oversight

Program Fraud Civil Remedies Act: Observations on Implementation

Published by the Government Accountability Office on 2012-01-27.

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

United States Government Accountability Office
Washington, DC 20548



           January 27, 2012


           The Honorable Darrel E. Issa
           Chairman
           The Honorable Elijah E. Cummings
           Ranking Member
           Committee on Oversight and Government Reform
           House of Representatives

           Subject: Program Fraud Civil Remedies Act: Observations on Implementation

           This letter formally transmits the slides used at a briefing we presented to staff from
           your offices in response to your request for information about federal executive
           agencies’ recent use of the Program Fraud Civil Remedies Act of 1986 (PFCRA). 1 (See
           enclosure for a copy of our briefing slides). PFCRA provides an administrative
           remedy available to federal executive branch agencies to address false, fictitious, or
           fraudulent claims and statements (false claims). PFCRA can be used for false claims
           where the alleged liability is less than $150,000 (claim ceiling). It also provides for
           monetary penalties up to $5,000 (a cap that most agencies are to adjust upward for
           inflation 2) and allows for an assessment of up to two times the amount of the
           fraudulent claim. In addition to PFCRA, federal agencies also use other mechanisms
           to address false claims, such as the False Claims Act, 3 suspension and debarment
           processes, and statutes that address Medicaid and Medicare false claim frauds
           through the Social Security Act, as amended. 4
           In 1991, we reported that federal agencies did not use PFCRA extensively. 5 You
           asked us to provide recent information on federal agencies’ use of PFCRA. As
           discussed with your staff, our objectives were to present information on (1) the
           extent to which federal agencies have used PFCRA in recent years, (2) factors

           1
             31 U.S.C. Chapter 38.
           2
             The Federal Civil Penalties Inflation Adjustment Act (28 U.S.C. § 2461 note) provides a mechanism to
           allow for regular adjustment (once every four years) for inflation of civil monetary penalties
           established in law. The monetary penalty in PFCRA would be subject to adjustment by this Act.
           However, agencies made initial adjustments to the PFCRA penalty cap at different times causing
           agencies to have varying penalty caps. For example, the Department of Housing and Urban
           Development reported adjusting its PFCRA cap to $7,500 in fiscal year 2009, and the Department of
           Energy reported adjusting its cap to $8,000 in fiscal year 2010.
           3
             The False Claims Act is codified at 31 U.S.C. § 3729-33.
           4
             42 U.S.C. § 1320a-7a.
           5
             GAO, Program Fraud: Implementation of the Program Fraud Civil Remedies Act of 1986,
           GAO/AFMD-91-73 (Washington, D.C.: Sept. 13, 1991).


