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D E PA R T M E N T O F J U S T I C E | O F F I C E O F T H E I N S P E C T O R G E N E R A L
PANDEMIC RESPONSE REPORT
20-079
JULY 2020
Interim Report - Review of the Office of
Justice Programs’ Administration of CARES Act
Funding
AUDIT DIVISION
DEPARTMENT OF JUSTICE | OFFICE OF THE INSPECTOR GENERAL
Interim Report - Review of the Office of Justice Programs’
Administration of CARES Act Funding
On March 27, 2020, U.S. Congress passed the
Coronavirus Aid, Relief, and Economic Security
Act (CARES Act), which provided over $2 trillion
in funding intended to strengthen the national
response to the COVID-19 global pandemic. Of
this amount, approximately $1.007 billion was
appropriated to the Department of Justice (DOJ),
with $850 million (84 percent of the total)
allocated to DOJ’s Office of Justice Programs
(OJP) to award grants for the purposes of
preventing, preparing for, and responding to the
Coronavirus.1
OJP’s Bureau of Justice Assistance (BJA) issued a
solicitation for the Coronavirus Emergency
Supplemental Funding grant program (CESF) on
March 30, 2020.
All CARES Act funding
appropriated to OJP will be awarded through the
CESF, which aids eligible states, U.S. territories,
the
District
of
Columbia,
units
of
local
government, and tribes. Pursuant to the CARES
Act,
CESF
award
allocations
are
based
proportionally on OJP’s 2019 Edward Byrne
Memorial Justice Assistance Grant Program (JAG)
allocations.
The DOJ Office of the Inspector General (OIG) is
reviewing OJP’s administration of CARES Act
funding.
Our preliminary objectives are to
assess OJP’s efforts to: (1) distribute Coronavirus
award funding in a timely and efficient manner,
and (2) review pre-award activities to determine
if Coronavirus awards were made in accordance
with applicable laws, regulations, and other
guidelines.
Table 1. CESF Total Dollars Awarded by Week
--
$-
$500
$1,000
March 28 - April 3
$3
$77
April 11 - 17
$178
$287
April 25 - May 1
$374
$454
May 9 - 15
$497
$609
May 23 - 29
$669
$850
(in millions, cumulative); Source: OJP
OJP’s CESF solicitation was initially open from
March 30, 2020, through May 29, 2020. During that
time, OJP awarded $669 million of the $850 million
appropriated under the CARES Act. OJP continues to
review applications, and additional awards will be
made in the weeks and months ahead.
The OIG’s oversight of CARES Act funding will be
conducted in several phases, and we will issue
focused interim reports to provide transparency
to the public and ensure OJP is able to review
and respond to areas of potential risk in a timely
manner. This report covers OJP’s actions during
the solicitation’s open period.
Generally, we
noted that OJP has distributed CESF funding
quickly and in accordance with CARES Act
requirements. We also identified two areas of
concern specific to the CESF program which, if
addressed in a proactive manner, may mitigate
the potentiality of fraud or wasteful spending in
the long term. These issues are discussed in
detail below.
1 OJP provides federal leadership, grants, training, technical assistance, and other resources to improve the
nation’s capacity to prevent and reduce crime, assist victims, and enhance the rule of law by strengthening the criminal
and juvenile justice systems.
1
An Unprecedented Challenge
The CARES Act provided over $2 trillion in “fast
and direct” economic assistance across the
United States.2 The urgent public health need to
ensure the funding is distributed in an
exceptionally
timely
manner
presents
unprecedented challenges.
The influx of
unexpected funding, absent the public health
crisis and exigency, is similar to that received by
many entities under the American Recovery and
Reinvestment Act of 2009 (ARRA).3 While OIG
oversight found OJP generally
managed
JAG-related
ARRA
awards appropriately, audits of
specific ARRA grants identified
deficiencies in the grantees’ use
of JAG funds (for both ARRA and
non-ARRA awards) in the areas
of
internal
control
environment,
grant
expenditures,
property
management, monitoring of
subrecipients, reporting, and
program performance.4
OJP has taken steps to provide
guidance to both BJA staff and
CESF eligible applicants.
