Federal Reports

The Office of Inspector General (OIG) is issuing this Evaluation report to assess the Small Business Administration’s process for awarding Small Business Lending Company (SBLC) licenses and its compliance with licensing procedures.

An SBLC is a non-depository lending institution that is licensed and authorized by SBA to make loans pursuant to Section 7(a) of the Small Business Act and to intermediaries in SBA's Microloan Program.  In 1981, SBA imposed a moratorium on licensing new SBLCs and lifted the moratorium in 2023, opening the application period for three new SBLC licenses.  The three new SBLC licenses were issued to lenders focused on underserved markets, including small businesses in native, rural, and low-income communities.

SBA complied with its licensing procedures when it awarded three new SBLC licenses in fiscal year 2024. These procedures included an evaluation of qualitative factors required in the SBLC application and a comprehensive assessment of other factors that gauged each applicant’s strengths and limitations, such as historical performance measures and the applicant’s affiliation with lenders or lender service providers previously sanctioned by SBA. The application evaluation process also included reviews by different personnel across multiple SBA offices. In addition, we reviewed applications for the three awarded licenses and determined they contained all the information SBA required. As a result, we made no recommendations.
 

This management advisory highlights the risks associated with DOI awarding grants to the Illinois Department of Natural Resources.

KPMG LLP’s (KPMG) report on its financial statement audit of the National Credit Union Administration’s (NCUA) financial statements, which includes the Share Insurance Fund, the Operating Fund, the Central Liquidity Facility, and the Community Development Revolving Loan Fund, as of and for the years ended December 31, 2024, and 2023. The NCUA prepared financial statements in accordance with the Office of Management and Budget (OMB) Circular No. A-136 Revised, Financial Reporting Requirements, and subjected them to audit. Under a contract monitored by the NCUA OIG, KPMG, an independent certified public accounting firm, performed an audit of NCUA’s financial statements as of December 31, 2024. The contract required that the audit be performed in accordance with generally accepted government auditing standards issued by the Comptroller General of the United States, OMB audit guidance, and the Government Accountability Office/President's Council on Integrity and Efficiency Financial Audit Manual. KPMG’s audit report for 2024 includes: (1) an opinion on the financial statements, (2) conclusions on internal control over financial reporting, and (3) a section addressing compliance and other matters. In its audit of the NCUA, KPMG found:• The financial statements were fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles,• There were no deficiencies in internal control identified as material weaknesses or significant deficiencies and• No instances of reportable noncompliance with laws and regulations it tested or other matters that are required to be reported under Government Auditing Standards or OMB guidance.

The VA Office of Inspector General (OIG) conducted a healthcare inspection to assess clinic cancellation practices at a VA Northern Indiana Healthcare System (system) mental health clinic in Fort Wayne, Indiana. 

The OIG found that mental health leaders and a social work supervisor used a standard clinical disposition process to address the needs of a social work mental health provider’s (the provider’s) patients and transition patients to alternate appointments or treatment following the provider’s sudden resignation. Mental health leaders and a social work supervisor completed the clinical disposition process before advanced medical support assistants canceled patients’ previously scheduled appointment(s) with the provider. Upon review of the electronic health records and patient safety data, the OIG did not identify any concerns or adverse outcomes related to the cancellations.

The OIG concluded that the chief of mental health and the chief of social work did not notify the Chief of Staff (COS) to seek approval for urgent cancellations of the provider’s clinic as required by the system clinic cancellation policy. Ultimately, due to mental health and social work leaders’ communication failures, the COS could not approve the clinic cancellations or assess the need for, and potential allocation of, resources; nor did it allow for COS evaluation of the potential patient impact.

An additional concern was identified regarding the system’s failure to include social work providers assigned to mental health clinics during the system-initiated review of short notice clinic cancellations.

The OIG made two recommendations to the System Director to (1) evaluate the system clinic cancellation policy and COS notification of urgent clinic cancellations and to (2) include social work mental health provider data in the system review of short notice clinical cancellations within mental health clinics.

The VA Office of Inspector General (OIG) conducted this inspection to assess the oversight and stewardship of funds by the VA Tampa Healthcare System. This inspection assessed four financial activities and administrative processes to determine whether appropriate controls and oversight were in place: use of managerial cost accounting information, open obligations oversight, purchase card use and oversight, and supply chain management operations.

The OIG found the healthcare system could use managerial cost accounting information more effectively to help spend more efficiently and improve its performance measurement process for identifying and correcting cost inaccuracies.

The healthcare system did not always perform monthly reviews and deobligate funds no longer needed. The healthcare system appeared to use funds from the wrong fiscal year to pay for services, which may have violated the “bona fide needs” rule. The OIG estimated $6.3 million in open obligations was invalid due to the healthcare system’s lack of monthly follow-up and reconciliations and found that an estimated $5.9 million in invalid obligations should have been deobligated for better use.

The healthcare system did not always process purchase card transactions in accordance with VA policy. The OIG found violations involving a lack of prior approvals, supporting documentation, and segregation of duties.

Furthermore, the healthcare system did not meet the days-of-stock-on-hand metric or maintain accurate supply chain data. Officials also did not fulfill their duties to ensure that Medical Surgical Prime Vendor (MSPV) ordering officers and a facility contracting officer’s representative were nominated and delegated to ensure the MSPV program achieved its goals and objectives and effectively safeguarded the government’s interests and resources.

The OIG made 12 recommendations for improvement to the healthcare system director. The recommendations address issues that, if left unattended, may eventually interfere with financial efficiency practices and the strong stewardship of VA resources.