Audit Report - Oig 26 033 Coronavirus Disease 2019 Pandemic Relief Programs Audit Of Airline Wor
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- Oig 26 033 Coronavirus Disease 2019 Pandemic Relief Programs Audit Of Airline Wor
Summary
Audit Report OIG-26-033 of the Department of the Treasury Office of Inspector General, dated June 9, 2026, on the Payroll Support Program Extension (PSP2) certification of contractor Allied New York Services, Inc. Saggar & Rosenberg, P.C. performed the audit under contract, covering October 1, 2019 through March 31, 2020. It finds Allied included $3,362,506 in unallowable employer-side payroll taxes and ineligible-employee compensation, largely offset by a $3,163,957 understatement, so that Allied overstated its awardable amount by $198,549. With PSP2 funds disbursed pro-rata at 30.4 percent, the report questions a $60,359 overpayment and recommends reimbursement and a review of Allied's Payroll Support Program 3 request. Allied management accepted the conclusions and Treasury management concurred with the recommendations.
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SENSITIVE BUT
UNCLASSIFIED
(SBU)
asu ry
T r e
U.S.
SBU Cover Sheet
For further information, refer to the
Treasury Security Manual (TD P 15-71) at
http://intranet.treas.gov/security/
TD F 15-05.11 (3/07)
Audit Report
OIG-26-033
CORONAVIRUS DISEASE 2019 PANDEMIC RELIEF
PROGRAMS
Audit of Airline Worker Support Extension
Certification – Allied New York Services, Inc.
June 9, 2026
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Office of Inspector General
Department of the Treasury
This Page Intentionally Left Blank
D EP ART M E NT O F THE TRE A SU RY
WASHINGTON, D.C. 2022 0
OFFICE OF
I NSPECTOR GENERAL
June 9, 2026
MEMORANDUM FOR JEFFREY STOUT
ACTING CHIEF PROGRAM OFFICER
FROM: Pauletta Battle /s/
Assistant Inspector General for Audit
SUBJECT: Audit of Airline Worker Support Extension Certification — Allied
New York Services, Inc.
Attached is our audit report for the Audit of Airline Worker Support Extension
Certification — Allied New York Services, Inc (Allied) (OIG-26-033; June 9, 2026).
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 Allied’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 Payroll Support Program Extension (PSP2). This audit was mandated
by Title IV, Subtitle A, Airline Worker Support Extension, of the Consolidated
Appropriations Act, 2021. 1 The scope of our audit covered the period from
October 1, 2019, through March 31, 2020, and included the certified PSP2
Application, sworn financial statement, tax returns, and other documentation
submitted to Treasury.
In its audit report, S&R found that Allied, a contractor, incorrectly reported information
- -
in the Determining Awardable Amount section of the PSP2 Application. 2 Specifically,
Allied included $ in employer-side payroll taxes and $
compensation paid by an affiliate not included in the PSP2 Application. The
unallowable amount of $3,362,506 was largely offset by a $3,163,957
in employee
understatement related to the differences between the actual compensation paid and
the amounts requested on the PSP2 Application. Overall, Allied overstated its
requested awardable amount by$198,549. Since Treasury disbursed PSP2 funds
1
P.L. 116–260 (December 27, 2020)
2
Allied’s PSP2 Application included nine other United States based affiliate companies. All affiliate
companies are overseen by the same management group.
i
pro-rata for contractors at 30.4 percent of the requested amount, Allied received an
overpayment of $60,359. As a result, S&R questions the costs totaling $60,359.
Accordingly, S&R recommends the Acting Chief Program Officer:
1. seek reimbursement of the $60,359 overpayment to Allied for PSP2 financial
assistance; and
2. review Allied’s requested amount for unallowable expenses, under Payroll
Support Program 3, authorized by the American Rescue Plan Act of 2021 and
seek reimbursement for the overpayment. 3
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.
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 Allied’s compliance with Treasury’s PSP2 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) 927-5400, or a member of your staff may contact Julie Wong, Acting Deputy
Assistant Inspector General for Audit, at (202) 439-6354.
Attachment
cc: Thao P. Tran, Acting Chief Operating Officer, Department of the Treasury
Danielle Christensen, Deputy Chief Program Officer for State and Local
Programs, Office of Capital Access, Department of the Treasury
Jason Morrow, Senior Counsel, Department of the Treasury
Jeff Davis, Partner, Saggar & Rosenberg, P.C.
