September 22, 2021

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Michigan Man Sentenced for COVID-19 Relief Fraud

9 min read
<div>A Michigan man was sentenced today to 32 months in federal prison for fraudulently seeking nearly $1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.</div>
A Michigan man was sentenced today to 32 months in federal prison for fraudulently seeking nearly $1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

More from: September 14, 2021

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  • DOD Financial Management: Actions Needed to Address Deficiencies in Controls over Army Active Duty Military Payroll
    In U.S GAO News
    What GAO FoundGAO identified deficiencies in the design of key control procedures relied on by the Army and the Defense Finance and Accounting Service-Indianapolis (DFAS-IN) to detect errors in payroll disbursements to active duty Army military personnel. Specifically, GAO found that the Army's procedures for reviewing Unit Commander Finance Reports (UCFR) do not (1) provide for monitoring of required UCFR reviews to better assure detection of payroll errors, (2) require reporting on completed UCFR reviews in all cases, and (3) clearly establish time frames for completing and reporting on UCFR reviews. GAO's analysis of DFAS data on military pay debts and Army investigations of potential fraud completed over the past 2 years identified numerous instances of the effect of errors or irregularities in Army active duty payroll disbursements that went undetected for lengthy periods of time, including some that were not detected for up to 2 years or until the soldier left the Army. For example:A soldier who separated from the Army in 2009 continued to receive active duty pay totaling about $185,000 until 2011.A soldier who was absent without leave from January 2010 to September 2011 received military pay of $33,268 to which she was not entitled.A soldier under investigation for possible fraud allegedly received over $34,000 in paratrooper and language proficiency pay but did not have a documented record of jumps performed or up-to-date proficiency certifications.GAO's analysis determined that the Army could reduce its risk of lengthy delays in detecting and correcting pay errors with more stringent UCFR monitoring and reporting requirements.GAO also found that DFAS and the Army have procedures and metrics in place that focus on the timeliness of manual processing and payroll adjustments for error corrections. However, they do not have procedures and metrics to enable them to gather data on active duty pay errors that were related to causes other than timeliness, such as over- and underpayments, data entry errors, and unauthorized payments. Further, the design of existing Defense Joint Military Pay System-Active Component and DFAS-IN Case Management System procedures for transaction processing and error correction did not provide for monitoring to capture data on all types of pay errors and their causes that would be useful in identifying the extent to which there are any additional systemic payroll control weaknesses. For example, an Army National Guard colonel deployed on active duty to Afghanistan reported that he experienced financial hardship when his military pay was stopped for 1-1/2 months. The absence of data on the extent and causes of all types of Army active duty military payroll errors impairs the Army's ability to identify and address any adverse trends that may indicate the existence of other systemic control weaknesses. Overall, the control deficiencies that GAO identified increase the risk that the nearly $47 billion in reported fiscal year 2011 Army active duty military payroll includes Army servicemembers who received pay to which they were not entitled and others who did not receive the full pay they were due. Further, to the extent that errors in Army active duty pay are not identified and addressed in a timely manner, they can have a negative effect on soldier welfare and, ultimately, could erode soldiers' focus on their Army mission.Why GAO Did This StudyIn March 2012, GAO reported on challenges that DOD and the Army face in achieving audit readiness with respect to the over $45 billion in reported fiscal year 2010 Army active duty military payroll disbursements. In performing that work, GAO identified indications of possible weaknesses in selected processes, systems, and controls relied on to reasonably assure the validity and accuracy of reported Army active duty military payroll that were beyond the scope of that audit. GAO subsequently completed work on those issues and is presenting the results in this report. GAO (1) assessed the design of key controls for payroll accuracy and (2) determined the extent to which the Army and DFAS-IN have monitoring controls to identify and address any systemic weaknesses. GAO compared selected Army and DFAS-IN processes, systems, and controls for assuring payroll accuracy to applicable internal control standards and to applicable provisions of law, regulations, and policies and procedures. GAO also interviewed officials and examined related data and information.
