EB-5 regional centers are USCIS-designated entities integral to the Regional Center Program. They provide a platform for foreign nationals to collectively invest in EB-5 projects. Regional centers make foreign nationals’ EB-5 visa process more seamless by handling job creation requirements, due diligence, and overall project oversight on behalf of investors.
Recently, the United States Citizenship and Immigration Services (USCIS) announced that it will introduce an audit process for designated regional centers starting April 23, 2024. Through these regional center audits, USCIS aims to improve the integrity of the EB-5 program by conducting more thorough checks on regional center operations and other documentation.
In this article, we will explain the objectives of the USCIS’s recent audit requirement, the steps of the process, and its potential consequences for EB-5 regional centers.
Why Does USCIS Audit Regional Centers?
The USCIS Audit Process
Implications of Audit Findings on Regional Centers
Working With an Experienced Regional Center Operator
Why Does USCIS Audit Regional Centers?
Under the EB-5 Reform and Integrity Act, section 203(b)(5)(E)(vii) was added to the Immigration and Nationality Act (INA). This provision requires all designated regional centers to allow USCIS officials to audit their processes and documents every five years.
This initiative was introduced to benefit the different stakeholders in the EB-5 visa program. The audit requirement makes it easier for USCIS to uphold its compliance standards by verifying regional centers’ annual statements and whether they adhere to program requirements.
Additionally, the Generally Accepted Government Auditing Standards (GAGAS) adopted by USCIS for this procedure enables a cohesive review system to be used for all regional centers. This uniform standard provides a level framework for immigration officials to obtain key information and draft reliable audit reports for regional centers across different states.
The audit requirement also promotes timely and accurate information sharing by regional centers, making them more accountable to investors. Information on projects’ progress, investor fund management, and other important details have to be disclosed during the audit process, which may boost investors’ trust in their chosen regional centers and the overall security of the EB-5 program.
Ultimately, the audit requirement aims to improve EB-5 investment transparency by ensuring compliance with USCIS standards. The audit process is also meant to detect fraud and suggest fixes for potential problems in the EB-5 program.
The USCIS Audit Process
USCIS handles each regional center’s audit process on a case-by-case basis. This is why audit timelines may differ depending on factors such as the regional center’s average response time and the unique issues in their audit processes.
To make it easier to understand, we’ve divided the USCIS audit process into three parts: pre-audit preparations, the audit process, and post-audit procedures.
Pre-Audit Preparations
Starting April 23, USCIS will initiate the audit process by sending an official notification letter to the designated regional center selected for auditing. The letter will likely include the audit scope, timeline, and directives on cooperating with the USCIS audit officials to ensure a seamless audit process.
In response to the USCIS’s audit request, the selected EB-5 regional center will gather all the documentation it is legally required to maintain under INA. This includes books, ledgers, financial records, documents containing updates, and other supporting documents.
Audit Process
According to the agency’s outlined plan, the auditing process begins with a documentation review. USCIS reviews all documents provided by the designated regional center following an entrance conference. This may include applications, petitions, reports, annual statements, and public records.
After verifying the provided documentation, the USCIS audit team conducts site visits, which could be physical or virtual. During this visit, the officials appraise the regional center’s internal controls and management systems. They also interview the regional center management teams, employees, and other stakeholders in person.
These interviews help the audit team compare the information presented in documents with stakeholders’ description of the project status. If the documentation provided by the regional center is inconsistent, USCIS may request the regional center to provide more information or specific additional evidence to clarify previously submitted documents.
The USCIS audit process is expected to be fast and smooth, as long as regional centers follow the audit team’s instructions.
Post-Audit Procedure
After the USCIS officials complete the audit process, the regional center participates in an exit conference and receives a closeout memo. The audit team then drafts reports detailing their findings, which become part of the regional center’s record.
In cases where USCIS detects fraud or misuse of funds, the agency will investigate the regional center further.
Implications of Audit Findings on Regional Centers
As mentioned earlier, USCIS introduced the audit requirement to filter out regional centers that do not comply with USCIS requirements. By doing so, the agency protects investor interests while refining the integrity of the EB-5 program.
If the audit results are not favorable for the regional center, this does not necessarily affect the regional center’s designation status, or the immigration processes of foreign nationals that invested in projects sponsored by that regional center.
Implication of Not Consenting to an Audit
A negative audit report alone does not have extreme implications for the regional center. However, if a regional center representative refuses to comply with the requirements or deliberately prevents USCIS from auditing its documents and operations, the agency terminates the audit process and indicates that the regional center was uncooperative in its audit report. This will result in the regional center losing its designation.
Working With an Experienced Regional Center Operator
The EB-5 visa is a unique investment immigration program constantly improved by new regulations—and regional centers’ compliance to these regulations is a key aspect of the program’s integrity. This is why, as an EB-5 investor, you should aim to collaborate with industry experts with a track record of success to help you achieve your goals.
EB5AN is a government-authorized regional center operator that owns over 10 EB-5 regional centers covering the entire continental United States. Our regional center projects have a 100% USCIS approval rate and numerous testimonials supporting our position as industry leaders.
If you would like to learn more about EB-5 regional centers, schedule a free consultation with EB5AN today, and our expert team will be happy to answer all your questions.
