Four Charged in $32 Million Health Care Fraud Scheme

A medical director, operator and two unlicensed practitioners at a Texas medical clinic are now in custody on charges related to their alleged participation in a $32 million health care fraud scheme.

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  • 2020 Census: Census Bureau Needs to Ensure Transparency over Data Quality
    In U.S GAO News
    This 2020 Census was taken under extraordinary circumstances. In response to the Coronavirus Disease 2019 (COVID-19) pandemic and related executive branch decisions, the Bureau made a series of late changes to the design of the census. The report GAO is releasing today discusses a number of concerns regarding how late changes to the census design could affect data quality. The Bureau has numerous planned assessments and evaluations of operations which, in conjunction with its post-enumeration survey (PES)—a survey conducted independently of each census to determine how many people were missed or counted more than once—help determine the overall quality of the census and document lessons for future censuses. As the 2020 Census continues, GAO will continue to monitor the Bureau's response processing operations. GAO was asked to testify on the Census Bureau's progress to deliver apportionment counts for the 2020 Decennial Census. This testimony summarizes information contained in GAO's December 2020 report, entitled 2020 Census: Census Bureau Needs to Assess Data Quality Concerns Stemming from Recent Design Changes and discusses key quality indicators the Bureau can share, as it releases apportionment counts and redistricting data. These key indicators discussed are consistent with those recommended by the American Statistical Association and Census Scientific Advisory Committee for the Bureau. In the accompanying report being issued today, GAO is recommending that the Bureau update and implement its assessments to address data quality concerns identified in this report, as well as any operational benefits. In its comments, the Department of Commerce agreed with GAO's findings and recommendation. For more information, contact J. Christopher Mihm at (202) 512-6806 or mihmj@gao.gov.
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  • Operation Warp Speed: Accelerated COVID-19 Vaccine Development Status and Efforts to Address Manufacturing Challenges
    In U.S GAO News
    Operation Warp Speed (OWS)—a partnership between the Departments of Health and Human Services (HHS) and Defense (DOD)—aimed to help accelerate the development of a COVID-19 vaccine. GAO found that OWS and vaccine companies adopted several strategies to accelerate vaccine development and mitigate risk. For example, OWS selected vaccine candidates that use different mechanisms to stimulate an immune response (i.e., platform technologies; see figure). Vaccine companies also took steps, such as starting large-scale manufacturing during clinical trials and combining clinical trial phases or running them concurrently. Clinical trials gather data on safety and efficacy, with more participants in each successive phase (e.g., phase 3 has more participants than phase 2). Vaccine Platform Technologies Supported by Operation Warp Speed, as of January 2021 As of January 30, 2021, five of the six OWS vaccine candidates have entered phase 3 clinical trials, two of which—Moderna's and Pfizer/BioNTech's vaccines—have received an emergency use authorization (EUA) from the Food and Drug Administration (FDA). For vaccines that received EUA, additional data on vaccine effectiveness will be generated from further follow-up of participants in clinical trials already underway before the EUA was issued. Technology readiness. GAO's analysis of the OWS vaccine candidates' technology readiness levels (TRL)—an indicator of technology maturity— showed that COVID-19 vaccine development under OWS generally followed traditional practices, with some adaptations. FDA issued specific guidance that identified ways that vaccine development may be accelerated during the pandemic. Vaccine companies told GAO that the primary difference from a non-pandemic environment was the compressed timelines. To meet OWS timelines, some vaccine companies relied on data from other vaccines using the same platforms, where available, or conducted certain animal studies at the same time as clinical trials. However, as is done in a non-pandemic environment, all vaccine companies gathered initial safety and antibody response data with a small number of participants before proceeding into large-scale human studies (e.g., phase 3 clinical trials). The two EUAs issued in December 2020 were based on analyses of clinical trial participants and showed about 95 percent efficacy for each vaccine. These analyses included assessments of efficacy