Federal Reports

The University of Southern California did not complete verification of applicant data in accordance with Federal requirements for 7 of the 60 students included in our statistical random sample. As a result, the university improperly disbursed $21,530 in Title IV aid to four students and improperly disbursed $1,000 less in Title IV aid than one student was eligible to receive. There was no effect on the amount of Title IV aid disbursed for the other two students. Based on the results of our statistical random sample, we estimate that the University of Southern California did not complete verification in accordance with Federal requirements for 184 (12 percent) of the 1,534 Pell recipientsselected for verification for award year 2017–2018.We also found that the University of Southern California did not accurately report verification results to the Central Processing System and Common Origination and Disbursement System for 8 of the 60 students included in our statistical random sample. Based on the results of our statistical random sample, we estimate that the University of Southern California did not accurately report verification results for 199 (13 percent) of the 1,534 Pell recipients selected for verification for award year 2017–2018.

Under the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) operates the federally facilitated marketplace (Federal marketplace) in States that chose not to operate their own marketplaces. Prior OIG audits of the Federal marketplace covering the 2014 coverage year determined that not all of the marketplace's internal controls were effective in ensuring that individuals were properly determined eligible for qualified health plans (QHPs) and insurance affordability programs. Further, since 2014, additional eligibility verification requirements have become effective. The results of our prior audits and these additional requirements led us to review the marketplace's eligibility determinations for the 2018 coverage year.

This report presents the results of our audit of Ginnie Mae’s fiscal year 2019 financial statements, including our report on Ginnie Mae’s internal control and test of compliance with selected provisions of laws, regulations, and contracts applicable to Ginnie Mae.In fiscal year 2019, we were unable to obtain sufficient, appropriate evidence to express an opinion on the fairness of Ginnie Mae’s financial statements. Specifically, our work noted significant modeling concerns affecting Ginnie Mae’s guaranty asset, guaranty liability, and allowance for loan losses, which prevented us from completing our audit work due to time constraints imposed by the statutory reporting deadlines. These issues concerned the appropriateness and reasonableness of the model methodologies, specifications, and model assumptions, which raised questions about the reliability of the significant accounting estimates produced by these models. Additionally, we were unable to audit the nonpooled loan assets due to (1) documentation challenges to support balances for claims receivable and reimbursable costs and (2) insufficient time to complete necessary audit procedures for mortgage loans held for investment and acquired properties. Given the significance of all of these limitations combined, it is our professional opinion that there may be risks that undetected misstatements that could be material may exist in these statements. Therefore, we deemed our audit scope to be insufficient to express an opinion on Ginnie Mae’s fiscal year 2019 financial statements as a whole. We have 18 new audit recommendations in this year’s report. Based on the results of our work, we identified two material weaknesses, one significant deficiency, and one reportable noncompliance with selected provisions of laws, regulations and contracts.