Federal Reports

Our Semiannual Report to Congress covering the period October 1, 2024, to March 31, 2025, features highlights of the OIG’s audit and investigative accomplishments during the past 6 months.

The Fiduciary Program within the Veterans Benefits Administration (VBA) was established to protect beneficiaries who are unable to manage their VA benefits by appointing and overseeing fiduciaries—individuals or legal entities charged with stewarding the funds on behalf of beneficiaries for their well-being. VA-appointed fiduciaries can be removed and barred from future service if they are found to have misused or misappropriated benefits, been convicted of a qualifying felony offense, or knowingly violated or refused to comply with VA regulations. Staff are required to flag these barred fiduciaries in VBA’s electronic system to prevent a reappointment. The OIG conducted this review to determine whether VBA’s oversight ensures individuals and entities barred from serving as a VA fiduciary are identified and flagged.

When fiduciaries were removed for a reason that would constitute a bar to future service, the OIG found that staff did not flag them in 88 of 129 sampled cases, or 68 percent of the time. This occurred because the Fiduciary Program Manual lacked clear procedures about when the flag should be placed and by whom. Unclear guidance in the manual also led to inadequate staff training and insufficient oversight. Training did not address use of the flag or its purpose in protecting vulnerable beneficiaries, and checklists used for the quality assurance process had no specific questions or error descriptions to confirm the flag was properly applied.

Failure to properly flag barred fiduciaries increases the risk that they will be reappointed. The OIG made three recommendations to the under secretary for benefits, including updating the program’s manual to specify when a removed fiduciary should be flagged, developing and providing training about updated manual procedures regarding flagging, and updating the quality review process.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements.

The Office of Inspector General is issuing this management advisory to gain an understanding of the U.S. Small Business Administration’s (SBA) Coronavirus Disease 2019 (COVID-19) servicing processes and determine its capability to service more than 2 million COVID-19 Economic Injury Disaster Loans (EIDL).

We found the COVID-19 EIDL Servicing Center (CESC) demonstrated that it was capable of servicing over 2 million COVID EIDLs during the period of our review. The CESC appeared to be adequately staffed as evidenced by its ability to complete over 23,500 servicing actions per month with an average processing time of 5.44 days per action. However, we identified opportunities for improvement related to formal documentation and issuance of performance goals and written COVID-19 EIDL servicing guidance.

We made two recommendations for SBA to ensure appropriate processes are followed and to effectively monitor CESC operations. SBA management agreed with both recommendations and has taken actions to implement both. Management’s actions satisfy the intent of the recommendations; therefore, both recommendations will be closed upon issuance of this report.

During this semiannual reporting period, the National Endowment for the Arts (NEA) Office of Inspector General (OIG) completed the Congressionally mandated NEA financial statement audit for fiscal year (FY) 2024, and a performance audit of the Georgia Council for the Arts. We also collaborated with the NEA on the follow-up process required by the Office of Management and Budget, leading to corrective actions on eight OIG recommendations by the NEA and awardees during this period. Additionally, we resolved all hotline complaints received during the semiannual reporting period.

I applaud the NEA and the OIG staff for continuing to press forward and effectively work together to deliver our respective missions in a high-quality manner. The value-added work that the NEA and OIG accomplished this period is due to their commitment, leadership, and effectiveness; while helping to ensure integrity, excellence, and value in the delivery of NEA’s mission.

Semiannual Report to Congress, highlighting the activities and accomplishments of the U.S. AbilityOne Commission Office of Inspector General from October 1, 2024, through March 31, 2025.

VBA provides tax-free monthly compensation payments to veterans for disabilities incurred or aggravated during active military service. Additionally, VBA awards special monthly compensation (SMC) for certain severe disabilities or combinations of disabilities.

SMC is a difficult topic for claims processors to learn and apply. When this review began, VBA had two versions of an SMC calculator to help claims processors. One version was the Veterans Benefits Management System for Rating (VBMS-R) calculator, which allowed information generated by the calculator to automatically populate in the appropriate fields. In November 2023, the VA OIG received an allegation that the VBMS-R calculator did not generate accurate results for several disability combinations, and that these errors could result in veterans being underpaid. The OIG conducted this review to assess whether the VBMS-R calculator was producing inaccurate results as alleged.

The OIG review team confirmed that the VBMS-R calculator generated inaccurate results for the disability scenarios listed in the allegation and for several others identified by the team. For some errors, the VBMS-R calculator produced incorrect results that would cause incorrect payments—most of which would be underpayments—if claims processors relied on them. Additionally, the VBMS-R calculator sometimes generated an alert message that the request failed rather than producing SMC results. Officials from VBA and VA’s Office of Information and Technology could not determine the cause of the errors or how long they had been occurring. In October 2024, the VBMS-R calculator was disabled and was still inactive as of February 2025.

The OIG made two recommendations to the under secretary for benefits to ensure all erroneous scenarios in the VBMS-R calculator identified in this review are corrected and establish a plan to conduct additional testing of the tool to ensure its accuracy.