'Sheriff Biden' Versus The Weed Agency

    In a 2011 blog post titled There's a New Sheriff in Town, the White House announced that Vice President Joe Biden was spearheading a new "effort to root out wasteful spending at every agency and department in the Federal Government" called the Campaign to Cut Waste. As if to emphasize the urgency of the situation, another post went up on the White House blog just fifty-six minutes later entitled TooManyWebsites.gov (a tongue-in-cheek title). Then-Director of Digital Strategy Macon Phillips singled out several websites on Sheriff Biden's most wanted list:

As the President points out in this video, our government doesn't need a website dedicated to foresters who play the fiddle. We also don’t need multiple sites dealing with invasive plants (here and here).  And I‘m pretty sure the website dedicated to the Centennial of Flight can come down... particularly since the Centennial was in 2003.

     Here's where reality runs smack into fiction, or vice versa. In 2014, National Review's Jim Geraghty released his novel The Weed Agency. His book chronicles the saga of the fictional USDA Agency of Invasive Species, a zombie-like government entity that refuses to quit. In a parallel with Geraghty's book that almost seems like a promotional stunt, the two real-life "invasive plant" websites showcased by the White House more than three years ago as examples of redundancy that we "don't need"... both still exist today (here and here, and pictured below):

    As you might imagine, Geraghty wasn't exactly caught flat-footed by this revelation.  When asked for comment, he responded:

Somehow I am less than stunned to see that bold promises about cutting waste have not been kept. Barack Obama and Joe Biden, like Bill Clinton and Al Gore before them, and Jimmy Carter before them, knew that a key part of the progressive agenda requires restoring people's faith in government, including its efficiency and effectiveness. Thus, they contend - and fool themselves into thinking -- they have some magic formula for getting large bureaucracies with many layers of middle management, widely dispersed accountability, and a culture of complacency - and turning them into cost-efficient well-oiled machines. The forces of the status quo nods, smiles and carries on as if nothing changed. The difference between the Right and the Left is that this drives us bonkers, while the Left eventually shrugs its shoulders and accepts it as part of the price of doing business, so to speak.

     The invasive plant websites were not the only ones to evade, at least initially, Biden's Campaign to Cut Waste. As Macon Phillips points out in his blog post, President Obama himself recorded a video in which he derided the notion that the federal government needed "a website dedicated to foresters who play the fiddle." Here's a screen capture of the website from the president's video:

    However, more than three years after President Obama's chiding video was recorded, the government was still paying for the "fiddlin' foresters" site. (The address to which the White House linked, "fiddllinforresters.gov", never actually existed; both "fiddllin" and "forresters" were spelled incorrectly in the url Phillips used.) As recently as May 2014, www.fiddlinforesters.us was still in place as this archived page shows:

    While visitors to the main address of the site were greeted with a message that the "site has been temporarily shut down," the whole site was actually still intact. A check on the domain registration for the site reveals an official Forest Service email address and phone number under contact information. The individual listed is none other than one of the original Fiddlin' Foresters, Jane Leche, who works as a Public Affairs Specialist for the Forest Service. So while the website was finally shut down, the domain name remains registered even today.
     The final example in the TooManyWebsites.gov blog post was the Centennial of Flight website. This government-operated website celebrating the Wright Brothers' first flight did not go down without a fight, either. More than a year after Macon Phillips said he was "pretty sure the website... can come down," a cached version shows it was still hanging on in October 2012, though its days were numbered.
    However, even in this case, that's not the end of the story. The site was rescued by a non-profit organization and centennialofflight.gov was rechristened centennialofflight.net where the original content of the site is preserved and even updated. But, in fairness, at least it's no longer on the government's dime.
    Finally, Vice President Biden singled out one more website in the New Sheriff in Town blog post, noting that "your tax dollars pay for a website dedicated to the Desert Tortoise." That website indeed was shut down, though more than a year later the site was still active as a redirect... to the new tortoise site at majovedata.gov... which was also subsequently shut down. However, in true government fashion, the desert tortoise is by no means ignored. The U.S. Fish and Wildlife Service, the Bureau of Land Management, the National Park Service, and the Environmental Protection Agency all have the desert tortoise well covered:

