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    Subject Term: "Economic conditions"

    3 publications with a total of 9 open recommendations
    Director: Daniel Garcia-Diaz
    Phone: (202) 512-8678

    3 open recommendations
    Recommendation: Congress should consider amending the National Housing Act to specify the economic conditions the MMI Fund would be expected to withstand without substantial risk of drawing on permanent and indefinite budget authority, and require FHA to specify and comply with a capital ratio consistent with these conditions. In specifying the economic conditions, Congress should take into account FHA's statutory operational goals and role in supporting the mortgage market during periods of economic stress. (Matter for Consideration 1)

    Agency: Congress
    Status: Open

    Comments: When we determine what steps the Congress has taken, we will provide updated information.
    Recommendation: The Commissioner of FHA should combine stress test results for the forward mortgage and Home Equity Conversion Mortgage portfolios, where possible, and report estimated MMI Fund-wide capital ratios for the stress scenarios examined. (Recommendation 1)

    Agency: Department of Housing and Urban Development: Federal Housing Administration
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Commissioner of FHA should develop specific objectives for stress tests of the MMI Fund and apply stress testing methods and scenarios consistent with those objectives. (Recommendation 2)

    Agency: Department of Housing and Urban Development: Federal Housing Administration
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: William B.Shear
    Phone: (202) 512-8678

    2 open recommendations
    Recommendation: To improve SBA's administration and oversight of the HUBZone program and reduce the risk that firms that no longer meet program eligibility criteria receive HUBZone contracts, the Administrator of SBA should establish a mechanism to better ensure that firms are notified of changes to HUBZone designations that may affect their participation in the program, such as ensuring that all certified firms and newly certified firms are signed up for the broadcast e-mail system or including more specific information in certification letters about how location in a redesignated area can affect their participation in the program

    Agency: Small Business Administration
    Status: Open

    Comments: In response to this recommendation, SBA improved its notifications to newly certified firms but not to other certified firms. For example, SBA's certification letter to firms with principal offices in a redesignated area specifically states that the firm is in a redesignated area, explains the implications of the designation, and notes when the redesignated status will expire. However, we found in March 2016 that SBA had not yet implemented changes to better ensure that all currently certified firms would be notified of changes that could affect their program eligibility. It is important that all certified firms potentially affected by such changes receive information about the changes or are made aware in a timely fashion of any effects on their program eligibility. As of February 2017, SBA had begun to improve its notifications to all firms. According to SBA officials, the agency has started sending program notices to all the firms in its portfolio. They told us that for its most recent notice in February 2017, the agency copied all the e-mail addresses in its HUBZone database and placed them in the e-mail distribution system. According to SBA officials, SBA intends to repeat this effort with subsequent notices. We will continue to monitor SBA's implementation of this activity.
    Recommendation: To improve SBA's administration and oversight of the HUBZone program and reduce the risk that firms that no longer meet program eligibility criteria receive HUBZone contracts, the Administrator of SBA should conduct an assessment of the recertification process and implement additional controls, such as developing criteria and guidance on using a risk-based approach to requesting and verifying firm information, allowing firms to initiate the recertification process, and ensuring that sufficient staff will be dedicated to the effort so that a significant backlog in recertifications does not recur.

    Agency: Small Business Administration
    Status: Open

    Comments: In response to this recommendation, SBA officials told us that they began automating the process to notify firms that were due for recertification. According to the officials, since September 2015, notification e-mails have been sent daily (compared with the former cycle of two times a year). Each firm due for recertification within the next 30 days would receive the notice. SBA sends a second e-mail to firms that have not responded within 45 days of the first notification. According to SBA officials, as of February 2017, this change has not yet eliminated the backlog. SBA officials informed GAO in May 2017 that they have developed risk-based guidance for conducting recertification reviews and requesting supporting documentation. According to SBA, any certified HUBZone small business concern that has received $1 million or more in HUBZone contract dollars since its initial certification (or its most recent recertification) must submit the following: (a) a list of all current employees, identifying the name of the employee, the employee's address, the number of hours worked per month, and the location where the employee performs his/her work; and (b) payroll documentation. SBA intends to complete the implementation of this policy by the third quarter of 2017.
    Director: Jeszeck, Charles A
    Phone: (202) 512-7215

    4 open recommendations
    Recommendation: To enhance understanding and better inform debate on the possible effects of moving to a more risk-based premium structure, during consideration of various redesign options and after a redesign may be authorized, the Director of PBGC should continue to develop PBGC's hypothetical model, analyzing various premium redesign options and their impacts on sponsors, and report the results to Congress. As part of these analyses, PBGC should evaluate the potential effects on sponsors of incorporating additional risk factors, such as company financial health and plan investment mix, and include an assessment to identify any potentially disproportional hardships on smaller companies that may result from the redistribution of higher rates to riskier sponsors.

    Agency: Pension Benefit Guaranty Corporation
    Status: Open

    Comments: PBGC agreed with this recommendation. The agency is committed to continued development of the databases, models, and analyses of various premium redesign options and their impacts on sponsors, and to report the results of these analyses to Congress. In April 2014, PBGC noted that its efforts are still in process. As of August 2015, PBGC had provided no additional updates on actions taken on this recommendation.
    Recommendation: To help strengthen the PBGC insurance program, Congress should authorize redesign of PBGC's premium structure to more fully reflect the risk posed by plans and sponsors to the agency, such as by providing for the incorporation of additional risk factors.

    Agency: Congress
    Status: Open

    Comments: In July 2012 and December 2013, Congress passed premium increases (P.L. No. 112-141 and P.L. 113-67, respectively) to better reflect the risk posed to the Pension Benefit Guaranty Corporation by certain defined benefit pension plans and plan sponsors. Nevertheless, As of September 2015, Congress had yet to authorize a redesign of PBGC's premium structure.
    Recommendation: In addition, to improve PBGC's ability to collect key information that may be necessary to help the agency estimate its risk exposure to future claims and strengthen implementation of any changes to the premium structure, Congress should provide PBGC with access to additional information needed to assess risk and assist in setting premiums, such as by expanding the criteria requiring plan sponsors to report under section 4010 of ERISA.

    Agency: Congress
    Status: Open

    Comments: As of September 2015, Congress has taken no action related to this matter.
    Recommendation: Moreover, to better understand the mechanics of how best to incorporate additional risk factors, improve transparency, and help inform the evaluation of the various redesign options, Congress should establish an independent premiums advisory committee reflecting a range of perspectives--including, for example, representatives from federal agencies, sponsors, actuaries, private insurers, and labor groups--to assist with such activities as developing the mechanics for incorporating additional risk factors and implementing new rates, as well as delineating a variety of alternative methods to address PBGC's deficit.

    Agency: Congress
    Status: Open

    Comments: As of September 2015, Congress has taken no action related to this matter.