Publicly Released: September 8, 2022
Objective
The objective of this audit was to determine whether the Department of the Navy (DON) effectively managed the Federal Employees’ Compensation Act (FECA) Program, including reducing claimant fraud, waste, or abuse.
Background
The FECA Program’s primary goal is to assist Federal employees who have sustained work-related injuries or disease by providing financial and medical benefits, as well as assistance with returning to work. The Department of Labor Office of Workers’ Compensation Programs administers the FECA Program and accepts or denies claims, manages the claims, and pays benefits.
The Office of the Under Secretary of Defense for Personnel and Readiness has overall DoD FECA Program responsibility, and the Defense Civilian Personnel Advisory Service is responsible for developing FECA policy and providing guidance, advice, and assistance for injury compensation matters. The Assistant Secretary of the Navy (Manpower and Reserve Affairs) has overall DON FECA Program responsibility, and the Office of Civilian Human Resources (OCHR) is responsible for the administration of the DON FECA Program. From July 1, 2020, through June 30, 2021, the DoD FECA Program provided $414 million in workers’ compensation benefits, of which DON employees received $156 million. Chargebacks are the Department of Labor assignment of claimants’ FECA medical costs and compensation to the employing agencies, and the Department of Labor chargeback year runs from July 1 through June 30.
The Human Resources Office (HRO) Directors at each command are responsible for designating Injury Compensation Program Administrators (ICPAs) to serve as the focal point in all aspects of the DON FECA Program. The ICPAs provide training and guidance to supervisors and employees, help file claims, monitor accepted claims, and ensure that supervisors and employees complete job-related injury or illness forms properly and in a timely manner.
Finding
The DON did not effectively manage the FECA Program. The DON commands we reviewed did not consistently implement the FECA Program, such as assigning staff, completing chargeback reviews, and tracking and monitoring overpayments. This occurred because the Assistant Secretary of the Navy (Manpower and Reserve Affairs) did not issue detailed guidance for administering the FECA Program and adequately oversee how commands implemented the program. In addition, the ICPAs generally processed initial claims with the Department of Labor Office of Workers’ Compensation Programs as required. However, the ICPAs did not always maintain complete records needed to implement the FECA Program, perform annual reviews of a sample of long-term claim files, request current medical reports from the Department of Labor Office of Workers’ Compensation Programs, or identify claimants who could return to work. This occurred because the:
- Assistant Secretary of the Navy (Manpower and Reserve Affairs) did not establish timeframes for completing FECA training and the HRO Directors did not ensure that the ICPAs completed the training;
- HRO Directors and the Defense Civilian Personnel Advisory Service did not ensure that the ICPAs had access to the necessary documentation, software, and databases; and
- Under Secretary of Defense for Personnel and Readiness did not provide guidance that clearly established ICPA roles and responsibilities.
As a result, the DON did not have the ability to verify the accuracy of the DON FECA chargeback costs, overpaid at least $325,070 for FECA benefits that claimants or their beneficiaries were not entitled to receive, and missed opportunities to return employees to work.
Recommendations
We recommend that the Under Secretary of Defense for Personnel and Readiness update FECA guidance to clearly establish the ICPA roles and responsibilities.
We recommend that the Assistant Secretary of the Navy (Manpower and Reserve Affairs) develop and issue guidance providing a consistent approach for implementing the FECA Program and command assessments, establish timeframes for ICPAs to complete training, and complete a workforce study that identifies the number of DON personnel required to adequately implement and oversee the FECA Program.
We recommend that the Defense Civilian Personnel Advisory Service Director conduct an analysis of the software and databases needed to manage FECA claims and provide ICPAs access as appropriate.
We recommend that the Chief of Naval Operations and the Commandant of the Marine Corps direct the HRO Directors to:
- ensure the ICPAs complete the required ICPA Level I training;
- conduct reviews to ensure that the ICPAs are maintaining adequate documentation in the claim files and elevating documentation requests to Defense Civilian Personnel Advisory Service Injury Compensation Management Advisors when the Department of Labor Office of Workers’ Compensation Programs is unresponsive; and
- report training compliance and overpayment information to the OCHR.
Management Comments and Our Response
The Under Secretary of Defense for Personnel and Readiness agreed with the recommendations to update FECA guidance to clearly establish the ICPA roles and responsibilities and to perform an analysis of the software and databases necessary for FECA case management.
The Acting Assistant Secretary of the Navy (Manpower and Reserve Affairs) agreed with the recommendations to develop a single source of FECA Program implementing guidance, re-establish FECA assessments, require annual refresher training, and conduct workforce studies to identify the OCHR personnel required to perform the FECA workload and the ICPAs required for FECA Program implementation.
The Acting Assistant Secretary stated that the DON would also explore opportunities to investigate fraudulent claims in conjunction with the Naval Criminal Investigative Service. The Acting Assistant Secretary of the Navy (Manpower and Reserve Affairs), responding for the Chief of Naval Operations and the Commandant of the Marine Corps, agreed with the recommendations to ensure that the ICPAs complete required Level I training and to require the Command Budget Submitting Office FECA Program Managers and Leads to report completion of the training for compliance tracking. Additionally, the DON will institute a biannual program review.
The Acting Assistant Secretary of the Navy (Manpower and Reserve Affairs), responding for the Chief of Naval Operations and the Commandant of the Marine Corps, also agreed with the recommendation to report FECA Program overpayment information to the OCHR to monitor the outcomes of overpayments. However, the Acting Assistant Secretary did not provide specific actions to address the recommendation. Therefore, we request additional comments on the final report describing the specific actions that the Chief of Naval Operations and Commandant of the Marine Corps will take to report and monitor FECA Program overpayment information.
This report is the result of Project No. D2021-D000AT-0125.000.