in improper home health care payments the DEEOIC did not ensure that the PIU had
in the Energy Workers program between 2017 proper leadership. According to DEEOIC officials,
and 2019. Because of concerns regarding the management of PIU staff was not consistent
potential for providers to exploit these benefits or well qualified to oversee performance and
through unauthorized billings, we conducted this operations until the Performance Management
audit to determine if DEEOIC had controls to help Branch was created in 2020 and its first chief
identify and prevent the improper payment of position was filled in June 2020.
home health care benefits.
We made three recommendations for controls to
While DEEOIC generally had controls in place to help identify and prevent the improper payment
identify and prevent improper payments of home of home health care benefits. OWCP agreed with
health care costs, we found that the controls could all three recommendations and has already taken
be improved and brought into compliance with corrective actions on the issues identified.
the Office of Management and Budget Circular
A-123—Management’s Responsibility for Internal For more information, go to https://www.oig.dol.
Control. gov/public/reports/oa/2021/03-21-001-04-437.
pdf, Report No. 03-21-001-04-437 (September 16,
Despite the fact that between 2017 and 2019, 2021).
home health care costs were increasing, the
Program Integrity Unit (PIU) did not have a Two Dallas Men Each Sentenced to
tracking mechanism to proactively identify and 87 Months in Prison for Defrauding
analyze causes of improper payments to avoid
OWCP
making improper payments. During our testing,
we found instances in which data analytics would On September 27 and June 14, 2021, Kyle
have helped the PIU identify improper payments Hermesch and Michael Braddick were each
before they were made. The lack of a proper data sentenced to 87 months in prison. Hermesch and
tracking and analysis system means that the PIU Braddick were also ordered to pay more than $6
cannot identify patterns of fraud, waste, or abuse. million in joint and several restitution to OWCP
for their participation in a scheme to defraud the
In January 2020, DEEOIC developed a draft program.
Standard Operating Procedure to guide the
PIU’s activities that contained detailed guidance The investigation revealed that Braddick,
for reviewing, auditing, and/or investigating President of Bioflex, and Hermesch, Chief
claims. The draft Standard Operating Procedure, Operating Officer of Bioflex, both engaged in
however, was never finalized because DEEOIC a scheme to fraudulently bill OWCP through
management did not place sufficient priority on Braddick’s durable medical equipment company,
Semiannual Report to Congress: April 1 – September 30, 2021 39
Worker and Retiree Benefit Programs
Bioflex Medical. Bioflex provided durable medical Pharr Family Pharmacy billed various federal
equipment to patients who did not need the health care programs, to include OWCP, more
equipment. When Bioflex billed OWCP, they than $110 million for bogus services through
incorrectly billed transactions as rentals and claims that were false, fraudulent, and the result
incorrectly coded the durable medical equipment of illegal kickbacks. Delacruz and his partner
to increase the reimbursement paid by OWCP. owned a marketing company in Pharr, Texas, and
Braddick and Hermesch also paid illegal marketed on behalf of Pharr Family Pharmacy.
kickbacks to other indicted and un-indicted co- Delacruz and a co-conspirator made agreements
conspirators, in exchange for OWCP beneficiary with physicians to write prescriptions for medically
information, which they then used to submit unnecessary compound prescription medication
additional fraudulent billing statements through in exchange for a kickback of the profits. Delacruz
Bioflex to OWCP. and his co-conspirator funneled approximately
$8.1 million dollars in kickbacks from Pharr Family
This is a joint investigation with the United Pharmacy through the marketing business.
States Postal Service (USPS)–OIG, Veterans
Affairs (VA)–OIG, and Department of Homeland This is a joint investigation with USPS–OIG, the
Security–OIG. United States v. Michael Charles FBI, Defense Criminal Investigative Service, and
Braddick, United States v. Kyle Martin Hermesch VA–OIG. United States v. John Rodriguez et al.
(N.D. Texas) (S.D. Texas)
Pharmacy Marketer Pleads Guilty to
Paying and Receiving Kickbacks for
His Role in a Scheme to Defraud the
Office of Workers’ Compensation
Programs
On August 30, 2021, Hector Delacruz pleaded
guilty to one count of conspiracy to pay and
receive kickbacks for his role in a scheme to
defraud federal health care programs.
40 Semiannual Report to Congress: April 1 – September 30, 2021
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 that employers
provide every worker in America safe and healthy working conditions. OSHA pursues this mission by
setting and enforcing workplace safety and health standards; by investigating whistleblower complaints;
by providing training, outreach, and education; and by encouraging continuous improvement in workplace
safety and health.
OSHA’s Diminished Enforcement diminished enforcement efforts left more workers
Left More Workers at Risk for at risk for exposure to silica.
Exposure to Silica
OSHA’s silica inspections declined by more than
OSHA’s respirable crystalline silica (silica) final 50 percent in the 2 FYs after the final rule first
rule became enforceable for the construction became enforceable. In FYs 2018 and 2019,
industry in September 2017. However, OSHA performed only 880 silica inspections; in
approximately 1 month later, OSHA cancelled its contrast, in FYs 2016 and 2017, before the final
existing silica National Emphasis Program (NEP) rule became enforceable, OSHA performed 2,108
without replacing it, essentially eliminating OSHA’s silica inspections (Table 3).
silica-focused inspection goals. The final rule
had cut permissible levels of silica by 50 percent In addition, from October 1, 2019, through
and was intended to protect at least 2.3 million February 20, 2020, OSHA had performed only 85
workers OSHA estimated are at risk for silica silica inspections. The NEP had required that at
exposure each year through common materials least 2 percent of inspections be silica-focused,
such as stone, brick, mortar, and ceramics. and OSHA consistently met that goal. However,
Reducing and eliminating worker exposure to when canceling the silica NEP on October 26,
silica is vital because, when inhaled, it causes 2017, OSHA did not issue a new NEP, so that
serious, potentially fatal illnesses, including there was no NEP in place until February 4,
silicosis, an incurable lung disease. Prior to 2020. During the NEP lapse of more than 2
September 2017, OSHA had consistently and for years, OSHA conducted some silica inspections,
more than 2 decades recognized and emphasized but those were unplanned and resulted from
the importance of protecting workers from silica complaints. Overall, we found that the lapse likely
exposure through emphasis programs, ensuring resulted in OSHA’s conducting approximately 600
that at least 2 percent of its inspections were fewer silica inspections per year.
silica-focused.
OSHA worked for 18 years to develop and
The OIG conducted an audit to determine publish the final rule, with standards to protect
to what extent OSHA has protected workers workers from potential exposure to silica in their
from exposure to silica. We found that OSHA’s workplaces; yet diminished enforcement left more
workers at risk for silica exposure. In addition
42 Semiannual Report to Congress: April 1 – September 30, 2021
Worker Safety, Health, and Workplace Rights
Table 3. Silica Inspections Before and After Final Rule
Before Final Rule
Fiscal After Final Rule
(and During
Year (and During Lapse)
Emphasis)
2016 1,026
2017 1,082
2018 466
2019 414
Totals 2,108 880
Source: OIG’s analysis of OSHA’s publicly available data
to fewer inspections, we found that OSHA had willfully committing an OSHA violation resulting in
not developed meaningful goals and processes an employee’s death.
to demonstrate that their educational efforts
(outreach and guidance) succeeded in reaching In March 2019, Dana Container, Inc., was
the 2.3 million at-risk workers. We made three contracted to clean crude oil residue from
recommendations to improve OSHA’s silica NEP, approximately 100 railcars, located at a railway
inspections, data, and outreach processes. OSHA yard in Pittston, Pennsylvania. Under OSHA
provided a number of comments on the report regulations, an employee who is tasked by his or
and agreed that it is important to establish real her employer to work in a confined space must be
and meaningful metrics for evaluating outreach protected in various ways. Employers are required
conducted after the issuance of new standards. to test and monitor atmospheric conditions within
the space to ensure that the atmosphere is
For more information, go to https://www.oig.dol. non-hazardous and to purge, flush, or ventilate
gov/public/reports/oa/2021/02-21-003-10-105. the space as necessary to eliminate or control
pdf, Report No. 02-21-003-10-105 (September 29, any atmospheric hazards, including oxygen
2021). concentrations below 19.5 percent. Employers
must also outfit any employee tasked with working
New Jersey Company Sentenced in any atmosphere considered to be potentially
to 24 Months of Probation and to a hazardous with a particular type of OSHA-certified
respirator.
Fine of $325,000 for Committing an
OSHA Violation That Resulted in a
On May 31, 2019, a Dana Container, Inc.,
Worker’s Death employee entered one of the railcars at the
On June 7, 2021, Dana Container, Inc., Pittston site in order to scrape crude oil from the
headquartered in Avenel, New Jersey, was walls of the car. About 30 minutes after entering
sentenced to 24 months of probation and ordered the railcar, the employee collapsed inside the car.
to pay a fine of $325,000 after pleading guilty to He later died on scene, with the cause of death
ruled to be asphyxiation. The atmosphere inside
Semiannual Report to Congress: April 1 – September 30, 2021 43
Worker Safety, Health, and Workplace Rights
the car was determined to be oxygen deficient, and although Dana Container, Inc., was aware of applicable
OSHA regulations, the employee had not been outfitted with the proper OSHA-certified respirator.
This was a joint investigation with OSHA. United States v. Dana Container, Inc. (M.D. Pennsylvania)
Nebraska Railcar Cleaning Services and Owners Plead Guilty to Violating
Environmental and Worker Safety Laws Related to Workers’ 2015 Deaths
On July 12, 2021, Nebraska Railcar Cleaning Services, LLC (NRCS), its president and owner, Steven
Michael Braithwaite, and its vice president and co-owner, Adam Thomas Braithwaite, pleaded guilty to 21
counts stemming from an investigation into an April 2015 fatal railcar explosion that killed two workers.
The charges include conspiracy, violating worker safety standards resulting in worker deaths, violating the
Resource Conservation and Recovery Act, and submitting false documents to OSHA.
NRCS was in the business of cleaning railcars, including rail tanker cars, which often involved NRCS
sending workers inside the cars’ tanks to scrape and remove various commodities, including gasoline,
ethanol, petroleum by-products, and other residues. On various occasions prior to the April 2015 explosion,
OSHA officials conducted regulatory inspections, during which they notified the principals of NRCS that
they were in violation of OSHA safety regulations concerning confined space entries. Steven Braithwaite
ultimately entered into a written agreement with OSHA, in which he represented that NRCS had been
testing for benzene since July 2014, and Adam Braithwaite submitted falsified documents to OSHA
purporting to show that NRCS had been purchasing equipment to test the contents of railcars for benzene
and had taken other required safety precautions.
On or about January 2015, NRCS received an inquiry from one of its customers about cleaning product
residue from a rail tanker car that contained a highly flammable product and benzene. NRCS responded
that it could handle the material in the railcar. However, NRCS did not test the tanker car’s benzene
as required. On April 14, 2015, approximately 1 hour after two employees were sent into the tanker to
complete the cleaning job, its contents ignited and exploded, killing both employees and injuring a third.
This is a joint investigation with the Environmental Protection Agency Criminal Investigation Division. United
States v. Nebraska Railcar Cleaning Services (D. Nebraska)
44 Semiannual Report to Congress: April 1 – September 30, 2021
Worker Safety, Health, and Workplace Rights
Wage and Hour Programs
The Wage and Hour Division (WHD) enforces federal minimum wage, overtime pay, recordkeeping,
and child labor requirements of the Fair Labor Standards Act (FLSA). WHD also enforces the Migrant
and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family
and Medical Leave Act, the wage garnishment provisions of the Consumer Credit Protection Act, and
a number of employment standards and worker protections as provided in several immigration-related
statutes.
Additionally, WHD administers and enforces the prevailing wage requirements of the Davis-Bacon and
Related Acts, the Service Contract Act, and other statutes applicable to federal contracts for construction
and for the provision of goods and services. WHD also administered and enforced the Emergency Paid
Sick Leave Act and the Emergency Family and Medical Leave Expansion Act under the Families First
Coronavirus Response Act (FFCRA), which was effective from April 1, 2020, to December 31, 2020.
COVID-19: The Pandemic determine if WHD implemented effective controls
Highlighted the Need to Strengthen for enforcing its FFCRA paid leave compliance.
Wage and Hour Division’s
We found that WHD did implement controls
Enforcement Controls
for enforcing FFCRA paid leave compliance,
Congress passed the FFCRA to ensure that consistent with the agency’s internal controls
American workers would not be forced to and enforcement, but these controls could be
choose between their paychecks and the public strengthened.
health measures needed to combat the virus.
With approximately 60 million employees in WHD relied on incoming complaints to enforce
the United States covered by the FFCRA’s FFCRA paid leave. The agency does not require
paid leave provisions and 22 million COVID-19 staff to document all incoming complaints and
cases in the working age population, WHD was did not implement additional complaint handling
responsible for implementing and enforcing the controls specific to the FFCRA. As a result, WHD
new law and 11 other labor laws, and also for cannot ensure the agency took proper action on
making critical operational decisions during the all FFCRA complaints, and could have turned
COVID-19 pandemic. Given previously identified away employees whose employers violated their
challenges with WHD’s handling of FFCRA and right to obtain paid leave benefits through the
also previously identified issues with its complaint FFCRA. Because WHD incorporated the FFCRA
processes, we conducted a performance audit to
Semiannual Report to Congress: April 1 – September 30, 2021 45
Worker Safety, Health, and Workplace Rights
into its existing processes, these control deficiencies also apply to non-FFCRA labor laws enforced by the
agency.
In addition, WHD did not ensure that FFCRA complainants received the leave payments they were
owed. By not always requiring staff to follow up with complainants, WHD did not verify payments were
made. WHD also did not have a method for analyzing trends regarding conciliation outcomes or a
conciliation performance measure to determine if WHD was meeting agency objectives. As a result, WHD
cannot determine how effective the agency was at securing FFCRA payments for workers when using
conciliations. WHD has also increasingly used conciliations to enforce non-FFCRA labor laws. However,
WHD’s current conciliations policy makes it difficult for WHD to adequately assess the effectiveness of
conducting conciliations in its enforcement of other labor laws as well.
Finally, we found that WHD conducted fewer investigations and implemented enforcement changes during
the pandemic, assessing $66.8 million less in back wages compared to the prior year. WHD conducted
fewer investigations in FY 2020 for the other 11 laws—including the FLSA—than it had in prior years,
including a reduction in agency-initiated investigations, and utilized remote investigations more often.
Although the reduction in oversight and the decrease in back wages can be attributed to pandemic
restrictions, WHD did not assess its use of remote investigations or develop a plan for continuing agency-
initiated investigations in a remote environment at the onset of the pandemic. As a result, WHD risked not
achieving its mission and risked not protecting wages earned by those still working during the economic
disruption.
While the paid leave provisions of the FFCRA are no longer in effect, we made five recommendations to
WHD to address the control weaknesses we identified in its complaints and conciliation processes for the
other enforcement programs.
WHD generally agreed with our recommendations although disagreed specifically with our
recommendation on conciliations process improvements. WHD stated its established policy properly
records the effectiveness of WHD conciliations in securing back wages for workers. However, WHD’s
current policy does not require follow-up with the complainant or proof of back wage payments resulting
from conciliations, nor do they have a method for analyzing trends regarding the outcomes of conciliations
to determine if WHD was meeting agency objectives. Therefore, we continue to assert that this
recommendation is needed to ensure that WHD is meeting its mission to secure wages using conciliations.
For more information, go to https://www.oig.dol.gov/public/reports/oa/2021/19-21-008-15-001.pdf, Report
No. 19-21-008-15-001 (September 30, 2021).
46 Semiannual Report to Congress: April 1 – September 30, 2021
Worker Safety, Health, and Workplace Rights
Bureau of International Labor Affairs
The Bureau of International Labor Affairs (ILAB) safeguards dignity at work—both at home and abroad—
by strengthening global labor standards, enforcing labor commitments among trading partners, promoting
racial and gender equity, and combating international child labor, forced labor, and human trafficking.
