U.S. Department of Housing and Urban Development Office of Inspector General. Super Storm Sandy Presentation Newark, NJ March 20, 2013

Transcription

1 U.S. Department of Housing and Urban Development Office of Inspector General Super Storm Sandy Presentation Newark, NJ March 20, 2013

2 Ruth Ritzema Presenters Assistant Inspector General for Investigations Frank Rokosz Deputy Assistant Inspector General for audit

3 What is OIG? The HUD Office of Inspector General (OIG) became statutory with the signing of the Inspector General Act of 1978 (Public Law ). This Act sets out certain authorities that permit the OIG to initiate, carry out and complete audits and investigations of HUD programs and operations. The OIG is an independent office within HUD. As an independent official appointed by the President, the Inspector General is free from undue influence or constraints in performing his function. OIG staff review HUD programs, activities and entities receiving funds from HUD.

4 The interrelationship between HUD and OIG HUD s Mission: Create strong, sustainable, inclusive communities and quality affordable homes for all. Strengthen the housing market to bolster the economy and protect consumers Meet the need for quality affordable rental homes Utilize housing as a platform for improving quality of life Build inclusive and sustainable communities free from discrimination Transform the way HUD does business. (from HUD s Strategic Plan ) OIG s Mission: Promotes the integrity, efficiency and effectiveness of HUD programs and operations to assist the Department in meeting its mission. Detects and prevents waste, fraud, and abuse Seeks administrative sanctions, civil recoveries and/ or criminal prosecution of those responsible for waste, fraud and abuse in HUD programs and operations.

5 HUD Inspector General Office of Audit

6 To accomplish our mission we: Conduct independent and objective audits, investigations, and other activities relevant to HUD s mission. Keep the Secretary, Congress, and the American public fully and currently informed. Work collaboratively with HUD staff and program participants to ensure success of HUD program goals.

7 Office of Audit Discussion Conduct audits Access all records and information of the agency and program participants Issue subpoenas for records and documents

8 What Audit Does Internal and External Audits/Surveys Legislation/Regulation Reviews Audit Plan Audit Follow-up Support for the Office of Investigations and US Attorney s Office

9 Risk Assessment Some elements considered in assessing risk include: Funding type/amounts HUD monitoring efforts HUD-assigned risk levels

10 External Audit Work Performed related to Hurricanes Katrina, Wilma, Ike, Gustav, and Dolly & Lessons Learned

11 Audit Work Performed Alabama Louisiana Mississippi Texas

12 Audit Monetary Impact (in millions) 180, , , , ,000 80,000 60,000 40,000 20,000-53, ,772 Questioned Funds Put to Better Use

13 Audit Finding Areas Contracting Eligibility of recipients Duplicate benefits Subrecipients IT System issues Insurance issue

14 Contracting Issues Ineligible cost plus a percentage of cost contract types. Violations of State procurement requirements. Inadequate procurement history documentation. Poorly written and vague contracts. Significant contract modification without determining whether additional competition was necessary.

15 Eligibility of Recipients Lack of documentation to support eligibility of recipients. Duplicate benefits. Assistance to ineligible recipients.

16 Subrecipients Lack of State monitoring and oversight to ensure that subrecipients Followed its policies and that those policies complied with program requirements. Were meeting deadlines. Only spent funds on eligible expenses. Reported on results as required.

17 IT System Issues IT system allowed issuance of funds even though recipients were flagged as ineligible. Significant amounts spent on developing IT systems, but the States did not own the systems. Two states licensed additional software to replace the systems that were developed.

18 Insurance Issue No requirement for adequate homeowners insurance for the homes built or rehabilitated with Disaster Recovery funds.

19 How to Avoid Audit Findings Know the Rules and Regulations Communicate With HUD Get Training Keep Good Documentation Develop and Implement a Good Control Structure

20 Office of Investigations

21 Hurricane Sandy Offices Region 1/2 - New York, NY Office of Investigation Special Agent in Charge Cary Rubenstein 26 Federal Plaza, Room 3437 New York, NY Telephone number: (212) Facsimile number: (212) Region 3 - Philadelphia, PA Office of Investigation Special Agent in Charge Joseph Clark The Wannamaker Building 100 Penn Square East, 10th Floor Philadelphia, PA Telephone number: (215) Facsimile number: (215)

22 Role Investigations vary in purpose and scope and involve violations of criminal or civil laws, as well as administrative requirements. The focus is on the integrity of programs, operations, and personnel in agencies at Federal, state, and local levels of government We utilize specialized investigative techniques; examining complex financial transactions, interviewing government and corporate officials. A wide variety investigative techniques such as undercover and wire taps.

23 OIG Partnerships Federal Law Enforcement Including: Federal Inspectors General (73 statutory) Federal Bureau of Investigation U.S. Postal Inspection Service Internal Revenue Service Department of Justice U.S. Attorney s Office Main Justice National Center for Disaster Fraud Other Federal, State and Local Agencies State Licensing Agencies Insurance Commission

24 Fraud Briefly, fraud is an intentional deception, which results in action or reliance by, and injury or damage to, another party. It usually consists of misrepresentation, concealment, or nondisclosure of a material fact, or at least misleading conduct, devices, or contrivance.

25 Contractors Employees Management Recipients Who could perpetrate Organized Crime a fraud? Criminals that take advantage of the programs

26 Types of OIG Investigations False Statements and Contract Fraud Invoicing and False Claims Double Billing Insurance Fraud Environmental Crimes Theft Public Corruption by Organized Bribes/Kickbacks Crime Bid Rigging False Payrolls Prevailing Wage Fraud Wire Fraud and Mail Fraud No Show Jobs Embezzlement Artificial Price Market Inflation

27 5 Year Gulf Coast Disaster Fraud Report ( ) 1,464 Complaints Received (10/1/2005 to 8/5/2010) Investigations Initiated: 381 Indictments: 269 Convictions: 264 Monetary impact related to disaster fraud investigations: Court Ordered Restitution - $2,377,872 Court Ordered Fines - $4,500

28 What steps can you take to prevent Fraud? Educate employees regarding fraud indicators, what to look for and how to report it. Create an environment in which employees understand that dishonest acts will be detected and promptly addressed. Send a message that your operation is proactively looking for fraud and will immediately report it to the authorities.

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31 Websites Office of Inspector General Locations: Semi-annual Reports to Congress:

32 Questions?