Semiannual Report to Congress, Office of Inspector General for the U.S. Department of Labor, Volume 87 (October 1, 2021 – March 31, 2022)
Summary
The Department of Labor Office of Inspector General's Semiannual Report to Congress, Volume 87, covers October 1, 2021 to March 31, 2022. The OIG reports 133 investigative reports issued and cases closed, 314 indictments, 187 convictions and more than $90 million in monetary accomplishments. Applying an 18.71 percent improper payment rate to the estimated $872.5 billion in pandemic-related UI payments, it says at least $163 billion in pandemic UI benefits could have been paid improperly, with a significant portion attributable to fraud. Among the cases, a Michigan state contractor was sentenced over the theft of $3.8 million in a pandemic UI fraud. Other chapters cover workers' compensation, employee benefit plans, worker safety, OIG congressional testimony and legislative recommendations.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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Semiannual Report to Congress
Office of Inspector General for the U.S. Department of Labor
Volume 87 October 1, 2021 – March 31, 2022
A Message from the Inspector General
After being nominated by the President and being confirmed
by the Senate, I assumed the position of Inspector General for
the U.S. Department of Labor (DOL) on December 7, 2021.
I am deeply honored to lead the Office of Inspector General
(OIG) after serving for more than 7 years as Deputy Inspector
General. As such, it is my privilege to submit this Semiannual
Report to Congress, which highlights the most significant
activities and accomplishments of the DOL OIG for the 6-month
period ending March 31, 2022.
On March 17, 2022, I had the honor to testify before the U.S.
Senate Committee on Homeland Security and Governmental
Affairs about the OIG’s oversight of the unemployment
insurance (UI) program during the COVID-19 pandemic.
As my testimony detailed, the unprecedented infusion of
federal funds into the UI program during the pandemic gave
individuals and organized criminal groups a high-value target to exploit. That, combined with easily
attainable stolen personally identifiable information and continuing UI program weaknesses identified by
the OIG over the last several years, created a perfect storm that allowed criminals to defraud the system.
Because many states were not prepared to process the extraordinary volume of new UI claims and
struggled to implement new UI programs, many internal fraud controls that had been traditionally used or
recommended for the processing of UI claims were not initially implemented. Fraudsters thus had a high-
reward target where an individual could make a fraudulent claim with relatively low risk of being caught.
For example, as time went on, one fraudster could have been issued several UI debit cards, with tens of
thousands of dollars on each card.
I recommended the OIG have better access to claim and wage data and several other actions DOL
can take, including addressing issues related to UI staffing and systems for prompt payment during
emergencies; implementing controls for improper payments; helping states with claims; overpayments
and fraud reporting; and working with Congress to better assist State Workforce Agencies’ ability
to cross-match UI claims with available data in areas with high-risk for fraud. I also highlighted the
measures the OIG has taken to address the impact of fraud on the UI program.
Although a large part of our focus has been on overseeing the UI program, we have other
accomplishments of which I am also very proud. During this reporting period, the OIG issued 15 audit
and other reports with 49 recommendations for corrective action. For example, we recommended that:
• the Occupational Safety and Health Administration collaborate to encourage referrals of potential
COVID-19 safety and health hazards from external federal agency personnel active in industries
with a high risk of COVID-19 exposure;
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 3
• the Employment and Training Administration provide dedicated technical assistance to four
states to assist them in attaining planned goals, provide close monitoring of the Disaster National
Dislocated Worker Grants to ensure performance, and amend its guidance to include specified
timeline provisions and technical assistance;
• DOL consistently report IT data elements in accordance with the Digital Accountability and
Transparency Act of 2014; and
• DOL ensure progress on implementing Information Security Continuous Monitoring controls.
The OIG’s investigative work also yielded significant outcomes, with a total of 133 investigative reports
issued and cases closed, 314 indictments, 187 convictions, and more than $90 million in monetary
accomplishments. Highlights of this work include:
• a Michigan state contractor sentenced for her role in the theft of $3.8 million in a pandemic UI fraud
scheme;
• a Virginia woman sentenced to 10 years in prison for her role in defrauding the government of
more than $1.5 million in UI benefits;
• a former NFL wide receiver sentenced for his role in a scheme to defraud California’s Employment
Development Department;
• a Louisiana couple sentenced in a $38 million medical reimbursement account program fraud
scheme;
• a California man sentenced to 15 months in prison and ordered to forfeit more than $533,000 in a
Foreign Labor Certification fraud scheme; and
• an international labor union official sentenced to 24 months in prison for health care fraud and
union embezzlement.
These are just some examples of the exceptional work done by our dedicated staff. I thank them for
their significant achievements during this reporting period.
I look forward to continuing to work constructively with the Department and Congress on our shared
goals of identifying improvements to DOL programs and operations and of protecting the interests and
benefits of the nation’s workers, retirees, and taxpayers during this unprecedented time.
Larry D. Turner
Inspector General
4 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
OIG FY 2022–2026 Strategic Plan
OIG Mission
We serve the American people, DOL, and Congress by providing independent and
objective oversight of Departmental programs through audits and investigations, and by
combatting the influence of labor racketeering in the workplace.
Core Values
Excellence
We deliver relevant, quality, timely, high-impact products and services, through a
workforce committed to accountability and the highest professional standards.
Integrity
We adhere to the highest ethical principles, and perform our work in an honest and
trustworthy manner.
Independence
We are committed to being free of conflicts of interest through objectivity and impartiality.
Service
We are a unified team, vigilant to duty through dedicated public service.
Transparency
We promote an environment of open communication through information sharing,
accountability, and accurate reporting.
Strategic Goals
Goal 1: Deliver timely, relevant, and high-impact results.
Goal 2: Foster an internal OIG culture that drives high performance and
engagement.
Goal 3: Promote responsible stewardship of OIG financial and nonfinancial
resources.
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 5
–
Contents
Selected Statistics. ................................................8 OIG Congressional Testimony............................81
Significant Concerns. ..........................................10 Legislative Recommendations. ..........................83
Worker and Retiree Benefit Programs. ..............25 Appendices...........................................................89
Unemployment Insurance Programs......................26 Funds Recommended for Better Use.....................92
Office of Workers’ Compensation Programs..........44 Questioned Costs. .................................................93
Employee Benefit Plans. ........................................45 Final Audit Reports Issued.....................................94
Other Reports. .......................................................95
Worker Safety, Health, and Workplace Rights...47 Unresolved Audit Reports Over 6 Months Old.......96
Occupational Safety and Health Administration.....48 Corrective Actions Taken by the Department.........98
Bureau of International Labor Affairs. ....................52 Unimplemented Recommendations.....................101
High-Priority Unimplemented
Employment and Training Programs. ................55 Recommendations. ..............................................102
Employment and Training Administration Summary of Reports with Unimplemented
Programs................................................................56 Recommendations with Cost Savings / Funds Put to
Job Corps...............................................................60 Better Use.............................................................106
Foreign Labor Certification Programs....................62 Reports with Unimplemented Recommendations
for Management Improvement or Disallowed Costs
Labor Racketeering..............................................63 Owed....................................................................107
Investigative Statistics.......................................... 111
Departmental Management.................................67 OIG Hotline........................................................... 113
Single Audits...........................................................73 Peer Review......................................................... 114
Fiscal Year 2022 Audit Workplan......................... 115
Employee Integrity Investigations......................75 Addendum to FY 2022 Audit Annual Workplan....127
OIG Whistleblower Activities. .............................77
Audit Statistics
15 49
Audits and Other Recommendations for
Reports Issued Corrective Action
OIG Unimplemented Recommendations
OIG recommendations not fully implemented as of March 31, 2022
EBSA 2
ETA 43
MSHA 31
OASAM 2
OASP 47
OCFO 19
OFCCP 1
OSEC 1
OSHA 19
OWCP 5
WHD 6
0 10 20 30 40 50
8 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
InvestigativeStatistics
Investigative Results Labor Racketeering
Program Fraud
190 / 133
400
314
300
200 190 187
148
133
100
55 190 investigative
9 cases opened and
0 over 130 cases
r r s s ry ts
s d
se ose
s d
se ene fo tion fo tion e nt i on to en closed
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 $21,821,798
Recoveries
Cost-Efficiencies
Restitutions
Fines/Penalties
Forfeitures
Civil Monetary Actions
$68,438,559
$90,260,357
Total Labor Racketeering
Program Fraud
Significant Concerns
Significant Concerns
The OIG has identified the following areas of significant concern that cause the Department
to be at particular risk for fraud, mismanagement, waste, abuse, or other deficiencies. The
identified areas of concern reflect continuing matters as well as emerging issues. Most of these
issues appear in our annual Top Management and Performance Challenges report, which can
be found in its entirety at www.oig.dol.gov.
Deploying Ensuring the Safety
Unemployment of Students and
Insurance Benefits While Staff at Job Corps
Reducing Improper Centers
Payments
Providing the
Maintaining the
OIG Access to UI
Integrity of Foreign
Claimant Data and
Labor Certification
Wage Records
Programs
Protecting the
Protecting the
Safety and Health of
Security of
Workers
Employee Benefit
Plan Assets
Protecting the Managing Medical
Safety and Health Benefits in the Office of
of Miners Workers’ Compensation
Programs
Improving the
Performance
Accountability of Ensuring the Solvency
Workforce Development of the Black Lung
Programs Disability Trust Fund
Ensuring Safety
During On-Site Securing and
Instruction at Job Protecting Information
Corps Centers Management Systems
Improving Job
Corps’ Procurement
Process
10 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Significant Concerns
Deploying Unemployment Insurance For example, the OIG had audited the Disaster
Benefits Expeditiously and Efficiently Unemployment Assistance (DUA) program
While Reducing Improper Payments and found the Department had not established
adequate controls to ensure benefits were paid
timely. Similarly, for three key CARES Act UI
The Office of Inspector General (OIG) has repeatedly
programs, we identified that, on average, it took
reported significant concerns with the Department of
between 25 and 50 days for the first payment
Labor (DOL) and State Workforce Agencies’ (SWA)
to be disbursed. Continued programmatic
ability to deploy program benefits expeditiously and
weaknesses led to workers unemployed through
efficiently while ensuring integrity and adequate
no fault of their own suffering lengthy delays in
oversight, particularly in response to national
receiving benefits.
emergencies and disasters. The OIG reiterated
these concerns following the economic downturn
In addition, anticipating and addressing the
created by the COVID-19 pandemic and the
increased risk that came with the expanded
unprecedented levels of federal funding allocated to
funding was also vital to meeting the intent of
the unemployment insurance (UI) program, currently
the CARES Act. For example, we reported on
estimated at approximately $872.5 billion.
the challenges presented by the Pandemic
Unemployment Assistance (PUA) program.
Following the start of the pandemic in the United
PUA’s expanded coverage for a population
States in early 2020, unemployment compensation
of claimants who were traditionally ineligible
claims rose exponentially to historically
to receive UI benefits2 presented significant
unprecedented levels. Prior to the pandemic,
challenges to states. The OIG reported the risk
numbers of UI claims were low: on March 14, 2020,
of fraud and improper payments was even higher
the Department reported 282,000 initial claims.
under PUA than with DUA because claimants
Within 2 to 3 weeks, initial claims rose to 10 times
could self-certify their eligibility for UI. In June
pre-pandemic levels, far higher than state systems
2020, the OIG provided a member briefing3
were designed to handle.1 Within 5 months, through
and a statement for the record4 to Congress
August 15, 2020, the Department reported 57.4
highlighting challenges DOL and SWAs faced
million initial claims, the largest increase since the
Department began tracking UI data in 1967.
2
The new PUA program extended unemployment benefits
to the self-employed, independent contractors, those with
Rapid deployment of Coronavirus, Aid, Relief,
limited work history, and other individuals not traditionally
and Economic Security (CARES) Act funding was
eligible for unemployment benefits who were unable to
critical in helping workers in need. As the OIG’s
work as a direct result of COVID-19.
prior audit work has shown, quickly deploying
3
“Subcommittee on Government Operations Briefing
funds can result in shortcomings in the effective
with the Inspector General for the Department of Labor.”
and efficient implementation of stimulus programs.
Statement of Scott S. Dahl, Inspector General, U.S.
1
COVID-19: States Struggled to Implement CARES Act Department of Labor House Committee on Oversight and
Unemployment Insurance Programs, Report No. 19-21- Reform; Subcommittee on Government Operations (June
004-03-315 (May 28, 2021), available at: https://www.oig. 1, 2020), available at: https://www.oig.dol.gov/public/
dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf testimony/20200601.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 11
Significant Concerns
in administering and overseeing the UI program which ETA applied to two of three key pandemic UI
as well as the substantially increased fraud risk. programs. ETA states it will report the third program,
The reliance solely on claimant self-certifications PUA, in 2022.
without evidence of eligibility and wages during
the program’s first 9 months rendered the PUA Applying the 18.71 percent to the estimated $872.5
program extremely susceptible to improper billion in pandemic-related UI payments,6 at least
payments and fraud. Congress addressed the $163 billion in pandemic UI benefits could have been
self-certification issue under the Continued paid improperly, with a significant portion attributable
Assistance for Unemployed Workers Act of 2020, to fraud. Based on our audit and investigative work,
requiring individuals receiving PUA to substantiate the improper payment rate for pandemic-related UI
their employment. payments is likely higher.
Further, for over 20 years, the OIG has reported The OIG has referred information to the Department
on the Department’s limited ability to measure, and states on nearly $17 billion of potentially
report, and reduce improper payments in the UI fraudulent UI benefits paid from March 2020 to
program. Indeed, the UI program has experienced October 2020 in four specific high-risk areas, to
some of the highest improper payment rates across individuals with Social Security numbers: (1) filed
the federal government. The reported improper in multiple states, (2) of deceased persons, (3) of
payment estimate for the regular UI program federal prisoners, and (4) used to file for UI claims
has been above 10 percent for 14 of the last 18 with suspicious email accounts (see Figure 1).
years. Our recommendations have specifically
included the need for the Department to estimate As the OIG reported, the unprecedented infusion of
improper payments within federally-funded federal funds into the UI program gave individuals
temporary emergency programs. In August 2020, and organized criminal groups a high-value target
we recommended5 the Employment and Training to exploit. That, combined with easily attainable
Administration (ETA) estimate the improper payment stolen personally identifiable information (PII) and
rate for pandemic UI programs. In December 2021, continuing UI program weaknesses identified by the
consistent with our recommendation, ETA reported OIG over the last several years, allowed criminals
an improper payment rate of 18.71 percent for 2021, to defraud the system. Because many states were
not prepared to process the extraordinary volume
4
“Unemployment Insurance During COVID-19: The of new UI claims and struggled to implement new
CARES Act and the Role of Unemployment Insurance UI programs, many internal fraud controls that
During the Pandemic.” Statement for the Record of Scott
6
S. Dahl, Inspector General, U.S. Department of Labor ETA’s reported improper payment rate estimate of 18.71
Senate Committee on Finance (June 9, 2020), available at: percent does not include the PUA program. However,
https://www.oig.dol.gov/public/testimony/20200609.pdf it is the most current improper payment rate from ETA.
5
COVID-19: More Can Be Done to Mitigate Risk to Furthermore, PUA had control weaknesses that may have
Unemployment Compensation under the CARES Act, facilitated comparable or greater improper payments.
Report No. 19-20-008-03-315 (August 07, 2020), available Therefore, applying ETA’s rate to all of the estimated
at: https://www.oig.dol.gov/public/reports/oa/2020/19-20- $872.5 billion in CARES Act UI payments including PUA
008-03-315.pdf would equate to at least $163 billion in improper payments.
12 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Significant Concerns
Figure 1: Four High-Risk Areas for Potential UI Fraud7
Multistate Claimants Deceased Persons Federal Prisoners Suspicious Email Accounts
7
COVID-19: States Struggled to Implement CARES Act Unemployment Insurance Programs, Report No. 19-21-004-03-
315 (May 28, 2021), available at: https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
had been traditionally used or recommended While concerns persist within the UI program,
for the processing of UI claims were not initially DOL has instituted efforts to focus on program
implemented. This created a situation where integrity when implementing the CARES Act and
fraudsters had a high-reward target where an other pandemic-related UI programs. These efforts
individual could make a fraudulent claim with include establishing agreements with states to
relatively low risk of being caught. For example, as comply with all applicable requirements to receive
time went on, one fraudster could have been issued funds, issuing operating guidance, and providing
several UI debit cards, with tens of thousands of technical assistance to SWAs individually and
dollars on each card. through webinars. DOL has included requirements
for SWAs to focus on program integrity in
The volume of UI investigative matters currently guidance relevant to pandemic-related UI funds. In
under review is unprecedented in the OIG’s addition, DOL has reinforced the need for SWAs
history. Prior to the pandemic, the OIG opened to actively work with the OIG to address fraud in
approximately 120 UI investigative matters annually. the UI program. DOL is also working with SWAs
Since the pandemic started, the OIG has received to further their participation with the UI Integrity
more than 144,000 UI fraud complaints from the Center, established by DOL through a cooperative
U.S. Department of Justice’s (DOJ) National Center agreement and operated by the National Association
for Disaster Fraud (NCDF) and has independently of State Workforce Agencies (NASWA).
opened more than 39,000 investigative matters
concerning UI fraud. That is an increase of more On August 31, 2021, the Department announced
than 1,000 times in the volume of UI work that the establishment of the Office of Unemployment
we are facing. UI investigations now account for Insurance Modernization to provide oversight and
approximately 94 percent of the OIG investigative management of the $2 billion appropriated to UI
case inventory, compared to approximately 11 initiatives by the American Rescue Plan Act of
percent prior to the pandemic. 2021 (ARPA). The funding is aimed at preventing
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 13
Significant Concerns
and detecting fraud, promoting equitable access, authority to require states to provide UI data to the
ensuring timely benefits payments, and reducing OIG for audits. As a result, the OIG was forced to
backlogs. Of this $2 billion in funding, three take the unprecedented step of using IG subpoenas
grant programs have been set up: (1) a $140 to obtain this critical data. That process took many
million program for fraud prevention grants to be months and delayed our ability to detect fraud
awarded to states to cover subscription costs early in the pandemic. The Department revisited
for identity verification tools, establishment and its position and, on August 3, 2021, issued an
expansion of data analytics, and implementation Unemployment Insurance Program Letter (UIPL)
of cybersecurity defense strategies; (2) a separate advising SWAs they must provide UI data to the OIG
$260 million program for equity grants to be for benefits paid under the authority of the CARES
awarded to states to improve customer service Act. However, this was a temporary measure that
and claimant outreach, reduce claims backlogs, applied to CARES Act UI programs, which sunsetted
and improve access for workers in communities on September 6, 2021.8 Once the programs
that may have historically experienced barriers covered by the UIPL expired in September, the OIG
to access; and (3) up to $200 million in funding was back to not having routine access due to the
to support states in improving UI systems and Department’s interpretation of its own regulation
processes following a consultative assessment that it lacked authority to require states to provide UI
with a team of experts provided by DOL. data to the OIG for audit and investigative purposes.
While the Department has required states to
We plan to evaluate the effectiveness of the equity provide OIG with access to UI data as a condition of
grants program as well as to continue our audit and receiving fraud prevention grants, those grants are
investigative work on the Department’s and States’ not being provided to every state and the provision
ability to expeditiously and efficiently deploy UI requiring OIG access is temporary and will expire
benefits while reducing improper payments. with the grants on December 31, 2023.
Providing the OIG Access to UI The OIG requires permanent access to all UI
Claimant Data and Wage Records program data to conduct effective oversight.
In our June 16, 2021, alert memorandum,9 we
The OIG’s lack of direct access to UI claimant recommended that ETA amend 20 CFR 603.5 and
data and wage records from SWAs is of
8
significant concern because this deficiency The CARES Act UI programs ended on September 6,
directly and adversely impedes the OIG’s ability 2021; however, states continue to process backlogged
to combat fraud, waste, and abuse and provide claims, and they are required to submit payment data for
independent oversight to help DOL reduce the claims to the OIG.
9
improper payments in its programs, including Alert Memorandum: The Employment and Training
regular and temporary UI programs. Administration Needs to Issue Guidance to Ensure State
Workforce Agencies Provide Requested Unemployment
Prior to the pandemic, DOL required states to Insurance Data to the Office of the Inspector General,
disclose UI data for fraud investigations with data Report No. 19-21-005-03-315 (June 16, 2021), available
sharing agreements. DOL asserted it lacked the at: https://www.oig.dol.gov/public/reports/oa/2021/19-21-
005-03-315.pdf
14 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Significant Concerns
603.6(a) through the rulemaking process and that earliest opportunity. In support of the OIG’s
ETA meet with the OIG to develop a permanent oversight activities, the OIG needs access to
approach for the OIG to access UI data. We UI claimant data and wage records from SWAs
were optimistic the Department would work on its to verify claimants’ eligibility for UI benefits,
regulation prior to the expiration of the CARES Act including both initial eligibility (and amounts) and
programs, but, while the Department has been continuing eligibility. Direct and timely access
cooperative, this did not happen. ETA has required to these records will permit the OIG to identify
sharing of state UI data as a condition of the fraud claimants who appear to be receiving benefits
prevention grants offered under ARPA. However, while also earning wages. Further, direct and
the grants provide the OIG access only for those timely access to UI data will allow the OIG to
states that chose to participate and only through use our data analytics program to identify and
the end of 2023. Given that a few states are not investigate complex identity theft and multistate
receiving grants and ETA has not effectuated fraud schemes, as we have successfully done
another viable alternative for access to non-grantee during the pandemic. The OIG could also
data in the short-term, the data provided to the use UI data to assess the outcomes of UI
OIG will be incomplete; additional IG subpoenas reemployment programs.
may be necessary. However, as noted, use of IG
subpoenas to obtain UI data on a recurring basis is Congress should consider legislative action to
time-consuming and inefficient. Thus, the OIG would authorize DOL and the OIG to have direct access
not be able to obtain UI data in a manner that would to UI claimant data and wage records for our
allow it to more timely detect fraud. oversight responsibilities. Real time direct access
to SWA UI claimant data and wage records
The OIG must have easy and expeditious systems would further enable the OIG to quickly
access to state UI claimant and wage records identify large-scale fraud and expand its current
to conduct appropriate audit and investigative efforts to share emerging fraud trends with ETA
oversight of UI funds. As outlined in June 2021, and SWAs in order to strengthen the UI program
disclosure limitations regarding UI potential and prevent fraud before it occurs.
fraud data10 contradict the Inspector General Act
of 1978, as amended. To obtain access to UI In addition, data analytics based on the direct
data, the OIG had to issue two separate sets of access would further enable our auditors to identify
IG subpoenas. The resulting delays equated to program weaknesses and recommend corrective
the lack of detection and prevention of billions action that will improve the timeliness of UI benefit
of dollars in potentially fraudulent claims at the payments and the integrity of the UI program.
To underscore this point, based on the data that
10
Alert Memorandum: The Employment and Training was obtained by the OIG, our data scientists in
Administration Needs to Issue Guidance to Ensure State our Office of Investigations and Office of Audit
Workforce Agencies Provide Requested Unemployment worked collaboratively to identify nearly $17 billion
Insurance Data to the Office of the Inspector General, in potential UI fraud paid in the four specific high-
Report No. 19-21-005-03-315 (June 16, 2021), available risk areas, such as to multistate claimants and
at: https://www.oig.dol.gov/public/reports/oa/2021/19-21- deceased persons.
005-03-315.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 15
Significant Concerns
Protecting the Safety and Health of in September 2021, President Biden issued an
Workers executive order to write a rule requiring employers
with at least 100 workers to require employees to get
The Occupational Safety and Health Administration vaccinated or produce weekly test results showing
(OSHA) is responsible for the safety and health they are virus free. This rule was issued as an ETS
of 130 million workers employed at more than 8 on November 5, 2021, but subsequently withdrawn by
million establishments, and OSHA must ensure OSHA on January 26, 2022, after the U.S. Supreme
employers are providing the level of protection Court ruled the Occupational Safety and Health Act of
required under relevant laws and policies. The OIG 1970 did not authorize the agency to issue it.
remains concerned about OSHA’s ability to target its
compliance activities to areas where it can have the Protecting the Safety and Health of
greatest impact. Miners
OSHA carries out its compliance responsibilities The Mine Safety and Health Administration’s
through a combination of self-initiated inspections (MSHA) ability to complete mine inspections while
and those resulting from complaints and referrals. safeguarding the health of miners and the agency’s
However, because of resource limitations, the staff during the COVID-19 pandemic is a concern
program only reaches a fraction of the regulated for the OIG. Some MSHA inspectors self-identified
entities. Consequently, OSHA must target the as being at high risk during the pandemic, which
most egregious or persistent violators to protect meant they were no longer required to perform
the most vulnerable worker populations. OSHA mine inspections. The reduction in the number of
faces challenges to ensure that workplaces where inspectors able to conduct inspections, coupled
workers are exposed to safety and health violations with the logistical challenges of the pandemic, is a
are sufficiently covered. concern for the OIG. We are also concerned with
the high incidence of powered haulage accidents in
While OSHA has issued several guidance documents mines, which accounted for almost half of all mine
to enhance safety provisions during the pandemic, fatalities in 2021 and have been continuing a trend
guidance does not carry the weight of OSHA rules or in which powered haulage accidents account for a
standards. In June 2021, more than a year into the disproportionate share of overall fatalities over the
pandemic, OSHA issued an emergency temporary last several years. MSHA also needs to develop
standard (ETS) that only covered the health care strategies to address lung disease in coal mining
industry. This emergency standard expired in states, particularly by updating regulations regarding
December 2021. OSHA then substantially withdrew silica content in respirable dust.12 Respirable
the ETS, retaining only its logging and recordkeeping crystalline silica can cause deadly and incurable
sections. Despite the withdrawal of the vaccine or chronic conditions, such as black lung disease.
testing elements of the ETS, OSHA indicated it is MSHA regulations on respirable silica have not
pursuing a final rule on the subject.11 In addition,
12
MSHA Needs to Improve Efforts to Protect Coal Miners
11
DOL OSHA, COVID-19 Vaccination and Testing ETS. From Respirable Crystalline Silica, Report No. 05-21-001-
Updated January 25, 2022. https://www.osha.gov/ 06-001 (November 12, 2020), available at: https://www.oig.
coronavirus/ets2 dol.gov/public/reports/oa/2021/05-21-001-06-001.pdf
16 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Significant Concerns
changed in many years, even as the acceptable limit address the economic and workforce-related impacts
for silica exposure for workers other than miners has of the opioid crisis. Research suggests that opioid
been significantly decreased by OSHA regulations. dependency has been a leading cause of workforce
exits for workers ages 25 to 54. To date, ETA has
Improving the Performance approved up to $143 million in grants to address the
Accountability of Workforce opioid crisis. It is vital that the Department monitor
Development Programs the performance of the discretionary grants it has
awarded for the delivery of services to employers and
workers affected by the opioid crisis.
The OIG has concerns about the Department’s
ability to ensure its investment in workforce
As expressed in a March 2022 advisory report,14
development programs is successful in advancing
the OIG continues to be concerned about three
participants’ skills and placing them in suitable
areas in particular where our body of work has
employment. The pandemic continues to highlight
identified weaknesses: awarding grants, reviewing
the importance of the Department’s workforce
grantees’ use of funds, and measuring grantee
development programs assisting job seekers and
performance. Additional funding related to the
employers in finding and filling available jobs and
COVID-19 pandemic has increased the need for
assisting workers in developing the right skills to fill
ETA to ensure issues do not reoccur. Our June
new job openings. The Department’s ability to obtain
2020 advisory report15 noted areas of concern
accurate and reliable data to measure, assess, and
that ETA should keep in mind when spending
make decisions regarding the performance of grant
the additional $345 million allocated under the
recipients, contractors, and states in meeting the
CARES Act through grants to assist dislocated
programs’ goals is critical.
workers adversely affected by the pandemic.
The areas of concern were related to program
The Department needs to ensure its investments
eligibility, effectiveness, and compliance and
in credential attainment align with local employers’
monitoring. While ETA has taken action to address
needs and are having the desired impact on
many related findings and recommendations, it
participants’ ability to obtain or advance in a job. In
must also proactively monitor the three key areas
a 2018 audit13 that followed up on the employment
identified in the March 2022 advisory report and
status of a sample of Job Corps students 5 years
continue to assess for these weaknesses to
after they left the program, we found that Job Corps
ensure they do not reoccur.
faced challenges in demonstrating the extent to which
its training programs helped those participants
14
Advisory Report: ETA’s Management of Workforce
obtain meaningful jobs appropriate to their training.
Development Grants: Key Concerns, Report No. 09-22-
001-03-001 (March 31, 2022), available at: https://www.oig.