ILAB Properly Performed Oversight compliance with the MOA and its policies and
in Compliance with the USAID procedures.
Memorandum of Agreement
Castro determined that ILAB generally ensured
and Ensured Catholic Relief
CRS was in compliance with the cooperative
Services Was in Compliance agreement requirements. ILAB also ensured that
with the Cooperative Agreement costs claimed under the award were allowable,
Requirements supported, and in accordance with applicable
laws, regulations, guidelines, and terms and
ILAB awarded $3,478,000 received from
conditions of the cooperative agreement. ILAB
the United States Agency for International
also properly performed oversight in compliance
Development (USAID) through a modified
with the USAID MOA and its policies and
Memorandum of Agreement (MOA) to Catholic
procedures. However, Castro did identify one
Relief Services (CRS). CRS applied the funding
instance in which ILAB did not perform a thorough
to a project in El Salvador and Honduras focused
review of CRS’s Inventory Listing. While Castro
on improving livelihood outcomes among at-risk
noted that CRS purchased a vehicle that deviated
youth to prevent their engagement in the worst
from the approved budget justification, the vehicle
forms of child labor. Public Law 114-113, Division
purchased cost less than the approved cost and
K, Title VII, General Provisions, requires that
still achieved the intended purpose. In addition,
the Inspector General for the agency receiving
CRS did not meet three of its performance
the transfer or allocation of such USAID funds
indicator targets; however, this did not impact
perform periodic audits of the use of the funds.
CRS’s achievement of the overall project goals.
The OIG contracted with the independent certified
Castro identified a best practice used by ILAB
public accounting firm of Castro & Company,
that enabled CRS to achieve the majority of the
LLC (Castro) to conduct a performance audit
performance objectives. To ensure performance
to determine if ILAB: (1) ensured that CRS
compliance, ILAB uses a developed and
performed in accordance with the cooperative
implemented Management Procedures and
agreement requirements; (2) ensured that
Guidelines (MPG) procedure to perform periodic
costs claimed under the MOA were allowable,
site visits to project locations, to review prior
supported, and in accordance with applicable
audit reports on the awardees and any partners
laws, regulations, guidelines, and terms and
in order to identify potential weaknesses in
conditions of the cooperative agreement; and
internal controls or areas of noncompliance, to
(3) properly performed oversight over CRS in
Semiannual Report to Congress: April 1 – September 30, 2021 47
Worker Safety, Health, and Workplace Rights
perform multiple reviews over project deliverables, and to hire external, independent consultants to perform
mid-term and final performance evaluations over the awardees. Castro determined that these controls
contributed to greater success in CRS achieving the performance objectives.
Castro made two recommendations to the Deputy Undersecretary of International Labor Affairs to update
its MPG to improve oversight procedures for inventory management. ILAB concurred with one of the two
recommendations to improve its oversight procedures for inventory management.
For more information, go to https://www.oig.dol.gov/public/reports/oa/2021/17-21-003-01-070.pdf, Report
No. 17-21-003-01-070 (September 23, 2021).
48 Semiannual Report to Congress: April 1 – September 30, 2021
Employment and Training
Programs
Employment and Training Programs
Employment and Training Administration Programs
The Employment and Training Administration (ETA) provides employment assistance, labor market
information, and job training through the administration of programs authorized by the Workforce
Innovation and Opportunity Act (WIOA) for adults, youth, dislocated workers, and other targeted
populations. WIOA grant funds are allocated to state and local areas, based on a formula distribution,
and to governmental and private entities through competitive grant awards.
Memorandum: Review of knowledge and progressive advancement in
Appropriated Funds to Administer skills, IRAP is not a Registered Apprenticeship
program. Any activity done or created to carry out
the Industry-Recognized
the functions and purpose of IRAP could not be
Apprenticeship Program
funded from the TES appropriation.
In a November 20, 2019 congressional inquiry,
the former Assistant Secretary for ETA disclosed During our audit, ETA indicated a sequence
the possible misapplication of ETA’s Training of events leading to its correction of the
and Employment Services (TES) appropriated funding source for $1,114,590 in IRAP-related
funds in direct support of Industry-Recognized expenditures. Based on our review of ETA’s
Apprenticeship Program (IRAP) activity, along accounting of $1,114,590 in IRAP activities, no
with ETA’s corrective action. During the financial information came to our attention that would
statement audit conducted by KPMG LLP as indicate ETA had improperly used Program
contractors of the OIG, we performed certain Administration funding for IRAP activities.
inquiries and procedures to address whether ETA
properly used appropriated funds for IRAP activity. We also reviewed the appropriation language
The OIG found that ETA had initially used TES to determine whether ETA had appropriately
appropriated funds for certain IRAP activities and, used Program Administration funds for IRAP-
after identifying the misapplication of those funds, related activities. We concluded that ETA’s use
subsequently corrected the funding source to of Program Administration funds was appropriate
Program Administration funds. for their administration of IRAP activities.
Specifically, the Consolidated Appropriations Act,
Since 1937, under the National Apprenticeship 2018, authorized Program Administration funds
Act, the Secretary of Labor has been authorized for the expenses of administering employment
to support certain work toward apprenticeships. and training programs. Congress did not further
ETA’s work includes administering Registered restrict ETA’s authority to expend the funds.
Apprenticeship programs to which, in 2018, Absent appropriations language designating the
Congress appropriated $145 million in TES funds. funds for a specific purpose or program, ETA
While IRAPs are private-industry-led, high-quality may exercise discretion in allocating the funds
apprenticeship programs that provide individuals for expenses related to the administration of ETA
with opportunities to obtain workplace-relevant employment and training programs.
50 Semiannual Report to Congress: April 1 – September 30, 2021
Employment and Training Programs
The OIG made no recommendations. While ETA had initially erred by charging IRAP activities to TES-
appropriated funds, ETA identified the error and subsequently corrected the funding source to Program
Administration. Furthermore, no information came to our attention that would indicate ETA had improperly
used Program Administration appropriated funds in 2018 and 2019 to administer IRAP activities.
For more information, go to https://www.oig.dol.gov/public/reports/oa/2021/22-21-006-03-375.pdf, Report
No. 22-21-006-03-375 (May 28, 2021).
ETA Did Not Sufficiently Plan and Execute the American Apprenticeship
Initiative Grant Program
ETA awarded $175 million in grants, running through at least September 2020, for the American
Apprenticeship Initiative (AAI) grant program. The AAI program was intended to expand apprenticeships
into high-growth occupations and industries, increase apprenticeship opportunities for underrepresented
populations, and reduce the United States’ need for foreign workers under the H-1B visa program, among
other goals. Because of concerns with ETA grant programs and the Registered Apprenticeship program, we
conducted an audit to determine if ETA sufficiently planned and executed the AAI grant program. We found
that, while ETA made progress in achieving some of the program’s goals, systemic weaknesses throughout
the program resulted in ETA not sufficiently planning and executing the AAI grant program.
We found systemic weaknesses in the execution, as well as in the planning and award processes, of
the AAI grant program. For execution, 88.5 percent of the apprenticeships did not meet the specialty
occupation criteria for H-1B visas, and, often, they were not in H-1B occupations, which makes it difficult for
Figure 5: More than $155 Million in Apprenticeships Did Not Meet
H-1B “Specialty Occupation” Criteria
$20 million
$155 million
Apprenticeships Not Meeting
H-1B Specialty Criteria
Apprenticeships Meeting
Source: OIG analysis of ETA data
H-1B Specialty Criteria
Semiannual Report to Congress: April 1 – September 30, 2021 51
Employment and Training Programs
ETA to demonstrate that the program has helped in future grant programs if it had made AAI grants
reduce the U.S. need for foreign workers under that adhered to its own guidance.
the H-1B visa program (see Figure 5).
Generally, the weaknesses occurred because
As a result, ETA could have put more than $155 ETA did not sufficiently design various processes
million in funds to better use by having grant with appropriate controls or provide sufficient
recipients create apprenticeships that either start oversight, because personnel did not fully
in H-1B occupations or have career pathways understand all the requirements, and because
leading to H-1B occupations at the end of the grant recipients did not follow instructions. As a
apprenticeship. result, ETA will have difficulty measuring program
success, monitoring the grant recipients, and
ETA’s planning weaknesses included insufficiently accurately reporting.
designing AAI goals, metrics, and the reporting
system, and resulted in data quality issues that We made seven recommendations, including
negatively impacted some aspects of a $6.6 establishing internal controls to verify participant
million contractor evaluation of the program. ETA eligibility, complete and accurate system data,
did not have the reporting system ready to access and achievement of desired outcomes, such
on day one, forcing the use of an interim reporting as reducing H-1B visas. ETA agreed with six of
process. During that process, ETA violated the our recommendations and discussed corrective
Paperwork Reduction Act (44 U.S. Code § 3501) actions it had been making in some of these areas
by collecting data before receiving approval since the AAI grant program started. However,
from the Office of Management and Budget. ETA disagreed with our recommendation to delete
The system did not flag issues with eligibility duplicate records in the AAI reporting system
of participants. We also found incomplete and and to populate missing information and correct
inaccurate data such as: inaccurate SSNs and contact information. We
made this recommendation to ETA because, as
• participants over 100 years in age; the awarding agency, it has responsibility for the
• blank entries for contact information, including data in the reporting system and oversees the
4,856 blank Social Security numbers (SSNs); grant recipients. We reviewed information through
and March 2021 to verify that significant data issues
• duplicate entries, including SSNs and the use still existed more than 2 years after ETA was
of 123-456-7890 as the phone number 164 notified of the data issues. To address this issue,
times. ETA can either correct the data itself or oversee
the grant recipients’ correction of the data.
Finally, we found significant weaknesses in
the award process, including incorrect award For more information, go to https://www.oig.dol.
amounts, incorrect timing of compliance reviews, gov/public/reports/oa/2021/05-21-004-03-375.
incorrect scoring of grantee proposals, and pdf, Report No. 05-21-004-03-375 (September 30,
inaccurate public reporting, which can damage 2021).
public trust in government. Moreover, ETA could
have put $4.5 to $10 million of funds to better use
52 Semiannual Report to Congress: April 1 – September 30, 2021
Labor Racketeering
Labor Racketeering
Labor Racketeering
Under the Inspector General Act of 1978, 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. Labor
racketeering investigations by the OIG 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.
New York Labor Union President the bribe payors’ admission to the Local 926.
Sentenced to 60 Months in Prison Working with other co-conspirators, Tagliaferro
identified prospective members and solicited
for Selling Union Membership
cash payments in amounts ranging from $600
On September 8, 2021, Salvatore Tagliaferro, the to $2,000. Once prospective members had paid
former president of the Local 926 chapter of the bribes, Tagliaferro then used his authority to
United Brotherhood of Carpenters and Joiners of ensure that they were admitted into the Local
America, was sentenced to 60 months in prison 926 and received Union membership cards.
and ordered to pay restitution of approximately Over the course of the scheme, the Local 926
$145,000. Tagliaferro was found guilty, after ballooned by more than 800 new members, but
a 1-week trial of honest services wire fraud, for 2 years, more than half of the new members
conversion of union assets, and conspiracy, in never worked a single Union job. Tagliaferro and a
connection with his involvement in a scheme to co-conspirator split the cash bribes obtained from
solicit cash bribes from hundreds of prospective the bribe payors during clandestine early morning
union members in exchange for membership. meetings outside a construction site in lower
Manhattan. In total, they each received at least
From at least in or about 2017 through $70,000 as a result of the scheme.
approximately June 2019, Tagliaferro, as the
President of the Local 926, abused his position as This was a joint investigation with DOL–Office of
an officer and employee of the Union by soliciting Labor-Management Standards (OLMS) and the
and accepting cash bribes from prospective New York City Department of Investigation. United
Union members in exchange for securing States v. Tagliaferro et al. (S.D. New York)
54 Semiannual Report to Congress: April 1 – September 30, 2021
Labor Racketeering
Flushing, New York, Man Sentenced outstanding after the resolution of the pending civil
to 30 Months in Prison for Stealing case.
$4.1 Million in Pension Funds and
In addition, from at least January 2017 through
Approximately $305 Thousand in
March 2018, Stern failed to pay outstanding health
Health Care Funds care claims and caused BHCC and Rosegarden
On April 20, 2021, Chaim Stern was sentenced to fail to pay employment taxes he collected
to 30 months in prison for embezzlement and tax from BHCC and Rosegarden employees. Also,
offenses related to his operation of nursing homes from January 2017 through June 2018, Stern
in Bridgeport and Waterbury, Connecticut. He also caused BHCC and Rosegarden to fail to pay
was ordered to pay more than $4.1 million to his BHCC and Rosegarden’s share of employment
employees’ pension plan and almost $2.5 million taxes. The total tax loss resulting from Stern’s
to the Internal Revenue Service. conduct is more than $4.3 million. This was a
joint investigation with DOL–Employee Benefits
Stern was the principal operator of the Bridgeport Security Administration (EBSA), Boston Regional
Health Care Center (BHCC), Bridgeport Manor, Office, and IRS–CI. United States v. Chaim Stern
and the Rosegarden Health and Rehabilitation (D. Connecticut)
Center, LLC (Rosegarden), in Waterbury, which
are privately owned nursing and rehabilitation Bronx Man Sentenced to 18 Months
facilities. Between approximately 2011 and 2018, in Prison for Role in Large-Scale
Stern stole approximately $4.1 million from the Wire Fraud Conspiracy
BHCC Pension Plan, over which he was the
trustee, principally by diverting the money to a On June 23, 2021, Edwin Cordero was sentenced
purported charity (called Em Kol Chai), which he to 18 months in federal prison for his role in a
controlled, as well as to himself and other entities. high-tech wire fraud conspiracy that targeted
Also, in approximately February 2015, Stern financial institutions and retirement plans.
misapplied approximately $305,000 from the Cordero was initially charged with conspiracy
BHCC Health Plan by diverting the money from a to commit wire fraud related to multiple thefts
stop-loss insurance plan that was intended to pay from 401(k) plans covered under the Employee
for an employee health claim and, instead, used Retirement Income Security Act (ERISA) and
it for other purposes, including Em Kol Chai, the other financial instruments. The thefts were
operation of the BHCC, and for his personal use. conducted by Cordero and other co-conspirators
both in the United States and overseas. The
Stern also failed to pay millions of dollars in other conspirators had been employing business email
health insurance claims that he was obligated compromise and other cyber hacking methods
to pay on behalf of his employees, resulting in to perpetrate the crimes against multiple large
many cases of debt collection action against financial institutions and ERISA-covered plans.
employees by the health care providers. Payment Additionally, Cordero was ordered to pay more
of outstanding claims is currently being handled than $148,000 in restitution and forfeiture. This is
through civil litigation. However, Stern has a joint investigation with the FBI. United States v.
been ordered to pay for any claims that remain Joshua Suarez et al. (D. New Jersey)
Semiannual Report to Congress: April 1 – September 30, 2021 55
Labor Racketeering
FCA US LLC Sentenced for California Woman Sentenced for
Conspiring to Make Illegal Payments Her Role in Defrauding Union Health
to UAW Officials Plan
On August 17, 2021, Fiat Chrysler Automobiles Lucine Ilangezyan, the former insurance biller
US LLC (FCA) was sentenced for conspiring for R&R Medspa, was sentenced to 18 months
to violate the Taft-Hartley Act by making more in prison and ordered to pay almost $8 million
than $3.5 million in illegal payments to officers in restitution. Ilangezyan engaged in a scheme
of the International Union, United Automobile, with the owners of the clinic to submit fraudulent
Aerospace, and Agricultural Implement Workers claims to health insurance companies, including
of America (UAW) between 2009 and 2016. The the International Longshore and Warehouse
illegal payments to UAW officials took multiple Union, Pacific Maritime Association Benefit Plan.
forms, including lavish meals, rounds of golf, The proceeds from the scheme were used to
extravagant parties for the UAW International provide patients with “free” cosmetic procedures.
