Reports

Tennessee Valley Authority OIG

Pandemic Recovery Credit

On August 20, 2020, in response to the coronavirus (COVID-19) pandemic, the Tennessee Valley Authority (TVA) created the Pandemic Relief Credit (PRC) to provide a measure of relief to local power companies (LPCs), industries, businesses, and people of TVA’s seven state service region. Relief was provided in the form of a 2.5 percent credit to LPC and directly served customers’ demand and nonfuel energy charges. In August 2021, TVA extended the 2.5 percent credit through fiscal year (FY) 2022. TVA subsequently extended the 2.5 percent credit through FY 2023. Through July 2023, TVA had issued...

Full Details: Oversight.gov Report Page

Audit | 10/19/2023

Department of Education OIG

Kentucky’s Oversight of Local Educational Agency ARP ESSER Plans and Spending

The objectives of the audit were to determine whether the Kentucky Department of Education (Kentucky) had an adequate oversight process in place to ensure that (1) local educational agencies’ (LEA) American Rescue Plan (ARP) Elementary and Secondary School Emergency Relief (ESSER) plans met applicable requirements and (2) LEAs use ARP ESSER funds in accordance with applicable requirements and their approved LEA ARP ESSER plans. Overall, we found that Kentucky had adequate processes to ensure that LEA ARP ESSER plans met applicable requirements. We also determined that the ARP ESSER plans for...

Full Details: Oversight.gov Report Page

Audit | 10/12/2023

Small Business Administration OIG

Ending Active Collections on Delinquent COVID-19 Economic Injury Disaster Loans

The Small Business Administration's (SBA) Office of Inspector General (OIG) is issuing this management advisory to bring attention to concerns regarding SBA’s decision to end active collections on delinquent COVID-19 Economic Injury Disaster Loans (EIDL) with an outstanding balance of $100,000 or less. First, SBA’s decision to cease collections risks violating the Debt Collection Improvement Act of 1996, which prohibits ending collections on fraudulent, false, or misrepresented claims, because SBA OIG and other oversight agencies are continuing to work on identifying COVID-19 EIDL fraud that...

Full Details: Oversight.gov Report Page

Audit | 9/29/2023

1 - Open

To address concerns in the COVID-19 EIDL program, we recommend the Administrator direct the Associate Administrator for the Office of Capital Access to perform a comprehensive cost-benefit analysis, consistent with federal regulations, to include periodic comparisons of costs incurred and amounts collected on the portfolio of COVID-19 EIDLs of $100,000 or less to assess whether collection costs exceed recovery amounts.

2 - Open

To address concerns in the COVID-19 EIDL program, we recommend the Administrator direct the Associate Administrator for the Office of Capital Access to reevaluate and amend as appropriate the April 27, 2022 decision to end active collections contingent on the outcome of the more comprehensive cost-benefit analysis.

3 - Open

To address concerns in the COVID-19 EIDL program, we recommend the Administrator direct the Associate Administrator for the Office of Capital Access to ensure SBA does not end active collections pursuant to the April 27, 2022 decision on any COVID-19 EIDL of $100,000 or less made to borrowers who received multiple COVID-19 EIDLs that, when combined, exceed $100,000.

4 - Open

To address concerns in the COVID-19 EIDL program, we recommend the Administrator direct the Associate Administrator for the Office of Capital Access to ensure SBA does not end active collections on any COVID-19 EIDL that appears to be fraudulent, false, or misrepresented, including loans identified as such by OIG or other federal oversight entities, without 1) reviewing the loan application for fraud and 2) attempting active collection, at a minimum, regardless of the outcome of a comprehensive cost-benefit analysis.

5 - Open

To maximize the return to taxpayers, we recommend the Administrator direct the Associate Administrator for the Office of Capital Access to evaluate the COVID-19 EIDL portfolio, in collaboration with Treasury, to determine if selling the portfolio, including delinquent loans of $100,000 or less, is in the best interest of the government.

