Background EXIM Financing Product Types As described in figure 1, to support U.S. exports, EXIM offers four major types of financing products: direct loans, loan guarantees, export-credit insurance, and working capital guarantees. Regardless of type, EXIM’s financing products generally have one of three maturity periods: Short- term transactions are for less than 1 year; medium-term transactions are from 1 to 7 years long; and long-term transactions are more than 7 years. As we reported in July 2018, for all financing types, EXIM currently conducts a number of preauthorization and postauthorization antifraud activities. See the examples shown in figure 2. Fraud Risk Management Fraud and “fraud risk” are distinct concepts. Fraud—obtaining something of value through willful misrepresentation—can be challenging to detect and adjudicate because of its deceptive nature. Fraud risk exists when individuals have an opportunity to engage in fraudulent activity, have an incentive or are under pressure (e.g., financial pressures) to commit fraud, or are able to rationalize committing fraud. When fraud risks can be identified and mitigated, fraud may be less likely to occur. Although the occurrence of fraud indicates there is a fraud risk, a fraud risk can exist even if actual fraud has not yet been identified or adjudicated. According to the Standards for Internal Control in the Federal Government, executive-branch agency managers are responsible for managing fraud risks and implementing practices for combating those risks. Specifically, federal internal control standards call for agency management officials to assess the internal and external risks (including fraud risks) their entities face as they seek to achieve their objectives. The standards state that as part of this overall assessment, management should consider the potential for fraud when identifying, analyzing, and responding to risks. Risk management is a formal and disciplined practice for addressing risk and reducing it to an acceptable level. The leading practices in the Fraud Risk Framework call for agencies to identify inherent fraud risks affecting the program, examine the suitability of existing fraud controls, and then prioritize mitigating “residual” fraud risks—that is, risks remaining after antifraud controls are adopted. Specifically, according to the assess component of the Fraud Risk Framework, managers who effectively assess fraud risks attempt to fully consider the specific fraud risks the agency or program faces, analyze the potential likelihood and impact of fraud schemes, and then ultimately document prioritized fraud risks. Moreover, managers can use the fraud risk assessment process to determine the extent to which controls may no longer be relevant or cost-effective. Leading practices that are consistent with this component include conducting quantitative or qualitative fraud risk assessments at regular intervals, or both, of the likelihood and impact of inherent risks on the program’s objectives, and determining the agency’s risk tolerance for the inherent fraud risks; identifying specific sources for gathering information about fraud risks, including information on fraud schemes that are reflected in adjudicated cases of fraud; examining the suitability of existing fraud controls for preventing fraud and mitigating fraud risks identified; and documenting in the program’s fraud risk profile the analysis of the types of inherent fraud risks assessed, their perceived likelihood and impact, managers’ risk tolerance, and the prioritization of the inherent fraud risks and any residual fraud risks. As we reported in July 2018, the Fraud Reduction and Data Analytics Act of 2015 requires the Office of Management and Budget (OMB) to establish guidelines that incorporate the leading practices of GAO’s Fraud Risk Framework. The act also requires federal agencies to submit to Congress a progress report each year, for 3 consecutive years, on implementation of the risk management and internal controls established under the OMB guidelines. OMB published guidance under OMB Circular A-123 in 2016 affirming that federal managers should adhere to the leading practices identified in the Fraud Risk Framework. As we reported in December 2018, EXIM identifies itself as subject to the act, and, as such, follows it. The Fraud Risk Framework is also aligned with federal internal control standards, specifically Principle 8 (“Assess Fraud Risk”) of the Green Book. Federal internal control standards also state that excessive pressures, such as financial pressures (e.g., delinquent federal debt), can pose a fraud risk factor to agency programs as these pressures can provide an incentive or motive to commit fraud. Although the existence of financial pressure alone does not necessarily indicate that fraud exists or will occur, financial pressure is often present when fraud does occur. Delinquent Federal Debt and EXIM Financing Programs Applicants for EXIM programs who have delinquent federal debt may not be able to obtain certain types of financing until they resolve their debts. Specifically, under 31 U.S.C. § 3720B, applicants who are delinquent on federal nontax debts may not receive federal financial assistance, including such assistance provided by EXIM, until they satisfactorily resolve the delinquency (e.g., pay in full or negotiate a new repayment plan). However, 31 U.S.C. § 3720B also provides that an agency head may waive this restriction. Additionally, OMB’s Circular No. A-129, Policies for Federal Credit Programs and Non-Tax Receivables, prescribes to agencies the policies, procedures, and standards for screening program participants to determine whether they are delinquent on any federal debt when applying to federal credit programs. EXIM Reported Antifraud Controls for Mitigating Fraud Risks Identified and a Fraud Risk Assessment That Considered Those Risks Closed Cases of Fraud Generally Involve Four Fraud Risk Factors We identified fraud risks—generally involving four overall fraud risk factors—by examining EXIM-associated court cases of fraud adjudicated from calendar year 2012 through calendar year 2017. We then communicated these fraud risks to EXIM, and EXIM officials reported examples of existing controls it uses to help detect and mitigate these fraud risks. EXIM also provided documentation reflecting its efforts to conduct a fraud risk assessment that considered various fraud risks affecting its major financing product lines, including fraud risks we identified during this review. We identified fraud risks—generally involving four overall fraud risk factors—by examining 44 EXIM-associated closed court cases of fraud adjudicated from calendar year 2012 through calendar year 2017. Specifically, the various fraud risks we identified overall involved one or more of the fraud risk factors illustrated in figure 3 below: opportunities to falsify self-reported information on applications or financial pressures that potentially incentivized participants or employees to commit fraud; opportunities to circumvent or take advantage of EXIM or lender opportunities to circumvent the intent of EXIM’s programs by diverting loan proceeds and other EXIM financing for personal use or benefit instead of for the export of U.S. goods. See appendix I for a summary of these 44 cases we reviewed. These 44 cases illustrate the financial risks associated with fraud against EXIM. Federal and state courts combined have ordered restitution of $82.4 million in the 44 adjudicated cases, but much of that restitution has not yet been paid. For example, as of October 2018, the total remaining unpaid restitution amount is $71.6 million, or over 80 percent. In one fraud case we reviewed, which was adjudicated in 2013, a federal court ordered a convicted U.S. exporter to pay EXIM $8.6 million in restitution for the fraud that he committed in a loan guarantee program. Since 2013, the participant has paid back $25.00 of this amount. EXIM Reported Antifraud Controls for Mitigating Fraud Risks Identified in Closed Cases EXIM reported having existing antifraud controls to mitigate the fraud risks we identified. Specifically, we communicated to EXIM the fraud risks we identified from our review of the 44 adjudicated cases. In response, EXIM officials described general antifraud controls the agency currently uses to help detect and mitigate each of the fraud risks we identified. The officials stated that EXIM has experience with all the fraud risks we identified and stated that they were generally confident that EXIM’s antifraud controls were appropriate for mitigating the risks. EXIM officials consider many of the fraud risks that we identified as risks that could impact any of the agency’s financing programs (i.e., credit insurance, loan guarantees, direct loans, or working capital guarantee programs). EXIM officials provided examples of the general antifraud controls that they said EXIM uses to mitigate the fraud risks we identified across all agency financing products. According to EXIM officials and as illustrated in figure 4 below, these controls include: fraud prevention and detection procedures; due diligence standards; and a list