SEPA
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Inspector General
FRAUD, WASTE, AND ABUSE
Prevention, Detection, and Reporting
for Federal, State, Local, and Tribal Administrators
www. e pa. g o v/o ig
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Inspector General
"Catalyst for Improving the Environment"
WHO WE ARE
The Office of Inspector General is an independent office within EPA that helps the
Agency protect the environment in a more efficient and cost effective manner.
We consist of auditors, program analysts, investigators, and others with extensive
expertise.
WHAT WE DO
We perform audits, evaluations, and investigations of EPA and its contractors,
grantees, and recipients of other Federal funds to promote economy and efficiency,
and to prevent and detectfraud, waste, and abuse. We also maintain the DIG
Hotline.
WHY WE DO IT
We strive to serve as a catalyst for improving the environment. By helping the
Agency operate more economically, effectively, and efficiently, we contribute to
improved environmental quality and human health. We strive to provide solutions to
problems that ultimately result in making America a cleaner and healthier place.
OUR MISSION
Add value by promoting economy, efficiency, and effectiveness within EPA and the
delivery of environmental programs. Inspire public confidence by preventing and
detecting fraud, waste, and abuse in Agency operations and protecting the integrity
of EPA programs.
"There is no kind of dishonesty into which otherwise good people more
easily and frequently fall than that of defrauding the government."
Benjamin Franklin
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FRAUD, WASTE, AND ABUSE
Prevention, Detection, and Reporting
for Federal, State, Local, and Tribal Administrators
Fraud, Waste, and Abuse.. .What is it?
What is Fraud
Simply - fraud is a false representation about a material fact.
It is any intentional deception designed to deprive the United States, or EPA,
unlawfully of something of value or to secure from the United States, or EPA, for
an individual, a benefit, privilege, allowance, or consideration to which he or she
is not entitled.
What is Waste
It is the extravagant, careless, or needless expenditure of Government funds, or
the consumption of Government property, that results from deficient practices,
systems, controls, or decisions. The term also includes improper practices not
involving prosecutable fraud.
What is Abuse
It is the intentional or improper use of Government resources. Examples
include misuse of rank, position, or authority or misuse of resources such as
tools, vehicles, or copying machines.
Strive for Accountability and Integrity
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How Can I Tell if Fraud, Waste, and Abuse are
Occurring?
You can tell if fraud, waste, and abuse are occurring by looking for "fraud
indicators."
Fraud indicators are clues that may warrant further review of a specific area or
activity.
Some of the indicators of fraud include:
• No separation of duties.
• Lack of internal controls.
• High turnover of personnel.
• Unexplained entries or altered records.
• Unusually large amounts of payments for cash.
• Inadequate or missing documentation.
• Non-serial number transactions.
• Unauthorized transactions.
While the above occurrences are indicators of fraud, they could also be indicators
of weak or poor business practices without actual fraud occurring; such
indicators can often lead to opportunities to commit fraud.
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As a Federal, State, Local, or Tribal Administrator,
What Can I Do to Avoid Trouble ?
• If you suspect any irregularities, or criminal acts, contact the
EPA OIG immediately.
• Establish regular, open and clear lines of communication with your
contractors, awardees, or recipients. Know who they are and what
they do.
• Follow established agency policies, procedures, rules and
regulations.
• Keep current on training and applicable regulations.
• Correct any audit or program evaluation findings promptly.
• Ensure contractor, awardee, or recipient accountability.
• Conduct site visits, examine work performed and ensure recipient
compliance with terms of contract or grant.
• Ensure that all work is being performed as originally outlined and
planned.
• Protect Government information, resources, and equipment under
your control.
Above all else, if you have any questions or concerns, ask your EPA contact.
We are here to assist you. We want you to succeed.
If you are a federal employee, you are duty bound to report Fraud, Waste, Abuse,
and Corruption under the Code of Federal Regulations (CFR):
"Employees Shall Disclose Waste, Fraud, Abuse, and Corruption to Appropriate
Authorities." 5 CFR2635.101(b)(ll)
Remember, Act Like It's Your Money - It Is!
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Common Fraud Schemes...
What to Look for From Your Suppliers, Vendors, Contractors,
or Subcontractors
Prohibited Practices Before the Award of a Contract or Grant
Bribery, Gratuities, and Kickbacks
Giving or receiving a thing of value for the purpose of influencing an official act
or an award.
• Acceptance of inappropriate, high-value gifts or services from
suppliers, contractors, or awardees.
• Overly friendly interaction between government employee and
contractor or awardee.
• Sudden unexplained increase in wealth.
