[Excerpt] This Semiannual Report, covering the period April 1 through September 30, 1996, summarizes the most significant accomplishments of the U.S. Department of Labor (DOL), Office of Inspector General (OIG). My office has continued to work extensively with the Department, the Congress, and other Federal Agencies to ensure the integrity and efficiency of DOL programs, to safeguard the taxpayers’ investment in these programs, and to ensure that the American worker is served in the most efficient and cost-effective manner.
During this reporting period, our audits, investigations, and evaluations have focused on: the effectiveness and efficiency of employment and training programs; the Department’s effectiveness in protecting American workers’ jobs and pensions; fraud in the Department’s health care and unemployment insurance programs; and criminal labor racketeering activity by traditional and non-traditional organized crime groups.
In the past 6 months, the OIG questioned $6.7 million in costs charged to the Department and recommended that $66.3 million be put to better use. In addition, the Department disallowed $3.4 million in costs and agreed to put $15.9 million to better use, in response to OIG audit recommendations. Additionally, OIG criminal investigations resulted in 133 indictments, 93 convictions and $16 million in monetary results.
Also noteworthy has been our work in assisting agencies to prevent fraud, waste, and abuse in their programs and operations. An example of our work in this area is recent financial management training for grantees of the School-to-Work Program. The training was designed to ensure their compliance with cost principles and prevent improper charges to grants funded with already scarce Federal resources.
Just as we strive to assist the Department in fulfilling its mission in the most effective and cost-efficient manner, we are also committed to improving our own programs and operations. During this reporting period, we have continued to streamline field office and administrative operations and cross-train employees as necessary.
However, over the past few years, the OIG has consistently had to absorb significant across-the-board and targeted budget cuts. Up to this fiscal year, we were able to accommodate the cuts through streamlining initiatives and conservative fiscal policies, while maintaining an adequate level of operational effectiveness. Unfortunately, these cuts are now causing us to review our mandates and reassess our priorities by identifying areas where work will need to be reduced or eliminated.
In particular, these cuts are affecting our ability to conduct financial and compliance audits of grantees and contractors, which often result in the identification of millions of dollars in improper charges to the Government, as well as our ability to conduct the comprehensive financial audits mandated by the Chief Financial Officers Act. From an investigative perspective, we are reducing our pro-active initiatives aimed at not just detecting, but also preventing, fraud of DOL programs. Moreover, these cuts have reduced our ability to examine and combat organized crime’s influence over unions and entire industries.