What GAO Found
Deficiencies in internal control over financial reporting and other limitations on the scope of GAO’s work resulted in conditions that prevented GAO from expressing an opinion on the Schedules of the General Fund as of and for the fiscal year ended September 30, 2020. Such scope limitations also prevented GAO from obtaining sufficient appropriate audit evidence to provide a basis for an opinion on the effectiveness of the Bureau of the Fiscal Service’s (Fiscal Service) internal control over financial reporting relevant to the Schedules of the General Fund as of September 30, 2020. In addition, such scope limitations limited tests of compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements for fiscal year 2020.
Fiscal Service was unable to readily provide sufficient appropriate evidence to support certain information reported in the accompanying Schedules of the General Fund. Specifically, Fiscal Service was unable to readily (1) identify and trace General Fund transactions to determine whether they were complete and properly recorded in the correct general ledger accounts and line items within the Schedules of the General Fund and (2) provide documentation to support the account attributes assigned to Treasury Account Symbols that determine how transactions are reported in the Schedules of the General Fund. The resulting scope limitations, the first of which GAO reported in its fiscal year 2018 audit, are the basis for GAO’s disclaimer of opinion on the Schedules of the General Fund. As a result of these limitations, GAO cautions that amounts Fiscal Service reported in the Schedules of the General Fund and related notes may not be reliable.
Three significant deficiencies in Fiscal Service’s internal control over financial reporting relevant to the Schedules of the General Fund, which GAO reported in its fiscal year 2018 audit, continue to exist. One of the continuing significant deficiencies contributed to the first scope limitation discussed above. In addition, GAO identified four other control deficiencies, three newly identified and one reported in its fiscal year 2018 audit, which GAO does not consider to be material weaknesses or significant deficiencies.
Fiscal Service worked extensively, both internally and with other federal agencies, to address two scope limitations from GAO’s fiscal year 2018 audit, such that GAO no longer considers these to be scope limitations for fiscal year 2020. Fiscal Service also (1) took action to close six of the 12 recommendations that GAO issued as a result of its fiscal year 2018 audit, (2) is implementing plans for remediating the remaining six recommendations over the next few years, and (3) plans to develop corrective actions for the three new recommendations issued in this report. Fiscal Service expressed its commitment to remediating the scope limitations and significant deficiencies reported for fiscal year 2020, acknowledging that it expects to take several years to resolve them, given the nature and complexity of certain identified issues.
In addition, GAO is issuing a separate LIMITED OFFICIAL USE ONLY report on information systems controls.
Why GAO Did This Study
Because GAO audits the consolidated financial statements of the U.S. government and the significance of the General Fund of the United States (General Fund) to the government-wide financial statements, GAO audited the fiscal year 2020 Schedules of the General Fund to determine whether, in all material respects, (1) the schedules are fairly presented and (2) Fiscal Service management maintained effective internal control over financial reporting relevant to the Schedules of the General Fund. Further, GAO tested compliance with selected provisions of laws, regulations, contracts, and grant agreements related to the Schedules of the General Fund.
As the reporting entity responsible for accounting for the cash activity of the U.S. government, in fiscal year 2020, the General Fund reported over $23 trillion of cash inflows and nearly $22 trillion of cash outflows. It also reported a budget deficit of $3.1 trillion, the largest recorded federal deficit in history. The CARES Act, enacted in March 2020, and other COVID-19 pandemic relief laws, contained a number of funding provisions that resulted in a significant increase in the cash activity and budget deficit reported by the General Fund during fiscal year 2020.