Small Business Administration OIG

SBA’s Oversight of Restaurant Revitalization Fund Recipients

We reviewed the U.S. Small Business Administration’s (SBA) oversight of Restaurant Revitalization Fund (RRF) recipients. The American Rescue Plan Act of 2021 authorized SBA to administer the RRF and provided $28.6 billion to assist eligible small businesses adversely affected by the Coronavirus Disease 2019 (COVID-19) pandemic. We determined program officials developed a plan for monitoring RRF award recipients use of funds and recovering unused or improperly awarded funds. However, program implementation was not executed in accordance with the plan. We made six recommendations for SBA to...

Full Details: Oversight.gov Report Page

Audit | 9/29/2023

Department of Education OIG

Washington’s Oversight of Local Educational Agency ARP ESSER Plans and Spending

The objectives of the audit were to determine whether the Washington Office of Superintendent of Public Instruction (Washington) had an adequate oversight process in place to ensure that (1) local educational agencies’ (LEA) American Rescue Plan (ARP) Elementary and Secondary School Emergency Relief (ESSER) plans met applicable requirements and (2) LEAs use ARP ESSER funds in accordance with applicable requirements and their approved LEA ARP ESSER plans. We found that Washington did not have an adequate review and approval process to ensure that LEA ARP ESSER plans met all applicable...

Full Details: Oversight.gov Report Page

Audit | 9/20/2023

Treasury Inspector General for Tax Administration

Processing of Recovery Rebate Credit Claims During the 2022 Filing Season

Full Details: Oversight.gov Report Page

Audit | 8/24/2023

1 - Closed

On March 14, 2022, we notified the Director, Submission Processing, Wage and Investment Division, of our concerns regarding the accuracy of COVID Tax Tip 2022-29 regarding Internal Revenue Code §§ 6428B(f) and 6428B(h). Specifically, the guidance states incorrectly that taxpayers can claim the RRC for a shared dependent even if the IRS has already made an advance payment for the dependent. We recommended that the IRS revise the Tax Tip and related Frequently Asked Questions, etc., to state that taxpayers who share qualifying dependents are required to reduce the amount of the RRC claimed by the advance payment issued to either parent on behalf of the dependent.

2 - Closed

The Commissioner, Wage and Investment Division, should review the 274,865 individuals identified where the IRS issued an RRC to potentially ineligible dependents and nonresidents and take the actions needed to recover payments that are determined to be erroneous.

3 - Closed

Continue to periodically issue information on the availability of the RRC and how to claim it through Frequently Asked Questions on IRS.gov, communications with tax return preparers, annual unclaimed refund announcements, etc. until the statutory period for taxpayers to file a Tax Year 2020 and 2021 tax return to claim the RRC has expired.

4 - Closed

Send a letter to the nearly 3 million individuals we identified where the tax return data show the individual is potentially eligible for the RRC encouraging the individuals to amend their Tax Year 2021 return and claim the credit if eligible. The letter should clearly state the eligibility requirements for claiming the RRC in simple terms and direct the individuals to additional resources if needed to assist them in determining whether they are eligible.

Small Business Administration OIG

SBA’s Awards for Staffing Support for COVID-19 Economic Relief Loan Programs

We reviewed the U.S. Small Business Administration’s (SBA) blanket purchase agreement with Highlight Technologies, LLC for loan support services. To meet the increased demand for Coronavirus Disease 2019 (COVID-19) loan program support services, SBA issued labor hour contracts, e.g. call orders, using an existing blanket purchase agreement. However, SBA contracting officials did not always perform adequate price analyses, awarding contracts that were not the best use of taxpayer funds. SBA did not establish adequate guidance to ensure contracting officials consistently followed federal...