Conflict of Interest and Ethics Violations
Government personnel using their official duties to garner personal or financial
gain.
• Acceptance of gifts from a vendor or contractor.
• Government personnel providing proprietary information to one,
or a few competitors.
• Government personnel negotiating for employment with a company
that they have an official interest in or with.
Unbalanced Bidding
Contracting personnel providing a favored bidder with information in the bid
process.
• Particular line item bids appear to be unreasonably low.
• Change orders issued soon after contract award deleting or
modifying line items.
• Bidder is close to a government procurement official, or directly
participated in drafting the contract specifications.
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Prohibited Practices After the Award of a Contract or Grant
Defective Pricing
Contractors failure to disclose all facts that affect its cost for pricing products
or services.
• Not disclosing significant cost issues that will reduce contractors
proposed costs.
• Indications of falsification or alteration of supporting data.
• Denial of the existence of historical records.
Cost Mischarging
Improper allocation of costs to a cost contract or charging at higher than allowed
rates.
• Labor time and charges inconsistent with project progress.
• Time cards completed by management and not individual
employees.
• Inability to produce time cards immediately when requested.
• Lower level work being done by high level wage earners.
Product Substitution
Contractors deliver goods which do not conform to contract requirements
without making proper notifications.
• Falsification of test results, or delivery of counterfeit products.
• Providing foreign made products where domestic products are
required.
• Using one coat of paint instead of two, or using watered loads
of concrete.
False Statements and False Claims
Knowingly and willfully falsifying or concealing a material fact, knowing the
same contains any materially false statement or entry.
• Discrepancies between reported facts and supporting
documentation.
• Inability or refusal to provide supporting documentation.
• Site inspection reveals less progress on the site than reported.
Protecting our Environment for Our Children's Future
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Standards of Conduct Violation
All EPA employees are expected to adhere to certain standards of conduct which,
if violated, could adversely reflect on the Agency. Such prohibited conduct in-
cludes, but is not limited to:
• Official or moral misconduct (on or off duty).
• Soliciting or accepting gifts from outside sources.
• Abuse of authority or position.
• Misuse of government time, equipment, IT resources, and
information.
(Other Federal, State, and Local employees should know and adhere
to their applicable Standards of Conduct).
Computer Crimes
Computer fraud includes anyone who knowingly accesses a computer without
authorization; exceeds authorized access; obtains information from any depart-
ment or agency of the US Government to further an intended fraud; or to access
prohibited sites.
What Should You do if You Suspect Fraudulent
Activity, Waste, or Abuse
/ DO contact the OIG Hotline. -
S DO discuss your concerns with the OIG.
/" DO seek answers to your questions in the normal course of
business.
S DO cooperate with the OIG and expect to be contacted and
involved.
X DON'T feel compelled to "prove" a case or intent.
X DON'T "tip off" subjects of actual or pending investigation.
X DON'T "stop" your normal course of business unless otherwise
directed.
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Whistleblower Protection
A whistleblower is an individual that believes his or her organization is engaged
in or willfully permits unethical, or unlawful activities and reports it.
The Whistleblower Protection Act (WPA) provides protection rights to Federal
employees. Under WPA, Federal employees may seek protection from the Office
of Special Counsel and the Merit Systems Protection Board.
Section 1553 of the American Recovery and Reinvestment Act (ARRA) extends
the whistleblower protection to non-federal employees, whose employer is re-
ceiving ARRA funds.
"Any employee of any non-Federal employer receiving funds under ARRA, may not
be discharged, demoted, or otherwise discriminated against as a reprisal for disclos-
ing; Mismanagement, Waste, A danger to public Health or Safety, or any Violation
of law, rule, or regulation"
(Non-federal employers include a State or Local employing agency, as well as,
private companies).
Additional information about Whistleblower Protection may be found at the
Office of Special Counsel website, www.osc.gov.
We All Have a Choice, Choose to do the Right Thing
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Report Suspected Fraud Activity to Our Office
You can Place a Telephone Call to Our 24-hour Hotline
(888) 546-8740
You Can Mail Us
U.S. Environmental Protection Agency
Office of Inspector General Hotline (2443)
1200 Pennsylvania Avenue, NW
Washington, DC 20460
You Can E-mail Us
OIG_Hotline@epa.gov
Or You Can Contact Our Offices Directly
Northeastern Resource Center
Arlington, VA
(703) 347-8740
Eastern Resource Center
Atlanta, GA
(404)562-9857
Central Resource Center
Chicago, IL
(312)353-2507
Western Resource Center
San Francisco, CA
(415) 947-4507
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Notes
Protecting our Environment for Our Children's Future
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