Audit Buzz Newsletter February 2022

In this issue of Audit Buzz, we summarize the status of current engagements, highlight three of the most scandalous fraud cases of 2021 in the Knowledge Hive, and highlight an upcoming OAG-hosted training with topics including ethical intelligence and the Green Book, also known as Standards for Internal Control in the Federal Government.

Prior editions of Audit Buzz are archived here on OAG's website.

As always, we appreciate the cooperation and courtesies extended to our staff by FCPS management and staff during all past, current, and future audit engagements.

Engagement and Office Updates

Current Engagement Update

• At the February 16, Audit Committee meeting, OAG presented on the following agenda items (full agenda and meeting documents can be found on BoardDocs):
  • Proposed change to FY22 Audit Plan
  • FY22 Q1 Continuous Monitoring Results
  • FY22 Business Process Audit (BPA)
  • Office of Auditor General (OAG) FY21 Business Continuity Plan Performance Audit Report
  • Auditor General Updates
• The Community Use Performance Audit is complete and the report will be discussed at the March 16, 2022 Audit Committee meeting.  The report is posted to the February 16 meeting Audit Committee meeting linked above.
• OAG continues to serve as the project liaison for a comprehensive program review of FCPS’ special education, which American Institutes for Research (AIR) was contracted to perform.  AIR currently is conducting focus groups and classroom observations, as well as extant data analysis, per the approved scope of work.  The final (Year 2) report is scheduled to be presented to the School Board between September and November 2022. 
  
  Below is a high-level timeline of the review:

Knowledge Hive

In this edition of the Knowledge Hive, we highlight three of the top fraud cases to have occurred during 2021, as identified originally in 05 Most Scandalous Fraud Cases of 2021 in the the Association of Certified Fraud Examiner's (ACFE) January/February 2022 issue of Fraud Magezine.

2021 Top Three Most Scandalous Fraud Cases

One of the pillars of OAG work is the management of the anonymous fraud, waste, and abuse hotline (571-423-1333).  In this issue, we highlight three of the most scandalous fraud cases which happened around the world during 2021^[1], and then zoom back into FCPS and see how each one of us can contribute to fight fraud, waste, and abuse.

1 - COVID-19 Unemployment insurance fraud – Perpetuators used bots or teams of low wage works to complete online forms and file phony unemployment claims in all 50 US states.  An international collection of fraudsters raked in billions in pandemic unemployment relief funds!  The Office of Inspector General for the US Department of Labor estimates about $87 billion in fraudulent claims; some experts think losses could be in the hundreds of billions.

2 - US Department of Justice (DOJ) targets massive telemedicine fraud – In September 2021, the DOJ announced a six-week long national health care enforcement action in which it arrested 138 people, including 42 doctors, nurses and other licensed health care professionals, for their alleged participation in schemes involving telemedicine, COVID-19 related health care fraud.  In total, the schemes resulted in more than $1.4 billion in losses.

3 - Colonial Pipeline and the year of ransomware – In May 2021, an employee of Colonial Pipeline discovered a ransom note from hackers demanding cryptocurrency in exchange for the decryption of the oil and gas firm’s data.  Colonial Pipeline eventually paid nearly $5 million in bitcoin and resumed its operations five days later.  The hackers were able to get into the company system by logging into its VPN with a former employee’s password.^[2]

How could we apply the above lessons learnt at FCPS?  The Auditor General is authorized to receive and preliminarily review (and as necessary, investigate, either directly or in conjunction with internal investigators of the Department of Human Resources) credible reports of waste, fraud, and abuse, where observed or reasonably believed to have occurred, involving any FCPS employee or FCPS assets if such has caused or is likely to cause injury to the school division (Regulation 1410, Procedures for Reporting and Investigating Embezzlement, Fraud, Waste, or Abuse, and Other Financial Wrongdoing).Through the anonymous Waste, Fraud, and Abuse Hotline, OAG provides FCPS employees and the community a confidential means for reporting suspected wrongdoing involving fraud, waste, and abuse of school assets and resources.  During FY 2021, OAG received a total of 46 reports to the Hotline, which represents 14 additional cases over FY 2020 (32 reports).

_{Source: OAG Annual Report for FY 2021}

Reporting Fraud, Waste, and Abuse at FCPS

OAG takes all complaints and reports seriously and will make every effort to investigate the reports according to applicable laws, codes, policies, or regulations.  You can assist us in our review by providing as much information as possible.

You are encouraged to leave your contact information to enable us to gather or clarify information as needed.  If you choose to remain anonymous, ensure that thorough and detailed information is provided to enable a review of your complaint.

See the bottom of this issue for Fraud, Waste, and Abuse Hotline contact information.

Did you Know?

OAG Hosting CPE-Eligible Training

Ethical Intelligence and Green Book (Standards For Internal Control In The Federal Government) - March 11, 2022

This training is conducted in two sessions. The first part of the training will focus on leveling-up your ethical intelligence. All FCPS employees should conduct themselves in a manner that promotes and supports good ethical decisions. This session will highlight what is ethical intelligence and why it is important that all FCPS employees act in an ethical manner when facing difficult decisions. In the second part of the training, you will learn about the standards for internal controls (i.e. checks and balances), also known as the Green Book. This interactive session will provide an overview of what is the Green book and how it is applied, the similarities amongst other internal control frameworks, and how effective internal controls can increase success.

FCPS employees click here to sign-up for the training.  Eligible employees will be awarded up to 3-hours to NASBA CPE credits. 

Next Audit Committee Meeting

The next Audit Committee meeting is scheduled for March 16, 2022 at 4:00 PM.  Please refer to BoardDocs for meeting information once it becomes available. 

Fraud, Waste, and Abuse Hotline:
(571) 423-1333 (anonymous voicemail)
InternalAudit@fcps.edu (email is not anonymous)

Office of Auditor General Website | Audit Buzz Archive