    Jim Geraghty has pointed out that his novel The Weed Agency debuted back in June at number eight on the Washington Post's Bestsellers list, it was categorized, ironically enough, under "Nonfiction/General". The government's real-world inability to even eliminate redundant websites certainly lends credence to the suggestion that the preternatural resilience of the Agency of Invasive Species portrayed in Geraghty's book is all too realistic.
    When launching the Campaign to Cut Waste in 2011, Vice President Joe Biden wrote, "So, folks, we’re changing the way your government does business (and spends your hard-earned tax dollars), and I think you’re going to like the results." As it turns out, the "folks" might not agree.

Note: A version of this post first appeared at The Weekly Standard.

88 Charged in One of Largest Food Stamp Frauds Ever

    The FBI announced Tuesday in Savannah, GA that eighty-eight persons have been charged in "one of the largest federal food program frauds ever prosecuted."  Fifty-four of the defendants were charged with conspiring to open "purported grocery stores" specifically for the purpose of defrauding the Women, Infant, and Children (WIC) and Food Stamp program.  After the fake stores were "approved as WIC and Food Stamp vendors," many of the fifty-four defendants went through neighborhoods soliciting WIC and Food Stamp participants to exchange government benefits for cash instead of food in clear violation of the law.  The remaining thirty-four defendants were such benefit recipients who sold over $1,000 of their own or their minor children's benefits for a fraction of their worth.  In all, over $18 million was laundered in this way in at least nine cities in Georgia.
        The list of those charged includes some colorful nicknames, like Grand Hustle, Big Bo, Da Man, Rah Rah, and even The Money Wizard.  The fifty-four defendants were charged with mail and wire fraud conspiracy and money laundering conspiracy, each of which carry a maximum of twenty years in prison plus fines of $250,000 and $500,000 respectively. The thirty-four defendants charged with selling their benefits could face five years in prison and a $250,000 fine.  The government is attempting to seize "$20 million and various bank accounts and assets, including a 2008 Land Rover and a 2008 Mercedes Benz."
    A report in August 2013 revealed that in the latest period studied, 2009-2011, Food Stamp fraud had increased from 1% to 1.3%, an increase of 30% over the previous study period of 2006-2008. However, with the explosion in Food Stamp participation beginning with the 2008 financial crisis and subsequent recession, the increase in the dollar value of fraud illustrates the jump more dramatically, from $330 million in 2006-2008 to $858 million in 2009-2011.
    It is unclear from the FBI's press release how the "purported grocery stores" managed to acquire approval from the USDA as WIC and Food Stamp vendors without, at least initially, arousing suspicion. The FBI did not reveal how the fraud was uncovered, but credited a number of federal, state and local agencies and authorities for cooperation in the investigation.


Note: A version of this article first appeared at The Weekly Standard. 

Gov't Report: Nearly Half Sampled Approved School Lunch Applications Found to Be Ineligible

    A Government Accountability Office (GAO) report published a month ago but just publicly released on Monday found that while the U.S. Department of Agriculture (USDA) has taken steps to see that ineligible beneficiaries do not receive reduced-price or free school meals, oversight still needs to be improved. An analysis of a small, "nongeneralizable" sample of twenty-five approved applications found that eleven of them were in fact ineligible.
    The sample included two categories of applications: those which automatically qualify due to "categorical eligibility (by participating in certain public-assistance programs or meeting an approved designation, such as foster children)", and those which qualify based on self-reported household size and income.
    Of the six applications that indicated categorical eligibility, half were either completely ineligible (2) or qualified for reduced-price meals instead of free. These type of applications are not even subject to standard verification. The GAO recommended that the USDA conduct sample verification such as the one conducted by the GAO to help prevent this problem.
    Of the remaining nineteen applications, the GAO found that nine were ineligible, and only two of the nine could have been verified as ineligible under standard USDA procedures. The GAO suggests that using computer matching with external income data (state payroll records) could help in weeding out participants who do not qualify despite the self-reported information that resulted in the initial approval.
    A chart included in the report illustrates the relatively small window of income variation ($1,200) from the established thresholds that subjects an application to standard verification:

    The report noted that "[t]he Office of Management and Budget (OMB) has designated the NSLP [National School Lunch Program] as 1 of 13 federal 'high-error' programs due to its large estimated improper payments—approximately $1.8 billion in fiscal year 2013," for an error rate of 15.7 percent.  The School Breakfast Program (SBP) error rate was even higher at 25.3 percent for an estimated $831 million in improper payments in fiscal 2013.
    As of this date, the USDA has not responded to the GAO regarding the recommendations made in the report.


Note: A version of this article first appeared at The Weekly Standard. 

Under Obamacare, HHS Begins Fingerprinting "High Risk" Medicare Providers and Suppliers

    Four years after Obamacare became law, the Department of Health and Human Services (HHS) is notifying Medicare providers and suppliers of new fingerprint-based background checks.  Eventually, all individuals who hold a five percent or greater stake in a Medicare supplier or provider that is categorized as "high risk" will be subject to the requirement.  The provision is part of the Medicare, Medicaid, and CHIP Program Integrity Provisions (Title E) of the Affordable Care Act, and gives the HHS secretary broad discretion in applying the background check requirements depending on the potential for abuse, fraud and/or waste.

    The new requirements are spelled out in a document posted online on the website of the Centers for Medicare and Medicaid Services (CMS) last Friday.  The new rules will apply to both current and future enrollees who are classified as "high risk," the stated purpose being to weed out "bad actors" in the Medicare program and prevent any more from enrolling.

    This particular document is a "News Flash" from CMS's Medicare Learning Network and is addressed to suppliers and providers who submit claims for "Durable Medical Equipment Medicare Administrative Contractors (DME MACs) and Home Health and Hospice (HH&H) MACs for services provided to Medicare beneficiaries."  There is no effective date or implementation date listed on the document; rather, the document states that "fingerprint-based background check implementation will be phased in beginning in 2014," and that those affected will receive letters after which the individuals will have thirty days to comply with the finger-printing requirement.  The fingerprints will be submitted to the FBI for a background check and will be stored by the government in accordance with federal requirements and FBI guidelines.

    Although initially the new regulations will only be applied to providers and suppliers of "Durable Medicare Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers or Home Health Agencies (HHA)," the "high risk" category is defined at the discretion of the HHS secretary and may be expanded in the future.


Note: A version of this post first appeared at The Weekly Standard.

Feds Spend Another $20M on Healthcare.gov

    The Centers for Medicare and Medicaid Services (CMS) released details of the latest contract with Terremark Federal Group covering "open market items" required for the ongoing operation of Healthcare.gov.  The documents include an itemized list of computing and network services, fees, licenses and computing capacity.  The total comes to $19,755.465.98 and covers four months:

    The expenditures appear to relate to the increased capacity that CMS has said was being added in anticipation of increased interest in obtaining Marketplace insurance as the March 31 deadline nears. The government had previously announced that Terremark, a subsidiary of Verizon, was being replaced by Hewlett-Packard.  However, since the switch-over was scheduled for the end of March just as open enrollment is ending, CMS awarded Terremark a $58,000,000, seven-month extension back in January.

    The two contracts mentioned above are just the latest in a string of contracts awards, solicitations, and sources-sought notices by CMS since Health and Human Services (HHS) Secretary Kathleen Sebelius announced the creation of a new Chief Risk Officer (CRO) position at CMS on December 11, 2013.  Sebelius described the new CRO's initial task as follows:

The Chief Risk Officer’s first assignment will be to review risk management practices when it comes to IT [information technology] acquisition and contracting, starting with identifying the risk factors that impeded the successful launch of the HealthCare.gov website.  I will ask this individual to report back to me in 60 days with recommendations for strategies to mitigate risks in future large-scale, CMS contracting and IT acquisition projects.