For
example, OJP provided internal
training specific to the CESF to
BJA staff on April 1, 2020, just 2
days after the CESF solicitation
was posted, and has created
and posted a list of Frequently Asked Questions
on its public website.5
We
also
reviewed
OJP’s
anticipated
programmatic oversight of the CESF program.
For most grant programs, BJA requires award
recipients to report, on a semi-annual basis, on
the progress made towards meeting grant goals
and objectives through its standard, seven-
question progress report form. These reports
collect information that includes, but is not
limited to, grant accomplishments, problems or
barriers
encountered
in
implementing grant objectives,
and activities planned for the
next
6-month
period.
Collecting
this
information
allows OJP to assess recipient
progress
towards
meeting
award objectives and to identify
recipients
who
may
be
struggling to implement the
goals of their awards. We asked
OJP officials if BJA intended to
require
any
additional
information in its CARES Act
reporting.
OJP
officials
reported that BJA is currently in
communication
with
OJP’s
Office of Audit, Assessment,
and Management, who in turn
are working with the Office on
Management and Budget to
determine
what,
if
any,
additional
oversight
Examples of Permissible Uses
of CESF Funds
Overtime
Equipment (including law
enforcement and medical
personal protective
equipment)
Hiring
Training
Supplies (such a
s gloves,
masks, sanitizer)
Travel expenses
(particularly related to the
distribution of resources to
the most impacted areas)
Addressing t he medical
needs of inmates in st
ate,
local, and tribal prisons,
jails, and detention centers.
2 U.S. Department of the Treasury, “The CARES Act Works for All Americans,” https://home.treasury.gov/policy
issues/cares (accessed May 27, 2020).
3 American Recovery and Reinvestment Act of 2009, H.R. 1, 111th Cong. (2000).
4 DOJ OIG, OJP Recovery Act and Non-Recovery Act Programs for Edward Byrne Memorial Justice Assistance
Grants and Byrne Competitive Grants, Audit Report 10-43 (August 2010), https://oig.justice.gov/reports/OJP/a1043.pdf
(accessed May 28, 2020), iv.
5 OJP, “FY 2020 Coronavirus Emergency Supplemental Funding Program Frequently Asked Questions”
https://bja.ojp.gov/sites/g/files/xyckuh186/files/media/document/cesf-faqs.pdf, (accessed May 27, 2020). OJP created
this document based on questions it was receiving from the CESF applicant community, U.S. Congress, and others.
2
I
I
requirements are necessary.
As part of our
oversight of CARES Act funding, the OIG will
review progress reports submitted for CESF
awards to evaluate whether recipient activity
appears responsive to the goals of the CESF.
OIG Review of Approved Awards and
Denied Applications
The
CESF
solicitation
outlines
application
requirements, including all documents that
must be submitted to receive a CESF award.
Generally, these include standard application
forms such as the budget narrative, which
outlines how funding will be spent; the program
narrative, which details the activities that will be
carried out under the award; and other routine
financial disclosures. We tested a sample of 30
awards to determine if all documentation
required by the solicitation was included in
approved grant applications and did not identify
significant concerns with OJP’s initial review
process.
Further, we reviewed a total of 51 awards to
determine if the goals and objectives outlined in
the
program
narrative
appeared
to
be
responsive to the goals and objectives of the
CESF program. Again, we identified no instances
of awards made that did not appear to
reasonably address CESF program objectives.
The OIG will continue reviewing award materials
and conducting related oversight work as
appropriate.
Finally, we reviewed 130 applications that were
denied by OJP. Of the 130, we identified only 1
that was denied in error (.07 percent of the
total).
OJP reopened the application within
hours of our inquiry, reviewed the application
materials, and ultimately approved the award.