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  • Department of State: Foreign Service Midlevel Staffing Gaps Persist Despite Significant Increases in Hiring
    In U.S GAO News
    What GAO FoundThe Department of State (State) faces persistent experience gaps in overseas Foreign Service positions, particularly at the midlevels, and these gaps have not diminished since 2008. In fiscal years 2009 and 2010, State increased the size of the Foreign Service by 17 percent. However, these new hires will not have the experience to reach midlevels until fiscal years 2014 and 2015. GAO found that 28 percent of overseas Foreign Service positions were either vacant or filled by upstretch candidates—officers serving in positions above their grade—as of October 2011, a percentage that has not changed since 2008. Midlevel positions represent the largest share of these gaps. According to State officials, the gaps have not diminished because State increased the total number of overseas positions in response to increased needs and emerging priorities. State officials noted the department takes special measures to fill high-priority positions, including those in Afghanistan, Iraq, and Pakistan.State has taken steps to increase its reliance on Civil Service employees and retirees, as well as expand mentoring, to help address midlevel experience gaps overseas; however, State lacks a strategy to guide these efforts. State is currently implementing a pilot program to expand overseas assignments for Civil Service employees. Efforts to expand the limited number of these assignments must overcome some key challenges, such as addressing new gaps when Civil Service employees leave their headquarters positions and identifying qualified Civil Service applicants to fill overseas vacancies. State also hires retirees on a limited basis for both full-time and short-term positions. For example, State used limited congressional authority to offer dual compensation waivers to hire 57 retirees in 2011. As a step toward mitigating experience gaps overseas, State began a pilot program offering workshops that include mentoring for first-time supervisors. State acknowledges the need to close midlevel Foreign Service gaps, but it has not developed a strategy to help ensure that the department is taking full advantage of available human capital flexibilities and evaluating the success of its efforts to address these gaps.Why GAO Did This StudyIn 2009, GAO reported on challenges that State faced in filling its increasing overseas staffing needs with sufficiently experienced personnel and noted that persistent Foreign Service staffing and experience gaps put diplomatic readiness at risk. State is currently undertaking a new hiring plan, known as “Diplomacy 3.0,” to increase the size of the Foreign Service by 25 percent to close staffing gaps and respond to new diplomatic priorities. However, fiscal constraints are likely to delay the plan’s full implementation well beyond its intended target for completion in 2013. In addition, State’s first Quadrennial Diplomacy and Development Review highlighted the need to find ways to close overseas gaps. GAO was asked to assess (1) the extent to which State’s overseas midlevel experience gaps in the Foreign Service have changed since 2008 and (2) State’s efforts to address these gaps. GAO analyzed State’s personnel data; reviewed key planning documents, including the Five Year Workforce Plan; and interviewed State officials in Washington, D.C., and at selected posts.
