oversight

Inspectors General: Fraud Hotline Operations

Published by the Government Accountability Office on 1989-11-13.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United   States   General   Accounting   Office

GAO               Briefing Report to the Chairman,                  ’
                  Subcommittee on General Services,
                  Federalism, and the District of
                  Columbia, Committee on Governmental
                  Affairs, U.S. Senate
November   1989
                  INSPECTORS
                  GENERAL
                  Fraud Hotline
                  Operations
      United States

GAO   General Accounting Office
      Washington, D.C.'LO=8

      Accounting and Financial
      Management Division


      B-237226-l

      November13,1989

      The Honorable    Jim Sasser
      Chairman,    Subcommittee   on General
        Services,    Federalism,   and
        the District     of Columbia
      Committee on Governmental      Affairs
      United States Senate
      Dear Mr. Chairman:
      In response to your April                  3, 1989, letter,         we are providing
      you with the results              of our review of the federal
      government's         fraud hotlines.             Our report     summarizes
      information        presented        in our August 28, 1989, briefing                  to
      your office.           Specifically,         this    report   addresses       your
      request     to review hotline              policies     and procedures        for
      receiving       calls,      which     included      obtaining     information        on
      the accessibility             of hotlines        to federal     workers and the
      general     public,       and the backgrounds             and training      provided
      fraud hotline          staff.       In addition,        as requested,       we
      obtained      information         and views on the possibility                of
      creating      a central        point     of contact       for all reports         of
      federal     fraud,      waste, and abuse.
      BACKGROUND
      The Inspector         General Act of 1978 (Public                Law 95-452)
      states     that Inspectors          General       (IG) may receive        and
      investigate         employee complaints            of fraud,     waste, and abuse.
      During the 10 years since passage of the IG Act, fraud
      hotlines      have been established              in inspector       general     offices
      and other executive             agencies      for the purpose of receiving
      allegations         of fraud,      waste, abuse, and mismanagement
      within     their     own agencies.          In addition,        shortly    after     this
      act was implemented,             the General Accounting             Office    (GAO)
      established         a nationwide,       toll-free       hotline     to combat
      fraud,     waste, and abuse in the federal                   government.
      Additional        fraud hotlines        are being planned or implemented
      at other agencies            covered by the Inspector             General Act
      Amendments of 1988 (Public                Law 100-504).          The President's
      Council      on Integrity        and Efficiency         (PCIE),     whose
      membership        is made up largely            of the presidentially
      appointed        IGs, reports       annually       to the President        on the
      results      of calls      to the fraud hotlines.
B-237226-l

RESULTS IN BRIEF
Our review found that the fraud hotlines                      are generally
operating       well in terms of accessibility,                advertising,            and
staffing.         All 25 hotlines        we tested      for accessibility              were
answered and identified             themselves       as the location            to
report     allegations      of fraud in the agency.               These hotlines
are staffed        by personnel       experienced       in hotline         operations,
as well as experienced            in conducting         audits    or
investigations         in most cases.         The hotline        staffs        also
receive      periodic    formal training         to supplement           their      on-
the-job      experience.      Further,       each IG office         advertises           its
hotline      to the audiences         it believes       are most likely             to
provide      substantive     allegations.          Generally,       agencies
target     federal     employees as their          principal      audience,           using
methods such as posters             and listings        in agency phone
directories.          Some also target        program beneficiaries.
We found some areas in which hotlines                     could be better
promoted and be made more accessible                    to potential       callers.
We believe      listing    hotline     numbers in the government                pages
of local    telephone      directories        nationwide       could be a good
method for increasing           accessibility         to individuals         who know
of fraud,     waste, abuse, and mismanagement                  in federal
programs.       In addition,       six agencies         do not currently         have
available     toll-free      "800" numbers for callers               outside     the
Washington,       D.C., area.        Implementation         of toll-free
numbers in some of these agencies                  could make the hotlines
more accessible         to callers     outside      the local      area.
Also, further       efforts      could be made to promote the fraud
hotlines     to particular        audiences,       such as government
contractor      employees.        Finally,      our test calls   to agencies'
general    information        operators     indicated    that operators      at 6
of the 25 agencies          tested    were unable to provide        the
correct    hotline     number.       These agencies      could better     assist
callers    who are unfamiliar           with the agency or do not know
the hotline      number by assuring           that the general     operators
can provide      the hotline       number.
We found no compelling           reason for centralizing         hotline
operations.      We believe,        and hotline    officials     and IGs with
whom we spoke concur,          that it is not clearly         evident     that a
centralized     hotline     system would improve the effectiveness
of operations      of the existing       system of fraud hotlines            as a
means of receiving        reports     of fraud,    waste, abuse, and
mismanagement.        Through discussions         with IGs and hotline
staff,    we found that it is desirable            that staff     answering
the hotlines     work in the agencies           and be familiar       with the
2
B-237226-l

