Semiannual Report to Congress, Volume 84, April 1 to September 30, 2020 (Office of Inspector General, U.S. Department of Labor)

Summary

The Semiannual Report to Congress of the Office of Inspector General, United States Department of Labor, Volume 84, covering April 1 to September 30, 2020. The Acting Inspector General's message states that the OIG developed a Pandemic Response Oversight Plan and that its oversight focuses on the Department's actions under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including the expansion of unemployment benefits, worker and miner protection and paid-leave regulations. The OIG reports issuing 10 advisory memorandums, alert memorandums or audit reports on COVID-19 during the period, plus its report on the Top Pandemic Challenges Facing the Department and three fraud alerts relating to unemployment insurance. A Monetary Accomplishments section summarizes recoveries, restitutions, fines, penalties and forfeitures, and a Significant Concerns section follows.

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A Message from the Acting Inspector General

The last six months have proven challenging for our country and people around the world.
As the COVID-19 pandemic rages on, we understand its substantial impact and the
hardships many Americans are facing. Millions of Americans have filed for unemployment
since the beginning of the crisis. The U.S. Department of Labor (DOL) programs, such as
unemployment insurance and occupational health and safety protection, play a vital role in
securing the financial well-being, health, and safety of all Americans. It is imperative that
these programs continue to deliver on their essential missions effectively and efficiently.
As the federal agency with primary oversight of DOL, the Office of Inspector General
(OIG) is committed to meeting these challenges head-on and assisting DOL and Congress
in protecting the American workforce. We are diligently focused on limiting 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 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. Specific areas of review include DOL’s efforts to
administer and oversee the expansion of unemployment benefits, protect workers and
miners from exposure to COVID-19, and provide guidance and enforce CARES Act
regulations related to paid leave. Already this reporting period, we have issued 10 advisory
memorandums, alert memorandums, or audit reports on COVID-19 and the pandemic, in
addition to our report on the Top Pandemic Challenges Facing the Department. A short
summary of each is included herein, but the full publications and additional information
about how we are conducting oversight and responding to the pandemic are available on
the Pandemic Response Portal on our website.

We have also issued three fraud alerts and worked alongside our law enforcement partners
to notify institutions of financial schemes relating to unemployment insurance. As part of our
investigative program, we have identified and stopped several multistate multi-million-dollar
fraud schemes targeting the unemployment insurance program. The OIG is committed

2 Semiannual Report to Congress: April 1-September 30, 2020
to safeguarding this essential program and will continue to alert the public and our law
enforcement partners of any threats to the integrity of the unemployment insurance 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 more than
$2.4 trillion 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 many concerns relating to DOL’s response to the pandemic.

We will continue to work constructively with the Department and Congress on our shared

goals of identifying improvements to DOL programs and operations and protecting 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: April 1-September 30, 2020

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 non financial
resources.

Semiannual Report to Congress: April 1-September 30, 2020 5
Audit Statistics

Audits and Other
Reports Issued

Recommendations for
Corrective Action

Recommendations Closed
This Reporting Period

OIG Unimplemented Recommendations

OIG recommendations not fully implemented as of March 31, 2020

EBSA 2

ETA

MSHA

OASAM

OCFO

OFCCP 2

OSHA

OWCP

WHD

6 Semiannual Report to Congress: April 1-September 30, 2020

25 30 35
Investigative Statistics

Investigative Results Labor Racketeering 188 / 192
M@ Program Fraud

00 - 192 188

170

40
7 Over 180
investigative cases
S S S n na over
x Ss se opened and
RCS 190 cases closed
© ”

Monetary Accomplishments

This includes:

Recoveries

Cost-Efficiencies

Restitutions $48,326,987
Fines/Penalties

Forfeitures

Civil Monetary Actions

$74,810,563

Total Labor Racketeering
Program Fraud

Semiannual Report to Congress: April 1-September 30, 2020 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
Expeditiously While
Reducing Improper
Payments

Providing OIG Access
= to Wage Records

ey Protecting the Safety

and Health of Workers

Protecting the Safety
and Health of Miners

Ensuring a Safe Return

to Job Corps Centers

and Implementing

Distance Learning
During the Pandemic

Ensuring the Safety of
eG) Students and Staff at
Job Corps Centers

es Improving Job Corps’
wo Procurement Process

8 Semiannual Report to Congress: April 1-September 30, 2020

Ensuring the Integrity
of the DOL Rulemaking
Process

100
SSS

Improving the
Performance
Accountability of
Workforce Developmen
Programs

Maintaining the
Integrity of Foreign
Labor Certification
Programs

Protecting the
Security of Employee
Benefit Plan Assets

Managing Medical
Benefits in OWCP,
Including Opioids

Ensuring the Solvency
of the Black Lung
Disability Trust Fund

Securing and
Protecting Information
Management Systems
Significant Concerns

Deploying Unemployment Insurance
Benefits Expeditiously While
Reducing Improper Payments

The OIG has previously expressed concern

with the Department's ability to deploy program
benefits expeditiously and efficiently while
ensuring adequate oversight, particularly in
response to national emergencies and disasters.
The OIG has reiterated this concern in light of
the COVID-19 pandemic and the unprecedented
levels of funding for the unemployment insurance
(UI) program, which has received hundreds

of billions of dollars under recently enacted
legislation. The extraordinary increase in Ul
funding has resulted in a proportional increase in
our investigative work in the UI program. Since the
start of the pandemic, the OIG has opened more
than 1,800 complaints and investigations relating
to Ul benefits paid under the CARES Act. As a
result, Ul investigations account for 70 percent

of our investigative case inventory, compared to
12 percent prior to the pandemic. The OIG has
reported for many years on the Department’s
ability to measure, report, and reduce improper
payments in the UI program. The program is
designated a “high-priority” program by the Office
of Management and Budget, with an estimated
improper payment rate of more than 10 percent.
Conservatively, assuming improper payments
continue at 10 percent, at least $36 billion of the
$360 billion expended under the CARES Act as of
November 7, 2020, could be paid improperly, with
a significant portion attributable to fraud.

Our prior audit work revealed that the Department
has not done enough to formally assess the
various strategies available to combat improper
payments and determine which issues persist,
due in part to a lack of reliable state-reported
data. Furthermore, improper payments stemming

from fraudulent activity continue to pose a
significant threat to the integrity of the UI program,
as identity thieves and organized criminal groups
have found ways to exploit program weaknesses.
For example, benefits paid via non-state-issued
prepaid debit cards help provide anonymity

to those who submit fraudulent claims. Such
issues are exacerbated by the significant funding
increase in response to the COVID-19 pandemic,
resulting in the need for greater oversight and
scrutiny.

The Department needs to continue its ongoing
work with states to implement strategies designed
to reduce the UI improper payment rate, to
include sharing best practices identified among
states. The Department needs to continue
providing guidance to states on how to deploy
resources efficiently and expeditiously, establish
performance measures for activities to ensure
timely delivery of benefits to those in need,

and develop the required reporting to improve
effectiveness and accountability. In addition, the
Department needs to provide timely oversight
to ensure that states are effectively carrying out
these critical responsibilities.

Providing the OIG Access to Wage
Records

The OIG’s lack of direct access to wage records
to reduce improper payments and combat fraud
in employee benefit programs, including UI and

Disaster Unemployment Assistance (DUA), is of
significant concern.

The OIG must have easy and expeditious access
to the National Directory of New Hires (NDNH),
state Ul wage records, and Social Security
Administration (SSA) wage records to conduct
appropriate oversight of Ul funds. The NDNH is a

Semiannual Report to Congress: April 1-September 30, 2020 9
Significant Concerns

nationally consolidated database operated by the
U.S. Department of Health and Human Services
(HHS) Administration for Children and Families
that contains new hire, quarterly wage, and UI
information. The NDNH cannot be used for any
purpose not authorized by federal law. In 2004,
the law was amended to allow the state workforce
agencies to cross match UI claims against the
NDNH to better detect overpayments to UI
claimants who have returned to work but continue
to collect Ul benefits. However, the applicable

law does not permit the OIG to obtain NDNH data
directly, and the OIG cannot use its subpoena
authority to obtain NDNH records.

Similarly, the OIG needs the authority to access
state Ul and SSA wage records to verify claimants’
eligibility for Ul benefits, both for initial eligibility
(and amounts), and for continuing eligibility.
Access to these records would permit the OIG

to identify claimants who are receiving benefits
while also having reported wages. The OIG

could refer these claimants to the state workforce
agency to stop benefit payments determined to

be improper and take other appropriate actions as
necessary. The OIG could also use those records
to assess program outcomes for Ul reemployment
programs, as well as other training programs,
such as YouthBuild and Job Corps, where
employment and wage increases are important
factors in determining a program’s success.

Granting the OIG access to the NDNH, state

UI wage records, and SSA wage records would
provide the OIG with a valuable source of
information for both audits and investigations.
For example, OIG auditors could use these
records to verify initial and continuing eligibility
for unemployment compensation programs or to
assess the effectiveness of training programs,
such as the Job Corps program. In addition, OIG

10 Semiannual Report to Congress: April 1-September 30, 2020

investigators could use these records to compare
beneficiary Ul compensation payments to the
beneficiaries’ reported wages in the NDNH to
identify potential fraudulent activity.

Protecting the Safety and Health of
Workers

As the Occupational Safety and Health
Administration (OSHA) is responsible for the
safety and health of 136 million workers employed
at more than 9 million establishments, the OIG
remains concerned about OSHA's ability to target
its compliance activities to areas where it can
have the greatest impact. OSHA must ensure that
employers are providing the level of protection
warranted to workers by relevant laws and
policies.

OSHA carries out its compliance responsibilities
through a combination of self-initiated and
complaint-based inspections. However, the
program can reach only a fraction of the

entities it regulates due to resource limitations.
Consequently, OSHA must target the most
egregious or persistent violators to protect

the most vulnerable worker populations. For
example, about 2 million construction workers in
the United States are exposed to silica at work.
Employers are required to limit worker exposure
to respirable crystalline silica and take other steps
to protect workers. However, because of its limited
resources, OSHA faces challenges in targeting
workplaces where workers are exposed to silica
dust.

Moreover, since the start of the pandemic, OSHA
has received a sudden influx of complaints and
reduced the number of its inspections, particularly
on-site inspections. OSHA received 28 percent
more complaints but performed 53 percent fewer
Significant Concerns

inspections this year compared to a similar
period in 2019. The decline in on-site inspections
may be attributed, in part, to state-mandated
closures of “non essential” businesses. OSHA, in
response to the pandemic, has used alternative or
modified protocols to ensure worker safety, such
as conducting inspections remotely and verifying
the abatement of hazards through remote follow-
up with employers. There is an increased risk
that OSHA is not providing the level of oversight
needed at various job sites.

Protecting the Safety and Health of
Miners

The Mine Safety and Health Administration’s
(MSHA’s) ability to continue completing all
mandatory and non-mandatory mine inspections
while safeguarding the health of miners and the
agency’s staff during the COVID-19 pandemic is
a concern for the OIG. At the same time, mine
operators’ underreporting of occupational injuries
and illnesses hinders MSHA's ability to focus its
resources on addressing concerns at the most
dangerous mines. We are likewise concerned with
the high incidence of powered haulage accidents
in mines, which accounted for about half of all
mine fatalities in 2017 and 2018 and a quarter

of all mine fatalities in 2019. MSHA also needs
to develop strategies to address lung disease

in Appalachian coal mining states, in particular
updating regulations regarding quartz content

in respirable dust. Quartz can cause deadly and
incurable chronic diseases such as silicosis and
black lung disease.

Ensuring a Safe Return to On-Site
Instruction at Job Corps Centers
and Implementing Distance Learning
During the Pandemic

The OIG is concerned about Job Corps’ ability to
effect a safe return to in-person learning during
the COVID-19 pandemic. Job Corps released a
Program Instruction Notice to help guide centers
as they begin a phased reopening. Preventing
outbreaks of COVID-19 at centers across the
United States will pose a significant challenge

for Job Corps. Job Corps centers are residential
in nature, where students and staff work and live
in close quarters. Other residential educational
institutions have had substantial difficulty
containing and preventing outbreaks of COVID-19.
While Job Corps also plans to continue to
improve its distance learning programs, the OIG is
concerned with two issues related to this option.
First, many Job Corps programs are intensively
hands-on and may not successfully transition to

a virtual training model. Second, many Job Corps
students may not have access to the equipment
or high-speed Internet services they need in order
to participate in distance learning. Job Corps

has procured and begun distributing laptops

and mobile hot spots to students who need the
equipment to participate in distance learning.

Ensuring the Safety of Students and
Staff at Job Corps Centers

We continue to have concerns about the

Job Corps program’s ability to provide a safe
environment for its students and staff. Controlling
on-campus violence and other criminal behavior is
a long-standing challenge for Job Corps centers.
OIG audits from 2015 and 2017 revealed that
some Job Corps centers failed to report and
investigate serious misconduct, such as drug

Semiannual Report to Congress: April 1-September 30, 2020 11
Significant Concerns

abuse and assaults. The audits also disclosed that
some Job Corps centers downgraded incidents
of violence to lesser infractions, creating an
unsafe environment for students and staff. The
follow-up work we completed in December 2017,
and our ongoing review of Job Corps’ corrective
actions, showed that Job Corps has taken steps
to improve center safety and security. However,
the Department has not yet fully implemented

its corrective action plan. The OIG continues to
monitor Job Corps’ progress in completing its
various safety initiatives.

Improving Job Corps’ Procurement
Process

Job Corps spends about $1 billion on goods

and services annually for its approximately 120
centers nationwide and is currently transitioning
center operations from cost reimbursement to
fixed-price contracts. The Department believes
that this transition will lower government risk,
reduce the administrative burden, generate more
pre-award efficiencies, and encourage more
participants to compete for contracts. Increased
competition among contractors should lead to
better contractor performance with fewer staffing
shortages and improved services, including those
supporting centers’ safety and security.

Prior OIG work in this area found that Job Corps’
procurements did not ensure the best value for
taxpayers. As the Department moves to fixed-
price contracting, the Department must ensure
that its contract requirements are well developed;
contract competition is fair; contractor payments
align with performance metrics and related
outcomes; and sound post award oversight is
used to quickly ameliorate deficiencies and poor
performance.

12 Semiannual Report to Congress: April 1-September 30, 2020

Ensuring the Integrity of the DOL
Rulemaking Process

We are concerned about the Department’s
procedures for issuing rules and guidance to
promote the welfare of workers, job seekers,

and retirees by safeguarding working conditions,
health and retirement benefits, and wages. The
Department’s rules and guidance should be
transparent to American taxpayers, comply with
DOL’s policies and procedures, and applicable to
federal laws and regulations.

DOL also faces challenges in ensuring that it
enters into rulemaking when appropriate rather
than issuing guidance. For example, an OIG
audit of OSHA's issuance of guidance found that
OSHA lacked a procedure to ensure that it had
considered and determined the appropriateness
of issuing a document as guidance rather than
as arule. Issuing a document as guidance is
appropriate if the document is interpretative or

a general statement of policy and if it does not
create, modify, or revoke a standard. Between
2014 and 2016, OIG found that OSHA did not
follow its existing procedures for 80 percent of
sampled guidance. OIG identified shortcomings
including the failure to document on standard
clearance forms that OSHA and the Office of the
Solicitor had (1) determined whether guidance
was consistent with OSHA rules, (2) considered
the anticipated reception of the guidance by
significant stakeholders, and (3) obtained official
approval to issue the guidance.

DOL is aware of the challenges associated

with its rulemaking process and is completing

a comprehensive review and analysis of it,
including evaluating enforcement and compliance
assistance materials to ensure that they are
current, accessible, and easy to understand.
Significant Concerns

Improving the Performance
Accountability of Workforce
Development Programs

The OIG has concerns about the Department’s
ability to ensure that its planned $5 billion
investment in workforce development programs
is successful in advancing participants’ skills and
placing them in suitable employment. Critical

to this task is the Department's ability to obtain
accurate and reliable data with which to measure,
assess, and make decisions regarding the
performance of grantees, contractors, and states
in meeting the programs’ goals. For example,

our March 31, 2020, report on the Face Forward
grants, which help previously incarcerated
youths to overcome employment barriers, found
that reported performance outcomes for Face
Forward participants were unreliable because the
underlying performance data were incomplete.

The Department also needs to ensure that its
investments in credential attainment align with
the needs of local employers and are having the
desired impact on participants’ ability to obtain
or advance in a job. A 2018 audit followed up on
the employment status of a sample of Job Corps
students 5 years after they left the program.

It found that Job Corps faced challenges in
demonstrating the extent to which its training
programs helped participants obtain meaningful
jobs appropriate to their training.

Finally, research suggests that opioid dependency
has been a leading cause of workforce exits for
workers ages 25 to 54. To date, the Employment
and Training Administration has approved up

to $112 million in National Health Emergency
Grants for 20 states and the Cherokee Nation to
address the opioid crisis. The Department needs
to monitor the performance of the discretionary

grants it has awarded for the delivery of services
to employers and workers affected by the opioid
crisis.

Maintaining the Integrity of Foreign
Labor Certification Programs

Foreign labor certification (FLC) programs are
intended to permit U.S. businesses to hire foreign
workers to meet their workforce needs while
protecting the jobs, wages, and working conditions
of U.S. workers. DOL’s administration of the FLC
programs under current laws has been an OIG
concern for decades. OIG investigations have
shown these visa programs, in particular the H-1B
program for workers in specialty occupations,

to be susceptible to significant fraud and abuse.
Dishonest immigration agents, attorneys, labor
brokers, employers, and organized criminal
enterprises often perpetrate the fraud and abuse.

DOL is statutorily required to certify an H-1B
application unless it determines that the
application is “incomplete or obviously inaccurate.”
OIG investigations have revealed schemes

in which fictitious companies or dishonest
businesses seeking to acquire foreign workers
filed fraudulent applications with DOL. Our
investigations also have uncovered numerous
instances of employers misusing FLC programs
to engage in human trafficking, with victims often
exploited for economic gain.

In addition, rising application numbers and
seasonal spikes in employer workforce demands
have resulted in delays in processing visa
applications for the H-2B program, which
employers use to hire foreign workers for
temporary nonagricultural jobs. DOL needs to
continue its efforts to process H-2B applications
in time for employers to hire foreign workers by

Semiannual Report to Congress: April 1-September 30, 2020 13
Significant Concerns

the start dates needed while also protecting the
interests of U.S. workers.

Protecting the Security of Employee
Benefit Plan Assets

The OIG remains concerned over DOL’s

ability to administer and enforce Employee
Retirement Income Security Act of 1974

(ERISA) requirements that protect the benefit
plans of about 154 million plan participants and
beneficiaries, particularly in light of statutory
limitations on DOL’s oversight authority. One
challenge the Employee Benefits Security
Administration (EBSA) has been facing for
decades is that ERISA allows billions of dollars

in pension assets held in otherwise regulated
entities, such as banks, to escape full audit
scrutiny. We have previously found that as much
as $3.3 trillion in pension assets, including an
estimated $800 billion in hard-to-value alternative
investments, received limited-scope audits that
provided few assurances to participants regarding
the financial health of their plans.