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  • Whistleblower Protection: Actions Needed to Strengthen Selected Intelligence Community Offices of Inspector General Programs
    In U.S GAO News
    The six Intelligence Community (IC)-element Offices of Inspectors General (OIG) that GAO reviewed collectively received 5,794 complaints from October 1, 2016, through September 30, 2018, and opened 960 investigations based on those complaints. Of the 960 investigations, IC-element OIGs had closed 873 (about 91 percent) as of August 2019, with an average case time ranging from 113 to 410 days to complete. Eighty-seven cases remained open as of August 2019, with the average open case time being 589 days. The number of investigations at each IC-element OIG varied widely based on factors such as the number of complaints received and each OIG's determination on when to convert a complaint into an investigation. An OIG may decide not to convert a complaint into an investigation if the complaint lacks credibility or sufficient detail, or may refer the complainant to IC-element management or to another OIG if the complaint involves matters that are outside the OIG's authority to investigate. Four of the IC-element OIGs—the Central Intelligence Agency (CIA) OIG, the Defense Intelligence Agency (DIA) OIG, the National Reconnaissance Office (NRO) OIG, and the National Security Agency (NSA) OIG—have a 180-days or fewer timeliness objective for their investigations. The procedures for the remaining two OIGs—the Inspector General of the Intelligence Community (ICIG) and the National Geospatial-Intelligence Agency (NGA) OIG—state that investigations should be conducted and reported in a timely manner. Other than those prescribed by statute, the ICIG and NGA OIG have not established timeliness objectives for their investigations. Establishing timeliness objectives could improve the OIGs' ability to efficiently manage investigation time frames and to inform potential whistleblowers of these time frames. All of the selected IC-element OIG investigations units have implemented some quality assurance standards and processes, such as including codes of conduct and ethical and professional standards in their guidance. However, the extent to which they have implemented processes to maintain guidance, conduct routine quality assurance reviews, and plan investigations varies (see table). Implementation of Quality Assurance Standards and Practices by Selected IC-element OIG Investigations Units   ICIG CIA OIG DIA OIG NGA OIG NRO OIG NSA OIG Regular updates of investigation guidance or procedures — — — ✓ — ✓ Internal quality assurance review routinely conducted — — ✓ — — — External quality assurance review routinely conducted — ✓ — — — — Required use of documented investigative plans ✓ ✓ ✓ ✓ — ✓ Legend: ✓ = standard or practice implemented; — = standard or practice not implemented. Source: GAO analysis of IC-element OIG investigative policies and procedures. | GAO-20-699 The Council of Inspectors General on Integrity and Efficiency's (CIGIE) Quality Standards for Investigations states that organizations should facilitate due professional care by establishing written investigative policies and procedures via handbooks, manuals, or similar mechanisms that are revised regularly according to evolving laws, regulations, and executive orders. By establishing processes to regularly update their procedures, the ICIG, CIA OIG, DIA OIG, and NRO OIG could better ensure that their policies and procedures will remain consistent with evolving laws, regulations, Executive Orders, and CIGIE standards. Additionally, CIGIE's Quality Standards for Federal Offices of Inspector General requires OIGs to establish and maintain a quality assurance program. The standards further state that internal and external quality assurance reviews are the two components of an OIG's quality assurance program, which is an evaluative effort conducted by reviewers independent of the unit being reviewed to ensure that the overall work of the OIG meets appropriate standards. Developing quality assurance programs that incorporate both types of reviews, as appropriate, could help ensure that the IC-element OIGs adhere to OIG procedures and prescribed standards, regulations, and legislation, as well as identify any areas in need of improvement. Further, CIGIE Quality Standards for Investigations states that case-specific priorities must be established and objectives developed to ensure that tasks are performed efficiently and effectively. CIGIE's standards state that this may best be achieved, in part, by preparing case-specific plans and strategies. Establishing a requirement that investigators use documented investigative plans for all investigations could facilitate NRO OIG management's oversight of investigations and help ensure that investigative steps are prioritized and performed efficiently and effectively. CIA OIG, DIA OIG, and NGA OIG have training plans or approaches that are consistent with CIGIE's quality standards for investigator training. However, while ICIG, NRO OIG, and NSA OIG have basic training requirements and tools to manage