issues and programs that are subjects             of the allegations.
In addition,       some IGs cited   the concern that the use of a
central     point   for receipt   of allegations     would
unnecessarily       delay agencies'    receipt    and handling    of
allegations       by adding an additional      step in the process.
OBJECTIVES,       SCOPE, AND METUODOLOGY
The objectives         of this    review were to (1) review hotline
policies     and procedures        for receiving       calls,    which included
obtaining      information     on the accessibility           of hotlines     to
federal     workers and the general          public      and the backgrounds
and training        provided    fraud hotline       staff,    and (2) obtain
information       and views on the possibility              of creating     a
central     point    of contact      for all reports        of federal    fraud,
waste, and abuse.
To assess the operations           of fraud hotlines,         we obtained
information      on accessibility,        advertising      and staffing       of
25 fraud hotlines.         While many more hotlines            exist within
the federal      government,1      we focused on the hotlines            of the
24 IGs appointed        by the President       and the Office        of the
Special     Counsel,    an agency established         to protect      federal
employees alleging        waste, fraud,      and abuse.        The PCIE
included     it in its published        list   of federal      fraud
ho;;b;e;.      (Appendix   V lists    the hotlines       included      in our
          .
With regard to accessibility            of the hotlines,     we identified
all published       numbers for each of the 25 fraud hotlines              and
tested    the accessibility        of each published     number (local
Washington,      D.C. area, toll-free        "800" and/or the federal
government's      internal    telephone    system numbers) during
normal business        hours, lunch hours, and after         business
hours.      For purposes of testing,         we determined    that a fraud
hotline's     accessibility       was acceptable    if,  for the fraud
hotline     number published,       the call was answered and




lAdditiona1        hotlines      exist   within   the federal        government     to
  respond to both fraud and other purposes.                      They include,
  for example,        the Department        of Energy's     hotline,      which
  receives      information       regarding     nuclear   events,      and the
  National     Aeronautics        and Space Administration's             hotline,
  which receives         allegations      regarding     space flights         and
  safety    violations.
3
B-237226-l

identified     --either   by a person or a recording--as     a fraud
hotline.       We also   called   each agencies' general  information
number to      determine    whether the operator  could provide     us
the fraud      hotline   number(s).
We compared agencies'          fraud hotline       policies       and procedures
and interviewed        fraud hotline     officials        to determine     the
background     and training       of fraud hotline          staff   and whether
there is a need to standardize            policies        among agencies      for
receiving    calls.       In these interviews,          we also obtained
specifics    about    each hotline's      operation,          such as hours of
operation,     advertising,       and costs.
We interviewed     fraud hotline      officials     for all 25 agencies,
and six IGs active        in the PCIE, to discuss          the feasibility
of creating     a central    point of contact       for all reports          of
fraud,   waste and abuse, and to identify             alternative      means
to make fraud hotlines         more accessible      to federal     employees
and the public.       We also discussed         some alternatives         with
telecommunications        experts  from American Telephone            &
Telegraph,     MCI Communications,        Inc. and Microlog,        Inc.
We conducted    our review from April        1989 through      August 1989
in accordance    with generally    accepted government           auditing
standards.    The views of hotline     officials,       selected      IGs,
and the Vice Chair of the PCIE were sought during                 the
course of our work and are incorporated             where appropriate.
In addition,    we discussed    the results       of our review and our
recommendations     with the Vice Chair of the PCIE, and
incorporated    his comments where appropriate.
RECOMMENDATIONS
We recommend that the PCIE improve accessibility                        of the
hotlines by encouraging its members to
--   list    their  hotline     numbers in the        government       section   of
     local     phone directories      nationwide;
--   ensure that agencies'general             information   operators    are
     able to provide  the fraud          hotline     numbers to interested
     parties;
--   consider  using toll-free          hotline       numbers, where not
     already  used, for callers          outside       the local Washington,
     D.C., area; and
--   expand    advertising     in the    contractor       community.

