Brief (2020-11-17)

Summary

A Department of Justice Office of the Inspector General Pandemic Response Report 21-004, dated November 2020, titled Interim Report II - Review of the Office of Justice Programs' Administration of CARES Act Funding. It states that as of August 22, 2020, OJP made 1,828 awards totaling $847,715,565 (99.7 percent of the $850 million available) under the Coronavirus Emergency Supplemental Funding (CESF) program. It reports that as of June 30, 2020 recipients had drawn down $273,044,373 and reported expending or obligating $75,702,823, and that an OIG survey of 1,804 recipients received 1,052 responses. The OIG states that most recipient spending it reviewed appeared allowable and makes no recommendations to OJP on award distribution.

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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
21-004
NOVEMBER  2020
Interim Report II - Review of the Office of
Justice Programs’ Administration of CARES Act
Funding
AUDIT DIVISION

DEPARTMENT OF JUSTICE | OFFICE OF THE INSPECTOR GENERAL
Interim Report II - Review of the Office of Justice Programs’
Administration of CARES Act Funding

1

OIG Review of $850 Million in CARES
Act Funds
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
Coronavirus
Emergency
Supplemental Funding (CESF) grants for the
purposes of preventing, preparing for, and
responding to the Coronavirus.
The DOJ Office of the Inspector General (OIG) is
reviewing OJP’s administration of CARES Act
funding.  Our preliminary objectives are to:
(1) assess OJP’s efforts to: 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.
On July 9, 2020, the OIG released its first interim
report on OJP’s administration of CARES Act
funding.1 That report generally covered activity
through the CESF solicitation’s initial open
period (March 30, 2020 through May 29, 2020).
This second interim report provides updates

related to OJP’s award activity and summarizes
OIG
analysis
of
recipient
drawdowns,
expenditures, and program activities.  The OIG’s
oversight in this area remains ongoing.
Results in Brief
We found that, as of August 22, 2020, OJP’s
Bureau of Justice Assistance had awarded 99.7
percent of the $850 million received under the
CARES Act, and that most recipient spending we
reviewed appeared allowable under the terms
and conditions of the grant award.  When
concerns were identified related to unallowable
spending or a lack of adherence to internal
policies and procedures, OJP acted quickly to
remedy the issues, as discussed in detail below.
Recipient spending during the first full reporting
period (ending June 30, 2020) represented only
9 percent of the total amount available, but that
spending appeared to increase significantly as of
early September.  The approximately 10 percent
of recipients who indicated, through an OIG
survey, that they faced difficulties administering
their awards frequently cited the inability to
locate and purchase supplies and equipment,
and local challenges such as receiving necessary
approvals from state or local governing bodies, as
challenges in implementing their awards.
The next round of recipient financial reporting is
due on November 30, 2020.2  The OIG will
provide an update on reported expenditures in
a subsequent report.
1  DOJ OIG, Interim Report – Review of the Office of Justice Programs’ Administration of CARES Act Funding  Pandemic
Response Report 20-079 (July 2020), https://oig.justice.gov/reports/interim-report-review-office-justice-programs-
administration-cares-act-funding (accessed September 15, 2020).
2  OJP extended the Federal Financial Report due date for the period ending 9/30/2020 thirty days from the
original deadline of 10/31/2020 to accommodate OJP’s mid-October transition to a new online grant management
system.

2
OJP’s CESF Award Activity
As of August 22, 2020, OJP made 1,828 awards
totaling $847,715,565 (99.7 percent of the total
amount available).  As shown below, most awards
were made by June 13, 2020 – within 11 weeks of the
CESF solicitation’s open date.
Figure 1.  CESF Total Dollars Awarded by
Week
(in millions, cumulative)