CESF Award Recipients
As required by the CARES Act, BJA distributes
CESF awards directly to states or U.S. territories
(ranging from approximately $1.5 million to
Northern Mariana Islands to approximately
$58.5 million to the state of California), and to
units of local government and tribes (local and
tribal
awards
ranged
from
$32,226
to
approximately $12.4 million) based on the FY
2019 JAG formula allocations.
JAG formula
allocations,
and
therefore
CESF
award
allocations, are computed based on FBI violent
crime data and U.S. Census Bureau population
estimates, not COVID case data.6 Therefore, as
a result of the statutory requirement regarding
the allocation of funding, some local awards
have gone to areas with few reported positive
COVID-19 test results as of May 2020, as shown
below.
Table 2. All States or Territories with Over
$1,000 in CESF funds per Confirmed Case (State
and Local Awards as of May 28, 2020)
State or Territory
Total Amount
Received
Amount Per
Confirmed Case
Virgin Islands of
the United States
$2,932,867
$42,505
Guam
$2,932,867
$17,151
Montana
$4,610,396
$9,506
Alaska
$3,821,742
$9,014
Hawaii
$5,532,947
$8,552
West Virginia
$5,417,193
$2,800
Wyoming
$2,326,442
$2,656
Oregon
$9,191,254
$2,249
Vermont
$2,174,168
$2,232
Maine
$4,037,917
$1,845
Idaho
$4,622,121
$1,669
Arkansas
$10,007,326
$1,531
Oklahoma
$9,559,492
$1,524
South Carolina
$12,531,762
$1,162
North Dakota
$2,629,654
$1,060
Source: CESF award data; Johns Hopkins case data
6 Generally, the CESF formula allocation was approximately three times the amount each entity was eligible to
receive under JAG in 2019 (e.g., if a recipient was eligible to receive $100,000 under JAG, that recipient is eligible to
receive $322,000 under the CESF).
3
Table 3. Local Awards in Relation to Confirmed COVID-19 Case Data
(Local Awards Only as of May 28, 2020)
-
No Confirmed cases/Local Awards Present -
,S$1,500 per Case
-
Confirmed Cases/No Local Awards
-
,S$3,000 per Case
-
,;$750 per case
-
,S$4,500 per Case
>$4,500 per case
No Confinmed Cases/No Local Awards
Map depicts the Award Amount
per Confirmed Case of
COVID-19 per County for OJP
grant awards. All state-level
allocations were removed. Data
is from 05-28-2020.
Source: CESF award data; Johns Hopkins case data
Table 4. Breakdown of Counties Depicted Above (Local Awards Only as of May 28, 2020)
Award Amount per Case
Number of
Counties
Number of
Confirmed
Cases
Number of
Grants
Total Award
Amount
<= $750 per Case
409
1,000,131
710
$94,445,669
<= $1500 per Case
67
14,737
105
$15,063,305
<= $3000 per Case
27
2,580
43
$5,305,823
<= $4500 per Case
15
938
23
$3,155,733
> $4500 per Case
20
269
27
$2,076,139
Source: CESF award data; Johns Hopkins case data
4
In and of itself, this is not an indicator that the
funding will be used for unallowable purposes.
For example, it remains unknown where future
outbreaks
of COVID-19 will appear,
and
preparing for or preventing an outbreak is
allowable under the terms and conditions of the
CESF (meaning an applicant may, for example,
purchase equipment or supplies in anticipation
of future cases regardless of whether COVID-19
had impacted an organization’s area at the time
of expense). However, OJP’s CESF monitoring
strategy may benefit if oversight protocols
consider factors such as recipients who are in
areas with few positive COVID-19 test results or
deaths.
COVID-19 Fraud Schemes
Finally, the DOJ OIG and others have identified
multiple fraud schemes specifically targeting
funding made available through the CARES Act,
some of which could directly impact OJP’s CESF
award recipients. OJP has publicly posted an
advisory warning of scams targeting OJP’s Office
for Victims of Crime awards, but has not
distributed similar guidance for the CESF.7 In
our judgment, the CESF program is also
vulnerable to such scams, and we compiled a
summary of known fraud schemes in the
interactive graphic below. CESF recipients may
benefit
if
OJP
includes
similar
summary
information on its CESF website. Further,
considering the size of the CESF program and
the likelihood that CESF award recipients may be
the target of fraud schemes, OJP should
consider providing regular updates of known
fraud schemes to its CESF community.
