Semiannual Report to Congress, Office of Inspector General for the U.S. Department of Labor, Volume 85 (October 1, 2020–March 31, 2021)
Summary
Volume 85 of the Department of Labor Office of Inspector General's Semiannual Report to Congress covers October 1, 2020 to March 31, 2021. Acting Inspector General Larry D. Turner describes the OIG's Pandemic Response Oversight Plan and its oversight of the Department's actions under the CARES Act and the American Rescue Plan Act of 2021. In the period the OIG issued an alert memorandum and two audit reports on COVID-19 and the pandemic, plus 15 audit and other reports on Labor Department programs. The report says that since the start of the pandemic the OIG had reviewed more than 15,000 investigative matters and opened more than 2,600 complaints and investigations relating to UI benefits. Its statistics for the period list 195 indictments and 81 convictions.
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Semiannual Report to Congress
Office of Inspector General for the U.S. Department of Labor
Volume 85 October 1, 2020–March 31, 2021
–
Contents
Significant Concerns 8 Departmental Management
Departmental Management 60
Worker and Retiree Benefit Programs Single Audits 63
Unemployment Insurance Programs 20
Employee Integrity Investigations 64
Office of Workersʼ Compensation Programs 32
Employee Benefit Plans 33
OIG Whistleblower Activities 66
Worker Safety, Health, and Workplace
Rights Legislative Recommendations 68
Occupational Safety and Health Administration38
Mine Safety and Health Administration 42 Appendices
Wage and Hour Programs 45 Funds Recommended for Better Use 77
Questioned Costs 78
Employment and Training Programs Final Audit Reports Issued 79
Unresolved Audit Reports Over 6 Months Old 82
Employment and Training Administration
Corrective Actions Taken by the Department 83
Programs 48
Unimplemented Recommendations 87
Job Corps 50
Investigative Statistics 97
Foreign Labor Certification Programs 52
Peer Review Reporting 99
OIG Hotline 100
Labor Racketeering Fiscal Year 2021 Audit Workplan 101
Labor Racketeering 56
Semiannual Report to Congress: October 1, 2020–March 31, 2021 1
Message from the Acting Inspector General
As millions of COVID-19 vaccine doses are distributed around the world, our country
is looking to a future beyond this pandemic. Businesses are reopening and the U.S.
economy is beginning to show signs of recovery. However, millions of workers are still
filing unemployment insurance (UI) claims each week. U.S. Department of Labor (DOL)
programs support the health, safety, and financial stability of every working American. Now,
the need for these programs to function efficiently and effectively is more important than
ever. As the federal agency with primary oversight of DOL, the Office of Inspector General
(OIG) is committed to ensuring that DOL meets its challenges head-on and assisting DOL
and Congress in protecting the American workforce. We are diligently focused on reducing
the negative impacts of the pandemic as the country continues to reopen.
The OIG took immediate steps to respond to the crisis, quickly developing a comprehensive
Pandemic Response Oversight Plan (Plan) to address known and expected risks resulting
from the pandemic. The plan was developed using experience and information gained from
OIG work on previous disaster responses and stimulus bills. OIG work in this area provided
a very useful foundation that facilitated the swift development and execution of the plan,
especially in the area of expected risks. These risks include fraud, waste, and abuse as well
as the need for efficiency and effectiveness in providing benefits, guidance, training, and
other assistance to help the country get through the pandemic quickly and safely.
We continue to conduct oversight that focuses on the Department’s response to the
pandemic and, in particular, the Department’s actions under the Coronavirus Aid, Relief,
and Economic Security (CARES) Act, the American Rescue Plan Act of 2021, and other
relevant legislation. Specific areas of review include DOL’s efforts to help states administer
and to oversee the expansion of unemployment benefits, protect workers from exposure
to COVID-19, and provide guidance and enforce CARES Act regulations related to paid
leave. During this reporting period, we issued an alert memorandum and two audit reports
on COVID-19 and the pandemic, in addition to 15 audit and other reports reviewing DOL
programs and operations. A short summary of each pandemic-related report is included
herein, and the full publications and additional information about how we are conducting
oversight and responding to the pandemic are available via the OIG’s Pandemic Response
Portal.
We have also issued numerous fraud alerts and worked alongside our law enforcement
partners to notify public and private stakeholders, as well as the general public, of financial
schemes relating to UI. As part of our investigative program, we have identified and stopped
several multi state, multi million dollar UI fraud schemes targeting the unemployment
insurance program. The OIG is committed to safeguarding this essential program and will
2 Semiannual Report to Congress: October 1, 2020–March 31, 2021
continue to alert the Department, the public, and our law enforcement and State Workforce
Agency partners of any threats to the integrity of the UI system.
The OIG is also a member of the Pandemic Response Accountability Committee, which was
created to detect and prevent fraud, waste, abuse, and mismanagement of the trillions of
dollars in funds provided by the CARES Act and other legislation. As part of this effort, we
will work with our OIG partners to identify major risks that cut across DOL programs and
agency boundaries.
In addition to our extensive work relating to the pandemic, the OIG has continued to conduct
audits to review the effectiveness, efficiency, economy, and integrity of DOL programs
and operations, and investigations into alleged violations of federal laws relating to DOL
programs, personnel, and operations. This report highlights all of our office’s significant
audit and investigative accomplishments during the reporting period, and several significant
concerns, including those that relate to DOL’s response to the pandemic.
We will continue to work constructively with the Department and Congress on our shared
goals to identify improvements to DOL programs and operations and to protect the interests
and benefits of the nation’s workers and retirees during this unprecedented time.
Larry D. Turner
Acting Inspector General
Semiannual Report to Congress: October 1, 2020–March 31, 2021 3
OIG Mission
The Office of Inspector General (OIG) at the U.S. Department of Labor (DOL) conducts
audits to review the effectiveness, efficiency, economy, and integrity of all DOL
programs and operations, including those performed by its contractors and grantees.
This work is conducted in order to determine whether the programs and operations are
in compliance with the applicable laws and regulations; DOL resources are efficiently
and economically being utilized; and DOL programs achieve their intended results.
The OIG also conducts criminal, civil, and administrative investigations into alleged
violations of federal laws relating to DOL programs, operations, and personnel. In
addition, the OIG conducts criminal investigations to combat the influence of labor
racketeering and organized crime in the nation’s labor unions in three areas: employee
benefit plans, labor-management relations, and internal union affairs. The OIG also
works with other law enforcement partners on human trafficking matters.
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, 2020–March 31, 2021 5
Audit Statistics Second Half FY 2019
18 91 $2 Million
Audits and Other Recommendations for in Questioned Costs
Reports Issued Corrective Action
$
OIG Unimplemented Recommendations
OIG recommendations not fully implemented as of March 31, 2021
EBSA 2
ETA 33
MSHA 20
OASAM 38
OCFO 14
OFCCP 1
OSEC 1
OSHA 11
OWCP 18
WHD 9
0 5 10 15 20 25 30 35 40
6 Semiannual Report to Congress: October 1, 2020–March 31, 2021
InvestigativeStatistics Second Half FY 2019
Investigative Results Labor Racketeering
Program Fraud
269 / 64
300
269
250
208
200
195
150
100 81
64 54
50
Over 260
6
investigative cases
0
s d s d r
fo tion
r
fo tion nt
s ns ry ts opened and over 60
se ose se ene d d c e io to en
a
C Cl a
C Op rre ec
u
rre l A m ict u
at rm cases closed
fe ros fe ivi d ict nv St eba
e
R P e
R /C In Co D
ses s es min
d
Ca Ca A
Monetary Accomplishments
$
These include
$35,322,921
Recoveries
Cost-Efficiencies
Restitutions $173,609,167
Fines/Penalties
Forfeitures
Civil Monetary Actions
$208,932,088
Total Labor Racketeering
Program Fraud
Semiannual Report to Congress: October 1, 2020–March 31, 2021 7
Significant Concerns
Significant Concerns
The OIG has identified the following areas of significant concern that cause the Department to be at
particular risk of fraud, mismanagement, waste, abuse, or other deficiencies. The identified areas of
concern reflect continuing matters as well as emerging issues. Most of these issues appear in our
annual Top Management and Performance Challenges report, which can be found in its entirety at
www.oig.dol.gov.
Deploying UI Benefits
Ensuring the Integrity
Expeditiously While
of the DOL Rulemaking
Reducing Improper
Process
Payments
Improving the
Providing OIG Access Performance
to UI Claimant Data and Accountability of
Wage Records Workforce Development
Programs
Protecting the Safety Maintaining the
and Health of Workers Integrity of Foreign
Labor Certification
Programs
Protecting the Safety Protecting the
and Health of Miners Security of Employee
Benefit Plan Assets
Ensuring a Safe Return
to Onsite Instruction at
Job Corps Centers and Managing Medical
Implementing Distance Benefits in OWCP,
Learning Including Opioids
Ensuring the Safety of Ensuring the Solvency
Students and Staff at of the Black Lung
Job Corps Centers Disability Trust Fund
Improving Job Corps’ Securing and
Procurement Process Protecting Information
Management Systems
8 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Significant Concerns
Deploying Unemployment Insurance falling to just over 9 percent during the first three
Benefits Expeditiously While quarters of Fiscal Year (FY) 2020. However, DOL
has not estimated an improper payment rate for
Reducing Improper Payments
UI benefits provided in response to the COVID-19
Over the years, the OIG has repeatedly reported pandemic. Assuming an improper payment rate of
significant concerns with DOL and State 10 percent or higher for extended federal benefits
Workforce Agencies’ (SWA's) ability to deploy under the CARES Act and subsequent legislation,
program benefits expeditiously and efficiently at least $89 billion of the estimated $896 billion
while ensuring integrity and adequate oversight, in UI program funds could be paid improperly,
particularly in response to national emergencies with a significant portion attributable to fraud. The
and disasters. The OIG has reiterated these OIG’s initial pandemic audit and investigative
concerns following the economic downturn work indicate that UI program improper payments,
created by the COVID-19 pandemic and the including fraudulent payments, will be higher than
unprecedented levels of federal funding allocated 10 percent. For example, the alert memorandum
to the Unemployment Insurance (UI) program, we issued on February 22, 2021, identified
which is currently estimated at approximately $5.4 billion in potential fraudulent payments.
$896 billion.
Our prior audit work revealed that the Department
The extraordinary increase in UI funding has has not done enough to formally assess the
resulted in a proportional increase in our various strategies available to combat improper
investigative work in the UI program. Since the payments. Furthermore, improper payments
start of the pandemic, the OIG has reviewed more stemming from fraudulent activity continue to
than 15,000 investigative matters and has opened pose a significant threat to the integrity of the
more than 2,600 complaints and investigations UI program, as identity thieves and organized
relating to UI benefits paid under the Coronavirus criminal groups have found ways to exploit
Aid, Relief, and Economic Security (CARES) program weaknesses. For example, benefits
Act and subsequent legislation. As a result of paid via non-state-issued prepaid debit cards
the surge in complaints, UI investigations now help provide anonymity to those who submit
account for 76 percent of the OIG’s investigative fraudulent claims. Such issues are exacerbated
case inventory, compared with 12 percent prior to by the significant funding increase in response to
the pandemic. the COVID-19 pandemic, resulting in the need for
greater oversight and scrutiny.
For many years, the OIG has reported on the
limitations of the Department’s ability to measure, Under the Continued Assistance for Unemployed
report, and reduce improper payments in the Workers Act of 2020, Congress did include
UI program. Historically, the UI program has additional provisions to mitigate the risk of
experienced some of the highest improper improper payments, with applicants now being
payment rates among federal government benefit required to provide additional evidence to
programs. The reported improper payment support their initial eligibility for UI benefits for the
estimate for the regular UI program has been Pandemic Unemployment Assistance program.
above 10 percent for 14 of the last 17 years, However, the Department needs to continue its
Semiannual Report to Congress: October 1, 2020–March 31, 2021 9
Significant Concerns
ongoing work with states to implement strategies support of OIG oversight activities, the OIG needs
designed to reduce CARES Act UI improper the authority to access SWA UI claimant data
payments and share best practices identified and wage records to verify claimants’ eligibility
among states. These strategies include: for UI benefits, including both initial eligibility
(and amounts) and continuing eligibility. Direct
• providing guidance to states on how to deploy and timely access to these records will permit
resources efficiently and expeditiously; the OIG to identify claimants who are receiving
• using analytics to close IT security and benefits while also earning wages. The OIG could
process gaps as well as to tighten controls for also use those records to assess the outcomes
benefit integrity; of UI reemployment programs, as well as other
• establishing performance measures for training programs, such as YouthBuild and Job
activities to ensure timely delivery of benefits Corps, where employment and wage increases
to those in need; and are important factors in determining a program’s
• developing the required reporting to improve success.
effectiveness and accountability.
Granting the OIG access to SWA UI claimant data
In addition, the Department needs to provide and wage records would provide the OIG with a
timely oversight to ensure that states valuable source of information for both audits and
are effectively carrying out these critical investigations. Similarly, sharing this information
responsibilities. with DOL could help improve programmatic
controls as well as the integrity of benefit
Providing the OIG Access to UI payments.
Claimant Data and Wage Records
Protecting the Safety and Health of
The OIG’s lack of direct access to SWA UI
Workers
claimant data and wage records is of significant
concern because this deficiency directly impedes The Occupational Safety and Health
the OIG’s ability to combat fraud, waste, and Administration (OSHA) is responsible for the
abuse and provide independent oversight to help safety and health of 130 million workers employed
DOL reduce improper payments in employee at more than 8 million establishments, and OSHA
benefit programs, including UI and Disaster must ensure that employers are providing the
Unemployment Assistance. For decades, OIG level of protection required under relevant laws
audits and investigations have been impeded by and policies. The OIG remains concerned about
the lack of access to SWA UI claimant data and OSHA’s ability to target its compliance activities to
wage records. The COVID-19 pandemic and its areas where it can have the greatest impact.
detrimental consequences for U.S. unemployment
greatly amplified that challenge to OIG work. OSHA carries out its compliance responsibilities
through a combination of self-initiated and
The OIG must have easy and expeditious access complaint-based inspections. However, due to
to state UI claimant and wage records to conduct resource limitations, the program reaches only a
appropriate oversight of the use of UI funds. In fraction of the regulated entities. Consequently,
10 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Significant Concerns
OSHA must target the most egregious or Protecting the Safety and Health of
persistent violators to protect the most vulnerable Miners
worker populations. For example, about 2 million
construction workers in the United States are The Mine Safety and Health Administration’s
exposed to respirable crystalline silica at work. (MSHAss's) ability to complete mine inspections
Employers are required to limit worker exposure while safeguarding the health of miners and the
to silica and to take other steps to protect workers. agency’s staff during the COVID-19 pandemic is
However, because of limited resources, OSHA a concern for the OIG. At the same time, mine
faces challenges to ensure that workplaces where operators’ underreporting of occupational injuries
workers are exposed are sufficiently covered. and illnesses hinders MSHA’s ability to focus its
resources on addressing concerns at the most
Moreover, since the start of the pandemic, OSHA dangerous mines. We are also concerned with
has received an influx of complaints. At the same the high incidence of powered haulage accidents
time, OSHA has had to reduce the number of in mines, which accounted for about half of all
its inspections, particularly on-site inspections, mine fatalities in 2017 and 2018 and a quarter
as a way to reduce person-to-person contact. of all mine fatalities in 2019. MSHA also needs
It received 15 percent more complaints in 2020 to develop strategies to address lung disease in
but performed 50 percent fewer (13,164 fewer) Appalachian coal mining states, in particular by
inspections compared to a similar period in 2019. updating regulations regarding quartz content
Therefore, the risk that OSHA may not ensure the in respirable dust. Quartz can cause deadly and
level of protection that workers need at various incurable chronic diseases such as silicosis and
job sites has increased. OSHA’s on-site presence black lung disease.
during inspections has historically resulted in
timely mitigation efforts for at least a portion Improving the Performance
of the hazards identified. However, with most Accountability of Workforce
OSHA inspections performed remotely during Development Programs
the pandemic, workplace hazards may remain
unidentified and unabated longer, thereby leaving The OIG has concerns about the Department’s
more employees vulnerable. ability to ensure that its investment in workforce
development programs is successful in advancing
While OSHA has issued several guidance participants’ skills and placing them in suitable
documents to enhance safety provisions during employment. The high unemployment rates
the pandemic, guidance does not carry the weight caused by the pandemic make it more important
of OSHA rules or standards. Since the outbreak than ever that the Department’s workforce
of COVID-19 more than a year ago, OSHA has development programs assist job seekers and
not issued an emergency temporary standard for employers in finding and filling available jobs
airborne infectious diseases that could protect and assist workers in developing the right skills
employees’ health and safety at worksites. to fill new job openings. Critical to this task is
the Department’s ability to obtain accurate and
reliable data to measure, assess, and make
decisions regarding the performance of grantees,
Semiannual Report to Congress: October 1, 2020–March 31, 2021 11
Significant Concerns
contractors, and states in meeting the programs’ some staff living on campus. Other residential
goals. educational institutions have had substantial
difficulty containing and preventing outbreaks of
The Department needs to ensure that its COVID-19 due to students living, learning, and
investments in credential attainment align with working in close proximity to one another. While
the needs of local employers and are having the Job Corps also plans to continue to improve its
desired impact on participants’ ability to obtain distance learning programs, the OIG is concerned
or advance in a job. In a 2018 audit that followed with two issues related to this option. First, many
up on the employment status of a sample of Job Job Corps programs are intensively hands-on and
Corps students 5 years after they left the program, may not successfully transition to a virtual training
we found that Job Corps faced challenges in model. Second, many Job Corps students may
demonstrating the extent to which its training not have access to the equipment or high-speed
programs helped those participants obtain Internet services they need in order to effectively
meaningful jobs appropriate to their training. participate in distance learning. Since the summer
of 2020, Job Corps has procured and distributed
Research suggests that opioid dependency laptops and mobile hot spots to students to
has been a leading cause of workforce exits for participate in distance learning. According to
workers ages 25 to 54. To date, the Employment ETA, as of March 2021, Job Corps centers have
and Training Administration (ETA) has approved distributed less than half the available equipment;
up to $116 million in National Health Emergency however, new enrollment has decreased and
Grants for 21 states and the Cherokee Nation ETA estimates that the remaining devices will be
to address the opioid crisis. It is vital that the utilized once enrollment returns to normal, virtual
Department monitor the performance of the enrollment is initiated, and distance learning is
discretionary grants it has awarded for the delivery fully implemented.
of services to employers and workers affected by
the opioid crisis. Ensuring the Safety of Students and
Staff at Job Corps Centers
Ensuring a Safe Return to On-Site
In addition to the safety challenges posed by
Instruction at Job Corps Centers
the COVID-19 pandemic, controlling on-campus
and Implementing Distance Learning
violence and other criminal behavior remains a
During the Pandemic substantial challenge for Job Corps centers. OIG
The OIG is concerned about Job Corps’ ability to audits from 2015 and 2017 revealed that some
effect a safe return to in-person learning during Job Corps centers failed to report and investigate
the COVID-19 pandemic. Job Corps released a serious misconduct, such as drug abuse and
program instruction notice in September 2020 assaults. The audits also disclosed that some
to help guide centers as they begin a phased Job Corps centers downgraded incidents of
reopening. Preventing outbreaks of COVID-19 violence to lesser infractions, creating an unsafe
at centers across the United States will pose a environment for students and staff. The follow-
significant challenge for Job Corps. Job Corps up work we completed in December 2017, and
centers are mostly residential, with students and our ongoing review of Job Corps’ corrective
12 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Significant Concerns
actions, showed that Job Corps has taken steps meaningfully participate in DOL’s rulemaking
to improve center safety and security. However, process.
the OIG has concerns with the process Job
Corps uses to evaluate incoming applicants with DOL also faces the challenge of ensuring that it
respect to substance abuse and mental health enters into rulemaking, rather than simply issuing
issues. A March 2021 OIG audit report showed guidance, when appropriate. For example, a 2019
that the current process does not provide Job OIG audit found that OSHA lacked a procedure
Corps centers the appropriate tools and resources to ensure that it had considered and determined
to properly evaluate applicants as they enter the appropriateness of issuing a document as
the program. The OIG continues to monitor Job guidance, rather than a rule. Issuing a document
Corps’ various safety initiatives and actions to as guidance is appropriate if the document is
keep students and staff safe. interpretative or a general statement of policy, and
if it does not create, modify, or revoke a standard.
Ensuring the Integrity of the DOL Between 2014 and 2016, OIG found that OSHA
Rulemaking Process had not followed its existing procedures for 80
percent of sampled guidance.
We are concerned about the Department’s
procedures for issuing rules and guidance to DOL is aware of the challenges associated with
promote the welfare of workers, job seekers, its rulemaking process and continues to review its
and retirees by safeguarding working conditions, rulemaking policies and to update its rulemaking
health and retirement benefits, and wages. The standard operating procedures. However,
Department’s rules and guidance should be questions remain regarding the Department’s
transparent to American taxpayers, comply with transparency with American taxpayers when
DOL’s policies and procedures and applicable it comes to the rulemaking process and its
federal laws and regulations. compliance with federal laws and regulations
applicable to rulemaking.
The OIG has previously noted this concern for
transparency in rulemaking. For example, in Maintaining the Integrity of Foreign
December 2020, the OIG issued its report on
Labor Certification Programs
DOL’s 2017 Notice of Proposed Rulemaking
(NPRM) to rescind portions of its 2011 regulations The DOL foreign labor certification (FLC)
concerning tipped employees under the Fair Labor programs are intended to permit U.S. employers
Standards Act. The report showed that DOL did to hire foreign workers to meet their workforce
not demonstrate it had followed a sound process needs while protecting U.S. workers’ jobs, wages,
in promulgating the 2017 NPRM and did not fully and working conditions. DOL’s administration of
adhere to regulatory guidance. Consequently, FLC programs under current laws has been an
DOL was not transparent and did not provide the OIG concern for decades. OIG investigations have
public with complete information either to assess shown these visa programs, in particular the H-1B
the potential impact of the proposed rule or to program for workers in specialty occupations, to
be susceptible to significant fraud and abuse from
perpetrators, including dishonest immigration
Semiannual Report to Congress: October 1, 2020–March 31, 2021 13
Significant Concerns
agents, attorneys, labor brokers, employers, and, However, DOL has identified instances in which
most often, organized criminal enterprises. the employer is not complying with the conditions
of employment, reinforcing how susceptible these
In 2003, the OIG issued a white paper1 outlining programs are to fraud.
vulnerabilities that then existed in four FLC
programs, PERM, H-1B, H-2A, and H-2B, and, Finally, DOL has not established a risk-based
in 2020, we issued a similar report. We found process to determine which H-2A and H-2B
that, although the post-2003 rules revamped applications to audit. The current selection
the PERM, H-2A, and H-2B visa programs, as process does not use data analytics or account
well as addressed some of the vulnerabilities for risk when selecting applications to audit.
cited in OIG and Government Accountability Further, ETA has not documented any risk factors
Office (GAO) audits and investigations, those it considers before initiating an audit; thus, it is
same rules created challenges regarding DOL’s difficult to determine whether the applications
responsibilities. Additionally, DOL continues to audited were those most likely to result in
have limited authority over the H-1B and PERM violations eligible for debarment.
programs which challenges protecting the welfare
of the nation’s workforce. Protecting the Security of Employee
Benefit Plan Assets
The statute limits DOL’s ability to deny H-1B
applications. Specifically, DOL may only deny The OIG remains concerned over the Employee
incomplete and obviously inaccurate H-1B Benefits Security Administration’s (EBSA's) ability
applications and has only limited authority to to protect the benefit plans of about 154 million
conduct H-1B investigations in the absence of a plan participants and beneficiaries under the
complaint. The PERM program itself is persistently Employee Retirement Income Security Act of
vulnerable to employers not complying with its 1974 (ERISA). In particular, the OIG is concerned
qualifying criteria. Therefore, both the PERM and about the statutory limitations on EBSA’s
H-1B programs remain highly prone to fraud. oversight authority and inadequate resources
to conduct compliance and enforcement. A
With various new DOL rules going into effect decades-long challenge to EBSA’s compliance
since 2003, there have been opportunities for program, ERISA provisions allow billions of
the PERM, H-2A, and H-2B visa programs dollars in pension assets to escape full audit
to change. For example, these new rules scrutiny. We have previously found that as much
implemented employer attestation programs, as $3.3 trillion in pension assets, including an
which allow employers to agree to the conditions estimated $800 billion in hard-to-value alternative
of employment without providing supporting investments, held in otherwise regulated entities
documentation to validate their agreements. such as banks, received limited-scope audits
that provided few assurances to participants
¹Department of Labor. 2003. Overview and Assessment of regarding the financial health of their plans. EBSA
Vulnerabilities in DOL's Alien Labor Certification Programs. needs to focus its limited available resources
Report No. 06-03-007-03-321. Washington, DC: Office of on investigations that are most likely to result
Inspector General. https://www.oig.dol.gov/public/reports/oa/ in the deterrence, detection, and correction of
viewpdf.php?r=06-03-007-03-321&y=2003.
