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Organization

Executive Direction (the Immediate Office of the Inspector General and the Office of Counsel)

Audits and Evaluations

OAE audit and evaluation activities include performance audits and evaluations, and financial audits. OAE also reviews and handles resolution of certain single audits conducted by state and local auditors on recipients of Commerce financial awards. All audit work is performed in accordance with government auditing standards.

• Performance audits and evaluations address the efficiency, effectiveness, and economy of the Department's programs, activities, and information technology systems. They may check a unit's compliance with laws and regulations, and evaluate its success in achieving program objectives. They may also assess the operations of a contractor or recipient of a Commerce financial assistance award to determine whether the recipient complied with laws, regulations, and award terms; claimed allowable project costs; and achieved intended results.


• Financial audits determine whether a reporting entity (1) has presented its financial statements fairly and in accordance with generally accepted accounting principles; (2) has an internal control structure that provides reasonable assurance of achieving the control objectives set forth by OMB; and (3) has complied with laws and regulations that could have a direct and material effect on its financial statements, the Federal Financial Management Improvement Act, and other laws and regulations.


• Single audits. The Single Audit Act establishes audit requirements for state and local government and nonprofit organizations receiving federal financial assistance. In addition to undergoing OIG-performed audits, certain recipients of Commerce financial assistance undergo single audits conducted by state and local government auditors and independent public accountants. OAE reviews all single audit reports that have findings, and works with the funding agency and the recipients to resolve them.

OAE’s audits and evaluations may be prompted by congressional requests from committees and individual Members, or by statute. For example, within NOAA, we are evaluating whether conservation and management measures in fishery management plans are based on the best available science, in response to a request from four senators. We are reviewing the U.S. Patent and Trademark Office’s quality assurance process as requested by the Senate Committee on Appropriations. We perform annual audits of Commerce financial statements pursuant to the Chief Financial Officers Act of 1990 and information security reviews as required by the Federal Information Security Management Act of 2002.

Investigations

OI’s significant areas of criminal work are as follows:

• Computer Crimes Unit. OI has dedicated considerable resources to improving its capabilities to pursue and prosecute computer crime, establishing a state-of-the-art Computer Crimes Unit under the direction of a special agent in charge. This unit has aggressively and successfully investigated the criminal misuse of government computers.


• Telemarketing fraud. For the past 5 years, OIG has been investigating a major telemarketing fraud scheme based in Costa Rica that was perpetrated by callers identifying themselves as employees of the Commerce Department and other federal agencies. The callers told victims in the United States that they were winners in a national lottery sanctioned by the Department and that they had won sweepstakes prizes ranging in value from $450,000 to more than $4 million. Victims were then instructed to use commercial wire transfer services to send payments of $1,500 to $4,500 to Costa Rica, purportedly for insurance and customs fees that were required to retrieve their winnings. Many victims were persuaded to send multiple payments to the telemarketers. Total identified losses to U.S. residents exceed $30 million to date, but the worldwide total could top $1 billion. This ongoing investigation has netted nearly 40 arrests and 30 convictions.


• Grant fraud. The Department awards roughly $2 billion in grants annually through its various operating units. At the end of FY 2008, OI was investigating 19 grant fraud cases in 11 different states. One case successfully prosecuted this year involved an individual who diverted over $400,000 in grant funds for his own personal use..


• Employee misconduct. OI investigates or assists the Department in handling employee misconduct involving Commerce funds and programs. These cases cover a wide range of improper behavior—from misusing one’s official position to stealing government property—that may warrant administrative sanction or criminal prosecution. Between 30 percent and 50 percent of OI’s caseload at the end of FY 2008 consisted of such cases.


• Contract fraud. The Department awarded over $2 billion in contracts in FY 2007, most of this amount was for complex, high-cost systems, such as NOAA satellites and Census, USPTO, and NIST IT systems. OI’s caseload at the end of FY 2008 included 30 contract fraud cases involving several of the largest government contractors.


• Support for other law enforcement offices. OI often partners with other law enforcement agencies to investigate cases involving Commerce employees as victims or perpetrators of crimes not directly related the business of the Department. For example, we recently helped Virginia police secure a conviction of a Commerce employee charged with murder and worked with the Department of Homeland Security on an immigration fraud investigation that resulted in convictions of four Patent and Trademark employees. OI’s caseload currently includes 10 joint investigations.