In March 2018, ETA announced the National Health
dol.gov/public/reports/oa/2022/09-22-001-03-001.pdf
Emergency Grant program to help communities
15
Advisory Report: CARES Act: Key Areas of Concern
13
Job Corps Could Not Demonstrate Beneficial Job Regarding Implementation of Dislocated Worker Grant
Training Outcomes, Report No. 04-18-001-03-370 (March Provisions, Report No. 19-20-005-03-391 (June 23,
30, 2018), available at: https://www.oig.dol.gov/public/ 2020), available at: https://www.oig.dol.gov/public/reports/
reports/oa/2018/04-18-001-03-370.pdf oa/2020/19-20-005-03-391.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 17
Significant Concerns
Ensuring Safety During On-Site challenge for Job Corps centers. The OIG audits
Instruction at Job Corps Centers from 201516 and 201717 revealed that some Job
and Implementing Distance Learning Corps centers failed to report and investigate serious
misconduct, such as drug abuse and assaults. The
During the Pandemic
audits also disclosed that some Job Corps centers
downgraded incidents of violence to lesser infractions,
The OIG is concerned about the ability of Job Corps
creating an unsafe environment for students and
to mitigate the risk and spread of COVID-19 across
staff. The follow-up work we completed in December
the centers. Like many other educational institutions,
201718 and our ongoing review of Job Corps’ corrective
preventing outbreaks of COVID-19 at Job Corps
actions showed that Job Corps has taken steps to
centers continues to be a significant priority. Job
improve center safety and security by establishing
Corps centers are mostly residential, with students
internal controls and revising policy. However, student
and some staff living on campus. While Job Corps
misconduct concerns continue, and a March 2021
has implemented its distance learning programs,
OIG audit report19 showed that the current process
the OIG is concerned with two issues related to
does not provide Job Corps centers the appropriate
distance learning. First, many Job Corps programs,
tools and resources to properly evaluate applicants
such as plumbing and carpentry, are intensively
for substance abuse and mental health issues as
hands-on and may not successfully transition to
they enter the program and does not ensure centers
a virtual training model. Second, many Job Corps
have the necessary resources to mitigate them.
students may not have access to the equipment
While ETA told us it increased nursing and mental
or high-speed Internet services they need in order
health consultants’ hours at every center to help
to effectively participate in distance learning.
address these concerns, it determined pre-enrollment
To address these concerns, Job Corps granted
extensions allowing students to physically return 16
Job Corps Needs to Improve Enforcement and Oversight
to Job Corps to complete their hands-on training
of Student Disciplinary Policies to Better Protect Students
components and procured and distributed laptops
and Staff at Centers, Report No. 26-15-001-03-370
and mobile hotspots to students to participate in
(February 27, 2015), available at: https://www.oig.dol.gov/
distance learning. Finally, the OIG is concerned with
public/reports/oa/2015/26-15-001-03-370.pdf
the potential learning gaps, such as those caused 17
Review of Job Corps Center Safety and Security, Report
by delays to in-person instruction, that occurred
No. 26-17-001-03-370 (March 31, 2017), available at:
because of the temporary suspension of Job Corps
https://www.oig.dol.gov/public/reports/oa/2017/26-17-001-
instructional programs at the onset of the pandemic
03-370.pdf
and with how Job Corps intends to remediate these 18
Job Corps Took Action to Mitigate Violence, Drugs and
potential learning gaps.
Other Student Misconduct at Centers, But More Needs to
Be Done, Report No. 26-18-001-03-370 (December 29,
Ensuring the Safety of Students and 2017), available at: https://www.oig.dol.gov/public/reports/
Staff at Job Corps Centers oa/2018/26-18-003-03-370.pdf
19
Job Corps Should Improve Its Pre-Admission Evaluation
In addition to the safety challenges posed by the Process, Report No. 05-21-001-03-370 (March 25, 2021),
COVID-19 pandemic, averting on-campus violence available at: https://www.oig.dol.gov/public/reports/
and other potentially criminal behavior remains a oa/2021/05-21-001-03-370.pdf
18 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Significant Concerns
behavioral assessments, of the type OIG identified, post-2003 rules revamped the PERM, H-2A, and
are not feasible legally or programmatically and H-2B visa programs, and addressed some of the
pre-enrollment academic readiness screening of vulnerabilities cited in audits and investigations by
prospective students does not align with the program’s the OIG and the Government Accountability Office.
eligibility criteria and overall purpose to serve a diverse Those same rules created challenges regarding
collection of youth. The OIG continues to monitor DOL’s responsibilities. Additionally, DOL continues
various safety initiatives and actions taken by Job to have limited authority over the H-1B and PERM
Corps to keep students and staff safe. programs which challenges the goal of protecting
the welfare of the nation’s workforce.
Maintaining the Integrity of Foreign
Labor Certification Programs The statute limits DOL’s ability to deny H-1B
applications. Specifically, DOL may only deny
The DOL foreign labor certification (FLC) programs incomplete and obviously inaccurate H-1B
are intended to permit U.S. employers to hire applications and has only limited authority to
foreign workers to meet their workforce needs while conduct H-1B investigations in the absence of
protecting U.S. workers’ jobs, wages, and working a complaint. DOL has recently established a
conditions. DOL’s administration of FLC programs process to begin utilizing the Secretary-initiated
under current laws has been a concern for the H-1B investigations. The PERM program itself is
OIG for decades. Investigations have shown these persistently vulnerable to employers not complying
visa programs, in particular the H-1B program for with its qualifying criteria. Therefore, both the PERM
workers in specialty occupations, to be susceptible and H-1B programs remain highly prone to fraud.
to significant fraud and abuse from perpetrators,
including certain immigration agents, attorneys, With various new DOL rules going into effect since
labor brokers, employers, and, most often, organized 2003, there have been opportunities for the PERM,
criminal enterprises. H-2A, and H-2B visa programs to change. For
example, these new rules implemented employer
In 2003, the OIG issued a white paper20 outlining attestation programs, which allow employers to
vulnerabilities that then existed in four FLC agree to the conditions of employment without
programs, permanent employment certification providing supporting documentation to validate their
program (PERM), H-1B, H-2A, and H-2B, and, in agreements. However, DOL has identified instances
2020, we issued a similar report.21 We found the in which employers are not complying with the
conditions of employment, thereby reinforcing how
20
Overview and Assessment of Vulnerabilities in the susceptible these programs are to fraud.
Department of Labor’s Alien Labor Certification Programs,
Report No. 06-03-007-03-321 (September 30, 2003), Finally, DOL has established a risk-based process
available at: https://www.oig.dol.gov/public/reports/ to determine which H-2A and H-2B applications
oa/2003/06-03-007-03-321.pdf to audit. The new selection process identifies
21
Overview of Vulnerabilities and Challenges in Foreign appropriate risk factors based on adjudication
Labor Certification Programs, Report No. 06-21-001-03- experience and available H-2A and H-2B application
321 (November 13, 2020), available at: https://www.oig. processing data. DOL has implemented the process
dol.gov/public/reports/oa/2021/06-21-001-03-321.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 19
Significant Concerns
and started the audits. Because the process is still Savings Plan (TSP) assets. FERSA requires EBSA
new, it is difficult for ETA to determine whether the to conduct regular compliance audits to determine
applications audited were those most likely to result whether the Federal Retirement Thrift Investment
in violations eligible for employer debarment. Board (FRTIB), an independent agency, is fulfilling
its fiduciary duties and properly safeguarding
Protecting the Security of Employee TSP participants’ assets; however, EBSA has no
Benefit Plan Assets legal authority to compel FRTIB to implement its
recommendations.
The OIG remains concerned about the Employee
Benefits Security Administration’s (EBSA) ability Managing Medical Benefits in the
to protect the benefit plans of about 158 million Office of Workers’ Compensation
workers, retirees, and their families under the Programs
Employee Retirement Income Security Act (ERISA)
of 1974. In particular, the OIG is concerned about The OIG has concerns about the ability of the
the statutory limitations on EBSA’s oversight Office of Workers’ Compensation Programs’
authority and inadequate resources to conduct (OWCP) to effectively manage rising home health
compliance and enforcement. A decades-long care costs in the Energy Employees Occupational
challenge to EBSA’s compliance program, ERISA Illness Compensation Program Act (Energy
provisions allow billions of dollars in pension assets Workers) program, and about the use and cost
to escape full audit scrutiny. In 2013, we reported22 of pharmaceuticals in the Federal Employees’
that as much as $3.3 trillion in pension assets, Compensation Act (FECA) program. The
including an estimated $800 billion in hard-to-value Department needs to make sure it has controls
alternative investments, held in otherwise regulated in place to ensure that the medical benefits it
entities such as banks, received limited-scope provides to energy workers and FECA program
audits that provided few assurances to participants claimants are safe, effective, medically necessary,
regarding the financial health of their plans. EBSA and cost-effective.
needs to focus its limited available resources on
investigations that are most likely to result in the In the Energy Workers program, with an aging
deterrence, detection, and correction of ERISA claimant population and an increased demand for
violations, particularly given the number of benefit home health care services, there is a potential
plans EBSA oversees relative to the number of for providers to exploit these benefits through
investigators it employs. Finally, EBSA lacks the unauthorized or unnecessary billing. Since 2010,
authority under the Federal Employees’ Retirement home health care costs paid by the Energy Workers
System Act (FERSA) to effectively oversee more program have grown from $100 million to more than
than $769.4 billion in federal employee Thrift $675 million, amounting to 74 percent of all medical
benefits paid by the program in Fiscal Year (FY)
22
EBSA Needs to Provide Additional Guidance and
2020. OWCP needs to continue its efforts to analyze
Oversight to ERISA Plans Holding Hard-to-Value
home health care billing for abusive practices and to
Alternative Investments, Report No. 09-13-001-12-121
identify and refer allegations involving potential fraud
(September 30, 2013), available at: https://www.oig.dol.
or abuse to the OIG for further investigation.
gov/public/reports/oa/2013/09-13-001-12-121.pdf
20 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Significant Concerns
In the FECA program, we are currently conducting on coal) is not sufficient to cover annual benefit
an audit to determine if OWCP effectively managed obligations to meet administrative costs and to
pharmaceutical spending from FY 2015 to FY service past debt. The BLDTF expenditures have
2020. Past audits have identified internal control consistently exceeded revenue and it has essentially
weaknesses related to OWCP’s management of borrowed with interest from the U.S. Department
pharmaceuticals. For example, OWCP allowed of the Treasury’s (Treasury) general fund almost
increases in billing statements for compounded every year since 1979. According to DOL’s FY 2021
drugs to go undetected and failed to identify the Agency Financial Report, the BLDTF had to borrow
overuse of opioids. Given the high risk of fraud approximately $2.3 billion to cover its expenditures,
related to prescription payments, OWCP needs which included debt and interest payments. As of
to analyze and monitor FECA program costs to September 30, 2021, the BLDTF was carrying close
promptly detect and address emerging issues before to a $6.1 billion deficit balance, which is projected
they manifest into material concerns. to grow to nearly $13 billion (in constant dollars) by
September 30, 2046.
Consistent with prior audit recommendations by
the OIG, OWCP imposed restrictions on opioid The excise tax that funds the BLDTF is levied on
prescriptions in September 2019. In addition, in domestic sales of coal mined in the United States.
March 2021, OWCP contracted with a pharmacy On January 1, 2022, the temporary increased
benefits manager (PBM) that will be responsible tax rates of $1.10 per ton of underground-mined
for pharmaceutical transactions, including coal and $0.55 per ton of surface-mined coal sold
implementation of FECA eligibility determinations were reduced to the rates originally set when the
and pricing for pharmaceutical drugs. OWCP needs trust fund was established in 1978 at $0.50 per
to provide adequate oversight over the PBM to ton of underground-mined coal and $0.25 per ton
ensure that it is providing the most cost-effective and of surface-mined coal. The House Committee on
safe medical benefits. OWCP should also continue Education and Labor introduced the bill, Black
to monitor the COVID-19 pandemic and potential Lung Benefits Disability Trust Fund Solvency Act
impacts on its ability to provide timely and effective of 2022, to extend the temporary excise tax rates
benefits to injured workers. for 10 years through December 31, 2031, but it has
not yet been enacted in law. The excise tax rate
Ensuring the Solvency of the Black reduction plus the reduction in coal production will
Lung Disability Trust Fund result in decreased cash inflows to the BLDTF. The
Congressional Research Service reported in 2019
Miners and their dependent survivors receive lifetime that “the decline in the excise tax rates will likely put
benefits when awarded under the Black Lung additional financial strain on a trust fund that already
Benefits Act. Mine operators pay these benefits borrows from the general fund to meet obligations.”23
when possible, and the Black Lung Disability Trust
Fund (BLDTF) pays the benefits when a miner’s
23
Congressional Research Service, The Black Lung
former employer does not or cannot assume liability. Program, the Black Lung Disability Trust Fund, and the
The OIG’s primary concern is that the current annual Excise Tax on Coal: Background and Policy Options,
income of the BLDTF (primarily from an excise tax Report No. R45261 (January 18, 2019), available at:
https://crsreports.congress.gov/product/pdf/R/R45261/9
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 21
Significant Concerns
Securing and Protecting Information
Management Systems
We remain concerned about the Department’s
ability to safeguard its data and information
systems. The Department’s agencies rely on its
information technology (IT) systems to obtain and
create vast amounts of information and data in
carrying out their missions, and included in these
data are the PII and personal health information
of the public, including federal employees. Over
the past several years, the Department has made
significant changes in the way it provides IT
services to its program agencies. These changes
included transitioning from a program agency-
operated model to a shared services model,
centralizing information technology under the Office
of the Assistant Secretary for Administration and in the performance of security control assessments,
Management. While these changes have made account management controls, configuration
improvements in managing the Department’s management, and maintenance of system security
information technology, we continue to have plans. These deficiencies continue to hinder the
concerns in the following areas: Department in identifying security weaknesses;
• information system security, protecting its systems and data; and detecting,
responding to, and recovering from incidents.
• supply chain,
• cloud/third party, While Supply Chain Risk Management (SCRM)
• end user/remote security. has been an on-going concern, recent cyber
attacks, such as the 2020 Solar Winds attack,
Securing the Department’s information systems which took advantage of the supply chain
remains a concern as we continue to identify process, has increased awareness and related
recurring deficiencies in the Department’s efforts concerns throughout the industry and the federal
to manage and implement security controls government. As a new domain for our annual
within identity and configuration management. information security testing, we determined that
In addition, we determined the Department has DOL has not adequately defined SCRM policies,
not adequately implemented the technology tools procedures, and strategies.
required to manage and monitor IT security.
Recurring deficiencies were identified in four of The Department continues to move its information
the five information security functional areas (as systems to a shared services model and expand
defined by the National Institute of Standards and its use of cloud and third-party providers for its
Technology Cybersecurity Framework) and occurred information systems, infrastructure, and services.
22 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Significant Concerns
DOL’s ability to provide oversight and management These areas of concern represent ongoing risks
required of these systems and services is still an to the confidentiality, integrity, and availability of
issue. We continue to identify deficiencies in the DOL’s information systems, which are necessary
Department’s oversight of information systems to support the Department’s mission. Our concern
managed and/or operated by a third-party on is whether DOL can implement the necessary
behalf of the Department. As DOL continues this strategies and tools to provide sufficient capability
transition, the Department’s ability to provide the and effective security for the Department’s data
oversight and to retain the specialized knowledge and information systems as well as to support the
and expertise required to protect and manage execution of its mission.
its systems, including the contracted systems,
remains at risk. Our recent reviews identified Improving Job Corps’ Procurement
inadequate oversight of continuous monitoring Process
reviews and third-party systems. Also, prior
year recommendations regarding validation of Job Corps spends about $1 billion on goods
annual third-party and cloud service provider and services annually for 121 centers and is
assessments and continuous monitoring training currently transitioning center operations from
remained unimplemented. cost reimbursement to fixed-price contracts.
The Department believes that this transition will
As we return to the office, the Department is lower government risk, reduce the administrative
changing its work and IT landscape to significantly burden, generate more pre-award efficiencies, and
expand remote and telework operations for its encourage more competition for contracts. Increased
employees. This expansion raises our concern competition among contractors should lead to better
with the DOL’s ability to secure the changing contractor performance with fewer staffing shortages
and expanding endpoint security requirements. and improved services, including those for centers’
In the past few years, more DOL employees are safety and security.
teleworking and more computers are connected
remotely or connected as a service to primary We are concerned about the transition to fixed-
office locations. DOL needs to ensure the price contracting because prior OIG work in this
endpoint security between all connection points area found that Job Corps procurement processes
and review data transmission. Network access did not ensure the best value for taxpayers.24 As
control becomes less coordinated as different the Department moves to fixed-price contracting,
“software as a service” (SaaS) methods and non- the Department must continue to ensure its
centralized systems are required to be managed contract requirements are well developed, contract
independently. Unpatched systems are continual competition is fair, and sound post-award oversight
targets and patching may or may not be a portion is used to quickly ameliorate deficiencies and poor
of a service rather than a direct responsibility. performance.
Without the technical, contractual, and wider
scoped training, cyberattacks and data fraud are 24
Job Corps National Contracting Needs Improvement
due to increase with the shift in working patterns to Ensure Best Value, Report No. 26-13-004-03-370
and new remote services. (September 27, 2013), available at: https://www.oig.dol.
gov/public/reports/oa/2013/26-13-004-03-370.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 23
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 (SWA) 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.
OIG OVERSIGHT OF THE UI paid to the right person in the correct amount.
PROGRAM Each SWA:25
• administers a separate UI program under its
BACKGROUND laws, but follows uniform guidelines established
by federal law;
The OIG has remained committed to meeting
• establishes requirements for eligibility, benefit
the challenges created by the COVID-19
amounts, and the length of time that benefits can
pandemic and to assisting DOL and Congress
be paid; and
in improving the efficiency and integrity of the
UI program. Strengthening the UI program to • manages the personnel and system resources to
prevent fraud before it occurs and to detect it administer their respective programs.
when it does are key objectives to ensure that
unemployed workers expeditiously receive UI benefits are generally funded by state employer
much-needed benefits while safeguarding tax taxes with administrative costs funded by the
dollars directed toward that goal. federal government. The UI program requires
states to make weekly benefit payments while
OVERVIEW OF THE UI PROGRAM ensuring claimants meet eligibility requirements.
Extensions and expansions of coverage and
The UI program is a joint federal-state program benefits, such as those provided by the CARES
that is the first economic line of defense against Act and subsequent legislation, are normally
the collective impact of unemployment. The funded by the federal government.
program acts as a safety-net for individuals who
25
There are 53 SWAs, including the 50 states, the U.S.
lose their jobs through no fault of their own. The
Virgin Islands, Puerto Rico, and the District of Columbia.
UI program is required to make timely weekly
The CARES Act also provided certain UI benefits to
benefit payments to provide needed assistance
American Samoa, Commonwealth of the Northern Mariana
to unemployed workers. It is equally important
Islands, Federated States of Micronesia, Guam, Marshall
that the program have sufficient controls in place
Islands, and the Republic of Palau, provided the territory
to quickly determine that benefits are or were
signs an agreement with the Department.
26 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
DOL’s ETA is the federal agency responsible for anticipating and addressing the increased risk that
providing program direction and oversight. The OIG came with the expanded funding was also vital to
conducts independent oversight of the UI program meeting the intent of the act. As the OIG’s prior
through audits to strengthen the integrity and audit work has shown, quickly deploying funds can
efficiency of the program and criminal investigations result in shortcomings in the effective and efficient
to detect and deter large-scale fraud. The OIG’s implementation of stimulus programs. For example,
federal criminal investigations are time and resource- a 2011 audit report 27 found states took over a year
intensive and one of the last lines of defense in to spend most of the American Reinvestment and
safeguarding the UI program from fraud. Recovery Act of 2009 (Recovery Act) funding
available for emergency staffing, and at least 40
OIG SIGNIFICANT CONCERNS percent of funding for this purpose was unspent
after 15 months. In addition, a separate audit report
The OIG has repeatedly reported significant concerns on the Recovery Act 28 found $1.3 billion of the $7
with DOL and SWA’s ability to deploy program billion DOL provided to states for UI modernization,
benefits expeditiously and efficiently while ensuring including IT modernization, would likely not have
integrity and adequate oversight, particularly in been spent before their period of availability
response to national emergencies and disasters. The expired. To access these funds, states had to
OIG reiterated these concerns following the meet certain UI law modernization criteria; once
economic downturn created by the pandemic and the accessed, the funds could be spent for several
unprecedented levels of federal funding allocated to purposes including to modernize IT systems. Of
the UI program, currently estimated at approximately the funds spent from the $7 billion, states did
$872.5 billion. Less than a month after the CARES not always take advantage of the opportunity to
Act passed, we published an advisory report26 modernize their IT systems.
outlining areas of concern that ETA and the states
should consider as they implemented the UI To implement the new UI programs authorized
provisions included in the CARES Act. Our by the CARES Act in March 2020, states needed
identification of these areas represents years of work sufficient staffing and system resources to manage
relating to DOL’s UI program, including the use of the extraordinary increases in the number of claims
prior stimulus funds and response to past disasters. and payments. Since the start of the pandemic, our
Deploying Benefits Expeditiously and 27
Recovery Act: DOL Could Have Better Monitored the
Efficiently Use of Re-employment Services Funds to Adhere to
Standards for Transparency and Accountability, Report
No. 18-11-005-03-315 (March 31, 2011), available at:
Rapid deployment of CARES Act funding was
https://www.oig.dol.gov/public/reports/oa/2011/18-11-005-
critical in helping workers in need. However,
03-315.pdf
26
CARES ACT: Initial Areas of Concern Regarding 28
Recovery Act: More Than $1.3 Billion in Unemployment
Implementation of Unemployment Insurance Provisions Insurance Modernization Incentive Payments Are Unlikely
Report No. 19-20-001-03-315 (April 21, 2020), available to Be Claimed by States, Report No. 18-10-012-03-315
at: https://www.oig.dol.gov/public/reports/oa/2020/19-20- (September 30, 2010), available at: https://www.oig.dol.
001-03-315.pdf gov/public/reports/oa/2010/18-10-012-03-315.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 27
Worker and Retiree Benefit Programs
audit work confirmed the Department and states identified that it took, on average, 38 days for
continued to face challenges in these areas as the first payment after the CARES Act passed.
they endeavored to implement the new temporary Also, we identified delays in payments for two
UI programs authorized by the CARES Act. State other new programs: it took 25 days for the
preparedness through staffing and systems was Federal Pandemic Unemployment Compensation
one of the six areas we reported in April 2020 as a (FPUC) program and 50 days for the Pandemic
continued challenge for the Department and states. Emergency Unemployment Compensation (PEUC)
program.31 Continued programmatic weaknesses
Furthermore, we also reported on the program led to workers unemployed through no fault of their
that posed the greatest risk to the UI system, own suffering lengthy delays in receiving benefits.
the Pandemic Unemployment Assistance (PUA)
program. PUA’s expanded coverage for a population History of Improper Payments,
of claimants who were traditionally ineligible Including Fraud
to receive UI benefits29 presented significant
challenges to states as they designed and For more than 20 years, the OIG has reported
implemented processes to determine initial and on the Department’s challenges to measure,
continued program eligibility. The OIG reported report, and reduce improper payments in
the risk of fraud and improper payments was the UI program. Indeed, the UI program has
even higher under PUA because claimants could experienced some of the highest improper
self-certify their eligibility for UI and alerted ETA payment rates across the federal government.
to establish methods to detect fraud and recover The reported improper payment estimate for the
improper payments. regular UI program has been above 10 percent
for 14 of the last 18 years.
Our subsequent reports identified continued
programmatic weaknesses in each of these The UI program requires states to make
same areas. For example, the OIG had audited weekly benefit payments while ensuring
the Disaster Unemployment Assistance (DUA) claimants meet eligibility requirements. A
program and found the Department had not SWA may determine a payment is improper
established adequate controls to ensure benefits after a claimant receives benefits based on
were paid timely.30 Similarly, for PUA, we new information that was unavailable when
the SWA approved the benefit payment or as
29
The new PUA program extended unemployment benefits a result of the requirement that claimants be
to self-employed, independent contractors, those with provided with due process prior to stopping
limited work history, and other individuals not traditionally payment of benefits. Improper payments have
eligible for unemployment benefits who were unable to occurred as a result of four top causes:
work as a direct result of COVID-19.
31
30
ETA Should Do More to Assist Vulnerable States Also, the 12 states we selected for in-depth analysis
Prepare for Disaster Unemployment Assistance were generally unable to demonstrate they met the
Program Implementation, Report No. 04-20-002-03-315 payment promptness standard ETA established for regular
(September 29, 2020), available at: https://www.oig.dol. UI payments, which is to pay 87 percent of claimants
gov/public/reports/oa/2020/04-20-002-03-315.pdf within 14 or 21 days.
28 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
• Claimants Do Not Meet Work Search The CARES Act provided significant funding to the
Requirements32 – Claimants who fail to state-federal UI program, which resulted in hundreds
demonstrate they meet state requirements for of billions of dollars in additional payments. New
work search; UI programs under the CARES Act meant more
• Benefit Year Earnings – Claimants who workers qualified,33 all unemployed workers received
continue to claim benefits after they return to a supplement per week in addition to their regular
work, or who misreport earnings during a week in benefit amount, and individuals who exhausted
which benefits are claimed; their regular unemployment benefits were provided
additional weeks of unemployment compensation.
• Employers Do Not Timely Report Employees’
Also, UI claims could be backdated to the beginning
Separation – Employers or their third-party
of the eligibility period. With the legislative
administrators who fail to provide timely and
extensions, claimants could receive up to 79 weeks
adequate information about why individuals
of UI payments.
separated from their employment; and
• Fraud – Claims based on fraudulent schemes, In June 2020, the OIG provided a member
such as those perpetrated during the pandemic. briefing34 and a statement for the record35 to
Congress highlighting challenges DOL and SWAs
A PERFECT STORM faced in administering and overseeing the UI
program as well as the substantially increased
Following the start of the pandemic in the United fraud risk. The expanded coverage offered under
States in early 2020, unemployment compensation the PUA program posed significant challenges
claims rose exponentially to historically to states as they implemented processes to
unprecedented levels. Prior to the pandemic, determine initial and continued program eligibility
numbers of UI claims were low: on March 14, 2020, for participants. The reliance solely on claimant
the Department reported 282,000 initial claims.
Within 2 to 3 weeks, initial claims rose to 10 times 33
The PUA program provided UI benefits to those not
pre-pandemic levels, far higher than state systems traditionally eligible for UI who are unable to work as a
were designed to handle. Within 5 months, through direct result of the public health emergency.
August 15, 2020, the Department reported 57.4 34
“Subcommittee on Government Operations Briefing
million initial claims, the largest increase since the with the Inspector General for the Department of Labor.”
Department began tracking UI data in 1967. Statement of Scott S. Dahl, Inspector General, U.S.
Department of Labor House Committee on Oversight and
32
The Middle Class Tax Relief and Job Creation Act of Reform; Subcommittee on Government Operations (June
2012, requires that individuals receiving UI benefits must 1, 2020), available at: https://www.oig.dol.gov/public/
be able to work, available to work, and actively seeking testimony/20200601.pdf
35
work, as a condition of eligibility for regular compensation “Unemployment Insurance During COVID-19: The
for any week. Accordingly, states generally require that CARES Act and the Role of Unemployment Insurance
unemployed workers demonstrate they were actively During the Pandemic.” Statement for the Record of Scott
seeking work. Work search overpayments occur when S. Dahl, Inspector General, U.S. Department of Labor
states pay UI claimants who do not demonstrate that they Senate Committee on Finance (June 9, 2020), available
were actively seeking work. at: https://www.oig.dol.gov/public/testimony/20200609.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 29
Worker and Retiree Benefit Programs
self-certifications without evidence of eligibility has been applied to two of three key pandemic UI
and wages during the program’s first 9 months programs, PEUC and FPUC. ETA states it will report
rendered the PUA program extremely susceptible the third program, PUA, in 2022.
to improper payments and fraud.
