GAO-22-105397, COVID-19: Current and Future Federal Preparedness Requires Fixes to Improve Health Data and Address Improper Payments

Issuer: Government Accountability Office
Document type: Report
Date: 2022-04-27

Summary

GAO-22-105397, a Government Accountability Office report to congressional committees dated April 27, 2022, described as GAO's 10th comprehensive report under the CARES Act on the federal COVID-19 response. The highlights report that as of February 28, 2022 the federal government had obligated $4.2 trillion and expended $3.6 trillion for pandemic relief, and that GAO has made 279 total recommendations since June 2020. The report makes 15 new recommendations and raises one matter for congressional consideration, covering payment integrity, FEMA's COVID-19 Funeral Assistance, CDC surveillance and data modernization, the Critical Manufacturing Sector, and advance child tax credit and Economic Impact Payment outreach. Its enclosures include chapters on the Paycheck Protection Program and federal fraud-related cases, the latter closing with methodology and related GAO products.

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Full text

United States Government Accountability Oﬃce

Report to Congressional Committees
April 2022

COVID-19
Current and Future Federal
Preparedness Requires Fixes to
Improve Health Data and Address
Improper Payments

GAO-22-105397

www.gao.gov

April 27, 2022

COVID-19

Highlights of GAO-22-105397, a report to
congressional committees.

Current and Future Federal Preparedness Requires
Fixes to Improve Health Data and Address Improper
Payments

Why GAO Did This Study

What GAO Found

By the end of March 2022, the U.S.
had about 80 million reported cases of
COVID-19 and over 980,000 reported
deaths, according to CDC. The country
also experiences lingering economic
repercussions related to the pandemic,
including rising inflation and ongoing
supply chain disruptions.

By late March 2022, daily COVID-19 cases in the U.S. had fallen substantially
since the Omicron-related peak in January 2022. Though COVID-19-associated
hospitalizations and deaths have also decreased, the effects of the Omicron
variant—and the rising prevalence of its new BA.2 sublineage—underscore
enduring challenges and the importance of a continued, agile federal response.

As of February 28, 2022 (the most
recent date for which data were
available), the federal government had
obligated $4.2 trillion and expended
$3.6 trillion for pandemic relief. These
amounts reflect 91 and 79 percent,
respectively, of the total amount of
COVID-19 relief funds provided by the
CARES Act and five other relief laws.

This response has included a focus on COVID-19 vaccinations. As of March 26,
2022, about 70 percent of the eligible U.S. population had been fully vaccinated.
According to the Centers for Disease Control and Prevention (CDC), getting
vaccinated and staying up to date with vaccines—including a booster dose—is
the best way to protect against COVID-19. Data show that vaccinated adults
experienced lower COVID-19-associated hospitalization rates (see figure).
Age-Adjusted Rates of COVID-19-Associated Hospitalizations by Vaccination Status in Adults
Aged 18 Years and Older, Oct. 2021–Feb. 2022

The CARES Act includes a provision
for GAO to report on its ongoing
monitoring and oversight efforts
related to the COVID-19 pandemic.
This report—GAO’s 10th
comprehensive report—examines the
federal government’s continued efforts
to respond to, and recover from, the
COVID-19 pandemic. In addition,
GAO’s March 17, 2022 testimony
included 10 new legislative
suggestions to enhance the
transparency and accountability of
federal spending, which we reiterate
here.
GAO reviewed federal data and
documents and interviewed federal
and state officials and other
stakeholders.

What GAO Recommends
GAO is making 15 new
recommendations for agencies and
one matter for consideration by
Congress that are detailed in this
Highlights and in the report.

View GAO-22-105397. For more
information, contact Jessica Farb, (202)
512-7114 or farbj@gao.gov.

Since June 2020, GAO has made 279 total recommendations for improving
federal pandemic operations. These recommendations include improvements in
such areas as publicly reporting COVID-19 nursing home vaccination data and
targeting vaccine outreach to veterans. Agencies have fully or partially addressed
39 percent of these recommendations as of March 2022, fully addressing 22
percent (61 recommendations) and partially addressing another 17 percent (48
recommendations). Fully addressing GAO’s recommendations will enhance
federal COVID-19 pandemic response and recovery efforts, and help prepare for
future public health emergencies.
In this report, GAO makes 15 new recommendations and raises one matter for
congressional consideration in the areas of COVID-19 payment oversight, public
health data collection, and critical manufacturing, among others.
United States Government Accountability Office

Highlights of GAO-22-105397 (Continued)
Payment Integrity: COVID-19 Spending
The Payment Integrity Information Act of 2019 defines improper payments as any payment that should not have been
made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual,
administrative, or other legally applicable requirements. Improper payments are a pervasive and growing problem in
regular programs across the federal government. They also have been a significant concern in pandemic spending,
especially among the largest programs such as unemployment insurance.
Under guidance from the Office of Management and Budget (OMB), agencies are to complete a risk assessment to
determine a new program’s susceptibility to signiﬁcant improper payments after the ﬁrst 12 months of program operations
and, if susceptible, develop corrective actions and report on improper payments the following fiscal year. This means that
improper payment information for new COVID-19 programs may not be reported until November 2022. By that time,
agencies may have disbursed most or even all COVID-19 funds before assessing risk or developing corrective actions to
address potential improper payment issues.
GAO therefore suggested in its November 2020 report that Congress consider in any future legislation appropriating
COVID-19 relief funds designating all executive agency programs and activities making more than $100 million in
payments from COVID-19 relief funds as “susceptible to significant improper payment.”
GAO continues to believe that expeditiously estimating and reporting improper payments and developing corrective
actions to reduce such payments is critical to agency accountability, particularly for new programs that receive large
outlays in a given year. GAO reiterates the November 2020 matter, as well as a matter GAO made in a March 2022
testimony suggesting that Congress consider amending the Payment Integrity Information Act of 2019 to
designate all new executive agency programs—such as those created specifically to respond to the COVID-19
pandemic—making more than $100 million annually in payments as “susceptible to significant improper
payments” for their initial years of operation.
GAO also recommends that OMB require agencies to certify the reliability of submitted improper payment data.
OMB neither agreed nor disagreed with this recommendation.
FEMA’s COVID-19 Funeral Assistance and Public Assistance Program
As of February 28, 2022, the Federal Emergency Management Agency (FEMA) had received and was processing more
than 444,000 applications for funeral assistance since April 2021—when it began accepting applications—and awarded
more than $1.92 billion for more than 296,000 approved applications. (See figure for obligations made for COVID-19
Funeral Assistance from May 10, 2021, through February 22, 2022.)
Cumulative Obligations for FEMA Funeral Assistance over Time, May 10, 2021–Feb. 22, 2022

Highlights of GAO-22-105397 (Continued)
However, GAO identified several gaps in FEMA’s internal controls meant to prevent improper or potentially fraudulent
payments, such as cases in which these controls did not prevent duplicate applications for funeral assistance or
assistance issued to ineligible recipients. For example, GAO identified 374 deceased individuals that were listed on more
than one award-receiving application; in total, these applications received about $4.8 million in assistance. Without
adequate controls in place, COVID-19 Funeral Assistance is at risk of improper payments and potential fraud.
GAO recommends that the FEMA Administrator take action to identify the causes of the gaps in internal control
in COVID-19 Funeral Assistance and design and implement additional control activities, where needed, to prevent
and detect improper payments and potential fraud.
GAO recommends that the FEMA Administrator address deficiencies in the COVID-19 Funeral Assistance data by
updating data records as data are verified, and adding data fields where necessary, to ensure that consistent and
accurate data are available for monitoring of potential fraud trends and identifying control deficiencies. The
Department of Homeland Security (DHS) agreed with both recommendations.
COVID-19 Surveillance
CDC could be better positioned to lead and coordinate the national efforts to detect and monitor COVID-19 by including in
the agency’s existing surveillance approach specific objectives for how it will achieve its goals and a description of how it
will assess progress toward meeting them.
CDC’s COVID-19 surveillance approach outlines goals and activities for what the agency wants to achieve, but it does not
detail how it will achieve its stated goals or how it will measure its progress—two components of an effective strategy
GAO has noted in its past work. By including specific objectives that detail how CDC’s actions will allow it to meet its goals
and describing measures to assess its progress towards reaching its goals, CDC could better ensure it is able to
effectively monitor COVID-19 nationwide.
GAO recommends that the Director of CDC, in coordination with state, tribal, local, and territorial jurisdictions
and public health partner organizations, ensure the agency builds upon its existing COVID-19 surveillance
approach by detailing specific objectives for how it will achieve its COVID-19 surveillance goals and describing
how it will assess progress toward meeting them. HHS agreed with our recommendation.
Public Health Data Collection and Standardization
CDC has made progress in modernizing the U.S. public health data collection and surveillance infrastructure through its
Data Modernization Initiative, which aims to improve data collection and sharing, strengthen data reporting and analytics,
and advance surveillance of future public health threats, among other goals.
However, CDC’s strategic implementation plan for the Data Modernization Initiative does not articulate the specific
actions, time frames, and allocation of roles and responsibilities needed to achieve its objectives. In addition, CDC has not
fully developed plans for how it will allocate certain funds for data modernization. Without more specific, actionable plans,
CDC may not be able to gauge its progress on the initiative or achieve key results in a timely manner. In addition, such
lack of progress to implement enhanced surveillance systems could affect the quality and timeliness of data needed to
respond to future public health emergencies.
GAO recommends that the Director of CDC define specific action steps and time frames for the agency’s data
modernization efforts. HHS agreed with this recommendation.
Critical Manufacturing Sector
The pandemic has impacted the Critical Manufacturing Sector by causing worker shortages, delays in shipments of
goods, and increased cybersecurity vulnerability in critical infrastructure systems and assets. The Cybersecurity and
Infrastructure Security Agency (CISA)—in its role as the lead federal agency for coordinating security and resilience
efforts with the Critical Manufacturing Sector on behalf of DHS—took steps to respond to the pandemic’s impacts in the
sector. For example, CISA developed voluntary guidance to help jurisdictions and critical infrastructure owners and
operators identify essential work functions and ensure that the workers who performed those functions could continue to
access their workplaces when restrictions, such as stay-at-home orders, were in place in their communities.

Highlights of GAO-22-105397 (Continued)
Members of the Critical Manufacturing Sector have identified a lessons-learned analysis as a high-priority need, and CISA
has collected some information on the impact of the pandemic in the sector that could be leveraged in a lessons-learned
analysis. However, as of February 2022, CISA had not finalized a plan for developing the analysis.
GAO recommends that the Director of CISA assess and document lessons learned from the COVID-19
pandemic’s impacts on the Critical Manufacturing Sector. DHS agreed with this recommendation and stated it plans
to issue a lessons-learned report by December 2022.
Advance Child Tax Credit and Economic Impact Payments
During 2021, the Internal Revenue Service (IRS) and the Department of Treasury issued advance payments of the child
tax credit (CTC) and a third round of Economic Impact Payments (EIP 3) to eligible individuals, totaling over $500 billion.
Both payments could have had implications for individuals as they filed their 2021 taxes.
Information on Advance Child Tax Credit Payments, July 2021–Dec. 2021, as of April 6, 2022

To help individuals file accurate 2021 tax returns during the 2022 filing season, Treasury and IRS took several steps to
reach out to individuals that received the advance CTC payments and EIP 3. However, Treasury and IRS missed
opportunities to collaborate on these outreach efforts.
Relatedly, the communications plans and strategies IRS developed for several programs, including the advance CTC and
EIP, do not include metrics for assessing the usefulness and accessibility of these outreach efforts. Such metrics would
inform management of these efforts and help focus resources on what works. Without sufficient, relevant, timely, and
comparable data on its outreach efforts, IRS is missing information it could use to develop performance metrics and to
assess which aspects of their communications and outreach strategy were effective in reaching different audiences.
GAO is making three recommendations for Treasury and IRS to enhance communication and outreach efforts
concerning the refundable tax credit. These recommendations focus on improving collaboration between the
agencies and within IRS and on using data to assess the effectiveness of their efforts. Treasury and IRS neither
agreed nor disagreed with the recommendations.
This report contains additional recommendations related to the Single Audit Compliance Supplement, the Capital Projects
Fund, the Homeowner Assistance Fund, and Public Health Industrial Base Expansion. For example, GAO recommends
that the Assistant Secretary for Preparedness and Response within HHS conduct a workforce assessment of its
Innovation and Industrial Base Expansion Program Office to determine the critical skills and competencies
needed to support and sustain the office, and develop corresponding workforce strategies to address those
needs. HHS agreed with this recommendation.

Contents
Matters for Congressional Consideration.............................................................................. 1
Recommendations for Executive Action................................................................................ 2
Introduction................................................................................................................................... 4
Background.................................................................................................................................. 11
The COVID-19 Pandemic’s Eﬀect on Public Health............................................................................ 11
COVID-19 Vaccines and Therapeutics.............................................................................................. 13
The COVID-19 Pandemic and the Economy...................................................................................... 17
Federal COVID-19 Funding and Spending........................................................................................ 19
Executive Summary................................................................................................................... 27
Overview..................................................................................................................................... 27
Payment Integrity: COVID-19 Spending........................................................................................... 27
FEMA’s COVID-19 Funeral Assistance and Public Assistance Program................................................... 29
Single Audit Compliance Supplement............................................................................................. 30
Capital Projects Fund.................................................................................................................... 31
Homeowner Assistance Fund......................................................................................................... 31
COVID-19 Surveillance.................................................................................................................. 32
Public Health Data Collection and Standardization........................................................................... 33
Critical Manufacturing Sector......................................................................................................... 34
Public Health Industrial Base Expansion.......................................................................................... 35
Advance Child Tax Credit and Economic Impact Payments................................................................. 35
Conclusions.................................................................................................................................. 38
Closing........................................................................................................................................... 39
Congressional Addressees....................................................................................................... 40
Appendixes and Enclosures..................................................................................................... 42
Appendix I: Enclosures.................................................................................................................. 42
Economic Indicators..................................................................................................................... 42
COVID-19 Surveillance.................................................................................................................. 49
HHS COVID-19 Funding................................................................................................................. 57
Relief for Health Care Providers..................................................................................................... 66
Public Health Situational Awareness Network Capabilities................................................................. 79
Public Health Data Collection and Standardization........................................................................... 82
Public Health Supply Chain Resilience............................................................................................. 90
Public Health Industrial Base Expansion.......................................................................................... 98

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GAO-22-105397

Initial Vaccine Allocation.............................................................................................................. 103
Vaccine Distribution and Administration........................................................................................ 109
Health Insurance during COVID-19............................................................................................... 122
Unemployment Insurance Programs............................................................................................. 132
Homeowner Assistance Fund....................................................................................................... 148
Advance Child Tax Credit and Economic Impact Payments............................................................... 154
Economic Injury Disaster Loan Program........................................................................................ 169
Federal Reserve Lending Facilities................................................................................................ 181
Airport Grants........................................................................................................................... 185
Aviation Manufacturing Jobs Protection Program............................................................................ 195
Payroll Support Assistance to Aviation Businesses.......................................................................... 202
Loans for Aviation and Other Eligible Businesses........................................................................... 208
Transit Industry.......................................................................................................................... 214
Paycheck Protection Program...................................................................................................... 221
Coronavirus State and Local Fiscal Recovery Funds......................................................................... 237
COVID-19 Relief Funding to States and Localities............................................................................ 246
Capital Projects Fund.................................................................................................................. 254
Federal Contracts and Agreements for COVID-19............................................................................ 260
International Trade..................................................................................................................... 270
Federal Fraud-Related Cases........................................................................................................ 277
FEMA’s COVID-19 Funeral Assistance and Public Assistance Program................................................. 289
Critical Manufacturing Sector....................................................................................................... 310
Payment Integrity: COVID-19 Spending......................................................................................... 320
Single Audit Compliance Supplement........................................................................................... 332
Economic Eﬀects of the Paycheck Protection Program.................................................................... 341
Appendix II: Highlights Pages from Recently Issued GAO COVID-19 Products...................................... 350
Federal Prisons Response to COVID-19......................................................................................... 350
Freedom of Information Act........................................................................................................ 352
Defense Health Care.................................................................................................................. 353
COVID-19 Vaccination Eﬀorts for Racial and Ethnic Groups.............................................................. 354
Federal Telework........................................................................................................................ 355
Emergency Rental Assistance....................................................................................................... 356
Defense Contracting................................................................................................................... 357
Long COVID............................................................................................................................... 358
Tribal Epidemiology Centers........................................................................................................ 360
DHS Acquisition Programs........................................................................................................... 361
Transportation Security............................................................................................................... 362
State Department’s Overseas Operational Response to COVID-19..................................................... 363
Paycheck Protection Program...................................................................................................... 365
Emergency Relief Funds.............................................................................................................. 366
K-12 Education.......................................................................................................................... 367
COVID-19 Public Education Campaign........................................................................................... 368
Freedom of Information Act........................................................................................................ 369

