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Office of the Inspector General: 
U.S. Government Accountability Office: 

Federal Employees' Compensation Act: 

Internal Control Weaknesses Limit Effective Case Management and 
Program Oversight 

OIG-14-2: Federal Employees' Compensation Act 

Report Highlights: 

Office of Inspector General: 
U.S. Government Accountability Office: 

September 30, 2014: 

Federal Employees' Compensation Act: 

Internal Control Weaknesses Limit Effective Case Management and 
Program Oversight: 

Objective: 

This report addresses the extent to which GAO has effectively managed 
its FECA program to ensure that it pays only valid claims for 
continuation of benefits, and that employees are returned to work when 
able. 

What OIG Found: 

GAO has not effectively managed its FECA program to ensure that it 
pays only valid claims for continuation of benefits, and employees are 
returned to work when able. Information documenting eligibility of 
employees receiving benefits is generally outdated and not maintained. 
In addition, efforts to identify employees for reemployment and pursue 
options to return them to suitable work are limited. Third-party cases 
are not monitored to minimize GAO's workers' compensation program 
costs. Furthermore, policy intended to prevent, identify, and report 
potential fraud for investigation lacks specific fraud-prevention 
controls and is outdated. 

What OIG Recommends: 

OIG recommends that the Comptroller General direct the Chief Human 
Capital Officer to immediately develop and implement: operational 
procedures that include specific case documentation procedures to be 
followed by HCO case management specialists; clearly defined 
procedures that establish a framework and delineate responsibilities 
within GAO for identifying candidates for reemployment and developing 
reemployment strategies that foster improved return-to-work outcomes; 
and policy and procedures addressing the responsibilities of GAO 
employees and management in identifying and reporting potential third-
party liability claims. To help reduce the risk of and identify 
potential fraud within GAO's program, OIG recommends establishing 
specific workers' compensation fraud-prevention controls. In addition, 
OIG recommends updating the existing workers' compensation policy to 
reflect current GAO policy requiring all GAO officers and employees to 
promptly notify the GAO OIG concerning the possible existence of FECA 
program fraud, waste, and abuse. GAO agreed with OIG's recommendations 
and stated that the agency intended to act on them. However, GAO 
disagreed with some of the characterizations in the draft report. 

[End of section] 

United States Government Accountability Office: 
Office of the Inspector General: 
September 30, 2014: 

Memorandum For: Gene L. Dodaro: 
Comptroller General of the United States: 

From: [Signed by] Adam R. Trzeciak: 
Inspector Genera: 

Subject: Transmittal of Office of Inspector General (OIG) Audit Report: 

Attached for your information is our final report, Federal Employee's 
Compensation Act: Internal Control Weaknesses Limit Effective Case 
Management and Program Oversight (OIG-14-2). The audit objective was 
to evaluate the extent to which GAO has effectively managed its FECA 
program to ensure that it pays only valid claims for continuation of 
benefits and that employees are returned to work when able. 

The report contains five recommendations aimed at improving the workers'
compensation program at GAO. GAO agreed with our recommendations, but 
disagreed with some of the characterizations in the draft report. The 
agency also provided technical comments that we incorporated, as 
appropriate. Management comments are included in Appendix III of our 
report. Actions taken in response to our recommendations are expected 
to be reported to our office within 60 days. 

We are sending copies of this report to the other members of GAO's 
Executive Committee, GAO's Audit Advisory Committee, and other 
managers with workers' compensation program responsibilities. The 
report is also available on the GAO website at [hyperlink, 
http://www.gao.gov/about/workforce/ig.html]. 

If you have questions about this report, please contact me at (202) 
512-5748 or trzeciaka@gao.gov. 

Attachment: 

Table of Contents: 

Introduction: 

Objective, Scope, and Methodology: 

Background: 

Internal Control Weaknesses Limit Effective Workers' Compensation Case 
Management and Program Oversight: 

Conclusions: 

Recommendations: 

Agency Comments and Our Evaluation: 

Appendix I: Objective, Scope and Methodology: 

Appendix II: Age and Costs of GAO's Workers' Compensation Cases, as of 
December 14, 2013: 

Appendix III: Comments from the U.S. Government Accountability Office: 

Appendix IV: Major Contributors to This Report: 

Appendix V: Report Distribution: 

Figures: 

Figure 1: GAO's Workers' Compensation Case Profile, as of December 14, 
2013: 

Figure 2: Elapsed Years Between the OIG Review of GAO FECA Files and 
the Last Medical Evidence Found in Wage-Loss Compensation Case Files: 

Figure 3: Elapsed Years Between the OIG Review of GAO's FECA Files and 
the Last Medical Evidence Found in Medical Benefits Only Case Files: 

Figure 4: Example of Outdated Medical Evidence Hampering GAO from 
Monitoring FECA Eligibility and Benefit Payments: 

Figure 5: Example of Medical Evidence That Was Not Maintained 
Preventing GAO from Monitoring FECA Eligibility and Benefit Payments: 

Figure 6: Documentation to Promptly Stop Improper Payments Was Not 
Maintained: 

Figure 7: Case Example of Death Benefit Evidence That Was Not 
Maintained: 

Figure 8: Elapsed Years Between the OIG Review of GAO FECA Files and 
the Last Followup with Employees' Treating Physicians Found in Wage-
Loss Compensation Case Files: 

Figure 9: Example of No Follow-Up with Treating Physician Hindering 
Potential Reemployment: 

Figure 10: Example of No Referral to a Physician Specialist to Help 
Determine Potential Reemployment: 

Figure 11: Example of No Referral to a Physician Specialist to Help 
Determine Potential Reemployment: 

Figure 12: Example of No Contact with Employee Preventing GAO from 
Assessing the Employee's Ability to Return to Work: 

Figure 13: Example of a Third-Party Settlement with Missing Statement 
of Recovery: 

Table: 

Table 1: Frequency of Medical Evidence Review by Case Status: 

Abbreviations: 

CHCO: Chief Human Capital Officer: 

DOL: Department of Labor: 

FECA: Federal Employees' Compensation Act: 

HCO: Human Capital Office: 

iFECS: Integrated Federal Employees' Compensation System: 

OGC: Office of the General Counsel: 

OIG: Office of Inspector General: 

OWCP: Office of Workers' Compensation Programs: 

POWER: Protecting Our Workers and Ensuring Reemployment: 

SSA: Social Security Administration: 

[End of section] 

Introduction 

The Federal Employees' Compensation Act (FECA)[Footnote 1] is a workers'
 compensation program that provides compensation to federal employees 
who are injured or become ill, and to the survivors of workers who 
die, in the performance of their jobs. Compensation for lost wages and 
medical benefits represents a significant financial exposure, i.e., a 
program responsibility that may legally commit GAO or create the 
expectation for future federal spending by GAO. To minimize costs and 
prevent potential fraud, controls must be in place and properly 
designed to ensure that agencies pay only valid claims for continuation 
of benefits, and that employees are returned to work when able. 

Objective, Scope, and Methodology: 

This report addresses the extent to which GAO has effectively managed 
its FECA program to ensure that it pays only valid claims for 
continuation of benefits and that employees are returned to work when 
able. To achieve our audit objective, we identified and reviewed 
applicable policies, procedures, laws, and regulations. We interviewed 
Human Capital Office (HCO) managers and staff who administer GAO's 
FECA program. In addition, we met with GAO's Chief Human Capital 
Officer (CHCO) and Deputy CHCO, the Director of Employee Relations and 
Benefits, and Office of the General Counsel (OGC), Legal Services 
attorneys to obtain their perspectives on GAO policies and procedures 
for workers' compensation case management and oversight. 

We also reviewed GAO's Chargeback Billing List Detail for July 1, 2012 
through September 30, 2013. The Chargeback Billing List is a statement 
containing the names of, and costs for, current and former GAO 
employees receiving FECA benefits: wage-loss compensation, medical 
benefits only, and death benefits. We identified 31 individuals 
receiving benefits and reviewed available case files for these 
individuals to determine whether they contained current information 
documenting their continuing eligibility for benefits and evidence of 
efforts to return employees to work, if applicable. We used GAO's 
Standards for Internal Control in the Federal Government,[Footnote 2] 
GAO's workers' compensation policy,[Footnote 3] and federal laws and 
regulations governing FECA to determine whether GAO has established 
effective internal controls for case management and oversight. We 
obtained and analyzed compensation and bill payment history electronic 
data from the Department of Labor's (DOL) Integrated Federal Employees'
 Compensation System (iFECS), from June 15, 1978 to December 14, 2013, 
for all 31 FECA recipients. To assess the accuracy of key data 
elements, we selected a simple random sample of compensation and bill 
payment transactions for the 31 FECA recipients that occurred between 
June 1, 2002 and December 14, 2013—-the most current timeframes for 
which data were available at the time we initiated our audit. We 
determined the data were sufficiently reliable for the purposes of 
this report (see attachment I for further details). 

We conducted this performance audit from September 2013 through 
September 2014 in accordance with generally accepted government 
auditing standards (GAGAS), except for the quality control and 
assurance standard requiring an external peer review of our audit 
organization every three years. This exception did not affect the 
planning or performance of our audit. The Office of Inspector General 
is scheduled for a peer review in fiscal year 2015. GAGAS requires 
that we plan and perform the audit to obtain sufficient, appropriate 
evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objective. 

Background: 

The FECA Program and Benefits: 

The Division of Federal Employees' Compensation in the Office of 
Workers' Compensation Programs (OWCP) within DOL administers the FECA 
program, which provides compensation benefits, medical benefits, and 
specified injury award payments to federal employees who suffer 
disabilities resulting from work-related injuries or diseases. After 
OWCP adjudicates and approves claims submitted by employees who are 
injured in the performance of their official duties, OWCP manages 
distribution of program benefits in the form of compensation for lost 
wages, schedule awards (i.e., other payments made for the loss of, or 
loss of use of, a body part or function), and medical benefits. OWCP 
provides these benefit payments from a compensation fund that federal 
departments and agencies pay into with operating appropriations. 

An employee could be entitled to one or more of the following types of 
benefits: 

Medical benefits. FECA pays for medical treatment for injuries or 
illnesses caused by work. The program makes payments for necessary 
medical services from the employee's choice of physician. Medical 
benefits may continue as long as the conditions from the work-related 
injury persist. Some cases involve injuries, for which the employee is 
entitled to medical treatment only (“medical benefits only” cases). In 
other cases, the illness or injury prevents the employee from working, 
so the employee may receive wage-loss compensation. 

Disability (wage-loss) compensation. If an employee is unable to work 
due to a work-related illness or injury, FECA compensation covers a 
portion of the employee's pay.[Footnote 4] This compensation benefit 
(in lieu of the employee's regular pay) is tax-free and continues to 
be paid as long as the disability persists, even after retirement age. 
The compensation benefits are capped at 75 percent of the monthly pay 
of the maximum rate of basic pay for GS-15, step 10. Compensation 
benefits are subject to an annual cost-of-living adjustment. Employees 
cannot receive wage-loss compensation payments at the same time they 
receive certain other federal disability or retirement benefits, or 
they must have benefits reduced to eliminate duplicate payments. For 
example, Social Security Administration (SSA) disability benefits are 
reduced if an individual is also receiving FECA payments. 