after individuals were given two doses of vaccine and after they were monitored for about 2 months for adverse events. Manufacturing. As of January 2021, five of the six OWS vaccine companies had started commercial scale manufacturing. OWS officials reported that as of January 31, 2021, companies had released 63.7 million doses—about 32 percent of the 200 million doses that, according to OWS, companies with EUAs have been contracted to provide by March 31, 2021. Vaccine companies face a number of challenges in scaling up manufacturing to produce hundreds of millions of doses under OWS's accelerated timelines. DOD and HHS are working with vaccine companies to help mitigate manufacturing challenges, including: Limited manufacturing capacity: A shortage of facilities with capacity to handle the vaccine manufacturing needs can lead to production bottlenecks. Vaccine companies are working in partnership with OWS to expand production capacity. For example, one vaccine company told GAO that HHS's Biomedical Advanced Research and Development Authority helped them identify an additional manufacturing partner to increase production. Additionally, the U.S. Army Corps of Engineers is overseeing construction projects to expand capacity at vaccine manufacturing facilities. Disruptions to manufacturing supply chains: Vaccine manufacturing supply chains have been strained by the global demand for certain goods and workforce disruptions caused by the global pandemic. For example, representatives from one facility manufacturing COVID-19 vaccines stated that they experienced challenges obtaining materials, including reagents and certain chemicals. They also said that due to global demand, they waited 4 to 12 weeks for items that before the pandemic were typically available for shipment within one week. Vaccine companies and DOD and HHS officials told GAO they have undertaken several efforts to address possible manufacturing disruptions and mitigate supply chain challenges. These efforts include federal assistance to (1) expedite procurement and delivery of critical manufacturing equipment, (2) develop a list of critical supplies that are common across the six OWS vaccine candidates, and (3) expedite the delivery of necessary equipment and goods coming into the United States. Additionally, DOD and HHS officials said that as of December 2020 they had placed prioritized ratings on 18 supply contracts for vaccine companies under the Defense Production Act, which allows federal agencies with delegated authority to require contractors to prioritize those contracts for supplies needed for vaccine production. Gaps in the available workforce: Hiring and training personnel with the specialized skills needed to run vaccine manufacturing processes can be challenging. OWS officials stated that they have worked with the Department of State to expedite visa approval for key technical personnel, including technicians and engineers to assist with installing, testing, and certifying critical equipment manufactured overseas. OWS officials also stated that they requested that 16 DOD personnel be detailed to serve as quality control staff at two vaccine manufacturing sites until the organizations can hire the required personnel. As of February 5, 2021, the U.S. had over 26 million cumulative reported cases of COVID-19 and about 449,020 reported deaths, according to the Centers for Disease Control and Prevention. The country also continues to experience serious economic repercussions, with the unemployment rate and number of unemployed in January 2021 at nearly twice their pre-pandemic levels in February 2020. In May 2020, OWS was launched and included a goal of producing 300 million doses of safe and effective COVID-19 vaccines with initial doses available by January 2021. Although FDA has authorized two vaccines for emergency use, OWS has not yet met its production goal. Such vaccines are crucial to mitigate the public health and economic impacts of the pandemic. GAO was asked to review OWS vaccine development efforts. This report examines: (1) the characteristics and status of the OWS vaccines, (2) how developmental processes have been adapted to meet OWS timelines, and (3) the challenges that companies have faced with scaling up manufacturing and the steps they are taking to address those challenges. GAO administered a questionnaire based on HHS's medical countermeasures TRL criteria to the six OWS vaccine companies to evaluate the COVID-19 vaccine development processes. GAO also collected and reviewed supporting documentation on vaccine development and conducted interviews with representatives from each of the companies on vaccine development and manufacturing. For more information, contact Karen L. Howard and Candice N. Wright at (202) 512-6888 or howardk@gao.gov or wrightc@gao.gov.
