Department of Veterans Affairs Office of Inspector General Semiannual Report to Congress Issue 78 | April 1 – September 30, 2017 OIG MISSION To serve veterans and the public by conducting effective oversight of the programs and operations of the Department of Veterans Affairs (VA) through independent audits, inspections, and investigations. VISION To meet our mission and enhance the trust and confidence of veterans and their families, Veterans Service Organizations, Congress, VA employees, and the public, we must: Ensure that our work is independent and avoid any appearance of impairment to our independence. Prevent and detect fraud, waste, and abuse in VA programs and operations. Be proactive and strategic in identifying impactful issues. Produce reports that are: Accurate Timely Fair Objective Thorough Make meaningful recommendations that drive economy, efficiency, and effectiveness throughout VA programs and operations. Be fully transparent by promptly releasing reports that are not otherwise prohibited from disclosure. Promote accountability of VA employees if they fail to perform as expected. Attract, develop, and retain the highest quality staff in the Office of Inspector General (OIG). Treat whistleblowers and others who provide information to the OIG with respect and dignity and protect their identities if they so desire. VALUES Our conduct will be guided and informed by adherence to the following values: Meet the highest standards of professionalism, character, ethics, and integrity. Work as one organization by encouraging teamwork and collaboration across directorates and offices. Establish a positive and engaging work environment. Promote diversity, individual perspectives, and equal opportunity throughout the OIG. Respect the role and expertise that each staff member brings to the OIG. Continually improve our performance. Ensure equitable opportunities for professional growth and development. Accept responsibility for our behavior and performance. Message from the Inspector General I am pleased to submit this Semiannual Report to Congress that highlights our activities and accomplishments for the April 1 to September 30, 2017 reporting period. I believe this report refl ects VA Offi ce of Inspector General (OIG) staff’s strong commitment to ensuring that veterans receive the health care, benefi ts, and other services they have earned. In the past 6 months, we continued to make signifi cant enhancements to our organization to conduct more eff ective oversight of VA’s programs and operations. Th is includes advancing our collaborative eff orts to identify the underlying causes of problems and then produce timely, accurate, and high-quality reports. Our reports typically include recommendations to VA. Th ese recommendations are carefully developed to help improve effectiveness while preventing or redressing fraud, waste, abuse, and other misconduct. For example, we have launched a Rapid Response Team that draws on healthcare professionals, auditors, criminal investigators, and other experts across OIG to quickly respond to allegations of compromised patient safety. Th is team investigated allegations at the Washington, DC VA Medical Center (VAMC) and produced an Interim Report with recommendations for immediate action to reduce risks to patients and Federal Government assets. Although our work on the DC VAMC is not yet completed, improvements at the facility are already being implemented. OIG has expanded the inspection of the DC VAMC, and we are preparing a fi nal report with detailed recommendations. Meanwhile, the Rapid Response Team has deployed to other VA facilities where there is a critical need to assess imminent risk to veterans’ care. Another enhancement has been implementing the redesign of our Combined Assessment Program into the Comprehensive Healthcare Inspection Program. Unannounced OIG visits to facilities follow a newly developed protocol that examines high-risk areas and results in a more useful written review for facility and other VA leaders to make needed improvements. In addition to the Offi ce of Healthcare Inspections (OHI), other directorates also have been realigned to address key VA challenges. Finally, to better ensure OIG’s independence and transparency, we are now directing and funding the work of the Offi ce of Contract Review, which was previously supported through a reimbursable agreement with VA. Th ese and other changes have been made to advance OIG’s mission and values. In that spirit, we have also developed a new dashboard for our website that allows users to track both monetary impact and open recommendations associated with our reports. OIG issued 194 reports and work products on VA programs and operations during this reporting