Subcommittee Briefing with DOL IG Highlights Key Oversight Priorities in Response to Coronavirus Crisis

Statement

This week, Rep. Gerry Connolly, the Chairman of the Subcommittee on Government Operations, convened a briefing for Members with Scott S. Dahl, the Inspector General (IG) of the Department of Labor (DOL), focused on ongoing oversight efforts into the agency's response to the coronavirus pandemic.

Chairman Connolly issued this statement following the briefing:

"Inspectors General are the gatekeepers and guardians of taxpayer dollars and investments and ensure accountability in our democracy. The Department of Labor Office of Inspector General will help ensure taxpayer dollars are spent lawfully by identifying improper payments and fraud in the unemployment insurance program. I am pleased that the IG is coordinating with all U.S. Attorney's Offices to address unemployment insurance fraud and has produced a heat map with a target amount of fraud in each of their districts."

In addition, Chairwoman Carolyn B. Maloney issued the following statement:

"I commend Chairman Connolly for hosting this critical briefing for Members as part of his series of in-depth reviews of IG work. In the past two months, President Trump has removed, replaced, or attacked five Inspectors General at the Department of Defense, Department of Health and Human Services, Department of State, Department of Transportation, and the Intelligence Community. The President has made clear that he will target any IGs he feels are not loyal to him. The obvious result is that our IGs fear that the President will fire them just for doing their jobs."

Republican Members of the Subcommittee chose not participate in the briefing beyond Ranking Member Jody Hice's opening statement. Despite the absence of minority Members, the Inspector General provided the following critical information during the briefing:

-The IG is evaluating Occupational Safety and Health Administration (OSHA) guidance and its efforts to protect employees as they return to work. Since the beginning of the pandemic, OSHA has issued only one citation, which went to a nursing home in Georgia that delayed reporting the hospitalization of six infected workers. OSHA has received more than 3,000 worker complaints related to business operations during the coronavirus crisis since January 2020. "I was very surprised that only one citation had been issued to a nursing home, and I don't think it took months, it was recently issued after OSHA was informed of it on May 5," said Inspector General Dahl. The IG noted that it plans to release a report at the end of June that assesses OSHA's guidance and its efforts to protect employees as they return to the workplace. The IG also plans to assess OSHA's inspection and enforcement activity for other businesses, such as nursing homes and meat packing plants.

-Shortcomings in state IT systems prevented eligible individuals from receiving benefits in a timely manner. The IG will examine state information technology systems and focus on what can be done differently to ensure that IT systems are better prepared to accommodate changes to the unemployment insurance programs, including a surge in claims.

-The Pandemic Unemployment Assistance Program Needs Proactive Measures to Detect and Prevent Improper Payments and Fraud. Last week, the IG issued a memorandum to alert the Department to the needs of states to implement measures to establish and maintain integrity in the Pandemic Unemployment Assistance (PUA) program created under the CARES Act. Costs for PUA benefits are currently estimated to total nearly $110 billion. As the unemployment insurance program historically experiences some of the highest improper payment rates within the federal government, the associated risk of improper payments and fraud in the PUA program is significant. States' reliance on self-certification alone to ensure eligibility for PUA will lead to increased improper payments and fraud.

-An estimated $26 billion in unemployment insurance benefits could be wasted instead of going towards legitimate claims. The Department has estimated that about 10% of unemployment insurance payments are improper in the best of times. With the large amount of funding under the CARES Act, the improper payment rate potentially will be much higher. The fraud rate within that could range from at least 3% to a much higher percentage of improper payments. That means a conservative estimate of $26 billion could be wasted, and a large portion of that could be pocketed by fraudsters instead of going to legitimate workers.

-The IG has authority to investigate any misconduct allegations involving the Secretary of Labor. Under questioning by Chairman Connolly regarding Secretary Scalia's recent interference with the statutorily independent Federal Retirement Thrift Investment Board regarding its administration of the Thrift Savings Plan, IG Dahl affirmed that his office could look into whether any misconduct took place.

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