4
B-237226-l

The Vice Chair of the PCIE agreed with the results        and
recommendations   contained    in this report  and advised us
that the PCIE will    evaluate   means to implement  the
recommendations.


Appendixes      I through       III    provide     additional    details    on
hotline    accessibility,           staff    backgrounds      and training,    and
issues regarding          centralization.           Appendix IV provides
examples of advertisements                used by four fraud hotlines,          and
appendix V lists          the agencies        included      in our review and
their   hotline     telephone         numbers.
As agreed with your office,               unless you pub1 icly announce
its contents        earlier,      we plan no further         distribution      of
this report       until      30 days from the date of this letter.                 At
that time we will            send copies to the Directors              of the
Office    of Management and Budget and the Office                      of Special
Counsel,      the Chair and Vice Chair of the PCIE, and each
presidentially          appointed     inspector     general,      and we will
make copies available             to others     upon request.          This report
was prepared        under the direction          of John J. Adair,
Director,       Audit Oversight         and Policy,    who may be reached
on 275-9359 if you or your staff                 have any questions.           Major
contributors        are listed      in appendix VI.
     erely    yours,



Donald H. Chapin
Assistant Comptroller           General
                                  Contents
                                                                             Page
LETTER                                                                         1
APPENDIXES
          I   ACCESSIBILITY        OF FRAUD HOTLINES                           8
     II       STAFFING OF FRAUD HOTLINES                                      12
 III          ISSUES REGARDING CENTRALIZATION
                OF FRAUD HOTLINES                                             16
     IV       EXAMPLES OF ADVERTISING USED BY
                FRAUD HOTLINES                                                19
       V      HOTLINE NUMBERS OF AGENCIES REVIEWED                            23
     VI       MAJOR CONTRIBUTORS TO THIS REPORT                               25

                                   ABBREVIATIONS
GAO           General       Accounting     Office
IG            Inspector       General
OIG           Office      of Inspector       General
PCIE          President's        Council     on Integrity   and Efficiency
APPENDIX I                                                                APPENDIX I




                           ACCESSIBILITY    OF FRAUD EOTLINES




CURRENT ACCESSIBILITY:


             --   HOTLINES      AT 25 AGENCIES


             --   SIX   AGBNCIBS     DO NOT EAVB TOLL-J?RBE     NUMBERS


             --   EOTLINES      ANSUBRBD DURING AND AFTER BUSINESS        EOUBS


             --   SIX AGENCIES   GENERAL OPERATORS COULD NOT PROVIDE
                  EOTLINE NUHBER


             --   ADVERTISED TO FEDERAL BHPLOYBES AND PROGRAM
                  BENEFICIARIES, SOMB GOVBRNUBNT CONTRACTORS


             --   LITTLE     ADVERTISING    TO GENERAL PUBLIC


             --   EOTLINBS     NOT LISTED    IN LOCAL TBLBPEONE     DIRBCTORIBS
APPENDIX I                                                                             APPENDIX I

                           ACCESSIBILITY         OF FRAUD HOTLINES
FRAUD HOTLINES ARE ACCESSIBLE BUT
IMPROVEMENTS CAN BE MADE
         All the 24 presidentially           appointed      inspector      general    offices,
including      new offices     which were established            following       1988
amendments to the IG Act, operate                fraud hotline        telephones      that
enable individuals          to report    allegations       of fraud,       waste, and
mismanagement.         In addition,      the Office       of the Special         Counsel,
whose mission        it is to protect        federal     employees making
allegations       of federal     fraud,    waste, and mismanagement,              operates      a
hotline.       The PCIE's Fiscal        Year 1988 Report to the President                  also
identified      the Federal      Bureau of Investigation,             the Office      of
Management and Budget, and the Office                  of Government Ethics as
having hotlines.          However, these three agencies,                in fact,    do not
currently      operate    fraud hotlines.
         The fraud hotlines       have local    numbers that are accessible
toll-free      in the Washington,       D.C., area.     In addition,      19 of the 25
agencies     operate     "800" numbers that are toll-free         when calling     from
elsewhere      in the United States.*         Some agencies,     such as the
Department       of State,     the United States Information         Agency, and the
Agency for International           Development,     do not use "800" numbers
because their         employees are mainly      overseas and have other
channels,      such as cables,      to communicate     with the inspector
general's      office.
        By expanding       the use of "800" numbers, we believe                      some other
agencies might improve the accessibility                       of their      hotlines      to
individuals        who would know about possible                  wrongdoing      that could
warrant     an inspector        general     inquiry.        For example,        the Department
of Housing and Urban Development                  might benefit         if persons aware of
misappropriations          of public      housing funds had access to an "800"
number in the inspector              general's      office.        Other agencies         which
might benefit         from "800" numbers include               the Small Business
Administration          and the Office        of Personnel         Management.         These
agencies      indicated      that,    at present,        they do not believe            an "800"
line would be cost beneficial.                  Specific        reasons cited        include     the
fact that the limited              number of calls         currently      received      does not
justify     the expense,        or the likelihood           that the hotline           would be
inappropriately          used as an information             line.      However,
telecommunications           experts    told us that the cost to maintain                     an

