The Department of Labor’s Office of Inspector General (OIG) has issued its Semiannual Report to Congress, (pdf) outlining its significant accomplishments during the six-month period ending September 30, 2012 and making a number of legislative recommendations. The OIG conducts audits and evaluations to review the effectiveness, efficiency, economy, and integrity of all DOL programs and operations, including those performed by its contractors and grantees. The office is also responsible for conducting criminal, civil, and administrative investigations regarding violations of labor and employment-related federal laws, rules and regulations, including investigations of labor union racketeering and organized crime involving union affairs, employee benefit plans, and labor-management relations. Overall, the OIG issued 357 indictments, secured 230 convictions, and obtained $141.5 million in monetary recovery during this period.

The agency also determined that approximately $297 million in DOL funds could be put to better use. For example, the OIG found that the Occupational Safety and Health Administration (OSHA) might not be allocating its resources in the most efficient manner possible. Notably, the OIG Report concluded that OSHA’s site specific inspection targeting program “covered only a small portion of high-risk worksites nationwide,” and therefore left many high-risk workplaces vulnerable.

The Report also expressed concern over the Employee Benefit Security Administration’s (EBSA) ability to protect employee pension plans. According to the OIG, “millions in pension assets held in otherwise regulated entities, such as banks, escape audit scrutiny because of limited scope audits authorized under ERISA, which result in no opinion on the financial status of the plan by the independent public accountants that conduct the limited review.” Other challenges facing the EBSA, the OIG contends, include the shift from defined benefit retirement plans to defined contribution retirement plans; the large increase in the types and complexity of investment products available to pension plans; and the new health care law.

With respect to foreign labor certifications overseen by the DOL’s Employment and Training Administration (ETA), the OIG is in favor of strengthening the H-2B visa program to ensure that U.S. workers’ wages and rights are protected. For example, the OIG reports that of the 33 employers that it reviewed during the 6-month period, 27 were unable to support the attestations made on their H-2B applications that they could not find U.S. workers capable of performing the jobs and that the employment of foreign workers would not adversely affect the wages and working conditions of similarly employed U.S. citizens. The Report notes that the ETA issued a final rule in February 2012 that would, among other changes, replace the self-attestation model with a compliance-based format requiring the review of documentation provided to ETA in advance of the agency making the certification determination. Due to legal challenges, however, this rule has yet to be implemented.

The Report provided a number of legislative recommendations, including the following:

  • To reduce overpayments in employee benefit programs, the DOL should be given the authority to access state Unemployment Insurance and Social Security Administration wage records, and employment information from the National Directory of New Hires.
  • Pension protection laws should be amended to expand the authority of the EBSA to correct substandard benefit plan audits and ensure that auditors with poor records do not perform additional plan audits; repeal ERISA’s limited-scope audit exemption to allow independent public accountants who audit pension plans to render an opinion on the plans’ financial statements in accordance with professional auditing standards; require direct reporting of ERISA violations to DOL; and strengthen the criminal penalties for ERISA violations.
  • Give the DOL the statutory authority to, among other things, verify the accuracy of information provided on H-1B specialty occupation foreign labor condition applications.

More information on the OIG and a link to the full report can be found here.