                                                         GAO-12-275R Program Fraud Civil Remedies Act
reported by agency officials and inspectors general (IG) that either facilitated or
limited the use of PFCRA, and (3) views of federal agency IGs on prior
recommendations made by the National Procurement Fraud Task Force on possible
PFCRA reforms. 6
To obtain information about the recent use of PFCRA by federal agencies, we
selected the most recent 5-year period for which data were available–-fiscal years
2006 through 2010. We interviewed Department of Justice (DOJ) officials concerning
the PFCRA cases they received during this period, and summarized responses from
the statutory federal IGs we surveyed in May 2011, which included the extent to
which their agencies’ used PFCRA’s civil program fraud remedies and any factors
that limited their agencies’ use of PFCRA. 7 We also obtained information about
factors that either facilitated or limited federal agencies’ use of PFCRA’s provisions
by interviewing officials responsible for addressing false claims at the Departments of
Housing and Urban Development (HUD), Defense (DOD), and Health and Human
Services (HHS). We selected these agencies because they represented a range of
characteristics that may affect PFCRA usage. We also summarized responses to our
May 2011 survey concerning federal agency IGs’ views on prior recommendations
made by the National Procurement Fraud Task Force on possible PFCRA reforms.
We performed our work from February 2011 through January 2012 in accordance
with all sections of GAO’s Quality Assurance Framework that are relevant to our
objectives. The framework requires that we plan and perform the engagement to
obtain sufficient and appropriate evidence to meet our stated objectives and to
discuss any limitation in our work. We believe that the information and data obtained,
and the analysis conducted, provide a reasonable basis for any findings and
conclusions. We provided your staff with a briefing covering the above information in
a previous meeting. This letter transmits the updated materials used for that briefing.
In summary, according to information provided by DOJ and our survey of the IGs,
five civilian agencies (HUD, HHS, Department of Energy, the Corporation for
National and Community Service, and the Nuclear Regulatory Commission) used
PFCRA’s authorities to refer 141 cases to DOJ for approval by the Attorney General
during fiscal years 2006 through 2010. Of the 141 cases, 135, or 96 percent, were
referred by HUD. The remaining four agencies referred a total of 6 cases during this
period.
We asked HUD IG officials to identify factors that facilitated HUD’s use of PFCRA.
They told us that HUD’s use of PFCRA was the result of several factors; including the
support of HUD’s top management, applying PFCRA penalties to already successful
criminal prosecutions, proactive HUD IG office involvement, coordination within
HUD and with DOJ, use of standardized PFCRA case documentation, and a PFCRA
case tracking system. In contrast, officials from other agencies that did not use
PFCRA’s administrative remedies identified several factors that limited their ability to
use PFCRA. These factors included available alternative mechanisms to PFCRA that

6
 The Department of Justice, National Procurement Fraud Task Force, Legislation Committee,
recommended possible PFCRA reforms in its June 9, 2008, report, Procurement Fraud: Legislative
and Regulatory Reform Proposals.
7
  As of May 2011, there were 73 IG offices established by the IG Act of 1978, as amended, or other
statutes. Seventy-one IGs provided responses to our survey questions regarding their agencies’ use of
PFCRA but provided a limited response to our questions regarding factors that limited the use of
PFCRA and their views on prior recommendations to reform PFCRA.


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agency officials found more useful in addressing false claims and related fraud, and a
PFCRA requirement for their agency to use Administrative Law Judges (ALJ), which
are not available at DOD, to preside over PFCRA cases. On average, DOJ’s reviews of
PFCRA cases took 211 days rather than 90-days as prescribed by PFCRA. DOJ
officials told us this was due to several factors including (1) other high-dollar cases
that often took precedence over PFCRA cases and (2) time for DOJ follow-up with
the referring agencies to obtain necessary information. In their comments identifying
factors that limited the use of PFCRA, DOJ officials also cited the requirement for
PFCRA cases to be approved by the Attorney General or a designated Assistant
Attorney General, instead of a director-level official who may approve other fraud
cases involving similar dollar amounts. In our May 2011 survey, 39 IGs included these
and additional factors that limited use of PFCRA. The IGs most often cited the use of
alternative mechanisms to address false claims and resource constraints as factors
limiting PFCRA use. The other limiting factors they identified included that penalty
amounts recovered by the agencies, with few exceptions, are to be sent to the U.S.
Treasury rather than retained by the agency; the false claims ceiling and penalty
amounts are too low; the PFCRA process is too cumbersome; and there is a lack of
available ALJs. Further, the IGs noted that regulatory agencies have few issues with
false claims.
Most IGs who responded to our May 2011 survey with an opinion agreed with the
National Procurement Fraud Task Force recommendations for reforming PFCRA.
For the recommendation that agencies be allowed to retain their PFCRA-related
monetary recoveries, 51 of the 53 IGs in our survey who had an opinion agreed with
this reform. While the support for the remaining recommendations was not as strong,
the IGs who provided an opinion generally supported the other five proposals as well.
We received technical comments on a draft of this report from officials we
interviewed and made changes as appropriate. These officials were from DOJ, HUD
IG office, HHS IG office, U.S. Army, U.S. Air Force, Defense Logistics Agency,
Defense Contract Management Agency, Special IG for Iraq Reconstruction, and
additional IGs in the Council of the IGs on Integrity and Efficiency (CIGIE). We are
also providing copies of this report to these officials and all the IGs in CIGIE.
                                       ------------
If you have any questions or would like to discuss this report, please contact me at
(202) 512-8486 or raglands@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this report. Key
contributors to this letter and the enclosure were Jackson Hufnagle, Chris Yfantis,
Clarence Whitt, Tyrone Hutchins, Quang Nguyen, Rebecca Shea, Jacquelyn Hamilton,
and Katherine Lenane.




