Cash Rewards For Information

Inspector General Richard Moore announces that the OIG is offering cash rewards up to $10,000 for information about fraud against TVA where that information leads to a felony charge or a substantial monetary recovery.  “Giving rewards for information is not a new idea,” Moore says.  “Government agencies and corporations have found that offering financial incentives for information is a cost effective way to uncover fraud, and I believe the same is true at TVA.”  A reward program also can serve as part of an organization’s anti-fraud program under the Sarbanes-Oxley Act.

Why offer cash for information?

"Providing a financial reward to individuals who provide information about fraud makes good business sense,” according to Charles Kandt, Assistant Inspector General for Investigations.  A financial reward provides both an incentive to report fraud and a deterrent to committing fraud.  “Someone who is tempted to swindle the agency may think twice, knowing that anyone with information now has a financial incentive to report it.”  Other Inspectors General, the Department of Treasury, the Department of Justice, other federal agencies, and private companies have created rewards programs to encourage people to come forward with information about suspected fraud.

Further, to comply with the Sarbanes-Oxley Act, TVA must document, test, and report on the effectiveness of internal controls in each of its annual reports filed with the Securities and Exchange Commission beginning in Fiscal Year 2007.  The Rewards Program will provide an additional internal control related to the prevention, identification, and detection of fraud.

Who is eligible for a reward?

“Giving information to the OIG about fraud related to TVA that leads to a felony charge or a substantial monetary recovery makes you eligible,” Kandt says.  The only people excluded from the program are OIG employees and employees of other law enforcement agencies.  “While most people already recognize the harm fraud does to TVA and report when they see something isn’t right, providing a financial reward will help ensure no significant concern goes unreported.”

How much money can tipsters receive?

The maximum reward is $10,000 or one (1) percent of any projected recovery resulting from information provided, whichever is less.

How does the program work?

You don’t have to do anything except provide the OIG with information that leads to a felony charge or a substantial monetary recovery.  The information may be provided directly to an OIG employee, or to Empowerline by calling toll-free (1-877-866-7840) or going online at https://www.oigempowerline.com.  If an investigation in fact confirms the value of the information, the OIG automatically will consider whether a reward is warranted.  Whether to pay an award, the timing of any payment, and the amount of award are totally within the Inspector General’s discretion.  The Inspector General will consider relevant factors and will not pay for information the OIG already knows.

What factors does the OIG consider in deciding whether to pay a reward?

For further details on the reward program, visit the OIG website.

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What Is The OIG?

Your comments in response to the OIG survey last fall indicated some of you were not familiar with the OIG concept.  I welcome this opportunity to explain what the OIG is.

Put simply, the OIG is an independent fact-finder created to promote economy, efficiency and effectiveness and to prevent and detect fraud, waste and abuse in TVA programs and activities.  While the OIG provides information and makes recommendations, the OIG does not run TVA and has no decision-making authority on TVA matters.  The Inspector General (IG) Act gives the OIG defined roles and responsibilities which cannot be altered by anyone at TVA.

What were your survey comments?

Representative comments showing uncertainty about the OIG included:

“I do not truly understand the role of the OIG.”

“This [the survey] is the first thing I have heard about the OIG since starting work here.”

“There should be more education to what the OIG does.”

“There is little understanding about what [the OIG] does and the punishment that they impose on wrongdoers.”

When was the OIG created at TVA?

The TVA Board created the OIG on October 18, 1985.  As stated by Director John Waters at that Board meeting:

“A highly qualified Inspector General who occupies a position of independence, power, and prestige within this organization should help to promote the efficiency and increase the effectiveness of all TVA activities.  The Inspector General will not be encumbered with administering programs, but will be free to follow the facts of any investigation wherever they lead and to report directly to this Board and to Congress.”

What is the current basis for the OIG’s authority?

Today, the TVA OIG operates under the authority of the IG Act of 1978, as amended.  This act originally created IGs at 14 agencies.  At the time, the proposed legislation met with unanimous opposition from agency heads, who were clearly uncomfortable with having an audit and investigation organization over which they had no control.  That act became law exactly two centuries after the appointment of the first IG by the Continental Congress.  TVA’s IG was added to the act in 1988, and today TVA is one of over 50 agencies that have an IG acting under the authority of the IG Act.

The IG Act authorizes or requires the OIG to carry out a number of activities.

Conduct any audit or investigation the IG deems necessary or desirable Have access to all records and other material available to TVA Issue subpoenas and administer oaths Receive complaints and grant confidentiality Have direct and prompt access to the TVA Board Hire employees and contract for services as necessary

Promote economy and efficiency while preventing and detecting fraud, waste, and abuse Conduct and supervise audits, inspections, and investigations relating to TVA programs and operations Keep the TVA Board and Congress fully and currently informed concerning fraud and other serious problems, abuses, and deficiencies relating to TVA programs and operations Recommend corrective actions concerning problems, abuses, and deficiencies and report on the progress made in implementing such actions Assure any work performed by non-federal auditors complies with government auditing standards Issue semiannual reports to the TVA Board and Congress

I encourage you to visit the OIG Web page to learn more about the OIG.

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Where To Report Concerns At TVA: Choosing The Best Option

Where should TVA employees turn when they suspect someone is ripping off the agency, perhaps by stealing materials, overbilling, or substituting products?  What should a TVA worker do when he or she knows a foreman supervises a relative?  And who should a TVA employee talk to when he or she suspects a coworker comes to the workplace under the influence of drugs or alcohol?  Find the best course of action for each example at the end of this article.

