Federal Reports

The Office of Inspector General (OIG) is issuing this Inspection Report to assess the Small Business Administration’s (SBA) process for approving 7(a) loans for borrowers with unresolved pandemic loan compliance issues.From October 1, 2019 through May 8, 2023, SBA approved and disbursed 172,598 7(a) loans, totaling $83.4 billion. The 7(a) lenders who have delegated approval authority approved 92 percent of these loans and SBA approved the remaining 8 percent. SBA implemented a process to screen 7(a) loan applications for eligibility, which included screening for Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (EIDL) hold codes prior to loan approval. However, SBA did not implement the process until August 2023, after we initiated this review. Prior to August 2023, neither SBA nor lenders reviewed approved 7(a) loans to ensure borrowers did not have unresolved compliance issues that could negatively impact their eligibility for the 7(a) loan. As a result, there were 5,044 approved and disbursed 7(a) loans, totaling $4.5 billion, where the borrower had a PPP loan or COVID-19 EIDL with an unresolved eligibility or potential fraud issue.SBA stated it resolved hold codes for 3,015 of 5,044 loans and we did not assess the agency’s methodology or whether it appropriately removed hold codes. We will assess the appropriateness of SBA’s removal of hold codes for the 3,015 loans prior to closing our recommendation.We recommended SBA review and appropriately resolve hold codes related to the 5,044 7(a) loans to determine impact on 7(a) eligibility and seek remedy or repayment of all 7(a) loans deemed ineligible.

The Payment Integrity Information Act of 2019 (Public Law 116-117) (PIIA) requires the Office of Inspector General (OIG) to annually review its agency’s improper payment and payment reporting made in the annual Performance and Accountability Report (PAR) or Agency Financial Report (AFR) to determine compliance.

The VA Office of Inspector General (OIG) reviewed system leaders’ actions taken in response to allegations related to access to behavioral health care and patient privacy at the El Paso VA Health Care System (system) in Texas and evaluated whether the system sustained the actions.In August 2022, the OIG received allegations that patients who presented at the system for behavioral health services were denied care, patients who declined virtual care did not receive appointments, and behavioral health clinic staff violated patient privacy. The OIG requested a written response to the allegations in November 2022. The OIG initiated an inspection after reviewing subsequent system responses in February and July 2023.The OIG determined the actions taken by system leaders, including those initiated before the OIG inspection and those implemented after OIG inquiries, ensured that the system’s behavioral health clinic staff did not deny patients access to care, and that patients were seen in the time frame and at the location that met their preferences and needs. The OIG also determined that actions taken by system leaders ensured patient privacy was maintained during behavioral health services for which patients used tablets.While conducting the inspection, the OIG identified a potential vulnerability resulting from the varied locations of providers and the settings in which patients receive care. While no cases of concern were identified, due to some system providers residing in Texas and New Mexico, and virtual providers residing in different states altogether, the OIG noted potential issues arising from advice given by providers in emergent and urgent patient situations who may not be versed in state-specific emergency detention order laws.The OIG made one recommendation to the System Director related to system policies and guidance aligning with federal and state laws.

The U.S. International Development Finance Corporation Office of Inspector General (DFC OIG) contracted with RMA Associates, LLC (RMA) to conduct a review of DFC’s compliance with Payment Integrity Information Act of 2019 (PIIA) for fiscal year (FY) ending September 30,2023. The review was conducted in accordance with 1) the Office of Management and Budget (OMB) Memorandum M-21-19, Transmittal of Appendix C to OMB Circular A-123, Requirements for Payment Integrity Improvement and 2) OMB Circular A-136, Financial Reporting Requirements, May 19, 2023. Our review period was from February through May 2024.

This report presents the results of our audit of Mail Theft Mitigation and Response at the Jamaica Main, South Richmond Hill, and Woodside stations in Queens, NY (Project Number 24-037). The stations are in New York 2 District of the Retail and Delivery Operations, Atlantic Area. Our objective was to assess the U.S. Postal Service’s actions taken to mitigate and respond to mail theft in Queens, NY. The Postal Service’s mission is to provide the nation with trusted, safe, and secure mail services, including the more than 107 million pieces of mail volume collected and delivered in Queens, NY, in fiscal year (FY) 2023. Unfortunately, mail theft occurs in various ways. Criminals use stolen universal keys—called arrow keys—to access collection boxes, outdoor parcel lockers, cluster box units, and apartment panels. Mail theft can also occur by individuals fishing or breaking into collection boxes with force, residential mailbox break-ins, package theft, and carrier robberies. It is imperative for the Postal Service to address mail theft issues to protect the Postal Service and retain the public’s trust.