Susan Ragland
Director
Financial Management and Assurance

Enclosure



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Enclosure




         Program Fraud Civil Remedies Act:
         Observations on Implementation

     Briefing for Staff Members of the Committee on
            Oversight and Government Reform
                House of Representatives




                                                                  Page 1




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Enclosure




   Overview

   •   Introduction
   •   Objectives
   •   Scope and methodology
   •   Background
   •   Results
         • Agencies’ use of the Program Fraud Civil Remedies Act (PFCRA) during
            fiscal years 2006 through 2010
         • Factors reported by agency officials and inspectors general (IG) that
            facilitated or limited the use of PFCRA
         • IGs’ views on recommendations of the National Procurement Fraud Task
            Force for possible PFCRA reforms1

       1The Department of Justice, National Procurement Fraud Task Force, Legislation Committee, recommended PFCRA reforms in its June 9, 2008, report,

       Procurement Fraud: Legislative and Regulatory Reform Proposals.




                                                                                                                                                      Page 2




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Enclosure




   Introduction

   • The Program Fraud Civil Remedies Act of 1986 (PFCRA) (31 U.S.C § 3801-
     3812) created one of several mechanisms executive branch agencies have
     available to address false, fictitious, or fraudulent claims or statements.
      • Cap of $150,000 on the amount of claim (or group of related claims)
      • Civil penalties of up to $5,000 (adjusted for inflation)2 for each false claim or
          statement with assessments of up to double the amount falsely claimed in
          cases where federal payment has been made
      • Dollar recoveries collected from PFCRA cases are returned to the General
          Fund of the U.S. Treasury
   • We had previously reported that federal agencies did not use PFCRA
     extensively.3 You asked us to provide information on federal agencies’ recent
     use of PFCRA.
      2The   Federal Civil Penalties Inflation Adjustment Act (28 U.S.C. § 2461 note) provides a mechanism to allow for regular adjustment (once every four years) for
      inflation of civil monetary penalties established in law. The monetary penalty in PFCRA would be subject to adjustment by this act. However, agencies made
      initial adjustments to the PFCRA penalty cap at different times causing agencies to have varying penalty caps. For example, the Department of Housing and
      Urban Development adjusted its civil penalty cap under PFCRA to $7,500 in fiscal year 2009, and the Department of Energy adjusted its cap to $8,000 in fiscal
      year 2010.
     3GAO,   Program Fraud: Implementation of the Program Fraud Civil Remedies Act of 1986, GAO/AFMD-91-73 (Washington, D.C.: Sept. 13, 1991).


                                                                                                                                                               Page 3




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Enclosure




   Objectives

   • As agreed with committee staff, our objectives were to provide
     information on the recent use of PFCRA throughout the federal
     government. Specifically, we obtained information reported by
     federal executive branch agencies and IG officials on:
       • The extent to which they have used PFCRA in recent years
       • The factors they reported that either facilitated or limited their
         use of PFCRA, and
       • The views of the IGs on prior National Procurement Fraud
         Task Force recommendations to reform PFCRA.




