OIG (Office of Inspector General) Updates - Wipfli · OIG (Office of Inspector General) Updates 7 © Wipfli LLP Summary of Fiscal Year 2012 Accomplishments • Exclusions of 3,131

OIG (Office of Inspector General) Updates 1

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OIG (Office of Inspector General) Updates

Trainer: Denes L. Tobie, CPA, Partner

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Agenda

1. OIG auditors and the purpose of audits

2. Summary of findings

3. OIG FY 2013 work plan

4. How you can be ready for an OIG audit

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Who is OIG & what are they doing?

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OIG Mission and Organization

Mission:• Protect the integrity of DHHS programs as well as

the health and welfare of program beneficiaries.

Organization:• OIG employs about 1,700 professional staff

members who are deployed throughout the Nation in regional and field offices and in Washington, DC.

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OIG Organization Chart

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OIG Purpose

Purpose:

• Conduct audits, evaluations, and investigations;

• Provide guidance to industry; and,

• When appropriate, impose sanctions such as civil monetary penalties (CMP) and exclude individuals and entities from participation in Federal health care programs.

• Collaborate with HHS operating and staff divisions, the Department of Justice (DOJ) and other executive branch agencies, Congress, and States to bring about systemic changes, successful prosecutions, negotiated settlements, and recovery of funds.

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The Office of Audit Services (OAS)

• OAS provides auditing services for HHS, by conducting audits with its own audit resources or by overseeing audit work done by others.

• Audits examine the performance of HHS programs and/or its grantees in carrying out their responsibilities and are intended to provide independent assessments of programs and operations.

• These assessments help reduce waste, abuse, and mismanagement, and promote economy and efficiency throughout HHS.

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The Office of Evaluation and Inspections (OEI)

• OEI conducts national evaluations to provide HHS, Congress, and the public with timely, useful, and reliable information on significant issues.

• The focus on preventing fraud, waste, and abuse; and promoting economy, efficiency, and effectiveness in HHS programs.

• OEI reports also present practical recommendations for improving program operations.

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The Office of Investigations (OI)

• OI conducts criminal, civil, and administrative investigations of fraud and misconduct related to HHS programs, operations, and beneficiaries.

• OI coordinates with DOJ and other Federal, State, and local law enforcement authorities.

• The investigative efforts often lead to criminal convictions, administrative sanctions, or civil monetary penalties.

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The Office of Counsel to the Inspector General (OCIG)

• OCIG provides general legal services to OIG.

• OCIG represents OIG in all civil and administrative fraud and abuse cases involving HHS programs.

• OCIG negotiates and monitors corporate integrity agreements.

• OCIG renders advisory opinions, issues compliance program guidance, publishes fraud alerts, and provides other guidance to the health care industry.

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OIG Summary of Findings

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Summary of Fiscal Year 2012 Accomplishments

• Expected recoveries of about $6.9 billion

• $923.8 million in audit receivables

• $6 billion in investigative receivables

• $8.5 billion in savings as a result of legislative, regulatory, or administrative actions

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Summary of Fiscal Year 2012 Accomplishments

• Exclusions of 3,131 individuals and entities from participation in Federal health care programs;

• 778 criminal actions against individuals or entities that engaged in crimes against HHS programs;

• 367 civil actions, which include false claims and unjust-enrichment lawsuits filed in Federal district court, civil monetary penalties settlements, and administrative recoveries related to provider self-disclosure matters.

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Oversight of Head Start Eligibility

From an OIG report to Congress:• Improvements in Oversight of Program Eligibility

– The Administration for Children and Families (ACF) strengthened its oversight of Head Start program eligibility between FYs 2010 and FY 2011. ACF altered its FY 2011 triennial reviews to determine whether grantees kept on file the source documents proving children’s eligibility and began performing unannounced reviews.

– ACF promulgated draft regulations that, once final, will require grantees to keep eligibility documents on file.

– ACF was not consistent in issuing findings to grantees missing eligibility information in FY 2011. In FY 2012, ACF took action to reduce this variation when issuing findings.

– ACF developed an online complaint process for the Head Start program to capture complaints that could help the agency uncover problems with grantees.

