Blog

We work with data every day and know that it can be confusing and complicated.  So, we’ve launched a new feature: Data Stories to tell the story of one data point and why it matters.

Millions of Americans have struggled to pay rent during the pandemic, and now face the possibility of eviction. To help meet this need, Congress created the Emergency Rental Assistance program in December 2020, making $24 billion available to state and local governments to help households pay rent or utilities. 

Image

 

The PRAC’s Data Sharing Working Group recently collaborated with subject matter experts from government agencies in the United States, the United Kingdom, and Australia to share the data tools and techniques they use to help protect pandemic relief dollars. 

• In the United Kingdom, the Centre for Expertise for Counter Fraud found high-risk business loans and shared that data with lenders who are using it to investigate for potential fraud.  


• Australian government agencies are sharing data on stolen identities to protect victims and prevent thieves from stealing funds

The Inspectors General (IG) community is committed to holding those who defraud the American public accountable. Offices of Inspectors General (OIGs) and their investigators have been central in bringing charges against 250 of the 474 who allegedly defrauded the Paycheck Protection Program, Economic Injury Disaster Loan Program, and Unemployment Insurance.

Expansion of unemployment programs and the easing of some eligibility requirements under the CARES Act have led to increased fraud – especially identity theft. Some people who would not have normally been eligible to receive regular unemployment benefits became eligible for Pandemic Unemployment Assistance (PUA). In addition, U.S. Department of Labor rules allowed people to receive benefits prior to their filing claims. 

The Department of Labor’s (DOL) budget increased significantly in FY2020, due in large part to additional funding for programs created or augmented due to COVID-19. As the office responsible for overseeing these funds – $400 billion for 2020 – the DOL Office of Inspector General (DOL-OIG) created a Pandemic Rapid Response Team to combat fraud, waste, and abuse. What makes this Rapid Response Team unique is its multi-disciplinary approach to oversight. With members from multiple offices across the OIG – Investigations, Audits, Congressional and Public Relations, Legal Services, and Management and Policy – the team shares information and applies discoveries made more rapidly, while implementing the DOL-OIG’s Pandemic Response Oversight Plan. The results are impressive: since the pandemic started, the DOL-OIG has opened more than 3,000 investigative matters on unemployment insurance (UI) fraud, a staggering increase over the average 100 UI cases per year. In addition, the DOL-OIG has published 11 audits and other reports including two Alert Memos highlighting critical findings in UI program assessments. The team’s agile approach means key findings are shared as they are discovered, rather than waiting until a full report is finalized to share them. In addition, the team quickly developed recommendations to Congress based on vulnerabilities the DOL-OIG discovered relating to self-certification for UI benefits, the reason for many UI investigations. And, because of the team’s rapid information sharing and trend monitoring capabilities, DOL-OIG has already published several fraud alerts advising the public of multiple fraud scams. To learn more about DOL-OIG investigations, audits, reports, and fraud alerts, visit the DOL-OIG Pandemic Response portal.

The Internal Revenue Service has been sending out the second round of stimulus payments that were  part of the Coronavirus Response and Relief Supplemental Act of 2021.  Some Facts about Stimulus Payments What are the economic impact payments?  The stimulus payments are refundable tax credits, which means your next tax bill will be reduced by the amount of the stimulus you receive. For example, if you receive $600 and owe $500 in taxes, the federal government will refund $100 to you.  Additionally, you will not pay income taxes on the stimulus, nor will it reduce your tax refund or increase the amount you owe.  Who is eligible to receive a stimulus payment: U.S. citizens and resident aliens who are not being claimed as a dependent on another’s income tax return.  Single adults who reported a 2019 tax return with an adjusted gross income of $75,000 or less are eligible to receive $600. Married couples who filed jointly with an adjusted gross income of up to $150,000 will qualify to receive $1,200.  Families with children under 17 will receive an additional $600 for each child.  How to receive the payment If you filed an electronic tax return in 2019 and provided bank account information, or you receive Social Security, the stimulus payment will be automatically deposited into your account. Anyone who received the first round of stimulus in 2020 but don’t qualify for a  direct deposit will receive a check or, in some instances, a debit card.   If you didn't get the full Economic Impact Payment, you may be eligible to claim the Recovery Rebate Credit.  If you haven’t received your check or direct deposit, visit Get My Payment to check the status. The data is updated every night.  If a deceased member of your family received a stimulus check, you can find instructions on how to return the payment at the IRS. Find more information at IRS Frequently Asked Questions. 