                                                                             Page 4




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Enclosure




   Scope and Methodology

   • To obtain information about the use of PFCRA, we reviewed the act’s
     requirements and our 1991 report on the implementation of PFCRA.
   • To determine the extent to which federal agencies reported they have
     used PFCRA in recent years, we obtained data from the Department of
     Justice (DOJ) on PFCRA cases federal agencies referred for approval in
     fiscal years 2006 through 2010.
   • Through coordination with the Council of the IGs on Integrity and
     Efficiency (CIGIE), we surveyed 71 statutory IGs in May 2011 about
     their agencies’ use of PFCRA during fiscal years 2006 through 2010.4


     4CIGIE   was establish by the IG Reform Act of 2008 (Pub. L. No. 110-409, 122 Stat. 4302, Oct. 14, 2008) to address integrity, economy, and
     effectiveness issues that transcend individual government agencies and to increase the professionalism and effectiveness of personnel in the IG
     offices.




                                                                                                                                                       Page 5




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Enclosure




   Scope and Methodology

   • We obtained further information on the factors that facilitated or limited
     federal agencies’ use of PFCRA by interviewing officials from the
     Departments of Housing and Urban Development (HUD), Defense
     (DOD), and Health and Human Services (HHS) responsible for
     addressing false claims against their agencies.
       • We selected these agencies because
          • HUD used PFCRA extensively during our period of review;
          • DOD does not have administrative law judges (ALJ), which are a
            required component for presiding over PFCRA cases at DOD;
            and
          • HHS addressed false claims using alternative remedies provided
            by statutes specific to the Medicare and Medicaid programs.



                                                                              Page 6




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Enclosure




   Scope and Methodology

   • Specifically, these interviews included officials at the following agencies:
       • Department of Justice (DOJ) Commercial Litigation Branch
       • Department of Housing and Urban Development Office of Inspector
          General (HUD IG)
       • Department of Health and Human Services Office of Inspector
          General (HHS IG)
       • U.S. Air Force, General Counsel for Contractor Responsibility
       • U.S. Army, Procurement Fraud Branch, Contract and Fiscal Law
          Division, Legal Services Agency
       • Defense Contract Management Agency, Contract Integrity Center
       • Defense Logistics Agency, General Counsel, Contract Integrity
       • Special Inspector General for Iraq Reconstruction, IG Counsel
   • In response to our May 2011 survey, the IGs identified factors that
     limited the use of PFCRA at their agencies.

                                                                               Page 7




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Enclosure




   Scope and Methodology

   • To obtain IG views on the National Procurement Fraud Task Force’s
     proposed recommendations to reform PFCRA, we included a listing of
     these recommendations in our May 2011 survey of the IGs to determine
     the extent to which they agreed with these reforms.

   • We conducted our work from February 2011 through January 2012 in
     accordance with all sections of GAO’s Quality Assurance Framework
     that are relevant to our objectives. The framework requires that we plan
     and perform the engagement to obtain sufficient and appropriate
     evidence to meet our stated objectives and to discuss any limitations in
     our work. We believe that the information and data obtained, and the
     analysis conducted, provide a reasonable basis for any findings and
     conclusions.


                                                                              Page 8




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Enclosure




   Background: PFCRA Provisions

   • Provides federal executive branch agencies with an
     administrative remedy for small-dollar fraud cases for false
     claims and statements.

   • Liability of accused party alleged to have made, presented,
     or submitted false, fictitious, or fraudulent claims or
     statements is determined during administrative proceedings
     by federal executive branch agencies’ ALJs or other
     qualified individuals authorized under PFCRA to be a
     presiding official.


                                                                        Page 9




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Enclosure




   Background: PFCRA Roles and Responsibilities

   • Investigating Official—Agency IGs or designated investigating official initiates
     investigations of false claims or allegations.
   • Reviewing Official—Generally, the agency General Counsel reviews the
     findings of the Investigating Official and forwards the case to DOJ for approval.
   • Department of Justice—Attorney General or designated Assistant Attorney
     General reviews the PFCRA case for Attorney General approval within 90 days.
   • Accused Party—The accused party can settle the case at any time or has 30
     days after receiving notification of an allegation from the reviewing official to
     request a hearing.
   • Presiding Official—An ALJ (or other presiding official authorized under
     PFCRA) presides over the hearing and decides the outcome of PFCRA cases
     and the penalty and/or assessment imposed.
   • Agency Head—Promulgates regulations, designates other officials, and
     considers appeals made by an accused party.