14 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Significant Concerns
ERISA violations, particularly given the number FY 2020. OWCP needs to continue its efforts to
of benefit plans EBSA oversees relative to the analyze home health-care billings for abusive
number of investigators it employs. Finally, practices and to identify and refer allegations
EBSA lacks the authority under the Federal involving potential fraud or abuse to the OIG for
Employees' Retirement System Act (FERSA) further investigation.
to effectively oversee more than $500 billion in
Federal employee Thrift Savings Plan (TSP) Past audits of the FECA program have identified
assets. FERSA requires EBSA to conduct regular internal control weaknesses related to OWCP’s
compliance audits to determine whether the management of pharmaceuticals. For example,
Federal Retirement Thrift Board (the Board), an OWCP allowed increases in billings for
independent agency, is fulfilling its fiduciary duties compounded drugs to go undetected and failed
and properly safeguarding TSP participants’ to identify the overuse of opioids. Given the high
assets. risk of fraud related to prescription payments,
OWCP needs to analyze and monitor FECA
Managing Medical Benefits in the program costs to promptly detect and address
Office of Workers’ Compensation emerging issues before they manifest into material
concerns.
Programs, Including Opioids
The OIG has concerns about the Office of Consistent with prior OIG audit recommendations,
Workers’ Compensation Programs’ (OWCP) OWCP imposed restrictions on opioid
ability to effectively manage rising home prescriptions in September 2019, limiting
health care costs in the Energy Employees all initial opioid prescriptions to 7 days, with
Occupational Illness Compensation Act (Energy three subsequent 7-day refills, and requiring
Workers) program, as well as the use and cost prior authorization to obtain opioids beyond
of pharmaceuticals in the Federal Employees’ 28 days. According to OWCP-provided data,
Compensation Act (FECA) program. The OWCP’s efforts to address the opioid problem
Department needs to make sure it has controls have resulted in declines in opioid use and
in place to ensure that the medical benefits it new prescriptions. However, in response to the
provides to energy workers and FECA program COVID-19 pandemic, OWCP has had to divert
claimants are safe, effective, medically necessary, resources from focusing on claimants with opioid
and the most cost-effective. prescriptions to processing an influx of COVID-19
claims from federal workers, which has the
In the Energy Workers program, with an aging potential to negatively impact the FECA program’s
claimant population and an increased demand opioid user population. OWCP needs to balance
for home health-care services, there is a potential program needs under this pandemic, all the while
for providers to exploit these benefits through
unauthorized or unnecessary billings. Since
2010, home health care costs paid by the Energy
Workers program have grown from $100 million to
more than $675 million, amounting to 74 percent
of all medical benefits paid by the program in
Semiannual Report to Congress: October 1, 2020–March 31, 2021 15
Significant Concerns
continuing its efforts to help identify claimants at risk of opioid dependence and determine the associated
costs of addiction treatment.
Ensuring the Solvency of the Black Lung Disability Trust Fund
Miners and their dependent survivors receive lifetime benefits when awarded under the Black Lung
Benefits Act. Mine operators pay these benefits when possible, and the Black Lung Disability Trust Fund
(BLDTF) pays the benefits when a miner’s former employer does not or cannot assume liability. OIG’s
primary concern is that the current annual income of the BLDTF (primarily from an excise tax on coal) is
not sufficient to cover annual benefit obligations, to meet administrative costs, and to service past debt.
According to DOL’s Agency Financial Report, as of September 30, 2020, the BLDTF was carrying close
to a $6 billion deficit balance, which is projected to grow to nearly $15 billion (in constant dollars) by
September 30, 2045.
The U.S. Energy Information Administration projects that coal production will generally decline through
2050, a downturn that has already resulted in several coal mine operators filing for bankruptcy. In some
instances, the BLDTF will be responsible for benefit payments previously made by mine operators no
longer able to cover their federal black lung liabilities.
In February 2020, the GAO issued a report concluding that operator bankruptcies have placed a financial
strain on the fund and that DOL’s insufficient oversight of coal mine operator self-insurance arrangements
exposed the BLDTF to financial risk. Later that month, OWCP published a news release announcing
reforms to the self-insurance process for coal mine operators to better protect the BLDTF.2 It stated, “[i]n
part, the assessment involves reviewing actuarial estimates of the operators’ liabilities and setting security
amounts based on those liabilities and the operators’ risk of default” (see Table 1).
The excise tax that funds the BLDTF is levied on domestic sales of coal mined in the United States (coal
exports and lignite are not subject to this tax). From January 1 through December 31, 2019, the tax rates
were reduced to the rates originally set when the trust fund was established in 1978: $0.50 per ton of
underground-mined coal or $0.25 per ton of surface-mined coal. Even though this rate reverted to higher,
pre-2019 levels effective January 1, 2020, the temporary tax rate reduction plus the reduction in coal
production will result in decreased cash inflows to the BLDTF.
² http://www.dol.gov/newsroom/releases/owcp/owcp20200224.
16 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Significant Concerns
TABLE 1: SELF-INSURED COAL MINE OPERATOR BANKRUPTCIES
AFFECTING THE BLDTF, FILED FROM 2014 THROUGH 2016
Estimated Number
Estimated Transfer of of Beneficiaries for
Amount of Collateral at
Coal Operator Benefit Responsibility Whom Liability Has
the Time of Bankruptcy
to the BLDTF Been Transferred to
the BLDTF
Alpha Natural
Resources $12.0 million $494 million 1,839
James River Coal $0.4 million $141 million 490
Patriot Coal $15.0 million $230 million 993
Total $27.4 million $865 million 3,322
The Congressional Research Service reported in 2019 that “the decline in the excise tax rates will likely put
additional financial strain on a trust fund that already borrows from the general fund to meet obligations.”3
Moreover, the tax rate will once again revert to the lower, 2019 levels beginning in January 2022, putting
further strain on the BLDTF.
Securing and Protecting Information Management Systems
We remain concerned about the Department’s ability to safeguard its data and information systems. While
the Department is implementing a new IT governance model, we continue to report deficiencies in its efforts
and ability to identify vulnerabilities, to protect information systems and data, and to recover from security
incidents. The most recent deficiencies we identified were in four of the five information security functional
areas as defined by the National Institute of Standards and Technology Cybersecurity Framework. These
deficiencies continue to hinder the Department from identifying security weaknesses; protecting its systems
and data; and detecting, responding to, and recovering from incidents. For example, DOL has not:
• implemented effective strategies and programs to identify system security vulnerabilities and ensure
that appropriate actions are being taken.
• provided adequate oversight of its information systems, including those that are either owned or
operated by contractors or other federal entities on behalf of DOL; or
• accurately identified its information system inventory, as well as its hardware and software asset
inventory.
The Department’s agencies rely on IT systems to obtain and create vast amounts of information and data in
carrying out their missions. Included in these data are the personally identifiable information and personal
health information of the public and of federal employees. Securing these data is a concern because
DOL’s data integrity is constantly at risk from external and internal threats, and we continue to identify
deficiencies in the Department’s efforts to protect its information systems. In addition, we determined that
the Department has not adequately planned or implemented the technology tools required to manage and
³S. Szymendera, The Black Lung Program, the Black Lung Disability Trust Fund, and the Excise Tax on Coal: Background and
Policy Options, CRS Report No. R45261. (Washington, DC: Congressional Research Service, 2019).
Semiannual Report to Congress: October 1, 2020–March 31, 2021 17
Significant Concerns
monitor IT security. Moreover, DOL changed its information systems, which are necessary to
work and IT landscape to significantly expand support the Department’s mission. Our concern
telework operations for its employees as well as is whether DOL can implement the necessary
to identify alternate methods for securing data strategies and tools to provide sufficient capability
that were previously required to remain on-site for and effective security for the Department’s data
security reasons. and information systems as well as to support
the execution of its mission. Finally, we continue
As the Department is moving its information to be concerned that the position of the Chief
systems to a shared services model and Information Officer does not report directly to
expanding its use of cloud and third-party the agency head. Realigning the organization
providers for its information infrastructure and to create a direct reporting relationship would
services, we continue to identify deficiencies provide the position with greater independence
in the Department’s oversight of information and authority to implement and maintain an
systems managed by DOL’s program agencies effective information security program.
and systems operated by a third-party on behalf
of the Department. As the Department continues Improving the Job Corps’
this transition, we are concerned with the Procurement Process
Department’s ability to provide the oversight and
to retain the specialized knowledge and expertise Job Corps spends about $1 billion on goods and
required to protect and manage its systems, services annually for approximately 120 centers
including the contracted systems. nationwide and is currently transitioning center
operations from cost reimbursement to fixed-
Since this issue was first identified in 2011, price contracts. The Department believes this
the Department has been unable to implement transition will lower government risk, reduce the
an effective asset management system. The administrative burden, generate more pre-award
Department maintains a significant number of efficiencies, and encourage more participants
desktops, laptops, tablets, and mobile devices to compete for contracts. Increased competition
for its employees. In addition, the Department among contractors should lead to better contractor
maintains servers, routers, storage devices, performance with fewer staffing shortages and
and other IT hardware. The Department improved services, including those for centers’
indicated it implemented an enterprise asset safety and security.
management system in FY 2020 and is in the
process of ensuring data quality. However, the Prior OIG work in this area found that Job Corps’
Department needs to provide evidence of such procurement processes did not ensure the best
implementation, and more work needs to be done value for taxpayers. As the Department moves
to effectively track and protect its assets through to fixed-price contracting, the Department must
their life cycle. Without effective asset inventory continue to ensure that its contract requirements
processes, the Department is unable to account are well-developed, that contract competition
for and secure its data and equipment. is fair, that contractor payments align with
performance metrics and related outcomes, and
These deficiencies represent ongoing risks to the that sound post-award oversight is used to quickly
confidentiality, integrity, and availability of DOL’s ameliorate deficiencies and poor performance.
18 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker and Retiree Benefit
Programs
Worker and Retiree Benefit Programs
Unemployment Insurance Programs
Enacted more than 80 years ago as a federal–state partnership, the 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 (SWAs) in jurisdictions covering
the 50 states, the District of Columbia, and U.S. territories, under the oversight of DOL’s Employment
and Training Administration (ETA). The federal government pays the program’s administrative expenses.
DOL-OIG Oversight of the • administers a separate UI program under
Unemployment Insurance Program its laws, but follows uniform guidelines
established by federal law;
Background • establishes requirements for eligibility, benefit
amounts, and the length of time that benefits
As the federal agency with primary oversight of can be paid; and
DOL, the OIG remains committed to meeting the • manages the personnel and system resources
challenges created by the COVID-19 pandemic to administer their respective programs.
and assisting DOL and Congress in improving
the efficiency and integrity of the UI program. UI benefits are generally funded by state employer
Strengthening the UI program to prevent improper taxes with administrative costs funded by the
payments, including fraud, and to detect and federal government. Extensions and expansions
recover improper payments that have been of coverage and benefits, such as those provided
made, is key to ensuring unemployed workers by the CARES Act and subsequent legislation, are
expeditiously receive much needed benefits, while also normally funded by the federal government.
safeguarding tax dollars directed toward that goal. DOL’s ETA is the federal agency responsible for
providing program direction and oversight. The
The UI program is a joint federal-state program OIG conducts independent oversight of the UI
that acts as an initial economic safety net when program through audits to strengthen the integrity
individuals lose their jobs through no fault of their and efficiency of the program and criminal
own. Each SWA: investigations to detect and combat large-scale
fraud.
DOL-OIG UI Oversight Work
In April 2020, we published our Pandemic
Response Oversight Plan detailing how the OIG
would conduct its oversight, with a significant
focus on the UI program. We structured the work
20 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker and Retiree Benefit Programs
for completion in four phases. During Phase 1,
we examined past audits related to the American
Recovery and Reinvestment Act of 2009, and
the Disaster Unemployment Assistance program,
and assessed comparable lessons learned as
they were applicable to the UI program. As a
result, in late April 2020, we issued an Advisory
Report outlining our initial concerns regarding
the implementation of the UI program provisions
under the CARES Act. The report summarized
dozens of OIG recommendations to implement Indeed, following the passage of the CARES
corrective action in these areas. Act, fraud against the UI program exploded.
Working with our federal and state partners, we
Since then, we have issued several other have been able to identify billions in potential UI
reports and alerts involving the UI program. For fraud nationwide. The OIG has opened more than
example, our assessment of DOL’s CARES 15,000 new investigative matters involving UI
Act implementation plan resulted in an Alert fraud since the crisis began, up from an average
Memorandum in May 2020, describing our of 100 UI fraud matters pre-pandemic.
concerns regarding claimant self-certification in
the Pandemic Unemployment Assistance (PUA) In response to the extraordinary increase in
program. In our view, reliance on such self- oversight demands, the OIG hired additional
certifications rendered the PUA program highly criminal investigators; increased the caseload of
vulnerable to improper payments and fraud. investigators already on-board; deployed federal
The OIG’s alert memorandum informed recent and contract staff to review DOL and SWAs’
COVID-19 legislation, which included provisions efforts; and strengthened our data analytics
to improve SWAs’ abilities to ensure proper program. In addition, we took several other actions
claimant eligibility and to mitigate fraud. to augment our efforts, including the following:
In June 2020, the OIG provided a member briefing • initiated the development of a National
and a statement for the record to Congress UI Fraud Task Force, alongside the U.S.
highlighting challenges DOL and SWAs face in Department of Justice (DOJ);
administering and overseeing the UI program. As • collaborated with DOJ on the strategic
the OIG reported, the unprecedented infusion of assignment of 12 term-appointed Assistant
federal funds into the UI program gave individuals United States Attorneys assigned solely to
and organized criminal groups a high-value target prosecute UI fraud;
to exploit. That, combined with easily attainable • established a multi-disciplinary Pandemic
stolen PII and continuing UI program weaknesses Rapid Response Team within the OIG;
identified by the OIG over the last several years, • appointed a national UI fraud coordinator to
allowed criminals to defraud the system. manage our national investigative response to
UI fraud;
Semiannual Report to Congress: October 1, 2020–March 31, 2021 21
Worker and Retiree Benefit Programs
• appointed seven regional UI fraud OIG case, U.S. v. Leelynn Danielle Chytka, in the
coordinators to partner with the SWAs and Western District of Virginia, a defendant pleaded
federal, state and local law enforcement on guilty for her role in a scheme that fraudulently
UI fraud matters in their geographic areas of stole more than $499,000 in UI benefits using the
responsibility; identities of individuals ineligible for UI, including a
• leveraged resources from the Council of number of prisoners.
the Inspectors General on Integrity and
Efficiency, Pandemic Response Accountability DOL’s Progress
Committee;
• collaborated with States’ Auditors to help While concerns persist within the UI program,
develop their audit strategies for the CARES DOL has instituted efforts to focus on program
Act UI programs; and integrity when implementing the CARES Act
• implemented an extensive outreach and and other pandemic-related UI programs. These
education program targeted to SWAs, the efforts include putting agreements in place with
Department, financial institutions and their states to comply with all applicable requirements
associations, law enforcement agencies, and to receive funds, issuing operating guidance,
the public to inform and raise awareness and providing technical assistance to SWAs
regarding fraud trends, best practices, red individually and through webinars. DOL has
flags, and more. included requirements for SWAs to focus on
program integrity in guidance related to pandemic
Our efforts to date have directly resulted in the related UI funds. In addition, DOL has reinforced
identification and recovery of more than $150 the need for SWAs to actively partner with the
million in fraud involving the UI program. We have OIG to address fraud in the UI program.
also assisted in the identification and recovery of Further, the UI Integrity Center, established
more than $565 million in fraudulent UI benefits. by DOL through a grant and operated by the
In addition, the OIG identified more than National Association of State Workforce Agencies
$5.4 billion of potentially fraudulent UI benefits (NASWA), has continued to develop the Integrity
paid to individuals with Social Security numbers Data Hub (IDH) to serve as a secure portal
filed in multiple states, to individuals with Social for SWAs to cross-match public and private
Security numbers of deceased persons and sources of data, including new tools that will help
federal inmates, and to individuals with Social prevent improper payments. DOL is working with
Security numbers used to file for UI claims NASWA's Integrity Center to further enhance SWA
with suspicious email accounts. In an Alert participation in and use of NASWA's IDH through
Memorandum issued in February 2021, the additional guidance and regular communication
OIG notified DOL of these high risk areas for with SWAs.
potentially fraudulent claims and recommended
DOL take corrective actions.
Since the start of the pandemic, more than 140
individuals have been charged and arrested for
federal offenses related to UI fraud. In one recent
22 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker and Retiree Benefit Programs
DOL-OIG UI Recommendations numbers of deceased individuals, potentially
ineligible federal inmates, and claimants with
The OIG has made several recommendations suspicious email accounts; and
to improve the efficiency and integrity of the UI • work with Congress to establish legislation
program. Specifically, DOL needs to: requiring SWAs to cross-match in high-risk
areas, including the four areas identified in the
• facilitate the OIG’s access to UI claim data February 2021 Alert Memorandum.
for audit and investigative oversight purposes
through the issuance of Unemployment In addition, Congress should consider legislative
Insurance Program Letters; proposals included in prior budget requests and
• further enhance SWA participation in and use pass legislation to improve UI program integrity.
of the IDH operated by NASWA; These legislative proposals are consistent with
• work with SWAs to ensure that sufficient previous OIG findings and recommendations to
staffing and system resources are in place to improve the UI program. The proposals include
manage sudden increases in the number of UI the following:
claims and payments to meet the continued
requirements of the CARES Act, and similar • allow the Secretary of Labor greater authority
future legislation; to require SWAs to implement UI corrective
• incorporate the impact of UI improper actions related to performance and integrity;
payments related to temporary programs, • require SWAs to use the NASWA’s IDH and
such as those created by the CARES Act, into the State Information Data Exchange System;
the traditionally estimated improper payment • require SWAs to cross-match UI claims
rate calculations; against the National Directory of New Hires;
• identify and implement strategies designed • require SWAs to cross-match UI claims with
to reduce the UI improper payment rate, the U.S. Social Security Administration’s
including sharing best practices identified prisoner database and other repositories of
among SWAs; prisoner information;
• ensure that SWAs are enforcing UI claimants’ • allow SWAs to retain 5 percent of UI
requirements to meet the conditions of UI overpayment recoveries for program integrity
eligibility, including: 1) being available for work; purposes; and
2) actively seeking work; and 3) accepting • require SWAs to use UI penalty and interest
suitable and safe work when offered; collections solely for UI administration.
• create a rapid response team consisting of
federal and state officials capable of providing Finally, Congress should consider legislative
technical and other assistance to SWAs action to allow DOL and the OIG to have direct
impacted by major disasters; access to UI claimant data and wage records
• establish effective controls, in collaboration for its oversight responsibilities. Real-time direct
with SWAs, to mitigate fraud and other access to SWA UI claimant data and wage records
improper payments to ineligible claimants, systems would further enable the OIG to quickly
including UI benefits paid to: multi-state identify large-scale fraud and expand its current
claimants, claimants who used Social Security efforts to share emerging fraud trends with state
Semiannual Report to Congress: October 1, 2020–March 31, 2021 23
Worker and Retiree Benefit Programs
workforce partners in order to strengthen the UI COVID-19: States Cite Vulnerabilities
program and likely prevent fraud before it occurs. in Detecting Fraud While Complying
In addition, the data analytics based on the
with the CARES Act UI Program Self-
direct access would further enable our auditors
Certification Requirement
to identify program weaknesses and recommend
corrective action that will improve the timeliness The Coronavirus Aid, Relief, and Economic
of UI benefit payments and the integrity of the UI Security (CARES) Act of 2020 provides for up to
program. For more information, please refer to 39 weeks of Pandemic Unemployment Assistance
the Legislative Recommendations section of this (PUA). To be eligible for benefits under PUA,
report. applicants are required to self-certify that they are
unemployed for reasons related to the COVID-19
DOL-OIG Ongoing and Planned UI Work pandemic, and they are advised against making
fraudulent representations. As of July 8, 2020,
The OIG’s efforts to strengthen and protect the disbursements for PUA benefits totaled nearly
UI program continue. In addition to working with $110 billion.
our law enforcement partners to combat fraud
in the program, we will be issuing additional UI programs historically have among the highest
reports covering critical areas of concern and improper payment rates of all federal programs,
opportunities for program improvement. These will and the unprecedented volume of PUA claims,
include reports on: coupled with the short timeframe to implement
the PUA program, increases the risk of improper
• the capability of SWAs’ legacy IT systems payments, including those involving fraud. As a
to process UI benefit claims timely and result, we conducted this audit to determine what
accurately; steps states have reported taking to implement
• the effectiveness of SWAs’ controls to ensure the PUA program and to deter and detect
UI benefit payments are timely and made to fraud related to applicants’ self-certification.
only eligible claimants; To meet this objective, we developed a survey
• DOL and SWAs’ efforts to prevent and detect to obtain information from the states on their
overpayments; implementation of the PUA program, the self-
• the impact of CARES Act and subsequent certification process, and the tools used to detect
legislation provisions on nontraditional UI and deter fraud.
claimants;
• SWAs’ use of pandemic legislation UI Officials in the 45 states that responded to the
administrative funds and drawdowns; and survey all reported that they had implemented
• the sufficiency of SWAs’ staffing resources the PUA program. However, 98 percent of the
to support implementation of pandemic UI respondents reported implementation challenges,
programs. including a lack of resources to address the high
volume of claims, incompatible legacy systems,
For more information about the OIG’s work, and untimely and unclear guidance from ETA.
please visit our Pandemic Response Portal.
24 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker and Retiree Benefit Programs
States acknowledged the PUA self-certification requirement as the top fraud vulnerability within the PUA
program. Ninety-one percent of respondents reported using a variety of tools to detect and deter fraud,
such as documentation of wages earned or income verification, predictive analytics, and cross-matching
with other databases to verify eligibility (see Table 2). In addition, 89 percent of respondents said their state
requires applicants to acknowledge that their self-certifications are subject to penalty of perjury.
TABLE 2: FRAUD MESSAGING BY STATES
Survey Question Response and Associated Rate
1. Is the claimant advised that intentional
misrepresentation in the self-certification process is Yes: 100%
fraud?
2. Is the claimant required to acknowledge that his/
Yes: 89%
her self-certification is subject to penalty of perjury?
3. Does your state website provide clear messaging
online that claimants may be subject to criminal
Yes: 91%
prosecution if they are found to have committed
fraud?
Source: OIG analysis of PUA survey results
A majority of states also reported stopping payment for claims when they suspect fraud, conducting
investigations, and referring cases to DOL-OIG for investigation. In addition, some states said they report
suspected fraud to state and local law enforcement. However, while most states appeared to be taking
steps to detect and deter suspected fraudulent claims, many still said they faced resource and system
challenges that lessened their ability to better detect and deter fraud.
We did not make any recommendations in this report.
For more information, go to https://www.oig.dol.gov/public/reports/oa/2021/19-21-001-03-315.pdf, Report
No. 19-21-001-03-315 (October 21, 2020).
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
The OIG identified a concern during the audit of DOL’s response to the UI program’s expansion under
the CARES Act. An examination, in collaboration with the OIG’s Office of Investigations, identified more
than $5.4 billion of potentially fraudulent UI benefits paid to individuals who: 1) filed in multiple states, 2)
used Social Security numbers of deceased persons, 3) were federal inmates, or 4) used suspicious email
accounts to file for UI claims (see Table 3).
Semiannual Report to Congress: October 1, 2020–March 31, 2021 25
Worker and Retiree Benefit Programs
This alert memorandum captured only a subset of the potentially fraudulent UI activities from March 2020
through October 2020 and was the result of comprehensive data analysis. We expect the actual amount of
potential fraud to be much larger. For example, in January 2021, California reported that it paid at least
TABLE 3: POTENTIAL FRAUDULENT BENEFIT PAYMENTS
Type of Potential Fraud Amount
Multi-State Claimants $3,500 Million
Social Security Numbers of Deceased Persons $587 Million
Federal Inmates $98 Million
Suspicious Email Accounts $2,000 Million
Source: OIG analysis of claims filings
10 percent ($11 billion) of its UI benefits to payments. However, SWAs are not required to
fraudulent claimants since the pandemic began use the IDH and 22-SWAs have opted to not use
and believed the amount could be as high as the IDH.