3
P.L. 117-2, The American Rescue Plan Act of 2021, 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.
ii
Contents
Audit Report
Results in Brief ...................................................................................................2
Background ........................................................................................................3
Treasury Disbursement Processes ....................................................5
Allied New York Services, Inc. .........................................................6
Audit Results......................................................................................................6
Finding Inaccurate Compilation of the PSP2 Application Awardable Amount .....7
Recommendations ........................................................................10
Appendices
Appendix 1: Objective, Scope, and Methodology ..................................................11
Appendix 2: Schedule of Monetary Benefits .........................................................14
Appendix 3: Allied New York Services, Inc. Management Response ........................15
Appendix 4: Treasury Management Response ......................................................16
Appendix 5: Report Distribution ..........................................................................19
Abbreviations
Allied Allied New York Services, Inc
CAA Consolidated Appropriations Act, 2021
DOT Department of Transportation
DUNS Data Universal Numbering System
IRS Internal Revenue Service
JAMES Joint Audit Management Enterprise System
OIG Treasury Office of Inspector General
PSP1 Payroll Support Program, Coronavirus Aid, Relief, and Economic
Security Act
PSP2 Payroll Support Program Extension, Consolidated Appropriations
Act, 2021
PSP2 Guidelines Guidelines and Application Procedures for Payroll Support to
Passenger Air Carriers and Contractors
PSP3 Payroll Support Program 3, American Rescue Plan of 2021
S&R Saggar & Rosenberg, P.C.
SOC 1 System and Organizational Controls
Treasury Department of the Treasury
This Page Intentionally Left Blank
SAGGAR & ROSENBERG, P.C.
Assurance • Tax• Consulting
June 9, 2026
Jeffrey Stout
Acting Chief Program Officer
Department of the Treasury
This report presents the results of our audit of Allied New York
Services, Inc.’s (Allied’s) certifications made to the Department of
the Treasury (Treasury) as part of its participation in the Payroll
Support Program Extension (PSP2). This audit was mandated by
Title IV, Subtitle A, Airline Worker Support Extension, of the
Consolidated Appropriations Act, 2021 (CAA). Under the CAA,
Treasury was to provide $16 billion in financial assistance to
passenger 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. 4 Furthermore, the Treasury Office of
Inspector General (OIG) is required to audit certifications made by
passenger air carriers that do not report salaries and benefits to the
Department of Transportation (DOT) (hereinafter referred to as
non-241 air carriers) 5 and contractors.
Our audit objective was to assess the accuracy, completeness, and
sufficiency of Allied’s sworn financial statement or other data used
to certify the wages, salaries, benefits, and other compensation
amounts submitted and approved by Treasury for PSP2. The scope
of our audit covered the period from October 1, 2019, through
March 31, 2020, and included the certified PSP2 Application,
sworn financial statement, tax returns, and other documentation
submitted to Treasury on January 12, 2021.
To accomplish the objective, we reviewed applicable federal laws
and regulations; and Treasury’s policies, procedures and guidance,
4
The financial assistance provided under the CAA was split between passenger air carriers
($15 billion) and contractors ($1 billion).
5
Passenger 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 Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 1
including but not limited to, Title IV, Subtitle A, Airline Worker
Support Extension of the CAA; Guidelines and Application
Procedures for Payroll Support to Passenger Air Carriers and
Contractors (PSP2 Guidelines); PSP2 Agreement; and Question and
Answer: Payroll Support Program Extension for Passenger Air
Carriers and Contractors. We interviewed key personnel from Allied
and Treasury. We conducted our fieldwork from February 2025
through September 2025. Appendix 1 contains a more detailed
description of our objective, scope, and methodology.
Results in Brief
We found that Allied, a contractor, reported correct information for
five of six sections reviewed on its PSP2 Application. 6 These
sections are: (1) Recipient Information, (2) Eligibility Questions,
(3) Company Information, (4) Affiliates, and (5) Certification. We
also found that Allied reported incorrect information in the
Determining Awardable Amount section of the PSP2 Application.
- -
Specifically, Allied included $
taxes, and $
in employer-side payroll
in ineligible-employee compensation, totaling
$3,362,506. The unallowable expenses were largely offset by a
$3,163,957 understatement related to differences between the
actual compensation paid and the amounts requested on the PSP2
Application. Overall, Allied overstated its awardable amount by
$198,549. Since Treasury disbursed PSP2 funds pro-rata for
contractors at 30.4 percent of the requested amount, Allied
received an overpayment of $60,359. As a result, we question the
costs totaling $60,359.
Accordingly, we recommend the Acting Chief Program Officer seek
reimbursement of the $60,359 overpayment to Allied for PSP2
financial assistance; and review Allied’s requested amount for
unallowable expenses, under Payroll Support Program 3 (PSP3),
authorized by the American Rescue Plan Act of 2021 and seek
reimbursement for the overpayment. Appendix 2 contains the
schedule of monetary benefits.
6
The PSP2 Application is comprised of ten sections. We did not review four sections because the
Financial Information, Bankruptcy Information, and Employment Levels sections had no impact on
Treasury’s determination of recipients’ award amounts; and the Validation of Payroll Support
Program (PSP1) Award Amount section had no impact on Allied’s PSP2 awarded amount because
the company did not receive PSP1 financial assistance.
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 2
As part of our reporting process, we provided Allied management
with an opportunity to comment on a draft of this report. In a
written response, Allied management stated they have reviewed
the report and accept the conclusions and recommendations. Allied
management’s response, in its entirety, is included as appendix 3
of this report.
In a written response, Treasury management concurred with our
recommendations and agreed that any overpayments of PSP funds
should be recouped. Treasury stated it will conduct a review of the
findings, consider any response from the recipient, and seek
recoupment of any amounts that Treasury determines have been
overpaid. Treasury management will need to record an estimated
completion date for these actions in the Joint Audit Management
Enterprise System (JAMES). Management’s planned corrective
actions meet the intent of our recommendations. Treasury
management’s response, in its entirety, is included as appendix 4
of this report.
Background
Title IV, Subtitle A, of the CAA, Airline Worker Support Extension,
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
$15 billion; and
(2) contractors, in an aggregate amount up to $1 billion.
According to the CAA, Treasury is required to provide financial
assistance to contractors, in an amount equal to: (1) the amount
such contractor was approved to receive (without taking into
account any pro-rata reduction) under Payroll Support Program
(PSP1); 7 or (2) in the event such contractor did not receive
financial assistance under PSP1, an amount that the contractor
7
P.L. 116-136, The Coronavirus Aid, Relief, and Economic Security Act, enacted on March 27, 2020,
created the Air Carrier Worker Support. The program provided payroll support to passenger air
carriers, cargo air carriers, and certain contractors for the continuation of payment of employee
wages, salaries, and benefits in response to the economic impact of Coronavirus Disease 2019.
Treasury referred to this as PSP1.
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 3
certifies, using sworn financial statements or other appropriate
data, as the amount of wages, salaries, benefits, and other
compensation that such contractor paid the employees of such
contractor during the period from October 1, 2019, through
March 31, 2020. The amounts submitted on the application to
Treasury were considered sworn financial statements. To be
eligible for payments, contractors must enter into agreements with
Treasury certifying that they meet certain required assurances,
terms, and conditions.
On December 29, 2020, Treasury posted on its website the PSP2
Guidelines. Afterwards, Treasury posted a web-based PSP2
Application for applicants to complete and submit. The PSP2
Application was comprised of ten sections:
1. Recipient Information — (1) indication of whether the
applicant is an eligible passenger air carrier or an eligible
contractor; (2) Form-41 filer indication; 8 (3) applicant’s
name; (4) applicant’s taxpayer identification number; and
(5) PSP1 Applicant indication, if applicable, by listing the
PSP1 Application number, whether PSP1 Application was
approved, and financial assistance received.
2. Eligibility Questions — selection of whether the applicant is
a direct passenger air carrier, an indirect passenger air
carrier, a direct contractor, or a subcontractor. 9
3. Company Information — (1) applicant’s Data Universal
Numbering System (DUNS) number; 10 (2) indication of
whether the applicant is registered with the System for
Award Management; 11 (3) applicant’s entity type;
(4) applicant’s address; and (5) contact person name, title,
phone number, and email address.
8
A Form-41 filer is a large certificated air carrier, who is required to report financial information to
DOT.
9
Direct air carrier means a certificated commuter, foreign air carrier, an air taxi operator, or a Canadian
charter air taxi operator; that directly engages in the operation of aircraft under a certificate,
authorization, permit or exemption issued by DOT. Indirect air carriers are organizers and service
providers who use services of a direct air carrier but do not operate or own the aircraft. A direct
contractor is hired directly by the client to complete a project, whereas a subcontractor is hired by
the contractor to complete tasks within the contract.
10
A DUNS number is a unique nine-digit identifier associated with a company’s credit profile.
11
Entities registered on the System for Award Management, which is administered by the General
Services Administration, are allowed to bid on government contracts and apply for federal
assistance.
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 4
4. Financial Information — (1) the applicant’s account type,
number, and routing number; and (2) the financial
institution’s name, address, and telephone number.
5. Bankruptcy Information — applicant’s indication as to
whether they have taken or is contemplating taking action
to commence bankruptcy, to include explanation, debtor
name, bankruptcy court, case number, type of bankruptcy
filing, and date of bankruptcy filing.
6. Employee Levels — (1) applicant’s average number of
employees for 2019 and 2020; (2) employee count as of the
date of the PSP2 Application; (3) if applicant did not apply
for PSP1, number of involuntary reductions after
March 27, 2020; and (4) if applicant applied for PSP1,
number of involuntary reductions after October 1, 2020.
7. Determining Awardable Amount — applicant’s sworn
financial statement consisting of salaries, wages, benefits,
and other compensation for October 1, 2019, to
March 31, 2020.
8. Validation of PSP1 Award Amount — applicant’s
recertification to whether unallowable expenses were
included in its PSP1 Application, to include corporate officer
compensation, independent contractors, employer-side
payroll taxes, and amounts other than wages, salaries,
benefits, and other compensation.
9. Affiliates — (1) affiliate name; (2) affiliate applicant type;
(3) affiliate taxpayer ID; and (4) affiliate DUNS number.
10. Certification — names, titles, and signatures of two
certifying officials 12 and application submission date.
Treasury Disbursement Processes
The total PSP2 requested amount (also referred to as awardable
amount) by all contractor applicants exceeded the $1 billion
available financial assistance. As a result, Treasury applied a
12
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 Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 5
pro-rata rate of 30.4 percent to the requested amount. Generally,
Treasury disbursed two payments—each half of the awarded
amount.
Allied New York Services, Inc.
Headquartered in New York, New York, Allied is a contractor that
provides fueling services for the commercial aviation industry at
some of the largest airports in the United States.
Allied’s PSP2 Application included nine other United States based
affiliate companies: (1) Allied Aviation Fueling Company of Texas,
Inc.; (2) Allied Aviation Fueling Company of San Antonio, Inc.;
(3) Allied Aviation Service Company of New York, Inc.; (4) Allied
Aviation Service Company of New Jersey, Inc.; (5) Allied Aviation
Fueling of National Airport, LLC; (6) Allied Aviation Fueling of
South Carolina, LLC; (7) Allied Aviation Fueling Company of Miami,
Inc.; (8) Allied Aviation Fueling Company of Houston, Inc.; and
(9) Allied Aviation Fueling Company, Inc. All affiliates are managed
and operated by the same management group.
Allied’s PSP2 requested amount is $ . The company
received $15,755,055, or 30.4 percent of the requested amount.
Treasury’s disbursements to Allied were as follows:
• June 4, 2021: $7,877,528
• June 22, 2021: $7,877,527
In addition to PSP2, Treasury awarded Allied $15,755,055 under
PSP3 authorized by the American Rescue Plan Act of 2021. PSP3
was not the subject of this audit.
Audit Results
We found that Allied reported correct information for five of six
sections reviewed on its PSP2 Application. These sections are:
(1) Recipient Information, (2) Eligibility Questions, (3) Company
Information, (4) Affiliates, and (5) Certification. We compared
information provided in each section of the PSP2 Application to
supporting documentation, including general ledger data, company
sworn financial statement, Internal Revenue Service (IRS) Form
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 6
941, 13 executive-level business charts, payroll registers, and
third-party benefit claim and invoice data, among other items.
We also found that Allied incorrectly reported information in the
Determining Awardable Amount section. Specifically, the company
included: (1) employer-side payroll taxes and (2) ineligible-employee
compensation, totaling $3,362,506; however, the unallowable
expenses were largely offset by a $3,163,957 understatement
related to differences between the actual compensation paid and
the amounts requested on the PSP2 Application. Overall, Allied
overstated its PSP2 requested amount by $198,549. Since
Treasury disbursed PSP2 funds pro-rata for contractors at
30.4 percent of the requested amount, Allied received an
overpayment of $60,359.
Finding Inaccurate Compilation of the PSP2 Application
Awardable Amount
Treasury’s PSP2 Application instructs applicants to enter:
(1) salaries and wages as an amount equal to Line 2 on its IRS
Form 941 for October - December of tax year 2019 and
January - March of tax year 2020, less amounts paid to corporate
officers of the company; and (2) benefits in an amount equal to
benefits paid to all individuals on payroll from October 1, 2019
through March 31, 2020, less benefits paid to corporate officers of
the company.
According to the instructions for IRS Form 941, employers are to
enter amounts on Line 2 that are equal to Box 1 [Wages, tips,
other compensation] of the employees' IRS Form W-2. The Form
W-2 instructions requires that Box 1 excludes elective deferrals
such as employee contributions to 401(k).