of “red flags” that EXIM staff should be aware of and is used to identify indicators of potential fraud and corruption that may appear on EXIM transaction documents. Officials said that their confidence in the controls stems from seeing a reduction in fraud cases since the early 2000s after these antifraud controls were put in place. EXIM officials clarified that this confidence does not stem from completing a comprehensive fraud risk assessment of fraud risks impacting all of its financing products consistent with the leading practices in the Fraud Risk Framework. EXIM’s Fraud Risk Assessment Considered Fraud Risks Identified EXIM also provided documentation reflecting its efforts to conduct a fraud risk assessment that considered various fraud risks affecting its major financing product lines, including fraud risks we identified during this review. EXIM officials said that the fraud risks we identified were generally already known to EXIM as they relate to or are very similar to those fraud risk factors contained in EXIM’s list of red flags. EXIM officials acknowledged that assessing its fraud risks and evaluating the agency’s existing antifraud controls may indicate opportunities for EXIM to further adapt EXIM’s antifraud controls to mitigate any residual fraud risks within its tolerance level. Such assessments can further help EXIM mitigate fraud and the resulting effects across all product lines before they occur, which includes the length of time it can take for EXIM to fully recover from restitution losses after fraud has been perpetrated, as illustrated in the 44 cases presented in appendix I. EXIM Has Procedures for Detecting Delinquent Federal Debt Owed by Applicants and Participants but Is Missing Additional Opportunities to Use Readily Available SAM Data to Do So EXIM has procedures for detecting delinquent federal debt owed by EXIM applicants and participants. However, EXIM is missing additional opportunities to use readily available SAM data to identify ineligible applicants or participants that may have delinquent federal debt, and to use such data to determine eligibility or assess repayment fraud risk. EXIM Has Procedures to Detect Delinquent Federal Debt Owed by Applicants and Participants EXIM has procedures to detect delinquent federal debt owed by applicants and participants that include reviewing their credit reports and requiring applicants to certify that they and other participants do not have such delinquent debt. Under 31 U.S.C. § 3720B, applicants who are delinquent on federal nontax debts may not receive federal financial assistance, including direct loans, loan guarantees, or loan insurance until they satisfactorily resolve the delinquency (e.g., pay in full or negotiate a new repayment plan). 31 U.S.C. § 3720B does not address delinquent federal tax debt; however, such delinquent federal debt may also pose a fraud risk or repayment fraud risk to EXIM’s financing programs. Additionally, OMB Circular No. A-129 prescribes to agencies the policies, procedures, and standards for screening program participants to determine whether they are delinquent on any federal debt when applying to federal credit programs, including recommending that agencies ask applicants to self-certify on their applications that they have no delinquencies; requiring agencies to obtain and review applicants’ credit reports; and encouraging agencies to use appropriate databases, such as the Department of the Treasury’s Do Not Pay portal sources to identify delinquent federal debtors during the application screening process. According to EXIM officials, the agency employs procedures to ensure its policies and processes meet these requirements for applicable financing products. Specifically, and as illustrated in figure 5 below, these procedures include reviewing the following: Self-certifications: EXIM applications for relevant financing programs include a self-certification by the applicant that the applicant does not have delinquent federal debt. However, as we have reported in the past, relying on applicants to self-report adverse actions on their applications, instead of verifying such information, could cause an agency to miss opportunities to develop a more-complete picture of the applicants. Credit reports: EXIM obtains credit reports for applicants and participants in some financing products. In particular, EXIM’s internal Loan Guarantee and Credit Insurance Manual of 2015 communicates the 31 U.S.C. § 3720B restriction to loan officers and instructs them to review the borrower’s credit report to check whether the borrower is delinquent on any federal debt. If the loan officer finds that the credit report reflects such delinquent federal debt, the manual further instructs the loan officer to advise and request guidance from EXIM’s Trade Finance Director and the Office of General Counsel. However, as we have reported in the past, some delinquent federal tax debt may not appear on the credit reports unless the Internal Revenue Service has filed a lien on the delinquent federal tax debt. World Check: EXIM, through the assistance of a third-party vendor, also makes use of some data sources listed in the Do Not Pay sources as part of its prescreening application process and possibly during postauthorization risk-based reviews. Specifically, EXIM officials told us that EXIM uses Thomson Reuters’s World Check database to identify federal debts owed by applicants as part of its Character, Reputational, and Transaction Integrity (CRTI) review process that is managed by EXIM’s Credit Review and Compliance Division. The World Check database currently checks over 20 different watch lists and other databases, including lists of entities excluded from doing business with the federal government maintained in GSA’s SAM. According to EXIM, other sources in the World Check database that reveal such federal debts could also lead indirectly to the discovery of delinquent federal debt. However, as discussed below, this check of SAM does not involve a check of delinquent federal debt. This CRTI review process is conducted during the underwriting (i.e., the preauthorization review) phase and may occur throughout the life cycle of transactions, such as during EXIM’s postauthorization risk-based reviews. EXIM officials told us that, as part of this process, loan officers or other EXIM officials send the names of applicants to EXIM librarians, who perform a manual search of the World Check database, review results, and return relevant results to EXIM officials for their consideration. EXIM officials noted that this process can be challenging, particularly when librarians perform searches on applicants with common names, which produce many results that are not useful. EXIM officials told us that EXIM does not track information on instances in which an applicant’s delinquent federal debt prevents a transaction from moving forward or prevents a specific applicant’s participation in a transaction. Consequently, EXIM officials told us that EXIM has no records of this happening. However as described in greater detail below, EXIM does not make use of readily available SAM data to identify delinquent federal debts owed by applicants and participants, which could limit its ability to detect instances in which applicants and participants owe these debts. EXIM Is Missing Additional Opportunities to Use Readily Available SAM Data to Detect Applicants and Participants That May Have Delinquent Federal Debt EXIM is missing additional opportunities to use readily available SAM registration data to identify potentially ineligible applicants and participants that may have delinquent federal debt or may otherwise pose a repayment fraud risk. Specifically, while EXIM employs procedures that may reveal applicants’ delinquent federal debts, as described above, EXIM’s procedures for identifying applicants and participants with delinquent federal debt do not include a search of a specific data element in the SAM database that can be used to detect delinquent federal debtors. The data element we refer to here is the Debt Subject to Offset flag, which may reflect both nontax and tax delinquent federal debts owed. As mentioned previously, SAM is a government-wide information system that federal agencies can use to obtain information on businesses that do business with the federal government, including an entity’s Debt Subject to Offset status. The Debt Subject to Offset data element in SAM indicates that the entity potentially has a delinquent federal debt subject to collection under the Treasury Offset Program. The GSA officials who maintain the SAM database told us that all federal agencies have the legal authority to use the SAM registration database free of charge. Specifically, all federal agencies can use this database to manually search by an entity’s name, Data Universal Numbering System number, or Tax Identification Number for the purpose of detecting whether the entity potentially has delinquent federal debt, such as by identifying whether an entity’s SAM record contains the Debt Subject to Offset flag. Further, GSA officials also told us that all federal agencies are able to request batches of SAM