December 20, 2014

Accurate Spending Reports Won't Help Taxpayers?

In a report posted earlier this week, the Washington Examiner's Sarah Westwood writes that "Federal department's CFO says accurate spending reports won't help taxpayers." She begins her reporting this way:

“The costs of ensuring 100 percent accuracy ... would far outweigh the benefit to the public.”

"That's how a top federal official explained opposition to a government watchdog's call on her department to do a better job of accounting for spending on conferences.

"The comment by Ellen Murray, the department's assistant secretary for financial services and chief financial officer, came in response to an investigation by the inspector general of how government workers spent $1.4 million on conferences in 2012 that was never reported.

"The IG recommended that HHS officials report actual conference costs instead of estimates after finding discrepancies in the actual costs for four of the events held that year. The four events included an international AIDS conference, an awards ceremony and two medical preparedness meetings.

"In 2012, HHS sponsored 140 conferences that cost more than $100,000 each, according to the report. The agency spent more than $56 million on conferences that year.

"In her response to the IG, Murray added that “striving for perfection would put the department at risk of not fulfilling the statutory requirement for a timely report,” citing the availability of data as a factor in its ability to produce accurate reports."

Westwood's reporting includes much more, which you can read here. Her reporting is based on an HHS Inspector General report released earlier this month, and is accessible at the Washington Examiner website.

The HHS bureaucrat's reasoning is bizarre, and raises the question of whether she has any knowledge of accounting. Ether that, or HHS has a poorly designed accounting system.

Readers of Growls who are concerned about waste, fraud, and abuse in federal spending are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- Rep. Moran is retiring at the end of the current Congress. We'll update the link for incoming Rep. Don Beyer next month.

And, tell them ACTA sent you.

December 19, 2014

Can Government Get Anything Right?

If you think the federal government is indeed falling apart, an above-the-fold story on the front page of the Tuesday, December 16, 2014 Washington Post would be all the proof you need. The Post's David Fahrenthold reports that construction of a test tower by NASA continued after the rocket project for which it was built was scrubbed.

The tower constructed at the Stennis Space Center in Mississippi was originally estimated to cost $119 million with a 2010 completion date. Here are the basic facts in Fahrenthold's reporting:

"In June, NASA finished work on a huge construction project here in Mississippi: a $349 million laboratory tower, designed to test a new rocket engine in a chamber that mimicked the vacuum of space.

"Then, NASA did something odd.

"As soon as the work was done, it shut the tower down. The project was officially “mothballed” — closed up and left empty — without ever being used.

“You lock the door, so nobody gets in and hurts themselves,” said Daniel Dumbacher, a former NASA official who oversaw the project.

The reason for the shutdown: The new tower — called the A-3 test stand — was useless. Just as expected. The rocket program it was designed for had been canceled in 2010.

"But, at first, cautious NASA bureaucrats didn’t want to stop the construction on their own authority. And then Congress — at the urging of a senator from Mississippi — swooped in and ordered the agency to finish the tower, no matter what.

"The result was that NASA spent four more years building something it didn’t need. Now, the agency will spend about $700,000 a year to maintain it in disuse."

The story runs to almost two pages, and includes a graphical timeline of NASA's mothballed test towers. Read the entire story and timeline here to learn all the details and context.

Over the past few years, we've had sequestration and continuing resolutions. Now Congress just passed a CRomnibus. Unless Congress reverts to "regular business" where Congress holds detailed hearings of appropriations bills, there will likely be more examples of wasteful projects such as "NASA's $349 million monument to drift."

Kudos to David Fahrenthold for his detailed investigative reporting.

Readers of Growls who are concerned about the future of the federal government are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- Rep. Moran is retiring at the end of the current Congress. We'll update the link for incoming Rep. Don Beyer next month.

And, tell them ACTA sent you.

December 18, 2014

Senator Tom Coburn's Retirement

In a search of Growls. you are likely to find more references to U.S. Senator Dr. Tom Coburn of Oklahoma than any other current member of Congress. There is probably no politician today on Capitol Hill whose name would come to mind as a friend of America's taxpayers.

Consequently, we were pleased to read a short op-ed today on the editorial pages of Investor's Business Daily by Kerry Jackson who notes that America is losing a senator who "got it." Jackson writes:

"Sen. Tom Coburn made more sense in a few words in his farewell speech than most congressmen make across entire careers that drag on for decades.

"Your whole goal is to protect the United States of America, its Constitution and its liberties," the retiring Oklahoma Republican told his colleagues last week. "It's not to provide benefits for your state."

"Nor is it, we might add, lawmakers' job to meddle in personal affairs, establish a boot-on-the-neck regulatory state, increase the size and strength of government, or cast the state in the role of a glorified nanny. Yet that's what they've been doing for decades now.

"There are too many Harry Reids, Barbara Boxers and Jerrold Nadlers in Washington and not enough Tom Coburns."

A list of oversight reports released by Dr. Coburn's office can be found here. Since Dr. Coburn is retiring at the end of 2014, I called his office this week, and learned the reports, e.g., his annual wastebooks, will likely remain available in a personal library.