Treasury’s PSP2 Guidelines define:
benefits as without duplication of any amounts counted as
salary or wages, pension expenses in respect of employees, all
expenses for accident, sickness, hospital, and death benefits to
employees, and the cost of insurance to provide such benefits;
any severance pay or other benefits payable to employees
pursuant to a bona fide voluntary early retirement program or
13
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.
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 7
voluntary furlough; and any other similar expenses paid by a
passenger air carrier or contractor for the benefit of employees,
including any other fringe benefit expense described in lines 10
and 11 of Financial Reporting Schedule P-6, 14 Form 41, as
published by the Department of Transportation, but excluding
any federal, state, or local payroll taxes paid by a passenger air
carrier or contractor;
employee as an individual who is employed by an air carrier or a
contractor and whose principal place of employment is in the
United States (including its territories and possessions),
including salaried, hourly, full-time, part-time, temporary, and
leased employees, but excluding any individual who is a
corporate officer or independent contractor; and
salaries as without duplication of any amounts counted as
benefits, a predetermined regular payment, typically paid on a
weekly or less frequent basis but which may be expressed as an
hourly, weekly, annual or other rate, as well as cost-of-living
differentials, vacation time, paid time off, sick leave, and
overtime pay, paid by a passenger air carrier or contractor to its
employees, but excluding any federal, state, or local payroll
taxes paid by the passenger air carrier or contractor.
Allied incorrectly certified its PSP2 awardable amount, resulting in
an overstatement of $3,362,506. Specifically, Allied included:
•
•
-
Employer-side payroll taxes, resulting in an overstatement of
$ ; and
Employee compensation paid by an affiliate not included in
-
the PSP2 Application, resulting in an overstatement of
$ .
The $3,362,506 overstatement was largely offset by an
understatement of $3,163,957. The understatement included
differences between:
• Actual salaries and wages incurred from October 1, 2019,
through March 31, 2020, totaling $ , which
14
The Schedule P-6 is one of the financial reports 241 air carriers must submit to DOT. The schedule
contains data for a company’s quarterly operating expenses and is separated into categories such as
salaries and fringe benefits.
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 8
exceeded the requested amount of $ , resulting
in an understatement of $2,367,944; and
• Actual benefits 15 paid and the application figures compiled
using accrual-based financial information, resulting in an
understatement of $796,013.
Overall, Allied overstated its awardable amount by $198,549.
Since Treasury disbursed PSP2 funds pro-rata for contractors at
30.4 percent of the requested amount, Allied received an
overpayment of $60,359. Table 1 illustrates the overpayment.
Table 1. Aggregate Overstatement and Pro-Rated Overpayment
Description Amount
--
PSP2 Application Requested Amount $
----------~--
Less Employer-side Payroll Taxes $( )
Less Ineligible-employee Compensation $( 7)
Plus Eligible Employee Wages $2,367,944
-
Plus Eligible Employee Benefits $796,013
PSP2 Calculated Amount $
Overstatement $198,549
PSP2 Contractor Pro-rata 30.4%
Pro-rated Overpayment $60,359
Source: S&R Calculation of Awardable Amount
Allied management stated that the inclusion of payroll taxes and
the differences between actual benefits paid and the amounts
requested were due to unintentional oversight. Furthermore,
management considered the compensation paid to individuals
supporting certain administrative functions for the Allied PSP2
affiliates, as an eligible PSP2 expense. In addition, Treasury’s PSP2
Application instructed applicants to exclude elective deferrals, such
as employee contributions to 401(k) and health insurance, which
are considered eligible expenses for PSP2 purposes.
In addition to PSP2, Allied received financial assistance under
PSP3. For contractors, the PSP3 awardable amount was to be
15
Allied’s benefits requested include medical insurance, dental insurance, life insurance, disability
insurance, workers compensation, and 401(k) match expenses.
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 9
equal to the amount awarded under PSP2. As a result, Allied
inherently included employer-side payroll taxes and
ineligible-employee compensation in its PSP3 awardable amount.
Recommendations
S&R recommends that Treasury’s Acting Chief Recovery Officer:
1. Seek reimbursement of the $60,359 overpayment to Allied for
PSP2 financial assistance.
Management Response
Treasury will conduct a review of the findings, consider any
response from the recipient, and seek recoupment of any
amounts that Treasury determines have been overpaid.
OIG Comment
Management’s planned corrective actions meet the intent of our
recommendation. Treasury management will need to record an
estimated completion date for these actions in JAMES.
