Audit Report - Oig 24 040 Coronavirus Disease 2019 Pandemic Relief Programs Audit Of Air Carrier
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- Oig 24 040 Coronavirus Disease 2019 Pandemic Relief Programs Audit Of Air Carrier
Summary
Audit Report OIG-24-040 of the Department of the Treasury Office of Inspector General, dated September 26, 2024, on the Air Carrier Payroll Support Program (PSP1) certifications of contractor Prosegur Services Group, Inc. Saggar & Rosenberg, P.C. performed the audit under contract, covering April 1, 2019 through September 30, 2019, with fieldwork from August 2023 through June 2024. It finds Prosegur could not provide sufficient documentation that its requested Benefits amounts were eligible, but that its actual compensation exceeded the amount certified to Treasury by $31,059,787, so it did not over-request PSP1 assistance. The report describes Treasury's final pro-rata rate of 90 percent for contractors. Prosegur management agreed with the results and stated its approach was conservative, and Treasury management noted that no amounts were overpaid.
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Audit Report
OIG-24-040
CORONAVIRUS DISEASE 2019 PANDEMIC RELIEF
PROGRAMS
Audit of Air Carrier Worker Support
Certifications - Prosegur Services Group, Inc.
September 26, 2024
Office of Inspector General
Department of the Treasury
This Page Intentionally Left Blank
September 26, 2024
MEMORANDUM FOR JESSICA MILANO
CHIEF PROGRAM OFFICER
FROM: Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT: Audit of Air Carrier Worker Support Certifications – Prosegur
Services Group, Inc.
Attached is our audit report for the Audit of Air Carrier Worker Support Certifications –
Prosegur Services Group, Inc. (Prosegur) (OIG-24-040; dated September 26, 2024).
Under a contract monitored by our office, Saggar & Rosenberg, P.C. (S&R), a certified
independent public accounting firm, performed the audit. The objective of this audit
was to assess the accuracy, completeness, and sufficiency of Prosegur’s sworn
financial statement or other data used to certify the wages, salaries, benefits, and
other compensation amounts submitted and approved by the Department of the
Treasury (Treasury) for the Air Carrier Payroll Support Program (PSP1). This audit was
mandated by Title IV, Subtitle B, Air Carrier Worker Support, of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act). 1 The scope of this audit covered the
period from April 1, 2019 through September 30, 2019, and included the certified
PSP1 Application, sworn financial statement, tax returns, and other documentation
submitted to Treasury.
In its audit report, S&R found that Prosegur, a contractor, was unable to provide
sufficient supporting documentation to demonstrate that the amounts requested for
“Benefits” were eligible for PSP1. However, the total actual compensation incurred
was , which exceeded the amount certified to Treasury by $31,059,787.
As a result, Prosegur did not over-request PSP1 financial assistance despite partial
non-compliance with application requirements.
Our contract required that the audit be performed in accordance with generally
accepted government auditing standards. In connection with the contract, we
reviewed S&R’s report and related documentation and inquired of its representatives.
1
P.L. 116–136 (March 27, 2020).
Our review, as differentiated from an audit performed in accordance with generally
accepted government auditing standards, was not intended to enable us to express an
opinion on Prosegur’s compliance with Treasury’s PSP1 policies and procedures. S&R
is responsible for the attached auditor’s report and the conclusions expressed therein.
Our review found no instances in which S&R did not comply, in all material respects,
with generally accepted government auditing standards.
We appreciate the courtesies and cooperation provided to S&R and our staff during
the audit. If you have any questions or require further information, please contact me
at (202) 486-1420, or a member of your staff may contact Lisa DeAngelis, Deputy
Assistant Inspector General for Audit, at (202) 487-8371.
Attachment
cc: Gregory Till, Chief Operating Officer, Office of Capital Access, Department of
the Treasury
Danielle Christensen, Deputy Chief Program Officer, Office of Capital Access,
Department of the Treasury
Jason Morrow, Senior Counsel, Department of the Treasury
Jeff Davis, Partner, Saggar & Rosenberg, P.C.