registration data free of charge, for the purpose of matching these data to agency data by entities’ names, Data Universal Numbering System numbers, or Tax Identification Numbers for the purpose of identifying entities that may have the Debt Subject to Offset flag in SAM, among other available data. Performing data analytics, such as batch matching, on available data is a leading practice cited in the Fraud Risk Framework that we have reported can help improve agency efforts to combat fraud. In particular, we have found in prior work that using available data to verify that EXIM’s transaction applicants are not delinquent on federal debt can help EXIM assure applicant eligibility is consistent with federal guidance, provide reasonable assurance of repayment, and help prevent fraud. We have also found that using available data to independently verify self-reported delinquent federal debt information, such as self-reported information on delinquent federal tax debt owed, is a key detection and monitoring component of fraud prevention. We identified additional opportunities for EXIM to manually use SAM’s online database or data-matching approaches to identify applicants or participants with potential delinquent federal debt. Specifically, we registered in SAM to conduct several manual searches (by entities’ Data Universal Numbering System numbers, Tax Identification Numbers, and names) and confirmed that it can be used to conduct such searches without incurring any external costs charged by GSA. For example, we conducted two Data Universal Numbering System number searches and found two active EXIM participants appearing in SAM’s registration database with a Debt Subject to Offset flag. We also obtained historical SAM data from GSA and EXIM transaction data and confirmed that these data sources could be used to identify EXIM applicants and participants with potentially delinquent federal debt in a batch match (rather than manual, case-by-case searches). As illustrated in our batch-matching results below, we found this data-matching process can provide an opportunity to match these data sets using the Tax Identification Numbers and Data Universal Numbering System numbers for the entities in both data sets. Our batch-matching analyses indicated that, from calendar year 2014 through calendar year 2016, EXIM authorized transactions that had an aggregate authorization value of approximately $34.3 billion. Of that amount, we found the following: An aggregate authorization value of about $1.7 billion was associated with 32 U.S.-based companies that had a delinquent federal debt indicator in SAM in the same month that these transactions were authorized. The transactions mostly involved U.S.-based applicants and exporters. As mentioned above, associated parties we reviewed included not only the applicant, but also participants involved, including the borrower, buyer, and exporter, which may or may not be the applicant. While the results of this analysis do not mean that EXIM should have suspended these transactions in accordance with 31 U.S.C. § 3720B, these results nonetheless indicate that the data in SAM that indicate delinquent federal debt could provide an opportunity for EXIM to identify important indicators of applicants or other transaction participants with potential delinquent federal debt when determining their program eligibility and assessing any related fraud risks or repayment risks they present during EXIM’s preauthorization CRTI reviews. Because the Debt Subject to Offset flag may indicate either nontax debts or tax debts, it is possible that some of these entities owed delinquent federal nontax debts that are applicable under 31 U.S.C. § 3720B, indicating EXIM should have considered suspending these transactions. However, it is also possible that some of these entities owed delinquent federal tax debts that are not applicable under 31 U.S.C. § 3720B, but that may pose a fraud risk or repayment risk nonetheless. By using the Debt Subject to Offset flag as an indicator of these delinquent federal debts and gathering additional information on the specific facts and circumstances of each case, EXIM would be better positioned to assess the relevant compliance, fraud, and repayment risks an applicant’s or participant’s delinquent federal debt may pose. An aggregate authorization value of about $4.1 billion was associated with 97 U.S.-based companies that had a delinquent federal debt indicator in SAM during the transaction maturity period (i.e., after the month they were approved, but before the transactions’ maturity date). These transactions mostly involved U.S.-based applicants and exporters. As mentioned above, associated parties we reviewed included not only the applicant, but also participants involved, including the borrower, buyer, and exporter, which may or may not be the applicant. 31 U.S.C. § 3720B may prevent applicants with federal financial debts from obtaining loans, guarantees, and insurance; thus, it does not apply to any delinquent federal debt accrued after loan approval. However, we looked at potential delinquent debt accrued after approval because delinquent debt accrued after approval and during the transaction maturity period might affect EXIM’s view of a financing product’s repayment risk. Further, EXIM already conducts similar postauthorization monitoring to identify such risks through its use of World Check as part of its CRTI process described above. Thus, these results nonetheless illustrate that EXIM can use SAM data during EXIM’s postauthorization CRTI reviews to identify transaction participants with potential delinquent federal debt and determine the extent to which they may pose a repayment fraud risk. Prior to sharing our results with EXIM, EXIM officials told us that they have access to SAM entity registration records, but they believe searching the SAM registration database is a time-consuming process that should be reserved for rare circumstances. Further, EXIM officials also told us that using the SAM registration database to identify applicants or participants that have the Debt Subject to Offset flag in SAM would yield few results because the vast majority of their financing program participants are foreign-based entities, and thus would not also be contractors for the U.S. government and registered in SAM. However, we identified many U.S.-based entities that had a delinquent federal debt indicator either in the month a transaction was approved, or during the transaction’s maturity period, by searching in the SAM database and analyzing SAM data for EXIM applicant and participants, as described above. Further, it is not clear whether performing manual searches or batch matches with SAM data to identify delinquent federal debtors would be any more time-consuming than EXIM’s current procedures for doing so, which include manual searches of World Check and obtaining and reviewing credit reports, as described above. When we met with EXIM officials to communicate our batch-matching results above, they expressed concern that these results could imply that EXIM is doing business with applicants or participants with delinquent federal debt. They then indicated that they were interested in obtaining SAM registration data so that they could determine whether it would be feasible for them to perform the same type of analysis that we performed. In a subsequent meeting, EXIM officials informed us that they were also able to obtain current SAM registration data, analyze the SAM data against active EXIM participant data, and find dozens of active EXIM participants with the Debt Subject to Offset flag in SAM. The results of our analyses, as well as EXIM’s own experience with the SAM data, suggest EXIM also has an additional and practical opportunity to incorporate searches of SAM entity registration data as part of its postapproval monitoring of transactions to enhance its monitoring of and response to risks in ongoing transactions. Standards for Internal Control in the Federal Government state that management should use quality data to achieve agency objectives. For example, this could include agencies obtaining relevant operational, financial, or compliance-related data from reliable internal and external sources in a timely manner based on identified information requirements, and then using such data to make informed decisions and evaluate performance in achieving program objectives and addressing risks. Without also pursuing available debt data in SAM’s registration database, as an additional layer of due diligence, to identify applicants with delinquent federal debt during underwriting and compliance reviews, EXIM is potentially forgoing practical opportunities to use such data when determining applicants’ program eligibility and to adopt leading practices for managing repayment fraud risks across EXIM’s financing programs. In particular, such available SAM data can provide opportunities to verify independently the applicants’ self-certification of delinquent federal debts they owe and assess whether the applicants may have misrepresented their delinquent federal debt status on their applications, which is a fraud risk in the application