2. Review Allied’s requested amount for unallowable expenses
under PSP3 and seek reimbursement for the overpayment.
Management Response
Treasury will conduct a review of the findings, consider any
response from the recipient, and seek recoupment of any
amounts that Treasury determines have been overpaid.
OIG Comment
Management’s planned corrective actions meet the intent of our
recommendation. Treasury management will need to record an
estimated completion date for these actions in JAMES.
******
We appreciate the courtesies and cooperation provided to our staff
during the audit. A distribution list for this report is provided as
appendix 5.
Saggar & Rosenberg, P.C. /s/
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 10
Appendix 1: Objective, Scope, and Methodology
Our objective was to assess the accuracy, completeness, and
sufficiency of Allied New York Services, Inc. (Allied) 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
Payroll Support Program Extension (PSP2).
The scope of our audit covered the period from October 1, 2019,
through March 31, 2020, and included the certified PSP2
Application, sworn financial statement, tax returns, and other
documentation submitted to Treasury on January 12, 2021.
To accomplish this objective, Saggar & Rosenberg, P.C. performed
the following activities during audit fieldwork from February 2025
through September 2025:
• Reviewed applicable federal laws and regulations, including:
o Title IV, Subtitle A, Airline Worker Support Extension, of
the Consolidated Appropriations Act, 2021; and
o 14 CFR Part 241, Uniform System of Accounts and
Reports for Large Certificated Air Carriers, amended
April 2, 2025.
• Reviewed Treasury’s policies, procedures, and guidance related
to PSP2:
o Guidelines and Application Procedures for Payroll Support
to Passenger Air Carriers and Contractors,
December 29, 2020;
o PSP2 Agreement;
o Question and Answer: Payroll Support Program Extension
for Passenger Air Carriers and Contractors,
(January 19, 2021, and March 10, 2021, versions).
• Performed 100 percent testing for six of the ten sections of the
PSP2 Application—specifically, the Company Information,
Recipient Information, Eligibility Questions, Affiliates,
Determining Awardable Amount, and Certification sections. We
did not review four sections because the Financial Information,
Bankruptcy Information, and Employment Levels sections had
no impact on Treasury’s determination of recipients’ award
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 11
Appendix 1: Objective, Scope, and Methodology
amounts; and the Validation of Payroll Support Program Award
Amount section had no impact on Allied’s PSP2 awarded
amount because the company did not receive Payroll Support
Program financial assistance.
• Interviewed key Treasury personnel.
• Interviewed Allied’s management responsible for the completion
and submission of the sworn financial statement in the
Determine Awardable Amount section of the PSP2 Application.
• Reviewed sworn financial statement and documents to support
the requested payroll support amount. The documentation
included but was not limited to: (1) general ledger data,
(2) company pay registers, (3) benefit claim information,
(4) Internal Revenue Service Form 941 – Employer’s Quarterly
Federal Tax Return, and (5) organizational hierarchy.
• Reviewed Government Accountability Office’s Standards for
Internal Control in the Federal Government 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 Allied’s payroll system, was
significant to the audit objective. 16 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
Allied’s payroll system, we examined Allied’s response to Data
Supplier Questionnaires, 17 reviewed a System and
Organizational Controls 1 (SOC 1) report, 18 and interviewed
Allied’s management responsible for generating and using the
16
The five components of internal control are Control Environment, Risk Assessment, Control
Activities, Information and Communication, and Monitoring.
17
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 of a third-party vendor’s accounting and
financial controls. The Data Supplier Questionnaire would be one of the tools used during the Data
Reliability Assessment.
18
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.
Audit of Airline Worker Support Extension Certification –
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Appendix 1: Objective, Scope, and Methodology
data. Additional details regarding our assessment of the
reliability of the data are reported in the section below.
• Reviewed Government Accountability Office’s Assessing Data
Reliability 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 needed to support
the findings, conclusions, or recommendations in the context of
the audit objective. Allied prepared the PSP2 Application using
payroll and benefit information from Allied’s payroll and financial
accounting systems. We compared details generated from the
payroll registers at the individual employee level, as well as
third-party benefit data from October 1, 2019, through
March 31, 2020, to the amounts presented in the Determine
Awardable Amount section of the PSP2 Application.
