Report Type
Report Category
Submitting Agency
State/Local Agency
State (State and Local Reports)
Fraud Type
Agency Reviewed
- (-) Board of Governors of the Federal Reserve System & CFPB (1)
- (-) Department of Labor (27)
- (-) Department of the Interior (6)
- (-) Internal Revenue Service (10)
- (-) Social Security Administration (3)
- Chemical Safety and Hazard Investigation Board (1)
- Consumer Financial Protection Bureau (1)
- Department of Agriculture (2)
- Department of Commerce (1)
- Department of Defense (8)
- Department of Education (12)
- Department of Health & Human Services (27)
- Department of Homeland Security (17)
- Department of Housing and Urban Development (1)
- Department of Justice (6)
- Department of the Treasury (30)
- Department of Transportation (5)
- Department of Veterans Affairs (17)
- Election Assistance Commission (5)
- Environmental Protection Agency (4)
- Federal Deposit Insurance Corporation (1)
- General Services Administration (1)
- Multiple Agencies (1)
- National Security Agency (1)
- Railroad Retirement Board (5)
- Small Business Administration (29)
- Tennessee Valley Authority (1)
- U.S. Agency for International Development (4)
- U.S. Postal Service (9)
Related Organizations
Management Challenges
Any Recommendations
Any Open Recommendations
Reports
The Social Security Administration’s Enumeration Services During the COVID-19 Pandemic
Develop and periodically conduct comprehensive refresher training on topics including but not limited to:
- processing original Social Security Number (SSN) cards for individuals aged 12 or older and emphasize requirements and documentation of the in-person interview;
- acceptable forms of evidentiary documents, and
- processing new (different) and replacement SSN cards when adoption
Complete the privacy assessments for the WorkTrack application.
Update quality control reviews to include comparison of SSNAP inputs to an applicant-submitted Form SS-5 and evidentiary documents, and provide feedback to the technicians who made input errors (such as race and ethnicity) or did not use the appropriate evidentiary documents.
Revise enumeration policy to include clear instructions for when Form SSA-5002 is required and how to properly document the form.
Update Program Operations Manual System (POMS) to provide current instructions for enumeration notices and archive outdated policy.
Retain enumeration notices in the Online Retrieval System for individuals with assigned SSNs.
Create and implement automated tools to assist staff in navigating through enumeration evidentiary document requirements.
Take corrective action on all keying errors and cross-referencing errors we identified.
Require managers to verify that incident reports are submitted through the Personally Identifiable Information (PII) Loss Reporting Tool before they approve reimbursement to customers for replacing lost original documents.
Update the National Mail Handling Business Process to include standard Agency-wide mitigation steps for misdirected mail including original documents.
COVID-19: ETA and States Did Not Protect Pandemic-Related UI Funds from Improper Payments Including Fraud or from Payment Delays
We recommend the Acting Assistant Secretary for Employment and Training: Use data collected from monitoring and BAM reports to identify the areas of highest improper payments including fraud and create a plan to prevent similar issues in future temporary UI benefit programs.
We recommend the Acting Assistant Secretary for Employment and Training: Require states to have written policies and procedures, which apply lessons learned during the COVID-19 pandemic, to continue eligibility testing and BPC procedures during emergencies or other times of increased claims volume. These policies and procedures should include strategies to pay claimants timely.
We recommend the Acting Assistant Secretary for Employment and Training: Work with NASWA to update the IDH Participant Agreement to require state to submit the results of their UI fraud investigations.
We recommend the Acting Assistant Secretary for Employment and Training: Work with NASWA to ensure the IDH cross matches are effective at preventing the types of fraud that were detected during the pandemic and regularly update using the results of state fraud investigations.
We recommend the Acting Assistant Secretary for Employment and Training: Work with the OIG and states to recover the greatest practicable amount of the $7,092,604 paid to claimants connected to likely fraudulent claims.
The Three Affiliated Tribes Did Not Account for CARES Act Funds Appropriately
We recommend that the BIA resolve the questioned costs of $237,270 by requiring the Three Affiliated Tribes to provide supporting documentation to ensure that the incurred costs are allowable, allocable, and reasonable.
We recommend that the BIA require the Three Affiliated Tribes to establish controls to ensure that it can determine the appropriate funding source for each CARES Act expense.
We recommend that the BIA resolve the questioned costs of $106,280 by creating and adjusting journal entries to reallocate the funds from the U.S. Department of the Interior to the U.S. Department of Health and Human Services.
We recommend that the BIA resolve the questioned costs of $89,623 by creating adjusted journal entries to reallocate the funds from the BIA CARES Act to the appropriate funding source.
Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk Areas Increased to $45.6 Billion
We recommend the Assistant Secretary of Employment and Training: Implement immediate measures to ensure SWAs are required to provide ongoing access to the OIG by amending its current guidance to require disclosures to the OIG for audits and investigations as necessary, mandatory, and without time limitation for the proper oversight of the UI program.
We recommend the Assistant Secretary of Employment and Training: Expedite OIG-related amendments to 20 C.F.R. § 603.6(a) to make ongoing disclosures of UI information to DOL OIG mandatory by expressly adding the U.S. Department of Labor, Office of Inspector General (including its agents and contractors) to the list of required disclosures that are necessary for the proper oversight of the UI program without distinction as to purpose (e.g., audits versus investigations).
We recommend the Assistant Secretary of Employment and Training: Expedite 603.5(i) to expressly make disclosures of UI information to federal officials for oversight, audits, and investigations of federal programs mandatory.
Delays in Management Actions Contribute to the Continued Tax Processing Center Backlogs
On September 16, 2021, we notified the Director, Submission Processing, Wage and Investment Division, that the IRS needed to identify when to stop coding and editing9 prior year tax returns to prevent having to rework these returns (a situation that occurred during the 2020 Filing Season). For example, the IRS needed to send 822,994 business tax returns back to the Code and Edit function at the beginning of Processing
Year 2021 to be re-edited to allow for processing. This occurred because these tax returns, although edited, had not been entered into the IRS’s tax processing system by the end of Processing Year 2020. This resulted in an inefficient use of the IRS’s resources because IRS employees needed to re-edit the tax returns. We recommended that the IRS develop a plan to not only limit the number of returns that would require rework, but also any potential downtime in the Code and Edit function so that resources can be maximized for processing tax returns.
On September 29, 2021, we notified the Director, Submission Processing, Wage and Investment Division, of our observation that paper-filed
information returns were being sorted and batched. According to both Tax Processing Centers, a decision had not yet been made regarding if the information return documents will be processed or destroyed. As we reported in September 2021,10 the IRS faced similar decisions during Processing Year 2020 and destroyed approximately 30 million paper-filed information return documents around March 19, 2021, because the documents could no longer be processed through its systems. We recommended that the IRS determine if/when Processing Year 2021 paper-filed information return documents would be processed. As an alternative to destroying these documents, we recommended that management evaluate and consider scanning the information return documents using the Service Center Recognition Image Processing System while forgoing the data validation process.
On September 17, 2021, we notified the Director, Submission Processing, Wage and Investment Division, of our concerns with the processing of a backlog of taxpayer address changes using a first-in/first-out method. As of August 27, 2021, the Ogden Entity function had more than 173,000 address change requests in its ending inventory. In our discussions with Ogden Entity function management, they estimated that due to the backlog of inventory, more than 50 percent of the address change requests the staff were working had already been made by other means, e.g., the filing of a tax return that automatically updates the taxpayer’s address. As such, Entity function employees were needlessly expending
resources working address change requests for which the address was already updated. We recommended that the IRS evaluate changing the order in which address changes are worked to a last-in/first-out method.
On October 21, 2021, we notified the Director, Submission Processing, Wage and Investment Division, of our concerns related to the accuracy of
information communicated to taxpayers regarding transcript request methods. For example, our review of information posted on IRS.gov found that non-paper-based methods for requesting tax transcripts were not communicated clearly. Whereas, the Form 4506-T, Request
for Transcript of Tax Return, and Form 4506, Request for Copy of Tax Return, provide information for automated self-help service tools. We also found that the instructions on the Forms 4506 and 4506-T do not align with the website wording and could cause confusion for taxpayers. We recommended that IRS management update IRS.gov to provide clear communications on available resources. This includes updating the Forms 4506 and 4506-T tip sections to match IRS.gov language and conducting outreach to encourage individual taxpayers to obtain tax transcripts using the various automated methods.
On September 16, 2021, we notified the Director, Submission Processing, Wage and Investment Division, of our concerns about the printing
capacity of the new electronic fax (e-fax) equipment in the Error Resolution System functional area, noting that this new equipment can only print about 20,000 to 30,000 pages/month (approximately 240,000/year) whereas, the prior equipment printed roughly 2 million documents
per year. In addition, in the three months since Ogden received this new equipment, it has burned out and needed new parts. Although Ogden ordered new multifunctional print devices, those were not to be delivered until January 2022. As a workaround, Ogden used two printers
that had a capacity of about 15,000 pages per month. We recommended that the Submission Processing function collaborate with Managed Print Services and the Information Technology organization to identify and expeditiously resolve all instances of printer capacity, break/fix, etc.
issues that are causing work stoppages in the Tax Processing Centers.