Applying the 18.71 percent to the estimated $872.5
The unprecedented infusion of federal funds into the billion in pandemic UI payments,36 at least $163
UI program gave individuals and organized criminal billion in pandemic UI benefits could have been paid
groups a high-value target to exploit. That, combined improperly, with a significant portion attributable to
with easily attainable stolen personally identifiable fraud. Based on the OIG’s audit and investigative
information and continuing UI program weaknesses work, the improper payment rate for pandemic UI
identified by the OIG over the last several years, programs is likely higher than 18.71 percent.
allowed criminals to defraud the system. Because
many states were not prepared to process the OIG PANDEMIC INVESTIGATIVE WORK
extraordinary volume of new UI claims and struggled
to implement new UI programs, many internal The volume of UI investigative matters currently
fraud controls that had been traditionally used or under review is unprecedented in the OIG’s
recommended for the processing of UI claims were history. Prior to the pandemic, the OIG opened
not initially implemented. This created a situation approximately 120 UI investigative matters annually.
where fraudsters had a high-reward target where Since the pandemic started, the OIG has received
an individual could make a fraudulent claim with more than 144,000 UI fraud complaints from the
relatively low risk of being caught. For example, as U.S. Department of Justice’s (DOJ) National Center
time went on, one fraudster could have been issued for Disaster Fraud (NCDF) and has independently
several UI debit cards, with tens of thousands of opened more than 39,000 investigative matters
dollars on each card. concerning UI fraud. That is an increase of more
than 1,000 times in the volume of UI work that
Estimating the overall improper payment rate we are facing. UI investigations now account for
for the pandemic UI programs is critical for the approximately 94 percent of the OIG investigative
efficient operation of the program. The OIG case inventory, compared to approximately 11
maintains that ETA and the SWAs, under their percent prior to the pandemic.
program operating responsibilities, must determine
the improper payment rate, including the fraud In response to the extraordinary increase in
rate, for pandemic UI programs. The Inspector oversight demands, the OIG hired additional criminal
General Act of 1978 prohibits the OIG from
undertaking program operating responsibilities. 36
ETA’s reported improper payment rate estimate of 18.71
In August 2020, we recommended that ETA percent does not include the PUA program. However,
estimate the improper payment rate for pandemic it is the most current improper payment rate from ETA.
UI programs. In December 2021, consistent with Furthermore, PUA had control weaknesses that may have
our recommendation, ETA reported an improper facilitated comparable or greater improper payments.
payment rate of 18.71 percent. The OIG notes this Therefore, applying ETA’s rate to all of the estimated
estimate is based on the regular UI program and $872.5 billion in CARES Act UI payments including PUA
would equate to at least $163 billion in improper payments.
30 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
investigators; increased the caseload of investigators regarding fraud trends, best practices, red
already onboard; deployed federal and contract staff flags, and more.38
to review DOL and SWAs’ efforts; and strengthened
our data analytics program. In addition, we took When the OIG identifies anti-fraud measures that
several other actions to augment our efforts, may help the program detect and stop fraud, we
including the following: share them with the Department and SWAs as
• initiated the development of a National appropriate. For example, in alert memoranda issued
Unemployment Insurance Fraud Task Force in February39 and June 2021,40 our
(NUIFTF),37 alongside DOJ; investigators, auditors, and data scientists
collaborated to identify nearly $17 billion of
• collaborated with DOJ on the strategic
potentially fraudulent UI benefits paid in four high risk
assignment of 12 term-appointed assistant
areas to individuals with Social Security numbers:
United States attorneys assigned solely to
(1) filed in multiple states, (2) of deceased persons,
prosecute UI fraud;
(3) of federal prisoners, and (4) used to file for UI
• established a multi-disciplinary Pandemic Rapid claims with suspicious email accounts. We shared
Response Team within the OIG; our methodology and the underlying data with the
• appointed a National UI Fraud Coordinator to Department and the SWAs, and we recommended
manage our national investigative response to they establish effective controls to mitigate fraud
UI fraud; and other improper payments to ineligible claimants,
including the four high-risk areas identified in the
• appointed seven Regional UI Fraud
Coordinators to partner with SWAs and
38
The OIG has issued or assisted in issuing: UI fraud
federal, state, and local law enforcement on
consumer protection guide; UI fraud investigations
UI fraud matters in their geographic areas
guide; UI fraud alert for state/local law enforcement; UI
of responsibility;
text message phishing alert; UI fraud and phishing alert;
• leveraged resources from the Council of the
UI fraud and identity theft alert; and UI detection and
Inspectors General on Integrity and Efficiency
mitigation alert for financial institutions. Available at: https://
(CIGIE), Pandemic Response Accountability
www.oig.dol.gov/OIG_Pandemic_Response_Portal.htm
Committee (PRAC); 39
Alert Memorandum: The Employment and Training
• collaborated with states’ auditors to help develop Administration Needs to Ensure State Workforce Agencies
their audit strategies for the CARES Act UI Implement Effective Unemployment Insurance Program
programs; and Fraud Controls for High Risk Areas, Report No. 19-21-002-
• implemented an extensive outreach and 03-315 (February 22, 2021), available at: https://www.oig.
education program targeted to SWAs, the dol.gov/public/reports/oa/2021/19-21-002-03-315.pdf
Department, financial institutions and their
40
Alert Memorandum: The Employment and Training
associations, law enforcement agencies, and Administration Needs to Issue Guidance to Ensure State
the public to inform and raise awareness Workforce Agencies Provide Requested Unemployment
Insurance Data to the Office of Inspector General, Report
37
National Unemployment Insurance Fraud Task Force, No. 19-21-005-03-315 (June 16, 2021), available at:
available at: https://www.justice.gov/coronavirus/national- https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-
unemployment-insurance-fraud-task-force 03-315.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 31
Worker and Retiree Benefit Programs
In one recent OIG investigation, 11 members and
associates of the Brooklyn-based Woo Gang were
charged with a multi-million-dollar pandemic UI
fraud scheme.41 In another recent OIG investigation,
a one-time California Employment Development
Department employee was sentenced to more than
5 years in prison for fraudulently obtaining nearly
$4.3 million in pandemic relief funds.42
Working with Domestic and
International Law Enforcement Partners
Early in the pandemic, the OIG worked with the
DOJ to create the NUIFTF, a nine agency federal
task force focused on law enforcement intelligence
sharing, deconfliction, joint national and regional
messaging, and the effective use of investigative
and prosecutorial resources. The NUIFTF has also
worked closely with partners at the International
Organized Crime Intelligence and Operations
Center (IOC 2) to develop a deconfliction process to
coordinate investigative information across federal
During the execution of a UI fraud search warrant, law enforcement agencies. Through data analytics
OIG agents recovered approximately 30 UI and a leads generation process, the NUIFTF and
debit cards, over $500,000 in cash, and several IOC-2 partner agencies have identified significant
notebooks containing PII.
fraud being committed against the UI program by
memoranda. The data provided to DOL and the 41
Department of Justice, “11 Members and Associates of
states included more than 3 million suspicious the Brooklyn-Based Woo Gang Charged with Multi-Million
claims. We are currently in the process of updating Dollar COVID-19 Unemployment Insurance Fraud,” Press
our UI dataset. Once that process is complete, Release, February 17, 2022, available at: https://www.
we plan to examine whether SWAs took effective oig.dol.gov/public/Press%20Releases/11_Members_
measures to address these four high-risk areas. and_Associates_of_the_Brooklyn-Based_Woo_Gang_
Charged_with_Multi-Million_Dollar_COVID.pdf
As of February 2022, our UI investigations have 42
Department of Justice, “One-Time EDD Employee
resulted in: the execution of more than 450 search Sentenced to More Than 5 Years in Prison for Fraudulently
warrants, 749 UI fraud related indictments, and over Obtaining Nearly $4.3 Million in COVID Relief Funds,”
$830 million in investigative monetary results. We Press Release (February 4, 2022), available at: https://
have also referred over 8,000 fraud matters that do www.oig.dol.gov/public/Press%20Releases/One-Time_
not meet federal prosecution guidelines back to the EDD_Employee_Sentenced_to_More_Than_5_Years_in_
SWAs for further action. Prison_for_Fraudulently_Obtaining_Nearly.pdf
32 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
domestic and international criminal organizations. DOJ and the USSS to collect that data and work
Many of these include street-level criminal with those financial institutions to return fraudulent
organizations with ties to illegal guns and drugs. funds to SWAs. The OIG and its law enforcement
These investigations are ongoing and actively being partners are working with more than 350 financial
investigated through the NUIFTF. institutions in response to our request.
The OIG has also been very engaged on DOJ’s The PRAC has also played a pivotal role in
COVID-19 Fraud Enforcement Task Force amplifying the ability of OIGs to share information
(CFETF). We also have representation on CFETF and conduct internal and external outreach to
subcommittees involving communication, forfeiture, stakeholders that have been impacted by pandemic
and data, and co-chairs the task force’s criminal fraud. For example, the OIG worked with the PRAC
enterprise subcommittee. on social media tool kits related to money mule
activity and erroneous Forms 1099-G that were
The OIG has also participated in other initiatives that issued to victims of UI fraud. The OIG has also
have fallen outside the framework of the NUIFTF worked with the PRAC, DOJ, and USSS to create a
and CFETF. For example, in 2020 and 2021, the OIG web-based survey where financial institutions can
supported DOJ’s annual Money Mule Initiative,43 more broadly report UI and other types of pandemic
which aimed to raise awareness about and suppress fraud. This information is being collected by the
money mule activity. The OIG conducted extensive PRAC, analyzed by its partners, and, if appropriate,
internal and external outreach regarding money sent to field personnel for further action.
mules and identified and targeted money mules in
coordination with DOJ and other partner agencies. The OIG, through its membership in IOC-2, has also
been engaged with several allied national police
In addition, the OIG issued alerts to financial agencies to strategize about pandemic-related
institutions about UI fraud both on its own and fraud and how to best establish practices to share
jointly with its partners, such as U.S. Secret information. The issue of pandemic fraud has not
Service (USSS), Financial Crimes Enforcement only been an issue for the United States, but it
Network (FinCEN), and NUIFTF. One such joint has also negatively impacted our foreign partners’
OIG/USSS alert, “Detection and Mitigation of pandemic entitlement programs. We have conducted
Unemployment Insurance Fraud Guidance for outreach and education related to pandemic fraud,
Financial Institutions,” served as a framework for including UI fraud, with our Five Eyes partner
the recovery of millions of dollars of fraudulent UI countries as participants on the International Public
funds being held by financial institutions. Later, in Sector Fraud Forum.44
2021, the OIG authored a NUIFTF alert that was
issued through FinCEN to financial institutions 44
The Five Eyes countries include Australia, Canada,
requesting that they identify funds they froze due to New Zealand, the United Kingdom and the United States.
suspicion of fraud. The OIG created a process with The International Public Sector Fraud Forum consists of
representatives from organizations from the Five Eyes
43
Additional information about DOJ’s Money Mule Initiative countries, whose collective aim is to share best and
available at: https://www.justice.gov/civil/consumer- leading practices in fraud management and control across
protection-branch/money-mule-initiative public borders.
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 33
Worker and Retiree Benefit Programs
The OIG, IOC-2, and our federal law enforcement ETA and the states to consider while implementing
partners have identified numerous instances of CARES Act UI provisions: (1) state preparedness
international organized criminal groups engaged in UI (including staffing and systems), (2) initial eligibility
fraud. We will continue to work with our domestic and determination, (3) benefit amount, (4) return to work,
international law enforcement partners on these matters. (5) improper payment detection and recovery, and (6)
program monitoring. Our identification of these areas
OIG PANDEMIC OVERSIGHT WORK represents at least 16 years of work relating to DOL’s
UI program, including the use of prior stimulus funds
In April 2020, shortly after CARES Act enactment, we and response to past disasters. The advisory report
published our Pandemic Response Oversight Plan45 summarized dozens of OIG recommendations to
detailing how the OIG would conduct its pandemic implement corrective action in these areas.
oversight, with a significant focus on the UI program.
We designed our four-phased pandemic response We have issued several subsequent reports,
oversight plan to provide recommendations to DOL including alert memoranda for urgent concerns,
to address current and emerging vulnerabilities involving the UI program, including:
with the pandemic response and to prevent similar • In May 2020, we issued an alert memorandum47
vulnerabilities from hampering preparedness for describing our concerns regarding claimant self-
future emergencies. Phases 1 and 2, which are certification in the PUA program. In our view,
complete, focused on DOL’s plans, guidance, and reliance on such self-certifications rendered
initial implementation of administration and oversight the PUA program highly vulnerable to improper
activities. Phase 3 audit work, assessing program payments and fraud. Subsequent to our work
results and more, is ongoing. Our Phase 4 work plans identifying fraud risks associated with self-
include reporting on lessons learned for UI, worker certification in the PUA program, including this
safety and health, and employment and training. alert memorandum and the next two described
reports, Congress took action to require
At the start of the pandemic, we examined past audits supporting documentation to improve SWAs’
including those related to the Recovery Act and the abilities to ensure proper claimant eligibility and
DUA program, and we assessed comparable lessons to mitigate fraud.
learned as applicable to the UI program. As a result,
• In August 2020, we reported48 states did not use
in April 2020, we issued the previously noted advisory
existing tools effectively to combat fraud and
report46 identifying six initial areas of concern for
47
Alert Memorandum: The Pandemic Unemployment
45
Pandemic Response Oversight Plan (updated March Assistance Program Needs Proactive Measures to Detect
21, 2022), available at: https://www.oig.dol.gov/public/ and Prevent Improper Payments and Fraud, Report No.
oaprojects/Updated%20Pandemic%20Response%20 19-20-002-03-315 (May 26, 2020), available at: https://www.
Oversight%20Plan%202022%20for%20Publication.pdf oig.dol.gov/public/reports/oa/2020/19-20-002-03-315.pdf
COVID-19: More Can Be Done to Mitigate Risk to
46
Advisory Report: CARES Act: Initial Areas of Concern 48
Regarding Implementation of Unemployment Insurance Unemployment Compensation Under The CARES Act,
Provisions, Report No. 19-20-001-03-315 (April 21, Report No. 19-20-008-03-315 (August 7, 2020), available
2020), available at: https://www.oig.dol.gov/public/reports/ at: https://www.oig.dol.gov/public/reports/oa/2020/19-20-
oa/2020/19-20-001-03-315.pdf 008-03-315.pdf
34 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
other improper payments. We also stated ETA memorandum51 where we increased that
should work with the OIG to obtain access to identification to almost $17 billion in potential
state claimant data that could be used to identify fraud in these same four high-risk areas. The
and disrupt fraudulent schemes that threaten the potentially fraudulent UI payments we identified
integrity of UI programs, including those under occurred during a limited time period, from
the CARES Act. March 2020 to October 2020, and covered only
• In October 2020, we reported49 where states the four noted high-risk areas.
confirmed our concerns about fraud in the UI • In May 2021, we reported52 that DOL and states
program. Specifically, states cited the PUA struggled to implement the three key new UI
self-certification requirement as a top fraud programs that posed the greatest risk for fraud,
vulnerability. Despite states’ deployment waste, and abuse: PUA, PEUC, and FPUC.
of strategies and tools for mitigating fraud, Specifically, DOL’s guidance and oversight did not
53 percent of respondents still cited fraud ensure states: implemented the programs and
vulnerabilities within the PUA program. States paid benefits promptly, performed required and
reported inherent vulnerability in the PUA self recommended improper payment detection and
certification process, systems issues, and recovery activities, and reported accurate and
inadequate fraud screening tools. complete program activities. This occurred primarily
• In February 2021, we issued an alert because states’ information technology (IT) systems
memorandum 50 that identified more than were not modernized, staffing resources were
$5.4 billion of potentially fraudulent UI insufficient to manage the increased number of
benefits paid in specific high-risk areas as new claims, and, according to state officials, ETA’s
previously mentioned—to individuals with guidance was untimely and unclear.
Social Security numbers: filed in multiple • In September 2021, we reported53 on our
states, of deceased persons, of federal assessment of DOL and states’ strategies
prisoners, and used to file for UI claims 51
Alert Memorandum: The Employment and Training
with suspicious email accounts. In June
Administration Needs to Issue Guidance to Ensure State
2021, we issued a subsequent alert
Workforce Agencies Provide Requested Unemployment
Insurance Data to the Office of the Inspector General,
49
COVID-19: States Cite Vulnerabilities in Detecting Fraud Report No. 19-21-005-03-315 (June 16, 2021), available
While Complying with The CARES Act UI Program Self- at: https://www.oig.dol.gov/public/reports/oa/2021/19-21-
Certification Requirement, Report No. 19-21-001-03-315 005-03-315.pdf
52
(October 21, 2020), available at: https://www.oig.dol.gov/ COVID-19: States Struggled to Implement CARES Act
public/reports/oa/2021/19-21-001-03-315.pdf Unemployment Insurance Programs, Report No. 19-21-
50
Alert Memorandum: The Employment and Training 004-03-315 (May 28, 2021), available at: https://www.oig.
Administration (ETA) Needs to Ensure State Workforce dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
Agencies (SWA) Implement Effective Unemployment 53
Unemployment Insurance Overpayments Related to
Insurance Program Fraud Controls for High Risk Areas, Work Search Underscore the Need for More Consistent
Report No. 19-21-002-03-315 (February 22, 2021), State Requirements, Report No. 04-21-001-03-315
available at: https://www.oig.dol.gov/public/reports/ (September 29, 2021), available at: https://www.oig.dol.
oa/2021/19-21-002-03-315.pdf gov/public/reports/oa/2021/04-21-001-03-315.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 35
Worker and Retiree Benefit Programs
to reduce UI overpayments related to work OIG RECOMMENDATIONS
search—the leading cause of improper
payments prior to the pandemic. We found The OIG has made several recommendations to DOL
ETA and state strategies did not consistently and Congress to improve the efficiency and integrity
reduce UI overpayments related to work search. of the UI program. Key recommendations follow.
The agency was unable to consistently reduce
these overpayments mainly because states had OIG Recommendations to DOL
varying work search laws and requirements,
with some more stringent than others. For OIG Access to Claim and Wage Data
example, in one state, we determined that, on
• Facilitate the OIG’s access to UI claim data for
average during Program Year (PY) 2018,54 a
audit and investigative purposes
claimant could complete one valid work search
contact in as few as 11 seconds. In addition, • Take immediate action to require the National
ETA inappropriately excluded certain types Association of State Workforce Agencies
of overpayments from improper payment (NASWA) to refer information to ETA and
estimates for the UI program. As a result, UI the OIG on suspected fraud, waste, abuse,
improper payment rates were considerably mismanagement, or misconduct
understated for FYs 2017 through 2020.
Staffing and Systems for Prompt Payments
• In November 2021, we issued55 the
during Emergencies
Department a qualified opinion, for the first
time in 25 years, on its consolidated financial • Continue to work with states to develop, operate,
statements and reported one material and maintain a modular set of technological
weakness related to UI COVID-19 funding. capabilities (i.e., staffing and replacing IT legacy
This was partially due to the Department systems) to modernize the delivery of UI benefits
being unable to provide sufficient evidence that is sufficient to manage and process sudden
for $47.3 billion it estimated for UI claims for spikes in claims volume during emergencies or
unemployed weeks that occurred prior to high unemployment
the expiration of the UI pandemic programs • Create a rapid response team consisting of
that were still in appeal or had not yet been federal and state officials capable of providing
processed as of September 30, 2021. technical and other assistance to SWAs impacted
This was also due to unreliable reporting by major disasters
of $4.4 billion in UI benefit overpayments
• Conduct a study to assess: the technological
due to certain states non-reporting of UI
needs of the UI programs to determine the
overpayment activity.
capabilities that need to be upgraded or
54
PYs start July 1 and end June 30 each year; PY 2018
replaced, the features necessary to effectively
started July 1, 2018, and ended June 30, 2019.
respond to rapid changes in the volume of claims
55
FY 2021 Independent Auditor’s Report on the DOL
in times of emergency or high unemployment,
Financial Statements, Report No. 22-22-003-13-001
the capabilities needed to ensure effective and
(November 19, 2021); available at: https://www.oig.dol.
equitable delivery of benefits, and the capabilities
gov/public/reports/oa/2022/22-22-003-13-001.pdf
to minimize fraudulent activities
36 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
• Develop standards for providing clear and • Examine the effectiveness of the Benefit
reasonable timeframes to implement temporary Accuracy Measurement (BAM)56 program contact
programs to establish expectations for prompt verification process to ensure it reflects the
benefit payments to claimants current methods claimants use to seek work
• Inform states that formal and informal warnings are
Controls for Improper Payments not permissible under Federal work search law
• Establish effective controls, in collaboration
with SWAs, to mitigate fraud and other improper Coordination with Congress
payments to potentially ineligible claimants, • Work with Congress to establish legislation
including multistate claimants, claimants who requiring SWAs to cross-match in high-risk
used Social Security numbers of deceased areas, including to individuals with Social
persons and federal prisoners, and claimants Security numbers: filed in multiple states, of
with suspicious email accounts deceased persons, of federal prisoners, and with
• Develop and implement cause-level reduction suspicious email accounts
targets to gauge and monitor the effectiveness of
strategies implemented by states to reduce work DOL Recommendations to Congress
search overpayments
• Include in the UI improper payment estimate: In addition, Congress should consider legislative
(1) overpayments related to work search formal/ proposals included in prior DOL budget requests and
informal warnings; and (2) payments to claimants pass legislation to improve UI program integrity. The
who provide no or insufficient documentation to DOL proposals include the following:
support eligibility with respect to work search • allow the Secretary of Labor greater authority to
• Incorporate the impact of UI improper payments require SWAs to implement UI corrective actions
related to temporary programs, such as those related to performance and integrity;
created by the CARES Act, into the traditionally • require SWAs to use NASWA’s Integrity Data
estimated improper payment rate calculations Hub (IDH) and the State Information Data
• Develop policies and procedures to coordinate Exchange System;
with SWAs to obtain the necessary UI • require SWAs to cross-match UI claims against
program information needed (for DOL financial the National Directory of New Hires (NDNH);
statements) to support related balances and
assumptions and to perform benchmarking and/
56
BAM is a quality control statistical survey used to
or other analyses to validate new assumptions
identify errors and support corrective action in the state UI
system. It usually focuses on the three major UI programs:
Guidance and Assistance to States
regular UI, Unemployment Compensation for Federal
• Assist states with claims, overpayment, and Employees, and Unemployment Compensation for Ex-
fraud reporting to create clear and accurate service members. The BAM data are an estimate of the
information, and then use the overpayment and total improper payments in the UI program, in each state
fraud reporting to prioritize and assist states with and the nation as a whole, based on a statistically valid
fraud detection and recovery examination of a sample of paid and denied claims.
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 37
Worker and Retiree Benefit Programs
• require SWAs to cross-match UI claims with the states will not receive the grants, and the data
U.S. Social Security Administration’s prisoner provided to the OIG will be incomplete. The
database and other repositories of prisoner OIG needs access to all UI program data to
information; effectively do its job.
• allow SWAs to retain 5 percent of UI
overpayment recoveries for program integrity Further, the UI Integrity Center, established
purposes; and by DOL through a cooperative agreement and
operated by NASWA, has continued to develop
• require SWAs to use UI penalty and interest
the IDH to serve as a secure portal for SWAs to
collections solely for UI administration.
cross-match public and private sources of data,
including new tools that will help prevent improper
These legislative proposals are consistent with
payments. DOL is working with NASWA’s Integrity
previous OIG findings and recommendations to
Center to further enhance SWA participation
improve the UI program.
in and use of NASWA’s IDH through additional
guidance and regular communication with SWAs.
DOL’S PROGRESS
On August 31, 2021, the Department announced
While concerns persist within the UI program,
the establishment of the Office of Unemployment
DOL has instituted efforts to focus on program
Insurance Modernization to provide oversight
integrity when implementing the CARES Act
and management of the $2 billion appropriated
and other pandemic-related UI programs. These
to UI initiatives by ARPA. The funding is aimed
efforts include establishing agreements with
at preventing and detecting fraud, promoting
states to comply with all applicable requirements
equitable access, ensuring timely benefits
to receive funds, issuing operating guidance,
payments, and reducing backlogs. Of this $2
and providing technical assistance to SWAs
billion in funding, three grant programs have
individually and through webinars. DOL has
been set up: (1) a $140 million program for fraud
included requirements for SWAs to focus
prevention grants to be awarded to states to
on program integrity in guidance relevant to
cover subscription costs for identity verification
pandemic-related UI funds. In addition, DOL has
tools, establishment and expansion of data
reinforced the need for SWAs to actively work
analytics, and implementation of cybersecurity
with the OIG to address fraud in the UI program.
defense strategies; (2) a separate $260 million
program for equity grants to be awarded to
The Department has facilitated the OIG’s
states to improve customer service and claimant
access to UI data but only for benefit weeks
outreach, reduce claims backlogs, and improve
covered by CARES Act programs and related
access for workers in communities that may
extensions. In addition, ETA has required grant
have historically experienced barriers to access;
recipients to share state UI data with the OIG
and (3) up to $200 million in funding to support
as a condition of the fraud prevention grants
states in improving UI systems and processes
offered under the American Rescue Plan Act of
following a consultative assessment with a team
2021 (ARPA), which will provide such access
of experts provided by DOL.
through December 31, 2023. However, a few
38 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
OIG ONGOING AND PLANNED WORK
The OIG’s efforts to strengthen and protect the UI
program continue. In addition to working with our
law enforcement partners to combat fraud in the
program, we will be issuing additional audit reports
covering critical areas of concern and opportunities
for improvement in the UI program. Planned and in-
progress57 Phase 3 audit work includes:
• ETA’s efforts to ensure UI program integrity;*
• ETA and states’ efforts to address claimants
• state efforts to ensure claimant eligibility;*
using the Social Security numbers of deceased
• DOL’s oversight of emergency UI administrative persons;
transfers to states;*
• ETA and states’ efforts to address claimants
• ETA and state efforts to detect and recover using the Social Security numbers of federal
overpayments;* prisoners;
• adequacy of state IT resources;* • ETA and states’ efforts to address claimants with
• adequacy of state staffing resources;* suspicious email accounts;
• effectiveness of programs for nontraditional • ARPA Equity Grants; and
claimants;* • impact of waivers on UI overpayments, fraud
• effectiveness of the Temporary Full Federal investigations, and recoveries.
Funding program;*
• effectiveness of the Short-Time Compensation For more information about the OIG’s work, please
program;* visit our Pandemic Response Portal.58
• effectiveness of the Mixed Earners
Melrose Man Sentenced to 87
Unemployment Compensation;*
Months in Prison for Unemployment
• effectiveness of the Emergency Unemployment
Insurance Scam
Relief for Governmental Entities and Non-Profit
Organizations program;*
On October 13, 2021, Alan Scott was sentenced
• Pandemic Response Accountability Committee’s to 87 months in prison and more than $340,000
(PRAC) Case Study Project on federal pandemic in restitution to the Massachusetts Department of
response funds in select geographic areas;* Unemployment Assistance (Massachusetts DUA).
• states’ compliance with CARES Act UI reporting
requirements;* Over the course of 6 years, Scott submitted numerous
• ETA and states’ efforts to address multistate fraudulent UI claims with the Massachusetts DUA.
claimants; Scott submitted these claims using his own identity, as
58
Our Pandemic Response Portal is available at: https://
57
Audits in progress are marked with an asterisk (*). www.oig.dol.gov/OIG_Pandemic_Response_Portal.htm
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 39
Worker and Retiree Benefit Programs
well as the identities of various individuals, including Unemployment Insurance Agency system, many of
some who were not eligible for unemployment which were filed using stolen identities. Once the
benefits, as they were incarcerated at the time and claims were filed, the outside actors signaled Hawkins,
could not have been employed as reported. Moreover, who then released payment on the claims in exchange
the fraudulent claims all reported prior employment at for bribes. Hawkins used her insider access to
a non-operational Massachusetts-based business also fraudulently release payment on more than 700 claims,
associated with Scott. As a result of these fraudulent resulting in the fraudulent disbursement of more than
claims, the Massachusetts DUA sent unemployment $3.7 million of federal and state funds intended for
benefits funds to several addresses connected to Scott unemployment assistance during the pandemic. If
and deposited funds into accounts he controlled. Scott every fraudulent claim released by Hawkins had been
also submitted fraudulent Pandemic Unemployment disbursed in full, the resulting loss of federal and state
Assistance claims in the names of others. funds would have exceeded $12 million.
This was a joint investigation with Homeland Security This is a joint investigation with the Federal Bureau
Investigations, the U.S. Postal Inspection Service of Investigation (FBI), the Internal Revenue Service
(USPIS), and the Commonwealth of Massachusetts, Criminal Investigations Division (IRS-CI), U.S. Secret
Department of Unemployment Assistance. United Service (USSS), and USPIS. United States v. Brandi
States v. Alan Scott (D. Massachusetts) Hawkins (E.D. Michigan)
Michigan State Contractor Michigan Resident Pled Guilty to
Sentenced for Role in $3.8 Million Identity Theft and Wire Fraud for
Pandemic Unemployment Insurance Fraudulently Receiving More than $1.6
Fraud Scheme Million in Unemployment Insurance
Benefits
On October 28, 2021, Brandi Hawkins was
sentenced for her role in a multi million dollar On November 10, 2021, Jordan Armstrong pled
UI fraud scheme aimed at defrauding the State guilty to identity theft and wire fraud for his role in a
of Michigan and the U.S. government of funds scheme to defraud numerous states out of more than
earmarked for unemployment assistance during the $1.6 million in UI benefits.