In addition, given the number of benefit plans that
the agency oversees relative to the number of
investigators, EBSA needs to focus its available
resources on investigations that are most

likely to result in the deterrence, detection, and
correction of ERISA violations. Finally, EBSA
lacks the authority under the Federal Employees’
Retirement System Act to enforce its oversight

of more than $500 billion in Thrift Savings Plan
(TSP) assets and to ensure the implementation of
TSP audit recommendations.

14 Semiannual Report to Congress: April 1-September 30, 2020

Managing Medical Benefits in the
Office of Workers’ Compensation
Programs, Including Opioids

The OIG has concerns about the Office of
Workers’ Compensation Programs’ (OWCP's)
ability to manage effectively rising home health
care costs in the Energy Employees Occupational
Illness Compensation (Energy Workers) program
as well as the use and cost of pharmaceuticals

in the Federal Employees’ Compensation Act
(FECA) program. The Department needs to make
certain it has controls in place to ensure that the
medical benefits it provides to energy workers
and FECA program claimants are safe, effective,
medically necessary, and the most cost-effective.

In the Energy Workers program, with an aging
claimant population and an increased demand
for home health care services, there is a potential
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 $610 million, comprising 73 percent of
all medical benefits paid by the program in

FY 2019. OWCP needs to continue its efforts to
analyze home health care billings for abusive
practices and to identify and refer allegations
involving potential fraud or abuse to the OIG for
further investigation.

Past audits of the FECA program have identified
internal control weaknesses related to OWCP’s
management of pharmaceuticals. For example,
OWCP allowed increases in billings for
compounded drugs to go undetected and failed to
identify the overuse of opioids. Given the high risk
of fraud related to prescription payments, OWCP
needs to analyze and monitor FECA program
costs to promptly detect and address emerging
Significant Concerns

issues before they manifest into material
concerns.

The prevalence of prescriptions for highly
addictive opioids in the FECA program has

the potential to lead to abuse. While opioids
accounted for less than 20 percent of total
pharmacy expenditures in FY 2019, 43 percent
of FECA’s claimants receiving pharmaceuticals
were receiving opioid prescriptions in a

given month. Additionally, in response to the
COVID-19 pandemic, OWCP has had to divert
resources from focusing on claimants with opioid
prescriptions to processing an influx of COVID-19
claims from federal workers, which has the
potential to negatively impact the FECA program’s
opioid user population.

Consistent with prior OIG audit recommendations,
OWCP imposed restrictions on opioid
prescriptions in September 2019, limiting all
initial opioid prescriptions to 7 days, with three
subsequent 7-day refills, and requiring prior
authorization to obtain opioids beyond 28 days.
According to OWCP-provided data, OWCP’s
efforts to address the opioid problem have
resulted in declines in opioid use and new
prescriptions. OWCP needs to continue its
efforts to help identify claimants at risk of opioid
dependence and determine the associated costs
of addiction treatment.

Recent actions taken by OWCP resulted in
significant decreases in compounded drug
costs—from more than $250 million in FY 2016 to
less than $1 million in FY 2019—underscoring the
enormous monetary impact of failing to monitor
rising costs and implement controls earlier.

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. The Black Lung Disability
Trust Fund (BLDTF) pays the benefits when

a miner’s former employer does not or cannot
assume liability. The current annual income of the
BLDTF (primarily from an excise tax on coal) is
not sufficient to cover annual benefit obligations,
meet administrative costs, and service past debt.
According to DOL’s Agency Financial Report, as
of September 30, 2019, the BLDTF was carrying
a $5.8 billion deficit balance, which is projected to
grow to nearly $15.3 billion (in constant dollars) by
September 30, 2044.

The U.S. Energy Information Administration
projects that coal production will decline through
2022. The downturn has 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 Government Accountability
Office 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." It stated, “[i]Jn part, the assessment
involves reviewing actuarial estimates of the

1 www.dol.gov/newsroom/releases/owcp/
owcp20200224.

Semiannual Report to Congress: April 1-September 30, 2020 15
Significant Concerns

operators’ liabilities and setting security amounts based on those liabilities and the operators’ risk of
default” (see Table 1).

TABLE 1: SELF-INSURED COAL MINE OPERATOR BANKRUPTCIES AFFECTING THE
BLACK LUNG DISABILITY TRUST FUND, FILED FROM 2014 THROUGH 2016

Estimated Estimated number of
Coal Amount of collateral at time | transfer of benefit beneficiaries for whom
Operator of bankruptcy responsibility to the | liability has been transferred
Trust Fund to the Trust Fund
Alpha Natural
pha Nara $12.0 million $494 million 1,839
Resources
James River wa _
$0.4 million $141 million 490
Coal
Patriot Coal $15.0 million $230 million 993
Total $27.4 million $865 million 3,322

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. 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.”* Moreover, the tax rate will once
again revert to lower pre-2020 levels beginning in January 2021, putting further strain on the BLDTF.

Securing and Protecting Information Management Systems

We are 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
modernization efforts and ability to identify vulnerabilities, protect information systems and data, and
recover from security incidents. The most recent deficiencies we reported were identified in four of the

five information security functional areas as defined by the National Institute of Standards and Technology
Cybersecurity Framework. The deficiencies continue to hinder the Department identifying security
weaknesses; protecting its systems and data; and detecting, responding to, and recovering from incidents.
For example, DOL has not:

2S. 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).

16 Semiannual Report to Congress: April 1-September 30, 2020
Significant Concerns

« 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.

* 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
citizens and federal employees. Securing these
data is a growing concern because DOL’s data
integrity is at risk from external and internal
threats. We continue to identify deficiencies

in the Department’s efforts to configure and
monitor its information systems as well as to
identify and report security vulnerabilities. In
addition, we determined that the Department
has not adequately planned or implemented the
technology tools required to manage and monitor
IT security. Moreover, due to COVID-19, DOL
changed its work and IT landscape to significantly
expand telework operations for its employees as
well as to identify alternate methods for securing
data that were previously required to remain on-
site for security reasons.

The Department continues to move its information
systems to a shared services model and expand
its use of cloud and third-party providers for
information infrastructure and services. We have
identified deficiencies that still remain in the
Department’s oversight of information systems
managed by DOL’s program agencies and

systems operated by a third party on behalf of
the Department. As it continues this move, DOL
will further require specialized knowledge and
expertise in protecting and managing its systems,
including the contracted systems.

The Department has been unable to implement
an effective asset management system since

this issue was first identified in 2011. The
Department maintains a significant number of
desktops, laptops, tablets, and mobile devices
for its employees. In addition, the Department
maintains servers, routers, storage devices,

and other IT hardware. The Department has
indicated that it implemented an enterprise asset
management system in FY 2020 and is in the
process of ensuring data quality. However, the
Department needs to provide evidence of such
implementation, and more work needs to be done
to effectively track and protect DOL assets through
their life cycle. Without effective asset inventory
processes, the Department is unable to account
for and secure its data and equipment.

These deficiencies represent ongoing risks to the
confidentiality, integrity, and availability of DOL’s
information systems, which are necessary to
support the Department’s mission. Our concern
is whether DOL can implement the necessary
strategies and tools to provide sufficient capability
and security for the Department’s data and
information systems as well as support the
effective execution of its mission. Finally, we
continue to be concerned that the position of

the Chief Information Officer (CIO) does not
report directly to the agency head. Realigning
the organizational chart to create such a direct
reporting relationship would provide this position
with greater independence and authority to
implement and maintain an effective information
security program.

Semiannual Report to Congress: April 1-September 30, 2020 17
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 in 53 jurisdictions covering
the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, under the oversight
of DOL’s Employment and Training Administration (ETA). The federal government pays the program’s

administrative expenses.

DOL-OIG’s Efforts to Protect the
Integrity of the Ul Program

DOL-OIG is the primary federal law enforcement
agency responsible for investigating fraud
involving the UI program. Fraudulent activity
poses a significant threat to the integrity of the

UI program, as identity thieves and organized
criminal groups continue to exploit program
weaknesses. These fraudsters have taken
advantage of federal and state program
vulnerabilities during the pandemic. Indeed,

the volume of UI investigative matters currently
under review is unprecedented in the DOL-OIG’s
history. Since the pandemic started, DOL-OIG
has opened more than 2,500 investigative matters
concerning UI fraud. Many of these matters
have developed into actionable, high-impact
investigations.

The combination of significant increases in the
number of claims and limited resources (IT
systems and personnel) available to respond to
and process these claims has made it easier for
fraudsters to target UI programs, and in particular
the Pandemic Unemployment Assistance (PUA)
program. The expanded coverage offered under
the PUA program has posed significant challenges

20 Semiannual Report to Congress: April 1-September 30, 2020

to states as they implement processes to
determine initial and continued program eligibility
for participants. The sole reliance on claimant
self-certifications without evidence of eligibility
and wages renders the PUA program vulnerable
to improper payments and fraud. DOL-OIG audit
work of the PUA program found ETA’s guidance
to states on administering the PUA program did
not sufficiently address the risk of fraud, waste,
or abuse. On May 26, 2020, we issued an alert
memorandum to highlight the risk of fraud in

the PUA program given this reliance on self-
certification. In response to our memorandum,
ETA agreed to engage Congress regarding
additional fraud prevention and program integrity
measures.

DOL-OIG took an immediate, proactive, and
coordinated approach to combat fraud, waste,
and abuse in all DOL programs and operations
in response to the pandemic. This effort included
creating a Pandemic Rapid Response Team
consisting of agency decision makers and
subject matter experts. This group developed

a phased action plan, which included hiring
additional criminal investigators, auditors, data
scientists, and a National Ul Fraud Coordinator.
Regional Ul Fraud Coordinators were also hired
Worker and Retiree Benefit Programs

in localities across the country. The National Ul
Fraud Coordinator and the Regional UI Fraud
Coordinators play an important role in intelligence
sharing, deconfliction, national and regional
messaging, and coordinating the interagency
response.

In addition, DOL-OIG recognized the importance
of investigating the significant influx of

fraud allegations in a joint law enforcement
environment. To this end, DOL-OIG was
instrumental in the formation of the U.S.
Department of Justice’s (DOU's) National Ul
Fraud Task Force (NUIFTF), which includes the
FBI, the U.S. Secret Service (USSS), the U.S.
Postal Inspection Service, the Social Security
Administration (SSA)—OIG, Homeland Security
Investigations, the U.S. Department of Homeland
Security (DHS)—OIG, and the IRS Criminal
Investigation Division. The NUIFTF focuses on
intelligence sharing, deconfliction, joint national
messaging, and the effective use of investigative
and prosecutorial resources.

DOL-OIG also deployed an extensive
engagement and outreach plan to educate and
raise awareness regarding fraud trends, best
practices, red flags, and other investigative
outreach tools. As part of this effort, the DOL-
OIG has addressed pandemic-related UI fraud
issues in collaboration with the American Bankers
Association, the Independent Community Bankers
of America, the National Association of Attorney’s
General, The Consortium (conglomerate of the
largest banks), DOL’s Office of Unemployment
Insurance, and the 53 state workforce

agencies. The DOL-OIG also developed and
coordinated the release of various public and law
enforcement sensitive alerts to aid stakeholders
in detecting and preventing fraud. Some of

these communications have included a NUIFTF

UI Fraud Consumer Protection Guide, an alert
regarding UI fraud and phishing, an alert regarding
UI fraud and identity theft, a joint DOL-OIG/USSS
alert on the detection and mitigation of UI fraud

for financial institutions, and an alert sent to banks
through the U.S. Department of the Treasury
regarding fraud and vulnerabilities in the PUA
program.

Finally, DOL-OIG is participating in initiatives to
address the new fraud typologies the Department
is facing. For example, DOL-OIG is working with
DOJ on its Money Mule campaign. The aim of this
campaign is to raise awareness, educate, and
deter money mule activity through criminal, civil,

and administrative remedies.

CARES Act: Initial Areas of Concern
Regarding Implementation of
Unemployment Insurance Provisions

When the OIG issued this advisory report in April
2020, the COVID-19 pandemic had resulted in
more than 22 million additional workers filing initial
jobless claims as of March 14, 2020, the largest
increase since DOL began tracking the data in
1967. The advisory report presents the OIG’s
initial areas of concern for DOL and the states to
consider in implementing UI provisions included
in the CARES Act. The concerns represent years
of oversight work relating to DOL’s UI program,
including the Department's use of prior stimulus
funds and response to past natural disasters.

The CARES Act became law on March 27, 2020.
It introduced three new UI programs, providing
hundreds of billions of dollars in additional
payments. The new PUA program extended
unemployment benefits to self-employed
individuals, independent contractors, those with

Semiannual Report to Congress: April 1-September 30, 2020 21
Worker and Retiree Benefit Programs

limited work history, and other individuals not
traditionally eligible for unemployment benefits
who are unable to work as a direct result of
certain COVID-19-related reasons. The CARES
Act also made available an additional 13 weeks of
unemployment compensation to those individuals
who have exhausted their regular unemployment
benefits. Finally, the CARES Act provided a
supplemental payment of $600 per week for up to
four months. These conditions require heightened
monitoring of the UI program.

The substantial increase in unemployment
benefits requires ETA and state workforce
agencies to establish strong controls to ensure
that the funding is used to meet the intent of the
CARES Act and helps support workers and the
economy. Based on our prior OIG reports, we
identified the following initial areas of concern for
ETA and states to consider in implementing UI
provisions: state preparedness, initial eligibility
determination, benefit amount, improper payment
detection and recovery, return to work, and
program monitoring.

Given the extraordinary circumstances
surrounding the CARES Act, the OIG remains
concerned that staffing challenges, coupled

with the state of legacy systems, will continue

to impede the management and oversight of Ul
benefits. We are concerned that ETA and the
states do not have sufficient systems, alternative
controls, and oversight in place to ensure
appropriate payment durations and amounts.

We noted that the risk of fraud and improper
payments is even higher under the PUA program
because Section 2102 of the CARES Act
permits claimants to self-certify that they meet
certain PUA-eligibility requirements. We are also
concerned that ETA and the states have not

22 Semiannual Report to Congress: April 1-September 30, 2020

developed sufficient systems to prevent fraud
during initial eligibility determinations and detect
fraud if those systems fail. ETA needs to continue
developing and improving its methods to assist
states in detecting fraud and recovering improper
payments.

To ensure that unemployment compensation
payments stop at the appropriate time, we
noted the need to cross match data to check the
continued eligibility of all benefit recipients. This
is especially important given the large numbers
of claimants expected to return to work once the
COVID-19 pandemic subsides, some of whom
may continue to collect benefits after successful
reemployment.

For more information, go to www.oig.dol.gov/
public/reports/oa/viewpdf.php?r=19-20-001-03-
315&y=2020, Report No. 19-20-001-03-315 (April
21, 2020).

Alert Memorandum: The Pandemic
Unemployment Assistance Program
Needs Proactive Measures to Detect
and Prevent Improper Payments and
Fraud

The PUA program was created under the CARES
Act to expand UI eligibility to those who are self-
employed, have a limited work history, or were
not previously covered by UI programs. Costs for
PUA benefits at the time this alert memorandum
was published, on May 26, 2020, were estimated
to total nearly $110 billion. The associated risk

of improper payments and fraud is significant, as
the UI program has historically experienced some
of the highest improper payment rates within the
federal government programs.
Worker and Retiree Benefit Programs

To establish eligibility, the CARES Act

requires individuals to self-certify that they are
unemployed, partially unemployed, or unable or
unavailable to work due to one of the COVID-
19-related reasons specified within the statute.
This self-certification renders such individuals
eligible to receive payments immediately. Given
the fraud risk associated with self-certification, the
OIG issued a memorandum on May 26, 2020, to
alert the Assistant Secretary for Employment and
Training that states’ reliance on self-certifications
alone to ensure eligibility for PUA will lead to
increased improper payments and fraud.

As ETA’s implementation of the PUA program
currently stands, any individual may initially self-
certify without evidence of previous wages earned
and be approved for payment in accordance with
the state’s Ul regulations. Even if the individual
fails to provide documentation within 21 days,

he is not rendered ineligible for PUA benefits.
Consequently, individuals continued to receive

an average of $775 per week (through July 31,
2020) based solely on an initial undocumented
self-certification statement that one of the COVID-
19-related reasons caused their unemployment
and the acknowledgment that any intentional
misrepresentation in their self-certifications to
obtain PUA benefits constitutes fraud.

The CARES Act (§ 2102(h)) states that the federal
regulations governing the DUA program apply to
the PUA program unless otherwise provided in
this section or to the extent that there is a conflict
between the CARES Act requirements and the
DUA regulations. The DUA regulations require
states to determine eligibility immediately, based
upon an initial application and the individual’s
self-certification, and determine the weekly benefit
amount (WBA) based on documentation available
at the time the initial application was submitted.

DUA regulations also require claimants to submit
documentation to substantiate employment or
self-employment within 21 days of the initial filing
if the original claim was based on the claimant’s
statement of employment or self-employment.

Therefore, the OIG believes the provisions under
DUA regulation 20 C.F.R. § 625.6(e)(1) apply

and do not conflict with the PUA requirement that
eligible claimants receive payments without a
waiting period. Rather, the DUA regulation works
in conjunction with the state agency requirements
to justify the continuation of program benefits and
the WBA.

In light of the Department’s disagreement with
our assessment, based upon its interpretation of
the act and underlying regulations, and given the
UI program’s previously reported vulnerability to
improper payments and the high risk of fraud, we
recommended that ETA seek additional guidance
or clarification from Congress. We believe
congressional guidance or clarification concerning
whether a claimant is entitled to establish and
continue to receive PUA payments, even without
providing documentation at any point to support
a WBA determination, might result in better
implementation of the CARES Act PUA program.

For more information, go to www.oig.dol.gov/
public/reports/oa/viewpdf.php?r=19-20-002-03-
315&y=2020, Report No. 19-20-002-03-315 (May
26, 2020).

Semiannual Report to Congress: April 1-September 30, 2020 23
Worker and Retiree Benefit Programs

COVID-19: More Can Be Done to
Mitigate Risk to Unemployment
Compensation Under the CARES Act

The CARES Act included an initial estimated
$260 billion in funding for new or expanded

UI benefits. It provided for additional benefit
payments and created new programs delivering
benefits to individuals not traditionally eligible for
Ul. These expanded benefits and new programs
have significantly increased the risks of fraud,
waste, and abuse. We conducted this audit to
determine whether ETA’s initial implementation of
the CARES Act UI provisions sufficiently mitigated
the risks of fraud, waste, and abuse.

While ETA implemented the CARES Act UI
provisions in a timely manner, additional guidance
could better assist states in mitigating the

risks of fraud, waste, and abuse. Further, ETA
has directed states to leverage their existing
program integrity systems to include CARES Act
UI programs, but ETA can do more to ensure
adequate program assessment and reporting.

We found that ETA has been leveraging existing
tools to combat fraud, but more needs to be

done. For example, ETA directed states to include
CARES Act UI programs in their Benefit Payment
Control activities. However, ETA needs to do more
to ensure that existing tools are used effectively
and to assist the OIG in obtaining access to state
data. Over the years, joint investigations between
the OIG and states have led to hundreds of
successful prosecutions and monetary recoveries.