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- Data Security: Recent K-12 Data Breaches Show That Students Are Vulnerable to HarmBy Sam NewsOctober 15, 2020A cybersecurity incident is an event that actually or potentially jeopardizes a system or the information it holds. According to GAO's analysis of K-12 Cybersecurity Resource Center (CRC) data from July 2016 to May 2020, thousands of K-12 students were affected by 99 reported data breaches, one type of cybersecurity incident in which data are compromised. Students' academic records, including assessment scores and special education records, were the most commonly compromised type of information (58 breaches). Records containing students' personally identifiable information (PII), such as Social Security numbers, were the second most commonly compromised type of information (36 breaches). Financial and cybersecurity experts say some PII can be sold on the black market and can cause students significant financial harm. Breaches were either accidental or intentional, although sometimes the intent was unknown, with school staff, students, and cybercriminals among those responsible (see figure). Staff were responsible for most of the accidental breaches (21 of 25), and students were responsible for most of the intentional breaches (27 of 52), most frequently to change grades. Reports of breaches by cybercriminals were rare but included attempts to steal PII. Although the number of students affected by a breach was not always available, examples show that thousands of students have had their data compromised in a single breach. Responsible Actor and Intent of Reported K-12 Student Data Breaches, July 1, 2016-May 5, 2020 Notes: The actor or the intent may not be discernible in public reports. For this analysis, a cybercriminal is defined as an actor external to the school district who breaches a data system for malicious reasons. Of the 287 school districts affected by reported student data breaches, larger, wealthier, and suburban school districts were disproportionately represented, according to GAO's analysis. Cybersecurity experts GAO spoke with said one explanation for this is that some of these districts may use more technology in schools, which could create more opportunities for breaches to occur. When a student's personal information is disclosed, it can lead to physical, emotional, and financial harm. Organizations are vulnerable to data security risks, including over 17,000 public school districts and approximately 98,000 public schools. As schools and districts increasingly rely on complex information technology systems for teaching, learning, and operating, they are collecting more student data electronically that can put a student's information, including PII, at risk of disclosure. The closure of schools and the sudden transition to distance learning across the country due to the Coronavirus Disease 2019 (COVID-19) pandemic also heightened attention on K-12 cybersecurity. GAO was asked to review the security of K-12 students' data. This report examines (1) what is known about recently reported K-12 cybersecurity incidents that compromised student data, and (2) the characteristics of school districts that experienced these incidents. GAO analyzed data from July 1, 2016 to May 5, 2020 from CRC (the most complete source of information on K-12 data breaches). CRC is a non-federal resource sponsored by an educational technology organization that has tracked reported K-12 cybersecurity incidents since 2016. GAO also analyzed 2016-2019 Department of Education data on school district characteristics (the most recent available), and interviewed experts knowledgeable about cybersecurity. We incorporated technical comments from the agencies as appropriate. For more information, contact Jacqueline M. Nowicki at (617) 788-0580 or firstname.lastname@example.org.[Read More…]
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- Acting Associate Attorney General Matthew Colangelo Delivers Remarks at Listening Session on Environmental Crime VictimsBy Sam NewsApril 20, 2021Good Afternoon. Kris, thank you for the kind introduction. Thank you all for joining us this afternoon for this opportunity to exchange ideas about how to better serve victims of environmental crime. We are honored to be joined by so many knowledgeable and dedicated professionals working on behalf of crime victims and the environment, federal and state law enforcement, academic experts, and representatives of organizations.[Read More…]