Death benefits. Family members of an employee who is killed by a 
workplace injury or illness may receive recurring compensation 
payments to partially replace the worker's capacity to provide for the 
family. The amount and duration of such payments depend on the 
relationship and ages of the family members.[Footnote 5] 

GAO's Workers' Compensation Case Profile: 

Our review focused on 31 cases that appeared on GAO's Chargeback 
Billing List Detail during the period July 1, 2012 through September 
30, 2013—the most current information available at the time we 
initiated our audit. These 31 cases ranged in age from less than one 
year to over 40 years. Our analysis of OWCP's iFECS electronic 
information, from June 15, 1978, to December 14, 2013, showed that GAO 
paid more than $20.3 million in workers' compensation benefits to 
these 31 individuals—14 recipients of wage-loss compensation, 12 
recipients of medical benefits only, and 5 recipients of death 
benefits. (See figure 1.) 

Figure 1: GAO's Workers' Compensation Case Profile, as of December 14, 
2013: 

[Refer to PDF for image: bar graph and pie-chart] 

Type of Case: 

Wage-Loss Compensation: 14 cases; 
Medical Benefits Only: 12 cases; 
Death Benefits: 5 cases. 

Total Costs: 

Wage-Loss Compensation: $11,245,263; 
Medical Benefits Only: $3,551,068; 
Death Benefits: $5,515,866. 

Source: GAO analysis of GAO Chargeback Billing Reports and OWCP 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

GAO's total FECA costs for the past year were almost $1.1 million. 
[Footnote 6] GAO estimates that future actuarial liabilities for FECA 
compensation payments to those receiving benefits, as of September 30, 
2013, would total an additional $16.7 million (this amount does not 
include any costs for workers added to the FECA rolls in future 
years).[Footnote 7] 

Roles and Responsibilities for Managing GAO's FECA Program: 

For more information about the age and costs of each case in figure 1, 
see appendix II. OWCP has responsibility for adjudicating claims for 
benefits, however, GAO has financial and management responsibilities 
for its own FECA cases. For example, claims examiners at DOL are 
responsible for proactively managing cases for benefit recipients 
until they return to work, are found to be entitled to reduced 
compensation when they are determined to have a wage-earning capacity, 
or are determined to have no reemployment potential for an indefinite 
period of time. 

On the other hand, Department of Labor Publication CA-810, Injury 
Compensation for Federal Employees, 2009 revision, encourages “active 
management of workers' compensation programs by agency personnel” to, 
among other things, contain costs. Program costs are borne by the 
agency, not OWCP. As such, GAO has a strong financial incentive to 
minimize expenses by ensuring both eligibility and suitable employment 
throughout the benefit eligibility period. This includes actions such 
as: maintaining documentation, monitoring medical information of, and 
staying in touch with, injured employees, identifying suitable jobs 
and returning employees to work as soon as possible. According to GAO 
Order 2810.1, GAO's workers' compensation program is intended to 
provide case management and oversight services to: 

* ensure that employees receive complete and timely benefits, 

* facilitate employees' recovery from work injuries, 

* provide job opportunities that will return employees to work as soon 
as possible while accommodating their medical needs resulting from 
work related injuries, and, 

* prevent inappropriate benefits and unnecessary costs. 

The order describes the authorities and establishes the policies, and 
roles and functions of GAO management officials for administering and 
managing GAO's workers' compensation program. The following officials 
and offices have roles with varying responsibilities in GAO's FECA 
program: 

* The CHCO is the accountable official for GAO's program and is 
responsible for providing program oversight and ensuring agency-wide 
program effectiveness. 

* HCO is responsible for the day-to-day administration of FECA in GAO. 

* Unit heads are responsible for ensuring that supervisors, in 
conjunction with HCO case management specialists, monitor the medical 
status of injured employees and offer them medically appropriate 
limited or light work duties[Footnote 8] during recovery. 

* OGC is responsible for providing advisory services to HCO and to 
management officials to assist in effective case management, and legal 
opinions, where appropriate, to ensure that applicable laws regarding 
employee rights and responsibilities are observed. 

Management Challenges Associated with FECA Programs: 

In reports on the FECA program,[Footnote 9] GAO reported that Labor 
and IGs from employing departments and agencies have consistently 
reported similar FECA program-management challenges, such as 
oversight, and have linked increased program costs to improper 
payments.[Footnote 10] For example, GAO reported that a 2012 Labor IG 
report found that Labor did not always take timely action to terminate 
benefits when notified of FECA claimants' deaths and had not designed 
effective procedures to ensure that benefit payments were reduced for 
FECA claimants who were collecting SSA retirement benefits.[Footnote 
11] In another report, GAO stated that every year since 2004, Labor 
has indicated in its annual Performance and Accountability Report that 
adequately overseeing the FECA program is one of its chief management 
challenges. Labor cites verification of beneficiaries' eligibility 
as one of the oversight difficulties that it faces. Moreover, GAO 
reported that IGs from agencies that participate in FECA have reported 
that certain policies and procedures did not exist within their 
agencies, or when they did exist, these agencies did not always follow 
them. Most often these deficiencies were related to a lack of controls 
that would have enabled staff to verify beneficiaries' continued 
eligibility.[Footnote 12] 

In 1999, GAO OIG reported deficiencies in GAO's management of workers' 
compensation cases that added significantly to the agency's FECA 
program costs and increased its vulnerability to waste and abuse. 
[Footnote 13] These deficiencies were related to a lack of certain 
controls, to include the lack of a policy for returning injured 
employees to work; limited case management and inadequate case 
documentation; and limited access to or use of legal, investigative, 
and medical expertise needed to protect GAO's interests. In our report, 
we outlined specific actions that supported proactive FECA case 
management such as: 

* maintaining a copy of OWCP's official files. 

* developing a management information system (with appropriate privacy 
safeguards) that includes claims financial history, description of 
most recent diagnosis and determination of disability, expected 
recovery times and work limitations for the diagnosis, chronological 
record of efforts to find employment for persons whom OWCP does not 
consider totally disabled. 

* involving OGC in reviewing employees' case histories and formulating 
strategies to address or avoid problems. 

* obtaining access to physician and nurse consultants in selected 
cases to, among other things, examine employees to confirm diagnoses, 
assess work limitations, and assist in assessing the suitability of 
available employment opportunities or identifying other workplace 
accommodations, and helping GAO correspond with the employees' health 
care professionals to clarify treatment plans and assessments of work 
limitations. 

* obtaining access to investigator resources and applying other 
information gathering techniques to corroborate selected employees' 
assertions of total disability. 

We noted that a significant outcome of these changes would be a 
program much less vulnerable to waste and abuse. 

Internal Control Weaknesses Limit Effective Workers' Compensation Case 
Management and Program Oversight: 

GAO has not effectively managed its FECA program to ensure that it 
pays only valid claims for continuation of benefits and employees are 
returned to work when able. Information documenting eligibility of 
employees receiving benefits is generally outdated or not maintained. 
In addition, GAO's efforts to identify employees for re-employment and 
return them to suitable work are limited. Third-party liability cases 
are not monitored to minimize GAO's workers' compensation program 
costs. Furthermore, GAO's policy intended to prevent, identify, and 
report potential fraud for investigation lacks specific fraud-
prevention controls and is outdated. 

Information Documenting Eligibility of Employees Receiving Benefits is 
Generally Outdated or Not Maintained: 

Most Medical Records Used to Monitor Eligibility are Outdated and Not 
Maintained: 

To support payment of continuing compensation, federal regulations 
[Footnote 14] state that medical evidence must be submitted whenever 
OWCP requests it but ordinarily not less than once a year.[Footnote 
15] OWCP guidelines for the frequency of case reviews vary by case 
status.[Footnote 16] For example, for those employees with more 
serious conditions not likely to improve and for employees over the 
age of 65, OWCP may require less frequent documentation, but 
ordinarily not less than once every three years.[Footnote 17] (See 
table 1.) 

Table 1: Frequency of Medical Evidence Review by Case Status 

Frequency of Review: Every year; 
Case Status: Medical evidence indicates extended disability is 
anticipated. The employee is entitled to wage-loss compensation, 
capped at 75 percent of the monthly pay of the maximum rate of basic 
pay for GS-15, step 10. 

Frequency of Review: Every 2 years; 
Case Status: Medical evidence indicates some wage-earning capacity. 
The employee is entitled to wage-loss compensation at a reduced 
rate, reflecting a partial wage-earning capacity or actual earnings. 

Frequency of Review: Every 3 years; 
Case Status: Medical evidence indicates employee has no wage-earning 
capacity or re-employment potential for the indefinite future. The 
employee is entitled to wage-loss compensation for the indefinite 
future. 

Source: OIG analysis of OWCP Procedural Manual. 

[End of table] 

GAO workers' compensation policy requires HCO to maintain sufficient 
up-to-date information on employees' medical conditions and 
rehabilitation efforts to document their progress in recovery and 
rehabilitation, and their potential to resume employment.[Footnote 18] 
OWCP procedures call for this medical evidence to include, among other 
things, specific information regarding the employees' diagnosis, 
treatment plan, and prognosis for continued recovery. In addition, 
GAO's policy states that HCO will visit DOL's District Office at least 
twice a year to assure GAO's files are complete. 

Our review of workers' compensation case files for GAO's 23 
employees19 receiving wageloss compensation and medical benefits only 
showed, with few exceptions, no evidence of recent collection of 
medical information. In most wage-loss compensation files, the most 
recent medical information was 3 or more years old, as shown in figure 
2. 

Figure 2 Elapsed Years Between the OIG Review of GAO FECA Files and 
the Last Medical Evidence Found in Wage-Loss Compensation Case Files: 

[Refer to PDF for image: horizontal bar graph] 

Case Number: 250XXXXXX; 
Recommended Timeframe for Medical Evidence: 1 year; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 3.8 years. 

Case Number: 252XXXXXX; 
Recommended Timeframe for Medical Evidence: 1 year; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 5.6 years. 

Case Number: 252XXXXXX; 
Recommended Timeframe for Medical Evidence: 1 year; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 12.8 years. 

Case Number: 500XXXXXX; 
Recommended Timeframe for Medical Evidence: 1 year; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 13.8 years. 

Case Number: 500XXXXXX; 
Recommended Timeframe for Medical Evidence: 1 year; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 14.4 years. 

Case Number: 500XXXXXX; 
Recommended Timeframe for Medical Evidence: 1 year; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 14.6 years. 

Case Number: 500XXXXXX; 
Recommended Timeframe for Medical Evidence: 1 year; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 15.8 years. 

Case Number: 250XXXXXX; 
Recommended Timeframe for Medical Evidence: 2 years; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 5.8 years. 

Case Number: 500XXXXXX; 
Recommended Timeframe for Medical Evidence: 3 years; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 6.0 years. 

Case Number: 130XXXXXX; 
Recommended Timeframe for Medical Evidence: 3 years; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 6.2 years. 

Case Number: 250XXXXXX; 
Recommended Timeframe for Medical Evidence: 3 years; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 10.8 years. 