Additionally, ETA’s oversight plan does not
sufficiently address the assessment of CARES
Act UI program results because the CARES

Act UI programs are not included in its program
assessments. ETA noted the programs’ temporary

24 Semiannual Report to Congress: April 1-September 30, 2020

nature and the cost associated with including
them as reasons not to include them in its
program assessments. However, by not doing so,
ETA fails to calculate the effect of programs with
an initial estimated cost of $260 billion.

To address the issue of individuals who refuse to
return to work, ETA encouraged states to request
employers to report such employees to their state
workforce agency. However, to prevent millions

of dollars in overpayments, states will also need
to take proactive measures to identify individuals
who refuse to return to work. ETA should consider
encouraging states to contact large employers, or
at least ensure that states use public websites to
alert employers to their obligation.

We made recommendations to ETA to improve
its management oversight of the UI program
provisions under the CARES Act by issuing
guidance to states on continuing eligibility

and fraud prevention, monitoring states, and
estimating improper payments.

For more information, go to www.oig.dol.gov/
public/reports/oa/2020/19-20-008-03-315.pdf,
Report No. 19-20-008-03-315 (August 7, 2020).

ETA Should Do More to Assist
Vulnerable States Prepare for
Disaster Unemployment Assistance
Program Implementation

In FY 2017, Hurricanes Harvey, Irma, and Maria
devastated parts of the Caribbean islands and
the United States. The DHS’s Federal Emergency
Management Agency, by way of ETA, granted
$85 million in DUA funds to the states of Florida,
Georgia, and Texas; Puerto Rico; and the U.S.
Virgin Islands (USVI). Prior OIG reports identified
Worker and Retiree Benefit Programs

a breakdown of essential systems during past disasters and increased risk of fraud, improper payments,
and untimely benefit payments.

Given these concerns, we conducted this audit to determine whether ETA had established adequate
controls to ensure that DUA benefits were paid only to eligible claimants and were paid promptly. We
determined that ETA had not.

We found that ETA did not establish adequate controls to ensure states paid benefits only to eligible
claimants. ETA did not make a timely on-site monitoring visit to the Florida Department of Economic
Opportunity (FLDEO), or ensure that FLDEO and the USVI Department of Labor (VIDOL) had provided
DUA trainingto their staff members and developed DUA-specific standard operating procedures. Training
and the development of procedures would have better ensured that officials collected the documentation
necessary to substantiate a claimant’s eligibility. ETA does not have specific policies and procedures in
place that require states to provide periodic training or ensure that regional officials make timely monitoring

FIGURE 1: OBSTACLES THAT PREVENTED VIDOL’S ROUTINE OPERATIONS

Hotels were shutdown, Sister islands were Supply shortages
Se Oe aa Water damage to presenting difficulties separated by bodies and challenges to
re duction in works ace servers in receiving outside of water and ports procuring additional
P assistance were closed supplies

visits. As a result, FLDEO and VIDOL officials could not substantiate eligibility for 23 percent of the claims
we tested at either site. We estimated that $5.6 million could have been put to better use.

We also found that ETA did not establish adequate controls to ensure that states paid benefits promptly.
ETA did not provide adequate oversight to ensure that VIDOL provided DUA training, developed standard
operating procedures, or took the necessary measures to reduce its backlog of claims. ETA’s lack of
specific policies or procedures that require states to provide periodic DUA training was a contributing factor
to this issue. ETA also did not ensure that VIDOL had DUA-specific written standard operating procedures
to mitigate this concern. As a result, VIDOL paid only 27 percent of its claims within 21 days. Initial delays
were understandable due to the devastation suffered. However, VIDOL paid on time only 42 percent of
extended claims on time, even though claimants did not file these claims until at least 18 months after the
hurricanes hit. See Figure 1 for obstacles that prevented VIDOL’s routine operations.

We recommended that the Assistant Secretary for Employment and Training establish policies, procedures,
and controls to ensure that states provide training and establish DUA policies and procedures, and

Semiannual Report to Congress: April 1-September 30, 2020 25
Worker and Retiree Benefit Programs

that ETA recover $95,699 in questioned costs
from FLDEO and VIDOL for participants whose
eligibility was not demonstrated.

For more information, go to www.oig.dol.gov/

public/reports/oa/2020/04-20-002-03-315.pdf,
Report No. 04-20-002-03-315 (September 29,
2020).

Maryland Department of Labor
Collaborates with U.S. Attorney’s
Office and DOL-OIG to Uncover
Massive Criminal Fraud Scheme

A massive and sophisticated criminal enterprise
targeting Maryland’s UI system was uncovered by
state officials working in conjunction with the U.S.
Attorney’s Office and DOL-OIG. Once the scheme
was discovered, officials were able to suspend
more than 47,500 fraudulent UI claims totaling
more than $501 million.

Oklahoma Employment Security
Commission Blocks 952 Fraudulent
Unemployment Insurance Claims,
Saving More than $2.8 million

On June 22, 2020, the Oklahoma Employment
Security Commission (OESC) blocked 952
fraudulent unemployment insurance claims

filed following the enactment of the CARES Act.
This action stopped more than $2.8 million in
unemployment benefits from reaching the hands
of international criminals.

Following the enactment of the CARES Act, the
U.S. Attorney’s Office for the Northern District of
Oklahoma created the Coronavirus Anti-Fraud
Team. The Team coordinated efforts to determine
that hundreds of Oklahomans’ identities had
been used to file fraudulent unemployment

26 Semiannual Report to Congress: April 1-September 30, 2020

insurance claims with OESC. Investigative efforts
determined that a large group of claims were
filed through the Internet from Internet protocol
(IP) addresses in London. Based on investigative
findings, OESC blocked this large group of
claims and blocked other foreign IP addresses
from accessing and fraudulently filing claims with
OESC. This is a joint investigation with OESC,
the Oklahoma Attorney General’s Office, the FBI,
USSS, and SSA-OIG.

Two Charged in $1.8 Million
Unemployment Insurance Scam

Aclaims examiner employed by Michigan’s

Ul agency and a co-conspirator were charged
via criminal complaint for their alleged role in

a $1.8 million Ul fraud scheme. The scheme
targeted state and federal funds meant to assist
unemployed lawful workers during the COVID-19
pandemic.

The complaint alleges that beginning in May 2020,
the claims examiner used his internal access to
release payments on hundreds of fraudulent Ul
claims. Specifically, he is alleged to have used his
network credentials to override “fraud stops” on Ul
claims that the state had identified as potentially
fraudulent. The examiner’s actions resulted in the
fraudulent disbursement of more than $1.1 million
in federal and state funds intended to assist
unemployed lawful workers during the COVID-19
pandemic. The examiner also attempted to
override fraud stops on another $761,000 in
fraudulent UI claims, but these payments were
stopped by authorities prior to execution.

The examiner is alleged to have worked with
outside co-conspirators as part of his fraud
scheme. One co-conspirator allegedly filed at
Worker and Retiree Benefit Programs

least 25 fraudulent claims seeking more than
$350,000 in unearned UI benefits.

Eight Arrested on Federal Indictment
Alleging Scheme to Obtain

$1.1 Million in Unemployment
Benefits Through Sham Companies

Law enforcement officers arrested eight
individuals indicted by a federal grand jury on
fraud charges involving the creation of non-
existent businesses and the claiming of more
than $1.1 million in unemployment benefits for
purported employees of those fake businesses.

The nine-count indictment unsealed on March
20, 2020, alleges a 3-year conspiracy to cheat
California’s UI program through the creation of
bogus cleaning services and boutique stores, and
sometimes using the names of prison inmates as
phony employees in order to fraudulently collect
UI benefits. The indictment charges each of the
eight defendants with one count of conspiracy to
commit wire fraud and one count of aggravated
identity theft.

From February 2013 until July 2016, the
defendants allegedly registered fake businesses
with the California Employment Development
Department (EDD), the administrator of the
federal UI benefit program for the state. Bogus
companies were created and post office boxes
were maintained in those names and used to
receive the fake businesses’ mail.

After being supplied California EDD-—funded debit
cards, the defendants allegedly withdrew funds
from the cards, which were in the names of other
claimants. In total, the defendants fraudulently
obtained approximately $1,106,282 in UI benefits,
according to the indictment.

North Miami Beach Resident
Sentenced for His Role in an

Unemployment Insurance Identity
Theft Fraud Scheme

On April 28, 2020, Johmson Augustin was
sentenced to 24 months in prison for his
involvement in an identity theft scheme to
defraud the Florida UI program. Augustin utilized
fraudulently obtained personally identifiable
information to file numerous Florida UI claims.
Augustin directed the funds received from the
scheme to several bank accounts and pre-paid
debit cards he controlled. Augustin was captured
on video utilizing the debit cards and also used
the stolen unemployment funds to make online
purchases. This was a joint investigation with
FLDEO and the North Miami Beach Police
Department. United States v. Johmson Augustin
(S.D. Florida)

$230,000 Seizure Warrant Served
Against Bank Account Held by
Arkansas Resident

On September 4, 2020, a seizure warrant was
served to Arvest Bank in Hot Springs, Arkansas,
authorizing the seizure of up to $230,000 from
the general checking account of a Hot Springs
resident. Money was deposited into this personal
checking account from a suspected fraudulent
Small Business Administration Paycheck
Protection Program loan and from proceeds
obtained through suspected fraudulent UI claims.
This ongoing investigation has identified more
than 50 suspected fraudulent UI claims affecting
46 state workforce agencies. The actual loss from
this suspected fraud is more than $485,000, and
the intended loss is in excess of $1 million. This
is a joint investigation with the FBI and Arkansas
Division of Workforce Services.

Semiannual Report to Congress: April 1-September 30, 2020 27
Worker and Retiree Benefit Programs

Office of Workers’ Compensation Programs

OWCP administers four workers’ compensation programs: the Federal Employees’ Compensation Act
(FECA) program, the Energy Employees Occupational Illness Compensation Program, the Longshore
and Harbor Workers’ Compensation Act program, and the Coal Mine Workers’ Compensation program.

FECA is the largest of the programs and provides workers’ compensation coverage to millions of
federal, postal, and other employees for work-related injuries and illnesses. Benefits include wage
loss benefits, medical benefits, vocational rehabilitation benefits, and survivors’ benefits for covered

employees’ employment-related deaths.

COVID-19: OWCP Should Continue
to Closely Monitor Impact on Claims
Processing

We audited OWCP'’s initial response to the
pandemic to determine the extent to which
COVID-19 has affected OWCP’s ability to process
and adjudicate claims and what OWCP did to
address the challenges encountered. We found
that most OWCP programs were experiencing
or expecting delays and resource management
issues as a result of increased claims or social
distancing mandates. In response, OWCP was
tracking delays, providing guidance, extending
deadlines, and taking additional actions as
needed.

The Division of Federal Employees’
Compensation (DFEC) expected a potential strain
on resources and claims processing delays. To
address these anticipated challenges, DFEC
developed a contingency plan, issued new
procedures for handling COVID-19 claims, and
created a COVID-19 Task Force to oversee claims
development and adjudication.

The Division of Coal Mine Workers’ Compensation
(DCMWC) experienced challenges in its ability

28 Semiannual Report to Congress: April 1-September 30, 2020

to process claims in a timely way because a
significant number of approved physicians
temporarily suspended pulmonary examinations,
which are required for a coal miner’s claim to be
processed. These delays created a backlog that
will strain resources whenever physicians resume
claimant examinations. DCMWC has tracked

the delays and taken steps to assist claimants,
including publishing guidance on its website and
extending deadlines.

The Division of Energy Employees Occupational
Illness Compensation (DEEOIC) was experiencing
delays in obtaining required information from
certain U.S. Department of Energy facilities and
physicians who had closed their practices or were
limiting operations. DEEOIC has been tracking

a small number of impacted claims and allowing
extensions in those cases.

The Division of Longshore and Harbor Workers’
Compensation did not experience, nor was it
expecting to experience, any significant impact in
its operations due to the pandemic.
Worker and Retiree Benefit Programs

The OIG made recommendations related
to monitoring, guidance, and performance
measurement.

For more information, go to www.oig.dol.gov/
public/reports/oa/2020/19-20-004-04-001.pdf,
Report No. 19-20-004-04-001 (July 6, 2020).

Florida Reference Laboratory,

Pain Clinic, and Two Individuals
Agree to Pay $41 Million to Resolve
Allegations of Unnecessary Urine
Drug Testing

On April 15, 2020, Logan Laboratories, LLC, a
reference laboratory in Tampa, Florida; Tampa
Pain Relief Centers, Inc., a pain clinic also based
in Tampa; and two of their former executives,
Michael T. Doyle and Christopher Utz Toepke,
agreed to pay a total of $41 million to resolve
alleged violations of the False Claims Act affecting
numerous federal health programs, including
those administered by OWCP, involving medically
unnecessary urine drug testing.

The government alleged that, from 2010 through
2017, the defendants knowingly submitted

or caused the submission of false claims to
federal health care programs for presumptive
and definitive urine drug tests, in circumstances
wherein such testing was not medically
reasonable or necessary. Presumptive urine drug
tests are tests that screen for the presence of
drugs, and definitive urine drug tests are tests
that identify the amounts of those drugs in a
patient’s system. The government alleged that
the defendants developed and implemented a
policy and practice of automatically ordering both
presumptive and definitive urine drug tests for

all patients at every visit, without any physician’s
making an individualized determination that either

test was medically necessary for the patients for
whom the tests were ordered.

The claims resolved by this settlement are
allegations only and there has been no
determination of liability.

This is a joint investigation with the U.S.
Department of Health and Human Services
(HHS)—OIG, United States Postal Service—OlG,
and Office of Personnel Management-OlG. United
States ex rel. Ashton v. Logan Laboratories, LLC,
et al. (E.D. Pennsylvania) and United States ex
rel. Cho v. Surgery Partners Inc., et al. (M.D.
Florida)

Semiannual Report to Congress: April 1-September 30, 2020 29
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.

Southern California Chiropractor Sentenced to Nearly 4 Years in Federal
Prison for Bilking Labor Union Health Plan for $4.8 Million

Mahyar David Yadidi, a chiropractor, was sentenced to 46 months in federal prison for conspiring to defraud
a labor union’s health care benefit plan by offering kickbacks to patients for attending a clinic he controlled
known as Philips San Pedro Chiropractic. Yadidi was also ordered to pay $1,976,832 in restitution at the
time of sentencing. Yadidi’s co-conspirators, lvan Semerdjiev and Julian Williams, were also previously
each sentenced to 6 months in prison for their roles in this scheme.

The investigation revealed that from July 2016 through October 2018, Yadidi, Semerdjiev (a fellow
chiropractor), and Williams (a personal fitness trainer) engaged in a scheme to defraud the welfare plan.
Specifically, the trio offered kickbacks to patients for visiting the clinic and billed the plan for services

not rendered to its patients, services not medically necessary, and services provided by unlicensed and
unqualified employees. In total, Yadidi, Semerdjiev, and Williams submitted almost $5 million in claims to
the plan, with the plan paying approximately $2 million.

This was a joint investigation with EBSA. United States v. Semerdjiev et al. (C.D. California)

30 Semiannual Report to Congress: April 1-September 30, 2020
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: OSHA Needs to Improve Its Handling of Whistleblower Complaints
During the Pandemic

The COVID-19 pandemic has raised concerns about the safety and health of workers and the protections
afforded to workers who report potential workplace safety violations, including violations involving social
distancing and personal protective equipment. As part of Phase 1 of the OIG’s Pandemic Response
Oversight Plan, we conducted this audit to determine what impact COVID 19 whistleblower complaints had
on OSHA and how OSHA addressed those complaints.

We found that due to the pandemic’s impact, the number of whistleblower complaints that OSHA received
increased significantly (see Figure 2).

FIGURE 2: TOTAL WHISTLEBLOWER COMPLAINTS RECEIVED

4,200
4,101
4,000

3,800

3,600

3,400

3,200
3,152

3,000

February— February—
May 2019 May 2020

Source: OSHA whistleblower data unaudited

32 Semiannual Report to Congress: April 1-September 30, 2020
Worker Safety, Health, and Workplace Rights

Before the pandemic, OSHA was challenged to complete investigations in a timely manner, and now the
potential exists for even greater delays. Exacerbating this challenge, full-time employment in OSHA's
Whistleblower Protection Program has decreased from 126 in 2019 to 120 in 2020. Investigators we
interviewed said they can optimally manage a maximum of 20 open investigations at once. However, the
number of open investigations per investigator ranged from 19 to 45 in 2020, compared to 15 to 40 in 2019.

If OSHA finds merit to an employee’s allegations, the employee may be entitled to reinstatement, back pay,
restored benefits, or other remedies. Any delays in investigations could leave workers to suffer emotionally
and financially and may also lead to the erosion of key evidence and witness participation.

Prior to the pandemic, OSHA began a triage pilot intended to expedite the complaint screening process.
The agency also reassigned older complaints from regions with large backlogs to regions with lesser
backlogs. However, OSHA did not use a similar approach to reassign pandemic-related complaints to more
evenly distribute the complaints among regions. Figure 3 shows the disparity of COVID-19 whistleblower
complaints received by OSHA.

FIGURE 3: COVID-19 COMPLAINTS PER REGION (FEBRUARY-—MAY 2020)

Region |: Boston I) Region V: Chicago ME Region IX: San Francisco
MH Region II: New York MH Region VI: Dallas MI Region x: Seattle
Mi Region Ill: Philadelphia {J Region VII: Kansas City Total: 1,618
. HM Region IV: Atlanta MW Region VIII: Denver

Source: OSHA COVID-19 whistleblower data unaudited

Semiannual Report to Congress: April 1-September 30, 2020 33
Worker Safety, Health, and Workplace Rights

We made recommendations to the Principal Deputy Assistant Secretary for Occupational Safety and
Health regarding staff vacancies, the triage pilot, and the caseload management plan to evenly distribute

whistleblower complaints among investigators.

For more information, go to www.oig.dol.gov/public/reports/oa/viewpdf.php?r=19-20-010-10-105&y=2020,

Report No. 19-20-010-10-105 (August 14, 2020).

Mine Safety and Health Administration

The federal Mine Safety and Health Act of 1977 (Mine Act), 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 350,000 men and women working in our nation’s mines.

COVID-19: MSHA Faces Multiple
Challenges in Responding to the
Pandemic

On March 28, 2020, DHS labeled mining as

one of the critical infrastructure industries that
states should consider keeping open to help in
the United States’ response to the COVID-19
pandemic. Since mines continued to operate,
MSHA continued to perform mine inspections and
investigations.

As part of Phase 1 of the OIG’s Pandemic
Response Oversight Plan, we conducted an

audit of MSHA’s initial response to the pandemic.
Given the risks to both miners and MSHA’s
workforce, we conducted an audit to determine
what plans and guidance MSHA had developed to
address the challenges created by COVID-19 and
examined the extent to which these challenges
have affected MSHA’s ability to protect the safety
of miners and the agency’s workforce.