Executive Board, an Italian-made shotgun, high-
end clothing, designer shoes, and other personal Ilangezyan and her co-conspirators induced
items paid for with credit cards issued by the patients to visit the clinics to receive free
jointly controlled training center. FCA executives cosmetic procedures, including facials, laser
also paid off the $262,000 home mortgage of hair removal, and Botox injections, which were
former UAW Vice President. The former UAW Vice not covered by insurance. The co-conspirators
President and his widow received hundreds of obtained insurance information from the patients
thousands of dollars funneled through a purported and fraudulently billed insurance companies for
charitable organization and sham companies unnecessary medical services or for services
under their control, which had lucrative contracts that were never provided. Using the fraudulent
with the UAW-Chrysler National Training Center proceeds from the insurance companies, the
(NTC). In many instances, FCA passed the illegal defendants calculated a “credit” that patients
Taft-Hartley payments through the NTC, which could use to receive “free” or discounted cosmetic
was entirely funded by FCA and was supposed to procedures.
provide training and health and safety protections
for FCA workers. During the course of the conspiracy, Ilangezyan
and her co-conspirators submitted more than
FCA’s sentence includes the payment of a $30 $20 million in claims to the insurance companies,
million fine, a 3-year term of probation, and 3 which paid almost $8 million on those claims.
years of oversight by an independent corporate
compliance monitor to ensure compliance with This was a joint investigation with DOL–EBSA,
federal labor and tax laws. Los Angeles Regional Office. United States v.
Roxy Khadem et al. Lucine Ilangezyan (C.D.
This is a joint investigation with the DOL–OLMS, California)
the IRS, IRS–Criminal Investigation Division, and
the FBI. United States of America v. FCA US LLC
(E.D. Michigan)
56 Semiannual Report to Congress: April 1 – September 30, 2021
Labor Racketeering
Departmental Management
Departmental Management
Departmental Management
The OIG performs oversight work involving the Department’s operations, financial management, and
information technology (IT) services.
DOL Complied with the Payment Integrity Information Act for FY 2020, but
Reported UI Information Did Not Represent Total Program Year Expenses
The OIG contracted with the independent certified public accounting firm of KPMG LLP (KPMG) to conduct
a performance audit related to DOL’s compliance with the Payment Integrity Information Act of 2019 (PIIA)
for FY 2020, which ended September 30, 2020. KPMG concluded that DOL met all six requirements for
compliance with PIIA. These six requirements relate to publishing improper payments information and
improper payments reduction targets, as well as conducting program-specific risk assessments.
However, as KPMG noted in its report, DOL permitted state workforce agencies to suspend their improper
payment sampling efforts for the final quarter of the unemployment insurance (UI) program year to reduce
the burden on program resources responsible for processing UI benefit claims and implementing new
programs related to the COVID-19 pandemic.
Figure 6. UI Benefits Included and Excluded from FY 2020 IP Rate
Included
$22.6 billion Excluded
in Regular UI $64.3 billion
in Regular
UI
Excluded
$195 billion
in CARES Act
UI
Source: OIG review of ETA’s reported data on UI
58 Semiannual Report to Congress: April 1 – September 30, 2021
Departmental Management
The Office of Management and Budget–approved For more information, go to https://www.oig.dol.
decision to suspend testing for the fourth quarter gov/public/reports/oa/2021/22-21-007-13-001.pdf,
of the program year permitted approximately Report No. 22-21-007-13-001 (August 6, 2021).
$64.3 billion, or 74 percent of the total $86.9
billion program year expenses reported by DOL, DOL’s IT Governance Lacked the
to go untested for improper payments. Moreover, Framework Necessary to Support
three new programs that provided federally funded
the Overall Mission
unemployment benefits authorized by the CARES
Act were excluded from the UI program improper DOL spends more than $685 million annually on
payment information as they were not in existence a portfolio of IT assets that support the operation
for more than 12 months as of the reporting and management of its programs. Prior audit work
period. These three programs, which are the found that DOL’s information security program
Pandemic Unemployment Assistance program, contained deficiencies in critical, high-risk areas.
the Pandemic Emergency Unemployment As cited for many years through audit reports,
Compensation program, and the Federal these issues were attributed, in part, to the DOL
Pandemic Unemployment Compensation, in Chief Information Officer’s (CIO) lack of authority
total comprised approximately $195 billion, or 69 and a misaligned reporting structure for the CIO’s
percent of the total $281.8 billion unemployment position.
expenses reported by DOL for Program Year
(PY) 2020. As such, DOL’s improper payment In 2019, DOL initiated an effort under the direction
information is reflective of only $22.6 billion, or 8 of the Assistant Secretary for Administration and
percent of total unemployment expenses reported Management (ASAM) to realign its IT resources
by DOL for PY 2020 (Figure 6). from across the organization and consolidate IT
functions into an IT Shared Services model under
Although DOL’s reported UI improper payment the CIO within the Office of the Assistant Secretary
rate of 9.17 percent is compliant with PIIA, it is for Administration and Management (OASAM).
not representative of the total unemployment Given our prior concerns and the changes
expenses for PY 2020. The OIG’s initial pandemic underway, we conducted a performance audit
audit and investigative work indicate that UI to determine if DOL’s IT governance structure
program improper payments, including fraudulent appropriately aligns authority and responsibility to
payments, are likely higher than 10 percent. support the overall mission of the Department.
KPMG and the OIG recommended that DOL
management develop procedures to ensure We determined that DOL’s IT governance
changes to its improper payment process are structure does not appropriately align the CIO’s
communicated to the Office of Management authority and responsibility to support DOL’s
and Budget in a timely manner and that those overall mission. We found IT governance at DOL
communications are properly maintained for was ambiguous, ad hoc, and reliant on personnel
subsequent review and inspection. to fulfill their duties without codified policies and
procedures. To be effective, the CIO must be
positioned within DOL’s leadership to ensure the
implementation of IT governance and without the
Semiannual Report to Congress: April 1 – September 30, 2021 59
Departmental Management
appearance of any conflicts of interest. This is not Service Auditors’ Report on the
the case at DOL because the CIO reports to the Integrated Federal Employees’
ASAM, the head of one of the CIO’s customer
Compensation System for the
agencies, who also represents the CIO in key
Period October 1, 2020 to June 30,
enterprise planning and strategy meetings.
2021
DOL made progress in ensuring that the CIO The OIG contracted with an independent
controls key IT functions within the Department. certified public accounting firm to perform an
However, blind spots remained in their visibility examination of the integrated Federal Employees’
and authority with IT because of agencies not Compensation System (iFECS) transaction
fully integrating into the IT Shared Services processing for the application and general
model, leading to a lack of control over essential controls as described in the report, were fairly
IT systems, contract procurements, project presented, suitably designed, and effectively
management, and hardware asset inventory. IT operating for the period October 1, 2020, through
processes critical to proper IT governance were June 30, 2021.
also weakened by ad hoc design and reliance
upon personnel. As a result, the current state of The controls and control objectives included in
DOL IT is currently reliant upon the direction of the description are those that the management of
the ASAM, and, without implementing codified the Office of Workers’ Compensation Programs’
structures, it is directly impacted by personnel Division of Federal Employees’ Longshore and
changes. Harbor Workers’ Compensation and OASAM
believe are likely to be internal controls for
The Associate Deputy Secretary for the financial reporting relevant to user entities of the
Department disagreed with one recommendation Federal Employees Compensation Act Special
to elevate the CIO position to a level Fund and iFECS throughout the period.
commensurate with DOL’s Assistant Secretaries
and the CFO and reporting to the Deputy The firm examined the suitability of the design and
Secretary. The Associate Deputy Secretary operating effectiveness of the controls and control
accepted the other four recommendations and will objectives. The firm concluded in all material
develop a plan to implement them. respects that the description fairly presented the
claims processing system and that the related
For more information, go to https://www.oig.dol. controls were suitably designed and operated
gov/public/reports/oa/2021/23-21-002-01-001. effectively to reasonably assure achievement of
pdf, Report No. 23-21-002-01-001 (September 30, the related control objective throughout the period.
2021).
This report, No. 22-21-008-04-431 (September
30, 2021), contains sensitive information and will
not be released publicly.
60 Semiannual Report to Congress: April 1 – September 30, 2021
Departmental Management
Single Audits
A single audit provides an organization-wide examination of an entity expending federal assistance
funds received for its operations. The audit is typically conducted annually by an independent certified
public accountant, and its objective is to provide assurance to the U.S. government regarding the
management and use of funds by recipients such as states, schools, universities, and nonprofits.
Quality Control Review of Single Audits
Under Uniform Guidance,12 cognizant federal agencies must oversee the implementation of single audit
requirements. DOL is currently cognizant for six entities, and the OIG periodically performs quality control
reviews (QCR) of the entities’ single audits. During this reporting period, we conducted one QCR on the
Single Audit of the Chicago Cook Workforce Partnership for the Fiscal Year Ended June 30, 2019. Based
on our review of the audit documentation related to DOL-funded programs, we determined that Mitchell
Titus LLP’s audit work was acceptable and met the requirements of applicable standards, including
generally accepted government auditing standards, generally accepted auditing standards, and Uniform
Guidance.
Uniform Guidance refers to 2 C.F.R. Part 200, OMB’s “Uniform Administrative Requirements, Cost
12
Principles, and Audit Requirements for Federal Awards.”
Semiannual Report to Congress: April 1 – September 30, 2021 61
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
The OIG received an allegation that a Program Analysis Officer in DOL’s Performance Management Center
(PMC), was running a personal business while on extended medical leave from their position with PMC.
Our investigation determined that three days before the employee was scheduled to return to PMC from
a detail position, the employee requested extended sick leave due to a “serious health condition” that
rendered the employee unable to work, in any capacity, within DOL. The investigation substantiated that
while on sick, annual, and leave without pay, the employee was working in multiple personal businesses.
The employee participated in paid public speaking engagements attended by other federal employees,
taught a Supervisory Development Course as a contract instructor for the U.S. Office of Personnel
Management (OPM), held office as the president of a private association, and is the founder and CEO
of a certified professional coaching business catering to federal government agencies and nonprofit
organizations. In addition, the employee solicited DOL employees, via their government email address,
to participate in a fee-based event hosted by the employee. The solicitation email included instructions
on how to register using the company Data Universal Numbering System’s number and Commercial and
Government Entity code number for accepting payments from federal agencies.
Prior to completion of the investigation, the OIG was notified that the employee requested disability
retirement from OPM. The OIG was later notified that after denial of the disability retirement, the employee
refused to return to duty as instructed and on November 29, 2020, DOL terminated the employee for
excessive absence and being “absent without official leave.”
Closed Investigations Not Disclosed to Public
• The OIG conducted an investigation as to whether a senior employee leaked internal information to a
prospective contractor that resulted in an advantage to that contractor during the solicitation process.
The OIG investigation did not substantiate the allegation. The investigation was closed without further
action.
• The OIG conducted an investigation as to whether a senior employee engaged in a conflict of interest
when the official began working as a consultant on a DOL contract immediately upon retirement
from DOL. The OIG substantiated the allegation. Criminal charges were declined as DOL could not
show any record that the employee had received ethics training or any guidance concerning post-
employment restrictions, and therefore the employee was not subject to any required cooling-off period
postemployment. The investigation was closed without further action.
62 Semiannual Report to Congress: April 1 – September 30, 2021
OIG Whistleblower Activities
OIG Whistleblower Activities
OIG Whistleblower Activities
Whistleblower Protection Coordinator
Pursuant to Section 2 of the Whistleblower Protection Coordination Act of 2018 (S.1869, June 25, 2018),
every inspector general’s office is required to designate a whistleblower protection coordinator. According
to Section 2, the coordinator (1) educates agency employees about prohibitions against retaliation for
protected disclosures; (2) educates agency employees who have made or are contemplating making
a protected disclosure about their rights and the remedies against retaliation for protected disclosures,
including the means by which employees may seek review of any allegation of reprisal, as well as the
roles of the OIG, the Office of Special Counsel (OSC), the Merit Systems Protection Board, and any
other relevant entities; and (3) provides general information about the timeliness of such cases, the
availability of any alternative dispute mechanisms, and avenues for potential relief. Within DOL-OIG, an
Associate Counsel to the Inspector General has been designated to serve as the whistleblower protection
coordinator. Pursuant to this designation, the coordinator has
• Provided input into training that was presented to, and required to be completed by, all DOL employees,
entitled “Prohibited Personnel Practices, Whistleblower Protection”;
• Provided live training to all DOL supervisors and managers entitled “Responding to Whistleblower
Retaliation Complaints/Overview of Prohibited Personnel Practices – Annual Training”
• Developed training for new employees titled “Whistleblower Rights and Protections for DOL Employees”
• Updated the DOL-OIG public facing website titled “Whistleblower Protection Coordinator”, which is
available to all DOL and OIG employees, to provide information on whistleblower protections and
options for DOL employees and employees of DOL contractors and grantees;
• Established a dedicated email address (OIGWhistleblower@oig.dol.gov) to receive and respond to
whistleblower-related inquiries from DOL employees;
• Worked with DOL to help obtain recertification of its 2302(c) program (October 2019); and
• Obtained the OIG’s recertification of its 2302(c) program (June 2020), and Monitored whistleblower
retaliation complaints received by the OIG, as well as whistleblower retaliation investigations conducted
by the OIG.
64 Semiannual Report to Congress: April 1 – September 30, 2021
OIG Whistleblower Activities
Whistleblower Retaliation Investigations
The OIG can initiate its own investigations into allegations of improper or illegal retaliation brought by DOL
employees or, on a discretionary basis, refer such allegations to OSC for review and investigation. At the
current time, the OIG has two open investigations involving complaints of whistleblower retaliation filed by
two DOL employees.
Further, pursuant to 41 U.S.C. § 4712, the OIG is required, with some exceptions, to investigate
whistleblower retaliation allegations made by employees of DOL contractors or grantees. During this
reporting period, the OIG:
• Closed one investigation of alleged whistleblower retaliation made by an employee of a DOL grantee or
contractor after preliminary investigation revealed that the individual’s allegation of retaliation had been
investigated by another OIG with a report being issued by that OIG; and
• Ended this reporting period with four pending investigations.
At the end of this reporting period, the Department is overdue in issuing its decisions on three complaints.
The OIG sent all three of these reports to the Secretary or his designee in earlier reporting periods.
Semiannual Report to Congress: April 1 – September 30, 2021 65
Legislative Recommendations
Legislative Recommendations
Legislative Recommendations
The Inspector General Act requires the OIG to review existing or proposed legislation and regulations,
and to make recommendations in the Semiannual Report concerning their impact both on the economy
and efficiency of the Department’s programs and on the prevention of fraud, waste, and abuse. The OIG
continues to propose the following legislative actions to increase efficiency and protect the Department’s
programs.