Case Number: 250XXXXXX; 
Recommended Timeframe for Medical Evidence: 3 years; 
Elapsed years between OIG file review and last medical evidence found 
in the file: 16.2 years. 

Case Number: 110XXXXXX; 
Recommended Timeframe for Medical Evidence: 3 years; 
Elapsed years between OIG file review and last medical evidence found 
in the file: No medical information. 

Source: GAO analysis of GAO FECA case files. 

[End of figure] 

In medical benefits only case files, the most recent medical 
information for 4 cases was 1 year old or less, and between 1 and 16 
years old in 6 cases, as shown in figure 3. 

Figure 3 Elapsed Years Between the OIG Review of GAO FECA Files and 
the Last Medical Evidence Found in Medical Benefits Only Case Files: 

[Refer to PDF for image: horizontal bar graph] 

Case Number: 252XXXXXX; 
Elapsed years: 0.4 years. 

Case Number: 252XXXXXX; 
Elapsed years: 0.8 years. 

Case Number: 252XXXXXX; 
Elapsed years: 0.8 years. 

Case Number: 252XXXXXX; 
Elapsed years: 1.0 years. 

Case Number: 252XXXXXX; 
Elapsed years: 1.4 years. 

Case Number: 252XXXXXX; 
Elapsed years: 2.0 years. 

Case Number: 090XXXXXX; 
Elapsed years: 2.6 years. 

Case Number: 252XXXXXX; 
Elapsed years: 3.0 years. 

Case Number: 250XXXXXX; 
Elapsed years: 10.0 years. 

Case Number: 250XXXXXX; 
Elapsed years: 16.4 years. 

Source: GAO analysis of GAO FECA case files. 

[End of figure] 

As of December 14, 2013, all 23 individuals continued to receive FECA 
compensation benefits, many without recent medical evidence to support 
their claims. If any individual's medical condition has improved, 
payments to that individual could be improper. 

GAO has not established operational procedures or provided guidance on 
who is responsible for maintaining medical evidence; ensuring that the 
medical evidence includes the required information; determining 
timeframes for collecting and evaluating medical evidence; and 
following up if medical evidence is not received within specified 
timeframes. Without such procedures or guidance, GAO lacks assurances 
that the agency pays only valid claims, which increases the risks of 
improper payments and potential fraud. 

Figure 4 illustrates a case where monitoring eligibility is hampered 
by the age of the medical evidence. 

Figure 4: Example of Outdated Medical Evidence Hampering GAO from 
Monitoring FECA Eligibility and Benefit Payments: 

[Refer to PDF for image: text box] 

A GAO employee, who was 72 years old, as of December 14, 2013, 
separated from GAO service on disability retirement and filed a notice 
of occupational disease and claim for compensation in 1988. In 2008, 
HCO sent a letter to OWCP requesting the status of the employee's 
level of work capacity (e.g., information relevant to the return-to-
work effort, especially work tolerance limitations) and requesting 
that an OWCP physician examine the employee. GAO's FECA case file does 
not contain any documentation of an OWCP response or HCO follow-up. 
The most recent medical report in the case file is more than 14 years 
old. 

Without current medical information, it is difficult for GAO to 
monitor changes in the employee's condition that could affect his or 
her benefit payments, or continuing eligibility. The employee 
continued to receive more than $4,000 a month in compensation benefits 
as of December 14, 2013. Between June 1, 2002, and December 14, 2013, 
the employee has received more than $540,900 in compensation benefits 
and $218,660 in medical expenses. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

Figure 5 illustrates another case where medical evidence was not 
maintained to monitor payment of continuing wage-loss compensation. 

Figure 5: Example of Medical Evidence That Was Not Maintained 
Preventing GAO from Monitoring FECA Eligibility and Benefit Payments: 

[Refer to PDF for image: text box] 

An employee, who was 82 years old, as of December 14, 2013, sustained 
an injury 34 years ago and has been on GAO's disability rolls since 
then. In 1983, the employee separated from GAO service on disability 
retirement. GAO's FECA case file does not contain any medical 
documentation concerning the employee's accepted work-related 
condition or the nature and extent of the employee's continuing 
disability. 

Without maintaining medical information in the file, it is difficult 
for GAO to monitor the employee's FECA eligibility and changes to the 
employee's condition that could affect the amount and type of his or 
her benefit payments. The employee continued to receive more than 
$4,700 monthly in compensation benefits, as of December 14, 2013, and 
a total of more than $640,000 in compensation payments between June 1, 
2002, and December 14, 2013, even though, based on our review and 
analysis of OWCP bill pay history data, the employee had not incurred 
any medical expenses during this same time period. In September 2014, 
we determined that the employee had been deceased since April 2013. If 
GAO had been monitoring this case, it may have identified and 
prevented improper payments made to the deceased employee for 10 
months. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

Two Case Files were Missing: 

GAO workers' compensation policy requires HCO to maintain case files 
documenting the history and status of all GAO employees receiving 
workers' compensation benefits. According to Standards for Internal 
Control in the Federal Government, all transactions, and other 
significant events need to be clearly documented, and the 
documentation should be readily available. Further, the standards 
state that all documentation and records should be properly managed 
and maintained. Internal control helps GAO effectively manage and 
safeguard resources. 

HCO could not provide workers' compensation case files for 2 employees—
1 receiving wage-loss compensation payments and the other receiving 
medical benefits only. Between June 1, 2002, and December 14, 2013, 
these employees received more than $614,000 in FECA benefits. Without 
readily available workers' compensation case files, it is difficult to 
determine if HCO has actively managed these cases, including ensuring 
that benefits are appropriate and costs are necessary. 

One Case File Lacked Documentation to Prevent Improper Payments: 

Federal law[Footnote 20] states that the agency gaining an employee as 
a result of transfer of functions is required to pay the employee's 
FECA compensation benefits and other expenses. Our review of workers' 
compensation case files for GAO's employees receiving wage-loss 
compensation and medical benefits identified 1 employee whose position 
was transferred to another agency and who was still receiving payments 
(i.e., improperly paid by GAO) for medical and other expenses after 17 
years. (See figure 6.) 

Figure 6: Documentation to Promptly Stop Improper Payments Was Not 
Maintained: 

[Refer to PDF for image: text box] 

An employee who was injured while working at GAO in 1990 had his or 
her job function transferred to another federal agency in 1996 
pursuant to legislative action. In 1999, the GAO IG notified GAO's 
Director of Personnel that the Office of the General Counsel—-pursuing 
a matter we brought to its attention—-found that the cost of FECA 
benefits should have been transferred from GAO to the other federal 
agency in 1996. Based on OIG records, in 2000, the Director sent two 
letters to Labor requesting that all of the former employee's FECA 
costs for fiscal year 1999 be transferred to the other federal agency 
and adjustments be made to GAO's chargeback report to reflect the 
overpayments in fiscal years 1997 and 1998, totaling $84,000. There is 
no evidence in GAO's workers' compensation file regarding our 
notification to HCO or correspondence between HCO, Office of General 
Counsel, and OWCP about the improper payments. 

As a result, GAO did not promptly stop FECA payments and continued to 
make them for over 17 years. In response to our current audit, HCO 
notified OWCP about GAO's continued improper payments. In 2014, OWCP 
transferred the former employee's case to the appropriate federal 
agency. Between June 1, 2002, and December 14, 2013, GAO improperly 
paid another $23,000 in medical benefits, of which GAO recovered about 
$845 – the cost billed to GAO between July 1, 2012 and June 30, 2013. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

Most Records to Confirm Death Benefit Coverage and Entitlement are Not 
Maintained: 

GAO workers' compensation policy states that HCO maintains case files 
documenting the history and status of all GAO employees receiving 
workers' compensation benefits. Standards for Internal Control in the 
Federal Government emphasize that all transactions and other 
significant events need to be clearly documented, and all 
documentation and records should be properly managed and maintained. 

Our review of the 5 death case files showed that most do not contain 
documents used to confirm death benefit coverage and entitlement. Out 
of the 5 case files, 

* None had evidence to demonstrate that HCO had obtained a notice of 
death and claim for compensation, which provides such basic 
information as the surviving spouse's name, date of birth, and social 
security number; nature of injury or occupational illness; and cause 
of death. 

* None had evidence to demonstrate that HCO had obtained a marriage 
certificate which provides verification of the relationship to the 
deceased GAO employee and entitlement to benefits. 

* Three had no evidence to demonstrate that HCO had obtained a copy of 
the employee's death certificate. 

* Four had no evidence to demonstrate that HCO had obtained a claim 
for continuation of compensation. For the one case that included such 
evidence, the verification information was no longer current (more 
than 6 years old). 

As of December 14, 2013, all 5 individuals' families continued to 
receive FECA compensation benefits without sufficient evidence to 
support their claims. 

Figure 7 illustrates a case missing evidence to support a death 
benefit claim, preventing GAO from monitoring eligibility for those 
benefits. 

Figure 7: Case Example of Death Benefit Evidence That Was Not 
Maintained: 

[Refer to PDF for image: text box] 

An employee who suffered a work-related illness more than 4 decades 
ago continued to receive wage-loss compensation until his or her 
death. OWCP determined the employee's death was covered under FECA 
and approved more than $3,300 in monthly survivor benefits for the 
employee's dependent. GAO's FECA case file did not contain any 
information concerning the employee's death or his or her surviving 
dependent. According to OWCP compensation data, more than $140,800 in 
recurring compensation payments has been paid since the employee's 
death, without evidence to support the initial or continuing claim for 
benefits. 

According to GAO management officials, the documentation concerning 
the employee's death or his or her dependents would have no effect on 
the adjudication of the claim. A different case illustrates the 
importance of maintaining information concerning the employee's 
surviving beneficiary. We recently determined that the surviving 
dependent receiving death benefits was deceased for several months, but 
payments continued through September 2014. Although GAO plays no role 
in survivor benefit decisions, it can still provide evidence for OWCP 
to consider. If GAO had been monitoring this case, the improper 
payments to a deceased dependent may have been prevented. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

GAO has not established or implemented operating procedures and 
guidance for workers' compensation records management. Without such 
procedures and guidance, it would be difficult to ensure that valid 
death benefits are paid in accordance with FECA requirements. 

Recent HCO Actions: 

HCO has taken a number of actions to address some of the internal 
control weaknesses that limit effective workers' compensation case 
management and program oversight. For example, according to the HCO 
Director of Employee Relations and Benefits, HCO established a work 
log to track and monitor all OWCP cases; implemented a quarterly 
review comparing the cases listed on the chargeback report to the case 
files to ensure that readily available files are maintained; reviewed 
all cases to assess their current status and to determine what missing 
and additional documentation was required from DOL; and visited DOL to 
obtain missing file documentation for certain cases. In addition, HCO 
received approval for OWCP training for Benefit Specialists in 
December 2014. In April 2014, HCO hired a benefit specialist whose 
major duties include, among other things, administering GAO's workers' 
compensation program. On September 10, 2014, GAO's CHCO and Chief 
Information Officer signed a Memorandum of Understanding with DOL to 
use its electronic claims filing system, known as the Employees' 
Compensation Operations and Management Portal (ECOMP). ECOMP will 
enable GAO to electronically access information about its claimants, 
such as up-to-date medical information, that the office currently does 
not have ready access to in every case. 