- Man Purchased Lamborghini After Receiving $3.9 Million in PPP LoansBy Sam NewsFebruary 10, 2021A Florida man pleaded guilty today for fraudulently obtaining approximately $3.9 million in Paycheck Protection Program (PPP) loans and using those funds, in part, to purchase a $318,000 Lamborghini sports car for himself. Authorities seized the Lamborghini and $3.4 million from the bank accounts of David T. Hines, 29, of Miami, at the time of his arrest. Hines pleaded guilty today to one count of wire fraud and is scheduled to be sentenced on April 14.[Read More…]
- Owner of Oil Chem Inc. Pleads Guilty to Violating the Clean Water ActBy Sam NewsJanuary 14, 2021The president and owner of Oil Chem Inc. pleaded guilty in federal court in Flint, Michigan, to a criminal charge of violating the Clean Water Act stemming from illegal discharges of landfill leachate — totaling more than 47 million gallons — into the city of Flint sanitary sewer system over an eight and a half year period.[Read More…]
- Small Business Administration: COVID-19 Loans Lack Controls and Are Susceptible to FraudBy Sam NewsOctober 1, 2020In April 2020, the Small Business Administration (SBA) moved quickly to implement the Paycheck Protection Program (PPP), which provides loans that are forgivable under certain circumstances to small businesses affected by COVID-19. Given the immediate need for these loans, SBA worked to streamline the program so that lenders could begin distributing these funds as soon as possible. For example, lenders were permitted to rely on borrowers' self-certifications for eligibility and use of loan proceeds. As a result, there may be significant risk that some fraudulent or inflated applications were approved. Since May 2020, the Department of Justice has publicly announced charges in more than 50 fraud-related cases associated with PPP funds. In April 2020, SBA announced it would review all loans of more than $2 million to confirm borrower eligibility, and SBA officials subsequently stated that they would review selected loans of less than $2 million to determine, for example, whether the borrower is entitled to loan forgiveness. However, SBA did not provide details on how it would conduct either of these reviews. As of September 2020, SBA reported it was working with the Department of the Treasury and contractors to finalize the plans for the reviews. Because SBA had limited time to implement safeguards up front for loan approval, GAO believes that planning and oversight by SBA to address risks in the PPP program is crucial moving forward. SBA's efforts to expedite processing of Economic Injury Disaster Loans (EIDL)—such as the reliance on self-certification—may have contributed to increased fraud risk in that program as well. In July 2020, SBA's Office of Inspector General (OIG) reported indicators of widespread potential fraud—including thousands of fraud complaints—and found deficiencies with SBA's internal controls. In response, SBA maintained that its internal controls for EIDL were robust, including checks to identify duplicate applications and verify account information, and that it had provided banks with additional antifraud guidance. The Department of Justice, in conjunction with other federal agencies, also has taken actions to address potential fraud. Since May 2020, the department has announced fraud investigations related to the EIDL program and charges against recipients related to EIDL fraud. SBA has made or guaranteed more than 14.5 million loans and grants through PPP and EIDL, providing about $729 billion to help small businesses adversely affected by COVID-19. However, the speed with which SBA implemented the programs may have increased their susceptibility to fraud. This testimony discusses fraud risks associated with SBA's PPP and EIDL programs. It is based largely on GAO's reports in June 2020 (GAO-20-625) and September 2020 (GAO-20-701) that addressed the federal response, including by SBA, to the economic downturn caused by COVID-19. For those reports, GAO reviewed SBA documentation and interviewed officials from SBA, the Department of the Treasury, and associations that represent lenders and small businesses. GAO also met with officials from the SBA OIG and reviewed OIG reports. In its June 2020 report, GAO recommended that SBA develop and implement plans to identify and respond to risks in PPP to ensure program integrity, achieve program effectiveness, and address potential fraud. SBA neither agreed nor disagreed, but GAO believes implementation of this recommendation is essential. For more information, contact William B. Shear at (202) 512-4325 or email@example.com.[Read More…]
- 10th Anniversary of the Revolution in TunisiaBy Sam NewsJanuary 14, 2021