Allow DOL and the OIG Access to UI (ETA) amend its regulations through rulemaking
Claimant Data and Wage Records to reinforce that UI information must be provided
to the OIG for all Inspector General (IG)
Congress should consider legislative action to engagements.
allow DOL and the OIG to have direct access to
State Workforce Agency (SWA) unemployment This lack of direct and real-time access to data
insurance (UI) claimant data and wage records has severely hampered the OIG’s ability to
for our respective oversight responsibilities. effectively oversee the UI program. In order to
The Department has stated that outside of the overcome this impediment and effectively oversee
temporary authority provided by the Coronavirus UI benefits provided in response to the COVID-19
Aid Relief and Economic Security (CARES) pandemic, the OIG issued multiple IG subpoenas
Act, it lacks the authority to require SWAs to to all SWAs, seeking UI claimant data. OIG data
provide the OIG with access to UI claimant data scientists then normalized and analyzed the
and wage records unless the OIG is conducting data to identify potential fraud and programmatic
an investigation into a particular instance of weaknesses. While the Department did issue an
suspected UI fraud. The Department is unable to Unemployment Insurance Program Letter in July
cite any law enacted by Congress to support its 2021, requiring SWAs to provide the OIG with UI
opinion; and contrary to the Department’s belief, data related to the CARES Act and subsequent
the IG Act of 1978, as amended, authorizes pandemic UI legislation, the OIG no longer has
the OIG’s access to information related to the access to such data for audit purposes with the
Department’s programs, unless Congress enacts temporary UI benefits that expired on September
law that expressly refers to the OIG and limits 6, 2021. Thus, without data access, the OIG is
the OIG’s right of access. Furthermore, in a June unable to provide effective oversight of the UI
2021 alert memorandum,13 the OIG recommended program. The OIG has communicated in the past
that the Employment and Training Administration the value of receiving periodic reporting on this
data, such as on a monthly or quarterly basis,
13
DOL OIG, “Alert Memorandum: The Employment and
rather than requesting this data via legal action,
Training Administration Needs to Issue Guidance to
such as subpoenas, under special circumstances.
Ensure State Workforce Agencies Provide Requested
Unemployment Insurance Data to the Office of
The results of our efforts have shown that
Inspector General,” (June 16, 2021; Report No. 19-21-
data analytics is a vital tool in performing our
005-03-315).
68 Semiannual Report to Congress: April 1 – September 30, 2021
Legislative Recommendations
oversight function. The OIG’s efforts resulted in these proposals to aid the Department’s efforts to
the identification of billions in improper payments, combat improper payments in the UI program. The
with most attributable to potential fraud. The OIG proposals include the following:
was further able to recommend programmatic
changes to put billions in federal funds to better • require states to use the State Information
use. In addition, the OIG shared portions of our Data Exchange System;
methodology with ETA to allow the Department • require states to cross-match UI claims against
and SWAs to stop fraud before it occurs. The use the National Directory of New Hires (NDNH);
of IG subpoenas is time consuming and inefficient • allow the Secretary of Labor to require states
and it does not allow the OIG to identify fraud as it to implement UI corrective actions related to
is occurring. performance and integrity;
• require states to cross-match UI claims with
Real-time access to SWA UI claimant data the Social Security Administration’s prisoner
and wage records systems would assist in database and other repositories of prisoner
the Department’s programmatic oversight information;
responsibilities to identify improper payments • allow states to retain 5 percent of UI
and weak controls. This access is also vital to the overpayment recoveries for program integrity
OIG’s oversight responsibility and would enable use; and
the OIG to quickly identify and investigate large- • require states to use UI penalty and interest
scale fraud. It would also allow the OIG to expand collections solely for UI administration.
our current efforts to share emerging fraud trends
with ETA and SWAs in order to strengthen the UI In addition to the above, the President’s FY 2020
program and likely prevent fraud before it occurs. budget request included a new proposal to require
In addition, conducting data analytics based on states to access data sources available through
direct access would further enable our auditors the National Association of State Workforce
to identify program weaknesses and recommend Agencies’ Integrity Data Hub (IDH). The IDH
corrective actions that would improve the contains a Suspicious Actor Repository that
timeliness of UI benefit payments and the integrity allows states to exchange data elements from
of the UI program. known fraudulent UI claims as well as additional
real near-time data sources to help states detect
Enact the UI Integrity Legislative improper payments and fraud, including an
Proposals identity verification tool to prevent fraudulent UI
benefit claims. This proposal will require states to
In October 2016, the Department submitted cross-match UI claims against the data sources
a legislative package to Congress proposing available through the IDH. The UI program’s
changes that would help address UI program system-wide use of the IDH will result in increased
integrity and the high improper payment rates prevention, detection, and recovery of improper
experienced in the UI program. These proposals and fraudulent payments.
have also been included in each of the President’s
budget requests since FY 2018. The OIG These legislative proposals are consistent with
encourages Congress to consider and adopt previous OIG findings and recommendations
Semiannual Report to Congress: April 1 – September 30, 2021 69
Legislative Recommendations
to address UI improper payments. In order There have also been instances when companies
to maintain UI program integrity, the OIG has illegally generated profit by requiring foreign
recommended, as of February 2021, establishing workers to pay fees and recurring payments to
legislation that requires SWAs to cross-match secure H-1B visas. Without statutory authority
high-risk areas, including UI benefits paid to to ensure program integrity, the Department
individuals with Social Security numbers filed in cannot verify employers’ attestations to the H-1B
multiple states, belonging to deceased persons certifications unless a complaint is filed. This is
and federal inmates, or used to file for UI claims unlikely, as foreign workers are generally reluctant
with suspicious email accounts. to file complaints, for fear of retaliation and losing
their jobs.
Provide Authority to Ensure the
Integrity of the H-1B Program Amend Pension Protection Laws
If DOL is to have a meaningful role in the Legislative changes to the Employment
foreign labor certification process for H-1B Retirement Security Act of 1974 (ERISA) and
specialty occupation visas, it must have the criminal penalties for ERISA violations would
statutory authority to ensure the integrity of enhance the protection of assets in pension plans.
that process, including the ability to verify the To this end, the OIG continues to recommend the
accuracy of information provided on labor following legislative actions:
condition applications, and to initiate its own
H-1B investigations more broadly. Currently, the • Repeal ERISA’s limited-scope audit
Department is statutorily required to certify an exemption. This exemption excludes pension
H-1B application unless it determines that the plan assets invested in financial institutions,
application is “incomplete or obviously inaccurate.” such as banks and savings and loan firms,
However, DOL may not initiate its own H-1B from audits of employee benefit plans.
investigations based on reasons outside the four Notwithstanding recent changes to auditing
statutory criteria, unlike investigations into the standards that strengthen limited-scope
H-2A and H-2B programs. audits, these audits prevent independent
public accountants who are auditing pension
Our concern with the Department’s limited ability plans from rendering an opinion on the plans’
to ensure the integrity of the certification process financial statements in accordance with
is heightened by the results of OIG analyses professional auditing standards. These “no
and investigations showing that the program opinion” audits offer no substantive assurance
is susceptible to significant fraud and abuse, of asset integrity either to plan participants or
particularly by employers and attorneys. For to the Department.
example, some staffing companies utilize the
H-1B program without having scheduled jobs • Expand the authority of the Employee
already lined up. Some employers and attorneys Benefits Security Administration (EBSA)
misrepresent their need for workers to DOL, then to correct substandard benefit plan
reassign the extra workers to other companies audits and ensure that auditors with poor
or require foreign workers to find their own work. records do not perform additional plan
70 Semiannual Report to Congress: April 1 – September 30, 2021
Legislative Recommendations
audits. Changes should include providing penalty up to 10 years for all three violations to
EBSA with greater enforcement authority correspond with the 10-year penalty imposed
over registration, suspension, and debarment by Section 669 (for theft from health care
as well as the ability to levy civil penalties benefit programs), which would serve as a
against employee benefit plan auditors. The greater deterrent and, consequently, further
ability to correct substandard audits and take protect employee pension plans.
action against auditors is essential, as benefit
plan audits help protect participants and Improve the Integrity of the FECA
beneficiaries by ensuring the proper valuation Program
of plan assets and computation of benefits.
Legislative reforms should be considered in the
• Require direct reporting of ERISA following areas to improve the effectiveness and
violations to DOL. Under current law, a integrity of the FECA program:
pension plan auditor who finds a potential
ERISA violation is responsible for reporting • Provide statutory access to the NDNH and
it to the plan administrator, but not directly Social Security wage records. Currently,
to DOL. To ensure that improprieties are the Department has no access to the NDNH
addressed, we recommend that plan data and can access Social Security wage
administrators or auditors be required to report information only if the claimant gives it
potential ERISA violations directly to DOL. permission. Granting the Department routine
This change would ensure the timely reporting access to these databases would aid in
of violations and would more actively involve detecting fraud committed by individuals
auditors in safeguarding pension assets as receiving FECA wage loss compensation but
a first line of defense against the abuse of failing to report income they have earned.
workers’ pension plans.
• Establish a 3-day waiting period at the
• Strengthen criminal penalties in U.S.C. beginning of the claims process. FECA
Title 18. Three sections of U.S.C. Title 18 legislation provides for a 3-day waiting period,
serve as the primary criminal enforcement which is intended to discourage the filing of
tools for protecting pension plans covered by frivolous claims. As currently written, however,
ERISA. Section 664 prohibits embezzlement the legislation places the waiting period at the
or theft from employee pension and welfare end of the 45-day continuation-of-pay period,
plans; Section 1027 prohibits making false thereby negating its purpose. Legislation
statements in documents required by passed in 2006 placed the waiting period
ERISA; and Section 1954 prohibits giving for postal employees immediately after an
or accepting bribes related to the operation employment-related injury. If the intent of the
of ERISA-covered plans. Sections 664 and law is to ensure a true waiting period before
1027 subject violators to up to 5 years’ an employee applies for benefits, then that
imprisonment, while Section 1954 calls for period should likewise come immediately after
up to 3 years’ imprisonment for violators. an employment-related injury—for all federal
The OIG recommends raising the maximum workers, not exclusively postal employees.
Semiannual Report to Congress: April 1 – September 30, 2021 71
Legislative Recommendations
This proposal was included in the President’s FY 2021 budget as part of the Office of Workers’
Compensation Programs’ (OWCP) FECA reform.
• Allow the temporary suspension of questionable medical providers pending the outcome of
an investigation. While FECA regulations allow OWCP to exclude a provider through administrative
means, OWCP must give notice to the provider and afford the provider an opportunity for a hearing
before DOL’s Office of Administrative Law Judges. This process and the various procedures involved
can be lengthy. Although the Department’s suspension and debarment process is being successfully
applied to FECA medical providers, legislative changes are necessary to enable DOL to immediately
suspend all payments to providers who have been indicted for fraudulent billing practices. This proposal
was included in the President’s FY 2021 budget as part of OWCP’s FECA reform.
72 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Appendices
Reporting Requirements Under
the Following Acts
Inspector General Act of 1978
REPORTING REQUIREMENT PAGE
Recommendations on Existing and Proposed Legislation and 68
Section 4(a)(2) Regulations relating to the programs and operations of DOL
Section 5(a)(1) Description of Significant Problems, Abuses, and Deficiencies relating ALL
to the administration of programs and operations
Description of Recommendations for Corrective Action with Respect to ALL
Section 5(a)(2) Significant Problems, Abuses, and Deficiencies
Significant Recommendations from Previous Semiannual Reports on 81
Section 5(a)(3)
Which Corrective Action Has Not Been Completed
Matters Referred to Prosecutive Authorities and the Prosecutions and 97
Section 5(a)(4) Convictions Which Have Resulted
Section 5(a)(5) and Summary
of Each Report Made to the Head of DOL under Section 6(c) None to
Section 6(c)(2) (2) (Information or assistance requested and unreasonably refused in report
the judgment of the Inspector General).
List of Audit Reports, Inspection Reports, and Evaluation Reports 79
Section 5(a)(6) Subdivided According to Subject Matter
Section 5(a)(7) Summary of Particularly Significant Reports ALL
Statistical Tables Showing the Total Number of Audit Reports, 78
Inspection Reports, and Evaluation Reports and the Total Dollar Value
of Questioned Costs, Including Unsupported Costs, for Reports—
(A);(D) for which no management decision had been made by the
Section 5(a)(8) beginning or the end of the reporting period;
(B) which were issued during the reporting period; and
(C) for which a management decisions was made during the reporting
period, including the dollar value of disallowed and not disallowed
costs
Statistical Tables on Management Decisions on Recommendations 77
That Funds Be Put to Better Use
(A);(D) for which no management decision had been made by the
Section 5(a)(9) beginning or the end of the reporting period;
(B) which were issued during the reporting period; and
(C) for which a management decisions was made during the reporting
period, including the dollar value of disallowed and not disallowed
costs
74 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Reporting Requirements Under
the Following Acts, continued
Inspector General Act of 1978, continued
Summary of Each Audit Report, Inspection Report, and Evaluation 86 –
Report Issued Before the Commencement of the Reporting Period— 100
(A) for which no management decision has been made by the end of
the reporting period (including the date and title of each such report),
an explanation of the reasons such management decision has not
been made, and a statement concerning the desired timetable for
Section 5(a)(10)
achieving a management decision on each such report;
(B) for which no establishment comment was returned within 60 days
of providing the report to the establishment; and
(C) for which there are any outstanding unimplemented
recommendations, including the aggregate potential cost savings of
those recommendations
Description and Explanation for Any Significant Revised Management None to
Section 5(a)(11) Decision report
Information on Any Significant Management Decisions with Which the None to
Section 5(a)(12)
Inspector General Disagrees report
Information from the Federal Financial Improvement Act Section None to
Section 5(a)(13) 804(b)—instances and reasons when an agency has not met report
intermediate target dates in remediation plan
Peer Review Reporting None to
Section 5(a)(14) (A) Results of any peer review conducted by another OIG; or report
(B) A statement identifying the date of the last peer review conducted
Section 5(a)(15) Outstanding Peer Review Recommendations None to
report
Section 5(a)(16) Peer Reviews Conducted by DOL-OIG and Recommendations None to
Outstanding or Not Fully Implemented report
Statistical Tables on Investigative Findings Showing Total Number of— 97
(A) reports issued
(B) persons referred to DOJ for prosecution
Section 5(a)(17)
(C) persons referred to State and local prosecuting authorities
(D) indictments and criminal informations that resulted from any prior
referral to prosecuting authorities
Metrics Used for Developing the Data for the Statistical Tables Under 97
Section 5(a)(18) Section 5(a)(17)
Summary of Investigations of Senior Government Employees Where None to
Allegations of Misconduct Were Substantiated—including the facts, report
Section 5(a)(19) circumstances, status, disposition of the matter, and name of the
official if made public by the Office
Description of Whistleblower Retaliation Cases Including Information 67
Section 5(a)(20) About the Official Found to Have Engaged in Retaliaton and What, if
any, Consequences that Establishment Imposed to Hold that Official
Accountable
Semiannual Report to Congress: April 1 – September 30, 2021 75
Appendices
Reporting Requirements Under
the Following Acts, continued
Inspector General Act of 1978, continued
Section 5(a)(21) Summary of Instances of Attempted Departmental Interference with None to
the Independence of the Office, including—with budget constraints report
and incidents where the establishment has: resisted or objected to
oversight activities; or restricted or significantly delayed access to
information
Section 5(a)(22) (A) Descriptions of Inspections, Evaluations, Audits, and Investigations 59
That Are Closed and Were Not Disclosed to the Public; and
(B) Descriptions of Investigations Conducted By the Office Involving a
Senior Government Employee that is Closed and Was Not Disclosed
to the Public
Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010
Section 989C Peer Review Reporting None to
report
76 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Funds Recommended for Better Use
Funds Put to a Better Use Agreed to by DOL*
Number of Dollar Value
Reports ($ millions)
For which no management decision had been made as of the commencement of the
1 5,409
reporting period
Issued during the reporting period 2 33,901
Subtotal 3 39,310
For which a management decision was made during the reporting period:
• Dollar value of recommendations that were agreed to by management 39,154
• Dollar value of recommendations that were not agreed to by management
For which no management decision had been made as of the end of the reporting period 1 156
Funds Put to a Better Use Implemented by DOL
Number of Dollar Value
Reports ($ millions)
For which final action had not been taken as of the commencement of the reporting period 2 5.6
For which management or appeal decisions were made during the reporting period 2 39,154
Subtotal 4 39,160
For which a management decision was made during the reporting period:
• Dollar value of recommendations that were actually completed 0
• Dollar value of recommendations that management has subsequently concluded 0
should not or could not be implemented or completed
For which no final action had been taken by the end of the period 4 39,160
*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 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.