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OIG reviews for ACF in the past years

Year (available data) Number of reviews

2010 11

2011 37

2012 24

2013 16 year-to-date

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Summary of recent OIG reports by subject

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Unknown and Cost Allocation

OIG FINDINGS BY CATEGORY

? Did not need awarded money;

CADid not ensure that joint costs were allocated properly among various programs administered;

CAUsed organization-furnished automobiles for non-Head Start related purposes;

CA Expenditures were improperly allocated to unallowable activities;

CACharged a grant when not all parts of the cost were allowed under the grant;

CAHad Indirect costs that were improperly charged as direct;

CADid not ensure all cost sharing was allowable under the applicable cost principles;

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Allowable Costs

COSTS Unreasonable costs associated with travel and attendance;COSTS Claimed unallowable and excessive fuel charges;

COSTS Paid employees ineligible benefits;

COSTS Paid employees for work before it was earned and recorded;

COSTSDid not follow the provisions of the applicable Federal cost principles and the terms and conditions of the award;

COSTSMiscalculated salaries, bonuses, benefits, FICA, workers’ compensation, pension expenses, or health insurance amounts;

COSTSClaimed expenditures that were not reasonable, allocable, and necessary to the overall operation of the Head Start program;

COSTS Claimed money organization was not entitled to;

COSTS Did not prepare travel logs;

COSTS Unallowable drawdown of funds;

COSTS Claimed costs without an adequate contractual agreement;

COSTS Made payments or charged grants without supporting documentation;

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Equipment

EQUIP Did not properly record disposition of assets;

EQUIP Did not properly identify equipment

EQUIP Did not submit a list of equipment in a timely manner;

EQUIP

Did not provide for complete equipment records or a physical inventory of equipment purchased with Head Start funds;

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ERSEA, Financial Reporting and Governance

ERSEADid not ensure that at least 10% of its actual enrollment was children with disabilities. No waiver was requested;

ERSEADid not maintain a waiting list when it reached 100% of its funded enrollment;

FINDid not provide accurate, current, and complete disclosure of financial results;

FINDid not provide records that identify adequately the source and application of funds for HHS-sponsored activities;

GOVDid not ensure all members of the Policy Council were elected by parents of children currently enrolled in the program;

GOVDid not ensure the sharing of regular information for use by the governing body and the Policy Council;

GOV

Did not enable low-income members of the Policy Council and parent committees to fully participate in their responsibilities by providing reimbursements for reasonable expenses incurred;

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Human Resources

HRDid not create professional development plans for employees;

HRDid not obtain state or federal criminal record checks prior to hiring staff;

HR Did not maintain effective internal communication;

HRDid not conduct formal evaluations of teachers;

HRDid not provide wage comparability study to determine reasonableness of salary increase;

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Head Start Policies and Procedures

HS POLDid not obtain linguistically and age appropriate screening procedures to identify concerns regarding developmental, sensory, visual and auditory and behavior skills;

HS POLDid not ensure its EHS program provided opportunities for each child to explore a variety of sensory and motor experiences;

HS POL Did not provide sufficient materials to meet the needs of the children;HS POL Did not employ two persons for each HS classroom.

HS POLDid not provide for the repair, cleanliness, and safety of all Head Start facilities and equipment;

HS POLDid not assist parents in making arrangements for preventative and primary health care, blood-lead screenings, dental examinations;

HS POLDid not accurately track health, dental, hearing, vision, behavioral, social-emotional, and mental health screenings;

HS POL Did not ensure children washed their hands before consuming food;

HS POL Did not arrange for Health staff to visit each newborn within 2 weeks after the infant’s birth;

HS POL Did not implement procedures for the ongoing monitoring of its Head Start operation;

HS POL Did not maintain accurate and consistent information regarding children and families;

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Internal Controls

IC Did not have adequate segregation of duties;

ICDid not adequately safeguard and manage checks;

ICDid not establish adequate financial procedures and controls;

ICDid not perform duties in a timely manner;

ICDid not have internal controls in place to prevent double payments;

ICDid not perform required end of year duties;

ICUnder or overcharged a grant;

ICExceeded the timeframe to complete the drawdown;

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In-Kind

IK Claimed unallowable and excessive volunteer services as non-Federal share;

IK Did not properly value donated space

IK Did not adequately document in-kind non-Federal share;

IK Did not document volunteer services on monthly timecards;

IK Improperly documented in-kind Federal share

IKDid not claim annual depreciation or use allowance as non-federal share;

IK Did not use an independent, licensed appraiser;

IK

Did not ensure its non-Federal share included only amounts necessary and reasonable for the accomplishments of Head Start program objectives;

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Personnel Activity Reports

PARUse of 2-week time period when calculating monthly employee activity;

PARPayroll distribution and financial reporting did not comply with Federal requirements;

PARSalaries and wages were not adequately supported by personnel activity reports;

PAR

Did not provide salary records documenting actual work/based salary and wages on estimated percentages of efforts rather than on documentation of actual work performed.