Contents
Audit Report
Results in Brief ...................................................................................................2
Background ........................................................................................................3
Treasury Disbursement Processes ....................................................5
PSP1 Interim Audit Report ...............................................................6
Prosegur Services Group, Inc. ..........................................................7
Audit Results......................................................................................................8
Finding 1 Prosegur Did Not Over-Request PSP1 Financial Assistance Despite
Partial Non-Compliance with Application Requirements .......................9
Appendices
Appendix 1: Objective, Scope, and Methodology ..................................................12
Appendix 2: Prosegur Management Response ......................................................16
Appendix 3: Treasury Management Response ......................................................17
Appendix 4: Report Distribution ..........................................................................20
Abbreviations
CARES Act Coronavirus Aid, Relief, and Economic Security Act
COVID-19 Coronavirus Disease 2019
DOT Department of Transportation
GAO Government Accountability Office
Guidelines Guidelines and Application Procedures for Payroll Support to Air
Carriers and Contractors
IRS Internal Revenue Service
OIG Treasury Office of Inspector General
Prosegur Prosegur Services Group, Inc.
PSP1 Payroll Support Program, CARES Act
PSP2 Payroll Support Program Extension, Consolidated Appropriations
Act, 2021
PSP3 Payroll Support Program 3, American Rescue Plan Act of 2021
S&R Saggar & Rosenberg, P.C.
SOC 1 System and Organizational Controls
Treasury Department of the Treasury
i
This Page Intentionally Left Blank
September 26, 2024
Jessica Milano
Chief Program Officer
Department of the Treasury
This report presents the results of our audit of Prosegur Services
Group, Inc.’s (Prosegur) certifications made to the Department of
the Treasury (Treasury) as part of its participation in the Air Carrier
Payroll Support Program (PSP1). This audit was mandated by
Title IV, Subtitle B, Air Carrier Worker Support, of the Coronavirus
Aid, Relief, and Economic Security Act (CARES Act). 1 Under the
CARES Act, Treasury was to provide $32 billion in financial
assistance to passenger air carriers, cargo air carriers, and certain
contractors to be exclusively used for the continuation of payment
of employee wages, salaries, and benefits, in response to the
economic impact of the Coronavirus Disease 2019 (COVID-19). 2
Furthermore, the Treasury Office of Inspector General (OIG) is
required to audit certifications made by passenger and cargo air
carriers that do not report salaries and benefits to the Department
of Transportation (DOT) (hereinafter referred to as non-241 air
carriers) 3 and contractors.
Under a contract with OIG, Saggar & Rosenberg, P.C. (S&R)
conducted this audit. Our audit objective was to assess the
accuracy, completeness, and sufficiency of Prosegur’s sworn
financial statement or other data used to certify the wages,
salaries, benefits, and other compensation amounts submitted and
approved by Treasury for PSP1. The scope of our audit covered the
period from April 1, 2019 through September 30, 2019, and
included the certified PSP1 Application, sworn financial statement,
1
P.L. 116–136 (March 27, 2020).
2
The financial assistance provided under the CARES Act was split between Passenger Air Carriers
($25 billion), Cargo Air Carriers ($4 billion), and Contractors ($3 billion).
3
Passenger and cargo air carriers that are not required to report salaries and wages to DOT under
14 CFR, Part 241, “Uniform System of Accounts and Reports for Large Certificated Air Carriers”.
Audit of Air Carrier Worker Support Certifications – Prosegur Services
Group, Inc. (OIG-24-040) 1
tax returns, and other documentation submitted to Treasury on
April 3, 2020. 4
To accomplish the objective, we reviewed applicable laws and
regulations and Treasury’s policies and procedures, including but
not limited to, the Title IV, Subtitle B, Air Carrier Worker Support of
the CARES Act; Guidelines and Application Procedures for Payroll
Support to Air Carriers and Contractors (Guidelines); PSP1
Agreement; and Frequently Asked Questions: Application
Procedures for Payroll Support to Air Carriers and Contractors. We
interviewed key personnel from Prosegur, Treasury, and contracted
consultants engaged by Treasury to evaluate certified company
applications. We conducted our fieldwork from August 2023
through June 2024. Appendix 1 contains a more detailed
description of our objective, scope, and methodology.
