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GAO-12-275R: 

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).[Footnote 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[Footnote 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,[Footnote 3] suspension and 
debarment processes, and statutes that address Medicaid and Medicare 
false claim frauds through the Social Security Act, as amended. 
[Footnote 4] 

In 1991, we reported that federal agencies did not use PFCRA 
extensively.[Footnote 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 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.[Footnote 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.[Footnote 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 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. 

Signed by: 

Susan Ragland:
Director:
Financial Management and Assurance: 

Enclosure: 

[End of section] 

Enclosure: 

Program Fraud Civil Remedies Act: Observations on Implementation: 

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

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 reforms[Footnote 8] 

[End of Overview] 

Introduction: 

The Program Fraud Civil Remedies Act of 1986 (PFCRA) (31 U.S.C § 
38013812) 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)[Footnote 9] 
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.[Footnote 10] You asked us to provide information on 
federal agencies' recent use of PFCRA. 

[End of Introduction] 

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. 

[End of Objectives] 

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. 
[Footnote 11] 

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. 

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. 

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. 

[End of Scope and Methodology] 

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. 

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 anytime or 
has 30 days after receiving notification of an allegation from the 
reviewing official to request a hearing. 

* Presiding Official-—An All (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. 

Background: PFCRA Process: 

[Refer to PDF for image: process map] 

Investigating Official: 
Start: 
Investigating official initiates and documents the investigation of 
the alleged misconduct; 
Investigation findings: 
No: End; 
Yes: go to #1. 

Reviewing Official: 

1) Reviewing official determines if investigating official provided 
adequate evidence to find the accused liable. 
Adequate evidence: 
No: End; 
Yes: continue. 

Reviewing official forwards evidence and required information to DOJ 
Attorney General: #2. 

3) Reviewing official forwards evidence and required information to 
DOJ Attorney General. 

Continue to #4 and #5. 

Department of Justice: 

2) DOJ reviews the agency's evidence and determines whether to approve 
the case for administrative remedies. 
Adequate evidence: 
No: End; 
Yes: continue. 

Attorney General approval? 
No: End; 
Yes: go to #3. 

Note: The accused party has 90 days to review and make a decision to 
approve or disapprove the agency's case against the accused.  

Accused Party: 

4) The accused can settle case at anytime or has 30 days after 
receiving notification of an allegation to request a hearing. 
Settle: 
No: #6; 
Yes: continue. 

The accused and the agency agree on terms to settle the dispute. 
Go to #9; or: 
End. 

#7, #9, #10: 
The accused pays any monetary penalty applied. 

Presiding Official: 

5)and 6) The presiding official determines the outcome of the 
allegations; renders decision; 
Accused appealed? 
No: go to #7; 
Yes: go to #8. 

Note: The accused party has 30 days to appeal the presiding official's 
decision.  

Head of Agency: 

8) The agency's head may stay the decision or compromise or settle 
with the accused. 
Settle: 
Yes: go to #9;
No: continue. 

Accused appealed? 
No: #10; 
Yes: go to #11. 

Note: The accused party has 60 days to appeal the decision of the 
agency's head. 

U.S. District Court: 

11) U.S. District Court decides the final outcome of the case; 
End. 

Source: GAO analysis of 31 U.S.C. § 3801-812. 

[End of figure] 

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 (31 U.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 or 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).[Footnote 
12] 

* 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. 

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. 

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. 

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 Affairs[Footnote 13]. 

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.[Footnote 14] 

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. 

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. 

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

Department or Agency: Housing and Urban Development; 
2006[A]: 11; 
2007: 37; 
2008: 32; 
2009: 33; 
2010: 22; 
Total: 135. 

Department or Agency: Corporation for National and Community Service; 
2006[A]: 0; 
2007: 1; 
2008: 2; 
2009: 0; 
2010: 0; 
Total: 3. 

Department or Agency: Energy; 
2006[A]: 0; 
2007: 0; 
2008: 0; 
2009: 1; 
2010: 0; 
Total: 1. 