2The Railroad     Retirement      Board, located   in Chicago,       Illinois,        has
 available    a toll-free      local   hotline  number in the Chicago area,
 and also operates        an "800" number for calls      originating           outside
 Chicago.
                                                 9
APPENDIX     I                                                                    APPENDIX     I

"800"     line is minimal,      with the only fluctuating      cost being the
long    distance     charges for individual    calls.     Thus, the costs would
be in     proportion     to the number of calls     an agency received    per year
and,    therefore,     most likely   small for agencies     with few calls.
        We tested     each of the 25 hotlines           to determine      their
accessibility        during     business   hours,    lunch hours,      and non-
business      hours.      Twenty-two     of the 25 are accessible           to callers        24
hours a day.         They generally       rely on assigned       hotline      staff     during
business      hours and use recorded messages during                non-business          hours
and when the staff          are unavailable       during    business     hours.        Three of
the hotlines       operate     only during     agency business         hours and do not
have an after-hours           recorded message.3          Our test calls       to the local
Washington,       D.C., hotline        numbers and the "800" numbers,               for those
agencies      with them, were all answered and identified                   as the
location      to report     fraud for the agency.l
        We had mixed results          from our test calls         to the 25 agencies'
general    information       operators     to determine       if they knew the hotline
numbers.      Six were unable to provide              the correct       numbers.   We
believe    that general       operators      could greatly       assist    callers  who
wish to report       allegations        of fraud,     waste, and abuse by providing
the hotline      number to callers         unfamiliar      with the agency fraud
hotline    or who do not know its number.
AGENCIES TARGET ADVERTISING
PRIMARILY TO FEDERAL EMPLOYEES
      The 25 hotlines    that we reviewed  focused their     advertising
predominantly   on federal    employees.  Hotline  officials     we spoke
with consider   employees to be the most likely     source of


3The Office      of the Special         Counsel does not consider          it necessary
 to maintain      a 24-hour hotline         since its purpose is to protect
 federal     employees making allegations.             The Department         of Justice,
 which established         its hotline      in July 1989, plans to make an
 after-hours       recorded     message service      available     in the near future.
 In addition,       the Office       of Personnel    Management had an after-hours
 recording     for several        years.    However, it received        very few calls
 and no substantive          allegations,      and therefore     discontinued         the
 service.      Since it is now a statutory            IG, however,       it plans to
 take a more active          stance and re-implement          a recording       service   in
 the near future.
4For the Railroad  Retirement             Board,    the local      hotline    number
 tested was the local    number           in the    Chicago,     Illinois,     area.

