# Recent Reports

Reports News from the GAO

- Vehicle Repair: Information on Evolving Vehicle Technologies and Consumer Choice [Reissued with revisions on Apr. 5, 2024] What GAO FoundRight-to-repair is the ability of consumers to decide who repairs their products. For vehicles, this means consumers deciding whether to make their own repairs or take their vehicle to repair facilities at independent repair shops or dealerships franchised with automakers. Most automakers have been operating under a 2014 voluntary nationwide right-to-repair agreement. This agreement has generally resulted in independent repair shops not associated with vehicle manufacturers having access to the information, data, and tools needed for vehicle repairs. However, stakeholders GAO interviewed and a nongeneralizable review of complaints suggest that independent repair shops may face some limitations in that access.Advanced vehicle technologies, such as electric vehicles, may make repairs more expensive and complex because they require additional knowledge, equipment, and other investments. Such issues could particularly affect some independent repair shops, that are unable to make such commitments. In addition, according to some independent repair stakeholders GAO interviewed, the use of telematics systems to wirelessly transfer data between vehicles and automakers could give dealerships a competitive advantage over independent repair shops in conducting some repairs. However, industry and independent repair stakeholders GAO interviewed agreed that telematics data are not currently needed to conduct repairs.The Department of Transportation's National Highway Traffic Safety Administration (NHTSA) is focused on vehicle safety and its role in vehicle right-to-repair issues is limited to cybersecurity issues that could affect vehicle safety. The Federal Trade Commission (FTC) is involved in protecting consumers and promoting competition, including in the vehicle repair market. FTC is taking steps to better understand potential vehicle repair limitations by considering new ways to categorize and analyze potentially relevant consumer complaints. If independent repair shops face limitations in access to the information, data, and tools needed for repair or are otherwise disadvantaged compared to dealerships, consumers may have fewer repair choices, which may reduce competition and make repairs more expensive and inconvenient.Why GAO Did This StudyGAO was asked to review the effects of changing vehicle technologies on vehicle right-to-repair. This report examines how changes in vehicle technologies are affecting competition and consumer choice in the vehicle repair market and NHTSA's and FTC's actions related to this issue.To conduct this work, GAO conducted a literature search and reviewed relevant publications, conducted a non-generalizable review of vehicle and vehicle repair complaints, and interviewed over 50 industry and consumer-focused stakeholders, including vehicle manufacturers, independent repair shops, and others.For more information, contact Elizabeth Repko at (202) 512-2834 or repkoe@gao.gov.
- Small Business Research Programs: Increased Performance Standards Likely Affect Few Businesses Receiving Multiple Awards What GAO FoundThrough the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, businesses compete for federal R&amp;D awards. Phase I awards fund businesses to assess feasibility, and Phase II awards fund them to develop prototypes or make other advancements.Twenty-two small businesses received 50 or more Phase II awards from federal agencies in the 10-year period from fiscal years (FY) 2011 through 2020. During this period, these 22 businesses, referred to as multiple awardees, represented fewer than 1 percent of all Phase II awardees (22 of 6,865). They received 11 percent of total Phase II awards and 10 percent of total Phase II award dollars.The 11 participating agencies varied in the percentage of awards to multiple awardees. Agencies associated with multiple awardees have specific R&amp;D needs and do not cap the number of awards per business. Other agencies have broader needs, prioritize attracting new applicants, or use award caps.Phase II Awards Issued to Multiple Awardees in the Small Business Innovation Research and Small Business Technology Transfer Programs, Fiscal Years 2011–2020			Agency									Number of awards									Percentage of awards								Department of Homeland Security									46									26%								Department of Transportation									27									23%								Department of Defense									1,718									17%								Department of Energy									199									12%								Department of Commerce									17									10%								National Aeronautics and Space Administration									154									10%								Environmental Protection Agency									5									6%								U.S. Department of Agriculture									10									3%								Department of Health and Human Services									89									2%								Department of Education									1									1%								National Science Foundation									0									0%								Overall									2,266 									11% 					Source: GAO analysis of data from the Small Business Administration. | GAO-24-106398Note: For more details, see table 3, GAO-24-106398.SBIR and STTR program goals include meeting federal R&amp;D needs, increasing private sector commercialization, stimulating innovation, and encouraging participation by disadvantaged and women-owned small businesses. On average, multiple awardees performed below or similarly to other awardees in measures of progress toward these goals, according to GAO's analysis.The SBIR and STTR Extension Act of 2022 created increased standards for some businesses, calling for greater success rates in transitioning from Phase I to Phase II and from Phase II to commercialization. But GAO's analysis suggests these standards may have minimal effects on participation by multiple awardees. In FY 2023, six companies did not meet the new standards. According to GAO's analysis, a small number of businesses are generally at risk of not meeting the standards. Among those, few may face meaningful consequences, because the limit on awards is higher than these businesses generally receive per year.Why GAO Did This StudySmall businesses are important drivers of economic growth, but they can face challenges accessing capital to fund research and development. Through the SBIR and STTR programs, agencies provide awards (e.g., grants and contracts) to small businesses for several purposes, including to meet federal R&amp;D needs, increase private sector commercialization, stimulate innovation, and encourage participation by disadvantaged and women-owned small businesses. New awards amounted to approximately $3 billion during FY 2021, according to data from the Small Business Administration (SBA), which oversees the programs.The SBIR and STTR Extension Act of 2022 includes a provision for GAO to examine small businesses that received multiple awards. This report examines 1) the extent to which multiple awardees received 50 or more Phase II awards from participating agencies, 2) how multiple awardees compare on measures of progress toward program goals, and 3) the extent to which increased performance standards affect multiple awardees' participation.For all three objectives, GAO compiled and analyzed data from multiple sources, including SBA. GAO also reviewed agency documentation and interviewed officials from the 11 participating agencies and SBA and a non-generalizable selection of 10 small businesses.For more information, contact Candice N. Wright at (202) 512-6888 or wrightc@gao.gov.
- Driver Assistance Technologies: NHTSA Should Take Action to Enhance Consumer Understanding of Capabilities and Limitations What GAO FoundNew vehicles are increasingly equipped with driver assistance technologies designed to prevent or mitigate crashes (crash avoidance technologies) and support the driving task (driver support systems). According to interviewed stakeholders and research GAO reviewed, when drivers have a realistic understanding of their vehicles' driver assistance technologies, they are more likely to use them as intended. There is some evidence, however, that consumers do not always have an accurate understanding of technologies' capabilities and limitations. One study found that between 27 and 79 percent of consumers surveyed had misperceptions about the limitations of different crash avoidance technologies in their vehicles. In addition, misuse is a safety concern particular to partial driving automation systems, a type of driver support system, which can take over some of the driving tasks in a vehicle but still requires the full attention of the driver.Vehicle Dashboard Displays Driver Assistance Technology ActivationWithin the Department of Transportation, the National Highway Traffic Safety Administration (NHTSA) provides consumers with information on crash avoidance technologies through its New Car Assessment Program (NCAP), additional information on its website, and other means. NHTSA uses checkmarks to indicate whether vehicles come equipped with the four crash avoidance technologies that it recommends and that meet NHTSA's performance criteria. In 2022, NHTSA published a draft roadmap with plans to upgrade NCAP, including recommending four more crash avoidance technologies and developing a rating system for them. These upgrades would provide more comprehensive and comparative information to consumers. However, NHTSA has not finalized its roadmap and has missed time frames even though work on these upgrades started years ago. Developing realistic time frames and publicly communicating its progress could help NHTSA provide consumers with more meaningful information. Aside from NCAP, NHTSA provides consumers with a description on partial driving automation systems, but there is little information about their intended use and operational limitations. Providing this information could assist consumers in developing a more accurate understanding of these systems.Why GAO Did This StudyAccording to NHTSA, almost 42,800 people died in vehicle crashes in 2022. New vehicles are increasingly equipped with driver assistance technologies that could help reduce crashes and fatalities. NHTSA administers NCAP to educate consumers about vehicle safety, including driver assistance technologies, and to assist in consumers' purchasing decisions.The Consolidated Appropriations Act, 2022, included a provision for GAO to review consumer education about driver assistance technologies. Among the issues this report examines are (1) consumers' use and understanding of driver assistance technologies; and (2) the extent to which NHTSA contributes to consumers' understanding and using the technologies as intended.GAO reviewed NHTSA's relevant rulemaking documents, website, and studies; analyzed a nongeneralizable sample of NHTSA consumer complaint data; and interviewed NHTSA and other relevant agency officials and a range of industry stakeholders, including automakers and safety organizations. GAO assessed NHTSA's efforts against key project schedule management practices.
