GAO urges Export-Import Bank to use SAM and Do Not Pay for loan guarantee screening

The Government Accountability Office found that the Export-Import Bank's (EXIM) underwriting process does not consistently use readily available federal databases to identify applicants with delinquent non-tax federal debt, a condition that generally makes them ineligible for loan guarantees. EXIM's policy requires a review of the System for Award Management's Debt Subject to Offset data only for transactions approved by its Board of Directors, and it does not extend that review to transactions approved by staff with individual delegated authority. Since April 2023, the bank has relied on a third-party vendor that screens for some tax debt but does not capture non-tax obligations such as delinquent student loans.

Under the Payment Integrity Information Act of 2019, executive agencies must use the Do Not Pay system to ensure awards and payments are made only to eligible recipients. EXIM currently lacks policies and procedures to employ Do Not Pay in its underwriting, despite the system being available at no cost and offering broader delinquent debt data than the vendor database.

GAO recommended that EXIM's Chief Operating Officer develop and implement underwriting procedures that incorporate both the System for Award Management and Do Not Pay to prevent loan-guarantee transactions from being approved for participants with delinquent federal debt. EXIM has agreed to the recommendation.

The GAO review covered EXIM's compliance with its underwriting guidelines for loan-guarantee transactions from October 1 2022 through December 31 2025. The review involved analysis of EXIM policies, interviews with officials, and testing of approved transactions during that period.

If adopted, the new procedures are expected to strengthen EXIM's credit-risk mitigation by ensuring that all loan-guarantee applicants are screened against comprehensive federal debt data before approval.