Treasury to be used for other purposes.
Semiannual Report to Congress: April 1 – September 30, 2021 77
Appendices
Questioned Costs
Resolution Activity: Questioned Costs*
Questioned
Number of
Costs
Reports
($ millions)
For which no management decision had been made as of the commencement of the
1 2
reporting period (as adjusted)
Issued during the reporting period 0 0
Subtotal 1 2
For which a management decision was made during the reporting period:
• Dollar value of disallowed costs 2
• Dollar value of costs not disallowed 0
For which no management decision had been made as of the end of the reporting period 0 0
For which no management decision had been made within six months of issuance 0 0
Closure Activity: Disallowed Costs
Disallowed
Number of
Costs
Reports
($ millions)
For which final action had not been taken as of the commencement of the reporting period (as
3 1.1
adjusted)
For which management or appeal decisions were made during the reporting period 1 2.0
Subtotal 4 3.1
For which final action was taken during the reporting period:
• Dollar value of disallowed costs that were recovered 1.0
• Dollar value of disallowed costs that were written off 0
• Dollar value of disallowed costs that entered appeal status 0
For which no final action had been taken by the end of the reporting period 2 2.1
*As defined by the Inspector General Act, questioned costs include alleged violations of law, regulations, contracts, grants,
or agreements; costs not supported by adequate documentation; or the expenditure of funds for an intended purpose that was
unnecessary or unreasonable. 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. Treasury.
78 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Final Audit Reports Issued
Number of Questioned Funds Put to
Report Name
Recommendations Costs ($) Better Use ($)
Bureau of International Labor Affairs
ILAB Properly Performed Oversight in Compliance with the USAID
Memorandum of Agreement and Ensured Catholic Relief Services
was in Compliance with the Cooperative Agreement Requirements;
Report No. 17-21-003-01-070; 09/23/21 2 0 0
Employment and Training Administration
COVID-19: States Struggled to Implement CARES Act
Unemployment Insurance Programs; Report No. 19-21-004-03-
315; 05/28/21 4 0 33,745,677,576
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 General; Report No. 19-21-005-03-315; 06/16/21 5 0 0
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 Office of the Inspector General or the Employment and
Training Administration; Report No. 19-21-006-03-315; 07/01/21 2 0 0
Unemployment Insurance Overpayments Related to Work Search
Underscore the Need for More Consistent State Requirements;
Report No. 04-21-001-03-315; 09/29/21 4 0 0
ETA Did Not Sufficiently Plan and Execute the American
Apprenticeship Initiative Grant Program; Report No. 05-21-004-03-
375; 09/30/21 7 0 155,582,864
Office of the Chief Financial Officer
The U.S. Department of Labor Complied with the Payment
Integrity Information Act for FY 2020, but Reported Unemployment
Insurance Information Did Not Represent Total Program Year
Expenses; Report No. 22-21-007-13-001; 08/06/21 1 0 0
Occupational Safety and Health Administration
OSHA's Diminished Enforcement Left More Workers at Risk for
Exposure to Silica; Report No. 02-21-003-10-105; 09/29/21 3 0 0
Office of the Secretary
DOL's IT Governance Lacked the Framework Necessary to
Support the Overall Mission; Report No. 23-21-002-01-001;
09/30/21 5 0 0
Office of Workers' Compensation Programs
DEEOIC Could Do More To Prevent Improper Payments of Home
Health Care Costs; Report No. 03-21-001-04-437; 09/16/21 3 0 0
COVID-19: Pandemic Causes Delays in FECA Claims
Adjudication; Report No. 19-21-007-04-431; 09/23/21 1 0 0
Federal Agencies with Responsibilities for the Federal Employees'
Compensation Act Program; Report No. 22-21-008-04-431;
09/30/21 0 0 0
COVID-19: The Pandemic Highlighted the Need to Strengthen
Wage and Hour Division’s Enforcement Controls; Report No. 19-
21-008-15-001; 09/30/21 5 0 0
Reports Total (13 Reports) 42 $0 $33,901,260,440
Semiannual Report to Congress: April 1 – September 30, 2021 79
Appendices
Other Reports
Number of
Report Name
Recommendations
Employment and Training Programs
Workforce Innovation and Opportunity Act
Quality Control Review for the Single Audit of the Chicago Cook Workforce Partnership for the Fiscal
Year Ended June 30, 2019; Report No. 24-21-002-03-390; 05/26/21 0
Apprenticeship
Review of Appropriated Funds to Administer the Industry-Recognized Apprenticeship Program; Report
No. 22-21-006-03-375; 05/28/21 0
Other Report Total (2 Reports) 0
80 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Unresolved Audit Reports Over 6 Months Old
Number of Questioned Costs
Agency Report Name
Recommendations ($)
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve; OIG Negotiating with
Agency
Job Corps Should Do More to Prevent Cheating in High School
ETA
Programs; Report No. 26-19-001-03-370; 09/25/19 4 0
COVID-19: More Can Be Done to Mitigate Risk to Unemployment
ETA Compensation Under the CARES Act; Report No. 19-20-008-03-
315; 08/07/20 2 0
MSHA Needs to Provide Better Oversight of Emergency
MSHA
Response Plans; Report No. 05-17-002-06-001; 03/31/17 2 0
MSHA Did Not Evaluate Whether Civil Monetary Penalties
MSHA Effectively Deterred Unsafe Mine Operations; Report No. 23-19-
002-06-001; 08/16/19 1 0
MSHA Needs to Improve Efforts to Protect Coal Miners From
MSHA Respirable Crystalline Silica; Report No. 05-21-001-06-001;
11/12/20 2 0
MSHA Can Improve How Violations Are Issued, Terminated,
MSHA
Modified, and Vacated; Report No. 05-21-002-06-001; 03/31/21 1 0
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist;
OASAM
Report No. 23-16-002-07-725; 09/30/16 1 0
DATA Act: DOL's Reported Data Generally Met Quality Standards
OCFO but Accuracy Issues Remain; Report No. 03-20-001-13-001;
11/21/19 3 0
DOL Needs to Do More to Secure Employees' Personally
OCFO Identifiable Information in the Travel Management System; Report
No. 23-20-003-13-001; 09/10/20 2 0
OFCCP Did Not Show It Adequately Enforced EEO Requirements
OFCCP on Federal Construction Contracts; Report No. 04-20-001-14-001;
03/27/20 1 0
DOL Did Not Demonstrate It Followed a Sound Process in
WHD Promulgating the 2017 Tip Rule Notice of Proposed Rulemaking;
Report No. 17-21-001-15-001; 12/11/20 1 0
Agency Management Decision or Grant/Contracting Officer’s Final Determination Not Issued by Close of Period
NONE
Total Nonmonetary Recommendations and Questioned Costs 20 0
Funds
Number of
Agency Report Name Recommended for
Recommendations
Better Use ($)
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve; OIG Negotiating with
Agency
Total Funds Recommended for Better Use 0 $0
Total Audit Exceptions and Funds Recommended for Better Use 20 $0
Total Funds Recommended for Better Use 0 0
Total Audit Exceptions and Funds Recommended for Better Use 20 $0
Semiannual Report to Congress: April 1 – September 30, 2021 81
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.
OSHA Needs to Improve the Guidance for its Fatality and Severe Injury
Reporting Program to Better Protect Workers; Report No. 02-18-203-10-105;
09/13/18
The Occupational Safety and Health Administration (OSHA) requires employers to report all work‑related
fatalities, certain injuries, inpatient hospitalizations, amputations, and losses of an eye within specific
timeframes. OSHA also encourages employers to conduct investigations into these incidents so they can
abate the hazards that caused them. Our audit found OSHA: (1) had no assurance employers reported
these work‑related incidents; (2) did not follow its policies consistently to issue citations when employers
failed to report them; and (3) lacked justification for its decision to allow employers to perform investigations
into these incidents and for closing investigations without first obtaining sufficient evidence that employers
had abated the hazards. Furthermore, OSHA did not monitor employer investigations to ensure accuracy
and completeness of the information reported.
In response to our audit, on December 21, 2018, OSHA issued a guidance memorandum titled, "Additional
Guidance on Case File Documentation," to remind field staff of the need to document significant events
within the inspection case file, such as the decision not to issue a citation or conduct an inspection. After
issuing this guidance, OSHA reached out to field staff to reinforce the need for such documentation. OSHA
issued more guidance on March 7, 2019, for monitoring rapid response investigations (RRIs). To verify the
integrity of the process, OSHA created a random inspection list of 100 establishments that had submitted
RRIs deemed sufficient and closed within the prior 3 months, and then determined if employers adequately
investigated the incidents and took appropriate abatement actions.
Trade Adjustment Assistance Community College and Career Training Grants:
ETA Spent $1.5 Billion and Met Its Stated Capacity Development Goals, but is
Challenged to Determine if the Investment Improved Employment Outcomes;
Report No. 02-18-201-03-330; 07/26/18
Our audit covered approximately $1.5 billion in grant funds awarded to 173 grantees for the Trade
Adjustment Assistance Community College and Career Training Grants Program. We found that grantees
generally achieved their goals related to developing, expanding, and improving training programs; however,
less than half of the students who were unemployed found a job. Additionally, the Employment and Training
82 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Corrective Actions Taken by the Department,
continued
Administration (ETA) lacked information to determine if the resulting employment was in a high-wage, high-
skill occupation.
In response to our audit, ETA provided documentation demonstrating its use of the National Directory of
New Hires data as the method for collecting employment outcomes data beyond the period of performance
for discretionary grants. Furthermore, ETA provided its Memorandum of Understanding with the Kansas
Department of Commerce that will be used for obtaining wage record information for its national and
discretionary grant programs to analyze wage data and program outcomes.
Alert Memorandum: The Pandemic Unemployment Assistance Program Needs
Proactive Measures to Detect and Prevent Improper Payments and Fraud;
Report No. 19-20-002-03-315; 05/26/20
On March 27, 2020, Congress passed the Coronavirus Aid Relief and Economic Security Act, which
included approximately $392 billion in funding to operate new or existing unemployment compensation
programs, including the Pandemic Unemployment Assistance (PUA) program. PUA was designed to
provide benefits to individuals who are not traditionally eligible for unemployment assistance. DOL directed
states to allow PUA applicants to self-certify that they are able and available for work but unemployed due
to a COVID-19 related reason. However, DOL did not direct the states to require PUA recipients to provide
documentation within 21 days to support the recipient’s employment or self-employment. DOL’s decision
to rely solely on claimant self-certifications rendered the PUA program highly vulnerable to improper
payments and fraud.
In response to our audit, DOL agreed to consult with Congress and offer technical assistance if Congress
wished to amend the self-certification provision to require submission of documentation to substantiate an
individual’s previous employment or self-employment. On December 27, 2020, the Continued Assistance
for Unemployed Workers Act of 2020 was signed into law. The Act included a requirement for PUA
recipients to provide, within established time frames, documentation that supports employment or self-
employment or planned employment or self-employment. PUA recipients who fail to provide requested
documentation within those established time frames are not eligible for the program.
ETA Could Not Demonstrate that Credentials Improved WIOA Participants'
Employment Outcomes; Report No. 03-20-002-03-391; 09/30/20
ETA ensures employment and training services provided by the Workforce Innovation and Opportunity
Act’s (WIOA) core programs are coordinated and complementary so job seekers may acquire skills and
Semiannual Report to Congress: April 1 – September 30, 2021 83
Appendices
Corrective Actions Taken by the Department,
continued
credentials that meet local employers' needs. Accordingly, job training and any credential obtained from the
training should improve the employment opportunities of participants. Our audit found ETA lacked data to
measure the impact credentials had on participants’ outcomes and did not ensure participants’ data was
accurate, valid, and reliable.
In response to our audit, ETA stated it agrees that understanding the impact of credentials on employment
outcomes is important to assessing the success of many of ETA’s WIOA programs, especially since
WIOA established credential attainment as an outcome subject to sanctions. ETA has provided extensive
technical assistance to states on credentials, including information to better define and accurately report
credentials, and convened a group of several state teams to develop useful strategies and tools to assess
appropriate credentials. State teams of the Credential Attainment Cohort, a collaboration between DOL and
the Department of Education, developed credential attainment tools that serve as companion resources to
the Credential Attainment Decision Tree Tool. In addition, states were provided with an action plan template
to assist in the development of their strategies for determining what qualifies as a credential.
Also, ETA continues to strengthen its data validation efforts. Beginning with WIOA Title I data, ETA is
currently piloting a Quarterly Report Analysis (QRA) tool to leverage existing data to identify potential data
anomalies and to enhance program decision-making. The QRA serves as a technical assistance tool for
grant recipients to identify areas in their reported data that may require additional attention or correction in
support of their data validation efforts prior to the submittal of the data to ETA. ETA stated many of ETA’s
regional offices conducted general oversight of state Data Validation (DV) practices during their WIOA
monitoring reviews. State DV policy and practices were discussed and verified and in some cases DV
results were reviewed for one quarter during the course of the WIOA monitoring review.
Job Corps Should Improve Its Pre-admission Evaluation Process; Report No.
05-21-001-03-370; 03/25/21
The Workforce Innovation and Opportunity Act requires Job Corps to assess the suitability, or “fit,” of
applicants for the program. Admitting applicants to the Job Corps program without sufficiently evaluating
their ability to fit within the program can result in program disruptions and safety issues. The Job Corps
program currently provides academic and career skills training to nearly 30,000 low-income, disadvantaged
youth at 121 residential centers nationwide. However, Job Corps’ admissions screening process does not
allow Admissions Counselors to sufficiently inquire about an applicant’s history to help them determine if
applicants are ready for the Job Corps program. A large portion of Center Directors surveyed said they
had observed an increase in the number of separations due to mental health and substance abuse issues
84 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Corrective Actions Taken by the Department,
continued
during their tenure, and two-thirds of Center Directors reported an increase in the number of violent
incidents they associated with mental health issues.
Based on these identified concerns, we recommended the Assistant Secretary for Employment and
Training evaluate the funding needs of Center Mental Health Consultant (CMHC) and Trainee Employee
Assistance Program (TEAP) Specialists center functions to determine if adjustments are needed
to adequately support students with mental health or substance abuse issues. In response to our
recommendation, the Employment and Training Administration evaluated the needs of CMHCs and TEAP
Specialists and, on April 16, 2021, Job Corps issued Policy and Requirements Handbook Change Notice
20-05, which announced that effective June 15, 2021, CMHC hours will be increased from nine hours per
100 students per week, to 20 hours per 100 students per week. This increase in hours will help CMHCs
provide earlier identification, assessment, and treatment for students who may be at risk. In addition, Job
Corps will consult with the Office of the Assistant Secretary for Administration and Management’s Civil
Rights Center to evaluate resource requirements to assist and provide reasonable accommodations for
students with mental health conditions/psychiatric disabilities. Job Corps is currently monitoring centers’
student support and funding needs, as well as funding availability, to determine whether to increase the
TEAP Specialist hours further.
Semiannual Report to Congress: April 1 – September 30, 2021 85
Appendices
Unimplemented Recommendations
During this reporting period, we encountered no instances of audits or evaluations provided to the
Department for comment that were not responded to within 60 days. In addition, agencies have provided
management decisions in response to all audits and evaluations issued before the commencement of this
reporting period.
From October 1, 2011, through March 31, 2021, the OIG made 1,608 audit recommendations to the
Department, of which 208 have not been fully implemented. These 208 recommendations include
131 recommendations resulting from audits issued since the end of FY 2019, and in many cases, the
Department has corrective action plans in place.
