Treasury OIG Letter Re: State of Rhode Island's Uses of Coronavirus Relief Fund Payment (OIG-CA-21-018)
- Document type
- PDF source document
- Date
- 2021-02-11
Summary
A letter dated February 11, 2021 from the Department of the Treasury Office of Inspector General, signed by Acting Inspector General Richard K. Delmar, to Jeremy Licht, Director of the Rhode Island Pandemic Recovery Office, referenced OIG-CA-21-018. The letter recounts meetings in August and November 2020 about allegations that the State intended to withhold Coronavirus Relief Fund proceeds to balance a budget shortfall, and notes the State's letter of November 13, 2020 calling those allegations untrue. It states the State received $1.25 billion from Treasury under the CARES Act. The letter quotes the Section 601(d) uses-of-funds requirements and Treasury guidance, and advises that using the proceeds to cover revenue shortfalls remains an unallowable use. It states the office will seek recoupment if payments are used that way.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
DEPARTMENT OF THE TREASURY
W ASHINGTON, D.C. 20220
OFFICE OF
INSPECTOR GENERAL February 11, 2021
Mr. Jeremy Licht, Director
Rhode Island Pandemic Recovery Office
One Capitol Hill
Providence, Rhode Island 02908
Re: State of Rhode Island’s Uses of Coronavirus Relief Fund Payment
(OIG-CA-21-018)
Dear Mr. Licht:
We would like to thank you and other State of Rhode Island representatives for
meeting with our office in August and November 2020 to discuss a matter that had
come to our attention regarding the State of Rhode Island’s Coronavirus Relief
Fund 1 payment received from the Department of the Treasury (Treasury) under Title
VI of the Social Security Act, as amended by Title V of Division A of the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Our office had
made inquiries concerning allegations that the State intended to withhold
Coronavirus Relief Fund proceeds to balance the State’s budget shortfall.
In our November 2020 meeting, you advised that Coronavirus Relief Fund proceeds
were not being withheld to cover budget shortfalls despite the Governor’s
comments during an interview with a local news station 2 that the State had taken a
cautious approach in withholding funds in case they are needed to balance the
budget. At the time of the Governor’s comments, you noted that potential
legislation might allow Coronavirus Relief Fund proceeds to be used to backfill
revenue shortfalls. It was noted that the State of Rhode Island officials had internal
conversations as to whether they would pivot their approach to spending
Coronavirus Relief Fund proceeds if the proposed legislation passed allowing prime
recipients to fill budget gaps. Subsequent to our meeting, you confirmed by letter,
dated November 13, 2020, that allegations of Rhode Island using funds to
impermissibly resolve a government revenue shortfall are untrue.
1
The State of Rhode Island received $1.25 billion from the Department of the Treasury under Title
VI of the Social Security Act, as amended by Title V of Division A of the Coronavirus Aid, Relief,
and Economic Security Act (P. L. 116-136; March 27, 2020).
2
Q&A: Raimondo discusses unemployment backlog, federal spending | WPRI.com. Posted
September 24, 2020.
1
Since meeting with you, the Coronavirus Relief Fund was extended by the
Consolidated Appropriations Act, 2021 Division N, “Additional Coronavirus
Response and Relief,” Title X. 3 Under the “Uses of Funds” requirements of Section
601(d) under Title VI of the Social Security Act, as amended, payments from the
Fund may only be used to cover costs that—
• are necessary expenditures incurred due to the public health emergency with
respect to the Coronavirus Disease 2019 (COVID–19);
• were not accounted for in the budget most recently approved as of
March 27, 2020 (the date of enactment of the CARES Act) for the State or
government; and
• were incurred during the period that begins on March 1, 2020, and ends on
December 31, 2021.
We are following up to advise your office that the use of Coronavirus Relief Fund
proceeds to cover revenue shortfalls remains an unallowable use of funds. The
recent legislation did not change this requirement as anticipated by your office in
our November 2020 meeting. As such, Treasury’s Coronavirus Relief Fund
Guidance for State, Territorial, Local, and Tribal Governments (Updated
September 2, 2020) 4 (Guidance) remains in effect, which clarified necessary
expenditures and assessment of need as follows:
Necessary expenditures incurred due to the public health emergency
The requirement that expenditures be incurred “due to” the public health
emergency means that expenditures must be used for actions taken to
respond to the public health emergency. These may include expenditures
incurred to allow the State, territorial, local, or Tribal government to respond
directly to the emergency, such as by addressing medical or public health
needs, as well as expenditures incurred to respond to second-order effects of
the emergency, such as by providing economic support to those suffering
from employment or business interruptions due to COVID-19-related
business closures. Funds may not be used to fill shortfalls in government
revenue to cover expenditures that would not otherwise qualify under the
statute. Although a broad range of uses is allowed, revenue replacement is
not a permissible use of Fund payments…
3
P. L. 116-260 (December 27, 2020).
4
https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf
2
To the extent that payments are used in this manner, our office will seek
recoupment of those funds from the State of Rhode Island in accordance with the
CARES Act.
Sincerely,
Richard K. Delmar
Acting Inspector General
cc: Stephen T. Milligan, Deputy Assistant General Counsel, Department of the
Treasury
Katherine C. Smith, Attorney Advisor, Department of the Treasury
Dorothy Pascale, Chief, Rhode Island Office of Internal Audit
3
File and source
- File
- OIG-CA-21-018-state-of-rhode-island-s-uses-of-coronavirus-relief-fund-payment.pdf
- Size
- 188,308 bytes
- SHA-256
- 3044c8987839ad7ca9fb801bead09308dfc66f5fe3c967aaeaab2e377ad26a3e
- Original
- oig.treasury.gov