training, those OIGs have not established training requirements for their investigators that are linked to the requisite knowledge, skills, and abilities, appropriate to their career progression, and part of a documented training plan. Doing so would help the ICIG, NRO OIG, and NSA OIG ensure that their investigators collectively possess a consistent set of professional proficiencies aligned with CIGIE's quality standards throughout their entire career progression. Most of the IC-element OIGs GAO reviewed consistently met congressional reporting requirements for the investigations and semiannual reports GAO reviewed. The ICIG did not fully meet one reporting requirement in seven of the eight semiannual reports that GAO reviewed. However, its most recent report, which covers April through September 2019, met this reporting requirement by including statistics on the total number and type of investigations it conducted. Further, three of the six selected IC-element OIGs—the DIA, NGA, and NRO OIGs—did not consistently document notifications to complainants in the reprisal investigation case files GAO reviewed. Taking steps to ensure that notifications to complainants in such cases occur and are documented in the case files would provide these OIGs with greater assurance that they consistently inform complainants of the status of their investigations and their rights as whistleblowers. Whistleblowers play an important role in safeguarding the federal government against waste, fraud, and abuse. The OIGs across the government oversee investigations of whistleblower complaints, which can include protecting whistleblowers from reprisal. Whistleblowers in the IC face unique challenges due to the sensitive and classified nature of their work. GAO was asked to review whistleblower protection programs managed by selected IC-element OIGs. This report examines (1) the number and time frames of investigations into complaints that selected IC-element OIGs received in fiscal years 2017 and 2018, and the extent to which selected IC-element OIGs have established timeliness objectives for these investigations; (2) the extent to which selected IC-element OIGs have implemented quality standards and processes for their investigation programs; (3) the extent to which selected IC-element OIGs have established training requirements for investigators; and (4) the extent to which selected IC-element OIGs have met notification and reporting requirements for investigative activities. This is a public version of a sensitive report that GAO issued in June 2020. Information that the IC elements deemed sensitive has been omitted. GAO selected the ICIG and the OIGs of five of the largest IC elements for review. GAO analyzed time frames for all closed investigations of complaints received in fiscal years 2017 and 2018; reviewed OIG policies, procedures, training requirements, and semiannual reports to Congress; conducted interviews with 39 OIG investigators; and reviewed a selection of case files for senior leaders and reprisal cases from October 1, 2016, through March 31, 2018. GAO is making 23 recommendations, including that selected IC-element OIGs establish timeliness objectives for investigations, implement or enhance quality assurance programs, establish training plans, and take steps to ensure that notifications to complainants in reprisal cases occur. The selected IC-element OIGs concurred with the recommendations and discussed steps they planned to take to implement them. For more information, contact Brenda S. Farrell at (202) 512-3604, farrellb@gao.gov or Brian M. Mazanec at (202) 512-5130, mazanecb@gao.gov.
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  • Drug Safety: FDA’s Future Inspection Plans Need to Address Issues Presented by COVID-19 Backlog
    In U.S GAO News
    Fiscal year 2015 was the first time that the Food and Drug Administration (FDA) conducted more inspections of foreign drug manufacturers than domestic manufacturers, with the majority conducted in China and India. However, in June 2020, GAO reported that from fiscal year 2016 through fiscal year 2018, both foreign and domestic inspections decreased, in part due to staffing vacancies. While foreign inspections increased in 2019, since March 2020, FDA has largely paused foreign and domestic inspections due to the Coronavirus Disease 2019 (COVID-19) pandemic, conducting only those deemed mission critical. In January 2021, GAO reported that FDA conducted three foreign inspections in fiscal year 2020 following the pause—significantly less than in recent years. Number of FDA-Conducted Foreign Drug Manufacturing Establishment Inspections, Fiscal Years 2019–2020, by Month FDA has used alternative inspection tools to maintain some oversight of drug manufacturing quality while inspections are paused. These tools include relying on inspections conducted by foreign regulators, requesting and reviewing records and other information, and sampling and testing drugs. FDA has determined that inspections conducted by certain European regulators are equivalent to and can be substituted for an FDA inspection. Other tools provide useful information