process; detect potential delinquent federal debts that are not apparent in credit make informed eligibility decisions during preauthorization CRTI reviews and assess repayment fraud risk during postauthorization CRTI reviews. Conclusions EXIM assumes the credit and country risks that the private sector is unable or unwilling to accept, including the risk of losses due to fraud. EXIM’s financing products face various fraud risks, and EXIM has begun to take steps to consider these fraud risks as part of a full fraud risk assessment, as we recommended in July 2018. However, because it remains unclear whether EXIM’s actions fully respond to the recommendations of our July 2018 report, we will continue to monitor EXIM’s progress in fully assessing its fraud risks. EXIM also employs procedures to detect delinquent federal debt owed by EXIM applicants and participants. However, EXIM is missing opportunities to use readily available SAM data to identify applicants or participants that may misrepresent their delinquent federal debt status and pose a repayment fraud risk to EXIM financing programs. Applicants or participants with delinquent federal debt could be one of many repayment fraud risks that could indicate an increased risk of nonrepayment and incentives to commit fraud against EXIM. EXIM officials believe searching SAM is a time-consuming process that would yield few results. However, manually searching SAM’s online registration database for the purpose of determining whether an applicant or participant may have a Debt Subject to Offset flag may not be any more time-consuming than what EXIM currently performs through its preauthorization or postauthorization CRTI reviews. Nevertheless, we demonstrate in this report the practicality and illustrate results of using such data through multiple approaches, such as batch matching, without incurring any external costs charged by GSA. By assessing the practicality of searching SAM data, EXIM may determine that this source of data provides an additional tool for combating fraud. Implementing these antifraud activities could further help EXIM verify program eligibility, identify repayment fraud risk, and provide EXIM with reasonable assurance that it is effectively and efficiently carrying out its mission of supporting U.S. jobs and the export of U.S. goods. Recommendations for Executive Action We are making the following two recommendations to EXIM: EXIM’s chief operating officer should direct EXIM’s Credit Review and Compliance Division to assess and document the practicality of incorporating into its preauthorization CRTI reviews searches of data elements in SAM that indicate delinquent federal debts owed by applicants, and, if practical, implement relevant approaches—such as manual searches or batch matching. (Recommendation 1) EXIM’s chief operating officer should direct EXIM’s Credit Review and Compliance Division to assess and document the practicality of incorporating into its postauthorization CRTI reviews searches of data elements in SAM that indicate delinquent federal debts owed by applicants and participants, and, if practical, implement relevant approaches—such as manual searches or batch matching. (Recommendation 2) Agency Comments and Our Evaluation We provided a draft of this report to EXIM for review and comment. In its written comments, reproduced in appendix II, EXIM concurred with our recommendations and stated that it will move forward to implement them. EXIM also provided technical comments, which we incorporated as appropriate. In its written comments, EXIM noted a number of points it referred to as “key concerns.” These points do not disagree with our findings, conclusions, or recommendations. Specifically, EXIM stated that the 44 cases we reviewed involved transactions that were approved between 2002 and 2012 and that it will continue to work with the Department of Justice to collect restitution payments. Additionally, EXIM stated that it is in full compliance with 31 U.S.C. § 3720B and the related provisions of OMB Circular A-129 guidance regarding restrictions on doing business with delinquent federal debtors. However, assessing EXIM’s compliance with 31 U.S.C. § 3720B or OMB Circular A-129 was outside the scope of this report. Finally, for the purpose of implementing our recommendations, EXIM requested the data pertaining to the U.S.-based companies that we found to have a delinquent federal debt indicator in SAM. To identify those companies, we used (1) an extract of data that EXIM provided to us, and (2) GSA SAM data, which EXIM told us it can and has already obtained directly from GSA. We will provide EXIM with a copy of the EXIM data it requested. However, we believe EXIM will be better positioned to assess the practicality of checking the SAM delinquent federal debt flag by continuing to obtain the SAM data directly from GSA. We are sending copies of this report to the appropriate congressional committees, the president and board chairman of EXIM, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staffs have any questions about this report, please contact me at (202) 512-6722 or bagdoyans@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Appendix I: Summary of GAO Review of 44 Cases Adjudicated from Calendar Years 2012 through 2017 The table below summarizes the information we reviewed during our review of the 44 Export-Import Bank of the United States (EXIM)- associated cases of alleged fraud that we were able to identify and determine were adjudicated from calendar years 2012 through 2017. Such information includes financing product types, dates adjudicated, fraud schemes, fraud risk factors involved, and the amount of EXIM restitution owed and paid to EXIM. As mentioned earlier, the fraud risks we identified in these 44 cases related to one or more of the following four fraud risk factors: (1) opportunities to falsify self-reported information on applications or transaction documents, (2) financial pressures that potentially incentivized participants or employees to commit fraud, (3) opportunities to circumvent or take advantage of EXIM or lender controls, or (4) opportunities to circumvent the intent of EXIM’s financing programs by diverting loan proceeds and other EXIM financing for personal use or benefit instead of for the export of U.S. goods. Appendix II: Comments from the Export- Import Bank of the United States Appendix III: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the contact named above, Jonathon Oldmixon (Assistant Director), Flavio Martinez (Analyst in Charge), Mason Calhoun, Marcus Corbin, Anthony Costulas, Adam Cowles, David Dornisch, Heather Dunahoo, Paulissa Earl, Colin Fallon, Dennis Fauber, Jennifer Felder, Dragan Matic, Maria McMullen, Christopher H. Schmitt, Albert Sim, Sabrina Streagle, and Steve Westley made key contributions to this report.


Available Data Show a Range of Threats and Assaults against Land Management Agency Employees, but Not All Incidents are Captured in the Data Available federal law enforcement data show a range of threats and assaults against the four federal land management agencies’ employees in fiscal years 2013 through 2017. The severity of these incidents ranged from threats conveyed over the telephone to attempted murder and included an incident in which an employee was stabbed outside a federal building. The number of incidents of threats and assaults varied by agency. For example, for fiscal years 2013 through 2017 BLM data included 88 incidents of threats and assaults against BLM FWS data included 66 incidents of threats and assaults against FWS Forest Service data included 177 incidents of threats and assaults against Forest Service employees; and Park Service data included 29 incidents of threats and assaults against Park Service employees. Further, FBI data for fiscal years 2013 through 2017 show that the FBI initiated under 100 domestic terrorism investigations into potential threats to federal land management agencies. Our analysis of the FBI data showed that the majority of the domestic terrorism investigations involved BLM. Additionally, the majority involved individuals motivated by anti- government ideologies. For example, the FBI investigated one case in which a BLM law enforcement officer received more than 500 harassing phone calls and several death threats after a subject posted personal information about the officer on the social media platform Twitter. However, the number of actual threats and assaults against federal land management employees is unclear and may be higher than what is represented in available data, because not all incidents of threats and assaults against land management agency employees are captured in the agencies’ databases. There are several reasons why this may be the case. Specifically, some incidents of threats and assaults are investigated by local or state law enforcement and may be recorded in their data systems rather than in the land management agencies’ systems. Additionally, officials from two agencies we interviewed said that when a single incident involved multiple offenses, the less serious offenses are unlikely to be recorded in the data system and, therefore, the