Federal Reports

This report presents the results of our audit of the Food Safety and Inspection Service’s Cooperative Interstate Shipment Program.

We found that none of the three Department of Homeland Security components responsible for end of parole activities—U.S. Customs and Border Protection, U.S. Citizenship and Immigration Services, and U.S. Immigration and Customs Enforcement — were designated to monitor parole expiration and DHS did not have a well-defined process to address parole expiration for aliens paroled into the United States through Operation Allies Refuge/Operation Allies Welcome, Uniting for Ukraine, and processes for Cubans, Haitians, Nicaraguans, and Venezuelans. We also found that DHS did not initiate enforcement actions for parolees whose parole expired. As a result, DHS did not have assurance that former parolees were lawfully present in the United States after parole expiration.

We audited Neighborhood Loans, Inc., to evaluate its quality control (QC) program for originating and underwriting Single Family FHA-insured loans. Our audit covered the period October 2020 through September 2022.  We selected Neighborhood Loans for review based on its increasing loan volume and delinquency rate and because its rate of self-reporting loans to HUD when it identified fraud, material misrepresentations, and other material findings that it could not mitigate was below average for 5 of the last 6 years.

We found that Neighborhood Loans’ QC program for originating and underwriting FHA-insured loans was not sufficient.  Specifically, Neighborhood Loans (1) did not select the proper number of loans for review and maintain complete data to document its loan selection process; (2) did not complete all loan reviews in a timely manner; (3) did not always complete key review steps and sometimes missed material deficiencies; and (4) did not adequately assess, mitigate, and report loan review findings, which included self-reporting loans to HUD when required.  These issues occurred because Neighborhood Loans had insufficient controls over its QC program, was not always familiar with HUD requirements, and experienced staffing constraints.  As a result, HUD did not have assurance that Neighborhood Loans’ QC program fully achieved its intended purposes, which include, among other things, protecting the FHA insurance fund and lender from unacceptable risk, guarding against fraud, and ensuring timely and appropriate corrective action.

We recommend that HUD require Neighborhood Loans to (1) update its QC plan and related procedures to align with HUD requirements; (2) provide training to staff and management on HUD requirements for lender QC programs; (3) review the loans that it had not selected and take appropriate actions when applicable; (4) review its QC files for loans in which it may not have performed complete reverifications and reverify information where appropriate (5) evaluate its QC files for reviews in which it did not yet assess the risk of findings identified; and 6) evaluate its QC files for the loans in which it identified material findings to confirm whether it self-reported to HUD all findings of fraud or material misrepresentation, along with any other material findings that it did not acceptably mitigate.
 

The OIG receives requests from VA’s National Acquisition Center to validate vendors’ data and compliance with Federal Supply Schedule (FSS) contract terms and conditions. The VA FSS program supports the acquisition needs of VA and other government agencies for medical equipment, supplies, pharmaceuticals, and services by contracting with vendors that provide the items at a discount. The OIG reports its findings to the National Acquisition Center, but the reports are not published because they contain sensitive commercial information.

This report summarizes 20 reports the OIG issued to the National Acquisition Center in fiscal years (FYs) 2023 and 2024. The report presents overall findings in three areas: vendors’ compliance with FSS terms and conditions, noncompliance that could be pursued under the False Claims Act, and net overcharges to the government. In the 20 reports, the OIG identified overbillings and noncompliance with the price adjustment clause, the price reductions clause, the industrial funding fee and sales reporting clause, and the trade agreements clause, as well as with the Veterans Health Care Act of 1992 and shipping charges. The OIG issued two False Claims Act reports in FY 2023 and determined the impact to the government was $13,833,997 in overcharges, of which VA was able to recover about $13,418,977. Finally, the OIG calculated about $20.1 million in overall net overcharges to the government.

Federal agencies purchased about $18.9 billion in products and services through VA’s FSS program during FY 2023 and $21.4 billion in FY 2024. The OIG’s findings and recommendations helped VA collect about $19.5 million in net overcharges (97 percent of the about $20.1 million).

Like other organizations, Amtrak (the company) has been migrating its existing technology systems and data and deploying new systems to the cloud, and its efforts are ongoing. During our ongoing audit of the company’s cloud computing practices, we identified two pressing cybersecurity issues. We are providing this early alert to bring these issues to the company’s immediate attention. Given the sensitive nature of the information, we are summarizing the results in this public version of the report.

SUMMARY OF RESULTS

Our work to date on the company’s cloud computing practices, which we plan to continue, identified two matters for immediate consideration. In commenting on a draft of this interim report, the company’s Executive Vice President for Digital Technology and Innovation agreed with our matters for consideration and described actions the company plans to take to address them.

The VA Office of Inspector General (OIG) conducted a healthcare inspection to evaluate facility leaders’ response to surgical care concerns related to two facility surgeons at the St. Cloud VA Medical Center (facility) in Minnesota.

The OIG found facility leaders generally met the Veterans Health Administration requirements for summary suspension notifications and initiation of focused clinical care reviews (FCCR) for the surgeons. However, the OIG identified concerns related to clinical privileges and professional practice evaluations for the medical staff.

The OIG determined that the surgical service chief failed to ensure that one surgeon’s application for privileges included recent surgical case volume and case mix as required. Additionally, although the focused professional practice evaluation plan for monitoring the surgeon included direct observation, the surgeon was not directly observed to ensure competency with surgical procedures. The OIG determined that facility leaders failed to initiate reporting of the surgeon to the state licensing board (SLB) when clinical care concerns were identified in the surgeon’s FCCR.

The OIG found facility surgeons’ ongoing professional practice evaluations reviewed only procedures completed in the surgical outpatient clinic and did not include the evaluation of operating room surgical procedures. The OIG is concerned that the failure to include all aspects of the surgeons’ practice limited facility leaders’ ability to ensure the effectiveness of the professional evaluation processes and processes used to monitor the quality of surgical care.

The OIG found that the surgical service chief was clinically inactive for the first two years of employment. As a result, facility leaders had no ability to ensure the competent clinical performance of the surgical service chief.

The OIG made four recommendations to the Facility Director related to comprehensive review of surgical service credentialing and privileging processes, professional practice evaluations, and SLB reporting processes.