27 percent ($29 billion). The SWAs paid out a
total of $400 billion in calendar year 2020. If To address claims filed by federal inmates, who
other SWAs have problems similar to those of are potentially ineligible for UI benefits, ETA needs
California, potential fraud could easily range into to determine how SWAs can cross-match federal
the tens of billions of dollars. prisoner UI data to prevent additional improper
payments. In addition to cross-matching federal
ETA needs to take immediate action and increase prisoners and UI data, ETA must assist SWAs to
its efforts to ensure that SWAs implement ensure they implement controls to cross-match
effective controls to mitigate fraud and improper state prisoner data to mitigate fraud.
payments. Without effective controls, the UI
program is exposed to substantial risks, including To mitigate suspicious email fraud, ETA can
the cost of improper payments to ineligible require SWAs to request additional identity
claimants. For example, NASWA’s IDH is a verification to file a UI claim that uses a suspicious
secure, centralized platform to compare and email account. ETA could also prohibit claimants
analyze UI claims data through various cross- from using the particular account types used to
matches. IDH performs cross-matches, such commit fraud.
as multi-state claims and comparisons with
deceased persons’ Social Security numbers We made two recommendations to ETA to
and provides the match results to the affected establish effective controls, in collaboration with
SWA. According to ETA, SWA use of the IDH has SWAs, to mitigate fraud and other improper
increased during the pandemic. As of December payments to ineligible claimants, including fraud
2020, 32 of the 54 SWAs had used or partially in the four areas identified in the memorandum.
used the IDH. According to NASWA, the use ETA also needs to work with Congress to
of the IDH during the pandemic has helped to establish legislation requiring SWAs to cross-
prevent more than $178-million in improper
26 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker and Retiree Benefit Programs
match the high-risk areas identified in this alert The investigation of the domestic access of the
memorandum. fraudulently obtained benefit funds is ongoing.
For more information, go to https://www.oig.dol. This is a joint investigation with OESC and the
gov/public/reports/oa/viewpdf.php?r=19-21-002- Osage Nation–Office of the Attorney General.
03-315&y=2021, Report No. 19-21-002-03-315
(February 22, 2021). Pennsylvania Man Sentenced to
Prison for UI and Tax Fraud Scheme
Oklahoma Employment Security
On October 29, 2020, Aaron Horton was
Commission Blocks More Than
sentenced to 75 months in prison and ordered
1,800 Fraudulent UI Claims, Saving
to pay more than $500,000 in restitution for his
Tax Payers More Than $6.5 Million involvement in a UI and tax return fraud scheme.
Between July 14, 2020, and October 15, 2020, Horton, along with various indicted and unindicted
the Oklahoma Employment Security Commission co-conspirators, created false and fictitious
(OESC) blocked more than 1,800 fraudulent businesses in order to use stolen PII to collect
UI claims that were filed after the CARES Act unemployment benefits and file false tax returns.
became law. This action stopped more than
$6.5 million in UI benefits from reaching the hands This is a joint investigation with the IRS Criminal
of international criminals. Investigation Division (IRS-CI), U.S. Postal
Inspection Service, Social Security Administration
Following the enactment of the CARES Act, the -OIG), and Treasury Inspector General for Tax
U.S. Attorney’s Office for the Northern District Administration. United States v. Aaron Horton
of Oklahoma created the Coronavirus Anti- (E.D. Pennsylvania)
Fraud Team. The team determined that a large
number of the fraudulent UI claims used the Man Sentenced for His Role
stolen identities of Osage Nation employees, a in a Scheme to Defraud the
federally recognized Native American government Unemployment Systems in the
headquartered in Oklahoma. Investigative efforts States of Arizona and California
determined UI claims had been filed through the
Internet from several offshore locations including On March 18, 2021, Misael Jimenez-Castro
South Africa, Australia, London, Chile, Panama, pleaded guilty to one count of aggravated
and Toronto. Based on investigative findings, identity theft and was sentenced to 24 months
OESC stopped this large group of claims, blocked of incarceration. After his period of confinement
the IP addresses used to file the UI claims and is complete, Jimenez-Castro must surrender to
began blocking other foreign IP addresses from U.S. Immigration and Customs Enforcement for
accessing and filing UI claims with the OESC. removal proceedings. As a condition of his plea
Semiannual Report to Congress: October 1, 2020–March 31, 2021 27
Worker and Retiree Benefit Programs
agreement, the government agreed to drop all and the other conspirators to obtain UI benefits.
remaining charges. Through the scheme, the group defrauded 16
states of more than $500,000.
In July 2020, Jimenez-Castro arrived at the
Miami International Airport aboard a flight from United States v. Delanea Edwards (E.D.
the Dominican Republic and proceeded through Arkansas)
U.S. Customs. While Jimenez-Castro was
undergoing screening for entry into the United
States, Customs and Border Protection officers
discovered a composition notebook and a cellular
telephone containing PII within his backpack.
Jimenez-Castro admitted to OIG special agents
that the composition notebook was his and that
he used the stolen PII to file unemployment
claims in the states of Arizona and California.
An examination of his cellular telephone later
revealed text messages containing a link to the
unemployment web page for the state of Arizona.
Jimenez-Castro was subsequently apprehended
pursuant to a criminal complaint charging him with UI debit cards seized during a search of King’s
unlawfully possessing 15 or more access devices residence.
and aggravated identity theft while trying to enter
the United States. Michigan Man Pleads Guilty to UI
Fraud
This is a joint investigation with Homeland
Security Investigations. United States v. Jimenez- In March 2021, Dwayne Cochran of Detroit
Castro (S.D. Florida) pleaded guilty to one count of wire fraud and one
count of aggravated identity theft.
Arkansas Women Sentenced in
Cochran submitted fraudulent UI claims through
Unemployment Benefits Scheme
the Internet using unauthorized PII in order to
On January 13, 2021, Delanea Edwards was obtain benefits from the Michigan Unemployment
sentenced to three years of probation and ordered Insurance Agency. Cochran engaged in a scheme
to pay more than $21,000 in restitution to the to file 223 fraudulent claims, resulting in a loss to
states of Indiana, Massachusetts, and Texas for the State of Michigan of more than $188,000.
her involvement in an unemployment benefits
conspiracy. From June 2012 through August 2017, United States v. Dwayne Cochran (E.D. Michigan)
Edwards, along with 18 other charged individuals,
conspired with Mark “Big Head” King to create
multiple fictitious employers to allow Edwards
28 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker and Retiree Benefit Programs
Southern California Man Pleads and the California Employment Development
Guilty to Fraudulently Obtaining Department.
More Than $500,000 in COVID-19
USA v. Marinas (C.D. California)
Unemployment Assistance
In February 2021, Bonifacio Jastilana Marinas Miami Resident Pleads Guilty to
pleaded guilty to a federal criminal charge for Aggravated Identity Theft and Mail
fraudulently obtaining more than $500,000 in Fraud for His Role in a Scheme to
COVID-19-related unemployment benefits in the
Defraud Multiple State UI Programs
names of foreign nationals he falsely claimed
were local real estate agents hit hard financially In March 2021, Joel Bellegarde pleaded
by the pandemic. guilty to one count of mail fraud, one count of
aggravated identity theft, and one count of use of
Marinas admitted to filing approximately 85 unauthorized access devices.
UI claims with the California Employment
Development Department in which he falsely Bellegarde used stolen identities to fraudulently
asserted that the named claimants were self- submit claims and collect UI benefits from
employed real estate agents in Los Angeles Oklahoma. This CARES Act UI fraud was one
County and their jobs were adversely impacted by of several fraudulent schemes perpetrated
the COVID-19 pandemic. by Bellegarde. Bellegarde also used stolen
identities to file fraudulent applications for various
In actuality, the named claimants resided in lines of credit and to gain access to victims’
Saipan or the Philippines, were not registered as retirement savings accounts, successfully
real estate agents in Los Angeles County, had no completing account takeovers. During a search
employment history in California, and were not of Bellegarde’s apartment, OIG and FBI agents
eligible for the benefits Marinas claimed. seized bulk cash, cell phones, computers, lists
of PII, multiple credit cards from various financial
Marinas listed his own residence as the mailing institutions, and counterfeit checks.
address for each of the named claimants. As
a result, the debit cards used to distribute the This is a joint investigation with the FBI. United
unemployment benefits were mailed to Marinas, States v. Joel Bellegarde (S.D. Florida)
who then used them to withdraw the fraudulently
obtained funds.
This investigation was jointly worked with U.S.
Secret Service, U.S. Postal Inspection Service
Semiannual Report to Congress: October 1, 2020–March 31, 2021 29
Worker and Retiree Benefit Programs
Two California Men Plead Guilty to Texas UI Fraud Scheme
In March 2021, Ricardo Parno and Carlos Lopez Gomez each entered a guilty plea to a one count
information, charging each of them with theft of government funds.
From November 2020 through January 2021, Parno and Lopez-Gomez traveled from California to Texas
and found addresses that could be used to receive mail and benefits associated with fraudulent UI
claims. Parno used a fake Utah driver’s license along with a fraudulent insurance card to open at least 33
mailboxes at 24 different retail locations throughout the Dallas–Fort Worth metroplex. Parno applied for,
paid for, and opened these mailboxes under alias. Stolen identities were used to file fraudulent UI claims
with the Texas Workforce Commission.
This was a joint investigation with the U.S. Postal Inspection Service and the Texas Workforce
Commission. United States v. Ricardo Parno, United States v. Carlos Lopez Gomez (N.D. Texas)
Mailbox keys in plain view following a probable-cause traffic stop of a vehicle operated by Parno and
Lopez-Gomez
30 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker and Retiree Benefit Programs
Bronx Man Arrested for Alleged $1.4 Million COVID-19 UI Fraud
On March 16, 2021, Elvin German was arrested and charged with wire fraud and aggravated identity theft
in connection with a COVID-19 unemployment benefit scheme that resulted in the loss of more than
$1.4 million from the New York State Department of Labor (NYS DOL).
From May 2020 through March 2021, German allegedly engaged in a scheme to obtain COVID-19
unemployment benefits by fraudulently filing and verifying applications using the names and Social Security
numbers of more than 250 people. The NYS DOL was alerted to the suspicious activity based on metadata
associated with the applications, which were either submitted and/or verified on a weekly basis from the
same internet protocol (“IP”) address. Additionally, the applications had the same security questions and
responses, including that the applicant’s first pet was named Benji. After identifying the residence assigned
to the IP address, OIG and U.S. Secret Service agents conducted a joint search of the residence. During
the search, items linked to German were located including, approximately $7,000 in cash, a computer
loaded with the NYS DOL unemployment benefits web page, and the PII of four individuals open in an
adjacent computer file and, consistent with the security question used in the fraudulent applications, a dog
wearing a collar inscribed with the name “Benji.”
Photo of “Benji” the dog and his dog tag
This is a joint investigation with the U.S. Secret Service. United States v. Elvin German (S.D. New York)
Semiannual Report to Congress: October 1, 2020–March 31, 2021 31
Worker and Retiree Benefit Programs
Office of Workersʼ Compensation Programs
OWCP administers four workers’ compensation programs: the Federal Employees’ Compensation Act
(FECA) program, the Energy Employees Occupational Illness Compensation Program, the Longshore
and Harbor Workers’ Compensation Act program, and the Coal Mine Workers’ Compensation program.
FECA is the largest of the programs and provides workers’ compensation coverage to millions of federal,
postal, and other employees for work-related injuries and illnesses. Benefits include wage loss benefits,
medical benefits, vocational rehabilitation benefits, and survivors’ benefits for covered employees’
employment-related deaths.
Dallas Resident Sentenced for Receiving Illegal Kickbacks Related to a
Federal Health Care Program
In October 2020, Terry Holley was sentenced to 12 months in prison and ordered to pay more than
$190,000 in restitution for his role in a kickback scheme involving the DOL’s Office of Workers’
Compensation Programs.
In September 2019, Holley, an employee at a durable medical equipment supplier, was charged by
information with one count of receipt of illegal remuneration. From around August 2014 to around
September 2017, Holley received cash from a corporation in exchange for providing PII of federal
employees covered under the Federal Employees’ Compensation Act.
This is a joint investigation with the U.S. Postal Service–OIG, U.S. Department of Veterans Affairs–OIG,
and U.S. Department of Homeland Security–OIG. United States v. Terry Holley (N.D. Texas)
32 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker and Retiree Benefit Programs
Employee Benefit Plans
The Department’s EBSA is responsible for protecting the security of retirement, health, and other
private-sector employer-sponsored benefit plans for America’s workers and retirees, and their
families. EBSA is charged with protecting about 154 million workers, retirees, and family members
who are covered by nearly 722,000 private retirement plans, 2.5 million health plans, and similar
numbers of other welfare benefit plans that together hold estimated assets of $10.7 trillion..
Two Georgia Men Sentenced in of Georgia submitted an Order and Judgment
Large-Scale Money Laundering of Forfeiture seeking a personal judgement
against Okai, requiring that Okai forfeit all assets,
Conspiracy Involving Stolen
amounting to $3.5 million, to the U.S. government.
Pension Funds
On January 12, 2021, Prince Okai was sentenced This investigation, Operation Five Fingers, is
to a term of 57 months in prison followed by three being conducted under the auspices of the
years of supervised release. On December 16, Organized Crime Drug Enforcement Task Force
2020, Obinna Nwosu was sentenced to a term (OCDETF) program—the keystone drug, money
of 37 months in prison followed by three years of laundering, and transnational organized crime
supervised release. Both men had pleaded guilty enforcement program of the Department of
to conspiracy to commit money laundering. Justice, along with the support of the International
Organized Crime Intelligence and Operations
Nwosu and Okai were charged in the same Center (IOC-2). DOL-OIG is a member agency of
money laundering conspiracy with 21 other both OCDETF and IOC-2.
individuals. The laundered funds originated
from the targeting of Employee Retirement This was a joint investigation with the FBI,
Income Security Act (ERISA) covered retirement Homeland Security Investigations, U.S. Secret
accounts, business e-mail compromise schemes, Service, and DOL-EBSA. United States v. Obinna
and online romance schemes. Nwosu (N.D. Georgia), United States v. Prince
Okai (N.D. Georgia)
Nwosu was ordered to pay more than $1 million
in restitution. In addition, the U.S. Attorney’s Former CFO Sentenced for
Office for the Northern District of Georgia Embezzling More Than $1 Million
submitted an order and judgment of forfeiture from Employee-Owned Company
seeking a personal judgment against Nwosu, in
the amount of $979,612.51 requiring Nwosu to On October 22, 2020, Carrie N. Harris was
forfeit all assets, amounting to nearly $1 million, sentenced to 41 months in prison for committing
to the U.S. government. Okai was ordered to wire fraud, and 24 months in prison for aggravated
pay $4,950,586.54 in restitution. In addition, the identity theft and ordered to pay more than
U.S. Attorney’s Office for the Northern District $1 million in restitution for embezzling from her
Semiannual Report to Congress: October 1, 2020–March 31, 2021 33
Worker and Retiree Benefit Programs
employer to pay for her personal expenses. “marketing money” doled out as a percentage of
Harris was also debarred for 13 years by DOL’s surgeries each doctor referred to Forest Park.
EBSA. Harris will be prohibited from serving
any employee benefit plan as an administrator, Instead of billing patients for out-of-network co-
fiduciary, officer, trustee, custodian, counsel, payments, instituted by insurers to de-incentivize
agent, employee or representative in any capacity. the high costs associated with out-of-network
treatment, Forest Park allegedly assured patients
As the CFO and Treasurer, Harris was they would pay in-network prices. Because they
responsible for the company’s finances, payroll, knew insurers wouldn’t tolerate such practices,
bank accounts, payable books and records, and they concealed the patient discounts and wrote off
payroll taxes. Harris, however, did not have check the difference as uncollected “bad debt.”
signing authority. Harris possessed and used the
signature of the company’s president on company Alan Andrew Beauchamp, the hospital manager,
checks used to pay for her and her husband’s was sentenced to 63 months in prison, 2 years
personal expenses. Between December 2008 of supervised release, and a joint and several
and June 2013, Harris caused more than 100 restitution of nearly $83 million for one count of
company checks to be issued in amounts ranging conspiracy to pay health care bribes and one
from approximately $4,500 to approximately count of commercial bribery under the Travel Act.
$17,000, each of which was used to make
payments for charges incurred on her personal Jackson Jacob, owner of the shell companies
credit cards, her husband’s credit cards, and her through which some of the bribes were routed,
home equity line of credit. Harris concealed her was sentenced to 96 months in prison, 2 years
conduct by creating false entries in the company’s supervised release, and restitution of more than
general ledger to appear as company expenses. $400,000 for one count of conspiracy and three
counts of paying kickbacks.
This was a joint investigation with the FBI, and
EBSA. United States v. Carrie N. Harris (N.D. Israel Ortiz, the founder of Kortmed, a company
Georgia) that fills out pre-authorization for workers
compensation patients, was sentenced to 12
11 Defendants Sentenced to 70+ months and 1 day in prison, 3 years supervised
Years in Forest Park Healthcare release, and restitution of more than $110,000
(paid in full) for conspiracy to pay and receive
Fraud
healthcare kickbacks.
The $200 million scheme was designed to induce
doctors to steer lucrative patients - particularly Dr. Mrugeshkumar Shah, a pain management
those with high-reimbursing, out-of-network doctor, was found guilty on four of four counts,
private insurance – to the now defunct hospital. including conspiracy, two counts of paying
Most of the kickbacks, which totaled more than kickbacks, and one count of commercial bribery.
$40 million, were disguised as consulting fees or
34 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Employee Benefit Plans
He was sentenced to 42 months in prison, and one count of commercial bribery in violation of the
restitution of more than $40,000. Travel Act, and one count of money laundering.
Dr. Douglas Won, a spinal surgeon, was Iris Forrest, a nurse who recruited and pre-
sentenced to 60 months in prison, 2 years authorized workers’ compensation requests,
supervised release, and restitution of more than was sentenced to 36 months in prison, 2 years
$27 million for one count of conspiracy to pay and supervised released, and restitution of more than
receive healthcare kickbacks. $100,000 for one count of conspiracy to pay and
receive health care bribes and one count of paying
Dr. Michael Rimlawi, a spinal surgeon who kickbacks.
partnered with Won, was sentenced to 90
months in prison, 3 years supervised release, This was a joint investigation with EBSA, the FBI,
and restitution of nearly $30 million for one count IRS-CI, the Office of Personnel Management–
of conspiracy to pay and receive healthcare OIG, and the Defense Criminal Investigative
kickbacks and two counts of receiving kickbacks. Service. United States v. Beauchamp et al. (N.D.
Texas)
Dr. Wade Neal Barker, a bariatric surgeon who
co-founded Forest Park Medical in 2008, was
sentenced to 60 months in prison, 2 years
supervised release, and joint and several
restitution of nearly $83 million, for one count of
conspiracy to pay health care bribes and one
count of paying illegal remuneration in violation of
the Travel Act.
Wilton Burt, Forest Park’s managing partner,
was sentenced to 150 months in prison, 2 years
supervised released, and joint and several
restitution of nearly $83 million for one count of
conspiracy to pay and receive health care bribes,
one count of paying kickbacks, four counts of
commercial bribery in violation of the Travel Act,
and one count of money laundering.
Dr. Shawn Henry, a spinal surgeon who invested
in Forest Park Medical, was sentenced to 90
months in prison, 2 years supervised release, and
restitution of more than $6 million for one count of
conspiracy to pay and receive health care bribes,
Semiannual Report to Congress: October 1, 2020–March 31, 2021 35
Worker Safety, Health,
and Workplace Rights
Worker Safety, Health, and Workplace Rights
Occupational Safety and Health Administration
The mission of 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; investigating whistleblower complaints; providing training, outreach, and education; and
encouraging continuous improvement in workplace safety and health.
COVID-19: Increased Worksite being conducted onsite increase the safety risk for
Complaints and Reduced OSHA employees.
Inspections Leave U.S. Workers’
Since the start of the pandemic, OSHA has
Safety at Increased Risk
received an influx of complaints. In order to
The COVID-19 pandemic has raised specific protect the health and safety of its inspectors,
concerns about the health and safety of workers OSHA has reduced the number of inspections
and about the measures OSHA has taken to assigned to each inspector, particularly those
ensure that employers are mitigating employees’ performed onsite. Compared with a similar
risk of exposure to the virus at workplaces. Due period in 2019, OSHA received 15 percent more
to the pandemic, OSHA has received a surge complaints in 2020, but performed 50 percent
of complaints in a matter of months. OSHA has fewer inspections (see Figure 1). As a result, there
garnered the attention of Congress, labor unions, is an increased risk that OSHA is not providing the
and the media with requests to act swiftly on level of protection that workers need at various
behalf of the 146 million workers at more than job sites. During the pandemic, OSHA issued 295
10 million worksites nationwide whom OSHA is violations for 176 COVID-19-related inspections
responsible for protecting. while State Plans4 issued 1,679 violations for 756
COVID-19-related inspections.
We conducted this audit to determine what plans
and guidance OSHA developed to address With most OSHA inspections done remotely
challenges created by COVID-19 and to what during the pandemic, workplace hazards may
extent these challenges have affected OSHA’s go unidentified and unabated longer, leaving
ability to protect the safety of workers and its employees vulnerable. OSHA’s on-site presence
workforce. We found that OSHA has taken a during inspections has historically resulted in
series of actions to address its challenges and timely mitigation efforts for at least a portion of the
has issued guidance in response to the pandemic. hazards identified.
However, increased complaints, reduced
inspections, the fact that most inspections are not While OSHA has issued several guidance
documents to enhance safety provisions during
⁴ State Plans are OSHA-approved workplace safety and
health programs operated by individual states or U.S.
territories.
38 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker Safety, Health, and Workplace Rights
Figure 1. Comparison of Complaints and Inspections Between 2019 and 2020
30000
23,447
Feb.1 – Oct. 26, 2020
26,174
25000 Feb.1 – Oct. 26, 2019
20000
20,391
Feb.1 – Oct. 26, 2019
15000
13,010
Feb.1 – Oct. 26, 2020
10000
Complaints Inspections
Source: OSHA complaint inspection data (unaudited) provided by OSHA
the pandemic, guidance is not enforceable in the same way as rules or standards, and OSHA has not
issued an emergency temporary standard during the pandemic for airborne infectious diseases that may
better protect employees’ health and safety at worksites.
We made four recommendations to OSHA regarding on-site inspection strategies, remote inspection
guidance, and an emergency temporary standard for infectious diseases. OSHA agreed with all of our
recommendations.
For more information, go to http://www.oig.dol.gov/public/reports/oa/2021/19-21-003-10-105.pdf, Report
No. 19-21-003-10-105 (February 25, 2021).
Semiannual Report to Congress: October 1, 2020–March 31, 2021 39
Worker Safety, Health, and Workplace Rights
Region IX Whistleblower Protection from October 2010 through September 2018.
Program Complaints Were Not We interviewed current and former Region IX
whistleblower investigators and managers,
Complete or Timely
officials from OSHA’s national office, Solicitor of
On July 6, 2018, then Secretary of Labor Labor attorneys from the San Francisco Regional
Alexander Acosta received a referral from Office, and whistleblower complainants. We
the U.S. Office of Special Counsel (OSC) carried out other procedures in order to answer
that described allegations against OSHA’s the five questions from OSC and the allegations
Whistleblower Protection Program (WPP), which from the whistleblower.
investigates complaints of employer retaliation
when employees report violations of law by However, we found problems with the
their employers. OSC’s referral referenced a completeness and timeliness of whistleblower
whistleblower, an investigator for OSHA from 2010 complaint investigations, and the results were
to 2015, who alleged that OSHA’s Region IX had worse than those reported by the OIG in its
breakdowns in processing the employer retaliation 2010 and 2015 audits. For the 75 whistleblower
complaints it received, which, in turn, resulted in complaint investigations tested, we found that
widespread failure to protect complainants. OSC’s 96 percent did not meet all essential elements
referral also included concerns about ongoing for an investigation, and 88 percent exceeded
WPP issues raised in previous GAO and OIG statutory time frames for an investigation (30, 60,
audits. This report is in response to Secretary or 90 days) by an average of 634 days. These
Acosta’s request to review OSC’s referral5 and results could be attributed partly to average
it serves to answer the overarching question: caseload counts in OSHA’s Region IX that were
Did the whistleblower’s disclosures reveal approximately double the average caseload
violations of law, rule, or regulation, and gross counts nationwide.
mismanagement?
