Semi-Annual Report to Congress for the Period of October 1, 2004 to March 31, 2005

[Excerpt] This Semiannual Report to the Congress summarizes the significant activities of the Office of Inspector General (OIG) for the six-month period ending March 31, 2005. During this reporting period, our audits of Department of Labor (DOL) programs and operations resulted in $5.6 million in questioned costs. Our investigative work led to 302 indictments, 217 convictions, and nearly $50 million in monetary accomplishments. I am pleased to submit this record of our accomplishments. Among our most significant results this period was a decision by a DOL Administrative Review Board ordering Florida to reimburse the Department $11.4 million in misspent job training funds previously questioned by an OIG audit. The Board reversed an administrative law judge ruling and allowed the costs. Through our audit program we continue to focus on assessing programs or functions, identifying systemic problems, and recommending constructive solutions to improve the effectiveness and efficiency of DOL operations. Chief among our recommendations this reporting period is the need for the Department to separate its procurement functions from program functions by creating an independent acquisition office led by an Acquisitions Officer who reports directly to the Deputy Secretary. Our recommendation is based on findings in three comprehensive audits involving two major DOL agencies where we found problems with the award, documentation, monitoring, and/or contract termination processes. In another significant audit completed this reporting period we confirmed allegations that managers of the Kittrell Job Corps Center manipulated student records, potentially resulting in overpayments for their services. The OIG also found opportunities for improvement relative to Information Technology security controls involving some of DOL\u27s most critical IT systems. Our audits also identified areas where the Department has achieved success, most significantly in the financial management area, as evidenced by the Department receiving an unqualified opinion on its consolidated financial statements for the eighth year in row. OIG investigations continue to combat abuses of DOL programs that serve American workers and to combat labor racketeering in the workplace. Among our recent successes were the guilty plea of a Gambino crime-family associate to conspiracy charges relative to a scheme in which he defrauded the Carpenter\u27s and Laborer\u27s Union benefit funds of more than $7 million. Also significant was the guilty plea of a union official to conspiracy charges related to a $1 million embezzlement of the Hudson County District Council of Laborers and its benefit funds. Also notable were the indictments in Virginia of seven defendants on charges of conspiracy, visa fraud, and money laundering, where two of the defendants allegedly filed more than 900 fraudulent foreign labor certification applications on behalf of foreign nationals seeking entry into the United States; and the indictment of 32 members and associates of the Gambino Organized Crime family, including the acting boss, for alleged racketeering and other crimes, including extortion and union embezzlement in the New York City area. The OIG will continue its efforts to promote the integrity and efficiency of programs that serve American workers and retirees by detecting and identifying ways to prevent waste, fraud, and abuse. In this regard, we will continue to work with the Secretary and officials of the Department to maximize the economy and effectiveness of DOL programs and operations