[Excerpt] This Semiannual Report to the Congress represents the work of the U.S. Department of Labor (DOL) Office of Inspector General (OIG) during the six-month period April 1, 2002, through September 30, 2002. The OIG is committed to serving American workers and taxpayers by conducting audits, investigations, and evaluations that result in improvements in the effectiveness, efficiency, and economy of departmental programs and operations and detecting and preventing fraud and abuse in DOL programs and labor racketeering in the American workplace.
Our audit work during this period resulted in nearly $30 million in total questioned costs. OIG audits continue to raise concerns about the performance and accountability of grants, particularly those administered by the Employment and Training Administration (ETA), which issues over $10 billion in grants annually. For example, we conducted performance audits of several H-1B technical skills grants intended to help both employed and unemployed U.S. workers acquire technical skills for positions currently filled by foreign workers on H-1B visas. We found that some of the grantees failed to achieve their intended employment outcomes for participants or did not know what those employment outcomes were. In addition, several grantees had questionable expenditures that could have been avoided had detailed subcontractor program and budget information been provided and evaluated by both ETA and the grantees prior to the awarding of the grants. We also conducted a performance audit that found ETA has little assurance that state-reported Workforce Investment Act (WIA) performance outcomes data are either accurate or verifiable, making it difficult for ETA to adequately assess the effectiveness of WIA training programs. We are working with the Department to help assess these weaknesses in its grant accountability procedures and to draft potential solutions.
In this reporting period, we also evaluated the Department’s Domestic Child Labor Program. Our evaluation found that the Department needs to update its listing of occupations in the non-agricultural sectors found to be particularly hazardous or detrimental to the health or well-being of young workers. In addition, the Department has not updated the management and investigative tools used to determine child labor law compliance.
During this reporting period, our investigative work resulted in over $186 million in investigative recoveries, restitutions, fines, and penalties; 229 indictments; and 205 convictions. We continue to focus on corruption involving the monies in union-sponsored pension and health and welfare benefit plans. For example, a former FBI agent and investment advisor for an International Longshoremen’s Association (ILA) local pled guilty to embezzlement and money laundering for his role in diverting over $500,000 in pension fund money into personal real estate investments. Also, two California investment brokers for Capital Access, Inc., were ordered to pay nearly $2 million each in restitution for their roles in a $4 million investment scheme in which the money was diverted into ventures other than what was represented and then used to support their lifestyles. Cases in the labor racketeering area include an indictment of 17 members of the Gambino Crime Family for various crimes, including racketeering and extortion, that involved corruptly influencing ILA locals and members on the New York and New Jersey waterfronts, among others. We also continue to see a proliferation of fraud schemes committed against DOL programs such as the Black Lung program and the foreign labor certification programs. For example, two Virginia doctors were sentenced and ordered to pay $2 million in restitution for their role in defrauding the Black Lung program of over $1.5 million by billing for excessive and unnecessary medical treatments and supplies. In another case, a Virginia immigration attorney was sentenced and ordered to pay restitution for defrauding clients who were seeking work visas of over $350,000.
In addition, we complemented our traditional audit and investigative work by providing the Department with Unemployment Insurance and Federal Employees’ Compensation Act fraud training at the national and state levels, as well as technical assistance to improve a number of management functions, particularly with respect to grant accountability, data validation, and employee security.
I am proud of the diligent work of all OIG employees and their continued commitment to serving American workers and taxpayers. My staff and I look forward to continuing to work constructively with the Secretary and the DOL team to further our common goal of ensuring the effectiveness, efficiency, and integrity of the programs that serve and protect the American workforce.