Federal Reports

The Office of Inspector General (OIG) is issuing this evaluation report to assess SBA’s screening of 7(a) loan applications under its Risk Mitigation Framework. Our scope covered 7(a) loans approved and disbursed from August 1, 2023, to December 31, 2024, for which SBA used the framework to determine applicants’ eligibility. 

SBA’s Risk Mitigation Framework was not sufficient to determine borrowers’ eligibility because it did not screen or fully screen for three of six eligibility requirements. Specifically, the framework did not screen to determine whether a small business (1) was organized for profit, (2) met SBA’s size requirements, or (3) was an ineligible business type. We also reviewed 188 of the 9,650 loans that had at least one error code and found SBA did not maintain sufficient documentation to support the reviewer’s decision to clear error codes for 71 (or 38 percent) of the loans we reviewed, totaling about $60.7 million. As a result of SBA’s incomplete screenings, there is limited assurance that borrowers met eligibility requirements for the 73,302 loans, totaling about $32 billion in questioned costs. This includes the subset of 71 loans we identified, totaling about $60.7 million, for which SBA did not maintain sufficient documentation to support its decision to clear the error codes, further limiting this assurance.

We recommended that SBA flag the 73,302 loans for review at guaranty purchase to assess whether borrowers met all eligibility requirements and seek remedy for all loans deemed ineligible.

 SBA agreed with the recommendation, stating they will flag the 73,302 loans for review at guaranty purchase and seek recovery where appropriate and legally justified. 

Background 

The U.S. Postal Service’s mission is to provide timely, reliable, secure, and affordable mail and package delivery to more than 160 million residential and business addresses across the country. The U.S. Postal Service Office of Inspector General (OIG) reviews delivery operations at facilities across the country and provides management with timely feedback in furtherance of this mission. 

This interim report presents the results of our self-initiated audit of delivery operations and property conditions at the Huntington Station in Shreveport, LA. The Huntington Station is in the Louisiana District of the Southern Area and serves about 55,444 people in ZIP Codes 71101, 71103, 71109, 71119, and 71129 which are considered predominately urban communities. Specifically, 51,619 (93.1 percent) were considered living in urban communities and 3,825 (6.9 percent) were considered living in rural communities.

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

This is an annual report to Congress regarding the U.S. Consumer Product Safety Commission’s (CPSC) efforts to prevent and protect trafficking victims in 2025 in accordance with the Trafficking Victims Prevention and Protection Reauthorization Act of 2022.

Our objective was to determine whether the U.S. Census Bureau has implemented adequate data collection procedures to ensure that American Community Survey (ACS) estimates are reliable. We found that the bureau did not effectively implement its data collection and quality control procedures to ensure that ACS estimates were reliable. We also found that the bureau did not sufficiently monitor ISR data collection procedures and did not effectively implement personal visit data collection and quality control procedures.  

We recently issued an audit report on the City and County of Honolulu’s (City) fraud risk management practices, which determined the grantee did not adequately develop a fraud risk management framework for the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding provided for the Emergency Solutions Grant (ESG) program to prevent, detect, and respond to fraud (Audit Report No. 2024-LA-1002, issued August 6, 2024). This audit follows that recent work, in which we audited the City’s ESG CARES Act program with the objective of determining if improper payments existed.  

The City made some improper payments in its ESG CARES Act program because it did not always follow HUD’s requirements.  Specifically, the City and its subrecipients did not (1) determine that 233 landlord signing bonus payments totaling $714,512 were reasonable and necessary, (2) prorate the rent amount for partial months resulting in $51,235 in overpaid rent (projected to be $248,572 in overpayments based on our statistical sample), and (3) ensure there were no duplication of benefits for three program participants totaling $10,100.  We also determined that HUD communicated draw deadline dates to grantees that were inconsistent with guidance it publicly issued, causing the City to draw $1.9 million in grant funds after the deadline.  These conditions occurred because we determined that officials of the City and its subrecipients were not aware of some of HUD’s requirements for the ESG CARES Act program and did not have controls for preventing a duplication of benefits.  In addition, HUD used a single draw deadline for grantees, which conflicted with the three separate expenditure deadlines that it established, but did not issue formal written notice so that all grantees, subrecipients, and the public would be aware of the single deadline.  These results reduced the number of participants that could have been served by the program, intended to reduce or mitigate homelessness, and impacted the City’s ability to maintain program and payment integrity of the ESG CARES Act program.  Although the ESG CARES Act program has concluded, the City could make some of the same types of improper payments in the annual ESG program and other HUD-funded programs it operates, since these programs allow expenses for similar activities.

We recommend that the Director of HUD’s Honolulu Office of Community Planning and Development instruct the City to (1) determine whether the $714,512 paid for 233 signing bonuses under the ESG CARES Act program were reasonable and necessary, (2) develop and implement written policies and procedures for the ESG program to ensure that rents are prorated for the first month for tenant-based rental assistance, (3) repay HUD from non-Federal funds $51,235 in overpaid rent to landlords, (4) develop and implement written policies and procedures to prevent duplication of benefits, and (5) review the rental assistance payments made for the ESG CARES Act program to identify other possible duplication of benefits with other rental assistance programs that the City operates. 
 

We found that a former Principal of a BIE Boarding School in Arizona viewed and possessed child pornography while on duty.