More needs to be done to address the quality
We found no evidence of misconduct, nor and timeliness of whistleblower complaint
evidence of any other issue that would rise to investigations. Both Region IX and OSHA’s
the level of “violations of law, rule, or regulation, Directorate of Whistleblower Protection Programs
and gross mismanagement.” As evidence to took steps to address high caseloads, but, in FY
support disclosures to OSC, the whistleblower 2018, the average caseload in Region IX was still
provided us with five general allegations against 57 percent higher than the national average (see
WPP and a list of 15 WPP complaints with 72 Figure 2).
specific allegations of wrongdoing related to
the complaint investigations. We tested the OSHA’s database lacked a tracking system
complaint investigations and allegations from with case management features to ensure that
the whistleblower, plus Region IX’s investigation investigators completed the essential steps. The
of another 60 complaints randomly selected database did not flag periods of inactivity in an
investigation to prompt investigators to proceed
⁵ The public record on OSC’s referral and related documents
with the next step and to maintain contact with the
can be found at: https://osc.gov/PublicFiles under OSC File
complainant and respondent. Case files also did
No. DI-15-1950.
40 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker Safety, Health, and Workplace Rights
Figure 2. Average Open Caseload per Investigator
100
80
60
40
20
2012 2013 2014 2015 2016 2017 2018
National Average Region IX Average
Source: OSHA data on caseloads
not contain evidence that supervisors checked to ensure investigators completed the essential steps before
reaching their findings. Last, OSHA did not establish goals to complete investigations within the 30-, 60-, or
90-day time frames established by statutes.
We made four recommendations to the Principal Deputy Assistant Secretary for Occupational Safety and
Health regarding case management, monitoring, and development of guidance. The Principal Deputy
Assistant Secretary agreed with the report recommendations and stated that strengthening the WPP
continues to be one of OSHA’s top priorities.
For more information, go to http://www.oig.dol.gov/public/reports/oa/2021/02-21-001-10-105.pdf, Report
No. 02-21-001-10-105 (November 23, 2020).
Semiannual Report to Congress: October 1, 2020–March 31, 2021 41
Worker Safety, Health, and Workplace Rights
Mine Safety and Health Administration
The federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New
Emergency Response Act of 2006, charges MSHA with setting and enforcing standards to protect the
health and safety of approximately 300,000 men and women working in our nation’s mines.
MSHA Needs to Improve Efforts to Protect Coal Miners from Respirable
Crystalline Silica
The Federal Mine Safety and Health Act of 1977 (Mine Act) requires the Mine Safety and Health
Administration (MSHA) to protect miners from exposure to toxic materials or harmful agents. However, over
the past four decades, various stakeholders have raised concerns about exposure to respirable crystalline
silica (silica), a carcinogen and a contributing cause of black lung disease, in coal mines. In fact, after
two decades of decline, the number of U.S. coal miners with black lung disease has been rising since the
2000s. More than three times as many coal miners were identified as having black lung disease from 2010
to 2014 as compared with 1995 to 1999 (see Figure 3). The evidence indicates silica may be responsible
for this increase. We conducted this audit to determine whether MSHA has sufficiently protected coal
miners from exposure to respirable crystalline silica.
Figure 3: Percentage of Examined Coal Miners with Black Lung (1970–2017*)
Years Mining Tenure
0–9 years
10–14 years
15–19 years
20–24 years
25+ years
1975 1980 1985 1990 1995 2000 2005 2010 2015 2017
Source: National Institute for Occupational Safety and Health (NIOSH) provided Coal Workers’ Health Surveillance Program data6.
⁶ NIOSH did not start collecting data on surface coal miners until 2014. However, this data was not included in the above graph
because it only represents 5-year moving averages. For example, the data point for 1974 is the average of 1970, 1971, 1972,
1973, and 1974 data.
42 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker Safety, Health, and Workplace Rights
We determined that MSHA has not sufficiently semiannually. MSHA has only sampled mines for
protected coal miners from exposure to respirable silica levels only during these periodic inspections.
crystalline silica. The Mine Act requires MSHA However, silica levels fluctuate frequently.
to set standards based on the best available Changes in geology and movement of personnel
evidence. MSHA's current silica exposure limit, within mines mean that miners’ exposure to
however, is out of date. Despite a significant body silica may change on a daily, if not hourly, basis.
of evidence showing that a lower silica exposure According to federal standards for internal control,
limit would be a major factor in preventing coal management should obtain data on a timely basis
workers’ deaths and illnesses caused by silica so that they can be used for effective monitoring.
exposure. MSHA has not changed its legal silica
exposure limit in more than 50 years. Moreover, We made three recommendations to the Assistant
MSHA has spent the past two decades in Secretary for Mine Safety and Health to address
rulemaking7 without any changes to its silica these three issues. The Assistant Secretary did
exposure limit. not fully agree with our recommendations, but
indicated MSHA will take corrective actions to
Further, because MSHA has not established a address them.
separate standard for silica limits in coal mines,
MSHA cannot cite and fine mine operators for For more information, go to http://www.oig.dol.
excess silica exposure alone. Instead, MSHA’s gov/public/reports/oa/2021/05-21-001-06-001.
exposure limit for silica is tied to its exposure pdf, Report No. 05-21-001-06-001 (November 12,
limit for respirable coal mine dust. Thus, violating 2020).
MSHA’s silica limit alone does not result in a
citation or fine to deter future violations. As a MSHA Can Improve How Violations
result, workers in coal mines with silica levels Are Issued, Terminated, Modified,
above recommended limits continue to be at risk
and Vacated
of developing life-threatening health problems.
A separate standard for silica is needed so that One of MSHA’s essential roles is to ensure the
MSHA can issue citations and monetary penalties safety of miners by conducting periodic mine
for violating its silica limit to better protect miners inspections. The Mine Act gives MSHA the
from this toxic mineral. authority to issue notices, safeguards, citations,
and orders (“violations” is the blanket term used
Finally, MSHA’s silica sampling protocols may be by MSHA for all of these) to mine operators who
too infrequent to be sufficiently protective. MSHA do not comply with health and safety standards
is required by the Mine Act to inspect underground or the Mine Act. The process for issuance and
coal mines quarterly and surface mines remediation of violations should be bound by clear
guidance, appropriate internal controls, and a
⁷As early as 2009, MSHA recognized in its regulatory agenda
strong monitoring system to ensure the process
that its standards were outdated and may not protect miners
meets its goals. Incorrectly written violations or
from developing silicosis. To lower MSHA’s silica exposure
untimely verification by MSHA inspectors that
limit standard would require rulemaking, the process for
operators abated hazards by the due dates can
developing and issuing rules (rules are also referred to as
“regulations” or standards”).
Semiannual Report to Congress: October 1, 2020–March 31, 2021 43
Worker Safety, Health, and Workplace Rights
result in miners’ unnecessary continued exposure sufficient guidance on timely recording of
to hazards. violations in the agency’s Centralized Application
System or guidance involving issuing multiple
We performed an audit to determine whether safeguards at a single mine. The insufficient
MSHA properly managed the process established guidance affected MSHA’s ability to terminate
to issue, terminate, modify, and vacate violations. violations and could lead to incorrect violation
We found that MSHA did not properly manage this types, duplicate violations, and avoidance of
process, resulting in the identification of significant penalties.
weaknesses that jeopardized MSHA’s mission to
maintain miner safety. We made 10 recommendations to the Assistant
Secretary for Mine Safety and Health to address
MSHA did not timely verify whether operators had the control weaknesses through training,
abated hazards. For more than 215,000 violations guidance, establishing new controls, revising
out of the 706,000 we reviewed, MSHA had not existing controls, and monitoring. MSHA generally
verified that operators corrected hazards until after agreed with all of our recommendations.
the required due date. Not verifying that operators
timely abated hazards unnecessarily jeopardized For more information, go to http://www.oig.dol.
miner safety. gov/public/reports/oa/2021/05-21-002-06-001.pdf,
Report No. 05-21-002-06-001 (March 31, 2021).
Furthermore, violation abatement due dates
were excessively long and varied widely, and
extensions were unjustified. These lengthy
hazard abatement periods can expose miners to
hazards longer than necessary and affect penalty
assessments for operators.
We also found that thousands of violations written
by MSHA inspectors did not comply with the Mine
Act and MSHA Handbook requirements. Despite
MSHA’s previous efforts to implement internal
controls, controls meant to maintain compliance
were missing or not working as intended. This
lack of controls resulted in thousands of issued
and modified violations that did not comply with
Handbook requirements and with the Mine Act.
These types of violation errors can lead to court
challenges and inaccurate penalty assessments,
as well as jeopardize miner safety.
MSHA guidance was also insufficient in certain
instances. Specifically, MSHA had not issued
44 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Worker Safety, Health, and Workplace Rights
Wage and Hour Programs
The Wage and Hour Division (WHD) enforces federal minimum wage, overtime pay, recordkeeping,
and child labor requirements of the Fair Labor Standards Act (FLSA). WHD also enforces the Migrant
and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family
and Medical Leave Act, the wage garnishment provisions of the Consumer Credit Protection Act, and
a number of employment standards and worker protections as provided in several immigration related
statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis-
Bacon and Related Acts, the Service Contract Act, and other statutes applicable to federal contracts
for construction and for the provision of goods and services. WHD also administers and enforces the
Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act under
the recently enacted Families First Coronavirus Response Act (FFCRA), which was effective from April
1, 2020, to December 1, 2020.
DOL Did Not Demonstrate It rulemaking process. Thus, we conducted a review
Followed a Sound Process in to determine whether DOL had followed a sound
process in promulgating the 2017 NRPM. We
Promulgating the 2017 Tip Rule
determined DOL did not demonstrate that it had
Notice of Proposed Rulemaking
followed a sound process in promulgating the
On December 5, 2017, DOL published a Notice 2017 NPRM and did not fully adhere to regulatory
of Proposed Rulemaking (NPRM) to rescind guidance.
portions of its 2011 tip regulations under the Fair
Labor Standards Act (FLSA) because DOL was In the initial phase of the rulemaking process, a
concerned that it had incorrectly construed the DOL senior official expressed the opinion that
statute in promulgating the tip credit regulations. regulatory action was unnecessary and the courts
The 2017 NPRM proposed removing the should be the arbiters. However, the Department
regulations’ limitation on employers’ ability to pool of Justice’s Office of the Solicitor General
tips received by employees, and thereby allow expressed the belief that rulemaking action was
employers to allocate tips into a tip pool shared necessary. Based on this latter opinion, DOL
with employees who do not customarily receive proceeded with the NPRM. Members of DOL’s
tips, such as dishwashers and cooks, or to simply NPRM workgroup and senior leadership told us
retain the tips. they had felt “pressured” to take regulatory action
and were told not to document the decisions they
Although the 2017 NPRM included a qualitative received from management.
analysis of potential cost-related benefits and
transfers, multiple news sources reported that DOL analyzed various cost estimates of
DOL had conducted an economic analysis that transferring tips from employees who typically
was not included in the final NPRM, raising receive tips to those who do not or to employers.
questions about the soundness of DOL’s DOL made several revisions, but it ultimately
Semiannual Report to Congress: October 1, 2020–March 31, 2021 45
Worker Safety, Health, and Workplace Rights
excluded the transfer analysis from the published 2017 NPRM. DOL did not demonstrate what was
lacking that made these analyses insufficient to predict what employers would do under the proposed
rule. DOL also did not provide criteria in support of its rationale for familiarization costs (i.e., the cost of
getting a business establishment familiar with a rule), and DOL did not include in the published NPRM an
assessment of the effect the rule would have on families.
Furthermore, DOL did not identify to the public the substantive changes it made between the draft NPRM
submitted to the Office of Information and Regulatory Affairs, under the Office of Management and Budget
(OMB), and the 2017 NPRM published in the Federal Register. DOL told us that its practice is not to
identify substantive changes for any of its rulemaking to the public. This practice prevented the public
from meaningfully participating in DOL’s rulemaking process and responding to substantive changes that
might affect workers, families, and employers. DOL lacked transparency because it did not identify these
substantive changes.
We made five recommendations to the Administrator for the Wage and Hour Division, in conjunction with
the Assistant Secretary for Policy, to improve DOL’s rulemaking process. The recommendations include
developing policies and procedures to document rationale and supporting evidence for use in making key
decisions in the development of economic regulatory analysis and for use when DOL determines that the
prescribed regulatory guidance does not apply.
For more information, go to http://www.oig.dol.gov/public/reports/oa/2021/17-21-001-15-001.pdf, Report
No. 17-21-001-15-001 (December 11, 2020).
46 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Employment and Training
Programs
Employment and Training Programs
Employment and Training Administration Programs
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.
ETA Needs to Improve Its Disaster Figure 4. 2017 Whittier Fire in California
National Dislocated Worker Program
Prior OIG audits have raised concerns about ETA
grant investments not achieving performance
goals and about ETA’s need to provide better
oversight of its disaster grants. In the aftermath
of 2017 hurricanes Harvey, Irma, and Maria, and
the 2017 wildfires in California (see Figure 4),
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 Source: Santa Ynez Valley Star, July 9, 2017 –
by these disasters. California, Florida, and (unaudited)
Puerto Rico were approved for up to $83 million
(combined) of the $100 million appropriation Furthermore, state grantees performed limited
for hurricane and wildfire cleanup and evacuee monitoring of their subrecipients.
assistance. We conducted an audit to investigate
whether ETA properly administered its Disaster ETA also did not ensure that grantees helped
National Dislocated Worker Grants (DWG) local areas to restore communities in a timely
program under the Bipartisan Budget Act of 2018. manner or that out-of-work participants received
expeditious disaster relief assistance. Some
We found that ETA needs to improve the grantee subrecipients took up to approximately
administration of its DWG program under the 6 months to begin cleanup services and up to
Bipartisan Budget Act of 2018. ETA did not approximately 13 months for some evacuee
establish time lines for disaster relief and provided assistance to begin after the disaster declarations.
minimal oversight of its state grantees, and
subrecipients did not follow requirements for Further, ETA grantees did not maximize the
the use of funds and verification of participant number of participants who obtained employment
eligibility when they self-certified. as intended by the grants. As of December 31,
2019, grantees had underperformed on all of their
48 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Employment and Training Programs
performance goals. In addition, the grantees had significantly underperformed on enrolling participants
in training and returning them to full-time employment, as intended by some of the grants. Overall,
grantees provided training services to only about one-third of participants and returned only 39 percent
of unemployed participants back to full-time employment. Finally, ETA did not ensure that disaster relief
funds were used efficiently and effectively. About $4.5 million in grantee obligations and costs either were
not necessary for disaster relief or were not supported by adequate documentation. In addition, there were
incomplete recovery efforts because grantees did not allocate funds to local areas most in need of disaster
relief services.
We made six recommendations to ETA regarding timeliness, eligibility, and allowable costs. ETA generally
agreed with our recommendations and stated it has already taken corrective actions on the issues
identified.
For more information, go to https://www.oig.dol.gov/public/reports/oa/2021/02-21-002-03-391.pdf, Report
No. 02-21-002-03-391 (January 29, 2021).
Semiannual Report to Congress: October 1, 2020–March 31, 2021 49
Employment and Training Programs
Job Corps
The Job Corps program provides education, training, and support services to more than 30,000
disadvantaged, at-risk youths, ages 16–24, at more than 120 Job Corps centers nationwide, both
residential and nonresidential. The goal of the nearly $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.
Job Corps Should Improve Its Pre- increase in the number of separations due to
admission Evaluation Process mental health and substance abuse issues, and
two-thirds of center directors reported an increase
Admitting applicants to the Job Corps program in the number of violent incidents they associated
without sufficiently evaluating their ability to with mental health issues (see Figure 5).
fit within the program can result in program
disruptions and safety issues. The Job Corps Job Corps management has been aware of such
program currently provides academic and issues, but it has not taken action in response. For
career skills training to nearly 30,000 low- example, in 2015, Job Corps convened a working
income, disadvantaged youth at more than 120 group to explore the possibility of pre-enrollment
centers nationwide. Previous OIG audits and drug testing of Job Corps applicants. However,
our preliminary audit work identified issues with the working group subsequently disbanded
Job Corps center student safety. Specifically, without any action taken. In addition, Job Corps
insufficient suitability evaluations of incoming rolled out a system wide applicant readiness tool
students could lead to program disruptions, in the summer of 2019, but we found that few
as well as unsafe learning environments. We admissions counselors were aware of it.
conducted a performance audit to determine
whether Job Corps sufficiently evaluated the As a result, applicants who were not properly
suitability of incoming students. assessed during the admissions process have
caused classroom disruptions and safety issues,
We found that Job Corps did not sufficiently as well as strained the resources of unprepared
evaluate the suitability of incoming students. Job Corps centers.
The Workforce Innovation and Opportunity Act
requires Job Corps to assess the suitability, or Given how essential it is to determine whether an
“fit,” of applicants for the program. However, applicant is suitable for the program, Job Corps
Job Corps’ admissions screening process does must take action to develop a more robust pre-
not allow admissions counselors to sufficiently enrollment suitability assessment apparatus to
inquire about an applicant’s history to help them identify applicants who might impact the safety of
determine whether applicants are ready for the centers and cause program disruptions, and to
Job Corps program. A large portion of center identify strategies for assisting those students with
directors surveyed said they had observed an their challenges. We made four recommendations
50 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Employment and Training Programs
Figure 5. Mental Health and Substance Abuse Issues at Job Corps Centers,
2019
70 percent of center 61 percent of center Center directors and health
directors reported increases directors reported increases and wellness managers
in disruptions related to in the number of violent reported observing a
students with mental health incidents due to students significant increase in the
issues and 49 percent with mental health issues number of separations due
reported increases for and 32 percent reported to substance abuse and
substance abuse issues increases for substance mental health issues
abuse issues
to the Assistant Secretary for Employment and Training to address this issue. ETA generally agreed with
our recommendations.
For more information, go to http://www.oig.dol.gov/public/reports/oa/2021/05-21-001-03-370.pdf, Report
No. 05-21-001-03-370 (March 25, 2021).
Semiannual Report to Congress: October 1, 2020–March 31, 2021 51
Employment and Training Programs
Foreign Labor Certification Programs
ETA administers a number of FLC programs that allow U.S. employers to employ foreign workers
to meet domestic worker shortages, PERM, H-1B, H-2A, and H-2B. The PERM program allows an
employer to hire foreign nationals to work in the U.S. on a permanent basis, while the H-1B, H-2A, and
H-2B programs are for temporary employment in the U.S. The H-1B program allows employers to hire
foreign workers on a temporary basis in specialty occupations or as fashion models. The H-2A program
allows employers to hire foreign workers for temporary agricultural jobs, in contrast to the H-2B program
which is for temporary non-agricultural jobs. ETA ensures the admission of foreign workers into the
U.S. 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.
Overview of Vulnerabilities and primary recruiting announcement. In addition, the
Challenges in Foreign Labor PERM program’s application phase was changed
in 2005 so that employers do not have to submit
Certification Programs
any documentation with their application. This
In 2003, the OIG issued a “white paper8” lack of documentation means, for example, that
identifying vulnerabilities in four foreign labor ETA cannot make an informed decision as to
certification programs—permanent (PERM), whether able, available, qualified, and willing U.S.
H-1B, H-2A, and H-2B—managed in part workers were available for the job opportunities.
by DOL. Subsequent OIG and GAO audits Further, as previously reported, DOL has no post
and investigations have confirmed that many adjudication review and enforcement authority to
vulnerabilities still exist. The OIG’s November validate the integrity of employers’ attestations,
2020 report presents both the continuing and thus employers have the ability to not comply
vulnerabilities that were noted in our 2003 with the qualifying criteria or the conditions of
report and the vulnerabilities identified since, employment.
according to the three key phases of foreign labor
certification: the pre-filing, application filing, and The H1-B program’s vulnerabilities include the
post adjudication phases. inability of ETA to assess in the application phase
whether the applicant possesses the required
The PERM program’s vulnerabilities include qualifications (previously reported). It is ETA’s
an outdated regulation requiring employers to responsibility to ensure the application is complete
advertise in the local Sunday newspaper as a and free from obvious inaccuracies while WHD
investigates and determines whether employers
⁸ Department of Labor. 2003. Overview and Assessment of
have misrepresented or failed to comply with
Vulnerabilities in DOL's Alien Labor Certification Programs.
Report No. 06-03-007-03-321. Washington, DC: Office of
Inspector General. https://www.oig.dol.gov/public/reports/oa/
viewpdf.php?r=06-03-007-03-321&y=2003.
52 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Employment and Training Programs
program requirements as well as with employment of processes to measure program efficiency, and
laws. WHD's lack of subpoena authority. Further, ETA
did not process H-2B applications within 30 days
As long as an H-1B application is complete and of the employer’s date of need, as previously
free of obvious errors or inaccuracies, ETA is reported. Finally, the H-2B program remains
required to approve the application (previously highly susceptible to fraud. OIG agents have cited
reported). In recent years, WHD H-1B-related foreign recruiters charging foreign workers for the
investigations have been initiated based on only purchase of H-2B visas and transportation to the
two of the four methods set forth in the statute: United States. For example, a recruiting agency
receipt by WHD of a complaint or receipt of submitted false employment based petitions to
credible information from a reliable source that an DOL and other agencies in order to obtain work
applicant has failed to meet application conditions. visas for foreign workers. An agent within the
One of the other two methods, in which the company unlawfully charged foreign workers $500
Secretary personally certifies an investigation to $4,000 to purchase fraudulent visas.
of the employer, has never been used, and the
other—a random investigation of a previous For more information, go to http://www.oig.dol.
willful violator—has not been used in many years. gov/public/reports/oa/2021/06-21-001-03-321.
Finally, even for a major violation, we found WHD pdf, Report No. 06-21-001-03-321 (November 13,
cannot initiate an investigation if the alleged 2020).
violation comes to WHD’s attention more than 12
months from the date of the alleged violation. California Business Owner
Sentenced for Role in Exploiting
H-2A program vulnerabilities identified
Immigrant Farmworkers
included the fact that ETA did not evaluate the
effectiveness of the SeasonalJobs.dol.gov website In February 2021, Ricardo Mendoza Oseguera,
in reaching a greater population of U.S. workers the owner of Discoteca Mi Pueblito, a check
and ETA’s lack of documentation in support of cashing business in Santa Paula, California, was
employer attestations made during the application sentenced to 12 months in prison for his role
process. As ETA does not maximize its audit in operating an unlicensed money transmitting
resources to validate the integrity of employers’ business that enabled a farm labor contractor
attestations, employers have the opportunity not and H-2A recruiter to exploit H2-A workers. The
to comply with the conditions of employment. H-2A program is managed under the Office of
Finally, WHD’s lack of subpoena authority hinders Foreign Labor Certification for DOL. In addition to
WHD in obtaining documents in a timely manner provisions designed to protect domestic workers,
in order to debar employers. the H-2A program has rules designed to protect
foreign workers from exploitation. Oseguera and
The H-2B’s program vulnerabilities include the his co-conspirator engaged in an immigration
same ones attributed to the H-2A program above, fraud scheme that illegally charged Mexican
such as ETA’s failure to evaluate the effectiveness nationals thousands of dollars to obtain H-2A
of the SeasonalJobs.dol.gov website, ETA not
reviewing supporting documentation, ETA’s lack
Semiannual Report to Congress: October 1, 2020–March 31, 2021 53
Employment and Training Programs
work visas and additional charges for expenses once they arrived in the United States, all of which were
prohibited fees.
This was a joint investigation with Homeland Security Investigations and the U.S. Department of State,
Diplomatic Security Service. USA v. Vasquez et al. (C.D. California)
Owner of IT Services Company Pleads Guilty to Paying Kickbacks
On March 5, 2021, Lakshmikanth Sripuram pleaded guilty to a wire fraud conspiracy in connection with a
scheme to defraud New York State. Sripuram is the president of PIntegra, LLC, a company that employs
temporary foreign workers. Sripuram paid kickbacks to a New York State employee and conspired to create
bogus experience and education credentials for PIntegra employees contracted to New York State.
In January 2015, the Office of the New York State Comptroller entered into a contract with a consortium
of three companies to identify and hire computer programmers for a project. Between February 2015 and
October 2016, Sripuram and his co-conspirator ensured that programmers from PIntegra were hired by
falsifying information regarding their experience and work histories, and by providing them with interview
questions ahead of their interviews at OSC. PIntegra received approximately $870,000 from the Office of
the New York State Comptroller for its programmers’ pay. Sripuram kept a percentage of the programmers’
pay and then paid a kickback to the New York State employee.
This was a joint investigation with the Office of the New York State Comptroller, Homeland Security
Investigations, and the U. S. Postal Inspection Service. United States v. Lakshmikanth R. Sripuram (N.D.
New York)
54 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Labor Racketeering
Labor Racketeering
Labor Racketeering
Under the Inspector General Act of 1978, the OIG is responsible for investigating labor racketeering
and the influence of organized criminal enterprises involving unions, employee benefit plans, and
labor-management relations.