Kudos to Dr. Tom Coburn. We wish him well on his retirement.

December 17, 2014

The End is Near for Arlington County's Artisphere?

The headline of the story by the Washington Post's Patricia Sullivan reads "Arlington County poised to close money-losing Artisphere arts center in June." Here's the beginning of her report:

"Arlington’s money-losing Artisphere should close in June because it has failed to draw enough visitors or supporters to break even after years of government subsidy, County Manager Barbara Donnellan said Wednesday.

"The recommendation to close the Rosslyn arts center, which members of the County Board said they would probably support, would save about $2.5 million per year and eliminate the jobs of 12 full-time and 20 part-time employees. Donnellan said the Arlington government would attempt to find other county jobs for those employees.

"The proposal is the latest example of fiscal caution by the county government, which last month canceled plans for two expensive streetcar projects after a leading streetcar critic was reelected to the County Board."

Sullivan also discussed the prior criticism regarding the public subsidies provided to the Artisphere:

"Public spending on Artisphere has been criticized by fiscal conservatives in Arlington for years. The issue received renewed attention when County Board member John Vihstadt (I) made public spending on capital projects a major focal point of his election campaign.

"Vihstadt was elected in April to fill an empty board seat and easily won a full four-year term in November. He took his second oath of office Wednesday, between the board’s afternoon and evening meetings. In a brief interview, he said he didn’t intend to gloat, but he thought Donnellan’s recommendation was the right decision.

“From the beginning, officials had an unrealistic expectation that the Artisphere would be self-sustaining,” Vihstadt said. “I think the county manager made a cold, calculated and reality-based decision that the Artisphere would not be successful without a large continuing subsidy.”

"Other board members said they would work to make sure Rosslyn is not left without an arts or cultural component."

There's more in Ms. Sullivan's report. The entire report is here, and includes a night-time picture in case you've never visited the Arlisphere.

The online news site includes the following in their report posted this afternoon:

"Donnellan made the recommendation at today’s County Board meeting, after being charged by the Board earlier this year to study Artisphere and suggest a way forward for the money-losing, county-run center.

“I will be recommending that the county close the Artisphere as a cultural center in fiscal year 2016,” Donnellan said. “This was a business decision… this was a tough decision, a disappointing one. The reality is that the Artisphere has not lived up to projections.”

"Donnellan said Artisphere, in her opinion, would require “substantial ongoing tax support.”

“That is not what we promised our community when we opened Artisphere,” she said. Artisphere will remain open through June 30. It will close after that, if the County Board adopts Donnellan’s recommendation. After Donnellan gave her report, it became clear that the Board was behind her decision and it’s likely the art center will close on June 30.

“I support what you suggested, that next June, Artisphere would close as we know it,” Board Chair Jay Fisette said. “My hope is whatever option will move forward on our economic competitiveness goals one way or another.”

"County Board member John Vihstadt, who had used the Artisphere as an example of wasteful county spending in his election campaign this year, obliquely referenced the county’s cancellation of the streetcar last month."

Washington City Paper is also reporting on County Manager Barbara Donellan's recommendation to close the Artisphere.

Closing the Artisphere is welcome news for Arlington County taxpayers. However, the good news is balanced by not so good news. While writing this growls, an e-mail from Arlington County's public affairs shop announcing, "The Arlington County Board today approved a new fnancing plan for Signature Theatre, a three-way agreement between the award-winning non-profit theater company, its private lenders and the County." Unfortunately, the press release is not yet posted at the county's website.

December 16, 2014

A Federal Gummint Program Susceptible to Fraud. Who Knew?

CNS News' Susan Jones wrote today of a new U.S. General Accountability Office (GAO) report. Her article is entitled "Social Security disability programs (are) susceptible to physician-assisted fraud." Here's the core or Jones' reporting:

"We keep putting people on disability who are not truly disabled," Sen. Tom Coburn (R-Okla.), a medical doctor, told the House Oversight Committee this past June.

"Three years before that, Coburn and Sen. Orrin Hatch (R-Utah) expressed concern that Social Security disability benefits were being used as an extension of unemployment benefits.

"Now, a new report from the Government Accountability Office says the Social Security Administration remains vulnerable to fraud, particularly when unscrupulous doctors submit false claims.

"While the full extent and nature of physician-assisted fraud is difficult to measure, each fraudulent claim allowed by SSA has the potential to cost the government several hundred thousand dollars over the life of the claimant and places an additional financial burden on these programs at a time when SSA estimates that its disability trust fund will be depleted and unable to pay full benefits to individuals starting in 2016," the report said."

Ms. Jones' article has many more details. Read the entire article here.

