HHS-OIG Report: HHS’s Grant Payment System Lacks Controls to Prevent $7.8 Million in Fraud
HHS-OIG published a report that found HHS’s Program Support Center (“PSC”) grant payment system lacked effective internal controls to prevent $7.8 million in grant funds from being fraudulently diverted to bad actors. HHS-OIG found, among other things, that PSC did not have effective controls to prevent bad actors from gaining access to payment system grant accounts, did not address the risk of fraud and misappropriation of funds after it had been initially defrauded in 2023, and PSC did not implement certain cybersecurity controls to protect its payment system. Specifically, bad actors diverted more than $640,000 in March 2023, and thereafter diverted an additional $7 million over the course of nine months. It was not until January 2024 that a grant awarding agency notified PSC leadership of possible fraudulent activity. In its report, HHS-OIG made six recommendations to improve PSC’s controls over its grant payment system, including developing standard operating procedures that specify how risks and vulnerabilities will be regularly assessed and tested; implementing automated verification processes for bank account information changes; and conducting information system level risk assessment that includes integrating fraud risk in accordance with NIST guidance.
HHS-OIG Report: FDA Food Safety Inspections of Domestic Food Facilities
HHS-OIG published a report that it found gaps in the FDA’s efforts to inspect domestic food facilities. According to the report, the FDA conducted fewer food facility inspections compared to inspections done prior to the COVID-19 pandemic, did not inspect many facilities within required time frames, attempted to inspect thousands of facilities that were not in operation, and reported it uncovered significant FDA violations in 1 to 2% of facilities inspected per year, a steady decrease of the percentage of facilities found with significant violations. The FDA is required to inspect facilities within specific time frames (generally every three to five years) depending on the food safety risk of the facility. In its report, HHS-OIG recommended that the FDA, among other things, increase the number of facilities it inspects each year within the required time frames; improve methods for identifying non-operating facilities; assess the reasons for the decrease in numbers of facilities inspected by the FDA with significant violations, and conduct timely follow‑up inspections of facilities with significant violations.
HHS Announces Director of Office of Civil Rights
HHS Office of Civil Rights announced the appointment of Paula M. Stannard as the Director for the Office for Civil Rights. Director Stannard will be an advisor to HHS Secretary Robert F. Kennedy, Jr. pertaining to the implementation, compliance, and enforcement of federal health information privacy, security and breach notification rules under the Health Insurance Portability and Accountability Act (“HIPAA”) as well as federal civil rights, conscience, and religious freedom laws in HHS’s jurisdiction. Director Stannard previously served as an HHS Senior Counselor and Advisor during President Trump’s previous administration and served as HHS’s Acting General Counsel and Deputy General Counsel during President George W. Bush’s administration. Director Stannard most recently served as Chief Legal Counsel of the Montana Department of Public Health and Human Services, leading the Office of Legal Affairs.
HHS Reconstitutes Advisory Committee for Immunization Practice
HHS announced it reconstituted the Advisory Committee for Immunization Practice (“ACIP”), an advisory committee appointed to make recommendations on the safety, efficacy, and clinical need of vaccines to the Centers for Disease Control and Prevention. HHS removed the 17 sitting members of the ACIP committee and seeks to replace them with new members currently under consideration.
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