Labor racketeering refers to the infiltration, exploitation, or control of a union, employee benefit plan,
employer entity, or workforce, carried out through illegal, violent, or fraudulent means. 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.
Fiat Chrysler Automobiles Pleads personal items. The illegal payments were passed
Guilty and Pays $30 Million Fine through the UAW-Chrysler Skill Development &
Training Program, which was supposed to provide
On March 1, 2021, Fiat Chrysler Automobiles training and health and safety protections for
(FCA) US LLC pleaded guilty to conspiring FCA workers. Under the terms of the agreement,
to violate the Labor Management Relations FCA agreed to pay a fine of $30 million and serve
Act by making illegal payments to officers of probation for three years, during which time,
the International Union, United Automobile, an independent compliance monitor selected
Aerospace, and Agricultural Implement Workers by the government will oversee the company’s
(UAW). Under the terms of the plea agreement, adherence to federal labor laws.
FCA has agreed to pay a fine of $30 million and
be subject to federal oversight. This is a joint investigation with the U.S.
Department of Labor, Office of Labor Management
FCA admitted the company had conspired with Standards, the IRS, IRS-CI, and the FBI. United
other entities and individuals to violate the Taft- States of America v. FCA US LLC (E.D. Michigan)
Hartley Act from 2009-2016 by making more
than $3.5 million in illegal payments to officers
of the UAW. The illegal payments to UAW
officials took various forms, including extravagant
meals, rounds of golf, lavish parties for the UAW
International Executive Board, an Italian-made
shotgun, clothing, designer shoes, and other
56 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Labor Racketeering
Former Union President Sentenced Union, Pacific Maritime Association Benefit Plan.
to 12 Years in Prison in California for The fraudulent proceeds from the scheme were
used to provide patients with “free” cosmetic
Embezzlement
procedures.
John Romero, the former United Industrial and
Service Workers of America union president and Sarkisyan and her co-conspirators induced
health plan trustee, was sentenced to 144 months patients to visit R&R Medspa clinics to receive
in federal prison for embezzling nearly $800,000 free cosmetic procedures, including facials, laser
from the union’s health plan trust fund. Money hair removal, and Botox injections, that were not
paid into the union health plan was supposed to covered by insurance. The conspirators obtained
be used exclusively for health care benefits of its the insurance information from the patients and
participants. Instead, Romero stole the union’s fraudulently billed insurance companies for
health funds for the benefit of himself and his unnecessary medical services or for services that
immediate family. were not rendered. Using the fraudulent proceeds
from the insurance companies, Sarkisyan and
Romero accomplished the scheme by appointing other conspirators calculated a “credit” that
a sham trustee who had no prior experience with patients could use to receive “free” or discounted
unions. He also actively misled the third-party cosmetic procedures. During the course of the
administrators of the health plan into making conspiracy, Sarkisyan and her conspirators
improper payments from the trust fund. From submitted at least $17 million in claims to the
2008 to 2014, Romero embezzled health plan insurance companies, which paid approximately
funds to pay for personal legal fees, payments on $7 million on those claims.
rental properties, and salary payments to family
members who never worked for the health plan. This was a joint investigation with EBSA. United
He also used plan funds to pay off a $25,000 loan States v. Khadem et al. (C.D. California)
on his son’s sports car.
This was a joint investigation with the Office of
Labor Management Standards and EBSA. United
States v. Romero, et al. (C.D. California)
California Woman Pleads Guilty to
Her Role in Defrauding Union Health
Plan
On March 3, 2021, Marina Sarkisyan, former
office manager for R&R Medspa, pleaded guilty to
a federal criminal charge as a result of a scheme
she engaged in with others to submit fraudulent
claims to health insurance companies including
the International Longshore and Warehouse
Semiannual Report to Congress: October 1, 2020–March 31, 2021 57
Labor Racketeering
Departmental Management
Departmental Management
Departmental Management
The OIG performs oversight work involving the Department’s operations, financial management, and
information technology (IT) services.
FY 2020 FISMA DOL Information security controls across 20 DOL information
Security Report: Progress Needed systems.
to Improve Risk Management
The information security program’s scores showed
and Continuous Monitoring of
some improvements from FY 2019, which may be
Information Security Controls the result of DOL adopting and implementing new
DOL spends approximately $666 million annually tools to address the issues previously identified.
on its information technology assets that support However, based on the issues identified,
the programs needed to fulfill DOL’s mission. we remain concerned about the continued
Because information technology plays an integral improvements needed in the Office of the Chief
role in providing the services and operations Information Officer’s (OCIO) oversight and
needed to fulfill DOL’s mission, it is imperative accountability over the Department’s information
that DOL maintain a strong information security security control environment.
program to protect these assets. Ineffective
information security programs increase the The firm reported 18 findings for DOL’s
risk of unavailable service, security breaches, information security program in four of the five
and unreliable information. Under the Federal Cybersecurity Framework’s functions. As a
Information Security Modernization Act of 2014 result of the issues identified, DOL’s information
(FISMA), inspectors general are required to security program was rated as not effective
perform annual independent evaluations of their for FY 2020. To be considered an effective
agencies’ information security programs and information security program, a majority of
practices. The Office of Management and Budget the Cybersecurity Framework’s functions are
(OMB) and the Department of Homeland Security required to be implemented at a level identified as
annually issue FISMA guidance, based on the “Managed and Measurable.” DOL’s program did
National Institute of Standards and Technology’s not achieve the Managed and Measurable level in
Cybersecurity Framework, which includes the three of the five cybersecurity functions: Identify,
metrics OIGs should use to evaluate agencies’ Detect, and Recover. In addition, for the Protect
information security programs. function, DOL’s program received a Managed
and Measurable rating, but additional progress
For the FY 2020 evaluation, we contracted with an is needed in three of its domains: Configuration
independent public accounting firm to conduct an Management, Identity and Access Management,
audit of DOL’s information security program. The and Data Protection and Privacy.
firm based its determinations in part on tests of a
selection of DOL’s entity-wide and system-specific
60 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Departmental Management
We made 25 recommendations to improve to DOL’s Office of Federal Contract Compliance
DOL’s information security program, including Programs and eight applicable to all federal
establishing performance metrics. Management agencies.
generally concurred with the findings and
recommendations identified and described in We did not make any recommendations related to
our report. OCIO stated it has addressed or has the results of the assessments presented in this
developed plans to address all recommendations. report.
For more information, go to http://www.oig.dol. For more information, go to https://www.oig.dol.
gov/public/reports/oa/2021/23-21-001-07-725. gov/public/reports/oa/viewpdf.php?r=17-21-002-
pdf, Report No. 23-21-001-07-725 (December 22, 50-598&y=2021, Report No. 17-21-002-50-598
2020). (December 29, 2020).
Review of the Department of Labor’s FY 2020 Independent Auditors’
Compliance in Implementing the Report on the DOL Financial
Requirements of Executive Order Statements
13950
OIG contracted with an independent public
On September 22, 2020, President Donald accounting firm to audit DOL’s annual financial
Trump issued Executive Order (EO) 13950, statements, which comprise the consolidated
”Combating Race and Sex Stereotyping.”9 EO financial statements and the sustainability financial
13950 prohibited the federal government from statements. DOL received an unmodified opinion
promoting race or sex stereotyping in the federal on its FY 2020 financial statements, meaning DOL
workforce and uniformed services and from using presented financial statements fairly in all material
contracting and grant funds for any of these respects and in conformity with U.S. generally
purposes. accepted accounting principles.
The EO required agency inspectors general to For more information, go to https://www.oig.dol.
assess their agencies’ compliance with the EO gov/public/reports/oa/viewpdf.php?r=22-21-004-
annually and to report the results by December 13-001&y=2021, Report No. 22-21-004-13-001
31 each year, to OMB. Thus, the OIG conducted (November 16, 2020).
a review in 2020 to assess whether DOL met the
requirements of EO 13950. Management Advisory Comments
Identified in an Audit of the
We found DOL had met all 10 requirements Consolidated Financial Statements
of EO 13950 as of December 21, 2020. The
for the Year Ended September 30,
requirements included two specifically applicable
2020
⁹ EO 13950 was rescinded on January 20, 2021, as part
In a separate Management Advisory Comments
of the new EO 13985, titled "Advancing Racial Equity and
report, the independent public accounting
Support for Underserved Communities through the Federal
firm provided additional information to DOL
Government.".
Semiannual Report to Congress: October 1, 2020–March 31, 2021 61
Departmental Management
management on issues identified during the OIG- procedures and identified differences between the
contracted financial statement audit that did not actuarial liability and the benefit expense.
rise to the level of significant deficiencies. The
additional information represented opportunities For more information, go to https://www.oig.dol.
for DOL to improve internal controls or achieve gov/public/reports/oa/viewpdf.php?r=22-21-001-
other operating efficiencies. By satisfactorily 04-431&y=2021, Report No. 22-21-001-04-431
addressing the comments in the Management (October 30, 2020).
Advisory Comments report, departmental
management will help ensure that these issues Longshore and Harbor Workers’
do not rise to the level of significant deficiencies in Compensation Act Special Fund
the future.
Financial Statements and Inspector
General’s Report
For more information, go to https://www.oig.dol.
gov/public/reports/oa/viewpdf.php?r=22-21-005- The OIG audited the financial statements of the
13-001&y=2021, Report No. 22-21-005-13-001 Longshore and Harbor Workers’ Compensation
(December 18, 2020). Act Special Fund as of September 30, 2019. The
OIG issued an unmodified opinion, meaning the
Special Report Relating to the financial statements were presented fairly in all
Federal Employees’ Compensation material respects and in conformity with U.S.
Act Special Benefit Fund generally accepted accounting principles. The
OIG also performed certain tests of controls and
The OIG contracted with an independent public a test for compliance with laws and regulations
accounting firm to audit the Federal Employees’ related to the fund, which did not identify any
Compensation Act (FECA) Special Benefit deficiencies.
Fund’s Schedule of Actuarial Liability, Net
Intra-governmental Accounts Receivable, and For more information, go to https://www.oig.dol.
Benefit Expense Fund as of and for the year gov/public/reports/oa/viewpdf.php?r=22-21-002-
ended September 30, 2020. The firm issued 04-432&y=2021, Report No. 22-21-002-04-432
an unmodified opinion, meaning the schedule (November 13, 2020).
was presented fairly in all material respects
and in conformity with U.S. generally accepted District of Columbia Workmen’s
accounting principles. The firm also performed
Compensation Act Special Fund
certain tests of controls and compliance with
Financial Statements and Inspector
laws and regulations related to the fund, which
disclosed a deficiency that we have reported
General’s Report
every year since 2017 pertaining to internal The OIG audited the financial statements of the
controls over claims examiners’ review of FECA District of Columbia Workmen’s Compensation
claims. The firm also performed agreed-upon Act Special Fund as of September 30, 2019. The
OIG issued an unmodified opinion, meaning the
financial statements were presented fairly in all
material respects and in conformity with U.S.
62 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Departmental Management
generally accepted accounting principles. The OIG also performed certain tests of controls and a test for
compliance with laws and regulations related to the fund, which did not identify any deficiencies.
For more information, go to https://www.oig.dol.gov/public/reports/oa/viewpdf.php?r=22-21-003-04-
432&y=2021, Report No. 22-21-003-04-432 (November 13, 2020).
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 such recipients as states, schools, universities, and nonprofits.
Change in OIG Processes to Streamline Timeliness of Agency Management
Decisions and Refocus the OIG on Its Own Oversight Responsibilities
Uniform Guidance10 requires federal awarding agencies to issue a management decision for findings that
relate to the agencies’ awards to non-federal entities. The federal awarding agencies are required to issue
the decision within 6 months of when the audit report was accepted by the Federal Audit Clearinghouse
(FAC). Since 2004, the OIG has assisted DOL agencies with these requirements by reviewing and
providing single audit reports from the FAC, an effort that the OIG was not required to do. Effective October
1, 2020, the OIG is no longer assisting DOL agencies in this manner. The change allows for a more
streamlined process, enabling agencies to issue management decisions without any OIG review imposed
delays, while the OIG focuses its efforts on meeting single audit oversight responsibilities.
Under Uniform Guidance, cognizant federal agencies must oversee the implementation of single audit
requirements. DOL is currently cognizant for six entities, and the OIG periodically performs quality control
reviews (QCRs) of the entities’ single audits. During this reporting period, we conducted one QCR on
the Single Audit of the New Mexico Workforce Solutions Department for the year ended June 30, 2018.
Based on our review of the audit documentation related to DOL-funded programs, we determined that
Moss Adams LLP’s audit work was acceptable and met the requirements of applicable standards including
generally accepted government auditing standards, generally accepted auditing standards, and Uniform
Guidance.
10
Uniform Guidance refers to 2 C.F.R. Part 200, OMB’s “Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards.”
Semiannual Report to Congress: October 1, 2020–March 31, 2021 63
Employee Integrity Investigations
Employee Integrity Investigations
The OIG is responsible for investigating possible misconduct or criminal activities involving senior
DOL employees or individuals providing services to the Department.
Substantiated
Director of Human Resources Misused Government Equipment for Personal
Gain
The OIG received an allegation that the Director of Human Resources for ETA was misusing government
equipment and their access to personally identifiable information for personal gain.
Our investigation substantiated that the Director misused their government issued equipment by
operating multiple personal businesses using the government-issued laptop. In addition, the investigation
substantiated that the official failed to notify the Department when a local police department seized their
government-issued laptop and cell phone pursuant to the execution of a search warrant in an unrelated
matter. The OIG also substantiated that the employee provided false and misleading information related to
their personal businesses and loss of government equipment throughout the OIG investigation.
On August 8, 2020, we referred our findings to ETA for review. On January 14, 2021, the OIG was notified
that the employee was terminated from federal employment.
Closed Investigations Not Disclosed to Public
• The OIG conducted an investigation as to whether a senior manager violated policy when they allowed
an employee to continue working while on restricted duties. The OIG did not establish that a policy
violation occurred. The investigation was closed without further action.
• The OIG received an allegation that a senior manager was running a personal business using
government equipment during business hours. The OIG did not establish that the alleged activity
occurred. The investigation was closed without further action.
64 Semiannual Report to Congress: October 1, 2020–March 31, 2021
OIG Whistleblower Activities
OIG Whistleblower Activities
OIG Whistleblower Activities
Whistleblower Protection Coordinator
DOL employees, contractors, subcontractors, and grantees perform an important service by reporting
evidence of wrongdoing, including misconduct, fraud, waste, and abuse in DOL programs. Whistleblowers
should never be subjected to, or threatened with, retaliation for having engaged in a protected
communication or protected activity. DOL-OIG plays a vital role in ensuring that DOL employees and
employees of DOL grantees and contractors are informed of their rights and protections against retaliation
for “blowing the whistle.” This work is done by the OIG Whistleblower Protection Coordinator (WPC)
Program, which is housed in the OIG’s Office of Legal Services.
The WPC educates DOL employees and supervisors and employees of DOL grantees and contractors
regarding their right to be free from retaliation as well as the avenues of redress that are available to
them both to file a whistleblower complaint and to file a complaint of whistleblower retaliation. The WPC
works with DOL to ensure that all DOL employees and supervisors receive required training related to
whistleblower rights and the handling of whistleblowers.
The WPC also ensures that the OIG promptly and thoroughly reviews complaints, and that it is responding
to whistleblowers in a timely fashion; and coordinates with the U.S. Office of Special Counsel (OSC) and
other agencies on relevant matters.
Whistleblower Retaliation Investigations
The OIG can initiate its own investigations into allegations of improper or illegal retaliation brought by DOL
employees or, on a discretionary basis, refer such allegations to OSC for review and investigation.
Further, pursuant to 41 U.S.C. § 4712, the OIG is required, with some exceptions, to investigate
whistleblower retaliation allegations made by employees of DOL contractors or grantees.
Whistleblower Investigations October 1, 2020 – March 31, 2021
Pending DOL employee complaint investigations 2
Closed DOL employee complaint investigation because employee also filed with OSC 1
Grantee/contractor complaints opened 3
Grantee/contractor complaints closed after preliminary investigation because they did not fall 4
under 41 U.S.C. § 4712
Pending grantee/contractor complaint investigations 4
Grantee/contractor complaint investigation closed and report sent to Secretary or his designee 1
Reports pending with the Secretary of Labor 3
66 Semiannual Report to Congress: October 1, 2020–March 31, 2021
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 data to identify potential fraud and programmatic
Claimant Data and Wage Records weaknesses.
Congress should consider legislative action to The results of our efforts have shown that
allow DOL and the OIG to have direct access data analytics is a vital tool in performing our
to SWA UI claimant data and wage records for oversight function. The OIG’s efforts resulted in
our respective oversight responsibilities. The the identification of billions in improper payments,
Department has opined that it lacks the authority with most attributable to potential fraud. The OIG
to require SWAs to provide the OIG with access was further able to recommend programmatic
to UI claimant data and wage records unless changes to put billions in federal funds to better
the OIG is conducting an investigation into a use. Further, the OIG shared portions of our
particular instance of suspected UI fraud. The methodology with ETA to allow the Department
Department is unable to cite to any law enacted and SWAs to stop fraud before it occurs. The use
by Congress to support its opinion; and contrary of IG subpoenas is time consuming and inefficient
to the Department’s belief, the IG Act of 1978, and it does not allow the OIG to identify fraud as it
as amended, authorizes the OIG’s access to is occurring.
information related to the Department’s programs,
unless Congress enacts law that expressly refers Real-time access to SWA UI claimant data
to the OIG and limits the OIG’s right of access. and wage records systems would assist in
the Department’s programmatic oversight
This lack of direct and real-time access to data responsibilities to identify improper payments
has severely hampered the OIG’s ability to and weak controls. This access is also vital to the
effectively oversee the UI program. In order to OIG’s oversight responsibility and would enable
overcome this impediment and effectively oversee the OIG to quickly identify and investigate large-
UI benefits provided in response to the COVID-19 scale fraud. It would also allow the OIG to expand
pandemic, the OIG issued multiple IG subpoenas our current efforts to share emerging fraud trends
to all SWAs seeking UI claimant data. OIG data with ETA and SWAs in order to strengthen the UI
scientists then normalized and analyzed the program and likely prevent fraud before it occurs.
In addition, conducting data analytics based on
direct access would further enable our auditors
to identify program weakness and recommend
68 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Legislative Recommendations
corrective action that will improve the timeliness the National Association of State Workforce
of UI benefit payments and the integrity of the UI Agencies’ Integrity Data Hub (IDH). The Integrity
program. Data Hub contains a Suspicious Actor Repository
that allows states to exchange data elements from
Enact the UI Integrity Legislative known fraudulent UI claims as well as additional
Proposals near real-time data sources to help states detect
improper payments and fraud, including an
In October 2016, the Department submitted identity verification tool to prevent fraudulent UI
a legislative package to Congress proposing benefit claims. This proposal will require states to
changes that would help address UI program cross-match UI claims against the data sources
integrity and the high improper payment rates available through IDH. The UI program’s system-
experienced in the UI program. These proposals wide use of IDH will result in increased prevention,
have also been included in each of the President’s detection, and recovery of improper and fraudulent
budget requests since FY 2018. The OIG payments.
encourages Congress to consider and adopt
these proposals to aid the Department’s efforts to These legislative proposals are consistent with
combat improper payments in the UI program. previous OIG findings and recommendations
to address UI improper payments. In order
The proposals include the following: to maintain UI program integrity, the OIG has
recommended, as of February 2021, establishing
• require states to use the State Information legislation that requires SWAs to cross-match
Data Exchange System. high-risk areas, including UI benefits paid to
• require states to cross-match UI claims individuals with Social Security numbers filed in
against the National Directory of New Hires multiple states, belonging to deceased persons
(NDNH). and federal inmates, or used to file for UI claims
• allow the Secretary of Labor to require states with suspicious email accounts.
to implement UI corrective actions related to
performance and integrity. Provide Authority to Ensure the
• require states to cross-match UI claims with
Integrity of the H-1B Program
the Social Security Administration’s prisoner
database and other repositories of prisoner If DOL is to have a meaningful role in the
information. foreign labor certification (FLC) process for
• allow states to retain 5 percent of UI H-1B specialty occupations visas, it must have
overpayment recoveries for program integrity the statutory authority to ensure the integrity
use. of that process, including the ability to verify
• require states to use UI penalty and interest the accuracy of information provided on labor
collections solely for UI administration. condition applications, and to initiate its own
H-1B investigations more broadly. Currently, the
In addition to the above, the President’s FY 2020 Department is statutorily required to certify an
budget request included a new proposal to require H-1B application unless it determines that the
states to access data sources available through application is “incomplete or obviously inaccurate.”
Semiannual Report to Congress: October 1, 2020–March 31, 2021 69
Legislative Recommendations
However, DOL may not initiate its own H-1B Notwithstanding recent changes to auditing
investigations based on reasons outside the four standards that strengthen limited-scope
statutory criteria, unlike investigations into the audits, these audits prevent independent
H-2A and H 2B programs. public accountants who are auditing pension
plans from rendering an opinion on the plans’
Our concern with the Department’s limited ability financial statements in accordance with
to ensure the integrity of the certification process professional auditing standards. These “no-
is heightened by the results of OIG analyses opinion” audits offer no substantive assurance
and investigations showing that the program of asset integrity either to plan participants or
is susceptible to significant fraud and abuse, to the Department.
particularly by employers and attorneys. For
example, some staffing companies utilize the • Expand the authority of the Employee
H-1B program without having scheduled jobs Benefits Security Administration (EBSA)
already lined up. Some employers and attorneys to correct substandard benefit plan
misrepresent their need for workers to DOL, then audits and ensure that auditors with poor
reassign the extra workers to other companies records do not perform additional plan
or require foreign workers to find their own work. audits. Changes should include providing
There have also been instances where companies EBSA with greater enforcement authority
illegally generated profit by requiring foreign over registration, suspension, and debarment
workers to pay fees and recurring payments to as well as the ability to levy civil penalties
secure H-1B visas. Without statutory authority against employee benefit plan auditors. The
to ensure program integrity, the Department ability to correct substandard audits and take
cannot verify employers’ attestations to the H-1B action against auditors is essential, as benefit
certifications unless a complaint is filed. Such is plan audits help protect participants and
unlikely, as foreign workers are generally reluctant beneficiaries by ensuring the proper valuation
to do so for fear of retaliation and losing their jobs. of plan assets and computation of benefits.
Amend Pension Protection Laws • Require direct reporting of ERISA
violations to DOL. Under current law, a
Legislative changes to the Employee Income pension plan auditor who finds a potential
Retirement Security Act of 1974 (ERISA) and ERISA violation is responsible for reporting
criminal penalties for ERISA violations would it to the plan administrator, but not directly
enhance the protection of assets in pension plans. to DOL. To ensure that improprieties are
To this end, the OIG continues to recommend the addressed, we recommend that plan
following legislative actions: administrators or auditors be required to report
potential ERISA violations directly to DOL.
• Repeal ERISA’s limited-scope audit This change would ensure the timely reporting
exemption. This exemption excludes pension of violations and would more actively involve
plan assets invested in financial institutions, auditors in safeguarding pension assets as
such as banks and savings and loan firms,
from audits of employee benefit plans.
70 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Legislative Recommendations
a first line of defense against the abuse of wage loss compensation but failing to report
workers’ pension plans. income they have earned.
• Strengthen criminal penalties in U.S.C. • Establish a 3-day waiting period at the
Title 18. Three sections of U.S.C. Title 18 beginning of the claims process. FECA
serve as the primary criminal enforcement legislation provides for a 3-day waiting period,
tools for protecting pension plans covered by which is intended to discourage the filing of
ERISA. Section 664 prohibits embezzlement frivolous claims. As currently written, however,
or theft from employee pension and welfare the legislation places the waiting period at the
plans; Section 1027 prohibits making false end of the 45-day continuation-of-pay period,
statements in documents required by thereby negating its purpose. Legislation
ERISA; and Section 1954 prohibits giving passed in 2006 placed the waiting period
or accepting bribes related to the operation for postal employees immediately after an
of ERISA-covered plans. Sections 664 and employment-related injury. If the intent of the
1027 subject violators to up to 5 years’ law is to ensure a true waiting period before
imprisonment, while Section 1954 calls for an employee applies for benefits, then that
up to 3 years’ imprisonment for violators. period should likewise come immediately after
The OIG recommends raising the maximum an employment-related injury – for all federal
penalty up to 10 years for all three violations workers, not exclusively postal employees.
to correspond with the 10-year penalty This proposal was included in the President’s
imposed by Section 669 (for theft from health FY 2021 budget as part of the Office of
care benefit programs), which would serve as Workers’ Compensation Programs’ (OWCP’s)
a greater deterrent and, consequently, further FECA reform.
protect employee pension plans.
