Deputy Secretary Biegun’s Call with Japanese Vice Foreign Minister Akiba

Office of the Spokesperson

The following is attributable to Principal Deputy Spokesperson Cale Brown:

Deputy Secretary of State Stephen R. Biegun spoke on December 1 with Japanese Vice Foreign Minister Takeo Akiba. Deputy Secretary Biegun and Vice Foreign Minister Akiba highlighted the importance of the U.S.-Japan Alliance as the cornerstone of peace and stability in the Indo-Pacific region. Deputy Secretary Biegun and Vice Foreign Minister Akiba also discussed continued Alliance coordination on a range of bilateral, regional, and global issues, including North Korea.

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    What GAO Found In April 2020, the Small Business Administration (SBA) quickly implemented the Paycheck Protection Program (PPP) and expedited the processing of Economic Injury Disaster Loans (EIDL) and a new EIDL advance program. These important programs have helped businesses survive during the COVID-19 pandemic. In an effort to move quickly on these programs, SBA initially put limited internal controls in place, leaving both susceptible to program integrity issues, improper payments, and fraud. Because of concerns about program integrity, GAO added PPP and the EIDL program onto its High-Risk List in March 2021. SBA has begun to take steps to address these initial deficiencies: PPP oversight. Because ongoing oversight is crucial, GAO recommended in June 2020 that SBA develop plans to respond to PPP risks to ensure program integrity, achieve program effectiveness, and address potential fraud. Since then, SBA has developed a loan review process and added up-front verifications before it approves new loans. Improper payments for PPP. GAO recommended in November 2020 that SBA expeditiously estimate improper payments for PPP and report estimates and error rates. SBA has now developed a plan for the testing needed to estimate improper payments. Analyzing EIDL data. Based on evidence of widespread potential fraud for EIDL, GAO recommended in January 2021 that SBA conduct portfolio-level analysis to detect potentially ineligible applications. SBA has not announced plans to implement this recommendation. EIDL oversight. GAO recommended in March 2021 that SBA implement a comprehensive oversight plan for EIDL to ensure program integrity. SBA agreed to implement such a plan. Assessment of fraud risks. SBA has not conducted a formal fraud risk assessment for PPP or the EIDL program. GAO made four recommendations in March 2021, including that SBA conduct a formal assessment and develop a strategy to manage fraud risks for each program. SBA said it would work to complete fraud risk assessments for PPP and EIDL and continually monitor fraud risks. Financial statement audit. In December 2020, SBA's independent financial statement auditor issued a disclaimer of opinion on SBA's fiscal year 2020 consolidated financial statements because SBA could not provide adequate documentation to support a significant number of transactions and account balances related to PPP and EIDL. GAO continues to review information SBA recently provided, including data on PPP loan forgiveness and details on the PPP and EIDL loan review processes. In addition, GAO has obtained additional information from a survey of PPP participating lenders, interviews with SBA's PPP contractors, and written responses to questions provided by SBA's EIDL contractor and subcontractors. Why GAO Did This Study SBA has made or guaranteed about 18.7 million loans and grants through PPP and the EIDL program, providing about $968 billion to help small businesses adversely affected by COVID-19. PPP provides potentially forgivable loans to small businesses, and EIDL provides low-interest loans of up to $2 million for operating and other expenses, as well as advances (grants). This testimony discusses the lack of controls in PPP and the EIDL program and SBA's efforts to improve its oversight of these programs. It is based largely on GAO's June 2020–March 2021 reports on the federal response, including by SBA, to the economic downturn caused by COVID-19 (GAO-20-625, GAO-20-701, GAO-21-191, GAO-21-265, GAO -21-387). For those reports, GAO reviewed SBA documentation and SBA Office of Inspector General (OIG) reports; analyzed SBA data; and interviewed officials from SBA, the SBA OIG, and the Department of the Treasury.
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  • Remarks by Deputy Attorney General Jeffrey A. Rosen on the Settlement of Clean Air Act Claims against Daimler AG and Mercedes-Benz USA LLC
    In Crime News
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  • Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements
    In U.S GAO News