RECOMMENDATIONS MADE PRIOR TO
APRIL 1, 2021, NOT YET IMPLEMENTED
Fiscal Total Number of Unimplemented Recommendations
Year Recommendations Made Total Number Monetary Impact ($)
2011 319 7 0
2012 213 2 0
2013 195 0 0
2014 128 1 0
2015 163 6 0
2016 100 1 0
2017 112 17 0
2018 98 6 51,750
2019 84 37 0
2020 105 47 5,660,468
2021 91 84 5,411,954,825
Total 1,608 208 5,417,667,043
86 Semiannual Report to Congress: April 1 – September 30, 2021
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; Date Issued Unimplemented Recommendation(s)
Worker Safety
MSHA Needs To Provide Better Oversight of Clarify mine operators’ responsibilities for local coordination under
Emergency Response Plans; Report No. 05-17-002- the Mine Improvement and New Emergency Response (MINER) Act,
06-001; 03/31/17 including coordination and communication between the operator,
mine rescue teams, and local emergency response personnel, and
familiarizing local rescue personnel with surface functions that may be
required in the course of mine rescue work.
COVID-19: OSHA Needs To Improve Its Handling Continue to monitor and evaluate the Region II triage pilot and
of Whistleblower Complaints During the Pandemic; consider extending the triage process to all regions to expedite
Report No. 19-20-010-10-105; 08/14/20 screening whistleblower complaints.
MSHA Needs To Improve Efforts To Protect Coal Adopt a lower legal exposure limit for silica in coal mines based on
Miners from Respirable Crystalline Silica; Report No. recent scientific evidence. Establish a separate standard for silica that
05-21-001-06-001; 11/12/20 allows MSHA to issue citations and monetary penalties when violations
of its silica exposure limit occur. Enhance its sampling program to
increase the frequency of inspector samples where needed (e.g., by
implementing a risk-based approach).
COVID-19: Increased Worksite Complaints and Improve OSHA’s inspection strategy by prioritizing very high- and high-
Reduced OSHA Inspections Leave U.S. Workers’ risk employers for COVID-19-related onsite inspections as businesses
Safety at Increased Risk; Report No.19-21-003-10-105; reopen and increase operations in various localities across the United
02/25/21 States. Ensure remote inspections are tracked retroactive to February
1, 2020, and going forward. Compare remote inspections to onsite
inspections and document analysis of the frequency and timeliness of
inspectors in identifying and ensuring abatement of worksite hazards.
Analyze and determine whether establishing an infectious disease-
specific emergency temporary standard (ETS) is necessary to help
control the spread of COVID-19 as employees return to worksites.
Employment and Training Programs
ETA Needs To Improve Its Disaster National Dislocated Establish written timelines for when disaster relief should begin
Worker Program; Report No. 02-21-002-03-391; providing relief to those impacted by a disaster. Develop a strategy to
01/29/21 continuously work with state grantees to ensure local areas maximize
the use of disaster relief funds, and that states are sufficiently
monitoring subrecipients. Evaluate ETA’s monitoring of grantees
and technical assistance provided to ensure grantees have greater
opportunities to achieve key performance goals. Ensure that on future
awards that include self-certification processes, regular eligibility
verification is performed. Recover $1,988,627 in questioned costs.
Semiannual Report to Congress: April 1 – September 30, 2021 87
Appendices
High-Priority Unimplemented
Recommendations, continued
Report Title; Report Number; Date Issued Unimplemented Recommendation(s)
Employee Benefits
OWCP’S Efforts To Detect and Prevent FECA Improper Develop effective procedures, including seeking legislative authority to
Payments Have Not Addressed Known Weaknesses; conduct matches with SSA retirement records, to ensure that claimants
Report No. 03-12-001-04-431; 02/15/12 who receive SSA retirement benefits are identified timely and their
FECA benefits are adjusted accordingly.
EBSA Did Not Have the Ability to Protect the Estimated Reduce or eliminate exemption thresholds for small plans.
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 Must Continue Strengthening Management of Ensure the Pharmacy Benefits Manager (PBM) implements a drug
FECA Pharmaceuticals, Including Opioids; Report No. utilization review as specified in the contract. Ensure the PBM, when
03-19-002-04-431; 05/14/19 developing its formulary, considers all classes of drugs to determine
if prior authorization or letters of medical necessity (LMN) would be
appropriate.
Unemployment Insurance Benefits
COVID-19: More Can Be Done To Mitigate Risk to Include CARES Act UI transactions in the Benefit Accuracy
Unemployment Compensation Under the CARES Act; Measurement (BAM) or develop an alternative methodology to reliably
Report No. 19-20-008-03-315; 08/07/20 estimate improper payments for those programs. Issue guidance
directing states to provide access to state UI claimant data, in order to
prevent and detect fraud.
Alert Memorandum: The Employment and Training Establish effective controls, in collaboration with SWAs, to mitigate
Administration (ETA) Needs To Ensure State Workforce fraud and other improper payments to ineligible claimants, including
Agencies (SWA) Implement Effective Unemployment the areas identified in the memorandum: UI benefits paid to multi-
Insurance Program Fraud Controls for High Risk Areas; state claimants, claimants who used the social security numbers
Report No. 19-21-002-03-315; 02/22/21 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. Work with Congress to establish legislation requiring
SWAs to crossmatch high-risk areas, including the four areas identified
in the memo.
Alert Memorandum: The Employment and Training Amend 20 CFR 603.5 and 603.6(a) through the rulemaking process
Administration Needs to Issue Guidance to Ensure to reinforce that UI information must be provided to DOL OIG for
State Workforce Agencies Provide Requested all IG engagements authorized under the IG Act, including audits,
Unemployment Insurance Data to the Office of evaluations, and investigations. Continue to work with the OIG, and
Inspector General; Report No. 19-21-005-03-315; within 30 days of the memorandum, meet with the OIG to develop a
06/16/21 permanent approach for OIG access to UI data.
Departmental Management
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Realign the organizational structure as it relates to the CIO to address
Exist; Report No. 23-16-002-07-725; 09/30/16 organizational independence issues.
DOL Did Not Comply with Improper Payments Maintain its current focus on increasing its technical assistance and
Elimination and Recovery Act for FY 2017; Report No. funding to states to improve the improper payment reduction strategies
03-18-002-13-001; 05/15/18 in order to ensure compliance with the improper payments estimate
rate threshold.
88 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
High-Priority Unimplemented
Recommendations
Report Title; Report Number; Date Issued Unimplemented Recommendation(s)
Stronger Controls Needed Over Web Application Establish and maintain a comprehensive inventory of web applications,
Security; Report No. 23-20-001-07-725; 11/14/19 identifying which applications are public-facing and contain sensitive
information. Review and update the DOL Plan of Action and
Milestones (POA&M) policy to ensure agency corrective actions and
timeframes are implemented. Establish and verify the implementation
of Department-wide policies and procedures specific to associated
risks to web applications, securing web servers, and web application
programming.
DATA Act: DOL’s Reported Data Generally Met Quality Where appropriate, correct the errors in DOL’s source systems and
Standards but Accuracy Issues Remain; Report No. develop corrective action plans to address the underlying causes
03-20-001-13-001; 11/21/19 for data elements with significant errors. Ensure that OASAM issue
guidance to ensure Contracting Specialists accurately input the Period
of performance Start Date into the procurement system’s Effective
Date field. Identify risks specific to DATA Act reporting and take
appropriate action to ensure internal controls address the resulting
areas of concern.
FY 2019 FISMA DOL Information Security Report: Implement improvements in DOL’s information security program for
Implementation of Security Tools Hindered by the following areas: Risk Management, Configuration Management,
Insufficient Planning; Report No. 23-20-002-07-725; Identity and Access Management, Data Protection and Privacy,
12/23/19 Information Security Continuous Monitoring, Incident Response, and
Contingency Planning.
DOL Needs To Do More To Secure Employees’ Establish and implement procedures to ensure the E2 Solutions (E2)
Personally Identifiable Information in the Travel travel and management tool is managed in compliance with contractual
Management System; Report No. 23-20-003-13-001; security requirements and DOL computer security policies for
09/10/20 contracted information systems. Establish and implement procedures
to ensure E2 account management practices enforce DOL’s security
policies. These procedures must include application of the principle
of least privilege when creating, monitoring, and deactivating E2 user
accounts.
FY 2020 Independent Auditors’ Report on the DOL Formally document the level of precision used in the reviews to ensure
Financial Statements; Report No. 22-21-004-13-001; that the review occurs at an appropriately precise level to identify
11/16/20 errors within model functionality and data input, which would allow
the reviewer to identify material errors in the estimates. Maintain
documentation of the reviews performed to assess the reasonableness
of the underlying data, assumptions, and formulas used in the models
that is sufficiently detailed to evidence the specific items reviewed,
analysis performed, and conclusions reached. Provide additional
training to the reviewers of the estimates to reinforce established
policies and procedures, as necessary. Amend policies and procedures
to provide specific steps to be performed during the reviews and the
documentation requirements, which should include the specific items
reviewed, analyses performed, and conclusions reached.
Semiannual Report to Congress: April 1 – September 30, 2021 89
Appendices
High-Priority Unimplemented
Recommendations, continued
Report Title; Report Number; Date Issued Unimplemented Recommendation(s)
DOL Did Not Demonstrate It Followed A Sound Develop policies and procedures to document its rationale and
Process in Promulgating the 2017 Tip Rule Notice of supporting evidence for key decisions in the development of economic
Proposed Rulemaking; Report No. 17-21-001-15-001; regulatory analysis. Develop policies and procedures to document
12/11/20 its rationale and supporting evidence when DOL determines the
prescribed regulatory guidance does not apply. Enforce policies and
procedures that require employees to maintain records that document
government business. Employees should not be discouraged from
maintaining such records. Develop policies and procedures to ensure
that after a regulatory action has been published in the Federal
Register, or otherwise issued to the public, DOL identifies for the public
in a complete, clear, and simple manner the substantive changes
between the draft submitted to the Office of Information and Regulatory
Affairs (OIRA) for review and the action subsequently announced.
FY 2020 FISMA DOL Information Security Report: Provide training to responsible personnel over the third-party
Progress Needed To Improve Risk Management and continuous monitoring review checklist. Enforce DOL policies and
Continuous Monitoring Information Security Controls; procedures regarding separation of duties so developers do not
Report No. 23-21-001-07-725; 12/22/20 possess the ability to migrate changes to production. Enforce DOL
security baseline polices with DOL’s Cloud Service Providers (CSP)
and develop a security configuration checklist for the CSPs. Develop
sufficiently defined quantitative and qualitative metrics that provide
meaningful indications of security status and trend analysis at all
risk management tiers. Review, revise as necessary, finalize, and
implement their revised Software Development Life Cycle Manual.
Implement a process for approving deviations from established
configuration settings.
Job Corps Safety
COVID-19: ETA Should Continue to Closely Monitor Prior to reopening campuses, ensure all centers have proper controls
Impact on Job Corps Program; Report No. 19-20-007- in place to adhere to federal, state, local, and other guidelines—from
03-370; 07/28/20 physical distancing to having ample disinfectant, cleaning, and PPE
supplies. Ensure centers provide needed resources to address
the learning needs of all students, including students who require
reasonable accommodations, hands-on-instruction, and special
equipment to learn.
Job Corps Should Improve Its Pre-Admission Make a final determination on the legality and permissibility of pre-
Evaluation Process; Report No. 05-21-001-03-370; enrollment behavioral assessment tools, such as drug screenings,
03/25/21 trial periods, or personality or aptitude tests that would be appropriate
for use within Job Corps. Perform cost/benefit analyses to determine
which, if any, of these pre-enrollment behavioral suitability assessment
tools would be beneficial to Job Corps. Incorporate the results of these
recommendations, as appropriate, in revising guidance to improve the
assessment process.
90 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Summary of Reports with Unimplemented
Recommendations with Cost Savings / Funds
Put to Better Use
Number of
Report Name Funds Put to Better Use ($)
Recommendations
Employment and Training Administration
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
1 5,564,769
Establish policies, procedures and controls to ensure states provide
DUA staff annual training and have required written state DUA
policies and procedures in place.
Alert Memorandum: The Employment and Training Administration
(ETA) Needs to Ensure State Workforce Agencies (SWA) Implement
Effective Unemployment Insurance Program Fraud Controls for High
Risk Areas; Report No. 19-21-002-03-315; 02/22/21
Establish effective controls, in collaboration with SWAs, to mitigate
fraud and other improper payments to ineligible claimants, including 1 5,409,966,198
the areas identified in the memorandum: UI benefits paid to multi-
state claimants, claimants who used the social security numbers
of deceased individuals, potentially ineligible federal inmates, and
claimants with suspicious email accounts. Effective controls will help
prevent similar or greater amounts of fraud and allow those funds to
be put to better use.
Total 2 $5,415,530,967
Semiannual Report to Congress: April 1 – September 30, 2021 91
Appendices
Summary of Reports with Unimplemented
Recommendations with Other Monetary
Impact
Number of
Report Name Funds Put to Better Use ($)
Recommendations
Employment and Training Administration
Job Corps Could Not Demonstrate Beneficial Job Training
Outcomes; Report No. 04-18-001-03-370; 03/30/18
We recommend the Employment and Training Administration 1 51,750
determine and assess liquidated damages to contractors that
misreported data based on invalid placements.
Total 1 $51,750
92 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Reports with Unimplemented
Recommendations for Management
Improvement or Disallowed Costs Owed
The following table lists all OIG reports issued prior to this semiannual reporting period with
recommendations that have not yet been fully implemented (as of September 30, 2021).
Number of
Disallowed Costs
Report Name Unimplemented
Owed ($)
Recommendations
Employee Benefits Security Administration
Limited-Scope Audits Provide Inadequate Protections to Retirement Plan
Participants; Report No. 05-14-005-12-121; 09/30/14 1 0
EBSA Did Not Have the Ability to Protect the Estimated 79 Million Plan
Participants in Self-Insured Health Plans from Improper Denials of Health
Claims; Report No. 05-17-001-12-121; 11/18/16 1 0
Employment and Training Administration
Job Corps Oversight of Center Performance Needs Improvement; Report
No. 26-12-006-03-370; 09/28/12 1 0
Investigative Advisory Report – Weaknesses Contributing to Fraud in the
Unemployment Insurance Program; Report No. 50-15-001-03-315; 07/24/15 6 0
ETA Violated the Bona Fide Needs Rule and the Antideficiency Act; Report
No. 26-17-002-03-370; 09/21/17 1 0
Program Specific Performance Measures Are Needed to Better Evaluate
the Effectiveness of the Reemployment Services and Eligibility Assessment
Program; Report No. 04-17-002-03-315; 09/26/17 3 0
Experience Works, Inc. Misused More Than $4 Million in SCSEP Grant
Funds; Report No. 26-18-002-03-360; 09/28/18 1 0
Job Corps Should Do More to Prevent Cheating in High School Programs;
Report No. 26-19-001-03-370; 09/25/19 5 0
ETA Had No Reasonable Assurance That $183 Million in H-1B TST Grant
Funds Helped Participants Get H-1B Jobs; Report No. 06-19-001-03-391;
09/27/19 1 0
COVID-19: ETA Should Continue to Closely Monitor Impact on Job Corps
Program; Report No. 19-20-007-03-370; 07/28/20 2 0
COVID-19: More Can Be Done to Mitigate Risk to Unemployment
Compensation Under the CARES Act; Report No. 19-20-008-03-315;
08/07/20 2 0
ETA Should Do More To Assist Vulnerable States Prepare for Disaster
Unemployment Assistance Program Implementation; Report No. 04-20-002-
03-315; 09/29/20 2 95,699
ETA Needs To Improve Its Disaster National Dislocated Worker Program;
Report No. 02-21-002-03-391; 01/29/21 5 1,988,627
Alert Memorandum: The Employment and Training Administration (ETA)
Needs to Ensure State Workforce Agencies (SWA) Implement Effective
Unemployment Insurance Program Fraud Controls for High Risk Areas;
Report No. 19-21-002-03-315; 02/22/21 1 0
Semiannual Report to Congress: April 1 – September 30, 2021 93
Appendices
Reports with Unimplemented
Recommendations, continued
Number of
Disallowed Costs
Report Name Unimplemented
Owed ($)
Recommendations
Job Corps Should Improve Its Pre-admission Evaluation Process; Report
No. 05-21-001-03-370; 03/25/21 3 0
Mine Safety and Health Administration
MSHA Needs to Provide Better Oversight of Emergency Response Plans;
Report No. 05-17-002-06-001; 03/31/2017 6 0
MSHA Did Not Evaluate Whether Civil Monetary Penalties Effectively
Deterred Unsafe Mine Operations; Report No. 23-19-002-06-001; 08/16/19 2 0
MSHA Can Improve Its Pre-Assessment Conferencing Program; Report No.