entirety of what occurred may not be captured. Further, land management agency employees do not always report all incidents of threats. For example, some field unit employees said that in certain circumstances, they consider receiving threats as a normal part of their job. Some officials also described being threatened while off duty, such as being harassed in local stores or being monitored at their home, and they said that in some cases they did not report the incident because it was a common occurrence. However, even in more high-profile incidents, agency officials told us that employees may not always report threats to agency law enforcement. For example, agency officials we interviewed cited specific incidents around the time of the 2016 armed occupation of FWS’s Malheur National Wildlife Refuge that they did not necessarily report to their agency’s law enforcement. These incidents included individuals holding anti-government beliefs who followed a teenage girl wearing a BLM shirt around the local grocery store and threatened to burn her house down, and agency employees who had shots fired over their heads while working in the field. According to officials at two agencies, many employees were traumatized by the Malheur occupation and some did not return to work, including some who transferred to other agency field units. Land Management Agencies Use Various Approaches to Protect Employees, but Several Factors May Affect Their Ability to Do So Federal land management agencies use various approaches to protect their employees from threats and assaults, including deploying agency law enforcement officers to protect employees and resources and building relationships with external law enforcement entities and the public. Specifically, when necessary, agencies deploy additional law enforcement officers to assist their local officers. For example, during the armed occupation of the Malheur National Wildlife Refuge, FWS officials reported deploying FWS law enforcement officers from around the country to field units in western states to provide additional security for FWS employees. Agency officials we interviewed also told us that they build relationships with local, state, and other federal agency law enforcement entities to help protect employees and resources in the field and to assist with coordinating law enforcement responses. Such relationships are important because not all field units have a law enforcement officer, and those that do often rely on local law enforcement for assistance in responding to incidents of threats or assaults against agency employees. For example, officials we interviewed at a field unit in Nevada stated that during a high-profile court case involving the agency, the Las Vegas Metropolitan Police Department kept a patrol car outside the field unit for several days to help ensure field unit employees’ safety. Finally, officials at several field units we visited stated that their law enforcement officers are focused on educating, rather than policing, visitors. Agency officials we interviewed cited several factors that can affect their ability to protect employees. Specifically, agency officials noted that employees are required to interact with the public as part of their official duties and may wear uniforms, which makes them easily recognizable and can put them at risk of being threatened or assaulted. (See figure 1.) Additionally, agency officials stated that it can be difficult to protect employees because, as part of their field work, employees may be dispersed across hundreds of miles of federal lands and may be located hours or days away from the nearest agency law enforcement officer. For example, as of fiscal year 2018, BLM had 194 field law enforcement officers to cover the 245 million acres of land managed by BLM. Further, the number of agency field law enforcement officers at all four land management agencies declined from fiscal year 2013 through fiscal year 2018. For example, BLM experienced a decrease of 9 percent, while the Forest Service experienced a decrease of 22 percent, the largest decrease among the four agencies. Finally, agency officials we interviewed said that the risk to employee safety posed by individuals holding anti-government sentiments can be unpredictable and that incidents of threats and assaults against employees by such individuals are generally sporadic. Land Management Agencies Have Not Met Certain Facility Security Assessment Requirements The four federal land management agencies have completed some but not all of the facility security assessments on their occupied federal facilities as required by the ISC Standard. Agency officials cited various reasons for not doing so, including lack of resources, training, and expertise. Not complying with the ISC Standard’s requirement to complete facility security assessments on all occupied facilities could leave federal agencies exposed to risks in protecting their employees and facilities. While FWS has a plan to complete its assessments, BLM, the Forest Service, and the Park Service do not. Specifically: FWS. FWS has conducted five facility security assessments on its approximately 465 occupied facilities. According to FWS headquarters officials, FWS employees have limited physical security expertise to conduct facility security assessments; therefore, the agency has developed a plan to meet the ISC Standard’s requirement using contractors. BLM. BLM has conducted 21 facility security assessments on its approximately 280 occupied facilities, but officials do not know when they will complete the remaining assessments and do not have a plan to do so. Forest Service. The Forest Service has conducted at least 135 facility security assessments on its approximately 1,135 occupied facilities, but officials do not know when they will complete the remaining assessments and do not have a plan for doing so. Park Service. The Park Service has conducted at least 148 facility security assessments on its approximately 1,505 occupied facilities, but officials do not know when they will complete the remaining assessments and do not have a plan to do so. The ISC Standard requires that agencies conduct assessments using a methodology that meets, among other things, two key requirements: (1) consider all of the undesirable events (e.g., arson and vandalism) identified in the ISC Standard as possible risks to facilities, and (2) assess the threat, vulnerability, and consequence for each of these events. The Forest Service’s methodology meets these two requirements and utilizes an ISC-compliant facility security assessment methodology developed by the U.S. Department of Agriculture. The Park Service’s methodology partially meets the requirements because it does not include a step to assess the consequences of specific undesirable events, as required by the ISC Standard. BLM and FWS have not yet established methodologies for conducting facility security assessments, although officials we interviewed from each agency stated that they intend to develop an ISC- compliant methodology. Specifically, BLM officials told us that they plan to hire a security manager who will develop an assessment methodology but did not know when the manager would be hired. FWS officials we interviewed provided a high-level description of what they expected to be included in their new methodology. However, FWS’s description did not indicate that the agency would evaluate the consequences of specific undesirable events, as required by the ISC Standard. Without developing a plan for conducting all of the remaining facility security assessments and using a methodology that complies with ISC requirements, agencies may not identify the risks their facilities face or identify the countermeasures they could implement to mitigate those risks. Based on these findings, we made a total of six recommendations to the four land management agencies, including that BLM, the Forest Service, and the Park Service each develop a plan to conduct all required facility security assessments agency-wide; The Park Service update its facility security assessment methodology to address the consequences of specific undesirable events in order to comply with requirements in the ISC Standard; and BLM and the Forest Service each develop facility security assessment methodologies that comply with requirements in the ISC Standard. The four land management agencies generally concurred with our recommendations and provided examples of actions they plan to take to address our recommendations, including revising policies and developing new tools, training, and data system modules. Chairwoman Haaland, Republican Leader Young, and Members of the Subcommittee, this completes my prepared statement. I would be pleased to respond to any questions that you may have at this time. GAO Contact and Staff Acknowledgments If you or your staff have any questions about this testimony, please contact Anne-Marie Fennell at (202) 512-3841 or fennella@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. GAO staff members who made key contributions to this testimony are Casey L. Brown (Assistant Director), Tanya Doriss (Analyst in Charge), Charles W. Bausell, Charles A. Culverwell, John W. Delicath, Emily E. Eischen, Cindy K. Gilbert, Richard P. Johnson, Vanessa E. Obetz, Dan C. Royer, and Breanna M. Trexler. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.