- Secretary Michael R. Pompeo and Israeli Foreign Minister Gabi AshkenaziBy Sam NewsNovember 19, 2020
- FBI Report on Crime Shows Decline in Violent Crime Rate for Third Consecutive YearBy Sam NewsSeptember 28, 2020Today, the Federal Bureau of Investigation released its 2019 edition of Crime in the United States, which showed that violent crime decreased nationwide for the third consecutive year. After decreases in both 2017 and 2018, the violent crime rate dropped an additional one percent this past year and the property crime rate decreased 4.5 percent.[Read More…]
- IRS Reorganization: Planning Addressed Key Reform Practices, but Goals and Measures for the Plan Have Not Been FinalizedBy Sam NewsNovember 18, 2020GAO identified advantages of, challenges related to, and options for improving the Internal Revenue Service's (IRS) current organizational structure, based on GAO's review of prior work and interviews with IRS officials and stakeholders. For example, one advantage of the current structure, according to several interviewees, is that IRS's divisions have developed specialized expertise on different types of taxpayers with similar needs, such as small businesses. Several interviewees also believed that addressing some of IRS's challenges may not require significant changes to IRS's organizational structure. GAO and others have identified challenges and options to improve IRS's structure, processes, and operations in the following areas: (1) customer service; (2) communication and coordination within IRS; (3) technology; and (4) strategic human capital management and training. While developing its reorganization plan required by the Taxpayer First Act, IRS addressed or partially addressed all six of the key practices for agency reforms that GAO reviewed (see table below). GAO Assessment of IRS's Reorganization Planning Process against Key Reform Practices Key reform practice Extent addressed Establishing goals and outcomes ◑ Involving employees and key stakeholders ● Using data and evidence ● Addressing fragmentation, overlap, and duplication ◑ Addressing high-risk areas and long-standing management challenges ◑ Leadership focus and attention ● Legend: ● Generally addressed ◑ Partially addressed ○ Not addressed Source: GAO analysis of Internal Revenue Service (IRS) information. | GAO-21-18 IRS established a senior-level team—the Taxpayer First Act Office—to lead the reorganization planning, involved employees and key stakeholders, and used multiple sources of data and evidence to inform its planning. Although IRS has developed preliminary goals for the plan, it has not yet finalized and communicated the goals and performance measures for the plan. IRS has also researched potential actions it could take to address long-standing management challenges at IRS, such as those related to areas of fragmentation, overlap, duplication, and high risk that GAO has identified. However, IRS has not yet decided on specific actions to address those areas in its plan. IRS officials told us that they intend to take these additional steps, but COVID-19 delayed the completion of their reorganization plan to December 2020. As a result, it is still unclear whether the reorganization plan will have outcome-oriented goals and performance measures or whether it will identify specific actions to address long-standing management challenges. Taking these steps could help IRS identify and achieve the intended outcomes of the reorganization plan, and identify reforms that can create long-term gains in efficiency and effectiveness. The Taxpayer First Act required that a comprehensive written plan to redesign IRS be submitted to Congress by September 30, 2020. Reforming and reorganizing a federal agency as large and complex as IRS is not an easy task. However, a potential reorganization could provide IRS with an opportunity to address emerging and long-standing challenges. GAO was asked to review IRS's organizational structure and IRS's plans to reform it. This report examines (1) reported advantages of, challenges related to, and options for potentially improving IRS's organizational structure; and (2) the extent to which IRS's reorganization planning process is consistent with selected leading practices. GAO reviewed documents from IRS and other sources; interviewed IRS officials and stakeholders, including three former IRS commissioners; and assessed IRS's reorganization planning process against selected key practices for agency reform efforts developed by GAO. GAO is making three recommendations to IRS as it finalizes its reorganization plan, including that IRS should finalize goals and performance measures, and identify specific actions to address long-standing management challenges. IRS responded that it plans to implement GAO's recommendations when it submits its final reorganization plan to Congress in December 2020. For more information, contact James R. McTigue, Jr. at (202) 512-9110 or firstname.lastname@example.org.[Read More…]