COVID-19 pandemic. Hawkins was sentenced to 58
months in prison and ordered to pay restitution of Between approximately May 2020 and October 2020,
almost $3.8 million. Armstrong filed for pandemic-related UI benefits
using PII fraudulently obtained from victims. In total,
Hawkins was a State of Michigan Unemployment Armstrong filed or attempted to file over 300 claims
Insurance Agency contract employee hired as an for unemployment benefits in 17 states and received
Unemployment Insurance examiner. Hawkins’s more than $1.6 million in fraudulent UI benefits.
duties included reviewing, processing, and
verifying the legitimacy of UI claims. In spring 2020, This is a joint investigation with the FBI and
Hawkins worked with outside actors who entered multiple SWAs. United States v. Jordan Armstrong
numerous false claims into the State of Michigan’s (E.D. Michigan)
40 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
Virginia Woman Responsible for Two Michigan Residents Pled
Defrauding the Federal Government Guilty to Unemployment Insurance
of More than $1.5 Million in Fraud Scheme
Unemployment Benefits Sentenced to
10 Years in Prison On December 8, 2021, Mitchacole Johnson and
Larry Witherspoon pled guilty to wire fraud for
On December 17, 2021, Farren Ricketts was filing more than 66 fraudulent unemployment
sentenced to 120 months in prison and 36 months insurance claims that defrauded multiple states
supervised release due to her June 21, 2021, guilty of more than $1.3 million, with attempted fraud
plea to conspiracy to defraud the United States, mail nearing $3.5 million.
fraud conspiracy, and aggravated identity theft.
Johnson filed a number of claims in her own
Ricketts and her co-conspirators concocted a name, while Witherspoon filed multiple claims
scheme to gather PII and then submit unemployment in the names of people who had names similar
insurance (UI) benefit claims to the Virginia to his own. Both Johnson and Witherspoon filed
Employment Commission for individuals who were their claims using the Social Security numbers of
known to be ineligible to receive such benefits, other people and had the benefits deposited into
including various inmates in Virginia Department of a variety of bank accounts they controlled, some
Corrections facilities. connected to pre-paid debit cards.
Ricketts established a business, “Ricketts Advisory, This was a joint investigation with the FBI and the
LLC.,” and advertised it as a financial services Michigan Unemployment Insurance Agency. United
company that helped with filing pandemic-related UI States v. Mitchacole Johnson and Larry Witherspoon
benefit claims. In addition to receiving UI benefits (E.D. Michigan)
herself, Ricketts charged fees to over 120 of her
co-conspirator ”clients” for the service of filing their Three Members of Robles Park
fraudulent claims. Criminal Enterprise Pled Guilty
to Racketeering and Pandemic
Between May 2020 and February 2021, Ricketts and Unemployment Assistance Fraud
her co-conspirators filed more than 150 fraudulent
claims for pandemic-related unemployment benefits. In December 2021 and January 2022, three
Ricketts created fraudulent documents to support the members of the Robles Park criminal enterprise
claims, including fraudulent IRS forms purporting to pled guilty to numerous charges, including
show pre-pandemic income for many of these filings. racketeering conspiracy, conspiracy to commit
fraud, and aggravated identity theft. Robles Park
This was a joint investigation with the IRS-CI; the is a criminal organization whose members and
City of Norton Police Department, Virginia; and the associates engaged in acts involving murder,
Russell County Sheriff’s Office, Virginia. United assault, intimidation, narcotics trafficking, access
States v. Farren Ricketts (W.D. Virginia) device fraud, identity theft, obstruction of justice,
and other crimes.
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 41
Worker and Retiree Benefit Programs
Tywon Spann, Kareem Spann, and Eriaus Bentley in states outside of Florida. There were more than 10
conspired to conduct and participate in the conduct victims of Thompkins’ scheme.
of the affairs of the criminal enterprise through a
pattern of racketeering activity to include narcotics This was a joint investigation with the Aventura
trafficking, wire fraud, and identity theft. The three Police Department, Florida. United States v. Kenbrell
defendants admitted to unlawfully obtaining the PII Thompkins (S.D. Florida)
of others in order to submit false applications for UI
benefits. Over $420,000 in UI benefits were paid Virginia Inmate Sentenced to 115
to Robles Park members in the form of bank debit Months in Prison for Involvement
cards issued in the names of victims who did not
in Pandemic Unemployment
give their PII or permission to use their PII.
Benefits Scheme
This investigation is currently ongoing and is being
On January 13, 2022, Michael Lee Lewis Jr. was
worked jointly with the FBI and the Tampa Police
sentenced to 115 months in federal prison for his
Department, Florida. United States v. Tywon Spann,
involvement in a scheme to obtain pandemic-related
United States v. Kareem Spann, United States v.
UI benefits by using the PII of more than 30 Virginia
Eriaus Bentley (M.D. Florida)
prison inmates. Lewis was also ordered to pay
more than $227,000 in restitution and forfeit $5,000
Former NFL Wide Receiver Sentenced seized during the investigation.
for His Role in a Scheme to Defraud
the State of California Employment In 2020, Lewis was incarcerated at the Augusta
Development Department Correctional Center in Craigsville, Virginia. Beginning
in May 2020, he worked with co-conspirators to
On January 6, 2022, Kenbrell Thompkins was collect the PII of other inmates to fraudulently
sentenced to 25 months in prison after pleading apply for Virginia UI benefits during the COVID-19
guilty to one count of access device fraud and one pandemic. Lewis provided his co-conspirators
count of aggravated identity theft. A preliminary with information for fellow inmates at the Augusta
order of forfeiture was entered, ordering Thompkins Correctional Center, which resulted in the filing of
to forfeit $6,000 previously seized by law more than 20 fraudulent UI claims using the names
enforcement. Thompkins was also ordered to pay and identifiers of those inmates, who were not eligible
over $132,000 in restitution. to collect UI benefits. Lewis and his co-conspirators,
along with the prisoners whose information was used
In August and September 2020, Thompkins used in the fraudulent UI claim applications, shared the
the Social Security numbers and PII of unsuspecting proceeds of the crimes, which amounted to more
Florida residents to obtain pandemic-related than $330,000.
unemployment insurance benefits in the form of
prepaid debit cards from California. Thompkins then This is a joint investigation with the U.S. Department
withdrew thousands of dollars from such cards via of Homeland Security OIG and the Virginia
ATMs. Thompkins researched internet tutorials for Department of Corrections. United States v. Mary
the application of unemployment insurance benefits Landon Benton et al. (E.D. Virginia).
42 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
Maryland Man Sentenced to 39 Months To obtain the place-of-employment information,
in Prison for Leading Computer Fraud Trowbridge directed members of the conspiracy
and Identity Theft Ring that Targeted to pretend to be debtors and create thousands
of false online UI applications in the unknowing
State Workforce Computers
debtors’ names and with the debtors’ personal
identifiers, including Social Security numbers,
On March 3, 2022, Jason “JR” Trowbridge was
and to complete the applications to the point
sentenced to 39 months in prison and fined $30,000
where each debtor’s last known place of
pursuant to his November 2021 guilty plea to
employment appeared. After confirming that
conspiracy to misuse Social Security numbers,
the debtors worked for the relevant employers,
misuse of a Social Security number, and aggravated
Paymerica sold the place of employment
identity theft.
information for approximately $90 per debtor.
Over the course of approximately 3 years,
Trowbridge owned and operated Paymerica
Paymerica made nearly $1 million selling the
Corporation located in Frederick, Maryland.
stolen place of employment information.
Paymerica researched where purported debtors
worked and sold their employer information—called
This is a joint investigation with the New York
place-of-employment information or “POE”—to debt
State Department of Labor, Office of Special
collectors and companies selling information to debt
Investigations. United States v. Jason “JR”
collectors. In the debt collecting industry, the process
Trowbridge, aka Ted Frost. (N.D. New York)
is known as “skiptracing.”
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 43
Worker and Retiree Benefit Programs
Office of Workers’ Compensation Programs
The Office of Workers’ Compensation Programs (OWCP) administers four major workers’ compensation
programs: the Federal Employees’ Compensation Act (FECA) program, the Energy Employees Occupational
Illness Compensation Program, the Longshore and Harbor Workers’ Compensation program, and the Coal
Mine Workers’ Compensation program.
FECA is the largest of the programs and provides
workers’ compensation coverage to millions of
federal, postal, and other employees for work-
related injuries and illnesses. Benefits include
those for wage loss, medical expenses, vocational
rehabilitation, and for survivors for covered
employees’ employment-related deaths.
Houston Clinic Owner Sentenced
in Illegal Kickback and Money
Laundering Scheme
On January 6, 2022, Anurag Dass, aka Anna Dass,
was sentenced to 24 months in prison and ordered
to pay more than $2.2 million in restitution.
Dass operated A&A Pain and Wellness Center,
Inc. (A&A), located in Houston, Texas, along with
of services the federal worker, or claimant, received
her brother Anukul Dass, aka Andy Dass. Anna
from A&A. Hunt also charged injured federal
Dass admitted that she submitted or caused
workers whom he had referred to A&A a fee for his
others to file false claims with the Office of
representation and services through a company he
Workers’ Compensation Programs (OWCP) for
controlled under the name Zentec.
patients that Stephen Hunt directed to the clinic.
Hunt was a former employee of the U.S. Postal
Hunt and Andy Dass were previously convicted for
Service who was injured on the job and filed his
their roles in the scheme, each pleading guilty to
own claim with OWCP.
illegal kickbacks.
The Dass siblings conspired with Hunt, causing him
This was a joint investigation with the U.S. Postal
to direct injured federal workers to the center for
Service OIG. United States v. Anurag Dass, a/k/a
medical treatment and health care services. Hunt
Anna Dass (S.D. Texas)
received referral fees based on the type and amount
44 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker and Retiree Benefit Programs
Employee Benefit Plans
The Employee Benefits Security Administration (EBSA) is responsible for ensuring the security of retirement,
health, and other workplace-related benefits of America’s workers and their families. EBSA works to educate and
assist the nearly 158 million workers, retirees, and family members who are covered by nearly 734,000 private
retirement plans, 2 million health plans, and 662,000 other welfare benefit plans that together hold estimated
assets of $13.3 trillion, as well as plan sponsors and members of the employee benefits community.
Louisiana Couple Sentenced in $48 participants never made any actual contributions. Rather,
Million Medical Reimbursement Account TTFG arranged for the contribution, loan, and insurance
Program Fraud Scheme policy to appear as a series of “paper transactions” that,
in effect, did nothing more than reduce participants’
taxable wages and employers’ Federal Insurance
On March 17, 2022, Denis J. Joachim and his wife,
Contributions Act (FICA) payments improperly, without
Donna K. Joachim, along with their company, The Total
their knowledge of the impropriety. Consequently, TTFG
Financial Group, Inc. (TTFG) were sentenced for their
and the Joachims caused the underpayment of at least
roles in creating, marketing, and operating what they
$23 million in FICA taxes, as well as the underreporting
claimed to be a Medical Reimbursement Program. Denis
and underpayment of personal federal income taxes,
Joachim was sentenced to 97 months in prison, followed
federal unemployment taxes, and state unemployment
by 36 months of supervised release. Donna K. Joachim
taxes—amounts for which the employer- clients and
was sentenced to 12 months and 1 day in prison followed
employee-participants may be individually responsible.
by 36 months of supervised release, and TTFG received
12 months of probation and a special assessment fee
The only money actually paid to TTFG were the fees,
in excess of $2,000. As part of their guilty pleas, the
which the Joachims used for personal expenses,
defendants have agreed to forfeit assets seized with a
including the purchase of a 26-foot boat; a 2016
collective value of approximately $6,300,000.
Grand Design Solitude recreational trailer; a Chevrolet
Corvette; a Jeep Wrangler; a Dodge Ram truck; a
TTFG was a Louisiana business incorporated by Denis
Mercedes-Benz CL 550 automobile; a GMC Yukon
and Donna Joachim. TTFG and its owners created and
XL Denali; multiple CAN AM Maverick 1000R off-
marketed a Medical Reimbursement Account program
road vehicles; jet skis; their Covington residence; real
called “Classic 105” that was subject to the Employee
property located adjacent to their Covington residence;
Retirement Income Security Act of 1974 (ERISA).
two residences located in Madisonville, Louisiana; 40
Classic 105 claimed to be a Multiple Employer Welfare
acres of property in Bush, Louisiana; and 125 acres of
Arrangement that was marketed to employers as a
property in Spring City, Tennessee.
supplemental benefits plan to reimburse their employees
for medical expenses, such as co-pays and deductibles.
This is a joint investigation with EBSA, the FBI, and the
In total, TTFG took in more than $25 million in fees from
IRS-CI. United States v. Denis John Joachim v. Donna
the employer-clients and employee participants.
Kennedy Joachim v. The Total Financial Group, Inc.
However, TTFG never obtained a single loan or
(E.D. Louisiana)
insurance policy for the Classic 105 program, and
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 45
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.
COVID-19: To Protect Mission Critical hazards from external federal agency personnel
Workers, OSHA Could Leverage active in industries with a high risk of COVID-19
exposure. High-risk industries have oversight and
Inspection Collaboration Opportunities
enforcement personnel on-site from at least three
with External Federal Agencies
external federal agencies (see Figure 2).
The mission of OSHA to ensure safe and healthful
OSHA viewed collaboration with these external
work environments meant a specific challenge
agencies as separate from its enforcement
during the COVID-19 pandemic: to prevent, to the
capabilities, rather than as a way to enhance its
greatest extent possible, transmission of a highly
enforcement. However, both the Wage and Hour
contagious virus in worksites with mission critical
Division (WHD) and OSHA indicated collaboration
employees. Such employees work in industries
helped them achieve their individual missions. Not only
at highest risk of COVID-19 exposure including
did OSHA not leverage opportunities for collaboration
meat processing plants, nursing homes, hospitals,
with external agencies, it also did not identify those
grocery stores, restaurants, department stores, and
external agencies with enforcement or oversight
correctional institutions. As of January 2022, more
personnel who would be active at worksites and could
than 1 million mission critical employees contracted
inform OSHA’s hazard-specific outreach and training.
COVID-19, with many resulting fatalities. Reducing
morbidity and mortality rates of these essential
OSHA and WHD entered into a collaborative
workers required a whole-of-government approach
Memorandum of Understanding (MOU) in August
from multiple agencies. During the pandemic, OSHA
2021 that recognized the value of a collaborative
reduced inspections, particularly onsite inspections
partnership to protect the health and wellbeing of
as a means to reduce person-to-person contact
the nation’s workforce. However, OSHA did not
while already having a historically low number of
create any additional MOUs nor update any existing
Compliance Safety and Health Officers (CSHO) and
ones focusing on collaboration with external federal
an increased volume of complaints. Given these
agencies that conduct enforcement or oversight
challenges, we conducted this audit to determine to
activities of high-risk industries and could have made
what extent OSHA collaborated with external federal
referrals during the pandemic.
agencies’ enforcement or oversight personnel to help
safeguard U.S. workers during the pandemic.
However, during the current pandemic, OSHA could
We found OSHA did not collaborate to encourage
have done more in terms of collaborative efforts
referrals of potential COVID-19 safety and health
by identifying those external federal agencies with
48 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker Safety, Health, and Workplace Rights
enforcement or oversight personnel in higher-risk We made two recommendations to OSHA to
industries and using their input to inform hazard-specific establish interagency collaboration by devising
outreach and training. OSHA could have also tracked a plan with training and outreach to be activated
and analyzed its referral information to determine the during a large-scale safety and health crises
outreach and types of training those agencies might and exploring the use of MOUs or other such
need to increase the likelihood of referrals being made written agreements. OSHA generally disagreed
to OSHA. It also could have explored mechanisms, with the report and provided a number of
such as MOUs or other written agreements, with federal comments. We considered OSHA’s comments
agencies that oversee high-risk industries and updated and adjusted the report as appropriate.
its existing MOUs with external agencies to ensure they However, OSHA’s response did not change our
are current and include accountability characteristics. conclusions in the report.
Figure 2: U.S. Federal Agencies with Enforcement or Oversight Personnel in
COVID-19 High Risk Industries
Department of Department of Health and Department Department
Agriculture Human Services of Justice of Labor
Centers for
Food Safety and Medicare Food and Drug Bureau of Wage and Hour
Inspection Service and Medicaid Administration Prisons Division
Services
Full and Correctional All Business
Food Healthcare
Limited Service Institutions Establishments
Manufacturing Restaurants, with Wage
Drinking Places Earners
General Seafood
Medical Processing
Meat and
Poultry and Surgical
Processing Hospitals
Supermarkets
and Other
Grocery Stores
Nursing
Care
Facilities,
Skilled Gasoline
Nursing Stations with
Convenience
Stores
Department
Stores
Source: OIG analysis
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 49
Worker Safety, Health, and Workplace Rights
For more information, go to https://www.oig.dol.gov/ show that NRCS had been purchasing equipment to
public/reports/oa/2022/19-22-003-10-105.pdf, Report test the contents of railcars for benzene and had taken
No. 19-22-003-10-105 (March 31, 2022). other required safety precautions, though NRCS had
not actually taken those steps.
Nebraska Railcar Cleaning Services
and Owners Sentenced for Violating In 2015, NRCS received an inquiry from one of its
Environmental and Worker Safety customers about cleaning product residue from a rail
tanker car that contained a highly flammable product
Laws Related to Workers’ 2015 Deaths
and benzene. NRCS responded that it could clean the
railcar. However, NRCS did not test the tanker car’s
On January 14, 2022, Nebraska Railcar Cleaning
benzene as required. On April 14, 2015, approximately
Services LLC (NRCS), as well as its president and
one hour after two employees were sent into the tanker
owner, Steven Braithwaite, and its vice president
to complete the cleaning job, its contents ignited and
and co-owner, Adam Braithwaite, were sentenced
exploded, killing both employees and injuring a third.
in Omaha, Nebraska. NRCS was sentenced to
60 months’ probation and fined $21,000. Adam
This was a joint investigation with the U.S.
Braithwaite was sentenced to 12 months and 1 day in
Environmental Protection Agency Criminal
prison and $100,000 in restitution. Steven Braithwaite
Investigation Division. United States v. Nebraska
was sentenced to 30 months in prison and $100,000
Railcar Cleaning Services (D. Nebraska)
in restitution.
The sentencings were a result of guilty pleas stemming
Owner of an Idaho Tanker Company
from an investigation into an April 2015 fatal railcar Sentenced to Prison for Lying to
explosion that killed two workers and injured a third. OSHA and Violating Department of
The charges include conspiracy, violating worker Transportation Safety Standards
safety standards resulting in worker deaths, violating
the Resource Conservation and Recovery Act On November 19, 2021, Loren Jacobson, an owner
(RCRA), and submitting false documents to OSHA. of a tanker testing and repair company, KCCS Inc.,
was sentenced to 1 month in federal prison, 5 months
NRCS was in the business of cleaning railcars, which of home confinement, and a $15,000 fine for lying to
often involved NRCS sending workers inside the cars’ an Occupational Safety and Health Administration
tanks to scrape and remove various fuel residual (OSHA) official and for making an illegal repair to a
products, including highly flammable compounds such cargo tanker in violation of the Hazardous Materials
as benzene. Prior to the April 2015 explosion, OSHA Transportation Act.
officials conducted inspections and notified NRCS
that it was in violation of safety regulations concerning In August 2018, an explosion occurred at KCCS
confined space entries. Steven Braithwaite ultimately during a cargo tanker repair, which severely
entered into a written agreement with OSHA, in injured a KCCS employee. After the explosion, an
which he represented that NRCS had been testing OSHA investigator interviewed Jacobson about
for benzene since July 2014. Adam Braithwaite also the circumstances surrounding the accident, and
submitted falsified documents to OSHA purporting to Jacobson lied to the OSHA investigator during
50 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker Safety, Health, and Workplace Rights
the interview. Jacobson also did not possess the New Jersey Man Admits to Conspiring
necessary certification to conduct cargo tanker with Brother, an OSHA Compliance
repairs, which he regularly conducted at KCCS.
Officer, to Extort Contractors
Jacobson had a routine practice of making repairs
despite knowing that he did not have the required
On December 21, 2021, Paul Idrovo pled guilty to
certification to do so. In addition, he sent employees
conspiring to commit an act of extortion under cover
into the cargo tankers to weld patches from the
of his brother’s position as a compliance safety and
inside so that the illegal repairs would not be visible
health officer (CSHO) with the Occupational Safety
from the outside. Jacobson directed one of his
and Health Administration (OSHA). Paul Idrovo was
employees to make a hidden repair of this type on
previously charged in September 2020, along with
the tanker that subsequently exploded, in violation of
his brother, Alvaro Idrovo, with conspiring to commit
OSHA safety standards.
an offense against the United States based on the
extortion of a New Jersey contractor.
This was a joint investigation with the U.S.
Department of Transportation Office of Inspector
According to court documents and statements made
General. U.S. v. Loren Jacobson, (D. Idaho)
in open court, while acting in an official capacity
Philadelphia Business Owner Convicted at Trial of
as an OSHA CSHO, Alvaro Idrovo misrepresented
Bribing an OSHA Inspector
to contractors in New Jersey that they were facing
significant OSHA fines and penalties if they did not
On December 13, 2021, Tony Ren, owner of Hua Da
obtain OSHA safety training from a specific individual.
Construction, was convicted at trial of two counts of
Alvaro Idrovo would provide the contractors with
bribing a public official. In September 2021, Ren was
the phone number for the required trainer, allegedly
charged in an indictment with two counts of bribery.
named “Jose Diaz” or “Paul Mejia,” when in fact the
The charges arose from Ren’s attempts to bribe an
phone number actually belonged to Paul Idrovo,
OSHA compliance safety and health officer (CSHO).
posing under these names to conceal the brothers’
relationship.
In October 2017, an OSHA CSHO conducted an
inspection of a construction worksite in Philadelphia,
In furtherance of their fraud scheme, the brothers,
Pennsylvania, in response to an imminent hazard
who initially demanded higher sums of cash,
report. During the inspection, the CSHO observed
ultimately charged the contractors $4,000 to $6,000
numerous violations of OSHA standards including
each for the safety training. Paul Idrovo collected the
debris in passageways, electrical issues, holes in the
cash and provided the contractors with fraudulent
floor, and gas tanks with broken pressure gauges. On
computer generated safety and health certificates
two separate dates in November 2017, Ren offered
that falsely stated the employees had received
cash bribes to the OSHA CSHO in exchange for the
OSHA-certified safety training from “Jose Diaz”
official falsifying the inspection results and agreeing
and “Paul Mejia.” Paul Idrovo shared portions of the
not to report the violations so that Ren could avoid
extortion payments with Alvaro Idrovo.
the substantial financial penalties that would follow.
This was a joint investigation with OSHA. United
This is a joint investigation with the FBI. United States
States v. Tony Ren (E.D. Pennsylvania)
v. Alvaro Idrovo et al. (D. New Jersey)
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 51
Worker Safety, Health, and Workplace Rights
Bureau of International Labor Affairs
The Bureau of International Labor Affairs (ILAB) strengthens global labor standards, enforces labor
commitments among trading partners, promotes racial and gender equity, and combats international child
labor, forced labor, and human trafficking.
ILAB Properly Performed Oversight The OIG contracted with the independent certified
in Compliance with the USAID public accounting firm of Castro & Company,
Memorandum of Agreement and LLC (Castro) to conduct a performance audit to
determine if ILAB: (1) ensured IMPAQ performed
Ensured IMPAQ International,
in accordance with the cooperative agreement
LLC Was in Compliance with the requirements; (2) ensured costs claimed under the
Cooperative Agreement Requirements cooperative agreement were allowable, supported,
and in accordance with applicable laws, regulations,
To better support ILAB’s mission to promote a guidelines, and terms and conditions of the
fair global playing field for workers around the cooperative agreement; and (3) properly performed
world, the United States Agency for International oversight over IMPAQ in compliance with the MOA
Development (USAID) transferred $4 million to and its policies and procedures.
ILAB under a memorandum of agreement (MOA).
On September 26, 2017, ILAB awarded the $4 Castro determined ILAB ensured IMPAQ performed
million through a cooperative agreement to IMPAQ in accordance with the cooperative agreement
International, LLC (IMPAQ), and on June 4, 2020, requirements; ensured IMPAQ’s claimed costs
ILAB awarded additional funding to IMPAQ in the were allowable, supported, and in accordance
amount of $345,000 for a total funded amount of with applicable laws, regulations, guidelines, and
$4,345,000. IMPAQ used the funding to support terms and conditions of the cooperative agreement;
the “Labor Market Supply and Demand in the and properly performed oversight over IMPAQ
Northern Triangle: Leveraging Data to Build an in compliance with the MOA and its policies and
Efficient Labor Market in Central America” project, procedures.
which focuses on increasing the efficiency of El
Salvador, Guatemala, and Honduras labor markets Although IMPAQ did not meet five performance
by strengthening their information systems to create indicator targets, both IMPAQ and ILAB made
useful labor market intelligence. The Inspector adjustments to better monitor the indicators, and
General for the agency receiving the transfer Castro determined this issue did not affect IMPAQ
or allocation of such USAID funds is statutorily in achieving the overall project goals or ILAB’s
required to perform periodic audits regarding the monitoring of project performance. In addition,
use of the funds.59 Castro identified a best practice used by ILAB
that enabled IMPAQ to achieve the majority of the
59
According to Public Law 114-113, Division K, Title VII, performance objectives. To help ensure performance
General Provisions
52 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Worker Safety, Health, and Workplace Rights
compliance, ILAB developed and implemented As ILAB properly performed oversight in
Management Procedures and Guidelines specific to compliance with the USAID MOA and ensured
cooperative agreements that outlines the monitoring IMPAQ was in compliance with the cooperative
procedures in place over those agreements. These agreement requirements, the audit report had no
controls contributed to greater success in IMPAQ recommendations.
achieving the performance objectives. Castro
suggested ILAB expand the use of these best For more information, go to https://www.oig.dol.gov/
practices across all ILAB projects to ensure the public/reports/oa/2022/17-22-001-01-070.pdf, Report
achievement of project objectives. No. 17-22-001-01-070 (February 11, 2022).
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 53
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.
COVID-19: Delays in Providing The firm found ETA generally administered the
Disaster Relief Jeopardize $366 Million DWG program in accordance with applicable federal
Disaster Worker Grant Program regulations and guidelines. However, there was a
significant delay in grantees providing disaster relief
employment and training services. For the first 9
The CARES Act provided additional funding
months of the grants, DWG grantees did not perform
to ETA under Division B, Title VIII, for Disaster
at a rate that would enable them to meet planned
National Dislocated Worker Grants (DWG). Of the
outcomes as DWGs are expected to be utilized
$366 million ETA awarded in 57 grants from April
over a 24-month period. With over 38 percent of the
2020 to August 2020, $248 million were CARES
grant periods elapsed and minimal (8 percent) grant
Act funds for training and employment services
spending, there is a lack of evidence to support that
and other necessary expenses directly related to
grantees will effectively use the funds and deliver
the consequences of the COVID-19 pandemic.
services by the end of the grant periods. Collectively,
Prior OIG audits60 have raised concerns
grantees had limited planned participants enrolled and
about ETA’s grant investments not achieving
employed (see Figure 3).
performance goals, including significant delays
in grantees providing disaster relief employment
These issues occurred in part because ETA relied
and training services, and ETA needing to provide
on existing DWG guidance and measures and did
better oversight of DWGs. Due to these concerns,
not establish additional metrics or guidance to assist
the OIG contracted with an independent certified
grantees with the timely delivery of services to quickly
public accounting firm (firm) to determine if ETA
assist dislocated workers with disaster relief activities.
administered the CARES Act-funded DWG
program in accordance with applicable federal
The firm made four recommendations to ETA to
regulations and guidelines.
provide dedicated technical assistance to four states
and provide close monitoring for the remaining DWGs
60
For example, ETA Needs to Improve its Disaster to ensure performance and to amend its guidance
National Dislocated Worker Program, Report No. 02 21 to include specified timeline provisions and technical
002-03-391 (January 29, 2021), available at https://www. assistance. Any of the remaining funds (determined
oig.dol.gov/public/reports/oa/2021/02-21-002-03-391.pdf as not needed) should be returned to the Treasury or
56 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Employment and Training Programs
recouped as soon as practicable so that these funds For awarding grants, ETA must have sufficient
can be made available for other allowable purposes. controls to ensure grant applicants’ proposals meet all
solicitation requirements. In 2015 and 2019, the OIG
For more information, go to https://www.oig.dol.gov/ identified concerns with ETA’s grant award processes.
public/reports/oa/2022/19-22-002-03-391.pdf, Report For example, in 2019, ETA awarded $183 million
No. 19-22-002-03-391 (January 28, 2022). to deliver technical training to help participants get
jobs in H-1B occupations even though all grantees
Advisory Report: ETA’s Management detailed non-H-1B-related occupational training in
of Workforce Development Grants: Key their proposals. Further, our review of 400 participants
Concerns revealed only 7 percent received H-1B-related training
and only 5 percent obtained and retained H-1B-
related jobs. ETA has made progress in this area,
As part of its efforts to provide employment
and we closed the corresponding recommendations.
assistance and job training, ETA administers grants
However, continued attention is necessary as ETA
to fund public employment and training programs,
needs sufficient controls in its grant award processes
such as those to assist dislocated workers. Over
to ensure past issues do not reoccur.
the past decade, the OIG has reported numerous
issues with ETA’s management of federal grant funds.