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Medicaid................................................................................................................................... 370
Indian Health Service.................................................................................................................. 371
Scientiﬁc Integrity....................................................................................................................... 372
Appendix III: List of Ongoing GAO Work Related to COVID-19 as of April 27, 2022................................ 373
Appendix IV: Matters for Congressional Consideration for Oversight of Federal Spending and Data from
GAO’s March 17, 2022 Testimony................................................................................................. 376
Appendix V: Comments from the Department of Defense............................................................... 378
Appendix VI: Comments from the Department of Education............................................................ 379
Appendix VII: Comments from the Department of Health and Human Services................................... 381
Appendix VIII: Comments from the Department of Homeland Security.............................................. 384
Appendix IX: Comments from the Internal Revenue Service............................................................. 389
Appendix X: Comments from the Department of the Treasury......................................................... 391

Contacts..................................................................................................................................... 395
Tables
Table 1: Reported COVID-19 Vaccinations by Age Group in the U.S., as of Mar. 26, 2022.......................... 15
Table 2: COVID-19 Relief Funding and Spending as of Feb. 28, 2022.................................................... 22
Table 3: COVID-19 Relief Funding for Federal Programs and Funds Receiving $10 Billion or More in Aid for
States, the District of Columbia, Localities, U.S. Territories, and Tribes, as of Feb. 28, 2022...................... 24
Goals and Selected Initiatives in CDC’s Framework for COVID-19 Surveillance....................................... 51
Prior GAO Recommendations Related to COVID-19 Testing................................................................ 55
HHS-Reported COVID-19 Relief Appropriations, Obligations, and Expenditures, by Relief Law, as of Feb. 28,
2022........................................................................................................................................... 59
HHS-Reported Allocations, Obligations, and Expenditures of COVID-19 Relief Funding, by Agency or Key
Fund, as of Feb. 28, 2022.............................................................................................................. 60
HHS-Reported Allocations, Obligations, and Expenditures by Selected COVID-19 Response Activity, as of Feb.
28, 2022..................................................................................................................................... 62
Prior GAO Recommendation Related to Department of Health and Human Services (HHS) COVID-19
Funding...................................................................................................................................... 65
Provider Relief Fund: Summary of Allocations and Disbursements, as of February 28, 2022.................... 69
Status and Total of Payment Discrepancy Types for Post-payment Review............................................ 73
Provider Relief Funds (PRF) Identiﬁed as Potential Overpayments and Overpayments Sought by Health
Resources and Service Administration (HRSA) for Repayment............................................................ 76
Prior GAO Recommendations Related to Department of Health and Human Services (HHS) Relief for Health
Care Providers............................................................................................................................. 78
Centers for Disease Control and Prevention’s (CDC) Priorities and Objectives for Its Data Modernization
Initiative...................................................................................................................................... 87
Prior GAO Recommendations Related to Public Health Supply Chain Resilience during COVID-19............. 96
Estimated COVID-19 Vaccination by Age Group, as of Mar. 26, 2022.................................................. 112
CDC Guidance on COVID-19 Booster Doses as of April 2022............................................................ 115

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Minimum Order Sizes, Number of Hours in Which Doses in Opened Vials Must Be Used, and Vial Sizes for
Available COVID-19 Vaccines, as of February 2022.......................................................................... 119
Prior GAO Recommendation Related to COVID-19 Vaccine Distribution and Administration.................. 121
Prior GAO Recommendations Related to Unemployment Insurance (UI) Programs.............................. 144
Prior GAO Recommendations Related to Advance Child Tax Credit and Economic Impact Payments....... 165
Key Legislation Aﬀecting the Economic Injury Disaster Loan (EIDL) Program in Response to COVID-19.... 171
Prior GAO Recommendations Related to the Economic Injury Disaster Loan Program.......................... 179
Federal Aviation Administration (FAA) Obligations and Expenditures for CARES Act Airport Grants, as of Feb.
28, 2022................................................................................................................................... 186
Federal Aviation Administration (FAA) Obligations and Expenditures for the Consolidated Appropriations Act,
2021 Airport Grants, as of Feb. 28, 2022....................................................................................... 188
Federal Aviation Administration (FAA) Obligations and Expenditures for the American Rescue Plan Act of
2021 (ARPA) Airport Grants, as of Feb. 28, 2022............................................................................. 189
Prior GAO Recommendations Related to Payroll Support Assistance for Aviation Businesses................. 207
Executed and Outstanding Loans for the CARES Act Loan Program for Aviation and Other Eligible Businesses
as of Apr. 1, 2022...................................................................................................................... 209
Prior GAO Recommendation Related to Loans for Aviation and Other Eligible Businesses..................... 213
FTA Allocations and Transit Agency Obligations and Expenditures of COVID-19 Relief Formula Funds, as of
Feb. 28, 2022............................................................................................................................. 217
Prior GAO Recommendations Related to the Paycheck Protection Program........................................ 235
Prior GAO Recommendations Related to Coronavirus State and Local Fiscal Recovery Funds (CSLFRF).... 245
COVID-19 Relief Funding for Federal Programs and Funds That Received $10 billion or More in Aid for States,
the District of Columbia, Localities, U.S. Territories, and Tribes......................................................... 247
Prior GAO Recommendations Related to Federal Contracts and Agreements for COVID-19................... 267
Prior GAO Recommendations Related to COVID-19......................................................................... 307
Fiscal Year 2021 Improper Payment Estimates Reporting for Major Spending Areas Receiving Over $100
Billion in COVID-19 Funding, as of February 28, 2022...................................................................... 323
Fiscal Year 2021 Estimated Improper Payments Reported in Federal Agency Financial Reports.............. 328
Prior GAO Matters for Congressional Consideration and Recommendations Related to Payment
Integrity.................................................................................................................................... 331
Prior GAO Recommendations Related to Single Audits and Coronavirus State and Local Fiscal Recovery
Funds....................................................................................................................................... 339
Paycheck Protection Program (PPP) Phases................................................................................... 342

Figures
Age-Adjusted Rates of COVID-19-Associated Hospitalizations by Vaccination Status in Adults Aged 18 Years
and Older, Oct. 2021–Feb. 2022......................................................................................................H1
Cumulative Obligations for FEMA Funeral Assistance over Time, May 10, 2021–Feb. 22, 2022...................H3
Information on Advance Child Tax Credit Payments, July 2021–Dec. 2021, as of April 6, 2022....................H5
Figure 1: Report Enclosures by Topic Area......................................................................................... 8
Figure 2: Status of Prior GAO Recommendations from COVID-19-Related Work, by Federal Department or
Agency, as of Mar. 2022................................................................................................................ 10
Figure 3: 7-Day Averages of Reported COVID-19 Cases in the U.S., Mar. 1, 2020–Mar. 24, 2022................. 11

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Figure 4: Reported Daily Hospitalizations and 7-Day Averages of Patients with Conﬁrmed COVID-19 in the
U.S., Aug. 1, 2020–Mar. 27, 2022.................................................................................................... 12
Figure 5: Age-Adjusted Rates of COVID-19-Associated Hospitalizations by Vaccination Status in Adults Aged
18 Years and Older, Oct. 2021–Feb. 2022........................................................................................ 16
Figure 6: Employment-to-Population Ratio, Jan. 2020–Mar. 2022......................................................... 18
Figure 7: Percentage of COVID-19 Relief Funding Obligated and Expended, July 31, 2020–Feb. 28, 2022..... 20
Indicators for Areas of the Economy Supported by the Federal COVID-19 Pandemic Response, Nov. 2021–
Mar. 2022, Cumulative Changes since Feb. 2020.............................................................................. 42
Employment-to-Population Ratio, Jan. 2020–Mar. 2022...................................................................... 44
Indicators of Inﬂation, Feb. 2021–Feb. 2022, and Average Inﬂation Rates, 2000–2019............................. 46
Percentage Change in Inﬂation Indicators from the Previous Month, Jan. 2020–Feb. 2022....................... 47
HHS-Reported COVID-19 Relief Appropriations, Obligations, and Expenditures from COVID-19 Relief Laws, as
of Feb. 28, 2022........................................................................................................................... 58
Six Desirable Characteristics of Eﬀective National Strategies.............................................................. 91
How the National Strategy and Plan of Action and Milestones Template, if Fully Implemented, Align with Six
Desirable Characteristics of an Eﬀective National Strategy................................................................. 93
Example of Allocation Calculations before and after Minimum Order Quantity Adjustments for Two States
with Diﬀerent Population Sizes.................................................................................................... 106
Example of Allocation before and after the Sovereign Nation Supplement for One State...................... 107
Child Receiving COVID-19 Vaccination........................................................................................... 111
Federal Survey Estimates of Uninsurance Rates among Non-Elderly Adults, 2018-2020........................ 124
National Health Interview Survey’s Estimated Non-Elderly Adult Uninsurance Rate by Race and Hispanic
Origin, 2018-2020....................................................................................................................... 125
Weekly Continued Claims Submitted Nationwide for Regular UI, PEUC, and Extended Beneﬁts, Mar. 1, 2020–
Mar. 12, 2022............................................................................................................................ 135
Timeliness of Nationwide First Payments of Regular Unemployment Insurance (UI) Beneﬁts, Jan. 2020–Feb.
2022......................................................................................................................................... 137
Status of DOL’s Expert Team Activities in 18 States as of March 2022, By Cohort of Participating States... 141
Status of Homeowner Assistance Fund (HAF) Programs and Percentage of Allocation Spent by State and
Territory, as of March 2022......................................................................................................... 151
Information on Advance Child Tax Credit Payments, July 2021–Dec. 2021, as of April 6, 2022................. 155
Number of EIDL Applications in Processing by Type and Week, June 1, 2021 through Dec. 31, 2021........ 173
Outstanding Assets of Federal Reserve Lending Facilities Supported by CARES Act Funding, June 2020–Mar.
2022......................................................................................................................................... 182
Aviation Manufacturing Jobs Protection (AMJP) Program Eligible Recipients, by Funding Oﬀer Amount, as of
Mar. 8, 2022.............................................................................................................................. 197
Status of SBA Loan Forgiveness Determinations on Paycheck Protection Program Loans, as of Jan. 2,
2022......................................................................................................................................... 223
Percentage of Paycheck Protection Program Loans with Loan Forgiveness Decisions Submitted to SBA by
Lender Type and Year, as of Jan. 2, 2022....................................................................................... 224
Coronavirus State and Local Fiscal Recovery Funds Allocations and Treasury Distributions as of Mar. 2, 2022,
by Recipient Type....................................................................................................................... 238

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Treasury’s Reporting Requirements for the Coronavirus State and Local Fiscal Recovery Funds, by Recipient
Type, as of Feb. 28, 2022............................................................................................................ 239
Contract Obligations in Response to COVID-19 by Federal Agency, as of Mar. 31, 2022......................... 261
Government-wide COVID-19-Related Contract Obligations and Conﬁrmed COVID-19 Cases by Month, Feb.
2020–Mar. 31, 2022.................................................................................................................... 262
Contract Obligation Amounts for Top Five Goods and Services Procured in Response to COVID-19 by month,
Feb. 2020–Mar. 31, 2022............................................................................................................. 263
Monthly Trends in U.S. Import Charges Relative to Value Imported, from Jan. 2018–Dec. 2021............... 271
Monthly U.S. Import Values of COVID-19-Related Products, by Product Type, Jan. 2019–Dec. 2021.......... 273
Value of U.S. Exports of Vaccines for Human Use, Overall and to EU Member Countries and the United
Kingdom, Jan. 2019 – Dec. 2021................................................................................................... 275
Number of Individuals or Entities That Have Pleaded Guilty to Federal Fraud-Related Charges by COVID-19
Relief Program, as of Jan. 31, 2022............................................................................................... 280
Number of Individuals Who Have Pleaded Guilty to Federal Fraud-Related Charges and Have Been
Sentenced, as of Jan. 31, 2022..................................................................................................... 281
Number of Individuals or Entities That Have Pleaded Guilty to, Faced Federal Charges for, or Were Convicted
for Consumer Fraud, as of Jan. 31, 2022....................................................................................... 284
Federal Emergency Management Agency’s Disaster Relief Fund Balance, by Month, Feb. 2021–Feb.
2022......................................................................................................................................... 290
FEMA’s Disaster Relief Fund Obligations for COVID-19 by Program and Activity through March 2022....... 291
Cumulative Obligations for Federal Emergency Management Agency’s COVID-19 Funeral Assistance over
Time, May 10, 2021 – Feb. 22, 2022.............................................................................................. 292
COVID-19 Funeral Assistance Awards as of December 15, 2021, by U.S. County................................... 294
Number of FEMA Projects and Amounts Obligated for Public Assistance for COVID-19, by Region, through
Feb. 28, 2022............................................................................................................................. 299
Federally Deﬁned Categories within the Critical Manufacturing Sector............................................... 311
Critical Infrastructure Sectors Represented in the Essential Critical Infrastructure Workforce Guidance... 314

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Abbreviations
ARPA

American Rescue Plan Act of 2021

ASPR

Office of the Assistant Secretary for Preparedness and Response

CDC

Centers for Disease Control and Prevention

CISA

Cybersecurity and Infrastructure Security Agency

CPF

Coronavirus Capital Projects Fund

COVID-NET

COVID-19-Associated Hospitalization Surveillance Network

DHS

Department of Homeland Security

FDA

Food and Drug Administration

FEMA

Federal Emergency Management Agency

HAF

Homeowner Assistance Fund

HHS

Department of Health and Human Services

IBx

Innovation and Industrial Base Expansion Program

OMB

Office of Management and Budget

PIIA

Payment Integrity Information Act of 2019

TANF

Temporary Assistance for Needy Families

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to good government is reﬂected in its core values of accountability, integrity, and reliability.
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Page vii

GAO-22-105397

Matters for Congressional Consideration
•

Page 1

Congress should consider providing the Department of Health and Human Services the
authority to require states to report the data necessary for the Secretary to estimate and
report on improper payments for the Temporary Assistance for Needy Families program
in accordance with 31 U.S.C. § 3352. See the Payment Integrity: COVID-19 Spending
enclosure.

