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DoD OIG Newsletter - May 2020

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On April 6, 2020, the Honorable Sean O'Donnell was designated to be the Acting Inspector General for the Department of Defense Office of Inspector General. He will continue to serve in addition to his current duties as the Inspector General for the U.S. Environmental Protection Agency. The DoD OIG newsletter summarizes the reports and investigations released by the Department of Defense Office of Inspector General in the previous month and those we anticipate releasing in the coming month. I encourage you to read these reports and to access our website, which lists reports and investigations by year, subject, and DoD component. You'll also find our project announcements and additional news releases highlighting investigations conducted by the Defense Criminal Investigative Service. Thank you for subscribing to our newsletter.

                                                                                                            

 

UPCOMING REPORTS

Significant reports expected to be issued within the next 30 days include:

Summary of Reports Issued and Testimonies Made Regarding Department of Defense Cybersecurity From July 1, 2018, Through June 30, 2019
This audit summarizes the results of unclassified and classified cybersecurity reports and testimonies from the Department of Defense Office of Inspector General (DoD OIG), the DoD oversight community, and the Government Accountability Office issued between July 1, 2018, and June 30, 2019.  The audit also identifies cybersecurity risk areas for DoD management to address based on the five functions of the National Institute of Standards and Technology Cybersecurity Framework identifies open recommendations related to DoD cybersecurity.

Audit of Department of Defense Management of Undefinitized Contract Actions
This audit determines whether the DoD Military Departments properly managed undefinitized contract actions by obligating funds within required limits, ensuring profit was adjusted for costs incurred, and definitizing actions within required time limits.  Undefinitized contract actions are agreements that allow a contractor to begin work and incur costs before the Government and the contractor have reached a final agreement on contract terms, specifications, or price.

Audit of the Department of Defense's FY 2019 Compliance With the Improper Payments Elimination and Recovery Act Requirements
This audit determines whether the DoD complied with the requirements of Federal laws related to identifying and reporting on improper payments in the DoD.  An “improper payment” is defined as any payment made in an incorrect amount, made to an ineligible recipient, or made for goods or services that were not received.  The Improper Payment Information Act requires each Federal agency to review its programs and identify programs that may be susceptible to significant improper payments, report the amount and causes of improper payments that occurred, and report on corrective actions planned to reduce the improper payments.

Audit of the Governance and Protection of Department of Defense Artificial Intelligence Data and Technology
This audit determines the DoD’s progress in setting direction, establishing standards, and prioritizing investments for artificial intelligence, and whether DoD Components have implemented security mechanisms to protect artificial intelligence data and technologies from internal and external cyber threats. 

Audit of the Department of Defense's Processes to Identify and Clear Munitions and Explosives During Construction on Guam
This audit determines whether DoD personnel implemented safety standards and quality assurance controls for addressing munitions and explosives of concern during military construction projects on Guam, and whether DoD personnel properly managed related safety concerns and readiness according to military standards and risk-management instructions.  Munitions and explosives of concern are unexploded ordnance, discarded military munitions, and munitions constituents present in concentrations high enough to pose an explosive hazard. 

Followup Evaluation on Report No. DoDIG-2014-083, "Insufficient Infrastructure Support to the Fixed Submarine Broadcast System," June 23, 2014
This evaluation determines whether the Navy implemented recommendations made in a prior OIG report, Report No. DODIG-2014- 083, "Insufficient Infrastructure Support to the Fixed Submarine Broadcast System," June 23, 2014.  The Fixed Submarine Broadcast System provides one-way communication to submarines when they are submerged. This report is classified.

Evaluation of DoD Security Controls for Intelligence Surveillance and Reconnaissance Supply Chains
This evaluation determines whether DoD procurement and security components followed policies, procedures, and guidance for monitoring and mitigating foreign access, control, and influence to DoD intelligence, surveillance, and reconnaissance supply chains. This report is classified.

Evaluation of Regional Security Centers
This evaluation determines whether the DoD Regional Centers for Security Studies complied with regulations relating to the vetting of foreign faculty, use of nondisclosure agreements, official travel, and payment of fees for guest lecturers (honoraria).  The Centers provide international venues for bilateral and multilateral research, communication, exchange of ideas, and training involving military and civilian participants. 

