Federal Reports

Hanna Dinh, a California resident, was sentenced on February 12, 2024, in U.S. District Court, Central District of California, for conspiracy to commit wire fraud. Dinh was sentenced to 20 months in prison, followed by 3 years’ probation, of which 7 months is to be served as home confinement.Our investigation found that Dinh and others made false statements to lenders in connection with fraudulent applications for Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) loans for her company, HD Financial Firm. The applications included false representations regarding the number of employees on the company’s payroll and false certifications that the loans would be used for permissible business purposes. Dinh incorporated HD Financial Firm in June 2020 and was its sole officer and registered agent. Dinh and others submitted fraudulent EIDL and PPP loan applications seeking approximately $260,672.This investigation is part of a nationwide law enforcement action that resulted in criminal charges against 18 defendants for their alleged participation in fraud schemes that exploited the COVID-19 relief funds. A co-defendant in this case, Dr. Anthony Hao Dinh, a licensed doctor of osteopathy who was an ear, nose, and throat specialist and a facial plastic surgeon, was charged in September 2023 for allegedly defrauding the Health Resources and Services Administration Uninsured Program of approximately $230 million. Anthony Hao Dinh allegedly submitted fraudulent claims to the Uninsured Program for treatment of patients, including Amtrak employees, who were, in fact, insured. In addition, Anthony Hao Dinh allegedly billed for services not rendered and for services that were not medically necessary.

We reviewed how RMA administered and oversaw the Federal Crop Insurance Program’s requirements for prevented planting.

The Federal Election Commission (FEC) has experienced a significant decline in staffing levels over the last 20 years, losing 20% of its full-time workforce from 2002 to 2022. Based on this observed decline, the Office of Inspector General (OIG) initiated this evaluation to identify root and proximate causes of this decline and to evaluate related issues.

We audited the U.S. Department of Housing and Urban Development (HUD), Office of Community Planning and Development’s (CPD) process for collecting financial information from grantees participating in the Community Development Block Grant (CDBG) Entitlement program. Prior year HUD financial statement audits found weaknesses in CPD’s processes to estimate accrued grant liabilities and instances where it appeared CDBG grantees were holding advanced funds. Our audit objectives were to determine whether (1) the financial information collected from grantees was sufficient to monitor grantee financial reporting and performance as required by federal regulations; (2) HUD’s monitoring of grantees’ cash on hand was sufficient to ensure compliance with cash management requirements and that the monitoring was adequate to safeguard funds against the risk of fraud, waste, and abuse; and (3) HUD was properly reporting the financial information collected from its grantees in accordance with the Statements of Federal Financial Accounting Standards.We found that the financial information collected from CDBG Entitlement grantees was not sufficient to monitor grantee compliance with cash management requirements contained in federal regulations. Our review of CPD Cash on Hand Quarterly Reports (PR 29 reports) found that grantees consistently made errors in preparing the report or did not have adequate documentation to support the amounts reported. We also found PR 29 reports that were not submitted or were submitted after the required deadline for certain quarters and resubmissions that were not tracked by HUD. Without reliable and timely financial data, CPD cannot adequately monitor grantees’ excess cash or properly assess their compliance with cash management requirements, thereby increasing the funds’ susceptibility to the risk of fraud, waste, and abuse. Further, since the reports were not submitted in a timely manner and were not reliable, the information collected could not be leveraged by the Office of the Chief Financial Officer (OCFO) to properly report grantee financial information in compliance with the Statements of Federal Financial Accounting Standards. Additionally, we found opportunities for CPD to improve (1) the timing of grantee drawdowns to better align with when the actual expense was incurred and (2) its financial data collection efforts from its CDBG grantees to estimate HUD’s accrued grant liability as required by the Statements of Federal Financial Accounting Standards. CPD’s accrued grant liability estimation methodology relies on grantee drawdown data and produces an unreliable estimate due to the significant delays in grantee disbursements from when an expense is incurred. Further, CPD does not collect expense data elements from the OMB Federal Financial Report (Standard Form-425), which could potentially be used to assist HUD in producing a more precise accrual estimate, resulting in improved financial reporting. Lastly, we identified that CPD is collecting information on the PR 29 report that was not approved by the Office of Management and Budget (OMB) as required by the Paperwork Reduction Act (PRA). Consequently, CPD did not receive public input as required nor did they assess the reporting burden imposed on the grantee as required by the PRA.We recommend that CPD improve its guidance, training, and monitoring of the PR 29 report to ensure that the information collected is reliable, accurate, and timely. In addition, we recommended that CPD work with OCFO to ensure that it collects all of the information needed to properly account for all CPD activities in HUD’s financial statements in accordance with Federal financial reporting requirements and accounting standards. Lastly, we made a recommendation that CPD obtain the required approvals under the PRA for the PR 29 report.