Background Each year more than a dozen federal agencies and state and local jurisdictions were involved in the Fourth of July events on the National Mall. Some were involved in the overall planning, production, and execution of the events as a whole, while others played specific roles in only one event. Figure 1 shows the overall geographic layout of each event that occurred on the National Mall. Overall Event Organization, Security, and Attendee and Participant Health For 2016 through 2019, the National Park Service (NPS) was responsible for the overall organization and execution of Fourth of July events on the National Mall, including the National Independence Day Parade; A Capitol Fourth Concert; Independence Day Fireworks Display; and in 2019, A Salute to America. Successful completion of these events depended on NPS, including United States Park Police (Park Police), coordinating with federal agencies and state and local jurisdictions to ensure that attendees could safely and securely attend each event. In addition, during the 2019 events, because of the addition of the Salute to America event and attendance by the President of the United States, additional federal agencies were involved with the planning, production, and execution of the events. Overall event security for the 2016 though 2019 events on the National Mall was coordinated among several federal agencies and state and local jurisdictions. Specifically, the following organizations provided security personnel and assets for the events overall: Park Police provided overall coordination with federal, state, and local law enforcement agencies and assisted with event security. State and local law enforcement agencies assisted with security, traffic, and crowd control. The District of Columbia Government (DC Government) provided a comprehensive command, control, and coordination system, in conjunction with federal partners, to ensure seamless event activities and the safety and security of all attendees. The DC Government tasked multiple offices in its organization to help with ensuring event security, including the Metropolitan Police Department, which deployed uniformed officers in areas surrounding the National Mall and provided traffic control and road closures. The National Guard deployed hundreds of personnel who provided security, movement of supplies, and crowd management at road intersections and metro stations. The Washington Metropolitan Area Transit Authority provided buses to barricade road closures for 2016 through 2018. The Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; and Department of Energy deployed specialized law enforcement and security support units during all of the Fourth of July events on the National Mall. Given the large crowds and potential for high temperatures in July in Washington, D.C., it was important that organizers ensured that adequate medical resources were available to attendees and participants for the 2016 through 2019 events. This was accomplished by coordination between the following federal agencies and state and local jurisdictions: The Department of Health and Human Services (HHS) provided medical aid stations for attendees and participants and veterinarian services for NPS working animals at various locations on the National Mall. In 2019, HHS provided additional efforts, including a larger medical aid station at the end of the parade route to assist with heat casualties and a command and control team to coordinate and support HHS personnel on the National Mall. The Federal Emergency Management Agency participated in the public safety planning for the Fourth of July events on the National Mall in 2016 through 2018. Because of increased security levels in 2019, the agency coordinated the support of federal agencies and state and local jurisdictions, and deployed an emergency response team. The DC Government deployed numerous personnel from its offices, including Fire and Emergency Medical Services and the Department of Health to respond to health emergencies at the events. The Smithsonian Institution (SI) and the Federal Protective Service (FPS) assisted by providing their facilities as safe havens for citizens to seek shelter in the event of severe weather or other emergency. Each year, SI staffed its facilities near the National Mall with security protection officers, grounds cleanup crews, and emergency medical technician support as part of its assistance. In addition, FPS personnel staffed federal buildings near the National Mall and operated safe haven locations. National Independence Day Parade For 2016 through 2019, the National Independence Day Parade ran along Constitution Avenue NW from 7th Street NW to 17th Street NW. A private entity produced the parade, and obtained a Public Gathering Permit from NPS. The entity managed the parade, its participants, and associated costs, with funding from nonfederal sponsors. NPS participated in the parade by coordinating with an additional private entity, which fully funded the creation and operation of a parade float for NPS. In addition, several military bands regularly participated in the parade. To ensure security for the parade, the Park Police requested assistance annually from the DC Government, National Guard, and FPS. The DC Government assisted by ensuring roads were closed to vehicle traffic on the parade route, the National Guard assisted by providing personnel and assets for road closure, and FPS provided personnel to ensure parade- route safety. A Capitol Fourth Concert For 2016 through 2019, the Capitol Fourth Concert was broadcast live from the West Lawn of the U.S. Capitol by the Public Broadcasting Service. As we have previously reported, a private entity in the District of Columbia has produced the annual concert for many years. The private entity received federal funding from NPS through a cooperative agreement that provided funding from NPS and the Department of the Army and sponsorships from other private entities. The private entity was responsible for producing the concert, including the selection of musical acts and coordination with DOD for military band attendees. Because of its jurisdiction over the Capitol grounds, the United States Capitol Police (Capitol Police) provided perimeter security and security screening of concert attendees, in coordination with multiple federal agencies and local jurisdictions. In addition, the Architect of the Capitol provided security barriers, fencing, ground protection, turf restoration, trash removal, and setup and teardown of the security elements on the Capitol grounds. Independence Day Fireworks Display For 2016 through 2019, annually, NPS entered into a contract with a private entity that was responsible for producing and executing the fireworks display. For 2016 through 2018, the fireworks were launched from the Reflecting Pool between the Lincoln Memorial and the Washington Monument, with that area being restricted to visitors for safety and security. However, in 2019, the launch site was relocated to the West Potomac Park. The Park Police provided security over the fireworks and coordinated with federal law enforcement agencies, which provided security and conducted a sweep of the fireworks launch area. Many attendees of the fireworks display viewed the show from their personal watercraft on the Potomac River. The United States Coast Guard (Coast Guard) provided security on Potomac River waterways to ensure attendee safety and to establish a secured perimeter for the launch site. Salute to America In 2019, the Salute to America event was held for the first time in front of the Lincoln Memorial. The event included military band performances, a military display, a speech by the President of the United States, military aircraft flyovers, and a fireworks display. The planning of the event began after a meeting at the White House where the Secretaries of the Interior and Defense were tasked with event planning, production, and execution. The Executive Office of the President (EOP) coordinated the content of the event and contracted with a private entity, which was responsible for general event production. NPS and EOP entered into a reimbursable agreement whereby EOP, and the private entity with which it contracted, coordinated and produced the event, paid for with NPS appropriations. The EOP determined the guest list and distributed tickets for the event. According to EOP, it distributed tickets in a manner similar to that for other White House events. The Secretary of the Interior tasked NPS with permitting for the event, coordinating with the United States Secret Service (Secret Service) on security and with the DC Government on movement of DOD assets, relocating the existing contracted fireworks display from the Reflecting Pool to the West Potomac Park and coordinating the acceptance of an additional donated fireworks display. The DC Government had additional responsibilities in 2019 compared to prior years because of