Full Details: Oversight.gov Report Page

Inspection / Evaluation | 7/26/2023

Small Business Administration OIG

SBA’s Administrative Process to Address Potentially Fraudulent Restaurant Revitalization Fund Awards

We inspected the U.S. Small Business Administration’s (SBA) administrative process used to review potentially fraudulent Restaurant Revitalization Fund (RRF) applications and recover funds. Program officials designed the RRF application validation and approval processes using the Government Accountability Office’s A Framework for Managing Fraud Risks in Federal Programs. However, 3,790 applications submitted through a point-of-sale partner were processed without verifying gross sales, a key control designed to prevent ineligible entities from receiving awards. As a result, SBA’s RRF...

Full Details: Oversight.gov Report Page

Inspection / Evaluation | 7/05/2023

Tennessee Valley Authority OIG

Remote Application and Desktop Virtualization Client

The Office of the Inspector General audited the Tennessee Valley Authority’s (TVA) use of remote application and desktop virtualization client due to the risks of (1) potential system intrusion through misconfigurations and (2) continued elevated remote users during the COVID-19 pandemic. We found the configuration management control for TVA’s remote application desktop virtualization client was ineffective. However, we determined compensating access controls were in place to mitigate the risk to an overall acceptable level.

Full Details: Oversight.gov Report Page

Treasury Inspector General for Tax Administration

American Rescue Plan Act: Assessment of the Expanded Child and Dependent Care and Earned Income Tax Credits

Full Details: Oversight.gov Report Page

Audit | 6/15/2023

1 - Closed

On February 17, 2022, we notified the Director, Submission Processing, Wage and Investment Division, of our concern with three business rules and recommended that IRS management update the business rule programming to identify and evaluate returns for both refundable and nonrefundable CDCC claims.

2 - Closed

Ensure that programming is updated for Processing Year 2023 to identify taxpayers who reported an obviously invalid care provider TIN on Form 2441.

3 - Closed

Develop a tool or programming for Error Resolution to ensure that tax returns claiming prior year expenses are systemically identified to determine if the maximum CDCC had been claimed in the prior year, before processing the return and potentially releasing erroneous refunds.

4 - Closed

Work with the Department of the Treasury, Office of Tax Policy, to advance legislation to treat a tax return as filed only when it is accepted. This would remove the legal risks associated with rejecting tax returns with conditions that indicate the taxpayer is ineligible for refundable credits claimed on the return.

5 - Closed

If legislation is enacted, develop programming to reject e-filed returns meeting certain conditions, such as those noted in this report.

6 - Closed

The Commissioner, Wage and Investment Division, should ensure that the compliance filter criteria for identifying individuals claiming self-only EITC who are not eligible for work is updated to include the *************************.

7 - Closed

The Commissioner, Wage and Investment Division, should establish processes to compare subsequent legislative changes with compliance filter
programming to identify and make necessary changes, as needed.

8 - Closed

The Commissioner, Wage and Investment Division, should review the 774,559 returns with self-only EITC from potentially ineligible ******** and take actions needed to recover credits that are determined to be erroneous.

9 - Open

The Commissioner, Wage and Investment Division, should complete examinations for all 61 tax returns we identified to ensure taxpayers receive the correct CDCC amounts.

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State/Local Agency

State (State and Local Reports)

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Management Challenges

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Reports

Pandemic Recovery Credit

Kentucky’s Oversight of Local Educational Agency ARP ESSER Plans and Spending

Ending Active Collections on Delinquent COVID-19 Economic Injury Disaster Loans

SBA’s Oversight of Restaurant Revitalization Fund Recipients

Washington’s Oversight of Local Educational Agency ARP ESSER Plans and Spending

Processing of Recovery Rebate Credit Claims During the 2022 Filing Season

SBA’s Awards for Staffing Support for COVID-19 Economic Relief Loan Programs

SBA’s Administrative Process to Address Potentially Fraudulent Restaurant Revitalization Fund Awards

Remote Application and Desktop Virtualization Client

American Rescue Plan Act: Assessment of the Expanded Child and Dependent Care and Earned Income Tax Credits

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