1. Office of the State Inspector General
Audits, Investigations & Case Studies: Food, Fish & Fashion December 7, 2018
Michael C. Westfall, State Inspector General
Corrine A. Louden, Deputy Inspector General
Mike
AGA 23rd Annual Commonwealth of Virginia PDT

2. Office of the State Inspector General
What is OSIG and what do we do?
Established July 1, 2012
Chapter 3.2 of the Code of Virginia
Mike
- Combined 4 departmental IGs (VDOT, DOC, DJJ, DBHDS) and the State Internal Auditor to create OSIG.
- Jurisdiction = State agencies defined in our Code section as any agency, institution, board, bureau, commission, council or instrumentality of state government in the executive branch listed in the appropriation act. In the 2016 GA Session, the definition of state agency was expanded to also include local departments of social services. We can also conduct investigations in non-state agencies defined in our Code section as organizations that are not a unit of state government that are wholly or principally supported by state funds. Contrary to what you may have read in some newspapers, OSIG does not have jurisdiction over local and regional jails. In fact Code section C. specifically states we have no authority over the operation and security of local jails.

3. Organizational Chart Mike - OSIG is a small agency with 40 FTE.
- OSIG investigates complaints alleging fraud, waste, abuse or corruption in executive branch state agencies and nonstate agencies. In addition, OSIG:
Administers the Fraud and Abuse Whistle Blower Reward Fund;
Oversees the Fraud, Waste and Abuse Hotline;
Conducts performance audits of state agencies;
Provides training and coordinates and requires standards for the state’s 30 or so internal audit functions;
Performs inspections and conducts reviews of Behavioral Health and Developmental Services facilities and programs; and
Reviews operations of the Virginia Tobacco Region Revitalization Commission.

4. Performance Audit Services
FY2019 Work Plan
Drinking Water Regulation (VDH)
Forensic Technical Services (VDFS)
Meat & Poultry Inspections (VDACS)
Natural Resources Law Enforcement Recruitment (various)
Snow Removal (VDOT)
Vocational Rehabilitation Services (VDBVI)
Mike

5. Behavioral Health & Developmental Services
Legislative Mandates Include:
Unannounced Inspections Part I
Prescribing Practices
Pharmacy Costs and Billing
Unannounced Inspections Part II
Medication Variances
Hazardous Medication Management System
Inspect, Monitor & Review Quality of Services
Investigate Specific Complaints About Care
Mike
- Unannounced inspections – required for all 14 DBDHDS sites annually – areas reviewed have included significant events (including deaths) and reporting and investigating abuse and neglect for example.
- Quality of services reviews – includes DBHDS facilities, as well as DOC facilities (again – NOT local and regional jails) and over 1,000 licensed providers of BHDS.
- Specific complaints (38 total, 23 in-house, 3 to DBHDS CO, 9 to facility directors or human rights advocates 2 to OSIG hotline, 1 to CSB)

6. Investigations & Law Enforcement Services
Primary Legislative Mandate: Fraud, Waste, Abuse and Corruption
State Agency Reporting Requirement
FY2018 Highlights
Case Discussion
Mike
- Mandate – executive branch state agencies, non-state agencies and independent contractors. 7 positions are certified law enforcement officers (and a forensic analyst).
- State Agency Reporting Requirement - § State agencies, courts, and local constitutional officers to report certain fraudulent transactions; penalty.
Upon the discovery of circumstances suggesting a reasonable possibility that a fraudulent transaction has occurred involving funds or property under the control of any state department, court, officer, board, commission, institution or other agency of the Commonwealth, including local constitutional officers and appointed officials exercising the powers of elected constitutional officers, as to which one or more officers or employees of state or local government may be party thereto, the state agency head, court clerk or local official in charge of such entity shall promptly report such information to the Auditor of Public Accounts (Auditor), the State Inspector General, and the Superintendent of State Police (Superintendent).
FY2018 highlights – 19 cases opened at 14 agencies; 19 cases closed; 12 referred to OAG, most were fraud (13 out of 19)
Case Discussion:
- ODU: allegations that an academic staff member with ODU had misappropriated university funds and engaged in questionable financial practices. Evidence supported allegations. Expense claims that were submitted by the staff member to ODU were found to be out of compliance with procurement regulations. Staff member separated from employment with ODU.
- DSS: Jobs Virginia Community Development Corporation submitted falsified daily meal count sheets in the summer of 2012, vastly exaggerating the number of meals served. The company was paid about $871,000 for serving more than 293,400 meals at 85 local sites in Tidewater (churches, neighborhoods, community groups). Program was paid for by the U.S. Department of Agriculture and the VA Department of Health. Employees testified they were pressured to increase numbers, told to sign blank meal sheets (supposedly to be completed by others later), that a “1” was added to the front of the numbers, boosting each count by 100 (i.e., 60 to 160). Shaun Brown was found guilty of fraud conspiracy, two counts of wire fraud, and theft of government property. Sentencing will occur on March 13, You may also remember Shaun Brown as she was the Democratic candidate in the 2nd Congressional District (Williamsburg to VA Beach). Initially ran again as a Democrat, then withdrew before the primary to run as an Independent. Investigations found forged signatures on her petitions to get on the November 2018 ballot against U.S. Representative Scott Taylor and Democrat Elaine Luria. A judge ordered Shaun Brown off the ballot because of the forgery and invalid home addresses listed by Brown on her paperwork.