To assess data reliability of these sources, we (1) reviewed the
Data Supplier Questionnaires for the payroll and financial
accounting systems, (2) reviewed the SOC 1 report for the
payroll system, and (3) interviewed Allied’s management
responsible for generating and using the data. Based on our
assessment, we determined that the data was sufficiently
reliable 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 Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 13
Appendix 2: Schedule of Monetary Benefits
According to the Code of Federal Regulations, 19 a questioned cost
is a cost that is questioned by the auditor because of:
(a) an alleged violation of a provision of a law, regulation,
contract, or other requirement governing the expenditure of
funds;
(b) a finding that, at the time of the audit, such cost is not
supported by adequate documentation; or
(c) a finding that the expenditure of funds for the intended
purpose is unnecessary or unreasonable.
Questioned costs are to be recorded in the Department of the
Treasury’s (Treasury) Joint Audit Management Enterprise System.
The amount will also be included in the Treasury Office of
Inspector General (OIG) Semiannual Report to Congress. It is
Treasury management's responsibility to report to Congress on the
status of the agreed to OIG recommendations with monetary
benefits in accordance with Section 405(c) of the Inspector
General Act of 1978, as amended.
Recommendation Questioned Costs
Recommendation No. 1 $60,359
The questioned cost represents amounts provided by Treasury
under the Payroll Support Program Extension (PSP2). As discussed
in the Finding, Allied New York Services, Inc. overstated its PSP2
requested amount to Treasury by $198,549 due to: (1) the
inclusion of unallowable payroll taxes, (2) the inclusion of
ineligible-employee compensation, and (3) differences between the
actual PSP2-eligible compensation paid and the requested amount.
Treasury’s disbursement of PSP2 funds to contractors was based
on a pro-rata rate of 30.4 percent of the requested amount,
therefore, we question the cost totaling $60,359.
19
2 CFR § 200.1 – Questioned Cost
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 14
Appendix 3: Allied New York Services, Inc. Management
Response
1219 S East Avenue
Suite 301
Sara~
Tel:- -
431 5th Avenu e,
6 th Floor
New Yori<, 10016
May 14, 2026
Via Email
Saggar & Rosenberg, P.C.
RE: Draft Report ofl\llay 13. 2026- PSP2 Audit -Allied Kew York Senices. Inc.
Dear Sir/11adam:
We acknowledge receipt of your final draft report dated May 13, 2026. and we accept the
conclusions and recommendations outlined therein.
As indicated in the report, the incorre:et reporting of payroll taxes and inclusion of
ineligible employee payroll was unintentional and resulted from a misunderstanding in
the calculation and treatment of certain payroll elements. This is further supported by the
relatively small proportion of overstated payroll compared to the total PSP2 payroll relief
requested.
We also note that the funds received provided significant support, enabling our company
to retain many valued and experienced employees and to resume airport foeling seivices.
In conclusion. we do not dispute the audit findings and consider the report to be final.
Robert L. Rose
President
Audit of Airline Worker Support Extension Certification -
All ied New York Serv ices, Inc. (OIG-26-033) 15
Appendix 4: Treasury Management Response
DEPARTMENT OF TH E TREASURY
WASHlNGTO N. D.C. 20220
June 2, 2026
Pauletta Batt1e
Assistant Inspector General for Audit
U.S Department of the Treasury - Office of hts-pector General
1500 Pennsylvania Avenue N.V. .
Washington, D.C. 20220
Dear Ms. Batt]e:
I write regarding the Office of lnspedor General' s (OIG) draft Audit ofAir Carrier TF orker
Support Certifications (Draft Report), 1egarding Allied New York Seivices, Inc. (the Recipient),
a recipient of funds mider Treasury' s Payroll Support Program (PSP). The U.S. Department of
the Tre~1sury (Treasury) appreciates OIG's efforts.
Bac){,.,<>;1·01md on the Payro11 Supp ort ProgJ·am
PSP was part of an effort to provide emergency assistance in re-,ponse to the unprecedented
challenges presented by the COVID-19 public health emergency and bad three iterations:
• The Coronavims Aid, Rehef, and Economic Security Ac.t (CARES Act) was enacted on
March 27, 2020, and established the Payroll Support Program (PSP I) to provide financial
assistance to Americ.a ' s passenger air carriers, cargo air carriers, and cert.ain aviation
contractors. Tre.asury disbursed more than 28 billion to over 600 businesses in PSP 1
directly supporting more than 600,000 Americ.an jobs.
• In December 2020, the Consolidated Appropriations Act 2021, created the Payroll
Support Program Extension (PSP2) for eligible passenger air carriers and certain aviation
oontractors. Treasury disbursed over $15 billion to over 480 passenger air carrien; and
oontractors under .PSP2.