Source:  OJP’s CESF Award Data
The CESF solicitation closed on July 10, 2020, and as of
August 26, 2020, OJP does not anticipate making any
additional awards.3 OJP officials reported that it is in
the process of determining what will be done with the
remaining $2.3 million in unclaimed CESF funds.
As noted in our prior interim report, we did not
identify significant concerns with OJP’s review of CESF
applications.  Specifically, we found that OJP made
CESF awards quickly and in accordance with CARES
Act requirements, and our review of pre-award
activities such as review and approval of budget and
program narratives did not identify significant
concerns.4  Because OJP has distributed over 99

percent of funds allocated to it through the CARES Act,
we consider our initial review of award distribution to
be complete and we make no recommendations to
OJP in this area.5
CESF Program Background
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 in
preventing, preparing for, and responding to the
coronavirus.  Pursuant to the CARES Act, CESF
award allocations are based proportionally on
OJP’s 2019 Edward Byrne Memorial Justice
Assistance Grant Program (JAG) allocations.
Allowable uses of CESF funding include, but are
not limited to, overtime, equipment (including
law
enforcement
and
medical
personal
protective equipment), hiring, training, supplies
(such as gloves, masks, and sanitizer), travel
expenses, and addressing the medical needs of
inmates in state, local, and tribal prisons.
Additional detail on CESF program background
can be found in our first interim report.6
OIG CESF Recipient Survey
On August 26, 2020, the OIG distributed a
survey to 1,804 CESF award recipients to obtain
feedback on the CESF program.  The survey was
open through September 4, 2020, and we
received 1,052 responses (a 58 percent
response rate).  Quantitative portions of the
survey allowed us to aggregate recipient ratings
indicating overall satisfaction or concern with
program areas.  The survey also requested
narrative responses to assist in identifying
specific challenges to award implementation.
3  The solicitation originally closed on May 29, 2020.  OJP made two extensions to allow additional time for
eligible recipients to apply.  The final extension closed on July 10, 2020.
4  DOJ OIG, OJP’s Administration of CARES Act Funding, 1-3.
5  The OIG will directly audit use of CESF funds by CESF award recipients.  These audits will also include review
of recipient budget narratives, program narratives, and grant spending.
6  DOJ OIG, OJP’s Administration of CARES Act Funding, 1-2.
$3
$178
$374
$557
$689
$841 $847 $847 $848 $848 $848
 $-
 $100
 $200
 $300
 $400
 $500
 $600
 $700
 $800
 $900
Apr 4
Apr 18
May 2
May 16
May 30
Jun 13
Jun 27
Jul 11
Jul 25
Aug 8
Aug 22
Awards by Week (in millions, cumulative)

3
Both quantitative and narrative results are
included throughout our interim report, as
appropriate.
Drawdowns and Reported
Expenditures
Consistent with the CESF program’s purpose to
provide assistance in response to the present national
emergency with the coronavirus, OJP determined that
eligible recipients may draw down funds either in
advance or on a reimbursable basis.  Additionally,
recipients report grant expenditures using the
Federal Financial Report (FFR), which shows the actual
funds that have been spent (expenditures), and any
bills that will be paid (unliquidated obligations) at the
recipient or subrecipient level, both for the reporting
period and cumulatively, for each award.  To assess
CESF drawdowns and expenditures, we reviewed all
submitted reports covering activity through June 30,
2020, the end of the first complete CESF reporting
period.
As of June 30, 2020, CESF recipients had drawn down
a total of $273,044,373 in grant funds (32 percent of
the total amount available under the CESF) and
reported expending or obligating a total of
$75,702,823 (9 percent of the total available and 28
percent of the total drawn down).  A total of 1,213
recipients, or 66 percent of all CESF recipients,
reported no expenditures or unliquidated obligations
as of that date.
As part of our survey, we asked recipients if they
expected to use the funding received on allowable
program activities within the grant period.  As shown
in Figure 2, approximately 94 percent responded in
the affirmative and approximately 6 percent of
respondents stated they were unsure if all funding
would be used.
Figure 2.  Survey Response – Anticipated Use
of Funds
Does your organization expect to utilize all CESF funds
received on allowable program activities within the grant
period (including any possible extensions)?
•
Yes, our organization expects to utilize all CESF funds
received on allowable program activities within the
grant period (including any possible extensions).
•
At this time, we are unsure if all CESF funds will be
utilized.
•
No, we do not expect to utilize all CESF funds.
Source:  OIG Survey of CESF Award Recipients
Additional information regarding CESF use of funds
challenges was evident in the narrative responses to
this question, and that shown in Figure 3, below.
Figure 3.  Survey Response – Award
Administration
Has your organization encountered difficulties in
administering your CESF award? If so, please describe.
•
No
•
Yes
Source: OIG Survey of CESF Recipients
CESF recipient narrative responses demonstrated
two general areas of consensus related to challenges
in award administration:  (1) the lack of supplies or
equipment available for purchase, and (2) local
challenges, such as receiving approval from state or
local governing bodies prior to expending funds or
COVID-19 related staffing issues that resulted in fewer