    Three and a half months have passed since Sebelius instructed CMS Administrator Marilyn Tavenner to create the position, but both HHS and CMS have been silent about it during that time.  No announcements or press releases have discussed the position, and as we first reported back on February 7, the organizational chart for CMS lists no Chief Risk Officer.  Nevertheless, CMS has continued to contract for tens of millions of dollars in IT goods and services, the very expenditures for which the new CRO was to submit "recommendations for strategies to mitigate risks" within 60 days of being appointed.
    Numerous emails to HHS and CMS inquiring about the position have gone unanswered.


Note: A version of this post first appeared at The Weekly Standard.

Half of Tax Returns Prepared by IRS Volunteers in Audit Test Completed Incorrectly

    A report issued in September and released this week by the IRS's Treasury Inspector General for Tax Administration (TIGTA) found continuing problems with the agency's Volunteer Program, which provides free tax preparation and electronic filing for "low- and moderate-income, elderly, disabled, and limited-English-proficient taxpayers."  The report, with the unwieldily title "Inconsistent Adherence to Quality Requirements Continues to Affect the Accuracy of Some Tax Returns Prepared at Volunteer Sites," found errors in 19 of 39 returns prepared by volunteers.  In each case, a TIGTA staffer anonymous approached a member of the Volunteer Program for assistance with one of three test scenarios developed by TIGTA for the review.  The errors were the result of "incorrect application of the tax law, insufficient requests for information during the intake/interview process, or lack of adherence to quality review requirements."
    The Inspector General has been tracking the performance of the IRS Volunteer Program since at least 2004.  The accuracy rate steadily improved over the years, peaking at 90% in 2010, but then plummeted in 2011 and has not yet recovered, as indicated by an accuracy chart included in the report:

    The TIGTA report noted that due to the small size of the test (39 returns,) the 51% accuracy rating could not be statistically applied to the entire Volunteer Program, a fact also cited by an IRS spokesperson in response to an inquiry from Accounting Today:

“The IRS greatly appreciates the community service that volunteers provide to underserved segments of the taxpaying public and appreciates TIGTA’s acknowledgement of these contributions,” said the IRS statement. “Results from TIGTA’s audit visits were based on three pre-determined scenarios and only 39 returns prepared during these reviews, which is not statistically valid. While we are concerned with any level of error and will address the issues raised in the report, any attempt to extrapolate the findings from 39 visits of this type to the typical tax return prepared by VITA / TCE volunteers would unfairly characterize the tax assistance provided by our volunteers. By comparison, our quality review showed a 91 percent accuracy rate on the more than 3.3 million federal and state returns prepared by our nearly 91,000 volunteers. The IRS remains committed to continually improving the volunteer program, and have agreed with TIGTA’s suggestions.”

    The IRS began granting matching funds to volunteer organizations in 2009.  In 2013, a total of 206 organizations received $12.1 million dollars for electronic filing and for training.  There were a total of 13,081 Volunteer  Program sites in 2013 helping to prepare almost three million tax returns.


Note: A version of this article first appeared at The Weekly Standard.

State Dept. Awards $5M Contract for Crystal Stem and Barware For Embassies

    Just a week before the government shut down kicked in on October 1, the State Department awarded a five-year, maximum $5 million contract for custom handcrafted crystal stem and barware, according to a report in the Valley News, an online news site in Vermont (via Charlie Perkins.)  Valley News reporter Warren Johnston reports:

On eve of last week’s government shutdown, Simon Pearce won a potential five-year competitive contract for $5 million to provide 20 different styles of custom handcrafted stem and barware to the State Department for use in American embassies around the world. 

The contract stipulates that the items be made in the United States, Clay Adams, chief executive officer at Simon Pearce, said in an email. 