Results in Brief
In brief, S&R found that Prosegur, a contractor, reported correct
information for three of the four sections reviewed on its PSP1
Application. 5 These sections are: (1) Applicant Information,
(2) Applicant Type, and (3) Certification. For the Awardable
Amounts section, we found that although Prosegur was unable to
provide sufficient supporting documentation to demonstrate that
the amounts requested for “Benefits” were eligible for PSP1, the
total actual compensation incurred was , between
April 1, 2019 and September 30, 2019, exceeding the amount
certified to Treasury by $31,059,787. As a result, Prosegur did not
over-request PSP1 financial assistance despite partial
non-compliance with application requirements.
As part of our reporting process, we provided Prosegur
management with an opportunity to comment on a draft of this
report. In a written response, Prosegur management stated they
agree with the results detailed in the audit report. In addition,
Prosegur management stated that they limited the PSP1
Application to eligible expenses generated via its aviation line of
4
Prosegur submitted the PSP1 Application and related supporting documentation on April 3, 2020.
5
The PSP1 Application is comprised of eight sections. Four sections - Financial Institution Information,
Employment Levels, Taxpayer Protection, and Additional Information, were not subject to audit
procedures. Details regarding the sections not reviewed can be found in appendix 1.
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 2
businesses based on their interpretation of the CARES Act and
Treasury’s guidance. Prosegur acknowledged that their approach
was conservative and created an approximate $31 million variance
between the requested amount and the amounts they were eligible
to receive. Further, Prosegur management stated that the PSP1
funds provided significant relief to the company and that no
employees were terminated or furloughed due to the impact of
COVID-19. Prosegur management’s response, in its entirety, is
included as appendix 2 of this report.
In a written response, Treasury management stated the draft report
describes work performed by OIG’s contractor to determine
whether the recipient’s requested awardable amount complied with
Treasury’s program requirements. The draft report notes the
extensive fieldwork conducted for this review between
August 2023 and June 2024, including interviewing Prosegur’s
management and reviewing a wide range of the company’s
financial records and corporate documents. In relation to Prosegur,
Treasury management noted that OIG’s contractor found no
amounts were overpaid. Treasury management appreciates the
OIG’s work on this engagement and looks forward to working with
the OIG to protect the integrity of the PSP and other recovery
programs. Treasury management’s response, in its entirety, is
included as appendix 3 of this report.
Background
Title IV, Subtitle B, of the CARES Act, Air Carrier Worker Support,
requires Treasury to provide financial assistance to air carriers and
contractors that must exclusively be used for the continuation of
payments of employees’ wages, salaries, and benefits. Financial
assistance is to be provided to:
(1) passenger air carriers, in an aggregate amount up to
$25 billion;
(2) cargo air carriers, in an aggregate amount up to $4 billion;
and
(3) contractors, in an aggregate amount up to $3 billion.
According to the CARES Act, Treasury is required to provide
financial assistance to air carriers that report salaries and benefits
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 3
to DOT (referred to as 241 air carriers), 6 in an amount equal to the
salaries and benefits reported to DOT for the period April 1, 2019
through September 30, 2019. For air carriers that do not report
such data to DOT (referred to as non-241 air carriers), and
contractors, financial assistance is required to be in an amount that
the air carrier or contractor certifies using sworn financial
statements or other appropriate data as the amount of wages,
salaries, benefits, and other compensation paid to employees
during the period of April 1, 2019 through September 30, 2019.
The amounts submitted on the application to Treasury were
considered sworn financial statements. To be eligible for payments,
air carriers and contractors must enter into agreements with
Treasury certifying that they meet certain required assurances,
terms, and conditions.
