Implementation Review: Loan Agreements Need to Provide for Appropriate SIGPR Access (July 2020)

Record facts

Full text

• 
OFFICE OF THE SPECIAL INSPECTOR GENERAL 
FOR PAN D E M IC RECOVERY 
July 28, 2020 
TO: 
BRENT J. MCINTOSH 
UNDER SECRETARY FOR INTERNATIONAL AFFAIRS 
U.S. DEPARTMENT OF THE TREASURY { 
FROM: 
THEODORE R. STEHENY lfl.w.l11u . ~ 
ASSISTANT INSPECTOR efuNE;~L FOR AUD;;~~ ­- -­
\ 
SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY 
SUBJECT: 
Loan Agreements Need to Provide For Appropriate 
Access to the Special Inspector General for Pandemic Recovery 
The US Department of the Treasury posted its first loan agreement on its website on July 8, 
2020. This is Treasury's first Section 4003 loan made under the Coronavirus Aid, Recovery, and 
Economic Security (CARES) Act. This loan agreement, dated July 7, 2020, does not specifically 
provide the Special Inspector General for Pandemic Recovery (SIGPR) timely and unrestricted 
access to all documents and records related to this loan. 
Under Section 4018(d)(l) of the CARES Act, the SIGPR is given the "authorities provided in 
Section 6 of the Inspector General Act." CARES Act§ 4018(d)(l). Accordingly, the SIGPR 
should have "timely access to all records, reports, audits, reviews, documents, papers, 
recommendations, and other materials available to the applicable establishment which relate to the 
programs and operations with respect to which that Inspector General has responsibilities under 
this Act." Inspector General Act§ 6. Section 4003 loans constitute a program "with respect to 
which" the SIGPR "has responsibilities," and the materials related to that program are expressly 
made available to Treasury. 
This first loan agreement contains the following affirmative covenant in Article 6: 
Section 6.19. Treasury Access. Provide Treasury, the Treasury Inspector General, and such 
other entities as authorized by Treasury timely and unrestricted access to all documents, 
papers, or other records, including electronic records, of the Borrower related to the Loans, 
to enable Treasury and the Treasury Inspector General to make audits, examinations, and 
otherwise evaluate the Borrower's compliance with the terms of this Agreement. This right 
also includes timely and reasonable access to the Lender's and its Affiliates' personnel for 
the purpose of interview and discussion related to such documents. 
The covenant does not specifically include the SIGPR as an entity authorized to receive timely and 
unrestricted access to all documents and records necessary to perform its statutory duties. 

OFFICE OF THE SPECIAL INSPECTOR GENERAL 
FOR PAN DEM IC RECOVERY 
RECOMMENDATION 
The Special Inspector General for Pandemic Recovery recommends that: 
The Under Secretary for International Affairs should ensure that Treasury ·modifies this covenant, 
wherever it appears, to specifically include the Special Inspector General for Pandemic Recovery 
as follows: 
Section 6.19. Treasury Access. Provide Treasury, the Treasury Inspector General, the 
Special Inspector General for Pandemic Recovery, and such other entities as authorized 
by Treasury timely and unrestricted access to all document , papers, or other records, 
including electronic records, of the Borrower related to the Loans, to enable Treasury, 
Treasury Inspector General, and the Special Inspector General for Pandemic 
Recovery to make audits, examinations, and otherwise evaluate the Borrower's 
compliance with the terms of this Agreement. This right also includes timely and 
reasonable access to the Lender's and its Affiliates' personnel for the purpose of interview 
and discussion related to such documents. 
Otherwise the Treasury should certify to Congress that Treasury determines no action is 
necessary. Please provide a response to this recommendation along with any proposed corrective 
action. 
This review was conducted by the Special Inspector General for Pandemic Recovery in accordance 
with the Council of the Inspectors General on Integrity and Efficiency Quality Standards for 
Inspection and Evaluation (January 2012). To accomplish our review, we researched applicable 
laws and reviewed loan agreements established by Treasury. 

DEPARTMENT OF THE TREASURY 
WASHINGTON, D.C. 
lJNDER SECRETARY 
July 30, 2020 
Theodore R. Steheny 
Assistant Inspector General for Auditing 
Special Inspector General 
for Pandemic Recovery 
Re: Information Access for Special Inspector General for Pandemic Recovery 
Dear Mr. Steheny: 
I write in response to your memorandum dated July 28, 2020, which sets forth a recommendation 
from the Special Inspector General for Pandemic Recovery (SIGPR) regarding SIGPR's 
authority to access information from businesses that receive loans from the Treasury Departrrient 
under section 4003 of the Coronavirus Aid, Recovery, and Economic Security (CARES) Act. 
We share your desire to ensure that SIGPR has access to all documents and records necessary to 
perform its statutory duties, and as such we gladly accept SIGPR's recommendation. 
As of the date of this letter, Treasury has entered into one loan agreement under section 4003. 
That agreement requires the borrower to provide Treasury, the Treasury Inspector General, and 
such other entities as authorized by Treasury with access to the borrower's documents, records, 
and personnel, to enable compliance audits. SIGPR's recommendation is that this type of 
covenant should be expanded to list SIGPR as well, which will help enable SIGPR to receive 
information directly from borrowers. Treasury is committed to transparency and effective 
oversight, and we will incorporate SIGPR's proposed revisions into our future loan agreements 
under section 4003. 
Treasury is working diligently to implement the CARES Act to get much-needed relief to 
millions of Americans and businesses as quickly as possible. We appreciate SIGPR's efforts to. 
ensure that these programs are efficient and effective. 
Please feel free to contact Treasury's Office of General Counsel at (202) 622-0283 if you have 
any questions about this letter. 
BJ
Brent!Sosh 
Under Secretary for International Affairs

File and source

File

REPORT_SIGPR_loan-agreements-need-provide-appropriate-special-inspector-g_2020-07-31.pdf

Size

1,843,198 bytes

SHA-256

78ab31007fdd21c2687d617136a0860385e973d6ce3b9cf19ce81a1acb368550

Our copy

REPORT_SIGPR_loan-agreements-need-provide-appropriate-special-inspector-g_2020-07-31.pdf

Original

www.oversight.gov