34 Semiannual Report to Congress: April 1-September 30, 2020

We found that MSHA faces a number of current
and potential challenges related to COVID-19.
Challenges include unavailable inspectors,
potential safety concerns expressed by the
mining industry, shortages of personal protective
equipment, canceled and suspended mine rescue
contests, and unenforceable Centers for Disease
Control and Prevention and MSHA COVID-19
guidance. While the agency has taken actions

to address some of the concerns, more effort is
required to ensure the safety of its workforce and
those in the mining industry.

On March 26, 2020, MSHA posted COVID-19
guidance on its website to its workforce and to the
mining industry, addressing the need to implement
measures such as social distancing, disinfecting
equipment, and washing hands.? However, unless
it issues an emergency temporary standard,
MSHA cannot enforce this guidance to the extent
that it is not already covered by existing MSHA

3 MSHA’s website has been updated since the
report was issued; the updated guidance can be
found at www.msha.gov/msha-response-covid-19.
Worker Safety, Health, and Workplace Rights

standards. More action is needed to determine whether the agency should issue an emergency temporary
standard related to COVID-19.

MSHA suspended or reduced some of its enforcement activities, and education visits, as well as special
safety and fatality initiatives that normally gather groups of miners on-site in order to limit unnecessary
contact. Such actions could affect miners’ health or safety and result in a backlog of work. MSHA will need
to develop a plan to address the potential backlog once full operations resume.

MSHA is challenged to timely complete mandatory inspections while ensuring the safety of its inspectors.
Workforce reductions (due to inspectors’ being sidelined because they self-identified as high risk for
COVID-19) and miners’ safety concerns may challenge MSHA’s ability to complete enforcement activities.
Further, shortages of personal protective equipment, such as N-95 masks, complicate the agency’s ability
to ensure the safety of its personnel.

We recommended that MSHA monitor and plan to address the potential backlog of suspended and
reduced enforcement activities and that the agency use information about COVID-19 outbreaks in mines to
reevaluate its decision not to issue an emergency temporary standard related to COVID-19.

For more information, go to www.oig.dol.gov/public/reports/oa/2020/19-20-006-06-001.pdf, Report No. 19-
20-006-06-001 (July 24, 2020).

Semiannual Report to Congress: April 1-September 30, 2020 35
Worker Safety, Health, and Workplace Rights

Wage and Hour Programs

The Wage and Hour Division (WHD) enforces federal minimum wage, overtime pay, record-keeping,
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).

WHD Needs to Closely Monitor
the Impact of COVID-19 on Its
Operations

On March 18, 2020, Congress passed the
Emergency Paid Sick Leave Act and the
Emergency Family and Medical Leave
Expansion Act of the FFCRA to ensure that
American workers would not be forced to choose
between their paychecks and the public health
measures needed to combat the virus. We
audited WHD’s initial response to the COVID-19
pandemic to determine the extent to which it has
affected WHD’s ability to implement its FFCRA
responsibilities and conduct investigations.

Our audit also sought to review any plans and
guidance WHD had developed to address the
challenges it encountered.

WHD acted quickly after Congress passed the
FFCRA by issuing guidance, training staff, and
conducting investigations of potential violations
of the law. However, WHD continues to face the
challenges of an expanded telework policy, a
broad definition of health care providers who may
be exempted from taking paid leave under the

36 Semiannual Report to Congress: April 1-September 30, 2020

FFCRA, and an incomplete operating plan that did
not discuss any FFCRA-related activities for the
future.

First, WHD has transitioned to telephone-only
contact with the public and maximized telework.
WHD has performed on-site investigations only for
child labor and agriculture complaints affecting the
health and safety of workers. Only 19.3 percent

of the FLSA cases investigated during our audit
period were on-site investigations, whereas
between October 1, 2019, and March 17, 2020,
53.5 percent were on-site investigations. This
reduction challenges WHD’s oversight of certain
FFCRA requirements and other programs. Only
19.3 percent of the FLSA cases investigated
during our audit period were on-site investigations,
whereas between October 1, 2019, and March 17,
2020, 53.5 percent were on-site investigations.
This reduction challenges WHD’s oversight of
certain FFCRA requirements, and other programs.

Second, WHD has been challenged to ensure that
all who were eligible for the FFCRA’s emergency
paid leave benefits were able to take advantage
of those benefits. DOL issued a temporary rule
Worker Safety, Health, and Workplace Rights

that could have excluded an estimated 9 million health care providers from the emergency leave provisions
of the FFCRA, despite their working in environments vulnerable to COVID-19. This estimate, provided to
the public and other stakeholders, was likely understated because it did not include employees who might
provide services to the health care providers excluded under DOL’s definition.

Third, we found that the FY 2020 WHD Operating Plan: COVID-19 Addendum was finalized at the end of
May 2020, more than two months after the FFCRA was signed, and the addendum primarily documented
what WHD had already accomplished and was less focused on providing details on what it planned to do.
For example, the addendum did not address how WHD intends to use the additional $2.5 million it received
in CARES Act funding to fulfill its obligations under the FFCRA.

We recommended that WHD improve its FFCRA-related strategies by developing a plan to monitor the
program, managing the backlog of delayed on-site investigations, taking action to address the impact of
legal decisions, and updating its COVID-19 operating plan addendum.

For more information, go to www.oig.dol.gov/public/reports/oa/2020/19-20-009-15-001.pdf, Report No.19-
20-009-15-001 (August 7, 2020).

Bureau of International Labor Affairs

The Bureau of International Labor Affairs (ILAB) promotes a fair global playing field for workers in the
United States and around the world by enforcing trade commitments, strengthening labor standards,
and combating international child labor, forced labor, and human trafficking.

ILAB Could Improve Oversight of Child Labor and Forced Labor Grants

ILAB Office of Child Labor, Forced Labor, and Human Trafficking (OCFT) battles child and forced labor
practices—including slavery, child prostitution, pornography, and trafficking—in other countries by funding
projects ranging from providing services to vulnerable children to advocating for reforms. OCFT has spent
more than $1.2 billion in approximately 100 countries since 1995 to fund projects in efforts to reduce child
and forced labor. It is critical that OCFT meet its reporting obligations and effectively monitor its grant-
funded projects to ensure that they achieve their objectives in light of continuing child and forced labor
practices. These practices present dire consequences for children and other workers. We conducted a
performance audit to determine whether OCFT implemented its reporting requirements and provided
effective oversight of its grant-funded projects related to combating child and forced labor.

We determined OCFT implemented its reporting requirements but could improve oversight of its grant-
funded projects related to combatting child and forced labor. OCFT reports on countries’ efforts to eliminate

the worst forms of child labor and publishes lists that identify goods and products made by child or forced

Semiannual Report to Congress: April 1-September 30, 2020 37
Worker Safety, Health, and Workplace Rights

labor or forced child labor. According to OCFT, Congress and the executive branch use OCFT’s report on
the worst forms of child labor to formulate labor and trade policies. The product listings are used to raise
public awareness of child and forced labor and to ensure that federal agencies do not procure goods made
by forced child labor.

Oversight of projects is vital for OCFT to ensure that grantees use funds to serve and protect vulnerable
individuals at risk of child or forced labor practices. As part of its oversight responsibilities, OCFT conducted
audits of high-risk projects. We found that it took at least a year on average for OCFT to issue corrective
action notices to grantees. Inadequate oversight of the audit resolution process and lack of coordination
with the grant officer resulted in delays.

OCFT also conducted third-party evaluations of each project twice during the project’s period of
performance. However, we found that OCFT did not adequately document follow-up actions taken by
grantees in response to evaluation recommendations. Specifically, OCFT did not ensure that grantees
reported on the status of all recommendations from project evaluations. When grantees did report on
follow-up actions, the reporting was insufficient to determine whether the actions taken were consistent with
agreed-upon plans.

We made recommendations to the Associate Deputy Undersecretary for International Labor Affairs to
develop and implement processes for ensuring that corrective action notices and other audit resolution
documents are issued to grantees in a timely manner, and for documenting and tracking the status of
recommendations from interim and final evaluations.

For more information, go to www.oig.dol.gov/public/reports/oa/2020/17-20-003-01-070.pdf, Report No. 17-
20-003-01-070 (September 25, 2020).

38 Semiannual Report to Congress: April 1-September 30, 2020
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.

Alert Memorandum: ETA

Needs to Improve Its Plans

for Providing Administrative,
Financial Management, and Audit
Requirements Relief to Grant
Recipients Impacted by the Novel
Coronavirus (COVID-19)

On March 19, 2020, the Office of Management
and Budget (OMB) issued Memorandum M-20-
17, “Administrative Relief for Recipients and
Applicants of Federal Financial Assistance
Directly Impacted by COVID-19 Due to Loss

of Operations.” These time-limited flexibilities
provided short-term relief from some
administrative, financial management, and
audit requirements of federal awards and were
reassessed by OMB in a June 18, 2020, memo.

ETA needs to improve its communication with
grant recipients regarding the availability of these
time-limited flexibilities. As of the date of our alert
memorandum, May 19, 2020, the following ETA
or DOL websites did not have any information on
such flexibilities:

* ETA’s Homepage—www.dol.gov/agencies/eta
¢« ETA’s Grants Website—www.dol.gov/
agencies/eta/feature-grants

40 Semiannual Report to Congress: April 1-September 30, 2020

« ETA’s Advisories Website—wadr.doleta.gov/
directives/

¢ DOL’s Coronavirus Resources Website—
www.dol.gov/coronavirus

« DOL’s Grants Information Website—www.dol.
gov/general/grants/howto

ETA officials informed us that they had
discussed the flexibilities internally and taken
several actions; however, no formal plan

had been developed or implemented. Even

so, ETA officials stated that they were either
implementing, implementing on a limited basis,
or not implementing the various flexibilities
identified in OMB’s memorandum. Although
ETA officials stated that they had communicated
these flexibilities to grant recipients, such
communication was through a non-DOL website
and did not specify the plans ETA intended to
implement.

The website ETA had been using was sponsored
by DOL and provided resource information to
state workforce agencies, but ETA should have
used it in conjunction with more formal DOL
communication channels, such as the main DOL
website or ETA’s website. Moreover, nothing

on DOL’s website indicated that this time-
sensitive information on flexibilities was available
externally. The use of a non-DOL website created
unnecessary risks because ETA was not in full
Employment and Training Programs

control of what was posted, and the audience was
limited.

We recommended that ETA take immediate action
to improve its communication with grant recipients
regarding the time-limited flexibilities provided by
OMB in Memorandum M-20-17.

For more information, go to www.oig.dol.gov/
public/reports/oa/viewpdf.php?r=19-20-003-03-
001&y=2020, Report No. 19-20-003-03-001 (May
19, 2020).

CARES Act: Key Areas of Concern
Regarding Implementation of
Dislocated Worker Grant Provisions

As of June 2, 2020, DOL had awarded Dislocated
Worker Grants (DWGs) of more than $222 million
of CARES Act funding to address the surge in
unemployed workers due to business closures
resulting from the COVID-19 pandemic. The goal
of this grant program is to provide disaster-relief
employment as well as employment and training
activities for eligible participants.

The OIG has published numerous audit reports
identifying areas for improvement in ETA’s grant
programs, including the use of prior stimulus
funds and the Department’s response to past
natural disasters. The CARES Act made

$345 million of funds available for DWGs. To
help the Department avoid historical pitfalls
while implementing its pandemic response, we
pinpointed three areas of concern for ETA and
states to consider when distributing the funds:
eligibility, program effectiveness, and program
compliance and monitoring.

According to our prior audit work, swift fund
deployment under rapidly changing circumstances
can lead to shortcomings in the effective and
efficient management of programs that provide
stimulus funds. DWGs temporarily expand the
service capacity of dislocated worker training
and employment programs at the state and local
levels. A principal challenge faced by states is
ensuring that the expanded program serves only
individuals who are eligible to receive CARES
Act—funded employment as well as employment
and training services. Keeping past systemic
weaknesses in mind, ETA must ensure that:

¢« States collect complete documentation to
support participant eligibility;

* States establish clear and achievable program
goals; and

* CARES Act-funded grants are sufficiently
designed and executed, and costs are
accurately tracked and reported.

Our past audit work included recommendations
to address deficiencies identified in each of these
areas. In most cases, ETA initiated corrective
actions, but initiating such actions does not
ensure that they are effective or will continue

to be effective in addressing program risks and
weaknesses. In implementing the relevant CARES
Act provisions to help workers transition back to
the workforce, ETA and the states need to ensure
that DWGs are used effectively, efficiently, and in
compliance with current laws and regulations.

For more information, go to www.oig.dol.gov/
public/reports/oa/19-20-005-03-391.pdf, Report
No. 19-20-005-03-391 (June 23, 2020).

Semiannual Report to Congress: April 1-September 30, 2020 41
Employment and Training Programs

ETA Could Not Demonstrate That Credentials Improved WIOA Participants’
Employment Outcomes

ETA ensures that employment and training services provided by WIOA core programs are coordinated
and complementary so that job seekers acquire skills and credentials that meet local employers’ needs.
A credential is awarded in recognition of an individual's attainment of the measurable technical or
occupational skills necessary to gain employment or advance within an occupation. Accordingly, ETA
has provided guidance to states indicating that participants are to earn credentials that improve their
employment opportunities. In fact, for the WIOA credential attainment measure, credit is given if the
participant earns a credential and becomes employed, or enters post-secondary education (for youth
participants).

We conducted a performance audit to determine the extent to which earning credentials impacted WIOA
Title | (adult, dislocated worker, and youth) program participants’ outcomes after exit. We found ETA could
not demonstrate that credentials improved participants’ outcomes because it did not collect the information
necessary to measure the effectiveness of earning credentials. Figure 4 presents the number of credentials
earned by type in program year 2016.

The credential attainment rate that states report to ETA is only the percentage of participants who receive
a credential out of those trained. Further, employers are not required to indicate the specific job the
participant holds and whether a credential was necessary for the job. For example, if a participant exits the
WIOA program with a credential and obtains employment, it is not known whether the participant worked

FIGURE 4: NUMBER OF CREDENTIALS EARNED IN PROGRAM YEAR 2016

50,154

50000 ;—

Secondary School Diploma

Associate's Degree
40000

Bachelor's Degree
Graduate Degree

30000 Occupational Licensure
Occupational Certificate

Occupational Certification

20000

Other Recognized Degree

10000

42 Semiannual Report to Congress: April 1-September 30, 2020
Employment and Training Programs

as a cashier, store manager, truck driver, or IT
specialist. Since there is no performance measure
to determine whether the participant needed

the credential for the job obtained upon exiting
the program, ETA could not confirm whether

the credential helped the participant obtain
employment. In ETA’s response, the agency
stated that it limits data collected from states to
statutory mandated measures and data necessary
to calculate the outcomes identified in the law.
ETA disagreed that requiring additional data after
program exit was necessary to understand the
impact credentials had on employment.

Further, ETA could not provide reasonable
assurance that the WIOA data it collected from
states were accurate, valid, and reliable. The
WIOA performance accountability provisions
became effective July 2016, but ETA did not issue
data validation guidance until December 2018.
Thus, states whose programs were reviewed
during our audit had no instruction on how to
validate the data they submitted for program years
2016 and 2017. ETAdid implement more than
400 extensive edit/logic checks in its information
system, so the WIOA data states reported were
checked up front for reliability and accuracy. The
data validation guidance was issued in time for
states to check further validity of their program
year 2018 data, the first year states reported on
the credential attainment rate.

Without capturing sufficient information to
determine whether credentials were necessary to
obtain employment or assisted with advancement
within an occupation, ETA cannot measure the
advantage credentials may provide to participants.
Furthermore, inaccurate data for performance
indicators inhibits the proper decision making

that would help ETA increase the effectiveness

of the program overall. Accurate data are also

important for annual reporting purposes because
stakeholders depend on the data to assess

the WIOA program’s effectiveness. We made
recommendations to the Assistant Secretary

for Employment and Training to develop a
mechanism to measure the impact of credentials
on participant outcomes and to ensure that states
validate performance data they submit to ETA.

For more information, go to www.oig.dol.gov/
public/reports/oa/2020/03-20-002-03-391.pdf,
Report No. 03-20-002-03-391 (September 30,
2020).

Georgia Commercial Driver’s
License Examiner and Owner of
Alabama Commercial Driver’s
License School Sentenced

On June 11, 2020, Michael Jordan and James
Welburn were sentenced for their roles in

a conspiracy to falsify U.S. Department of
Transportation examinations. Jordan was
sentenced to 36 months’ probation, a $10,250
fine, a $100 special assessment, and 100 hours’
community service. Welburn was sentenced to 60
months’ probation, a $250,000 fine, and a $100
special assessment.

Jordan was a third-party commercial driver license
(CDL) examiner who operated in Columbus,
Georgia. Welburn was the owner and president

of American Truck Driving Academy (ATDA),

a WIOA~authorized training provider for CDL
training located in Opelika, Alabama. In exchange
for cash payments from Welburn, Jordan falsified
CDL examinations for ATDA students. This was

a joint investigation with the U.S. Department of
Transportation—OlG. United States v. James F.
Welburn; United States v. Michael K. Jordan (M.D.
Alabama)

Semiannual Report to Congress: April 1-September 30, 2020 43
Employment and Training Programs

Job Corps

The Job Corps program provides education, training, and support services to more than 50,000
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.

COVID-19: ETA Should Continue
to Closely Monitor Impact on Job
Corps Program

The Job Corps program, administered by DOL’s
ETA, had about 30,000 students enrolled in

its program when the pandemic began. This
report presents the results of an audit of ETA’s
initial response to the challenges the pandemic
posed to the Job Corps program. Specifically, we
conducted a performance audit to determine what
actions Job Corps had taken in response to these
challenges.

Job Corps temporarily suspended operations
and transitioned students to remote learning,
but challenges continue, particularly with regard
to ensuring that students are safe and receive
the services they need during the pandemic.
Specifically, Job Corps temporarily suspended
operations on its campuses on March 16, 2020,
and transported nearly 30,000 students to their
homes or located housing for them. Fifty-five
centers remained open to house and feed 445
students who had nowhere else to go. Between
March 16 and May 31, 2020, 4 of these students
tested positive for COVID-19. Thirty-five staff
tested positive while they were working on-site.

In April 2020, Job Corps also started requiring its
career transition and outreach and admissions

44 Semiannual Report to Congress: April 1-September 30, 2020

service providers to work remotely. The program
also transitioned to remote learning on May 11,
2020, in order to continue educating and training
students. However, not every student had a
laptop, tablet, or even Internet access and thus
could not participate in remote learning. Job
Corps said it was working to ensure that every
student would have the necessary tools needed
for remote learning by August 2020. Job Corps
procured and intended to distribute laptops and
mobile hot spots to students over the remainder of
this calendar year.

Remote learning has created new challenges

for Job Corps students, many of whom have

not completed a secondary education and have
basic skills deficiencies. Without the structured
environment Job Corps provides, some students
may not be able to adapt to online learning and
may discontinue participation in the program.
Remote learning will be especially challenging for
participants in some training courses, as certain
technical skills, such as automotive and machine
repair, carpentry, and advanced cement masonry,
might be difficult to learn when courses are limited
to virtual instruction.