On March 30, 2020, Treasury posted on its website the
Guidelines, which included the PSP1 Application. The PSP1
Application is comprised of eight sections:
1. Applicant Information ─ (1) applicant name; (2) taxpayer
identification number and address; and (3) contact person’s
name, title, phone number, and email address.
2. Applicant Type ─ selection of applicant type whether it is
passenger air carrier, cargo air carrier, or contractor.
Additionally, if the applicant is a contractor, this section would
identify the contractor’s service functions and the name of the
air carrier or airport to which services are provided. Finally, this
section includes affiliate and parent company information.
3. Financial Institution Information ─ (1) the applicant’s account
number and routing number; and (2) the financial institution’s
name, address, and telephone number.
4. Employment Levels ─ applicant’s average number of employees
for 2019 and involuntary reductions after March 1, 2020.
6
14 CFR, Part 241 “Uniform System of Accounts and Reports for Large Certificated Air Carriers”
defines “Air carrier, large certificated” as an air carrier holding a certificate issued under 49 U.S.C.
41102, as amended, that: (1) operates aircraft designed to have a maximum passenger capacity of
more than 18,000 pounds; or (2) conducts operations where one or both terminals of a flight stage
are outside the 50 states of the United States, the District of Columbia, the Commonwealth of
Puerto Rico, and the U.S. Virgin Islands. These air carriers are required to report financial information
to DOT. Prosegur is not a Large Certificated Air Carrier.
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 4
5. Awardable Amounts ─ applicant’s sworn financial statement
consisting of salaries, wages, benefits, and other compensation
for the period April 1, 2019 through September 30, 2019.
6. Taxpayer Protection ─ a table that outlines in detail the
proposed financial instrument to be issued to Treasury.
7. Additional Information ─ applicant’s verification of submitting its
Internal Revenue Service (IRS) Form 941, Employer’s Quarterly
Federal Tax Return, 7 covering the period April 1, 2019 through
September 30, 2019, along with the PSP1 Application
submitted to Treasury.
8. Certification ─ names, titles, and signatures of two certifying
officials 8 and the applicant’s name and application submission
date.
On April 18, 2020, Treasury published a sample PSP1 Agreement
on its website, which provided definitions, terms, and conditions
for participation in PSP1, and required applicants to submit
completed applications by April 27, 2020. After Treasury reviewed
and approved an application, both parties were required to sign the
PSP1 Agreement.
Treasury Disbursement Processes
To disburse PSP1 payments to contractor applicants as quickly as
possible and prior to the application deadline of April 27, 2020,
Treasury applied an initial estimated pro-rata rate of 69.7 percent
to the awardable amount because not all applications had been
submitted at the time. After the application deadline, Treasury
determined the total amount requested by all contractors was
approximately $4.1 billion, which exceeded the $3 billion available
financial assistance. Because its initial estimated pro-rata rate was
low, Treasury calculated an additional 20.3 percent, the top-off
amount, for contractors making the final pro-rata rate 90 percent.
Treasury explained that 17 contractors did not accept the top-off
7
IRS Form 941 is a tax form that businesses file quarterly to report income taxes, Social Security
taxes, and Medicare taxes they withheld from employees’ paychecks.
8
The certifying officials attested under penalty of perjury that the information and certifications
provided in the application and its attachments are true and correct.
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 5
amount; as such, the final awardable amount for these contractors
was 69.7 percent.
Treasury disbursed an initial lump sum payment of one-third of the
awardable amount, followed by four equal subsequent payments to
ensure it provided sufficient and timely financial assistance
corresponding to the applicants’ payroll schedule. In instances
where Treasury needed to perform additional follow-up with
contractors or needed additional time to approve applications,
Treasury compressed the payment schedule on a case-by-case
basis. Generally, Treasury disbursed the top-off amounts for
contractors in February 2021.
