semiannual report to the congress · lroa. d. tober . ian. n the . c f in. s f. o re. t. 1, 2009....
TRANSCRIPT
Offi
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UNITED STATES RAILROAD RETIREMENT BOARD
OFFICE OF INSPECTOR GENERAL
844 N RUSH STREET CHICAGO IL 60611-2092 Printed on recycled paper
April 30, 2010
The Honorable Michael S. Schwartz, Chairman Railroad Retirement Board 844 North Rush Street Chicago, Illinois 60611-2092 Dear Mr. Schwartz: I am pleased to submit our Semiannual Report to the Congress. This report provides a descriptive summary of our activities and accomplishments during the period of October 1, 2009 through March 31, 2010. This report is submitted in accordance with Section 5 of the Inspector General Act of 1978, as amended. The Act requires that you transmit this report, along with any comments you may wish to make, to the appropriate Congressional committees and subcommittees within 30 days. During this reporting period, we completed our audit of the RRB’s fiscal year 2009 financial statements, issuing an unqualified opinion. In addition we:
• published our “Letter to Management” detailing matters related to internal control identified during the financial statement audit;
• prepared our statement on Management and Performance Challenges Facing the Railroad Retirement Board;
• published the results of our annual evaluation of the agency’s information security program; and
• examined the RRB’s compliance with sections 2201(a)(1)-(5) and 2006(a) of the American Recovery and Reinvestment Act of 2009.
Our criminal investigators achieved 19 criminal convictions, 25 indictments and/or informations, 10 civil judgments, and established receivables totaling over $1.6 million. The Office of Inspector General sincerely appreciates the ongoing assistance extended to our staff during the performance of their audits and investigations. We look forward to a continued cooperative relationship. Sincerely, Original Signed by Martin J. Dickman Inspector General
TABLE OF CONTENTS
INTRODUCTION ............................................................................................................. 1
Railroad Retirement Board .......................................................................................... 1
EXECUTIVE SUMMARY ................................................................................................ 2
Office of Inspector General .......................................................................................... 2
Office of Audit .............................................................................................................. 2
Office of Investigations ................................................................................................ 4
OCTOBER 1, 2009 - MARCH 31, 2010 ACCOMPLISHMENTS .................................... 5
Office of Audit .............................................................................................................. 5
Opinion on the Financial Statements ....................................................................... 5
Report on Internal Control ........................................................................................ 5
Report on Compliance with Laws and Regulations .................................................. 6
Management and Performance Challenges Facing the RRB ................................... 6
Fiscal Year 2009 Financial Statement Audit Letter to Management ........................ 9
Fiscal Year 2009 Evaluation of Information Security at the RRB ........................... 10
American Recovery and Reinvestment Act of 2009 ............................................... 11
Management Decisions and Implementation ......................................................... 12
Office of Investigations .............................................................................................. 13
Investigative Accomplishments .............................................................................. 13
Current Caseload ................................................................................................... 14
Representative Investigations .................................................................................... 15
Disability Investigations .......................................................................................... 15
Unemployment and Sickness Insurance Investigations ......................................... 17
Retirement/Survivor Benefit and Representative Payee Investigations ................. 18
Railroad Medicare Investigations ........................................................................... 20
Civil Enforcement Results ...................................................................................... 22
Hotline Contacts ........................................................................................................ 23
OTHER OVERSIGHT ACTIVITIES ............................................................................... 24
American Recovery and Reinvestment Act of 2009 ............................................... 24
Occupational Disability Program ............................................................................ 25
OUTREACH ACTIVITIES ............................................................................................. 27
OPERATIONAL ISSUES .............................................................................................. 28
National Railroad Investment Trust ........................................................................ 28
LEGISLATIVE & REGULATORY REVIEW .................................................................. 28
Semiannual Report to the Congress October 1, 2009 – March 31, 2010
TABLE OF CONTENTS
Semiannual Report to the Congress October 1, 2009 – March 31, 2010
APPENDICES ........................................................................................................... 29
Appendix A – Office of Inspector General Reports and Other Publicly Available Documents Issued ................................................................................................. 30
Appendix B – Audit Reports with Questioned Costs or with Recommendations That Funds be Put to Better Use .................................................................................... 31
Appendix C – Report on Receivables, Waivers, and Recoveries ........................... 32
Appendix D – Significant Matters ........................................................................... 34
Appendix E – Management Reports ...................................................................... 35
Appendix F – Reporting Requirements .................................................................. 41
Appendix G – Acronyms ........................................................................................ 42
Appendix H – Legal Citations ................................................................................. 43
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OI86Meinvwifra$4
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20
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These gvarious memberTexas. the Depand HumEnforcemSpecial Houston
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21
SemiannOctober
OI had a 10 civil jud
totaling$686,0
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This casTexas. Fraud ancriminal The DMsentenc
enteredand penJustice’means below treturn ffuture fr
nual Reporr 1, 2009 –
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total of dgments g over 00 in
es and ties.
se was refeThe nurse nd six counjury trial an
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Dud by U.S. Dnalties. So’s Affirmativto address he financiaraud lossesraud.