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  • Justice Department Finds Yale Illegally Discriminates Against Asians and Whites in Undergraduate Admissions in Violation of Federal Civil-Rights Laws
    In Crime News
    The Department of Justice today notified Yale University of its findings that Yale illegally discriminates against Asian American and white applicants in its undergraduate admissions process in violation of Title VI of the 1964 Civil Rights Act. The findings are the result of a two-year investigation in response to a complaint by Asian American groups concerning Yale’s conduct.   
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  • Doctor Pleads Guilty to Not Paying Employment Taxes
    In Crime News
    A doctor, formerly of Great Falls, Virginia, pleaded guilty today to willful failure to pay employment taxes, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Raj Parekh for the Eastern District of Virginia.
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  • Environment and Natural Resources Division Distributes Memorandum Summarizing Enforcement Policies and Priorities
    In Crime News
    On Friday, the Environment and Natural Resources Division publicly distributed a memorandum summarizing important principles and priorities for environmental enforcement. The memorandum, issued Jan. 14 by outgoing Assistant Attorney General Jeffrey Bossert Clark, emphasizes that robust enforcement of our nation's environmental laws remains one of the division’s highest priorities. It emphasizes that, when engaged in criminal and civil enforcement, it is important that the division continue to enhance the fair and impartial application of the law.
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    In Crime News
    A North Carolina man was sentenced today to 63 months in prison for perpetrating three fraud schemes between March and July 2020 connected to the COVID-19 pandemic, through which he defrauded consumers and the federal government’s Economic Injury Disaster Loan program (EIDL), created to assist small business owners during the pandemic.
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    A former U.S. Department of State employee and his spouse were sentenced today for their roles in a conspiracy to traffic hundreds of thousands of dollars in counterfeit goods through e-commerce accounts operated from State Department computers at the U.S. Embassy in Seoul, Republic of Korea.
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  • Man Pleads Guilty to COVID-19 Relief Fraud Scheme
    In Crime News
    A Washington man pleaded guilty today to perpetrating a scheme to fraudulently obtain COVID-19 relief guaranteed by the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
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    In Crime News
    The United States filed a civil complaint to stop a California company from distributing unapproved and misbranded drugs and adulterated animal drugs, the Department of Justice announced today.
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  • 2019 Wiretap Report: Orders and Convictions Increase
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    Federal and state courts reported a combined 10 percent increase in authorized wiretaps in 2019, compared with 2018, according to the Judiciary’s 2019 Wiretap Report. Convictions in cases involving electronic surveillance also increased.
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  • Justice Department Issues Favorable Business Review Letter To ISDA For Proposed Amendments To Address Interest Rate Benchmarks
    In Crime News
    The Department of Justice’s Antitrust Division announced today that it has completed its review of the proposal by the International Swaps and Derivatives Association Inc. (ISDA) to amend its standardized model documentation for derivatives to account for the potential discontinuation of certain interbank offered rates (collectively referred to as “IBORs”).  The department has concluded, based on the representations in ISDA’s letter request, including its description of certain safeguards, that ISDA’s proposed amendments to its standardized documentation are unlikely to harm competition.  Therefore, the department does not presently intend to challenge ISDA’s proposed amendments to its standardized documentation for derivatives.