On December 17, 2021, we notified the Commissioner, Wage and Investment Division, of our concern that the resources assigned to the RAIVS unit were not commensurate between the Kansas City and Ogden Tax Processing Centers. In our discussions, IRS management advised that taxpayer tax transcript requests had been previously transshipped from the Kansas City Tax Processing Center to the Austin Tax Processing Center with the last transshipment of work occurring in October 2021. On January 11, 2022, we notified the Director, Submission Processing, Wage and Investment Division, of the same concern noting that during our December 2021 walkthroughs, Kansas City management stated they have 70 full-time employees in the RAIVS/Income Verification Express Service’s unit. Whereas, Ogden management stated they have 183 full-time employees. As of December 10, 2021, the Kansas City RAIVS unit had over 751,000 unprocessed requests compared to a little more than 145,000 unprocessed requests in the Ogden RAIVS unit. We recommended that the IRS evaluate alternatives to address the volume of RAIVS inventory at the Kansas City Tax Processing Center. This should include an evaluation of the capacity to reallocate staffing at the Kansas City Tax Processing Center to assist the RAIVS unit, and/or realignment of work among the various Tax Processing Centers, i.e., transship inventory from
Kansas City to Ogden.
The Commissioner, Wage and Investment Division, should immediately take steps to address the imbalance of Tax Processing Center staffing and inventory to address the continued backlog of transcript requests.
The Commissioner, Wage and Investment Division, should develop a detailed strategy to show how current and future staffing resources, including available surge team members, will be used to address the significant backlog of amended returns in the Submission Processing function’s inventory.
The Commissioner, Wage and Investment, should ensure that the various products and IRS.gov landing pages are updated to reflect acceptable methods for faxing information to the IRS.
Compliance Efforts Are Needed to Address Refund Claims Reported on Form 1139 That Are Based on the CARES Act Net Operating Loss Carryback Provisions
Track and monitor examination results for the 25 “still open” examinations of Forms 1120 with reported NOL and an associated Form 1139 reported in Figure 4 of this report, excluding Joint Committee Refund cases which currently have specific monitoring requirements in place.
Use the examination results from Recommendation 1 to assess whether to increase the number of examinations of Forms 1120 with reported NOL and an associated Form 1139.
The Commissioner, SB/SE Division should review the examination results and computations of proposed NOL adjustments for the 25 “still open” Form 1120 examinations with associated Forms 1139, as referenced in Figure 4, excluding Joint Committee Refund cases which currently have specific review requirements in place, to determine if the interim guidance regarding NOLs is being properly followed.
Processing of Recovery Rebate Credit Claims During the 2021 Filing Season
On June 15, 2021, we alerted IRS management of our concerns with the systemic calculation of the allowable RRC amount. We recommended that IRS management review the returns we identified and provide us with any corrective actions they intended to take.
Conduct analysis of Tax Year 2020 tax returns processed after May 27, 2021, to identify additional individuals who received an RRC for a qualifying child for which the IRS has already paid an EIP or an RRC to someone else and take the actions needed to recover RRC payments that are determined to be erroneous.
Review the 7,022 individuals identified in which the IRS issued multiple RRCs for a qualifying child who was claimed on more than one tax return and take the actions needed to recover payments that are determined to be erroneous.
Conduct analysis of Tax Year 2020 tax returns processed after May 27, 2021, to identify additional individuals who received an RRC for a qualifying child who was claimed on more than one tax return and take the actions needed to recover payments that are determined to be erroneous.
Review the 75,594 tax returns identified in which the individual is potentially a nonresident alien and take the actions needed to recover the RRC payments that are determined to be erroneous.
Perform analysis of Tax Year 2020 tax returns filed after May 27, 2021, to identify additional tax returns with the same characteristics as those the IRS determined were filed by a nonresident alien and take the actions needed to recover erroneous RRC payments.
The Commissioner, Wage and Investment Division, should coordinate with the Territories to confirm and recover erroneous RRCs.
Review the nearly 6.9 million potentially eligible individuals we provided to the IRS who had not filed a Tax Year 2020 tax return as of May 27, 2021, and send a letter to those individuals who still have not filed a Tax Year 2020 return to encourage them to file a return and claim the RRC if eligible.
Review the 3.1 million eligible individuals we identified who filed a Tax Year 2020 return and proactively issue these taxpayers their credit.
Conduct additional analysis to identify tax returns filed after May 27, 2021, in which an individual is eligible for the RRC based on their Tax Year 2020 tax return and did not claim the credit, and proactively issue the taxpayer their credit.