t to the ConMarch 31, 2
of Inspecto
rred to the was indicte
nts of Healtnd is curren
as also ind
Civil En OI mayrecoveclaimaprovisgovern
$11,000
uring this seistrict Courtme of theseve Civil Enffraud againl guideliness to the RR
ngress 2010
or General
United Staed on one ch Care Frantly awaiting
icted on ide
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y pursue civery of fundsants. Theseions of the
nment to rec0 for each fa
emiannual ts for RRB e civil actioforcement (nst RRB prs for crimina
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for the Ra
tes Attornecount of Coud. She wag sentencin
entical coun
ment Res
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period, a tofraud case
ons are purs(ACE) progrograms, paal prosecutnds and it a
ilroad Reti
ey’s Office fnspiracy toas convicteng.
nts and is c
sults
o obtain judtly obtainedns are typicms Act. Th treble damsubmitted.
otal of 10 cis totaling osued underram which articularly wion. ACE isalso creates
irement Booard
for the Souto Commit Hed on all co
thern Districealth Care unts during
ct of
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s for the ants or ht under theallows the ell as $5,50
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00 to
vil judgmenover $686,0r the Departprovides an
where the frs an effectis a deterre
nts were 00 in damatment of n efficient raud lossesve way to nt against
ages
are
22
SemiannOctober
H
The OIGwaste, aopen linmisman The Hosumma
nual Reporr 1, 2009 –
Office o
Hotline C
G establishand abuse ne of commnagement/w
otline receivarizes Hotlin
ROOMDO
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t to the ConMarch 31, 2
of Inspecto
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ed its Hotliin the RRB
munication fwaste of RR
ved 1,185 cne referrals
Referral or
RRB DistrictOffice Other (HangMisdirected DisconnectioOffice of Inve
Other FederCalls with Innformation t
Appropriate RRB Bureau
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ngress 2010
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ne to receivB’s programfor individuaRB funds.
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us
te AgenciesNot Yet Additional is Being
a Railroad
for the Ra
ve complainms and operals to repor
ring this repriod Octobe
tivity O
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porting perioer 1, 2009 th
October 1, March 31,
751
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od. The fohrough Mar
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oard
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activity and
llowing tablrch 31, 201
23
le 0.
SemiannOctober
The OIG pmonthly
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O
applicabU.S. Tre
• aR
• 1ee
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nual Reporr 1, 2009 –
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prepares y ARRA
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gble to all Feeasury to pa
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ent to mostmately $135
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nd retirees a
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itional admonal benefvity by the
ompliance ed on pagee a transpareloped by thonthly repore RRB’s Re
nvolving frad one case
nt annuitant
irement Booard
nvestmeent Act oof
G continuedt the RRB's
d its ongoins
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17, 2009, ereporting wom the geneas follows:
stablished which are
eral fund off the
ve benefitss under the
ain railroad nder the RU
workers whUIA, not to
ho
inistrative cits. HowevOIG.
costs ver, it did noot
with the rele 11 of this rent ARRA he Recoverrts are publecovery Act
levant sectireport. Theprocess by
ry ished on tht Informatio
ions e y
he n
udulent rece referral invts.
ceipt of volving the
24
SemiannOctober
O
The RRBqualifyindifferentpermaneinvestiga The natiSeptembof the Loafter reti In Octobfor greatits five-poccupat On NoveRetiremRailroadexperienprogram In SepteFY 2007higher thclaims o
5 Bogdanic6 United SClaims Re
nual Reporr 1, 2009 –
Office o
Occupat
B’s occupang railroad wt, and someent disabilitative and a
ional spotligber 2008 wong Island irement.5
ber 2008, thter oversigh
point plan, tional disab
ember 24, 2ent Experie
d Retiremennce of emp
m as a whole
ember 20097 “LIRR worhan workerof all worker
ch, Walt. “A D
States Governmeveals Potenti
t to the ConMarch 31, 2
of Inspecto
tional Di
tional disabworkers. Te would sayty under theudit resourc
ght was turwhen the Ne
Rail Road (
he RRB adoht of the octhe RRB beility applica
2008, the Inence of the nt Act. Thisloyees of the.
9, the Goverkers appliers from others at the sa
Disability Epidement Accountal Program V
ngress 2010
or General
isability
bility prograhe qualifica
y more leniee Social Seces to the o
ned on the ew York Tim(LIRR) app
opted Boardcupational
egan utilizinants receive
nspector GEmployees
s documenthe LIRR wit
ernment Acced for occuer commuteame rate – n
emic Among atability Office, ulnerabilities,
for the Ra
y Program
am is a uniqation standaent, than th
ecurity Act. oversight of
RRB’s occmes reportelies for and
d Order 08disability cl
ng secondaed from LIR
eneral issus of the Lont provided athin the con
countabilitypational dis
er railroads”near 100%.
a Railroad’s RReview of CoGAO-09-821
ilroad Reti
m
que benefit ards for this
hose needeThe OIG c
f this and o
cupational ded that neard receives d
-63 which dlaims of LIRry medical
RR applican
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y Office (GAsability ben” and that “t.”6
Retirees.” Newommuter RailrR (Washingto
irement Bo
available os benefit ard to qualify
continues toother agenc
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disability be
described aRR employescreening ots.
ng documenRail Road Uns of the retir
railroad ret
AO) reporteefits at a rathe RRB ap
w York Times,road Occupation, D.C.: Sept
oard
only to re much y for a total o devote y programs
ogram in areer emploenefits soon
a five-point ees. As paon all
nt entitled nder the rement tirement
ed that in ate 12 timespproved the
, 20 Sept. 200ional Disability. 9, 2009).