but are not equivalent. In addition, FDA was unable to complete more than 1,000 of its planned fiscal year 2020 inspections and will likely face a backlog of inspections in future years. In January 2021, GAO recommended that FDA ensure that inspection plans for future fiscal years respond to the issues presented by the backlog and that FDA fully assess the agency's alternative inspection tools. FDA concurred with both recommendations. Even before the COVID-19 pandemic, FDA faced persistent challenges conducting foreign inspections. GAO found in December 2019 that there continued to be vacancies among the investigators who conduct foreign inspections. GAO further found that FDA's practice of preannouncing foreign inspections up to 12 weeks in advance could give manufacturers the opportunity to fix problems ahead of the inspection and raised questions about their equivalence to domestic inspections. In light of COVID-19, FDA is now preannouncing both foreign and domestic inspections for the safety of its staff and manufacturers. GAO also found that language barriers can create challenges during foreign inspections as FDA generally relies on the establishment for translation services. The outbreak of COVID-19 has called greater attention to the United States' reliance on foreign drug manufacturers. FDA reports that 74 percent of establishments manufacturing active ingredients and 54 percent of establishments manufacturing finished drugs for the U.S. market were located overseas, as of May 2020. FDA is responsible for overseeing the safety and effectiveness of all drugs marketed in the United States, regardless of where they are produced, and it conducts inspections of both foreign and domestic manufacturing establishments. GAO has had long-standing concerns about FDA's ability to oversee the increasingly global pharmaceutical supply chain, an issue highlighted in GAO's High Risk Series since 2009. This statement is largely based on GAO's Drug Manufacturing Inspections enclosure in its January 2021 CARES Act report, as well as GAO's December 2019 and June 2020 testimonies. Specifically, it discusses (1) the number of FDA's foreign inspections, (2) FDA's response to the COVID-19 pandemic pause in inspections, and (3) persistent foreign inspection challenges. For that work, GAO examined FDA data from fiscal years 2012 through 2020, interviewed FDA investigators, and reviewed documents related to drug oversight during the COVID-19 pandemic, among other things. For more information, contact Mary Denigan-Macauley at (202) 512-7114 or deniganmacauleym@gao.gov.
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  • COVID-19: Brief Update on Initial Federal Response to the Pandemic
    In U.S GAO News
    As of August 20, 2020, the U.S. had over 5.5 million cumulative reported cases of COVID-19, and 158,000 reported deaths, according to federal agencies. The country also continues to experience serious economic repercussions and turmoil. Four relief laws, including the CARES Act, were enacted between March and July 2020 to provide appropriations for the response to COVID-19. The CARES Act includes a provision for GAO to report bimonthly on its ongoing monitoring and oversight efforts related to COVID-19. This second report examines federal spending on the COVID-19 response; indicators for monitoring public health and the economy; and the status of matters for congressional consideration and recommendations from GAO’s June 2020 report (GAO-20-625). GAO reviewed data through June 30, 2020 (the latest available) from USAspending.gov, a government website with data from government agencies. GAO also obtained, directly from the agencies, spending data, as of July 31, 2020, for the six largest spending areas, to the extent available. To develop the public health indicators, GAO reviewed research and federal guidance. To understand economic developments, GAO reviewed data from federal statistical agencies, the Federal Reserve, and Bloomberg Terminal, as well as economic research. To update the status of matters for congressional consideration and recommendations, GAO reviewed agency and congressional actions. In response to the national public health and economic threats caused by COVID-19, four relief laws making appropriations of about $2.6 trillion had been enacted as of July 31, 2020. Overall, federal obligations and expenditures government-wide of these COVID-19 relief funds totaled $1.5 trillion and $1.3 trillion, respectively, as of June 30, 2020. GAO also obtained preliminary data for six major spending areas as of July 31, 2020 (see table). COVID-19 Relief Appropriations, Obligations, and Expenditures for Six Major Spending Areas, as of July 2020 Spending area Appropriationsa ($ billions) Preliminary obligationsb ($ billions) Preliminary expendituresb ($ billions) Business Loan Programs 687.3 538.1 522.2c Economic Stabilization and Assistance to Distressed Sectors 500.0 30.4 19.2c Unemployment Insurance 376.4 301.1 296.8 Economic Impact Payments 282.0 273.5 273.5 Public Health and Social Services Emergency Fund 231.7 129.6 95.9 Coronavirus Relief Fund 150.0 149.5 149.5 Total for six