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1980-04-01.Pdf INTRODUCTION * • • EXECUTIVE SUMMARY 2 I ORGANIZATION AND STAFFING. 5 II STATUS OF ITEMS REPORTED AS SIGNIFICANT PROBLEMS, ABUSES, OR DEFICIENCIES IN PREVIOUS REPORTS • • • • • • • • • • 6 III DESCRIPTION OF SIGNIFICANT PROBLEMS, ABUSES, AND DEFICIENCES AND RECOMMENDATIONS FOR CORRECTIVE ACTION •••••••••• 14 IV SPECIAL EFFORTS TO CONTROL FRAUD, WASTE, AND MISMANAGEMENT. • • • • •• • •• 18 V REVIEW OF LEGISLATION AND REGULATIONS. 21 VI STATISTICAL SUMMARY OF ACTIVITIES. 23 VII HIGHLIGHTS OF ACTIVITIES • 30 Appendix I - List of audit reports issued during the period April 1, 1980 through September 30, 1980 ••• ~ 0' •••••••••• 37 Appendix II - List of inspection reports issued during the period April 1, 1980 through September 30, 1980 • • .. • .. • .'. • • • • • ... 71 INTRODUCTION This is the fourth semiannual report of the Office of Inspector General, General Services Administration (GSA), submitted pursuant to the Inspector General Act of 1978 (P.L. 95-452). It covers the period April 1, 1980 to September 30,1980, and includes, as required by the Act: 1. A description of significant problems, abuses, and deficiencies in agency programs; 2. Recommendations for corrective action; 3. A report on the status of significant items previously reported; 4. A summary of matters referred to prosecutive authorities~ and 5. A listing of all audit reports issued. I believe this report reflects the dedication and professionalism of the many auditors, investigators, inspectors and lawyers who are personally committed to an aggressive posture on behalf of this Office in the detection of fraud, abuse and mismanagement. I extend my personal appreciation to each and everyone of these employees whose work is only generally reflected in this brief report. Much of the work performed by this organization has not been included in, this report simply due to space limita­ tions; however, I believe that the numerous reports which are not specifically referenced in this semiannual report are also truly indicative of a strong professional commitment on behalf of all Inspector General employees. I would also like to acknowledge the continued excellent support received from Administrator Freeman in carrying out the respon­ sibilities of my Office. J4~~A.'- Inspector General General Services Administr GSA DC.Oll00485 -1- Some the mOl' ificant activities r ting per iod are as 27 cases to the Department Justice for prosecu- tion consi at. -Referred 10 cases to the Department of J ice civil recovery. -Collected $205,721 as the result of settling GSA claims against individuals who defrauded the Government. -Participated in the filing of 5 fraud-related civil actions seeking a total recovery of approximately $2 million. -Referred 18 suspension actions and 29 debarment actions to appropriate GSA officials. -Referred 81 cases to GSA management for administrative action and 38 for informational purposes only. -Issued 53 subpoenas. ~Issued 168 internal audit reports and 234 contract audit reports, the latter recommending savings in excess of $23 million. -Conducted inspections of 222 leases, construction projects, contracts and work orders. -Issued 38 inspection reports recommending actions which could result in total savings of more than $1.4 million. -Opened 256 and closed 223 investigative cases. -Participated in numerous inter-Inspector General projects regarding legislation, suspension and debarment, and consultant contracts. -2- REPORTING REQUIREMENTS OF LOCATION IN THIS THE INSPECTOR GENERAL ACT REPOR"I' Section 4(a) (2)-Review of Section V Legislation and Regulations Section 5ea) (I)-Significant Section III problems, Abuses and Deficiencies Section 5(a) (2)-Recommendations Section III for Corrective Action with Respect to Significant Problems, Abuses and Deficiencies ~ection 5(a) (3)-Status of Section II Items previously Reported as Significant Problems Section 5(a) (4)-Summary of Sections VI, VII Matters Referred to prosecutive Authorities and Convictions Resulting Therefrom Section 5(a) (5)~Summary of No such reports were Reports Made to the made this reporting Administrator under the period. Provisions of Section 6(b)(2) Section 5(a) (6)-Listing of Appendix I Audit Reports -3- OFFICE OF INSPECTOR GENERAL GENERAL SERVICES ADMINISTRATION Inspector General Deputy Inspector General Office of the Executive Director I I Office of Office of Office of Office of Special Projects Audits Inspections Investigations I 4:­ I Field Audit Offlces Area Inspectlons Field InvestIgatIons Offices Offices Boston Kansas City t.on Boston Kansas City Ne\ll York Fort Worth Atlanta New York. Fort Worth i ia Denver Chicago Wash ton Denver Washington San Francisco San Fr- sco San Francisco Atlanta Auburn Chicago Auburn Chicago I. ORGANIZATION AND STAFFING On July 