Federal Reports

The U.S. Small Business Administration (SBA) is authorized under Section 7(a) of the Small Business Act to provide financial assistance to small businesses in the form of government guaranteed loans. The secondary market was established to provide greater liquidity to lenders, thereby, expanding the availability of commercial credit for small businesses. Lenders are allowed to sell the guaranteed portions of their loans in the secondary market. The lender receives cash equal to the amount of the guaranteed portion sold plus a market driven premium, while the investor gets an interest earning security that is backed by the full faith and credit of the U.S. government.Before a loan can be sold on the secondary market, the lender must submit it to the fiscal and transfer agent (FTA) for approval. FTA reviews loans submitted for sale approval via Secondary Participation Guarantee Agreement (SBA Form 1086). For lenders under regulatory, state, or federal orders, SBA maintains a watch list. Lenders on this list may request for a loan to be sold on the secondary market through the FTA. However, due to the risk associated with these lenders, SBA’s Office of Credit Risk Management (OCRM) conducts a detailed review of each loan to determine whether it complies with SBA requirements and is eligible for sale.We determined that the process OCRM established to document secondary market loan sale denials in the Centralized Loan Chron System (CLCS) was generally effective at communicating loan deficiencies to the appropriate loan centers. OCRM completed its process to document secondary market loan sale denials in CLCS; however, we noted that the required CLCS notes on two of eight denied applications were not made until after we announced this inspection and requested applicable information. An OCRM official stated they noted the error while compiling the requested information and made the corrections in the system prior to sending us the information.

EAC OIG, through the independent public accounting firm of McBride, Lock & Associates, LLC, audited $27.4 million in funds received by the State of Wisconsin under the Help America Vote Act. The objectives of the audit were to determine whether the State of Wisconsin Elections Commission: 1) used funds for authorized purposes in accordance with Section 101 and Section 251 of HAVA and other applicable requirements; 2) properly accounted for and controlled property purchased with HAVA payments; and 3) used the funds in a manner consistent with the informational plans provided to EAC. The audit also determined if proper closeout procedures were followed for the CARES Act funds.

The Office of the Inspector General conducted a review of the Power Service Shop (PSS) organization to identify factors that could impact PSS’s organizational effectiveness. During our evaluation, PSS personnel commented positively on interactions within and outside of PSS and the safety environment. However, we identified issues that could negatively impact PSS’s effectiveness, if not addressed. These issues include (1) staffing challenges; (2) resource concerns related to tooling, tools, equipment, and trailers; and (3) communication with business partners. PSS is taking actions to address some of these concerns. We also identified risks to the independence of PSS’s Quality Control inspectors performing work on nuclear related components.

Our objective was to evaluate the Delivery Survey process for residential customers and small and medium businesses and to identify opportunities for improvement. We reviewed processes, contracts, and results, and interviewed Postal Service and supplier officials.

Our objective was to assess the Postal Service’s management of penalty overtime. For this audit, we analyzed nationwide penalty overtime data during fiscal years (FYs) 2020 through 2022. The data included average penalty overtime per employee and the total penalty overtime hours used. We conducted site visits at 22 judgmentally selected facilities where we held interviews to identify underlying causes that contributed to penalty overtime usage at the facilities and the Postal Service as a whole. Additionally, we interviewed headquarters personnel regarding their responsibilities, processes, and procedures on the management of penalty overtime.

Final Management Letter: Readiness Review – The SEC’s Progress Toward Implementing Zero Trust Cybersecurity Principles