the vehicles that the Department of the Army provided for the Salute to America event. For example, DC Government personnel consulted with engineers to verify that affected roads, sewer pipes, and bridges could withstand the weight of bringing in the M2 Bradley Infantry Fighting Vehicles and conducted damage assessments after the event, during which no damage was identified. The DOD Joint Staff received orders from the Secretary of Defense directing United States Northern Command (NORTHCOM) to organize a flyover and provide support to the Salute to America event. NORTHCOM tasked the Coast Guard, Department of the Army, Department of the Navy, United States Marine Corps, and United States Air Force to ensure that various DOD assets were in attendance. The Department of the Army stood up a Joint Operations Center within its Joint Force Headquarters Branch, National Capital Region, to coordinate the various DOD assets involved. Prior to the President’s speech, several military bands performed for the audience in front of the Lincoln Memorial. Displayed on both sides of the performing bands were two M2 Bradley Infantry Fighting Vehicles provided by the Department of the Army. At designated times during the President’s speech, DOD aircraft participated in flyovers, including Air Force B-2 Stealth Bombers, Air Force One, F-22 Raptors, and F- Navy F/A 18 Hornet Blue Angels and F-35 Lightning IIs; Marine Corps MV22 Osprey helicopters and Marine One; Army AH-64 Apache and CH-47 Chinook helicopters; and Coast Guard H-65 Dolphin and H-60 Jayhawk helicopters and HC- 144 Medium Range Surveillance Aircraft. Following the President’s speech and associated flyovers, a fireworks display, donated by two private entities through a donation agreement with NPS, was presented from the Lincoln Memorial. Because the President, Vice President, and other government officials attended the event, the Secret Service had primary responsibility for security of the event and surrounding areas, in coordination with the Park Police. The Secret Service requested the assistance of the Transportation Security Administration, which provided security screening for the event. The Coast Guard provided additional support on the Potomac River during the event, because of the additional firework display, and requested the assistance of the United States Customs and Border Protection, which provided additional waterway security. The Federal Aviation Administration provided an air traffic controller that shut down the airspace around the National Mall and assisted with the Salute to America flyovers. Because of the additional fireworks, the Park Police provided additional security at the storage site of the fireworks and additional road closures. The Park Police coordinated with state and local law enforcement to provide escorts for the M2 Bradley Infantry Fighting Vehicles. Fourth of July Events on the National Mall Costs Estimated at Millions of Dollars Annually According to estimates we obtained, federal agencies and state and local jurisdictions combined spent millions of dollars annually for the Fourth of July events on the National Mall during 2016 through 2019. Not all costs were tracked separately by the organizations for each of the Fourth of July events. Therefore, in order to develop a comprehensive estimate of the costs, we grouped costs into five categories, which include general event costs as well as costs for each of the specific events held on the National Mall. Table 1 summarizes the event costs we obtained, by year and event. In addition to costs that could be directly attributed to Fourth of July events on the National Mall, there were other costs incurred associated with federal personnel and assets that we did not capture as event costs because they would have been incurred regardless of whether the Fourth of July events had occurred. For example, costs such as salaries of federal civilian, military, and law enforcement personnel who worked during the events were not included in cost estimates because those salaried personnel would have been paid even if the Fourth of July events did not occur. General Event Costs We categorized costs attributable to more than one specific event, or to agencies that did not track costs by event, as general event costs. According to documents we reviewed and interviews with agency officials, more than $2 million was spent annually on general event costs. Table 2 contains general event cost by federal agency and state or local jurisdiction, and by year. General event costs consisted primarily of the personnel and supplies costs for HHS medical aid stations, Department of the Interior overtime, holiday pay and supply costs, and costs for DC Government personnel payroll. Specifically, federal and local law enforcement agencies provided security, screening of attendees, traffic control, road blockades, and escorts for participants at all the events. These agencies incurred salaries, overtime, and overtime with differential pay for civilian and law enforcement personnel. Other costs included providing personnel and supplies for fire and emergency medical services, crowd control, information and directions for attendees, cleaning of the grounds, and safe haven areas in case of an emergency. National Independence Day Parade Event Costs According to documents we reviewed and agency officials we interviewed, no federal agency recorded costs specifically attributable to the National Independence Day Parade for 2016 through 2019. A private entity produced the parade and managed its participants and associated costs, which was funded through nonfederal sponsors. The security during the event, provided by the National Guard and FPS, was not included in cost estimates because those salaried personnel would have been paid regardless of the parade. The majority of federal participants in the parade were local ceremonial military personnel, including military bands, marching platoons, color guards, Army Old Guard fife and drum corps, an Army anthem vocalist, and other ceremonial military participants who would have received their salaries and benefits on the Fourth of July even if the parade did not occur. A Capitol Fourth Concert Event Costs According to documents we reviewed and agency officials we interviewed, the concert cost the federal government an estimated $4 million annually from 2016 through 2019. The concert takes place on the grounds of the Capitol and the costs are primarily for the contractor that plans and executes the concert. NPS provided minimal operations support to the entity that produced the concert but was responsible for funding the concert from its annual appropriations and with additional funding that the Department of the Army provides each year. Table 3 contains the concert cost by agency for 2016 through 2019. The Capitol Police is the primary law enforcement agency responsible for security and screening the attendees on the Capitol grounds. The Capitol Police estimated that it incurred several hundred thousand dollars annually in overtime and holiday pay costs that would not have been incurred had the concert not taken place. The Architect of the Capitol incurred other concert costs for its involvement. Additionally, DOD had bus rental costs for movement of ceremonial military personnel in 2017. Other costs not considered directly attributable to the concert included salaries and benefits of federal military participants. The salary costs for these personnel would have been incurred regardless of their participation in the Fourth of July events. Independence Day Fireworks Display Event Costs Independence Day Fireworks Display event costs were estimated from $253,000 to $409,000 annually from 2016 through 2019 (see table 4). Each year, NPS contracted with a private entity, which produced and executed the fireworks display. The cost associated with this contract was the majority of the cost of the event. In addition to the contract costs, other fireworks display event costs included paying overtime for security personnel during the event, conducting security sweeps prior to the event, securing areas for storage of fireworks, closing roads, and performing cleanup after the fireworks. In addition, the Coast Guard had personnel travel costs in 2019. Other event costs not considered directly attributable to the fireworks display were for Coast Guard personnel and boats that patrolled a security perimeter around the event area. The Coast Guard stated that these boats and personnel would have been operating on the Fourth of July regardless of whether the fireworks display event occurred. Salute to America Event Costs The 2019 Salute to America Event cost an estimated $4.3 million, primarily related to the EOP contract with a private entity to plan and execute the event (see table 5). The cost of that contract was approximately $2.45 million and was funded with NPS appropriations through a Memorandum of Agreement with EOP. The movement of DOD ground assets to the Washington, D.C., area was also a cost for the event. Specifically, DOD used a contractor to transport vehicles and other military equipment to the event area at a cost of more than $1.12 