In preparation for the reopening of all centers,
Job Corps recognizes that some students may
Employment and Training Programs

surpass the maximum allotted time they may remain in the program. Job Corps has granted extensions to
address this issue.

We made recommendations focused on protecting the health of students and staff who are currently at Job
Corps centers, ensuring that both centers and remote students have the necessary resources to engage

in a virtual learning environment, and ensuring that centers have the proper controls in place to adhere to
national safety guidance prior to reopening their campuses.

For more information, go to www.oig.dol.gov/public/reports/oa/2020/19-20-007-03-370.pdf, Report No. 19-

20-007-03-370 (July 28, 2020).

Semiannual Report to Congress: April 1-September 30, 2020 45
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, including the H-1B and H-2B programs. The H-1B program requires
employers that intend to employ foreign workers in specialty occupations on a temporary basis to file
labor condition applications with ETA stating that the employer will pay the applicable wage rates and
meet other conditions of employment required by statute. The H-2B program requires U.S. employers
to apply for a temporary labor certification as the first step in bringing foreign workers into the United
States on a temporary basis to perform nonagricultural services. The temporary labor certification for
H-2B employers reflects a determination that there are not qualified U.S. workers available to perform
the labor or services and that the employment of foreign workers will not adversely affect the wages and
working conditions of similarly employed U.S. workers. The OIG also investigates labor trafficking cases

that involve fraud against FLC programs.

DOL Needs to Improve Debarment
Processes to Ensure Foreign
Labor Program Violators Are Held
Accountable

Prior OIG investigations have shown that U.S.
foreign labor programs are susceptible to fraud
and abuse, which sometimes involves crimes

as egregious as human trafficking. DOL is
responsible for ensuring that foreign and domestic
workers are protected in foreign labor programs,
such as the H-1B, H-2A, H-2B, and permanent
labor certification (PERM) programs.

DOL’s ETA and WHD conduct investigations
and audits to identify employers that should be
debarred for fraud or abuse. We conducted a
review to determine whether DOL’s debarment
process held H-1B, H-2A, H-2B, and PERM
employers accountable for violating laws and
policies.

We determined that DOL needs to improve
its debarment processes to hold violators

accountable and ensure full protection for U.S.

46 Semiannual Report to Congress: April 1-September 30, 2020

and foreign workers as well as for employers that
follow laws and regulations. DOL had not fully
utilized the H-1B program’s investigation process
to determine when employers should be debarred
and had not established a risk-based process

for determining the number of H-2A and H-2B
applications to audit.

Regarding the H-1B program, DOL can only
initiate investigations under four circumstances:
(1) WHD receives a complaint from an aggrieved
party, (2) WHD receives credible information
from a reliable source, (3) WHD conducts a
random investigation of an employer who the
Secretary found willfully violated aspects of the
H-1B program within the previous 5 years, or

(4) the Secretary personally certifies that there

is reasonable cause that the employer is not

in compliance. This final option, the Secretary-
certified investigation, has never been used. Not
exercising the Secretary’s authority to initiate
investigations and WHD’s inability to initiate an
investigation without a complaint impede DOL
from holding H-1B program violators accountable.
Employment and Training Programs

Regarding the H-2A and H-2B programs, we found that the process of selecting applications to audit
neither used data analytics nor accounted for risk. ETA had not documented any of the risk factors
considered before initiating an audit, making it difficult to determine whether the applications audited were
those most likely to result in violations eligible for debarment.

Consequently, DOL could not provide reasonable assurance that it had identified violators and held them
accountable to ensure the protection of U.S. workers, foreign workers, and employers that abide by laws
and regulations. Figure 5 indicates some reasons for debarment.

FIGURE 5: MORE INFORMATION ON DEBARMENT

DEBARRED from future sponsorship of any immigrant or any

temporary visa or as a permanent resident for usually 1-5 years
Some reasons for debarment:

xX Failed to pay wages, benefits or working conditions to foreign
workers

X Failed to comply with employer's obligation to recruit US workers

X Displaced U.S. Workers or improper layoffs

X Impeded an investigation of an employer

We recommended that WHD develop guidelines to use the Secretary’s option to initiate H-1B
investigations, define a process for assessing willfulness, and work with Congress to broaden the authority
to launch investigations, similar to the process for the H-2A and H-2B programs. For the H-2A and H-2B
programs, we recommended that ETA use data analytics to establish and document a risk-based audit
process.

For more information, go to www.oig.dol.gov/public/reports/oa/2020/06-20-001-03-321.pdf, Report No. 06-
20-001-03-321 (September 30, 2020).

Illinois Woman Pleads Guilty to Labor Trafficking

On July 28, 2020, Concepcion Malinek pleaded guilty to one count of labor trafficking. Malinek admitted
she assisted 10 undocumented Guatemalan immigrants enter the United States illegally from 2009 to
2019. Once they were in the country, Malinek arranged for the immigrants to reside in her home while they
worked at nearby jobs. Malinek threatened to contact U. S. immigration authorities if the immigrants did not
pay her a significant portion of their earnings.

This was a joint investigation with the FBI, DHS, the Cook County Sheriff's Office, and th Chicago Police
Department. United States v. Concepcion Malinek (N.D. Illinois)

Semiannual Report to Congress: April 1-September 30, 2020 47
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. OI/G 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 complex financial and investment schemes used to defraud
benefit fund assets, resulting in millions of dollars in losses to plan participants. OIG investigations have
demonstrated that abuses involving service providers are particularly egregious not only because of their
potential for large dollar losses but also because the schemes often affect several plans simultaneously.

New York Man Sentenced for
Conspiring to Commit Extortion
and Racketeering Offenses with
Members of the Genovese Crime
Family

On June 22, 2020, Frank Giovinco was sentenced
to 48 months’ incarceration and was ordered to
pay $135,000 in restitution, jointly and severally,
as well as a forfeiture of $5,000.

In December 2019, Giovinco was convicted at trial
of conspiring to commit extortion and racketeering
offenses with members and associates of the
Genovese Crime Family of La Cosa Nostra. The
jury found Giovinco responsible for acts involving
extortion, honest services fraud, and unlawful
kickback payments related to the Genovese Crime
Family’s control of two local chapters of a labor
union. Giovinco extorted a financial adviser and a
labor union official for a cut of commissions made

50 Semiannual Report to Congress: April 1-September 30, 2020

from union investments. Giovinco also participated
in the long-running extortion of a union president
for annual tribute payments of more than $10,000
and sought a job at the union for the purpose

of exerting control over the official and union on
behalf of the Genovese Crime Family.

This is a joint investigation with the FBI, New York
City Police Department, and Office of Labor—
Management Standards. United States v. Frank
Giovinco (S.D. New York)

Former Iron Workers President
Sentenced to 42 Months in Prison
for Violent Hobbs Act Extortion

On September 23, 2020, former Iron Workers
Local 395 president Jeffrey Veach was sentenced
to 42 months’ imprisonment for Hobbs Act
extortion conspiracy. Veach was also ordered

to pay more than $30,000 in restitution to the
Labor Racketeering

victims and was prohibited from holding any union
position for 13 years.

Veach admitted to conspiring with former business
agent Thomas Williamson Sr., and others, to use
actual and threatened violence in an attempt to
obtain a labor contract for Local 395 with D5 Iron
Works, an Illinois steelworking company, and

a business contract with Lagestee—Mulder, an
Illinois construction company. Williamson pleaded
guilty to Hobbs Act extortion conspiracy on
January 24, 2020, and is awaiting sentencing.

Veach learned that D5 was working on a
construction project for Plum Creek Christian
Academy, a school affiliated with the Dyer Baptist
Church in Dyer, Indiana. Veach and Williamson
visited the job site to convince the owner of D5

to sign up with Local 395 or stop working on the
job. The owner refused and told them to leave
the job site. Williamson became angry and said
that they were going to have to “take things back
to old school.” Veach and Williamson gathered
approximately 10 rank-and-file members of Local
395 and returned to the job site that afternoon.
Local 395 members attacked the D5 workers,
beat them with their fists and loose pieces of
hardwood, and kicked them while they were on
the ground. As a result of the attack, one D5
worker sustained serious bodily injury in the form
of a broken jaw that required several surgeries
and extended hospitalization. Veach admitted that
the purpose of the attack was to intimidate D5 and
Lagestee—Mulder in order to secure replacement
contracts from them.

This is a joint investigation with the FBI and Dyer
Police Department. United States v. Jeffrey Veach
(N.D. Indiana)

Former Union President Sentenced
to 16 Months in Prison for Theft of
Union Funds

On May 14, 2020, Rhondalyn Cornett was
sentenced to 16 months in prison and ordered

to pay restitution of more than $150,000. Cornett
was also debarred per 29 U.S.C. §1111 from
serving and being permitted to serve in certain
capacities involving employee welfare and
pension benefit plans for a period of 13 years.
From November 2013 until her resignation in
November 2018, Cornett was the president of the
Indianapolis Education Association, the union that
represents Indianapolis Public School teachers.
Cornett used her position and authority to write
checks from the union’s bank account and use the
union’s debit card for personal expenses and to
withdraw more than $150,000 in cash.

This is a joint investigation with the FBI and DOL’s
Office of Labor-Management Standards. United
States v. Rhondalyn Cornett (S.D. Indiana)

Semiannual Report to Congress: April 1-September 30, 2020 51
Departmental Management
Departmental Management

Departmental Management

The OIG performs oversight work involving the Department’s operations, financial management, and

information technology (IT) services.

DOL Needs to Do More to

Secure Employees’ Personally
Identifiable Information in the Travel
Management System

DOL’s travel management system, E2 Solutions
(E2), is managed by the Department's Office of
the Chief Financial Officer (OCFO). E2 contains
personally identifiable information (PII) for all DOL
employees who use the system, including Social
Security numbers and credit card numbers, which
are common targets for identity theft. E2 also
contains sensitive details regarding travel plans
for DOL personnel. Concerned by the potential
risk of unauthorized access to or unintentional
exposure of employees’ PII, we reviewed the
OCFO’s management and oversight of E2 to
determine whether the OCFO effectively managed
and oversaw the system to prevent unnecessary
access to DOL employees’ PII.

We determined that the OCFO did not effectively
manage and oversee its E2 travel system to
prevent unnecessary access to DOL employees’
Pll. Specifically, the OCFO did not manage E2
user accounts according to DOL information
security policies. We found that the OCFO had
not provided sufficient guidance to agencies’
personnel on how to secure E2 user accounts
during account creation and maintenance. In
addition, the OCFO had not performed the
oversight necessary to ensure that E2 user
accounts were appropriately created and
maintained. Further, we found that the OCFO had

54 Semiannual Report to Congress: April 1-September 30, 2020

not fully implemented E2’s contractual security
requirements and deliverables.

These security issues existed because the

OCFO had not implemented controls to manage
E2 user accounts and contractual requirements
appropriately. DOL employees were at risk of
having their PIl accessed or exposed because the
OCFO did not ensure that E2 user accounts were
appropriately secured.

We recommended that the Chief Financial Officer
establish and implement procedures to ensure
that E2 account management practices enforce
DOL’s security policies and that E2 is managed in
compliance with contractual security requirements
and DOL computer security policies for contracted
information systems.

For more information, go to the report summary
at www.oig.dol.gov/public/reports/oa/viewpdf.
php?r=23-20-003-13-001&y=20208&t=b, Report
No. 23-20-003-13-001 (September 10, 2020).
Departmental Management

DOL Needs to Do More to Implement
the Geospatial Data Act of 2018

The Geospatial Data Act of 2018 (GDA) was
signed into law October 5, 2018, to foster

efficient management of geospatial data,
technologies, and infrastructure through enhanced
coordination among federal, state, local, and tribal
governments, along with the private sector and
academia. Geospatial data (information linked to
specific geographic locations) is used to help in
decision making and to support many functions,
including national security, law enforcement,
health care, environmental protection, and natural
resources conservation.

The GDA requires inspectors general to complete
the first audit of their agencies’ progress toward
implementing the requirements of the act by
October 5, 2020. However, agencies have 5
years from the establishment of applicable data
standards to complete implementation. To address
this mandatory audit requirement, we focused on
DOL’s progress toward compliance with the GDA
and performed an audit to determine the extent to
which DOL fulfilled the requirements of the GDA
to date.

We determined that DOL has taken some steps
to address the 13 specific requirements of the
GDA, but more remains to be done. Of the 13
requirements, DOL has initiated action and
made limited progress on 3 of the requirements,
completed or met 3, and made no progress to
date on the remaining 7.

DOL’s progress to date has been impaired

by several factors. First, DOL’s Chief Data
Officer had only recently assumed the role to
develop DOL’s policies and procedures for
implementing geospatial laws and regulations.

Further, required guidance and regulations from
the Federal Geospatial Data Committee and

the Office of Management and Budget have not
yet been issued. DOL determined its current
geospatial footprint to be low risk since it is not a
significant producer of geospatial data. For this
reason, DOL decided to wait until data guidance
and regulations are finalized before spending
resources to further develop and implement
policies and procedures. DOL believes it can
meet the deadlines imposed by the GDA once the
required guidance is provided. However, without
sufficient planning efforts underway, there is no
reasonable assurance that DOL will be able to
achieve timely compliance with the GDA.

While planning and implementing standards would
generally improve data handling and information
control, the impact to government-wide geospatial
data collection is low because DOL does not
produce or share geospatial data.

We made recommendations to DOL to better
prepare for full implementation and use of
geospatial data resources.

For more information, go to www.oig.dol.gov/
public/reports/oa/2020/23-20-004-01-001.pdf,
Report No. 23-20-004-01-001 (September 30,
2020).

Semiannual Report to Congress: April 1-September 30, 2020 55
Departmental Management

Reporting Over the U.S. Department of Labor's FY 2019 Compliance with the
Improper Payments Elimination and Recovery Act

Since 2002, federal agencies have been required to identify programs susceptible to significant improper
payments and to estimate and report on actions taken to reduce improper payments for those programs.
The Improper Payments Elimination and Recovery Act of 2010 (IPERA) further requires federal agencies to
take additional steps to reduce improper payments. The OIG contracted with the independent accounting
firm KPMG LLP to conduct a performance audit related to DOL’s compliance with IPERA for the year ended
September 30, 2019.

The first objective of the performance audit was related to DOL’s compliance with the requirements of
Section 3(a)(3) of IPERA. The second was an agreed-upon procedures engagement to assist the OIG in
evaluating certain objectives of OMB Circular No. A-123, Appendix C, Requirements for Payment Integrity
Improvement*. The third objective was to determine the status of corrective action plans related to IPERA
that were reported in DOL’s FY 2018 Agency Financial Report (AFR).

For the first objective, KPMG determined that DOL complied with 5 of the 6 requirements listed in IPERA
Section 3(a)(3). The requirement it did not meet was a UI improper payment rate of less than 10 percent;
DOL’s rate was 10.61 percent.

For the second objective, KPMG determined that DOL implemented certain procedures to address the
requirements of the Do Not Pay Initiative, as defined in Office of Management and Budget Circular No.
A-123, Appendix C.

For the third objective, KPMG determined that of the 16 corrective actions reported in DOL’s FY 2018 AFR,
13 actions remained open, while 3 actions were closed and replaced with new corrective actions. One open
action was updated because DOL did not meet the 10 percent threshold requirement for improper payment
rates.

For more information, go to www.oig.dol.gov/public/reports/oa/viewpdf.php?r=22-20-008-13-001&y=2020,
Report No. 22-20-008-13-001 (May 15, 2020).

4 www.whitehouse.gov/wp-content/uploads/2018/06/M-18-20.pdf.

56 Semiannual Report to Congress: April 1-September 30, 2020
Departmental Management

Risk Assessment of DOL’s Purchase and Travel Card Programs

Pursuant to the Government Charge Card Abuse Prevention Act of 2012 (Charge Card Act), we completed
our required risk assessment of DOL’s purchase and travel card programs as of June 30, 2020. Based

on the results of our assessment, we determined the risk of illegal, improper, or erroneous use of DOL’s
purchase and travel cards was very low to moderate. See Figure 6 for the level of risk we identified for
each of the six key program objectives we assessed separately for the purchase and travel card programs.

The Charge Card Act is designed to prevent recurring waste, fraud, and abuse of government-wide charge
cards. It requires agencies to implement safeguards and internal controls to prevent and detect improper
use of government purchase cards, convenience checks, and travel cards. Inspectors general are required
to conduct periodic risk assessments of agency purchase cards, combined integrated card programs, and
travel card programs to analyze the risks of illegal, improper, or erroneous purchases.

In FY 2019, DOL had 1,026 purchase card holders, who generated 38,201 transactions totaling
approximately $18 million, and 10,352 travel card holders, who generated 265,818 transactions totaling
approximately $38 million. DOL used centrally billed purchase cards and convenience check accounts

FIGURE 6: ASSESSED RISK OF KEY PROGRAM OBJECTIVES NOT BEING ACCOMPLISHED

Purchase Card Program

Accounts Transactions Account Annual results are
are are properly balances are properly reported
properly accounted for paid on time
established in the financial
late! system
maintained

Only used for Transactions
purchases that are made at
are necessary, a reasonable

authorized and/or fair
and supported price
and in which
finds are
available

Travel Card Program

Only used Properly
while on official established and
Government maintained

travel for

Properly accounted Centrally Individually Results are
for in the financial billed travel billed travel properly reported
system charge card charge card
balances are balances are
transactions paid on time paid on time
that are properly
authorized and

supported

Semiannual Report to Congress: April 1-September 30, 2020 57
Departmental Management

as well as individual and centrally billed accounts for travel. DOL’s Office of the Assistant Secretary for
Administration and Management manages the purchase card program, and the OCFO manages the travel
card program. Our assessment resulted in no recommendations to the agency.

For more information, go to www.oig.dol.gov/public/reports/oa/viewpdf.php?r=1 7-20-004-50-598&y=2020,
Report No. 17-20-004-50-598 (September 29, 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.

Single Audits Identified Material Weaknesses or Significant Deficiencies for 40
DOL Grantees

The OIG reviewed 90 single audit reports this period, covering DOL expenditures of about $18 billion.
The auditors identified material weaknesses or significant deficiencies in reports of 40 organizations that
received DOL grant funds. These findings indicate that improvements are needed in those organizations’
management of DOL funds and/or compliance with grant requirements. We reported the 104 findings and
104 related recommendations identified in these 40 single audit reports to the appropriate DOL funding
agencies and requested that the agencies ensure that the grantees take necessary corrective actions.

Under Uniform Guidance,° cognizant federal agencies must oversee the implementation of single audit
requirements. The OIG is currently cognizant for 15 entities and is required to periodically perform quality
control reviews of their single audits. During this reporting period, we initiated one quality control review.