Efforts to Identify Employees for Re-employment and Pursue Options to 
Return Them to Suitable Work Are Limited: 

Injured workers who are medically able to return to work[Footnote 21] 
(with or without accommodation) are expected to return to gainful 
employment when work is made available. Those who do not do so are no 
longer eligible for disability compensation under FECA. DOL, in 
collaboration with the Protecting Our Workers and Ensuring 
Reemployment (POWER) Return to Work Council,[Footnote 22] identified 
strategies that federal agencies may use to increase the likelihood of 
an employee's return to work.[Footnote 23] These include best 
practices such as: 

* initial and follow-up contact with employees to identify 
restrictions for a modified work arrangement; 

* contact with physicians to provide them with materials explaining 
the program and the availability of modified work positions; and; 

* communication within the agency among individuals with varying 
important roles in the success of a return-to-work program, such as 
upper-level managers, supervisors, human resources, disability program 
managers, and medical professionals. 

The FECA regulations contemplate several available strategies to 
monitor an injured worker's progress toward returning to work. The 
regulations make explicit actions which agencies may undertake in 
monitoring FECA files. These actions should be exercised, when 
appropriate, because there are divergent incentives in returning 
injured employees to work. 

Contact with Treating Physicians to Determine Work Limitations is 
Infrequent: 

Federal regulations[Footnote 24] state the employer may monitor the 
employee's medical progress and duty status by obtaining periodic 
medical reports. To aid in returning an injured employee to suitable 
employment, the employer may also contact the employee's physician in 
writing concerning the work limitations imposed by the effects of the 
injury and possible job assignments. GAO's workers' compensation 
policy authorizes GAO to contact the employee's physician to help 
structure an assignment that accommodates the employee's limitations 
and restrictions, if any exist.[Footnote 25] 

In a report on return to work strategies, GAO reported that contact 
with medical service providers was among the key practices agencies 
had at their disposal to manage return-to-work programs for disabled 
employees. [Footnote 26] In addition, GAO reported that this 
communication helps the physician understand a disabled employee's 
essential job functions when deciding whether to clear the employee to 
return to work.[Footnote 27] GAO further noted that this communication 
also helps the physician understand any transitional work 
opportunities or other job accommodations that the employer would be 
willing to provide. Otherwise, according to GAO, the physician may not 
clear the employee to return to work until he or she can function at 
pre-disability levels.[Footnote 28] 

Our review of 13 workers' compensation case files for GAO's employees 
receiving wageloss compensation identified 2 employees with no 
evidence in their files that GAO contacted their physicians to 
determine return to work potential. For the 11 cases that had evidence 
of physician contact, these contacts occurred anywhere from 5 to more 
than 12 years ago. (See figure 8.) 

Figure 8: Elapsed Years Between the OIG Review of GAO FECA Files and 
the Last Follow-up with Employees' Treating Physicians Found in Wage-
Loss Compensation Case Files: 

[Refer to PDF for image: horizontal bar graph] 

Case Number: 500XXXXXX; 
Elapsed years: 5.0 years. 

Case Number: 250XXXXXX; 
Elapsed years: 5.4 years. 

Case Number: 250XXXXXX; 
Elapsed years: 5.4 years. 

Case Number: 250XXXXXX; 
Elapsed years: 5.4 years. 

Case Number: 500XXXXXX; 
Elapsed years: 5.4 years. 

Case Number: 500XXXXXX; 
Elapsed years: 5.4 years. 

Case Number: 500XXXXXX; 
Elapsed years: 5.4 years. 

Case Number: 130XXXXXX; 
Elapsed years: 6.2 years. 

Case Number: 250XXXXXX; 
Elapsed years: 11.6 years. 

Case Number: 250XXXXXX; 
Elapsed years: 12.6 years. 

Case Number: 500XXXXXX; 
Elapsed years: 12.8 years. 

Source: GAO analysis of GAO FECA case files. 

[End of figure] 

An employee's treating physician generally has the most knowledge 
about the employee's work-related medical condition, as well as any 
non-work related medical issues, and recommends specific treatment 
options for the employee. Without regular contact with physicians, GAO 
may miss opportunities to identify jobs suitable for injured employees 
and take steps to reemploy them as soon as medically possible. 

Figure 9 illustrates a case of infrequent contact with a treating 
physician to determine work limitations. 

Figure 9: Example of No Follow-Up with Treating Physician Hindering 
Potential Re-employment: 

[Refer to PDF for image: text box] 

A GAO employee was injured at work in 1994 and eventually returned to 
part-time employment in 1997. In 1999, the employee separated from GAO 
on disability retirement. In 2001, an HCO employee benefit specialist 
sent a letter to the employee's physician requesting the physician 
complete a GAO Work Capacity Evaluation Form and stating that GAO was 
in the process of reviewing all of its work-related injury claims with 
the intent of returning individuals to work in their former positions 
or creating modified job assignments. The letter, however, did not 
address the fundamental job duties of the position the employee held, 
or other job accommodations that the agency was willing to provide. 
The physician's completed form only indicated that the employee was 
unable to work, with no medical reasons given to support the 
physician's opinion. For example, the physician gave no indication 
whether the employee would be able to work a modified schedule, how 
long the employee's restrictions would apply, whether maximum medical 
improvement had been reached, or whether there were other medical 
facts, situational factors, equipment, or devices that needed to be 
considered in identifying a position for the employee. There is no 
evidence in the file that GAO followed up with a targeted letter to 
the physician to clarify or obtain additional information about the 
employee's duty status or medical progress. 

By not following up with the physician, GAO did not have the 
information it needed to evaluate whether a job offer was appropriate, 
with or without accommodations. Between June 1, 2002, and December 14, 
2013, GAO paid more than $489,100 in compensation and $241,600 in 
medical expenses for this case. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

GAO's policy does not define operational guidance or procedures that 
describe what medical information the agency considers necessary and 
relevant for determining work restrictions; how to contact physicians 
to obtain that information; or what offices and individuals to involve 
for their relevant technical expertise--such as the Reasonable 
Accommodation Coordinator; the Accommodation Committee; and the Chief 
Administrative Officer. Furthermore, GAO's policy does not clearly 
establish guidance or procedures for monitoring OWCP's plans for 
employees' return to work with a new employer, in cases where efforts 
to return the employee to work with GAO are not successful. 

Injured Employees are Not Referred to Physician Specialists to Help 
Determine Potential to Resume Employment: 

Federal regulations[Footnote 29] state that an agency may require an 
employee to report for an examination to determine medical limitations 
that may affect placement decisions, if the employee applies for or 
receives benefits as a result of an on-the-job injury or disease. In 
addition, the regulations[Footnote 30] state that an agency has the 
option to offer a medical examination (including a psychiatric 
evaluation) in any situation where it needs additional medical 
documentation to make an informed management decision. GAO's workers' 
compensation policy states that the agency may refer an employee to a 
physician specialist of its choosing to help it make such a 
determination. 

Our review of 13 wage-loss compensation case files showed no evidence 
that GAO had referred any of the employees to a physician specialist 
for examination. While referrals to a physician specialist should be 
considered on a case-by-case basis, such referrals can help GAO make 
an informed employment decision. Without this information, the agency 
may miss opportunities to return employees to suitable work. 

GAO's policy does not include operational procedures or guidance for 
making a referral or for taking action based on the medical evidence 
obtained. 

Figures 10 and 11 illustrate case outcomes when injured employees are 
not referred to physician specialists to help determine their 
potential to resume employment. 

Figure 10: Example of No Referral to a Physician Specialist to Help 
Determine Potential Reemployment: 

[Refer to PDF for image: text box] 

A GAO employee was injured while on official duty in 1984. The 
employee subsequently was separated from GAO service through 
termination-disability in 1985. Notes in the file indicated that, in 
1991, the employee's physician assessed him or her as totally 
disabled; however, in 2000, an OWCP rehabilitation and disability 
management consultant noted in a report that documentation of the 
employee's medical condition lacked evidence of total disability. In 
addition, the consultant noted that previous attempts at reemployment 
were unsuccessful, in part, due to the employee's insistence that his 
or her primary responsibility was child-rearing and he or she would 
consider only home-based employment. The consultant further noted that 
the employee appeared unmotivated to return to competitive employment, 
and the basis of the employee's alleged disability was difficult to 
assess objectively and was in great part based on the employee's self-
report. The consultant finally noted that efforts to investigate or 
develop a light duty job offer would not be worthwhile unless OWCP was 
willing to solicit a current (and objective) second medical opinion of 
the employee's diagnoses and functional capacity, and GAO could offer 
permanent modified employment. The consultant noted that this claim 
implied significant financial exposure. There is no evidence in the 
case file that GAO referred the employee to a physician specialist 
to help make a determination regarding potential reemployment. 

By not referring the employee to a specialist as suggested, GAO missed 
an opportunity to determine the employee's re-employment options. 
Between June 1, 2002, and December 14, 2013, GAO paid more 
than $424,250 in compensation and $81,480 in medical expenses. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

Figure 11: Example of No Referral to a Physician Specialist to Help 
Determine Potential Reemployment: 

[Refer to PDF for image: text box] 

A GAO employee was injured at work in 1985 and was separated from GAO 
service on termination/disability in 1987. In 1998, OWCP referred the 
employee for a second medical evaluation by a specialist, whose report 
noted that the injuries for which the employee was receiving benefits 
had “long since resolved,” and “there was no need for any further 
treatment” for the injuries. The specialist completed a work capacity 
evaluation form indicating that the employee could work 8 hours per 
day with lifting restrictions for 4-6 weeks. In 1999, GAO OIG asked 
HCO what it had done to return the employee to work in some capacity. 
HCO stated that nothing had been done because of a medical issue 
unrelated to the employee's work-related injury, and said it would 
discuss the case with the Office of General Counsel. There is no 
evidence in the file of communications between HCO and the Office of 
General Counsel about this case. In addition, there is no evidence in 
the file that GAO referred the employee to a physician specialist to 
evaluate the medical issue unrelated to the employee's work-related 
injury and to determine his or her potential to work. 

By not referring the employee to a specialist, GAO missed an 
opportunity to determine the employee's reemployment options. Between 
June 1, 2002, and December 14, 2013, GAO paid more than $291,700 in 
compensation and $22,900 in medical expenses. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

Contact with Injured Employees to Assess Their Ability to Return to 
Work is Infrequent: 

Federal regulations[Footnote 31] state that an employer may contact an 
employee at reasonable intervals to request periodic medical reports 
addressing his or her ability to return to work. GAO workers' 
compensation policy states that unit heads, after consultation with 
HCO, may at reasonable intervals request that the employee provide 
them with periodic medical reports from their physician addressing the 
employee's ability to work.[Footnote 32] 

In a report, GAO highlighted the importance of establishing early 
contact and staying in touch with disabled employees to help maintain 
their motivation to return to work.[Footnote 33] The report noted that 
contacting an employee helps reassure him or her that there is a job 
to return to, and that the employer is concerned about his or her 
recovery. 

