Federal Reports

We audited the Housing Authority of the City of Annapolis, MD’s Housing Choice Voucher Program because we received a complaint alleging that the Authority (1) ignored discrepancies between income information for applicants and program participants and (2) did not properly administer its program. Our objective was to determine whether the Authority administered its program in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. We focused the audit on whether the Authority (1) accurately calculated and maintained support for housing assistance payments, (2) properly administered its waiting list and selected applicants from it, and (3) admitted only eligible applicants.The allegation regarding the Authority’s ignoring discrepancies between income information for applicants and program participants had no merit. However, the allegation that the Authority did not always properly administer its program had merit. Specifically, the Authority did not (1) properly administer its waiting list and select tenants from it and (2) maintain adequate documentation to show that it admitted eligible applicants into its program. These conditions occurred because the Authority (1) was unaware of some waiting list requirements, (2) lacked controls to ensure that it maintained documentation to show that it properly selected applicants from the waiting list, (3) lacked procedures to ensure that it maintained documentation to show that it admitted eligible families into the program, and (4) did not establish a reasonable timeframe before admitting applicants who had engaged in criminal activity. As a result, HUD lacked assurance that applicants admitted into the program (1) were properly placed on the waiting list, (2) were selected fairly from the waiting list, and (3) met all eligibility requirements.We recommend that HUD require the Authority to (1) update its administrative plan to clearly define the weights or rankings of its waiting list preference system; (2) develop and implement controls to ensure that it administers its waiting list according to the requirements in its administrative plan, including maintaining documentation to show that it properly selected applicants from the waiting list; (3) develop and implement procedures to ensure that it maintains documentation to show that it admitted eligible families into the program; and (4) update its administrative plan to establish the timeframe during which an applicant must not have engaged in criminal activity before it will admit the applicant into the program.

When Congress established average sales price (ASP) as the basis for Medicare Part B drug reimbursement, it also provided a mechanism for monitoring market prices and limiting potentially excessive payment amounts. The Social Security Act mandates that OIG compare ASPs with average manufacturer prices (AMPs). If OIG finds that the ASP for a drug exceeds the AMP by a certain percentage (currently 5 percent), the Act directs the Secretary of Health and Human Services to substitute the ASP based payment amount with a lower calculated rate. Through regulation, CMS outlined that it would make this substitution only if the ASP for a drug exceeds the AMP by 5 percent in the 2 previous quarters or 3 of the previous 4 quarters.

This management advisory presents the evaluation results of two 7(a) loans as part of our ongoing High Risk 7(a) Loan Review Program. This is the second in a series of advisories for 7(a) loans we reviewed in fiscal year 2019. The objectives of our evaluation were to determine whether (1) high‐dollar/early‐defaulted 7(a) loans were originated and closed in accordance with the Small Business Administration’s (SBA’s) rules, regulations, policies, and procedures and (2) material deficiencies existed that warrant recovery of guaranteed payments to lenders.Our review of these two high-dollar/early-defaulted 7(a) loans identified that lenders for both loans did not provide sufficient evidence to support that they originated and closed the loans in accordance with SBA’s requirements. Specifically, the lenders did not provide adequate documentation to substantiate reasonable assurance that the borrowers met requirements for eligibility, repayment ability, and equity injection.As a result, the lenders’ material noncompliance with SBA requirements while originating and closing the loans resulted in a combined potential loss to SBA of approximately $2 million. We recommended that SBA require the lenders to bring the two loans into compliance or seek recovery of approximately $2 million. SBA agreed with the recommendations and stated they will contact the lenders to obtain additional information to bring the loan into compliance. If the issues are not overcome, SBA will seek recovery from the lenders.

Attention deficit hyperactivity disorder (ADHD) is a common neurobehavioral disorder with symptoms of inattention, hyperactivity, and impulsivity. The Department of Health and Human Services publishes national quality measures that outline timeframes for followup care for children with ADHD. Additionally, professional guidelines from American Academy of Pediatrics and American Academy of Child and Adolescent Psychiatry describe the importance of followup care and behavioral therapy for these children. Some children may not receive followup care or behavioral therapy for reasons such as limited access to care or because practitioners may be unaware of the professional recommendations. This study focuses specifically on the extent to which children do not receive followup care and behavioral therapy.