    The 340B Drug Pricing Program (340B Program) requires drug manufacturers to sell outpatient drugs at a discount to covered entities—eligible hospitals and other entities participating in the program—in order for their drugs to be covered by Medicaid. Participation in the 340B Program has grown from nearly 9,700 covered entities in 2010 to 12,700 in 2020. The Department of Health and Human Services' (HHS) Health Resources and Services Administration (HRSA) administers the program and oversees covered entities' compliance with 340B Program requirements through annual audits, among other efforts. If audits identify noncompliance with program requirements, HRSA issues findings to covered entities and requires them to take corrective action to continue participating in the 340B Program (see table). Audit Findings Issued to Covered Entities by the Health Resources and Services Administration (HRSA) for Fiscal Years 2012-2019, as of September 2020 340B Program findings of noncompliance Number Eligibility of covered entities. Failure to maintain eligibility-related requirements (e.g., covered entities' oversight of their contract pharmacies). 561 Diversion of 340B drugs to ineligible patients. 340B drugs distributed to individuals who are not eligible patients of a covered entity (e.g., patients' health records are not maintained by the covered entity). 546 Duplicate discounts. Prescribed drugs that may have been subject to both the 340B price and a Medicaid rebate. 429 Total 1,536 Source: GAO analysis of information received from HRSA. | GAO-21-107 HRSA officials told GAO that, beginning in fall 2019, the agency started issuing findings only when audit information presents a clear and direct violation of the requirements outlined in the 340B Program statute. HRSA officials explained that guidance, which is used to interpret provisions of the 340B statute for the purposes of promoting program compliance among covered entities, does not provide the agency with appropriate enforcement capability. For example, HRSA officials reported that there were instances among fiscal year 2019 audits in which the agency did not issue findings for a failure to comply with guidance related to contract pharmacies in part because the 340B statute does not address contract pharmacy use and, therefore, there may not have been a clear statutory violation. In addition to audits, HRSA provides education to covered entities about 340B Program requirements and has implemented other efforts to identify noncompliance. For example, HRSA requires all covered entities to recertify their eligibility to participate in the 340B Program annually (e.g., self-attesting to compliance); and uses a self-disclosure process through which covered entities can disclose and correct self-identified instances of noncompliance. Covered entities can realize substantial savings through 340B Program price discounts, enabling them to stretch federal resources to reach more eligible patients and provide more comprehensive services. GAO was asked to provide information on HRSA's efforts to oversee covered entities' compliance with 340B Program requirements. This report describes (1) the audit findings that HRSA issued to address covered entity noncompliance with 340B Program requirements; and (2) other efforts HRSA uses to help ensure that covered entities comply with 340B Program requirements. GAO reviewed documentation, including relevant federal laws and regulations and HRSA's policies, procedures, and guidance, related to 340B Program oversight. GAO also reviewed HRSA data on the number and type of audit findings made from audits finalized during fiscal years 2012 through 2019 as of September 2020—the latest data available at the time of the audit. GAO also interviewed officials from HRSA, agency contractors, and 340B Program stakeholders. GAO provided a draft of this report to HHS for review. The agency provided written and technical comments on the draft, both of which were incorporated as appropriate. For more information, contact Debra A. Draper at (202) 512-7114 or draperd@gao.gov.
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  • North Carolina Man Pleads Guilty to Violating Fair Housing Act and Threatening a Family Because of Their Race
    In Crime News
    The Justice Department announced today that Douglas Matthew Gurkins, 34, pleaded guilty today in federal court in the Eastern District of North Carolina to one count of criminal interference with the Fair Housing Act, for using threats of force against an African American family because of the family members’ race and because they were renting a dwelling.
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  • Houston Attorney Sentenced to Prison for Offshore Tax Evasion Scheme
    In Crime News
    A Houston, Texas attorney was sentenced to 24 months in prison today for conspiring to defraud the United States and tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Ryan K. Patrick for the Southern District of Texas.
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