• Allow the temporary suspension of
Improve the Integrity of the FECA questionable medical providers pending the
Program outcome of an investigation. While FECA
regulations allow OWCP to exclude a provider
Legislative reforms should be considered in the through administrative means, OWCP must
following areas to improve the effectiveness and give notice to the provider and afford the
integrity of the FECA program: provider an opportunity for a hearing before
DOL’s Office of Administrative Law Judges.
• Provide statutory access to the NDNH and This process and the various procedures
Social Security wage records. Currently, the involved can be lengthy. Although the
Department has no access to NDNH data and Department’s suspension and debarment
can access Social Security wage information process is being successfully applied to FECA
only if the claimant gives it permission. medical providers, legislative changes are
Granting the Department routine access to necessary to enable DOL to immediately
these databases would aid in detecting fraud suspend all payments to providers who have
committed by individuals receiving FECA been indicted for fraudulent billing practices.
This proposal was included in the President’s
Semiannual Report to Congress: October 1, 2020–March 31, 2021 71
Legislative Recommendations
FY 2021 budget as part of OWCP’s FECA take other actions as necessary to protect
reform. miners’ health and safety. Therefore, the OIG
recommends a review of the existing “rescue and
• Set prescription drug price limitations. Through recovery work” language found in Section 103(j)
the Federal Ceiling Price statute (38 U.S.C. and the “when present” language found in Section
§ 8126), Congress mandated controls on 103(k). Amending the language in those sections
the prices that manufacturers can charge would ensure that the Secretary’s authority is
for drugs in four specific medical programs broad, clear, and not vulnerable to challenge.
operated by the U.S. Department of Veterans
Affairs, the U.S. Department of Defense,
the U.S. Public Health Service, and the U.S.
Coast Guard. Granting DOL similar authority
to implement such ceiling prices would help
ensure that the prices it pays for drugs are fair
and reasonable.
Clarify MSHA’s Authority to Issue
Mine Closure Orders
The Mine Act charges the Secretary of Labor with
protecting the lives and health of mine workers.
To that end, the Mine Act contains provisions
authorizing the Secretary to issue mine closure
orders. Specifically, Section 103(j) states, “[i]
n the event of any accident occurring in a coal
or other mine where rescue and recovery work
is necessary, the Secretary or an authorized
representative of the Secretary shall take
whatever action he deems appropriate to protect
the life of any person.” Under Section 103(k), “an
authorized representative of the Secretary, when
present, may issue such orders as he deems
appropriate to ensure the safety of any person in
the coal or other mine.” The Federal Mine Safety
and Health Review Commission has affirmed
that the act places certain limitations on MSHA’s
authority. As a result, legislative action is needed
to clarify this authority.
MSHA has long-standing and critically important
authority to issue mine closure orders and
72 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Appendices
Reporting Requirements Under
the Following Acts
Inspector General Act of 1978
REPORTING REQUIREMENT PAGE
Recommendations on Existing and Proposed Legislation and 68
Section 4(a)(2) Regulations relating to the programs and operations of DOL
Section 5(a)(1) Description of Significant Problems, Abuses, and Deficiencies relating ALL
to the administration of programs and operations
Description of Recommendations for Corrective Action with Respect to ALL
Section 5(a)(2) Significant Problems, Abuses, and Deficiencies
Significant Recommendations from Previous Semiannual Reports on 82
Section 5(a)(3)
Which Corrective Action Has Not Been Completed
Matters Referred to Prosecutive Authorities and the Prosecutions and 97
Section 5(a)(4) Convictions Which Have Resulted
Section 5(a)(5) and Summary
of Each Report Made to the Head of DOL under Section 6(c) None to
Section 6(c)(2) (2) (Information or assistance requested and unreasonably refused in report
the judgment of the Inspector General).
List of Audit Reports, Inspection Reports, and Evaluation Reports 79
Section 5(a)(6) Subdivided According to Subject Matter
Section 5(a)(7) Summary of Particularly Significant Reports ALL
Statistical Tables Showing the Total Number of Audit Reports, 78
Inspection Reports, and Evaluation Reports and the Total Dollar Value
of Questioned Costs, Including Unsupported Costs, for Reports—
(A);(D) for which no management decision had been made by the
Section 5(a)(8) beginning or the end of the reporting period;
(B) which were issued during the reporting period; and
(C) for which a management decisions was made during the reporting
period, including the dollar value of disallowed and not disallowed
costs
Statistical Tables on Management Decisions on Recommendations 77
That Funds Be Put to Better Use
(A);(D) for which no management decision had been made by the
Section 5(a)(9) beginning or the end of the reporting period;
(B) which were issued during the reporting period; and
(C) for which a management decisions was made during the reporting
period, including the dollar value of disallowed and not disallowed
costs
74 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Reporting Requirements Under
the Following Acts, continued
Inspector General Act of 1978, continued
Summary of Each Audit Report, Inspection Report, and Evaluation 87 –
Report Issued Before the Commencement of the Reporting Period— 100
(A) for which no management decision has been made by the end of
the reporting period (including the date and title of each such report),
an explanation of the reasons such management decision has not
been made, and a statement concerning the desired timetable for
Section 5(a)(10)
achieving a management decision on each such report;
(B) for which no establishment comment was returned within 60 days
of providing the report to the establishment; and
(C) for which there are any outstanding unimplemented
recommendations, including the aggregate potential cost savings of
those recommendations
Description and Explanation for Any Significant Revised Management None to
Section 5(a)(11) Decision report
Information on Any Significant Management Decisions with Which the None to
Section 5(a)(12)
Inspector General Disagrees report
Information from the Federal Financial Improvement Act Section None to
Section 5(a)(13) 804(b)—instances and reasons when an agency has not met report
intermediate target dates in remediation plan
Peer Review Reporting 99
Section 5(a)(14) (A) Results of any peer review conducted by another OIG; or
(B) A statement identifying the date of the last peer review conducted
Section 5(a)(15) Outstanding Peer Review Recommendations None to
report
Section 5(a)(16) Peer Reviews Conducted by DOL-OIG and Recommendations None to
Outstanding or Not Fully Implemented report
Statistical Tables on Investigative Findings Showing Total Number of— 97
(A) reports issued
(B) persons referred to DOJ for prosecution
Section 5(a)(17)
(C) persons referred to State and local prosecuting authorities
(D) indictments and criminal informations that resulted from any prior
referral to prosecuting authorities
Metrics Used for Developing the Data for the Statistical Tables Under 97
Section 5(a)(18) Section 5(a)(17)
Summary of Investigations of Senior Government Employees Where None to
Allegations of Misconduct Were Substantiated—including the facts, report
Section 5(a)(19) circumstances, status, disposition of the matter, and name of the
official if made public by the Office
Description of Whistleblower Retaliation Cases Including Information 67
Section 5(a)(20) About the Official Found to Have Engaged in Retaliaton and What, if
any, Consequences that Establishment Imposed to Hold that Official
Accountable
Semiannual Report to Congress: October 1, 2020–March 31, 2021 75
Appendices
Reporting Requirements Under
the Following Acts, continued
Inspector General Act of 1978, continued
Section 5(a)(21) Summary of Instances of Attempted Departmental Interference with None to
the Independence of the Office, including—with budget constraints report
and incidents where the establishment has: resisted or objected to
oversight activities; or restricted or significantly delayed access to
information
Section 5(a)(22) (A) Descriptions of Inspections, Evaluations, Audits, and Investigations 59
That Are Closed and Were Not Disclosed to the Public; and
(B) Descriptions of Investigations Conducted By the Office Involving a
Senior Government Employee that is Closed and Was Not Disclosed
to the Public
Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010
Section 989C Peer Review Reporting 99
76 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Funds Recommended for Better Use
Funds Put to a Better Use Agreed to by DOL*
Number of Dollar Value
Reports ($ millions)
For which no management decision had been made as of the commencement of the
1 5.6
reporting period
Issued during the reporting period 1 5,409.0
Subtotal 2 5,414.6
For which a management decision was made during the reporting period:
• Dollar value of recommendations that were agreed to by management 5.6
• Dollar value of recommendations that were not agreed to by management 0.0
For which no management decision had been made as of the end of the reporting period 1 5.409.0
Funds Put to a Better Use Implemented by DOL
Number of Dollar Value
Reports ($ millions)
For which final action had not been taken as of the commencement of the reporting period 1 12.6
For which management or appeal decisions were made during the reporting period 0 0
Subtotal 1 12.6
For which a management decision was made during the reporting period:
• Dollar value of recommendations that were actually completed 1 12.6
• Dollar value of recommendations that management has subsequently concluded 0.0
should not or could not be implemented or completed
For which no final action had been taken by the end of the period 0 0
* The term “recommendation that funds be put to better use” means a recommendation by the OIG that funds could be used more
efficiently or achieve greater program effectiveness if management took actions to implement and complete the recommendation.
This term is defined by the Inspector General Act and includes, among other things, reductions in future outlays; deobligation of funds
from programs or operations; costs not incurred in the future by implementing recommended improvements related to the operations
of the establishment, a contractor, or a grantee; and any other savings specifically identified, including reverting funds to the U.S.
Treasury to be used for other purposes.
Semiannual Report to Congress: October 1, 2020–March 31, 2021 77
Appendices
Questioned Costs
Resolution Activity: Questioned Costs*
Questioned
Number of
Costs
Reports
($ millions)
For which no management decision had been made as of the commencement of the
18 5.3
reporting period (as adjusted)
Issued during the reporting period 1 2.0
Subtotal 19 7.3
For which a management decision was made during the reporting period:
• Dollar value of disallowed costs 0.1
• Dollar value of costs not disallowed 0.0
For which no management decision had been made as of the end of the reporting period 1 2.0
For which no management decision had been made within six months of issuance 0 0.0
Closure Activity: Disallowed Costs
Disallowed
Number of
Costs
Reports
($ millions)
For which final action had not been taken as of the commencement of the reporting period (as
58 11.8
adjusted)
For which management or appeal decisions were made during the reporting period 0 0.0
Subtotal 58 11.8
For which final action was taken during the reporting period:
• Dollar value of disallowed costs that were recovered 1.4
• Dollar value of disallowed costs that were written off 0.0
• Dollar value of disallowed costs that entered appeal status
For which no final action had been taken by the end of the reporting period 3 1.11
*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.
¹The balances at the commencement of the reporting period include Single Audit activities; however, Single Audit activities, with
the exception of Quality Control Reviews conducted by OIG, are no longer included in the end of reporting period totals. This
intentional change is the result of the OIG’s change in approach to better focus its Single Audit oversight.
78 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Final Audit Reports Issued
Number of Questioned Funds Put to
Report Name
Recommendations Costs ($) Better Use ($)
Employment and Training Administration
COVID-19: States Cite Vulnerabilities in Detecting Fraud While
Complying with the CARES Act UI Program Self-Certification
Requirement; Report No. 19-21-001-03-315; 10/21/20 0 0 0
ETA Needs To Improve Its Disaster National Dislocated Worker
Program; Report No. 02-21-002-03-391; 2/1/21 6 1,988,627 0
Alert Memorandum: ETA Needs to Ensure SWAs Implement
Effective Unemployment Insurance Program Fraud Controls for
High Risk Areas; Report No. 19-21-002-03-315; 2/22/21 2 0 5,409,966,198
Job Corps Should Improve Its Pre-Admission Evaluation Process;
Report No. 05-21-001-03-370; 03/25/21 4 0 0
Mine Safety and Health Administration
MSHA Needs to Improve Efforts to Protect Coal Miners From
Respirable Crystalline Silica; Report No. 05-21-001-06-001;
11/21/20 3 0 0
MSHA Can Improve How Violations are Issued, Terminated,
Modified, and Vacated; Report No. 05-21-002-06-001; 03/31/21 10 0 0
Multi-Agency
Overview of Vulnerabilities and Challenges in Foreign Labor
Certification Programs; Report No. 06-21-001-03-321; 11/13/20 0 0 0
Office of the Assistant Secretary for Administration and Management
DOL Did Not Demonstrate It Followed A Sound Process in
Promulgating the 2017 Tip Rule Notice of Proposed Rulemaking;
Report No. 17-21-001-15-001; 12/11/20 5 0 0
FY 2020 FISMA DOL Information Security Report: Progress
Needed to Improve Risk Management and Continuous Monitoring
Information Security Controls; Report No.23-21-001-07-725;
12/22/20 25 0 0
Office of the Chief Financial Officer
FY 2020 Independent Auditors' Report on the DOL Financial
Statements; Report No. 22-21-004-13-001; 11/16/20 6 0 0
Management Advisory Comments Identified in an Audit of
the Consolidated Financial Statements, For the Year Ended
September 30, 2020; Report No. 22-21-005-13-001; 12/18/20 20 0 0
Occupational Safety and Health Administration
Region IX Whistleblower Protection Program Complaints Were Not
Complete or Timely; Report No. 02-21-001-10-105; 11/23/20; 4 0 0
COVID-19: Increased Worksite Complaints and Reduced OSHA
Inspections Leave U.S. Workers’ Safety at Increased Risk; Report
No. 19-21-003-10-105; 02/25/21 4 0 0
Semiannual Report to Congress: October 1, 2020–March 31, 2021 79
Appendices
Final Audit Reports Issued, continued
Number of Questioned Funds Put to
Report Name
Recommendations Costs ($) Better Use ($)
Office of Workers’ Compensation Program
Special Report on the Federal Employees' Compensation Act
Special Benefit Fund; Report No. 22-21-001-04-431; 10/30/20 2 0 0
District of Columbia Workmen’s Compensation Act Special Fund
Financial Statements and Inspector General’s Report; Report
No.22-21-003-04-432; 11/13/20 0 0 0
Longshore and Harbor Workers’ Compensation Act Special Fund
Financial Statement and Inspector General’s Report; Report No.
22-21-002-04-432; 11/13/20 0 0 0
Total (16 Reports)
Final Audit Report Total (16 Reports) 91 $1,988,627 $5,409,966,198
80 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Other Reports
Number of
Report Name
Recommendations
Employment and Training Programs
Workforce Innovation and Opportunity Act Programs
Quality Control Review (QCR) for Single Audit of the State of New Mexico Workforce Solutions
Department for the Fiscal Year Ended on June 30, 2018; Report No. 24-21-001-03-315; 12/16/20 0
Worker Benefit Programs
Office of Federal Contract Compliance Programs
Review of the Department of Labor’s Compliance in Implementing the Requirements of Executive
Order 13950; Report No. 17-21-002-50-598; 12/29/20 0
Other Report Total (2 Reports) 0
Semiannual Report to Congress: October 1, 2020–March 31, 2021 81
Appendices
Unresolved Audit Reports Over 6 Months Old
Number of Questioned Costs
Agency Report Name
Recommendations ($)
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve; OIG Negotiating with
Agency
ETA Violated the Bona Fide Needs Rule and the Antideficiency
ETA
Act; Report No. 26-17-002-03-370; 09/21/17 1 0
Job Corps Should Do More to Prevent Cheating in High School
ETA
Programs; Report No. 26-19-001-03-370; 09/25/19 4 0
COVID-19: More Can Be Done to Mitigate Risk to Unemployment
ETA Compensation Under the CARES Act; Report No. 19-20-008-03-
315; 08/07/20 2 0
MSHA Needs to Provide Better Oversight of Emergency
MSHA
Response Plans; Report No. 05-17-002-06-001; 03/31/17 2 0
MSHA Did Not Evaluate Whether Civil Monetary Penalties
MSHA Effectively Deterred Unsafe Mine Operations; Report No 23-19-
002-06-001; 08/16/19 1 0
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist;
OASAM
Report No. 23-16-002-07-725; 09/30/16 1 0
DATA Act: DOL's Reported Data Generally, Met Quality Standards
OCFO But Accuracy IssueRemain; Report No 03-20-001-13-001;
11/21/19 3 0
DOL Needs To Do More To Secure Employees' Personally
OCFO Identifiable Information in the Travel Management System; Report
No. 23-20-003-13-001; 09/10/20 2 0
OFCCP Did Not Show It Adequately Enforced EEO Requirements
OFCCP on Federal Construction Contracts; Report No. 04-20-001-14-001;
03/27/20 1 0
OSHA Procedures for Issuing Guidance Were Not Adequate and
OSHA
Mostly Not Followed; Report No. 02-19-001-10-105; 03/28/19 1 0
Agency Management Decision or Grant/Contracting Officer’s Final Determination Not Issued By Close of Period
NONE
Total Nonmonetary Recommendations and Questioned Costs 18 $0
Funds
Number of
Agency Report Name Recommended for
Recommendations
Better Use ($)
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve; OIG Negotiating with
Agency
Total Funds Recommended for Better Use 0 $0
Total Audit Exceptions and Funds Recommended for Better Use 18 $0
Total Funds Recommended for Better Use 0 0
Total Audit Exceptions and Funds Recommended for Better Use 18 $0
82 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Corrective Actions Taken by the Department
During this reporting period, we took final action to close recommendations within reports based on
corrective action taken by the Department. The following is a summary of the most significant actions.
COVID-19: OSHA Needs to Improve Its Handling of Whistleblower Complaints
During the Pandemic; Report No. 19-20-010-10-105
OSHA’s Whistleblower Protection Program enforces 25 whistleblower statutes. These statutes prohibit
employers from retaliating against their employees for exercising their rights to report violations of
various workplace safety, consumer product, environmental, financial reform, and securities laws. OSHA
investigates complaints of discriminatory actions taken against employees who “blow the whistle” under
any of these statutes.
The pandemic has raised concerns regarding the safety and health of the workforce, and the protections
afforded to those who report potential workplace safety violations. News articles have depicted alleged
employer retaliation against employees who reported potential workplace safety violations during
COVID-19, including social distancing and personal protective equipment violations. Employees who
believe they have been subject to retaliation may file a complaint with the Whistleblower Program.
Whistleblower complaints have significantly increased during the pandemic, and at the same time, the
Whistleblower Program’s full-time equivalent employment (FTE) has decreased. Based on interviews with
investigators and a regional supervisory investigator, no more than 20 open investigations at one time
would be the optimal caseload per investigator. Depending on the region, the investigators reported that
open investigations ranged from 15 to 40 in 2019, but 19 to 45 in 2020. As a result, the potential exists for
an even greater delay in the average days to close an investigation. Amid this challenge, OSHA needs to
improve its handling of whistleblower complaints during the COVID-19 pandemic.
In response to our audit, OSHA filled the five whistleblower positions with Alternative Dispute Resolution
(ADR) Coordinators. According to OSHA, this program has proven to be an effective and viable alternative
to the investigative process and an invaluable asset to OSHA's whistleblower protection program. OSHA
also stated that filling these positions with ADR Coordinators will provide the greatest benefit to the agency.
Review of the Occupational Safety and Health Administration’s Referral to and
Reclamation of Debt from the U.S. Department of the Treasury; Report No. 22-
20-006-10-001
OSHA is authorized to levy penalties against employers who violate OSHA safety regulations. These
penalties serve as OSHA’s primary means for motivating employers to prevent or correct hazards
Semiannual Report to Congress: October 1, 2020–March 31, 2021 83
Appendices
Corrective Actions Taken by the Department,
continued
voluntarily. Any penalties assessed by OSHA become delinquent 30 calendar days after the due date.
Pursuant to the Debt Collection Improvement Act (DCIA) of 1996, OSHA must refer any debts over 180
days past due to Treasury’s Fiscal Service for collection. We found OSHA had not been timely in referring
delinquent debt for collection to Treasury’s Fiscal Service. Moreover, we found OSHA did not accurately
report to Treasury the status of its receivables and did not notify the area office to provide a status update
and specify follow-up actions.
In response to our memorandum, OSHA developed and implemented several standard operating
procedures to improve its debt collection process. It implemented periodic reporting between headquarters
and regional offices to provide status updates and action to be taken on overdue cases. Further, it
implemented procedures to enhance reporting to Treasury on the status of debt.
DOL Could Improve Exit Requirements and Participant Outcomes for the
YouthBuild Program; Report No. 04-18-002-03-001
The YouthBuild program targets at-risk youth that are current or former high school dropouts, providing
education, occupational skills training, and leadership development to youth in need. Our audit found that
1,155 of 18,750 participants who “successfully exited” the program had not secured an industry credential,
had not earned a high school diploma or equivalency degree, nor had they obtained employment or
enrolled in another educational program. We also questioned $1.4 million in costs for participants that
remained in the program longer than the legal limit of 2 years.
In response to our audit, DOL acknowledged that the definitions grantees had in place for a "successful"
exit were subject to substantial variation. All Workforce Innovation and Opportunity Act (WIOA) authorized
programs, including YouthBuild, are now required to use the same set of six performance indicators, as part
of WIOA's goal of greater alignment of the workforce system. The YouthBuild program began using these
new measures and fully discontinued the use of "successful" and "unsuccessful" exit by the end of 2020.
Additionally, ETA recovered the disallowed costs related to the number of unallowable days of training.
COVID-19: More Can Be Done to Mitigate Risk to Unemployment
Compensation Under the CARES Act; Report No. 19-20-008-03-315
On March 27, 2020, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act.
As of January 2, 2021, the CARES Act included approximately $392 billion in funding to operate new or
existing unemployment compensation programs, including a program designed to provide benefits to
individuals who are not traditionally eligible for unemployment assistance. Our audit found that DOL’s
guidance did not sufficiently address the risks of fraud, waste, or abuse. In addition, although DOL
84 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Corrective Actions Taken by the Department,
continued
leveraged existing tools to combat fraud, it did not always ensure those tools were used effectively and it
did not sufficiently address the assessment of CARES Act programs in its oversight plan.
In response to our audit, DOL engaged a contractor that identified states with best practices, compiled
those best practices, and produced a webcast for the states. DOL also provided significant technical
assistance to states, including an implementation checklist, and developed a suite of comprehensive
monitoring tools to support reviews of states’ operations and reporting activities. In September 2020, DOL
regional offices began conducting monitoring and risk assessments, and issuing monitoring reports for
each state.
Voluntary Protection Program: Controls Are Not Sufficient to Ensure Only
Worksites with Exemplary Safety and Health Systems Remain in the Program;
Report No. 02-14-201-10-105, and OSHA’s Voluntary Protection Programs
Require Better Information to Identify Participants with Contract-Worker
Fatalities and Catastrophes; Report No. 02-17-202-10-105
OSHA has used its Voluntary Protection Program (VPP) to establish cooperative relationships with
businesses and their workers to help prevent fatalities, injuries, and illnesses; and to officially recognize
worksites with exemplary safety and health management systems. Once approved for VPP participation,
a worksite is exempted from OSHA programmed inspections as long as it complies with program
requirements and maintains exemplary systems.
OSHA did not have controls in place to sufficiently select, reevaluate, and monitor VPP participants to
ensure their worksites maintained exemplary status. As a result, we found approximately 13 percent of
VPP participants had injury and illness rates above industry averages or had been cited for violations
of safety and health standards. Most of these participants were still allowed to remain in the program.
In addition, OSHA’s policy allowed participants with injury and illness rates above industry averages to
potentially remain in the program for up to 6 years. Finally, OSHA did not have assurance that it received
reports of all VPP contract-worker fatalities and catastrophes, because it did not have adequate information
systems. Instead, OSHA relied on participants, workers, and contract-workers to report VPP fatalities and
catastrophes. Regulations require all employers to report work-related fatalities and severe injuries to
OSHA; however, contractors that report may not reveal their affiliation with a VPP participant.
In response to our audits, OSHA updated its VPP Policies and Procedures Manual. VPP participants are
allowed to develop and implement a 2 year Rate Reduction Plan (RRP) when, for a given calendar year,
their three-year average injury and illness rates go above their industry average rates published annually
Semiannual Report to Congress: October 1, 2020–March 31, 2021 85
Appendices
Corrective Actions Taken by the Department,
continued
by the Bureau of Labor Statistics (BLS). When the employers recognize their rate increase, they are
obligated to develop and implement an RRP that will feasibly result in their rates being reduced a level
lower than the published industry injury and illness rates for the most recent calendar year. The Policy and
Procedures Manual has been amended to clarify when an RRP can and cannot be used for a participant
whose 3-year average injury and illness rates increase above the BLS published injury and illness rates
for their industry. Moreover, OSHA implemented a requirement for field offices to provide reports that
include specific information for reporting fatalities and significant events at VPP sites. Finally, the updated
VPP manual presents codes for OSHA’s information system specifically developed to identify enforcement
activities at VPP sites, including those for non-VPP contractors working at VPP sites. The requirement to
report significant incidents now clearly includes all contractor employees at VPP sites.
