Federal Reports

Cybersecurity remains one of NASA’s top management challenges. While NASA’s information security program maintained a Level 3 rating this year, it still falls short of what the Office of Management and Budget considers effective.

This report presents the results of the System and Organization Controls 1 Type 2 examination conducted in accordance with relevant attestation standards established by the American Institute of Certified Public Accountants for the United States Department of Agriculture’s (USDA) Financial Management Service (FMS) description of its financial systems used to process user entities financial transactions throughout the period October 1, 2023, to June 30, 2024. The report contains an unmodified opinion on the description and controls that were suitably designed to provide reasonable assurance that the control objectives would be achieved.

Seventeen Amtrak employees based at New York Penn Station or the NW Base in New Jersey, consisting of two Gang Foremen, four linemen, three truck drivers, six 3rd Rail welders, one trackman, and one electronic technician resigned in connection with an OIG investigation of alleged healthcare fraud. Five of those who resigned were among 10 current and former employees charged by indictment June 20, 2024, with conspiracy to commit health care fraud.The resignations occurred between July 15 and September 12, 2024. Our investigation found that the employees participated in an $11 million health care fraud scheme beginning in 2019 and continuing to June 2022 involving health care providers and others who recruited Amtrak employees—primarily from New Jersey and New York—to participate in the scheme. The employees were given cash payments in exchange for allowing the health care providers to use their patient and insurance information to submit fraudulent claims to Amtrak’s health care plan for services that they never provided or that were medically unnecessary.

VA is authorized by statute to procure healthcare resources from affiliates on a sole-source basis without regard to laws or regulations that require competition. VA policy requires that contracting officers request an Office of Inspector General (OIG) review or audit for any sole-source healthcare proposal with an anticipated annual value of at least $400,000. The OIG provides information that contracting officers may use as they negotiate fair and reasonable prices. In fiscal year 2023, the OIG completed 15 audits of sole-source healthcare proposals. The combined estimated contract value of these 15 preaward audits was about $125.8 million, and the OIG team identified approximately $37.3 million in potential cost savings. Following the OIG audits, the Veterans Health Administration sustained about $9.2 million in cost savings.Thirteen proposals reviewed had full-time-equivalent pricing. For these 13 proposals, the OIG determined the hourly rate pricing offered to the government was higher than the supported amounts, and the OIG recommended contracting officers obtain lower prices than those offered to the government.Two proposals reviewed had both hourly rate pricing and per-procedure pricing. The OIG found the affiliate offered rates higher than current Medicare rates for per-procedure pricing. In these two audits, the OIG recommended reimbursement rates that were 100 percent of the current Medicare rates for the per-procedure portion of the affiliate’s proposals.Finally, for 10 of the 15 contract proposals examined, the OIG found potential conflicts of interest for VA personnel who may be involved in the acquisition process and who also hold a position with the affiliate. In each instance, the OIG recommended the contracting officer request an opinion from VA’s Office of General Counsel as to whether these individuals would have a financial interest in the proposal.

The VA Office of Inspector General (OIG) conducted this inspection to assess the VA Pittsburgh Healthcare System’s stewardship and oversight of funds. This inspection assessed the following financial activities and administrative processes to determine whether appropriate controls and oversight were in place: managerial cost accounting information, open obligations oversight, purchase card use, and supply chain management operations.The OIG found the healthcare system did not consistently use managerial cost accounting information to enhance efficiency, help reduce costs, and make business decisions, and the system’s use did not fully align with federal financial accounting practices.The healthcare system did not fully comply with VA policies on obligations oversight, resulting in an estimated $87,000 that could have been put to better use and about $63,000 from accruals that were not reviewed and canceled in a timely manner. The system could improve management of open obligations by enhancing reviews of inactive obligations and creating an escalation process when services do not provide status of open orders.Concerning purchase card transactions, the OIG estimated the healthcare system may have incurred about $403,000 in questioned costs because of split purchases. The system could improve efficiency by complying with VA policies on split purchases or by considering contracts.Finally, the OIG found the healthcare system’s supply chain management did not ensure days-of-stock-on-hand metrics were met or that supply chain data were accurate. To improve inventory management, the system could strengthen processes and procedures to ensure stock data are recorded correctly and routinely monitored. Facility leaders reported that staffing shortages may have affected local oversight.The OIG made six recommendations to the healthcare system director. The recommendations address issues that, if unattended, may eventually interfere with financial efficiency practices and the stewardship of VA resources.