[Excerpt] I am pleased to submit this issue of the Semiannual Report to the Department and the Congress. Pursuant to the Inspector General Act of 1978, as amended, this report presents the most significant activities and accomplishments of the U.S. Department of Labor (DOL) Office of Inspector General (OIG) for the six-month period ending March 31, 2015.
The OIG remains committed to promoting the integrity, effectiveness, and efficiency of DOL’s programs and operations. During this reporting period, the OIG issued 22 audit and other reports that, among other things, recommended that more than $112 million in funds be put to better use, and questioned $5.6 million in costs. Among our many significant findings, we reported the following:
- The Wage and Hour Division did not distribute $60 million of back wages owed to employees after making minimal efforts to locate them.
- DOL’s cyber security program presented unnecessary risks to the confidentiality, integrity, and availability of DOL’s information.
- Improper payment detection and recovery rates in Pennsylvania’s Unemployment Insurance (UI) program remained well short of the target of 50 percent during the period 2009 to 2013, and estimated improper UI payments totaling $1.7 billion went undetected while $500 million of detected overpayments were not recovered.
- Job Corps had exposed students and staff to potentially dangerous students because its center operators had not enforced disciplinary policies.
- The Employment and Training Administration expended $7.8 million in Superstorm Sandy National Emergency Grant funds that were used for potentially ineligible participants.
OIG investigations also continue to combat program fraud, labor racketeering, and organized crime in internal union affairs, employee benefit plans, and labor-management relations. During this reporting period the OIG’s investigative work yielded impressive results, with a total of 209 indictments, 203 convictions, and $27.8 million in monetary accomplishments. Highlights of our work include the following:
- An Illinois CEO and a head trader were sentenced to prison and ordered to pay restitution of $665 million for a massive fraud scheme involving Employee Retirement Income Security Act - covered pension funds.
- Miami siblings were sentenced to prison and ordered to pay $815,000 in restitution for their roles in an identity theft and Unemployment Insurance (UI) fraud scheme.
- A Cleveland woman was sentenced to prison and ordered to pay $360,000 in restitution for her role in a multi state unemployment insurance fraud scheme.
- Three former presidents and a former vice president of the International Longshoremen’s Association Local 1235 were sentenced to prison for conspiring to compel tribute payments from union members by threatening them with violence.
These are some of the examples of the exceptional work done by our dedicated OIG staff. I would like to express my gratitude to them for their significant achievements during this reporting period.
We are currently working on several important audits. For more details, I invite you to review our updated audit work plan, which can be found in the appendix of this report.
I look forward to continuing to work constructively with the Department and the Congress on our shared goals of identifying improvements to DOL programs and operations, and protecting the interests and benefits of workers and retirees.