PSP1 Interim Audit Report
In a prior audit report, 9 OIG identified two systemic issues affecting
the payment amounts administered to all PSP1 recipients for
non-241 air carriers and contractors. Specifically, some of the
recipients audited included unallowable employer-side payroll taxes
and/or corporate officer compensation in their calculation of the
awardable amounts on their PSP1 applications. Treasury
management acknowledged these issues and agreed to: (1) review
payments issued under PSP1 to ensure awarded amounts are
allowable per the CARES Act and Treasury guidance; and
(2) remedy the incorrect amounts awarded under PSP1. Based on
our recommendations, in March 2022 Treasury implemented a
PSP1 recertification process whereby recipients had to certify
whether they excluded employer-side payroll taxes and corporate
officer compensation in their calculation of the awardable amounts
on their PSP1 applications. Treasury’s goal was to determine if
overpayments were made to recipients based on inaccurate
information included in PSP1 applications.
Treasury officials told us that if recoupment was necessary for an
applicant’s inclusion of unallowable expenses, such as corporate
officer compensation and employer-side payroll taxes in the
application, the recoupment method was dependent on timing. Any
overpayment was first offset against the approved top-off
payment. If an overpayment remained, or the overpayment was
identified after all PSP1 disbursements were made, and the
9
OIG-21-025, Interim Audit Update – Air Carrier and Contractor Certifications for Payroll Support
Program (Interim Audit), March 31, 2021.
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 6
recipient was entitled to PSP2 or PSP3 funding, the overpayment
was offset against the PSP2 and/or PSP3 awards prior to issuance.
All remaining PSP1 overpayments not previously collected where
the recipient did not qualify for, or apply for, PSP2 and PSP3
funding, were required to be repaid to Treasury.
Prosegur Services Group, Inc.
Headquartered in Herndon, Virginia, Prosegur is a contractor that
provides a variety of security services including, but not limited to,
terminal security, pre-departure screening, hangar protection, and
aircraft guarding.
Prosegur submitted its PSP1 Application totaling on
April 3, 2020. Prosegur accepted the contractor top-off for a total
award amount of $29,208,646, or 90 percent of the company’s
requested amount. Treasury’s disbursements to Prosegur were as
follows:
• June 3, 2020: $11,310,237
• August 3, 2020: $3,770,079
• August 18, 2020: $3,770,079
• September 1, 2020: $3,770,079
• February 16, 2021: $6,588,172
In addition to PSP1, Treasury awarded Prosegur $9,866,032
under the Payroll Support Program Extension (PSP2) 10 authorized
by the Consolidated Appropriations Act, 2021 and $9,866,032
under the Payroll Support Program 3 (PSP3) 11 authorized by the
American Rescue Plan Act of 2021. PSP2 and PSP3 were not the
subject of this audit.
10
The Consolidated Appropriations Act, 2021 (P.L. 116–260), enacted on December 27, 2020,
created the Airline Worker Support Extension for passenger air carriers and certain contractors.
Treasury referred to this as Payroll Support Program Extension (PSP2).
11
The American Rescue Plan of 2021 (P.L. 117—2), enacted on March 11, 2021, created the Air
Transportation Payroll Support Program Extension authorizing Treasury to provide additional
assistance to passenger air carriers and contractors that received financial assistance under PSP2.
Treasury referred to this as Payroll Support Program 3 (PSP3).
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 7
Audit Results
We found that Prosegur reported correct information for three of
the four sections reviewed on its PSP1 Application. These sections
are: (1) Applicant Information, (2) Applicant Type, and
(3) Certification. We compared information provided in each section
of the PSP1 Application to supporting documentation including
general ledger data, company sworn financial statement,
IRS Form 941, executive-level business charts, payroll registers,
and third-party benefit invoices.
For the Awardable Amounts section, we found that although
Prosegur was unable to provide sufficient supporting
documentation to demonstrate that the amounts requested for
“Benefits” were eligible for PSP1, the total actual compensation
incurred was , exceeding the amount certified to
Treasury by $31,059,787. As a result, Prosegur did not over-
request PSP1 financial assistance despite partial non-compliance
with application requirements, as illustrated in Table 1 below.