                                              10
APPENDIX I                                                                          APPENDIX I

substantive       allegations        since    they work with         and should      be more
familiar     with federal         programs.       The primary        forms of advertising
used by agencies          include      posters    hung in agency facilities,
listings     of the hotline          numbers in agency phone directories,                  and
advertising       in the IGs semi-annual             reports      (see appendix       IV).
Other    methods,      used to varying          degrees,     include     brochures     on
fraud,    waste, and abuse in the federal                  workplace,       listing     of fraud
hotline     numbers on employee pay stubs,                and discussions           of fraud
prevention      during      employee orientation           seminars.
       The Departments      of Health and Human Services          and Agriculture,
which administer      social    programs,   also target      advertising       to
program beneficiaries.          The Department     of Health and Human
Services,    for example,     provides    posters   to social     security       offices
nationally    and places advertisements          in periodicals       familiar       to
medicaid/medicare      recipients.       The Department      of Agriculture          prints
the hotline     number in each booklet        of food stamps.
        In addition,        the Department       of Defense requires        contractors
receiving      over $5 million         in defense contracts         to either     establish
a fraud hotline         or advertise       the Department's        hotline    number.
Defense hotline         officials      found contractors-to         be an Ncellent
source of fraud allegations.                 They provide      advertising     of its
hotline     to contractors        in the form of posters          and pamphlets       as well
as audio-visual         presentations.         The National      Aeronautics       and Space
Administration        also provides        posters   advertising        its hotline     to
contractors.         Since other agencies,          such as the General Services
Administration,         also rely on contractors,            we suggest those agencies
which use contractors,            might also benefit         from targeting
advertising      toward the contractor            community.
        Agencies with fraud hotlines             do not actively     target
advertising      to the public.          We reviewed    local   phone directories      in
eight major U.S. cities             and found that federal       fraud hotline
numbers are listed         for only two agencies          in one city.      While the
opinions     of hotline      officials     and selected      IGs we spoke with vary
regarding     the value of advertising            to the public,     all support
listing     major federal        hotline   numbers in local      phone directories
nationwide.        Listing    numbers could serve to increase            accessibility
of hotline      numbers to citizens         who know of fraud,       waste, and abuse
in federal      programs.




                                              11
APPENDIX   II                                                             APPENDIX    II




                              STAFFING   OF   FRAUD   EOTLINBS




EOTLINES APPEAR TO BE APPROPRIATELY                STAFFED BASED ON THB WIDE
VARIATIONS AMONG AGBNCIBS IN



                --   TEE VOLUHB OF CALLS RBCBIVBD         PER STAFF BBMBBR AND



                --   TEE COMPLEXITY OF ALLEGATIONS         RELATIVE   TO STAFFS'
                     TRAINING AND BACKGROUND




SIZE AND BACKGROUNDS OF EOTLINB               STAFF VARY CONSIDBRAELY     AMONG
AGENCIES




STAFF ARE EXPERIENCED          IN EOTLINB     OPERATIONS




MOST EAVB PRIOR         INVBSTIGATIVB,    AUDIT,      OR PROGRAM EXPERIENCE




STAFF RECEIVE         FORHAL TRAINING    TO SUPPLBMBNT ON-TEE-JOB        EXPERIENCE




                                            12
APPENDIX II                                                                             APPENDIX II

                                STAFFING OF FRAUD HOTLINES
       While the number and backgrounds                 of fraud hotline        staff   vary,
agencies    appear to staff         their    hotlines      appropriately      based on our
review of the number and type of calls                    received     and the background
and training      of the assigned         staff.      The volume of Calls and the
complexity    of allegations          among agencies         vary greatly.        Agencies
appear to staff      their     hotlines      to accommodate these disparities,
which we believe       is appropriate          and reasonable.           All hotline    staff
are experienced      in hotline        operations       and most have prior
experience    in investigative,           audit,     or specific       program areas.         In
addition,    hotline     staff    receive      periodic      formal training       to
supplement    on-the-job       and prior       experience.
        For the 25 agencies           that we reviewed,            the number of staff
assigned      to hotline     duties       varies    from no separate          assigned     staff
to a staff        of 17 which serve on a rotational                   basis.      However, over
half of the agencies            rely on a single            person either       on a full-time
or part-time        basis.      Fraud hotline         officials       and IGs we spoke with
indicated       that staffing       levels      are often based on the number and
complexity        of calls    received,        and variations         are to be expected.
The size of the staffs             appears consistent             with the volume of calls
each agency receives.              For example,         Defense's      staff    of 15 received
over 10,000 calls          in fiscal        year 1988.          In contrast,      the Agency for
International        Development,         which has no full-time             staff,    but
assigns     an investigator         to calls       as they are received,             had four
calls     in fiscal     year 1988.          Those agencies         with few calls       believe
that staffing        a hotline      full-time       would not be cost beneficial.
        Many of the hotline            officials         emphasized        the importance          of the
staffs'     background        to the success of the hotline                    operation.          They
consider     the ability         to elicit        sufficient,         appropriate        information
through     effective       interviewing          skills       and an understanding            of the
agency's     programs to be the most important                        skills    hotline       personnel
can have.        The majority         of hotline         officials       believe      fraud hotlines
should be staffed           by criminal         investigators           who are trained          to
recognize       and ask the right            questions         to obtain      substantive
information       on allegations.             The remainder           believe,       however,      that
staff    with strong backgrounds                in agency program requirements                     and
training      in audit,       interviewing,          and     investigative         techniques        can
be as effective          in recognizing           and screening          potential       allegations
as criminal        investigators.
        Of the staff   employed by the 25 hotlines         in our review,      almost
two-thirds     are criminal   investigators,        and the remainder      are
management or program analysts.            The grade levels      of fraud hotline
staff    also vary, with the largest         number of hotline      operators    at
the GS-13 level.       Where there is not a criminal          investigator
actively     assigned  to the hotline,       supervisors   with investigative
                                                  13
APPENDIX II                                                                            APPENDIX II