GAO summarized their findings in the report's highlights (GAO 15-19; November 2014) this way:

"The Social Security Administration (SSA) has policies and procedures in place for detecting and preventing fraud with regard to disability benefit claims. However, GAO identified a number of areas that could leave the agency vulnerable to physician-assisted fraud and other fraudulent claims:

  • SSA relies heavily on front-line staff in the offices of its disability determination services (DDS)—which have responsibility for reviewing medical evidence—to detect and prevent potential fraud. However, staff said it is difficult to detect suspicious patterns across claims, as directed by SSA policy, given the large number of claims and volume of medical information they review. Moreover, DDS offices generally assign claims randomly, so staff said it would only be by chance that they would review evidence from the same physician.
  • SSA and, in turn, DDS performance measures that focus on prompt processing can create a disincentive for front-line staff to report potential fraud because of the time it requires to develop a fraud referral. Four of the five DDS offices GAO visited count time that staff spend on documenting potential fraud and developing fraud referrals against their processing time. Some staff at these DDS offices said this creates a reluctance to report potential fraud.
  • The extent of anti-fraud training for staff varied among the five offices GAO visited and was often limited. SSA requires all DDSs to provide training to newly hired staff that includes general information on how to identify potential fraud, but does not require additional training. The five DDS offices GAO visited varied in whether staff received refresher training and its content— such as how to spot suspicious medical evidence from physicians—and staff at all levels said they needed more training on these issues.
  • SSA has not fully evaluated the risk associated with accepting medical evidence from physicians who are barred from participating in federal health programs. Although information from these physicians is not necessarily fraudulent, it could be associated with questionable disability determinations.

"SSA has launched several initiatives to detect and prevent potential fraud, but their success is hampered by a lack of planning, data, and coordination. For instance, SSA is developing computer models that can draw from recent fraud cases to anticipate potentially fraudulent claims going forward. This effort has the potential to address vulnerabilities with existing fraud detection practices by, for example, helping to identify suspicious patterns of medical evidence. However, SSA has not yet articulated a plan for implementation, assigned responsibility for this initiative within the agency, or identified how the agency will obtain key pieces of data to identify physicians who are currently not tracked in existing claims’ management systems. Furthermore, SSA is developing other initiatives, such as a centralized fraud prevention unit and analysis to detect patterns in disability appeals cases that could indicate fraud. However, these initiatives are still in the early stages of development and it is not clear how they will be coordinated or work with existing detection activities."

Readers of Growls who are concerned about fraud in federal government programs are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

December 15, 2014

Efforts to Fight Medicare Fraud are being Blocked

At Breitbart News' Big Government website today, Mike Flynn writes that the President and Congress are blocking efforts "to combat Medicare fraud." Flynn begins this way:

"The Department of Health and Human Services reports that the error rate for Medicare payments increased to 12.7% of total fee-for-service reimbursements last year. This is up almost 50% since 2012 and represents a $46 billion annual loss for the health program. Despite this, the Obama Administration has suspended an audit program that had already recovered more than $8 billion in improper payments.

"The Recovery Audit Contractor (RAC) program, initiated in 2010, is charged with ferreting out waste and fraud in the giant Medicare program. The federal government contracts with private companies to investigate Medicare billing records and capture any improper payments. The companies are allowed to keep 9-12.5% of any money recovered, providing a market incentive to identify fraud. In 2012, before the Obama Administration put a hold on the program, RAC companies found $2.3 billion in improper payments.

"In October 2013, the Obama administration undertook a series of steps to curtail the fraud recovery program. Over subsequent months, the administration suspended auditing activity and put a hold on awarding new contracts to police Medicare billing. Existing contracts have been extended only for "administrative and transition activities." In other words, the audits are supposed to wind down.

"The suspension of the audit program is a victory for the American Hospital Association, which has led a lobbying campaign against the program. In a series of letters, the AHA has not only lobbied against the RAC program, but even auditing efforts by the federal government's own Office of the Inspector General."

Flynn also points out Congress' efforts to block the effort to fight fraud, writing:

"One piece of legislation, introduced by House Republicans, would block audits of Medicare providers unless their estimated error rate exceeded 40% of total billing. In other words, more than one-third of bills submitted to Medicare could be fraudulent before any audit threshold was triggered. Earlier this year, Congress passed legislation to suspend all audits for another 6 months."

If Americans are wondering even more about the nation's fiscal future after this past weekend's passage of the $1.1 trillion CRomnibus, Mike Flynn's report must have Americans shaking their heads with almost takeoff velocity, including asking themselves the same question as Flynn asks in concluding his report:

"If the nation isn't serious about curtailing spending that, by law, shouldn't exist, what hope is there to curtail the spending choices we've actually made?"

You can read Mike Flynn's entire reporting here. We growled about the CRomnibus on December 9, 2014.

Readers of Growls who are concerned about federal spending are urged to  contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

December 14, 2014

A Thought on the Cost of Government Regulation

"Dodd–Frank (Wall Street Reform and Consumer Protection Act) seriously undermines people's living standards. Whenever laws take resources away from the production of goods and services people want and allocate those resources for the paperwork government demands, living standards decline."

~ Robert Genetski, Economist and Policy Advisor, Heartland Institute

Source: His Op-Ed, posted December 12, 2014, Investor's Business Daily

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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister