Long Island Resident Pleads Guilty to Multimillion-Dollar Elder Fraud Scheme

A Long Island woman pleaded guilty today to participating in a scheme to mail fraudulent prize notices that led recipients, many of whom were elderly and vulnerable, to believe that they could claim large cash prizes in exchange for a modest fee. None of the victims who submitted fees, which in total exceeded $30 million, received a substantial cash prize.

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  • Climate Change: USAID Is Taking Steps to Increase Projects’ Resilience, but Could Improve Reporting of Adaptation Funding
    In U.S GAO News
    The U.S. Agency for International Development (USAID) provided at least $810 million to directly and indirectly support climate adaptation from fiscal years 2014 through 2018—the latest available data at the time of GAO's analysis. However, USAID ended new funding for programming activities that directly address climate adaptation (i.e., direct funding) in fiscal year 2017 in part due to a shift in administration priorities, according to agency officials. However, following a congressional directive in the fiscal year 2020 appropriations act, USAID restored direct funding for adaptation programming. GAO found that USAID did not consistently report all funding data for activities that indirectly addressed climate adaptation, which does not align with expectations in foreign assistance guidance and internal controls standards. USAID's direct adaptation assistance had the primary program goal of enhancing resilience and reducing vulnerability. For example, in the Philippines, a USAID activity assisted communities in preparing for extreme weather events by developing maps of potential hazards to aid in evacuation planning. USAID attributed funding that indirectly addresses climate adaptation assistance (i.e., indirect funding) from programs with other goals such as agriculture, where priorities include supporting food production and distribution. For example, in Guatemala, a USAID agricultural activity worked with farmers to transition to crops with greater economic benefits that are also drought tolerant. However, not all missions with indirect adaptation assistance reported these funding data and reporting has varied, in part, because the agency has not clearly communicated the expectation to do so. Without addressing this issue, USAID risks providing incomplete and inconsistent data to Congress and others. A Community Leader Shows the Hazard Map Prepared as Part of a U.S. Agency for International Development Project to Help Adapt to Climate Change in the Philippines Since October 2016, USAID has generally required projects and activities to conduct climate risk management, which is the process of assessing and managing the effects of climate change. USAID requires documentation of this process and GAO's review found 95 percent compliance for USAID's priority countries for adaption funding. USAID has experienced some challenges with its initial implementation of climate risk management and is assessing these challenges and identifying improvements. For example, mission officials said that some technical staff lack expertise to do climate risk management and that their environment offices had a small number of staff to provide assistance. To help staff conduct climate risk management, USAID is building staff capacity through trainings and is in the process of evaluating implementation of the policy and whether it requires any changes, among other efforts. USAID is the primary U.S. government agency helping countries adapt to the effects of climate change. USAID has provided this assistance through activities that directly address climate adaptation as well as indirectly through activities that received funding for other purposes, such as agriculture, but which also support climate adaptation goals. GAO was asked to review issues related to U.S. foreign assistance for climate adaptation. For USAID, this report examines (1) funding the agency provided for climate adaptation assistance in fiscal years 2014 through 2018, and (2) how climate risk management is implemented. GAO analyzed funding data and documentation of agency activities and climate risk management; interviewed agency and project officials; and conducted fieldwork in three countries receiving adaptation assistance—Guatemala, the Philippines, and Uganda. GAO selected these countries based on the amount of funding they received for climate adaptation activities, geographic diversity, and variety of observed and projected climate effects, among other factors. GAO recommends that USAID communicate to its missions and bureaus that they are expected to report all data on funding that indirectly addresses climate adaptation. USAID agreed with the recommendation and outlined a number of steps the agency plans to take to improve the reporting of these data. For more information, contact David Gootnick at (202) 512-3149 or gootnickd@gao.gov.
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  • Former Oilfield Manager Pleads Guilty in Connection with OSHA Worker Fatality Investigation
    In Crime News
    A Montana man pleaded guilty in federal court in the District of North Dakota to a felony charge of obstructing an Occupational Safety and Health Administration (OSHA) proceeding stemming from the 2014 death of an oilfield worker in Williston, North Dakota.
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    The Justice  Department’s Antitrust Division announced today that it has completed its review of a proposed joint patent licensing pool known as the University Technology Licensing Program (UTLP).  UTLP is a proposal by participating universities to offer licenses to their physical science patents relating to specified emerging technologies.
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  • DHS Office of Inspector General: Preliminary Observations on Long-Standing Management and Operational Challenges
    In U.S GAO News
    What GAO Found GAO's preliminary work has identified a number of management and operational challenges, including frequent leadership turnover, since fiscal year 2015 that have impeded the overall effectiveness of the Department of Homeland Security (DHS) Office of Inspector General (OIG). DHS OIG senior leaders have acknowledged that these challenges have contributed to organizational weaknesses, and have taken steps to begin addressing some of them. GAO's preliminary work has identified issues in the following areas, among others: Strategic planning: DHS OIG has not consistently developed strategic plans, which are a necessary input for developing the organization's other guiding documents and governance framework. Specifically, DHS OIG has operated for 4 of the past 6 years without a strategic plan, and the plan it adopted for fiscal years 2018–2019 included some, but not all, of the elements considered standard for federal entities. In 2020, DHS OIG contracted with a nonprofit academy of government experts to develop a strategic plan for fiscal years 2021–2025, with expected delivery in June 2021. Quality assurance: Internal and external reviews have reported on concerns about quality assurance in some of DHS OIG's work. In 2017 and 2018, after an internal review found that some reports issued by DHS OIG may not have adhered to the professional standards cited, DHS OIG retracted 13 audit reports that had been issued over a 5-year period. In 2018, an external review determined that DHS OIG needed to improve its system of quality control. Though DHS OIG concurred with all of the recommendations from that external review, it did not fully implement them. In addition, DHS OIG has not established roles and responsibilities for an organization-wide quality assurance program. Moreover, GAO's preliminary work indicates that current staff allocations may limit DHS OIG's quality assurance reviews to focusing on audit work and not on the other types of work it produces, including inspections, evaluations, special reviews, and management alerts. Timeliness: DHS OIG project time frames for work from its offices of Audits and Special Reviews and Evaluations have increased over the 4 fiscal years GAO assessed. For example, in fiscal year 2017, 79 of 102 Office of Audits projects were completed in 1 year or less and eight of 102 took more than 18 months. In fiscal year 2020, seven of 67 reports were completed in 1 year or less and more than half (35 of 67) took more than 18 months. In addition, DHS OIG has not assessed time frames for work completed by these offices, though timeliness in reporting is a key element of effective oversight and DHS OIG staff considered it an organizational weakness. GAO will complete its evaluation of these and other management and operational areas, and will issue a final report in the coming months. Why GAO Did This Study DHS OIG has a critical role in providing independent and objective oversight of DHS, which encompasses multiple operational and support components. OIGs are expected to maintain high standards of professionalism and integrity in light of their mission, according to quality standards developed by the community of federal Inspectors General. However, DHS OIG has faced a number of challenges that have affected its ability to carry out its oversight mission effectively. This statement is based on GAO's draft report on DHS OIG's management and operations, which is currently at the agency for comment. It provides preliminary observations on DHS OIG's strategic planning processes; quality assurance processes; and reporting time frames for work from DHS OIG's offices of Audits and Special Reviews and Evaluations. To develop these preliminary observations, GAO reviewed relevant federal laws and quality standards for federal OIGs as well as DHS OIG documentation, including organizational policies; internal communications such as emails and memoranda; and DHS OIG's semiannual reports to Congress and published reports. GAO also analyzed DHS OIG project data from fiscal years 2015 through 2020, and interviewed DHS OIG leaders and other staff.
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  • Eastern Kentucky Doctor Sentenced to Prison for Unlawfully Distributing Controlled Substances
    In Crime News
    A Kentucky doctor and his former office manager were sentenced to 60 and 32 months respectively in prison Wednesday for their roles in unlawfully distributing controlled substances during a time when the defendants did not have a legitimate medical practice.
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  • Lead Paint in Housing: HUD Has Not Identified High-Risk Project-Based Rental Assistance Properties
    In U.S GAO News
    During fiscal years 2018 and 2019, the Department of Housing and Urban Development (HUD) obligated about $421 million through two grant programs to state and local governments to help identify and control lead paint hazards in housing for low-income households. HUD also issued guidelines for evaluating and controlling lead paint hazards, generally encouraging abatement (such as replacing building components containing lead) as the preferred long-term solution. HUD has supported research on lead paint hazard control and provided education and outreach to public housing agencies, property owners, and the public through publications and training events. HUD monitors lead paint-related risks in its Project-Based Rental Assistance Program, one of HUD's three largest rental assistance programs, through management reviews and periodic physical inspections, but has not conducted a comprehensive risk assessment to identify properties posing the greatest risk to children under the age of 6. HUD's management reviews include assessing property owners' compliance with lead paint regulations—such as by reviewing lead disclosure forms, records of lead inspections, and plans to address lead paint hazards. Inspectors from HUD's Real Estate Assessment Center also assess the physical condition of properties, including identifying damaged paint that could indicate lead paint risks. According to HUD officials, they have not conducted risk assessments in project-based rental assistance housing because they believe the program has relatively few older and potentially riskier properties. However, GAO's analysis of HUD data found that 21 percent of project-based rental assistance properties have at least one building constructed before 1978 (when lead paint was banned in homes) and house over 138,000 children under the age of 6. If HUD used available program data to inform periodic risk assessments, HUD could identify which of the properties pose the greatest risk of exposure to lead paint hazards for children under the age of 6. Unless HUD develops a strategy for managing the risks associated with lead paint and lead paint hazards in project-based rental assistance housing, it may miss the opportunity to prevent children under the age of 6 from being inadvertently exposed to lead paint in those properties. Project-Based Rental Assistance Properties with at Least One Building Built before 1978 and That House Children under Age 6, as of December 31, 2019 Note: Children under the age of 6 are at the greatest risk of lead exposure because they have frequent hand-to-mouth contact, often crawl on the floor, and ingest nonfood items. Lead paint exposure in children under the age of 6 can cause brain damage, slowed development, and learning and behavioral problems. Exposure to lead paint hazards can cause serious harm to children under 6 years old. HUD is required by law to reduce the risk of lead paint hazards in HUD-assisted rental housing—including project-based rental assistance (subsidies to make privately owned multifamily properties affordable to low-income households). The 2019 Consolidated Appropriations Act Joint Explanatory Statement includes a provision for GAO to review, among other things, HUD's oversight of lead paint and related hazards in affordable rental housing. This report (1) describes how HUD programs and guidance address lead paint hazards in HUD-assisted and other low-income rental housing, and (2) examines HUD's oversight procedures for assessing risk for lead paint hazards in project-based rental assistance housing. GAO reviewed HUD and Environmental Protection Agency (EPA) lead paint regulations and documents on lead programs and methods for addressing lead paint hazards. GAO reviewed HUD oversight policies and procedures and analyzed HUD data on building and tenant age. GAO interviewed staff at HUD, EPA, and organizations that advocate for safe affordable housing. GAO recommends that HUD (1) conduct periodic risk assessments for the Project-Based Rental Assistance Program and (2) develop and implement plans to proactively manage identified lead paint risks. HUD agreed to conduct periodic risk assessments and develop and implement a plan to proactively manage risks. For more information, contact John H. Pendleton at (202) 512-8678 or pendletonj@gao.gov.
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  • Florida Doctor Charged in Massive $681 Million Substance Abuse Treatment Fraud Scheme
    In Crime News
    A Palm Beach County, Florida doctor was arrested and charged with conspiring to commit health care fraud and wire fraud for his alleged participation in a massive years-long health care fraud scheme throughout Palm Beach County, billing for fraudulent tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction.
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  • Justice Department to Provide Funding for Body-Worn Cameras to Small, Rural and Tribal Law Enforcement Agencies
    In Crime News
    The Justice Department announced today that the Bureau of Justice Assistance (BJA) is releasing $7.65 million in a competitive microgrant grant solicitation that will fund body-worn cameras (BWCs) to any law enforcement department with 50 or fewer full-time sworn personnel, rural agencies (those agencies within non-urban or non-metro counties); and federally-recognized Tribal agencies.
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  • Remarks by Assistant Attorney General Makan Delrahim on the Future of ASCAP and BMI Consent Decrees
    In Crime News
    Good afternoon. Thank you very much to Vanderbilt Law School and in particular to the Vanderbilt Journal of Entertainment & Technology Law for hosting this event. I love Vanderbilt and I love Nashville, and I’m sorry not to be there in person with you today. Someday when COVID-19 is a memory and social distancing is something you do only with people you don’t like, I look forward to returning to Nashville and reconnecting with many of my old friends there. More importantly, I look forward to returning to some of my favorite honky-tonks and showing off my famous dance moves. I’ve been practicing at home in my free time, to make sure I’m ready.
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  • Medicaid: CMS Needs More Information on States’ Financing and Payment Arrangements to Improve Oversight
    In U.S GAO News
    States and the federal government share in financing Medicaid, a health care program for low-income and medically needy individuals. States finance the nonfederal share with state general funds and other sources, such as taxes on health care providers and funds from local governments. GAO's analysis showed a change in how states finance their Medicaid programs. In particular, states relied on provider taxes and local government funds for about 28 percent, or $63 billion, of the estimated $224 billion total nonfederal share of Medicaid payments in state fiscal year 2018—7 percentage points more than state fiscal year 2008. Nonfederal Share of Medicaid Payments from Provider Taxes and Local Government Funds, State Fiscal Years 2008 and 2018 Note: Percentages do not add up due to rounding. Furthermore, GAO estimated that states' reliance on provider taxes and local government funds decreased states' share of net Medicaid payments (total state and federal payments) and effectively increased the federal share of net Medicaid payments by 5 percentage points in state fiscal year 2018. It also resulted in smaller net payments to some providers after the taxes and local government funds they contribute to their payments are taken into account. While net payments are smaller, the federal government's contribution does not change. This effectively shifts responsibility for a larger portion of Medicaid payments to the federal government and away from states. The Centers for Medicare & Medicaid Services (CMS)—which oversees Medicaid—collects some information on states' sources of funds and payments, but it is not complete, consistent, or sufficiently documented, which hinders the agency's oversight. For example, CMS does not require states to report on the source of the nonfederal share for all payments. Absent complete, consistent, and sufficiently documented information about all Medicaid payments, CMS cannot adequately determine whether payments are consistent with statutory requirements for economy and efficiency, and with permissible financing, such as the categories of services on which provider taxes may be imposed. Medicaid cost $668 billion in fiscal year 2019. GAO has previously reported on concerns about states' use of various funding sources for the nonfederal share. Although such financing arrangements are allowed under certain conditions, they can also result in increasing the share of net costs paid by the federal government and decreasing reliance on state general funds. GAO was asked to review the sources of funds states used for Medicaid and the types of payments made to providers. This report describes states' reliance on provider and local government funds for these arrangements; the estimated effect of these arrangements on the federal share of net Medicaid payments; and the extent to which CMS collects information on these arrangements. To do this work, GAO reviewed CMS information; administered a questionnaire to all state Medicaid agencies; analyzed the estimated effects of reliance on provider and local government funds; and interviewed CMS officials, as well as Medicaid officials in 11 states selected, in part, on Medicaid spending and geographic diversity. The Administrator of CMS should collect and document complete and consistent information about the sources of funding for the nonfederal share of payments to providers. CMS neither agreed nor disagreed with GAO's recommendation, but acknowledged the need for additional financing and payment data for Medicaid oversight. For more information, contact Carolyn L. Yocom at (202) 512-7114 or yocomc@gao.gov.
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  • Afghan National Arrested for 2008 Abduction of American Journalist
    In Crime News
    The Department of Justice announced the unsealing of a federal indictment charging Haji Najibullah, a/k/a “Najibullah Naim,” a/k/a “Abu Tayeb,” a/k/a “Atiqullah” with six counts related to the 2008 kidnapping of an American journalist and two Afghan nationals. Najibullah, 44, was arrested and transferred to the United States from Ukraine to face the charges in the indictment. Najibullah will be presented today before U.S. Magistrate Judge Ona T. Wang. The case is assigned to U.S. District Judge Katherine Polk Failla.
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  • Taxpayer Advocate Service: Opportunities Exist to Improve Reports to Congress
    In U.S GAO News
    What GAO Found The budget for the Internal Revenue Service's (IRS) Taxpayer Advocate Service (TAS) declined by about 14 percent from fiscal years 2011 to 2020, when adjusted for inflation. For fiscal year 2020, TAS used most of its resources to assist individual taxpayers, known as case advocacy. TAS allocated about 76 percent of its $222 million budget and 86 percent of its almost 1,700 full-time equivalents to this purpose. The percentage of resources for case advocacy has decreased during the past decade—in fiscal year 2011 about 85 percent of the budget was devoted to it. For the same period, resources to address broader issues affecting groups of taxpayers, known as systemic advocacy, increased from 9 percent to 14 percent of the total budget. This shift is due in part to the reallocation of staff to better integrate systemic advocacy work and TAS's overall attrition rate more than doubling to 15.9 percent between fiscal years 2011 and 2019. Since 2011, TAS has received more than 2 million taxpayer cases, of which almost half were referrals from other IRS offices. TAS closed more cases than it received each year from 2012 to 2017, but its inventory has grown since fiscal year 2018, due in part to attrition in case advocacy staff and an increase in taxpayers seeking assistance (see figure below). Number of Taxpayer Cases Received and Closed, Fiscal Years 2011 to 2020 TAS has recently modified its two mandated reports to Congress by reducing their length and separately compiling legislative recommendations. It shortened its annual reports in part because the Taxpayer First Act reduced the required number of most serious taxpayer problems from “at least 20” to “the 10” most serious problems. GAO identified the following additional actions that could further improve TAS reporting. Report outcome-oriented objectives and progress. The objectives for the upcoming fiscal year that TAS included in its most recent report are not always clearly identified and do not link to the various planned activities that are described. Further, the objectives TAS does identify do not include measurable outcomes. In addition, TAS's reports do not include the actual results achieved against objectives so it is not possible to assess related performance and progress. Improved performance reporting could help both TAS and Congress better understand which activities are contributing toward achieving TAS's objectives and where actions may be needed to address any unmet goals. Consult with Congress and other stakeholders. TAS briefs congressional committees each year after publishing its annual report and solicits perspectives from stakeholders. TAS officials said they incorporate the perspectives into its objectives. However, TAS does not follow leading practices to consult congressional committees about its goals and objectives prior to publication at least once every 2 years. Thus, it misses opportunities to obtain congressional input on its objectives and performance reporting. Consultations would provide TAS opportunities to confirm if its goals incorporate congressional and other stakeholder perspectives and whether its reports meet their information needs. Publish updates on recommendation implementation status. By law, TAS's annual report must include an inventory of actions IRS has fully, partially, and not yet taken on TAS's recommendations to address the most serious problems facing taxpayers. If those recommendations take multiple years to implement, which some have as shown in the table below, updating the inventory would be required. In its objectives reports, TAS provides only a one-time inventory of IRS responses to TAS's recommendations made during the preceding year, including plans and preliminary actions taken for those IRS accepts for implementation. TAS does not publicly update the inventory in subsequent annual reports to reflect actions IRS takes or does not take to address TAS's recommendations. This reporting approach does not provide complete information on the status of actions IRS has taken to address serious problems facing taxpayers and also does not provide the information in the annual report, as required. Publishing such updated status information would support congressional oversight. Taxpayer Advocate Service's (TAS) Recommendation Reporting and Status as of the Fourth Quarter of Fiscal Year 2020 GAO also identified options for TAS to consider to improve its reporting. These options include explaining changes to the list of the most serious taxpayer problems from year to year and streamlining report sections congressional staff use less frequently. Why GAO Did This Study TAS, an independent office within IRS, helps taxpayers resolve problems with IRS and addresses broader, systemic issues that affect groups of taxpayers by recommending administrative and legislative changes to mitigate such problems. Congress mandated that TAS issue two reports every year—one known as the annual report which includes sections on, among other things, the 10 most serious problems encountered by taxpayers, and the other known as the objectives report that discusses organizational objectives. GAO was asked to review how TAS carries out its mission, focusing on resources and reporting. This report (1) describes TAS's resources and workload, and (2) assesses TAS's reporting to Congress and identifies opportunities for improvement. GAO reviewed documents from TAS, IRS, and other sources, including TAS's annual and objectives reports and internal guidance; analyzed TAS's budget, staffing, and workload data for fiscal years 2011 through 2020; and interviewed knowledgeable TAS and IRS officials. GAO assessed TAS's reporting of its objectives and performance against statutory requirements, relevant internal control standards, and selected key practices for performance reporting developed by GAO. In addition, GAO reviewed relevant TAS web pages, analyzed the length and composition of TAS's reports, and interviewed key congressional committee staff to identify additional options to improve TAS's reporting.
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  • Covid-19 Housing Protections: Moratoriums Have Helped Limit Evictions, but Further Outreach Is Needed
    In U.S GAO News
    What GAO Found Eviction moratoriums at the federal, state, and local levels reduced eviction filings during the COVID-19 pandemic; however, some eligible renters may not have benefitted from a recent federal moratorium. GAO's analysis of 63 jurisdictions found that the median rate of eviction filings was about 74 percent lower in the last week of July 2020—when a moratorium included in the CARES Act expired—than in the same week in 2019. Eviction filings remained lower throughout 2020 (relative to 2019) but gradually increased during a separate moratorium ordered by the Centers for Disease Control and Prevention (CDC) in September 2020 (see fig.). During this moratorium, jurisdictions without separate state or local moratoriums experienced larger increases in eviction filings, which suggests that some renters may not fully understand how to use the CDC moratorium (completing required documentation). CDC extended its moratorium through March 31, 2021, but has taken few steps to promote awareness and understanding of the moratorium and its requirements. Clear, accurate, and timely information is essential to keep the public informed during the pandemic. Without a communication and outreach plan, including federal coordination, CDC will be missing an opportunity to ensure that eligible renters avoid eviction. Year-over-Year Percentage Change in Eviction Filings in 63 Jurisdictions Note: Centers for Disease Control and Prevention's (CDC) moratorium is active through March 31, 2021. Local moratoriums include separate state or local eviction moratoriums. Unlike the CARES Act, CDC's moratorium does not prohibit eviction filings, which could explain some increases. By late January 2021, Treasury had disbursed 99 percent of the $25 billion in Emergency Rental Assistance funds to state and other eligible grantees responsible for making rent and utility payments to recipients. Treasury's initial program guidance issued that month did not fully define some program requirements and included requirements that could have delayed the delivery of funds or deter participation. In late February 2021, Treasury updated its guidance to address several of these concerns, such as by providing grantees with flexibility for prioritizing lower income applicants and allowing written attestation of income. Although the guidance did not clarify certain data collection and spending requirements, officials said they will continue to update guidance to address stakeholder concerns and strike a balance between accountability and administrative efficiency. GAO will continue to actively monitor these efforts. Why GAO Did This Study Millions of renters and property owners continue to experience housing instability and financial challenges during the COVID-19 pandemic. To address these concerns, Congress and CDC created eviction moratoriums, and Congress appropriated $25 billion to Treasury to disburse to state and local grantees to administer emergency rental assistance programs to help those behind on their rent. The CARES Act includes a provision for GAO to monitor federal efforts related to COVID-19. This report examines, among other objectives, (1) how eviction moratoriums have contributed to housing stability during the pandemic and (2) Treasury's implementation of the Emergency Rental Assistance program. GAO analyzed data on eviction filings and local policies in a sample of 63 jurisdictions (selected based on data availability) from January to December 2020. GAO also analyzed Census Bureau survey data on rental payments and data from federal housing entities on mortgage forbearance. GAO interviewed officials from CDC, Treasury, and organizations representing renters, property owners, and rental assistance grantees.
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  • The Nation’s Fiscal Health: Effective Use of Fiscal Rules and Targets
    In U.S GAO News
    In fiscal year 2019, debt held by the public reached 79 percent of gross domestic product (GDP). The government's fiscal response to COVID-19 combined with the severe economic contraction from the pandemic will substantially increase federal debt. The Congressional Budget Office (CBO) projected that debt held by the public will reach 98 percent of GDP by the end of fiscal year 2020. The nation's fiscal challenges will require attention once the economy has substantially recovered and public health goals have been attained. GAO has previously reported that a long-term plan is needed to put the government on a sustainable fiscal path. Other countries have used well-designed fiscal rules and targets—which constrain fiscal policy by controlling factors like expenditures or revenue—to contain excessive deficits. For example, Germany's constitution places limits on its deficits. The U.S. federal government has previously enacted fiscal rules, such as those in the Budget Control Act of 2011. However, current fiscal rules have not effectively addressed the misalignment between spending and revenues over time. GAO identified key considerations to help Congress if it were to adopt new fiscal rules and targets, as part of a long-term plan for fiscal sustainability (see table). Key Considerations for Designing, Implementing, and Enforcing Fiscal Rules and Targets Setting clear goals and objectives can anchor a country's fiscal policy. Fiscal rules and targets can help ensure that spending and revenue decisions align with agreed-upon goals and objectives. The weight given to tradeoffs among simplicity, flexibility, and enforceability depends on the goals a country is trying to achieve with a fiscal rule. In addition, there are tradeoffs between the types and combinations of rules, and the time frames over which the rules apply. The degree to which fiscal rules and targets are binding, such as being supported through a country's constitution or nonbinding political agreements, can impact their permanence, as well as the extent to which ongoing political commitment is needed to uphold them. Integrating fiscal rules and targets into budget discussions can contribute to their ongoing use and provide for a built-in enforcement mechanism. The budget process can include reviews of fiscal rules and targets. Fiscal rules and targets with limited, well-defined exemptions, clear escape clauses for events such as national emergencies, and adjustments for the economic cycle can help a country address future crises. Institutions supporting fiscal rules and targets need clear roles and responsibilities for supporting their implementation and measuring their effectiveness. Independently analyzed data and assessments can help institutions monitor compliance with fiscal rules and targets. Having clear, transparent fiscal rules and targets that a government communicates to the public and that the public understands can contribute to a culture of fiscal transparency and promote fiscal sustainability for the country. Source: GAO analysis of literature review and interviews. | GAO-20-561 Our nation faces serious challenges at a time when the federal government is highly leveraged in debt by historical norms. The imbalance between revenue and spending built into current law and policy have placed the nation on an unsustainable long-term fiscal path. Fiscal rules and targets can be used to help frame and control the overall results of spending and revenue decisions that affect the debt. GAO was asked to review fiscal rules and targets. This report (1) assesses the extent to which the federal government has taken action to contribute to long-term fiscal sustainability through fiscal rules and targets, and (2) identifies key considerations for designing, implementing, and enforcing fiscal rules and targets in the U.S. GAO compared current and former U.S. fiscal rules to literature on the effective use of rules and targets; reviewed CBO reports and relevant laws; and interviewed experts. GAO conducted case studies of national fiscal rules in Australia, Germany, and the Netherlands. Congress should consider establishing a long-term fiscal plan that includes fiscal rules and targets, such as a debt-to-GDP target, and weigh GAO's key considerations to ensure proper design, implementation, and enforcement of these rules and targets. The Department of the Treasury and other entities provided technical comments, which GAO incorporated as appropriate. For more information, contact Jeff Arkin, at (202) 512-6806 or arkinj@gao.gov.
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  • Priority Open Recommendations: Office of Personnel Management
    In U.S GAO News
    What GAO Found In April 2020, GAO identified 18 priority recommendations for the Office of Personnel Management (OPM). Since then, OPM has implemented four of those recommendations by, among other things, taking actions to collect and share agencies’ information on mission critical occupations as well as hiring data; sharing key practices and lessons learned, including how to address employee misconduct; and implementing a quality assurance review process to re-evaluate security control assessments. We are not adding any new priority recommendations this year. The total number of priority recommendations remaining is 14. These recommendations involve the following areas: improving the federal classification system; making hiring and special pay authorities more effective; improving Enterprise Human Resource Integration payroll data; addressing employee misconduct and improving performance management; and strengthening IT security and management. OPM’s continued attention to these issues could lead to significant improvements in government operations. Why GAO Did This Study Priority open recommendations are the GAO recommendations that warrant priority attention from heads of key departments or agencies because their implementation could save large amounts of money; improve congressional and/or executive branch decision making on major issues; eliminate mismanagement, fraud, and abuse; or ensure that programs comply with laws and funds are legally spent, among other benefits. Since 2015 GAO has sent letters to selected agencies to highlight the importance of implementing such recommendations. For more information, contact Alissa Czyz, Acting Director, Strategic Issues at 202-512-6806 or CzyzA@gao.gov.
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  • Texas Entrepreneur Charged with Spending COVID Relief Funds on Improper Expenses Including Lamborghini and Strip Club
    In Crime News
    A Houston, Texas man has been taken into custody on allegations he fraudulently obtained more than $1.6 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick of the Southern District of Texas.
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  • Virginia Return Preparer Convicted of Tax Fraud
    In Crime News
    A federal jury in Newport News, Virginia, convicted Karl Burden-El Bey (aka Carl L. Burden) Friday of aiding and assisting in the preparation of false tax returns, theft of government funds and failing to file federal income tax returns.
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  • Retirement Security: Debt Increased for Older Americans over Time, but the Implications Vary by Debt Type
    In U.S GAO News
    What GAO Found Americans age 50 or older had significantly more debt in 2016 than in 1989, according to GAO's analysis of Survey of Consumer Finances (SCF) data. Debt. The share of older households with debt was 71 percent in 2016 compared to 58 percent in 1989 (see figure). The median debt amount for older households with debt was about three times higher in 2016 ($55,300) than in 1989 ($18,900 in real 2016 dollars) and the share of older households with home, credit card, and student loan debt was significantly higher in 2016 than in 1989. Debt stress. The median ratio of debt to assets—known as the leverage ratio, a measure of debt stress—for older households was twice as high in 2016 than in 1989. Adverse debt outcomes. Measures of older individuals' adverse debt outcomes, including their share of mortgage and credit card debt that was late by at least 90 days, generally followed economic trends, peaking after the Great Recession of 2007-2009, according to GAO's analysis of Consumer Credit Panel (CCP) data from 2003 to 2019. However, the share of student loan debt that was late was significantly higher for older individuals in 2019 than in 2003. These trends in debt, debt stress, and adverse debt outcomes varied by older Americans' demographic and economic characteristics, including their age, credit score, and state of residence. For example, from 2003 to 2019, individuals in their late 70s often had higher shares of credit card and student loan debt that was late than those aged 50-74. In addition, older individuals with credit scores below 720—including those with subprime, fair, or good credit—had median student loan debt amounts that were more than twice as high in 2019 as in 2003. Further, older individuals in the Southeast and West had much higher median mortgage and student loan debt, as well as student loan delinquency rates, in 2019 than in 2003. Percent of Households Age 50 or Older with Any Debt (Left) and Median Leverage Ratio (Right) for These Households, 1989 to 2016 Note: The bars above and below the lines represent the bounds of 95 percent confidence intervals. While older Americans' overall debt and debt stress decreased as they aged, those in low-income households experienced greater debt stress according to GAO's analysis of Health and Retirement Study (HRS) data, a nationally representative survey that follows the same individuals over time. The share of older households in this cohort that had debt continuously decreased as they aged, from about 66 percent of households in 1992 to 38 percent in 2016, and the median leverage ratio declined from about 19 to 13 percent over this period (see figure). However, low-income households in this cohort consistently had greater levels of debt stress than high-income households. This disparity in debt stress increased as these households aged. Estimated Percent of Households with Any Debt for Those Born in 1931-1941 (Left) and Median Leverage Ratio for Those Households from 1992-2016 (Right) Notes: The lines overlapping the bars represent 95 percent confidence intervals. According to experts GAO interviewed, differences in debt type (that is, credit card versus housing debt) and debt stress levels will have varying effects on the retirement security of different groups. For example, experts noted that credit card debt has negative implications for older Americans' retirement security because credit cards often have high, variable interest rates and are not secured by any assets. In contrast, an increase in mortgage debt may have positive effects on retirement security because a home is generally a wealth-building asset. Experts also said that older individuals with lower incomes and unexpected health expenses are likely to experience greater debt stress, which can negatively affect retirement security. Similarly, experts noted that the increased debt stress faced by low-income households is also faced by non-White households. Further, GAO's analysis of data from the Survey of Consumer Finances found that in 2016, debt stress levels were about two times higher for Black, Hispanic/Latino, and Other/multiple-race households than for White households. Experts GAO interviewed noted it is too early to evaluate the retirement security implications of the recession caused by the COVID-19 pandemic, in part because CARES Act provisions suspend or forbear certain debt payments. However, as with past recessions, the COVID-19-related recession may reveal any economic fragility among older Americans who, for example, lost jobs or cannot work because of the pandemic. Why GAO Did This Study GAO reported in 2019 that an estimated 20 percent of older American households aged 55 or older had less than $22,000 in income in 2016 and GAO reported in 2015 that about 29 percent of older households had neither retirement savings accounts (such as a 401(k) plan) nor a defined benefit plan in 2013. Older Americans held nearly half of the total outstanding debt in 2020—and these debts may affect retirement security. The Census Bureau projects the number of older Americans will increase. GAO was asked to report on debt held by older Americans. This report examines (1) how the types, levels, and outcomes of debt changed for older Americans over time, including for different demographic and economic groups; (2) how the types and levels of debt held by the same older Americans changed as they aged, including for those in different demographic groups; and (3) the implications of these debt trends for the general retirement security of older Americans and their families. GAO analyzed data from two nationally representative surveys–the SCF (1989 through 2016 data) and the HRS (1992 through 2016 longitudinal data)–and nationally representative administrative data from the Federal Reserve Bank of New York's CCP (2003 through 2019). These datasets were the most recent available at the time of GAO's analyses. GAO also reviewed studies and interviewed experts that GAO identified from these studies to further analyze the relationship between debt and retirement security. For more information, contact Kris Nguyen, (202) 512-7215 or NguyenTT@gao.gov.