experience    actively  participate        in screening      and processing      hotline
calls.     Almost all hotline      staff     have several     years prior
experience    working  within    their    agency or other federal         agencies       in
an audit or investigative        capacity.       As a result,      they are familiar
with agency programs as well as techniques                for screening     hotline
calls.
        All 25 agencies          rely on on-the-job           training         in addition       to
hotline     staffs'      prior     experience.         Furthermore,         most agencies
provide     formal training            in investigative,          audit,       and program areas
to supplement         on-the-job         experience.        For example,          a third     of the
agencies      having staff        with strong        investigative          or audit      skills
also provide        training       in agency program requirements.                    Conversely,
another third         with personnel           who have strong program backgrounds
also provide        hotline      staff      with investigative           training.         In
addition,      as a result        of a 1987 PCIE study which recommended better
training      for hotline        staff,      a group of hotline            officials      designed     a
course.       The course,        which was made available                in 1988 and 1989,
focused on providing             basic hotline         skills     and discussions            of issues
common to all agencies'                hotline    operations.         The course has been
attended      by staff       from over half of the 25 agencies                      in our review.
At present,       the group plans to continue                 making similar            courses
available       on an annual basis.




                                                 14
APPENDIX III                                                             APPENDIX III




          ISSUES   REGARDING CENTRALIXATION           OF FRAUD EOTLINES



NO COMPELLING    REASON FOR CENTRALIZATION




ALTBRNATIVBS    CONSIDERED     FOR CBNTRALIXATION         INCLUDE:


           --   DISBANDING     BXISTING    EOTLINBS     TO FORH SINGLE      CENTRAL
                EOTLINE

                DRAWBACKS:      DIFFICULT TO OBTAIN         STAFF KNOWLEDGBABLE IN
                                ALL PROGRAMS

                                QUBSTIONABLB WBO WOULD FINANCE             AND MANAGE
                                CENTRAL EOTLINB

           --   COHBINING     EXISTING    EOTLINBS     ALONG FUNCTIONAL      LINES

                DRAWBACKS:      DUPLICATES     EXISTING     EOTLINBS

                                SCOPE OF AN AGENCY'S         CALLS     BROADER TEAN
                                ONE FUNCTIONAL ARBA


           --   BSTABLISEING     A CENTRALIZED        COMPUTER-ASSISTED      CENTRAL
                SUITCEBOARD

                DRAWBACK:      GENERAL OPBRATORS HAY LACK NECESSARY
                               PROGRAM KNOWLEDGE FORDIRECTING  CALLS




                                          16
APPENDIX III                                                                     APPENDIX III

             ISSUES REGARDING CENTRALIZATION                 OF FRAUD HOTLINES
        We were asked to consider                 alternatives       for creating       a central
point of.contact           for all reports           of federal      fraud,    waste, and
abuse.      The concept of centralization                    of the hotlines        involves
establishing        a single       toll-free       fraud hotline         number which would be
accessible       to both federal            employees and the public.
Centralization          could facilitate           national     advertising       of the hotline
as well as centralize              the receipt         of hotline      calls   in one location.
In the course of discussing                  centralization         with hotline       officials
and IGs,      three     alternatives         evolved.        The three alternatives
include     disbanding        existing       hotlines      to form a central         hotline,
combining       existing      hotlines       along functional          lines,    or creating      a
centralized        computer-assisted            switchboard       to direct     calls      to
individual       agencies.
        We found no compelling        reason for centralizing             hotline
operations.       Through discussions       with IGs and hotline             staff, we
found that it is desirable          that staff       answering     the hotlines     work
in the agencies       and be familiar      with the issues and programs that
are subjects      of the allegations.         In addition,        some IGs expressed
the concern that the use of a central                point   for receipt        of
allegations      would unnecessarily       delay agencies'          receipt     and
handling     of allegations     by adding an additional            step in the
process.      We believe,     and hotline     officials      and IGs with whom we
spoke concur,      that it is not clearly           evident    that a centralized
hotline     system would improve the effectiveness                of operations     of
the existing      system of fraud hotlines           as a means of receiving
reports     of fraud,    waste, abuse, and mismanagement.
         In the course of our review,      we discussed   the three
alternatives       for creating a centralized     hotline   with hotline
officials      from 25 agencies  and 6 IGs.      Specific   concerns    for               each
of the three alternatives       we considered     are discussed     below.
         One alternative      we considered      would be to disband      existing
agency hotlines         and create   a central     fraud hotline,    using a single
toll-free      number.      Under this alternative,      the central      hotline
staff     would both receive       and screen incoming      calls,   similar      to what
is currently       done by individual       agencies.    The information         obtained
from the calls         would be forwarded      to agency IG offices       to
investigate.
       The biggest     drawback IGs and fraud hotline               officials     cited    was
the difficulty       in obtaining   staff    sufficiently         knowledgeable        in all
agencies'      programs to recognize      potential       allegations         and properly
screen calls.        They indicated    that each program has unique
requirements       and what may be a potential           allegation        about one
program may not be for another.            Since callers          may not always be
                                              17
APPENDIX III                                                                      APPENDIX III

able to articulate       their     concerns,    it becomes incumbent    on the
fraud hotline      staff   answering     the call   to be sufficiently
knowledgeable      about the programs to discern          whether a substantive
allegation    exists.      In addition,      the IGs with whom we spoke felt
it would be difficult          to decide who would manage the central
hotline    and how it would be financed.            One IG proposed that an
individual    existing     hotline     be expanded to cover all other
agencies,    but other IGs said they would continue              their own
hotlines    even if this were done.
        The second alternative         we considered     involves      combining
existing      agency hotlines      along functional      lines.      For example, a
single     hotline      could be established     for hotline      calls    which deal
primarily       with fraud in the procurement         and contract       issue area
(for example,         for the Departments      of Defense and Energy, the
National      Aeronautics      and Space Administration,         and the General
Services      Administration).        A single   agency could operate          the
functional       line and bill     the other agencies        based on ar,
established        scale.
        IGs with whom we spoke believe         the scope of calls      to
individual      hotlines  is much broader than one functional            area. They
indicated     that they would want to continue          to operate   their    own
hotlines    to accommodate all program areas,           even if functional
hotlines    were established.        As a result,   this alternative        would
only serve to duplicate       existing    hotlines    and may also confuse
callers    as to which hotline      to contact.
         The third    alternative        considered      involves      the establishment         of
a computer-assisted            central     switchboard      to direct        incoming    calls
from a single       toll-free         number to the individual             agency fraud
hotlines     already      in existence.          Under this alternative,             a single
number could be advertized               nationwide      even though the existing
hotlines     would continue           to operate     separately.         We discussed       the
approach with experts             in the telecommunications              field     who indicated
that the technology            exists    to accomplish        this alternative.           This
alternative       appears to be the easiest              to implement          because it would
be less disruptive           to existing       hotline     operations.          However,
officials      with whom we spoke voiced concerns                  that a general
operator     with little        program knowledge may not be able to determine
the agency to which the call                should be forwarded.




                                               18
APPENDIX IV                                                                 APPENDIX IV

              EXAMPLES OF ADVERTISING USED BY FRAUD HOTLINES




                 FRAUD-WASTE-MISMANAGEMENT




Source:   Veterans    Administration--        Office   of the   Inspector     General
          semi-annual    report                                     i


                                 q!f     19
APPENDIX IV                                                                                           APPENDIX IV




                                                                     REPORT:
                                                                      FRAUD,
                                                                       WASTE
                                                                            OR
                                                                       ABUSE
                                                                       TO THE
                                                                 INSPECTOR
                                                                    GENERAL

                                                              HOTLIN
                                                                                                  I
                                                                                                  I
                                                                                                  I