Table 1: Aggregate Understatement by Month
PSP1 Awardable Amount
Variance
Month Application Re-Calculated by S&R
April 2019
May 2019
June 2019
July 2019
August 2019
September 2019
TOTAL $31,059,787
Source: S&R Calculation of Awardable Amount
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 8
Finding 1 Prosegur Did Not Over-Request PSP1 Financial Assistance
Despite Partial Non-Compliance with Application
Requirements
Both the CARES Act and Treasury’s Guidelines define “employee”
as “an individual, other than a corporate officer, who is employed
by an air carrier or contractor in the United States (including its
territories and possessions).”
Treasury’s Guidelines define wages, salaries, benefits, and other
compensation as:
remuneration paid by the applicant to its employees for personal
services and includes salaries, wages, overtime pay, cost-of-
living differentials, and other similar compensation, as
distinguished from per diem allowances or reimbursement for
expenses incurred by personnel for the benefit of the applicant.
In addition, the Guidelines define Awardable Amounts as:
an amount that such contractor certifies, using sworn financial
statements or other appropriate data, as the amount of wages,
salaries, benefits, and other compensation that such contractor
paid its employees during the time period.
Prosegur was unable to provide sufficient supporting
documentation to demonstrate that the amounts requested for
12
“Benefits” were eligible for PSP1. Specifically, only of
the requested was adequately supported. The
remaining benefit request amounts associated with company-paid
insurance premiums for medical insurance, dental insurance, vision
insurance, life insurance, and disability insurance either (1) were
not itemized at the employee-level to quantify the amounts
associated with ineligible corporate officer’s benefits; or (2) could
not be validated by third-party benefit invoices or company
payment records. Table 2 illustrates a monthly breakdown of
Prosegur’s overstated benefit amounts.
12
This amount represented company-paid union workers health insurance premiums and did not include
corporate officers’ benefits.
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 9
Table 2: Benefits Overstatement
Requested Re-Calculated
Month Amount Amount Variance
April 2019
May 2019
June 2019
July 2019
August 2019
September 2019
TOTAL
Source: S&R Calculation of Awardable Amount
However, the overstatement for “Benefits” was entirely offset by
differences between actual amounts paid to PSP1-eligible
employees and the application figures compiled using payroll
information exclusively for its employees who worked in the
company’s “aviation divisions”. 13 Specifically, the actual “Salaries
and Wages” and “Other Compensation,” paid to all company
employees was , which exceed the PSP1 Application
by , as shown in Table 3.
Table 3: Aggregate Understatement for Salaries/Wages and Other
Compensation
Other
Description Salaries/Wages Compensation Total
Actual Supported PSP1
Eligible Compensation
PSP1 Application
Net Understatement
Source: S&R Calculation of Awardable Amount
13
Prosegur’s payroll and financial accounting systems assign employees a division code that indicate
the location and/or type of service being provided by the employee. Prosegur only included the codes
that are associated with airports, airlines, or aviation-related activities.
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 10
The “Benefit” overstatement of and “Salaries/Wages,
and Other Compensation” understatement of ,
resulted in an aggregate understatement of $31,059,787.
Prosegur management stated that it was unable to obtain itemized
copies of third-party benefit invoices or company payment records
in order to demonstrate the amount of PSP1-eligible benefit
expenses. In addition, Prosegur management stated that it only
requested compensation for the aviation divisions because
management’s interpretation of the CARES Act was that only
aviation-related employees within a company were eligible for
PSP1.
To remedy the findings listed in the prior OIG audit report, 14
Treasury required PSP2 applicants to recertify their PSP1
awardable amounts. Prosegur certified to Treasury under PSP2,
that its PSP1 Application did not include corporate officer
compensation or employer-side payroll taxes. Although Prosegur
was unable to provide sufficient documentation to support the
exclusion of corporate officers from the ”Benefits” section of the
requested amount, the company did not over-request PSP1
financial assistance because the actual compensation incurred
exceeded the amount requested in the PSP1 Application.