The Food and Drug Administration has approved coronavirus vaccines for distribution, and scammers around the world are trying to lure you into falling victim to their fraudulent schemes.  Protect yourself and your loved ones from these potential scams.  Recognize the red flags: You are asked to pay out of pocket to get a vaccine. You are asked to pay to put your name on a waiting list to get early access to the vaccine. You receive texts, emails, or robocalls asking you for your social security number, banking, or credit card numbers to receive a vaccine or sign up to get a vaccine.  Advertisements on social media for COVID-19 vaccines. Websites offering to sell you a vaccine.  It is important to check with your health care provider before paying for or receiving any COVID-19 treatment.  Find more information about how to recognize, avoid, and report COVID-19 vaccine scams on these websites:  Health and Human Services  Food and Drug Administration Federal Trade Commission    Homeland Security Investigations

The U.S. Department of the Treasury (Treasury) made $150 billion in Coronavirus Relief Funds (CRF) available to states, eligible local governments, Tribal governments, the District of Columbia, and the U.S. Territories. These prime recipients are spending the money on necessary expenses due to the impact of the pandemic. Follow the money from the prime recipients to their sub-recipients and see a map that shows where the money has been spent. NOTE: We display the data as we receive it, and do not change, alter, or add to it.  Here are some important facts:  The CRF was established in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  Prime recipients must use CRF funds to cover expenses that:  Are necessary costs due to the public health emergency, such as meeting payroll expenses for public safety and public health employees responding to the pandemic. Occurred between March 1 and December 30, 2020. The CARES Act gave the Treasury Inspector General (OIG) the responsibility to monitor CRF funds and request the return of any funds that are not spent according to the law. The IG decided that to carry out its oversight responsibilities, it would require prime recipients to submit reports to the IG detailing how the prime recipient and their sub-recipients are spending the money.  The IG required the 760 recipients that received more than $150,000 to submit reports on their sub-recipients. The prime recipients combined any payments to sub-recipients of less than or equal to $50,000 into one report and did not supply identifying information about those organizations or individuals.   Prime recipients distributed payment to their sub-recipients through contracts, grants, loans, transfers, and direct payments.  The transfers allow one government to simply transfer funding to another governmental entity (for example, the state of Mississippi to the city of Biloxi).  Some limitations to the data to be aware of are:  35 prime recipients with thousands of sub-recipients plan to submit reports when the prime recipients can bulk upload the reports instead of submitting them manually, which they will be able to do in December 2020. We will display the data in January  2021. For now, the money these prime recipients received is displayed but the sub-award amount is displayed at $0 and the number of sub-recipients is listed as 0.  Our data visualizations display prime recipient data for Tribal governments but the money the Tribes distributed to sub-recipients is not yet publicly available.  For more information about the CRF and prime recipient reporting visit the U.S. Department of the Treasury.  