million. The Secret Service had significant involvement with events on the National Mall, and specifically with the Salute to America event, because the President, Vice President, and other government officials attended. In order to prepare for and execute security, the Secret Service used numerous special agents from its Washington, D.C., Field Office, and incurred overtime pay and cost for materials. In addition, the airspace in the area was shut down for this event, which included a fireworks display. Various federal agencies incurred overtime costs for storing the donated fireworks and for keeping additional roads closed. While DOD and the Coast Guard provided military flyovers during the Salute to America event, most of the costs associated with the flyovers, such as crew salaries, fuel, and asset depreciation, were not attributable to the event. According to DOD and the Coast Guard, flying hours associated with the event were used to satisfy annual training requirements for their pilots. However, some travel costs were incurred for pilots and crew, which we included in the cost estimates in table 5. Finally, the estimate includes salaries for a small number of DOD civilian personnel who were paid holiday or overtime pay. Fourth of July Events’ Funding Sources, Reimbursements to State and Local Jurisdictions, and Effects on Other Federal Activities We found that the majority of the agencies funded costs of the Fourth of July events with annual appropriations and did not receive any other funding. NPS used amounts from multiple appropriation accounts to pay for costs of the Fourth of July events for 2016 through 2019. For the Salute to America event in 2019, NPS used the Operation of the National Park System, Centennial Challenge, and Federal Lands Recreation Enhancement Act (FLREA) accounts to cover costs. NPS obligated $2.45 million of the FLREA amounts to pay for the private entity with which the EOP contracted to plan and execute the event. NPS also used the Centennial Challenge appropriation account to pay for certain costs attributable to the Salute to America event. NPS used the Operation of the National Park System account to fund the other Fourth of July events during 2016 through 2019. The Department of the Army transferred funds from its annual appropriations for fiscal years 2016 through 2019 to NPS to support the Capitol Fourth and Memorial Day concerts. The Army entered into an agreement with NPS each fiscal year and transferred a lump sum to NPS. NPS allocated the funding for the two concerts each fiscal year. The DC Government received an appropriation each fiscal year from the federal government for emergency planning and security costs in the District of Columbia that remains available until expended. This appropriation is for the costs of providing public safety at events related to the presence of the National Capital in the District of Columbia. According to DC Government officials, DC Government obligated the entire amount appropriated in fiscal year 2019 for the various events in the District of Columbia, including the Fourth of July events on the National Mall. DC Government officials stated that they did not request additional appropriations from Congress because they used funds from other appropriations to cover the cost of events exceeding the fiscal year 2019 appropriation. Park Police reimbursed local law enforcement outside of the District of Columbia for assistance with security, traffic, and crowd control, costs which were estimated from $85,000 to $132,000 annually from 2016 through 2019. These costs are included as regular operations. Finally, according to the officials at agencies we contacted, none of them delayed, deferred, or canceled any programs or activities as a result of resources being used for the Fourth of July events for 2016 through 2019. Agency Comments We provided a draft of this report to the EOP, DOD, Department of the Interior, Department of Homeland Security, Capitol Police, Architect of the Capitol, DC Government, SI, American Red Cross, Department of Energy, HHS, Washington Metropolitan Area Transit Authority, Department of Transportation, and Department of Justice for review and comment. The EOP, DOD, Department of the Interior, DC Government, Washington Metropolitan Area Transit Authority, and Department of Justice provided technical comments, which we incorporated as appropriate. The Department of Homeland Security, Capitol Police, Architect of the Capitol, SI, Department of Energy, HHS, and Department of Transportation informed us that they had no comments on the draft report and the American Red Cross did not provide comments. As agreed with your offices, unless you publically announce the contents of this report earlier, we plan no further distribution until 8 days from the report date. At that time, we will send copies to the Executive Office of the President, the Secretary of the Interior, the Acting Secretary of Homeland Security, the Secretary of Defense, the Secretary of Health and Human Services, and other interested parties. In addition, the report will be available at no charge on the GAO website at https://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-2989 or kociolekk@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Appendix I: Objectives, Scope, and Methodology Our objectives were to describe for the Fourth of July events on the National Mall for 2016 through 2019 (1) the total costs that federal agencies and state and local jurisdictions are estimated to have incurred and (2) the appropriations that were used to pay for the estimated federal costs; the extent, if any, to which the federal government has reimbursed costs incurred by state and local jurisdictions; and the extent, if any, to which federal agencies delayed, deferred, or canceled other programs or activities as a result of resources being used for Fourth of July events. To accomplish these objectives, we obtained and reviewed documentation, such as financial data, contracts, and relevant agreements, from federal agencies and state and local jurisdictions that contributed resources to the events. Agencies we contacted were the Executive Office of the President, Department of Defense (DOD), Department of the Interior, Department of Homeland Security, United States Capitol Police, Architect of the Capitol, District of Columbia Government, Smithsonian Institution, American Red Cross, Department of Energy, Department of Health and Human Services, Washington Metropolitan Area Transit Authority, Department of Transportation, and Department of Justice. In addition, we reviewed cost documents and other agency records to gain an understanding of the assets, including financial, physical, and human capital that each agency devoted to the events. In addition, we interviewed officials about estimated costs; any reimbursed costs; and any delayed, deferred, or canceled programs or activities. The scope of our review consisted of estimated costs of the events and associated appropriations incurred by federal agencies and state and local jurisdictions. For the purposes of this engagement, we defined estimated costs as the costs that are directly traceable to the planning, production, and execution of the specific Fourth of July events on the National Mall. For example, we included the transportation costs of moving material, equipment, and supplies to the National Mall for Fourth of July events as well as personnel overtime and holiday pay expenses for federal employees. The costs also included contracts that various federal agencies awarded to private entities that were specifically attributable to the events. We excluded costs that are not directly attributable to the planning, production, and execution of the specific Fourth of July events on the National Mall, such as salary costs for civilian federal employees and military personnel who performed duties during the events that would have been incurred regardless of whether the events took place. Also, we excluded the costs to operate and maintain DOD aircraft that were used in the Salute to America event. According to DOD, the aircraft were existing DOD assets, and the flying hours associated with the event were used by DOD to meet annual pilot training requirements that were required regardless of the events on the Fourth of July. In addition, we excluded the cost associated with private entity parade participation and firework donations. Finally, cost estimates were provided by and attributable to each agency and department, and we did not independently verify the data during this audit. We conducted this performance audit from July 2019 through June 2020 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Appendix II: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments Kristen Kociolek, (202) 512-2989 or kociolekk@gao.gov In addition to the contact named above, Jonathan Meyer (Assistant Director), Kevin Scott (Auditor in Charge), and John Ledford made major contributions to this report. Other key contributors include Carl Barden, Anthony Clark, Marcia Carlsen, Elizabeth Erdmann, Pat Frey, Richard Geiger, Jason Kelly, Jason Kirwan, Quang Nguyen and Shahrzad Nikoo.