Under the Reform and Integrity Act of 2022 (RIA), U.S. Citizenship and Immigration Services is now required to audit EB-5 Regional Centers at least once every five years. The audits will include the review of key information and documentation which each Regional Center is required to maintain.
Beginning April 23, 2024 USCIS will use Generally Accepted Government Auditing Standards when auditing Regional Centers. The agencies announcement notes “An audit using the Yellow Book standards will help us verify the information that designated regional centers provide in associated applications and petitions as well as annual statements. It also will help us assess a regional center’s compliance with applicable laws for purposes of remaining eligible for its designation.”
IIUSA was a strong champion of the RIA and welcomes all efforts to increase transparency and enhance Program integrity. We are pleased to see the agency publishing these important updates as they roll out this new process.
From USCIS
Under the new provisions of section 203(b)(5)(E)(vii) added by the EB-5 Reform and Integrity Act of 2022 (RIA) to the Immigration and Nationality Act, we must audit each designated regional center at least once every five years. This audit will include a review of any documentation required to be maintained by the regional center and a review of the flow of immigrant investor capital into any capital investment project. 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.
At any point during a site visit in connection with an audit, if the regional center representative expresses an unwillingness to participate in the site visit, we will cancel the visit. We will complete the audit report using the data available and indicate that we canceled the site visit at the request of the regional center.
If a regional center chooses not to consent to an audit or deliberately attempts to impede the audit, we will terminate the regional center’s designation. See INA 203(b)(5)(E)(vii)(III). We may consider noncompliance with a site visit to mean nonconsenting to an audit.
Except when a regional center does not consent to an audit or deliberately attempts to impede an audit, there are generally no direct adverse consequences to an EB-5 associated entity or petitioner solely because of the negative audit result. 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.
Starting April 23, we will generally use Generally Accepted Government Auditing Standards, also known as the Yellow Book, when we audit EB-5 regional centers.
The Yellow Book provides standards and guidance for auditors and audit organizations. An audit using the Yellow Book standards will help us verify the information that designated regional centers provide in associated applications and petitions as well as annual statements. It also will help us assess a regional center’s compliance with applicable laws for purposes of remaining eligible for its 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.
We have created a new EB-5 Regional Center Audits webpage with information for regional centers on the auditing process, including the role of the audit team, how to prepare for an audit, participating in an audit, and more.