4
employees available to administer the award.
Additionally, while there was not a broad consensus
in this area, some recipients noted that they had
delayed spending on their CESF awards as they first
worked to obligate funding received from other
federal agencies, such as the Federal Emergency
Management Agency or the U.S. Department of the
Treasury.
We also asked CESF recipients if the funds had
assisted them in combating or preparing for the
coronavirus pandemic.  As shown in Figure 4,
approximately 90 percent reported that the funds
have allowed them to combat the current pandemic,
and approximately 80 percent stated that the funds
will assist in preparing for future outbreaks.
Figure 4.  Survey Response – Award
Assistance
Question 1: The purpose of the grant (i.e., the allowable
activities under the grant terms and conditions) has or will
allow us to combat the coronavirus pandemic.

Question 2: The purpose of the grant (i.e., the allowable
activities under the grant terms and conditions) has or will
allow us to prepare for future coronavirus outbreaks.

•
Strongly Agree
•
Agree
•
Neither Agree nor Disagree
•
Disagree
•
Strongly Disagree
Source:  OIG Survey of CESF Recipients
Of the recipients who expressed concerns, the
general
area
of
consensus
in
narrative
responses was the need for additional funding.
Other responses also discussed issues related to
nationwide supply shortages.  The future of the
COVID-19 pandemic is unknown, and it is likely that
CESF expenditures will increase in the weeks and
months ahead as recipients have more time to
implement their award, and as supplies become
available.  As of our survey close date of September 4,
2020, 65 percent of respondents reported that they
had used funding, up from 34 percent as of June 30.
Careful monitoring of CESF spending therefore must
remain a priority, particularly considering the extent
to which the CARES Act provided similar funding to
state, local, and tribal governments across the
country.  For example:
•
The
U.S.
Department
of
the
Treasury’s
$150 billion Coronavirus Relief Fund includes
allocations to state, local, and tribal governments
to fund, in part, the acquisition and distribution of
medical and protective supplies, including
sanitizing
products,
personal
protective
equipment, and overtime for applicable workers.
•
The Department of Homeland Security’s Federal
Emergency Management Agency’s provides
funding to state, tribal, and local governments
that funds, in part, training, supplies, equipment,
and overtime.
•
The Department of the Interior’s Bureau of Indian
Affairs received $453 million to address the
coronavirus through public safety and justice
programs, personal protective equipment, and
information
technology
for
teleworking
capability.
Each of the other agencies’ programs noted
above has areas of overlap with OJP’s CESF.  As
previously noted, OJP distributed CESF funding in
accordance with CARES Act requirements.  However,
the unprecedented distribution of similar funding
indicates that enhanced monitoring of actual CESF
expenditures will be a necessity – for both OJP and the
OIG – in the months and years to come.

5
OIG Review of CESF Recipient
Accounting Records
To assess spending, we requested accounting
records from 19 CESF recipients who had drawn
down CESF funds at the time of our analysis.  In
total, these recipients requested $60,860,072 in
CESF drawdowns as of August 10, and the grant
accounting records supported expenses totaling
$4,407,016 (7 percent of the total drawn down).7
While advance drawdowns are allowable under
the terms and conditions of the CESF program,
OJP should be prepared to carefully monitor any
significant disparities in the months and years to
come.
We reviewed these accounting records to
determine if reported expenditures appeared to
be allowable under the terms of the CESF
program.  While we found that most expenditures
appeared reasonable and allowable under
program, we identified one area of concern.
Specifically,
we
noted
that
one
State
Administering Agency (SAA) in our sample paid
$1,242 in a “special assessment of dues” at the
request of a membership-based not-for-profit.
This organization represents justice system
concerns to the federal government and
provides
assistance
to
its
member
organizations.  We contacted OJP regarding the
expense, and OJP confirmed that this cost would
be considered an unallowable donation.  We
further informed OJP that we identified 56 SAAs
listed on the non-for-profit’s website, indicating
that
unallowable
expenditures
may
total
$69,552
if
each
SAA
paid
the
amount
requested.8