“Simon Pearce is a natural fit for this given its production in Vermont and Maryland. Simon Pearce received its first purchase order … for more than 12,000 pieces, most of which will be produced here in Vermont later this year,” Adams said...

    Notice of the contract award was posted on September 30 on the Federal Business Opportunities website:

    The contract is the result of a Small Business bidding solicitation first posted by the State Department in February of this year for an "Indefinite Delivery Indefinite Quantity" contract.

Note: A version of this article first appeared at The Weekly Standard.

Federal Government Sinks Another $527K Into Recovery.gov Website Redesign

    In 2009, the Obama administration made news with an $18 million, five year contract to redesign Recovery.gov, the website the government set up to allow taxpayers to track the stimulus spending enacted by the president and Congress soon after President Obama took office.  On Wednesday, notice of a contract awarded to Smartronix, a Hollywood, MD company was posted for "Modification to exercise the Option to Extend Clause" for a total of $527,216.00:

    The stimulus is now into its fifth year.  The contract notice does not indicate what modifications are needed to the website to keep the public informed of the ongoing operation of the legislation.
    According to the Recovery.gov website, $803.1 billion of the $840 billion authorized by the stimulus has been disbursed.


Note: A version of this article first appeared at The Weekly Standard.

Medicaid Accidentally Overpays $88M to Alabama

    The State of Alabama received bonus payments from Medicaid for 2009 and 2010 that were a stunning 13 times higher than the state was eligible for.  So says the inspector general (IG) for Health and Human Services in a report released on Wednesday.  Instead of $7.1 million, Alabama received $95.3 million in performance bonuses related to the Children's Health Insurance Plan (CHIP) for the years in question.  As a consequence, the state owes the federal government a refund of about $88 million.
    The overpayment was not the result of a complicated series of errors or deliberate misrepresentation, but rather a very simple error, as the report spells out:

The State agency overstated its current enrollments because, rather than reporting a monthly average enrollment of qualifying children, it reported to CMS [Centers for Medicare & Medicaid Services] the total number of all qualifying children that had been enrolled in its program for each year reviewed.

    In other words, even children who qualified for CHIP for only a few months during the year were counted as if they were qualified the entire year.  That means the number of qualified children was overstated by more than 90,000.
    The IG choose to investigate the payments to Alabama because the state received over one-third (34%) of all such bonus payments to all states for 2009-2010:

We reviewed the bonus payments that Alabama received for FYs 2009 and 2010 because the amounts of the payments were relatively high compared with those of other States receiving bonus payments.  Alabama received $95 million (34 percent) of the $281 million in bonus payments made to all States for these 2 years.

    It is unclear why this imbalance did not raise any red flags at CMS prior to the IG's audit.
    According to a report on the Alabama-based website al.com, the State of Alabama wants to work out a repayment plan for the $88 million with the federal government.  The state's health office Dr. Don Williamson is quoted as saying that he believes the state Medicaid "acted in good faith" when filing for the refunds.
    Initially, Alabama disputed the findings in a May 2013 letter to CMS from acting Alabama Medicaid commissioner, Stephanie McGee Azar:

"Alabama Medicaid believes that it qualified for the bonuses at issue," according to the letter dated May 17, 2013. "CMS has worked closely with Alabama Medicaid in preparing the state's yearly bonus application in compliance with federal requirements since the State's first submission in 2009."

    The bonus payments were authorized in the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA).  According to the report [emphasis added]:

[Q]ualifying States may receive bonus payments for FYs 2009 through 2013 to offset the costs of increased enrollment of children in Medicaid.  A State is eligible for a bonus payment if it increased its current enrollment of qualifying children (current enrollment) above the baseline enrollment of qualifying children (baseline enrollment) for a given year as specified in CMS guidance.  A State must also have implemented at least five of the Medicaid enrollment and retention provisions specified in CHIPRA. 

Note: A version of this article first appeared at The Weekly Standard.