What We Looked At Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Federal Transit Administration (FTA) received $25 billion to help the Nation’s public transit agencies mitigate the impacts of COVID-19. FTA obligated over $4.4 billion of this funding to recipients within FTA’s Region 9, which contains the 4th, 10th, and 11th highest FTA CARES Act fund recipients nationwide. Although the Agency expanded its oversight of COVID-19 relief funding recipients, we previously found risks associated with these activities and FTA’s oversight of contract and grant expenditures. Given our previous findings and the magnitude of taxpayer funds involved, we initiated this audit to assess FTA’s oversight of its Region 9 recipients’ compliance with CARES Act funding requirements. Specifically, we evaluated (1) FTA’s oversight processes relevant to Region 9 CARES Act payments, and (2) the eligibility of CARES Act payments for a statistical sample of eight Region 9 recipients.What We Found FTA conducts limited oversight of its Region 9 recipients' CARES Act payments. Specifically, the Agency did not amend its standard automated grant payment process to account for elevated CARES Act fund risks and relies on contractor-conducted oversight reviews that are insufficiently scoped to identify CARES Act funding noncompliance. Further, despite FTA encouraging recipients to use these funds expeditiously, FTA Region 9 funds remain unexpended. These limited oversight activities put the Agency at greater risk its CARES Act funds will be subject to fraud and misuse. For instance, we identified a total of $192.8 million in unsupported costs and $4.2 million in ineligible expenses associated with CARES Act payments for six of the eight sample Region 9 recipients tested. These issues were due in part to FTA’s limited oversight and broad eligibility guidance. Overall, we estimate FTA paid up to $340 million in unsupported costs and $106.9 million in ineligible expenses across Region 9 CARES Act recipients—totaling $446.9 million in Federal funds at risk.Our Recommendations We made four recommendations to strengthen FTA’s oversight of its recipients’ compliance with CARES Act funding requirements. The Agency concurred with recommendations 1 through 3, which we consider resolved but open pending completion of planned actions. FTA did not concur with recommendation 4, which we consider open and unresolved. 

North American Electric Reliability Corporation (NERC) Emergency Preparedness and Operations (EOP) standard 011-2, was approved by the Federal Energy Regulatory Commission on August 24, 2021, with an effective date of April 1, 2023. EOP-011-2 includes a requirement to implement and maintain a cold weather preparedness plan for generating units with 7 required elements. EOP-011-2 also includes a requirement for evidence documenting the plan was implemented and maintained as well as evidence that applicable personnel completed training on the cold weather preparedness plan. Due to the risk of weather-related generation asset outages, we performed an evaluation to determine if TVA completed cold-weather plans in accordance with NERC reliability standard for Emergency Preparedness and Operations. We determined TVA generally completed cold-weather plans in accordance with NERC reliability standard for EOP-011-2. However, we identified minor discrepancies in certification letters and training.

The Payment Integrity Information Act (PIIA) requires agencies to annually review and identify programs and activities that may be susceptible to significant improper payments, estimate the improper payment rates in agency programs, and report on their actions to reduce and recover those payments. We found that AmeriCorps implemented corrective actions that improved its compliance with PIIA reporting requirements relative to past years. For FY 2023, AmeriCorps met eight of ten PIIA compliance requirements. We made three findings relating to the two remaining requirements. We found that: (1) AmeriCorps reported an improper payment rate above the ten percent compliance threshold for one program, the Senior Companion Program (SCP); (2) AmeriCorps reported improper payment rates that were not accurate, reliable, or consistent with Office of Management and Budget guidance for AmeriCorps State and National (ASN), Foster Grandparent Program (FGP), and SCP; and (3) AmeriCorps did not publish Improper Payment and Unknown Payment Estimates for the National Service Trust (NST), which they assessed as a susceptible program. AmeriCorps concurred with the first finding and agreed to develop and implement actions to reduce improper payment rates below ten percent. AmeriCorps did not concur with our second and third findings and will not implement the related recommendations on unmatched reporting errors, payments to ineligible recipients, and publishing improper and unknown payment estimates for the NST. We will keep open the recommendations related to the three findings until AmeriCorps submits documentation to demonstrate the completion and sufficiency of the corrective actions.