GAO-22-105397

Recommendations for Executive Action
Recommendations for Executive Action
We are making a total of 15 recommendations to federal agencies:

•

Page 2

The Director of the Oﬃce of Management and Budget should require agencies to certify
the reliability of data submitted to PaymentAccuracy.gov. See the Payment Integrity:
COVID-19 Spending enclosure. (Recommendation 1)
The Federal Emergency Management Agency Administrator should take action to identify
the causes of the gaps in internal control in COVID-19 Funeral Assistance and design and
implement additional control activities, where needed, to prevent and detect improper
payments and potential fraud. See FEMA’s COVID-19 Funeral Assistance and Public
Assistance Program enclosure. (Recommendation 2)
The Federal Emergency Management Agency Administrator should address deﬁciencies
in the COVID-19 Funeral Assistance data by updating data records as data are veriﬁed,
and adding data ﬁelds where necessary, to ensure that consistent and accurate data are
available for monitoring of potential fraud trends and identifying control deﬁciencies.
See FEMA’s COVID-19 Funeral Assistance and Public Assistance Program enclosure.
(Recommendation 3)
The Secretary of Education should document policies and procedures for providing
information to the Oﬃce of Management and Budget to better enable it to annually
update the Compliance Supplement that include steps for (1) establishing management’s
expectations of staﬀ competence for key roles (e.g., relevant knowledge, skills and abilities)
and providing ongoing training, and (2) agency oﬃcials proactively involving internal
stakeholders (e.g., the inspector general, general counsel and chief ﬁnancial oﬃcer) and
external stakeholders (e.g., the audit community) when developing audit procedures,
prior to submitting drafts to the Oﬃce of Management and Budget, in order to ensure the
guidance meets users’ needs. See the Single Audit Compliance Supplement enclosure.
(Recommendation 4)
The Secretary of Health and Human Services should document policies and procedures
for providing information to the Oﬃce of Management and Budget to better enable it
to annually update the Compliance Supplement, that include steps for (1) establishing
management’s expectations of staﬀ competence for key roles (e.g., relevant knowledge,
skills and abilities) and providing ongoing training, and (2) agency oﬃcials proactively
involving internal stakeholders (e.g., the inspector general, general counsel and chief
ﬁnancial oﬃcer) and external stakeholders (e.g., the audit community) when developing
audit procedures, prior to submitting drafts to the Oﬃce of Management and Budget,
in order to ensure the guidance meets users’ needs. See the Single Audit Compliance
Supplement enclosure. (Recommendation 5)
The Secretary of the Treasury should document policies and procedures for providing
information to the Oﬃce of Management and Budget to better enable it to annually
update the Compliance Supplement, that include steps for (1) establishing management’s
expectations of staﬀ competence for key roles (e.g., relevant knowledge, skills and abilities)
and providing ongoing training, and (2) agency oﬃcials proactively involving internal
stakeholders (e.g., the inspector general, general counsel and chief ﬁnancial oﬃcer) and
external stakeholders (e.g., the audit community) when developing audit procedures,
prior to submitting drafts to the Oﬃce of Management and Budget, in order to ensure the
guidance meets users’ needs. See the Single Audit Compliance Supplement enclosure.
(Recommendation 6)

GAO-22-105397

•

Page 3

The Secretary of the Treasury should document a comprehensive plan that includes
timely and suﬃcient policies and procedures for monitoring recipients of the CPF to
provide assurance that funds are being used in compliance with laws, regulations, agency
guidance, and award terms and conditions, including ensuring that funds are being used
for allowable purposes. See the Capital Projects Fund enclosure . (Recommendation 7)
The Secretary of the Treasury should develop and implement written procedures to
monitor Homeowner Assistance Fund participants’ programs and uses of funds for
compliance with program requirements and improper payments. See the Homeowner
Assistance Fund enclosure. (Recommendation 8)
The Director of the Centers for Disease Control and Prevention should deﬁne speciﬁc
action steps and time frames for the agency’s data modernization eﬀorts. See the Public
Health Data Collection and Standardization enclosure. (Recommendation 9)
The Director of the Centers for Disease Control and Prevention, in coordination with state,
tribal, local, and territorial jurisdiction and public health organization partners, should
ensure the agency builds upon its existing surveillance approach by detailing speciﬁc
objectives for how it will achieve its COVID-19 surveillance goals and describing how it
will assess progress toward meeting them. See the COVID-19 Surveillance enclosure.
(Recommendation 10)
The Director of the Cybersecurity and Infrastructure Security Agency should assess
and document lessons learned from the COVID-19 pandemic’s impacts on the Critical
Manufacturing Sector. See the Critical Manufacturing Sector enclosure. (Recommendation
11)
The Assistant Secretary for Preparedness and Response within the Department of Health
and Human Services should conduct a workforce assessment of its Innovation and
Industrial Base Expansion Program Oﬃce to determine the critical skills and competencies
needed to support and sustain the oﬃce, and develop corresponding workforce strategies
to address those needs. See the Public Health Industrial Base Expansion enclosure.
(Recommendation 12)
The Secretary of the Treasury, in coordination with the Commissioner of Internal Revenue,
should enhance collaboration among departmental components for refundable tax credit
communication and outreach eﬀorts by including relevant participants and clearly deﬁning
participant outcomes, roles, and responsibilities. See the Advance Child Tax Credit and
Economic Impact Payments enclosure. (Recommendation 13)
The Commissioner of Internal Revenue should enhance internal collaboration among its
stakeholder outreach and education oﬃces for refundable tax credit communications
and outreach eﬀorts by clearly establishing outcomes, roles and responsibilities, and
developing resources to facilitate joint interactions and methods to document information
sharing. See the Advance Child Tax Credit and Economic Impact Payments enclosure.
(Recommendation 14)
The Commissioner of Internal Revenue should collect suﬃcient, relevant, and comparable
data on the usefulness and accessibility of its communications and outreach eﬀorts for
refundable tax credits and use these data to develop performance metrics to assess the
eﬀectiveness of ongoing eﬀorts. See the Advance Child Tax Credit and Economic Impact
Payments enclosure. (Recommendation 15)

GAO-22-105397

Introduction
April 27, 2022
Congressional Committees
As of March 24, 2022, nearly 80 million cases of COVID-19 have been reported in the U.S. since
COVID-19 was ﬁrst identiﬁed in January 2020. As of the week ending March 26, 2022, over 980,000
deaths attributed to COVID-19 have been reported in the U.S. According to estimates from the
Centers for Disease Control and Prevention (CDC), as of March 26, 2022, the virus’s Omicron
variant was the dominant strain circulating in the U.S.1 New daily reported cases surged across the
U.S. in January 2022, followed by increases in COVID-19-associated hospitalizations and deaths, as
well as strain on hospital capacity and operations.
By late March 2022, the number of daily cases had fallen substantially since the January peak,
according to CDC data. Hospitalizations and deaths of patients with COVID-19 have also decreased
as of March 2022. The recent surge associated with the Omicron variant and the rising prevalence
of its new sublineage, BA.2, highlight both the pandemic’s enduring challenges, as well as the
importance of continued monitoring and an agile response to the COVID-19 pandemic.
Over the past year, the nation’s public health response has focused on making COVID-19 vaccines,
testing, and therapeutics more widely available to the U.S. population. In March 2022, the White
House released its National COVID-19 Preparedness Plan—an update to its January 2021 National
Strategy for the COVID-19 Response and Pandemic Preparedness—that announced eﬀorts to increase
the availability of COVID-19 treatments to the public, among other federal activities to respond
to COVID-19.2 However, on March 15, 2022, the White House noted that additional funding was
needed to implement several initiatives in the plan, including to secure suﬃcient booster doses,
variant-speciﬁc vaccines, monoclonal antibody treatments, and antiviral treatments.3 Additionally,
1According to CDC, viruses, such as COVID-19, constantly change through mutation, and new variants are expected to

occur. Sometimes, new variants emerge and disappear, while at other times, new variants persist. First identiﬁed in the
U.S. on December 1, 2021, the Omicron variant superseded the Delta variant to become the dominant COVID-19 strain
circulating in the U.S. during the week ending December 25, 2021. As of April 5, 2022, CDC has reported the presence
of multiple sublineages of the Omicron variant in the U.S., including BA.2; BA.2 became the dominant strain circulating
in the U.S. during the week ending March 26, 2022. Both the Omicron and Delta variants spread faster than previous
COVID-19 variants, though the Omicron variant generally causes less severe disease than the prior variants, according
to CDC. As of March 29, 2022, CDC reported that current vaccines protect against severe illness, hospitalizations, and
deaths due to the Omicron variant, and that some monoclonal antibody treatments are less eﬀective against Omicron’s
BA.2 lineage, though non-monoclonal antibody treatments remain eﬀective against Omicron.
2The White House, National COVID-19 Preparedness Plan (Washington, D.C.: Mar. 2022). This document was issued as an

update to the White House’s previous COVID-19 strategy document. The White House, National Strategy for the COVID-19
Response and Pandemic Preparedness (Washington, D.C.: Jan. 2021). The National COVID-19 Preparedness Plan focuses on
four goals: protecting and treating COVID-19, preparing for new variants, preventing shutdowns, and global vaccination.
Additionally, in April 2022, the White House issued a memorandum charging the Secretary of the Department of
Health and Human Services with coordinating the federal response to the long-term eﬀects of COVID-19. This includes
developing a report on services and mechanisms of support across federal agencies to assist the public with the longterm eﬀects, as well as developing a national research action plan on long COVID—new, returning, or ongoing health
problems 4 or more weeks after an initial case of COVID-19, potentially aﬀecting up to 23 million people in the U.S. For
more information on long COVID, see GAO, Science & Tech Spotlight: Long COVID, GAO-22-105666 (Washington, D.C.: Mar.
2, 2022).
3The White House, Fact Sheet: Consequences of Lack of Funding for Eﬀorts to Combat COVID-19 if Congress Does Not Act.

(Washington, D.C.: Mar. 2022).

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GAO-22-105397

the COVID-19 Uninsured Program, which covered treatment, testing, and vaccination for uninsured
individuals, stopped accepting claims for testing and treatment on March 22, 2022, and for
vaccinations on April 5, 2022, due to insuﬃcient funding.4
Providing the public with safe and eﬀective vaccines to protect against critical illness is crucial to
mitigating the public health and economic impacts of the virus and ending the pandemic. As of
March 26, 2022, about 70 percent of the eligible U.S. population—over 217 million individuals aged
5 years and older—had been fully vaccinated, and approximately 46 percent of fully vaccinated
individuals aged 12 years and older had received a booster dose.5
The federal government has taken several steps to increase access to at-home, rapid tests for
COVID-19, including providing tests to health centers and Medicare-certiﬁed rural health clinics,
as well as directly to households.6 According to the White House, over 260 million free tests
had been delivered to households as of March 2, 2022. In January 2022, the Departments of
Health and Human Services (HHS), Labor, and the Treasury released detailed guidance on the
requirements for private health insurance companies and group health plans to cover over-thecounter COVID-19 tests, and in April 2022 the Centers for Medicare & Medicaid Services expanded
access to free over-the-counter COVID-19 tests for Medicare beneﬁciaries.7 Additionally, the
federal government increased the number of rapid tests, as well as molecular tests, available to
schools and added free federal testing sites across the country in January 2022.8
According to a recent study, self-reported at-home rapid test use generally increased between
August 2021 and March 2022, and peaked in January 2022 during the Omicron-related surge in
cases.9 Increased at-home testing is a positive step, but rapid testing is not always reported to

4The Department of Health and Human Services’ Health Resources and Services Administration covered treatment,

testing, and administering the vaccine for the uninsured through its COVID-19 Uninsured Program. The agency covered
the cost of administering the vaccine for the underinsured through its COVID-19 Coverage Assistance Fund, which also
stopped accepting vaccination claims on April 5, 2022, due to a lack of suﬃcient funds.
5As of April 1, 2022, CDC counts individuals as being fully vaccinated if they received two doses on diﬀerent days

(regardless of time interval) of the two-dose vaccines or received one dose of a single-dose vaccine. CDC counts
individuals as having received a booster dose if they are fully vaccinated and have received another dose of COVID-19
vaccine since August 13, 2021, including those who received booster doses and those who received additional doses.
See CDC, “COVID Data Tracker: COVID-19 Vaccinations in the United States,” accessed April 1, 2022, https://covid.cdc.gov/
covid-data-tracker/#vaccinations_vacc-total-admin-rate-total.
6In January 2022, the White House, in partnership with the U.S. Postal Service, began to distribute 1 billion at-home,

rapid tests, with an initial four free tests—and an additional four tests announced in March 2022—available to each
household.
7State Medicaid programs and the Children’s Health Insurance Program were required to cover at-home COVID-19

tests authorized by the Food and Drug Administration without cost-sharing under guidance issued by the Centers for
Medicare & Medicaid Services in August 2021.

8As of April 1, 2022, the Food and Drug Administration has authorized two types of COVID-19 diagnostic and screening

tests. Rapid antigen tests can be conducted in doctors’ oﬃces, pharmacies, and other health care settings, as well
as in homes or other non-health care settings, and typically provide results in 30 minutes or less. Molecular tests are
considered the “gold standard” for diagnostic testing and typically provide results in 1 to 3 days.
9See B. Rader et al., “Use of At-Home COVID-19 Tests — United States, August 23, 2021–March 12, 2022,” Morbidity

and Mortality Weekly Report, vol. 71, no. 13 (Apr. 1, 2022). This analysis relied on self-reported survey data from a
nonprobability-based sample of U.S. adults.

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GAO-22-105397

health oﬃcials. As a result, health oﬃcials may have an incomplete picture of testing results across
the country.10
In addition to COVID-19’s devastating health eﬀects, the pandemic has also had far reaching
eﬀects on the U.S. economy. The U.S. has continued to experience both lower levels of
employment relative to the prepandemic period and, amid supply chain disruptions, rising U.S.
consumer prices.11 While inﬂation indicators suggest that inﬂation could be somewhat higher and
persist for somewhat longer than previously expected, labor and employment indicators reﬂect
general improvement from November 2021 through March 2022. Supply chain disruptions have
resulted in shortages in multiple sectors, including for certain critical products such as computer
chips—which are used in a wide range of consumer goods—as well as testing materials and other
medical supplies for the COVID-19 response.
The federal government has taken some steps to help address such shortages. For example,
the White House issued a report in June 2021 providing a framework for closing certain supply
chain vulnerabilities.12 Similarly, HHS—with the input of federal partners—released its National
Strategy for a Resilient Public Health Supply Chain in September 2021.13 See the Public Health Supply
Chain Resilience enclosure in appendix I for more information on recent eﬀorts to implement this
strategy. In February 2022, HHS released a report describing progress made over the past year to
strengthen the public health and medical supply chain and industrial base.14
Since March 2020, Congress has provided about $4.6 trillion through the CARES Act and other
laws that were enacted to fund federal eﬀorts to help the nation respond to and recover from
the COVID-19 pandemic (COVID-19 relief laws).15 Ongoing implementation of the provisions in
10In October 2021, we reported that if rapid antigen testing continues to expand, especially with the increasing

availability of over-the-counter tests, the ongoing limited reporting of antigen test results could reduce the ability of
public health oﬃcials to more comprehensively monitor and eﬀectively respond to the COVID-19 pandemic. These
issues highlight the importance of HHS and CDC eﬀorts aimed at improving reporting and exploring additional
approaches for surveillance.

11According to the Department of Labor’s Consumer Price Index, which is one measure of the prices of consumer goods

and services, prices increased 7.9 percent between February 2021 and February 2022, with larger increases recorded
in the prices for certain items, such as gasoline. According to the Department of Labor, this represents the largest yearover-year increase since the period ending January 1982.

12The White House, Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based
Growth (Washington, D.C.: June 2021). This report speciﬁcally examined the supply chains of four critical products:
semiconductor manufacturing and advanced packaging, large capacity batteries, critical minerals and materials, and
pharmaceuticals and active pharmaceutical ingredients.
13HHS, National Strategy for a Resilient Public Health Supply Chain (Washington, D.C.: July 2021). This strategy was

developed in response to Executive Order 14001, which directed the Department of Defense, Department of Homeland
Security, and HHS, among others, to develop a supply chain resilience strategy to include an approach to design, build,
and sustain long-term capability in the U.S. to manufacture supplies for future pandemics and biological threats. A
Sustainable Public Health Supply Chain, Exec. Order No. 14001, § 4, 86 Fed. Reg. 7,219, 7,220-21 (Jan. 26, 2021).

14HHS, Public Health Supply Chain and Industrial Base One-Year Report In Response to Executive Order 14017 (Washington,
D.C.: Feb. 2022). Among other things, the report outlines actions HHS has taken or plans to take to strengthen the public
health supply chain and industrial base for personal protective equipment and durable medical equipment, testing and
diagnostics, and pharmaceuticals—including therapeutics, vaccines, and active pharmaceutical ingredients.
15For the purposes of our review, the COVID-19 relief laws consist of the six laws providing comprehensive relief across

federal agencies and programs that Treasury uses to report COVID-19 spending. These six laws are the American Rescue
Plan Act of 2021 (ARPA), Pub. L. No. 117-2, 135 Stat. 4; Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, div.

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GAO-22-105397

the COVID-19 relief laws, as well as the size and scope of these eﬀorts—from distributing funding
to implementing new programs—continue to demand strong accountability and oversight.
Furthermore, the government must remain vigilant and agile to address additional potential
challenges while it continues to respond to the evolving COVID-19 pandemic.
The CARES Act includes a provision for us to report regularly on the federal response to the
pandemic. Speciﬁcally, the act requires us to monitor and oversee the federal government’s eﬀorts
to prepare for, respond to, and recover from the COVID-19 pandemic.16 This comprehensive
th

report is our 10

recurring oversight report in response to this provision.17

This report includes 33 enclosures addressing a range of federal programs and activities across
the government concerning public health and the economy (see appendix I). In these enclosures,
we are making 15 new recommendations to federal agencies in areas including public health
data modernization and industrial base expansion, as well as one matter for congressional
consideration related to payment integrity for COVID-19 spending. Figure 1 lists these enclosures
by topic area and highlights those with new recommendations.