                                                                                   Page 10




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Enclosure




   Background: PFCRA Process




                                                             Page 11




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Enclosure




   Background: Alternative Mechanisms Agencies
   Use to Address False Claims
   • In addition to PFCRA, federal agencies use other mechanisms to
     address false claims.
       • The False Claims Act (31U.S.C. § 3729) differs from PFCRA in that
         it provides a judicial remedy rather than an administrative process.
         It can be used against any person who knowingly submits false
         claims to the federal government and provides for penalties not less
         than $5,000 and not more than $10,000 plus possible triple
         damages (three times the amount of damages sustained by the
         government unless the person qualifies for reduced damages
         stipulated in the act).5
       • DOJ reported recoveries of approximately $3 billion in false claims
         cases in fiscal year 2010, with $2.5 billion, or 83 percent,
         attributable to health care fraud civil recoveries.

      5Pursuant to the Federal Civil Penalties Inflation Adjustment Act (28 U.S.C. § 2461 note) DOJ has adjusted the civil penalty range available under the False
      Claims Act to a minimum penalty of $5,500 and a maximum penalty of $11,000.




                                                                                                                                                            Page 12




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Enclosure




   Background: Alternative Mechanisms Agencies
   Use to Address False Claims
   • Suspension and debarment mechanisms prohibit contractors from
     obtaining future government contracts for various reasons, such as
     conviction of or indictment for certain offenses, or a serious failure to
     perform to the terms of a contract. These mechanisms differ from
     PFCRA in that the government’s interests are protected by preventing
     future business with the offender as compared to recouping some
     monetary value for the damages sustained from the actual offense.
   • More specifically, for suspensions and debarments:
       • A suspension is a temporary exclusion of a contractor pending the
         completion of an investigation and any ensuing legal proceedings.
       • A debarment is a fixed-term exclusion that generally shall not
         exceed 3 years.



                                                                              Page 13




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Enclosure




   Background: Alternative Mechanisms Agencies
   Use to Address False Claims
   • The Social Security Act allows civil monetary penalties as well as
     enforcement procedures for Medicaid and Medicare fraud cases (42
     U.S.C. § 1320a-7a). This authority provides that:

          • $10,000 may be recovered for each medical service improperly
            claimed
          • $50,000 may be recovered for each violation of anti-kickback
            statutes
          • $100,000 may be recovered per scheme under the physician self-
            referral laws
          • Penalties collected are to be retained by the appropriate program’s
            trust funds
          • Violators can be excluded from participation in the federal health
            care programs
                                                                               Page 14




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Enclosure




   Background: 1991 GAO Report

   •   In our prior report we reported that eight federal agencies had used PFCRA during the
       period October 21, 1986 through September 30, 1990. In addition, we reported that
       PFCRA was not used more often because the cost to implement PFCRA exceeded the
       potential recoveries and the procedural requirements were cumbersome. The following
       agencies referred a total of 41 PFCRA cases to DOJ during the period:

          •      U.S. Postal Service
          •      Department of Labor
          •      DOD
          •      HUD
          •      HHS
          •      Department of Transportation
          •      General Services Administration
          •      Department of Veterans Affairs6

          6The   Department of Veterans Affairs had implemented PFCRA but had not referred any cases to DOJ.




                                                                                                                   Page 15




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Enclosure




   Background: IGs’ Views on Prior
   Recommendations to Reform PFCRA
   • In April 2009 congressional testimony, the Chairman of the Legislation
     Committee of CIGIE discussed the IGs’ views on the National
     Procurement Fraud Task Force recommendations for possible PFCRA
     reforms.7
       • These included the following:
          • Update the dollar limit on the PFCRA claims ceiling from
             $150,000 to $500,000 and allow agencies to retain PFCRA
             monetary recoveries to the extent needed to make them whole.
          • Allow IGs the discretion to prosecute PFCRA claims themselves
             rather than referring them to their agencies’ general counsel, and
             permit greater delegation within DOJ to authorize PFCRA claims.

