A congressional watchdog agency said the U.S. Export-Import Bank could do more to identify parties with federal debt delinquency problems when they’re applying to the bank’s various financing programs.
Ex-Im Bank has procedures to identify applicants with delinquent federal debt, such as reviewing credit reports. However, the bank also could use “readily available” information containing delinquent federal debt indicators from the General Services Administration’s System for Award Management (SAM), the Government Accountability Office (GAO) said in a report released Thursday.
By federal law, applicants who are delinquent on federal nontax debts may not receive federal direct loans, loan guarantees or loan insurance until those debts are resolved.
GAO noted that it used SAM data from 2004 to 2016 against Ex-Im Bank transactions and found that $1.7 billion was associated with 32 U.S.-based companies that had a delinquent federal debt indicator in SAM in the same month the bank authorized the transactions.
“Without assessing the practicality of pursuing such readily available data, EXIM is potentially forgoing opportunities to perform additional due diligence that would help inform its decisions about applicants’ and participants’ program eligibility and fraud risks,” GAO added.
In September, the total outstanding and undisbursed amounts from Ex-Im Bank transactions was about $60.5 billion.
The 2015 Export-Import Bank Reform Authorization Act included a provision for GAO to review Ex-Im Bank’s anti-fraud controls. As part of this review, GAO analyzed 44 Ex-Im Bank-related court cases involving fraud from 2012 to 2017, examined bank transaction data and interviewed GSA and bank officials.