M and N, 134 Stat. 1182 (2020); Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139,
134 Stat. 620 (2020); CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020); Families First Coronavirus Response Act, Pub.
L. No. 116-127, 134 Stat. 178 (2020); and the Coronavirus Preparedness and Response Supplemental Appropriations Act,
2020, Pub. L. No. 116-123, 134 Stat. 146.
16Pub. L. No. 116-136, § 19010, 134 Stat. at 579–81.

17Our recurring oversight reports are GAO, COVID-19: Signiﬁcant Improvements are Needed for Overseeing Relief Funds and

Leading Responses to Public Health Emergencies, GAO-22-105291 (Washington, D.C.: Jan. 27, 2022); COVID-19: Additional
Actions Needed to Improve Accountability and Program Eﬀectiveness of Federal Response, GAO-22-105051 (Washington,
D.C.: Oct. 27, 2021); COVID-19: Continued Attention Needed to Enhance Federal Preparedness, Response, Service Delivery, and
Program Integrity, GAO-21-551 (Washington, D.C.: July 19, 2021); COVID-19: Sustained Federal Action Is Crucial as Pandemic
Enters Its Second Year, GAO-21-387 (Washington, D.C.: Mar. 31, 2021); COVID-19: Critical Vaccine Distribution, Supply Chain,
Program Integrity, and Other Challenges Require Focused Federal Attention, GAO-21-265 (Washington, D.C.: Jan. 28, 2021);
COVID-19: Urgent Actions Needed to Better Ensure an Eﬀective Federal Response, GAO-21-191 (Washington, D.C.: Nov. 30,
2020); COVID-19: Federal Eﬀorts Could Be Strengthened by Timely and Concerted Actions, GAO-20-701 (Washington, D.C.:
Sept. 21, 2020); COVID-19: Brief Update on Initial Federal Response to the Pandemic, GAO-20-708 (Washington, D.C.: Aug. 31,
2020); and COVID-19: Opportunities to Improve Federal Response and Recovery Eﬀorts, GAO-20-625 (Washington, D.C.: June
25, 2020).

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GAO-22-105397

Figure 1: Report Enclosures by Topic Area

In addition to the nine previously issued recurring oversight reports, as of April 1, 2022, we have
issued 145 targeted COVID-19-related reports, testimonies, and science and technology spotlights
in areas such as economic disaster loans, aviation operations, veterans nursing homes, and
Medicaid telehealth use during the pandemic. On March 17, 2022, we testiﬁed on federal agencies’
oversight of COVID-19 relief funds, including improper payments and fraud risk management.18
We also have reviews ongoing in other areas. See appendix II for highlights pages from our
recently issued work on COVID-19 and appendix III for a list of our ongoing work related to
COVID-19.
Across our body of COVID-19-related work, we have made 279 recommendations to federal
agencies and have raised 15 matters for congressional consideration to improve the federal
government’s response eﬀorts as of March 2022. This includes 10 new matters intended to
enhance the transparency and accountability of federal spending that we raised in our March 2022
testimony; see appendix IV for additional information on these matters. In addition, in January
2022 we designated HHS’s leadership and coordination of a range of public health emergencies

18The testimony focused on our assessment of (1) federal agencies' application of fundamental internal controls and

ﬁnancial and fraud risk management practices for COVID-19 spending, and (2) opportunities for Congress to improve
these practices during emergencies and national crises. See GAO, Emergency Relief Funds: Signiﬁcant Improvements Are
Needed to Ensure Transparency and Accountability for COVID-19 and Beyond, GAO-22-105715 (Washington, D.C.: Mar. 17,
2022).

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GAO-22-105397

as high risk.19 As of March 2022, agencies had fully or partially addressed 109 of our COVID-19related recommendations (39 percent); of these, agencies had fully addressed 61 and partially
addressed 48 recommendations.20 For example, in response to one of our recommendations,
HHS required nursing homes to report the COVID-19 vaccination status of residents and staﬀ.
This information is now publicly available online for over 15,000 Medicare and Medicaid certiﬁed
nursing homes, aiding in transparency and identifying facilities that may be in need of additional
assistance and resources.21
See ﬁgure 2 for an overview of the status of our COVID-19-related recommendations by
department. For a complete list of our COVID-related products, see https://www.gao.gov/
coronavirus.

19We designate federal programs and operations as “high risk” due to their vulnerabilities to fraud, waste, abuse, and

mismanagement, or because they need transformation. For more information on programs and operations on our HighRisk List, see https://www.gao.gov/high-risk-list.
20We consider a recommendation to be addressed when the target agency has completed the implementation of

the recommendation. We consider a recommendation to be partially addressed when the agency is in the process of
developing an action, has started but not yet completed or has partially implemented an action, or has taken steps
toward implementation.

21In March 2021, we recommended that the Secretary of HHS ensure that the Director of CDC collects data speciﬁc to

the COVID-19 vaccination rates in nursing homes and makes these data publicly available to better ensure transparency
and that the necessary information is available to improve ongoing and future vaccination eﬀorts for nursing home
residents and staﬀ.

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Figure 2: Status of Prior GAO Recommendations from COVID-19-Related Work, by Federal Department or Agency,
as of Mar. 2022

Note: For this ﬁgure, recommendations made to the Internal Revenue Service are counted toward the total of
recommendations made to the Department of the Treasury.

Given the government-wide scope of this report, we undertook a variety of methodologies to
complete our work, including examining a wide range of data sources and conducting interviews
and obtaining information from federal and state oﬃcials and related stakeholders, such as state
and local health oﬃcials and airline industry representatives. We also examined federal laws,
agency documents, and guidance, among other information. In each enclosure, we include a
summary of the methodology speciﬁc to the work conducted.
We conducted this performance audit from August 2021 to April 2022 in accordance with generally
accepted government auditing standards. Those standards require that we plan and perform
the audit to obtain suﬃcient, appropriate evidence to provide a reasonable basis for our ﬁndings
and conclusions based on our audit objectives. We believe the evidence obtained provides a
reasonable basis for our ﬁndings and conclusions based on our audit objectives.

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Background
The COVID-19 Pandemic’s Eect on Public Health
The COVID-19 pandemic continues to have devastating eﬀects on public health following the
circulation of the Omicron variant, which was associated with record levels of COVID-19 cases and
hospitalizations, strain on hospital capacity and operations, and increased deaths in early 2022.
Cases. COVID-19 cases surged nationwide in December 2021 and January 2022, coinciding with
the Omicron variant’s rise as the dominant COVID-19 strain, according to CDC estimates. The
number of new reported COVID-19 cases peaked in mid-January 2022 at over 800,000 cases per
day—more than three times the January 2021 peak. New reported COVID-19 cases then began
to fall, averaging under 30,000 cases per day between March 11, 2022, and March 24, 2022. See
ﬁgure 3 for 7-day U.S. case averages since March 2020. Between March 18, 2022, and March 24,
2022, the number of reported new COVID-19 cases per day, on average, increased in nine of 52
jurisdictions, held steady in three jurisdictions, and decreased in 40 jurisdictions, compared to the
previous 7 days.22
Figure 3: 7-Day Averages of Reported COVID-19 Cases in the U.S., Mar. 1, 2020–Mar. 24, 2022

Note: COVID-19 cases reported from states and territories include conﬁrmed and probable cases. Beginning April 14, 2020,
states could include probable as well as conﬁrmed COVID-19 cases in their reports to CDC. Previously, counts included only
conﬁrmed cases. According to CDC, the actual number of cases is unknown for a variety of reasons, including that people who
have been infected may not have been tested or may not have sought medical care. See CDC, “COVID Data Tracker: Trends

22The 52 states and jurisdictions include all 50 states; Washington, D.C.; and New York, N.Y. COVID-19 case counts for

New York, N.Y., are reported separately from the state of New York. We deﬁned states as holding steady if they had less
than a 5 percent increase or decrease in the average of the 7-day moving averages of new cases from March 18-24,
2022 compared to March 11-17, 2022. This is a change from our prior reports where we used a 1 percent threshold for
comparing average daily percent changes in the 7-day moving averages—a change we made because of less frequent
state reporting of case count data to CDC. See CDC, “United States COVID-19 Cases and Deaths by State Over Time,”
accessed on April 1, 2022, https://data.cdc.gov/Case-Surveillance/United-States-COVID-19-Cases-and-Deaths-by-Stateo/9mfq-cb36. These COVID-19 case counts may change as new or updated data are reported by states.

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in Number of COVID-19 Cases and Deaths in the U.S. Reported to CDC, by State or Territory,” accessed April 1, 2022, https://
covid.cdc.gov/covid-data-tracker/#trends_dailycases

Hospitalizations. HHS data show that COVID-19-associated hospitalizations sharply increased
in late December 2021 and January 2022, following the surge in cases as described above.
Hospitalizations then decreased through March 2022 (see ﬁg. 4).23 Similarly, the proportion of
emergency department visits with an accompanying COVID-19 diagnosis had fallen to less than 1
percent by late March 2022, a decrease from the record proportion of COVID-19-related patient
visits in January 2022, according to CDC data.24
Figure 4: Reported Daily Hospitalizations and 7-Day Averages of Patients with Conﬁrmed COVID-19 in the U.S.,
Aug. 1, 2020–Mar. 27, 2022

Note: We included only hospitalizations with conﬁrmed COVID-19 cases (rather than conﬁrmed and suspected COVID-19) to be
consistent with the Centers for Disease Control and Prevention’s COVID Data Tracker page on hospitalizations. Conﬁrmation of
the COVID-19 diagnosis is based on laboratory test results; counts in this ﬁgure may include patients with additional diagnoses.
August 2020 was the ﬁrst full month following HHS’s transition to its current hospital data collection process. We calculated the
7-day average as the average number of the adult and pediatric hospitalizations on a given date and each of the six previous
days. See HHS, “COVID-19 Reported Patient Impact and Hospital Capacity by State Timeseries,” accessed March 28, 2022,
https://healthdata.gov/Hospital/COVID-19-Reported-Patient-Impact-and-Hospital-Capa/g62h-syeh.

Surges in COVID-19 cases have stressed hospital systems and negatively aﬀected health care
and public health infrastructure, according to CDC. Increased COVID-19 infection rates among
hospitalized patients have required hospitals to expand the use of resource-intensive infection
prevention protocols, treat patients whose underlying medical conditions have experienced

23HHS, “COVID-19 Reported Patient Impact and Hospital Capacity by State Timeseries,” accessed March 28, 2022, https://

healthdata.gov/Hospital/COVID-19-Reported-Patient-Impact-and-Hospital-Capa/g62h-syeh.

24CDC, “Percentage of Emergency Department visits with Diagnosed COVID-19 in United States, All Ages,” accessed April

1, 2022, https://covid.cdc.gov/covid-data-tracker/#ed-visits. Data are from the National Syndromic Surveillance Program.
For insights into COVID-19 trends, CDC monitors a subset of emergency departments in 50 states to identify visits that
have a COVID-19 diagnosis associated with them.

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increased disease severity because of COVID-19, and adapt to hospital staﬃng shortages due to
personnel infection and burnout.25
Coinciding with the Omicron-related surge in cases, the percentage of hospitalized patients with
suspected or conﬁrmed COVID-19 rose to nearly 27 percent in January 2022, according to HHS
reporting, compared to 10 percent at the end of November 2021, before the Omicron variant was
identiﬁed in the U.S.26 This increase in COVID-19 infection rates among patients in January 2022,
similar to that associated with the Delta variant in 2021, highlights how new COVID-19 variants
have aﬀected hospital and public health systems over the last 2 years, and how future variants
may pose similar risks.
Deaths. Although CDC has reported that the Omicron variant generally causes less severe
disease than prior variants, the rapid spread and large volume of cases in December 2021 and
January 2022 coincided with increased COVID-19-associated deaths in January and February
2022, according to provisional data from CDC’s National Center for Health Statistics.27 In late
January 2022, the number of new reported COVID-19-associated deaths averaged about 20,000
per week—the highest since December 2020 and January 2021. COVID-19 deaths then decreased
through March 2022, following similar trends in cases and hospitalizations.
The number of deaths in the U.S. has been higher during the pandemic than the expected number
of deaths based on data from 2019 and earlier, according to provisional data from CDC’s National
Center for Health Statistics. From early February 2020 through March 5, 2022, it was estimated
that at least 900,000 more deaths occurred from COVID-19 and other causes than would normally
be expected.28

COVID-19 Vaccines and Therapeutics
The federal government continues to expand the availability of COVID-19 vaccines and
therapeutics to the U.S. population to mitigate the pandemic’s eﬀects on public health.

25Many people hospitalized with conﬁrmed COVID-19 will have additional diagnoses, either related to COVID-19 or not,

each of which may contribute to their need for hospitalization. Examples of resource-intensive protocols may include
placing patients with COVID-19 in single-person rooms or designated units, providing personal protective equipment for
healthcare personnel, and frequent cleaning and disinfection of facilities.

26HHS, “COVID-19 Reported Patient Impact and Hospital Capacity by State Timeseries,” accessed March 28, 2022, https://

healthdata.gov/Hospital/COVID-19-Reported-Patient-Impact-and-Hospital-Capa/g62h-syeh.

27CDC’s National Center for Health Statistics COVID-19 death counts in the U.S. are based on provisional counts from

death certiﬁcate data, which do not distinguish between laboratory-conﬁrmed and probable COVID-19 deaths. Data
are provisional and subject to updates. In more recent weeks, the data are more likely to be incomplete due to an
average delay of 2 weeks (a range of 1–8 weeks or longer) for death certiﬁcate processing. See CDC, National Center for
Health Statistics, “Provisional Death Counts for Coronavirus Disease 2019 (COVID-19),” accessed April 4, 2022, https://
www.cdc.gov/nchs/nvss/vsrr/covid19/index.htm.
28This number represents the number of deaths from all causes reported in the U.S. in a given week from February

2020 through March 5, 2022, that exceeded the upper-bound threshold of expected deaths calculated by CDC’s National
Center for Health Statistics on the basis of variation in mortality in prior years. As in prior reports, we continue to report
excess deaths based on the more conservative upper bound estimate of expected deaths. For further details of CDC’s
methodology, see CDC, National Center for Health Statistics, “Excess Deaths Associated with COVID-19,” accessed April 1,
2022, https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm.

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As of April 1, 2022, three COVID-19 vaccines—developed by Janssen, Moderna, and Pﬁzer—were
available in the U.S. The Pﬁzer vaccine was licensed by the Food and Drug Administration (FDA) for
individuals aged 16 and older (Comirnaty) and was also available for individuals aged 5 years and
older under an emergency use authorization.29 The Moderna vaccine was licensed for individuals
aged 18 years and older (Spikevax), and the Janssen vaccine was authorized for individuals aged 18
and older.30
FDA has also authorized booster doses for all three available COVID-19 vaccines. Speciﬁcally, as
of April 1, 2022, FDA had authorized a booster dose of the Pﬁzer vaccine for individuals aged 12
and older and booster doses of the Janssen and Moderna vaccines for individuals aged 18 and
older.31 Additionally, on March 29, 2022, FDA authorized a second booster dose of the Pﬁzer and
Moderna vaccines for individuals aged 50 and older, as well as a second booster dose of the Pﬁzer
and Moderna vaccines for certain immunocompromised individuals aged 12 and older and aged
18 and older, respectively.32 See table 1 for estimated U.S. COVID-19 vaccinations by age group.

29Typically, FDA must license a vaccine before it can be marketed in the U.S. See 42 U.S.C. § 262. However, during

an emergency, FDA may temporarily allow the use of unlicensed vaccines through an emergency use authorization,
provided certain statutory criteria are met. See 21 U.S.C. § 260bbb-3. The Pﬁzer vaccine was developed in collaboration
with BioNTech.
30Janssen Pharmaceutical Companies are a part of Johnson & Johnson.