There are dozens of situations in which employees or contractors may find themselves where they know something isn’t right and needs to be fixed.  They may have witnessed potential fraud or they may have been treated inequitably.  But who should they tell?  Who can ensure something will be done about it?

Unfortunately, the OIG does not have the resources to review every matter reported to Empowerline; instead, OIG directs its attention to those matters where its investigations, audits, and inspections are likely to have the greatest impact on TVA.  The matters which should be reported to the OIG are listed on the Empowerline Web page under What to Report.

Fortunately, there are many other avenues within TVA to handle individual, non-OIG concerns.  These avenues are listed by type of concern in the chart below. This information is also available on Empowerline.

And what was the best course of action to take in the examples described at the outset of this article?  Here are the OIG’s recommendations.

If you think someone is ripping off TVA, especially through a fraud scheme, call OIG Empowerline at 1-877-866-7840 or report the details online at https://www.oigempowerline.com.  If you have information about thefts of TVA property, call TVA police at the appropriate number above.

If you know a foreman is supervising a relative, tell your supervisor or other manager in your supervisory chain.  If you don’t feel comfortable reporting this or similar workplace issues to management, contact DeWitt Burleson, the TVA Ombudsman, at (865) 632-6323 or toll-free at 1-866-632-6322.

In the event a coworker comes to work under the influence of drugs or alcohol, talk to your supervisor, other manager in your supervisory chain, or your human resources officer.  If you want to provide this information anonymously or confidentially, contact the TVA Ombudsman.

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Separating The Undeserving From The Deserving: Eliminating Workers’ Compensation Fraud

Why should you care if someone is employed while at the same time receiving workers’ compensation benefits?  Because they may have lied about their employment in order to keep getting benefits, and lies like that cost TVA money.  If you know someone is working while getting workers’ compensation, call Empowerline; past calls have saved TVA millions of dollars by helping remove undeserving individuals from the workers’ compensation rolls.

Pursuant to the Federal Employees’ Compensation Act (FECA), TVA and other civilian federal employees receive compensation benefits for work-related injuries.  TVA pays all the workers’ compensation charges for TVA employees, which are now running about $60 million annually.  While the vast majority of people who receive workers’ compensation are entitled to those benefits, there is a significant minority that are not.  As shown by the examples below, past investigations have found people who receive total disability benefits while at the same time they engage in strenuous physical jobs or own and operate businesses.  These investigations in many cases lead to terminating benefits for these individuals and savings for TVA.

The Potential Costs Of Workers’ Compensation Program Fraud

James Hunter, OIG Senior Special Agent, has been investigating workers’ compensation fraud for almost 20 years.  “Workers’ compensation fraud costs TVA real money,” Hunter says.  At the end of FY 2005, there were almost 1700 individuals on TVA’s long-term rolls, and TVA paid about $59 million in claims for that year alone.

“Once individuals are on the long-term roll, they tend to stay on it,” Hunter says.  “If they have one dependent, they receive 75 percent of their salary tax-free for life; there is no reduction once an individual reaches retirement age.”  Thus, for example, a married 40-year old employee with a $50,000 salary injured on the job would receive $37,500 tax free annually, or an estimated $1.5 million over his lifetime, plus cost of living adjustments.

Examples Of Workers’ Compensation Fraud

“Our workers’ compensation investigations focus on an individual’s failure to report employment,” says Hunter.  “While there are other types of workers’ compensation fraud, such as claiming an injury occurred on-the-job when in fact it occurred elsewhere, most of our cases involve someone lying in order to continue receiving benefits.”

The Office of Workers’ Compensation Programs (OWCP) administers FECA.  Because FECA is intended to provide wage-replacement benefits to employees who cannot physically continue working, OWCP requires recipients to submit reports of earnings from employment or self-employment.  OWCP uses those reports to assist in determining whether an individual has a continuing entitlement.

“When the OIG receives an allegation that an individual is working while receiving workers’ compensation benefits, I or another special agent will determine whether that individual has reported his income to OWCP,” says Hunter.  “If he has not, then we will open an investigation to determine if the individual has lied in order to continue receiving benefits.  If he has lied and is convicted, he will lose all future benefits.” Congress amended FECA in 1994 to provide that any individual convicted of committing fraud in connection with the application for or receipt of workers’ compensation benefits loses his entitlement to any future benefits.

Here are a few examples of past fact patterns involving former employees on total disability due to a back injury who reported they had no earnings from employment or self-employment.  Each was convicted and their benefits terminated; the total projected long-term savings to TVA from these four cases alone exceeded $2.3 million.

• A former ironworker owned and operated an automotive sales and salvage business.  Special agents observed the individual loading and unloading scrap metal and junk items from a truck, using an acetylene torch on salvage vehicles, and operating machinery to reposition the vehicles and other junk.
  
  
• A former steamfitter actively participated in a trucking business owned by his wife, including driving trucks; in three years the trucking business grossed over $230,000.
  
  
• A former laborer was actively involved in harvesting and selling mussels, including loading and unloading the mussel boat from a trailer, operating the mussel boat, operating the winch that raises and lowers the boom on the boat, pulling the mussels from the brails, and selling the mussels.
  
  
• Another former ironworker was working as a cable tool well driller and welder.

How You Can Help

Everyone can help TVA save thousands if not millions of dollars by reporting suspected workers’ compensation fraud.  FECA was created to protect employees who suffer work-related injuries, not to create a windfall for the undeserving who bilk the system.  Any suspicions of workers’ compensation fraud should be reported to Empowerline, either by calling 1-877-866-7840 or by going online at https://www.oigempowerline.com.