Within
2
days
of
our
communication with OJP officials, they provided

evidence that it created and distributed
guidance notifying the CESF community that the
cost was unallowable.
OIG Review of CESF Recipient
Progress Reports
We also reviewed progress reports for each of
the 19 CESF recipients in our initial sample to
determine if reported grant activities appeared
to be consistent with the goals of the CESF
program.  In general, state recipients hired
administrative staff and contacted stakeholders
regarding subawards, and local recipients
purchased items that were approved in award
documents.  We found no indication that
reported grant activities were inconsistent with
the CESF program.
OIG Review of High-Risk Recipients
As part of its CESF monitoring strategy, OJP
included specific special conditions on awards
made to high risk recipients.  These recipients
were required to submit CESF grant accounting
records on either a monthly or quarterly basis
depending
on
OJP’s
assessment
of
the
recipient’s general responsiveness to prior OJP
communications.  We reviewed all recipients in
this category (14 of the 1,828 total CESF
recipients) and found that most had submitted
their
accounting
records,
though
some
submissions were between 2 and 5 days late.
We identified one recipient classified as “High-
Risk – Non-Responsive” whose accounting
records were not uploaded to OJP’s Grants
Management System (GMS) for the months of
July or August.  We contacted OJP with our
concern, and OJP provided evidence that the
7  Our initial sample included 50 CESF grant recipients.  However, as of August 2020, only 19 of those recipients
had made drawdowns against their CESF award.  Therefore, we included only those 19 recipients in our review of
accounting records.
8  Of the 19 organizations reviewed, 9 were states or SAAs, and all were listed on the non-profit’s website.  The
unallowable “special assessment of dues” expenditure was paid by only one state recipient at the time of our analysis.
That recipient is coordinating with OJP to appropriately remedy the costs and make the necessary adjustments to its
financial reporting.

6
accounting records were submitted by the
recipient in a timely manner.  However, the
recipient had emailed the records to an OJP
grant manager and the accounting records were
then not uploaded to GMS by OJP and were not
tracked on the Bureau of Justice Assistance’s
internal review spreadsheet that assists OJP in
monitoring actions of high-risk recipients.  OJP
stated that this was an oversight and provided
evidence that it had implemented revised
policies and procedures to prevent this issue
from recurring.  Specifically, OJP previously
required that grant managers and a first line
supervisor verify these submissions; reminders
to do so were sent out manually.  In response to
our inquiry, OJP has updated its guidance to
require second line supervisory review and has
automated recurring calendar reminders to
ensure the review is conducted.
We also identified one recipient classified as
“High Risk – Responsive” whose accounting
records were submitted 25 days late.  We asked
OJP why a Grant Adjustment Notice (GAN) to
place a hold on funds had not been initiated
during the period in which the recipient was
delinquent.  OJP acknowledged that the GAN
should have been initiated.  Again, OJP adjusted
its policies to require second line supervisory
oversight of this requirement and adjusted its
newly
implemented
automated
reminder
system to reiterate that holds are to be placed
within 5 days if the recipient is delinquent.
Based on the corrective actions already
implemented, we make no recommendations to
OJP in this area.
CESF Program Administration
Finally, as part of our survey, we asked recipients
general
questions
regarding
OJP’s
overall
administration of the program.  We first asked
for recipient feedback on the clarity of the CESF

