The Honorable Michael Missal assumes leadership role at VA OIG
The VA Office of Inspector General welcomed Mr. Michael Missal, who was sworn in today by Mr. Robert McDonald, Secretary, Department of Veterans Affairs to lead the Office of Inspector General (OIG). Mr. Missal was nominated to be the Inspector General by President Barack Obama on October 05, 2015, and unanimously confirmed by the Senate on April 19, 2016.
Review of Alleged Lack of Audit Logs for the Veterans Benefits Management System
In April 2015, the Office of Inspector General (OIG) received an anonymous allegation that the Veterans Benefits Administration (VBA) failed to integrate suitable audit logs into the Veterans Benefits Management System (VBMS). We substantiated the allegation that VBA failed to integrate suitable audit logs that clearly reported all security violations occurring in VBMS. We tested the existence and accuracy of audit logs by having 17 employees at 3 VA Regional Offices (VAROs) attempt to access same station veteran employee compensation claims in VBMS. Although audit logs identified security violations for 15 of the 17 employees, the logs did not show that the security violations occurred within VBMS. Instead, the audit logs indicated that the violations occurred in the Share application used by VARO employees or an unknown system. The other two employees did not appear on the audit logs. We could not determine why the two employees did not appear on the audit logs. This occurred because VBA officials did not develop sufficient system requirements to ensure that audit logs exist and are accessible to Information Security Officers (ISO). As a result, ISOs were unable to effectively detect, report, and respond to security violations occurring within VBMS. Until VBA resolves this issue, its VAROs will be more susceptible to fraudulent compensation claims processing. We recommended the Acting Under Secretary for Benefits develop system requirements for integrating audit logs into VBMS. We also recommended the Assistant Secretary for Information and Technology integrate audit logs into VBMS based on the requirements provided by the Acting Under Secretary for Benefits. Finally, we recommended the Acting Under Secretary for Benefits test the audit logs to ensure the logs capture all potential security violations. The Acting Under Secretary for Benefits and the Assistant Secretary for Information and Technology concurred with our recommendations and provided acceptable corrective action plans. We will monitor their implementation. The Acting Under Secretary also provided technical comments, which we took into consideration.
Review of Alleged Data Manipulation of Appealed Claims at VA Regional Office Wichita, Kansas
In April 2015, the Office of Inspector General (OIG) received an allegation that Wichita VA Regional Office (VARO) management instructed staff to input inaccurate data when entering Notices of Disagreement (NOD) into the Veterans Appeals Control and Locator System (VACOLS). Allegedly, VARO staff entered inaccurate data to improve timeliness measures associated with appealed claims processing actions. The Veterans Benefits Administration (VBA) uses VACOLS, an electronic records system, to track and manage its appeals workloads. The effectiveness of tracking appeals is dependent upon the accuracy and timeliness of the information entered in VACOLS. We substantiated the allegation that VARO management instructed staff to enter inaccurate data when recording NOD information into VACOLS rather than entering the actual diagnostic code for the disability or disabilities being appealed, as required. We found that in all 36 appealed claims, staff did not follow VBA policy when entering the NODs in VACOLS. We could not determine whether VARO management took these actions to improve timeliness measures. Data integrity issues identified at the Wichita VARO occurred because of the lack of management oversight and the subsequent conflicting guidance provided by Compensation Service that required VARO staff to enter incomplete and/or inaccurate information in VACOLS. As a result, VARO staff did not always update VACOLS with accurate information. This may have resulted in veterans not having received the correct information regarding their claims. In addition, inaccurate claims information in VBA’s system of records would result in unreliable appeals workload reporting, as well as an inefficient research and inaccurate responses to inquiries. We recommended the Wichita VARO Director take action to correct the 36 NODs established in VACOLS and implement a plan to provide adequate oversight to ensure staff establish NODs using accurate data. We recommended the Under Secretary for Benefits develop a plan to notify staff at its 56 VAROs of the modified policy, effective July 29, 2015, to ensure correct processing of an appellate claim. The Under Secretary for Benefits and VISN 3 Director concurred with our findings and the corrective actions were responsive to the recommendations. We considered Recommendation 1 closed and will follow up as required on the remaining recommendations.
Two Individuals Plead Guilty in Conspiracy to Defraud Over Ten Federal Agencies
These two individuals defrauded over 100 contractors and various government agencies in an elaborate surety bond scheme.
Review of Potential Inappropriate Split Purchasing at VA New Jersey Health Care System
In April 2014, the VA Office of Inspector General (OIG) Office of Investigations briefed VA New Jersey Health Care System (VANJHCS) leadership regarding the results of a criminal investigation of purchase card abuse in the Engineering Service. We determined whether inappropriate split purchasing occurred in services other than the Engineering Service at VANJHCS. We found the practice of inappropriate split purchasing extended beyond the Engineering Service at VANJHCS. We determined VANJHCS employees made inappropriate split purchases in 64 of the 76 purchase card transactions (84 percent) reviewed totaling $125,270. This included 19 purchase cardholders working in 6 different services. Based on the results of our sample, we estimated that VANJHCS staff inappropriately made about 4,750 split purchases totaling approximately $8.9 million from December 2012 through May 2014. This occurred because of a disregard for internal controls that are an integral part of every Federal Government purchase card program. Additionally, management did not provide effective oversight and did not hold VANJHCS purchase cardholders, supervisors, and approving officials accountable for policy violations. We estimated that split purchasing resulted in approximately $8.9 million in unauthorized commitments and increased the risk of fraud, waste, and abuse of taxpayer resources at the VANJHCS. The lack of oversight and strong controls prevented VANJHCS management from determining whether VANJHCS received all purchased goods and services. Management needs to take immediate corrective action and make long-term improvements to ensure sound financial stewardship of taxpayer resources. We recommended the Interim Director of Veterans Integrated Service Network (VISN) 3 ensure VANJHCS complies with VA purchase card program policies, including stronger management oversight. The Interim Director of VISN 3 concurred with our recommendations and provided plans for corrective action. We will monitor planned actions and follow up on their implementation.
Pennsylvania Man Charged In Alleged $35 Million Fraud Against Veterans’ Education GI Bill
Pennsylvania man orchestrated a scheme to defraud the Department of Veterans Affairs and veterans by charging ten to thirty times the actual cost of online correspondence courses through a subcontractor.
Warner Chilcott Sentenced to Pay $125 Million for Health Care Fraud Scheme
Warner Chilcott to pay $125 million for illegally marketing pharmaceuticals and providing kickbacks to physicians from 2009 through 2013.