- Small Business Administration: Progress and Work Remaining to Implement Key Management Improvements What GAO FoundIn response to the economic downturn caused by the COVID-19 pandemic, the Small Business Administration (SBA) quickly set up the Paycheck Protection Program (PPP), COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL) program, and other relief programs. SBA also administers a Disaster Loan Program that helps small businesses and others recover after natural disasters.Since February 2020, GAO has made recommendations to improve SBA programs, including 23 key recommendations. SBA fully addressed 10 of the key recommendations, including the following:PPP oversight.  Because SBA initially had limited safeguards, GAO recommended in June 2020 that it implement plans to respond to PPP risks, help ensure program integrity, and address potential fraud. In response, SBA developed a loan review process in December 2020. As of the end of fiscal year 2023, GAO estimated that SBA's use of additional safeguards in PPP and other COVID programs had resulted in more than $12 billion in savings.	Assessment of fraud risks.  SBA did not conduct a formal fraud risk assessment before implementing PPP or COVID-19 EIDL. In March 2021, GAO recommended that SBA conduct a formal assessment and develop a strategy to manage fraud risks for each program. SBA completed these steps in August 2023.SBA has not yet fully addressed 13 of these recommendations, including the following:Enhancing data analytics.  In May 2023, GAO recommended that SBA identify data that could help verify applicant information and detect potential fraud. GAO also recommended that SBA develop cross-program data analytics that would better identify applicants who tried to defraud multiple programs. According to SBA, to begin addressing these recommendations, it has procured third-party services to help validate customer identity and has begun a comprehensive review of its data analytics.	Addressing access barriers.  GAO found in December 2021 that SBA's Disaster Loan Program and five other federal programs did not have key information for examining barriers to access and disparate recovery outcomes among various socioeconomic and demographic groups. GAO recommended SBA work with two other agencies to implement an interagency plan to address these equity issues. SBA officials said the agencies are in the process of developing such a plan.In addition, SBA's independent financial statement auditor has issued four consecutive disclaimers of opinion on SBA's consolidated financial statements since fiscal year 2020. SBA was unable to support a significant number of transactions and account balances related to PPP and COVID-19 EIDL. The auditor identified six material weaknesses in internal controls over financial accounting, including in controls for PPP and COVID-19 EIDL. GAO supports the auditor's recommendations to address these weaknesses and encourages SBA to develop and implement a corrective action plan to address them.Why GAO Did This StudySince spring 2020, SBA has administered four pandemic relief programs, including PPP and COVID-19 EIDL. PPP provides potentially forgivable loans to small businesses. COVID-19 EIDL provides low-interest loans of up to $2 million for operating and other expenses, as well as advances (grants).Concerns about SBA's implementation of PPP and COVID-19 EIDL led GAO to include emergency loans for small businesses on its High-Risk List in March 2021. SBA made or guaranteed more than $1 trillion in loans and grants and assisted more than 10 million small businesses through its relief programs. In addition, SBA has continued to make loans under its Disaster Loan Program.Among other things, this testimony focuses on the status of selected recommendations GAO has made to SBA on its pandemic relief and disaster loan programs, and on issues related to SBA's financial accounting. This testimony is based largely on the reports GAO issued since February 2020 containing the 23 key recommendations. For those reports, GAO reviewed SBA documentation, analyzed program data, and interviewed officials from SBA and other federal agencies. GAO also reviewed the opinions of SBA's independent financial statement auditor.For more information, contact Courtney LaFountain at (202) 512-8678 or lafountainc@gao.gov.
- International Trade: USTR Should Improve Coordination on New Automotive Rules of Origin What GAO FoundAgencies used three key mechanisms to coordinate the implementation, verification, and enforcement of the United States-Mexico-Canada Agreement's (USMCA) new rules of origin for automotive goods:The Interagency Autos Committee, chaired by the U.S. Trade Representative (USTR), provides advice about and monitoring of the USMCA provisions regarding automotive goods.	The USMCA Center provided guidance to stakeholders and facilitated verification activities from its inception in March 2020 to its closure in February 2023.	Customs and Border Protection (CBP) and the Department of Labor (DOL) jointly developed guidance and shared information on certification and verification processes to ensure the value of the labor content of goods (Labor Value Content, or LVC) conforms to requirements.GAO evaluated the effectiveness of ongoing coordination against selected leading collaboration practices identified in prior GAO work.GAO's Leading Interagency Collaboration PracticesIn its efforts to coordinate on the implementation, enforcement, and verification of new automotive rules of origin, the Interagency Autos Committee generally followed six of the eight leading collaboration practices, as identified in GAO's prior work. However, the committee partially followed two other practices. For example, the committee had not developed written guidance to help ensure accountability. Clearly articulated written guidance could improve communication, limit uncertainty for agencies and stakeholders, and aid in the monitoring of progress toward committee outcomes.CBP and DOL have generally followed all eight of the leading collaboration practices during their implementation of the LVC certification process and planning for LVC verifications. Their LVC guidance details the agencies' roles and responsibilities, as well as other leading collaboration practices, for these two processes. In addition, GAO found that no significant interagency coordination takes place for enforcement of the new rules of origin, because CBP alone conducts those activities. According to officials, CBP has not yet enforced some of the requirements because the final set of rules of origin regulations are awaiting approval.Why GAO Did This StudyThe USMCA, which replaced the North American Free Trade Agreement, entered into force in July 2020. According to agency officials and industry stakeholders, this change was significant because it strengthened the rules of origin for automotive goods with a potentially widespread effect on trade. USMCA implementing legislation includes a provision for GAO to review the effectiveness of U.S. interagency coordination on implementation, enforcement, and verification of the automotive rules of origin, and the customs procedures of the USMCA with respect to automotive goods.In this report, GAO examines (1) what mechanisms U.S. agencies use to coordinate on the new rules of origin; and (2) the extent to which relevant agencies are effectively coordinating the implementation, enforcement, and verification of the new rules and customs procedures. GAO reviewed legislation and documents, interviewed agency and labor and industry stakeholders, and analyzed responses from nine agencies that participate on the Interagency Autos Committee against leading interagency collaboration practices, identified in prior GAO work.
- Prenatal Supplements: Amounts of Some Key Nutrients Differed from Product Labels What GAO FoundGAO contracted with an accredited laboratory to test 12 prenatal supplements for amounts of certain nutrients. GAO found that 11 of the 12 of the prenatal supplement products had at least one tested nutrient (folic acid, iodine, iron, or vitamin A, C, or E) that, on average, contained an amount outside of acceptable deviations from the amount stated on the label. This could lead to a pregnant individual either consuming too much or too little of these nutrients. Of these 11, we found one product with an average amount of folic acid that may cause a health concern based on metrics established by the Institute of Medicine. The other tested products that deviated from the amounts stated on the labels did not contain average amounts of nutrients likely to be a health concern. Of the six nutrients tested, Vitamin E showed the greatest variability between different prenatal supplement products, with a range of 28 percent to 332 percent of the amount stated on the label. Vitamin A was the nutrient most frequently found in amounts outside the acceptable deviations from the label value (nine of the 12 supplements). For a full description of the results, see GAO-24-107042.GAO also had the 12 prenatal supplements tested for certain heavy metal contaminants (arsenic, cadmium, lead, and mercury). GAO found trace amounts of two heavy metals—lead or cadmium—in half of the tested prenatal supplements (six of 12), but not in amounts likely to cause a health concern based on metrics used by the Food and Drug Administration (FDA).Many pregnant Americans take prenatal supplements to promote parental and fetal health as soon as they recognize they are pregnant, according to experts with the American College of Obstetricians and Gynecologists. However, dietary supplements—including prenatal supplements—are not generally required to be registered with FDA or evaluated for safety or effectiveness before reaching the shelves. This is because FDA regulates dietary supplements as a special category of food and not as drugs, limiting pre-market oversight. As a result, FDA has limited information about the dietary supplements on the market—including prenatal supplements—to inform its post-market inspections and oversight. Moreover, there is no federal statutory definition of what a prenatal supplement is and what these products should contain, resulting in a large and highly variable product market.Experts and stakeholders GAO spoke with identified a variety of challenges regarding dietary supplements and their oversight. Some concerns include a lack of standardization and limited market knowledge. Prior GAO work also found that FDA faces challenges related to limited information about the dietary supplement market. FDA and a dietary supplement trade association have publicly backed proposed legislation to increase FDA's oversight of dietary supplements, such as requiring dietary supplement manufacturers to register each product on the market with FDA. The stakeholders we interviewed also supported additional oversight of dietary supplements by FDA.Why GAO Did This StudyGAO was asked to assess the accuracy of over-the-counter prenatal supplement labels for amounts of certain nutrients and determine whether the supplements contain harmful substances, such as heavy metals. This Q&amp;A describes the accuracy of labels for the amounts of tested nutrients and possible heavy metal contaminants in 12 selected best-selling prenatal supplements. It also provides information on FDA's role overseeing prenatal supplements.GAO contracted with an accredited analytical laboratory to conduct blind testing of three different lots of each of the 12 selected supplement products for six nutrients and four heavy metals. GAO selected the nutrients and contaminants for testing based on a review of the literature and information available online from expert organizations. The prenatal supplement products tested are a nongeneralizable sample selected from a list of "best-selling" or "top-rated" prenatal supplements from the websites of major retailers and compared to "best of" lists found online. To gain contextual information for the testing results, GAO interviewed selected stakeholders and experts—including third-party dietary supplement testing organizations and the American College of Obstetricians and Gynecologists, respectively. GAO also interviewed officials from relevant federal agencies—including FDA—and reviewed agency guidance and data, relevant legislation, and prior GAO reports to analyze FDA's oversight role for dietary supplements.
- Vehicle Safety: Opportunities to Improve Repair Rates for Recalled Vehicles What GAO FoundGAO found five primary factors that influence vehicle recall repair rates (see fig.).Primary Factors That Influence Vehicle Owners to Respond to Safety Defect Recalls, according to Literature Review and IntervieweesThe National Highway Traffic Safety Administration (NHTSA) has conducted research that identified factors similar to those found by GAO. However, NHTSA has not updated this research and does not have plans to do so. Regularly updating this research could allow NHTSA to maintain more up-to-date information on the factors and enable the agency to respond accordingly. For example, technological developments, such as over-the-air technologies, can change these factors. NHTSA officials told GAO that they are seeing a growing number of recalls that can be repaired with over-the-air software updates.NHTSA and manufacturers collaborate with third parties to improve recall repair rates (see fig.). However, NHTSA has not fully implemented a lessons-learned process to analyze and document lessons learned across all collaborations. As a result, NHTSA may be losing valuable insights that could improve repair rates and help the agency work toward its vision of achieving a 100 percent repair rate for every recall.Examples of Collaborations the National Highway Traffic Safety Administration and Vehicle Manufacturers Have Engaged in to Improve Vehicle Recall Completion RatesWhy GAO Did This StudyNHTSA is responsible for overseeing recalls when a defect in a vehicle creates an unreasonable safety risk. In 2021, NHTSA reported that 69 percent of passenger vehicles recalled in 2018 had been repaired. High-profile recalls over the last decade highlighted the importance of repairing recalls.The Infrastructure Investment and Jobs Act includes a provision for GAO to study vehicle recall repair rates. This report examines (1) the primary factors that influence vehicle recall repairs, and the extent to which NHTSA has conducted research to identify these factors; and (2) how NHTSA has identified lessons learned from efforts to collaborate with third parties to improve recall repair rates, among other objectives.To identify factors, GAO reviewed literature, such as academic studies. To determine how NHTSA has identified lessons learned from collaborative efforts, GAO reviewed documents, such as after-action reports about the Takata air bag recall. GAO interviewed NHTSA officials. GAO also interviewed 27 industry entities—selected based on the literature review, recommendations of other interviewees, and other factors.
- Small Business Administration: Procedures for Reporting on Veteran-Owned Businesses Need Improvement What GAO FoundThe characteristics of small businesses owned by veterans generally were similar to those owned by nonveterans, according to GAO analysis of 2020 Annual Business Survey data. For both types, most businesses had fewer than 10 employees and were in urban areas. Among the most common challenges to accessing capital that veteran-owned businesses cited were long wait times for credit decisions, difficulty with application processes, and high interest rates, according to GAO analysis of Small Business Credit Survey data.The Small Business Administration (SBA) provides training and education on small business ownership through veterans business outreach centers, which state and local agencies and other eligible organizations operate. SBA requires the centers to submit quarterly performance reports. GAO found that some of the reports did not include all the required information, such as the number of counseling sessions. By developing procedures for ensuring compliance with reporting requirements, SBA would have better information with which to oversee centers.SBA facilitates access to capital for small business owners, including veterans, through three loan programs. The 7(a) program provides financing through commercial lenders, the 504 program provides financing for fixed assets (such as buildings or machinery), and the Microloan program provides financing up to $50,000 and technical assistance. Veteran-owned small businesses received about 2–5 percent of all loans in the three programs in fiscal years 2016–2021.Percentage of Loans to Veterans, for SBA's 7(a), 504, and Microloan Programs, Fiscal Years 2016–2021SBA does not have policies and procedures for complying with selected statutory requirements concerning veterans. For instance, SBA's standard operating procedures did not explain how the agency will provide special consideration to veterans in accordance with the Small Business Act and SBA's implementing regulation. SBA also lacked procedures for reporting to congressional committees and could not demonstrate compliance in recent years. Establishing policies and procedures for these requirements would provide greater assurance that SBA is keeping Congress informed and providing special consideration to veterans, as required by law.Why GAO Did This StudyApproximately 6 percent of businesses with paid employees were veteran-owned in 2020, but veteran entrepreneurs may face challenges in accessing small business capital. The Small Business Act authorizes certain SBA small business lending programs, requires SBA to give special consideration to veterans, and authorizes SBA to establish veterans outreach programs.GAO was asked to examine capital access for veteran-owned small businesses and SBA's role in serving these businesses. This report (1) describes characteristics of veteran-owned businesses and their challenges in accessing capital, (2) examines SBA performance data on its veterans outreach program, (3) examines SBA lending to veteran-owned small businesses in 2016–2021, and (4) assesses SBA policies and procedures for complying with selected statutory requirements concerning veterans. GAO reviewed national small business data and SBA policies, procedures, and data on lending programs and also interviewed agency officials, 22 veterans outreach center directors, and 11 veterans who participated in SBA programs.
- Small Business Contracting: SBA Could Improve Oversight of Individual Waiver Requests to the Nonmanufacturer Rule What GAO FoundThe nonmanufacturer rule allows federal agencies to award contracts to small business contractors to supply products manufactured by another small business if the contractors do not manufacture those products themselves. If no small business manufacturers exist, federal agencies can request from the Small Business Administration (SBA) a nonmanufacturer rule waiver to allow a small business to supply the product of any sized manufacturer (see figure).SBA data indicated that from fiscal years 2017 through 2022, agencies submitted approximately 670 waiver requests, roughly 80 percent of which were approved. Given the relatively small number of NMR waiver requests SBA has approved in recent years, stakeholders believed the effect of waivers to be limited. GAO could not determine the effect of these waivers as data in SBA's electronic waiver log on the number of approved requests were inaccurate or incomplete. Some log entries did not match underlying documentation and some status fields did not accurately indicate waiver request denial or approval. SBA officials told GAO they do not conduct scheduled quality reviews of the electronic waiver log. By developing policies and procedures for ensuring the reliability of its waiver request data on a scheduled basis, SBA would have more reasonable assurance that it has reliable data for reporting on and assessing the operation of its NMR program.SBA's Process for Reviewing Requests for Waivers of the Nonmanufacturer RuleAdditionally, SBA does not have policies or procedures describing how management is to review its analyst's decisions. SBA's guidance requires SBA to review certain types of information in waiver requests, but over half of the 12 approved waiver requests GAO analyzed did not contain evidence showing that analysts reviewed each required component. SBA stated that the analysts may have reviewed the components but not saved documents into the waiver request files. However, SBA was unable to provide support for this claim. By developing policies and procedures to inform management review, including which documents management should review to verify analysts' justification of waiver request decisions, SBA would have greater assurance that these decisions are sound and consistent.Why GAO Did This StudyCongress has established set-aside programs that require federal agencies to offer contracting opportunities to small businesses. Some policymakers have raised questions about whether nonmanufacturer rule waivers are reducing federal contracting opportunities for small manufacturers.GAO was asked to examine SBA's recent reviews of nonmanufacturer rule waiver requests. There are individual and class waivers, and this report focuses on individual waivers. This report examines (1) the number of individual waiver requests and their likely effect on small businesses and (2) SBA's policies and procedures for reviewing individual waiver requests. GAO reviewed the data reliability of a nongeneralizable sample of 67 waiver requests in SBA's electronic waiver log for fiscal years 2017–2022 (chosen to include a range of decision statuses for requests from selected agencies) and analyzed SBA's review process documented in the associated files for a subset of these requests. GAO interviewed officials at SBA and the Departments of Defense, Veterans Affairs, and the Interior (selected to account for the volume of waiver requests and a variety of outcomes). GAO also interviewed representatives from three industry associations with expertise in federal contracting.
- Federal Contracting: Opportunities Exist to Improve the Reporting of Waivers to Domestic Preference Laws What GAO FoundBuy American and other domestic preference laws, generally require federal agencies and grantees to purchase goods produced in the U.S., but waivers and exceptions (collectively referred to as waivers) to those requirements may apply. The Infrastructure Investment and Jobs Act, enacted in November 2021, gave the General Services Administration (GSA) a year to develop a website where the public could access information on agencies' use of such waivers. GSA released the first iteration of the website in October 2021. As of June 2023, 17 federal agencies had reported information on 745 waivers for items such as laboratory equipment, freight containers, and weapons parts.Domestic Preference Waivers Reported by Agencies as of June 2023 aTotal could include some duplicates.However, key issues remain that need attention and resolution. For example:GAO found some errors in agencies' reporting of waivers that have not been resolved.	The capability to report on one of the seven types of waivers identified by the Office of Management and Budget (OMB) related to unreasonable cost, has not been added to the website, as GSA is awaiting OMB direction to add it.	The website does not include the results of routine data audits to identify data errors and violation of domestic preference laws, as required.	Users noted that navigating the GSA website and identifying relevant waivers can be difficult.OMB and GSA officials indicated that continued improvements to the website are needed. However, they have not agreed on future development plans because they have varying views on how much additional development is needed. They lack fundamental documents and data that could facilitate these decisions. This includes (1) a memorandum of understanding that establishes the extent of future website development and resource needs; and (2) metrics to gauge the effectiveness of the website. Without such an agreement and metrics, OMB and GSA goals will likely continue to be misaligned, future website development could stall, and the website would then continue to not address key user needs.Why GAO Did This StudyFor decades, U.S. manufacturing capability has declined as companies outsourced production to other countries. Various domestic preference laws have been enacted reflecting a preference to purchase U.S. products. These laws permit agency waivers, as appropriate, to contracts and federal financial assistance (e.g., grants).The Infrastructure Investment and Jobs Act directed GSA to develop a public website displaying information on agencies' use of the waivers. The law included a provision for GAO to review this effort. This report describes (1) GSA actions to implement website requirements and (2) OMB and GSA plans for future website development.To conduct this work, GAO analyzed statutory provisions, website content, and user feedback. GAO interviewed officials from GSA, OMB, five federal agencies, and industry associations. GAO chose the agencies based on their high use of waivers as of January 2023 and the associations based on internet and database searches.
- Cosmetic Safety: Better Planning Would Enhance FDA Efforts to Implement New Law What GAO FoundResearch has established that certain substances found in cosmetics are potentially harmful to human health. However, the effects can be difficult to confirm, in part because they may take years to develop. Most of these potentially harmful substances are added by manufacturers to serve a specific function. For example, parabens are chemicals added as preservatives to prevent the growth of microorganisms such as bacteria, but parabens have been linked in some studies to endocrine problems (i.e., hormone imbalances). Other substances may be present unintentionally as impurities, such as asbestos in talc, or as byproducts of manufacturing. Inhalation of asbestos is associated with mesothelioma, a type of cancer that develops on the lining of internal organs.Examples of Potentially Harmful Substances in CosmeticsThe Modernization of Cosmetics Regulation Act of 2022 (MoCRA) significantly expands the regulatory authority of the Food and Drug Administration (FDA). MoCRA requires FDA to take several actions (e.g., issue standards for detecting asbestos in talc) by specific dates through December 2025. FDA has taken important steps to implement MoCRA, such as designating its Chief Scientist to lead FDA's implementation efforts. However, FDA has not fully addressed leading practices that help ensure the success of agency reforms—in this case, the organizational changes necessary to implement the law. For example:FDA has not developed an implementation plan for MoCRA. According to FDA's Chief Scientist, the agency is using MoCRA itself as its roadmap for implementation efforts. However, MoCRA generally does not detail interim steps or deadlines, as called for by project management guidance.	FDA has not developed a strategic workforce plan, as called for by leading practices, to help ensure that the agency has the necessary personnel with the requisite skills and competencies to exercise its new authorities.According to FDA's Chief Scientist, the agency had not developed such plans because FDA had been focused on meeting near-term MoCRA deadlines. By more fully addressing the leading practices, including planning, FDA can better ensure successful implementation of MoCRA and promote cosmetic safety.Why GAO Did This StudyCosmetics accounted for approximately $43 billion in revenue in the United States in 2021, according to U.S. Census data, with tens of thousands of cosmetic products and formulations on the market. Consumer groups and some scientists have raised concerns that cosmetics may contain substances that harm human health. In December 2022, a new law—MoCRA—took effect, expanding FDA's authorities to oversee cosmetic safety.GAO was asked to review FDA oversight of cosmetic safety. This report examines (1) research on the safety of selected substances in cosmetics and (2) FDA actions to implement its new authorities and the extent to which these actions addressed selected leading practices for agency reforms. This report also includes information on state laws and regulations that prohibit or restrict substances in cosmetics.GAO reviewed scientific literature and FDA documents and interviewed FDA officials. GAO compared FDA actions to implement MoCRA with selected leading practices for agency reforms. GAO uses the term “reforms” to include organizational changes, such as those needed to implement new statutory authorities.
- Disaster Loan Program: SBA Should Include Key Issues in Its Review of How the Program Affects Underserved Communities What GAO FoundThe Small Business Administration (SBA) has taken initial steps to improve access to the Disaster Loan Program for historically underserved communities (such as those with high poverty rates or high percentages of Black or African American, Asian, and Hispanic or Latino residents). In its 2022 Equity Action Plan, SBA identified its lending criteria, such as satisfactory credit score, as a barrier that underserved communities face in accessing the program. SBA plans to conduct a congressionally requested review to determine if any current practices provide unequal outcomes for certain underserved communities and, if so, develop recommendations to improve outcomes. However, SBA does not plan to assess its lending criteria as part of this review. Doing so would help it to better determine if changes to the criteria are needed to reduce unequal outcomes for historically underserved communities, consistent with Congress's direction.SBA declined about 40 percent of disaster loan applications for 13 hurricanes in fiscal years 2018–2022. Loan outcomes tended to be worse in communities with higher percentages of low-income and Black or African American individuals. Of the 312,916 applications SBA accepted in the first stage of its application review, SBA approved 42 percent and declined 38.6 percent. Applications were declined primarily due to insufficient credit score or lack of repayment ability. The average approval rate in communities with the lowest median household incomes was 23 percentage points lower than in communities with the highest median household incomes. The average approval rate in communities with the highest percentages of Black or African American residents was 22 percentage points lower than in communities with the lowest percentages of Black or African American residents. Results were similar for areas affected by four hurricanes in fiscal year 2017 and for Puerto Rico.Disaster Loan Approval Rates by Socioeconomic and Demographic Characteristic in Communities Affected by 13 Hurricanes, Fiscal Years 2018–2022Note: For each characteristic, GAO ordered the census tracts within the disaster areas from the lowest to the highest prevalence of that characteristic and divided the ordered distribution into four equal groups (quartiles). The tracts with the lowest prevalence of that characteristic fall into the lowest quartile (or &lt;=25th percentile), while those with the highest prevalence fall into the highest quartile (or &gt;75th percentile).Why GAO Did This StudyNatural disasters cause billions of dollars of damage each year. Underserved communities with low levels of community resilience may be disproportionately affected. SBA's Disaster Loan Program assists homeowners, businesses, and others affected by natural and other disasters.The Explanatory Statement to the Consolidated Appropriations Act, 2023 includes a provision for GAO to report on delivery of SBA disaster recovery support and how the needs of certain communities are addressed. This report examines (1) steps SBA has taken to improve equitable access to the Disaster Loan Program and (2) loan outcomes in and characteristics of communities in which program applicants and recipients are located.GAO reviewed SBA policies and procedures and interviewed SBA officials. GAO also analyzed disaster loan application data for all 17 hurricanes in fiscal years 2017–2022 that caused at least $1 billion in damage. This included calculating loan outcomes and using census data to determine the demographic and socioeconomic characteristics of communities in which applicants were located. Because of the magnitude of the four fiscal year 2017 hurricanes and Puerto Rico's unique demographics, GAO analyzed those applications separately.
- Small Business Research Programs: Information Regarding Subaward Use and Data Quality What GAO FoundSeveral factors determine which first-tier subawards must be reported by recipients of Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards under the Federal Funding Accountability and Transparency Act. These factors include the value of the subawards, applicable exemptions, and varying definitions of first-tier subawards. According to small business representatives that GAO interviewed, a lack of awareness and understanding by small businesses may also affect reporting rates. Based on GAO's review of USAspending.gov, few SBIR/STTR awards (about 10 percent) display subawards. Limitations on first-tier subaward reporting are a government-wide issue and not unique to SBIR/STTR awards (see GAO-24-106237).SBIR/STTR award recipients commonly partner with other entities, including subcontractors or consultants, to assist with a portion of the work for contracts, grants, and cooperative agreements. Based on a sample of fiscal year 2019 awards, GAO estimates that approximately 70 percent of SBIR/STTR Phase II awards—which are used to advance concepts after feasibility is assessed—included the use of subcontractors or consultants. In addition, GAO estimates that about 16 percent of the total award value across all Phase II awards went to subcontractors and about 2 percent went to consultants.Estimated Percentage of Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Awards That Used Subcontractors or Consultants, Fiscal Year 2019SBIR/STTR award recipients use private sector entities, academic institutions, and nonprofits for a variety of support. GAO estimates, for example, that 29 percent of awards included one or more subcontracts to private sector entities and 24 percent included one or more subcontracts to academic institutions. Award recipients use subcontractors and consultants for a wide variety of purposes, such as providing technical insights and expertise; assisting with design activities; developing systems, products, or software; and performing testing and evaluation of technological innovations.Why GAO Did This StudySmall businesses are important drivers of economic growth, but they can face challenges in accessing capital to fund research and development (R&amp;D). Congress established the SBIR/STTR programs to enable small businesses to undertake and obtain the benefits of R&amp;D. Agencies issue SBIR/STTR awards as contracts, grants, and cooperative agreements. The award recipients may enter into agreements—subawards—with other entities to carry out part of the work or to provide needed materials, supplies, or services.The SBIR and STTR Extension Act of 2022 includes provisions for GAO to evaluate subcontracting practices of SBIR/STTR award recipients. This report (1)&nbsp;examines factors that affect the reporting of SBIR/STTR first-tier subaward data on USAspending.gov; and (2)&nbsp;estimates the extent to which SBIR/STTR award recipients used subawards, the general purposes for these subawards, and which types of entities received them.GAO reviewed a generalizable sample of 198 fiscal year 2019 SBIR/STTR awards and interviewed agency officials from the Small Business Administration and 11 agencies that participate in the SBIR/STTR programs. GAO also interviewed a non-generalizable sample of 10 SBIR/STTR award recipients to obtain their perspectives on subaward reporting requirements.For more information, contact Candice N. Wright at (202) 512-6888 or WrightC@gao.gov.
- Small Business Research Programs: Agencies Are Implementing Programs to Manage Foreign Risks and Plan Further Refinement What GAO FoundThe Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs face risks of foreign governments seeking to illicitly acquire U.S.-funded research and technologies. To help address such risks, the SBIR and STTR Extension Act of 2022 (Extension Act) required participating agencies to develop a due diligence program to assess aspects of small businesses seeking a federally funded award. In March 2023, the Small Business Administration (SBA) issued a set of 12 best practices that provide general guidance on what agencies should consider in developing their programs. The best practices, which were developed in collaboration with other agencies, cover different types of risks, such as foreign ownership, employee affiliations, and cybersecurity practices. SBA also developed a set of standardized disclosure questions about foreign affiliations or relationships to foreign countries that SBIR/STTR applicants must answer to help participating agencies assess foreign influence.Examples of Best Practices SBA Issued for SBIR/STTR Participating Agencies' Due Diligence Programs to Address Foreign RisksAll 11 agencies participating in the SBIR and STTR programs established their due diligence programs by June 27, 2023, as required by the Extension Act. GAO found that agencies plan to assess all new proposals or applications that lead to SBIR/STTR awards using a documented risk-based approach—as called for by SBA best practices. These approaches vary. Some agencies plan to adapt existing due diligence review processes. Others plan to apply reviews based on different phases of technology development or require disclosures from a wider range of individuals who can significantly influence the research on a particular project. Regardless of these differences, each participating agency plans to assess, among other things, the cybersecurity practices and foreign ownership (e.g., financial ties and obligations) of small business award applicants.All 11 participating agencies plan to refine their due diligence programs through implementation experience. Agency officials identified several potential areas of refinement, such as hiring additional staff, supporting additional training, acquiring vetting tools, and addressing any effects of due diligence reviews on the timeliness of award issuance.Why GAO Did This StudySmall businesses are important drivers of economic growth and innovation, but they can face challenges accessing capital to fund research and development. Through the SBIR and STTR programs, participating agencies award funding to small businesses that helps bring important technologies to market. However, certain foreign governments are actively working to illicitly acquire such technologies.The federal government has taken a number of recent actions to help agencies, universities, and businesses counter foreign influence on federally funded research by implementing due diligence activities to identify and mitigate risks. The Extension Act builds on these actions by requiring each relevant federal agency to establish and implement a due diligence program to manage foreign risks.The Extension Act also includes a provision for GAO to issue a series of reports on the implementation of and best practices for these programs. This report, the first in the series, examines (1) SBA's efforts to develop best practices for participating agencies' due diligence programs, in collaboration with others; and (2) participating agencies' efforts to design and implement their due diligence programs.GAO interviewed officials from SBA, the 11 participating agencies, and other relevant federal entities. GAO also analyzed information related to the development of SBA's SBIR/STTR due diligence best practices and individual agencies' due diligence programs.For more information, contact Candice N. Wright at (202) 512-6888 or WrightC@gao.gov.
- Financial Audit: Consumer Financial Protection Bureau's FY 2023 and FY 2022 Financial Statements What GAO FoundGAO found (1) the Consumer Financial Protection Bureau's (CFPB) financial statements as of and for the fiscal years ended September 30, 2023, and 2022, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles; (2) CFPB maintained, in all material respects, effective internal control over financial reporting as of September 30, 2023; and (3) no reportable noncompliance for fiscal year 2023 with provisions of applicable laws, regulations, contracts, and grant agreements GAO tested.In commenting on a draft of this report, CFPB stated that it was pleased to receive an unmodified audit opinion on its fiscal years 2023 and 2022 financial statements and on its internal control over financial reporting. In addition, CFPB stated that it will continue to work to enhance its system of internal control and ensure the reliability of its financial reporting.Why GAO Did This StudyTitle X of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Full-Year Continuing Appropriations Act, 2011, both require CFPB to prepare financial statements annually and require GAO to audit the agency's financial statements. This report responds to these requirements.For more information, contact James R. Dalkin at (202) 512-3133 or dalkinj@gao.gov.
- Small Business Subcontracting: Some Contracting Officers Face Challenges Assessing Compliance with the Good Faith Standard What GAO FoundCertain federal contracts must have a plan containing goals for the percentage of work to be subcontracted to small businesses. Contracting officers are required to assess contractors' good faith efforts to meet these goals by comparing contractors' small business subcontracting performance against their goals. The contracting officer is to assess the contractor's explanation when the goals are not achieved. For these contracts, contracting officers are also required to assign contractors a rating related to subcontracting in the Contractor Performance Assessment Reporting System.Contracting officers from six agencies stated they rarely identify contractors who have not met their small business goals, and therefore rarely assign below-satisfactory ratings. In contrast, according to government-wide data released by the Small Business Administration (SBA), many contractors reported not meeting their subcontracting goals in fiscal year 2022 (see figure).Reported Government-wide Contractor Achievement of Subcontracting Goals by Small Businesses and Socioeconomic Category, Fiscal Year 2022Note: Data include only contractors that have individual subcontracting plans.SBA's data do not include agency-level information that may help explain the differences in the contracting officers' statements and SBA's government-wide data. Further, most federal agencies GAO reviewed do not report or review data on contractors' achievement of their subcontracting goals at the agency level, as required by statute. Collecting and reviewing these data would help agencies better understand the extent to which contractors comply in good faith with their subcontracting plans and the overall success of the agencies' small business subcontracting program. In addition, SBA could use these data to identify specific agencies that may need additional support and training related to small business subcontracting.SBA conducted only six compliance reviews of subcontracting plans in each of fiscal years 2021 and 2022. SBA found that contractors generally were not in compliance with all of the subcontracting plan requirements and regulations. SBA officials did not believe these reviews were representative of the universe of federal contracts. However, SBA has not analyzed the risks associated with conducting this limited number of reviews each year. Conducting such an assessment could help SBA determine whether to conduct additional reviews, which would further SBA's understanding of the extent and nature of contractors' noncompliance.Why GAO Did This StudyFederal regulations require, contractors make a good faith effort to provide small businesses with maximum practicable opportunities to participate in federal contracts. GAO was asked to review federal agencies' assessment of contractors' compliance with this good faith standard. This report examines (1) how contracting officers assess contractors' compliance with the good faith standard and the extent to which they find contractors noncompliant, and (2) the benefits and challenges associated with good faith standard assessments.GAO reviewed documentation and interviewed contracting related officials at two Department of Defense agencies (Air Force and Army) and four civilian agencies (Departments of Homeland Security, Health and Human Services, and Veterans Affairs, and the National Aeronautics and Space Administration), selected based on total contracting obligations. GAO also reviewed documentation and interviewed SBA and Defense Contract Management Agency officials on their role in supporting contracting agencies.
- Credit Cards: Pandemic Assistance Likely Helped Reduce Balances, and Credit Terms Varied Among Demographic Groups What GAO FoundApproximately half of active credit card accounts carried a balance during the period from June 2013 through 2019, according to GAO's analysis of a nongeneralizable sample of more than 650,000 credit card accounts from the Board of Governors of the Federal Reserve System. This included almost 35 percent of all active accounts in the highest credit score category (720 and above) and more than 30 percent of all active accounts in zip codes with median household incomes of $150,000 or more.After the onset of the COVID-19 pandemic in March 2020, cardholders in the GAO sample generally paid down credit card balances and carried balances for shorter periods, according to GAO's analysis. Specifically, the share of all active accounts that carried a balance declined from 50 to 45 percent from April 2020 to December 2021 (see figure). Federal pandemic assistance likely contributed to these improvements. GAO analysis suggests that after March 2020, cardholders who carried balances increased their average credit card payments during the months when pandemic assistance payments were disbursed.Percentage of Active Credit Card Accounts That Carried a Balance, 2019–2021Note: GAO's analysis was based on a nongeneralizable sample of active general purpose credit card accounts. This figure excludes the percentage of active credit card accounts that were seriously delinquent (90 or more days), which was less than 1 percent during this period.Cardholder accounts in the sample that were in billing zip codes with a majority of Black or African American or Hispanic or Latino residents likely had higher interest rates and lower credit limits and carried balances longer compared with accounts in predominantly White zip codes, as indicated by GAO analysis. For example, the difference in interest rates was on average about 1.3 percentage points. Cardholders in the sample that were in majority-Black or -Hispanic zip codes continued to face higher interest rates and lower credit limits as compared with cardholders in predominantly White zip codes who had the same credit scores, zip-code income distribution, and revolving status. While accounts in the sample that were in majority-Black or -Hispanic zip codes carried smaller balances than accounts in predominantly White zip codes, higher interest rates combined with carrying balances longer can result in higher credit costs.Why GAO Did This StudyCredit cards are the most common consumer lending product by number of users, with 82 percent of U.S. adults holding a credit card in 2022. However, credit card adoption rates vary by race, ethnicity, and income. Consumers can use credit cards as a convenient means of payment and source of credit. Some consumers do not always pay off their monthly credit card balances and can accumulate interest and fees over time, which can lead to debt burden and affect their financial health. In addition, the COVID-19 pandemic caused significant economic disruptions and has affected consumers' credit card usage.GAO was asked to review consumer credit card usage. This report examines (1) consumer credit card usage from 2013 through 2019, (2) how the COVID-19 pandemic and related assistance affected credit card usage from March 2020 through December 2021, and (3) how credit card costs and usage vary among racial/ethnic groups.GAO analyzed a nongeneralizable sample of credit card data from the Federal Reserve for June 2013–December 2021 and used the Census Bureau's American Community Surveys to estimate the median household income and racial and ethnic composition in cardholders' zip codes. GAO also reviewed research from the Consumer Financial Protection Bureau, Federal Reserve, and academics. Further, GAO interviewed representatives of federal agencies, six large credit card issuers, three credit reporting agencies, a banking association, and a consumer advocacy organization.For more information, contact Alicia Puente Cackley at (202) 512-8678 or cackleya@gao.gov.
- Small Business Research Programs: Most Agencies Allow Applicants to Define Needs and Propose Solutions What GAO FoundSeven of 11 federal agencies participating in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs used open topics from fiscal years 2019 through 2021. In response to solicitations with open topics, small businesses submit proposals that both define research needs and propose solutions to address them. The remaining four agencies only used conventional topics. For these topics, agencies define needs and small businesses propose solutions. Officials from the 11 agencies said they expect to continue their existing use of topic types in future years.Over the 3-year period, open topic awards accounted for about 40 percent of all awards and $4.1 billion. The percentage of awards originating from open topics increased from 36 percent in 2019 to 40 percent in 2020 and 46 percent in 2021.Open and conventional topic awards differed in terms of small business participation from fiscal years 2019 through 2021, according to GAO analysis of award data. Based on several GAO analyses, businesses receiving conventional topic awards tended to receive multiple awards, which could indicate that open topics promote a more competitive environment.Number of Businesses Receiving Open and Conventional Topic Awards in Small Business Research Programs, Fiscal Years 2019–2021Open topic awards also went to a higher percentage of small businesses owned by veterans and individuals from socially and economically disadvantaged groups, compared to conventional topic awards, but additional factors could explain this difference. For example, one agency stated that nontraditional businesses are less prevalent in certain fields, such as physics. This could contribute to lower proportions of nontraditional businesses receiving awards from agencies working in physics, regardless of the agencies' use of open topics.In deciding whether to use open or conventional topics, agencies reported considering their goals for using the SBIR/STTR programs and available resources. For example, agencies aiming to meet the goal of increasing applicant competition may consider using open topics, according to officials. Additionally, agencies consider the availability and expertise of proposal reviewers, which is especially important given the greater variation in the types of technologies covered in research proposals for open topics.Why GAO Did This StudySmall businesses are important drivers of economic growth, but they can face challenges accessing capital to fund research and development. Through the SBIR and STTR programs, agencies provide awards to small businesses to spur technological innovation, among other goals. For these awards, agencies release solicitations that include topics. Small businesses submit proposals with technical solutions to problems. Under open topics, the small businesses define the problems, whereas under conventional topics, agencies define the problems.The SBIR and STTR Extension Act of 2022 includes provisions for GAO to review agencies' use of open topics. This report examines, among other things, (1) the extent to which agencies have used open topics, (2) how open and conventional topic awards compare, and (3) agency considerations about which topic type to use.GAO compiled and analyzed data from multiple sources, including the 11 participating agencies and the Small Business Administration (SBA). The scope of the review covers fiscal years 2019 through 2021, because SBA award data for fiscal year 2022 were not yet available at the time of GAO's review. GAO also reviewed agency documentation and interviewed officials from the 11 participating agencies and SBA.For more information, contact Candice N. Wright at (202) 512-6888 or wrightc@gao.gov.
- Motor Carrier Operations: Improvements Needed to Federal System for Collecting and Addressing Complaints against Truck, Moving, and Bus Companies What GAO FoundThe Federal Motor Carrier Safety Administration (FMCSA), within the Department of Transportation, maintains complaint data submitted against large commercial truck, moving, and bus companies—which are types of motor carriers. GAO found that FMCSA makes some but not all of this complaint data available to the public, which is not consistent with Department of Transportation policy. As a result, FMCSA may be missing the opportunity to improve transparency and collaboration with industry partners.Types of Vehicles Used by Motor CarriersFMCSA has not designed sufficient controls to help ensure its policy for reviewing complaints related to motor carriers is followed. For example, FMCSA's guidance is organized by seven complaint categories. However, the guidance does not define several key terms, including the complaint categories, or define how the categories align with over 100 possible allegations. Matching the allegation to a category may be challenging without definitions. As a result, FMCSA may not have adequate assurance that staff are consistently applying the appropriate complaint review guidance. Ultimately, this could affect FMCSA's ability to respond to unsafe motor company practices.GAO also found that FMCSA's public-facing complaint website partially followed leading practices for federal website design and usability. For example, the website works on frequently used web browsers and the content is organized around user-friendly topics, in line with leading practices. However, the complaint website's content is not consistently easy to view on mobile devices. According to FMCSA officials, about half of users access the website on mobile devices. Representatives of industry associations noted that mobile access is particularly important for truck drivers.FCMSA has conducted some outreach activities for its complaint website, but has not developed a plan to guide these activities. According to GAO's review, FMCSA promotes the website through the “Protect Your Move” education campaign for people who are planning interstate moves. FMCSA's outreach to other audiences—such as truck drivers—has been more limited and all five of the trucking associations GAO interviewed were not aware of such outreach. Without a plan to guide outreach activities, key target audiences may lack awareness of the complaint website, limiting FMCSA's ability to collect motor safety complaints.Why GAO Did This StudyLarge trucks and buses move billions of tons of goods and transport millions of people across the United States each year. FMCSA is responsible for reducing crashes, injuries, and fatalities involving large trucks and buses. One way FMCSA carries out this responsibility is through its complaint website.The Infrastructure Investment and Jobs Act includes a provision for GAO to review FMCSA's complaint website. This report examines (1) complaint data FMCSA makes public, (2) control activities FMCSA uses to review complaints, (3) how the complaint website follows leading practices, and (4) user outreach for the complaint website.GAO analyzed data from the complaint website, reviewed applicable statutes and FMCSA regulations, policy, and guidance, compared the complaint website to leading practices for federal websites, and reviewed FMCSA's actions to promote awareness of the complaint website. GAO also interviewed agency officials and representatives of industry associations.
- Violent Extremism: Agencies' and Financial Institutions' Efforts to Link Financing to Domestic Threats What GAO FoundUnder U.S. law, domestic terrorism is generally defined as involving&nbsp;criminal acts dangerous to human life occurring in the U.S. or its territories that appear intended to coerce a civilian population or influence or affect the conduct of government. The Federal Bureau of Investigation (FBI) and the Department of Homeland Security (DHS) use the term domestic violent extremism to refer to a variety of domestic terrorism threats.Domestic violent extremists commonly self-finance their attacks through generally legal means (for example, using income or savings to pay for travel) in small dollar amounts, according to experts. Government reports and research also identified the risks of domestic violent extremist groups using other licit mechanisms to finance their activities, such as selling merchandise with messages supporting their cause. Many of these mechanisms implicate First Amendment protections (e.g., free speech), thereby limiting the ability to monitor the activity to the same extent as unprotected activity.These characteristics make it difficult for financial institutions and for agencies to identify the financial behavior of domestic violent extremists as suspicious or linked to a violent activity. Some financial institutions (which must report suspicious financial activity to the Department of the Treasury) indicated that unless a customer expressed some sort of terrorist sentiment or violent intent, they would have little way of knowing a transaction was related to violent extremism. Most investigations of such extremists that lead to criminal charges do not include charges for financial crimes, according to DOJ officials. But they also noted that information about their financial activity can help investigators establish patterns of behavior or identify leads.Multiple mechanisms exist to share information on suspicious financial activities related to threats from domestic violent extremists.Treasury's Financial Crimes Enforcement Network (FinCEN) shares financial information and analysis related to ongoing investigations with law enforcement agencies and engages with banks and other financial institutions. It also coordinates with international partners about the risks of the financial activity of domestic violent extremists.	Since 2015, the National Counterterrorism Center (NCTC), FBI, and DHS, have produced a booklet on indicators of violent extremist mobilization to aid law enforcement and the public in identifying threats of violence. The most recent version (2021) includes some indicators of suspicious financial activity, such as sudden disposal of personal assets. However, FinCEN was not involved in development of these indicators, partly because the process relied on the Intelligence Community. Although Treasury's Office of Intelligence and Analysis was included in the process, previous updates have not solicited input from FinCEN. NCTC officials said the booklet was not an intelligence product and they supported agencies seeking relevant expertise. As the threat of domestic violent extremism continues to evolve, FinCEN's expertise could help further refine and update financial indicators in future booklets.Why GAO Did This StudyIn 2022, DHS, FBI, and NCTC concluded that domestic violent extremists, fueled by various ideological and sociopolitical grievances, posed a sustained threat of violence to the American public, democratic institutions, and government and law enforcement officials.GAO was asked to review the funding mechanisms and financial activity of domestic violent extremists. This report examines: (1) available information about the sources of funds and financial activity of domestic violent extremists; (2) the difficulties of identifying and linking financial activity to violent extremist activity; and (3) U.S. agency efforts to share information with each other and the public to identify and track such funding and financial activity.GAO reviewed documentation and reports from Treasury, intelligence and law enforcement agencies, and international and nonprofit organizations focused on violent extremism. GAO also interviewed Treasury, NCTC, FBI, and DHS officials; experts in terrorist financing or extremism; and representatives of 11 financial institutions and seven other private-sector entities.
- Export-Import Bank: Monitoring of Exports with Dual Military and Civilian Uses as of 2023 What GAO FoundAs of August 2023, the Export-Import Bank (EXIM) was monitoring the end use of a single transaction that it had continued to finance in fiscal year 2021, as summarized below:Two satellites for the government of Mexico. EXIM had provided financing to the government of Mexico for (1) a fixed-service satellite that launched in December 2012 and became operational in February 2013 and (2) a mobile-service satellite that launched in October 2015 and became operational in December 2015. In 2023, EXIM received all documents from the government of Mexico on time and subsequently determined that Mexico was in compliance with the bank's dual-use policy.EXIM did not finance any new exports under its dual-use authority in fiscal year 2022, according to EXIM authorization data and EXIM officials.Why GAO Did This StudyEXIM's mission is to support the export of U.S. goods and services overseas through loans, loan guarantees, and insurance, thereby supporting U.S. jobs. In 1994, Congress passed legislation authorizing EXIM to facilitate the financing of U.S. exports of defense articles and services with both civilian and military applications, provided that the bank determines such dual-use items are nonlethal and primarily meant for civilian end use. Included in the same act was a provision for GAO, in consultation with EXIM, to report annually on the end uses of dual-use exports financed by EXIM during the second preceding fiscal year.This report (1) examines the status of EXIM's monitoring of dual-use exports that it continued to finance in fiscal year 2021, as of August 2023, and (2) identifies any new dual-use exports that EXIM financed in fiscal year 2022. To address these objectives, GAO reviewed EXIM documentation and data on dual-use exports and interviewed EXIM officials.For more information, contact Kimberly Gianopoulos at (202) 512-8612 or gianopoulosk@gao.gov.
- Over-the-Counter Drugs: Status of FDA's Implementation of Exclusivity Provisions in the CARES Act What GAO FoundOver-the-counter (OTC) drugs play an important role in the U.S. health care system by providing consumers quick access to health care products for a variety of uses without a prescription. The Food and Drug Administration (FDA)—an agency within the Department of Health and Human Services (HHS)—is responsible for ensuring the safety and effectiveness of drugs, including OTC drugs. FDA regulates the safety and effectiveness of most OTC drugs through its monograph process, through which OTC drugs can be marketed without prior FDA evaluation and approval for each individual product. Both FDA officials and industry stakeholders, among others, have noted that FDA's monograph process has limited its ability to quickly update OTC monographs to allow additional OTC products to be marketed for consumers, as GAO previously reported.In March 2020, the CARES Act made several changes to the regulation of OTC monograph drugs. Among those changes, the CARES Act changed the monograph process to make it less burdensome on the agency to update and create new monographs. The act also allowed drug manufacturers, marketers, and others to request changes to a monograph and provided an 18-month period of marketing exclusivity if FDA makes certain requested changes. Specifically, OTC monograph drug exclusivity is available for (1) a change adding a new active ingredient or (2) a change in the conditions of use of a drug for which new human data studies are conducted or sponsored by the requestor. This means that, for 18 months, the requestor would have exclusive rights to sell the new OTC product. This exclusivity is intended to create an incentive for industry innovation for OTC drug products.As of May 2023, no companies have received OTC monograph drug exclusivity for any OTC drugs under the new provisions in the CARES Act. FDA is in the process of implementing OTC monograph reform, including provisions related to OTC monograph drug exclusivity. For fiscal years 2021 and 2022, FDA reported that it had collected over $42 million in OTC monograph user fees and had used those funds in conjunction with the agency's regular appropriations to support all OTC monograph reform activities, including hiring 32 new employees, implementing a public-facing monograph IT dashboard, and designing an IT platform for FDA's monograph review activities.The potential effect of OTC monograph drug exclusivity on OTC drug innovation and consumers is unknown. None of the 91 journal articles GAO reviewed provided evidence for the effect that exclusivity could have on consumer access to OTC drugs on the affordability of OTC drug products or on OTC drug innovation. An organization representing consumer interests publicly raised concerns that OTC drug companies may limit the availability of older but equally effective OTC drugs, pushing consumers to purchase newer, more expensive drugs that have received exclusivity. In contrast, industry stakeholders told GAO they expect exclusivity to increase consumer access to new OTC drug products because it is a key incentive for product innovation. They also expect the effect on OTC drug affordability for consumers to be minimal because of the availability of alternative OTC drugs.Why GAO Did This StudyThe CARES Act included a provision that allows OTC drug manufacturers, marketers, and others to request changes to an OTC monograph and provides an 18-month period of exclusivity for certain changes. The CARES Act also included a provision for GAO to report on the implementation and impact of OTC monograph drug exclusivity for OTC drugs on industry innovation and consumer access and affordability.This report describes the status of FDA's efforts to implement OTC monograph drug exclusivity provisions, and research and stakeholder perspectives on how exclusivity may affect industry innovation for OTC drugs and consumer access to and affordability of these drugs. GAO reviewed FDA draft guidance, annual progress reports, relevant legislation, and interviewed FDA officials about their activities to implement the changes to the OTC monograph process under the CARES Act. GAO also conducted a literature search and interviewed representatives for industry stakeholders about how exclusivity may affect consumers and industry innovation.For more information, contact John Dicken at (202) 512-7114 or dickenj@gao.gov.
- Steel and Aluminum Tariffs: Agencies Should Ensure Section 232 Exclusion Requests Are Needed and Duties Are Paid What GAO FoundImporters can submit exclusion requests to the Department of Commerce's Bureau of Industry and Security (BIS) to seek relief from Section 232 steel and aluminum tariffs. GAO found that importers had used a small proportion of the quantities that BIS had approved (see figure). BIS implemented measures to ensure exclusion requests are needed, but has not evaluated the results. In December 2020, BIS reported that unneeded exclusion requests burdened the approval process, and began requiring requesters to certify that they expect to use the entire quantity if approved. Without evaluating the requirement's results, BIS lacks key information about whether it has helped ensure exclusion requests are needed and has improved the efficiency of the exclusion approval process.Use of Approved Section 232 Exclusion Quantities, March 2018–September 2021Note: This figure presents exclusion use data available as of November 2021.GAO found that BIS and the Department of Homeland Security's Customs and Border Protection (CBP) had inconsistent data for about 5 percent of the nearly 207,000 exclusions approved through September 2021. BIS transfers data about approved exclusions to CBP for use in the Automated Commercial Environment (ACE), the system importers use to bring goods into the U.S. BIS provides CBP partial data about the parameters, which requires CBP to derive additional information, such as the exclusion's validity period, for use in ACE. Without a more consistent data transfer process, CBP faces challenges in administering exclusions as BIS intends, creating a continuing risk of error and invalid use.GAO's analysis shows that importers generally used tariff exclusions consistent with BIS's approved parameters. However, GAO identified an estimated $32 million in unpaid duties resulting from invalid exclusion use as of November 2021. CBP officials said that when they programmed the Section 232 functionality in ACE, they did not have the time or resources to program automatic deactivation once the importer reaches the approved quantity. Instead, CBP has manually deactivated exclusions. However, the lag time between when importers reach approved quantities and CBP's manual deactivation allows importers to overclaim exclusions and not pay duties on the overage. Until CBP implements more effective controls to prevent overclaiming and to recover duties owed, the U.S. government is at risk of losing millions of dollars in revenue.Why GAO Did This StudyIn March 2018, citing national security concerns, the President placed tariffs of 25 percent on some imported steel and 10 percent on some imported aluminum products, under Section 232 of the Trade Expansion Act of 1962. At the same time, Commerce established a process to provide relief, or exclusion, from the tariffs. Requesters apply to BIS for tariff exclusion. If BIS approves, the requester may import specific products without paying those tariffs. BIS transmits data about the specific parameters of the approved exclusions to CBP, which determines if an importer may use an exclusion.  GAO was asked to review how Section 232 exclusions are administered. This report examines (1) BIS's measures to ensure Section 232 exclusion requests are needed, (2) the extent to which BIS and CBP maintain consistent data in order to administer the exclusions, and (3) the extent to which importers invalidly used exclusions. GAO defines invalid use as the claiming of an exclusion in ACE in a way that does not comport with BIS's parameters.GAO analyzed agency data, and reviewed agency documents related to the exclusion approval and import processes. GAO also interviewed BIS and CBP officials and spoke with industry stakeholders.
- Conflict Minerals: 2022 Company Reports on Mineral Sources Were Similar to Those Filed in Prior Years What GAO FoundThe U.S. Securities and Exchange Commission (SEC) disclosure rule on conflict minerals broadly requires that certain companies submit a filing that describes their efforts to conduct a reasonable country-of-origin inquiry for necessary conflict minerals used in their products. These minerals include tin, tungsten, tantalum, and gold. Depending on the determination reached through this inquiry, some companies must then conduct due diligence to further investigate whether these minerals came from covered countries, which include the Democratic Republic of the Congo (DRC) and adjoining countries.Companies' reasonable country-of-origin inquiry determinations have not changed significantly since 2015, according to GAO's analysis. In 2022, an estimated 51 percent of companies made preliminary determinations about whether the conflict minerals in their products may have come from the DRC or other covered countries. Of those companies that went on to perform due diligence, an estimated 53 percent reported they could not determine whether the minerals used in their products originated in covered countries.Source of Conflict Minerals in Products as Preliminarily Determined by Companies' Reasonable Country-of-Origin Inquiries, Reporting Years 2014–2022Note: Estimates have a margin of error of no more than plus or minus 10 percentage points.Many companies used standardized tools and programs, including supplier surveys, smelter and refiner audit programs, and traceability schemes, to attempt to determine the source of their minerals. However, some companies experienced challenges related to their due diligence efforts, according to GAO's analysis of filings and interviews with industry stakeholders. Such challenges included difficulties getting needed information because of lack of access to suppliers and complex supply chains. Industry stakeholders said that some companies are reporting supply chain information beyond that required by the SEC rule. Conversely, some industry stakeholders noted that other companies may be reporting incomplete information, or not filing at all, because of a perception that they are unlikely to face enforcement action by the SEC if they do not comply with the conflict minerals disclosure requirements.Why GAO Did This StudyThe United States, along with the international community, has sought to improve peace and security in the DRC for over 2 decades. However, according to the Department of State and the United Nations, conflict has persisted and contributed to severe human rights abuses and the displacement of people. Armed groups continue to profit from the mining and trade of conflict minerals, according to State.Provisions in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act required, among other things, the SEC to promulgate disclosure and reporting regulations regarding the use of conflict minerals from the DRC and adjoining countries. In 2012, the SEC adopted a conflict minerals disclosure rule requiring companies to file specialized disclosure reports beginning in 2014 and annually thereafter.The act also includes a provision for GAO to assess, among other things, the SEC rule's effectiveness in promoting peace and security in the DRC and adjoining countries. This report examines how companies responded to the SEC conflict minerals disclosure rule when filing in 2022. GAO analyzed a generalizable sample of 100 SEC filings; reviewed SEC documents; and interviewed SEC officials and industry stakeholders, including representatives from filing companies, business organizations, and non-governmental organizations.For more information, contact Kimberly M. Gianopoulos at (202) 512-8612 or gianopoulosk@gao.gov.
- Combating Illegal Fishing: Better Information Sharing Could Enhance U.S. Efforts to Target Seafood Imports for Investigation What GAO FoundThe National Marine Fisheries Service (NMFS) and the Department of Homeland Security's U.S. Customs and Border Protection (CBP) work to combat imports of seafood caught through illegal, unreported, and unregulated (IUU) fishing, which comprises many illicit activities (see fig.). For example, NMFS administers four trade monitoring programs that, by regulation, require documentation for imports of specific species. In addition, both agencies manage efforts to identify or “target” seafood imports potentially caught through IUU fishing so that such imports can be investigated or held for further inspection. Targeting efforts can include monitoring incoming seafood imports that fit a pattern of concern, such as importers with past trade violations.Common Types of Illegal, Unreported, and Unregulated FishingCBP and NMFS share information with each other through several mechanisms, including a data analysis tool and a CBP interagency coordination center. However, NMFS officials report difficulties obtaining timely information from CBP. In particular, NMFS officials told GAO that having to request information through CBP's interagency coordination center limits their ability to get the timely information they need. NMFS officials told us that if they want to inspect an incoming shipment, they need sufficient advance notice to coordinate with CBP. In addition, they said that receiving the information they need from CBP's interagency coordination center, in some cases, could take as long as a week. CBP officials told us that coordinating information requests through its coordination center is important to ensure that such requests do not jeopardize or duplicate ongoing CBP operations, among other reasons. Until CBP works with NMFS to ensure timely access to needed information, both NMFS and CBP may miss opportunities to combat imports of seafood caught through IUU fishing.Why GAO Did This StudyMany illicit activities, such as using prohibited fishing gear, constitute IUU fishing. Such fishing undermines the economic and environmental sustainability of the fishing industry. The illicit nature of IUU fishing means that the size of the problem can be estimated only roughly. However, the U.S. International Trade Commission estimated that about 11 percent of the value of the nation's approximately $22 billion in seafood imports in 2019 was derived from IUU fishing.GAO was asked to review federal efforts to combat imports of seafood caught through IUU fishing. This report (1) describes NMFS and CBP efforts to combat such imports; and (2) examines the mechanisms these agencies use to share information on such imports, and related challenges they have identified.GAO reviewed documents on NMFS and CBP efforts to combat imports of seafood caught through IUU fishing, as well as other relevant agency documents. GAO also interviewed officials from CBP and NMFS at the headquarters and port levels about these efforts and how officials share relevant information on seafood imports.
- Meat and Poultry Worker Safety: OSHA Should Determine How to Address Persistent Hazards Exacerbated by COVID-19 What GAO FoundCompanies reported taking steps to address COVID-19 in response to federal guidance. Most of the 15 companies responding to GAO's survey said they encouraged distancing in communal areas, installed barriers, and required masks. However, studies, federal inspections, and worker interviews suggest that meat and poultry workers continued to face high risk of infection in the first year of the pandemic. For example, in 2020, the Occupational Safety and Health Administration (OSHA) found that COVID-19 risk to workers at one large meat plant was more than 70 times higher than to the state's general population.Plastic Sheeting between Poultry Workers Standing in Close Proximity OSHA increased meat and poultry plant inspections in the first year of the pandemic, but faced enforcement challenges. Officials told GAO their ability to protect workers was limited because existing standards did not target COVID-related hazards, such as jobs requiring workers to stand in close proximity. The Occupational Safety and Health Act of 1970 permits OSHA to develop safety and health standards for specific industries. OSHA is developing an infectious disease standard for healthcare workers, but not for workers in meat and poultry processing. Without assessing the actions needed to better protect meat and poultry workers—such as assessing the need for an industry standard—OSHA may be missing an opportunity to protect workers.OSHA and Food Safety and Inspection Service (FSIS) officials said they met regularly during the pandemic, but did not provide documentation on whether they addressed worker safety. The agencies reported little field-level collaboration among staff with direct knowledge of plant conditions. In August 2022, the agencies updated their 1994 memorandum of understanding, which states that FSIS should report hazards to OSHA, including infectious diseases. The agencies did not follow some leading collaboration practices, such as defining outcomes and including key participants. By following these practices, OSHA and FSIS could better collaborate on meat and poultry worker safety.Why GAO Did This StudyIn 2016 and 2017, GAO reported that meat and poultry workers faced multiple occupational hazards. OSHA is responsible for ensuring worker safety and health, FSIS is responsible for ensuring the safety of meat and poultry products, and employers are responsible for providing safe and healthful workplaces.The CARES Act includes a provision to monitor and report on the federal pandemic response. GAO also was asked to review federal efforts to ensure meat and poultry worker safety and health during the pandemic.This report examines (1) meat and poultry companies' response to the pandemic and how the pandemic affected these workers; (2) OSHA's enforcement actions and associated challenges; and (3) OSHA and FSIS collaboration on worker safety. GAO surveyed companies, analyzed OSHA inspection data from February 2018 through June 2022—the most recent available at the time; reviewed federal laws and regulations; and spoke to workers from nine states with large meat and poultry processing operations. GAO also compared OSHA and FSIS actions to leading practices for interagency collaboration, and interviewed federal officials.