31As of April 1, 2022, the Pﬁzer and Moderna booster doses were authorized to be administered at least 5 months

after completion of the primary vaccination series (two doses for most individuals), and the Janssen booster dose was
authorized to be administered at least 2 months after administration of the primary vaccination series (one dose).
FDA also authorized a “mix and match” booster approach for eligible individuals following completion of the primary
vaccination series with a diﬀerent available COVID-19 vaccine. For additional information on vaccine distribution, see
GAO, COVID-19: HHS Agencies’ Planned Reviews of Vaccine Distribution and Communication Eﬀorts Should Include Stakeholder
Perspectives, GAO-22-104457 (Washington, D.C.: Nov. 4, 2021).
32In March 2022, CDC also recommended that adults who received a primary and booster dose of the Janssen vaccine

receive a second booster dose of the Pﬁzer or Moderna vaccine.

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Table 1: Reported COVID-19 Vaccinations by Age Group in the U.S., as of Mar. 26, 2022
Percentage of population

Percentage of fully vaccinated population

Fully vaccinated

Booster dose

5 years of age and older

69.6

Not applicable

12 years of age and older

73.9

46.4

18 years of age and older

75.4

48.2

65 years of age and older

89.0

67.2

Total

65.5

44.7

b
c

Source: Centers for Disease Control and Prevention (CDC). | GAO-22-105397

Note: See CDC, “COVID Data Tracker: COVID-19 Vaccinations in the United States,” accessed April 1, 2022, https://covid.cdc.gov/
covid-data-tracker/#vaccinations_vacc-total-admin-rate-total.
a

As of April 1, 2022, CDC counts individuals as being fully vaccinated if they received two doses on diﬀerent days (regardless
of time interval) of the two-dose vaccines or received one dose of the single-dose vaccine. According to CDC, the number of
people who are fully vaccinated may be under-estimated because CDC is not always able to link information on subsequent
vaccine doses.
b

The count of people who received a booster dose includes anyone who is fully vaccinated and has received another dose of
COVID-19 vaccine since August 13, 2021, including those who received booster doses and those who received additional doses.
According to CDC, the number of people who have received a booster dose may be under-estimated because CDC is not always
able to link information on subsequent vaccine doses.
c

As of April 1, 2022, children aged 5 to 11 were not eligible to receive a booster dose.

According to CDC, getting vaccinated and staying up to date with COVID-19 vaccines—including
getting a booster dose when eligible—is the best way to protect against COVID-19, including
the Omicron variant, and reduce the likelihood of new variants emerging.33 CDC surveillance
data suggest that rates of COVID-19 cases, COVID-19-associated hospitalizations, and COVID-19associated deaths are higher among unvaccinated people than vaccinated people.34 However,
CDC has reported that the eﬀectiveness of COVID-19 vaccines may decrease over time, particularly
among people aged 65 or older.

33As of April 1, 2022, CDC recommended that everyone 5 years and older remain up to date on their vaccinations by

getting their primary series of COVID-19 vaccines and receiving a booster dose when eligible. As of the same date,
getting a second booster dose was not necessary to be considered up to date on COVID-19 vaccines. See CDC, “Stay Up
to Date with Your COVID-19 Vaccines,” accessed April 1, 2022, https://www.cdc.gov/coronavirus/2019-ncov/vaccines/stayup-to-date.html
34Data on COVID-19 cases and COVID-19-associated deaths by vaccination status were from surveillance data from

about half of U.S. states, representing over 60 percent of the U.S. population. See CDC, “Rates of COVID-19 Cases and
Deaths by Vaccination Status,” accessed April 1, 2022, https://covid.cdc.gov/covid-data-tracker/#rates-by-vaccinestatus. Data on COVID-19-associated hospitalizations are from CDC’s COVID-19-Associated Hospitalization Surveillance
Network (COVID-NET), a population-based surveillance system that includes 99 counties in 14 states; ﬁndings should
not be generalized nationally. See CDC, “Rates of laboratory-conﬁrmed COVID-19 hospitalizations by vaccination status,”
accessed April 1, 2022, https://covid.cdc.gov/covid-data-tracker/#covidnet-hospitalizations-vaccination. Surveillance data
are preliminary and subject to change as more data become available.

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Booster doses can increase the immune response to COVID-19. According to CDC, people who
were fully vaccinated and had received boosters experienced lower COVID-19 case rates compared
to vaccinated people who had not received boosters.35 Additionally, between October 2021
and February 2022, adults in the U.S. who were fully vaccinated and boosted experienced lower
COVID-19 hospitalization rates compared to both unvaccinated adults and fully vaccinated adults
who had not received booster doses, particularly during the Omicron-related surge (see ﬁg. 5).
Similarly, a CDC analysis found that those who had received booster doses had a lower probability
of COVID-19-associated emergency department and urgent care visits, compared to unvaccinated
individuals and those who had received the vaccine but had not received boosters.36 The pace
of booster administration has slowed over time, and uptake across the U.S. has varied. See the
Vaccine Distribution and Administration enclosure for more information on COVID-19 vaccination
eﬀorts, including the administration of booster doses.
Figure 5: Age-Adjusted Rates of COVID-19-Associated Hospitalizations by Vaccination Status in Adults Aged 18
Years and Older, Oct. 2021–Feb. 2022

Note: Hospitalization data are from CDC’s COVID-19-Associated Hospitalization Surveillance Network (COVID-NET), which
generally includes data from 99 counties in 14 states, representing 10 percent of the U.S. population, and thus should not
be generalized nationally. Additional data on vaccination status for individual cases are collected and available from COVID35For example, see CDC, “Rates of COVID-19 Cases and Deaths by Vaccination Status,” accessed April 1, 2022, https://

covid.cdc.gov/covid-data-tracker/#rates-by-vaccine-status. Data on COVID-19 cases by booster status between
September 19, 2021 and February 19, 2022, were from surveillance data from 26 U.S. jurisdictions, representing over 60
percent of the U.S. population.
36See M. G. Thompson et al., “Eﬀectiveness of a Third Dose of mRNA Vaccines Against COVID-19–Associated Emergency

Department and Urgent Care Encounters and Hospitalizations Among Adults During Periods of Delta and Omicron
Variant Predominance — VISION Network, 10 States, August 2021–January 2022,” Morbidity and Mortality Weekly Report,
vol. 71, no. 4 (Jan. 28, 2022). This analysis only included people who had received Pﬁzer or Moderna vaccines.

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NET areas in 13 of the 14 states. For fully vaccinated persons with an additional or booster dose, rates reﬂect COVID-19associated hospitalizations among fully vaccinated persons with a positive SARS-CoV-2 test collected 14 or more days after
receipt of an additional or booster dose. For fully vaccinated persons without a booster dose, rates reﬂect COVID-19-associated
hospitalizations among fully vaccinated persons with a positive SARS-CoV-2 test collected 14 or more days after either the
second dose of a two-dose vaccine series or after one dose of a single dose vaccine, who have not received an additional or
booster dose. For unvaccinated persons, rates reﬂect COVID-19-associated hospitalizations among persons with a positive
SARS-CoV-2 test who have no record of receiving any COVID-19 vaccine. According to CDC, these data are preliminary and
subject to change as more data become available. See CDC, “Rates of laboratory-conﬁrmed COVID-19 hospitalizations by
vaccination status,” accessed April 1, 2022, https://covid.cdc.gov/covid-data-tracker/#covidnet-hospitalizations-vaccination.

In addition to vaccines, FDA has also authorized new COVID-19 antiviral drugs to combat the virus.
In late December 2021, FDA authorized two oral antiviral drugs—Molnupiravir, developed by
Merck and Ridgeback Biotherapeutics, and Paxlovid, developed by Pﬁzer—for use in individuals
aged 18 and older at high risk of disease progression, such as those with certain underlying
medical conditions like diabetes or cancer. Both drugs have been shown to reduce the risk of
hospitalization and death in high-risk adults with COVID-19, and according to CDC, are expected
to be active against all circulating variants, including Omicron. On February 11, 2022, FDA also
authorized a new monoclonal antibody treatment—bebtelovimab, developed by Eli Lilly and
Company—that works against the Omicron variant; the federal government purchased 600,000
courses of this treatment to prevent severe outcomes from COVID-19.37
In March 2022, the White House announced eﬀorts to improve access to and availability of
COVID-19 treatments. For example, beginning in March 2022, “One-Stop Test to Treat” locations
test people for COVID-19 and—if they test positive and are eligible for treatment—provide
and ﬁll a prescription for free antiviral pills on the spot. Participating Test to Treat sites include
pharmacy-based clinics, community health centers, long-term care facilities, and Veterans Health
Administration and Department of Defense facilities across the country.38 Also in March 2022, the
White House launched COVID.gov, a website that allows individuals to locate COVID-19 vaccines,
tests, high-quality masks, and treatment—including Test to Treat sites—near them.

The COVID-19 Pandemic and the Economy
The overall national economy has continued to recover from the economic downturn in early 2020
sparked by the COVID-19 pandemic, based on data available in early April 2022. The labor market
improved in early 2022, but remained weaker than in the prepandemic period. Weekly initial
claims for regular unemployment insurance beneﬁts remained generally similar to prepandemic
levels in January through mid-March 2022. See the Unemployment Insurance Programs enclosure
in appendix I for more information. Moreover, in March 2022 the employment-to-population ratio,
which measures the share of the population employed, increased 0.2 percentage points from the
37FDA has previously authorized monoclonal antibodies—laboratory-made proteins that mimic the immune system’s

ability to ﬁght oﬀ harmful pathogens such as viruses—to treat COVID-19, though variants can aﬀect the eﬀectiveness
of certain treatments. In January 2022, FDA revised the authorizations for two of these treatments—bamlanivimab and
etesevimab (administered together) and REGEN-COV (casirivimab and imdevimab)—to limit their use based on data
showing these treatments are highly unlikely to be active against the Omicron variant. In April 2022, FDA revoked the
authorization for a third treatment—sotrovimab—as data show this treatment is unlikely to be eﬀective against the
Omicron BA.2 variant.
38The American Medical Association has criticized the Test to Treat initiative, suggesting that pharmacy-based clinics

may be unable to suﬃciently consider patients’ medical history, evaluate drug interactions, and manage possible
negative reactions when prescribing antivirals for COVID-19.

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previous month, to 60.1 percent—nearing, but still slightly below, pre-pandemic levels (see ﬁg. 6).39
See the Economic Indicators enclosure in appendix I for more information.
Figure 6: Employment-to-Population Ratio, Jan. 2020–Mar. 2022

However, the pandemic continues to present lingering economic challenges that complicate
long-term recovery eﬀorts, such as disruptions in global supply chains, as demand for goods has
increased rapidly during the economic recovery. Increased demand and limited supply have, in
turn, contributed to higher inﬂation. Indicators of inﬂation have generally increased across most
of our inﬂation indicators since spring 2021, suggesting that inﬂation could be somewhat higher,
and last for somewhat longer, than previously expected. The extent to which higher inﬂation
will persist for a longer period of time is uncertain and depends on many factors, such as global
supply chain issues or how the pandemic inﬂuences consumer demand.
In response to elevated inﬂation levels, the Federal Reserve raised interest rates on March 16,
2022, and noted that it anticipates making additional adjustments to U.S. monetary policy.40 On
March 31, 2022, the White House announced a plan to decrease gas prices by increasing domestic
production of oil and releasing oil reserves.

39The employment-to-population ratio represents the number of employed people as a percentage of the civilian

noninstitutional population 16 years and older. The ratio is subject to misclassiﬁcation errors with respect to consistently
identifying workers as employed and absent from work or unemployed on temporary layoﬀ.
40The Federal Reserve System’s Federal Open Market Committee aims for inﬂation of 2 percent on average over

time and aims to achieve rates of inﬂation that are above 2 percent for some time after periods in which inﬂation is
persistently below 2 percent.

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Federal COVID-19 Funding and Spending
As of February 28, 2022, about $4.6 trillion in relief funds had been provided to fund response and
recovery eﬀorts for—as well as to mitigate the public health, economic, and homeland security
eﬀects of—the COVID-19 pandemic from the six COVID-19 relief laws.41
As of February 28, 2022, the most recent date for which government-wide information was
available at the time of our analysis, the federal government had obligated a total of $4.2 trillion
and expended $3.6 trillion of those funds, as reported by federal agencies to the Department
of the Treasury’s Governmentwide Treasury Account Symbol Adjusted Trial Balance System.42
Obligations and expenditures relative to the amounts provided through COVID-19 relief laws
have varied over time, as new relief laws have provided additional relief funds and as the federal
government has obligated and expended those funds (see ﬁg. 7).

41Total budgetary resources, reported to Treasury’s Governmentwide Treasury Account Symbol Adjusted Trial Balance

System, reﬂect appropriations, as well as transfers, adjustments, recoveries, rescissions, and returns of unused
indeﬁnite appropriations.

42An obligation is a deﬁnite commitment that creates a legal liability of the U.S. government for the payment of

goods and services ordered or received, or a legal duty on the part of the U.S. government that could mature into a
legal liability by virtue of actions on the part of another party that are beyond the control of the U.S. government. An
expenditure is the actual spending of money, or an outlay. Expenditures include some estimates, such as estimated
subsidy costs for direct loans and loan guarantees. Increased spending in Medicaid and Medicare is not accounted for in
the funding provided by the COVID-19 relief laws. Federal agencies use the Governmentwide Treasury Account Symbol
Adjusted Trial Balance System to report proprietary ﬁnancial reporting and budgetary execution information to Treasury.

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Figure 7: Percentage of COVID-19 Relief Funding Obligated and Expended, July 31, 2020–Feb. 28, 2022

Notes: Funding and spending amounts shown are based on trial balance information reported to the Department of the
Treasury’s Governmentwide Treasury Account Symbol Adjusted Trial Balance System. The percentages shown represent the
portions of funds available as of each date shown that had been obligated and expended. Data as of October 31, 2021, were
not available because agencies are not required to report October trial balance information. Funding has generally increased
over time and could increase in the future for programs with indeﬁnite appropriations (i.e., appropriations that, at the time of
enactment, are for an unspeciﬁed amount). Prior to September 30, 2021, we reported funding based on appropriation warrant
information provided by Treasury. The total amount we reported as of September 30, 2021, decreased from the amount we
reported as of August 31, 2021, mostly due to the return of unused indeﬁnite appropriations to the Treasury at the end of ﬁscal
year 2021 by the Internal Revenue Service and the Department of Labor. To account for this and other actions aﬀecting funding
amounts for each activity, we used total budgetary resources reported to Treasury’s Governmentwide Treasury Account Symbol
Adjusted Trial Balance System starting with September 2021. Total budgetary resources, as opposed to the previously reported
appropriation warrant information provided by Treasury, reﬂect appropriations, as well as transfers, adjustments, recoveries,
rescissions, and returns of unused indeﬁnite appropriations. Therefore, amounts can ﬂuctuate from month to month.

An obligation is a deﬁnite commitment that creates a legal liability of the U.S. government for
the payment of goods and services ordered or received, or a legal duty on the part of the U.S.
government that could mature into a legal liability by virtue of actions on the part of another party
that are beyond the control of the U.S. government. An expenditure is the actual spending of
money, or an outlay. Expenditures reﬂected in the percentages shown include some estimates,
such as estimated subsidy costs for direct loans and loan guarantees. Increased spending in
Medicaid and Medicare is not accounted for in the funding provided by the COVID-19 relief laws.
Under Oﬃce of Management and Budget guidance, federal agencies were not directed to report
COVID-19 related obligations and expenditures until July 2020.

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The nine major spending areas shown in table 2 represent $3.8 trillion, or 83 percent, of the total
amounts provided. For these nine spending areas, agencies reported obligations totaling $3.5
trillion and expenditures totaling $3.1 trillion as of February 28, 2022. Table 2 provides additional
details on budgetary resources, obligations, and expenditures of government-wide COVID-19 relief
funds, including the nine major spending areas as of February 28, 2022.