6, 1980, Brian M. Bruh was appointed Assistant Inspector General for Investigations. Mr. Bruh wa~ formerly employed by the Internal Revenue Service (IRS) as Chief, Criminal Investigation Division in Boston, Massachusetts. At the close of this reporting period, the Office of Inspector General had 544 employees either on-board or committed. See Figure l~ This figure indicates a 98-person increase during this reporting period. We have entered into an agreement with the Office of Personnel Management (OPM) authorizing us to establish and operate a Special Examining unit (SEU). The SEU will review and rate applicants for criminal investigator and auditor positions at the GS-9 through 15 levels. The personnel who will staff this unit have been designated and have received initial OPM training for operating an SEU. We anticipate that the establishment of our own SEU will greatly facilitate future staffing efforts. DISTRIBUTION OF STAFF OFFICE OF INSPECTOR GENERAL On-Board and On-Board Committed FY 1980 3/31/80 9/30/80 Ceiling Inspector General 6 6 6 Offices of: Audits 239 286 291 Inspections 52 78 82 Investigations 114 136 150 Special projects 23 22 27 Executive Director 12 16 16 Total 446 544 572 Figure 1 -5- II. STATUS OF ITEMS REPORTED AS SIGNIFICANT PROBLEMS, ABUSES, OR DEFICIENCIES IN PREVIOUS ~T§ ------~-- A. INSPECTOR GENERAL REPORT_O~_~~BER 1, 197~ 1. Otisville Federal Correctional Institution Construction project n - ------------- As indicated in the 2 preceding reports, this Office under­ took a broadly-based review of the entire Otisville Federal Correctional Institution construction project. Each of the 4 components of this Office--the Office of Audits, the Office of Inspections, the Office of Investigations, and the Office of Special projects--played a part in this review, each contributing to the review its own particular expertise. As noted in the pre­ ceding report and discussed below, this review resulted in a number of recommendations for administrative action and new mana­ gement policies. In addition, during this reporting period it resulted in a referral to the United States Attorney for the Southern District of New York for further investigation of those areas in which there may have been violations of federal criminal law and in which there is the potential for significant civil recoveries. We are continuing to provide that office with addi­ tional assistance in connection with the investigation and any possible future litigation. A final audit report on the Otisville project was issued during this reporting period. It recommended that the Regional Public Buildings Service (PBS) Construction Management Division take the following corrective actions: withdraw the contracting authority of those employees who demonstrated incompetence in the administration of this project, institute disciplinary actions where warranted, provide additional training for contract administrators, and refer to the Office of Inspector General any evidence of irregularities not addressed in the report. The Regional Administrator declined to follow the first 2 recommendations. He stated that, owing to extenuating cir­ cumstances connected with the Otisville project, there is no basis for either removing the contracting authority of, or taking disciplinary action against, any GSA employee involved with the project. With regard to the other 2 recommendations, the Regional Administrator took the position that no formal action is required since an effective training program is already in place and there is an established policy of referring evidence of irre­ gularities to the Office of Inspector General. In addition, the Regional Administrator announced the formation of a special Architect/Engineer Committee for the Federal Correctional Institution, Otisville, New York, project. Composed of PBS per­ sonnel not otherwise connected with the project, the Committee is to examine Architect/Engineer responsibility under the Otisville construction contract. -6- The Commissioner, PBS, has received the f ina'l audi t report and the Regional Administrator's response but has not yet submitted an action plan. When such a plan is submitted, this Office will review it and determine whether additional action is necessary. In accordance with its normal practice, PBS has also issued a final inspection report on the Otisville project in September 1980. This report contained technical analyses of several of the points made in the final audit report and confirmed many of these points. Our Office of Inspections is continuing to review the Otisville project. It is in the process of completing an inspection report which will evaluate the entire PBS performance. 2. Non-competitive Award of Guard Contracts The preceding report stated that as of March 25, 1980,
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