Federal Reports

An Amtrak Passenger Conductor based in Philadelphia, Pennsylvania, pleaded guilty on June 24, 2025, in U.S. District Court, Eastern District of New York, to one count of wire fraud involving the fraudulent submission and subsequent receipt of $52,500 for two Paycheck Protection Program (PPP) loans and one Economic Injury Disaster Loan. The employee’s spouse pleaded guilty on May 20, 2025, to one count of wire fraud involving the fraudulent submission of three PPP loans and the subsequent receipt of $53,845. Our investigation found that the couple provided fraudulent documents and made false representations to obtain the loans totaling $106,345 to which they were not entitled.

AmeriCorps OIG initiated this investigation after receiving a referral from OIG’s Office of Audits. The referral alleged that, in 2019, Delaware’s Governor's Commission on Community & Volunteer Service, an AmeriCorps State and National Program grantee also known as Volunteer Delaware, was not providing adequate oversight of its subrecipient, Delaware’s Division of Parks and Recreation (DPR). AmeriCorps OIG found that Volunteer Delaware did not provide adequate monitoring of DPR and that DPR falsely certified AmeriCorps members’ education awards even though service hours had not been performed, were outside the scope of the grant, were adjusted after service, or were otherwise questionable such as having duplicate entries or excessive hours in a day. The OIG also found that DPR shortened the terms of service for some members who exited the program before completing their original approved terms of service, which allowed those members to collect education awards to which they otherwise would not have been entitled. The case resulted in a disallowance of $111,369.

Our Objective(s)To evaluate PHMSA's (1) collection and tracking of hazardous materials (HazMat) registration fees and (2) monitoring and reporting of grantees' use of funds for the Hazardous Materials Emergency Preparedness (HMEP) Grant Program.
Why This AuditPHMSA administers grants, for emergency planning and first responder training related to the transport of HazMat. To fund these grants, PHMSA collects fees from HazMat transporters for their required annual registrations. We conducted this audit due to a recent significant increase in HazMat grant funding authorized under IIJA and the important roles the grants play in preparation for and response to emergency HazMat incidents.
What We FoundPHMSA's processes for registration fee collection and data tracking make data verification difficult.

PHMSA uses an online registration portal to collect registrants' data and fees to support the HazMat Grant Program. The Agency requires registrants to determine their business' sizes using the Small Business Administration's (SBA) business-size regulations and then self-certify the accuracy of their data. These SBA business-size regulations include complex variables and increase the risk for inaccurate fee assessments.
Data quality issues impact PHMSA's ability to monitor the quantity and accuracy of the information in its registry. PHMSA could not readily explain why the data issues we found"such as business size and fee mismatches"occurred. A PHMSA standard operating procedure (SOP) includes a daily error reporting process to identify data quality issues, but staff were unfamiliar with and could not locate any daily error reports or anyone who was familiar with them.

PHMSA did not always comply with its grant monitoring procedures or congressional reporting requirements.

PHMSA did not always complete all monitoring activities as required by its HazMat Grants SOP. Forty of 64 (62.5 percent) low and medium risk grantees we evaluated did not receive required annual spot checks, and 25 of 43 (58.1 percent) medium and high-risk grantees did not receive required desk reviews. PHMSA also did not receive or review all grantees' financial and performance reports in a timely manner.
PHMSA did not meet the annual reporting requirements to Congress but has implemented a redesign of its report and data collection process to meet these requirements.

RecommendationsWe made four recommendations to improve PHMSA's oversight of HMEP grants.

We audited Flat Branch Mortgage, Inc., to evaluate its quality control (QC) program for originating and underwriting Single Family FHA-insured loans.  Our audit covered the period October 2020 through September 2022.  We selected Flat Branch for review based on its loan volume and delinquency rate and because its rate of self-reporting loans to HUD when it identified fraud, material misrepresentations, and other material findings that it could not mitigate was below average for more than a 5-year period.

We found that Flat Branch’s QC program for originating and underwriting FHA-insured loans was not sufficient.  Specifically, Flat Branch (1) did not select the proper number of loans for review and maintain complete and accurate data to document its loan selection process; (2) did not complete all loan reviews in a timely manner; (3) did not always complete key review steps and sometimes missed material deficiencies; and (4) did not adequately assess, mitigate, and report loan review findings, which included self-reporting loans to HUD when required.  These issues occurred because Flat Branch had insufficient controls over its QC program, was not always familiar with HUD requirements, and experienced staffing constraints.  As a result, HUD did not have assurance that Flat Branch’s QC program fully achieved its intended purposes, which include, among other things, protecting the FHA insurance fund and lender from unacceptable risk, guarding against fraud, and ensuring timely and appropriate corrective action.

We recommend that HUD require Flat Branch to (1) update its QC plan and related procedures to align with HUD requirements; (2) provide training to staff and management on HUD requirements for lender QC programs; (3) review the loans that it had not selected and take appropriate actions when applicable; (4) obtain credit reports and reverifications of borrower information for QC reviews in which it did not complete these steps and evaluate the risk of findings identified for these loans; and (5) evaluate its QC files for the loans in which it identified material findings to confirm whether it self-reported to HUD all findings of fraud or material misrepresentation, along with any other material findings that it did not acceptably mitigate.

Our investigation determined that a Clerk based in New Brunswick, New Jersey, violated company policies by using her company-issued computer and other company equipment, such as printers and copiers, to conduct personal business by selling items online on company time. We also confirmed that she was selling company property on Poshmark for personal profit. She was terminated on June 20, 2025, and she is not eligible for rehire.