5 Uniform Guidance refers to 2 C.F.R. Part 200, OMB’s “Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.”

58 Semiannual Report to Congress: April 1-September 30, 2020
OIG Whistleblower Activities
OIG Whistleblower Activities

Whistleblower Protection Coordinator

Pursuant to Section 2 of the Whistleblower Protection Coordination Act of 2018 (S.1869, June 25, 2018),
every inspector general’s office is required to designate a whistleblower protection coordinator. According
to Section 2, the coordinator (1) educates agency employees about prohibitions against retaliation for
protected disclosures; (2) educates agency employees who have made or are contemplating making

a protected disclosure about their rights and the remedies against retaliation for protected disclosures,
including the means by which employees may seek review of any allegation of reprisal, as well as the
roles of the OIG, the Office of Special Counsel (OSC), the Merit Systems Protection Board, and any
other relevant entities; and (3) provides general information about the timeliness of such cases, the
availability of any alternative dispute mechanisms, and avenues for potential relief. Within DOL-OIG, an
Assistant Counsel to the Inspector General has been designated to serve as the whistleblower protection
coordinator. Pursuant to this designation, the coordinator has:

¢ Provided input into training that was presented to, and required to be completed by, all DOL employees,
entitled “Prohibited Personnel Practices, Whistleblower Protection”;

¢ Provided live training to all DOL supervisors and managers entitled “Responding to Whistleblower
Retaliation Complaints / Overview of Prohibited Personnel Practices—Annual Training,”

¢ Updated the DOL—OIG public—facing website titled “Whistleblower Protection Coordinator,” which
is available to all DOL and OIG employees, to provide information on whistleblower protections and
options for DOL employees and employees of DOL contractors and grantees;

¢ Established a dedicated e-mail address (OlGWhistleblower@oig.dol.gov) to receive and respond to
whistleblower-related inquiries from DOL employees;

¢ Worked with DOL to help obtain recertification of its 2302(c) program (October 2019);

¢ Obtained the OIG’s recertification of its 2302(c) program (June 2020), and

¢ Monitored whistleblower retaliation complaints received by the OIG, as well as whistleblower retaliation
investigations conducted by the OIG.

60 Semiannual Report to Congress: April 1-September 30, 2020
OIG Whistleblower Activities

Whistleblower Retaliation Investigations

The OIG can initiate its own investigations into allegations of improper or illegal retaliation brought by DOL
employees or, on a discretionary basis, refer such allegations to OSC for review and investigation. During
this reporting period, the OIG received complaints from two DOL employees who allege that they were
retaliated against for engaging in protected activity under the whistleblower protection statute. The OIG is
currently evaluating these complaints to determine how it will proceed.

Further, pursuant to 41 U.S.C. § 4712, the OIG is required, with some exceptions, to investigate
whistleblower retaliation allegations made by employees of DOL contractors or grantees. During this
reporting period, the OIG:

* Closed one investigation into alleged whistleblower retaliation made by an employee of a government
contractor and provided the OIG report to the Secretary of Labor or his designee; and
¢ Ended this reporting period with six pending investigations.

Semiannual Report to Congress: April 1-September 30, 2020 61
OIG Congressional Testimony
OIG Congressional Testimony

OIG Congressional Testimony

During this semiannual reporting period, the OIG provided a briefing for one congressional committee,
and provided a statement for the record for one congressional hearing. The full text of our testimony is
available on our website at www.oig.dol.gov/testimony.htm

June 1, 2020—House Committee on Oversight and Reform: Subcommittee on
Government Operations

Scott S. Dahl, former Inspector General, U.S. Department of Labor, briefed the Subcommittee on
Government Operations.

June 9, 2020—Senate Committee on Finance

Scott S. Dahl, former Inspector General, U.S. Department of Labor, provided a statement for the record on
“Unemployment Insurance During COVID-19: The CARES Act and the Role of Unemployment Insurance
During the Pandemic.”

64 Semiannual Report to Congress: April 1-September 30, 2020
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 on both the economy
and the efficiency of the Department’s programs and on the prevention of fraud, waste, and abuse. The
OIG continues to believe that the following legislative actions are necessary to increase efficiency and

protect the Department’s programs.

Allow DOL and the OIG Access to
Wage Records

The OIG lacks direct access to wage records
necessary to reduce improper payments and
combat fraud in employee benefit programs,
including Ul and DUA. For example, DOL needs
access to the NDNH, which is a nationally
consolidated database that contains UI claimant
data and wage information from state and federal
agencies. Recent legislation enacted in response
to the coronavirus pandemic has substantially
increased government funding to provide
expanded benefits across federal government
programs, including billions of dollars in Ul
benefits.

To enhance oversight of and reduce
overpayments in employee benefit programs,
including the UI, DUA, and FECA programs, the
Department and the OIG also need authority to
access state Ul and SSA wage records. Access
to SSA and UI wage records would also allow the
Department to measure the long-term impact of
employment and training services on job retention
and earnings. This type of outcome information
for program participants is otherwise difficult to
obtain.

66 Semiannual Report to Congress: April 1-September 30, 2020

Because the NDNH contains UI claimant data,
granting the OIG statutory access to NDNH data
would provide the OIG with a valuable source of
information for both audits and investigations. The
NDNH, however, cannot be used for any purpose
not specifically authorized by federal law. In 2004,
the law was amended to allow the state workforce
agencies to cross match UI claims against the
NDNH to better detect overpayments to UI
claimants who have returned to work but continue
to collect Ul benefits. However, the applicable law
does not permit the OIG to obtain NDNH data,
and the OIG cannot use its subpoena authority to
obtain NDNH records. Granting the OIG access
to the NDNH would permit OIG auditors to use
these records to verify Workforce Innovation and
Opportunity Act program participants and their
reported outcomes. In addition, OIG investigators
could use these records to investigate employer
fraud in the UI program, claimant fraud in the
FECA program, and prevailing wage violations by
federal contractors.

Enact the UI Integrity Legislative
Proposals

In October 2016, the Department submitted

a legislative package to Congress proposing
legislative changes that would help address UI
program integrity and the high improper payment
rates experienced in the Ul program. These
Legislative Recommendations

proposals were also included in each of the
President’s budget requests since FY 2018. The
OIG encourages Congress to consider and adopt
these proposals to aid the Department's efforts
to combat improper payments in the UI program.
The proposals include the following:

« Require states to use the State Information
Data Exchange System.

¢ Require states to cross match UI claims
against the NDNH.

¢ Allow the Secretary of Labor to require states
to implement UI corrective actions related to
performance and integrity.

¢ Require states to cross match UI claims
with SSA's prisoner database and other
repositories of prisoner information.

¢ Allow states to retain 5 percent of Ul
overpayment recoveries for program integrity
use.

e Require states to use UI penalty and interest
collections solely for Ul administration.

In addition to the above, the President’s FY
2020 budget request included a new proposal to
require states to access data sources available
through the UI Integrity Center’s Integrity Data
Hub (IDH). IDH contains a Suspicious Actor
Repository that allows states to exchange data
elements from known fraudulent UI claims and
contains additional near-real-time data sources to
help states detect improper payments and fraud,
including an identity verification tool to prevent
fraudulent UI benefit claims. This proposal will
require states to cross match UI claims against
the data sources available through IDH. The UI
program’s system wide use of IDH will result in
increased prevention, detection, and recovery of
improper and fraudulent payments.

These legislative proposals are consistent with
previous OIG findings and recommendations to
address UI improper payments.

Provide Authority to Ensure the
Integrity of the H-1B Program

If DOL is to have a meaningful role in the H-1B
specialty-occupations FLC process, it must have
the statutory authority to ensure the integrity

of that process, including the ability to verify

the accuracy of information provided on labor
condition applications, and to initiate its own

H-1B investigations. Currently, the Department is
statutorily required to certify an H-1B application
unless it determines that the application is
“incomplete or obviously inaccurate.” Also, DOL
may not initiate its own H-1B investigations based
on factors outside the four statutory criteria, unlike
investigations into the H-2A and H-2B programs.

Our concern with the Department’s limited ability
to ensure the integrity of the certification process
is heightened by the results of OIG analyses
and investigations showing that the program

is susceptible to significant fraud and abuse,
particularly by employers and attorneys.

Amend Pension Protection Laws

Legislative changes to ERISA and criminal
penalties for ERISA violations would enhance the
protection of assets in pension plans. To this end,
the OIG recommends the following legislative
actions:

¢ Repeal ERISA’s limited-scope audit
exemption. This exemption excludes
pension plan assets invested in financial
institutions, such as banks and savings and
loans, from audits of employee benefit plans.
Notwithstanding recent changes to auditing

Semiannual Report to Congress: April 1-September 30, 2020 67
Legislative Recommendations

standards strengthening limited-scope
audits, these audits prevent independent
public accountants who are auditing pension
plans from rendering an opinion on the
plans’ financial statements in accordance
with professional auditing standards. These
“no opinion” audits provide no substantive
assurance of asset integrity either to plan
participants or to the Department.

Expand the authority of EBSA to correct
substandard benefit plan audits and
ensure that auditors with poor records

do not perform additional plan audits.
Changes should include providing EBSA

with greater enforcement authority over
registration, suspension, and debarment as
well as the ability to levy civil penalties against
employee benefit plan auditors. The ability to
correct substandard audits and take action
against auditors is important because benefit
plan audits help protect participants and
beneficiaries by ensuring the proper valuation
of plan assets and computation of benefits.

Require direct reporting of ERISA
violations to DOL. Under current law, a
pension plan auditor who finds a potential
ERISA violation is responsible for reporting

it to the plan administrator but not directly

to DOL. To ensure that improprieties are
addressed, we recommend that plan
administrators or auditors be required to report
potential ERISA violations directly to DOL.
This change would ensure the timely reporting
of violations and would more actively involve
auditors in safeguarding pension assets,
providing a first line of defense against the
abuse of workers’ pension plans.

Semiannual Report to Congress: April 1-September 30, 2020

Strengthen criminal penalties in U.S.C.
Title 18. Three sections of U.S.C. Title 18
serve as the primary criminal enforcement
tools for protecting pension plans covered by
ERISA. Embezzlement or theft from employee
pension and welfare plans is prohibited by
Section 664; making false statements in
documents required by ERISA is prohibited by
Section 1027; and, giving or accepting bribes
related to the operation of ERISA-covered
plans is prohibited by Section 1954. Sections
664 and 1027 subject violators to up to 5
years’ imprisonment, while Section 1954 calls
for up to 3 years’ imprisonment for violators.
We believe the maximum penalty should be
raised to 10 years for all three violations to
correspond with the 10-year penalty imposed
by Section 669 (theft from health care benefit
programs), to serve as a greater deterrent and
to further protect employee pension plans.

Improve the Integrity of the FECA
Program

The OIG believes reforms should be considered
to improve the effectiveness and integrity of the
FECA program in the following areas:

Provide statutory access to Social Security
wage records and the NDNH. Currently,

the Department can access Social Security
wage information only if the claimant gives

it permission to do so, and it has no access
to NDNH data. Granting the Department
routine access to these databases would aid
in detecting fraud committed by individuals
receiving FECA wage loss compensation but
failing to report income they have earned.

Establish a 3-day waiting period at the
beginning of the claim process. FECA
Legislative Recommendations

legislation provides for a 3-day waiting period,
which is intended to discourage the filing

of frivolous claims. As currently written, the
legislation places the waiting period at the
end of the 45-day continuation-of-pay period,
thereby negating its purpose. Legislation
passed in 2006 placed the waiting period

for postal employees immediately after an
employment-related injury. If the intent of the
law is to ensure a true waiting period before
an employee applies for benefits, then that
period should likewise come immediately after
an employment-related injury for all federal
workers, not exclusively postal employees.

¢ Allow the temporary suspension of
questionable medical providers pending
the outcome of an investigation. While
FECA regulations allow OWCP to exclude
a provider through administrative means,
OWCP must provide notice to the provider
and afford the provider an opportunity for a
hearing before DOL’s Office of Administrative
Law Judges. This process and the various
procedures involved can be lengthy. Although
the Department's suspension and debarment
process is being successfully applied to
FECA medical providers, legislative changes
are needed to enable DOL to immediately
suspend all payments to providers who have
been indicted for fraudulent billing practices.
This proposal was included in the President's
budget proposal for FY 2019.

¢ Set prescription drug price limitations.
Through the Federal Ceiling Price statute (38
U.S.C. § 8126), Congress mandated controls
on the prices that manufacturers can charge
for drugs in four specific medical programs
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 workers in
coal and other mines. To that end, the Mine Act
contains provisions authorizing the Secretary to
issue mine closure orders. Specifically, Section
103(j) states that in 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 or she 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 or she 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
MSHA’s authority.

MSHA has long-standing and critically important
authority to issue mine closure orders and

take other actions as necessary to protect
miners’ health and safety. Therefore, the OIG
recommends a review of the existing “rescue and
recovery work” language found in Section 103(j)
and the “when present” language found in Section
103(k). Reviewing the language in those sections
is necessary to ensure that the Secretary's
authority is broad, clear, and not vulnerable to
challenge.

Semiannual Report to Congress: April 1-September 30, 2020 69
Appendices

Reporting Requirements Under
the Following Acts

Inspector General Act of 1978

REPORTING REQUIREMENT PAGE
; Recommendations on Existing and Proposed Legislation and 66
Section 4(a)(2) Regulations relating to the programs and operations of DOL
‘ Description of Significant Problems, Abuses, and Deficiencies relating ALL
Section 5(a)(1) to the administration of programs and operations
Section 5(a)(2 Description of Recommendations for Corrective Action with Respect to ALL
ection 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
Section 5(a)(4) Matters Referred to Prosecutive Authorities and the Prosecutions and 96

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 77
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, 76

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

period, including the dollar value of disallowed and not disallowed

costs

Statistical Tables on Management Decisions on Recommendations 75
That Funds Be Put to Better Use
(A);(D) for which no management decision had been made by the
beginning or the end of the reporting period;

Section 5(a)(9) (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

72 Semiannual Report to Congress: April 1-September 30, 2020
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
Section 5(a)(10) been made, and a statement concerning the desired timetable for
achieving a management decision on each such report;
(B) for which no establishment comment was returned within 60 days
of providing the report to the establishment; and
(C) for which there are any outstanding unimplemented
recommendations, including the aggregate potential cost savings of
those recommendations
. Description and Explanation for Any Significant Revised Management None to
Section 5(a)(11) Decision P ye" 3 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 98
Section 5(a)(14) (A) Results of any peer review conducted by another OIG; or
(B) Astatement identifying the date of the last peer review conducted
Section 5(a)(15) Outstanding Peer Review Recommendations Noort”
Peer Reviews Conducted by DOL-OIG and Recommendations None to
Section 5(a)(16) Outstanding or Not Fully Implemented report
Statistical Tables on Investigative Findings Showing Total Number of— 96
(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 96
Section 5(a)(18) Section 5(a)(17) ee
Summary of Investigations of Senior Government Employees Where None to
Section 5(a)(19) Allegations of Misconduct Were Substantiated—including the facts, report
circumstances, status, disposition of the matter, and name of the
official if made public by the Office
Description of Whistleblower Retaliation Cases Including Information 67

Section 5(a)(20)

About the Official Found to Have Engaged in Retaliaton and What, if
any, Consequences that Establishment Imposed to Hold that Official
Accountable

Semiannual Report to Congress: April 1-September 30, 2020 73
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 98

74 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Funds Recommended for Better Use

Funds Put to a Better Use Agreed to by DOL*
Number of Dollar Value
Reports ($ millions)

Issued during the reporting period

For which management decision was made during the reporting period:
e Dollar value of recommendations that were not agreed to by management Po 0.0

Funds Put to a Better Use Implemented by DOL
Number of Dollar Value
Reports ($ millions)
For which management or appeal decisions were made during the reporting period 11.2
For which management decision was made during the reporting period:

e Dollar value of recommendations that management has subsequently concluded
should not or could not be implemented or completed

* The term “recommendation that funds be put to better use” means a recommendation by the OIG that funds could be used more

efficiently or achieve greater program effectiveness if management took actions to implement and complete the recommendation.
This term is defined by the Inspector General Act and includes, among other things, reductions in future outlays; deobligation of
funds from programs or operations; costs not incurred in the future by implementing recommended improvements related to the
operations of the establishment, a contractor, or a grantee; and any other savings specifically identified, including reverting funds to

the U.S. Treasury to be used for other purposes.

Semiannual Report to Congress: April 1-September 30, 2020 75
Appendices

Questioned Costs

Resolution Activity: Questioned Costs*'

Questioned
Costs
($ millions)

Number of
Reports

Issued during the reporting period

For which a management decision was made during the reporting period:

e Dollar value of costs not disallowed

For which no management decision had been made within six months of issuance 8 4.50

Closure Activity: Disallowed Costs

Disallowed
Costs
($ millions)

Number of
Reports

For which management or appeal decisions were made during the reporting period 0.08

For which final action was taken during the reporting period: a ee
e Dollar value of disallowed costs that were written off ee)

For which no final action had been taken by the end of the reporting period 58 11.80

* 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.

’ Includes questioned costs from Single Audits.