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    In Crime News
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  • Science & Tech Spotlight: Consumer Electronics Recycling
    In U.S GAO News
    Why This Matters Consumer electronics contain critical materials whose supplies are limited, including gold, platinum, and rare earth metals. Domestic recycling of consumer electronics could extend the supply and reduce the current U.S. reliance on imports. New technologies are becoming available, but electronics recycling is complex and faces challenges, such as narrow profit margins. The Technology What is it? Recycling of consumer electronics—including smartphones, televisions, and computers—generally involves separating high-value metals from plastics and other low-value materials. Precious metals and rare earth metals are the economic driving force for consumer electronic recycling technology. These metals have high market values and limited supplies, and they can be reused across many industries, including the defense and energy sectors. Consumer electronic devices can also contain personally identifiable information (PII), including medical and financial data, which could be improperly disclosed if they are not destroyed prior to recycling. According to a study of selected consumer electronics, about 2.8 million tons were disposed of in the U.S. in 2017, of which about 36 percent was recycled. Figure 1. Selected valuable, hazardous, and digital materials contained within consumer electronics that can be recovered, disposed, or destroyed There is no federal standard requiring consumer electronics recycling. Some states have enacted electronics recycling laws requiring electronics producers to pay fees or contract with businesses to ensure electronic waste is collected for recycling. The U.S. recycles electronics domestically and also exports electronics for recycling abroad. How does it work? The high concentration of valuable material in certain consumer electronics is key to the economic viability of recycling these products. Cell phones, as one example, have more precious metal by weight than raw ore does. According to the EPA, 35,274 pounds of copper, 772 pounds of silver, and 75 pounds of gold can be recovered from a million recycled cell phones. Based on commodity market prices on August 12, 2020, these weights of metals are worth approximately $100,000, $290,000, and $2.1 million for copper, silver, and gold, respectively. In contrast, cathode ray tube (CRT) displays in older televisions and computer monitors have little recycling value, but they contain leaded glass and may be considered hazardous waste. In addition, recovery of certain valuable materials from consumer electronics is limited due to the high costs of technology and processing. Electronics recycling companies disassemble devices by shredding, which also destroys PII, or by hand. These companies then separate valuable materials for reuse (including gold, silver, platinum, and rare earth metals) from toxic materials for disposal (including brominated materials and lead). Traditional methods include burning to remove non-metal parts and separation using strong acids. New separation technologies are being used or piloted to recover precious and rare earth metals. For example, robotic disassembly uses machine learning and computer vision to more rapidly pick and sort items. Another new technology uses ultrasound to speed up the chemical removal of gold from cell phone SIM cards. Figure 2. Emerging separation technologies for recycled electronics Other technologies are emerging, like biometallurgy, which uses microorganisms to separate high-value metals from other materials, such as plastics, glass, and glue. For example, naturally occurring bacteria can oxidize gold in acidic solutions, making it soluble and thus easier to separate from other materials. Other advanced techniques, such as magnetic or electrochemical separation, are showing promise in the laboratory with existing technology. For example, in one study, researchers used ultrasound to dissolve nickel and gold within a SIM card. They then used a magnetic field to separate the dissolved nickel, which is magnetic, from the gold, which is not. Similarly, other techniques use electric fields to separate dissolved metals based on their weight and electric charge. How mature is it? Recycling technology is well established for some traditional single-stream processes, such as aluminum recycling. However, electronic devices are more complex and require disassembly and separation. At least one consumer electronics manufacturer is piloting robotic disassembly for its products. Emerging separation technologies such as ultrasound have come to market in the past decade and are being used. Manual disassembly and shredding are decades old. Biometallurgy is being tested in pilot plants, and new microorganisms are being developed in laboratories to treat electronic waste. Opportunities Increase supply and reduce imports. Recycling could increase the domestic supply of precious and rare earth metals and reduce the current U.S. reliance on overseas sources. Grow the green economy. Developing advanced recycling technologies could promote domestic business and employment. Reduce hazardous practices. A significant amount of recycling currently occurs in the developing world, where methods include open-pit burning. New technology could reduce the use of such methods, which are hazardous to the environment and human health. Lessen environmental impacts. Developing advanced recycling technologies could reduce the environmental impacts of raw ore mining and landfill disposal of hazardous materials such as lead and brominated materials. Challenges Market challenges. Markets for recovered materials may be limited, and the value of recovered materials may not be enough to cover the costs of equipment for collection, sorting, disassembly, and separation. Secure destruction of personal information. Many electronic devices contain PII. Shredding them may effectively destroy PII but may also make high-value material harder to recover. Counterfeit electronic parts. Exported used electronics may serve as a source of counterfeit electronic parts, which, as GAO previously reported, could disrupt parts of the Department of Defense supply chain and threaten the reliability of weapons systems. (See GAO-16-236, linked below.) Rapid technological development. As consumer electronics made with new materials get smaller, new technologies for separation may be needed to recycle valuable materials. Policy Context and Questions With the volume of electronic waste expected to grow, questions include: How can programs to support technological innovation, economic development, and advanced manufacturing be leveraged to promote a more robust domestic electronics recycling industry? What efforts can the federal government, states, and others make to incentivize recycling rather than disposal? What are the potential benefits and challenges of such policies? What strategies can the public and private sectors implement to address the risk that exports of used electronics will contribute to unsafe recycling practices, disclosure of PII, and counterfeit electronics? How can reductions in exports bolster job growth? For more information, contact Karen Howard at (202) 512-6888 or HowardK@gao.gov.