We found that GAO's contacts with injured employees receiving wage-
loss compensation were infrequent. Out of the 13 wage-loss 
compensation case files, 10 did not have evidence in their FECA files 
that GAO contacted the employees. For the 3 cases that had such 
evidence, the most recent contacts were over 16 years ago in the first 
case, over 19 years in the second case, and in third case, 36 years 
ago. 

GAO's policy does not establish operating procedures or guidance on 
how to initiate contact or implement information received from those 
contacts. 

Figure 12 illustrates a case of infrequent contact with an injured 
employee preventing GAO from assessing the employee's ability to 
return to work. 

Figure 12: Example of No Contact with Employee Preventing GAO from 
Assessing the Employee's Ability to Return to Work: 

[Refer to PDF for image: text box] 

An employee, who was 79 years old, as of December 14, 2013, sustained 
an injury in 1976. In 1978, the employee notified GAO that the doctor 
had released him or her to return to work. GAO informed the 
employee that a medical statement from the physician was needed 
indicating that the employee was completely well and able to continue 
his or her duties on a full-time basis. GAO subsequently received a 
signature-stamped medical statement from the employee's physician 
indicating that the employee was presently receiving no treatment and 
that the employee could return to work on a full-time basis with no 
restrictions. Within 5 days, the employee reported to work and was 
informed that the doctor's report was not acceptable because it lacked 
an original signature on the medical statement and additional 
information was needed before the employee could return to work. The 
following day the employee voluntarily resigned, citing tensions 
created by an intolerable work environment. There is no evidence in 
the case file indicating that GAO contacted the employee in the last 
36 years. 

Because GAO did not maintain communication with the employee, GAO did 
not remind the employee that he or she was expected to seek re-
employment within his or her medical restrictions, possibly with 
another government agency or private employer. Between June 1, 2002, 
and December 14, 2013, GAO paid more than $232,350 in compensation and 
$62,550 in medical expenses. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

Third-Party Liability Cases Not Monitored to Minimize GAO's Workers' 
Compensation Program Costs: 

In some FECA-covered cases, a third party may be found legally liable 
for damages. The potential for third-party liability exists in a 
variety of situations. For instance, the driver of a vehicle causing 
an accident in which an employee is injured, the owner of a building 
where unsafe conditions cause an employee to fall, and a manufacturer 
whose defective product causes an employee's injury, could all be 
considered third parties to the injury. FECA requirements34 state that 
the Secretary of Labor may require the employee to pursue the case 
personally or assign it to the United States for prosecution. If the 
employee (or the beneficiary, in the event of death) is required to do 
this and refuses, he or she is no longer entitled to FECA 
compensation. FECA also has specific requirements[Footnote 35] for 
cases in which damages are recovered. After deducting the cost of the 
subrogation lawsuit and a reasonable attorney's fee from the damages 
awarded in the lawsuit, the employee must refund to the federal 
government the total amount of FECA compensation it paid, and credit 
the remainder of the damage award against any future compensation 
payable for that claim. 

GAO's workers' compensation policy only briefly describes procedural 
steps that employees and supervisors should take to report a potential 
third-party case before a third-party case is prosecuted.[Footnote 36] 
This information is located in a question-and-answer chapter of the 
order. According to Standards for Internal Control in the Federal 
Government,[Footnote 37] management is responsible for developing 
detailed policies, procedures and practices to fit agency operations. 
GAO's workers' compensation policy, however, does not establish 
detailed policies and procedures for managing, collecting and 
documenting information about, and overseeing third-party cases after 
damages have been recovered. 

Our review of 31 workers' compensation cases identified three cases 
resulting in third party recoveries. None of these cases had evidence 
in the file to demonstrate that HCO had obtained a statement of 
recovery, which would confirm, among other things: 

* the gross amount of damages awarded; 

* the amount of damages retained by the injured employee; 

* all compensation and medical benefits paid by GAO; 

* the amount to be refunded to GAO; and; 

* any surplus damages, if any, against which future compensation 
payments must be credited. 

Without this information, it is difficult to ensure recovered funds 
are properly credited to GAO and costs of the program are minimized. 

Figure 13 illustrates a third-party case resulting in recoveries with 
no statement of recovery to help GAO determine how much money it 
should have received. 

Figure 13: Example of a Third-Party Settlement with Missing Statement 
of Recovery: 

[Refer to PDF for image: text box] 

An employee, who was 50 years old, as of December 14, 2013, was 
injured on the job by a third party in 1992. In 1996, the employee was 
separated from GAO service through a removal for unavailability for 
duty. In 1996, the attorney who handled the third-party lawsuit sent a 
check for $25,196, with a notation on the check indicating the full 
and final lien payment, to the Department of Labor's Office of the 
Solicitor. In a letter from the Department of Labor's Solicitor to the 
attorney, the Solicitor stated that the Office was unable to close its 
file because it had not received a statement of recovery reflecting 
the full distribution of the third-party settlement. The letter also 
stated that the full distribution of the settlement was needed to 
determine the exact amount of the refund due and to establish a third-
party credit. In 2008, an HCO human capital specialist sent a letter 
to the OWCP claims examiner requesting “an explanation of the third-
party check (whose account and when this amount applied).” The letter, 
however, did not request a copy of the statement of recovery, which 
would confirm, among other things, the gross amount of damages awarded 
and the amount to be refunded to GAO. The claims examiner's written 
reply instructed the human capital specialist to contact the National 
Office for that information. There is no evidence in GAO's workers' 
compensation file that the human capital specialist followed up with 
the National Office to request the statement of recovery. 

Without a statement of recovery, it is difficult to ensure that 
recovered funds are properly credited to GAO and costs of the program 
are minimized. Between June 1, 2002, and December 14, 2013, the 
employee received more than $934,400 in compensation benefits and 
medical expenses. 

Source: GAO Workers' Compensation Case File and OIG analysis of OWCP's 
Integrated Federal Employees' Compensation System data. 

[End of figure] 

Policy Intended to Prevent, Identify, and Report Potential Fraud for 
Investigation Lacks Specific Fraud-Prevention Controls and Is Outdated: 

FECA regulations state that employees who obtain benefits fraudulently 
could be prosecuted.[Footnote 38] If the employee is convicted, his or 
her compensation benefits would be terminated. GAO's work examining 
FECA fraud-prevention controls has identified several promising 
practices that could help to reduce the risk of fraud within the FECA 
program.[Footnote 39] GAO reported that the promising practices link 
back to fraud-prevention concepts contained in GAO's Fraud Prevention 
Framework and Standards for Internal Control in the Federal 
Government,[Footnote 40] and include: 

* having full-time staff dedicated to the FECA program; 

* periodically reviewing claimants' eligibility; 

* analyzing data for potential fraud indicators; and; 

* effectively using investigative resources. 

Further, GAO reported that these promising practices have resulted in 
successful investigations and prosecutions of FECA-related fraud at 
some agencies, and could help to further enhance the program's fraud-
prevention controls. 

Current GAO policy requires all employees to promptly refer any 
suspected criminal misconduct or other serious wrongdoing in a GAO 
program to GAO's OIG.[Footnote 41] GAO's Standards for Internal 
Control in the Federal Government emphasize that policies and 
procedures should be periodically reviewed for continued relevance and 
effectiveness and updated as needed. GAO's workers' compensation 
policy states that when case review or other sources identify 
instances of potential fraud, HCO will compile available information, 
immediately refer the matter to Labor's OIG for investigation, and 
continue to closely monitor the case until it is resolved. [Footnote 
42] However, HCO has not established specific fraud-prevention 
controls which may help to prevent and detect potential FECA fraud. In 
addition, GAO's workers' compensation policy does not reflect current 
GAO policy and procedures for reporting potential fraud to GAO's OIG, 
as required. As a result, potential FECA fraud, waste, and abuse could 
go undetected by HCO and unreported to GAO OIG. 

Based on our review of 31 workers' compensation cases, four cases of 
potentially fraudulent claims are under review by our Office of 
Investigations to determine whether an investigation or other action 
is warranted. 

Conclusions: 

GAO's workers' compensation program is intended to provide case 
management and oversight services to, among other things, offer job 
opportunities that will return employees to work as soon as medically 
possible and to prevent inappropriate benefits and unnecessary costs. 
While OWCP has responsibility for adjudicating claims for benefits, the 
employing agency (i.e., GAO) has primary financial and management 
responsibility for administering its own FECA cases. This is 
accomplished through active case management controls and activities 
such as monitoring medical information and staying in touch with 
injured employees and their treating physicians, identifying suitable 
jobs, and returning them to work as soon as possible. However, GAO 
lacks properly designed controls—-operational procedures, guidance, 
and fraud-prevention controls—to ensure the agency pays only valid 
claims for continuation of benefits and employees return to work when 
able. Without effective controls, GAO lacks reasonable assurances that 
its FECA program costs are minimized and potential program fraud is 
prevented. 

Recommendations: 

We recommend that the Comptroller General direct the Chief Human 
Capital Officer to immediately take the following five actions: 

1. Develop and implement operational procedures that include specific 
case documentation procedures to be followed by HCO case management 
specialist to help ensure HCO maintains: 

* Case files documenting the history and status of all GAO employees 
receiving workers' compensation benefits. The procedures should, at a 
minimum, outline responsibilities for visiting OWCP to assure GAO's 
files are complete. 

* Sufficient up-to-date information on all employees receiving workers'
compensation benefits. The procedures should, at minimum, outline 
responsibilities for maintaining medical information, timeframes for 
collecting and evaluating medical information, content of medical 
evidence, and follow-up actions if medical evidence is not received 
within specified timeframes. 

2. Develop and implement clearly defined procedures that establish a 
framework and delineate responsibilities within GAO for identifying 
candidates for re-employment and developing re-employment strategies 
that foster improved return to work outcomes. 

3. Develop and implement policy and procedures addressing the 
responsibilities of GAO employees and management in identifying and 
reporting potential third-party liability claims, and the case 
management and oversight responsibilities of HCO to help ensure GAO is 
reimbursed from recoveries. 

4. To help reduce the risk of and identify potential fraud within 
GAO's program, establish specific workers' compensation fraud-
prevention controls to help reduce the risk of and identify potential 
fraud within GAO's program. 

5. Update the existing workers' compensation policy to reflect current 
GAO policy requiring all GAO officers and employees to promptly notify 
the GAO OIG concerning the possible existence of FECA program fraud, 
waste, and abuse as outlined in GAO Order 1130.1. 

Agency Comments and Our Evaluation: 

The Inspector General provided GAO with a draft of this report for 
review and comment. In its written comments, reprinted in appendix 
III, GAO agreed with our recommendations, but disagreed with some of 
the characterizations in the draft report. The agency also provided 
technical comments that we incorporated, as appropriate. 

Many of GAO's comments reflect a fundamental difference between GAO's 
views regarding responsibility for management of FECA cases and our 
own. GAO believes, as evidenced in its comments, that OWCP bears 
responsibility for managing GAO's cases and, when appropriate, finding 
suitable employment for individuals who can work. As discussed in our 
report, both OWCP and GAO have important roles and responsibilities in 
ensuring that continuing entitlement to workers' compensation is valid 
and employees are returned to work when able. The OIG believes that 
active case management is a team approach and consists of more than 
just OWCP intervention. The OIG's view that management of GAO cases is 
a shared responsibility is based on GAO policy, best practices, and GAO'
s recommendations to other federal agencies to improve management 
of their FECA programs. We believe that the best outcomes stem from an 
active team approach where the OWCP, GAO, the employee, and medical 
providers use all available tools to ensure medical recovery and a 
sustainable return to work. Because OWCP manages thousands of cases 
government-wide and GAO's appropriated dollars are paid out to benefit 
recipients, we believe that GAO must take an active role in case 
management if program costs are to be effectively managed. 