      7CIGIE,Improving the Ability of Inspectors General to Detect, Prevent, and Help Prosecute Contracting Fraud, statement of J. Anthony Ogden, IG, U.S.
      Government Printing Office, before the Contracting Oversight Subcommittee of the Senate Committee on Homeland Security and Governmental Affairs
      (Washington, D.C.: April 21, 2009).




                                                                                                                                                        Page 16




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Enclosure




   Agencies’ Use of PFCRA

   • As shown in table 1, only five agencies referred PFCRA
     cases to DOJ during fiscal years 2006 through 2010
      • During this period a total of 141 PFCRA cases were
        referred to DOJ
            • HUD referred 135 PFCRA cases, or 96 percent of
              all cases
            • Three agencies each referred one PFCRA case
            • One agency referred three PFCRA cases




                                                                     Page 17




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Enclosure




   Agencies’ Use of PFCRA

    Table 1: PFCRA Cases Referred to the Department of Justice,
    Fiscal Years 2006 through 2010

    Department or Agency                                                            2006a          2007      2008         2009          2010   Total
    Housing and Urban Development                                                      11            37       32            33           22    135
    Corporation for National and
    Community Service                                                                                  1        2                                 3

    Energy                                                                                                                   1                   1
    Health and Human Services                                                                                                            1       1
    Nuclear Regulatory Commission                                                                                                        1       1


    Totals                                                                             11            38       34            34           24    141b
    Source: GAO analysis of case files reported by the Department of Justice.
    aOnly   partial year FY 2006 data are available due to the lack of complete DOJ records for this year.
    bAccording   to DOJ officials, all but four PFCRA cases referred to DOJ were ultimately approved. These four cases were from HUD.

                                                                                                                                                Page 18




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Enclosure




   HUD Officials Reported Factors That Facilitated
   Their Use of PFCRA
   • According to HUD IG officials, HUD’s top management supported pursuing
     PFCRA cases through HUD’s Office of Program Enforcement and HUD’s
     Associate General Counsel, who has wide latitude to determine which cases to
     prosecute and which remedy, including PFCRA, works best. According to these
     HUD officials, several additional factors facilitated the use of PFCRA including:
       • Applying PFCRA to previously completed successful criminal prosecutions
         required little additional review, and HUD’s ALJs have the expertise and
         resources to preside over PFCRA hearings and render decisions
       • Proactive involvement by the HUD IG’s office including attorney assistance
         to identify potential PFCRA cases, and additional training on PFCRA
       • Close coordination within HUD between the HUD IG (Investigating Official)
         and the Office of General Counsel (Reviewing Official), and between HUD
         and DOJ prior to referral
       • A standardized case documentation format for potential PFCRA cases with
         fully developed supporting documents
       • A PFCRA case tracking system through the use of a database
                                                                                 Page 19




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Enclosure




   Agency Officials Reported Factors That Limited
   the Use of PFCRA
   • DOJ officials identified the following limitations to using PFCRA:
      • Excessive time required to process PFCRA cases. For fiscal years 2006
        through 2010, DOJ took 211 days on average to approve agencies’ PFCRA
        cases, which exceeds the 90-day approval required by PFCRA. According
        to DOJ officials, some reasons for the delays include:
         • High-dollar cases take precedence over PFCRA cases
         • Time for follow-up with the referring agency to obtain all necessary
            information
         • The 211 day average to approve PFCRA case referrals was based on
            the date of the agencies’ referrals and not the date DOJ receives them
      • The Attorney General or designated Assistant Attorney General is required
        to approve PFCRA cases, whereas similar small-dollar cases reviewed
        under the False Claims Act may be approved by a DOJ director, which
        takes less time
      • Under fraud statutes other than PFCRA, the statute of limitations can be
        suspended, or tolled, by filing a case. However, for PFCRA cases a hearing
        must be scheduled to toll the statute