- Priority Open Recommendations: Small Business Administration What GAO FoundIn June 2022, GAO identified 15 priority recommendations for the Small Business Administration (SBA). SBA has implemented eight of those recommendations, including developing fraud risk assessments for the Paycheck Protection Program and Economic Injury Disaster Loans and taking measures to improve grantees' compliance with export promotion funding requirements.In May 2023, GAO identified six additional priority recommendations for SBA, bringing the total number to 13. The recommendations involve the following areas:Improving oversight and communication for COVID-19 pandemic response.	Enhancing disaster recovery efforts.	Improving export promotions operations.	Addressing cybersecurity challenges.	Meeting reporting requirements in a more timely manner.SBA's continued attention to these issues could lead to significant improvements in government operations.Why GAO Did This StudyPriority 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 Daniel Garcia-Diaz at (202) 512-8678 or garciadiazd@gao.gov.
- Priority Open Recommendations: Department of Commerce What GAO FoundIn July 2022, GAO identified 16 priority recommendations for the Department of Commerce (Commerce). Since then, Commerce has implemented two of those recommendations by:updating a joint memorandum of understanding with the Federal Communications Commission related to promoting the efficient use of radio spectrum in the public interest, and	completed the last in a series of workforce planning activities intended to improve its ability respond to changing staffing needs and to control human capital risks.In May 2023, GAO identified three additional priority recommendations for Commerce, bringing the total number to 17. These recommendations involve the following 8 areas:Decennial Census,	Ensuring the cybersecurity of the nation,	Improving the nation's water quality,	Privacy,	International trade,	Managing climate change risks,	Managing the radio frequency spectrum, and	Conflict minerals rule.Full implementation of these open recommendations could significantly improve Commerce's operations.Why GAO Did This StudyPriority 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 Michelle Sager at (202) 512-6806 or sagerm@gao.gov.
- COVID Relief: Fraud Schemes and Indicators in SBA Pandemic Programs What GAO FoundThe Small Business Administration (SBA) moved quickly under challenging circumstances to develop and launch pandemic relief programs to help small businesses. These programs, including the Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL), totaled over $1&nbsp;trillion and assisted more than 10 million small businesses. However, in some instances relief funds went to those who sought to defraud the government. As schemes emerged, SBA adapted its fraud risk management approach and added controls to help prevent, detect, and respond to fraud.GAO analyzed 330 PPP and COVID-19 EIDL fraud cases. Federal prosecutors across the United States filed bank fraud, wire fraud, money laundering, identity theft, and other charges against 524 individuals associated with these cases. This analysis is based on fraud cases publicly announced by the Department of Justice (DOJ) as of December 2021.Cases Charged by the Department of Justice Involving Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL) Fraud, as of December 31, 2021In those cases, DOJ charged individuals withmisrepresenting eligibility, falsifying documents, using stolen identities, and	deliberately exploiting the programs by conspiring with each other, sharing knowledge on how to circumvent controls, and obtaining kickbacks.For the 155 of the 330 cases that reached conclusion through guilty pleas or convictions, GAO calculated about $188 million in direct financial losses. Across these cases, as of December 2021, 94&nbsp;individuals had been sentenced to an average of about 37 months in prison. The number of cases will continue to grow. As of January 2023, the SBA Office of Inspector General (OIG) had 536 ongoing investigations, and the statute of limitations has been extended to 10 years to prosecute individuals who committed PPP and COVID-19 EIDL-related fraud.Select GAO analyses of PPP and COVID-19 EIDL data, including comparisons with National Directory of New Hires (NDNH) wage data, identified over 3.7 million unique recipients with fraud indicators out of a total of 13.4 million (see figure). Fraud indicators can be used to identify potential fraud and assess fraud risk. They are not proof of fraud. Additional review, investigation, and adjudication is needed to determine if fraud exists. To that end, GAO referred the unique recipients with fraud indicators it identified to the SBA OIG for further review and investigation. The unique recipients identified include potentially non-existent businesses or businesses that may have misrepresented employee counts to obtain more funds. However, it is possible that the analysis identified non-fraudulent recipients with data discrepancies consistent with an indicator. While SBA has conducted its own analyses to identify recipients with fraud indicators, it does not have access to the NDNH database and could not have performed the same analyses as GAO.Unique Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL) Recipients with Fraud IndicatorsSBA has employed data analytics to enhance fraud prevention and detection. For example, the use of analytics contributed to SBA determining that some PPP borrowers were ineligible for loan amounts or used them for unauthorized purposes, resulting in $4.7 billion in loan proceeds not being forgiven. In addition, SBA referred over 669,000 potentially fraudulent PPP and COVID-19 EIDL loans to the SBA OIG for investigation after using data analytics and conducting manual reviews. SBA enhanced its analytic capabilities during the pandemic and has recognized that it would benefit from further development of its data analytics program. SBA has opportunities to continue to improve its ability to prevent and detect potentially fraudulent transactions. For example, SBA did not fully leverage information to help identify applicants who tried to defraud multiple pandemic relief programs. While it has access to multiple external data sources, SBA does not have access to other external data sources that could aid in fraud detection and prevention. Leveraging information across programs and obtaining access to external data are consistent with leading fraud risk management practices. SBA has the opportunity to ensure that it fully leverages data across programs and accesses external data to the fullest extent possible to mitigate the likelihood and impact of fraud. Obtaining such access could necessitate pursuing statutory authority or entering into data-sharing agreements with other agencies to gain timely access to those sources.Why GAO Did This StudyCongress established four programs to support small businesses during the pandemic: PPP, COVID-19 EIDL, Restaurant Revitalization Fund, and Shuttered Venue Operators Grant. Widely reported incidents of fraud raised questions about SBA's management of these programs. For this and other reasons, GAO added small business emergency loans to its High Risk Program in 2021.The CARES Act includes a provision for GAO to monitor COVID-19 pandemic relief funds. This report (1)&nbsp;analyzes fraud cases charged by DOJ involving PPP and COVID-19 EIDL to understand fraud schemes and impacts, (2)&nbsp;provides the results of select data analyses regarding fraud indicators in PPP and COVID-19 EIDL, and (3) identifies opportunities for SBA to enhance its data analytics.GAO analyzed DOJ press releases and court documents related to PPP and COVID-19 EIDL cases publicly announced as of December 2021 for fraud schemes and impacts. GAO analyzed 2020 and 2021 PPP and COVID-19 EIDL data, comparing these data to NDNH wage data to identify the presence of fraud indicators. GAO also evaluated SBA's data analytic efforts against leading practices.
- Noncompete Agreements: Use is Widespread to Protect Business' Stated Interests, Restricts Job Mobility, and May Affect Wages What GAO FoundTwo recent nationally representative studies GAO reviewed estimated that 18 percent of workers were subject to noncompete agreements (NCAs), and one of the studies estimated that 38 percent of workers had been subject to an NCA at some time in their careers. Over half of the 446 private sector employers responding to GAO's survey reported that at least some of their workers had NCAs. Studies and GAO's employer survey also found that different types of workers are required to sign NCAs, including executives and hourly workers. For example, over 70 percent of respondents that use NCAs and that employed hourly workers used NCAs for at least some of them (see fig.).Noncompete Agreements (NCAs) by Worker Type, among Responding Employers Using NCAsEmployers GAO surveyed most often reported using NCAs to protect certain confidential information from competitors, regardless of worker type. However, several stakeholders GAO interviewed said that lower-wage workers generally do not have access to such information. Evidence suggests that workers who sign NCAs often do so as a condition of employment. Evidence also suggests that few workers who sign NCAs negotiate the terms, because they are unaware of what NCAs are, they want the job regardless, or the NCA is introduced after a job is accepted. Most surveyed employers reported rarely or never enforcing NCAs in the past 5 years. Employers that reported enforcing NCAs reported doing so for all worker types, though most often for executives and managers.Studies GAO reviewed found that NCAs restrict job mobility, and may reduce wages and new firm creation. Two of these studies found that even when NCAs are not legally enforceable in a state, NCAs reduce job mobility and workers with NCAs are less likely to search for new jobs. Studies also found that NCAs lower workers' earnings, on average, though certain groups like executives may experience mixed effects. In addition, studies found that NCAs may discourage workers from starting new firms.Of the 26 attorney general offices that responded to GAO's survey, 6 reported not having NCA-related statutes, 3 reported a statute that generally allows NCAs, and one reported a statute that generally does not allow NCAs. In addition, 16 reported a statute that allows NCAs, subject to certain provisions; for example, exempting workers who earn less than a certain wage from NCAs or requiring employers to provide written notice of an NCA to workers before they start a job.Why GAO Did This StudyNCAs are provisions in employment contracts that can restrict workers from seeking employment with a competitor. Employers historically have applied NCAs to highly skilled workers and executives with access to proprietary information, such as trade secrets. NCAs generally are governed by state law. Questions have been raised about employers' use of NCAs, and their effects on lower-wage workers who may not have access to protected proprietary information.GAO was asked to review the use and effects of NCAs. This report examines (1) the prevalence of NCAs, including for various types of workers; (2) what factors influence employers' and employees' decisions to enter into NCAs; (3) the effects of NCAs on the workforce and firms; and (4) steps states have taken to regulate NCAs.GAO reviewed empirical studies on the prevalence and economic effects of NCAs. GAO also conducted a nongeneralizable survey of private sector employers on the reasons they use and enforce NCAs; 446 employers responded to the survey. GAO conducted a separate survey of state attorney general offices on state statutes related to NCAs; 25 states and the District of Columbia responded. GAO also interviewed stakeholders, such as worker advocates, employer groups, and researchers, and reviewed relevant federal laws.The Department of Justice and Federal Trade Commission (FTC) provided technical comments on this report, which GAO incorporated, as appropriate. FTC also provided a comment letter with additional context from its research on NCAs.For more information, contact Thomas Costa at (202) 512-4769 or costat@gao.gov.