spending areas 2,227.4 1,422.2 1,357.0 Source: GAO analysis of data from the Department of the Treasury, USAspending.gov, and applicable agencies. | GAO-20-708 aCOVID-19 relief appropriations reflect amounts appropriated under the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134 Stat. 146; Families First Coronavirus Response Act, Pub. L. No. 116-127, 134 Stat. 178 (2020); CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020); and Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620 (2020). These data are based on appropriations warrant information provided by the Department of the Treasury as of July 31, 2020. These amounts could increase in the future for programs with indefinite appropriations, which are appropriations that, at the time of enactment, are for an unspecified amount. In addition, this table does not represent transfers of funds that federal agencies may make between appropriation accounts or transfers of funds they may make to other agencies. bObligations and expenditures data for July 2020 are based on preliminary data reported by applicable agencies. cThese expenditures relate to the loan subsidy costs (the loan’s estimated long-term costs to the United States government). The CARES Act included a provision for GAO to assess the impact of the federal response on public health and the economy. The following are examples of health care and economic indicators that GAO is monitoring. Health care. GAO’s indicators are intended to assess the nation’s immediate response to COVID-19 as it first took hold, gauge its recovery from the effects of the pandemic over the longer term, and determine the nation’s level of preparedness for future pandemics, involving subsequent waves of either COVID-19 or other infectious diseases. For example, to assess the sufficiency of testing—a potential indicator of the system’s response and recovery—GAO suggests monitoring the proportion of tests in a given population that are positive for infection. A higher positivity rate can indicate that testing is not sufficiently widespread to find all cases. That is higher positivity rates can indicate that testing has focused on those most likely to be infected and seeking testing because they have symptoms, and may not be detecting COVID-19 cases among individuals with no symptoms. Although there is no agreed-upon threshold for the test positivity rate, governments should target low positivity rates. The World Health Organization recommends a test positivity rate threshold of less than 5 percent over a 14-day period. As of August 12, 2020, 12 states and the District of Columbia had met this threshold (38 states had not). Resolve to Save Lives, another organization, recommends a threshold of less than 3 percent over a 7-day period, and 11 states and the District of Columbia had met this threshold (39 states had not) as of August 12, 2020. GAO also suggests monitoring mortality from all causes compared to historical norms as an indicator of the pandemic’s broad effect on health care outcomes. Mortality rates have tended to be consistent from year to year. This allows an estimation of how much mortality rose with the onset of the pandemic, and provides a baseline by which to judge a return to pre-COVID levels. According to Centers for Disease Control and Prevention data, about 125,000 more people died from all causes January 1–June 13 than would normally be expected (see figure). CDC Data on Higher-Than-Expected Weekly Mortality, January 1 through June 13, 2020 Note: The figure shows the number of deaths from all causes in a given week that exceeded the upper bound threshold of expected deaths calculated by CDC on the basis of variation in mortality experienced in prior years. Changes in the observed numbers of deaths in recent weeks should be interpreted cautiously as this figure relies on provisional data that are generally less complete in recent weeks. Data were accessed on July 16, 2020. Economy. GAO updated information on a number of indicators to facilitate ongoing and consistent monitoring of areas of the economy supported by the federal pandemic response, in particular the COVID-19 relief laws. These indicators suggest that economic conditions—including for workers, small businesses, and corporations—have improved modestly in recent months but remain much weaker than prior to the pandemic. In June and July initial regular unemployment insurance (UI) claims filed weekly averaged roughly 1.4 million (see figure), which was six and a half times higher than average weekly claims in 2019, but claims have decreased substantially since mid-March, falling to 971,000 in the week ending August 8, 2020. Increasing infections in some states and orders to once again close or limit certain businesses are likely to pose additional challenges for potentially fragile economic improvements, especially in affected sectors, such as the leisure and hospitality sector. National Weekly Initial Unemployment Insurance Claims, January 2019–July 2020 Note: See figure 5 in the report. As GAO reported in June, consistent with the urgency of responding to serious and widespread health issues and economic