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  • Nuclear Weapons: Action Needed to Address the W80-4 Warhead Program’s Schedule Constraints
    In U.S GAO News
    The National Nuclear Security Administration (NNSA), a separately organized agency within the Department of Energy (DOE), has identified a range of risks facing the W80-4 nuclear warhead life extension program (LEP)—including risks related to developing new technologies and manufacturing processes as well as reestablishing dormant production capabilities. NNSA is managing these risks using a variety of processes and tools, such as a classified risk database. However, NNSA has introduced potential risk to the program by adopting a date (September 2025) for the delivery of the program's first production unit (FPU) that is more than 1 year earlier than the date projected by the program's own schedule risk analysis process (see figure). NNSA and Department of Defense (DOD) officials said that they adopted the September 2025 date partly because the National Defense Authorization Act for fiscal year 2015 specifies that NNSA must deliver the first warhead unit by the end of fiscal year 2025, as well as to free up resources for future LEPs. However, the statute allows DOE to obtain an extension, and, according to best practices identified in GAO's prior work, program schedules should avoid date constraints that do not reflect program realities. Adopting an FPU date more consistent with the date range identified as realistic in the W80-4 program's schedule risk analysis, or justifying an alternative date based on other factors, would allow NNSA to better inform decision makers and improve alignment between schedules for the W80-4 program and DOD's long-range standoff missile (LRSO) program. W80-4 Life Extension Program Phases and Milestone Dates NNSA substantially incorporated best practices in developing the preliminary lifecycle cost estimate for the W80-4 LEP, as reflected in the LEP's weapon design and cost report. GAO assessed the W80-4 program's cost estimate of $11.2 billion against the four characteristics of a high quality, reliable cost estimate: comprehensive, well-documented, accurate, and credible. To develop a comprehensive cost estimate, NNSA instituted processes to help ensure consistency across the program. The program also provided detailed documentation to substantiate its estimate and assumptions. To help ensure accuracy, the cost estimate drew on historic data from prior LEPs. Finally, to support a credible estimate, NNSA reconciled the program estimate with an independent cost estimate. GAO considers a cost estimate to be reliable if the overall assessment ratings for each of the four characteristics are substantially or fully met—as was the case with the W80-4 program's cost estimate in its weapon design and cost report, which substantially met each characteristic. To maintain and modernize the U.S. nuclear arsenal, NNSA and DOD conduct LEPs. In 2014, they began an LEP to produce a warhead, the W80-4, to be carried on the LRSO missile. In February 2019, NNSA adopted an FPU delivery date of fiscal year 2025 for the W80-4 LEP, at an estimated cost of about $11.2 billion over the life of the program. The explanatory statement accompanying the 2018 appropriation included a provision for GAO to review the W80-4 LEP. This report examines, among other objectives, (1) the risks NNSA has identified for the W80-4 LEP, and processes it has established to manage them, and (2) the extent to which NNSA's lifecycle cost estimate for the LEP aligned with best practices. GAO reviewed NNSA's risk management database and other program information; visited four NNSA sites; interviewed NNSA and DOD officials; and assessed the program's cost estimate using best practices established in prior GAO work. GAO is making two recommendations, including that NNSA adopt a W80-4 program FPU delivery date based on the program's schedule risk analysis, or document its justification for not doing so. NNSA generally disagreed with GAO's recommendations. GAO continues to believe that its recommendations are valid, as discussed in the report. For more information, contact Allison B. Bawden at (202) 512-3841 or bawdena@gao.gov.
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  • Offshore Wind Energy: Planned Projects May Lead to Construction of New Vessels in the U.S., but Industry Has Made Few Decisions amid Uncertainties
    In U.S GAO News
    Under the Jones Act, vessels carrying merchandise between two points in the U.S. must be built and registered in the United States. Developers are planning a number of offshore wind projects along the U.S. east coast, where many states have set targets for offshore wind energy production. Stakeholders described two approaches to using vessels to install offshore wind energy projects in the U.S. Either approach may lead to the construction of new vessels that comply with the Jones Act. Under one approach, a Jones Act-compliant wind turbine installation vessel (WTIV) would carry components from a U.S. port to the site and also install the turbines. WTIVs have a large deck, legs that allow the vessel to lift out of the water, and a tall crane to lift and place turbines. Stakeholders told GAO there are currently no Jones Act-compliant vessels capable of serving as a WTIV. One company, however, has announced a plan to build one. Under the second approach, a foreign-flag WTIV would install the turbines with components carried to the site from U.S. ports by Jones Act-compliant feeder vessels (see figure). While some potential feeder vessels exist, stakeholders said larger ones would probably need to be built to handle the large turbines developers would likely use. Example of an Offshore Wind Installation in U.S. Waters Using a Foreign-Flag Installation Vessel and Jones Act-Compliant Feeder Vessels Stakeholders identified multiple challenges—which some federal programs address—associated with constructing and using Jones Act-compliant vessels for offshore wind installations. For example, stakeholders said that obtaining investments in Jones Act-compliant WTIVs—which may cost up to $500 million—has been challenging, in part due to uncertainty about the timing of federal approval for projects. According to officials at the Department of the Interior, which is responsible for approving offshore wind projects, the Department plans to issue a decision on the nation's first large-scale offshore wind project in December 2020. Some stakeholders said that if this project is approved, investors may be more willing to move forward with vessel investments. While stakeholders also said port infrastructure limitations could pose challenges to using Jones Act-compliant vessels for offshore wind, offshore wind developers and state agencies have committed to make port investments. Offshore wind, a significant potential source of energy in the United States, requires a number of oceangoing vessels for installation and other tasks. Depending on the use, these vessels may need to comply with the Jones Act. Because Jones Act-compliant vessels are generally more expensive to build and operate than foreign-flag vessels, using such vessels may increase the costs of offshore wind projects. Building such vessels may also lead to some economic benefits for the maritime industry. A provision was included in statute for GAO to review offshore wind vessels. This report examines (1) approaches to use of vessels that developers are considering for offshore wind, consistent with Jones Act requirements, and the extent to which such vessels exist, and (2) the challenges industry stakeholders have identified associated with constructing and using such vessels to support U.S. offshore wind, and the actions federal agencies have taken to address these challenges. GAO analyzed information on vessels that could support offshore wind, reviewed relevant laws and studies, and interviewed officials from federal agencies and industry stakeholders selected based on their involvement in ongoing projects and recommendations from others. For more information, contact Andrew Von Ah at (202) 512-2834 or vonaha@gao.gov.
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