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Table 2: COVID-19 Relief Funding and Spending as of Feb. 28, 2022
Total budgetary resources Total obligations Total expenditures
($ in billions)
($ in billions)
($ in billions)

Major spending area
Economic Impact Payments
(Department of the Treasury)

871.5

850.3

Business Loan Programs
(Small Business Administration)

838.0

828.2

827.8

Unemployment Insurance
(Department of Labor)

725.3

723.4

673.2

Coronavirus State and Local Fiscal Recovery
Funds
(Department of the Treasury)

350.0

245.4

Public Health and Social Services Emergency
Fund
(Department of Health and Human Services)

345.7

301.0

226.1

278.1

259.9

59.8

Coronavirus Relief Fund
(Department of the Treasury)

150.0

149.9

Supplemental Nutrition Assistance Programs
(Department of Agriculture)

117.1

80.8

79.5

97.0

80.7

27.5

Other areas

802.1

638.4

487.9

4,574.4

4,158.1

3,627.5

Education Stabilization Fund
(Department of Education)

Disaster Relief Fund
(Department of Homeland Security)
d

Total

Source: GAO analysis of data from the Department of the Treasury and applicable agencies. | GAO-22-105397

Notes: Total budgetary resources, obligations, and expenditure data shown for the major spending areas are based on data
reported by applicable agencies to Treasury’s Governmentwide Treasury Account Symbol Adjusted Trial Balance System.
Each spending area may include multiple programs. Total budgetary resources reﬂect the amount of funding made available
for the COVID-19 response under the American Rescue Plan Act of 2021 (ARPA), Pub. L. No. 117-2, 135 Stat. 4; Consolidated
Appropriations Act, 2021, Pub. L. No. 116-260, div. M and N, 134 Stat. 1182 (2020); Paycheck Protection Program and Health
Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620 (2020); CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020); Families
First Coronavirus Response Act, Pub. L. No. 116-127, 134 Stat. 178 (2020); and Coronavirus Preparedness and Response
Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134 Stat. 146. Total budgetary resources reﬂect appropriations, as
well as transfers, adjustments, recoveries, rescissions, and returns of unused indeﬁnite appropriations.
An obligation is a deﬁnite commitment that creates a legal liability of the U.S. government for the payment of goods and
services ordered or received, or a legal duty on the part of the U.S. government that could mature into a legal liability by
virtue of actions on the part of another party that are beyond the control of the U.S. government. An expenditure is the actual
spending of money, or an outlay. Expenditures shown include some estimates, such as estimated subsidy costs for direct loans
and loan guarantees.
a

The Small Business Administration’s Business Loan Program account includes activity for the Paycheck Protection Program
loan guarantees and certain other loan subsidies. These expenditures relate mostly to the loan subsidy costs (i.e., the loan’s
estimated long-term costs to the U.S. government).

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Department of Education oﬃcials told us that the Education Stabilization Fund amounts reported to the Department of the
Treasury’s Governmentwide Treasury Account Symbol Adjusted Trial Balance System for February 2022 did not include all
COVID-19 related activity. Total obligations were $276.9 billion and expenditures were $93.2 billion as of February 28, 2022.
Education told us that they will correct these amounts with the March 2022 submission.
c

Funding provided to the Disaster Relief Fund is generally not speciﬁc to individual disasters. Therefore, Treasury’s methodology
for determining COVID-19-related obligations and expenditures does not capture obligations and expenditures for the
COVID-19 response based on funding other than what was provided in the COVID-19 relief laws. Further, Treasury’s
methodology includes all obligations and expenditures based on funding in the COVID-19 relief laws, including those for other
disasters. In its Disaster Relief Fund Monthly Report dated March 8, 2022, the Department of Homeland Security reported
COVID-19-related obligations totaling $95.7 billion and expenditures totaling $71.2 billion as of February 28, 2022.
d

Several provisions in the Families First Coronavirus Response Act and ARPA authorized increases in Medicaid payments to
states and U.S. territories. The Congressional Budget Oﬃce estimated that federal expenditures from these provisions would be
approximately $76.9 billion through ﬁscal year 2030. The largest increase to federal Medicaid spending is based on a temporary
formula change rather than a speciﬁc appropriated amount. Some of the estimated costs in this total are for the Children’s
Health Insurance Program, permanent changes to Medicaid, and changes not speciﬁcally related to COVID-19. This increased
spending is not accounted for in the funding provided by the COVID-19 relief laws and therefore not included in this table.
e

Because of rounding, amounts shown in columns may not sum to the totals.

The COVID-19 relief laws provided more than $1 trillion to federal agencies to provide assistance
related to the COVID-19 pandemic to states, the District of Columbia, localities, U.S. territories, and
tribes through existing and newly created programs and funds.43 Table 3 lists programs and funds
that each received $10 billion or more—exclusively or primarily for states, the District of Columbia,
localities, U.S. territories, and tribes—in at least one of the six laws. It also provides obligations and
expenditures for these programs and funds as of February 28, 2022.

43This total is based on (1) an analysis of the appropriated amounts in ARPA, Divisions M and N of the Consolidated

Appropriations Act, 2021, the Paycheck Protection Program and Health Care Enhancement Act, the CARES Act, the
Families First Coronavirus Response Act, and the Coronavirus Preparedness and Response Supplemental Appropriations
Act, 2020 that are available to agencies for assistance to states, the District of Columbia, localities, U.S. territories, and
tribes; and (2) the Congressional Budget Oﬃce’s estimated outlays for Medicaid resulting from authorized increases in
payments to states and U.S. territories under those laws.

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Table 3: COVID-19 Relief Funding for Federal Programs and Funds Receiving $10 Billion or More in Aid for States,
the District of Columbia, Localities, U.S. Territories, and Tribes, as of Feb. 28, 2022
Appropriations
($ in billions)

Obligations
($ in billions)

Expenditures
($ in billions)

Coronavirus State and Local Fiscal Recovery Funds
Administered by the Department of the Treasury, these
funds provide payments to states, the District of Columbia
(D.C.), U.S. territories, tribal governments, and localities
to mitigate the ﬁscal eﬀects stemming from the COVID-19
pandemic.

350

245.4

Elementary and Secondary School Emergency Relief
Fund
Administered by the Department of Education, this fund
generally provides formula grants to states (including D.C.
and Puerto Rico) for education-related needs to address
the impact of the COVID-19 pandemic.

190.3

189.5

36.3

Coronavirus Relief Fund
Administered by Treasury, this fund provides payments
to states, D.C., localities, U.S. territories, and tribal
governments to help oﬀset costs of their response to the
COVID-19 pandemic.

150

149.9

Disaster Relief Fund
Administered by the Federal Emergency Management
Agency, this fund provides federal disaster recovery
assistance for state, local, tribal, and territorial
governments when a major disaster occurs.

42.7

26.3

Program fund/description

Medicaid
Administered by states and U.S. territories according to
plans approved by the Centers for Medicare & Medicaid
Services, which oversees Medicaid at the federal level. This
program ﬁnances health care for certain low-income and
medically needy individuals through federal matching of
states’ and U.S. territories’ health care expenditures. The
Families First Coronavirus Response Act and American
Rescue Plan Act of 2021 temporarily increased federal
Medicaid matching rates under speciﬁed circumstances,
among other changes.

76.9

70.0

Transit Grants
Administered by the Federal Transit Administration, these
funds are distributed through existing grant programs to
provide assistance to states, localities, U.S. territories, and
tribes to prevent, prepare for, and respond to the COVID-19
pandemic.

69.5

59.9

34.8

Child Care and Development Fund
Administered by the Department of Health and Human
Services (HHS), this program provides funds to states,
D.C., territories, and tribes to subsidize the cost of child
care for low-income families. COVID-19 relief funds have
supported assistance to health care and other essential

52.5

15.1

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GAO-22-105397

Appropriations
($ in billions)

Obligations
($ in billions)

Expenditures
($ in billions)

46.6

39.3

Public Health and Social Services Emergency Fund
Administered by HHS, this fund provides for grants to
states, U.S. territories, localities, and tribal governments to
support COVID-19 testing, surveillance, and contact tracing,
among other uses.

33.4

32.9

11.2

Airport Grants
Administered by the Federal Aviation Administration,
these grants provide funds for eligible airports to prevent,
prepare for, and respond to the eﬀects of the COVID-19

19.6

10.7

Highway Infrastructure
Administered by the Federal Highway Administration, these
programs provide funds to states, D.C., U.S. territories,
and tribes for highway construction and authorize the
use of these funds for maintenance, personnel, and other
purposes to prevent, prepare for, and respond to the
COVID-19 pandemic.

5.4

2.9

Coronavirus Capital Projects Fund
Administered by Treasury, this fund provides payments to
states, D.C., U.S. territories, freely associated states, and
tribal governments for critical capital projects that directly
enable work, education, and health monitoring, in response

Program fund/description
workers without regard to income eligibility requirements.
Additional child care stabilization funding was provided
for subgrants to eligible child care providers to support
the stability of the child care sector during and after the
e

COVID-19 pandemic.

Emergency Rental Assistance
Administered by Treasury, this program provides assistance
to states, D.C., U.S. territories, localities, and tribes to assist
eligible households with rent, utilities and home energy
costs, and other expenses related to housing and housing

stability.

pandemic.

to the COVID-19 pandemic.

State Small Business Credit Initiative
Administered by Treasury, this program provides funds to
states, D.C., U.S. territories, tribal governments, and eligible
municipalities to fund small business credit support and
k

investment programs.

Source: GAO analysis of federal laws, data from the Congressional Budget Oﬃce, and obligations and expenditures data from the Department of the Treasury and applicable
agencies. | GAO-22-105397

Notes: The COVID-19 relief laws providing the appropriations shown are the American Rescue Plan Act of 2021 (ARPA), Pub.
L. No. 117-2, 135 Stat. 4 (2021), the Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, div. M and N, 134 Stat. 1182
(2020), the Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620 (2020), the
CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020), and the Families First Coronavirus Response Act, Pub. L. No. 116-127, 134

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Stat. 178 (2020). The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134
Stat. 146, did not provide any speciﬁed amounts for these programs or funds for states, D.C., localities, territories, or tribes. The
amounts shown are the cumulative amounts for each program or fund under the other ﬁve laws. Some appropriation amounts
include an amount available for administration expenses or for the relevant inspectors general. Numbers are rounded to the
nearest hundred million.
We did not independently verify obligations and expenditures amounts.
a

Appropriations for the Disaster Relief Fund generally are not speciﬁc to individual disasters and may be used for various
disaster assistance programs, including the Public Assistance program, which provides assistance to state, local, territorial, and
tribal governments.
b
c

The obligations and expenditures listed in the table are for the Public Assistance program for the COVID-19 response.

Several provisions in the Families First Coronavirus Response Act and ARPA authorized increases in Medicaid payments to
states and U.S. territories. The Congressional Budget Oﬃce estimated that federal expenditures from these provisions would be
approximately $76.9 billion through ﬁscal year 2030. The largest increase to federal Medicaid spending is based on a temporary
funding formula change rather than a speciﬁc appropriated amount. Some of the estimated costs in this total are for the
Children’s Health Insurance Program, permanent changes to Medicaid, and changes not speciﬁcally related to the COVID-19
pandemic.
d

Medicaid obligations and expenditures are as of December 31, 2021. COVID-19 related obligation and expenditure amounts
for Medicaid only reﬂect provisions in the Families First Coronavirus Response Act. Complete obligation and expenditure
amounts for COVID-19 related Medicaid provisions in ARPA are not currently available from the Centers for Medicare &
Medicaid Services.
e

The Child Care and Development Fund is made up of two funding streams: mandatory and matching funding authorized
under section 418 of the Social Security Act, and discretionary funding authorized under the Child Care and Development Block
Grant Act of 1990, as amended. See 42 U.S.C. §§ 618 and 9858m.
f

We refer to ERA1 and ERA2 as the ERA program for convenience. While Treasury uses this approach, it clariﬁed that it considers
them to be two separate programs managed by the same oﬃce.
g

Expenditures represent funding disbursed to grantees by Treasury for distribution to renters, landlords, and utility providers,
as well as associated administrative costs and certain housing stability services.
h

Funds are available to eligible sponsors of airports. Nearly all of these airports are under city, state, county, or public-authority
ownership.
i

Treasury issued implementing guidance in September 2021 that provides that the application deadline for requesting
allocations of the Coronavirus Capital Projects Fund from Treasury was (1) December 27, 2021, for states, D.C., and U.S.
territories; and is (2) June 1, 2022, for tribal governments.
j

Coronavirus Capital Projects Fund (CPF) recorded obligations and expenditures of $1.2 million as of February 28, 2022. In
addition, Treasury reported signiﬁcant obligations in March 2022, and as of March 18, 2022, a total of $9.9 billion has been
obligated.
k

States, D.C., and territories were required to submit completed applications by February 11, 2022. Tribal governments must
submit their applications by May 11, 2022.

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Executive Summary
Overview
The nation’s COVID-19 response and recovery eﬀorts continue following a surge of cases,
hospitalizations, and deaths from the Omicron variant in January 2022. Challenges to these
eﬀorts remain, including supply chain disruptions and higher inﬂation, while future variants
continue to pose a risk for hospital and public health systems. This report identiﬁes key issues
for the federal government to consider as it addresses the ongoing public health and lingering
economic challenges facing the nation. We are making 15 new recommendations and one matter
for congressional consideration aimed at improving the integrity and eﬀectiveness of the federal
response.
In our prior CARES Act reports and other targeted COVID-19-related reports, we have made a total
of 279 recommendations to federal agencies, which have addressed or partially addressed 109 (39
percent).44 As of March 2022, agencies had addressed 61 of these recommendations, resulting in
improvements such as publicly reporting COVID-19 vaccination data for nursing home residents
and staﬀ, and targeting outreach to veterans to improve completion of vaccine regimens. Agencies
have also partially addressed an additional 48 recommendations. Fully addressing our previous
recommendations as well as the new recommendations we are making in this report will enhance
the quality, value, and accountability of the federal government’s investments in the response to
and recovery from the COVID-19 pandemic.

Payment Integrity: COVID-19 Spending
Improper payments are those that should not have been made or were made in an incorrect
amount, including overpayments and underpayments under statutory, contractual, administrative,
or other legally applicable requirements.45 Under Oﬃce of Management and Budget (OMB)
guidance, agencies are to complete a risk assessment to determine a new program’s susceptibility
to signiﬁcant improper payments after the ﬁrst 12 months of program operations, and, if
susceptible, develop corrective actions and report on improper payments the following ﬁscal year.
Given the rapid timeline of COVID-19 program-related spending, such time lags in assessing risk
and developing corrective actions may result in improper payment issues in COVID-19 programs,
including those resulting from fraudulent activities, not being identiﬁed or addressed until after
most or even all funds are disbursed. We therefore suggested in our November 2020 report
44This number includes recommendations from our June 2020, September 2020, November 2020, January 2021, March

2021, July 2021, October 2021, and January 2022 CARES Act reports as well as other targeted COVID-19-related reports in
areas such as emergency rental assistance and oversight of infection control and prevention in veteran nursing homes.
For a complete list of our COVID-related products, see https://www.gao.gov/coronavirus.
45The Payment Integrity Information Act of 2019 (PIIA) further states that this deﬁnition includes any payment to an

ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any payment for a good or
service not received (except for such payments where authorized by law), and any payment that does not account for
credit for applicable discounts. See PIIA, Pub. L. No. 116-117, 134 Stat. 113, 114 (2020) (codiﬁed at 31 U.S.C. § 3351(4)).
PIIA also provides that when an executive agency’s review is unable to discern whether a payment was proper as a result
of insuﬃcient or lack of documentation, this payment must also be included in the improper payment estimates. 31
U.S.C. § 3352(a), (c)(2).