Two different pandemic response programs used self-certification by applicants as a primary requirement to determine eligibility and experienced increased fraud due to that requirement. The Small Business Administration (SBA) and Department of Labor (DOL) Offices of Inspectors General (OIG) found in recent reports that self-certification is a major fraud risk that cuts across program and agency boundaries. As a result, businesses and individuals may have improperly received pandemic response funds, in effect reducing the total amount of funds available for those businesses and individual economically impacted by the pandemic. The two OIGs have both identified increased fraud risk from self-certification requirements in pandemic response programs. The SBA’s Economic Injury Disaster Loans (EIDL) and advance grants program and DOL’s Pandemic Unemployment Assistance (PUA) program only required that applicants confirmed that they met the eligibility requirements. Without additional requirements or controls to corroborate and validate that applicants were eligible, these programs are vulnerable to a high risk of fraud. Validating self-reported information is a key fraud risk management leading practice.  GAO’s Framework for Managing Fraud Risks in Federal Programs calls for agencies to take steps to verify reported information, particularly self-reported data and other key data necessary to determine eligibility for enrolling in programs or receiving benefits.  What SBA OIG Found: Economic Injury Disaster Loans and Advance Grants To be eligible for an EIDL or an advance grant, an applicant had to be in business on January 31, 2020. To verify eligibility, SBA only required an applicant to self-certify the “Date of Business Established” instead of program officials independently verifying the business establishment date using the Employer Identification Number registration date. As a result, SBA OIG found that SBA approved 22,706 COVID-19 EIDL applications totaling $917.7 million and 45,385 advance grants totaling $135.1 million to applicants with registration dates of February 1, 2020 or later. In total, SBA approved nearly $1.1 billion to potentially ineligible applicants. In SBA OIG’s report issued on October 28, 2020,  SBA senior leaders only partially agreed to the OIG’s recommendation to improve the controls to verify the date of establishment for businesses seeking an EIDL or advance grant. What DOL OIG Found: Pandemic Unemployment Assistance The CARES Act expanded unemployment insurance eligibility to individuals not typically eligible by allowing for up to 39 weeks of benefits through the PUA program. To be eligible, individuals were required to self-certify that they were able and available to work but unemployed due to a COVID-19 related reason. In its report issued on October 21, 2020, DOL OIG found that states had challenges implementing the program and detecting and deterring fraud, despite the processes in place for claimants to self-certify they met eligibility requirements for PUA benefits. Specifically, states cited the PUA self-certification requirement as a top fraud vulnerability. As of July 8, 2020, PUA benefits disbursements totaled nearly $110 billion, which includes an estimated $61.5 billion for the Federal Pandemic Unemployment Compensation portion of the PUA program. DOL OIG has previously identified high fraud risk in unemployment insurance programs, which had an improper payment rate of around 10 percent. With the influx of additional CARES Act funds, the improper payment rate could increase into the billions, based on DOL OIG’s historical rate of improper payments. DOL OIG has questioned relying on self-certification to approve applications with senior leaders on multiple occasions; however, DOL senior leaders maintain their position that the CARES Act only requires self-certification and does not require proof of employment. The CARES Act expanded unemployment insurance eligibility to individuals not typically eligible by allowing for up to 39 weeks of benefits through the PUA program. To be eligible, individuals were required to self-certify that they were able and available to work but unemployed due to a COVID-19 related reason. In its report issued on October 21, 2020, DOL OIG found that states had challenges implementing the program and detecting and deterring fraud, despite the processes in place for claimants to self-certify they met eligibility requirements for PUA benefits. Specifically, states cited the PUA self-certification requirement as a top fraud vulnerability. As of July 8, 2020, PUA benefits disbursements totaled nearly $110 billion, which includes an estimated $61.5 billion for the Federal Pandemic Unemployment Compensation portion of the PUA program. DOL OIG has previously identified high fraud risk in unemployment insurance programs, which had an improper payment rate of around 10 percent. With the influx of additional CARES Act funds, the improper payment rate could increase into the billions, based on DOL OIG’s historical rate of improper payments. DOL OIG has questioned relying on self-certification to approve applications with senior leaders on multiple occasions; however, DOL senior leaders maintain their position that the CARES Act only requires self-certification and does not require proof of employment. Conclusion The Bureau of the Fiscal Service’s website PaymentAccuracy.gov tracks the programs that the Office of Management and Budget has identified as “high priority” for improper payments. The most common root cause agencies report for improper payments is reliance on self-reported information or inability to authenticate eligibility. The SBA and DOL OIG reports identify a fraud risk related to self-certification. This risk cuts across program and agency boundaries, affecting two separate pandemic response programs with two different purposes. If loans, advance grants, or unemployment assistance are provided to potentially ineligible applicants, that reduces the amount of funds available to eligible businesses and unemployed individuals that have suffered economically due to the pandemic. Every dollar lost to fraud is one less dollar available to those who need support in this challenging time. For more information Small Business Administration OIG Reports Inspection of Small Business Administration’s Initial Disaster Assistance Response to the Coronavirus Pandemic, October 28, 2020 Serious Concerns of Potential Fraud in the Economic Injury Disaster Loan Program Pertaining to the Response to COVID-19, July 28, 2020 Department of Labor OIG Reports COVID-19: States Cite Vulnerabilities in Detecting Fraud While Complying with the CARES Act UI Program Self-Certification Requirement, October 21, 2020 COVID-19: More Can Be Done to Mitigate Risk to Unemployment Compensation under the CARES Act, August 7, 2020 Alert Memorandum: The Pandemic Unemployment Assistance Program Needs Proactive Measures to Detect and Prevent Improper Payments and Fraud, May 26, 2020 CARES Act: Initial Areas of Concern Regarding Implementation of Unemployment Insurance Provisions, April 21, 2020