If IRS management does not proactively issue the RRC to individuals who filed a return and did not claim the credit, the IRS should notify these individuals that they are eligible to claim the RRC and should file an amended tax return to claim the credit.
On March 19, 2021, we alerted IRS management of our concerns that an incorrect amount of advance payments was being used to calculate the RRC for some taxpayers. We recommended that IRS management review the returns we identified and provide us with any corrective actions they intended to take.
Work with the BFS to ensure that individuals who were denied the RRC and have still not activated their EIP1 or EIP2 debit card as of December 31, 2021, have EIPs reversed in their tax account and are issued their RRC. These processes should include notifying Metabank that the debit cards in question are to be cancelled.
Work with the BFS to obtain recurring data during Processing Year 2022 to identify individuals who have not activated their advance ARPA RRC debit card at the time a return is filed and implement processes to reverse the advance payment so these individuals can receive the RRC on their Tax Year 2021 tax return.
We alerted the Commissioner, Wage and Investment Division, of our concerns that the IRS was unnecessarily burdening taxpayers whose RRC claims were identified for manual ERS review. We recommended the IRS develop processes to systemically adjust RRC claims using the computer-generated RRC calculation.
On April 6, 2021, we alerted IRS management of our concerns regarding ERS tax examiners incorrectly computing the RRC (see management’s action in response to Recommendation 1). We recommended the IRS review the returns we identified and take the actions necessary to ensure that these taxpayers receive the amount of the RRC
they are entitled to receive.
On March 12, 2021, we alerted IRS management of our concerns that some tax returns were not being identified by fraud filters. We recommended IRS management review the returns we identified and associated fraud filters to identify why these returns were not selected and make programming changes as necessary to ensure proper
identification of returns with potentially questionable claims.
Conduct analysis to identify Tax Year 2020 RRC claims processed after May 27, 2021, to identify other returns in which ERS tax examiners incorrectly calculated the number of allowable dependents and returns that were not reprocessed per IRS guidance after programming was corrected, and ensure that these taxpayers receive the correct amount of the RRC.
Review the 14,508 individuals identified in which the IRS issued an RRC to an individual who was claimed as a dependent on someone else’s tax return but did not check the dependent box and take the actions needed to recover payments that are determined to be erroneous.
Conduct analysis of Tax Year 2020 tax returns processed after May 27, 2021, to identify additional individuals who received an RRC and were also claimed as a dependent on someone else’s tax return but did not check the dependent box, and take the actions needed to recover the RRC payments that are determined to be erroneous.
Review the 238,680 individuals under the age of 25 identified as potential dependents and take the actions needed to recover payments that are determined to be erroneous.
Review the 15,741 individuals identified in which the individual incorrectly received an RRC and an EIP for the same qualifying child and take the actions needed to recover RRC payments that are determined to be erroneous.
The Child Tax Credit Update Portal Was Successfully Deployed, but Security and Process Improvements Are Needed
The Social Security Administration’s Mail Processing During the COVID-19 Pandemic
If cost-effective, invest in software and equipment to reduce manual processing of incoming mail.
Expand the use of Post Office Boxes for long-term, high-volume workloads.
If cost-effective, outsource additional mail duties to contractors.
Incorporate centralized printing of forms and notices into SSA’s systems modernization efforts.
Implement policy and operational changes, where appropriate, to decrease reliance on original documents.
Implement options for customers to submit the most frequently used forms online.
Implement capabilities for employees to securely correspond with the public electronically.
Implement online versions of the most frequently sent notices.
COVID-19: To Protect Mission Critical Workers, OSHA Could Leverage Inspection Collaboration Opportunities with External Federal Agencies
We recommend the Assistant Secretary for Occupational Safety and Health develop an OSHA outreach plan to be activated during a large-scale safety and health crises such as the COVID-19 pandemic that (a) identifies external federal agencies with enforcement or oversight personnel who are active on worksites and (b) defines how OSHA will collaborate with those agencies. OSHA should consider incorporating into the plan: a process to identify and document highly visible, safety and health hazards for large-scale safety and health crises; a plan for how OSHA will conduct related outreach and training on those hazards and how to refer them to OSHA; and a tracking system for agency referrals and outcomes of those referrals, using that information to periodically inform the outreach plan on areas and types of guidance and training the agencies’ oversight and enforcement personnel need.
We recommend the Assistant Secretary for Occupational Safety and Health explore mechanisms to enhance collaboration, such as MOUs or other written agreements using GAO’s seven key features for collaboration, and incorporate a process to utilize those mechanisms into the outreach plan.