76 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Final Audit Reports Issued

Funds Put to

Number of Questioned Other Monetary
Secs EU) Recommendations Costs ($) ay Impact ($)
Worker Safety Programs
Mine Safety and Health Administration
COVID-19: MSHA Faces Multiple Challenges in
Responding to the Pandemic; Report No. 19-20-
006-06-001; 07/24/20 2 0 0 0
Office of Safety and Health Administration
COVID-19: OSHA Needs to Improve Its Handling
of Whistleblower Complaints During the Pandemic;
Report No. 19-20-010-105; 08/14/20 3 0 0 0
Total (2 Reports) 5 0 0 0
Employment and Training Programs
Bureau of International Labor Affairs
ILAB Could Improve Oversight of Child Labor and
Forced Labor Grants; Report No. 17-20-003-01-
070; 09/25/20 2 0 0 0
Employment and Training Administration
COVID-19: ETA Should Continue to Closely
Monitor Impact on Job Corps Program: Report No.
19-20-007-03-370; 07/28/20 5 0 0 0
CARES Act: Key Areas of Concern Regarding
Implementation of Dislocated Worker Grant
Provisions; Report No.19-20-005-03-391; 06/23/20 0 0 0 0
CARES Act: Initial Areas of Concern Regarding
Implementation of Unemployment Insurance
Provisions; Report No. 19-20-001-03-315;
04/21/20 0 0 0 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 4 0 0 0
ETA Could Not Demonstrate That Credentials
Improved WIOA Participants’ Employment
Outcomes; Report No. 03-20-002-03-391;
09/30/20 2 0 0 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 3 95,699 5,600,000 0
Total (7 Reports) 16 $95,699 $5,600,000 0
Departmental Programs
Office of the Assistant Secretary of Administration and Management
DOL Could Improve Areas of Physical Security to
Help Effectively Safeguard Employees; Report No.
17-20-001-07-001; 05/21/20 7 0 0 0
Risk Assessment of DOL’s Purchase and Travel
Card Programs; Report No. 17-20-004-50-598;
09/29/20 0 0 0 0

Semiannual Report to Congress: April 1-September 30, 2020 77
Appendices

Final Audit Reports Issued, continued

Funds Put to
Better Use

($)

Number of Questioned
Recommendations Costs ($)

Other Monetary
Impact ($)

Report Name

Office of the Chief Financial Officer

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 0 0

Reporting over the U.S. Department of Labor’s
FY 2019 Compliance with the Improper Payments
Elimination and Recovery Act; Report No. 22-20-
008-13-001; 05/15/20 0 0 0 0

Office of the Secretary

DOL Needs to Do More to Implement the
Geospatial Data Act of 2018; Report No. 23-20-
004-01-001; 09/30/20 2

Total (5 Reports) 11
Worker Benefit Programs

Office of Workers’ Compensation Program

COVID-19: OWCP Should Continue to Closely
Monitor Impact on Claims Processing; Report No.
19-20-004-04-001; 07/06/20 5 0 0 0

Federal Employees’ Compensation Act Program

FECA SSAE 18 Combined Report: Service
Auditors’ Report on the Integrated Federal
Employees’ Compensation System and Service
Auditors’ Report on the Central Bill Processing
System and Service Auditors’ Report on the U.S.
Department of Labor Workers’ Compensation
Medical Bill Processing System; Report No. 22-20-
009-04-431; 09/30/20 0 0 0 0

Office of Foreign Labor Certification

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 0 0

Total (3 Reports) 6 0 0 0

78 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Final Audit Reports Issued, continued

Funds Put to
Better Use

($)

Number of Questioned
Recommendations Costs ($)

Other Monetary
Impact ($)

Report Name

Workers’ Rights Programs

Wage and Hour Division

COVID-19: WHD Needs To Closely Monitor The
Pandemic On Its Operations; Report No. 19-20-
009-15-001; 08/07/20 4 0 0 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 0 0
Total (2 Reports) 7 0 0 0
Final Audit Report Total (18 Reports)! 45 $95,699 $5,600,000 0

Other Reports

Number of

Report Name Recommendations

Employment and Training Programs

Alert Memorandum: ETA Needs to Improve its Plans for Providing Administrative, Financial
Management, and Audit Requirements Relief to Grant Recipients Impacted by the Novel Coronavirus
(COVID-19); Report No. 19-20-003-03-001; 05/19/20 1

Total (1 Report) 1
Worker Benefit Programs

Unemployment Insurance

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

Office of Workers’ Compensation Programs

Alert Memorandum: Vulnerability in OWCP FECA Bill Pay Processing System; Report No.50-20-001-
04-430; 05/07/20

Total (2 Reports) 2
Other Reports Total (3 Reports) 3

‘This amount reflects the total number of Final Audit Reports issued during the semi-annual period. One report is reflected twice in
the table to account for recommendations within the same report directed toward two different agencies; however, the report is not

double counted.

Semiannual Report to Congress: April 1-September 30, 2020 79
Appendices

Single Audit Reports Processed

Number of Questioned

Program/Report Name Recommendations Costs ($)

Dallas Inter-Tribal Center DBA Urban Inter-Tribal Center of Texas; Report No. 24-20-526-

03-355; 06/19/20 4 0
El Corredor Techno Economico De Puerto Rico Y El Caribe, Inc.; Report No. 24-20-523-

03-390;06/19/20 2 0
City of Springfield, Missouri; Report No. 24-20-525-03-390; 06/19/20 1 465,000
Southwest Georgia United Empowerment Zone Inc. and Subsidiary; Report No. 24-20-

527-03-391; 06/19/20 1 0
State of New York; Report No. 24-20-522-03-315; 06/19/20 1 0
Commonwealth of Massachusetts; Report No. 24-20-554-02-201; 09/28/20 1 0
State of West Virginia; Report No. 24-20-524-03-315; 06/19/20 5 12,894
Lumbee Regional Development Association Inc.; Report No. 24-20-531-03-355; 09/22/20 1 0
National Indian Youth Council, Inc.; Report No. 24-20-540-03-355; 09/28/20 2 0
Alu Like, Inc.; Report No. 24-20-561-03-355; 09/29/20 4 0
Oregon Human Development Corporation; Report No. 24-20-539-03-365; 09/28/20 1 39,240
Volunteers of America Chesapeake, Inc. and Subsidiaries, Including Volunteers of

America of the Carolinas, Inc.; Report No. 24-20-528-03-390; 09/21/20 1 0
Private Industry Council of Passaic County, Inc.; Report No. 24-20-529-03-390; 09/22/20 1 1,910
Building Futures; Report No. 24-20-530-03-390; 09/22/20 2 0
Commonwealth of Kentucky; Report No. 24-20-542-03-390; 09/28/20 3 0
Goodwill Industries of Grand Rapids, Inc.; Report No. 24-20-545-03-390; 09/28/20 1 0
Metropolitan School District of Pike Township; Report No. 24-20-546-03-390; 09/28/20 2 0
Trwib Inc. and Affiliate D/B/A Partner4work; Report No. 24-20-547-03-390; 09/28/20 1 0
YouthBuild Lake County, Inc.; Report No. 24-20-549-03-390; 09/28/20 2 0
Friendly House Inc.; Report No. 24-20-550-03-390; 09/28/20 3 69,379
Jobs for the Future; Report No. 24-20-552-03-390; 09/28/20 1 0
Commonwealth of Massachusetts; Report No. 24-20-553-03-390; 09/28/20 5 0
State of Nevada; Report No. 24-20-555-03-390; 09/28/20 3 0
Center for Self Sufficiency, Inc.; Report No. 24-20-557-03-390; 09/28/20 1 0
Commonwealth of Virginia; Report No. 24-20-532-03-315; 09/22/20 1 0
State of Alaska; Report No. 24-20-533-03-31; 09/22/20 4 0
State of Louisiana; Report No. 24-20-534-03-315; 09/22/20 3 0
State of Tennessee; Report No. 24-20-535-03-315; 09/22/20 4 0
State of Florida; Report No. 24-20-536-03-315; 09/22/20 12 23,634
State of North Carolina; Report No. 24-20-537-03-315; 09/22/20 1 0
State of Hawaii Department of Accounting and General Services; Report No. 24-20-538-

03-315; 09/28/20 4 0
State of Wyoming; Report No. 24-20-541-03-315; 09/28/20 1 0
State of lowa; Report No. 24-20-543-03-315; 09/28/20 5 0
State of Minnesota; Report No. 24-20-544-03-315; 09/28/20 4 22,801
State of New Jersey; Report No. 24-20-548-03-315; 09/28/20 3 1,071
State of Maine; Report No. 24-20-551-03-315; 09/2/20 2 10,375

80 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Single Audit Reports Processed, continued

State of Oklahoma; Report No. 24-20-556-03-315; 09/28/20 2 37,075
State of Connecticut; Report No. 24-20-558-03-315; 09/28/20 4 0
State of Rhode Island and Providence Plantations; Report No.24-20-559-03-315;

09/28/20 1 0
Government of the United States Virgin Islands; Report No. 24-20-560-03-315; 09/29/20 5 0
Single Audit Report Total (40 Reports) 105 $683,379

Semiannual Report to Congress: April 1-September 30, 2020 81
Appendices

Unresolved Audit Reports Over 6 Months Old

Number of Questioned Costs
Agency Management Decision or Grant/Contracting Officer’s Final Determination Did Not Resolve; OIG Negotiating with
Agency

ETA ETA Violated the Bona Fide Needs Rule and the Antideficiency

Act; Report No. 26-17-002-03-370; 09/21/17 1 0
ETA Job Corps Should Do More to Prevent Cheating in High School

Programs; Report No. 26-19-001-03-370; 09/25/19 4 0
MSHA MSHA Needs to Provide Better Oversight of Emergency

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
OASAM FISMA Fiscal Year 2015: Ongoing Security Deficiencies Exist;

Report No. 23-16-002-07-725; 09/30/16 1 0
OSHA OSHA Procedures for Issuing Guidance Were Not Adequate and

Mostly Not Followed; Report No. 02-19-001-10-105; 03/28/19 1 0

DATA Act: DOL’s Reported Data Generally, Met Quality Standards
OCFO But Accuracy Issue Remain; Report No 03-20-001-13-001;

11/21/19 3 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 2 0

Agency Management Decision or Grant/Contracting Officer’s Final Determination Not Made on the Following
Recommendations by Close of Period

ETA Single Audit: State of Hawaii Department of Accounting and

General Services; Report No. 24-19-521-03-315; 06/10/19 8 0
ETA Single Audit: State of Texas c/o Comptroller of Public Accountants;

Report No. 24-19-525-03-315; 06/25/19 1 0
ETA Single Audit: State of Tennessee; Report No. 24-19-527-03-315;

07/11/19 3 0
ETA Single Audit: State of Oklahoma; Report No. 24-19-541-03-315;

07/23/19 1 0
ETA Single Audit: Commonwealth of Puerto Rico Department of Labor

and Human Resources; Report No. 24-19-543-03-315; 07/23/19 8 0
ETA Single Audit: South Carolina Department of Employment and

Workforce; Report No. 24-20-503-03-315; 10/29/19 10 0
ETA Single Audit: State of Illinois; Report No. 24-20-510-03-315;

12/05/19 15 129,251
ETA Single Audit: Government of the United States Virgin Islands;

Report No. 24-20-515-03-315; 12/10/19 3 0
ETA Single Audit: State of Utah; Report No. 24-20-520-03-315;

03/04/20 1 0
ETA Single Audit: Alu Like, Inc.; Report No. 24-19-529-03-355;

07/11/19 1 0
ETA Single Audit: Southern California Indian Center, Inc.; Report No.

24-19-546-03-355; 07/30/19 1 0

82 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Unresolved Audit Reports Over 6 Months Old,

ETA Single Audit: Flying High, Inc.; Report No. 24-19-518-03-360;

05/21/19 6 0
ETA Single Audit: National Asian Pacific Center on Aging; Report No.

24-20-504-03-360; 10/29/19 2 54,032
ETA Single Audit: Operation A.B.L.E. of Greater Boston,Inc.; Report

No. 24-20-507-03-360; 11/21/19 1 0
ETA Single Audit: Experience Works, Inc. and Affiliate; Report No. 24-

20-509-03-360; 12/05/19 2 0
ETA Single Audit: Inter-Tribal Council of Louisiana, Inc.; Report No. 24-

20-514-03-360; 12/10/19 9 0
ETA Single Audit: National Asian Pacific Center on Aging; Report No.

24-20-517-03-360; 01/28/20 2 75,565
ETA Single Audit: Oregon Human Development Corporation; Report

No. 24-19-522-03-360; 06/11/19 1 0
ETA Single Audit: National Plastering Industry’s Joint Apprenticeship

Trust Fund; Report No. 24-18-524-03-370; 06/07/18 1 0
ETA Single Audit: Experience Works; Report No. 24-16-552-03-390;

06/13/16 3 1,619,324
ETA Single Audit: Experience Works, Inc. and Affiliates; Report No. 24-

17-572-03-390; 08/03/17 4 1,991,900
ETA Single Audit: State of New Mexico Workforce Solution

Department; Report No. 24-19-513-03-390; 03/15/19 3 0
ETA Single Audit: lvy Technical Community College of Indiana; Report

No. 24-19-532-03-390; 07/16/19 3 0
ETA Single Audit: State of Ohio; Report No. 24-19-533-03-390;

07/16/19 2 0
ETA Single Audit: Jobs for the Future, Inc.; Report No. 24-19-535-03-

390; 07/18/19 2 0
ETA Single Audit: State of Connecticut; Report No. 24-19-547-03-390;

07/30/19 5 184,870
ETA Single Audit: Puerto Rico Department of Economic Development

and Commerce; Report No. 24-20-501-03-390; 10/08/19 4 418,244
ETA Single Audit: The Urban League of Greater Atlanta, Inc.; Report

No. 24-20-502-03-390; 10/29/19 2 79,853
ETA Single Audit: Manufacturing Renaissance; Report No. 24-20-506-

03-390; 11/21/19 2 0

Single Audit: El Corredor Techno Economico De Puerto Y El
ETA Carico, Inc., for the Year Ended June 30, 2017; Report No. 24-20-

508-03-390; 12/05/19 3 0
ETA Single Audit: Guadalupe Alternative Programs; Report No. 24-20-

512-03-390; 12/10/19 2 0
ETA Single Audit: Youth Conservation Corps and Affiliates; Report No.

24-20-513-03-390; 12/10/19 4 0
ETA Single Audit: Puerto Rico Department of Economic Development

and Commerce; Report No. 24-20-521-03-390; 03/04/20 3 0

Semiannual Report to Congress: April 1-September 30, 2020 83
Appendices

Unresolved Audit Reports Over 6 Months Old,
continued

Single Audit: New Mexico Environment Department; Report No.

OSHA 24-19-515-10-001; 05/08/19 1 0

Funds

Report Name Recommendations Recommended for
Better Use ($)

Number of

Total Funds Recommended for Better Use 0 $0

Total Nonmonetary Recommendations and Questioned Costs 135 $4,553,039

Total Audit Exceptions and Funds Recommended for Better Use $4,553,039

84 Semiannual Report to Congress: April 1-September 30, 2020
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 some of the most significant
actions.

Control Over the Release of the UI Weekly Claims Report Need Improvement;
Report No. 17-14-001-03-315; 01/02/2014; The Department Remains Vulnerable
to Premature Release of Embargoed Economic Data; Report No. 17-16-001 -01-
001; 03/25/2016

Lock-ups are used to allow select news organization early access to embargoed economic data to enable
them to to prepare summaries and analyses of the data before they are officially released. Because
embargoed data can impact financial markets, controls over the lock up are critical in protecting the data
from unauthorized use and disclosure.

Our audits found that: (1) the Employment and Training Administration (ETA) unintentionally created an
unfair competitive advantage for certain news organizations and their clients by operating an optional
press lock-up to provide news organizations pre release access to the embargoed Unemployment Claims
Reports; (2) the Bureau of Labor Statistics (BLS) utilized press lock-ups to provide news organizations pre-
release access to market-moving economic data; and (3) a news organization in the press lock-up used
data-queuing software that exploited the active Internet connection and automatically transmitted data—
without any human interaction—before the embargo ended. News organizations in the press lock-up use
this software for faster data transmission when an embargo ends, but it provides no benefit to the general
public or the Department and increases the likelihood of a premature data release.

In response to our report, BLS and ETA devoted significant resources to improving their technologies to
ensure that embargoed economic data are posted and accessible on their websites immediately following
the official release time. When the COVID-19 pandemic required the closure of the media lock-up, these
improved technologies allowed BLS and ETA to disseminate the data immediately and widely to the public
without incident and without providing early access to lock-up participants. As such, the Department
permanently discontinued its media lock-ups for all economic releases. BLS and ETA will continue to make
their data available to the public immediately when the embargo ends through the Web and other sources.

Semiannual Report to Congress: April 1-September 30, 2020 85
Appendices

Corrective Actions Taken by the Department,
continue

Department of Labor Needs Improvements in Managing Its Records
Management Program to Capture Electronic Messages for Preserving Federal
Records; Report No. 17-19-001-07-001; 09/20/2019

Federal electronic records pose a challenge to record keeping in the Federal Government. All DOL
employees must be aware of their records management responsibilities. Our audit found that DOL needs
to improve the controls in place to better preserve Federal records (or potential Federal records) of
electronic messages other than e-mails. In response to our audit, DOL issued a new electronic messages
policy that contains specific guidance for social media (e.g., Twitter, Facebook, Instagram), text messages,
instant messages (Skype for Business, Microsoft Teams, etc.), and websites. In addition, DOL updated
the Records Management Training for all employees to include a Records Management Rules of Behavior
Acknowledgement Form. In August 2020, DLMS-1-500 Records Management was updated to include
policies and procedures for the Department’s Capstone Approach guidance.

Investigative Advisory Report: Recommendations for Enhancing Forms Used
for H-2B Non-Agricultural Temporary Workers; Report No. 50-19-001-03-321;
01/30/2019

In FY 2019, the OIG made six recommendations for improvements to the application form the Employment
Training Administration’s Office of Foreign Labor Certification (OFLC) uses in the H-2B program. The

OIG has routinely reported that one of the top management challenges facing DOL is ensuring that U.S.
employers comply with statutory requirements intended to protect U.S. workers against adverse impacts
on their job opportunities, wages, and working conditions when U.S. employers hire foreign workers. OIG
investigations have shown OFLC programs are susceptible to fraud and abuse by dishonest immigration
attorneys, employers, labor brokers, and organized criminal enterprises. The ambiguity of application form
ETA-9142B, which is used in the H-2B program, has created obstacles in our efforts to prosecute offenders
who have committed fraud against the program.

In response to our recommendations, ETA made significant changes to the application form. These
changes included: a) requiring petitioners and preparers to affirm that they have read and understood the
attestations they declared in the application; b) clarifying the petitioners and preparer’s responsibility to
accurately complete the application form; and c) acknowledging the consequences of misrepresentation on
attestations and declarations made on the application.

86 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Unimplemented Recommendations

During this reporting period, we did not encounter any instances of audits or evaluations provided to the
Department for comment that were not responded to within 60 days. Furthermore, agencies have provided
management decisions in response to all audits and evaluations issued before the commencement of this
reporting period.

From October 1, 2011, through March 31, 2020, the OIG made 1,469 audit recommendations to the
Department, of which 163 have not been fully implemented. These 163 recommendations include
93 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
APRIL 1, 2020, NOT YET IMPLEMENTED

Fiscal Total Number of Unimplemented Recommendations

Year Recommendations Made Total Number Monetary Impact ($)

2011 319 6

2012 213 3

2013 195 2

2014 128 7 126,500,000
2015 163 8 48,404
2016 100 3

2017 112 22

2018 98 19 15,042,248
2019 84 45

2020 57 48

Total 1,469 163 $141,590,652

Semiannual Report to Congress: April 1-September 30, 2020 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

MSHA Can Improve How It Responds to and Tracks
Hazardous Condition Complaints;
Report No. 05-16-002-06-001; 09/30/16

Establish standard completion goals for post-complaint inspections.

MSHA Needs to Provide Better Oversight of
Emergency Response Plans;

Report No. 05-17-002-06-001; 03/31/17

Clarify mine operators’ responsibilities for local coordination under
the MINER Act, including coordination and communication among
the operator, mine rescue teams, and local emergency response
personnel, and familiarizing local rescue personnel with surface
functions that may be required in the course of mine rescue work.

COVID-19: OSHA Needs to Improve Its Handling of
Whistleblower Complaints During the Pandemic

Report No. 19-20-010-10-105; 8/14/20

Continue to monitor and evaluate the Region II triage pilot and
consider extending the triage process to all regions to expedite the
screening of whistleblower complaints.

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;

Report No. 05-17-001-12-121; 11/18/16

Reduce or eliminate exemption thresholds for small plans.

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

Develop effective procedures, including seeking legislative authority to
conduct matches with SSA retirement records, to ensure that claimants
who receive SSA retirement benefits are identified timely and their
FECA benefits are adjusted accordingly.

OWCP Must Continue Strengthening Management of
FECA Pharmaceuticals, Including Opioids;

Report No. 03-19-002-04-431; 5/14/19

Ensure that the pharmacy benefits manager (PBM) implements a

drug utilization review as specified in the contract. Ensure that the
PBM, when developing its formulary, considers all classes of drugs to
determine if prior authorization or letters of medical necessity would be
appropriate.