For reviewing grantees’ use of funds, ETA must have
This advisory report reviewed 17 reports published
sufficient controls to ensure its grantees use grant
from March 2011 to September 2021 that identified
funds as intended (i.e., in accordance with applicable
upwards of $489 million in grant funds that were
requirements). In both 2018 and 2021, the OIG found
inefficiently used, including funds put to better use
grant funds were misused by grantees or could have
and questioned costs, and numerous findings related
been put to better use. Weaknesses in ETA’s review
to ETA’s grants management. While ETA has made
of grantees’ spending allowed this to occur. For
progress in addressing our specific findings and
example, in 2021, we reported $2.5 million in disaster
recommendations, our work over the years shows
grant funds meant for hurricane cleanup remained
similar deficiencies continue to emerge and persist.
unspent after 2 years. ETA has taken action to
This advisory report covered three key areas of
address most of our prior recommendations related to
concern meriting attention from ETA relating to: (1)
this second area. However, it is crucial ETA continue
awarding grants, (2) reviewing grantees’ use of funds,
to strengthen its processes in reviewing grantees’
and (3) measuring grantee performance.
Figure 3: Grantees Not Meeting Planned Outcomes
Source: OIG analysis of ETA and grantee data
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 57
Employment and Training Programs
use of funds to ensure limited resources are used use of hundreds of millions of dollars of grant funds.
efficiently and as intended. We therefore advise ETA to prioritize these areas and
make any necessary adjustments to better utilize its
In addition, ETA needs to ensure it properly measures resources and improve performance to ensure grant
how well its grantees perform, especially in relation to funds are used properly.
the specific program objectives. Our recent audit work
from 2018 to 2020 found ETA could not determine if For more information, go to https://www.oig.dol.gov/
its programs were effective because it did not have public/reports/oa/2022/09-22-001-03-001.pdf, Report
clear performance goals, performance metrics, and/ No. 09-22-001-03-001 (March 31, 2022).
or the underlying data was inaccurate and incomplete.
For example, in 2020, we reported ETA awarded Career Coach Sentenced to 2 Years in
64 grants intended to help previously incarcerated Prison for Stealing More than $68,000
youth overcome employment barriers and prevent
from Workforce Development Program
reincarceration due to a new offense. We found ETA
lacked outcome data at the time these grants were
On January 6, 2022, Jessica Miller was sentenced to
operating for nearly half of participants aged 17 and
24 months in prison and ordered to pay over $71,000
under—a group that constituted approximately two
in restitution to DOL and a financial institution after
thirds of program enrollment—because it did not
pleading guilty to wire fraud for defrauding the federal
establish procedures to account for participants who
government.
exited the program. ETA also lacked complete data to
determine if grantees achieved certain outcomes.
From July 2016 to November 2019, Jessica Miller
was employed as a career coach to provide training
As a result, ETA could not show if the grants
to job seekers, using federal funds made available
improved education and employment outcomes for
by DOL under the Workforce Innovation and
program participants. ETA has made progress in this
Opportunity Act (WIOA).
third area, and we closed many of the corresponding
recommendations. However, the frequency and
As a career coach, Miller was responsible for
similarity of the issues we identified underscore
providing career guidance, case management, and
the importance of ETA continuing to establish
follow-up to participants in the youth program. Miller
performance goals and metrics that accurately
previously admitted in court that, while serving as
measure grantees’ performance using reliable and
a career coach, she engaged in a scheme to divert
accurate data.
government funds for her own benefit.
While ETA has taken action to address many of the
Among other schemes, Miller created fraudulent
related findings and recommendations from our last
documents that falsely indicated that qualified
decade of reports, it must also proactively monitor
individuals had made reimbursable purchases and
these three key areas—awarding grants, reviewing
were seeking reimbursement for those costs. Miller
grantees’ use of funds, and measuring grantee
then submitted the fraudulent documents and cashed
performance—and continue to assess for these
the reimbursement checks. Miller also created and
weaknesses to ensure they do not reoccur. Such
submitted fraudulent documents, which included
weaknesses can and have resulted in the inefficient
58 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Employment and Training Programs
students’ forged signatures, indicating that students had also submitted false invoices to the Manufacturing
successfully completed certain milestones that entitled Innovation Fund (MIF) Program for training that was
them to gift cards, which Miller retained for herself. never provided. Through this scheme, Kania caused
more than $940,000 in loss to the wage subsidy
To further perpetuate the scheme, Miller opened programs and $115,000 in loss to the MIF Program.
bank and other accounts in the names of students Kania also underreported his total income on his 2014
without their knowledge and consent and used those through 2018 federal tax returns by failing to account
accounts to cash the fraudulent reimbursement for almost $300,000 in business funds that he used for
checks. In total, Miller defrauded at least 40 personal expenses.
individuals and diverted more than $68,000 in
government funds for her own personal enrichment. This is a joint investigation with the IRS-CI. United
States v. David Kania (D. Connecticut)
This was a joint investigation with the North Carolina
State Bureau of Investigations and the Conover Police Vermont Woman Pled Guilty to
Department, North Carolina. United States v. Jessica Nonprofit Embezzlement
Anne Miller (W.D. North Carolina)
On November 10, 2021, Louise Larivee, the former
Middlefield Man Pled Guilty to Abenaki Self-Help Association (ASHAI) grant director,
Defrauding State Jobs Programs pled guilty in United States District Court to a federal
fraud charge. The guilty plea came on the third day of
On November 15, 2021, David Kania pled guilty to a jury trial.
offenses stemming from his fraud against several
state-run wage subsidy and job training programs. ASHAI functioned as the service arm of the Abenaki
Nation, promoting economic and social development
Kania was the owner and operator of three small through programmatic efforts in education,
businesses, principally in the dietary supplement and employment, and economic development. Each year,
beverage industry. Between 2013 and 2018, through ASHAI received tens of thousands of dollars in grant
his companies, Kania applied for and received state money from the U.S. Department of Labor.
subsidies for employing unemployed jobseekers,
including veterans, and for providing training to Between 2013 and 2017, Larivee and a co-conspirator
employees. A portion of these state subsidies were embezzled more than $100,000 from ASHAI. At
funded through the U.S. Department of Labor Ready- Larivee’s request, a co-conspirator issued checks
to-Work Partnership initiative, which was formed to and provided cash to Larivee that significantly
expedite the employment of Americans struggling with exceeded Larivee’s authorized compensation. Larivee
long-term unemployment. In order to receive funds, also received travel reimbursement checks based
Kania submitted false documents to the Connecticut on fraudulently inflated mileage claims. The co-
Department of Labor and the state Workforce conspirator covered up this fraud by sending tax forms
Investment Board, which administer wage subsidy to the IRS that concealed the true amount of ASHAI
programs, showing that he had hired certain workers funds that were being paid to Larivee.
and that they worked for his businesses for a certain
period of time, when he knew that to be false. Kania United States v. Louise Larivee (D. Vermont)
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 59
Employment and Training Programs
Job Corps
The Job Corps program provides education, training, and support services to thousands of
disadvantaged, at-risk youths, ages 16–24, at more than 120 Job Corps centers nationwide, both
residential and nonresidential. The goal of the over $1.7 billion program is to offer an intensive
intervention to members of this targeted population as a means to help them learn vocational skills, earn
a high school diploma or general equivalency diploma, and find and keep a good job.
COVID-19: Safety
and Remote Learning
Challenges Continue for
Job Corps
In March 2020, Job Corps,
administered by ETA, suspended
operations at 121 campuses and
sent nearly 29,000 students home.
Over the following months, Job
Corps centers developed protocols
to resume on-campus operations
and transitioned from in-person to
remote instruction. As of August
2021, on-campus operations had
resumed at 113 centers. Given a
previous OIG report61 that described
While Job Corps established specific requirements
the many hurdles Job Corps faced fulfilling its
for safely returning students and staff to centers,
mission and operational responsibilities, we
such as reducing capacity and installing barriers
conducted a performance audit to determine
to help with physical distancing, we found gaps in
how the COVID-19 pandemic impacted Job
the oversight of COVID-19 safety precautions for
Corps’ efforts to safely and effectively educate its
resuming on-campus operations. This included
students. We found the pandemic had a significant
not visiting centers (virtually or in-person) to verify
impact on Job Corps’ efforts to develop and
safety precautions were followed before and after
implement protocols to safely resume on-campus
centers resumed on-campus operations and
operations and provide effective remote instruction.
not rejecting center plans that did not address
checklist requirements. By July 2021, Job Corps
61
COVID-19: ETA Should Continue to Closely Monitor brought students and staff back to 112 centers, but
Impact on Job Corps Program, Report No. 19-20-007-03- it reviewed less than half of them for compliance
370 (July 28, 2020), available at: https://www.oig.dol.gov/ with select safety requirements (e.g., masking and
public/reports/oa/2020/19-20-007-03-370.pdf
60 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Employment and Training Programs
installing physical barriers). Instead, Job Corps hands-on, skill-based portions of training were
relied on written explanations and declarations effectively on hold until they returned to campus.
from centers and infrequent assessments. These Partly as a result, Job Corps’ student enrollment
gaps diminished Job Corps’ ability to detect and dropped 56 percent from March 2020 to April
correct COVID-19 risks timely, if at all, and to 2021, trades training completions dropped
maintain a safe environment for students and staff to zero from April 2020 to April 2021, and
at campuses during the pandemic. the average length of time it took students to
complete the program more than doubled from
Furthermore, since suspending in-person approximately 8 months to 18 months.
instruction and shifting to remote learning,
Job Corps encountered many challenges We made four recommendations to ETA
ranging from an inadequate remote learning focusing on continuing COVID-19 safety protocol
infrastructure to ensuring students had the development and monitoring, identifying and
resources to learn remotely. For example, more closing student learning gaps, and increasing
than 68 percent of its students needed basic oversight of remote instructional programs. ETA
tools, including computers and internet access. agreed with our recommendations and indicated
In addition, Job Corps could not perform key the agency has already taken action to implement
aspects of basic skills and technical instruction some of the recommendations.
programs virtually. Centers developed innovative
alternatives to in-person instruction, such as For more information, go to https://www.oig.dol.
live-streaming instructor demonstrations and gov/public/reports/oa/2022/19-22-001-03-370.
supplying material kits for students to practice pdf, Report No. 19-22-001-03-370 (November
at home. However, for many students, the 12, 2021).
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 61
Employment and Training Programs
Foreign Labor Certification Programs
ETA administers a number of Foreign Labor least 2017 to obtain H-1B visas from government
Certification (FLC) programs that allow U.S. agencies by submitting H-1B applications that
employers to employ foreign workers to meet contained false and fraudulent statements. Kavuru
domestic worker shortages, PERM, H-1B, H-2A, admitted to submitting more than 100 applications
and H-2B. The PERM program allows an employer that falsely described available H-1B positions and
to hire foreign nationals to work in the United falsely stated that the H-1B workers were to be
States on a permanent basis, while the H-1B, placed at specific companies. Kavuru admitted he
H-2A, and H-2B programs are for temporary knew at the time he submitted the applications that
employment in the United States. The H-1B the companies did not have the named jobs and
program allows employers to hire foreign workers that he did not intend to place the workers at those
on a temporary basis in specialty occupations companies. None of those foreign skilled workers
or as fashion models. The H-2A program allows were ever placed at those companies.
employers to hire foreign workers for temporary
agricultural jobs, in contrast to the H-2B program
which is for temporary non agricultural jobs. ETA
ensures the admission of foreign workers into the
United States on a PERM, H-2A, or H-2B visa will
not adversely affect job opportunities, wages, and
working conditions of U.S. workers. The OIG also
investigates labor trafficking cases that involve
fraud against FLC programs.
Northern California Man Sentenced
to 15 Months in Prison and Ordered Kavuru further admitted that he required the H-1B
foreign skilled workers to pay him thousands
to Forfeit More than $533,000 in Work
of dollars in cash for the cost of preparing and
Visa Fraud Scheme
submitting their H-1B visa petitions, which is a
violation of DOL regulations. He also admitted
On November 22, 2021, Kishore Kavuru was
to requiring his H-1B visa recipients to go unpaid
sentenced to 15 months of prison and ordered
for months while he looked for legitimate H-1B
to forfeit more than $533,000 for his role in
positions for them, violating DOL regulations
orchestrating a work visa fraud scheme.
by failing to pay H-1B workers while they were
“benched” in this manner.
Kavuru, the owner and chief executive officer of
four IT consulting companies that specialized in
This is a joint investigation with Homeland Security
obtaining H-1B visas for foreign skilled workers,
Investigations. U.S. v. Kishore Kavuru (N.D. California)
engaged in a scheme from 2009 through at
62 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
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. OIG labor
racketeering investigations focus largely on individuals and organized criminal enterprises engaged
in embezzlement, extortion, violence against union members or employers, and other related criminal
activities.
Our investigations continue to identify fraudulent payments from employers to union representatives in
order to gain favorable labor agreements for the employer. Our investigations have also identified complex
financial and investment schemes used to defraud union affiliated benefit plans, resulting in millions of
dollars in losses to plan participants.
Illinois Politician Pled Guilty to Fraud $249,000 in salary, benefit plan contributions, and
Related to Union Employment reimbursed medical claims during his employment.
Cullerton was first elected to the Illinois Senate in
On March 8, 2022, former Illinois State Senator November 2012. He resigned from his Senate post
Thomas E. Cullerton pled guilty to embezzlement in February 2022.
of union funds in connection to his employment with
Teamsters Joint Council 25. This is a joint investigation with the FBI. United
States v. Thomas E. Cullerton (N.D. Illinois)
Cullerton was hired in early 2013 as a purported
union organizer and remained on the payroll until Former International Labor Union
February 2016. During his Teamsters employment, Official Sentenced to 24 Months in
Cullerton received a salary commensurate with Prison for Health Care Fraud and
other full-time organizers, monthly car and telephone Union Embezzlement
allowances, and annual bonuses. The union also
paid for Cullerton’s participation in union-sponsored On October 14, 2021, Roderick Bennett, the
pension, health and welfare benefit programs. former chief of staff for the Laborers’ International
Union of North America (LIUNA), headquartered
As part of the plea agreement, Cullerton admitted in Washington, DC, was sentenced to 24 months
that he did little to no work as an organizer during in federal prison and ordered to pay more than
his employment with the Teamsters. Cullerton also $155,000 in restitution to LIUNA.
admitted that he routinely ignored requests from In July 2021, a jury found Bennett guilty of health
supervisors that he perform the job functions of care fraud for fraudulently placing his girlfriend on
an organizer. Cullerton received approximately the union health care plan designed for LIUNA
64 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Labor Racketeering
headquarters employees when he knew she Brotherhood of Electrical Workers (IBEW Local
was ineligible to participate in the plan. Bennett 98), and Robert Henon, City of Philadelphia
previously pled guilty to three counts of theft councilmember, were convicted at trial of multiple
or embezzlement from a labor organization in crimes involving public corruption including
November 2018 stemming from unauthorized conspiracy to commit honest services fraud, and
personal purchases that he made using his LIUNA- Henon was convicted of bribery.
issued credit card, which exceeded $150,000.
Evidence presented during the trial demonstrated
This was a joint investigation with OLMS and EBSA. that Henon received a salary from IBEW Local 98
United States v. Roderick Bennett (D. District of and other things of value from Dougherty and, in
Columbia) exchange, Henon used his position as a member
of the City of Philadelphia’s City Council to serve
IBEW Local 98 Business Manager Dougherty’s interests, thereby defrauding the City of
and Philadelphia City Councilmember Philadelphia and its citizens of the right to Henon’s
Found Guilty of Public Corruption honest services as a member of the City Council.
This is a joint investigation with the IRS–CI, FBI,
On November 15, 2021, John Dougherty,
OLMS, and EBSA. United States v. John Dougherty
business manager of Local 98 of the International
et al. (E.D. Pennsylvania)
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 65
Departmental Management
Departmental Management
Departmental Management
The OIG performs oversight work involving the Department’s operations, financial management, and
information technology (IT) services.
FY 2021 Independent Auditors’ Report In addition, KPMG identified certain deficiencies
on the DOL Financial Statements in internal control that they considered to be a
material weakness and determined improvements
The OIG contracted with the independent certified were needed in controls over financial reporting
public accounting firm KPMG LLP (KPMG) to audit related to unemployment trust fund (UTF)
DOL’s annual financial statements, which comprise the balances and activity. New UI pandemic programs,
consolidated financial statements and sustainability including Federal Pandemic Unemployment
financial statements. KPMG issued a modified opinion Compensation (FPUC) and Pandemic
on the consolidated financial statements—DOL’s first Unemployment Assistance (PUA), resulted in a
such in 25 years—and one material weakness on significant increase in UI benefit disbursement
internal control over financial reporting. and related activity in UTF. However, KPMG
found certain management controls were not
Overall, KPMG found the sustainability financial sufficiently designed and documented to support
statements presented fairly, in all material respects, the specific items reviewed, analyses performed,
DOL’s social insurance information and its changes and conclusions reached for certain UTF balances
in social insurance amounts in accordance with U.S. and related transactions. These deficiencies
generally accepted accounting principles. KPMG resulted in material corrections to the FY 2021
also found the consolidated financial statements DOL financial statements and notes and increased
presented fairly DOL’s financial position and its the risk that other misstatements could occur and
net costs, changes in net position, and budgetary not be prevented or detected and corrected in a
resources in accordance with U.S. generally timely manner.
accepted accounting principles.
To address these deficiencies, KPMG provided
KPMG modified its opinion because they were three recommendations to the Assistant
unable to obtain sufficient appropriate audit evidence Secretary for Employment and Training and
about the methodology and certain underlying two recommendations to the Acting Chief
assumptions used to estimate the balances included Financial Officer. Management agreed with the
in $47.3 billion in obligations related to the COVID-19 recommendations and indicated actions have
pandemic-related UI programs. Consequently, already been taken to improve policies and
they were unable to determine whether any procedures for internal control.
adjustments to these amounts were necessary
and the completeness of the benefit overpayment For more information, go to https://www.oig.dol.
receivable, which included $4.4 billion in UI benefit gov/public/reports/oa/2022/22-22-003-13-001.pdf,
overpayments related to COVID-19. Report No. 22-22-003-13-001 (November 19, 2021).
68 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Departmental Management
Management Advisory Comments and regulations related to the fund, which disclosed
Identified in an Audit of the a significant deficiency that we have reported every
Consolidated Financial Statements for year since 2017 pertaining to internal controls over
claims examiners’ review of FECA claims. The
the Year Ended September 30, 2021
firm also performed agreed-upon procedures and
identified certain differences as a result of performing
In a separate Management Advisory Comments
the procedures over the actuarial liability and the
report, the independent public accounting firm
benefit expense.
provided additional information to DOL management
on issues identified during the OIG-contracted
For more information, go to https://www.oig.dol.gov/
financial statement audit that did not rise to the level
public/reports/oa/2022/22-22-001-04-431.pdf, Report
of significant deficiencies. The additional information
No. 22-22-001-04-431 (November 3, 2021).
represented opportunities for DOL to improve internal
controls or achieve other operating efficiencies. The
firm identified three new comments and six prior-year
Longshore and Harbor Workers’
comments still present in FY 2021 and noted the Compensation Act Special Fund
resolution of seven prior-year comments closed in Financial Statements and Independent
FY 2021. By satisfactorily addressing the outstanding Auditors’ Report
comments in the report, departmental management
will help ensure that these issues do not rise to the The Longshore and Harbor Workers’ Compensation
level of significant deficiencies in the future. Act (LHWCA) provides medical benefits,
compensation for lost wages, and rehabilitation
For more information, go to https://www.oig.dol.gov/ services for job-related injuries and diseases
public/reports/oa/2022/22-22-004-13-001.pdf, Report sustained by private-sector workers in certain
No. 22-22-004-13-001 (December 20, 2021). maritime and related employment. The LHWCA also
extends benefits to dependents if any injury results
Special Report Relating to the Federal in the worker’s death. The OIG contracted with an
Employees’ Compensation Act Special independent public accounting firm (firm) to audit the
financial statements of the LHWCA’s Special Fund
Benefit Fund
(Fund) as of September 30, 2020. The firm issued an
unmodified opinion, meaning the financial statements
The OIG contracted with an independent certified
presented fairly, in all material respects, the financial
public accounting firm to audit the Federal Employees’
position of the Fund, and its net costs, changes in net
Compensation Act (FECA) Special Benefit Fund’s
position, and budgetary resources for the years then
Schedule of Actuarial Liability, Net Intra-governmental
ended in accordance with U.S. generally accepted
Accounts Receivable, and Benefit Expense Fund
accounting principles.
as of, and for the year ended, September 30, 2021.
The firm issued an unmodified opinion, meaning the
As part of its audit, the firm also considered the
schedule was presented fairly in all material respects
Fund’s internal control over financial reporting (internal
and in conformity with U.S. generally accepted
control), but not for the purpose of expressing its
accounting principles. The firm also performed
opinion on the effectiveness of the Fund’s internal
certain tests of controls and compliance with laws
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 69
Departmental Management
control nor to identify all deficiencies that might be As part of its audit, the firm also considered the Fund’s
material weaknesses or significant deficiencies. The internal control over financial reporting (internal control),
firm identified certain deficiencies in internal control but not for the purpose of expressing its opinion on
it considered to be a significant deficiency, instances the effectiveness of the Fund’s internal control nor
where the claims examiners’ reviews were not to identify all deficiencies that might be material
performed in accordance with the relevant procedure weaknesses or significant deficiencies.62 While the firm
manual and also instances of incorrectly calculated did not identify any deficiencies in internal control that
benefit payment amounts. As part of obtaining it considered to be material weaknesses, it did identify
reasonable assurance, the firm also performed certain deficiencies in internal control that it considered
certain tests of the Fund’s compliance with applicable to be a significant deficiency, instances where the
laws and regulations and its test results disclosed no claims examiners’ reviews were not performed in
instances of noncompliance or other matters required accordance with the relevant procedure manual and
to be reported under Government Auditing Standards. also instances of incorrectly calculated benefit payment
amounts. As part of obtaining reasonable assurance,
For more information, go to https://www.oig.dol.gov/ the firm also performed certain tests of the Fund’s
public/reports/oa/2022/22-22-005-04-432.pdf, Report compliance with applicable laws and regulations and its
No. 22-22-005-04-432 (March 31, 2022). test results disclosed no instances of noncompliance
or other matters required to be reported under
District of Columbia Workmen’s Government Auditing Standards.
Compensation Act Special Fund
Financial Statements and Independent For more information, go to https://www.oig.dol.gov/
public/reports/oa/2022/22-22-006-04-432.pdf, Report
Auditors’ Report
No. 22-22-006-04-432 (March 31, 2022).
The District of Columbia Workmen’s Compensation
Act of 1928 (DCCA) provides medical benefits,
The U.S. Department of Labor Digital
compensation for lost wages and rehabilitation Accountability and Transparency Act of
services for job-related injuries, diseases, or death 2014 Performance Audit
of certain private-sector workers in the District of
Columbia. The DCCA Special Fund (Fund) also The Digital Accountability and Transparency Act of
extends benefits to dependents if any injury resulted 2014 (DATA Act) established standards intended to
in the employee’s death. The OIG contracted with help taxpayers and policymakers understand how
an independent public accounting firm (firm) to 62
A deficiency in internal control exists when the design
audit the financial statements of the Fund as of
or operation of a control does not allow management
September 30, 2020. The firm issued an unmodified
or employees, in the normal course of performing their
opinion, meaning the financial statements presented
assigned functions, to prevent, or detect and correct,
fairly, in all material respects, the financial position
misstatements on a timely basis. A significant deficiency
of the Fund, and its net costs, changes in net
is a deficiency, or a combination of deficiencies, in
position, and budgetary resources for the years then
internal control that is less severe than a material
ended in accordance with U.S. generally accepted
weakness, yet important enough to merit attention by
accounting principles.
those charged with governance.
70 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Departmental Management
federal agencies spend taxpayer dollars and improve We made three recommendations to the Acting
agencies’ spending oversight and data centric Chief Financial Officer, which supersede the
decision-making. In addition to agency reporting recommendations made in the 2019 OIG DATA
requirements, each federal agency’s Inspector General Act report.63 Management agreed with our
must audit a statistical sample of the spending data recommendations and indicated actions have already
submitted by its agency focusing on 59 specific data been taken to improve data accuracy.
elements required to be tested under the DATA Act.
For more information, go to https://www.oig.dol.gov/
To evaluate DOL’s compliance with these standards, public/reports/oa/2022/22-22-002-13-001.pdf, Report
DOL OIG contracted with the independent certified No. 22-22-002-13-001 (November 8, 2021).
public accounting firm of KPMG LLP (KPMG) to
determine: (1) the completeness, accuracy, timeliness, FY 2021 FISMA DOL Information
and quality of DOL’s FY 2020 third quarter and FY Security Report: Information Security
2021 first quarter financial and award data submitted
Continuous Monitoring Controls
for publication on USASpending.gov and (2) DOL’s
Remain Deficient
implementation and use of the government-wide
financial data standards established by Office of
Under the Federal Information Security
Management and Budget (OMB) and the U.S.
Modernization Act of 2014 (FISMA), DOL OIG is
Department of the Treasury (Treasury).
required to perform annual independent evaluations
of the Department’s information security program
KPMG determined DOL submitted data of a moderate
and practices. We contracted with KPMG LLP
quality because certain data was not submitted
(KPMG) to conduct an independent audit of DOL’s
completely, accurately, or timely. In 17,203 individual
FY 2021 information security program. The objective
data elements, KPMG identified a total of 5,368 errors,
of this audit was to determine if DOL implemented
which resulted in the following projected error rates:
an effective information security program for the
5.32 percent for completeness, 20.93 percent for
period October 1, 2020, through September 30,
accuracy, and 4.75 percent for timeliness. KPMG also
2021. KPMG determined DOL’s information security
determined DOL implemented and, except as noted
program was not effective for FY 2021.
below, is consistently using the government-wide
financial data standards established by OMB and the
KPMG reported 16 findings for DOL’s information
Treasury under the DATA Act.
security program. These findings were identified
within four of five Cybersecurity Functions and six of
KPMG identified one instance in which DOL was not
nine FISMA Metric Domains. The findings were based
consistently reporting data elements in accordance
on the 45 control deficiencies resulting from KPMG’s
with DATA Act guidance. Specifically, the Transaction
testing of 20 DOL systems and entity-wide controls.
Obligated Amount for obligations at the award and object
63
class level did not contain data for 156 of 254 grants DATA Act: DOL’s Reported Data Generally Met Quality
samples reviewed and 85 of 131 procurement samples Standards but Accuracy Issues Remain, DOL Report No.
reviewed. As a result, KPMG identified an internal 03-20-001-13-001 (November 21, 2019), available at:
control deficiency relevant to the audit objectives and https://www.oig.dol.gov/public/reports/oa/2020/03-20-001-
proposed recommendations for management. 13-001.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 71
Departmental Management
For an information security program to be considered capabilities that continually assess the security state
effective, the majority of the FY 2021 IG FISMA of the systems and hold the agency and system
Reporting Metrics must be rated at least Managed owners accountable for identified compliance gaps.
and Measurable (Level 4). Based on KPMG’s testing
results and the CyberScope64 analysis, DOL’s Furthermore, in comparing the FY 2021 results to the
information security program was assessed as not FY 2020 FISMA assessment, we identified similar
effective because the majority were rated Consistently issues with access management, audit log review,
Implemented (Level 3). Although DOL established and configuration management at the system level,
and maintained its information security program which, due to the restructuring of DOL’s information
and practices for its information systems for the five technology, leads to additional concern that the findings
Cybersecurity Functions and nine FISMA Metric identified might also apply to other DOL systems.