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Policies and Procedures

POL Did not follow written procurement procedures;

POLDid not comply with its (insert specific name here ) policy;

POLStaff was not using systems consistently and/or correctly;

PROCURE Did not adequately addressed conflicts of interest;

PROCURE

Entered into a contract without providing for free and open competition to the maximum extent practical;

PROCUREDid not obtain prior approval for specific equipment or project;

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See attachments for summaries of actual reports and findings

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OIG FY 2013 Work Plan

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2013 Work Plan

Administration for Children and FamiliesChild Care and Development Fund – Monitoring of Licensing and Health and SafetyRequirements for Childcare Providers

We will review outcomes in selected States in more detail (i.e., deficiencies, complaints, and safety issues). Federal Head Start performance standards require that Head Start facilities comply with State and local childcare-licensing requirements. If States do not have licensing requirements or the States’ requirements are less stringent than Federal standards, the facilities must comply with Head Start health and safety requirements.

Child Care Development Fund – Licensing, Health, and Safety Standards at Federally

Funded Facilities (New)

We will review licensing, health, and safety standards at childcare facilities that received Federal funding from CCDF to determine the extent to which the facilities have complied with applicable State and Federal requirements.

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2013 Work Plan

Head Start – Reviews at Selected Grantees (New)

At ACF’s request, we will review four Head Start agencies that have used the services of the same public accounting firm over the past 13 years. The accounting firm has developed a pattern of producing audit reports with no audit findings in the last 13 years even though significant items are discussed in the management letter for each these Head Start grantees.

In 2008, the accounting firm began working with three other Georgia Head Start grantees, bringing the total to seven grantees using the firm’s auditing services. Our review will determine whether costs claimed by the grantees were allowable under the terms of the grants and applicable Federal regulations.

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2013 Work Plan

Community Action Agencies – Pension Costs Claimed on HHS-Funded ProgramsWe will determine whether costs for retirement benefits for Community Action Agency employees have been appropriately charged to ACF-sponsored grants. We will also determine whether retirement benefit costs claimed are reasonable and allowable and comply with Federal requirements.

Low-Income Home Energy Assistance Program (New)We will review States' controls for assessing and monitoring the Low-Income Home Energy Assistance Program (LIHEAP) funds provided to community action agencies (CAA). We will also review CAAs to assess whether LIHEAP funds are being used in accordance with Federal requirements.

Low-Income Home Energy Assistance Program – Duplicate PaymentsWe will examine the extent to which LIHEAP grantees made duplicate payments or payments that exceeded benefit thresholds. We will also review ACF’s oversight of LIHEAP grantees.

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You can pass an OIG audit!

1. Know the regulations and your grant requirements

2. Implement processes that comply, have effective internal controls, and are efficient

3. Hold managers accountable for following policies and procedures (e.g. PARs)

4. Perform internal monitoring throughout the year

5. Practice continuous improvement

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Summary of recent OIG reports by subject

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Summary

• OIG’s carries out its mission by performing audits around the US

• Common findings include unallowable costs, cost allocation, HS requirements and internal controls

• Know the regulations and grant requirements so you can be in compliance

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Materials/Disclaimer

• OIG (Office of Inspector General) Updates PowerPoint*

• Summaries of Actual Reports and Findings• Technical Information

* Please note that these materials are incomplete without the accompanying oral comments by Denes L. Tobie of Wipfli LLP. These materials are informational and educational in nature and represent the

speaker’s own views.

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Thank You!

Thank you for your participation.

We hope today’s webinar met your expectations.

Following the webinar,

you will receive a survey via e-mail.

We appreciate your time completing and returning the survey.

For further assistance,

please contact us at 888.876.4992

or e-mail us at [email protected].

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Documents

OIG (Office of Inspector General) Updates - Wipfli · OIG (Office of Inspector General) Updates 7 © Wipfli LLP Summary of Fiscal Year 2012 Accomplishments • Exclusions of 3,131