period. Th ose investigations, inspections, audits, evaluations, and other reviews identifi ed more than $9 billion in monetary impact, for a substantial return on investment of $134 for every dollar expended on OIG oversight. Approximately $5 billion of that amount is attributed to potential cost-savings OIG identified in relation to a Hepatitis C drug contract. Th e OIG Hotline received more than 20,000 contacts over 6 months from sources concerning VA programs and operations. OIG investigators closed 295 investigations and made 162 arrests for crimes including fraud, bribery, Semiannual Report to Congress | 1 Issue 78 | April 1–September 30, 2017 Message from the Inspector General embezzlement, identity theft, drug diversion and illegal distribution, and personal and property offenses. OIG investigative and Hotline work resulted in 1,123 administrative sanctions and corrective actions. Our staff, at all levels and across each directorate, has played an integral role in providing effective oversight work that reflects our mission, vision, and values. I am grateful for their efforts and thankful for the support of our Nation’s veterans, Congress, Veteran Service Organizations, and stakeholders. We look forward to working with dedicated VA leaders and staff to foster a culture of continuous improvement for the benefit of veterans and their families. MICHAEL J. MISSAL Inspector General 2 | VA Office of Inspector General Issue 78 | April 1–September 30, 2017 Highlights of VA OIG Activities Pursuant to Public Law (P.L.) 95-452, Inspector General Act of 1978, as amended, this Report presents our accomplishments during the reporting period April 1–September 30, 2017. Highlighted below are some of the activities conducted during this reporting period and their impact. Office of Investigations Th e Offi ce of Investigations continues to coordinate with other law enforcement agencies to identify a wide range of criminal activity. Among notable cases were these regarding serious allegations of fraud. A VA OIG, Housing and Urban Development OIG, and Federal Housing Administration (FHA) OIG investigation determined that a mortgage company failed to comply with certain VA, Fannie Mae, Freddie Mac, and FHA origination, underwriting, and quality control requirements. Th e mortgage company and its subsidiaries agreed to pay the United States $74,453,802 to resolve allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured, guaranteed, and purchased by Government programs that did not meet applicable requirements. Th e VA portion of the settlement was $6,464,000. A nationwide VA OIG, Federal Bureau of Investigation, and Department of Justice OIG investigation resulted in charges that alleged between 2011 and 2015 the defendant, the school’s president, the school’s former vice president, and veterans conspired to defraud VA of more than $4.3 million in education benefi ts. Th e school received infl ated, unearned tuition and fees ranging between $5,000 and $13,000 per course, while the veterans received basic housing allowance and a books and supplies stipend totaling over $2,000 per month. Th e former student coordinator of a trucking school pled guilty to wire fraud for his part in enrolling at least 108 veterans who allegedly never attended or received training at the school. OIG investigators completed nearly 300 investigations and made more than 160 arrests for fraud, bribery, embezzlement, identity theft , drug crimes, and personal and property crimes. More than 1,000 administrative sanctions and corrective actions were taken as a result of investigations. Office of Healthcare Inspections OHI published 77 reports that range from reviews of the performance and eff ectiveness of leadership at individual VA hospitals, to reviews of national VA Suicide programs and to the evaluation of single veterans treated at VA hospitals. OHI continues to focus and report on VA’s eff orts to improve Veterans Health Administration’s (VHA’s) opioid prescribing practices and delivery of mental health (MH) services to veterans. Below are some examples of our reports in these critically important areas: • In Healthcare Inspection – Review of Opioid Prescribing Practices, Clement J. Zablocki VAMC, Milwaukee, Wisconsin, OHI reviewed the prescribing practices related to controlled substances at the Clement J. Zablocki VAMC, Milwaukee, WI and made recommendations to improve oversight of narcotic prescribing practices to ensure providers employ the most appropriate treatments for veterans with chronic pain. • In Healthcare Inspection – Opioid Prescribing to High-Risk Veterans Receiving VA Purchased Care, OHI identifi ed that non-VA providers were not required to adhere to Opioid Safety Initiative guidelines