25
and
s.
oyee n
plan art of
s e
08. y
T
SemiannOctober
The implemeof OIG
recommendwould pro
disabilexaminers
additioinformat
Pursuan
• Am
• Tcreath
• TaIfre
• Tvis
The impadditionsupporte
7 United SDisability P8 Id.
nual Reporr 1, 2009 –
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entation G dations ovide lity s with nal tion.
nt to a subsRRB’s
th
m
All future ocmedical scre
The RRB shertify all RRequest inforpplicants; hhe forms or
The RRB shnnual quesf the disabileasonable t
The RRB sherification f
s currently w
plementatioal informatied decision
States GovernProgram acro
t to the ConMarch 31, 2
of Inspecto
sequent Cons occupatiohe House C
Member JPipelinesGAO reanalysisawardsmost cu
In connec
made the fo
cupational eening prio
hould requirRB Forms Grmation frohowever, inr provide the
hould amenstionnaire reity annuitantimeframe,
hould amenform to requworking wit
n of these rion to cons
ns.
nment Accounoss the Rail Ind
ngress 2010
or General
ngressionaonal disabiliCommittee oJohn L. Mics, and Haza
eported theys had the c that existe
urrent data
ction with thollowing rec
disability ar to adjudic
re the appliG-251a or Gm railroad e
n a large pee requested
d current dequiring a cnt fails to rethen their d
d their curruire more thh the OIG t
recommendider in their
ntability Officedustry, GAO-1
for the Ra
l request, Gity programon Transpoa and the Hardous Maty “found thaconsistentlyed at LIRR favailable a
he occupaticommendat
pplicants shcation.
cant’s immG-251b. Themployers
ercentage od informatio
isability ancertified reseturn the sigdisability an
rent self-emhorough anto develop
dations wour adjudicatio
, Use of the R10-351R (Was
ilroad Reti
GAO initiatem.”7 In a Feortation andHouse Subcterials Rankat no other y high rates for calenda
at the time o
onal disabitions to the
hould be se
ediate supehese forms regarding jf cases theon.
nuitant remsponse fromgned certifinnuity shou
mployment/cnd completea more com
uld provide on process
Railroad Retireshington, D.C
irement Booard
ed “a systemebruary 4, 2d Infrastructcommittee king Membrail employof occupatr years 200
of [GAO’s] r
matic review2010 letter tture Rankinon Railroader Bill Shus
yers in [GAOtional disab04 to 2007, review.”8
w of to ng ds, ster, O’s]
bility the
lity programRRB’s Boa
m, the OIG ard membe
has ers:
ent for a secondary
ervisor to coare used bob duties p
e employers
omplete anby the RRB performed bs fail to retu
nd to
by urn
minder formsm all disabilcation form
uld be suspe
s to includeity annuitan
m within a ended.
e an nts.
corporate ine informatiomprehensiv
nvolvementon. The Bove form.
t ard
disability e, resulting i
examiners wn better
with
ement Board OC.: Feb. 4, 201
Occupational 0).
26
SemiannOctober
O
In additimembermission.conduct The InspmajoringCollege on govecommun OI staff several trelated cinvestigaDepartmDepartmPersonnInvestigaMedicarprogramParticipanecessabe includbecome A numbeof Goveopportunserve on
nual Reporr 1, 2009 –
Office o
OUTREA
on to audit rs perform o. The followed during t
pector Geng in Governof Criminalrnment audnity.
members ptask forcescommunicaations. Me
ment of Justment of Heanel Manageation; variore Program
m, membersation in Tasary contactsded in any familiar wi
er of OA starnment Accnities for gon the Execu
t to the ConMarch 31, 2
of Inspecto
EACH A
and investoutreach aswing are exhis reportin
eral made anment Overl Justice in diting stand
participateds. These taations and fmbers of thtice; the Ce
alth and Huement, Officous State Po
Safeguards of the OI ssk Force mes and informcases. Theth the most
aff membercountants (Aovernment autive Comm
ngress 2010
or General
CTIVITI
igative activs a means txamples of ong period.
a presentatrsight and InNew York.
dards and is
in a varietysk forces pfoster a teahe various tenters for Mman Servicce of Inspecolice agenc Contractorstaff attend eetings allomation to eney also prot recent frau
rs participaAGA). AGAauditing pro
mittee as Me
for the Ra
TIES
vities, OIG to further thoutreach ac
tion to studnspection a His prese
ssues pertin
y of Medicaprovide an om approachtask forces
Medicare ances, Office octor Generacies; variours. Since Rtask forces
ows the Spensure that Rvide an oppud scheme
ted in the CA provides ofessionalsembership
ilroad Reti
staff he office’s ctivities
ents at John Jayntation focunent to the
are related open forum h to health include rep
nd Medicaidof Inspectoal; the Fedes Medicaid
Railroad Mes in severalecial AgentRailroad Meportunity fos.