disruptions, federal agencies gave priority to moving swiftly where possible to distribute funds and implement new programs designed to help small businesses and the newly unemployed, for example. However, such urgency required certain tradeoffs in achieving transparency and accountability goals. To make mid-course corrections, GAO made three recommendations to federal agencies: To reduce the potential for duplicate payments from the Paycheck Protection Program (PPP)—a program that provides guaranteed loans through lenders to small businesses—and unemployment insurance, GAO recommended that the Department of Labor (DOL), in consultation with the Small Business Administration (SBA) and the Department of the Treasury (Treasury), immediately provide information to state unemployment agencies that specifically addresses PPP loans, and the risk of improper unemployment insurance payments. DOL issued guidance on August 12, 2020, that, among other things, clarified that individuals working full-time and being paid through PPP are not eligible for UI. To recoup economic impact payments totaling more than $1.6 billion sent to decedents, GAO recommended that the Internal Revenue Service (IRS) consider cost-effective options for notifying ineligible recipients of economic impact payments how to return payments. IRS has taken steps to address this recommendation. According to a Treasury official, nearly 70 percent of the payments sent to decedents have been recovered. However, GAO was unable to verify that amount before finalizing work on this report. GAO is working with Treasury to determine the number of payments sent to decedents that have been recovered. Treasury was considering sending letters to request the return of remaining outstanding payments but has not moved forward with this effort because, according to Treasury, Congress is considering legislation that would clarify or change payment eligibility requirements. To reduce the potential for fraud and ensure program integrity, 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 has begun developing oversight plans for PPP but has not yet finalized or implemented them. In addition, to improve the government’s response efforts, GAO suggested three matters for congressional consideration: GAO urged Congress to take legislative action to require the Department of Transportation (DOT) to work with relevant agencies and stakeholders, such as HHS, the Department of Homeland Security (DHS), and international organizations, to develop a national aviation-preparedness plan to ensure safeguards are in place to limit the spread of communicable disease threats from abroad, while also minimizing any unnecessary interference with travel and trade. In early July 2020, DOT collaborated with HHS and DHS to issue guidance to airports and airlines for implementing measures to mitigate the public health risks associated with COVID-19, but it has not developed a preparedness plan for future communicable disease threats. DOT has maintained that HHS and DHS should lead such planning efforts as they are responsible for communicable disease response and preparedness planning, respectively. In June 2020, HHS stated that it is not in a position to develop a national aviation-preparedness plan as it does not have primary jurisdiction over the entire aviation sector or the relevant transportation expertise. In May 2020, DHS stated that it had reviewed its existing plans for pandemic preparedness and response activities and determined it is not best situated to develop a national aviation-preparedness plan. Without such a plan, the U.S. will not be as prepared to minimize and quickly respond to future communicable disease events. GAO also urged Congress to amend the Social Security Act to explicitly allow the Social Security Administration (SSA) to share its full death data with Treasury for data matching to help prevent payments to ineligible individuals. In June 2020, the Senate passed S.4104, referred to as the Stopping Improper Payments to Deceased People Act. If enacted, the bill would allow SSA to share these data with Treasury's Bureau of the Fiscal Service to avoid paying deceased individuals. Finally, GAO urged Congress to use GAO's Federal Medical Assistance Percentage (FMAP) formula for any future changes to the FMAP—the statutory formula according to which the federal government matches states' spending for Medicaid services—during the current or any future economic downturn. Congress has taken no action thus far on this issue. GAO incorporated technical comments received the Departments of Labor, Commerce, Health and Human Services, Transportation, and the Treasury; the Federal Reserve; Office of Management and Budget; and Internal Revenue Service. The Small Business Administration commented that GAO did not include information on actions taken and controls related to its loan forgiveness program or its plans for loan reviews. GAO plans to provide more information on these topics in its next CARES Act report. For more information, contact A. Nicole Clowers at (202) 512-7114 or clowersa@gao.gov.
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