05-19-001-06-001; 09/23/19 9 0
COVID-19: MSHA Faces Multiple Challenges in Responding to the
Pandemic; Report No. 19-20-006-06-001; 07/24/20 1 0
MSHA Needs To Improve Efforts To Protect Coal Miners from Respirable
Crystalline Silica; Report No. 05-21-001-06-001; 11/12/20 3 0
MSHA Can Improve How Violations Are Issued, Terminated, Modified, and
Vacated; Report No. 05-21-002-06-001; 03/31/21 10 0
Office of the Assistant Secretary for Administration and Management
The Department Could Do More To Strengthen Controls Over Its Personal
Identity Verification System; Report No. 04-11-001-07-001; 03/31/11 1 0
Ineffective Accounting for Sensitive Information Technology Hardware and
Software Assets Places DOL at Significant Risk; Report No. 23-11-001-07-
001; 03/31/11 6 0
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 5 0
Alert Memorandum: Security Vulnerability Relating to DOL Information
Security Property; Report No. 50-19-002-07-725; 06/17/19 2 0
Stronger Controls Needed Over Web Application Security; Report No. 23-
20-001-07-725; 11/14/19 3 0
FY 2019 FISMA DOL Information Security Report: Implementation of
Security Tools Hindered By Insufficient Planning; Report No. 23-20-002-07-
725; 12/23/19 13 0
DOL Could Improve Areas of Physical Security To Help Effectively
Safeguard Employees; Report No. 17-20-001-07-001; 05/21/20 3 0
FY 2020 FISMA DOL Information Security Report: Progress Needed to
Improve Risk Management and Continuous Monitoring Information Security
Controls; Report No. 23-21-001-07-725; 12/22/20 25 0
Office of the Assistant Secretary for Policy
DOL Did Not Demonstrate It Followed A Sound Process in Promulgating the
2017 Tip Rule Notice of Proposed Rulemaking; Report No. 17-21-001-15-
001; 12/11/20 2 0
94 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Reports with Unimplemented
Recommendations, continued
Number of
Disallowed Costs
Report Name Unimplemented
Owed ($)
Recommendations
Office of the Chief Financial Officer
The Department Needs To Take Action To Improve the Quality of its Data
Act Submissions Report; Report No. 03-18-001-13-001; 01/19/18 2 0
DOL Did Not Comply with Improper Payments Elimination and Recovery Act
for FY 2017; Report No. 03-18-002-13-001; 05/15/18 1 0
DATA Act: DOL’s Reported Data Generally Met Quality Standards but
Accuracy Issues Remain; Report No. 03-20-001-13-001; 11/21/19 3 0
Management Advisory Comments Identified in an Audit of the Consolidated
Financial Statements for the Year Ended September 30, 2019; Report No.
22-20-005-13-001; 12/19/19 6 0
DOL Needs To Do More To Secure Employees’ Personally Identifiable
Information in the Travel Management System; Report No. 23-20-003-13-
001; 09/10/20 2 0
FY 2020 Independent Auditors’ Report on the DOL Financial Statements;
Report No. 22-21-004-13-001; 11/16/20 6 0
Management Advisory Comments Identified in an Audit of the Consolidated
Financial Statements for the Year Ended September 30, 2020; Report No.
22-21-005-13-001; 12/18/20 20 0
Office of Federal Contract Compliance Programs
OFCCP Did Not Show It Adequately Enforced EEO Requirements on
Federal Construction Contracts; Report No. 04-20-001-14-001; 03/27/20 1 0
Office of the Secretary
DOL Needs To Do More To Implement the Geospatial Data Act of 2018;
Report No. 23-20-004-01-001; 09/30/20 1 0
Occupational Safety and Health Administration
OSHA Needs To Improve the Guidance for Its Fatality and Severe Injury
Reporting Program To Better Protect Workers;
Report No. 02-18-203-10-105; 09/13/18 1 0
OSHA Procedures For Issuing Guidance Were Not Adequate and Mostly
Not Followed; Report No. 02-19-001-10-105; 03/28/19 4 0
Review of the Occupational Safety and Health Administration’s Referral to
and Reclamation of Debt from the U.S. Department of the Treasury; Report
No. 22-20-006-10-001; 03/16/20 1 0
COVID-19: OSHA Needs to Improve Its Handling of Whistleblower
Complaints During the Pandemic; Report No. 19-20-010-10-105; 08/14/20 2 0
COVID-19: Increased Worksite Complaints and Reduced OSHA Inspections
Leave U.S. Workers’ Safety at Increased Risk; Report No. 19-21-003-10-
105; 02/25/21 4 0
Office of Workers’ Compensation Programs
OWCP’S Efforts To Detect and Prevent FECA Improper Payments Have Not
Addressed Known Weaknesses; Report No. 03-12-001-04-431; 02/15/12 1 0
Semiannual Report to Congress: April 1 – September 30, 2021 95
Appendices
Reports with Unimplemented
Recommendations, continued
Number of
Disallowed Costs
Report Name Unimplemented
Owed ($)
Recommendations
Interim Report on Audit of Pharmaceutical Management in DOL Benefit
Programs - OWCP Needs Better Controls Over Compounded Prescription
Drugs; Report No. 03-17-001-04-431; 05/23/17 6 0
Special Report Relating to the Federal Employees’ Compensation Act
Special Benefit Fund (September 30, 2018); Report No. 22-19-003-04-431;
11/02/18 1 0
OWCP Must Continue Strengthening Management of FECA
Pharmaceuticals, Including Opioids; Report No. 03-19-002-04-431; 05/14/19 2 0
Alert Memorandum: Vulnerability in OWCP FECA Bill Pay Processing
System; Report No. 50-20-001-04-430; 05/07/20 1 0
Special Report Relating to the Federal Employees’ Compensation Act
Special Benefit Fund; Report No. 22-21-001-04-431; 10/30/20 2 0
Wage and Hour Division
Better Strategies Are Needed To Improve the Timeliness and Accuracy of
Davis-Bacon Act Prevailing Wage Rates; Report No. 04-19-001-15-001;
03/29/19 6 0
DOL Needs To Improve Debarment Processes To Ensure Foreign Labor
Program Violators Are Held Accountable; Report No. 06-20-001-03-321;
09/30/20 3 0
DOL Did Not Demonstrate It Followed a Sound Process in Promulgating the
2017 Tip Rule Notice of Proposed Rulemaking; Report No. 17-21-001-15-
001; 12/11/20 2 0
Totals 205 $2,084,326
96 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
Investigative Statistics
Division Totals Total
Investigative Reports Issued / Cases Closed (includes investigative reports issued, case
closing reports, and matters referred for possible civil and/or administrative action): 108
Program Fraud 87
Labor Racketeering 21
Cases Opened: 204
Program Fraud 196
Labor Racketeering 8
Cases Referred for Prosecution (each case is measured as a singular statistic and may
include more than one person or business entity): 157
Program Fraud 151
Labor Racketeering 6
Cases Referred for Administrative/Civil Action (each case is measured as a singular
statistic and may include more than one person or business entity): 51
Program Fraud 44
Labor Racketeering 7
Persons Referred to the Department of Justice for Criminal Prosecution (includes the
number of individuals and business entities referred for prosecution): 221
Program Fraud 213
Labor Racketeering 8
Persons Referred to State and Local Prosecuting Authorities for Criminal Prosecution
(includes the number of individuals and business entities referred for prosecution): 31
Program Fraud 31
Labor Racketeering 0
Indictments and Criminal Informations That Resulted from Any Prior Referral to
Prosecuting Authorities (includes sealed and unsealed indictments): 418
Program Fraud 386
Labor Racketeering 32
Indictments (includes sealed and unsealed indictments): 418
Program Fraud 386
Labor Racketeering 32
Convictions: 182
Program Fraud 148
Labor Racketeering 34
Statutory Debarments: 8
Program Fraud 3
Labor Racketeering 5
Recoveries, Cost-Efficiencies, Restitutions, Fines/Penalties, Forfeitures, and Civil
Monetary Actions: $32,670,421
Program Fraud $30,697,016
Labor Racketeering $1,973,405
Semiannual Report to Congress: April 1 – September 30, 2021 97
Appendices
Investigative Statistics, continued
Recoveries (the dollar amount/value of an agency’s action to recover or to reprogram funds or to make other
adjustments in response to OIG investigations): $5,070,034
Cost-Efficiencies (the one-time or per annum dollar amount/value of management’s commitment, in response
to OIG investigations, to utilize the government’s resources more efficiently): $6,122,668
Restitutions/Forfeitures (the dollar amount/value of restitutions and forfeitures resulting from OIG criminal
investigations): $13,683,986
Fines/Penalties (the dollar amount/value of fines, assessments, seizures, investigative/court costs, and other
penalties resulting from OIG criminal investigations): 0
Civil Monetary Actions (the dollar amount/value of forfeitures, settlements, damages, judgments, court costs,
and other penalties resulting from OIG criminal investigations): $ 7,793,732
Total: $32,670,421
98 Semiannual Report to Congress: April 1 – September 30, 2021
Appendices
OIG Hotline
The OIG Hotline provides a communication link between the OIG and persons who want to report
alleged violations of laws, rules, and regulations; mismanagement; waste of funds; abuse of authority;
or danger to public health and safety. During the reporting period April 1, 2021, through September 30,
2021, a total of 145,240 complaints were opened in the OIG Hotline’s complaint management system.
Of these, 131,511 were complaints received from the National Center on Disaster Fraud (NCDF).
Almost all of these complaints involve concerns regarding COVID-19-related unemployment benefits.
During this reporting period, 7,794 referrals were made for further review and/or action in response to
complaints opened in the OIG Hotline’s complaint management system. Numerous individual complaints
involving alleged fraud regarding COVID-19-related unemployment benefits were referred to both the
OIG’s Office of Investigations and the appropriate State Workforce Agency. During this reporting period,
the OIG Hotline received additional complaints that are awaiting processing.
Complaints Received (by method reported):
Telephone 100
E-mail/Internet 145,136
Mail 2
Fax 2
Walk-in 0
Total 145,240
Contacts Received (by source):
Complaints from Individuals or Nongovernmental Organizations 13,574
Complaints/Inquiries from Congress 2
Referrals from U.S. Government Accountability Office 0
Complaints from Other DOL Agencies 3
Complaints from Other (non-DOL) Government Agencies 131,6611
Total 145,240
Disposition of Complaints:
Referred to OIG Components for Further Review and/or Action 4,449
Referred to DOL Program Management for Further Review and/or Action 84
Referred to Non-DOL Agencies/Organizations 3,231
No Referral Required / Informational Contact 30
Total 7,794
1
Includes a significant amount of complaints received from the NCDF that originated from individuals.
Semiannual Report to Congress: April 1 – September 30, 2021 99
OIG FY 2022 Audit Workplan
Fiscal Year 2022 Audit Workplan
Bureau of Labor Statistics (BLS)
Discretionary Audit
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.” 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.
Bureau of International Labor Affairs (ILAB)
Mandatory Audit
Memoranda of Agreement between USAID and ILAB – In Progress. ILAB signed two agreements with
the U.S. Agency for International Development (USAID) that transferred approximately $7 million to ILAB
for grant-funded projects. The projects are intended to ensure a fair global playing field for workers by
enforcing trade commitments, strengthening labor standards, and combatting child labor, forced labor, and
human trafficking. This mandatory audit focuses on how taxpayer dollars were spent and if the reported
program results were reliable.
Employment and Training Administration (ETA)
Discretionary Audits
ETA Contract and Grant Programs
COVID-19: ETA Efforts to Help Workers Who Lost Jobs Due to the Pandemic. Although estimates vary
widely, economists generally report that somewhere between 20 and 40 million jobs were lost in 2020 as a
result of the COVID-19 pandemic and subsequent business closures. At the same time, the unemployment
rate increased from 3.8 percent in 2019 to 8.6 percent in 2020. This audit will focus on steps taken by
ETA to ensure workers who need job search assistance or training have access, in person or remotely, to
resources to assist them with job placement.
100 Semiannual Report to Congress: April 1 – September 30, 2021
OIG FY 2022 Audit Workplan
COVID-19: ETA Job Training Programs Performance. 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 they were trained.
This audit will assess the impact of the pandemic on ETA’s job training programs by reviewing which and
how many job training programs were interrupted and how ETA was able to resume training and ensure
participants completed training programs they had started prior to the pandemic.
Job Corps
COVID-19: Job Corps Training Program Performance During the Pandemic. In the middle of 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 U.S., Job Corps had not planned for a transition
to a distance learning program when in-person instruction abruptly ceased. This audit will review the impact
that the sudden interruption of in-person instruction had on the ability of Job Corps to educate its students
during the COVID-19 pandemic.
Job Corps Fixed Price Contact Transition. In 2019, Job Corps began to transition its contracts for
educational, outreach, admissions, and career transition services to firm fixed-price contracts using the
number of students enrolled at the center as the basis for the contract price. This transition is planned in
phases and is expected to continue through 2024. The change to firm fixed-price contracts, especially in a
time of severely declining enrollment, raises questions about Job Corps’ ability to control costs and monitor
program performance. This audit will review Job Corps’ strategy for monitoring and controlling costs and
program performance using firm fixed-price contract vehicles.
Unemployment Insurance (UI) Program
COVID-19: DOL’s Oversight of Emergency UI Administrative Grants to States – In Progress. The
Families First Coronavirus 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 are critical to delivering an effective UI program that is relied upon by millions of American
taxpayers, especially now during the pandemic. Funds provided through these emergency administrative
grants may only be used for the administration of the UI program and are 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.
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 Coronavirus Aid, Relief, and Economic Security (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
Semiannual Report to Congress: April 1 – September 30, 2021 101
OIG FY 2022 Audit Workplan
the risks of fraud and increased improper payments rose significantly. As of March 31, 2021, states and the
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.
COVID-19: CARES Act UI Claimant Eligibility – In Progress. As of January 2, 2021, DOL reported
nearly 74 million initial jobless claims since March 14, 2020. This was the largest increase in initial jobless
claims since DOL began tracking UI data in 1967. Among providing other relief, the approximately $2.2
trillion CARES Act expanded UI benefits. Past audits of UI program expansions have shown that ETA did
not adequately ensure proper controls were in place to ensure funds were paid to eligible claimants. States
likely paid billions of dollars in benefits to individuals who were not eligible for CARES Act programs. This
audit focuses on how effective states’ controls were in ensuring that CARES Act UI program benefits were
paid promptly and only to eligible claimants.
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 Great
Recession where some states’ systems failed completely. In October 2020, the National Association of
State Workforce Agencies (NASWA) UI IT Support Center reported that 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.
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 nontraditional 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 nontraditional claimants. Our audit will determine
if DOL and State Workforce Agencies’ efforts ensured that nontraditional claimants received UI benefits
as intended under the CARES Act and the Continued Assistance for Unemployed Workers Act (Continued
Assistance Act).