Known Fraud
Schemes
Targeting the
COVID-19
Response
Advance Fee and
Business Email
Compromise
Schemes
Emerging Health
Care Fraud
Schemes
Risk of
Cryptocurrency
Scams
Fradulent Sales
of Medical
Equipment
Summary of
Online Scams
Scams Related
to Treatments
and Cures
7 OJP, “Office for Victims of Crime News and Features,” November 8, 2019, https://ovc.ojp.gov/announcement/
fraud-alert-scammers-claiming-be-ovc, (accessed May 28, 2020).
5
Summary
In conclusion, our preliminary work indicates that
OJP’s administration efforts over CARES Act funding
appear effective and appropriate as of May 29,
2020.
However, OJP’s CESF monitoring strategy
may benefit if oversight protocols consider factors
such as recipients who are in areas with few
positive COVID-19 test results or deaths. Further,
OJP should consider notifying the CESF recipient
community, on a regular basis, of fraud schemes
known to be targeting CARES Act funds.
We provided a draft copy of this interim report to
OJP for review and comment. OJP’s response to the
draft is included in this report.
Report Fraud Related to Pandemic Relief
Programs to:
•
The Department of Justice Office of the
Inspector General
•
The Disaster Fraud H
otline
•
The Pandemic Response Accountability
Committee
OIG Oversight of CESF
Funding: What’s Next?
1. We will continue to review awards
made under the CESF to ensure
costs appear allowable and that
program activities appear
responsive to the goals and
objectives of the CESF.
2. We will continue to monitor areas
of potential risk, including
applicants from areas with little
demonstrated COVID-19 impact
to date.
3. We will review a sample from the
first round of semi-annual
progress reports submitted for
CESF awards (due to OJP by July
30, 2020).
4. We will monitor and review, on a
judgmental basis, actual
drawdowns made under the CESF
program.
5. We will review a judgmental
sample of CESF recipient
accounting records to determine
if actual expenditures support
activities outlined in grant
application materials and appear
responsive to CESF program
goals.
6
U.S. Department of Justice
Office of Justice Programs
Office of the Assistant Attorney General
\VcuhiflRWII, D .C. 20531
7
I, 2020
MEMORANDUM TO:
Michael E. Horowitz
Inspector General
United States Department of Justice
THROUGH:
Jason R. Malmstrom
Assistant Inspector General for Audit
Office of the Inspector General
United States Department of Justice
FROM:
Katharine T. Sullivan
~}
Principal Deputy Assistant Attorney General
SUBJECT:
Response to the Office of the Inspector General's Interim Report,
Review <~f the Office <~f Justice Programs' Adminislration of
CARES Acl Funding
This memorandum provides a response to the Office of the Inspector General's (OIG), June 11,
2020 interim report entitled, Review of/he Qfjice of.Justice Programs ' Administralion of CARES
Act Funding. The Office of Justice Programs (OJP) appreciates the opportunity to review and
comment on this first interim report which covers OJP's actions during the Coronavirus
Emergency Supplemental Funding (CESF) Program solieitation's open period. Funding was
provided to assist eligible states, U.S. territories, the District of Columbia, units of local
government, and tribes in preventing, preparing for, and responding to the coronavirus.
The interim report contains no recommendations to OJP, but provides useful monitoring strategies
to mitigate the potential for fraud, waste, and abuse as the Bureau of Justice Assistance begins its
oversight of an additional $850 million allocated to OJP1•
If you have any questions regarding this response, please contact Ralph E. Martin, Director, Office
of Audit, Assessment, and Management, at (202) 305-1802.
1 Through June 24, 2020, 0.IP had made l .R 13 awards totaling SR46.694.3 I 9 .