&EPA
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Inspector General
FRAUD, WASTE, AND ABUSE
Prevention, Detection, and Reporting
for Contractors, Awardees, and Recipients
www.epa.gov/oig
-------
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
-------
FRAUD, WASTE, AND ABUSE
Prevention, Detection, and Reporting
for Contractors, Awardees, and Recipients
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
-------
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.
-------
As a Contractor, Awardee, or Grant Recipient,
What Can I Do to Avoid Trouble?
• Establish regular, open, and honest communication with your EPA
point of contact.
• If you suspect any irregularities or criminal acts, contact the EPA OIG
immediately.
• Establish clear policies, procedures, rules, and regulations for oversight
and control of Government funds, awards, grants, or equipment
purchase or usage.
• Create accountability.
• Immediately correct any audit or evaluation findings. Document these
corrections and notify your EPA point of contact.
• Abide by the terms and conditions of your government agreement -
Strive for accountability.
• Protect Government or other contractor proprietary information.
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.
Remember, Act Like It's Your Money - It Is!
-------
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 requesting a thing of value for the purpose of influencing an official
act.
• Overly friendly government employee and contractor interactions.
• Unexplained increase in wealth.
• Promise of a thing of value to ignore, disregard, or dismiss a
required action, inspection, or activity as required by law, or by the
contract.
Collusive Bidding
Contractors agree to prohibit or limit competition and rig prices to increase the
amount of business available to all.
• Winning bid is too high compared to cost estimates and published
prices.
• Contractor includes in its bid, contractors that are competing for
same contract.
• Certain sub-contractors repeatedly win contracts at one agency or
company but not elsewhere.
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.
-------
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 informing the government.
• 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.
___ •N r
We All Have a Choice, Choose to do the Right Thing
-------
What Should You do if You Suspect Fraudulent
Activity, Waste, or Abuse
/ DO contact the OIG Hotline. -
-------
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 American Recovery and Reinvestment Act of 2009 (ARRA), Subtitle D,
Section 1553 provides whistleblower protection to non-federal employees whose
employer receives ARRA funds.
Specifically, the protection is afforded to employees who reasonably believe they
have information that constitutes:
• Gross mismanagement of an agency contract or grant relating to
stimulus funds;
• Gross waste of stimulus funds;
• Substantial and specific danger to public health or safety related to
implementation of stimulus funds;
• Abuse of authority related to implementation or use of stimulus
funds; or
• Violation of law, rule, or regulation related to an agency contract or
grant relating to stimulus 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."
Additional information about Whistleblower Protection may be found at the
Office of Special Counsel website, www.osc.gov.
Protecting our Environment for Our Children's Future
-------
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
-------
Notes
Remember, Act Like It's Your Money - It Is!
-------
------- |