Federal Reports

The Refugee Act of 1980 created the Refugee Resettlement Program (RRP) to provide for the effective resettlement of refugees and to assist them in achieving economic self-sufficiency after arriving in the United States. The Act provides Federal grants to States for cash and medical assistance, social services, and targeted assistance to help qualified refugees. Within HHS, the Administration for Children and Families, Office of Refugee Resettlement (ORR) runs the RRP program. In 2015 and 2016, ORR obligated $286 million and $417 million, respectively, to States for the RRP.

This management advisory presents the evaluation results of two 7(a) loans as part of our ongoing High Risk 7(a) Loan Review Program. This is the first in a series of advisories for 7(a) loans we reviewed in fiscal year 2019. The objectives of our evaluation were to determine whether (1) high‐dollar/early‐defaulted 7(a) loans were originated and closed in accordance with the Small Business Administration’s (SBA’s) rules, regulations, policies, and procedures and (2) material deficiencies exist that warrant recovery of guaranteed payments to lenders.Our review of these two high-dollar/early-defaulted 7(a) loans identified that lenders for both loans did not provide sufficient evidence to support that they originated and closed the loans in accordance with SBA’s requirements. Specifically, the lenders did not provide adequate documentation to substantiate reasonable assurance that the borrowers met requirements for repayment ability, eligibility, collateral, equity injection, and debt refinance.As a result, the lenders’ material noncompliance with SBA requirements while originating and closing the loans resulted in a combined potential loss to SBA of approximately $5.3 million. We recommended that SBA require the lenders to bring the two loans into compliance or seek recovery of approximately $5.3 million. SBA agreed with the recommendations and has contacted the lenders to obtain additional information to bring the loan into compliance and stated that if the issues are not overcome, recovery will be sought from the lenders.

The OIG’s data analytics identified WES-McCorkle Branch as having recorded $161,848 to Account Identifier Code (AIC) 526, Refund Spoiled/Unused Customer Meter Stamps, from July 1, 2018 to March 31, 2019. Meter revenue refunds for the WES-McCorkle Branch accounted for 45 percent of all refunds processed under AIC 526 within the Ohio Valley District for the same timeframe. The WES-McCorkle Branch was the highest within the Ohio Valley District and the second highest in the nation for the scope period. The objective of this audit was to determine whether meter revenue refunds were properly issued, supported, and processed.

We issued this to determine whether the Social Security Administration (SSA) identified, and took appropriate action on, all cases in which a new representative payee was needed when a current representative payee died.

An Amtrak Electrician in Providence, Rhode Island, resigned from employment on July 10, 2019, following our investigation, which revealed the employee violated company policies by engaging in outside employment multiple times per week for several months in 2016 and 2017 and that, in early 2019, the employee left his work-site to preview another potential side job. During an interview, the employee admitted to leaving the Amtrak job site and performing electrical work for a side job during his shifts and on company time. The employee resigned from Amtrak prior to his disciplinary hearing.

An effective provider enrollment screening process is an important tool for preventing Medicaid fraud. It plays a vital role in identifying unscrupulous providers and preventing them from enrolling in Medicaid. The Federal Government requires States to conduct risk based screening activities as part of their processes for enrolling providers in Medicaid. OIG's evaluation of the Medicaid provider enrollment screening process in 2016 found that States were struggling to implement the required screening activities. Many States had yet to implement fingerprint based criminal background checks-a screening activity required for providers that the Federal Government deems to be at high risk for fraud, waste, and abuse. If not all high-risk providers undergo criminal background checks, the Federal and State Governments are vulnerable to unscrupulous providers intent on defrauding the Medicaid program.