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that Congress consider in any future legislation appropriating COVID-19 relief funds, designating
all executive agency programs and activities making more than $100 million in payments from
COVID-19 relief funds as “susceptible to signiﬁcant improper payments.”
We continue to believe that expeditiously estimating and reporting improper payments
and developing corrective actions to reduce such payments is critical to agency
accountability—particularly for new programs that receive large outlays in a given year. Therefore,
in our March 2022 testimony on federal oversight of emergency relief funds, we suggested
that Congress should consider amending the Payment Integrity Information Act of 2019 to
designate all new executive agency programs—such as those that were created speciﬁcally to
respond to the COVID-19 pandemic—making more than $100 million annually in payments as
“susceptible to signiﬁcant improper payments” for their initial years of operation. We reiterate
here the importance of both matters for congressional consideration that we raised in November
2020 and March 2022.
Further, HHS reported it does not have the authority to obtain the information it needs to
estimate or report improper payment information for its Temporary Assistance for Needy
Families (TANF) program.46 According to HHS’s 2021 agency ﬁnancial report, TANF spent about
$17 billion in ﬁscal year 2021 and is a risk susceptible program. ARPA provided $1 billion for TANF
Pandemic Emergency Assistance for ﬁscal year 2021. HHS’s 2021 agency ﬁnancial report identiﬁes
two statutory provisions in the Social Security Act that render HHS unable to require states to
provide it with the data needed to develop a TANF improper payment estimate.47 Consistent
with recommendations made by HHS’s Oﬃce of Inspector General, HHS has in previous budget
proposals requested, but not received, such authority from Congress.
To ensure that Congress and other external stakeholders will have key payment integrity
information for monitoring improper payments, we are suggesting that Congress consider
providing HHS the authority to require states to report the data necessary for the Secretary to
estimate and report on improper payments for the TANF program. Providing such statutory
authority would also help ensure accountability over TANF payments and enable HHS to collect
the required information to implement and report on the eﬀectiveness of corrective actions to
address improper payments for the program.
OMB guidance does not require agencies to formally review or certify the reliability of their
PaymentAccuracy.gov data submissions. To prepare the annual datasets for publication on
PaymentAccuracy.gov, OMB sends a request (or “data call”) to agencies for submissions of agency
and program-level improper payment data. Yet, in direct contrast to OMB’s guidance for agency
ﬁnancial reports, OMB does not require agencies to have any formal review or certiﬁcation by
agency management prior to submission.48 Had a management-level review requirement been in
46The TANF program serves as the nation’s major cash assistance program for low-income families with children.

47Department of Health and Human Services, FY 2021 Agency Financial Report (Washington, D.C.: November 2021), pg.

233. Speciﬁcally, HHS identiﬁed section 411 of the Social Security Act, which speciﬁes the data elements that HHS may
require states to report, and section 417 of that act, which dictates that the federal government may only regulate the
conduct of states where Congress has given the express authority to do so.
48OMB A-123 Appendix C. OMB A-136 guidance requires that agency ﬁnancial reports include an assessment by the

agency head of the completeness and reliability of the performance and ﬁnancial data used in the report.

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place, it may have detected, for example, a roughly $1.4 billion error we identiﬁed in our review of
PaymentAccuracy.gov.49
To help ensure users of the website obtain complete and reliable government-wide improper
payment information, we are recommending that the Director of OMB require agencies to certify
the reliability of data submitted to PaymentAccuracy.gov. OMB neither agreed nor disagreed with
this recommendation.
See the Payment Integrity: COVID-19 Spending enclosure in appendix I for more information.

FEMA’s COVID-19 Funeral Assistance and Public Assistance
Program
The scope of the Federal Emergency Management Agency’s (FEMA) COVID-19 Funeral Assistance
is unprecedented. According to FEMA data, as of February 28, 2022, it had received and was
processing over 444,000 applications since April 2021—when it began accepting applications—and
awarded over $1.92 billion for over 296,000 approved applications. In the decade before the
COVID-19 pandemic, FEMA had processed approximately 6,000 applications for funeral assistance
after other disasters, according to FEMA oﬃcials.
We identiﬁed several gaps in FEMA’s internal controls meant to prevent improper or potentially
fraudulent payments. Speciﬁcally, we identiﬁed cases in which FEMA’s controls did not prevent
funeral assistance provided (1) in response to duplicate applications listing the same decedents;
(2) above the maximum of $9,000 allowed per decedent; and (3) in response to applications listing
incorrect applicant identifying information. For example, GAO identiﬁed 374 deceased individuals
that were listed on more than one award-receiving application; in total, these applications received
about $4.8 million in assistance. Without adequate controls that, for example, prevent funeral
assistance payments in response to duplicate applications, COVID-19 Funeral Assistance is at risk
of improper payments and potential fraud.
We are recommending that the Federal Emergency Management Agency Administrator take
action to identify the causes of the gaps in internal control in COVID-19 Funeral Assistance and
design and implement additional control activities, where needed, to prevent and detect improper
payments and potential fraud.
In addition, our review also determined that FEMA does not suﬃciently maintain the quality of
the application data for its COVID-19 Funeral Assistance in a way that would facilitate oversight of
COVID-19 Funeral Assistance and prevent and detect potential fraud. Our Framework for Managing
Fraud Risks in Federal Programs calls for agencies to follow leading practices, such as designing and
implementing data analytics and other control activities to prevent and detect fraud. However, we
determined that FEMA lacked consistent data on whether applications were paid, decedent death

49Speciﬁcally, we identiﬁed a $1.4 billion overstatement in one agency’s dataset for overpayments that had been

identiﬁed and recaptured when compared to information provided in the agency ﬁnancial report. According to OMB
staﬀ, the overstatement occurred because one agency failed to convert its recovery amount into millions of dollars prior
to entering it into the OMB data call tool.

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dates, the amount of funeral assistance awarded for speciﬁc decedents on an application listing
multiple decedents, and applicant Social Security numbers.
While FEMA oﬃcials stated that they are able to obtain accurate data on each application by
manually checking its history, FEMA would be unable to eﬃciently identify which applications
merited manual review if automated checks ﬁrst did not detect the relevant discrepancies.
This information—in particular, information on whether an award that appears in FEMA’s data
was truly paid—would be a key factor in implementing data analytics and managing fraud risk.
Without consistent data, FEMA lacks assurance that it can use data analytics to prevent and detect
potential fraud as part of its oversight of the COVID-19 Funeral Assistance.
We are recommending that the FEMA Administrator address deﬁciencies in the COVID-19 Funeral
Assistance data by updating data records as data are veriﬁed, and adding data ﬁelds where
necessary, to ensure that consistent and accurate data are available for monitoring of potential
fraud trends and identifying control deﬁciencies.
The Department of Homeland Security agreed with both recommendations and stated that it
agreed with the need for internal controls and the importance of maintaining accurate, current
data.
See the FEMA’s COVID-19 Funeral Assistance and Public Assistance Program enclosure in appendix
I for more information.

Single Audit Compliance Supplement
OMB annually issues the single audit Compliance Supplement, which provides guidance to
auditors performing audits of certain entities that receive funding from federal assistance
programs when expenditures meet or exceed $750,000.50 Auditors generally follow the
implementing guidance in the annual Compliance Supplement and agency guidance speciﬁc to
their programs to determine whether the recipient has complied with federal statutes, regulations,
and award terms that may have a direct and material eﬀect on each of the recipient’s major
programs.
Each year, OMB requires federal awarding agencies to provide it with proposed updates for their
respective program sections for inclusion in the Supplement. Annual updates to the Supplement
are necessary for many reasons, including to add additional requirements resulting from changes
in statutory or regulatory requirements, such as those in the COVID-19 relief laws. However, we
found that three agencies we selected for review—the Departments of Education, Health and
Human Services, and Treasury, which together received over $2 trillion in COVID-19 funding—have
not developed comprehensive policies and procedures for providing this information to OMB.
Establishing written policies and procedures could help expedite OMB’s ﬁnal issuance of the
Supplement, ensure agencies and OMB have adequate time to fully resolve concerns from
stakeholders prior to issuance, and strengthen the quality of single audit guidance.
50The Single Audit Act is codiﬁed at 31 U.S.C. §§ 7501-06, and implementing OMB guidance is reprinted in 2 C.F.R. part

200. The Act requires a “single audit” of the entity’s ﬁnancial statements and federal awards (or a program-speciﬁc audit,
in limited circumstances) for the ﬁscal year. 31 U.S.C. § 7502; 2 C.F.R. § 200.501.

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We are making three total recommendations, one each to the Secretary of Education,
the Secretary of Health and Human Services, and the Secretary of the Treasury, to document
policies and procedures for providing information to OMB to better enable OMB to update the
Compliance Supplement, that include steps for (1) establishing management’s expectations of
staﬀ competence for key roles (e.g., relevant knowledge, skills and abilities) and providing ongoing
training; and (2) agency oﬃcials proactively involving internal and external audit stakeholders
when developing audit procedures, prior to submitting drafts to OMB, in order to ensure the
guidance meets users’ needs. The Departments of Education, Health and Human Services, and the
Treasury each agreed with the recommendation.
See the Single Audit Compliance Supplement enclosure in appendix I for more information.

Capital Projects Fund
The Coronavirus Capital Projects Fund (CPF), administered by Treasury, was established in
March 2021. The fund may provide up to $10 billion to state, territorial, and tribal governments
to support critical capital projects directly enabling work, education, and health monitoring,
in response to the COVID-19 public health emergency. Although Treasury has documented
application and grant review procedures for CPF, it has not yet begun recipient monitoring and has
not documented a comprehensive plan and process that includes the design and documentation
of procedures to monitor recipients’ use of funds for allowable purposes once funds have been
disbursed.
We are recommending that the Secretary of the Treasury document a comprehensive plan
that includes timely and suﬃcient policies and procedures for monitoring recipients of the CPF
to provide assurance that funds are being used in compliance with laws, regulations, agency
guidance, and award terms and conditions, including ensuring that funds are being used for
allowable purposes. Treasury agreed with this recommendation.
See the Capital Projects Fund enclosure in appendix I for more information.

Homeowner Assistance Fund
The Homeowner Assistance Fund (HAF), created on March 11, 2021, under ARPA provided
about $10 billion to mitigate ﬁnancial hardships associated with the pandemic and prevent
mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services,
and displacement of homeowners. Treasury administers the HAF and disburses allocations to
participants—states, territories, tribal entities, and the Department of Hawaiian Home Lands—to
develop local programs and provide assistance to homeowners. HAF participants can use the
funds to assist homeowners with mortgage and utility payments, delinquent property taxes and
insurance, and other eligible uses.
As of March 20, 2022, Treasury had disbursed over $9 billion to participants and approved HAF
plans for 50 of the 56 state and territorial participants (89 percent). The agency was in the process
of reviewing HAF plans from three participants, and expects the three participants that had
not submitted HAF plans to do so in the coming months, according to an agency oﬃcial. While

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GAO-22-105397

Treasury has disbursed most of the funds appropriated for the program, state and territorial
participants have only spent about $121 million—about 1 percent of their allocations, based on
participant-reported data provided by Treasury.
Treasury has not developed and implemented written procedures that describe how it will monitor
the compliance of HAF participants’ uses of funds with program requirements and eﬀorts to
prevent improper payments.
According to a Treasury oﬃcial, the Oﬃce of Recovery Programs, which oversees HAF and
Treasury’s other pandemic relief programs, was developing a post-award compliance monitoring
process that will apply to all of its programs. Treasury was also developing monitoring procedures
speciﬁc to the HAF program. In addition, Treasury plans to monitor compliance through single
audits and was developing guidance for OMB’s 2022 compliance supplement. However, Treasury
had not ﬁnished and implemented any of these monitoring eﬀorts as of late March 2022.
Without written and implemented procedures for monitoring compliance, Treasury cannot have
reasonable assurances that participants are meeting program requirements and managing
improper payment risks.
We are recommending that the Secretary of the Treasury develop and implement written
procedures to monitor Homeowner Assistance Fund participants’ programs and uses of funds
for compliance with program requirements and improper payments. Treasury agreed with our
recommendation and said it was developing a monitoring framework for its pandemic recovery
programs to identify potential areas of noncompliance for remediation.
See the Homeowner Assistance Fund enclosure in appendix I for more information.

COVID-19 Surveillance
CDC could be better positioned to lead the nation’s eﬀorts to detect and monitor COVID-19,
in coordination with state, tribal, local, and territorial partners (collectively referred to as
jurisdictions) and public health partner organizations. This could be accomplished by including in
the agency’s existing surveillance approach speciﬁc objectives for how it will achieve its goals and a
description of how it will assess progress toward meeting them.
Surveillance—the ongoing, systematic collection, analysis, and interpretation of health-related
data—is intended to guide eﬀorts to detect and monitor disease and assist in the management of,
and recovery from, large-scale public health incidents, according to CDC. In the U.S., public health
surveillance is a shared eﬀort between CDC and thousands of agencies at the federal, state, local,
tribal, and territorial levels, along with health care providers, laboratories, and others.
The COVID-19 pandemic prompted new funding to support public health activities at all levels of
government. Speciﬁcally, the CARES Act, ARPA, and annual appropriation acts for ﬁscal years 2020
and 2021 together provided CDC with $1.1 billion to support data modernization and COVID-19
surveillance activities.51
51CARES Act, Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 554 (2020); ARPA, Pub. L. No. 117-2, § 2404, 135 Stat. 4,

42. Committee reports accompanying the Further Consolidated Appropriations Act, 2020, Pub. L. No. 116-94, and the

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GAO-22-105397

CDC’s COVID-19 surveillance approach outlines goals and activities for what the agency wants
to achieve, but it does not detail how it will achieve its stated goals or how it will measure its
progress—two components of an eﬀective strategy we have noted in our past work. By including
speciﬁc objectives that detail how CDC’s actions will allow it to meet its goals and describing
measures to assess its progress towards reaching its goals, CDC could better ensure it is able to
eﬀectively monitor COVID-19 nationwide.
We are recommending that the Director of CDC, in coordination with state, tribal, local, and
territorial jurisdictions and public health partner organizations, ensure the agency builds upon
its existing COVID-19 surveillance approach by detailing speciﬁc objectives for how it will achieve
its COVID-19 surveillance goals and describing how it will assess progress toward meeting them.
HHS agreed with our recommendation, and CDC noted that it will continue eﬀorts to develop a
document summarizing its COVID-19 surveillance goals and how it will assess progress towards
meeting them.
See the COVID-19 Surveillance enclosure in appendix I for more information.

Public Health Data Collection and Standardization
The pandemic highlighted limitations in both the data that CDC collects and in the public
health surveillance systems CDC uses to collect and share these data. Both the CARES Act and
ARPA provided funding to CDC to support modernizing the nation’s public health surveillance
infrastructure. CDC’s Data Modernization Initiative, launched in 2020, aims to improve data
collection and sharing, strengthen data reporting and analytics, and advance surveillance of future
public health threats, among other goals. CDC faces several challenges to collecting accurate and
timely data and conducting surveillance across the U.S., such as outdated methods to collect and
transmit data and lack of interoperability among key surveillance systems. CDC oﬃcials also noted
that, among these challenges, the agency generally lacks authority to require reporting of public
health data.
CDC has made progress in modernizing the U.S. public health data collection and surveillance
infrastructure through its Data Modernization Initiative. However, CDC’s Data Modernization
Initiative strategic implementation plan does not articulate the speciﬁc actions, time frames,
and allocation of roles and responsibilities needed to achieve its objectives. In addition, CDC
has not fully developed plans for how it will allocate ARPA funds for data modernization. While
the agency’s draft spend plan includes estimates for how it will spend the $500 million from
ARPA—such as $200 million for a data forecasting center—the draft spend plan lacks speciﬁc
actions and associated time frames for such spending.
Without more speciﬁc, actionable plans, including time frames for achieving data modernization
objectives, spending plans, and the entities that are responsible for taking actions, CDC may not
be able to gauge its progress on the initiative or achieve key results in a timely manner. In addition,
such lack of progress to implement enhanced surveillance systems could aﬀect the quality and
timeliness of data needed to respond to future public health emergencies.
Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, speciﬁed that $50 million from each law was to be used for
data modernization. See H.R. Rep. No. 38-679 at 107 (2020); and H.R. Rep. No. 43-750, pt. 2, at 1608 (2021).

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GAO-22-105397

We are recommending that the Director of CDC deﬁne speciﬁc action steps and time frames for
the agency’s data modernization eﬀorts. HHS agreed with this recommendation.
See the Public Health Data Collection and Standardization enclosure in appendix I for more
information.