7. Administrative Services
Mike
Introduce Corrine

8. Internal Audit Oversight & Training Services
FY2019 Work Plan
QARs at CNU, DJJ, and NSU
Training courses (9 plus CAE roundtable)
Auditor Professional Connect
Audit findings
Corrine
Internal Audit Oversight & Training Services has two main functions – assisting Internal Audit shops with technical issues, and providing training to the Commonwealth’s internal auditors.
OSIG requires IA programs to use the Red Book (International Standards for the Professional Practice of Internal Auditing)
In compliance with the Standards, OSIG operates a peer review QAR program. This year, CNU, DJJ and NSU will be participating.
OSIG partners with firms to provide quality CPE training for internal auditors, to include fraud, risk, cybersecurity, internal controls, and state updates.
OSIG meets periodically with CAEs to ensure collaboration throughout the Commonwealth.
OSIG recently launched a new blog site (APC) to more than 250 internal audit members to share documents, ask questions, and share ideas to improve efficiency and effectiveness of operations.
IAOTS uses reports submitted by IA shops to create a statewide database for analysis of findings, which is distributed annually to IA shops. This year the report will be broken down even more to assist with audit planning and internal audit processes.

9. State Fraud, Waste & Abuse Hotline
FY 2018 Highlights
2,570 calls received
785 investigations
596 cases closed, 19% were substantiated
38 investigated by OSIG
Corrine
- Review stats (huge increase in FY18: 785 in FY18, 645 in FY17, 494 in FY16); OSIG investigations involve agency head, agency IA employee, or an “at-will” employee

10. State Fraud, Waste & Abuse Hotline
Corrine
FY18 - VA Dept of Corrections investigates the most cases (usually about 1/3 of all cases), which makes sense with almost 13,000 employees and the largest state agency. DOC also has the most substantiated complaints across the Commonwealth.

11. State Fraud, Waste & Abuse Hotline
Recent Cases:
Solar Fishing
Time for Porn
Contracted for Fashion
Chatty Cathy
Corrine
-Solar Fishing: Received complaint that two employees had used state vehicles for personal purposes and engaged in personal activities unrelated to their job duties during work hours. Investigation found that the two employees did travel to conduct personal business and knew they were doing wrong because they asked a witness to deny they did it. Also found that two employees went fishing during work hours during the solar eclipse. They used a state car, recorded a video of the event and uploaded the video to YouTube. Also found that the same two employees drove their state vehicles to conduct personal business, and as a result, one of those employees arrived to a scheduled meeting over an hour late. Management is conversing with legal counsel to determine disciplinary action.
-Time for Porn - received a complaint that two employees were spending significant non-work-related time on the Internet during work hours. Found that one employee worked 12 days and was connected to the internet for 46 hours. A review of the second employee also found excessive Internet use, but also a review of several pornographic images. Both employees did not utilize the Internet to perform their jobs. Both employees were related. Both ended up utilizing short-term disability very shortly afterwards.
-Contracted for Fashion – received a complaint that a security officer in a state building was selling items in the building and utilizing state resources for printing and shipping. The investigation found frequent Internet use and employee purchases during work hours. Video surveillance showed her printing shipping labels. This employee was not a state employee; however, she was contracted by a state agency and subsequently terminated.
-Chatty Cathy – received a complaint that an employee had excessive use of the state phone for personal use and falsification of a state application. The investigation found excessive phone use, with two calls over two hours each, 44 calls over 1 hour, and 130 calls over 30 minutes – over a five-month period. Also found that she received preferential treatment on a state application because she checked “yes” on the veteran service question. However, she had not served more than 180 days of full-time duty in the armed forces. During these interviews, the interesting thing was that this employee also revealed that she had fraternized with an offender shortly after his release (violation of policy) and as a result he was now stalking her. No jurisdiction over stalking, but she did receive disciplinary action from management.

12. Questions? Mike Westfall, State Inspector General
Corrine Louden, Deputy Inspector General