Chicago Cha variety of
s. Two OA Director an
irement Booard
OI spa
Met
thr
y used Inspector G
meetings infor health ccare fraud
presentatived Services; or General; eral Bureau
Fraud Conedicare is al judicial diss to develoedicare frau
or the OI Sp
hapter for thf networkinstaff memb
nd Website
staff membarticipate iedicare fratask forcesroughout t
country.
General
ncluding care fraud
es from: thethe the Office o
u of ntrol Units; national
stricts. op the ud losses w
pecial Agen
he Associatg and train
bers currentDirector.
bers in ud s the
e
of
and
will ts to
tion ing tly
27
SemiannOctober
O
The opeoversigh
N
The NatRailroadinvest Rthe NRR AlthoughRRSIA rconcernRRB’s othe OIG office beensure tare fulfil
L
The Insreview eoperatioregulati During RepresServiceMedicasystem identify which thTaxpayFraud Aeach coeach bi
nual Reporr 1, 2009 –
Office o
OPERA
erational issht role. This
National
tional Railrod RetiremenRailroad RetRIT were va
h the Trust requires thas about the
oversight in with overs
elieves that that sufficieling their fid
LEGISLspector Genexisting andons of the aons during
this reportinentatives, t
es regardingre fraud deutilizing reaand preven
he IG believyers ObligatAct of 2009 osponsor exll be amend
t to the ConMarch 31, 2
of Inspecto
TIONA
sue addresss issue wou
l Railroa
oad Retiremnt and Survtirement asalued at app
is a tax-exeat the Truste RRB’s pasthis area aight authorindepende
ent reportingduciary resp
LATIVE neral Act ofd proposedagency. Ththis reporti
ng period, tthe Attorneyg vulnerabiletection sysal-time anant fraud. Tves represetion Protect(H.R. 4222
xpressing sded to spec
ngress 2010
or General
L ISSU
sed, impactuld have to
ad Inves
ment Investvivors’ Improssets. As ofproximately
empt entityt report to thssive relatio
as a critical ity to condu
ent oversighg mechanisponsibilities
& REGf 1978, as ad legislationhe agency ning period.
the IG sent y General, lities in the tem of “pay
alysis may phere are cuent steps intion Act of 22 and S. 21support for cifically nam
for the Ra
UES
ts the OIG’sbe remedie
tment T
ment Trust ovement Af January 3
y $22.8 billio
y independehe RRB. Tonship withissue. How
uct audits aht of the Trusms are in ps.
GULATOamended, ren and regulaneither prop
correspondand the SeMedicare p
y and chaseprovide a murrently thren the right d2009 (S. 9728). Recetheir legisla
me the Railr
ilroad Reti
s ability to eed with leg
Trust
(NRRIT) wct of 2001 (
31, 2010, thon.
ent of the FThis office hh the NRRITwever, the Rand investigust’s operatplace and to
ORY REequires theations relatposed nor f
dence to a ecretary of Hprogram. Se” is antiqua
more effectivee bills pendirection. T75) and the ntly the IG ation and reroad Medic
irement Bo
effectively cislative cha
was establis(RRSIA) to
he RRB’s in
ederal goveas previousT and has idRRSIA doe
gations of thtions is neco ensure th
EVIEW e Inspector ing to the pfinalized an
variety of SHealth and Specifically,ated and a ve and efficding before
They are thePrevent Hesent corres
espectfully rcare program
oard
carryout its ange.
shed by themanage anvestments
ernment, thsly expressdentified th
es not providhe NRRIT. cessary to hat the Trus
General (IGprograms any legislatio
Senators anHuman the currensoftware
cient meanse the Congre Seniors aealth Care spondencerequesting m.
28
e nd in
he sed he de This
stees
G) to nd n or
nd
nt
s to ress nd
to that
SemiannOctober
A
Appen
A
B
C D E F G H
nual Reporr 1, 2009 –
Office o
APPEND
ndix Title OfficAvaAudRecRepSignManRepAcroLega
t to the ConMarch 31, 2
of Inspecto
DICES
e
ce of Inspeilable Doc
dit Reports ommendatort on Rec
nificant Management Rorting Reqonyms al Citation
ngress 2010
or General
ector Geneuments Isswith Ques
tions that ceivables, Watters Reports quirements
s
for the Ra
eral Reportsued stioned CoFunds Be Waivers, a
s
ilroad Reti
ts and Oth
osts or withPut to Bett
and Recove
irement Bo
er Publicly
h ter Use eries
oard
PN
y
29
PageNo.