Department or Agency: Health and Human Services; 
2006[A]: 0; 
2007: 0; 
2008: 0; 
2009: 0; 
2010: 1; 
Total: 1. 

Department or Agency: Nuclear Regulatory Commission; 
2006[A]: 0; 
2007: 0; 
2008: 0; 
2009: 0; 
2010: 1; 
Total: 1. 

Totals: 
2006[A]: 11; 
2007: 38; 
2008: 34; 
2009: 34; 
2010: 24; 
Total: 141[B]. 

Source: GAO analysis of case files reported by the Department of 
Justice. 
[A] Only partial year FY 2006 data are available due to the lack of 
complete DOJ records for this year. 

[B] According to DOJ officials, all but four PFCRA cases referred to 
DOJ were ultimately approved. These four cases were from HUD. 

[End of table] 

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 Ails 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. 

[End of Background] 

Results: 

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. 

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. 

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. 

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 PFCRA:  

Use of alternative processes for false claims: 
Number of IGs who identified limitation: 15. 

Limited resources to implement PFCRA: 
Number of IGs who identified limitation: 10. 

Penalty amounts sent to U.S. Treasury, not the agency: 
Number of IGs who identified limitation: 9. 

PFCRA false claims ceiling/penalty amount is too low: 
Number of IGs who identified limitation: 9. 

PFCRA process is too cumbersome: 
Number of IGs who identified limitation: 9. 

Regulatory agencies have few issues with false claims: 
Number of IGs who identified limitation: 7. 

Lack of available administrative law judges: 
Number of IGs who identified limitation: 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. 

[End of table] 

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. 

Table 3: IGs' Views to National Procurement Fraud Task Force 
recommendations: 

Question concerning prior recommendations: Should penalty amount be 
changed? 
Yes: 27; 
No: 6; 
Undecided: 33; 
No answer: 5. 

Question concerning prior recommendations: Should claim amount be 
changed? 
Yes: 37; 
No: 4; 
Undecided: 25; 
No answer: 5. 

Question concerning prior recommendations: Should the IG be able to 
refer PFCRA cases directly to DOJ without going through the reviewing 
official? 
Yes: 38; 
No: 5; 
Undecided: 22; 
No answer: 6. 

Question concerning prior recommendations: Should agencies retain 
recoveries? 
Yes: 51; 
No: 2; 
Undecided: 13; 
No answer: 5. 

Question concerning prior recommendations: Should the definition of 
presiding officer be amended to include agency boards of contract 
appeals or military judges? 
Yes: 20; 
No: 3; 
Undecided: 40; 
No answer: 8. 

Question concerning prior recommendations: Would you use PFCRA more if 
the claim ceiling and/or penalty amounts increased? 
Yes: 24; 
No: 17; 
Undecided: 24; 
No answer: 6. 

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

[End of Results] 
 
GAO on the Web: 
Web site: [hyperlink, http://www.gao.gov/] 

Contact: 

Susan Ragland, Director, Financial Management and Assurance, at (202) 
512-8486 or raglands@gao.gov. 

Copyright: 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. The published product may be 
reproduced and distributed in its entirety without further permission 
from GAO. However, because this work may contain copyrighted images or 
other material, permission from the copyright holder may be necessary 
if you wish to reproduce this material separately. 

[End of section] 

Footnotes: 

[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, [hyperlink, 
http://www.gao.gov/products/GAO/AFMD-91-73] (Washington, D.C.: Sept. 
13, 1991). 

[6] [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. 

[8] The 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. 

[9] 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 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. 

[10] GAO, Program Fraud: Implementation of the Program Fraud Civil 
Remedies Act of 1986, [hyperlink, 
http://www.gao.gov/products/GAO/AFMD-91-73] (Washington, D.C.: Sept. 
13, 1991). 

[11] CIGIE 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. 

[12] Pursuant 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. 

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

[14] CIGIE, 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). 

[End of section] 

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