******
We appreciate the courtesies and cooperation provided to our staff
during the audit. A distribution list for this report is provided as
appendix 4.
Saggar & Rosenberg, P.C. /s/
14
OIG-21-025, Interim Audit Update – Air Carrier and Contractor Certifications for Payroll Support
Program (Interim Audit), March 31, 2021.
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 11
Appendix 1: Objective, Scope, and Methodology
Our objective was to assess the accuracy, completeness, and
sufficiency of Prosegur Services Group, Inc.’s (Prosegur) sworn
financial statement or other data used to certify the wages,
salaries, benefits, and other compensation amounts submitted and
approved by the Department of the Treasury (Treasury).
The scope of our audit covered the period from April 1, 2019
through September 30, 2019, and included the certified Payroll
Support Program (PSP1) Application, sworn financial statement,
tax returns, and other documentation submitted to Treasury on
April 3, 2020. 15
To accomplish this objective, Saggar & Rosenberg, P.C. (S&R)
performed the following activities during audit fieldwork from
August 2023 through June 2024:
• Reviewed applicable Federal laws and regulations, including:
o Title IV, Subtitle B, Air Carrier Worker Support, of the
Coronavirus Aid, Relief, and Economic Security Act
(CARES Act);16 and
o 14 CFR, Part 241,17 Uniform System of Accounts and
Reports for Large Certificated Air Carriers,
December 28, 2023.
• Reviewed Treasury’s policies, procedures, and guidance related
to PSP1:
o Guidelines and Application Procedures for Payroll Support
to Air Carriers and Contractors (Guidelines), which
included the PSP1 Application, March 30, 2020;
o PSP1 Agreement;
15
Prosegur submitted the PSP1 Application and related supporting documentation on April 3, 2020.
16
P.L. 116–136 (March 27, 2020).
17
14 CFR, Part 241 “Uniform System of Accounts and Reports for Large Certificated Air Carriers”
defines “Air carrier, large certificated” as an air carrier holding a certificate issued under 49 U.S.C.
41102, as amended, that: (1) operates aircraft designed to have a maximum passenger capacity of
more than 18,000 pounds; or (2) conducts operations where one or both terminals of a flight stage
are outside the 50 states of the United States, the District of Columbia, the Commonwealth of
Puerto Rico, and the U.S. Virgin Islands. These air carriers are required to report financial information
to the Department of Transportation. Prosegur is not a Large Certificated Air Carrier.
Audit of Air Carrier Worker Support Certifications – Prosegur Services
Group, Inc. (OIG-24-040) 12
Appendix 1: Objective, Scope, and Methodology
o Question and Answer: Payroll Support to Air Carriers and
Contractors, (April 2, 2020, April 3, 2020 and
April 20, 2020 versions); and
o Frequently Asked Questions: Application Procedures for
Payroll Support to Air Carriers and Contractors,
April 3, 2020.
• Performed 100 percent testing for four of the eight sections of
the PSP1 Application—specifically, the Applicant Information,
Applicant Type, Awardable Amounts, and Certification sections.
The other four sections were not reviewed because the
Taxpayer Protection section generally applied to 241 air
carriers, with exceptions; the Employment Levels, Financial
Institution Information, and Additional Information sections had
no impact on Treasury’s determination of recipients’ award
amounts.
• Interviewed key Treasury personnel and contracted consultant
personnel engaged by Treasury to aid in its evaluation of the air
carriers’ and the contractors’ certified applications and other
data.
• Interviewed Prosegur management responsible for the
completion and submission of the sworn financial statement in
the Awardable Amounts section of the PSP1 Application.