30
31
32 34 35 41 42 43
Appendix A – Office of Inspector General Reports and Other Publicly Available Documents Issued
• Management and Performance Challenges Facing the Railroad Retirement Board, October 16, 20099 • Opinion on the Financial Statements of the Railroad Retirement Board for the Fiscal Year ending September 30, 2009, November 9, 200910 • Fiscal Year 2009 Evaluation of Information Security at the Railroad Retirement Board, November 12, 2009 ● Fiscal Year 2009 Financial Statement Audit Letter to Management, March 11, 2010 • Examination of Management’s Assertion of Compliance with the Economic Recovery Payment Provisions of the American Recovery and Reinvestment Act of 2009, March 18, 2010 • Examination of Management’s Assertion of Compliance with the Extended Unemployment Benefit Payment Provisions of the American Recovery and Reinvestment Act of 2009, March 24, 2010
All audits and other publicly available documents are available on our website at www.rrb.gov/oig.
9 Published as pages 111 – 115 of the Railroad Retirement Board’s Fiscal Year 2009 Performance and Accountability Report. 10 Published as pages 99 – 106 of the Railroad Retirement Board’s Fiscal Year 2009 Performance and Accountability Report.
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 30
Appendix B – Audit Reports with Questioned Costs or with Recommendations That Funds be Put to Better Use
Audit Reports with
Questioned Costs
Amount of Questioned
Costs
Amount of Unsupported
Costs A. For which no management decision had been made by October 1, 2009 0 0 0 B. Which were issued from October 1, 2009 through March 31, 2010 0 0 0
Subtotal (A + B) 0 0 0 C. For which a management decision was made between October 1, 2009 through March 31, 2010
0 0 0
(i) dollar value of disallowed costs 0 0 0
(ii) dollar value of costs not disallowed 0 0 0 D. For which no management decision had been made by March 31, 2010 0 0 0 E. Report for which no management decision was made within six months of issuance
0 0 0
Audit reports with Recommendations
that Funds Be Put to Better Use
Dollar Value Value
A. For which no management decision had been made by October 1, 2009 0 0
B. Which were issued from October 1, 2009 through March 31, 2010 0 0
C. Subtotal (A + B) 0 0 (i) dollar value of disallowed costs 0 0
(ii) dollar value of costs not disallowed 0 0 D. For which no management decision had been made by
March 31, 2010 0 0 E. Report for which no management decision was made
within six months of issuance 0 0
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 31
Appendix C – Report on Receivables, Waivers, and Recoveries
The FY 1999 appropriations language for OIG requires the reporting of additional information concerning actual collections, offsets, and funds put to better use achieved as a result of OIG’s activities.
Office of Investigations Recoveries realized by the RRB resulting from court-ordered restitution and civil damages:
Fiscal Year Amount Recovered
1999 $ 855,655
2000 $1,038,134
2001 $ 990,356
2002 $ 785,843
2003 $ 947,876
2004 $ 646,273
2005 $ 844,183
2006 $1,281,680
2007 $1,347,049
2008 $1,389,489
2009 $1,097,227
10/1/09 – 3/31/10 $581,425
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 32
Appendix C – Continued
Office of Audit
Report
Funds to be put to better
use
Funds Agreed by
Management
Receivables Established
Waivers
Recoveries to Date11
99-03 $50,850 $50,850 $50,850 $50,490 $36099-14 $83,000 $83,000 $34,423 $30,58499-16 $48,000,000 $48,000,000 $14,800,00099-17 $11,000,000 $11,000,000 $1,604,54500-16 $235,000 $235,000 $253,84603-06 $306,129 N/A $0 $0 $306,12904-06 $821,000 $821,000 $604,429 $5,564 $629,688 04-10 $400,000 $400,000 $761,15105-03 $1,800,000 $1,800,000 $4,587,453 $337,700 $1,718,25205-06 $10,000 $10,000 $42,91505-07 $1,070,000 $1,070,000 $50,581 $51,22905-10 $2,600,000 $2,600,000 $311,000 06-04 $257,000 $257,00006-05 $2,100 $2,100 06-06 $200,000 $200,000 $13,712 $20,36909-02 $600,000 $600,000 $265,672
11 Both overpayments and underpayments are included in this column.
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 33
Appendix D – Significant Matters
The OIG has identified deficiencies in controls over financial reporting and information security as significant matters. A summary of the issues and related recommendations for corrective action follow.