Evaluation of Air Refueling Support to U.S. Strategic Command’s Nuclear Deterrence Mission
This evaluation determines whether the Air Force has mission capable aircraft and aircrew to meet U.S. Strategic Command's Operation Global Citadel air refueling requirements.  The evaluation focuses on the KC-135 aircraft nuclear mission readiness, the nuclear mission readiness of associated aircrew, and the required installation support needed to meet U.S. Strategic Command’s KC-135 air refueling requirements. This report is classified. 

Evaluation of the DoD’s Management of Health and Safety Hazards in Government-Owned and Government-Controlled Military Family Housing
This evaluation determines whether the DoD effectively managed health and safety hazards in Government-owned and Government-controlled military family housing.  The evaluation focuses on the management of lead-based paint, asbestos-containing material, and radon at eight military installations visited.

 

Recently issued Reports of Interest (to view report, if available, please click on title)

Special Report on Protecting Patient Health Information During the COVID19 Pandemic
This audit special report identified best practices for implementing security measures that decrease the risk of unauthorized access to, and disclosure of, protected health information at medical treatment facilities.  Measures such as multifactor authentication, vulnerability management, and data encryption decrease the risk of unauthorized access to patient information.   Furthermore, limiting access to patient information to users with a mission‐related need to know and implementing active and passive security surveillance measures reduce the capability of insiders to intentionally compromise networks and systems that contain protected heath information.  As medical treatment facilities and alternate care facilities experience increased volumes of patients seeking treatment during the COVID‑19 pandemic, DoD health care leaders, medical treatment facility chief information officers, network administrators, and users must protect the confidentiality, integrity, and availability of protected health information.

Audit of United States Military Equipment Retrograded From Syria
This audit determined that in some instances the Army did not properly account for U.S. Military equipment retrograded from Syria.  Retrograde is the process of moving non-unit equipment from a forward location to a restoration program or another location to satisfy a different requirement.  Equipment retrograded from Syria included items such as vehicles, laptops, and communication devices, but did not include any lethal equipment.  Although the Army did not lose any of the equipment in the audit sample, the audit team statistically projected that the Army did not continuously account for 559 pieces of equipment.  This audit also determined that the Army properly secured storage facilities at Camp Arifjan, Kuwait, that contained U.S. Military equipment retrograded from Syria.  Equipment that is not accounted for while being transferred is at an increased risk of loss.  In addition, if the Army does not enter equipment into accountable property systems of record, Army officials have less visibility of the available equipment to make supply-chain decisions.  

Audit of Physical Security Controls at Department of Defense Medical Treatment Facilities
This audit determined that DoD medical treatment facilities (MTFs) generally implemented required physical security controls to prevent unauthorized access to facilities, equipment, and sensitive areas.  However, security weaknesses were identified at all of the eight MTFs visited.  As a result of these security weaknesses, the restricted areas where medical equipment and pharmaceuticals were stored were vulnerable to unauthorized access, and the MTFs were vulnerable to incidents of violence, sabotage, or terrorism.  Based on findings at the MTFs visited, and the lack of minimum physical security standards, the audit concluded that these weaknesses may exist at other DoD MTFs.

System Review Report on the Defense Logistics Agency (DLA) Office of the Inspector General Audit Organization
This review evaluated the system of quality control for the Defense Logistics Agency Office of the Inspector General Audit Organization in effect for the 3-year period ending in September 30, 2019.  A system of quality control covers the Defense Logistics Agency Office of the Inspector General audit organization’s structure, the policies adopted, and procedures established to provide the Defense Logistics Agency with reasonable assurance of conformity with the Government Auditing Standards.  Audit organizations can receive a rating of pass, pass with deficiencies, or fail.  The Defense Logistics Agency Office of the Inspector General audit organization received an external peer review rating of pass.

 

DEFENSE CRIMINAL INVESTIGATIVE SERVICE HIGHLIGHTS (to view DOJ press release, if available, please click on title)