                                                                               Page 20




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Enclosure




   Agency Officials Reported Factors That Limited
   the Use of PFCRA
   • DOD officials stated that they do not use PFCRA but instead use
     alternative mechanisms such as suspension and debarment and the
     False Claims Act due to the following reasons:
      • DOD does not have dedicated ALJs, which are required by PFCRA
          to preside over DOD cases
      • For DOD, PFCRA limits the investigating role solely to the IG office.
          DOD officials stated that investigations leading to alternative
          remedies can be performed by DOD investigators not in the IG
          office allowing a more flexible process

   • Much of the HHS Secretary’s authority under the Social Security Act to
     seek civil monetary penalties has been delegated to the HHS IG. HHS
     IG officials told us they prefer this authority because it allows greater
     monetary penalties than under PFCRA, includes exclusions of health
     care providers, and allows the penalties to be retained by the
     appropriate program’s trust funds
                                                                             Page 21




Page 24                               GAO-12-275R Program Fraud Civil Remedies Act
Enclosure




   IGs Reported Factors That Limited the
   Use of PFCRA
   • As discussed previously, only five agencies used PFCRA’s
     administrative remedies in the past 5 years. IGs responding
     to our May 2011 survey were asked why PFCRA was not
     generally used. As summarized in table 2, 39 of the 71 IGs
     surveyed included a variety of factors limiting PFCRA’s use.




                                                                       Page 22




Page 25                         GAO-12-275R Program Fraud Civil Remedies Act
Enclosure




   IGs Identified Factors That Limited the
   Use of PFCRA
   In response to our May 2011 survey, 39 IGs included factors that limited the use
   of PFCRA.
     Table 2: Identified factors that limited the use of                                                          Number of IGs who
     PFCRA                                                                                                        identified limitations
     Use of alternative processes for false claims                                                                15
     Limited resources to implement PFCRA                                                                         10
     Penalty amounts sent to U.S. Treasury, not the agency                                                         9
     PFCRA false claims ceiling/penalty amount is too low                                                          9
     PFCRA process is too cumbersome                                                                               9
     Regulatory agencies have few issues with false claims                                                         7
     Lack of available administrative law judges                                                                   6

     Source: GAO analysis of IG responses on the reasons for their limited use of PFCRA were obtained from our May 2011 survey of 71 IGs. The remaining IGs
             described limitations unique to their agencies or did not respond.


                                                                                                                                                     Page 23




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Enclosure




   IGs’ Views on Prior Recommendations to Reform
   PFCRA
   • Given that only five agencies used PFCRA’s provisions in
     the last 5 years, it is not surprising that many IGs were
     undecided as to whether they agreed with the National
     Procurement Fraud Task Force’s recommended PFCRA
     reforms. As summarized in table 3, the majority of IGs
     providing “yes” or “no” responses to our survey questions
     regarding their agreement with the proposed PFCRA
     reforms, were in agreement.




                                                                     Page 24




Page 27                        GAO-12-275R Program Fraud Civil Remedies Act
Enclosure




   IGs’ Views on Prior Recommendations to Reform
   PFCRA
    Table 3: IGs’ Views to National Procurement Fraud Task Force recommendations

    Questions concerning prior
                                                                                 Yes       No     Undecided    No answer
    recommendations
    Should penalty amount be changed?                                                 27   6          33           5
    Should claim amount be changed?                                                   37   4          25           5
    Should the IG be able to refer PFCRA
    cases directly to DOJ without going                                               38   5          22           6
    through the reviewing official?
    Should agencies retain recoveries?                                                51   2          13           5
    Should the definition of presiding officer be
    amended to include agency boards of                                               20   3          40           8
    contract appeals or military judges?
    Would you use PFCRA more if the claim
    ceiling and/or penalty amounts increased?                                         24   17         24           6

    Source: GAO analysis of Information obtained by our May 2011 survey of the IGs.

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