Financial Reporting The OIG previously identified internal control over financial reporting as a material weakness. As a result, financial accounting controls cannot be relied upon to ensure that material errors will be detected to prevent misstatements in financial reporting. RRB financial managers have worked to strengthen internal control over financial reporting during FY 2009. During the third quarter of FY 2009, the agency implemented enhanced controls to address the weaknesses that, in the aggregate, were the basis for the OIG's assessment of a material weakness during the prior year.12 However, because these enhanced controls were not implemented until mid-year, they could not be relied upon to ensure the accuracy of accounting and reporting for FY 2009 and had not been in operation for a period of time sufficient to support an assessment of overall effectiveness. Compliance with requirements February 9, 2007 Report OIG: 07-01, #11 Report preparation March 6, 2008 Report OIG: 08-01, #9 Transaction documentation March 6, 2008 Report: OIG 08-01, #11 Journal voucher preparation and recording March 24, 2009 Report: OIG 09-02, #2 and 4
Information Security
The OIG previously evaluated information security pursuant to the provisions of the Federal Information Security Management Act of 2002 (FISMA) and concluded that the RRB has not yet achieved an effective FISMA-compliant security program. Although agency managers are working to strengthen controls, management action in response to the following OIG recommendations had either not been completed as of the end of the current semiannual reporting period or had not been in place long enough to permit evaluation. Access Controls February 5, 2002 Report OIG 02-04, #20 and 21 June 7, 2005 Report DSD Web, #16 September 27, 2007 Report OIG 07-08, #1 March 24, 2009 Report OIG 09-02, #7 and 8 September 30, 2009 Report OIG 09-05, #8, 11, 12,
15, 19, and 20 September 30, 2009 Report OIG 09-06, #3, 4, and 6 Internal Control Over Certification and Accreditation
July 18, 2005 Report OIG 05-08, #4
September 30, 2008 Report OIG 08-05, #2 and 7 November 12, 2009 Report OIG 10-01, #1 and 5
12 "Fiscal Year 2008 Financial Statement Audit Letter to Management," OIG Report No. 09-02, March 2009.
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 34
Appendix E13 – Management Reports
Final Action on Audits with Disallowed Costs
For the 6-Month Period Ending March 31, 2010
Number of audit reports
Disallowedcosts
A. Audit reports, with management decisions, on
which final action had not been taken at the beginning of the period.
0
$ 0
B. Audit reports on which management decisions were made during the period.
0
$ 0
C. Total audit reports pending final action during
the period. (A + B)
0
$ 0 D. Audit reports on which final action was taken
during the period.
1. Recoveries
(a) Collections and offsets 0 $ 0 (b) Property 0 $ 0 (c) Other 0 $ 0
2. Recovery Waived 0 $ 0 3. Total of 1 and 2 0 $ 0
E. Audit reports needing final action at the end of the period (C - D.3)
0
$ 0
13 Appendix E was prepared by RRB management.
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 35
Appendix E – Continued Management Report on Final Action on Audits with
Recommendations to Put Funds to Better Use for the 6-Month Period Ending March 31, 2010
Number of
audit reports Funds to be
put to better useA. Audit reports, with management decisions, on
which final action had not been taken at the beginning of the period.
4
$2,602,1001
B. Audit reports on which management decisions
were made during the period.
0
$0 C. Total audit reports pending final action during
the period. (A + B)
4
$2,602,100 D. Audit reports on which final action was taken
during the period.
1. Value of recommendations implemented (completed)
1
$1,800,0002
2. Value of recommendations that
management concluded should not or could not be implemented (completed)
0
$0 3. Total of 1 and 2 1 $1,800,000
E. Audit reports needing final action at the end of the period (C - D.3)
3
$802,100
1. Comprised of the following amounts: $1,800,000 from Audit Report 05-03, “Evaluation of the RRB’s
Processing of Disability Earnings Cases,” $2,100 from Audit Report 06-05, “Review of Compliance with Provisions of the Railroad Retirement Act Governing the Initial Award of Benefits,” $200,000 from Audit Report 06-06, “Review of the Termination and Suspension of Benefits Paid Under the Railroad Retirement Act,” and $600,000 from Audit Report 09-02, “Fiscal Year 2008 Financial Statement Audit Letter to Management.”
2. Audit Report 05-03, “Evaluation of the RRB’s Processing of Disability Earnings Cases.”
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 36
Appendix E – Continued
Management Statement on Resolved Audit Reports Over 12 Months Old with Final Action Pending as of March 31, 2010
Report Date Disallowed
costs Funds to be put
to better use Reason action not completed Fiscal Year 2000 Financial Statement Audit (01-03)
2/23/01 NONE NONE While help desk procedures have been upgraded, the Bureau of Information Services is still developing reports to close the last open recommendation.
Review of Information Security at the Railroad Retirement Board (02-04)
2/5/02 NONE NONE Information Services has closed 24 recommendations and hopes to close the remaining 4 in FY10.
Inspection of Unverified Records in the RRB’s Employment Data Maintenance System (03-06)
3/20/03 NONE NONE Programs reviewed all 20,000 records and are using a recently implemented tracking system to close the last recommendation in FY10, however due to ARRA and WHBAA work, project extended to 12/31/2011 to be completed.
Review of RRB Compliance with Federal Laws and Regulations on Competitive Sourcing (05-02)
12/6/04 NONE NONE Information Services completed an initial feasibility study of sourcing information technology activities but continues to investigate alternate approaches and use contractor support.
Review of Internal Control Over the Actuarial Projection Process (05-04)
5/5/05 NONE NONE The Chief Actuary indicated that they are reviewing their options to best implement this recommendation.
Review of Customer Service Performance Measures for Timeliness of Initial Railroad Retirement Annuity Payments (05-05)
5/17/05 NONE NONE System changes are still being made to address the remaining open recommendation in FY11.