• Reviewed sworn financial statement and documents to support
the requested payroll support amount. The documentation
included general ledger data, company pay registers, benefit
invoices, Internal Revenue Service (IRS) Form 941, Employer’s
Quarterly Federal Tax Return, 18 and organizational hierarchy
information.
• Reviewed Government Accountability Office’s (GAO) Standards
for Internal Control in the Federal Government 19 to identify the
components of internal control that are significant to the audit
objective. Understanding internal control within the context of
an entity’s internal control framework can help auditors
determine whether internal control deficiencies exist. We
concluded that one of the five internal control components,
Control Activities, as related to Prosegur’s payroll system, was
18
IRS Form 941 is a tax form that businesses file quarterly to report income taxes, Social Security
taxes, and Medicare taxes they withheld from employee paychecks.
19
GAO-14-704G (September 2014).
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 13
Appendix 1: Objective, Scope, and Methodology
significant to the audit objective.20 This component states that
control activities are the actions management establishes
through policies and procedures to achieve objectives and
respond to risks in the internal control system, which includes
the entity’s information system. To assess the controls over
Prosegur’s payroll system, we examined Prosegur’s response to
Data Supplier Questionnaires, 21 reviewed a System and
Organizational Controls 1 (SOC 1), 22 and interviewed Prosegur’s
management responsible for generating and using the data.
Additional details regarding our assessment of the reliability of
the data is reported in the section below.
• Reviewed GAO’s Assessing Data Reliability 23 guidance, which
states that a data reliability determination does not involve
attesting to the overall reliability of the data or database. For
this audit, the audit team has only determined the reliability of
the specific data sources needed to support the findings,
conclusions, or recommendations in the context of the audit
objective. Prosegur prepared the PSP1 Application using payroll
and benefit compensation from April 2019 through
September 2019, which included information developed from
the company’s payroll and financial accounting systems. We
compared details generated from payroll registers at the
individual employee level, as well as third-party vendor benefit
invoices from April 2019 through September 2019 to the
amounts presented in the Awardable Amounts section of the
PSP1 Application.
To assess data reliability of these sources, we reviewed Prosegur’s
response to the Data Supplier Questionnaires for the payroll and
financial accounting systems, reviewed the SOC 1 report for the
payroll system, and interviewed Prosegur’s management
responsible for generating and using the data. Based on our
assessment, we determined that the data was sufficiently reliable
20
The five components of internal control are Control Environment, Risk Assessment, Control
Activities, Information and Communication, and Monitoring.
21
A Data Reliability Assessment is completed to assess the reliability of data originating from a system
to determine if it is reliable for the purposes of the audit. The Data Supplier Questionnaire would be
one of the tools used during the Data Reliability Assessment.
22
SOC 1 report addresses a company’s internal control over financial reporting, which pertains to the
application of checks-and-limits. Essentially, it is the audit of a third-party vendor’s accounting and
financial controls.
23
GAO-20-283G (December 2019).
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 14
Appendix 1: Objective, Scope, and Methodology
to support the findings and conclusions to answer the objective of
this audit.
We conducted this performance audit 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 objective. We believe that the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objective.
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 15
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 18
Audit of Air Carrier Worker Support Certifications - Prosegur Services
Group, Inc. (OIG-24-040) 19
Appendix 4: Report Distribution
Department of the Treasury
Deputy Secretary
Treasury Audit Liaison
Office of Strategic Planning and Performance Improvement
Office of the Deputy Chief Financial Officer, Risk and Control
Group
Prosegur Services Group, Inc.
Chief Executive Officer
Chief Financial Officer
Office of Management and Budget
OIG Budget Examiner
United States Senate
Committee on Homeland Security and Governmental Affairs
Committee on Finance
Committee on Banking, Housing, and Urban Affairs
Committee on Commerce, Science, and Transportation
Committee on Appropriations
Committee on the Budget
United States House of Representatives
Committee on Oversight and Accountability
Committee on Financial Services
Committee on the Budget
Committee on Transportation and Infrastructure
Audit of Air Carrier Worker Support Certifications – Prosegur Services
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