Domains, KMPG found weaknesses that demonstrated
the information security program had not achieved KPMG made 18 recommendations to strengthen
a Level 4 rating in three of the five Cybersecurity DOL’s information security program. To improve
Functions: Identify, Detect, and Recover (see Table 1). and progress the maturity of the information
security program, the CIO should apply these
In reviewing the results from KPMG’s testing, we recommendations to its entire universe of systems.
are concerned the Chief Information Officer’s (CIO) The CIO generally concurred with the findings
oversight over DOL’s information technology is not and recommendations in our report and stated the
ensuring progress on implementing Information Department has addressed or developed plans to
Security Continuous Monitoring controls. We continue address all recommendations.
to identify issues with the system authorization
process, system security plans, and security control For more information, go to https://www.oig.dol.gov/
assessments. The CIO needs to obtain authority public/reports/oa/2022/23-22-001-07-725.pdf, Report
and access to further implement robust monitoring No. 23-22-001-07-725 (January 28, 2022).
Table 1: Maturity Levels for Cybersecurity Functions
Cybersecurity Function - Domains Maturity Level
Identify – Risk Management (RM) and Supply Chain Risk
Consistently Implemented (Level 3)
Management (SCRM)65
Protect – Configuration Management (CM), Identity and Access
Management (IAM), Data Protection and Privacy (DPP), and Security Managed and Measurable (Level 4)
Training (ST)
Detect – Information Security Continuous Monitoring (ISCM) Consistently Implemented (Level 3)
Respond – Incident Response (IR) Managed and Measurable (Level 4)
Recover – Contingency Planning (CP) Consistently Implemented (Level 3)
Source: IG CyberScope entries
64
The Office of Management and Budget and Department of Homeland Security’s web-based application for IT security
reporting by federal agencies.
65
While we assessed the maturity levels of the SCRM metrics, they are not considered in the overall maturity results used
in determining the effectiveness of the Identify Function and the overall information security program.
72 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Departmental Management
Single Audits
A single audit provides an organization-wide examination of an entity expending federal assistance funds
received for its operations. The audit is typically conducted annually by an independent certified public
accountant, and its objective is to provide assurance to the U.S. government regarding the management and
use of funds by recipients such as states, schools, universities, and nonprofits.
Under Uniform Guidance,66 cognizant federal agencies For the activities allowed or unallowed and the
must oversee the implementation of single audit allowable costs/cost principles requirements,
requirements. DOL is currently cognizant for six the cash disbursement sample audit work was
entities, and the OIG periodically performs quality incomplete, the sample population was not verified,
control reviews (QCR) of the entities’ single audits. and the testing conducted was not properly
During this reporting period, we conducted two QCRs: documented. As a result of our review, the firm
one on the Single Audit of the Center for Workforce provided us with additional documentation supporting
Inclusion, Inc. for the Year Ended June 30, 2020, and the testing of internal control and compliance testing
the other on the Single Audit of Job Service North over cash disbursements.
Dakota for the Fiscal Year Ended June 30, 2020.
Quality Control Review Single Audit
of the Center for Workforce Inclusion,
Inc. for the Year Ended June 30, 2020
The single audit—which covered one DOL major
program with funds totaling $46,123,049—was
completed by Gorfine, Schiller & Gardyn, P.A. (firm).
We found the firm’s audit work did not meet certain
requirements of OMB Uniform Guidance, including
the Compliance Supplement, Generally Accepted
Government Auditing Standards, and Generally
However, the firm did not conduct internal control
Accepted Auditing Standards. Specifically, the firm
and compliance testing of the subrecipients’ financial
did not adequately address three of the six applicable
and programmatic reporting, which is required for
OMB compliance supplement requirements. These
reporting. Additional work is required to bring this
inadequately addressed requirements included
single audit into compliance.
activities allowed or unallowed, allowable costs/cost
principles, and reporting.
We made two recommendations to the firm to
66
Uniform Guidance refers to 2 C.F.R. Part 200, OMB’s communicate with the Employment and Training
“Uniform Administrative Requirements, Cost Principles, Administration once it has conducted internal control
and Audit Requirements for Federal Awards.”
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 73
Departmental Management
and compliance testing of the subrecipients’ financial documentation related to DOL-funded programs,
and programmatic reporting and review its FY 2020 we determined that the firm’s audit work was
single audit report, updating it if needed after the acceptable. However, their report did not meet
additional work is completed. certain requirements of applicable standards,
including generally accepted government
For more information, go to https://www.oig.dol.gov/ auditing standards, generally accepted auditing
public/reports/oa/2022/24-22-001-03-360.pdf, Report standards, and Uniform Guidance. Specifically,
No. 24-22-001-03-360 (January 6, 2022). certain elements were omitted from the 2020
Independent Auditor’s Report due to their oversight.
Quality Control Review Single Audit of Since we have discussed these matters with
Job Service North Dakota for the Fiscal the firm’s management and they have already
taken corrective action, we consider these
Year Ended June 30, 2020
deficiencies resolved and closed, and have no
recommendations in our report.
The single audit—which covered two DOL major
programs with funds totaling $433,486,066—
For more information, go to https://www.oig.dol.gov/
was completed by Brady, Martz & Associates,
public/reports/oa/2022/24-22-002-03-315.pdf, Report
P.C. (firm). Based on our review of the audit
No. 24-22-002-03-315 (March 21, 2022).
74 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Employee Integrity
Investigations
Employee Integrity Investigations
Employee Integrity Investigations
The OIG is responsible for investigating possible misconduct or criminal activities involving DOL
employees or individuals providing services to the Department.
Closed Investigations Not Disclosed to Public
• The OIG conducted an investigation as to whether a senior employee accessed government systems
without authorization and disclosed protected information. The OIG did not establish facts to support
the allegations.
• The OIG conducted an investigation into a senior employee for use of a government vehicle in furtherance
of a personal business during duty hours. The OIG found evidence to support the allegation. Criminal
charges were declined by DOJ in lieu of internal administrative remedies, however the employee retired
prior to the investigative report being completed and provided to management.
76 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
OIG Whistleblower Activities
OIG WHISTLEBLOWER ACTIVITIES
OIG Whistleblower Activities
Whistleblower Protection Coordinator potential relief. Within DOL OIG, an Associate
(WPC) Counsel to the Inspector General has been
designated to serve as the WPC. Pursuant to this
DOL employees, contractors, subcontractors, designation, the WPC has
and grantees perform an important service by • provided input into training that was presented
reporting evidence of wrongdoing, including to, and required to be completed by, all DOL
misconduct, fraud, waste, and abuse in DOL employees, entitled “Prohibited Personnel
programs. Whistleblowers should never be Practices, Whistleblower Protection”;
subjected to, or threatened with, retaliation for • provided live training to all DOL supervisors
having engaged in a protected communication or and managers entitled “Responding to
protected activity. The DOL OIG plays a vital role Whistleblower Retaliation Complaints/Overview
in ensuring that DOL employees and employees of Prohibited Personnel Practices – Annual
of DOL grantees and contractors are informed of Training”;
their rights and protections against retaliation for
• developed training for new employees titled
“blowing the whistle.” This work is done by the
“Whistleblower Rights and Protections for
OIG Whistleblower Protection Coordinator (WPC)
DOL Employees” which is included in all DOL
Program, which is housed in the OIG’s Office of
employees’ New Employee Orientation;
Legal Services.
• updated the DOL OIG public facing
Pursuant to Section 2 of the Whistleblower website titled “Whistleblower Protection
Protection Coordination Act of 2018 (S.1869, Coordinator”, which is available to all DOL
June 25, 2018), every inspector general’s office is and OIG employees, to provide information on
required to designate a whistleblower protection whistleblower protections and options for DOL
coordinator. According to Section 2, the WPC (1) employees and employees of DOL contractors
educates agency employees about prohibitions and grantees;
against retaliation for protected disclosures; (2) • established a dedicated e-mail address
educates agency employees who have made or are (OIGWhistleblower@oig.dol.gov) to receive and
contemplating making a protected disclosure about respond to whistleblower-related inquiries from
their rights and the remedies against retaliation DOL employees;
for protected disclosures, including the means by
• worked with DOL to help obtain recertification of
which employees may seek review of any allegation
its 2302(c) program (October 2019);
of reprisal, as well as the roles of the OIG, the
Office of Special Counsel (OSC), the Merit Systems • obtained the OIG’s recertification of its 2302(c)
Protection Board, and any other relevant entities; program (June 2020); and
and (3) provides general information about the • monitored whistleblower retaliation complaints
timeliness of such cases, the availability of any received by the OIG, as well as whistleblower
alternative dispute mechanisms, and avenues for retaliation investigations conducted by the OIG.
78 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
OIG WHISTLEBLOWER ACTIVITIES
Whistleblower Retaliation Investigations Further, pursuant to 41 U.S.C. § 4712, the OIG
is required, with some exceptions, to investigate
The OIG can initiate its own investigations into whistleblower retaliation allegations made by
allegations of improper or illegal retaliation employees of DOL contractors or grantees.
brought by DOL employees or, on a discretionary
basis, refer such allegations to OSC for review
and investigation.
Whistleblower Retaliation Investigations
October 1, 2021 – March 31, 2022
Pending DOL employee complaint investigations 3
Pending Grantee/Contractor employee complaint investigations 5
Reports pending with DOL 2
Decision issued by the DOL Assistant Secretary for Administration and Management 1
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 79
OIG Congressional Testimony
OIG Congressional Testimony
OIG Congressional Testimony
During this semiannual reporting period, the OIG testified before one congressional committee. The full
text of our testimony is available on our website at www.oig.dol.gov/testimony.htm
• March 17, 2022 – Larry D. Turner, Inspector General, U.S. Department of Labor, testified before the
Senate Committee on Homeland Security and Governmental Affairs. The hearing was titled “Pandemic
Response and Accountability: Reducing Fraud and Expanding Access to COVID-19 Relief through
Effective Oversight.”
82 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
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 oversee the UI program. In order to overcome
Claimant Data and Wage Records this and effectively oversee UI benefits provided
in response to the COVID-19 pandemic, the OIG
Congress should consider legislative action to issued multiple IG subpoenas to all SWAs, seeking
allow DOL and the OIG to have direct access to UI claimant data. OIG data scientists then normalized
State Workforce Agency (SWA) unemployment and analyzed the data to identify potential fraud
insurance (UI) claimant data and wage records and programmatic weaknesses. The Department
for our respective oversight responsibilities. The revisited its position and on August 3, 2021, issued
Department has stated that outside of the temporary an Unemployment Insurance Program Letter (UIPL)
authority provided by the Coronavirus Aid, Relief, advising SWAs they must provide UI data to the OIG
and Economic Security (CARES) Act, it lacks the for benefits paid under the authority of the CARES
authority to require SWAs to provide the OIG with Act. However, this was a temporary measure that
access to UI claimant data and wage records applied to CARES Act UI programs, which sunsetted
unless the OIG is conducting an investigation into on September 6, 2021,68 and without such data
a particular instance of suspected UI fraud. The access on a permanent-basis, the OIG is unable
Department is unable to cite any law enacted by to provide effective oversight of the UI program.
Congress to support its opinion. Contrary to the The OIG has communicated in the past the value
Department’s view on the matter, the Inspector of receiving periodic reporting on this data, such as
General Act of 1978, as amended, authorizes on a monthly or quarterly basis, rather than through
the OIG’s access to information related to the
67
Department’s programs, unless Congress enacts Alert Memorandum: The Employment and Training
law that expressly refers to the OIG and limits Administration Needs to Issue Guidance to Ensure State
the OIG’s right of access. Furthermore, in a June Workforce Agencies Provide Requested Unemployment
2021 alert memorandum,67 the OIG recommended Insurance Data to the Office of Inspector General, Report
that the Employment and Training Administration No. 19-21-005-03-315 (June 16, 2021), available at:
(ETA) amend its regulations through rulemaking to https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-
reinforce that UI information must be provided to the 03-315.pdf
68
OIG for all Inspector General (IG) engagements. The CARES Act UI programs ended on September 6,
2021; however, states continue to process backlogged
This lack of direct and real-time access to data has claims, and they are required to submit payment data for
severely hampered the OIG’s ability to effectively the claims to the OIG.
84 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Legislative Recommendations
recurring issuances of IG subpoenas. The repeated
use of IG subpoenas to obtain UI data on a recurring
basis is time-consuming and inefficient. Thus, the
OIG would not be able to obtain UI data in a manner
that would allow the OIG to more timely detect fraud.
The results of our efforts have shown that data
analytics is a vital tool in performing our oversight
function. The OIG’s efforts resulted in the
identification of billions in improper payments, with
most attributable to potential fraud. The OIG was
further able to recommend programmatic changes to
put billions in federal funds to better use. In addition,
the OIG shared portions of our methodology with
ETA to allow the Department and SWAs to stop high improper payment rates experienced in the UI
fraud before it occurs. program. Similar proposals have also been included
in each of the President’s budget requests since FY
Real-time access to SWA UI claimant data 2018. The OIG encourages Congress to consider
and wage records systems would assist in and adopt proposals to aid the Department’s efforts
the Department’s programmatic oversight to combat improper payments in the UI program.
responsibilities to identify improper payments and The proposals from the President’s FY 2021 budget
weak controls. This access is also vital to the OIG’s request include the following:
oversight responsibility and would enable the OIG • allow the Secretary of Labor greater authority to
to quickly identify and investigate large-scale fraud. require SWAs to implement UI corrective actions
It would also allow the OIG to expand our current related to performance and integrity;
efforts to share emerging fraud trends with ETA • require SWAs to use NASWA’s Integrity Data
and SWAs in order to strengthen the UI program Hub (IDH) and the State Information Data
and likely prevent fraud before it occurs. In addition, Exchange System;
conducting data analytics based on direct access
• require SWAs to cross-match UI claims against
would further enable our auditors to identify program
the National Directory of New Hires (NDNH);
weaknesses and recommend corrective actions that
would improve the timeliness of UI benefit payments • require SWAs to cross-match UI claims with the
and the integrity of the UI program. U.S. Social Security Administration’s prisoner
database and other repositories of prisoner
Enact the UI Integrity Legislative information;
Proposals • allow SWAs to retain 5 percent of UI
overpayment recoveries for program integrity
In October 2016, the Department submitted a purposes; and
legislative package to Congress proposing changes • require SWAs to use UI penalty and interest
that would help address UI program integrity and the collections solely for UI administration.
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 85
Legislative Recommendations
These legislative proposals are consistent with is heightened by the results of OIG analyses
previous OIG findings and recommendations to and investigations showing that the program
address UI improper payments. In order to maintain is susceptible to significant fraud and abuse,
UI program integrity, the OIG has recommended, particularly by employers and attorneys. For
as of February 2021, establishing legislation that example, some staffing companies utilize the H-1B
requires SWAs to cross-match high-risk areas, program without having scheduled jobs already lined
including UI benefits paid to individuals with Social up. Some employers and attorneys misrepresent
Security numbers: filed in multiple states, belonging their need for workers to DOL, then reassign the
to deceased persons and federal prisoners, or used extra workers to other companies or require foreign
to file for UI claims with suspicious email accounts. workers to find their own work. There have also
been instances when companies illegally generated
Provide Authority to Ensure the profit by requiring foreign workers to pay fees and
Integrity of the H-1B Program recurring payments to secure H-1B visas. Without
statutory authority to ensure program integrity, the
If DOL is to have a meaningful role in the foreign Department cannot verify employers’ attestations
labor certification process for H 1B specialty to the H-1B certifications unless a complaint is filed
occupation visas, it must have the statutory or the Department utilizes a Secretary-initiated
authority to ensure the integrity of that process. investigation, for which DOL developed a process in
This authority should include the ability to verify FY 2021. As foreign workers are generally reluctant
the accuracy of information provided on labor to file complaints for fear of retaliation and losing
condition applications, and to initiate its own their jobs, it is unlikely to result in verification action
H-1B investigations more broadly. Currently, the being taken.
Department is statutorily required to certify an
H-1B application unless it determines that the Amend Pension Protection Laws
application is “incomplete or obviously inaccurate.”
However, unlike investigations into the H-2A and Legislative changes to the Employment
H 2B programs, DOL may not initiate its own H-1B Retirement Security Act of 1974 (ERISA) and
investigations based on reasons outside the four criminal penalties for ERISA violations would
statutory criteria: (1) a credible source complaint, enhance the protection of assets in pension plans.
(2) aggrieved party, (3) Secretary initiated random To this end, the OIG continues to recommend the
investigation of a willful violator, or (4) Secretary following legislative actions:
initiated investigation of any H-1B employer.69 • Repeal ERISA’s limited-scope audit
exemption. This exemption excludes pension
Our concern with the Department’s limited ability plan assets invested in financial institutions,
to ensure the integrity of the certification process such as banks and savings and loan firms,
69 from audits of employee benefit plans.
DOL Needs to Improve Debarment Processes to Ensure
Notwithstanding recent changes to auditing
Foreign Labor Program Violators Are Held Accountable,
standards that strengthen limited-scope audits,
Report No. 06-20-001-03-321 (September 30, 2020),
these audits prevent independent public
available at: https://www.oig.dol.gov/public/reports/
accountants who are auditing pension plans
oa/2020/06-20-001-03-321.pdf
86 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Legislative Recommendations
from rendering an opinion on the plans’ financial in documents required by ERISA; and Section
statements in accordance with professional 1954 prohibits giving or accepting bribes
auditing standards. These “no opinion” audits related to the operation of ERISA-covered
offer no substantive assurance of asset integrity plans. Sections 664 and 1027 subject violators
either to plan participants or to the Department. to up to 5 years’ imprisonment, while Section
• Expand the authority of the Employee 1954 calls for up to 3 years’ imprisonment for
Benefits Security Administration (EBSA) violators. The OIG recommends raising the
to correct substandard benefit plan audits maximum penalty up to 10 years for all three
and ensure that auditors with poor records violations to correspond with the 10-year
do not perform additional plan audits. penalty imposed by Section 669 (for theft from
Changes should include providing EBSA with health care benefit programs), which would
greater enforcement authority over registration, serve as a greater deterrent and, consequently,
suspension, and debarment as well as the ability further protect employee pension plans.
to levy civil penalties against employee benefit
plan auditors. The ability to correct substandard Improve the Integrity of the FECA
audits and take action against auditors is Program
essential as benefit plan audits help protect
participants and beneficiaries by ensuring the Legislative reforms should be considered in the
proper valuation of plan assets and computation following areas to improve the effectiveness and
of benefits. integrity of the Federal Employees’ Compensation
• Require direct reporting of ERISA violations Act (FECA) program:
to DOL. Under current law, a pension plan • Provide statutory access to the National
auditor who finds a potential ERISA violation Directory of New Hires (NDNH) and Social
is responsible for reporting it to the plan Security wage records. Currently, the
administrator, but not directly to DOL. To ensure Department has no access to the NDNH
that improprieties are addressed, we recommend data and can access Social Security wage
that plan administrators or auditors be required information only if the claimant gives it
to report potential ERISA violations directly permission. Granting the Department routine
to DOL. This change would ensure the timely access to these databases would aid in detecting
reporting of violations and would more actively fraud committed by individuals receiving FECA
involve auditors in safeguarding pension assets wage loss compensation but failing to report
as a first line of defense against the abuse of income they have earned.
workers’ pension plans. • Establish a 3-day waiting period at the
• Strengthen criminal penalties in U.S.C. Title beginning of the claims process. FECA
18. Three sections of U.S.C. Title 18 serve legislation provides for a 3-day waiting period,
as the primary criminal enforcement tools for which is intended to discourage the filing of
protecting pension plans covered by ERISA. frivolous claims. As currently written, however,
Section 664 prohibits embezzlement or theft the legislation places the waiting period at the
from employee pension and welfare plans; end of the 45-day continuation-of-pay period,
Section 1027 prohibits making false statements thereby negating its purpose. Legislation
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 87
Legislative Recommendations
that passed in 2006 placed
the waiting period for postal
employees immediately after
an employment-related injury. If
the intent of the law is to ensure
a true waiting period before an
employee applies for benefits,
then that period should likewise
come immediately after an
employment-related injury—
for all federal workers, not
exclusively postal employees.
This proposal was included in
the President’s FY 2021 budget
as part of the Office of Workers’ and to recover fraudulently obtained funds.70
Compensation Programs’ (OWCP) FECA reform. Asset forfeiture is a critical legal tool that serves a
• Allow the temporary suspension of number of compelling law enforcement purposes.
questionable medical providers pending It is designed to deprive criminals of the proceeds
the outcome of investigations. While FECA of their crimes, to break the financial backbone
regulations allow OWCP to exclude a provider of organized criminal syndicates, and to recover
through administrative means, OWCP must give property that may be used to compensate victims
notice to the provider and afford the provider an and deter criminal activity. Currently, the OIG is
opportunity for a hearing before DOL’s Office of not a participant in the Department of the Treasury
Administrative Law Judges. This process and (Treasury) or Department of Justice (DOJ) forfeiture
the various procedures involved can be lengthy. funds. The lack of authority to participate in these
Legislative changes are necessary to enable funds limits the OIG’s ability to effectively recover
DOL to immediately suspend all FECA providers ill gotten proceeds of UI fraud and other crimes
who have been indicted for fraudulent billing under the OIG’s jurisdiction. Statutory authority to
practices from providing further medical services seize and forfeit illicit funds would allow the OIG to
and receiving payments. This proposal was participate in the Treasury and DOJ forfeiture funds,
included in the President’s FY 2021 budget as thus enabling the OIG to better combat UI fraud and
part of OWCP’s FECA reform. other crimes in the future.
Authorize OIG Participation in Asset
70
According to DOJ, forfeiture “is the legal process by
which title to an asset is transferred to the government…
Forfeiture Funds to Combat UI Fraud
because that asset was derived from, used to facilitate, or
and Other Crimes involved in criminal conduct in a manner that subjects it
to forfeiture under an applicable asset forfeiture statute.”
Legislative authority in the area of asset forfeiture Department of Justice, Asset Forfeiture Policy Manual
would increase the OIG’s ability to effectively and (2021), available at: https://www.justice.gov/criminal-afmls/
efficiently investigate UI fraud and other crimes file/839521/download
88 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Appendices
Reporting Requirements Under the Following
Acts
Inspector General Act of 1978
REPORTING REQUIREMENT PAGE
Recommendations on existing and proposed legislation and regulations relating to the
Section 4(a)(2) 71
programs and operations of DOL
Description of significant problems, abuses, and deficiencies relating to the administration of
Section 5(a)(1) All
programs and operations
Description of recommendations for corrective action with respect to significant problems,
Section 5(a)(2) All
abuses, and deficiencies
Significant recommendations from previous semiannual reports on which corrective action
Section 5(a)(3) 84
has not been completed
Matters referred to prosecutive authorities and the prosecutions and convictions which have
Section 5(a)(4) 98
resulted
Section 5(a)(5) and Summary of each report made to the head of DOL under section 6(c)(2) (information or
None to report
Section 6(c)(2) assistance requested and unreasonably refused in the judgment of the IG).
List of audit reports, inspection reports, and evaluation reports subdivided according to
Section 5(a)(6) 81
subject matter
Section 5(a)(7) Summary of particularly significant reports All
Statistical tables showing the total number of audit reports, inspection reports, and
evaluation reports and the total dollar value of questioned costs, including unsupported
costs, for reports—(A); (D) for which no management decision had been made by the
Section 5(a)(8) 80
beginning or the end of the reporting period; (B) which were issued during the reporting
period; (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
that funds be put to better use
(A); (D) for which no management decision had been made by the beginning or the end of
Section 5(a)(9) the reporting period; 79
(B) which were issued during the reporting period;
(C) for which a management decisions was made during the reporting period, including the
dollar value of disallowed and not disallowed costs
Summary of each audit report, inspection report, and evaluation report issued before the
commencement of the reporting period—
(A) for which no management decision has been made by the end of the reporting period
(including the date and title of each such report), an explanation of the reasons such
management decision has not been made, and a statement concerning the desired
Section 5(a)(10) 89-97
timetable for achieving a management decision on each such report;
(B) for which no establishment comment was returned within 60 days of providing the report
to the establishment; and
(C) for which there are any outstanding unimplemented recommendations, including the
aggregate potential cost savings of those recommendations.
Section 5(a)(11) Description and explanation for any significant revised management decision None to report
continued on next page
90 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Information on any significant management decisions with which the inspector general
Section 5(a)(12) None to report
disagrees
Information from the Federal Financial Management Improvement Act Section 804(b) —
Section 5(a)(13) instances in which an agency has not met intermediate target dates in a remediation plan, None to report
and the reasons
Peer review reporting
Section 5(a)(14) (A) results of any peer review conducted by another OIG; or 101
(B) a statement identifying the date of the last peer review conducted
Section 5(a)(15) Outstanding peer review recommendations None to report
Peer reviews conducted by DOL OIG and recommendations outstanding or not fully
Section 5(a)(16) 101
implemented
Statistical tables on investigative findings showing total number of —
(A) reports issued
(B) persons referred to the U.S. Department of Justice for prosecution
Section 5(a)(17) 98
(C) persons referred to state and local prosecuting authorities
(D) indictments and criminal informations that resulted from any prior referral to prosecuting
authorities
Section 5(a)(18) Metrics used for developing the data for the statistical tables 98
Under Section 5(a) (17)
Summary of investigations of senior government employees where allegations of
Section 5(a)(19) 67
misconduct were substantiated — including the facts, circumstances, status, and disposition
of the matter
Description of whistleblower retaliation cases including information about the official found
Section 5(a)(20) to have engaged in retaliation and what, if any, consequences that establishment imposed 68
to hold that official accountable
Summary of instances of attempted departmental interference with the independence of
the office, including— with budget constraints and incidents in which the establishment has:
Section 5(a)(21) None to report
resisted or objected to oversight activities, or restricted or significantly delayed access to
information
A) Descriptions of inspections, evaluations, audits, and investigations that are closed and
were not disclosed to the public; and
Section 5(a)(22) 67
(B) Descriptions of investigations conducted by the office involving a senior government
employee that are closed and were not disclosed to the public.
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
REPORTING REQUIREMENT PAGE
Section 989(C) Peer review reporting 101
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 91
Appendices
Funds Recommended for Better Use
Funds Put to a Better Use Agreed to by DOL71
Number Dollar Value
of Reports ($ millions)
For which no management decision had been made as of the commencement of the reporting
1 156
period.
Issued during the reporting period 0 0
Subtotal 1 156
For which management decision was made during the reporting period:
• Dollar value of recommendations that were agreed to by management 156
• Dollar value of recommendations that were not agreed to by management 0
For which no management decision had been made as of the end of the reporting period 0 0
Funds Put to a Better Use Implemented by DOL
Number Dollar Value
of Reports ($ millions)
For which final action had not been taken as of the commencement of the reporting period. 4 39,160
For which management or appeal decisions were made during the reporting period 1 156
Subtotal 5 39,316
For which management decision was made during the reporting period:
• Dollar value of recommendations that were actually completed 2 5.6
• Dollar value of recommendations that management has subsequently concluded should not or
0
could not be implemented or completed
For which no final action had been taken by the end of the period 3 $39,311
71
The term “recommendation that funds be put to better use” means a recommendation by the OIG that funds could be
used more efficiently or achieve greater program effectiveness if management took actions to implement and complete
the recommendation. This term is defined by the Inspector General Act and includes, among other things, reductions
in future outlays; deobligation of funds from programs or operations; costs not incurred in the future by implementing
recommended improvements related to the operations of the establishment, a contractor, or a grantee; and any other
savings specifically identified, including reverting funds to the U.S. Treasury to be used for other purposes.
92 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Questioned Costs
Resolution Activity: Questioned Costs72
Questioned
Number
Costs
of Reports
($ millions)
For which no management decision had been made as of the commencement of the reporting
0 0
period (as adjusted)
Issued during the reporting period 0 0
Subtotal 0 0
For which a management decision was made during the reporting period:
• Dollar value of disallowed costs 0
• Dollar value of costs not disallowed 0
For which no management decision had been made as of the end of the reporting period
For which no management decision had been made within six months of issuance 0 0
Closure Activity: Disallowed Costs
Disallowed
Number
Costs
of Reports
($ millions)
For which no management decision had been made as of the commencement of the reporting
2 2.0
period (as adjusted)
Issued during the reporting period 0 0
Subtotal 2 2.0
For which a management decision was made during the reporting period:
• Dollar value of disallowed costs 1 1.9
• Dollar value of costs not disallowed 0
For which no management decision had been made as of the end of the reporting period
For which no management decision had been made within six months of issuance 1 0.1
72
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.