COVID-19: WHD Needs to Closely Monitor the Pandemic Impact on Its
Operations; Report No. 19-20-009-15-001
On March 18, 2020, Congress passed the FFCRA in response to the COVID-19 pandemic to ensure
American workers would not be forced to choose between their paychecks and the public health measures
needed to combat the virus. Even though WHD acted quickly after Congress passed the FFCRA by
issuing guidance, training staff, and conducting oversight, the agency continued to face challenges as it
implemented and enforced the requirements of the FFCRA. Challenges WHD faced included conducting
enforcement activities while maximizing telework, maintaining social distancing, and ensuring appropriate
eligibility for FFCRA’s emergency paid leave benefits. While WHD developed a COVID-19 specific
addendum for its operating plan, it focused on past efforts and did not sufficiently address the agency’s
planned future actions, including how it intended to use the additional $2.5 million it received in CARES Act
funding to fulfill its obligations under the FFCRA.
In response to our audit, WHD took actions to develop a robust, flexible infrastructure for closely monitoring
the FFCRA and FLSA programs, including system-wide impacts from the pandemic; leverage existing case
management systems, which already tracks case backlogs; and administer and enforce FFCRA paid leave
requirements based on the initial definition of health care provider in the relevant regulatory provision
until the court vacated that definition. WHD also established performance measures in the FY 2020 WHD
Operating Plan: COVID-19 Addendum that were baselined for the remainder of FY 2020 and monitored
moving forward. WHD relied on a proven mix of data analytics, cross-functional teams, and continuous
communication to ensure effective and efficient case management.
86 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Unimplemented Recommendations
During this reporting period, we encountered three instances of audits or evaluations provided to the
Department for comment that were not responded to within 60 days. However, agencies have provided
management decisions in response to all audits and evaluations issued before the commencement of this
reporting period.
From October 1, 2011, through September 30, 2020, the OIG made 1,517 audit recommendations to
the Department, of which 149 have not been fully implemented. These 149 recommendations include
92 recommendations resulting from audits issued since the end of FY 2018, and in many cases, the
Department has corrective action plans in place.
RECOMMENDATIONS MADE PRIOR
TO OCTOBER 1, 2020, NOT YET
IMPLEMENTED
Fiscal Total Number of Unimplemented Recommendations
Year Recommendations Made Total Number Monetary Impact ($)
2011 319 7
2012 213 3
2013 195 2
2014 128 1
2015 163 7 48,404
2016 100 1
2017 112 20
2018 98 16 1,051,750
2019 84 37
2020 105 55 5,660,468
Total 1,517 149 $6,760,622
Semiannual Report to Congress: October 1, 2020–March 31, 2021 87
Appendices
High-Priority Unimplemented
Recommendations
The following table summarizes the unimplemented recommendations the OIG considers to be the
highest priorities for the Department.
Report Title; Report Number; Date Issued Unimplemented Recommendations
Worker Safety
Clarify mine operators’ responsibilities for local coordination under
MSHA Needs to Provide Better Oversight of the MINER Act, including coordination and communication among
Emergency Response Plans; the operator, mine rescue teams, and local emergency response
Report No. 05-17-002-06-001; 03/31/17 personnel, and familiarizing local rescue personnel with surface
functions that may be required in the course of mine rescue work.
COVID-19: OSHA Needs to Improve Its Handling of Continue to monitor and evaluate the Region II triage pilot and
Whistleblower Complaints During the Pandemic consider extending the triage process to all regions to expedite the
Report No. 19-20-010-10-105; 8/14/20 screening of whistleblower complaints.
Improve OSHA’s inspection strategy by prioritizing very high and high-
risk employers for COVID-19 related onsite inspections as businesses
reopen and increase operations in various localities across the United
COVID-19: Increased Worksite Complaints and States. Ensure remote inspections are tracked retroactive to February
Reduced OSHA Inspections Leave U.S. Workers’ 1, 2020. Compare remote inspections to onsite inspections, and
Safety at Increased Risk; Report No. at a minimum provide analysis that addresses their frequency and
19-21-003-10-105; 02/25/21 timeliness for identifying and abating worksite hazards. Analyze and
determine whether establishing an infectious disease specific ETS is
necessary to help control the spread of COVID-19 as employees return
to worksites.
Employee Benefits
EBSA Did Not Have the Ability to Protect the Estimated
79 Million Plan Participants in Self-Insured Health
Plans from Improper Denials of Health Claims; Reduce or eliminate exemption thresholds for small plans.
Report No. 05-17-001-12-121; 11/18/16
OWCP’s Efforts to Detect and Prevent FECA Improper Develop effective procedures, including seeking legislative authority to
Payments Have Not Addressed Known Weaknesses; conduct matches with SSA retirement records, to ensure that claimants
who receive SSA retirement benefits are identified timely and their
Report No. 03-12-001-04-431; 02/15/12 FECA benefits are adjusted accordingly.
OWCP Must Continue Strengthening Management of Ensure that the pharmacy benefits manager (PBM) implements a drug
FECA Pharmaceuticals, Including Opioids; utilization review as specified in the contract. Ensure the PBM, when
developing its formulary, considers all classes of drugs to determine if
Report No. 03-19-002-04-431; 5/14/19 prior authorization or letters of medical necessity would be appropriate.
Unemployment Insurance Benefits
DOL Did Not Comply with Improper Payments Maintain its current focus on increasing its technical assistance and
Elimination and Recovery Act for FY 2017; funding to states to improve the improper payment reduction strategies
to ensure compliance with the improper payments estimate rate
Report No. 03-18-002-13-001; 05/15/18 threshold.
88 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
High-Priority Unimplemented
Recommendations, continued
Include CARES Act UI transactions in the Benefit Accuracy
COVID-19: More Can Be Done to Mitigate Risk to Measurement (BAM) or develop an alternative methodology to reliably
Unemployment Compensation Under the CARES Act estimate improper payments for those programs; and issue guidance
Report No. 19-20-008-03-315; 08/07/20 directing states to provide access to state UI claimant data, in order to
prevent and detect fraud.
Seek additional guidance or clarification from Congress concerning
whether a claimant is entitled to establish and continue to receive PUA
Alert Memorandum: The Pandemic Unemployment payments without providing documentation at any point to support a
Assistance Program Needs Proactive Measures to weekly benefit amount (WBA) determination. Alternatively consider
Detect and Prevent Improper Payments and Fraud tools already available under the CARES Act such as those cited
Report No. 19-20-002-03-315; 05/26/20 in § 2102(a)(3)(A)(i)(I)(kk) or § 2104(f)7 and change its guidance;
or request legislative action to curtail improper or fraudulent PUA
payments.
Establish effective controls, in collaboration with SWAs, to mitigate
fraud and other improper payments to ineligible claimants, including
Alert Memorandum: The Employment and Training the areas identified in the memorandum: UI benefits paid to multi-
Administration (ETA) Needs to Ensure State Workforce state claimants, claimants who used the social security numbers
Agencies (SWA) Implement Effective Unemployment of deceased individuals, potentially ineligible federal inmates, and
Insurance Program Fraud Controls for High Risk Areas; claimants with suspicious email accounts. Effective controls will help
prevent similar or greater amounts of fraud and allow those funds
Report No. 19-21-002-03-315; 02/22/21 to be put to better use. Work with Congress to establish legislation
requiring SWAs to cross-match high-risk areas, including the four areas
identified in the memo.
Departmental Management
FISMA Fiscal Year 2015: Ongoing Security Deficiencies
Exist; Realign the organizational structure as it relates to the CIO to address
organizational independence issues.
Report No. 23-16-002-07-725; 09/30/16
FY 2019 FISMA DOL Information Security Report: Implement improvements in DOL’s information security program for
Implementation of Security Tools Hindered by the following areas: Risk Management, Configuration Management,
Insufficient Planning; Identity and Access Management, Data Protection and Privacy,
Information Security Continuous Monitoring, Incident Response, and
Report No. 23-20-002-07-725; 12/23/19 Contingency Planning.
DATA Act: DOL’s Reported Data Generally Met Quality Identify risks specific to DATA Act reporting and take appropriate action
Standards But Accuracy Issues Remain; to ensure internal controls address the resulting areas of concern.reas
Report No. 03-20-001-13-001; 11/21/19 of concern.
Establish and maintain a comprehensive inventory of web applications,
identifying which applications are public-facing and contain sensitive
Stronger Controls Needed Over Web Application information. Review and update DOL Plan of Action and Milestones
Security; (POA&M) policy to ensure agency corrective actions and timeframes
are implemented. Establish and verify the implementation of
Report No. 23-20-001-07-725; 11/14/19 Department-wide policies and procedures specific to associated
risks to web applications, securing web servers, and web application
programming.
Semiannual Report to Congress: October 1, 2020–March 31, 2021 89
Appendices
High-Priority Unimplemented
Recommendations
Establish and implement procedures to ensure E2 is managed in
DOL Needs to Do More to Secure Employees’ compliance with contractual security requirements and DOL computer
Personally Identifiable Information in the Travel security policies for contracted information systems; and establish and
Management System implement procedures to ensure E2 account management practices
enforce DOL’s security policies. These procedures must include
Report No. 23-20-003-13-001; 09/10/20 application of the principle of least privilege when creating, monitoring,
and deactivating E2 user accounts.
Formally document the level of precision used in the reviews to ensure
that the review occurs at an appropriately precise level to identify
errors within model functionality and data input, which would allow
the reviewer to identify material errors in the estimates. Maintain
documentation of the reviews performed to assess the reasonableness
FY 2020 Independent Auditors' Report on the DOL of the underlying data, assumptions, and formulas used in the models
Financial Statements; that is sufficiently detailed to evidence the specific items reviewed,
Report No. 22-21-004-13-001; 11/16/20 analysis performed, and conclusions reached. Provide additional
training to the reviewers of the estimates to reinforce established
policies and procedures, as necessary. Amend policies and procedures
to provide specific steps to be performed during the reviews and the
documentation requirements, which should include the specific items
reviewed, analyses performed, and conclusions reached.
Provide training to responsible personnel over the third-party
continuous monitoring review checklist. Enforce DOL policies and
procedures regarding separation of duties so developers do not
possess the ability to migrate changes to production. Enforce DOL
FY 2020 FISMA DOL Information Security Report: security baseline polices with DOL’s Cloud Service Providers (CSPs)
Progress Needed to Improve Risk Management and and develop a security configuration checklist for the CSPs. Develop
Continuous Monitoring Information Security Controls; sufficiently defined quantitative and qualitative metrics that provide
Report No. 23-21-001-07-725; 12/22/20 meaningful indications of security status and trend analysis at all
risk management tiers. Review, revise as necessary, finalize, and
implement their revised Software Development Life Cycle Manual.
Implement a process for approving deviations from established
configuration settings.
Job Corps Safety
Prior to reopening campuses, Job Corps should ensure all centers
have proper controls in place to adhere to federal, state, local
COVID-19: ETA Should Continue To Closely Monitor and other guidelines – from physical distancing to having ample
Impact on Job Corps Program disinfectant, cleaning and PPE supplies; and Job Corps should ensure
Report No. 19-20-007-03-370; 07/28/20 centers provide needed resources to address the learning needs of all
students, including students who require reasonable accommodations,
hands-on-instruction, and special equipment to learn.
90 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Summary of Reports with Unimplemented
Recommendations with Cost Savings / Funds
Put to Better Use
Number of
Report Name Funds Put to Better Use ($)
Recommendations
Employment and Training Administration
ETA Should Do More to Assist Vulnerable States Prepare for
Disaster Unemployment Assistance Program Implementation; Report
No. 04 20 002-03-315; 09/29/20
1 5,564,769
Establish policies, procedures and controls to ensure states provide
DUA staff annual training and have required written state DUA
policies and procedures in place.
Total 1 $5,564,769
Semiannual Report to Congress: October 1, 2020–March 31, 2021 91
Appendices
Summary of Reports with Unimplemented
Recommendations with Other Monetary
Impact
Number of
Report Name Funds Put to Better Use ($)
Recommendations
Employment and Training Administration
Job Corps Could Not Demonstrate Beneficial Job Training
Outcomes; Report No. 04-18-001-03-370; 03/30/18
We recommend the Employment and Training Administration 1 51,750
determine and assess liquidated damages to contractors that
misreported data based on invalid placements.
Total 1 $51,750
92 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Reports with Unimplemented
Recommendations for Management
Improvement or Disallowed Costs Owed
The following table lists all OIG reports issued prior to this semiannual reporting period with
recommendations that have not yet been fully implemented (as of September, 2020).
Number of
Disallowed
Report Name Unimplemented
Costs Owed ($)
Recommendations
Office of the Chief Financial Officer
The Department Needs to Take Action to Improve the Quality of its Data Act
Submissions Report;
Report No. 03-18-001-13-001; 01/19/18 2 0
DOL Did Not Comply With Improper Payments Elimination and Recovery Act for
FY 2017;
Report No. 03-18-002-13-001; 05/15/18 1 0
DATA Act: DOL’s Reported Data Generally Met Quality Standards But Accuracy
Issues Remain;
Report No. 03-20-001-13-001; 11/21/19 3 0
Management Advisory Comments Identified In An Audit of the Consolidated
Financial Statements For The Year Ended September 30, 2019;
Report No. 22-20-005-13-001; 12/19/19 6 0
DOL Needs To Do More To Secure Employees' Personally Identifiable Information
in the Travel Management System;
Report No. 23-20-003-13-001; 09/10/20 2 0
Employee Benefits Security Administration
Limited-Scope Audits Provide Inadequate Protections to Retirement Plan
Participants;
Report No. 05-14-005-12-121; 09/30/14 1 0
EBSA Did Not Have the Ability to Protect the Estimated 79 Million Plan
Participants in Self-Insured Health Plans from Improper Denials of Health Claims;
Report No. 05-17-001-12-121; 11/18/16 1 0
Employment and Training Administration
Job Corps Oversight of Center Performance Needs Improvement;
Report No. 26-12-006-03-370; 09/28/12 1 0
Job Corps Needs to Improve Enforcement and Oversight of Student Disciplinary
Policies;
Report No. 26-15-001-03-370; 02/27/15 1 48,404
Investigative Advisory Report–Weaknesses Contributing to Fraud in the
Unemployment Insurance Program;
Report No. 50-15-001-03-315; 07/24/15 6 0
Program Specific Performance Measures Are Needed to Better Evaluate the
Effectiveness of the Reemployment Services and Eligibility Assessment Program;
Report No. 04-17-002-03-315; 09/26/17 3 0
ETA Violated the Bona Fide Needs Rule and the Antideficiency Act;
Report No. 26-17-002-03-370; 09/21/17 2 0
Semiannual Report to Congress: October 1, 2020–March 31, 2021 93
Appendices
Reports with Unimplemented
Recommendations, continued
Number of
Disallowed
Report Name Unimplemented
Costs Owed ($)
Recommendations
Trade Adjustment Assistance Community College Career Training Grants:
ETA Spent $1.5 Billion and Met Its Stated Capacity Development Goals, but Is
Challenged to Determine if the Investment Improved Employment Outcomes;
Report No. 02-18-201-03-330; 07/26/18 3 1,000,000
Experience Works, Inc. Misused More than $4 Million in SCSEP Grant Funds;
Report No. 26-18-002-03-360; 09/28/18 1 0
Job Corps Should Do More to Prevent Cheating in High School Programs;
Report No. 26-19-001-03-370; 09/25/19 5 0
ETA Had No Reasonable Assurance That $183 Million in H-1B TST Grant Funds
Helped Participants Get H-1B Jobs;
Report No. 06-19-001-03-391; 09/27/19 1 0
Alert Memorandum: The Pandemic Unemployment Assistance Program Needs
Proactive Measures to Detect and Prevent Improper Payments and Fraud;
Report No. 19-20-002-03-315; 05/26/20 1 0
COVID-19: ETA Should Continue to Closely Monitor Impact on Job Corps
Program; Report No. 19-20-007-03-370; 07/28/20 2 0
COVID-19: More Can Be Done to Mitigate Risk to Unemployment Compensation
Under The CARES Act; Report No. 19-20-008-03-315; 08/07/20 2 0
ETA Should Do More to Assist Vulnerable States Prepare for Disaster
Unemployment Assistance Program Implementation; Report No. 04-20-002-03-
315; 09/29/20 2 95,699
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 1 0
ETA Could Not Demonstrate that Credentials Improved WIOA Participants’’
Employment Outcome; Report No. 03-20-002-03-391; 09/30/20 2 0
Office of Workers’ Compensation Programs
OWCP’s Efforts to Detect and Prevent FECA Improper Payments Have Not
Addressed Known Weaknesses;
Report No. 03-12-001-04-431; 02/15/12 1 0
Audit of Federal Employees’ Compensation Act, Durable Medical Equipment
Payments;
Report No. 03-12-002-04-431; 03/26/12 1 0
Interim Report on Audit of Pharmaceutical Management in DOL Benefit
Programs-OWCP Needs Better Controls over Compounded Prescription Drugs;
Report No. 03-17-001-04-431; 05/23/17 8 0
Special Report Relating to the Federal Employees’ Compensation Act Special
Benefit Fund–September 30, 2018;
Report No. 22-19-003-04-431; 11/02/18 1 0
OWCP Must Continue Strengthening Management of FECA Pharmaceuticals,
Including Opioids;
Report No. 03-19-002-04-431; 05/14/19 2 0
Alert Memorandum: Vulnerability in OWCP FECA Bill Pay Processing System;
Report No. 50-20-001-04-430; 05/07/20 1 0
94 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Reports with Unimplemented
Recommendations, continued
Number of
Disallowed
Report Name Unimplemented
Costs Owed ($)
Recommendations
COVID-19: OWCP Should Continue to Closely Monitor Impact on Claims
Processing; Report No. 19-20-004-04-001; 07/06/20 4 0
Mine Safety and Health Administration
MSHA Can Improve Its Section 110 Special Investigations Process;
Report No. 05-13-008-06-001; 09/30/13 2 0
MSHA Needs to Provide Better Oversight of Emergency Response Plans;
Report No. 05-17-002-06-001; 03/31/2017 6 0
MSHA Did Not Evaluate Whether Civil Monetary Penalties Effectively Deterred
Unsafe Mine Operations;
Report No. 23-19-002-06-001; 08/16/19 2 0
MSHA Needs to Better Manage its Pre-Assessment Conferencing Program;
Report No. 05-19-001-06-001; 09/23/19 9 0
COVID-19: MSHA Faces Multiple Challenges in Responding to the Pandemic;
Report No. 19-20-006-06-001; 07/24/20 1 0
Office of the Assistant Secretary for Administration and Management
The Department Could Do More to Strengthen Controls over Its Personal Identity
Verification System;
Report No. 04-11-001-07-001; 03/31/11 1 0
Ineffective Accounting for Sensitive Information Technology Hardware and
Software Assets Places DOL at Significant Risk;
Report No. 23-11-001-07-001; 03/31/11 6 0
FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist;
Report No. 23-16-002-07-725; 09/30/16 1 0
FY 2017 FISMA DOL Information Security Report;
Report No. 23-18-001-07-725; 12/29/17 4 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. 50-19-002-07-725; 06/17/19 2 0
Stronger Controls Needed over Web Application Security;
Report No. 23-20-001-07-725; 11/14/19 3 0
FY 2019 FISMA DOL Information Security Report: Implementation of Security
Tools Hindered by Insufficient Planning;
Report No. 23-20-002-07-725; 12/23/19 13 0
DOL Could Improve Areas of Physical Security To Help Effectively Safeguard
Employees;
Report No. 17-20-001-07-01; 05/21/20 3 0
Office of Federal Contract Compliance Programs
OFCCP Did Not Show It Adequately Enforced EEO Requirements on Federal
Construction Contracts;
Report No. 04-20-001-14-001; 03/27/20 1 0
Semiannual Report to Congress: October 1, 2020–March 31, 2021 95
Appendices
Reports with Unimplemented
Recommendations, continued
Number of
Disallowed
Report Name Unimplemented
Costs Owed ($)
Recommendations
Office of the Secretary
DOL Needs to Do More to Implement the Geospatial Data Act of 2018; Report
No. 23-20-004-01-001; 09/30/20 1 0
Occupational Safety and Health Administration
OSHA Needs to Improve the Guidance for Its Fatality and Severe Injury Reporting
Program to Better Protect Workers;
Report No. 02-18-203-10-105; 09/13/18 4 0
OSHA Procedures For Issuing Guidance Were Not Adequate and Mostly Not
Followed;
Report No. 02-19-001-10-105; 03/28/19 4 0
Review of the Occupational Safety and Health Administration’s Referral to and
Reclamation of Debt from the U.S. Department of the Treasury;
Report No. 22-20-006-10-001; 03/16/20 1 0
COVID-19: OSHA Needs to Improve Its Handling of Whistleblower Complaints
During the Pandemic;
Report No. 19-20-010-10-105; 08/14/20 2 0
Wage and Hour Division
Better Strategies Are Needed to Improve the Timeliness and Accuracy of Davis-
Bacon Act Prevailing Wage Rates;
Report No. 04-19-001-04-420; 03/29/19 6 0
DOL Needs to Improve Debarment Processes to Ensure Foreign Labor Program
Violators are Held Accountable; Report No. 06-20-001-03-321; 09/30/20 3 0
Totals 147 $1,144,103
96 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Investigative Statistics
Division Totals Total
Investigative Reports Issued / Cases Closed (includes investigative reports issued, case
closing reports, and matters referred for possible civil and/or administrative action): 64
Program Fraud 50
Labor Racketeering 14
Cases Opened: 269
Program Fraud 254
Labor Racketeering 15
Cases Referred for Prosecution (each case is measured as a singular statistic and may
include more than one person or business entity): 208
Program Fraud 198
Labor Racketeering 10
Cases Referred for Administrative/Civil Action (each case is measured as a singular
statistic and may include more than one person or business entity): 54
Program Fraud 49
Labor Racketeering 5
Persons Referred to the Department of Justice for Criminal Prosecution (includes the
number of individuals and business entities referred for prosecution): 221
Program Fraud 212
Labor Racketeering 9
Persons Referred to State and Local Prosecuting Authorities for Criminal Prosecution
(includes the number of individuals and business entities referred for prosecution): 30
Program Fraud 30
Labor Racketeering 0
Indictments and Criminal Informations That Resulted from Any Prior Referral to
Prosecuting Authorities (includes sealed and unsealed indictments): 195
Program Fraud 173
Labor Racketeering 22
Indictments (includes sealed and unsealed indictments): 195
Program Fraud 173
Labor Racketeering 22
Convictions: 81
Program Fraud 61
Labor Racketeering 20
Statutory Debarments: 6
Program Fraud 5
Labor Racketeering 1
Recoveries, Cost-Efficiencies, Restitutions, Fines/Penalties, Forfeitures, and Civil
Monetary Actions: $208,932,088
Program Fraud $173,609,167
Labor Racketeering $35,322,921
Semiannual Report to Congress: October 1, 2020–March 31, 2021 97
Appendices
Investigative Statistics, continued
Recoveries (the dollar amount/value of an agency’s action to recover or to reprogram funds or to make other
adjustments in response to OIG investigations): 71,319,024
Cost-Efficiencies (the one-time or per annum dollar amount/value of management’s commitment, in response
to OIG investigations, to utilize the government’s resources more efficiently): 86,333,384
Restitutions/Forfeitures (the dollar amount/value of restitutions and forfeitures resulting from OIG criminal
investigations): 48,462,236
Fines/Penalties (the dollar amount/value of fines, assessments, seizures, investigative/court costs, and other
penalties resulting from OIG criminal investigations): 1,139,236
Civil Monetary Actions (the dollar amount/value of forfeitures, settlements, damages, judgments, court costs,
and other penalties resulting from OIG criminal investigations): 1,677,209
Total: $208,932,088
98 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Appendices
Peer Review Reporting
The following meets the requirement under Section 5(1)(14)(A)–(B) 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 Assisted in Peer Review of the United States Postal Service (USPS)–
OIG Inspection and Evaluation Function
DOL-OIG assisted the Department of Homeland Security–OIG with a peer review of the system of quality
control for USPS-OIG’s inspection and evaluation function for the period ending in June 2020. The peer
review report issued by the Department of Homeland Security–OIG on November 17, 2020, resulted in
an opinion that USPS-OIG had suitably designed its system of quality control and provided reasonable
assurance that USPS-OIG conformed to the seven professional standards for the conduct of inspections
and evaluations. The peer review made no recommendations.
Semiannual Report to Congress: October 1, 2020–March 31, 2021 99
Appendices
OIG Hotline
The OIG Hotline provides a communication link between the OIG and persons who want to report
alleged violations of laws, rules, and regulations; mismanagement; waste of funds; abuse of authority;
or danger to public health and safety. During the reporting period October 1, 2020, through March 31,
2021, the OIG Hotline received a total of 2,882 contacts. Of these, 2,860 were referred for further review
and/or action.