As an initial matter, GAO asserted that our report could lead readers 
to believe that GAO incurs over $20 million in FECA program costs 
annually. Our report identifies the annual costs of the program and 
addresses the specific time period for which cumulative costs 
are discussed. 

In its comments, GAO asserted that our report gives the erroneous 
impression that it has paid claims that were unauthorized, fraudulent, 
or otherwise invalid. Our report revealed some unauthorized 
compensation and benefit payments, possible fraudulent activity that 
we have referred to OIG investigative staff. In addition, our report 
revealed that GAO has not effectively managed its FECA program to 
ensure that claims for continuation of benefits were valid and no 
instances in which the initial claims appeared to have been invalid. 

GAO commented that the presentation of findings leads readers to 
believe that issues identified occurred recently. As discussed in our 
report, we reviewed and analyzed the full period for which case file 
information was available, including medical information. In addition, 
we reviewed the agency's most recent efforts to identify employees for 
reemployment and to pursue options to return them to suitable work. 
Timeframes and years of actions in specific cases are identified in 
the case examples. 

In addition, GAO commented that the agency does not believe that any 
individuals currently on the long-term rolls could be successfully 
returned to work because of advanced age and the length of time in 
disability status. The agency notes that four such individuals have no 
wage-earning capacity or reasonable prognosis for improvement. As 
our report highlights, GAO generally did not use best practices that 
GAO and others have found to increase the likelihood of employees' 
return to work before decisions were made regarding the work capacity 
of these individuals. We believe this contributed to employees 
remaining on the long-term rolls at or beyond retirement age. As 
discussed in our report, the current case status for the majority of 
individuals on the long-term rolls does not reflect that they have no 
wage-earning capacity. While GAO noted that it had determined that the 
likelihood was extremely low for returning to work those employees who 
had been on the workers' compensation rolls for many years, GAO could 
not provide documentation supporting this determination. Although 
program costs are borne by the agency, not OWCP, GAO did not 
effectively respond to this financial incentive by taking effective 
action to ensure that continuing benefit eligibility was valid and 
opportunities for suitable employment were pursued. We believe it is 
incumbent upon GAO to actively manage its workers' compensation 
program. In 2003, HCO requested OGC Legal Services to review GAO's 
workers' compensation program and make recommendations in an effort to 
control or reduce program costs. The OGC analysis and recommendations 
directly parallel those of the current OIG review of the agency's FECA 
program. 

GAO commented that we criticize the agency for not maintaining 
duplicate copies of the records OWCP uses to decide entitlement to 
survivor benefits. GAO also asserted that OWCP requires individuals 
receiving survivor benefits to submit information annually to OWCP, 
but not to the employing agency, regarding continuing eligibility for 
benefits. However, as discussed in our report, GAO's workers' 
compensation policy directs HCO to maintain case files documenting the 
history and status of all GAO employees receiving workers' 
compensation benefits. As we illustrated in our report, if GAO had been 
monitoring its death benefit cases, improper payments to a deceased 
dependent may have been identified and prevented. 

GAO also commented that our report figures (i.e., case studies) 
present incomplete information. Specifically, GAO commented that: 

* Figure 6 did not address OWCP's failure to respond to GAO's request. 
Our report states that GAO did not have evidence in its workers' 
compensation file documenting key decisions or resolution of issues 
identified in correspondence between HCO, Office of General Counsel, 
and OWCP. As a result, HCO lacked documentation needed to prevent or 
identify improper payments that continued for 17 years after the 
claimant transferred to another agency. 

* Figure 7 faulted GAO for not maintaining documentation concerning an 
employee's death or the number of dependents, and the possession of 
such documents would have no effect on the adjudication of the claim. 
As highlighted in our report, GAO's workers' compensation policy 
requires HCO to maintain case files documenting the history and status 
of all GAO employees receiving workers' compensation benefits. 

We recently determined that a family member receiving survivor death 
benefits had been deceased for several months, but compensation 
benefit payments continued through September 2014. We stated that 
although GAO plays no role in survivor benefit decisions, it can still 
provide evidence for OWCP to consider as a result of its monitoring 
activities. If GAO had been monitoring this case, the improper payments 
may have been prevented. 

* Figure 9 provided no evidence to support that further inquiry with 
the claimant's physician would have yielded a different result. As our 
report indicates, GAO did not obtain the relevant medical information 
necessary to identify work restrictions and evaluate whether a job 
offer was appropriate. Consequently, GAO lacked support that further 
inquiry with the claimant's physician would have yielded a different 
result. 

* Figures 10 and 11 did not recognize the fact that OWCP did not refer 
the claimants to specialists. Regardless of OWCP's action, as our 
report indicates, GAO did not exercise its own authority to refer the 
employees to a physician specialist to determine medical limitations 
that affected placement decisions. 

* Figure 12 did not address the fact OWCP placed the claimant in PN 
status, meaning that the claimant has no wage-earning capacity and no 
reasonable prognosis for improvement. As our report shows, 36 years 
ago, the employee's disability had ceased and no residuals of the 
employment-related injury remained which prevented the employee from 
performing the regular duties of his or her position at the time of 
injury. As our report indicates, GAO has continued to pay the wage-
loss compensation after the employee's full recovery from a work-
related injury and has not been in contact with the employee in 36 
years. 

* Figure 13 shows no link between a third-party liability case and a 
claimant's entitlement to ongoing benefits. As discussed in our 
report, this example is intended to illustrate the impact GAO's weak 
third-party liability case management and program oversight policy and 
practices have had on its ability to minimize the agency's workers' 
compensation program costs. As our report indicates, GAO's lack of 
follow-up with DOL's Office of the Solicitor make it difficult to 
ensure that recovered funds are properly credited to GAO and costs of 
the program are minimized. 

[End of section] 

Appendix I: Objective, Scope and Methodology: 

This report addresses the extent to which GAO has effectively managed 
its Federal Employees' Compensation Act (FECA) program to ensure that 
it pays only valid claims for continuation of benefits and that 
employees are returned to work when able. To achieve our audit 
objective, we identified and reviewed applicable policies, procedures, 
professional standards, laws, and regulations. We interviewed Human 
Capital Office managers and staff who administer GAO's FECA program. 
In addition, we met with GAO's Chief Human Capital Officer (CHCO) and 
Deputy CHCO, the Director of Employee Relations and Benefits, and 
Office of the General Counsel, Legal Services attorneys to obtain 
their perspectives on GAO policies and procedures for workers' 
compensation case management and oversight. 

We reviewed GAO's Chargeback Billing List Detail for July 1, 2012 
through September 30, 2013 to determine the number of current and 
former employees receiving wage-loss compensation, medical benefits 
only, and death benefits. The Chargeback Billing List is a statement 
containing the names of, and costs for, current and former GAO 
employees receiving FECA benefits. We identified 31 individuals 
receiving benefits and reviewed available case files for these 
individuals to determine whether they contained current information 
documenting their eligibility for benefits and evidence of efforts to 
return employees to work, if applicable. We used GAO's Standards for 
Internal Control in the Federal Government,[Footnote 43] GAO's workers'
compensation policy, and federal laws and regulations governing FECA 
to determine whether GAO has established effective internal 
controls for case management and oversight. 

We obtained and analyzed compensation and bill payment history 
electronic data from the Department of Labor's Integrated Federal 
Employees' Compensation System (iFECS), from June 15, 1978 to December 
14, 2013, for all 31 employees. To test the reliability of the data, 
we performed electronic testing of select data elements to check for: 
missing data—either missing records or missing values in key data 
elements; duplicate records; invalid or duplicate unique identifiers; 
dates outside valid time periods; and values in key data elements 
outside a designated range. In addition, we reviewed related 
documentation and interviewed DOL Office of Workers' Compensation 
Programs (OWCP) Division of Federal Employees' Compensation officials 
who are knowledgeable about the data and iFECS. To assess the accuracy 
of key data elements, we selected a simple random sample of 60 (of 
3,043) compensation and 60 (of 10,831) bill payment transactions 
[Footnote 44] that occurred for the 31 employees between June 1, 2002 
and December 14, 2013—-the most current timeframes for which data were 
available at the time we initiated our audit. We compared these 
payments with record-level compensation and bill payment data in OWCP'
s Agency Query System. We determined that the data was sufficiently 
reliable for the purposes of this report. 

We conducted this performance audit from September 2013 through 
September 2014 in accordance with generally accepted government 
auditing standards (GAGAS), except for the quality control and 
assurance standard requiring an external peer review of our audit 
organization every three years. This exception did not affect the 
planning or performance of our audit. The Office of Inspector General 
is scheduled for a peer review in fiscal year 2015. GAGAS requires 
that we plan and perform the audit to obtain sufficient, appropriate 
evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objective. 

[End of section] 

Appendix II: Age and Costs of GAO's Workers' Compensation Cases, as of
December 14, 2013: 

Table: 

Case Number: 252XXXXXX; 
Years Since Injury: Less than 1; 
Total Costs: $320.  

Case Number: 252XXXXXX; 
Years Since Injury: Less than 1; 
Total Costs: $1,222.  

Case Number: 252XXXXXX; 
Years Since Injury: 1
Total Costs: $1,423.  

Case Number: 252XXXXXX; 
Years Since Injury: 1
Total Costs: $24,663.  

Case Number: 252XXXXXX; 
Years Since Injury: 2
Total Costs: $1,150.  

Case Number: 252XXXXXX; 
Years Since Injury: 3
Total Costs: $11,876. 

Case Number: 252XXXXXX; 
Years Since Injury: 4
Total Costs: $277,763. 

Case Number: 252XXXXXX; 
Years Since Injury: 11
Total Costs: $9,615. 

Case Number: 252XXXXXX; 
Years Since Injury: 12
Total Costs: $190,144. 

Case Number: 250XXXXXX; 
Years Since Injury: 15
Total Costs: $104,392.  

Case Number: 250XXXXXX; 
Years Since Injury: 17
Total Costs: $33,469.  

Case Number: 250XXXXXX; 
Years Since Injury: 19
Total Costs: $814,989. 

Case Number: 250XXXXXX; 
Years Since Injury: 20
Total Costs: $994,128. 

Case Number: 250XXXXXX; 
Years Since Injury: 21
Total Costs: $1,442,859.  

Case Number: 250XXXXXX; 
Years Since Injury: 21
Total Costs: $833,390.  

Case Number: 250XXXXXX; 
Years Since Injury: 22
Total Costs: $648,758. 

Case Number: 250XXXXXX; 
Years Since Injury: 23
Total Costs: $385,345. 

Case Number: 250XXXXXX; 
Years Since Injury: 24
Total Costs: $1,279,236. 

Case Number: 500XXXXXX; 
Years Since Injury: 25
Total Costs: $1,445,084. 