Georgia Man Arrested for Orchestrating Scheme to Defraud Health Care Benefit Programs Related to COVID-19 and Genetic Cancer Testing
On March 30, 2020, Erik Santos, of Braselton, Georgia was charged by criminal complaint for his alleged role in a conspiracy to defraud federally funded and private health care benefit programs by submitting fraudulent testing claims for COVID-19 and genetic cancer screenings.  Santos was charged with one count of conspiring to violate the Anti-Kickback Statute and one count of conspiring to commit health care fraud.  Santos operated a marketing company that generated leads to testing companies.  According to documents filed in this case and statements made in court, from November 2019 through the present, Santos and others allegedly engaged in a large-scale scheme to defraud Medicare by soliciting and receiving kickback payments from companies involved in clinical and diagnostic testing in exchange for steering to those companies individuals eligible for testing that Medicare would reimburse.  Santos agreed with others to be paid kickbacks on a per-test basis for submitting genetic cancer screening tests to diagnostic testing facilities, regardless of medical necessity.  A genetic cancer screening is a diagnostic tool that tests for a genetic predisposition to cancer.  Santos’ scheme aimed to submit more than $1.1 million in fraudulent claims to Medicare.  Starting in February 2020, the effects of the COVID-19 pandemic began to be felt in the United States.  As the COVID-19 crisis began to escalate, Santos used the pandemic as an opportunity to expand his pre-existing kickback schemes.  Santos agreed with others to be paid kickbacks on a per-test basis for COVID-19 tests, provided that those tests were bundled with a much more expensive respiratory pathogen panel test, which does not identify or treat COVID-19.  Also according to court documents and statements, Santos sought to maximize his kickback profits and to exploit federal health care resources at a time when Medicare beneficiaries across the United States were in dire need of coverage for medical treatment and services.  This is an ongoing investigation with the Federal Bureau of Investigation, the Department of Health and Human Services Office of Inspector General, the Defense Criminal Investigative Service and the Department of Veterans Affairs OIG.

Reference Laboratory, Pain Clinic, and Two Individuals Agree to Pay $41 Million to Resolve Allegations of Unnecessary Urine Drug Testing
On April 15, 2020, Logan Laboratories Inc. (Logan Labs), Tampa Pain Relief Centers Inc. (Tampa Pain), and two of their former executives, Michael T. Doyle and Christopher Utz Toepke (collectively, Defendants) agreed to pay a total of $41 million to resolve alleged violations of the False Claims Act for billing Medicare, Medicaid, TRICARE, and other Federal health care programs for medically unnecessary Urine Drug Testing (UDT).  Both Logan Labs and Tampa Pain are subsidiaries of Surgery Partners Inc.  Doyle is the former CEO of Surgery Partners and Logan Labs.  Toepke is the former Group President for Ancillary Services at Surgery Partners, with oversight of Logan Labs, and a former Vice President at Tampa Pain.  The Government alleged that Defendants knowingly submitted or caused the submission of false claims to Federal health care programs for presumptive and definitive UDT, in circumstances where such testing was not medically reasonable or necessary.  Presumptive UDT are tests that screen for the presence of drugs, and definitive UDT are tests that identify the amounts of those drugs in a patient’s system.  The Government alleged that Defendants developed and implemented a policy and practice of automatically ordering both presumptive and definitive UDT for all patients at every visit, without any physician making an individualized determination that either test was medically necessary for the particular patients for whom the tests were ordered.  According to the Government’s allegations, the medically unreasonable and unnecessary definitive UDT was performed at Logan Labs, the medically unreasonable and unnecessary presumptive UDT was performed at Tampa Pain, and the respective resulting false claims were submitted by both Tampa Pain and Logan Labs to Federal health care programs, from January 1, 2010 through December 31, 2017.  This case was investigated by the Department of Health and Human Services Office of Inspector General, and the Defense Criminal Investigative Service.

 

ANNOUNCED PROJECTS (to view the announcement letters, if available, please click on the title)

Evaluation of the U.S. Navy’s P-8 Aircraft Readiness to Meet the U.S. European Command’s Anti-Submarine Warfare Requirements
The objective of this evaluation is to determine whether the readiness of the Navy's P-8 Poseidon aircraft fleet meets the anti-submarine warfare requirements of the U.S. European Command.  The evaluation will focus on the P-8 Poseidon fleet equipment readiness, including sustainment, maintenance, and the spare parts supply chain.  The evaluation will also cover the P-8 Poseidon’s availability and requirements in the U.S. European Command area of responsibility. 

Evaluation of the Navy’s Airborne Support to the Survivable Nuclear Command and Control System
The objective of this evaluation is to determine the extent that the Navy’s airborne support to the survivable nuclear command and control system is meeting the Chairman of the Joint Chiefs of Staff Operation Order 2-18 and U.S. Strategic Command Operational Plan 801X requirements.

Evaluation of the Ground Test and Evaluation Infrastructure Supporting Hypersonic Capabilities
The objective of this evaluation is to determine whether the DoD has sufficient ground test and evaluation facilities with the capability and capacity to support environmental testing for the DoD's planned hypersonic weapon systems.