Review of LAN, LAN Security Scan and Web-based Applications (DSD)
6/7/05 NONE NONE These contractor-prepared confidential reports contained 45 recommendations, with two-thirds closed thus far.
Review of Access Controls in the End-User Computing General Support System (05-08)
7/18/05 NONE NONE Information Services has closed 14 of 15 recommendations in this confidential report. New risk assessment must be submitted for remaining case.
Fiscal Year 2005 Evaluation of Information Security at the Railroad Retirement Board (05-11)
9/28/05 NONE NONE Information Services continues to develop policies and procedures.
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 37
Appendix E – Continued
Management Statement on Resolved Audit Reports Over 12 Months Old with Final Action Pending as of March 31, 2010
Report Date Disallowed
costs Funds to be put
to better use Reason action not completed Accuracy and Reliability of GPRA Performance Measures: Timeliness of Non-Disability Survivor Annuity Payments (06-03)
1/30/06 NONE
NONE Programs have closed three of the seven recommendations. Work is delayed due to higher priority project. In addition further info is needed from OIG.
Review of Compliance with the Provisions of the Railroad Retirement Act Governing the Initial Award of Benefits (06-05)
4/12/06 NONE $2,100 Programs staff closed four of the five recommendations. Project is awaiting completion of AARP project.
Review of the Termination and Suspension of Benefits Paid Under the Railroad Retirement Act (06-06)
5/24/06 NONE $200,000 Programming work on a referral system is pending that should close out the remaining open recommendation.
Review of Incident Handling and Reporting at the Railroad Retirement Board (06-09)
8/24/06 NONE NONE Work continues on training material and progress has been made to updating of policies.
Fiscal Year 2006 Financial Statement Audit (07-01)
2/9/07 NONE NONE The agency has closed 19 of the 20 recommendations, with action on the final one to be verified as part of the FY08 financial statement audit. Submitted documentation to OIG for review. However OIG indicate they will evaluate implementation of this recommendation during FY2010 financial statement audit.
Audit of the DAISY/CHICO Component Application of the RRA Benefit Payment Major Application System (07-02)
3/9/07 NONE NONE Documentation was submitted to OIG for implementation on one recommendation and coordination with another agency is needed and resources were unavailable on the other two recommendations.
Audit of the State Wage Match Data Transmission Controls (07-04)
3/28/07 NONE NONE Coordination required with outside agencies. Programs plans to complete action to address the two remaining open recommendations in FY10.
Evaluation of the Railroad Retirement Board’s Privacy Program (07-06)
7/30/07 NONE NONE New CPO was appointed. Additional funding and resources were needed. Of the 15 recommendation, 6 have been closed with the remainder targeted for completion during FY10.
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 38
Appendix E – Continued
Management Statement on Resolved Audit Reports Over 12 Months Old with Final Action Pending as of March 31, 2010
Report Date Disallowed
costs Funds to be put
to better use Reason action not completed Audit of Federal Income Taxes Withheld from Railroad Retirement Annuities (07-07)
7/30/07 NONE NONE Coordination required with another org. Three of the six recommendations have been closed, with the rest targeted for completion in FY10.
Fiscal Year 2007 Evaluation of Information Security at the Railroad Retirement Board (07-08)
9/27/07 NONE NONE Policy and procedures still being developed. Two of the eight recommendations have been closed with the rest targeted for completion in FY10.
Audit of Controls to Safeguard Sensitive Personally Identifiable Information (07-09)
9/27/07 NONE NONE Coordination required with outside contractor on one recommendation. Of the 22 recommendations, 6 have been implemented with work plans still being developed for other recommendations to be finished in FY10.
Fiscal Year 2007 Financial Statement Audit Letter to Management (08-01)
3/6/08 NONE NONE OIG will reassess the implementation of the last two recommendations during the FY10 financial stmt audit. Of the 25 recommendations, 23 have been implemented.
Implementation of Selected Requirements for Gov’t Charge Card Program (08-02)
05/14/08 NONE NONE Coordination required with outside contractor. Of the 5 recommendations, 4 recommendations have been implemented with work on the remaining one to be finished in FY10.
Evaluation of Information Security for the RRB’s Financial Interchange Major Application – Abstract (08-03)
09/26/08 NONE NONE Documentation submitted to OIG for review on one recommendation and work continues on others. Of the 11 recommendations, 2 have been implemented with work on the remaining ones to be finished in 2010.
Fiscal Year 2008 Evaluation of Information Security at the RRB (08-05)
09/26/08 NONE NONE Coordination required with outside contractor on 1 recommendation and with another org on another recommendation. Of the 8 recommendations, 4 have been implemented with work on the remaining ones to be finished in FY10.
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 39
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 40
Appendix E – Continued
Management Statement on Resolved Audit Reports Over 12 Months Old with Final Action Pending as of March 31, 2010
Report Date Disallowed
costs Funds to be put
to better use Reason action not completed Fiscal Year 2008 Financial Statement Audit Letter to Management (09-02)
03/24/09 NONE NONE Of the 13 recommendations, documentations for 9 were submitted to the OIG for implementation. Review and updating of documentations along with case reviews are currently being performed on remaining recommendations.