Case Number: 500XXXXXX; 
Years Since Injury: 25
Total Costs: $647,665. 

Case Number: 500XXXXXX; 
Years Since Injury: 26
Total Costs: $1,596,140. 

Case Number: 500XXXXXX; 
Years Since Injury: 28
Total Costs: $761,957. 

Case Number: 500XXXXXX; 
Years Since Injury: 30
Total Costs: $858,950. 

Case Number: 500XXXXXX; 
Years Since Injury: 30
Total Costs: $994,759. 

Case Number: 130XXXXXX; 
Years Since Injury: 33
Total Costs: $1,130,987. 

Case Number: 110XXXXXX; 
Years Since Injury: 34
Total Costs: $1,407,007. 

Case Number: 020XXXXXX; 
Years Since Injury: 37
Total Costs: $868,404. 

Case Number: 130XXXXXX; 
Years Since Injury: 37
Total Costs: $725,096. 

Case Number: 090XXXXXX; 
Years Since Injury: 39
Total Costs: $92,667. 

Case Number: 100XXXXXX; 
Years Since Injury: 44
Total Costs: $1,339,511. 

Case Number: X90XXXXXX; 
Years Since Injury: 49
Total Costs: $1,389,230. 

Source: OIG analysis of GAO FECA case files and OWCP Integrated 
Federal Employees' Compensation System data. 

[End of table] 

Appendix III: Comments from the U.S. Government Accountability Office: 

U.S. Government Accountability Office: 
GAO: 

September 24, 2014: 

Mr. Adam Trzeciak: 
Inspector General: 
U.S. Government Accountability Office: 
441 G Street NW: 
Washington, D.C. 20548: 

Re: OIG Review of GAO's Federal Employees' Compensation Act Program 
(OIG Engagement Code 999836): 

Dear Mr. Trzeciak: 

Thank you for the opportunity to review and comment on your draft 
report on GAO's Federal Employees' Compensation Act (FECA) program. 
The draft report examined GAO's case files of the 31 current and 
former GAO employees, or their survivors, who were receiving benefits 
under FECA as of December 14, 2013. The draft report made five 
recommendations designed to help improve the management of the 
program. We have made, and will continue to make, numerous 
improvements to the program and recognize that more needs to be done. 
We agree with the recommendations, we intend to act on them, and we 
thank you for providing them. However, we respectfully disagree with 
some of the characterizations in the draft report, which may leave 
readers with incorrect perceptions on some aspects of the program. 

As an initial matter, the draft report states in several places that 
the total cost of GAO's FECA program is more than $20.3 million. 
Readers of the draft report could be led to believe that GAO incurs 
over $20 million in costs annually. The $20.3 million is the 
cumulative cost of the 31 cases examined, some dating back decades. 
GAO's total FECA costs for the past year were actually $1,091,426.75 
and GAO's annual FECA costs have risen by less than $200,000 since 
2003.[Footnote 1] GAO recommends that the draft report make clear the 
exact time period costs are incurred when specifically identified in 
the draft report, including annual individual beneficiary amounts.
The draft report provides examples of instances in which GAO did not 
take actions that, if taken, may have reduced GAO's FECA costs. Most 
of these examples state the amount GAO has paid to the claimant in 
question. GAO believes such examples give the erroneous impression 
that GAO paid claims that were invalid. In fact, nowhere does the 
draft report conclude that GAO paid any FECA claims that were 
unauthorized, fraudulent, or otherwise invalid. 

The draft report also presents its findings so that readers are led to 
believe that the issues identified occurred recently. Actually, of the 
31 claimants examined, 24 were placed on GAO's rolls before 2003 and, 
while our record keeping has not been what it should have been GAO has 
made several improvements in recent years. 

The draft report discusses opportunities that GAO missed to bring 
employees back to work. GAO does not believe that any individuals 
currently on the long-term rolls could be successfully returned to 
work. Four such individuals are in "PN" status, meaning that the 
Office of Workers Compensation Programs (OWCP), not GAO, had 
determined that they have no wage-earning capacity and no reasonable 
prognosis for improvement. Although not reflected in the files that 
your office examined,[Footnote 2] it should be noted that GAO has 
previously examined whether certain claimants were eligible to return 
to work. Ultimately, based on discussions with officials from other 
FECA programs and their experiences with OWCP, as well as our review 
of the cases, GAO determined that the likelihood of bringing back 
employees who had been on the workers' compensation rolls for many 
years was extremely remote, while the resources expended to challenge 
their claims would be significant. In many instances, the employee's 
advanced age and time in disability status would have rendered 
attempts to bring back that employee to work futile.[Footnote 3] The 
draft report appears to implicitly acknowledge this, as it contains no 
recommendations that GAO take any further action to return any current 
long-term claimants to work. 

Furthermore, the draft report overstates GAO's authority and 
responsibility with respect to its FECA program, while minimizing the 
role played by OWCP. OWCP controls the major aspects of the FECA 
program and OWCP regulations limit the employing agency's role. For 
instance, FECA-related records in an employing agency's files remain 
OWCP's property. GAO can raise questions to OWCP, but it has no 
authority concerning whether a claim is accepted or whether benefits 
should be reduced or terminated. Nevertheless, the draft report 
suggests that had GAO kept more complete records concerning its FECA 
claimants, GAO's FECA costs would be much less. 

For example, the draft report faults GAO for not maintaining up-to-
date medical records for its claimants. The draft report suggests that 
if GAO had recent medical information, it could have noticed changes 
in its claimants' conditions that would have affected their 
entitlement to benefits. However, claimants receiving continuing 
benefits are required to submit medical evidence to OWCP, not to GAO. 
20 C.F.R. § 10.501. While GAO certainly has responsibility for 
monitoring its cases and raising concerns, OWCP, not GAO, weighs the 
value of the medical evidence and has the power to grant or deny a 
claim, or send the claimant to additional physicians for a second or 
third opinion. Only OWCP has the power to change a claimant's 
benefits. 20 C.F.R. § 10.540. 

Likewise, although the draft report criticizes GAO for not maintaining 
duplicate copies of the records OWCP uses to decide entitlement to 
survivor benefits, GAO plays no role in survivor benefits decisions. 
As with all claims for FECA compensation, OWCP decides whether an 
individual is entitled to survivor benefits, including whether the 
individual has submitted to OWCP the correct documents in support of 
their claim. Here, the beneficiaries of five former employees on GAO's 
chargeback list receive survivor benefits. In four of those cases, the 
former employee (the decedent) had not been employed with GAO for many 
years prior to death. According to OWCP's Procedures Manual, the 
claimant and OWCP, not the employing agency, are responsible for 
collecting information regarding such claims. OWCP Procedures Manual, 
ch. 2-0700,1 4(c). Moreover, OWCP requires individuals receiving 
survivor's benefits to submit information annually to OWCP, but not 
the employing agency, regarding their continuing eligibility for 
benefits.[Footnote 4] See 20 C.F.R. § 10.540. 

Moreover, the draft report does not acknowledge the practical reality 
of working with OWCP in years past. Indeed, the draft report 
specifically discusses three instances in which GAO attempted to 
obtain information from OWCP in order to properly monitor cases, but 
OWCP was non-responsive. These examples were typical of the lack of 
cooperation the Human Capital Office (HCO) and Office of General 
Counsel (OGC) experienced when dealing with OWCP in the past. When GAO 
personnel have attempted to review OWCP's files in the past, OWCP 
placed limits on GAO's access to the files. In addition, OWCP claims 
examiners frequently did not respond to requests for information from 
GAO staff. Your office's 1999 report on GAO's FECA program confirmed 
these difficulties, noting numerous examples of GAO staffs 
unsuccessful attempts to obtain documents from OWCP, and instances in 
which OWCP staff did not return your office's phone calls and made 
your office wait months to review its files. That said, we need to 
continue to review claim status and pursue any concerns we have with 
OWCP. 

The draft report further notes concerns with GAO's procedures for 
protecting against fraud in its FECA program. In fact, GAO has 
previously identified certain individuals on GAO's FECA rolls as 
candidates for surveillance, because they were suspected of possible 
fraud. We have investigated numerous allegations and made appropriate 
conclusions about the levels of evidence, the resources involved, and 
whether there was sufficient cause to challenge the OWCP 
determinations. 

The draft report also contains figures that present incomplete 
information, as follows: 

* As Figure 6 states, GAO sent two letters to OWCP in 2000 asking that 
OWCP transfer the claimant from GAO's rolls to those of another 
agency. Figure 6 does not address the fact that OWCP failed to respond 
to GAO's request. 

* Figure 7 faults GAO for not maintaining documentation concerning an 
employee's death or the number of his dependents. However, as figure 7 
states, OWCP determined that the claimant's death was covered under 
FECA and approved monthly survivor benefits. Thus, GAO's possession of 
the documents in question would have had no effect on the adjudication 
of the claim. 

* Figure 9 assumes that GAO should have taken further action towards 
bringing a claimant back to work after the claimants physician 
indicated that the employee was completely unable to work. There is no 
evidence to support the conclusion that further inquiry with the 
claimant's physician would have yielded a different result. 

* Figure 10 does not address the fact that OWCP did not refer the 
claimant to a specialist, as its own consultant recommended. 

* Figure 11 does not address the fact that OWCP, which referred this 
claimant to a specialist, failed to act after the specialist noted 
that the claimant's injuries had resolved and the claimant could 
return to work. 

* Figure 12 does not address the fact OWCP placed this claimant in PN 
status, meaning that the claimant has no wage-earning capacity and no 
reasonable prognosis for improvement. 

* Figure 13 suggests a link between GAO's inability to obtain a 
statement of recovery in a third party liability case and a claimant's 
entitlement to ongoing benefits. There is no such link. GAO does not 
have the authority to pursue 3rd party claims. That authority falls 
under the Department of Labor. 

Finally, the draft report does not fully acknowledge the efforts GAO 
has made in recent years to improve management of its FECA program. 
Specifically, GAO's HCO and OGC forged a more proactive and 
cooperative relationship geared towards better management of the FECA 
program. As a direct result of this cooperation, in 2010 and 2011, HCO 
and OGC identified and successfully challenged two suspect claims for 
total disability filed by employees. The employees were each 46 years 
old at the time they filed their claims. Had the claims been accepted, 
GAO would have paid compensation to the employees for the remainder of 
their lives, and quite possibly to their dependents after their 
deaths. Thus, GAO likely saved upwards of $1 million in future FECA 
costs by challenging these claims. 

In March 2013, HCO began working to establish a Memorandum of 
Understanding (MOU) with the Department of Labor to use its electronic 
claims filing system known as the Employee's Compensation Operations 
and Management Portal (ECOMP). ECOMP will enable GAO to electronically 
access information about its claimants, such as up-to-date medical 
information, that it currently does not have ready access to in every 
case, and will not need to maintain duplicate information in its 
files. The MOU was finalized by DOL and GAO on September 10, 2014. 