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 93
Appendices
Final Audit Reports Issued
Number of Questioned Costs Funds Put To Better
Report Name
Recommendations ($) Use ($)
Bureau of International Labor Affairs
ILAB Properly Performed Oversight in Compliance with the USAID Memorandum of Agreement and
Ensured IMPAQ International LLC Was in Compliance with the Cooperative Agreement Requirement; 0 0 0
Report No. 17-22-001-01-070; 02/11/22
Employment and Training Administration
COVID-19: Safety and Remote Learning Challenges Continue for Job Corps; Report No. 19-22-001-03-370;
4 0 0
11/12/21
COVID-19: Delays in Providing Disaster Relief Jeopardize $366 Million Disaster Worker Grant Program;
4 0 0
Report No. 19-22-002-03-391; 01/28/22
Occupational Safety and Health Administration
COVID-19 To Protect Mission Critical Workers, OSHA Could Leverage Inspection Collaboration
2 0 0
Opportunities with External Federal Agencies; Report No. 19-22-003-10-105; 3/31/22
Office of the Chief Financial Officer
The U.S. Department of Labor Digital Accountability and Transparency Act Audit of 2014 Performance Audit;
3 0 0
Report No. 22-22-002-13-001; 11/08/21
FY 2021 Independent Auditor’s Report on the DOL Financial Statements; Report No. 22-22-003-13-
5 0 0
001;11/19/21
Management Advisory Comments Identified in an Audit of the Consolidated Financial Statements, for the
9 0 0
Year Ended September 30, 2021; Report No. 22-22-004-13-001; 12/20/21
Office of the Chief Information Officer
FY 2021 FISMA DOL Information Security Report: Information Security Continuous Monitoring Controls
18 0 0
Remain Deficient; Report No. 23-22-001-07-725; 01/28/22
Office of Workers’ Compensation Programs
Special Report Relating to the Federal Employees’ Compensation Act Special Benefit Fund – FY 2021;
0 0 0
Report No. 22-22-001-04-431; 11/03/2173
District of Columbia Workmen’s Compensation Act Special Fund Financial Statements and Independent
1 0 0
Auditors’ Report. September 30, 2020 and 2019; Report No. 22-22-006-04-432; 03/31/22
Longshore and Harbor Workers’ Compensation Act Special Fund Financial Statements and Independent
1 0 0
Auditors’ Report September 30, 2020 and 2019; Report No. 22-22-005-04-432; 03/31/22
Total (11 Reports)
Final Audit Total (11 Reports) 47 0 0
73
The FY 2022 report was issued with 2 recommendations that are currently documented in the FY 2021 Special Report
Relating to the Federal Employees’ Compensation Act Special Benefit Fund.
94 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Other Reports
Number of
Report Name
Recommendations
Employment and Training Programs
Workforce Innovation and Opportunity Act
Quality Control Review - Single Audit of the Center for Workforce Inclusion, Inc. for the Year Ended June
2
30, 2020; Report No. 24-22-001-03-360; 01/06/22
Quality Control Review - Single Audit of Job Service North Dakota for the Year Ended June 30, 2020;
0
Report No. 24-22-002-03-315; 03/21/22
Advisory Report – ETA’s Management of Workforce Development Grants: Key Concerns; Report No. 09-
0
22-001-03-001; 03/31/22
Congressional Testimony
Testimony before the U.S. Senate Committee on Homeland Security and Governmental Affairs
Pandemic Response and Accountability: Reducing Fraud and Expanding Access to COVID-19 Relief
0
through Effective Oversight; Report No. 19-22-003-03-315; 03/17/22
Other Reports Total (4 Reports) 2
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 95
Appendices
Unresolved Audit Reports Over 6 Months Old
Number of
Questioned
Agency Report Name Unimplemented
Costs ($)
Recommendations
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve;
OIG Negotiating with Agency
Job Corps Should Do More to Prevent Cheating in High School Programs; Report No. 26-19-001-
ETA 4 0
03-370; 09/25/19
COVID-19: More Can Be Done to Mitigate Risk to Unemployment Compensation Under the
ETA 2 0
CARES Act; Report No. 19-20-008-03-315; 08/07/20
Alert Memorandum: The Employment and Training Administration Needs to Issue Guidance to
ETA Ensure State Workforce Agencies Provide Requested Unemployment Insurance Data to the Office 4 0
of Inspector General; Report No. 19-21-005-03-315; 06/16/21
Unemployment Insurance Overpayments Related to Work Search Underscore the Need for More
ETA 1 0
Consistent State Requirements; Report No. 04-21-001-03-315; 09/29/21
ETA Did Not Sufficiently Plan and Execute the American Apprenticeship Initiative Grant Program;
ETA 1 0
Report No. 05-21-004-03-375; 09/30/21
MSHA Needs to Provide Better Oversight of Emergency Response Plans; Report No. 05 17 002
MSHA 2 0
06-001; 03/31/17
MSHA Did Not Evaluate Whether Civil Monetary Penalties Effectively Deterred Unsafe Mine
MSHA 1 0
Operations; Report No. 23-19-002-06-001; 08/16/19
MSHA Needs to Improve Efforts to Protect Coal Miners From Respirable Crystalline Silica; Report
MSHA 2 0
No. 05-21-001-06-001; 11/12/20
MSHA Can Improve How Violations Are Issued, Terminated, Modified, and Vacated; Report No.
MSHA 1 0
05-21-002-06-001; 03/31/21
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist; Report No. 23-16-002-07-725;
OASAM 1 0
09/30/16
DOL Needs to Do More to Secure Employees’ Personally Identifiable Information in the Travel
OCFO 2 0
Management System; Report No. 23-20-003-13-001; 09/10/20
continued on next page
96 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
The U.S. Department of Labor Complied with the Payment Integrity Information Act for FY 2020,
OCFO but Reported Unemployment Insurance Did Not Represent Total Program Year Expenses; Report 1 0
No. 22-21-007-13-001; 08/06/21
OFCCP Did Not Show It Adequately Enforced EEO Requirements on Federal Construction
OFCCP 1 0
Contracts; Report No. 04-20-001-14-001; 03/27/20
DOL’s IT Governance Lacked the Framework Necessary to Support the Overall Mission; Report
OSEC 1 0
No. 23-21-002-01-001; 09/30/21
DOL Did Not Demonstrate It Followed a Sound Process in Promulgating the 2017 Tip Rule Notice
WHD 1 0
of Proposed Rulemaking; Report No. 17-21-001-15-001; 12/11/20
Agency Management Decision or Grant/Contracting Officer’s Final Determination Not Issued By Close of Period
Total Nonmonetary Recommendations and Questioned Costs 25 0
Number of Funds Recommended for
Agency Report Name
Better Use ($)
Recommendations
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve;
OIG Negotiating with Agency
Total Funds Recommended for Better Use 0 0
Total Audit Exceptions and Funds Recommended for Better Use 25 0
Total Funds Recommended for Better Use 0 0
Total Audit Exceptions and Funds Recommended for Better Use 25 0
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 97
Appendices
Corrective Actions Taken by the Department
During this reporting period, we took final action to close recommendations within reports based on
corrective action taken by the Department. The following is a summary of the most significant actions.
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
Based on our work, we found DOL has not fully utilized the H-1B program investigation process to determine
employer debarment and has not established a risk-based process for determining the number of H-2A and
H-2B applications to audit. Specifically, the DOL Wage and Hour Division (WHD) generally cannot initiate
H-1B investigations unless it receives a complaint from an aggrieved party or a credible source, and while
the Secretary has authority to initiate investigations, DOL has never utilized this option. Further, DOL has not
established a risk-based process for determining the number of H-2A and H-2B applications to audit.
In response to our audit, WHD developed procedures to initiate Secretary-certified investigations and held
training for Secretary-certified investigations with enforcement staff. DOL also updated its Memorandum of
Agreement (MOA) with the U.S. Department of Homeland Security (DHS) and established processes by which
DHS will refer suspected employer violations within the H-1B program to DOL. The enhanced collaboration
and sources of information will be used by DOL in support of Secretary-certified investigations. Also, WHD
provided training to its enforcement staff that dealt with H-1B debarment and assessing employer willfulness.
Further, if DOL management so requests, WHD can provide technical assistance to Congress in support of any
proposed statutory changes to DOL or WHD’s authority to initiate investigations as requested and appropriate.
Finally, DOL has established a risk-based process for selecting H-2A and H-2B applications for audit.
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
For more than 20 years, Congress, the Office of Management and Budget, DOL OIG, and the Government
Accountability Office have raised concerns about the timeliness and accuracy of prevailing wage rates
mandated by the Davis-Bacon Act and published by DOL WHD. Construction workers completing contracts
financed wholly or in part with federal funds must be paid no less than the minimum wage rates WHD
determines to prevail in the area where the work is performed. Our audit found WHD had improved the time it
took to complete wage surveys, but it still needed to make improvements to ensure wage determinations were
updated in the shortest amount of time. More importantly, WHD needed to ensure contract awards did not
include outdated wage determinations that contain prevailing wage rates. We also found WHD continued to
face challenges in securing sufficient wage data from the local areas that prevailing wages represented.
98 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
In response to our audit, WHD has taken a number of initiatives to improve the timeliness and accuracy of
its wage surveys, including the development of a risk-based strategy for future wage surveys that focuses on
areas with older wage rates, a likelihood of survey sufficiency, and an increased demand for construction. WHD
also updated historical wage determinations by removing published, non-union, specialty wage rates over 10
years old from the General Service Administrations’ website. In addition, WHD developed a public awareness
campaign and is redesigning its electronic survey form to facilitate increased participation from contractors in
the wage survey process.
ETA Needs to Improve Its Disaster National Dislocated Worker Program; Report
No. 02-21-002-03-391; 01/29/21
In the aftermath of 2017 hurricanes Harvey, Irma, and Maria, and the 2017 wildfires in California, Congress
passed the Bipartisan Budget Act of 2018. The act provided $100 million in additional funding for cleanup
and restoration and for career and supportive services for people affected by these disasters. We found the
Employment and Training Administration (ETA) provided minimal oversight of its state grantees and needed
to improve the administration of the Disaster National Dislocated Worker Grants (DWG) program to ensure:
(1) grantees help local areas restore communities in a timely manner; (2) out-of-work participants receive
expeditious disaster relief assistance; (3) a greater number of participants obtain employment as intended by
the grants; and (4) disaster relief funds are efficiently and effectively used.
In response to our audit, ETA took corrective actions to improve its DWG program, which included: (1) adding
a performance metric to its operating plan to assess DWG progress with the goal of accelerating enrollments;
(2) developing guidance to aid reviewers in evaluating DWG programs, identifying areas where additional
assistance is required, and ensuring local areas maximize the use of disaster-relief funds; (3) conducting
technical assistance for grant cohorts through meetings and newly-developed materials; and (4) publishing
Training and Employment Guidance Letter (TEGL) 12-19, and Change 1 to TEGL 12-19, which added
clarifications for funding decisions and required grant recipients to gather additional eligibility information for
individuals who used self-attestation at initial enrollment.
ETA Should Do More to Assist Vulnerable States Prepare for Disaster
Unemployment Assistance Program Implementation; Report No. 04-20-002-03-
315; 09/29/20
In FY 2017, Hurricanes Harvey, Irma and Maria devastated parts of the Caribbean Islands and the United
States. The Federal Emergency Management Agency (FEMA), by way of administration from ETA, granted
approximately $85 million in Disaster Unemployment Assistance (DUA) program funds to the states of Florida,
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 99
Appendices
Georgia, Texas, and the islands of Puerto Rico and the U.S. Virgin Islands (USVI). The DUA program is
responsible for providing timely unemployment benefits to individuals who have become unemployed because
of a presidential-declared disaster but are not eligible for regular Unemployment Insurance (UI). Our audit
found that ETA did not have adequate policies in place to provide timely oversight or ensure states provided
periodic training to staff and developed standard procedures to substantiate a claimant’s eligibility. In addition,
ETA did not establish adequate controls to ensure states paid only eligible claimants and paid them promptly as
administratively feasible.
In response to our audit, ETA published Unemployment Insurance Program Letter (UIPL) No. 24-21 on August
20, 2021, and Training and Employment Notice (TEN) No. 13-21 on October 19, 2021. UIPL 24-21 requires
states to conduct and/or attend DUA-related training, as well as establish and maintain Standard Operating
Procedures (SOP) for DUA programs. TEN No. 13-21 requires states to include annual assurances in all State
Quality Service Plan narratives, indicating (1) the date the state will conduct and/or attend DUA training during
the fiscal year, and (2) they have a DUA SOP and continue to maintain it. These requirements begin in FY
2022. Additionally, TEN No. 13-21 announced the availability of a DUA SOP template.
ILAB Properly Performed Oversight in Compliance with the USAID Memorandum
of Agreement and Ensured that Catholic Relief Services Was in Compliance with
the Cooperative Agreement Requirements; Report No. 17-21-003-01-070; 09/23/21
The Bureau of International Labor Affairs (ILAB) awarded $3,478,000 received from the United States Agency
for International Development (USAID) through a Memorandum of Agreement (MOA) to Catholic Relief
Services (CRS). The Inspector General for the agency receiving the transfer or allocation of such USAID
funds is statutorily required to perform periodic audits regarding the use of the funds. ILAB is responsible for
ensuring that CRS performed in accordance with the cooperative agreement requirements; costs claimed
were allowable, supported, and in accordance with applicable laws, regulations, guidelines, and terms and
conditions of the cooperative agreement; and oversight was properly performed.
Our audit found that although ILAB properly performed oversight over CRS in compliance with the MOA and
its policies and procedures, we identified one instance where ILAB did not perform a thorough review of the
CRS Inventory Listing, which resulted in a vehicle purchase that deviated from the approved budget justification.
However, the purchased vehicle cost less than what was approved and achieved the purpose for which the
original vehicle was approved. In response to our audit, ILAB updated it policies and procedures to require
grantees to submit annually an Inventory Listing and notify the Grant Officer Representative of variations between
actual equipment/real property purchases and approved planned expenditure amounts and budget justification. A
memorandum was issued to all ILAB cooperative agreement recipients to notify them of these changes.
100 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Unimplemented Recommendations
During this reporting period, we encountered four instances of audits or evaluations provided to the
Department for comment that were not responded to within 60 days. However, agencies have provided
management decisions in response to all audits and evaluations issued before the commencement of this
reporting period.
From October 1, 2011, through September 30, 2021, the OIG made audit recommendations to the
Department, of which 181 have not been fully implemented. These 181 recommendations include
126 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 OCTOBER 1, 2021, NOT YET
IMPLEMENTED
Unimplemented Recommendations
Total Number of
Fiscal Year
Recommendations Made
Total Number Monetary Impact ($)
2011 319 6 0
2012 213 1 0
2013 195 0 0
2014 128 1 0
2015 163 6 0
2016 100 1 0
2017 112 9 0
2018 98 3 0
2019 84 28 0
2020 105 34 95,699
2021 133 92 39,311,226,638
Total 1,650 181 $39,311,322,337
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 101
Appendices
High-Priority Unimplemented
Recommendations
The following table summarizes the unimplemented recommendations the OIG considers to be the
highest priorities for the Department.
Report Title; Report Number;
Unimplemented Recommendation(s)
Date Issued
Worker Safety
MSHA Needs to Provide Better Oversight Clarify mine operators’ responsibilities for local coordination under the Mine Improvement
of Emergency Response Plans; Report and New Emergency Response (MINER) Act, including coordination and communication
No. 05-17-002-06-001; 03/31/17 between the operator, mine rescue teams, and local emergency response personnel,
and familiarizing local rescue personnel with surface functions that may be required in
the course of mine rescue work.
COVID-19: OSHA Needs to Improve Its Continue to monitor and evaluate the Region II triage pilot and consider extending the
Handling of Whistleblower Complaints triage process to all regions to expedite screening whistleblower complaints.
During the Pandemic; Report No. 19-20-
010-10-105; 08/14/20
MSHA Needs to Improve Efforts to Adopt a lower legal exposure limit for silica in coal mines based on recent scientific
Protect Coal Miners from Respirable evidence. Establish a separate standard for silica that allows MSHA to issue citations
Crystalline Silica; Report No. 05-21-001- and monetary penalties when violations of its silica exposure limit occur. Enhance its
06-001; 11/12/20 sampling program to increase the frequency of inspector samples where needed (e.g.,
by implementing a risk-based approach).
COVID-19: Increased Worksite Improve OSHA’s inspection strategy by prioritizing very high- and high-risk employers
Complaints and Reduced OSHA for COVID-19-related onsite inspections as businesses reopen and increase operations
Inspections Leave U.S. Workers’ Safety in various localities across the United States. Ensure remote inspections are tracked
at Increased Risk; Report No.19-21-003- retroactive to February 1, 2020, and going forward. Compare remote inspections to
10-105; 02/25/21 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.
OSHA’s Diminished Enforcement Left Implement a policy for future emphasis programs that minimizes the lapse in
More Workers at Risk for Exposure to enforcement between canceled, revised, or new programs. Provide the OIG with “read-
Silica; Report No. 02-21-003-10-105; only” access to the OSHA Information System to facilitate data requests on future audits.
09/29/21 Establish meaningful goals and processes to assess whether OSHA’s outreach events
are achieving the desired results in reaching a targeted number of workers at risk of
exposure to silica.
continued on next page
102 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Employment and Training Programs
ETA Did Not Sufficiently Plan and Improve funding opportunity announcements for discretionary grant programs by:
Execute the American Apprenticeship evaluating program goals using the SMART concept or a similar approach, and including
Initiative Grant Program; Report No. 05- required metrics that directly measure the success of each program goal, are clear,
21-004-03-375; 09/30/21 and are easily verifiable; having a scoring element covering completeness of applicant
proposals for items requested in the announcement that reduces in points when the
proposal is missing an element(s), significantly changes the wording of an element(s), or
incorrectly addresses an element(s); and identifying targeted occupations in the Funding
Opportunity Announcement language and/or scoring elements, or requiring submission
of the career pathway to an H-1B occupation as support during apprenticeship program
registrations or apprentice registrations.
Employee Benefits
OWCP’S Efforts to Detect and Prevent Develop effective procedures, including seeking legislative authority to conduct matches
FECA Improper Payments Have Not with Social Security Information (SSA) retirement records, to ensure that claimants
Addressed Known Weaknesses; Report who receive SSA retirement benefits are identified timely and their FECA benefits are
No. 03-12-001-04-431; 02/15/12 adjusted accordingly.
EBSA Did Not Have the Ability to Reduce or eliminate exemption thresholds for small plans.
Protect the Estimated 79 Million Plan
Participants in Self-Insured Health Plans
from Improper Denials of Health Claims;
Report No. 05-17-001-12-121; 11/18/16
OWCP Must Continue Strengthening Ensure the Pharmacy Benefits Manager (PBM) implements a drug utilization review as
Management of FECA Pharmaceuticals, specified in the contract. Ensure the PBM, when developing its formulary, considers all
Including Opioids; Report No. 03-19-002- classes of drugs to determine if prior authorization or letters of medical necessity would
04-431; 05/14/19 be appropriate.
Unemployment Insurance Benefits
COVID-19: More Can Be Done to Include CARES Act UI transactions in the Benefit Accuracy Measurement (BAM) or
Mitigate Risk to Unemployment develop an alternative methodology to reliably estimate improper payments for those
Compensation Under the CARES Act; programs. Issue guidance directing states to provide access to state UI claimant data, in
Report No. 19-20-008-03-315; 08/07/20 order to prevent and detect fraud.
Alert Memorandum: The Employment Establish effective controls, in collaboration with SWAs, to mitigate fraud and other
and Training Administration (ETA) improper payments to ineligible claimants, including the areas identified in the
Needs to Ensure State Workforce memorandum: UI benefits paid to multi-state claimants, claimants who used the Social
Agencies (SWA) Implement Effective Security numbers of deceased individuals, potentially ineligible federal inmates, and
Unemployment Insurance Program Fraud claimants with suspicious email accounts. Effective controls will help prevent similar
Controls for High Risk Areas; Report No. or greater amounts of fraud and allow those funds to be put to better use. Work with
19-21-002-03-315; 02/22/21 Congress to establish legislation requiring SWAs to cross match high-risk areas,
including the four areas identified in the memo.
COVID-19: States Struggled to Continue to work with states to develop, operate, and maintain a modular set of
Implement CARES Act Unemployment technological capabilities to modernize the delivery of UI benefits that is sufficient to
Insurance Programs; Report No. 19-21- manage and process sudden spikes in claims volume during emergencies or high
004-03-315; 05/28/21 unemployment.
continued on next page
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 103
Appendices
Alert Memorandum: The Employment Amend 20 CFR 603.5 and 603.6(a) through the rulemaking process to reinforce that UI
and Training Administration Needs information must be provided to DOL OIG for all IG engagements authorized under the
to Issue Guidance to Ensure State IG Act, including audits, evaluations, and investigations. Continue to work with the OIG,
Workforce Agencies Provide Requested and within 30 days of the memorandum, meet with the OIG to develop a permanent
Unemployment Insurance Data to the approach for OIG access to UI data.
Office of Inspector General; Report No.
19-21-005-03-315; 06/16/21
Alert Memorandum: The Employment Take immediate action to require the National Association of State Workforce Agencies
and Training Administration Does Not (NASWA) to refer information to ETA and the OIG on suspected fraud, waste, abuse,
Require the National Association of State mismanagement, or misconduct, per Department of Labor Manual Series (DLMS)
Workforce Agencies to Report Suspected 8-106(D)(3). Such actions could include modification of ETA’s grant award or issuance
Unemployment Insurance Fraud Data of unemployment insurance program policy guidance to ensure ETA complies with
to the Office of Inspector General or the the notice requirement and its grantees comply with the reporting requirements of the
Employment and Training Administration; DLMS. Continue to work with the OIG and, within 30 days of this memorandum, meet
Report No. 19-21-006-03-315; 07/01/21 with the OIG to develop a permanent approach to OIG access to the UI Integrity Data
Hub (IDH) data.
Departmental Management
FISMA Fiscal Year 2015: Ongoing Realign the organizational structure as it relates to the CIO to address organizational
Security Deficiencies Exist; Report No. independence issues.
23-16-002-07-725; 09/30/16
DOL Did Not Comply with Improper Maintain its current focus on increasing its technical assistance and funding to states to
Payments Elimination and Recovery Act improve the improper payment reduction strategies in order to ensure compliance with
for FY 2017; Report No. 03-18-002-13- the improper payments estimate rate threshold.
001; 05/15/18
Stronger Controls Needed Over Web Establish and maintain a comprehensive inventory of web applications, identifying which
Application Security; Report No. 23-20- applications are public-facing and contain sensitive information. Review and update
001-07-725; 11/14/19 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.
FY 2019 FISMA DOL Information Security Implement improvements in DOL’s information security program for the following areas:
Report: Implementation of Security Tools Risk Management, Configuration Management, Identity and Access Management, Data
Hindered by Insufficient Planning; Report Protection and Privacy, Information Security Continuous Monitoring, and Contingency
No. 23-20-002-07-725; 12/23/19 Planning.
DOL Needs to Do More to Secure Establish and implement procedures to ensure the E2 Solutions (E2) travel and
Employees’ Personally Identifiable management tool is managed in compliance with contractual security requirements
Information in the Travel Management and DOL computer security policies for contracted information systems. Establish and
System; Report No. 23-20-003-13-001; implement procedures to ensure E2 account management practices enforce DOL’s
09/10/20 security policies.
DOL Did Not Demonstrate It Followed a Develop policies and procedures to document its rationale and supporting evidence for
Sound Process in Promulgating the 2017 key decisions in the development of economic regulatory analysis. Develop policies and
Tip Rule Notice of Proposed Rulemaking; procedures to document its rationale and supporting evidence when DOL determines
Report No. 17-21-001-15-001; 12/11/20 the prescribed regulatory guidance does not apply. Enforce policies and procedures that
require employees to maintain records that document government business. Employees
should not be discouraged from maintaining such records. 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.
continued on next page
104 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
FY 2020 FISMA DOL Information Security Provide training to responsible personnel over the third-party continuous monitoring
Report: Progress Needed to Improve review checklist. Enforce DOL policies and procedures regarding separation of duties
Risk Management and Continuous so developers do not possess the ability to migrate changes to production. Enforce
Monitoring Information Security Controls; DOL security baseline polices with DOL’s Cloud Service Providers (CSP) and develop
Report No. 23-21-001-07-725; 12/22/20 a security configuration checklist for the CSPs. Develop sufficiently defined quantitative
and qualitative metrics that provide meaningful indications of security status and trend
analysis at all risk management tiers. Implement a process for approving deviations from
established configuration settings.
The U.S. Department of Labor Complied Develop procedures to ensure changes to its improper payment process are
with the Payment Integrity Information communicated to OMB in a timely manner and those communications are properly
Act for FY 2020, but Reported maintained for subsequent review and inspection.
Unemployment Insurance Did Not
Represent Total Program Year Expenses;
Report No. 22-21-007-13-001; 08/06/21
Job Corps Safety
Job Corps Should Improve Its Pre- Make a final determination on the legality and permissibility of pre-enrollment behavioral
Admission Evaluation Process; Report assessment tools, such as drug screenings, trial periods, or personality or aptitude tests
No. 05-21-001-03-370; 03/25/21 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.
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 105
Appendices
Summary of Reports with Unimplemented
Recommendations with Cost Savings / Funds
Put to Better Use
Number of
Funds Put to Better Use
Report Name Unimplemented
($)
Recommendations
Employment and Training Administration
Alert Memorandum: The Employment and Training Administration (ETA)
Needs to Ensure State Workforce Agencies (SWA) Implement Effective
Unemployment Insurance Program Fraud Controls for High Risk Areas;
Report No. 19-21-002-03-315; 02/22/21
Establish effective controls, in collaboration with SWAs, to mitigate fraud
1 5,409,966,198
and other improper payments to ineligible claimants, including 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.
COVID-19: States Struggled to Implement CARES Act Unemployment
Insurance Programs; Report No. 19-21-004-03-315; 05/28/21
Continue to work with states to develop, operate, and maintain a modular 1 33,745,677,576
set of technological capabilities to modernize the delivery of UI benefits that
is sufficient to manage and process sudden spikes in claims volume during
emergencies or high unemployment.
ETA Did Not Sufficiently Plan and Execute the American Apprenticeship
Initiative Grant Program; Report No. 05-21-004-03-375; 9/30/21
Improve funding opportunity announcements for discretionary grant
programs by conducting the following: Evaluate program goals using the
SMART concept or a similar approach, and including required metrics
that directly measure the success of each program goal, are clear, and
are easily verifiable; have a scoring element covering completeness of 1 155,582,864
applicant proposals for items requested in the announcement that reduces
in points when the proposal is missing an element(s), significantly changes
the wording of an element(s), or incorrectly addresses an element(s);
and identify targeted occupations in the FOA language and/or scoring
elements, or requiring submission of the career pathway to an H-1B
occupation as support during apprenticeship program registrations or
apprentice registrations.
Total 3 $39,311,226,638
106 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Reports with Unimplemented
Recommendations for Management
Improvement or Disallowed Costs Owed
The following table lists all OIG reports issued prior to this semiannual reporting period with
recommendations that have not yet been fully implemented (as of March 31, 2022).
Number of
Disallowed Costs
Report Name Unimplemented
Owed ($)
Recommendations
Employee Benefits Security Administration
Limited-Scope Audits Provide Inadequate Protections to Retirement Plan Participants; Report No. 05-14-
1 0
005-12-121; 09/30/14
EBSA Did Not Have the Ability to Protect the Estimated 79 Million Plan Participants in Self-Insured Health
1 0
Plans from Improper Denials of Health Claims; Report No. 05-17-001-12-121; 11/18/16
Employment and Training Administration
Investigative Advisory Report – Weaknesses Contributing to Fraud in the Unemployment Insurance
6 0
Program; Report No. 50-15-001-03-315; 07/24/15
ETA Violated the Bona Fide Needs Rule and the Antideficiency Act; Report No. 26-17-002-03-370;
1 0
09/21/17
Experience Works, Inc. Misused More Than $4 Million in SCSEP Grant Funds; Report No. 26-18-002-03-
1 0
360; 09/28/18
Job Corps Should Do More to Prevent Cheating in High School Programs; Report No. 26-19-001-03-370;
5 0
09/25/19
continued on next page
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 107
Appendices
ETA Had No Reasonable Assurance That $183 Million in H-1B TST Grant Funds Helped Participants Get
1 0
H-1B Jobs; Report No. 06-19-001-03-391; 09/27/19
COVID-19: More Can Be Done to Mitigate Risk to Unemployment Compensation Under the CARES Act;
2 0
Report No. 19-20-008-03-315; 08/07/20
ETA Should Do More to Assist Vulnerable States Prepare for Disaster Unemployment Assistance Program
2 95,699
Implementation; Report No. 04-20-002-03-315; 09/29/20
Alert Memorandum: The Employment and Training Administration (ETA) Needs to Ensure State Workforce
Agencies (SWA) Implement Effective Unemployment Insurance Program Fraud Controls for High Risk 1 0
Areas; Report No. 19-21-002-03-315; 02/22/21
Job Corps Should Improve Its Pre-Admission Evaluation Process; Report No. 05-21-001-03-370; 03/25/21 3 0
COVID-19: States Struggled to Implement CARES Act Unemployment Insurance Programs; Report No.