- Travel by U.S. Special Envoy for the Horn of Africa Jeffrey FeltmanBy Sam NewsMay 14, 2021
- Caltech Alum Robert Behnken Aboard Historic Demo-2 LaunchBy Sam NewsSeptember 26, 2020The SpaceX Crew Dragon [Read More…]
- Texas Clinic Owner and Clinic Employee Sentenced to Prison for Conspiring to Unlawfully Prescribe Hundreds of Thousands of OpioidsBy Sam NewsDecember 10, 2020A Houston-area pain clinic owner and a clinic employee who posed as a physician were sentenced to 240 months and 96 months in prison, respectively, today for their roles at a “pill mill” where they and their co-conspirator illegally prescribed hundreds of thousands of doses of opioids and other controlled substances.[Read More…]
- Fireside Chat at IHS CERAWeekBy Sam NewsMarch 6, 2021John Kerry, Special [Read More…]
- NASA Human Space Exploration: Significant Investments in Future Capabilities Require Strengthened Management OversightBy Sam NewsDecember 15, 2020The National Aeronautics and Space Administration (NASA) again delayed the planned launch date for Artemis I, the first uncrewed test flight involving three closely related human spaceflight programs—the Orion crew vehicle, Space Launch System (SLS), and Exploration Ground Systems (EGS). Together, these programs aim to continue human space exploration beyond low-Earth orbit. The most recent delay, to November 2021, resulted in part from manufacturing challenges and represents a 36-month slip since NASA established a schedule to measure performance in 2014. This new launch date does not account for the effects of COVID-19. According to NASA officials, COVID-19 delays and schedule risks will place pressure on NASA's ability to achieve this launch date. Development cost estimates for key programs also increased. The cost of the SLS program increased by 42.5 percent and the EGS program by 32.3 percent since 2014, for a combined increase of over $3 billion, bringing the total to $11.5 billion. NASA does not plan to complete revised estimates for Orion, which are tied to the second, crewed test flight (Artemis II) before spring 2021. Key Parts of Space Launch System Ready for Testing at Stennis Space Center NASA awarded billions of dollars in development and production contracts to support flights beyond Artemis I, but the flight schedule has changed frequently due to a lack of clear requirements and time frames for planned capability upgrades. Limited NASA oversight also places efforts to plan and execute future flights at risk of adverse outcomes, such as increased costs or delays. For example, NASA is committed to establishing cost and schedule performance baselines for these efforts, but it plans to do so too late in the acquisition process to be useful as an oversight tool. In addition, senior leaders do not receive consistent and comprehensive information at quarterly briefings on future efforts, such as a program to begin developing a more powerful upper stage for SLS. This is because current updates provided to NASA management focus primarily on the more short-term Artemis I and II flights. This approach places billions of dollars at risk of insufficient NASA oversight. NASA is pursuing an aggressive goal to return American astronauts to the surface of the Moon by the end of 2024. The success of NASA's plans hinges, in part, on two upcoming test flights. An uncrewed test flight and subsequent crewed test flight are intended to demonstrate the capability of a new launch vehicle, crew capsule, and ground systems. The House Committee on Appropriations included a provision in its 2017 report for GAO to continue to review NASA's human space exploration programs. This is the latest in a series of GAO reports addressing this topic. This report assesses (1) the progress the programs are making towards the first test flight, known as Artemis I, with respect to schedule and cost, and (2) the extent to which NASA's human space exploration programs are positioned to support the planned Artemis flight schedule beyond Artemis I. To do this work, GAO examined program cost and schedule reports, test plans, and contracts, and interviewed officials. GAO also assessed the extent to which the COVID-19 state of emergency has affected schedules for these programs. GAO is making two recommendations to NASA to establish baselines ahead of a key design review and improve internal reporting about capability upgrades for human space exploration programs beyond Artemis I. NASA concurred with the recommendations made in this report. For more information, contact William Russell at (202) 512-4841 or email@example.com.[Read More…]