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  • Commercial Space Transportation: FAA Should Examine a Range of Options to Support U.S. Launch Infrastructure
    In U.S GAO News
    Launch providers support the deployment of people and payloads, such as national security and commercial satellites or research probes, into space. The majority of these providers told GAO that U.S. space transportation infrastructure—located at sites across the country—is generally sufficient for them to meet their customers' current requirements. This situation is in part a result of the launch providers' investments in launch sites, along with state and local funding. Launch providers and site operators alike seek future improvements but differ on the type and location of infrastructure required. Some launch providers said that infrastructure improvements would be required to increase launch capacity at existing busy launch sites, while a few site operators said that new infrastructure and additional launch sites would help expand the nation's overall launch capacity. U.S. Commercial Launch Sites with Number of FAA-Licensed Launches, January 2015 - November 2020 The Federal Aviation Administration (FAA) was directed by statute to make recommendations to Congress on how to facilitate and promote greater investments in space transportation infrastructure, among other things. However, FAA's initial draft report was limited because it focused only on two existing FAA programs, rather than a range of options. FAA officials stated that they did not examine other options because of limited time and resources, and that the two identified programs could be implemented quickly because FAA has administrative authority to manage them. Leading practices in infrastructure investment emphasize the importance of conducting an examination of potential approaches, which can help identify how best to support national interests; avoid overlap or duplication of federal effort; and enhance, not substitute, participation by non-federal stakeholders. An examination may also help identify alternatives to making funding available, such as increasing efficiency and capacity through technology improvements. By focusing only on these existing programs, FAA may overlook other options that better meet federal policy goals and maximize the effect of any federal investment. Although FAA has already prepared its initial report to respond to the statute, it still has opportunities, such as during subsequent mandated updates, to report separately on potential approaches. Demand for commercial space launches is anticipated to increase in the coming years. FAA, the agency responsible for overseeing the sites where these launches occur, was directed by statute to submit a report—and update it every 2 years until December 2024—that makes recommendations on how to facilitate and promote greater investments in space transportation infrastructure. The FAA Reauthorization Act of 2018 included a provision for GAO to review issues related to space transportation infrastructure. This report discusses launch providers' and site operators' views on the sufficiency of infrastructure in meeting market demand and assesses the steps FAA has taken to identify options for federal support of space transportation infrastructure, among other things. GAO reviewed relevant regulations; assessed FAA's actions against GAO-identified leading practices; and interviewed FAA officials, commercial launch providers, and representatives from U.S. commercial launch sites that GAO identified as having hosted an FAA-licensed launch since 2015 or having an FAA launch site operator license as of August 2020. GAO recommends that FAA examine a range of potential options to support space transportation infrastructure and that this examination include a discussion of trade-offs. DOT partially concurred, noting that it would provide its mandated report to Congress but not conduct a new examination of a range of options. GAO continues to believe that such an examination is warranted. For more information, contact Heather Krause at (202) 512-2834 or KrauseH@gao.gov.
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  • Deputy Attorney General Jeffrey A. Rosen Delivers Remarks at Announcement of Results of Operation Disruptor
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  • Abusive Tax Schemes: Offshore Insurance Products and Associated Compliance Risks
    In U.S GAO News
    Federal law provides certain tax benefits for transactions involving genuine insurance products, including insurance products held offshore. While taxpayers may lawfully hold offshore insurance products, they contain features that make them vulnerable for use in abusive tax schemes. For example, offshore insurance products can be highly technical and individualized, making enforcement challenging, according to Internal Revenue Service (IRS) officials. Furthermore, insurance is not defined by federal statute, potentially making a determination of what constitutes genuine insurance for federal tax purposes unclear. Offshore micro-captive insurance products, which are made by small insurance companies owned by the businesses they insure, may be abused if the corporate taxpayer improperly claims deductions for payments made to a micro-captive for federal tax purposes. Courts have applied certain considerations to determine whether these deductions can be claimed. For example, one consideration is whether the insurance legitimately distributes risk across participating entities. IRS officials said they expend significant resources reviewing these schemes because of the varied ways insurance companies may work. Offshore variable life insurance products, which are insurance policies with investment components over which the insured has certain control, may be abused if the individual taxpayer fails to meet IRS reporting requirements or pay appropriate federal income taxes. Federal regulations require that taxpayers with certain foreign life insurance accounts report this information to IRS and the Financial Crimes Enforcement Network. The structure of life insurance products may vary and taxpayers are required to pay taxes based on the underlying type of financial product the policy represents. The figure below shows how noncompliance may occur when taxpayers use life insurance and micro-captive insurance in abusive tax schemes. Abusive Use of Micro-captive and Life Insurance When structured in abusive ways, insurance products held offshore can be designed to aid in unlawful tax evasion by U.S. taxpayers. Two products that IRS has recently warned have the potential for such abuse include micro-captive insurance and variable life insurance policies. GAO was asked to review how taxpayers may abuse offshore insurance products. This report describes (1) how offshore insurance tax shelters provide opportunities for income tax abuse; (2) how offshore micro-captive insurance is used and how it is used in abusive tax schemes; and (3) how offshore variable life insurance is used and how it is used in abusive tax schemes. GAO reviewed IRS tax and information return forms, relevant U.S. case law and IRS guidance, academic and trade publications, and applicable statutes and regulations. GAO also interviewed IRS officials and professionals in the tax preparation and insurance industries. For more information, contact Jessica Lucas-Judy at (202) 512-9110 or LucasJudyJ@gao.gov.