3 0
19-21-004-03-315; 05/28/21
Alert Memorandum: The Employment and Training Administration Needs to Issue Guidance to Ensure
State Workforce Agencies Provide Requested Unemployment Insurance Data to the Office of Inspector 4 0
General; Report No. 19-21-005-03-315; 06/16/21
Alert Memorandum: The Employment and Training Administration Does Not Require the National
Association of State Workforce Agencies to Report Suspected Unemployment Insurance Fraud Data to the
2 0
Office of Inspector General or the Employment and Training Administration; Report No. 19-21-006-03-315;
07/01/21
Unemployment Insurance Overpayments Related to Work Search Underscore the Need for More
3 0
Consistent State Requirements; Report No. 04-21-001-03-315; 09/29/21
ETA Did Not Sufficiently Plan and Execute the American Apprenticeship Initiative Grant Program; Report
6 0
No. 05-21-004-03-375; 09/30/21
Mine Safety and Health Administration
MSHA Needs to Provide Better Oversight of Emergency Response Plans; Report No. 05-17-002-06-001;
6 0
03/31/2017
MSHA Did Not Evaluate Whether Civil Monetary Penalties Effectively Deterred Unsafe Mine Operations;
2 0
Report No. 23-19-002-06-001; 08/16/19
MSHA Can Improve its Pre-Assessment Conferencing Program; Report No. 05-19-001-06-001; 09/23/19 9 0
COVID-19: MSHA Faces Multiple Challenges in Responding to the Pandemic; Report No. 19-20-006-06-
1 0
001; 07/24/20
MSHA Needs to Improve Efforts to Protect Coal Miners From Respirable Crystalline Silica; Report No. 05-
3 0
21-001-06-001; 11/21/20
MSHA Can Improve How Violations Are Issued, Terminated, Modified, and Vacated; Report No. 05-21-
10 0
002-06-001; 03/31/21
continued on next page
108 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Office of the Assistant Secretary for Administration and Management
Ineffective Accounting for Sensitive Information Technology Hardware and Software Assets Places DOL at
6 0
Significant Risk; Report No. 23-11-001-07-001; 03/31/11
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist; Report No. 23-16-002-07-725; 09/30/16 1 0
FY18 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-
2 0
19-002-07-725; 06/17/19
Stronger Controls Needed Over Web Application Security; Report No. 23-20-001-07-725; 11/14/19 3 0
FY 2019 FISMA DOL Information Security Report: Implementation of Security Tools Hindered By
12 0
Insufficient Planning; Report No. 23-20-002-07-725; 12/23/19
FY 2020 FISMA DOL Information Security Report: Progress Needed to Improve Risk Management and
18 0
Continuous Monitoring Information Security Controls; Report No. 23-21-001-07-725; 12/22/20
Office of the Assistant Secretary for Policy
DOL Did Not Demonstrate It Followed a Sound Process in Promulgating the 2017 Tip Rule Notice of
2 0
Proposed Rulemaking; Report No. 17-21-001-15-001; 12/11/20
Office of the Chief Financial Officer
DOL Did Not Comply With Improper Payments Elimination and Recovery Act for FY 2017; Report No. 03-
1 0
18-002-13-001; 05/15/18
Management Advisory Comments Identified in an Audit of the Consolidated Financial Statements for the
6 0
Year Ended September 30, 2019; Report No. 22-20-005-13-001; 12/19/19
DOL Needs To Do More To Secure Employees’ Personally Identifiable Information in the Travel
2 0
Management System; Report No. 23-20-003-13-001; 09/10/20
Management Advisory Comments Identified in an Audit of the Consolidated Financial Statements, for the
9 0
Year Ended September 30, 2020; Report No. 22-21-005-13-001; 12/18/20
The U.S. Department of Labor Complied with the Payment Integrity Information Act for FY 2020, but
Reported Unemployment Insurance Did Not Represent Total Program Year Expenses; Report No. 22-21- 1 0
007-13-001; 08/06/21
Office of Federal Contract Compliance Programs
OFCCP Did Not Show It Adequately Enforced EEO Requirements on Federal Construction Contracts;
1 0
Report No. 04-20-001-14-001; 03/27/20
continued on next page
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 109
Appendices
Office of the Secretary
DOL Needs to Do More to Implement the Geospatial Data Act of 2018; Report No. 23-20-004-01-001;
1 0
09/30/20
DOL’s IT Governance Lacked the Framework Necessary to Support the Overall Mission; Report No. 23-
5 0
21-002-01-001; 09/30/21
Occupational Safety and Health Administration
OSHA Needs to Improve the Guidance for Its Fatality and Severe Injury Reporting Program to Better
1 0
Protect Workers;
OSHA Procedures for Issuing Guidance Were Not Adequate and Mostly Not Followed; Report No. 02-19-
4 0
001-10-105; 03/28/19
Review of the Occupational Safety and Health Administration’s Referral to and Reclamation of Debt from
1 0
the U.S. Department of the Treasury; Report No. 22-20-006-10-001; 03/16/20
COVID-19: OSHA Needs to Improve Its Handling of Whistleblower Complaints During the Pandemic;
2 0
Report No. 19-20-010-10-105; 08/14/20
Region IX Whistleblower Protection Program Complaints Were Not Complete or Timely; Report No. 02-21-
4 0
001-10-105; 11/23/20
COVID-19: Increased Worksite Complaints and Reduced OSHA Inspections Leave U.S. Workers’ Safety
4 0
at Increased Risk; Report No. 19-21-003-10-105; 02/25/21
OSHA’s Diminished Enforcement Left More Workers at Risk for Exposure to Silica; Report No. 02-21-003-
3 0
10-105; 09/29/21
Office of Workers’ Compensation Programs
OWCP’S Efforts to Detect and Prevent FECA Improper Payments Have Not Addressed Known
1 0
Weaknesses; Report No. 03-12-001-04-431; 02/15/12
Interim Report on Audit of Pharmaceutical Management in DOL Benefit Programs - OWCP Needs Better
1 0
Controls Over Compounded Prescription Drugs; Report No. 03-17-001-04-431; 05/23/17
Alert Memorandum: Vulnerability in OWCP FECA Bill Pay Processing System; Report No. 50-20-001-04-
1 0
430; 05/07/20
Special Report Relating to the Federal Employees’ Compensation Act Special Benefit Fund; Report No.
2 0
22-21-001-04-431; 10/30/20
Wage and Hour Division
DOL Did Not Demonstrate It Followed a Sound Process in Promulgating the 2017 Tip Rule Notice of
2 0
Proposed Rulemaking; Report No. 17-21-001-15-001; 12/11/20
COVID-19: The Pandemic Highlighted the Need to Strengthen Wage and Hour Division’s Enforcement
4 0
Controls; Report No. 19-21-008-15-001; 09/30/21
Totals 178 $95,699
continued on next page
110 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
Investigative Statistics
Division
Total
Totals
Investigative Reports Issued / Cases Closed (includes investigative reports issued, case closing
133
reports, and matters referred for possible civil and/or administrative action):
Program Fraud 114
Labor Racketeering 19
Cases Opened: 190
Program Fraud 180
Labor Racketeering 10
Cases Referred for Prosecution (each case is measured as a singular statistic and may include more
148
than one person or business entity):
Program Fraud 138
Labor Racketeering 10
Cases Referred for Administrative/Civil Action (each case is measured as a singular statistic and may
55
include more than one person or business entity):
Program Fraud 53
Labor Racketeering 2
Persons Referred to the Department of Justice for Criminal Prosecution (includes the number of
180
individuals and business entities referred for prosecution):
Program Fraud 160
Labor Racketeering 20
Persons Referred to State and Local Prosecuting Authorities for Criminal Prosecution (includes
28
the number of individuals and business entities referred for prosecution):
Program Fraud 28
Labor Racketeering 0
Indictments and Criminal Informations That Resulted from Any Prior Referral to Prosecuting
314
Authorities (includes sealed and unsealed indictments):
Program Fraud 284
Labor Racketeering 30
Indictments (includes sealed and unsealed indictments): 314
Program Fraud 284
Labor Racketeering 30
Convictions: 187
Program Fraud 160
Labor Racketeering 27
Statutory Debarments: 9
Program Fraud 5
Labor Racketeering 4
continued on next page
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 111
Appendices
Recoveries, Cost-Efficiencies, Restitutions, Fines/Penalties, Forfeitures, and Civil
$90,260,357
Monetary Actions:74
Program Fraud $68,438,559
Labor Racketeering $21,821,798
Recoveries (the dollar amount/value of an agency’s action to recover or to reprogram funds or
$7,310,826
to make other adjustments in response to OIG investigations):
Cost-Efficiencies (the one-time or per annum dollar amount/value of management’s
commitment, in response to OIG investigations, to utilize the government’s resources more $21,760,565
efficiently):
Restitutions/Forfeitures (the dollar amount/value of restitutions and forfeitures resulting from
$54,940,493
OIG criminal investigations):
Fines/Penalties (the dollar amount/value of fines, assessments, seizures, investigative/court
0
costs, and other penalties resulting from OIG criminal investigations):
Civil Monetary Actions (the dollar amount/value of forfeitures, settlements, damages,
$6,248,473
judgments, court costs, and other penalties resulting from OIG criminal investigations):
Total: $90,260,357
74
The OIG assisted state workforce agencies recover more than $835,000 in unemployment insurance benefits that were
not directly related to an open OIG investigation and were not included in the statistics above.
112 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
Appendices
OIG Hotline
The OIG Hotline provides a communication link between the OIG and persons who want to report alleged
violations of laws, rules, and regulations; mismanagement; waste of funds; abuse of authority; or danger
to public health and safety. During the reporting period October 31, 2021, through March 31, 2022, a total
of 19,110 complaints were opened in the OIG Hotline’s complaint management system. Of these, 13,899
were complaints received from the National Center on Disaster Fraud. Almost all of these complaints
involve concerns regarding COVID-19-related unemployment benefits. During this reporting period, 6,524
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 (complaints opened by method reported): Totals
Telephone 166
E-mail/Internet 18,926
Mail 17
Fax 1
Walk-In 0
Total 19,110
Contacts Received (complaints opened by source): Totals
Complaints from Individuals or Non-Governmental Organizations 5,162
Complaints/Inquiries from Congress 0
Referrals from GAO 0
Complaints from Other DOL Agencies 0
Complaints from Other (non-DOL) Government Agencies 13,948
Total 19,110
Disposition of Complaints Reviewed and Processed: Totals
Referred to OIG Components for Further Review and/or Action 1,935
Referred to DOL Program Management for Further Review and/or Action 80
Referred to Non-DOL Agencies/Organizations 4,509
No Referral Required/Informational Contact 163
Total 6,687
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 113
Appendices
Peer Review
The following meets the requirement under Section 5(14)(A)–(B) and (15)-(16) of the Inspector General
Act, as amended, and Section 989C of the Dodd–Frank Wall Street Reform and Consumer Protection
Act (P.L. 111–203) that the Inspectors General include their peer review results as an appendix to each
semiannual report. Federal audit functions can receive a rating of “pass,” “pass with deficiencies,” or “fail.”
DOL OIG Peer Review of GSA OIG Audit Function
DOL OIG conducted a peer review of the system of quality control for General Services Administration
(GSA) OIG’s audit function for the period ending March 31, 2021. The peer review report, which was issued
on November 4, 2021, resulted in an opinion that the system of quality control was suitably designed and
provided reasonable assurance that GSA OIG conformed to professional standards in the conduct of audits.
The peer review report gave GSA OIG’s audit function a pass rating. We also issued a letter dated November
4, 2021, that sets forth findings that were not considered to be of sufficient significance to affect the opinion
expressed in the peer review report.
Peer Review of DOL
OIG Audit Function
The Department of the
Treasury OIG conducted a
peer review of the system
of quality control for DOL
OIG’s audit function for the
period ending September
2018. The peer review report,
which was issued on June 6,
2019, resulted in an opinion
that the system of quality
control was suitably designed
and provided reasonable
assurance of DOL OIG’s
conforming to professional
standards in the conduct of
audits. The peer review gave
DOL OIG a pass rating and
made no recommendations.
114 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
OIG FY 2022 Audit Workplan
Fiscal Year 2022 Audit Workplan
BUREAU OF LABOR STATISTICS (BLS)
Discretionary Audit
1. BLS Survey Response Rate – In Progress. BLS is the principal federal agency responsible for
measuring labor market activity, working conditions, and price changes in the nation’s economy. The
President, Congress, federal policymakers, public institutions, and private citizens use the economic
information developed by BLS to guide and support decision-making. According to a 2013 study by the
National Research Council, “[f]or many household surveys in the United States, response rates have been
steadily declining for at least the past two decades.” 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
2. Memoranda of Agreement between USAID and ILAB – Completed. 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
3. 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.
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 115
OIG FY 2022 Audit Workplan
4. COVID-19: ETA Job Training Programs Performance – In Progress. In March 2020, the COVID-19
pandemic caused many of ETA’s job training programs to cease operation. This interrupted participants’
job training, hence potentially preventing them from completing their training and getting a job in the
areas in which they were trained. This audit will 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
5. 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 United States, 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.
6. Job Corps Fixed Price Contract 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
7. 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.
8. 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
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already processing a substantial influx in UI claims. States then had to implement three new UI programs,
resulting in additional major challenges. Resources stretched, states attempted to pay benefits quickly, and
the 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.
9. 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.
10. 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.
11. 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).
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12. COVID-19: Audit of DOL and States’ Efforts to Detect and Recover Improper Payments – In
Progress. Under the CARES Act, ETA was required to implement large-scale changes to its existing UI
system, including establishing six new programs. The new programs were intended to provide expanded
UI benefits to workers who were suddenly jobless as a direct result of the COVID-19 pandemic. Given
the challenge of rapidly implementing new programs during a crisis situation, ETA and states faced an
additional hurdle of using controls, previously identified as weak and deficient in published OIG reports
and alert memorandums, to process more than 77 million seasonally adjusted initial jobless claims and
571 million seasonally adjusted continued claims over the course of the pandemic’s first year. According
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.
13. 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.
14. 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 Act (ARPA).
15. 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.
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16. COVID-19: Short-Time Compensation (STC) Program – In Progress. Passage of the CARES Act
expanded UI program benefits to new and existing programs, including the STC program. The CARES
Act included provisions that increased the federal reimbursement to 100 percent of benefits for states
that have an STC program in their laws and provided for a 50 percent reimbursement for states that
do not have an STC program in their laws but agreed to operate a program on a temporary basis. The
STC program acts as a work share program, with employers reducing the number of hours offered to
employees and the state making up the difference in the form of benefit payments. The CARES Act
provided for an estimated $2.2 billion for benefit reimbursements and administrative costs. Twenty
seven 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.
17. COVID-19: Mixed Earners Unemployment Compensation – In Progress. The Mixed Earners
Unemployment Compensation (MEUC) program is a new temporary, federal program under the Continued
Assistance Act and ARPA. It provided additional benefits to certain self-employed individuals who are
available for work for the week ending January 2, 2021, through the week ending September 4, 2021. This
audit will determine how states implemented the MEUC program for the benefit of unemployed individuals
and to meet the intent of the program.
18. 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.
19. American Rescue Plan Act Equity Grants. ARPA 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
20. 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.
21. Integrity of Dust Sampling. Miners are exposed to harmful substances in their work environments daily.
MSHA monitors 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 submitted
fraudulent dust samples that MSHA needed to regulate airborne toxins in mines. This audit will assess
MSHA’s efforts to address sample manipulation.
22. Mine Rescue Response Plan. When disaster strikes, a well-prepared mine rescue effort can mean
the difference between life and death for trapped miners. Insufficient personnel, equipment, or training
could hamper MSHA’s ability to respond quickly and effectively in mine rescue situations. Prior OIG work
found MSHA had not provided adequate oversight of mine emergency response plans, which included
planning by both mine operators and MSHA. This audit will assess MSHA’s preparedness in responding to
emergencies requiring mine rescue operations.
OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION (OSHA)
Discretionary Audits
23. 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.
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24. COVID-19: OSHA Inspection Collaboration Audit – Completed. 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
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.
25. 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.
26. 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 ARPA. ARPA provides relief to OSHA
in the amount of no less than $100 million. This audit focuses on whether OSHA adequately developed
plans to use ARPA funds to carry out COVID 19 related worker protection activities, and whether OSHA
has controls in place to effectively use ARPA funds to protect workers from COVID-19, particularly in
high-risk workplaces, including health care industries, meat and poultry processing facilities, agricultural
workplaces, and correctional facilities.
27. 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.
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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.
28. 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
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 healthcare 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.
29. 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.
30. Rising Injury Rates among Online Retailers’ Warehouse Workers – In Progress. High- speed fulfillment
of online orders has become the industry standard, with large online retailers promising free 2-day, next-day,
and even same-day deliveries of orders. To accomplish such speedy deliveries, warehouses around the
nation have been forced to work ever faster, and some have reported increased pressure to meet production
quotas. This may be having a significant impact on the health and safety of warehouse workers. For example,
injury rates among warehouse workers have skyrocketed, with one organization reporting that injury rates at a
leading online retailer are 80 percent higher and also more severe than at other online retailers’ warehouses.
The State of California recently passed legislation to help protect warehouse workers by empowering state
safety regulators to take additional enforcement actions. This audit will review what, if any, actions OSHA has
taken to address the rising injury rates and severity of injuries at online retailers’ warehouse facilities.
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OFFICE OF THE ASSISTANT SECRETARY FOR ADMINISTRATION AND
MANAGEMENT (OASAM)
Mandatory Audit
31. Federal Information Security Management Act (FISMA) Audit – Annual – In Progress. In performing
its various missions, DOL collects and processes sensitive information through approximately 77 major
information systems. FISMA recognizes the significant risks involved with information 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.
Discretionary Audit
32. 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
33. DOL Consolidated Financial Statements Audit – Annual – In Progress. We will determine if DOL’s
consolidated financial statements present fairly, in all material respects, the financial position of DOL as
of September 30, 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.
34. Review of DOL’s Improper Payment Reporting in the Annual Financial Report – Annual – In
Progress. 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 THE ASSISTANT SECRETARY FOR POLICY (OASP)
Mandatory Audits
35. 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
36. Report Relating to the Federal Employees’ Compensation Act Special Benefit Fund – Annual – In
Progress. We will determine if: (1) the Schedule of Actuarial Liability, Net Intra-Governmental Accounts
Receivable, and Benefit Expense was fairly presented for the year ending September 30, 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.
37. 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.
38. 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.
39. 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, 2021, through June 30, 2022.
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Discretionary Audits
40. 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 ARPA 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.
41. Energy Employees’ Claims Processing – In Progress. 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.
42. 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.
43. 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.
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WAGE AND HOUR DIVISION (WHD)
Discretionary Audits
44. 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
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 SERVICE (VETS)
Discretionary Audits
45. 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
46. 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.
47. 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.
Discretionary Audits
48. 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.
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Addendum to FY 2022 Audit Annual Workplan
The Department OIG issued a revised Pandemic Response Oversight Plan75 on March 21, 2022, which
included areas for pandemic-related audit focus. This addendum to our FY 2022 Annual Workplan
provides brief descriptions of those areas and also PRAC projects that were not included in the workplan.
EMPLOYMENT AND TRAINING ADMINISTRATION (ETA)
Discretionary Audits
ETA Contract and Grant Programs
49. COVID-19: ETA’s Administration of Grant Funds Provided under the CARES Act. ETA has obligated
over $15 billion in federal grant funds of which $345 million was specifically provided under the CARES
Act. Over the past decade, we reported numerous issues with ETA’s management of federal grant funds
not achieving performance goals and identified upwards of $489 million in grant funds that could have
been put to better use. These audits, to be performed by contractors, will review how effectively ETA
ensured these funds were used as intended.
Job Corps
50. COVID-19: Ensuring Job Corps Funds Were Properly and Efficiently Used during the COVID-19
Pandemic. In March 2020, during the COVID-19 pandemic, Job Corps shut down 121 centers and sent
almost 29,000 students home. From about March 2020 to April 2021, student enrollment plummeted 56
percent and the number of students who completed trades training also dropped to zero. For FY 2021, Job
Corps received over $1.7 billion in funding, generally the same amount as in prior years. While Job Corps
allowed centers to use budget underrun funds to purchase supplies and equipment to deploy remote
learning and to ensure student and staff safety when it reopened centers, there is a risk all these funds
were not used appropriately or efficiently. This audit will review how Job Corps’ funds were spent from
March 2020 through about December 2021.
Unemployment Insurance (UI) Program
51. COVID-19: DOL’s Oversight of the UI Program’s Emergency Administrative Grants. The Emergency
Unemployment Insurance Stabilization Access Act (EUISAA) of 2020 required the Secretary of Labor
to provide for grants in FY 2020 to states’ federal Unemployment Trust Funds. The $1 billion in grants
75
Pandemic Response Oversight Plan (updated March 21, 2022), available at: https://www.oig.dol.gov/public/oaprojects/
Updated%20Pandemic%20Response%20Oversight%20Plan%202022%20for%20Publication.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 127
OIG FY 2022 Audit Workplan
to states were to be used only to administer their unemployment compensation laws, including securing
adequate resources to address the drastic increase in UI claims resulting from the economic downturn
precipitated by COVID-19. This audit will determine if ETA provided adequate oversight of states’ use of
emergency administrative grant funds.
52. COVID-19: ETA and States’ Efforts to Address Multistate UI Claimants. In February 2021, we alerted
the Department76 to nearly $17 billion we had identified in potential fraud paid in four high-risk areas, of
which multistate claimants is the largest area. Through ETA, the OIG provided states with our underlying
methodology and also specific claimant information for follow up action. This audit will examine the extent
to which ETA and states have taken action to follow up on potentially fraudulent CARES Act UI claims
identified and referred by OIG.
53. COVID-19: ETA and States’ Efforts to Address UI Claimants Filing with Social Security Numbers of
Deceased Persons. UI claimants filing with Social Security numbers of deceased persons was another
of the four high risk areas in which we identified nearly $17 billion in potential fraud. Similarly, through
ETA, the OIG provided states with our underlying methodology and specific claimant information for follow
up action. This audit will examine the extent to which ETA and states have taken action to follow up on
potentially fraudulent CARES Act UI claims filed with Social Security numbers of deceased persons.
54. COVID-19: ETA and States’ Efforts to Address UI Claimants Filing with Social Security Numbers
of Federal Prisoners. UI claimants filing with Social Security numbers of federal prisoners was another
of the four high-risk areas in which we identified nearly $17 billion in potential fraud. Here also, through
ETA, the OIG provided states with our underlying methodology and specific claimant information for follow
up action. This audit will examine the extent to which ETA and states have taken action to follow up on
potentially fraudulent CARES Act UI claims filed with Social Security numbers of federal prisoners.
55. COVID-19: ETA and States’ Efforts to Address UI Claimants Filing with Suspicious Email
Accounts. UI claimants filing with suspicious email accounts was also one of the four high-risk areas
in which we identified nearly $17 billion in potential fraud. Here also, through ETA, the OIG provided
states with our underlying methodology and specific claimant information for follow up action. This audit
will examine the extent to which ETA and states have taken action to follow up on potentially fraudulent
CARES Act UI claims filed with suspicious email accounts.
76
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 (February 22, 2021), available at: https://www.oig.dol.gov/public/reports/oa/2021/19-21-002-03-315.pdf
128 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
OIG FY 2022 Audit Workplan
56. COVID-19: Impact of Waivers on UI Overpayments, Fraud Investigations, and Recoveries. On
February 7, 2022, the Department issued Unemployment Insurance Program Letter (UIPL) 20 21,
Change 1,77 allowing states to waive certain UI overpayments. There are concerns these waivers could
adversely impact the pursuit of fraud in the UI program. Also, the waivers could potentially allow for
fraudulent CARES Act UI payments to go uncollected. This audit will determine the impact of waivers on UI
overpayments, fraud investigations, and recoveries.
57. COVID-19: Audit of States’ Compliance with CARES Act UI Program Reporting – In Progress. In
two separate prior reports, we identified issues with states’ non- or incorrect reporting of overpayments
in CARES Act UI programs. In May 2021, we reported78 that 42 percent of states did not complete the
required quarterly reporting for overpayments for the period of March 2020 to September 2020. In
November 2021, we issued79 the Department a qualified opinion, for the first time in 25 years, on its
consolidated financial statements. This was partially due to unreliable reporting of overpayment activity
with respect to CARES Act UI programs. This audit examines the extent to which states complied with
reporting requirements for UI programs authorized by the CARES Act and related subsequent legislation.
58. PRAC – DOL Programs – Case Study Project – In Progress. The focus of this oversight project will
be to identify the federal pandemic response program funds provided to select geographic areas and
the purpose of those funds and to determine if the federal program spending aligned with the intended
goals and objectives. This project will be under the direction of the PRAC and in coordination with nine
other OIGs.
EMPLOYEE BENEFITS SECURITY ADMINISTRATION (EBSA)
Discretionary Audit
59. COVID-19: Pandemic’s Impact on Enforcement of Employee Retirement Income Security Act
(ERISA) Requirements. ARPA provided a 100 percent federal subsidy of Consolidated Omnibus Budget
Reconciliation Act (COBRA) of 1985 premiums from April 1, 2021, through September 30, 2021, for certain
COBRA participants. Employers that do not satisfy COBRA continuation coverage requirements may be
investigated by the Employee Benefits Security Administration (EBSA). This audit will determine if EBSA
effectively provided compliance assistance and enforced certain ARPA requirements, such as ensuring
employers provided coverage to COBRA-eligible individuals during the COVID-19 pandemic.
77
Employment and Training Administration, UIPL No. 20-21, Change 1, “Additional State Instructions for Processing
Waivers of Recovery of Overpayments under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as
Amended” (February 7, 2022), available at: https://wdr.doleta.gov/directives/attach/UIPL/UIPL_20-21_Change_1.pdf (last
accessed April 6, 2022)
78
COVID-19: States Struggled to Implement CARES Act Unemployment Insurance Programs, Report No. 19-21-004-03-
315 (May 28, 2021), available at: https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
79
FY 2021 Independent Auditors’ Report on the DOL Financial Statements, Report No. 22-22-003-13-001 (November 19,
2021), available at: https://www.oig.dol.gov/public/reports/oa/2022/22-22-003-13-001.pdf
Semiannual Report to Congress | October 1, 2021 – March 31, 2022 129
OIG FY 2022 Audit Workplan
OFFICE OF WORKERS’ COMPENSATION PROGRAMS (OWCP)
Discretionary Audit
60. PRAC – Telehealth Services in OWCP – In Progress. During the COVID-19 pandemic, federal health
care programs used several strategies, such as telehealth services, so patients could receive medical
services where needed, whether at home or elsewhere. This ongoing project with the PRAC will provide
information on: the types of telehealth services available across OWCP; potential program integrity risks
associated with increased telehealth utilization during the pandemic; and how the pandemic, and resulting
expansion of telehealth, affected patient access for a single service type. This PRAC project is being
performed in coordination with five other IGs.
WAGE AND HOUR DIVISION (WHD)
Discretionary Audits
61. COVID-19: WHD Enforcement Challenges during the COVID-19 Pandemic. During the COVID-19
pandemic, Congress passed the Families First Coronavirus Response Act (FFCRA), which provided
requirements for paid sick and family leave. Previous audit work identified challenges WHD faced as
it implemented and enforced the FFCRA requirements and made several recommendations, such as
developing a plan to monitor effectiveness of WHD’s oversight of the FFCRA program. FFCRA expired
on December 31, 2020. While ARPA does not require employers to provide paid leave for employee
absences related to COVID 19, it extended the tax credit through September 30, 2021. Building on
previous work, this audit will determine the extent to which WHD has addressed our recommendations
and improved its enforcement of the numerous laws under its jurisdiction as enforcement challenges
resulting from the pandemic continue.
130 Semiannual Report to Congress | October 1, 2021 – March 31, 2022
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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