solicitation.  As shown in Figure 5, 97 percent of
respondents reported that the solicitation was
clear.
Figure 5.  Survey Response – Clarity of CESF
Solicitation
How clear was the CESF solicitation guidance related to
allowable costs and activities?
•
Extremely Clear
•
Very Clear
•
Somewhat Clear
•
Not so Clear
•
Not at All Clear
Source: OIG Survey of CESF Recipients
When concerns were expressed, they were
frequently related to the broad range of
permissible uses of funds under the CESF.  Since
the CESF’s inception, OJP has continually
updated a Frequently Asked Questions (FAQ)
document on its public website with additional
information on a variety of allowable cost
questions.9
We also asked CESF recipients if they knew
whom to contact at OJP with questions about
their CESF award, with 94 percent providing an
affirmative
response.

Further,
recipients
reported that if they had reached out to OJP with
requests for assistance on their award, generally
that was provided, as shown in Figure 6.
9  OJP, “Bureau of Justice Assistance Fiscal Year 2020 Coronavirus Emergency Supplemental Funding Program
Frequently Asked Questions,” July 1, 2020, https://bja.ojp.gov/sites/g/files/xyckuh186/files/media/document/cesf-
faqs.pdf (accessed September 17, 2020).

7
Figure 6.  Survey Response – OJP Assistance
If you have contacted OJP with questions, concerns, or
other issues related to your CESF grant, did OJP assist in
resolving the issue?

•
Yes
•
N/A; We have not contacted OJP
•
No
Source:  OIG Survey of CESF Recipients
The concerns expressed in narrative responses
did not identify a specific area of consensus, and
covered issues related to the initial application
period through the initial stages of award
implementation.  Further, some concerns - such
as the allowability of certain costs - may have
been resolved had the recipient accessed the
previously mentioned FAQ document.  Based on
the generally low number of recipients who
reported issues in this area, we do not make any
recommendations to OJP.
Future OIG Oversight of CESF Funds
The OIG has issued two interim reports
assessing OJP’s administration of the $850 million
allocated to it under the CARES Act.  These
reports included our review of OJP’s actions
during the initial application period and through
the first full recipient reporting period.  As part
of our ongoing oversight, we plan future
reporting to include updates on drawdowns and
the use of CESF funds.

Office of Justice Programs Response to the Draft Report
8
U.S. Department of Justice
Office of Justice Programs
Office of the Assistant Attorney General
Washington, D.C. 20531
November 5, 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
ksullivan
1560793146
Digitally signed by ksullivan
15609793146 Date: 2020, 11.05 10:51:57
SUBJECT:
Response to the Office of the Inspector General's Draft Interim
Report II, Review of the Office of Justice Programs'
Administration of CARES Act Funding
This memorandum provides a response to the Office of the Inspector General's (OIG), October 28,
2020 draft interim report entitled, Interim Report II - Review of the Office of Justice Programs '
Administration of CARES Act Funding. The Office of Justice Programs (OJP) appreciates the
opportunity to review and comment on this second interim report, which covers award activity of
the Coronavirns Emergency Supplemental Funding (CESF) Program through August 22, 2020.
The second interim draft report does not contain any recommendations to OJP, and provides useful
information on CESF recipient drawdowns, expenditures, and program activities, which will be
used by the Bureau of Justice Assistance in carrying out its oversight of the CESF Program.
If you have any questions regarding this response, please contact Ralph E. Martin, Director, Office
of Audit, Assessment, and Management, at (202) 305-1802.
cc:
Maureen A. Henneberg
Deputy Assistant Attorney General
Ralph E. Martin
Director
Office of Audit, Assessment, and Management

9

cc:
Kendel Ehrlich
Acting Director
Bureau of Justice Assistance.
Leigh Benda
Chief Financial Officer
Rafael A. Madan
General Counsel
Phillip Merkle
Acting Director
Office of Communications
Louise Duhamel
Acting Assistant Director, Audit Liaison Group
Internal Review and Evaluation Office
Justice Management Division
David Sheeren
Regional Audit Manager
Denver Regional Audit Office
Office of the Inspector General
Jorge L. Sosa
Director, Office of Operations - Audit Division
Office of the Inspector General
2

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