COVID-19: WHD Needs to Closely Monitor the
Pandemic Impact on Its Operations

Report No. 19-20-009-15-001; 08/07/20

Develop a plan to monitor the effectiveness of the agency’s oversight
of the FFCRA and the FLSA programs so that the agency can identify
if or when operational adjustments are necessary to most effectively
utilize resources. Maintain a backlog of delayed on-site investigations
and develop a plan to manage the backlog once normal operations
resume.

Determine the impact of the decision issued by the United States
District Court for the Southern District of New York to the agency and
its mission, and take appropriate action to address its impact. Update
the agency’s COVID-19 operating plan addendum regarding the
agency’s oversight of the FFCRA to include: a. Specific performance
goals; b. Agency plans to use the $2.5 million received from the
CARES Act; c. Enforcement and outreach plans for the FFCRA once
COVID-19 restrictions are lifted; and d. Enforcement plans for the
FFCRA after it expires on December 31, 2020.

Semiannual Report to Congress: April 1-September 30, 2020
Appendices

High-Priority Unimplemented
Recommendations, continued

Unemployment Insurance Benefits

DOL Did Not Comply with Improper Payments
Elimination and Recovery Act for FY 2017;

Report No. 03-18-002-13-001; 05/15/18

Maintain management's current focus on increasing technical
assistance and funding to states to improve the improper payment
reduction strategies to ensure compliance with the improper payments
estimate rate threshold.

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

Include CARES Act UI transactions in the BAM or develop an
alternative methodology to reliably estimate improper payments for
those programs, and issue guidance directing states to provide access
to state UI claimant data, in order to prevent and detect fraud.

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

Consider tools already available under the CARES Act such as those
cited 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.

Departmental Management

FISMA Fiscal Year 2015: Ongoing Security Deficiencies
Exist;

Report No. 23-16-002-07-725; 09/30/16

Realign the organizational structure as it relates to the ClO to address
organizational independence issues.

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

Implement improvements in DOL’s information security program for
the following areas: Risk Management, Configuration Management,
Identity and Access Management, Data Protection and Privacy,
Information Security Continuous Monitoring, Incident Response, and
Contingency Planning.

DATA Act: DOL’s Reported Data Generally Met Quality
Standards but Accuracy Issues Remain;

Report No. 03-20-001-13-001; 11/21/19

Identify risks specific to DATAAct reporting and take appropriate action
to ensure that internal controls address the resulting areas of concern.

Stronger Controls Needed over Web Application
Security;

Report No. 23-20-001-07-725; 11/14/19

Implement processes to maintain an inventory for the purpose of
ensuring that web applications are timely and properly secured.
Review and update DOL policies to ensure that corrective actions for
web applications are timely implemented. Implement Department-wide
policies and procedures specific to securing web applications, web
servers, and web application coding.

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

Establish and implement procedures to ensure that E2 is managed in
compliance with contractual security requirements and DOL computer
security policies for contracted information systems, and establish
and implement procedures to ensure that E2 account management
practices enforce DOL’s security policies. These procedures must
include application of the principle of least privilege when creating,
monitoring, and deactivating E2 user accounts.

Job Corps Safety

COVID-19: ETA Should Continue To Closely Monitor
Impact on Job Corps Program

Report No. 19-20-007-03-370; 07/28/20

Prior to reopening campuses, Job Corps should ensure that all centers
have proper controls in place to adhere to federal, state, local, and
other guidelines—from physical distancing to having ample disinfec-
tant, cleaning, and PPE supplies; and Job Corps should ensure that
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.

Semiannual Report to Congress: April 1-September 30, 2020

89
Appendices

Summary of Reports with Unimplemented
Recommendations with Cost Savings / Funds
Put to Better Use

Number of

Report Name Recommendations

Funds Put to Better Use ($)

DOL Could Improve Exit Requirements and Participant Outcomes for
the YouthBuild Program; Report No. 04-18-002-03-001; 03/30/18

We recommended that the Assistant Secretary for Employment and
Training clarify the definition of a “successful exit” and require its use 1 12,600,000
by all grantees. At a minimum, this definition should require that the
successful exiter earn a high school diploma or equivalency degree
or an industry-recognized credential, have a job follow-up plan in
place, and receive referrals to either an employer or school.

90 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Summary of Reports with Unimplemented
Recommendations with Other Monetary
Impact

Number of

Recommendations Funds Put to Better Use ($)

Report Name

Employment and Training Administration

Job Corps Contractor and DOL Procurement Practices Need
Improvement; Report No. 26-14-002-03-370; 09/24/14

We recommend that the Assistant Secretary for Employment and
Training require the Regional Job Corps Offices and respective ETA
contracting officers to refer the 4 small business set-aside contracts
we identified held by AET and APS to SBA for review and guidance
on corrective action, if warranted.

1 126,500,000
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
determine and assess liquidated damages to contractors that
misreported data based on invalid placements.

51,750

Total 2 $126,551,750

Semiannual Report to Congress: April 1-September 30, 2020 91
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).

Costs Owed ($)

Report Name Unimplemented
Recommendations

Office of the Chief Financial Officer

Management Advisory Comments Identified in an Audit of the Consolidated
Financial Statements for the Year Ended September 30, 2015;
Report No. 22-16-004-13-001; 03/25/16 1 0

Management Advisory Comments Identified in the Consolidated Financial
Statements for the Year Ended September 30, 2017;
Report No. 22-18-006-13-001; 03/29/18 1 0

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

Management Advisory Comments Identified in an Audit of the Consolidated
Financial Statements for the Year Ended September 30, 2018;
Report No. 22-19-006-13-001; 03/15/19 5 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. 22-20-05-13-001; 12/19/19 20 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 Contractor and DOL Procurement Practices Need Improvement;

Report No. 26-14-002-03-370; 09/24/14 3 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

92 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Reports with Unimplemented
Recommendations, continued

Costs Owed ($)

Report Name Unimplemented
Recommendations

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

DOL Could Improve Exit Requirements and Participant Outcomes for the
YouthBuild Program;
Report No. 04-18-002-03-001; 03/30/18 1 1,390,498

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

ETA Could Not Determine the Impact Its Face Forward Program Had on
Participants Ages 17 and Under;
Report No. 02-20-001-03-390 3 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 3 0

OWCP Must Continue Strengthening Management of FECA Pharmaceuticals,
Including Opioids;
Report No. 03-19-002-04-431; 05/14/19 2 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

Semiannual Report to Congress: April 1-September 30, 2020 93
Appendices

Reports with Unimplemented
Recommendations, continued

Costs Owed ($)

Report Name Unimplemented
Recommendations

MSHA Can Improve How It Responds to and Tracks Hazardous Condition

Complaints;

Report No. 05-16-002-06-001; 09/30/16 1 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
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 5 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

Department of Labor Needs Improvements in Managing Its Records Management
Program to Capture Electronic Messages for Preserving Federal Records;

Report No. 17-19-001-07-001; 09/20/2019 1 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

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 2 0

Occupational Safety and Health Administration

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; 12/16/13 2 0

94 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Reports with Unimplemented
Recommendations, continued

Costs Owed ($)

Report Name Unimplemented
Recommendations

OSHA Needs to Continue to Strengthen Its Whistleblower Protection Programs;
Report No. 02-15-202-10-105; 09/30/15 1 0

OSHA's Voluntary Protection Programs Require Better Information to Identify
Participants with Contract-Worker Fatalities and Catastrophes;
Report No. 02-17-202-10-105; 09/11/17 2 0

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 4 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

Totals 160 $2,438,902

Semiannual Report to Congress: April 1-September 30, 2020 95
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): 192
Program Fraud 152

Labor Racketeering 40

Cases Opened: 188
Program Fraud 178

Labor Racketeering 10

Cases Referred for Prosecution (each case is measured as a singular statistic and may

include more than one person or business entity): 162
Program Fraud 147

Labor Racketeering 15

Cases Referred for Administrative/Civil Action (each case is measured as a singular sta-

tistic and may include more than one person or business entity): 69
Program Fraud 58

Labor Racketeering 11

Persons Referred to the Department of Justice for Criminal Prosecution (includes the

number of individuals and business entities referred for prosecution): 167
Program Fraud 149

Labor Racketeering 18

Persons Referred to State and Local Prosecuting Authorities for Criminal Prosecution

(includes the number of individuals and business entities referred for prosecution): 9
Program Fraud 7

Labor Racketeering 2

Indictments and Criminal Informations That Resulted from Any Prior Referral to Pros-

ecuting Authorities (includes sealed and unsealed indictments): 170
Program Fraud 128

Labor Racketeering 42

Indictments (includes sealed and unsealed indictments): 170
Program Fraud 128

Labor Racketeering 42

Convictions: 40
Program Fraud 28

Labor Racketeering 12

Statutory Debarments: 7
Program Fraud 2

Labor Racketeering 5

96 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

Investigative Statistics, continued

Recoveries, Cost-Efficiencies, Restitutions, Fines/Penalties, Forfeitures, and Civil Mon-

etary Actions: $74,810,563
Program Fraud $48,326,987

Labor Racketeering $26,483,575

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): $34,727,506
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): $21,654,281
Restitutions/Forfeitures (the dollar amount/value of restitutions and forfeitures resulting from OIG criminal

investigations): $16,370,887
Fines/Penalties (the dollar amount/value of fines, assessments, seizures, investigative/court costs, and other

penalties resulting from OIG criminal investigations): $20,000
Civil Monetary Actions (the dollar amount/value of forfeitures, settlements, damages, judgments, court costs,

and other penalties resulting from OIG criminal investigations): $2,037,888
Total: $74,810,562'

‘The OIG assisted state workforce agencies recover more than $565 million in unemployment insurance benefits that were not

directly related to an open OIG investigation and were not included in the statistics above.

Semiannual Report to Congress: April 1-September 30, 2020 97
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
(PL. 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 Conducted a Peer Review of TVA-OIG Inspection and Evaluation
Function

DOL-OIG conducted a peer review of the system of quality control for the Tennessee Valley Authority
(TVA)—OIG’s inspection and evaluation function for the period ending December 2019. The peer review
report issued on May 28, 2020, resulted in an opinion that TVA-OIG suitably designed its system of quality
control and provided reasonable assurance that TVA-OIG conformed to the seven professional standards
reviewed in the conduct of inspections and evaluations. The peer review made no recommendations.

98 Semiannual Report to Congress: April 1-September 30, 2020
Appendices

OIG Hotline

The OIG Hotline provides a communication link between the OIG and persons who want to report
alleged violations of laws, rules, and regulations; mismanagement; waste of funds; abuse of authority;
or danger to public health and safety. During the reporting period April 1, 2020, through September 30,
2020, the OIG Hotline received a total of 1,887 contacts. Of these, 1,715 were referred for further review

and/or action.

Complaints Received (by method reported):

Contacts Received (by source):

Telephone 222
E-mail/Internet 1,650
Mail 12
Fax 3
Walk-in 0
Total 1,887

Disposition of Complaints:

Complaints from Individuals or Nongovernmental Organizations 1,721
Complaints/Inquiries from Congress 1
Referrals from U.S. Government Accountability Office 1
Complaints from Other DOL Agencies 20
Complaints from Other (non-DOL) Government Agencies 144
Total 1,887

Referred to OIG Components for Further Review and/or Action 1,503
Referred to DOL Program Management for Further Review and/or Action 199
Referred to Non-DOL Agencies/Organizations 13
No Referral Required/Informational Contact 181
Total 1,896*

* 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).

Semiannual Report to Congress: April 1-September 30, 2020

99
Fiscal Year 2021 Audit Workplan

Bureau of Labor Statistics (BLS)
Discretionary Audit

BLS Survey Response Rate. 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 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. 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.

Ul Program

COVID-19: Audit of DOL and States Implementation of the CARES Act UI Provisions — In Progress.
Between March and July 2020, more than 56 million new claims for UI were filed. This was an average of
2.7 million new weekly claims, and more than 10 times the average of 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 highest number
of UI improper payments has been to claimants who failed to meet the work search requirements of the Ul

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OIG FY 2021 Audit Workplan

program. The Department estimated that between April 1, 2017, and March 31, 2018, states overpaid more
than $1.4 billion in Ul 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. The COVID-19
pandemic has 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.

COVID-19: Implementation and Oversight of the COVID-19 Emergency Transfers for Administration
of the Unemployment Compensation Program. The Families First Coronavirus Response Act provided
$1 billion to DOL to provide emergency administration grants to state Ul agencies for the administration of
their unemployment compensation programs. Administrative resources are critical to delivering an effective
UI program that is relied upon by millions of American taxpayers, especially now during the pandemic.
Funds provided through these emergency administrative grants may only be used for the administration of
the UI program and are not available for the payment of UI 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.

Effectiveness of Ul Program Integrity Efforts. ETA’s Ul program works in partnership with states

to provide the critical funds needed by unemployed citizens in a timely manner. Annually, ETA 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 have offered 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 Ul program, including working with states and partners
to identify and share best practices and data to reduce fraud.

Mine Safety and Health Administration (MSHA)
Discretionary Audits

MSHA Violations — In Progress. 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
hazards. This ongoing audit focuses on whether MSHA appropriately wrote, terminated, modified, and
vacated citations and orders.

Integrity of Dust Sampling. Miners are exposed to harmful substances in their work environments daily.
MSHA monitors many of these substances, including airborne toxins such as coal dust and respirable

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OIG FY 2021 Audit Workplan

crystalline silica. Since 1990, at least 150 mine operators, agents, and contractors have submitted
fraudulent dust samples that MSHA needed to regulate airborne toxins in mines. This audit will assess
MSHA’s efforts to address sample manipulation.

Mine Rescue Response Plan. When disaster strikes, a well-prepared mine rescue effort can mean

the difference between life and death for trapped miners. Insufficient personnel, equipment, or training
could hamper MSHA’s ability to respond quickly and effectively in mine rescue situations. Prior OIG work
found MSHA had not provided adequate oversight of mine emergency response plans, which included
planning by both mine operators and MSHA. This audit will assess MSHA’s preparedness in responding to
emergencies requiring mine rescue operations.

Occupational Safety and Health Administration (OSHA)
Discretionary Audits

COVID-19: OSHA’s Guidance Related to Safety of Its Inspectors — In Progress. 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, video conference, and 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 United States 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. Since the beginning of the COVID-19
pandemic in March 2020, OSHA has reduced its number of inspections and increased its number of non-
formal complaint investigations. In July 2020, OSHA was named in a lawsuit by meatpacking employees
who said OSHA was failing to do its job properly. OSHA 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 it has been
using to safeguard workers, and OSHA's future plans to ensure safe and healthy working conditions during
pandemics.

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OIG FY 2021 Audit Workplan

COVID-19: OSHA Inspection Collaboration Audit. 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. OSHA has been performing on-site inspections of worker safety in
these environments, while HHS and the U.S. Department of Agriculture (USDA) have been performing
on-site inspections to ensure patient care and product quality. However, according to HHS and USDA OIG
officials, their inspectors have not been reporting employee safety and health issues to OSHA. This audit
will focus on OSHA's efforts to promote collaboration with other federal agencies that also conduct on-site
inspections for potential workplace safety and health violations, especially during the pandemic.

COVID-19: Use of Complainant Interviews in OSHA Complaint Inspections. 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 OSHA did not identify all
egregious employers, and did not perform sufficient inspections and related enforcement, for 97 percent

of sampled employers. 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 more than 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 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 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.

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OIG FY 2021 Audit Workplan

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. As cited
for many years in previous OIG audits, these issues can be attributed partially to the DOL CIO’s lack of
authority and an uncertain reporting structure, as the CIO has not been elevated to an adequate level to
carry out required duties. In 2018, Executive Order 13833 required federal ClOs 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 ClO and DOL’s compliance with Executive Order 13833.

Working Capital Fund — In Progress. 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
in high risks areas. Our audit will focus on the ClO’s management of IT modernization efforts across the
Department, to include software integration, legacy systems, and shared services.

Office of the Chief Financial Officer (OCFO)
Mandatory Audits

DOL Consolidated Financial Statements Audit — Annual. We will determine if DOL’s consolidated

financial statements present fairly, in all material respects, the financial position of DOL as of September
30, 2021. We will consider DOL’s internal controls over financial reporting and test DOL’s compliance with

Semiannual Report to Congress: April 1-September 30, 2020 105
OIG FY 2021 Audit Workplan

applicable laws, regulations, contracts, and grant agreements that have a direct and material effect on the
consolidated financial statements.

Review of DOL’s Improper Payment Reporting in the Annual Financial Report — Annual. In FY 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 Ul 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 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 — Annual. Executive Order 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. EO 13950 further states that federal
agencies, contractors, and grant recipients should foster environments devoid of hostility and should be
trained to create inclusive workplaces. The federal government is, and must always be, committed to the
fair and equal treatment of all individuals before the law. This review will determine DOL’s compliance with
EO 13950 to ensure that federal agencies, including DOL, maintain an inclusive workplace free of race or
sex stereotyping or scapegoating.

Office of Workers’ Compensation Programs (OWCP)
Mandatory Audits

Report Relating to the Federal Employees’ Compensation Act (FECA) Special Benefit Fund —
Annual. We will determine whether: 1) the Schedule of Actuarial Liability, Net Intra-Governmental Accounts
Receivable, and Benefit Expense was fairly presented for the year ending September 30, 2021, and

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OIG FY 2021 Audit Workplan

2) internal controls over financial reporting related to the Schedule were in compliance with laws and
regulations that could have a direct and material effect on the Schedule.

Longshore and Harbor Workers’ Compensation Act (LHWCA) Special Fund — Annual. We will
determine if DOL’s LHWCA Special Fund financial statements presented fairly, in all material respects, the
financial position of the LHWCA Special Fund as of September 30, 2020.

District of Columbia Workmen’s Compensation Act (DCCA) Special Fund Financial Statement
Audits — Annual. We will determine if DOL’s DCCA Special Fund financial statements presented fairly, in
all material respects, the financial position of the DCCA Special Fund as of September 30, 2020.

FECA Statement on Standards for Attestation Engagements No. 18 — Annual. We will determine

if DOL’s Integrated Federal Employees’ Compensation System transaction processing for application
and general controls, as described in the report, were fairly presented, suitably designed, and effectively
operating for the period October 1, 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 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

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OIG FY 2021 Audit Workplan

$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. 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 2017, OWCP awarded a

$166 million contract to deliver a Workers’ Compensation Medical Bill Process (WCMBP) system for the
four OWCP workers’ compensation programs, which pay more than $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 — 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 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. The COVID-19 pandemic
has presented new challenges for WHD as it implemented and enforced the requirements of the FFCRA,
while continuing its other enforcement activities. We will conduct 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

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OIG FY 2021 Audit Workplan

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. 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. 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.

Semiannual Report to Congress: April 1-September 30, 2020 109
Office of Inspector General, U.S. Department of Labor
200 Constitution Avenue, NW
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 $-5506
Washington, DC 20210

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