In fiscal year 2012, HCO began recruiting, and was able to recently 
hire, a human capital specialist with many years of experience to 
manage its claims. HCO has also (1) established a work log to track 
and monitor all cases (2) implemented a quarterly review of all cases 
listed on the chargeback report (3) developed worksheets to assist 
timekeepers in tracking continuation of pay to ensure GAO is in 
compliance with the regulations and (4) conducted site visits to DOL 
to obtain missing file documentation. As of September 4, 2014, all 
cases have been reviewed to assess their current status and to 
determine whether additional documentation was needed. All 
documentation missing from GAO's files has been either located or 
requested from OWCP. HCO staff attended OPM-sponsored FECA training in 
April 2014, participated in the OWCP Inter Agency Meeting in June 
2014, and worked with OWCP to establish liaisons concerning ECOMP and 
FECA chargeback reports — such technical advisors/liaisons were not 
previously identified for GAO. 

In closing, we appreciate your work on this program and believe our 
actions position us to effectively manage the FECA program going 
forward. I am available to discuss these matters with you at your 
convenience. 

Sincerely yours, 

Carolyn Taylor: 
Chief Human Capital Officer: 

CC: Karl J. Maschino, Chief Administrative Officer: 
Susan Poling, General Counsel: 
Denise Hunter, Acting Deputy Chief Administrative Officer: 
William White, Deputy Chief Human Capital Officer: 
William Anderson, Controller:
Adebiyi Adesina, FMBO: 

Appendix III Footnotes: 

[1] The year, for purposes of FECA administration, runs from July 1 
through the following June 30. The figure listed above was GAO's FECA 
cost for the period July 1, 2013 through June 30, 2014. 

[2] Footnote not included in letter text. 

[3] Indeed, one example in the draft report of an instance in which 
GAO could have done more to return a claimant to work notes that the 
claimant was 79 years old and in disability status for almost 40 years 
at the time of your office's review. 

[4] In this regard, the draft report's statement that 5 individuals' 
families continue to receive FECA compensation benefits without 
sufficient evidence to support their claims' is misleading. OWCP 
presumably has sufficient evidence in its files to support their 
claims. Otherwise, their compensation would be terminated. 

[End of section] 

Appendix IV: Major Contributors to This Report 

Key contributors to this report were Sandra Burrell and Cynthia Hogue. 
Technical assistance was provided by James Ashley, Jill Lacey, Ying 
Long, Minette Richardson, and Gloria Hernandez-Saunders. 

[End of section] 

Appendix V: Report Distribution: 

U.S. Government Accountability Office: 

Gene Dodaro – Comptroller General; 
Patricia Dalton – Chief Operating Officer; 
Karl Maschino – Chief Administrative Officer/Chief Financial Officer; 
Susan Poling – General Counsel; 
Carolyn Taylor – Chief Human Capital Officer; 
Daphne Williams – Director, Employee Relations and Benefits; 
Joan Hollenbach – Legal Services Managing Associate General Counsel; 
William Anderson – Controller/Deputy Chief Financial Officer; 
Adrienne Walker – Director, Program Analysis and Operations; 
Adebiyi Adesina – Special Assistant to the Controller; 
Katherine Siggerud – Managing Director, Congressional Relations; 
Tim Bowling – Chief Quality Officer; 
Charles Young – Managing Director, Public Affairs. 

GAO Audit Advisory Committee Members: 

[End of section] 

Reporting Fraud, Waste, and Abuse in GAO's Internal Operations: 

To report fraud and other serious problems, abuses, and deficiencies 
relating to GAO programs and operations, do one of the following. (You 
may do so anonymously.) 

* Call toll-free (866) 680-7963 to speak with a hotline specialist, 
available 24 hours a day, 7 days a week. 

* Online at: [hyperlink, https://OIG.alertline.com]. 

Obtaining Copies of OIG Reports and Testimony: 

To obtain copies of OIG reports and testimony, go to GAO's website: 
[hyperlink, http://www.gao.gov/about/workforce/ig.html]. 

[End of section] 

Footnotes: 

[1] 5 U.S.C. § 8101, et seq. 

[2] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[3] GAO Order 2810.1: Line-of-Duty Injury Benefits For Government 
Accountability Office Employees Under the Federal Employees' 
Compensation Act (August 23, 2005). 

[4] If the employee is unable to work, the compensation benefit is 
equal to two-thirds of the injured employee's pay for single employees 
and three-fourths of the injured employee's pay for employees who are 
married or have dependents. If the employee can return to part-time, 
lighter-duty, or other work at a lower pay rate, the compensation 
benefit is two-thirds or three-fourths the difference between the 
salary for the light-duty position and the injured employee's regular 
duty position. 

[5] For example, if the employee's spouse has no children, then the 
spouse is eligible for a monthly benefit equal to 50 percent of the 
employee's monthly wage at the time of death. If the employee's spouse 
has one or more children, then the spouse is eligible for a monthly 
benefit equal to 45 percent of the employee's monthly wage at the time 
of death and each minor child is eligible for a monthly benefit equal 
to 15 percent of the employee's monthly wage at the time of death, up 
to a maximum family benefit of 75 percent of the employee's monthly 
wage at the time of death. 

[6] Workers' compensation costs are assigned to GAO annually at the 
end of the fiscal accounting period for the program, which runs from 
July to June. Each year, Labor furnishes GAO with a “chargeback report”
 which is a statement of payments made from the Employees' 
Compensation Fund that accounts for injuries to its employees. GAO's 
Chargeback Billing List Detail for fiscal account period, July 1, 2012 
through June 30, 2013, showed that GAO paid over $1.1 million in 
workers' compensation benefits. GAO includes these amounts in its 
budget requests to Congress. Sums appropriated are deposited into the 
fund. The Consolidated and Further Continuing Appropriations Act, 2013 
§ 1611 (a) authorizes GAO to deposit available balances of expired 
appropriations into the Employees' Compensation Fund. Pub. L. No. 113-
6, §1611(a), 127 Stat. 198 (2013). 

[7] GAO, U.S. Government Accountability Office Performance and 
Accountability Report for Fiscal Year 2013, [hyperlink, 
http://www.gao.gov/products/GAO-14-2SP] (Washington, D.C.: December 
16, 2013). 

[8] Limited duty assignments include duties from the injured 
employee's regular position that meet the employee's current work 
capabilities as identified by a physician. Light duty assignments 
include duties that are outside an employee's regular position, but 
that meet the employee's current work capabilities, as identified by a 
physician. Limited or light duty assignments may be performed for a 
full work shift or for shorter time periods. 

[9] GAO, Federal Employees' Compensation Act: Status of Previously 
Identified Management Challenges, [hyperlink, 
http://www.gao.gov/products/GAO-12-508R] (Washington, D.C.: Mar. 21, 
2012), and GAO, Federal Employees' Compensation Act: Case 
Examples Illustrate Vulnerabilities That Could Result in Improper 
Payments or Overlapping Benefits, [hyperlink, 
http://www.gao.gov/products/GAO-13-386] (Washington, D.C. Apr. 3, 
2013). 

[10] An improper payment is defined as any payment that should not 
have been made or that was made in an incorrect amount (including 
overpayments and underpayments) under statutory, contractual, 
administrative, or other legally applicable requirements. It includes 
any payment to an ineligible recipient, any payment for an ineligible 
good or service, any duplicate payment, payment for a good or service 
not received (except for such payments where authorized by law), and 
any payment that does not account for credit for applicable discounts. 
31U.S.C. § 3321 note. 

[11] [hyperlink, http://www.gao.gov/products/GAO-12-508R]. 

[12] [hyperlink, http://www.gao.gov/products/GAO-13-386]. 

[13] OIG, Review of GAO's Management of Workers' Compensation Cases 
(Washington, D.C.: June 21, 1999). 

[14] 20 C.F.R. § 10.501(a)(1). 

[15] According to the Department of Labor Injury Compensation for 
Federal Employees, Publication CA-810 (Revised 2009)—-the handbook for 
federal agency personnel specialists, compensation specialists, and 
supervisors—compensation payments for total disability may continue as 
long as the medical evidence supports total disability. However, only 
rarely is an employee declared permanently and totally disabled. 
Department of Labor Publication CA-810 § 7-1 (A)(2). 

[16] Every case file acquires a pay status code (or case status code) 
when it is created and retains such a status throughout its existence. 
Before the case is adjudicated, the pay status code reflects whether 
it has been reviewed, and afterwards it reflects whether and what 
benefits are being paid or are payable. 

[17] 20 C.F.R. § 10.501(a)(2). 

[18] GAO Order 2810.1. 

[19] Although 26 employees were receiving wage-loss compensation and 
medical benefits only, HCO could not provide workers' compensation 
case files for 2 employees and 1 case file involved an employee whose 
case transferred to another federal agency. 

[20] 5 U.S.C. § 8147(b). 

[21] The term “return to work” as used in this report is not limited 
to returning to work at the employee's normal worksite or usual 
position, but may include returning to work at other locations and in 
other positions, including alternative employment in other federal 
agencies or the private sector. 

[22] The POWER Return to Work Council is composed of select senior 
officials with oversight responsibilities for workers' compensation. 
Ad Hoc Council members include the Office of Personnel Management, the 
Office of Disability Employment Policy, the Occupational Safety and 
Health Administration, and the Computer/Electronic Accommodations 
Program. 

[23] Department of Labor, Best Practices in Return to Work for Federal 
Employees Who Sustain Workplace Injury or Illness: A Guide For 
Agencies. 

[24] 420 CFR § 10.506. 

[25] GAO Order 2810.1. 

[26] GAO, Return-to-Work Strategies From Other Systems May Improve 
Federal Programs, [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-96-133] (Washington, D.C.: July 
1996). 

[27] [hyperlink, http://www.gao.gov/products/GAO/HEHS-96-133]. 

[28] [hyperlink, http://www.gao.gov/products/GAO/HEHS-96-133]. 

[29] 5 C.F.R. § 339.301(c); 20 C.F.R. 10.320-10.324. 

[30] 5 C.F.R. § 339.302. 

[31] 20 C.F.R §10.506. 

[32] GAO Order 2810.1. 

[33] [hyperlink, http://www.gao.gov/products/GAO/HEHS-96-133]. 

[34] 5 U.S.C. § 8131. 

[35] 5 U.S.C. § 8132. 

[36] GAO Order 2810.1. 

[37] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[38] 20 C.F.R. 10.16(a). 

[39] GAO, Federal Employees' Compensation Act: Preliminary 
Observations on Fraud-Prevention Controls, [hyperlink, 
http://www.gao.gov/products/GAO-12-402] (Washington, D.C.: Jan. 25, 
2012). 

[40] [hyperlink, http://www.gao.gov/products/GAO-12-402] and 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[41] GAO Order 1130.1, Handling Information That May Indicate Criminal 
Misconduct Or Serious Wrongdoing In Federal Programs or Operations 
(November 16, 2010). 

[42] Fraud is the intentional deception that could cause detriment to 
others or to the government. Fraud includes a false representation, by 
false or misleading statements or by concealment of a fact with the 
intention to deceive. Fraud also includes misappropriation of GAO 
assets or resources. 

[43] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[44] We calculated the sample size of 60 compensation transactions and 
60 bill payment transactions assuming a binomial distribution for a 
proportion estimate, an expected error rate of 0 percent, an upper 
error limit of 5 percent, and a 95 percent confidence level. 

[End of document]