               I        l

                        l
                              Information is Confidential
                              Caller Can Be Anonymous


               800-424-4000                             or               202-382-4977

                                                 iSEFY4
                    U.S. Environmentrl     Rotoction Agency   . Gffla of th. Inspector   Gonerd
                                         401 M Street SW. l   Washington. OC




Source:   Environmental          Protection   Agency's                          Semi-annual           report   to
          the President          (March 1988)


                                                      20
APPENDIX IV                                                                   APPENDIX IV




              Waste,Fraud& Mismanagement
                To THE UNITED        STATES DEPARTMENT          OF STATE
               OFFICE OF INSPECTOR GENERAL
                            HOTLINE 202-647-3320
                                         OR WRITE TO:
                           THE UNITED STATES DEPARTMENT OF STATE
                           PO. 60X 193Q2 WASHINGTON. DC. 20036-9392




 Source:      Department     of   State--   Office     of the     Inspector   General


                                               21
APPENDIX IV                                                                  APPENDIX IV




           INTEGRITYIN                     GOVERNMENT
                        YOU CAN HELP!




                       Washington, D.C. Number: 366-1461
                         To&free Number: 800-424-9071
                         l   Report Fraud, Waste, and Abuse
                         l   Information is confidential
                         l   CaUermay remain anonymous

                    OFFICE OF INSPECTOR GENERAL
                U.S. DEPARTMENT OF TRANSPORTATION




Source:   Department    of    Transportation--Office          of   the   Inspector
          General

                                            22
APPENDIX V                                                               APPENDIX V

                    HOTLINE NUMBERS OF AGENCIES REVIEWED

     1.      Department      of Agriculture           (202)   472-1388
                                                      (800)   424-9121
     2.      Agency for International                 (202)   875-4999
               Development
     3.      Department      of Commerce              (202)   377-2495
                                                      (800)   424-5197
     4.      Department      of Defense               (202)   693-5080
                                                      (800)   424-9098
     5.      Department      of Education             (202)   755-2770
                                                      (800)   647-8733
     6.      Department      of Energy                (202)   586-4073
                                                      (800)   541-1625
     7.      Environmental        Protection          (202)   382-4977
               Agency                                 (800)   424-4000
     8.      General Services                         (202)   566-1780
               Administration                         (800)   424-5210
     9.      Department  of Health             and    (301)   965-5953
               Human Services                         (800)   368-5779
     10.     Department of Housing              and   (202)   472-4200
               Urban Development
     11.     Department      of   Interior            (202)   343-2424
                                                      (800)   424-5081
     12.     Department      of Justice               (202)   633-3435
                                                      (800)   869-4499
     13.     Department      of Labor                 (202)   357-0227
                                                      (800)   424-5409
     14.     National Aeronautics              and    (202)   755-3402
               Space Administration                   (800)   424-9183
     15.     Office  of Personnel                     (202)   632-4423
                Management
                                                                         (continued)
                                               23
APPENDIX V                                                                 APPENDIX V

     16.     Office   of the     Special                (202)   653-9125
                Counsel                                 (800)   872-9855
     17.     Railroad     Retirement        Board       (312)   751-4336
                                                        (800)   772-4258
     18.     Small   Business                           (202)   653-7557
                Administration
     19.     Department     of   State                  (202)   647-3320
     20.     Department     of                          (202)   366-1461
               Transportation                           (800)   424-9071
     21.     Department     of   Treasury               (202)   566-7901
                                                        (800)   826-0407
     22.     United States       Information            (202)   485-8202
               Agency
     23.   Veterans       Administration                (202)   233-5394
                                                        (800)   368-5899
     24.     Federal  Emergency          Management     (800)   245-5554
               Agency
    25.    Nuclear      Regulatory         Commission   (202)   492-7301
                                                        (800)   426-8096




                                               24
APPENDIX VI                                                                    APPENDIX VI

                         MAJOR CONTRIBUTORS TO THIS REPORT

ACCOUNTING AND FINANCIAL              MANAGEMENT DIVISION,          WASHINGTON, D.C.
Rex Simmons,        Assistant      Director,    Audit   Oversight      and Policy
  Issues,   (202)       275-9356
Kimberley  A. Caprio,   Evaluator-in-Charge
Warren Martin,  Evaluator
Brenda L. Wahl, Evaluator




(911645)


                                               25
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