• In March 2021 , the American Rescue Plan Act of 2021 provided an additional $15 billion
fo r Treasury to make further payroll support payments to entities that participated in
PSP2 (PSP3). Treasury disbursed over S1 4.5 billion to over 480 passenger ail carriers
and contractors under PSP3.
The CARES Act set forth hvo different methodologies for calculating awardable amounts for the
largest carriers and for smaller ai:r carriers and aviation contractors. For the largest air c.arriers
which received approximately 89% offhe total PSP assistance., PSPl amounts were based on
reports the carriers had filed with the U.. Department of Transportation under l4 C.F.R. part
241. In contrast, the statute required Treasury to provide financial assistance to smaller air
carriers and aviation contractors in an amount that the applicants certified using s.vom financial
statements or other appropriate data, as the amount of wages, salaries , and benefits that they paid
to their entplo:yees during the time period from April 1, ~019, through September 30, 2019.
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 16
Appendix 4: Treasury Management Response
For awards to the smaller companies the PSPl appllcation and Treaswy's guidelines made dear
that the awardable amounts should not ind ude, inter aJia, ( 1) any empJoyer-side payroll taxes,
which are not paid to employees, and (2) compensation paid to corporate officers and non-
employee contractors. Before accepting PSP2 application<;, Treasury published additional
guidance fiut:her emphasizing that such amounts should not be included in the oompanies '
awardable amount calculations .1 In both PSPl and PSP2, Treasury required two officials of each
applicant, including at least one corporate officer, to certify that the infonnation provided in the
application was corred and did not contain any materially false or fraudulent statements.
In April .020, OIG began a series of audits of PSPl recipients to determine whether they bad
properly calculated their requested ;nvardable amounts. In March 2021 , OIG issued an Interim
Audit Update, notifying Treasury that a number of recipients being audited had in1permissibly
included, in their PSPl applications, employer-side payrolJ taxes or oorpora.te officer
compensation in the calculation of the awardable amount, whioh may have resulted in an
overstatement of the amount of PSP l funds requested. In response, Treasury promptly took a
series of remedial actions, including requiring that aJJ PSPl applicants receiving awards on the
basis of self-certification re-certify whether their awardable amounts included employer-side
paymU taxes or corporate officer compensation. \Vb.ere a company informed Tre.asury that it had
improperly mcluded those amounts in its application, Treasury either withheld fi.rture PSPl
disbursements or began pursuing debt cecoupment. Jbrnugh this process, Treasuiy has
successfitlly recouped more than . 147 milhon of PSP overpayments.
OIG's Finding
The lliaft Report describes the work performed by OIG to determine wl1e!her the Recipient's
requested awardable amouot complied with the guidelines provided by Treasury The Draft
Report notes the extensive fieldwork conducted for this review between February 2025 and
December 2025 to determine the accmacy of the information in the Recipient ' PSP2 application
submitted to Treasury, including inte.wiewing the Recipient's management and collecting and
ceviewing a wide cange oft:he c0111pany' s financial records and corporate documents.
OIG found that the Recipient ovecstated tts cequested a,,r.rrdab]e amount for PSP2 due to the
improper inclusion of employer-side paymU taxes and ineligible-employee compensation. OIG
re.conm1ends that Treasury cecoup $60,359 from the Recipient for PSP2, and that Treasury
review the Recipient 's request for PSP3 assistance.
Treasury agrees with OIG that any overpayments of PSP fonds hould be reimbucsed Treasury
will review OIG's findings, consider any response from the Recipient., and seek recoupn1ent of
any amounts that Treasury detem1:ines have been overpaid.
1 Because awanlable am.o1111ts in PS¥3 were calculated as a perceniage of each company's PSP2 award, companies
were no required to c.akulate aw:udable .unmmts f01 PSP3.
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 17
Appendix 4: Treasury Management Response
Again, Treasmy appreciates OIG' s work on these engagements . We look forwa1·d to working
with you to protect the integrity of the PSP and other recovery programs.
Sincerely
Jeffrey Stout
Deputy Chief Program Officer for Small Business
and Community Investment Programs
Audit of Airline Worker Support Extension Certification –
Allied New York Services, Inc. (OIG-26-033) 18
Appendix 5: Report Distribution
Department of the Treasury
Treasury Secretary
Deputy Secretary
Treasury Audit Liaison
Office of Strategy, Planning, and Performance Improvement
Office of the Deputy Chief Financial Officer, Risk and Control
Group
Allied New York Services, Inc.
President
Vice President
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 Government Reform
Committee on Financial Services
Committee on the Budget
Committee on Transportation and Infrastructure
Audit of Airline Worker Support Extension Certification –
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