EB-5 Regional Center Audits
By statute, we must audit each designated regional center at least once every five years. The EB-5 Reform and Integrity Act of 2022 added this requirement as section 203(b)(5)(E)(vii) of the Immigration and Nationality Act (INA).
Regional center audits enhance the integrity of the EB-5 program by helping us verify information in regional center applications and annual certifications as well as associated investor petitions.
On April 23, 2024, we will start generally using Generally Accepted Government Auditing Standards (GAGAS) for our audits. Generally using GAGAS will help us plan and perform the audit in a way that allows us to obtain enough appropriate evidence for a reasonable basis for our findings and conclusions. It will also help us verify the information that designated regional centers provide in associated applications, petitions, and annual statements and to assess whether a center is complying with applicable laws and authorities and whether the regional center can keep its regional center designation.
Generally using GAGAS standards does not remove the officer’s discretion in considering the results of the audit in connection with making adjudicatory decisions, nor does it create any substantive or procedural right or benefit that is legally enforceable by any party against the United States or its agencies or officers or any other person.
Under the INA, the audit must include a review of any documentation that the regional center must keep and of the flow of immigrant investor capital into any capital investment project. See INA 203(b)(5)(E)(vii). An audit can also include researching information in government systems, reviewing commercial and public records, reviewing evidence that accompanies regional center applications, and obtaining information consensually through data requests and site visits.
USCIS auditors will perform such tasks as:
- Reviewing applications, certifications, and associated records;
- Reviewing public records and information on the regional center;
- Verifying the information, including supporting documentation, submitted with applications and in annual statements;
- Conducting in-person audits through a site visit (when applicable);
- Assessing the effectiveness of internal controls related to the regional center’s administration, oversight, and management functions;
- Reviewing and analyzing financial documentation;
- Reviewing the flow of investor capital into capital investment projects; and
- Interviewing personnel to confirm the validity of the information provided with applications and annual certifications.
Before an audit, regional centers should be ready to present any information such as books, ledgers, records, and other documentation that the regional center must maintain under the INA; any updates to that information; and any information requested in the audit questionnaire that the regional center did not already provide.
We may also ask for additional support in verifying information in the regional center’s associated petitions, applications, or annual statements. Specifically, the INA authorizes us to access books, ledgers, records, and other documentation that the regional center, new commercial enterprise, or job creating enterprise uses to support the annual statement and associated petitions.
Regional centers should provide all additional information requested to verify or update information in any follow-up communication from USCIS.
We will document the audit results, which become part of the regional center’s record. We will use information obtained through the audit to assess the regional center’s adherence to applicable laws and authorities. If the results contain any indicators of fraud, we will assess whether further investigation is warranted.
Consenting to and participating in required audits is one of the requirements for keeping a regional center’s designation. If a regional center does not consent to an audit or deliberately attempts to impede an audit, we will close the audit, and the audit results will show that the regional center did not consent to the audit or deliberately attempted to impede the audit. We will then terminate the regional center’s designation. See INA 203(b)(5)(E)(vii)(III).
The flowchart below is a visual representation of the typical audit process. The audit begins as of the date of the regional center’s notification letter. An audit timeline may be shorter or longer, depending on issues presented in any audit, including the regional center’s timely responses to audit requests.
Q. What is the difference between an audit and a compliance review?
A. An audit is a more detailed examination of the regional center than a compliance review. We will generally conduct the audit according to Generally Accepted Government Auditing Standards (GAGAS), with the objective of reviewing the regional center’s compliance with applicable requirements under the Immigration and Nationality Act.
Q. What is the difference between a Fraud Detection and National Security Directorate (FDNS) site visit and an in-person audit site visit?
A. FDNS conducts its site visits under separate authorities from a site visit for an audit. One type of FDNS site is through the Administrative Site Visit and Verification Program.
An audit can be virtual or in person. An in-person audit site visit may be part of the fieldwork phase of an audit. An in-person audit site visit may include verifying property, plant or equipment; visually checking internal control processes; walkthroughs; and employee interviews. Our auditor will coordinate any in-person site visits with the regional center ahead of time.
Q. When will my regional center be audited?
A. We must audit each designated regional center at least once every five years. See INA 203(b)(5)(E)(vii). We are developing procedures for selecting regional centers for audit each fiscal year.
Q. What if the audit results are not favorable for the regional center?
A. We handle audit results on a case-by-case basis. Except when a regional center fails to consent to an audit or deliberately attempts to impede an audit, the outcome of an audit will not by itself result in direct consequences to the regional center nor to any entity or petitioner associated with the regional center. We may consider noncompliance with a site visit to mean nonconsenting to an audit. However, we may use our audit findings to evaluate a regional center’s continuing eligibility to remain designated as well as compliance of associated applications, petitions, or other filings with applicable requirements.
Q. How long is the audit process?
A. Time required to complete the audit process varies depending on the regional center. An audit timeline may be shorter or longer, depending on the issues presented in any audit, including the regional center’s timely responses to audit requests.
Q. What will the regional center need to prepare for the audit?
A. Before the audit, regional centers should be ready to present any information such as books, ledgers, records, and other documentation that the regional center must maintain under the Immigration and Nationality Act (INA), any updates to that information, and any information requested in the audit questionnaire that the regional center has not previously provided. The audit team may also request additional support to verify information provided in associated petitions, applications, or statements, as permitted under the INA.
Q. If a regional center had a compliance review recently, is it subject to an audit?
A. Compliance reviews performed before the EB-5 Reform and Integrity Act (RIA) was enacted are different from an audit now required under the new provisions of the INA. Regardless of whether or when the regional center last had a compliance review, the INA requires that we audit each regional center at least once every five years.
Q. Can a regional center decline an audit?
A. The Immigration and Nationality Act (INA) requires that we audit each regional center at least once every five years. If a regional center responds to the notification of its audit that it will not consent to the audit or if the regional center deliberately attempts to impede the audit, we will terminate the regional center’s designation. See INA 203(b)(5)(E)(vii)(III).
Q. Why will USCIS generally use Generally Accepted Government Auditing Standards (GAGAS)?
A. GAGAS are standards meant to guide auditors in conducting performance audits under government programs such as the Immigration and Nationality Act. The general use of GAGAS solely relates to the standards by which the audit is conducted. General use of these standards does not remove the adjudication officer’s discretion in considering the results of the audit in connection with making adjudicatory decisions, nor does it create any substantive or procedural right or benefit that is legally enforceable by any party against the United States or its agencies or officers or any other person.
We decided to use GAGAS because audits performed per GAGAS provide a more reasonable assurance of detecting instances of program noncompliance with provisions of laws and regulations. Conversely, using the standards for compliance reviews allowed the auditor to use discretion, which was more subjective and less uniformed, on reviewing regional center supporting documentation, thereby providing less assurance in detecting instances of program noncompliance. Except when a regional center fails to consent to an audit or deliberately attempts to impede an audit, the outcome of an audit will generally not by itself result in direct adverse consequences to the regional center or to any EB-5 associated entity or associated petitioners. However, we may use our findings to evaluate a regional center’s continuing eligibility to remain designated as well as compliance of associated applications, petitions, or other filings with applicable requirements.