RD359 - Office of the State Inspector General: Fiscal Year 2016 Annual Report to the Governor and the General Assembly of Virginia – October 2016

Executive Summary:

In accordance with Title 2.2 Chapter 3.2 (§§ 2.2-307 through 2.2-313) of the Code of Virginia, the Office of the State Inspector General (OSIG) is responsible for:

• Investigating complaints alleging fraud, waste, abuse, or corruption by an executive branch state agency, non-state agency or officers, employees, or contractors of those agencies;

• Administering the Fraud and Abuse Whistle Blower Reward Fund;

• Overseeing the State Fraud, Waste and Abuse Hotline;

• Conducting performance reviews of state agencies;

• Providing training and coordination of standards for the state’s internal audit functions;

• Performing inspections and making policy and operational recommendations for Behavioral Health and Developmental Services facilities and providers; and

• Reviewing operations of the Virginia Tobacco Region Revitalization Commission.

Consistent with these responsibilities, OSIG completed the following activities during fiscal year 2016:

• Performance Review Services

* Published seven performance reviews.
* Made 67 performance review recommendations.
* Performed three follow-up reviews.
* Conducted one special project review.

• Behavioral Health & Developmental Services

* Published three unannounced inspections reports.
* Conducted three special projects.
* Of 79 total complaints received, reviewed 24 complaints in-house, referred 51 complaints to the Department of Behavioral Health and Developmental Service, and referred four to other agencies/organizations.

• Investigative Services

* Partnered with federal and/or state organizations on two major investigations, which resulted in two federal grand jury indictments and guilty pleas by four defendants.
* Opened 11 investigations related to executive branch agencies.
* Investigated allegations of fraud, conflict of interest, misappropriation, procurement violations, and ineffective management.
* Referred nine cases to the Office of the Attorney General.

• State Fraud, Waste & Abuse Hotline

* Assigned 494 cases for investigation.
* Of cases closed, determined that 20 percent were substantiated; 51 percent were unsubstantiated; 13 percent were referred to other agencies; and made recommendations to improve internal controls or policies in 16 percent of unsubstantiated cases.
* Investigated 25 cases in-house, because allegations involved an agency head, an agency internal audit employee, or an “at-will” employee.
* Completed five follow-up investigative reviews for compliance with recommendations.
* Conducted three agency work paper reviews to ensure investigations completed on behalf of OSIG were in compliance with Hotline Policies and Procedures.

• Audit Training Services

* Initiated a staffing study of internal audit departments at universities.
* Conducted one Quality Assurance Review.
* Offered 14 training courses to 443 individuals
* Determined that OSIG training resulted in savings of $199,868 over comparable course offerings from private vendors.
* Completed and implemented a findings database for analysis of internal audit department activities.

• Education and Outreach

* Made presentations before 10 state and national organizations.
* Developed brochures and information sheets about OSIG, the Performance Review Process, and the State Fraud, Waste and Abuse Hotline.
* Produced and distributed four news releases.