Complaints Received (by method reported):
Telephone 19
E-mail/Internet 2,858
Mail 5
Fax 0
Walk-in 0
Total 2,8821
Contacts Received (by source):
Complaints from Individuals or Nongovernmental Organizations 2,030
Complaints/Inquiries from Congress 1
Referrals from U.S. Government Accountability Office 2
Complaints from Other DOL Agencies 1
Complaints from Other (non-DOL) Government Agencies 848
Total 2,882
Disposition of Complaints:
Referred to OIG Components for Further Review and/or Action 2,828
Referred to DOL Program Management for Further Review and/or Action 29
Referred to Non-DOL Agencies/Organizations 3
No Referral Required / Informational Contact 22
Total 2,882
* During this reporting period, the hotline office referred several individual complaints to multiple offices or entities for review (e.g.,
to multiple OIG components, or to an OIG component and DOL program management and/or a non-DOL agency).
1
During this reporting period the OIG Hotline received approximately 28,500 complaints that are awaiting processing. The majority
of these complaints are referrals from the National Center for Disaster Fraud. Almost all of these referrals are complaints that
involve concerns regarding COVID-19-related unemployment benefits.
100 Semiannual Report to Congress: October 1, 2020–March 31, 2021
OIG FY 2021 Audit Workplan
Fiscal Year 2021 Audit Workplan
Bureau of Labor Statistics (BLS)
Discretionary Audit
BLS Survey Response Rate – In Progress. BLS is the principal federal agency responsible for measuring
labor market activity, working conditions, and price changes in the nation’s economy. The President,
Congress, federal policymakers, public institutions, and private citizens use the economic information
developed by BLS to guide and support decision-making. According to a 2013 study by the National
Research Council, “for 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 will focus on how efficiently
and effectively BLS is able to obtain data necessary to produce the economic information it is required to
produce, and if there are other sources to obtain the necessary data.
Bureau of International Labor Affairs (ILAB)
Mandatory Audit
Memoranda of Agreement between USAID and ILAB – In Progress. ILAB signed two agreements with
the U.S. Agency for International Development (USAID) that transferred approximately $7 million to ILAB
for grant-funded projects. The projects are intended to ensure a fair global playing field for workers by
enforcing trade commitments, strengthening labor standards, and combatting child labor, forced labor, and
human trafficking. This mandatory audit focuses on how taxpayer dollars were spent and if the reported
program results were reliable.
Employment and Training Administration (ETA)
Discretionary Audits
Apprenticeship Program
The Industry-Recognized Apprenticeship Program (IRAP) Audit – In Progress. IRAP was established
to highlight high quality apprenticeships where individuals obtain workplace relevant training and advanced
skills that result in an industry recognized credential. ETA disclosed that Training and Employment Services
funds had been expended inappropriately on activities for IRAP. This audit will determine the actions ETA
took to identify, correct, and prevent inappropriate expenditures of funds in the future.
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OIG FY 2021 Audit Workplan
ETA Contract and Grant Programs
COVID-19: ETA’s Administration of DWGs – In Progress. The Coronavirus Aid, Relief and Economic
Security (CARES) Act provided $345 million for DWGs to prevent, prepare for, and respond to the COVID
19 pandemic. These grants are intended to help Americans get back to work and can also be used for
contact tracing and coronavirus-related cleaning as businesses and schools continue to re-open. Flexibility
is essential for DWG funds so that they can be used where they are most needed, which is determined at
the state and local level. The audit focuses on the extent ETA properly administered the DWG program.
Oversight of American Apprenticeship Initiative (AAI) Grants – In Progress. In 2015, ETA awarded
46 AAI grants, totaling more than $175 million, to create and expand apprenticeship opportunities in H-1B
industries and occupations. In 2018, several OIG audits of similar ETA training programs reported ETA did
not provide sufficient oversight of grantees and participants did not benefit from training, despite claims
that grantees met their goals. This ongoing audit focuses on how ETA has designed and monitored the AAI
grant program.
Job Corps
COVID-19: Job Corps Response to COVID-19– Phase 2 – In Progress. Resuming operations at more
than 120 center campuses during the COVID-19 pandemic presents a number of challenges to the Job
Corps program, such as implementing physical distancing for more than 30,000 students returning to
classrooms, common areas, and dorms; obtaining sufficient supplies of personal protective equipment
(e.g., facemasks, face shields, gloves), disinfectants, and cleaning products; and transporting students to
centers. This audit will assess Job Corps’ efforts to comply with various local, state, and federal guidelines
to keep students and staff safe when reopening center campuses.
UI Program
COVID-19: Audit of DOL and States Implementation of the CARES Act UI Provisions – Completed.
Between March and July 2020, more than 56 million new claims for UI were filed. This is an average of 2.7
million new weekly claims, and more than 10 times the average of the 218,000 new weekly claims for the
weeks leading up to the onset of the COVID-19 pandemic. With the huge increase in traditional UI claims
and the implementation challenges associated with the new CARES Act programs, states’ resources have
been stretched beyond their limits and the risk of fraud and increased improper payments have been
significantly heightened. Our audit focuses on the initial period of benefits from March 27, 2020, to July 31,
2020. This will include an assessment of ETA’s oversight and states’ implementation of key provisions of
the CARES Act to ensure UI benefit recipients initially and continually met program eligibility requirements,
eligible individuals were paid timely, and improper payments were detected, recovered, and reported.
Unemployment Insurance, Work Search Requirements – In Progress. Since 2016, the leading
cause of UI improper payments has been payments to claimants who failed to meet the work search
102 Semiannual Report to Congress: October 1, 2020–March 31, 2021
OIG FY 2021 Audit Workplan
requirements of the UI program. The Department estimated that between April 1, 2017, and March 31,
2018, states overpaid more than $1.4 billion in UI benefits to recipients who did not meet state work search
requirements. This ongoing audit assesses the accuracy of reported levels of noncompliance with work
search requirements and, makes recommendations for possible approaches to improve compliance and
reduce improper payments.
COVID-19: Audit of DOL and States Implementation of the CARES Act UI Provisions– Phase 2 – In
Progress. The COVID-19 pandemic presented both new and familiar challenges for DOL and states as
they implement the CARES Act UI provisions. This audit will provide an after-the-fact review of the CARES
Act UI provisions with respect to: implementation, both at the federal and state level; oversight; lessons
learned; and how DOL’s response to the pandemic affected normal operations.
Effectiveness of UI Program Integrity Efforts– In Progress. ETA’s UI program works in partnership
with states to provide timely the critical funds needed by unemployed citizens. ETA annually reports
performance data and results related to fraud and the misuse of protections afforded by the UI program.
Over the years, ETA has implemented various program integrity and fraud reduction initiatives; however,
these initiatives offer only a partial solution to improving the integrity of the program. This audit will focus on
ETA’s role in managing the integrity of the UI program, including working with states and partners to identify
and share best practices and data to reduce fraud.
COVID-19: Implementation and Oversight of the COVID-19 Emergency Transfers for Administration
of the Unemployment Compensation Program. The Families First Coronavirus Act provided $1 billion
to DOL to provide emergency administration grants to state unemployment insurance (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 taxpayer, 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 funds. This audit will focus
on the Department’s monitoring of the emergency administration grants and whether these funds were
accurately tracked and reported, at both the state and federal level.
Mine Safety and Health Administration (MSHA)
Discretionary Audits
MSHA Violations – Completed. From 2013 through September 2019, MSHA inspectors issued more
than 736,000 citations and orders to mines for violations of health and safety laws and regulations. During
the same period, MSHA modified or canceled (“vacated”) more than 12,300 of those citations and orders.
Incorrectly modifying or vacating citations and orders increases the risk that miners remain exposed to
Semiannual Report to Congress: October 1, 2020–March 31, 2021 103
OIG FY 2021 Audit Workplan
hazards. This ongoing audit focuses on whether MSHA appropriately wrote, terminated, modified, or
vacated citations and orders.
Integrity of Dust Sampling. Miners are exposed to harmful substances in their work environment daily.
MSHA samples for and control many of these substances, including airborne toxins such as coal dust and
respirable crystalline silica. Since 1990, at least 150 mine operators, agents, and contractors have pleaded
or been found guilty of submitting fraudulent dust samples used to regulate airborne toxins in mines (e.g.,
silica and coal dust). This audit will assess MSHA’s efforts to address sample manipulation.
Mine Rescue Response Plan. When disaster strikes, a well-prepared mine rescue effort can mean the
difference between life and death for trapped miners. Insufficient personnel, equipment, or training could
hamper MSHA’s ability to respond quickly and effectively in mine rescue situations. Prior OIG work found
MSHA had not provided adequate oversight of mine emergency response plans, a key planning component
for mine emergencies, which includes planning by both mine operators and MSHA. This audit will assess
MSHA’s preparedness in responding to emergencies requiring mine rescue operations.
Occupational Safety and Health Administration (OSHA)
Discretionary Audits
COVID-19: OSHA’s Guidance Related to Safety of Its Inspectors – Completed. The COVID-19
pandemic has presented new challenges for OSHA in its mission to ensure safe and healthful working
conditions for its Certified Safety and Health Officials (CSHOs) whose job is to inspect workplaces. The
COVID-19 pandemic has resulted in a significant reduction in inspections and an increase in complaints.
During the pandemic, to prevent the spread of COVID-19, CSHOs switched from on-site inspections
to mostly remote inspections via telephone and video conference, or electronically by email. The audit
focuses on the extent of OSHA’s enforcement guidance for protecting CSHO’s health and safety, as well as
the effectiveness of completing on-site, remote, or Rapid Response Investigation (RRI) activities during a
pandemic.
OSHA Protecting Workers from Exposure to Respirable Silica – In Progress. OSHA has a duty to
create and enforce rules, known as “standards” or “regulations,” to help protect 121 million Americans at
9 million worksites. After 13 years of research and development, OSHA published an amendment to its
existing standards for Occupational Exposure to Respirable Crystalline Silica. OSHA estimates that about
2.3 million people in the U.S. are exposed to silica at work. This audit is assessing the extent to which
OSHA has protected workers from exposure to Respirable Crystalline Silica with the publishing of the
amended standard.
COVID-19: OSHA’s Guidance Related to Safety of Employees – In Progress. Since the beginning of
the COVID 19 pandemic in March 2020, OSHA has experienced a significant reduction in the number of
inspections and an increase in the 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
104 Semiannual Report to Congress: October 1, 2020–March 31, 2021
OIG FY 2021 Audit Workplan
believed its existing regulations and updated pandemic guidelines were sufficient to keep workers safe.
This audit will focus on the impact of the COVID-19 pandemic on OSHA operations, including the number
and types of inspections to safeguard workers, and OSHA’s future plans to ensure safe and healthy
working conditions during pandemics.
COVID-19: OSHA Inspection Collaboration Audit – In Progress. While many industries suffered the
impact of COVID-19 outbreaks during the pandemic, healthcare and meatpacking workers have had some
of the highest rates of COVID-19 infections. Although OSHA performs inspections of worker safety, the
U.S. Department of Health and Human Services (HHS) and the U.S. Department of Agriculture (USDA)
have federal inspectors on site to ensure patient care and product quality. However, according to HHS
and USDA OIG officials, the inspectors do not report employee safety and health issues to OSHA. This
audit will focus on OSHA’s efforts to promote collaboration with other federal agencies that have on-site
inspectors about potential workplace safety and health violations, especially during the pandemic.
COVID-19: 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 will focus on OSHA’s use of complainant and witness testimony during a
complaint inspection to ensure the complaint or referral was addressed adequately.
Enforcement of Severe OSHA Violators. There were 654 egregious workplace safety violators in 2019.
OSHA’s Severe Violators Enforcement Program requires that it expand its enforcement efforts and increase
the number of inspections on these employers. In 2009, an OIG audit found for 97 percent of sampled
employers, OSHA did not identify all egregious employers and did not perform sufficient inspections and
related enforcement. This audit will follow up on the OIG’s 2009 report to assess whether OSHA made
changes to improve enforcement activities related to employers who demonstrated indifference to their
workplace safety responsibilities.
OSHA’s Process for Initiating Lookback Reviews. OSHA uses lookback reviews to determine whether
standards should be maintained, rescinded or modified, with the goal of making standards more effective or
less burdensome. Since 2001, OSHA has issued 15 standards but has only conducted 8 lookback reviews,
with the most recent occurring over 10 years ago. This audit will include examining OSHA’s ammonium
nitrate standard that is almost 50 years old and the Process Safety Management Standard that is almost
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OIG FY 2021 Audit Workplan
30 years old. The audit will focus on OSHA’s process for initiating lookback reviews to ensure that the
standards are effective in reducing safety and health hazards in the workplace.
Office of the Assistant Secretary for Administration and Management (OASAM)
Mandatory Audit
Federal Information Security Management Act (FISMA) Audit – Annual – In Progress. In performing
its various missions, DOL collects and processes sensitive information through approximately 73 major
information systems. FISMA recognizes the significant risks involved with information technology and
its important role in fulfilling agency missions. As such, FISMA sets a framework for securing all federal
government systems by developing security standards and methods for measuring the effectiveness of
those security standards. This audit will focus on the status of the DOL Information Security Program in
implementing an effective framework to secure DOL information systems.
OASAM
Discretionary Audits
Effectiveness of DOL’s Information Technology Governance – In Progress. DOL spends
approximately $666 million annually on a portfolio of information technology assets that support the
operation and management of its programs, but has a history of undertaking IT projects that missed
deadlines, went over budget, or did not meet the needs of stakeholders. In addition, DOL’s information
security program has been found to contain deficiencies in critical high-risk areas and security. These
issues can be attributed partially to the DOL Chief Information Officer’s (CIO) lack of authority and
uncertain reporting structure, who had not been elevated to an adequate level to carry out required duties,
as cited for many years in previous OIG audits. In 2018, Executive Order 13833 required federal CIOs to
report directly to their agency heads. This audit is focusing on DOL’s implementation of an IT governance
framework, including the authority and independence of the CIO and DOL’s compliance with Executive
Order 13833.
Working Capital Fund – Cancelled. The Department’s working capital fund is intended to provide
increased efficiencies in how the Department funds and offers shared services, such as payroll,
telecommunications, accounting, mail, and publications. The money for DOL’s working capital fund comes
annually from the Department’s component agencies that utilize the shared services and amounted to more
than $400 million in FY 2020. This ongoing audit is determining if Working Capital Fund activities were
appropriate, and if costs were supported and properly allocated to DOL agencies.
IT System Modernization Review across the Department. IT modernization across the Department is
critical to preventing security breaches, excessive costs, missed deadlines, and low-quality IT products and
services. DOL has struggled to modernize IT systems, largely allocating resources to maintaining older
technologies, rather than to adopting modern technologies. This can result in greater security deficiencies
106 Semiannual Report to Congress: October 1, 2020–March 31, 2021
OIG FY 2021 Audit Workplan
in high risks areas. Our audit will focus on the CIO’s management of IT modernization efforts across the
Department, to include software integration, legacy systems, and shared services.
Office of the Chief Financial Officer
Mandatory Audits
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, 2021. We will consider DOL’s internal controls over financial reporting and test DOL’s
compliance with applicable laws, regulations, contracts, and grant agreements that have a direct and
material effect on the consolidated financial statements.
Review of DOL’s Improper Payment Reporting in the Annual Financial Report – Annual – In
Progress. In FY 2019, the UI program and FECA reported outlays of $26.9 billion and $3.0 billion
respectively, with an estimated improper payment rate of 10.61 percent and 2.44 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 its efforts to reduce
improper payments.
The Digital Accountability and Transparency Act of 2014 (DATA Act) Audit. The DATA Act requires
federal agencies to report spending data per government-wide data standards developed by the Office
of Management and Budget (OMB) and the Department of Treasury. Under this Act, it is critical that the
Department report accurate and reliable spending data so taxpayers and policy makers understand how
the Department is spending its funds. This mandatory audit will determine the completeness, timeliness,
accuracy, and quality of the data submitted by the Department for publication on USASpending.gov, and
the extent to which the Department has implemented and used the data standards established by OMB
and Treasury.
Office of Federal Contract Compliance Programs
Mandatory Audit
Combatting Race and Sex Stereotyping – Completed. Executive Order (EO) 13950 prohibits the
Federal Government from promoting race or sex stereotyping or scapegoating in the Federal workforce,
and states that contracting and grant funds shall not be used for these purposes. The EO further states
that Federal agencies, contractors, and grant recipients should foster environments devoid of hostility
and should be trained to create inclusive workplaces. The Federal Government is, and must always be,
committed to the fair and equal treatment of all individuals before the law. This review will determine
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OIG FY 2021 Audit Workplan
DOL’s compliance with EO 13950 to ensure that Federal agencies, including DOL, maintain an inclusive
workplace free of race or sex stereotyping or scapegoating.
Office of Workers’ Compensation Programs (OWCP)
Mandatory Audits
Report Relating to the Federal Employees’ Compensation Act (FECA) Special Benefit Fund
– Annual– In Progress. We will determine whether: 1) the Schedule of Actuarial Liability, Net Intra-
Governmental Accounts Receivable, and Benefit Expense was fairly presented for the year ending
September 30, 2021; and 2) internal controls over financial reporting related to the Schedule were in
compliance with laws and regulations that could have a direct and material effect on the Schedule.
Longshore and Harbor Workers’ Compensation Act (LHWCA) Special Fund – Annual – In Progress.
We will determine if DOL’s LHWCA Special Fund financial statements presented fairly, in all material
respects, the financial position of the LHWCA Special Funds as of September 30, 2020.
District of Columbia Workmen’s Compensation Act (DCCA) Special Fund Financial Statement
Audits – Annual – In Progress. We will determine if DOL’s DCCA Special Fund financial statements
presented fairly, in all material respects, the financial position of the DCCA Special Funds as of September
30, 2020.
FECA Statement on Standards for Attestation Engagements No. 18 – Annual– In Progress. We
will determine if DOL’s Integrated Federal Employees’ Compensation System transaction processing for
application and general controls, as described in the report, were fairly presented, suitably designed, and
effectively operating for the period October 1, 2020, through June 30, 2021.
OWCP
Discretionary Audits
COVID-19: FECA Oversight – In Progress. OWCP administers FECA, which provides workers'
compensation coverage to approximately 2.6 million federal and postal workers around the world for
employment-related injuries and occupational diseases. This audit is focusing on implementation of
OWCP’s initial plan to manage COVID 19 related claims in the FECA program. Specifically, we are
assessing if the COVID-19 pandemic has impacted OWCP’s ability to meet established performance
standards for processing and adjudicating FECA claims, and the extent to which OWCP’s response to the
pandemic has impacted its management of opioid claims.
Energy Employees’ Home Healthcare Costs – In Progress. Home healthcare costs in the Energy
Employee Occupational Illness Compensation program have risen from $100 million in FY 2010 to $616
million in FY 2019. The Department has expressed concern regarding the potential for providers to exploit
home healthcare benefits through unauthorized or unnecessary billings. This audit is assessing: 1) the
108 Semiannual Report to Congress: October 1, 2020–March 31, 2021
OIG FY 2021 Audit Workplan
policies and controls in place to prevent questionable billings and address improper payments; and 2) the
potential for fraud, waste, and abuse in home healthcare.
COVID-19: FECA High Risk Employment. 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. This audit will focus on an after-the-fact review of OWCP’s administration and oversight
of COVID 19 claims in the FECA program, which had received over 5,000 COVID claims as of late
August 2020. Given the influx of claims resulting from the pandemic, this audit will determine if high risk
employment related to COVID-19 was appropriately designated and supported, and if COVID-19 claims
filed by workers in high risk employment were properly identified and adjudicated.
Energy Employees’ Claims Processing. Since the Energy Employees Occupational Illness
Compensation Program Act (EEOICPA) was enacted in October 2000, OWCP has paid more than $17
billion in compensation and medical benefits to claimants under the Act. The OIG has received numerous
complaints concerning delays and inconsistencies in processing claims, and questions about OWCP’s
rationale for denying claims. This audit will determine if OWCP processed energy employees’ claims timely
and consistently.
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 audit is focusing on identifying the major factors
influencing pharmaceutical spending in the FECA program, including any impact from the COVID-19
pandemic, and determine if OWCP effectively manages pharmaceutical spending in the FECA program.
Reliability of Data from FECA’s New Bill Pay Processing System – In Progress. In 2017, OWCP
awarded a $166M contract to deliver a Workers Compensation Medical Bill Process (WCMBP) system for
the four OWCP workers’ compensation programs, which pay over $1 billion per year in medical benefits
to claimants. On April 27, 2020, OWCP launched the new WCMBP system, which allows providers to bill
for medical services rendered to claimants who have been approved for the four OWCP benefit programs.
An effective bill pay processing system is essential to ensure appropriate, accurate, and timely payments,
and must be able to provide reliable information to detect and prevent fraudulent billing practices. Paying
for services that are untimely, medically unnecessary, duplicative, or ultimately not performed negatively
impacts the integrity of the program. This audit will assess the WCMBP system’s controls and determine if
the new system collects, processes, maintains, and reports accurate and complete data.
Wage and Hour Division (WHD)
Discretionary Audits
COVID-19: WHD’s Implementation of COVID-19 Guidance and Oversight – Phase 2 – In Progress.
We previously reported on challenges WHD faced as it implements and enforces the requirements of
the Families First Coronavirus Response Act (FFCRA), such as conducting enforcement activities while
maximizing telework, ensuring appropriate eligibility for FFCRA’s emergency paid leave benefits, and
Semiannual Report to Congress: October 1, 2020–March 31, 2021 109
OIG FY 2021 Audit Workplan
addressing future actions related to its COVID-19 response. This audit is expanding upon our work and
focusing on WHD’s implementation of its FFCRA administration and enforcement activities.
COVID-19: WHD’s Implementation of COVID-19 Guidance and Oversight – Phase 3. The COVID-19
pandemic has presented new challenges for WHD as it implemented and enforced the requirements of the
FFCRA and continued its other enforcement activities. This audit will focus on an after-the-fact review of
WHD’s administration and oversight, lessons learned, and how WHD’s response to the pandemic affected
normal operations.
Multi-Agency
Mandatory Audits
Charge Card Risk Assessment – Annual. The Government Charge Card Abuse Prevention Act of 2012
was designed to prevent recurring waste, fraud, and abuse of government charge cards, and requires
agencies to implement safeguards and internal controls to reduce these risks. This audit will determine
if DOL has established controls over its purchase and travel card programs to prevent and detect illegal,
improper, or erroneous purchases and payments.
Single Audit Compliance, Quality Control Reviews of Single Audit Reports – Annual – In Progress.
We will determine if selected independent auditors complied with the requirements of the Single Audit Act
and if there is a need for any follow-up work.
Single Audit Compliance, Desk Reviews of DOL Grantee Reports Referred by the Federal Audit
Clearinghouse – Annual – In Progress. We will perform desk reviews of single audit reports submitted
to the Federal Audit Clearinghouse to determine whether: 1) the independent auditor’s report, Schedule of
Findings and Questioned Costs, Schedule of Expenditures of Federal Awards, and corrective action plans
were acceptable; 2) issues identified in the reports require follow-up audit work; 3) a quality control review
should be conducted; and 4) other issues identified in the report should be brought to the attention of the
appropriate DOL funding agency or agencies.
Multi-Agency
DiscretionaryAudits
Enterprise Risk Management. OMB Circular A-123 requires agencies to implement an Enterprise
Risk Management (ERM) process. Agencies’ ERM efforts are to be coordinated with the Government
Performance and Results Modernization Act of 2010’s strategic planning and review process, and the
internal control process required by the Federal Managers’ Financial Integrity Act and GAO’s Green
Book. We will determine whether management has implemented an effective ERM process that identifies,
assesses, responds, and reports on risks.
110 Semiannual Report to Congress: October 1, 2020–March 31, 2021
Office of Inspector General, U.S. Department of Labor
200 Constitution Avenue, NW
Room S-5502
Washington, DC 20210
To learn more about the Office of Inspector General’s
current and planned work, please visit www.oig.dol.gov.
Office of Inspector General
United States Department of Labor
Report Fraud, Waste, and Abuse
Contact the Hotline
202.693.6999 800.347.3756
Fax: 202.693.7020
www.oig.dol.gov
The OIG Hotline is open to the public and to federal employees
24 hours a day, 7 days a week, to receive allegations of fraud, waste,
and abuse concerning Department of Labor programs and operations.
OIG Hotline
U.S. Department of Labor
Office of Inspector General
200 Constitution Avenue, NW
Room S-5506
Washington, DC 20210
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