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  • The United States Applauds the Interim Government’s “People’s Vote”
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  • Man Sentenced for Advertising Videos and Images of Children Being Sexually Abused
    In Crime News
    A Washington, D.C., man was sentenced today to over 17 years in prison for advertising videos and images of children being sexually abused.
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  • Owner of Oil Chem Inc. Pleads Guilty to Violating the Clean Water Act
    In Crime News
    The president and owner of Oil Chem Inc. pleaded guilty in federal court in Flint, Michigan, to a criminal charge of violating the Clean Water Act stemming from illegal discharges of landfill leachate — totaling more than 47 million gallons — into the city of Flint sanitary sewer system over an eight and a half year period.
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    Today, the Department of Justice and the Department of Homeland Security (collectively, the Departments) announced the forthcoming publication of a Final Rule that will streamline and enhance procedures for the adjudication of claims for asylum, withholding of removal, and protection under the Convention Against Torture (CAT) regulations. 
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  • Louisiana Tax Preparer Sentenced to Prison for Filing Fraudulent Returns
    In Crime News
    A Louisiana tax return preparer was sentenced to 24 months in prison today for conspiring to defraud the United States, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and the U.S. Attorney’s Office for the Eastern District of Louisiana.
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    In Crime News
    Assistant Attorney General Eric Dreiband for the Civil Rights Division, and U.S. Attorney David L. Anderson for the Northern District of California, and Special Agent in Charge Jack Bennett for the FBI San Francisco Division announced today that a California man has been charged with a federal hate crime for attacking a black man with a knife on a street in Santa Cruz, California.
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    The International Competition Network (ICN) held its 19th annual conference on September 14-17, 2020.  Co-hosted by the Antitrust Division and the Federal Trade Commission (FTC), the conference was the ICN’s first virtual conference.  
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    In U.S GAO News
    The U.S. Department of Agriculture's (USDA) Farm Service Agency (FSA) distributed about $14.4 billion in 2019 Market Facilitation Program (MFP) payments to farming operations in all 50 states and Puerto Rico. According to USDA, these payments were intended to offset the effects of trade disruptions and tariffs targeting a variety of U.S. agricultural products. FSA distributed these payments to 643,965 farming operations. The average MFP payment per farming operation for 2019 was $22,312 but varied by county, ranging from $44 to $295,299. MFP payments for 2019 also varied by type of commodity. Three types of commodities were eligible for 2019 MFP payments: (1) nonspecialty crops (including grains and oilseeds, such as corn and soybeans); (2) specialty crops (including nuts and fruits, such as pecans and cranberries); and (3) dairy and hogs. Most of the 2019 MFP payments went to farming operations that produced nonspecialty crops. Less than 10 percent went to farming operations that produced specialty crops or dairy and hogs. USDA made approximately $519 million in additional MFP payments for 2019 compared with 2018 because of increases in payment limits—the cap on payments that members of farming operations can receive. FSA distributed these additional MFP payments to about 10,000 farming operations across 39 states. The amount of additional MFP payments that FSA distributed for 2019 varied by location. Farming operations in five states—Texas, Illinois, Iowa, Missouri, and Minnesota—received almost half of all additional payments. In May 2019, USDA announced it would distribute up to $14.5 billion in direct payments to farming operations that were affected by trade disruptions, following the approximately $8.6 billion USDA announced it had distributed for 2018. USDA referred to these 2018 and 2019 payments as the MFP. In comparison with 2018, USDA changed the 2019 payment structure for the three types of commodities that were eligible for payments. For example, USDA increased the payment limit for each of these three types. GAO was asked to review the distribution of MFP payments for 2019. This report examines, among other things, MFP payments for 2019 and how they varied by location, farming operation, and type of commodity, as well as additional MFP payments for 2019 compared with 2018 that resulted from increased payment limits. To accomplish these objectives, GAO analyzed data from USDA and interviewed agency officials knowledgeable about the data. For more information, contact Steve Morris at (202) 512-3841 or morriss@gao.gov.