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
102 Semiannual Report to Congress: April 1 – September 30, 2021
OIG FY 2022 Audit Workplan
system, including establishing six new programs. The new programs were intended to provide expanded
UI benefits to workers who were suddenly jobless as a direct result of the COVID-19 pandemic. Given
the challenge of rapidly implementing new programs during a crisis situation, ETA and states faced an
additional hurdle of using controls, previously identified as weak and deficient in published OIG reports
and alert memorandums, to process more than 77 million seasonally adjusted initial jobless claims and
571 million seasonally adjusted continued claims over the course of the pandemic’s first year. According
to 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.
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.
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 COVID-19. 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 the American Rescue Plan (ARP) Act.
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.
COVID-19: Short-Time Compensation (STC) Program. 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
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STC program in their laws and provided for a 50 percent reimbursement for states that do not have an
STC program in their laws but agreed to operate a program on a temporary basis. The STC program acts
as a work share program, with employers reducing the number of hours offered to employees and the
state making up the difference in the form of benefit payments. The CARES Act provided for an estimated
$2.2 billion for benefit reimbursements and administrative costs. Twenty-seven 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.
COVID-19: Mixed Earners Unemployment Compensation. The Mixed Earners Unemployment
Compensation (MEUC) program is a new temporary, federal program under the Continued Assistance Act
and the ARP Act. 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.
COVID-19: Audit of DOL and States Oversight of UI Claimants Return to Work. The CARES Act and
its related extensions provided generous additional UI benefits to claimants that lost their employment
due to the COVID-19 pandemic. However, business and state leaders reported that these generous UI
benefits incentivized claimants to refuse suitable employment offers and led to labor shortages as the
economy reopened. As a result, numerous states ended their participation in the enhanced federal jobless
benefits program ahead of its expiration citing complaints from businesses that say they were unable to
find workers. This audit will focus on DOL and states’ compliance with return to work provisions under the
CARES Act.
American Rescue Plan Act Equity Grants. The ARP Act provided $2 billion in funding to the Department
to prevent and detect fraud, promote equitable access, ensure timely payment of benefits and reduce
backlogs. This includes $260 million in Equity Grants to improve claimant outreach and customer service
processes and to implement strategies to reduce backlog and improve access for workers in communities
that may historically experience barriers. These first-of-their-kind grants will provide funding for states to
improve public awareness and service delivery as the Department seeks to address potential racial and
ethnic disparities in the administration and delivery of UI benefits in some states. This audit will focus on
the Department’s and states’ effectiveness in addressing the potential racial and ethnic disparities in the UI
program.
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Mine Safety and Health Administration (MSHA)
Discretionary Audits
COVID-19: Impact of COVID-19 MSHA Mandatory Inspections – In Progress. MSHA conducts certain
mandatory inspections to help ensure miners are working in safe environments. Because of workforce
limitations during the COVID-19 pandemic, the number and/or quality of mandatory MSHA inspections may
have declined, putting miners at risk. Between January and December 2020, MSHA conducted 19,487
mandatory inspections at 12,684 mines. This audit will determine if COVID-19 impacted MSHA’s ability to
effectively conduct all mandatory inspections.
Integrity of Dust Sampling. Miners are exposed to harmful substances in their work environment daily.
MSHA samples for and control many of these substances, including airborne toxins such as coal dust and
respirable crystalline silica. Since 1990, at least 150 mine operators, agents, and contractors have pleaded
or been found guilty of submitting fraudulent dust samples used to regulate airborne toxins in mines (e.g.,
silica and coal dust). This audit will assess MSHA’s efforts to address sample manipulation.
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, a key planning component
for mine emergencies, which includes planning by both mine operators and MSHA. This audit will assess
MSHA’s preparedness in responding to emergencies requiring mine rescue operations.
Occupational Safety and Health Administration (OSHA)
Discretionary Audits
COVID-19: OSHA Operations and Efforts to Protect Workers – In Progress. Since the beginning of
the COVID-19 pandemic in March 2020, OSHA has reduced its number of inspections and increased
its number of non-formal complaint investigations. In July 2020, OSHA was named in a lawsuit by
meatpacking employees who said OSHA was failing to do its job properly. OSHA stated its existing
regulations and updated pandemic guidelines were sufficient to keep workers safe. This audit focuses on
the impact of the COVID-19 pandemic on OSHA operations, including the number and types of inspections
it has been using to safeguard workers, and OSHA’s future plans to ensure safe and healthy working
conditions during pandemics.
COVID-19: OSHA Inspection Collaboration Audit – In Progress. While many industries suffered the
impact of COVID-19 outbreaks during the pandemic, health care and meatpacking workers have had
some of the highest rates of COVID-19 infections. OSHA has been performing inspections of worker
safety in these environments, while the U.S. Department of Health and Human Services (HHS) and the
U.S. Department of Agriculture (USDA) have been performing on site inspections to ensure patient care
and product quality. However, according to HHS and USDA OIG officials, their inspectors have not been
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reporting employee safety and health issues to OSHA. This audit focuses on OSHA’s efforts to promote
collaboration with other federal agencies that also conduct on-site inspections for potential workplace
safety and health violations, especially during the pandemic.
COVID-19: OSHA Effectiveness of the National Emphasis Program (NEP). Due to the COVID-19
pandemic, OSHA has 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 that employees in high-hazard industries
or work tasks are protected from the hazard of contracting COVID-19 and from retaliation.
COVID-19: OSHA’s Adequacy of Plans and Use of Funds under the American Rescue Plan Act
Funds – 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 the ARP Act. The ARP Act provides
relief to OSHA in the amount of no less than $100 million. This audit focuses on whether OSHA adequately
developed plans to use ARP Act funds to carry out COVID-19-related worker protection activities, and
whether OSHA has controls in place to effectively use ARP Act funds to protect workers from COVID-19,
particularly in high-risk workplaces, including health care industries, meat and poultry processing facilities,
agricultural workplaces, and correctional facilities.
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.
COVID-19: OSHA Future Pandemic Planning Adequacy. The COVID-19 pandemic has raised specific
concerns about the safety and health of workers. OSHA, under the OSH Act, shall issue an Emergency
Temporary Standard (ETS) if the agency determines that employees are exposed to grave danger from
substances or agents determined to be toxic or physically harmful or from new hazards, and an ETS is
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OIG FY 2022 Audit Workplan
necessary to protect employees from such danger. Since the start of the pandemic OSHA has received
numerous complaints and requests from Congress and other stakeholders to issue an ETS. While OSHA
has issued numerous pieces of guidance, guidance itself is not enforceable and cannot operate in lieu of
an ETS. OSHA initially proposed a broad-based ETS, covering multiple industries, but changed course and
only issued an ETS for health care on June 21, 2021. 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.
Use of Complainant Interviews in OSHA Complaint Inspections – In Progress. OSHA conducts
approximately 9,000 complaint inspections annually and issues citations in 24 percent of those inspections.
Inspectors are not required to interview complainants at any point during the inspection process, which
could result in OSHA having little interaction with complainants and witnesses during complaint inspections.
This audit focuses on OSHA’s use of complainant and witness testimony during a complaint inspection to
ensure the complaint or referral was addressed adequately.
Rising Injury Rates among Online Retailers’ Warehouse Workers. 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.
Office of the Assistant Secretary for Administration and Management (OASAM)
Mandatory Audit
Federal Information Security Management Act (FISMA) Audit – Annual. In performing its various
missions, DOL collects and processes sensitive information through approximately 77 major information
systems. FISMA recognizes the significant risks involved with information technology 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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OASAM
Discretionary Audits
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. Our audit will focus on
the management of IT modernization efforts across the Department, including software integration, legacy
systems, and shared services.
Office of the Chief Financial Officer
Mandatory Audits
DOL Consolidated Financial Statements Audit – Annual. We will determine if DOL’s consolidated
financial statements present fairly, in all material respects, the financial position of DOL as of September
30, 2022. 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.
Review of DOL’s Improper Payment Reporting in the Annual Financial Report – Annual. In FY
2020, the UI program and Federal Employees’ Compensation Act (FECA) reported outlays of $86.9 billion
and $3 billion, respectively, with an estimated improper payment rate of 9.17 percent and 2.34 percent,
respectively. Based on the Department’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 Federal Contract Compliance Programs
Mandatory Audit
Combatting Race and Sex Stereotyping – Completed. Executive Order (EO) 13950 prohibits the
Federal Government from promoting race or sex stereotyping or scapegoating in the Federal workforce,
and states that contracting and grant funds shall not be used for these purposes. The EO further states
that Federal agencies, contractors, and grant recipients should foster environments devoid of hostility
and should be trained to create inclusive workplaces. The Federal Government is, and must always be,
committed to the fair and equal treatment of all individuals before the law. This review will determine
DOL’s compliance with EO 13950 to ensure that Federal agencies, including DOL, maintain an inclusive
workplace free of race or sex stereotyping or scapegoating.
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Office of the Assistant Secretary for Administration and Management (OASAM)
Mandatory Audits
Federal Information Security Management Act (FISMA) Audit – Annual. In performing its various
missions, DOL collects and processes sensitive information through approximately 77 major information
systems. FISMA recognizes the significant risks involved with information technology 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.
OASAM
Discretionary Audits
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. Our audit will focus on
the management of IT modernization efforts across the Department, including software integration, legacy
systems, and shared services.
Office of the Chief Financial Officer (OCFO)
Mandatory Audits
DOL Consolidated Financial Statements Audit – Annual. We will determine if DOL’s consolidated
financial statements present fairly, in all material respects, the financial position of DOL as of September
30, 2022. 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.
Review of DOL’s Improper Payment Reporting in the Annual Financial Report – Annual. In FY
2020, the UI program and Federal Employees’ Compensation Act (FECA) reported outlays of $86.9 billion
and $3 billion, respectively, with an estimated improper payment rate of 9.17 percent and 2.34 percent,
respectively. Based on the Department’s risk assessments, the UI and FECA programs continue to be
considered the most susceptible to improper payments of all DOL programs. This audit will determine
if DOL complied with the Payment Integrity Information Act of 2019, which required DOL to: (1) conduct
a program-specific risk assessment for each required program or activity, (2) publish and meet annual
reduction targets for each program assessed to be at risk for improper payments, and (3) report information
on the efforts of each program to reduce improper payments.
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Office of Federal Contract Compliance Programs
Mandatory Audit
Combatting Race and Sex Stereotyping – Completed. Executive Order (EO) 13950 prohibits the
Federal Government from promoting race or sex stereotyping or scapegoating in the Federal workforce,
and states that contracting and grant funds shall not be used for these purposes. The EO further states
that Federal agencies, contractors, and grant recipients should foster environments devoid of hostility
and should be trained to create inclusive workplaces. The Federal Government is, and must always be,
committed to the fair and equal treatment of all individuals before the law. This review will determine
DOL’s compliance with EO 13950 to ensure that Federal agencies, including DOL, maintain an inclusive
workplace free of race or sex stereotyping or scapegoating.
Office of the Assistant Secretary for Policy
Mandatory Audits
DOL Implementation of Geospatial Data Audit – Biannual. Congress enacted the Geospatial Data Act
of 2018 (GDA) to foster efficient management of geospatial data, technologies, and infrastructure through
enhanced coordination among federal, state, local, and tribal governments, along with the private sector
and academia. The GDA applies to federal agencies that collect, produce, acquire, maintain, distribute,
use, or preserve geospatial data. To improve the management and oversight of geospatial data and related
investments, the GDA identified 13 requirements for federal agencies to implement. This audit will focus on
the extent DOL implemented the requirements and improved its management of geospatial data.
Office of Workers’ Compensation Programs (OWCP)
Mandatory Audits
Report Relating to the Federal Employees’ Compensation Act (FECA) Special Benefit Fund –
Annual. We will determine whether: 1) the Schedule of Actuarial Liability, Net Intra-Governmental Accounts
Receivable, and Benefit Expense was fairly presented for the year ending September 30, 2022; 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.
Longshore and Harbor Workers’ Compensation Act (LHWCA) Special Fund – Annual. We will
determine if DOL’s LHWCA Special Fund financial statements presented fairly, in all material respects, the
financial position of the LHWCA Special Funds as of September 30, 2021.
District of Columbia Workmen’s Compensation Act (DCCA) Special Fund Financial Statement
Audits – Annual. We will determine if DOL’s DCCA Special Fund financial statements presented fairly, in
all material respects, the financial position of the DCCA Special Funds as of September 30, 2021.
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OIG FY 2022 Audit Workplan
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, 2020, through June 30, 2022.
OWCP
Discretionary Audits
COVID-19: Oversight and Adjudication of COVID-19 FECA Claims. In response to the COVID-19
pandemic, OWCP created new procedures to specifically address COVID-19 claims received from federal
workers engaged in high-risk employment. In addition, the ARP Act made it easier for federal workers
diagnosed with COVID-19 to establish coverage. OWCP must ensure claims resulting from the pandemic
are appropriately adjudicated to reduce the risk of fraud and abuse while at the same time ensuring
claimants receive benefits they are entitled to receive. As of late June 2021, OWCP had received over
15,000 COVID-19 FECA claims and paid out over $6.3 million in benefits. Given this influx of claims, this
audit will focus on an after-the-fact review of OWCP’s administration and oversight of COVID-19 claims
received by the FECA program.
Energy Employees’ Claims Processing. From its inception to the end of FY 2020, the OWCP Energy
program awarded approximately 127,000 claimants compensation and medical benefits totaling over
$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 reasons claims are denied and why claims are denied at such a high rate.
Managing Pharmaceutical Spending in FECA – In Progress. Recent OIG audit work found OWCP
had not done enough to ensure it paid the best price for prescription drugs. Specifically, the audits noted
OWCP lacked a pharmacy 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.
Medical Bill Pay Processing Data Integrity – In Progress. In 2020, OWCP launched a new bill pay
processing system: the Workers' Compensation Medical Bill Processing (WCMBP) system. OWCP and
its programs rely on accurate and complete data from this new system and OWCP’s legacy systems to
provide the efficient and effective processing of medical bills and case management. This audit assesses
OWCP’s processes and controls to determine the reliability of the OWCP’s data in managing the workers’
compensation programs.
Wage and Hour Division (WHD)
Discretionary Audits
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
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OIG FY 2022 Audit Workplan
methods to help employers understand their labor responsibilities, such as opinion letters, compliance
videos, outreach events, and compliance partnerships. This audit will focus on how WHD has met its
enforcement requirements and leveraged its resources between compliance assistance and enforcement
activities.
Veterans' Employment and Training Services (VETS)
Discretionary Audits
COVID-19: VETS Reintegration and Training Programs. The COVID-19 pandemic has presented new
challenges for VETS in its mission to prepare America's veterans, transitioning service members, and
military spouses for meaningful careers; provide them with employment resources and expertise; protect
their employment rights; and promote their employment opportunities. The audit will focus on how the
pandemic impacted VETS reintegration and training programs, as well as the effectiveness of the training
programs during a health crisis.
Multi-Agency
Mandatory Audits
Charge Card Risk Assessment – Annual. The Government Charge Card Abuse Prevention Act of 2012
was designed to prevent recurring waste, fraud, and abuse of government charge cards, and requires
agencies to implement safeguards and internal controls to reduce these risks. This audit will determine
if DOL has established controls over its purchase and travel card programs to prevent and detect illegal,
improper, or erroneous purchases and payments.
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
and if there is a need for any follow-up work.
Multi-Agency
DiscretionaryAudits
Enterprise Risk Management. OMB Circular A-123 requires agencies to implement an Enterprise
Risk Management (ERM) process. Agencies’ ERM efforts are to be coordinated with the Government
Performance and Results Modernization Act of 2010’s strategic planning and review process, the internal
control process required by the Federal Managers’ Financial Integrity Act, and GAO’s Green Book. We will
determine if management has implemented an effective ERM process that identifies, assesses, responds,
and reports on risks.
112 Semiannual Report to Congress: April 1 – September 30, 2021
Office of Inspector General, U.S. Department of Labor
200 Constitution Avenue, NW
Room S-5502
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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