The Labor Department in The Carter
A Summary Report January 14, 1981
By Ray Marshall
Office of the Inspector General (OIG)
The Office of Inspector General was created in October 1978 to promote economy, efficiency and effectiveness in the administration of, and to prevent and detect fraud and abuse in DOL programs and operations. As was the case with the Office of Special Investigations (OSI); the Department's philosophy with respect to the OIG was to try to develop systems to prevent fraud and abuse rather than simply reacting to those problems. We also believe the best preventive system is good management, so OIG activities were considered a part of the Department's management system. Also, as the Act transferred functions previously carried out by the DOL Office of Special Investigations, the OIG assumed responsibility for the Department's organized crime and labor racketeering investigative program, carried out in cooperation with the Department of Justice's Strike Force program. The Department's philosophy with respect to organized crime was to develop priorities based on efforts to eliminate systemic causes of corruption rather than a purely ad hoc approach to randomly prosecute criminals who could be convicted.
The OIG Act caused a reorganization of all DOL audit and investigative offices, consolidating them under the Inspector General. One of the most significant accomplishments of the OIG was to develop a strong and effective organizational, managerial conceptual and programmatic framework within which to achieve the objectives of the Inspector General Act.
The Office spent considerable effort in reorienting traditional audit and investigative thinking; developing an IG identity and spirit and implementing key philosophic principles to guide work.
The Office of Audit undertook a number of initiatives to enhance service to Department managers, improve the quality of audit work, and use resources more effectively. Activities included improving audit communication, use of risk analysis, unified audits, single audits, audit residencies, internal auditing, and audit resolution.
During this period, the Office of Audit issued 578 final external audit reports, which took exception to $301.8 million in costs. The Office also undertook a number of special audit reviews, including studies of the Department's payroll system, property management program, ETA contract and grant close out procedures, FECA periodic roll case management, ESA's Wage-Hour Division, CECA cash management practices, and the Summer Youth Employment Program.
In 1978, the Department established a centralized program for fraud investigations. The Office of Investigations was established to conduct investigations based on allegations of criminal activity or misconduct under criminal laws or Department administered rules, and it undertakes special investigative projects to review major cases of fraud and to deter improper activities. A concerted effort was made to concentrate on high priority allegations.
In a similar vein, a priority based resource allocation system for managing case workload was established, along with an automated case tracking system, and the team concept was implemented in the investigative program, permitting the undertaking of more complex cases.
During this period, investigations resulted in 184 indictments and 126 convictions. During fiscal year 1980, monetary recoveries resulting from OIG investigative efforts totaled $9.9 million.
Concern regarding the Department's efforts to combat the influence of organized crime and racketeering in labor unions led to a mutual agreement between the Attorney General and the Secretary of Labor which provided that the Department would assign 90 full time criminal investigators to Strike Force offices, while Justice would provide secretarial support and that, on a yearly basis, the Secretary of Labor and the Attorney General would meet to review the program's basic strategy and the adequacy of resources devoted to the program. Under the Assistant Secretary for Policy, Evaluation and Research, a systematic analysis is being undertaken to provide the factual and analytical base to target resources on the strategic causes of corruption in organized labor. This kind of analysis is needed in order to put their problem in proper perspective.
The Department's Organized Crime Program, originally part of the Labor Management Services Administration, was transferred to OIG's predecessor organization, the Office of Special I Investigations in 1978, and later in the year was transferred, with passage of the Inspector General Act, to the OIG.
During this period, many significant cases were conducted, resulting in 73 indictments of individuals and 48 convictions.
In addition, the Office of Loss Analysis and Prevention (OLAP) was established to provide a centralized analytical capability for the design, development and direction of a Department wide program for the prevention and control of fraud, waste and abuse.