Federal Reports

The Office of Inspector General is issuing this report to present the results of our evaluation of the U.S. Small Business Administration’s (SBA) processes to forecast and request appropriation dollars for its disaster loans program account.

We found that SBA did not 1) adequately forecast funding needs for the disaster loan program in the annual budget request; 2) ensure that monthly reports submitted to Congress were clearly interpreted, always submitted timely, and in compliance with all the requirements of 15 U.S.C. § 636k(a); or 3) notify Congress, in writing, regarding the need for supplemental funding as soon as a shortfall was anticipated.

We recommended SBA ensure 1) historical factors are considered when developing the budget request, 2) monthly reports comply with 15 U.S.C. § 636k(a), 3) monthly reports are enhanced to clearly explain the information, and 4) Congress is notified, in writing, of the need for supplemental disaster loan program funds as soon as the agency anticipates a shortfall.

SBA management agreed with all four recommendations. Management’s planned action for Recommendations 1 through 4 satisfy the intent of the recommendations and are resolved.

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

To view this interactive report, visit: https://oig.justice.gov/reports/audit-federal-bureau-prisons-efforts-place-inmates-close-home

What Office of Inspector General Evaluated

The objectives of this engagement were to:

• Determine compliance with the requirements for grant awards issued to Waynesburg University, Illinois State University, and Metropolitan State University of Denver.
• Determine whether these universities are administering, awarding, and monitoring subawards in compliance with the Uniform Guidance, program requirements, and their respective requirements.

What Office of Inspector General Found

• Inadequate procedures to continue Teaching with Primary Sources awards.
• Ineffective controls for indirect cost approval and monitoring.
• Non-compliance with matching requirements.

What Office of Inspector General Recommends

We recommend that the Library:

• Update its Grants and Cooperative Agreements Guidelines and Procedures to limit the number of times the Library can continue the cooperative agreements, taking into consideration subgrantees’ record retention requirements.
• Update its policies and procedures to require Contracts and Grants Directorate to perform an annual review of relevant policies and procedures (e.g., Grants and Cooperative Agreements Guidelines and Procedures and Teaching with Primary Sources Administrative Requirements), including identifying any significant changes to the process (such as incorporating indirect costs into the budget proposal) that would require Contracts and Grants Directorate to update—or develop— control activities to help ensure that the Library and the regional partners are meeting the Teaching with Primary Sources objectives and appropriately mitigating risks.
•  Update Grants and Cooperative Agreements Guidelines and Procedures to address the monitoring of indirect costs, including: 
• Adding a requirement for Contracts and Grants Directorate to review the documentation supporting the basis for any changes in a regional partner’s indirect cost rate percentage. The procedures should include how Contracts and Grants Directorate will conduct and document this review. 
• Adding periodic reviews of regional partners’ application of their indirect cost rates to ensure that the application of the rate is in accordance with the approved indirect cost plans, and costs used to calculate indirect costs are allowable, reasonable, and allocable under the grant requirements and regional partners are not claiming indirect costs as both direct and indirect costs. 
• Review regional partners’ indirect cost plans to substantiate the basis for their proposed indirect cost rates or confirm that an approved negotiated rate exists before approving the cooperative agreements and any continuances, as well as maintain documentation supporting that Contracts and Grants Directorate performed this review. The review should help to ensure that the costs used to calculate indirect costs are allowable, reasonable, and allocable under grant requirements. 
• Update Contracts and Grants Directorate's procedures to ensure that the Request for Advance or Reimbursement form identifies indirect costs as a cost category.
• Update Contracts and Grants Directorate's procedures to clearly indicate how regional partners should document their indirect costs on their Federal 
• Financial Reports and include a requirement for Contracts and Grants Directorate to perform periodic monitoring of the regional partners’ compliance in maintaining support for the indirect costs claimed on their Federal Financial Reports.
• Create guidance for the regional partners that demonstrates how to calculate the matching requirement in accordance with the cooperative agreements. 
• Create procedures/internal controls to ensure that personnel comply with the defined methodology during the budget approval process, including budgeting matching costs as a separate line item to facilitate review and approval of the budget from a compliance standpoint.
• Create guidance and associated procedures/internal controls to help ensure that Contracts and Grants Directorate sufficiently reviews matching costs using Federal Financial Reports to provide a basis for determining reasonableness and allowability in accordance with 2 Code of Federal Regulations Part 200 and the cooperative agreements. This should include defining and documenting the methodology used for reviewing the underlying support, such as expenditure receipts and invoices, in substantiating the reasonableness and allowability of the matching costs. 
• Assist the regional partners by communicating clear monitoring procedures for them to use in ensuring that they have sufficiently reviewed subgrantees’ matching costs to provide a basis for determining reasonableness and allowability in accordance with 2 Code of Federal Regulations Part 200 and the subgrantee awards. This should include: 3.
• Defining and documenting the methodology the regional partners should use in reviewing the underlying support, such as expenditure receipts and invoices, to help substantiate matching costs. 
• Establishing a financial reporting protocol that clearly identifies the match cost incurred.
• Identifying corrective actions the regional partners should take if they determine that subgrantees do not meet the match requirements.

As directed under the MISSION Act, VA created clinical resource hubs to improve healthcare access for veterans in underserved areas. The hubs backstop medical facilities in each regional Veterans Integrated Service Network (VISN) that do not have enough clinical staff due to attrition, recruiting difficulties, or growth in the veteran population. Hub physicians see most patients virtually. Encounters increased from almost 482,000 in fiscal year (FY) 2021 to about 1.2 million in FY 2024.

The OIG team found that despite the increase in patient encounters, physicians in some hub primary care and specialty group practices—such as cardiologists, dermatologists, and psychiatrists and psychologists—generally did not appear to meet established minimum productivity thresholds. The apparent failure to meet these thresholds may have been caused by gaps and inaccuracies in the data used to measure productivity. The available data did not consistently give physicians credit for work documented at a spoke site (where a veteran presents for care), recognizing only work documented at the facility to which the hub physician’s labor is mapped. Moreover, VHA lacked formal guidance on how hubs should measure and monitor specialty physician productivity. Hub officials simply relied on indicators like the number of patient encounters and veterans served, instead of using standardized productivity metrics that factor in the complexity of each visit. The lack of guidance also prevented VHA from identifying and remediating underperforming hub services.

The OIG recommended VHA improve data, issue guidance on which productivity measures apply to hub physicians, and clarify who should monitor productivity and take corrective action when targets are not met. These steps will help VHA evaluate whether the ever-increasing investment in hubs is justified and the number of veterans served is optimized. VHA agreed with the recommendations.