[Excerpt] I am pleased to submit this Semiannual Report that covers the period April 1 - September 30, 1991, and also marks the close of a productive and successful Fiscal Year for the Office of Inspector General (OIG).
During Fiscal Year 1991, the OIG conducted over 500 audits of the U.S. Department of Labor (DOL) activities, recommending over $111.4million for better use, and the disallowance of some $28.7 million. Our audit regarding problems with reliance on grantees' reports under the single audit act spotlighted real concerns about the accountability for DOL funds spent below the Departmental level. The development of cost-based program results statements for the Job Corps program, discussed in this report, is a vivid example of our commitment to ensuring DOL program accountability. These statements clearly show the initial results the program achieved and the cost to the taxpayer of those results.
The OIG's investigative activities over this same period resulted in 449 successful criminal prosecutions, and in recoveries of some $11.8 million in fines, penalties, restitutions, settlements, and cost efficiencies. One outstanding investigation by the OIG's Office of Labor Racketeering led to the arrest of the operators of a fraudulent multiple employer welfare arrangement which defrauded over 120 businesses and their employees by causing them to believe that they were covered by health insurance when, in fact, only minimal coverage was provided. Approximately $500,000 in contributions was allegedly expended for purposes other than medical claims. Under Federal money laundering statutes, the Government was able to seize residences, automobiles, office and mining equipment, business and personal bank accounts, and other assets connected to the scheme. In another investigation by the OIG's Office of Investigations, we found that 22 States may have lost millions of dollars in an unemployment insurance fraud scheme. The perpetrators of this scheme were charged with conspiracy to defraud the Government by filing numerous fraudulent claims made on behalf of registered aliens residing in Mexico.
In this report, I again alert the Department and the Congress to the need for strengthening the integrity of the audits of pension plan assets. One important step towards this goal would be the elimination of the limited scope audit, which is of no value. This and other concerns are reported because they bear directly on the economy and efficiency of significant programs and operations of the Department of Labor. Because the laws administered by the Department touch in such pervasive and substantial ways the lives of American workers and retirees, these concerns deserve to be raised. The expression of these concerns underlines the role crafted for the Inspector General in the Act of 1978: that of an objective and appropriately independent auditor, investigator, and reviewer.