Audit of Internal Control Over Accounts Payable (09-03)
03/31/09 NONE NONE Of the 18 recommendations, 13 were implemented. Work continues on the remaining recommendations.
Appendix F – Reporting Requirements Act Reference Inspector General Reporting Requirements Page(s)Section 4(a) (2) Review of Legislation and Regulations 28Section 5(a) (1) Significant Problems, Abuses, and Deficiencies 34Section 5(a) (2) Recommendations With Respect to Significant
Problems, Abuses, and Deficiencies 34
Section 5(a) (3) Prior Significant Recommendations Not Yet Implemented
34
Section 5(a) (4) Matters Referred to Prosecutive Authorities 4, 13Section 5(a) (5) Instances Where Information Was Refused NoneSection 5(a) (6) List of Audit Reports 29Section 5(a) (7) Summary of Each Significant Report 5 – 11Section 5(a) (8) Statistical Tables on Management Decisions on
Questioned Costs 31
Section 5(a) (9) Statistical Tables on Management Decisions on Recommendations That Funds Be Put to Better Use
31
Section 5(a) (10) Summary of Each Audit Report Over 6 Months Old for Which No Management Decision Has Been Made
12
Section 5(a) (11) Description and Explanation for Any Significant Revised Management Decision
None
Section 5(a) (12) Information on Any Significant Management Decisions With Which the Inspector General Disagrees
None
Act Reference Management Reporting Requirements Page(s)Section 5(b) (1) Comments Deemed Appropriate Transmittal
LetterSection 5(b) (2) Statistical Table on Final Action on Disallowed
Costs 35
Section 5(b) (3) Statistical Table on Final Action to Put Funds to Better Use
36
Section 5(b) (4) Statement on Audit Reports With Final Action Pending
37 – 40
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 41
Appendix G – Acronyms
Acronym Explanation
ACE Affirmative Civil Enforcement AGA Association of Government Accountants ARRA American Recovery and Reinvestment Act of 2009 DME Durable Medical Equipment FISMA Federal Information Security Management Act of 2002 FY Fiscal Year GAO Government Accountability Office HEAT Health Care Fraud Prevention & Enforcement Action
Team IG Inspector General LIRR Long Island Rail Road NRRIT National Railroad Retirement Investment Trust OA Office of Inspector General for the Railroad
Retirement Board – Office of Audit OI Office of Inspector General for the Railroad
Retirement Board – Office of Investigations OIG Office of Inspector General for the Railroad
Retirement Board OMB Office of Management and Budget RRA Railroad Retirement Act RRB Railroad Retirement Board RRSIA Railroad Retirement and Survivors’ Improvement Act
of 2001 RUIA Railroad Unemployment Insurance Act SI Sickness Insurance UI Unemployment Insurance
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 42
Semiannual Report to the Congress October 1, 2009 – March 31, 2010 43
Appendix H – Legal Citations American Recovery and Reinvestment Act of 2009 – P.L. 111-5 Conspiracy to Commit Health Care Fraud – 18 U.S.C. § 1349 Criminal Forfeiture – 18 U.S.C. § 2461 and § 981(a)(1)(C) Failure to Report Information – 45 U.S.C. § 231(a) Failure to Report to the RRB – 45 U.S.C. § 231(l) False and Fraudulent Claims – 18 U.S.C. § 287 False Claims Act – 31 U.S.C. §§ 3729 - 3733 Federal Information Security Management Act of 2002 – 44 U.S.C. § 3531, et. seq. Fictitious or Fraudulent Statement – 18 U.S.C. § 1001 Health Care Fraud – 18 U.S.C. § 1347 Inspector General Act of 1978, as amended – 5 U.S.C. App. 3 Inspector General Act Amendments of 1988 – 5 U.S.C. App. 3 Prevent Health Care Fraud Act of 2009 – H.R. 4222 and S. 2128, 111th Cong., 1st Sess. (2009) Railroad Retirement Act – 45 U.S.C. § 231, et. seq. Railroad Unemployment Insurance Act – 45 U.S.C. § 351, et. seq. Railroad Retirement and Survivors’ Improvement Act of 2001 – 45 U.S.C. § 231n(j) Reports Consolidation Act of 2000 – P.L. 106–531 Seniors and Taxpayers Obligation Protection Act of 2009 – S. 975, 111th Cong., 1st Sess. (2009) Social Security Act – 42 U.S.C. § Ch. 7 Theft of Public Money/Government Funds/Government Property – 18 U.S.C. § 641 Wire Fraud – 18 U.S.C. § 1343
REPORT
FRAUD, WASTE, AND ABUSE
Call the OIG Hotline:
1-800-772-4258
E-mail: [email protected]
The OIG cannot ensure confidentiality to persons who provide information via e-mail. Do not send information by e-mail that
you do not want a third party to read.
Write: RRB, OIG Hotline Officer 844 N. Rush Street
Chicago, Illinois 60611-2092