- Texas Man Charged In $24 Million COVID-Relief FraudBy Sam NewsOctober 9, 2020A Dallas-area man was charged in an indictment filed Thursday for his alleged participation in a scheme to file fraudulent loan applications seeking approximately $24.8 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.[Read More…]
- Acting Assistant Attorney General Brian C. Rabbitt Delivers Remarks at Health Care Fraud Takedown Press ConferenceBy Sam NewsSeptember 30, 2020Good morning and thank you for joining us today. We are here this morning to announce the results of truly historic nationwide law enforcement operations led by the Criminal Division’s Health Care Fraud Strike Force Program — part of the Criminal Division’s Fraud Section.[Read More…]
- Washington Man Charged With COVID-Relief FraudBy Sam NewsOctober 27, 2020A Washington man was charged in a criminal complaint unsealed today for fraudulently seeking over $1.1 million in COVID-19 relief guaranteed by the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.[Read More…]
- Appointment of Dr. Matthew Graviss as Chief Data Officer By Sam NewsJanuary 4, 2021
- Public Health and the Draw Down of the Migrant Protection Protocols ProgramBy Sam NewsFebruary 19, 2021
- Colorado Man Sentenced to Prison for Biodiesel Tax Credit FraudBy Sam NewsOctober 28, 2020A Colorado resident was sentenced to 15 months in prison yesterday for his role in a biodiesel tax credit fraud scheme, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.[Read More…]
- Former Elkhart, Indiana Resident Sentenced to Over Six Years in Prison for Financing of TerrorismBy Sam NewsNovember 9, 2020Samantha Marie Elhassani, aka Samantha Sally, 35, formerly of Elkhart, Indiana, was sentenced by U.S. District Court Judge Philip P. Simon to 78 months in prison and three years of supervised release after pleading guilty to Financing Terrorism, announced Assistant Attorney General for National Security John C. Demers, U.S. Attorney for the Northern District of Indiana Thomas L. Kirsch II, FBI Assistant Director of the Counterterrorism Division Jill Sanborn, and FBI Special Agent in Charge of the Indianapolis field office Paul Keenan.[Read More…]
- Former Chattanooga Police Officer Sentenced to 20 Years in Prison for Sexual AssaultBy Sam NewsAugust 19, 2020Desmond Logan, 35, a former officer with the Chattanooga Police Department (CPD), was sentenced by the Honorable Curtis L. Collier, U.S. District Court Judge in the Eastern District of Tennessee at Chattanooga.[Read More…]
- CEO Sentenced to Prison in $150 Million Health Care Fraud, Opioid Distribution, and Money Laundering SchemeBy Sam NewsMarch 3, 2021The chief executive officer of a Michigan and Ohio-based group of pain clinics and other medical providers was sentenced today to 15 years in prison for developing and approving a corporate policy to administer unnecessary back injections to patients in exchange for prescriptions of over 6.6 million doses of medically unnecessary opioids.[Read More…]
- New Jersey Man Sentenced to Prison for Tax Fraud ConspiracyBy Sam NewsNovember 2, 2020A New Jersey man was sentenced to 78 months in prison today for conspiring to defraud the United States, filing false claims, and obstructing the internal revenue laws, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.[Read More…]
- State Department Designates Two Senior Al-Shabaab Leaders as TerroristsBy Sam NewsNovember 17, 2020
- Operation Legend: Case of the DayBy Sam NewsOctober 7, 2020An Indiana man has been charged with a federal firearm offense for allegedly illegally selling dozens of handguns and assault rifles in the Chicago area.[Read More…]
- Assistant Secretary of State for Political-Military Affairs R. Clarke Cooper Travels to the United Arab Emirates, Saudi Arabia, Bahrain, and IsraelBy Sam NewsNovember 12, 2020
- The United States Designates ISIS Financial FacilitatorsBy Sam NewsMay 17, 2021Antony J. Blinken, [Read More…]
- Cryptocurrency Fraudster Pleads Guilty to Securities Fraud and Money Laundering Charges in Multi-Million Dollar Investment SchemeBy Sam NewsMarch 4, 2021A citizen of Sweden pleaded guilty to securities fraud, wire fraud, and money laundering charges that defrauded more than 3,500 victims of more than $16 million.[Read More…]