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  • Department of Defense: Actions Needed to Improve Accounting of Intradepartmental Transactions
    In U.S GAO News
    The Department of Defense (DOD) has a long-standing material weakness related to intradepartmental transactions. Intradepartmental transactions occur when trading partners within the same department engage in business activities—such as the Department of the Army as a seller and the Department of the Navy as a buyer within DOD. As part of the standard process of preparing department-wide financial statements, intradepartmental transaction amounts are eliminated to avoid overstating accounts for DOD. For the fourth quarter of fiscal year 2019, DOD eliminated approximately $451 billion of net intradepartmental activity. Auditors continue to report a material weakness related to DOD's processes for recording and reconciling intradepartmental transaction amounts that are necessary to eliminate the transactions and prepare reliable consolidated financial statements. DOD has identified implementation of the Government Invoicing (G-Invoicing) system as its long-term solution to account for and support its intradepartmental activities. In fiscal year 2020, DOD issued a policy requiring all DOD components to use G-Invoicing's General Terms and Conditions (GT&C) functionality for initiating and approving GT&C agreements—a necessary step for using subsequent G-Invoicing functionalities (see figure). GAO found the use of this functionality varied among selected DOD components because of issues such as inconsistency in DOD policies and numerous changes to G-Invoicing system specifications. If DOD components do not implement the GT&C functionality, there is an increased risk of delay in full implementation of G-Invoicing to help remediate the intradepartmental eliminations material weakness. General Terms and Conditions Agreement Process in Government Invoicing Although DOD has identified G-Invoicing as its long-term solution, GAO found that DOD has not implemented an overall department-wide strategy to address its intradepartmental eliminations material weakness in the short term. Further, GAO found that while DOD issued a department-wide policy in May 2019 with new requirements for reconciling intradepartmental transactions, the Defense Finance and Accounting Service and selected DOD components have not updated their policies or implemented several of the new requirements. Without a short-term strategy that includes identifying the causes of issues and consistently implementing department-wide policies across DOD, DOD's efforts to resolve differences in intradepartmental transaction amounts—including its efforts in the long term—will likely be inefficient and ineffective. Since 1995, GAO has designated DOD financial management as high risk because of pervasive weaknesses in its financial management systems, controls, and reporting. DOD's long-standing intradepartmental eliminations material weakness reflects DOD's inability to adequately record and reconcile its intradepartmental transactions, and has affected DOD's ability to prepare auditable financial statements. GAO was asked to evaluate DOD's process for performing intradepartmental eliminations. This report examines the extent to which DOD has (1) identified and taken steps to address issues related to intradepartmental eliminations and (2) established and implemented policies and procedures related to intradepartmental eliminations. GAO interviewed DOD officials about intradepartmental eliminations processes and reviewed DOD policies and procedures to identify the extent to which procedures have been implemented to record and reconcile intradepartmental transactions. GAO is making five recommendations to DOD, including that DOD should (1) take actions to ensure that its components follow its policy for using G-Invoicing's GT&C functionality and (2) develop short-term solutions that address causes for trading partner differences before G-Invoicing is fully implemented. DOD agreed with all five recommendations and cited actions to address them. For more information, contact Kristen Kociolek at (202) 512-2989 or kociolekk@gao.gov.
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