Critical Manufacturing Sector
As with other infrastructure sectors that provide essential services to American society, the
COVID-19 pandemic has impacted the Critical Manufacturing Sector, such as by causing delays
in shipments of goods, worker shortages, and increased cybersecurity vulnerability in critical
infrastructure systems and assets.52 The Cybersecurity and Infrastructure Security Agency
(CISA)—in its role as the lead federal agency for coordinating security and resilience eﬀorts with
the Critical Manufacturing Sector on behalf of the Department of Homeland Security (DHS)—took
steps to respond to the pandemic’s impacts in the sector.53 For example, CISA developed
voluntary guidance to help jurisdictions and critical infrastructure owners and operators identify
essential work functions and ensure that the workers who performed those functions could
continue to access their workplaces during community restrictions, such as stay-at-home orders.54
CISA has not performed a lessons-learned analysis of the pandemic’s impacts in the Critical
Manufacturing Sector, although sector members identiﬁed this analysis as a high-priority need.
CISA oﬃcials said that they plan to pursue a lessons-learned analysis of the pandemic’s impacts
in the Critical Manufacturing Sector beginning in March 2022. However, as of February 2022, the
agency had not ﬁnalized a plan for developing the analysis.
DHS’s National Infrastructure Protection Plan says that leveraging lessons learned and applying
corrective actions from incidents can help reduce vulnerabilities in critical infrastructure.55
Additionally, the plan says DHS is responsible for documenting lessons learned from actual
incidents and applying them to its security and resilience activities. A documented lessons-learned
assessment that examines the impact of the pandemic in the Critical Manufacturing Sector,
including strengths and weaknesses in the sector’s response, would allow CISA to identify how it
could better support the sector to reduce the consequences of the pandemic and future incidents.
It could also help identify strategies to strengthen the sector’s resilience.
52The 16 critical infrastructure sectors are: chemical; commercial facilities; communications; critical manufacturing;

dams; defense industrial base; emergency services; energy; ﬁnancial services; food and agriculture; government
facilities; healthcare and public health; information technology; nuclear reactors, materials and waste; transportation
systems; and water and wastewater systems.

53In January 2021, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 established

“sector risk management agency” responsibilities for federal departments or agencies designated as such for each
critical infrastructure sector or subsector. Pub. L. No. 116-283, § 9002(c), 134 Stat. 3388, 4770. Prior to enactment of the
act, a “sector risk management agency” was called a “sector-speciﬁc agency.” CISA is also the sector risk management
agency for the Chemical, Commercial Facilities, Communications, Dams, Emergency Services, Information Technology,
and Nuclear Reactors, Materials and Waste Sectors.
54Cybersecurity and Infrastructure Security Agency, Guidance on the Essential Critical Infrastructure Workforce: Ensuring

Community and National Resilience in COVID-19 Response (Washington, D.C.: March 19, 2020).

55Department of Homeland Security, National Infrastructure Protection Plan 2013: Partnering for Critical Infrastructure

Security and Resilience (Washington, D.C.: December 2013).

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We are recommending that the Director of CISA assess and document lessons learned from
the COVID-19 pandemic’s impacts on the Critical Manufacturing Sector. DHS agreed with this
recommendation and stated that CISA is working with Critical Manufacturing Sector stakeholders
to identify pandemic impacts in the sector as well as mitigation actions, and plans to issue a
lessons-learned report by December 2022.
See the Critical Manufacturing Sector enclosure in appendix I for more information.

Public Health Industrial Base Expansion
As part of its role to lead the nation in medical and public health preparedness for, response
to, and recovery from emergencies and disasters, HHS’s Oﬃce of the Assistant Secretary for
Preparedness and Response (ASPR) is responsible for actively restoring and strengthening supply
capabilities depleted during the pandemic and securing the public health supply chain going
forward. ASPR’s eﬀorts to address these needs include forming a new Innovation and Industrial
Base Expansion Program (IBx) Oﬃce, beginning in September 2020. According to ASPR’s website,
the mission of the IBx Oﬃce is to strengthen and expand the U.S. public health industrial base and
deliver innovative solutions to counter health security threats.
ASPR has been primarily using detailees from other federal agencies to support the IBx Oﬃce, but
it has begun hiring its own staﬀ. However, the agency has not yet assessed the critical workforce
skills and competencies needed to support and sustain the mission and goals of the oﬃce, nor
has it developed strategies to achieve those workforce needs. Such an assessment would be
consistent with key principles of strategic workforce planning we have previously identiﬁed,
including (1) determining the critical skills and competencies needed to achieve current and future
programmatic results; and (2) developing strategies to address gaps in the number of staﬀ and
their skills and competencies, in order to meet those results.
We are recommending that the Assistant Secretary for Preparedness and Response within
HHS conduct a workforce assessment of its Innovation and Industrial Base Expansion Program
Oﬃce to determine the critical skills and competencies needed to support and sustain the oﬃce,
and develop corresponding workforce strategies to address those needs. HHS agreed with our
recommendation, and stated that the agency will conduct a workforce assessment in the future.
See the Public Health Industrial Base Expansion enclosure in appendix I for more information.

Advance Child Tax Credit and Economic Impact Payments
During 2021, the Internal Revenue (IRS) and the Department of Treasury issued advance payments
of the child tax credit (CTC) and a third round of Economic Impact Payments (EIP 3) to eligible
individuals, totaling over $500 billion. Both advanced child tax credits and EIPs could have
implications for individuals’ 2021 taxes ﬁled in 2022. In general, to determine advance CTC
payments, IRS used the reported information on an individual’s most recent tax return to estimate
the total amount of the CTC that an individual qualiﬁed for under the law. Treasury and IRS issued
EIP 3 to most eligible individuals. Eligible individuals who did not receive EIP 3—or their maximum
applicable EIP 3 amounts—could claim a recovery rebate credit on their 2021 tax return.

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To help individuals ﬁle accurate 2021 tax returns during the 2022 ﬁling season, IRS and Treasury
took several steps. For example, starting in December 2021, IRS began mailing millions of letters
to advance CTC and EIP 3 recipients. IRS and Treasury also worked with federal, state, and local
partners to encourage individuals to ﬁle taxes to claim credits they were eligible to receive.
However, Treasury and IRS missed opportunities to collaborate on these outreach eﬀorts.
According to Treasury oﬃcials, Treasury and IRS meet weekly to coordinate outreach and to
ensure they are sharing consistent information. However, some key IRS oﬃcials said they were
not always aware of Treasury’s eﬀorts. The lack of collaboration and transparent communication
between Treasury and IRS resulted in a missed opportunity to leverage resources and expertise on
communication and outreach eﬀorts.
Relatedly, IRS has developed communications plans and strategies for several programs,
including the advance CTC and EIP. However, these plans and strategies do not include metrics for
assessing the usefulness and accessibility of these outreach eﬀorts. Such metrics would inform
management of these eﬀorts and help focus resources on what works.
Although the EIP and advance CTC outreach eﬀorts are now complete, IRS plays a key role in and
devotes considerable resources to educating taxpayers, as well as those who are not in contact
with the tax system, about other refundable tax credits and eligibility. Collecting information on
the usefulness and accessibility of the various outreach eﬀorts from the past 2 years could help
inform future IRS eﬀorts to educate individuals about refundable tax credits and more reliably
measure the success of such eﬀorts.
We are recommending that the Secretary of the Treasury, in coordination with the Commissioner
of Internal Revenue, enhance collaboration among departmental components for refundable tax
credit communication and outreach eﬀorts by including relevant participants and clearly deﬁning
participant outcomes, roles, and responsibilities. Treasury neither agreed nor disagreed with
this recommendation, stating that it supports the goal of the recommendation and continues
to work with IRS to raise awareness on current and future communication and outreach eﬀorts.
We maintain that without additional actions, such as including relevant participants and clearly
deﬁning outcomes, roles and responsibilities, Treasury and IRS will continue to miss opportunities
to leverage their resources and expertise on communication and outreach eﬀorts.
We are recommending that the Commissioner of Internal Revenue enhance internal
collaboration among its stakeholder outreach and education oﬃces for refundable tax credit
communications and outreach eﬀorts by clearly establishing outcomes, roles, and responsibilities,
and by developing resources to facilitate joint interactions and methods to document information
sharing. IRS neither agreed nor disagreed with this recommendation, stating that it has clearly
established roles and responsibilities for its communication and outreach functions, which
coordinate with each other regularly and look for ways to improve their joint eﬀorts. We maintain
that IRS oﬃces overseeing stakeholder outreach and education do not consistently document
and share key information. Without additional actions, such as developing resources to facilitate
joint interactions and methods to document information sharing, IRS will continue to miss
opportunities to fully leverage the knowledge and expertise that resides among its staﬀ.

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We are recommending that the Commissioner of Internal Revenue collect suﬃcient, relevant,
and comparable data on the usefulness and accessibility of its communications and outreach
eﬀorts for refundable tax credits and use these data to develop performance metrics to assess
the eﬀectiveness of ongoing eﬀorts. IRS neither agreed nor disagreed with this recommendation,
stating that it obtains feedback, but these eﬀorts are not easily captured or translated into
performance metrics. We maintain that IRS is not collecting or using other types of information
to assess what aspects of their communications and outreach eﬀorts were eﬀective in reaching
diﬀerent audiences. This data could help inform future IRS eﬀorts to educate individuals about
refundable tax credits and more reliably measure the success of such eﬀorts.
See the Advance Child Tax Credit and Economic Impact Payments enclosure in appendix I for more
information.

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Conclusions
The federal government’s eﬀorts to respond to and recover from the COVID-19 pandemic
continue. The current decrease in the number of daily cases is part of a cycle of increases and
decreases the nation has faced over the previous 2 years, due in part to the emergence of new
variants of the virus. Though labor conditions have improved recently, other lingering economic
eﬀects, in addition to the potential for new variants, illustrate the challenges to the nation’s
response and recovery eﬀorts and the work that remains. We are pleased that agencies have
addressed 61 and partially addressed 48 of our 279 recommendations as of March 2022. Fully
addressing our recommendations, including the new recommendations we are making in this
report, and the new matters we raised in March 2022, can help improve the federal response and
recovery eﬀorts. Ensuring accountability and transparency in federal programs remains critical to
respond to the COVID-19 pandemic, and in preparing the nation for potential future emergencies.

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Closing
We are sending copies of this report to the appropriate congressional committees, the Oﬃce of
Management and Budget, and other relevant agencies. In addition, the report is available at no
charge on the GAO website at https://www.gao.gov.
If you or your staﬀ have any questions about this report, please contact me at (202) 512-5500
or dodarog@gao.gov. Questions can also be directed to Orice Williams Brown, Chief Operating
Oﬃcer, at (202) 512-5600; Jessica Farb, Managing Director, Health Care, at (202) 512-7114 or
farbj@gao.gov; or A. Nicole Clowers, Managing Director, Congressional Relations, at (202) 512-4400
or clowersa@gao.gov. Contact points for our Oﬃce of Public Aﬀairs may be found on the last page
of this report.

Gene L. Dodaro
Comptroller General of the United States

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Congressional Addressees
The Honorable Patrick Leahy
Chairman
The Honorable Richard Shelby
Vice Chairman
Committee on Appropriations
United States Senate
The Honorable Ron Wyden
Chairman
The Honorable Mike Crapo
Ranking Member
Committee on Finance
United States Senate
The Honorable Patty Murray
Chair
The Honorable Richard Burr
Ranking Member
Committee on Health, Education, Labor, and Pensions
United States Senate
The Honorable Gary C. Peters
Chairman
The Honorable Rob Portman
Ranking Member
Committee on Homeland Security and Governmental Aﬀairs
United States Senate
The Honorable Rosa L. DeLauro
Chair
The Honorable Kay Granger
Ranking Member
Committee on Appropriations
House of Representatives
The Honorable Frank Pallone, Jr.
Chairman
The Honorable Cathy McMorris Rodgers
Republican Leader
Committee on Energy and Commerce
House of Representatives
The Honorable Bennie G. Thompson
Chairman
The Honorable John Katko
Ranking Member
Committee on Homeland Security

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House of Representatives
The Honorable Carolyn B. Maloney
Chairwoman
The Honorable James Comer
Ranking Member
Committee on Oversight and Reform
House of Representatives
The Honorable Richard Neal
Chairman
The Honorable Kevin Brady
Republican Leader
Committee on Ways and Means
House of Representatives

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Appendixes and Enclosures
Appendix I: Enclosures
Economic Indicators
Based on data available in the beginning of April 2022, the overall national economy has continued
to recover from the COVID-19 pandemic, while speciﬁc areas of the economy we are monitoring
saw mixed performance in recent months. Indicators of inﬂation have generally increased,
suggesting that inﬂation could be somewhat higher, and persist for somewhat longer than
previously expected. Indicators for labor markets and state and local government employment
generally improved from November 2021 through March 2022 (see table).56
Indicators for Areas of the Economy Supported by the Federal COVID-19 Pandemic Response, Nov. 2021–Mar.
2022, Cumulative Changes since Feb. 2020

The employment-to-population ratio represents the number of employed people as a percentage of the civilian
noninstitutional population 16 years and over. The ratio is subject to a misclassiﬁcation error with respect to identifying workers
as employed and absent from work who are likely unemployed on temporary layoﬀ.

56In previous work, we identiﬁed a number of economic indicators to facilitate ongoing and consistent monitoring of

areas of the economy supported by the federal pandemic response, including labor markets, household ﬁnances, and
small business credit and ﬁnancial conditions. To the extent that federal pandemic responses are eﬀective, we would
expect to see improvements in outcomes related to these indicators. However, while trends in these indicators may be
suggestive of the eﬀect of provisions of the COVID-19 relief laws over time, those trends will not on their own provide
deﬁnitive evidence of eﬀectiveness.

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State and local government and leisure and hospitality employment data from February 2022 and March 2022 are preliminary.
These data reﬂect revisions to 2020-2021 data by Bureau of Labor Statistics as presented in the January 2022 Employment
Situation and thus may diﬀer from what we reported in previous CARES Act reports.
c

Higher levels in the Consumer Credit Default Composite Index rate indicate more defaults on consumer loans, including auto
loans, bank cards, and mortgages. The Consumer Credit Default Composite Index could be subject to seasonal variation but is
not seasonally adjusted.
d

Seriously delinquent loans are 3 months or more past due or in foreclosure, based on mortgages insured by the Federal
Housing Administration (FHA). Decrease in serious delinquency rates on FHA loans may indicate improvement in the ﬁnances of
the minority and low- to moderate-income households that disproportionately take out mortgages insured by FHA.
e

Lower levels of the small business credit card delinquency index indicate more delayed payments on credit. The small business
credit card delinquency index is published under license and with permission from Dun & Bradstreet, and no commercial use
can be made of these data.

Real gross domestic product (GDP) grew at a 6.9 percent annual rate in the fourth quarter of 2021,
increasing from its third quarter growth rate of 2.3 percent, according to the Bureau of Economic
Analysis.57 Private inventory investment, including investment in motor vehicle dealer inventories,
was notably higher in the fourth quarter, as were exports and consumer spending, especially
spending on health care, ﬁnancial services and insurance, and recreation. Faster GDP growth
suggests that private sector demand growth more than oﬀset the waning ﬁscal eﬀects of the
federal pandemic response.
Key trends in economic indicators. Based on monthly and weekly data from the Department of
Labor, the labor market generally improved in January, February, and March 2022 but remained
weaker than in the prepandemic period. Initial unemployment insurance claims remained similar
to prepandemic levels from January through mid-March 2022 (see the Unemployment Insurance
Programs enclosure in app. I). The overall labor market continued to improve, as the employmentto-population ratio in March 2022 increased 0.2 percentage points from the previous month, to
60.1 percent. The employment-to-population ratio in March 2022 was 1.1 percentage points lower
than in the prepandemic period (see ﬁgure).

57Real GDP is a measure of the value of all goods and services produced in the economy in a given year, adjusted for

changes in the price level.

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Employment-to-Population Ratio, Jan. 2020–Mar. 2022

Changes in employment across sectors continue to reﬂect the diﬀerential impact of the pandemic
on various sectors of the economy. For example, the leisure and hospitality sector experienced
strong job growth in January, February, and March 2022, but employment in the leisure and
hospitality sector was still 8.7 percent lower than it was in February 2020. State and local
government employment also increased in January, February, and March 2022, but employment in
these sectors remained 3.6 percent lower than in the prepandemic period.
Serious delinquency rates—loans that are 90 or more days past due or in foreclosure—for singlefamily mortgage loans insured by the Federal Housing Administration (FHA) decreased from March
2021 through February 2022, to 5.93 percent of loans, but still remained much higher than rates
prior to the pandemic. FHA loans disproportionately serve minority and low- to moderate-income
borrowers, and therefore falling delinquencies may indicate improvement in the ﬁnances of
some of those households in recent months, including fewer borrowers relying on FHA mortgage
forbearance.58
Key trends in inﬂation. Indicators of inﬂation have generally increased since Spring 2021,
suggesting that inﬂation could be somewhat higher, and persist for somewhat longer than
58In ﬁscal year 2021, 32.8 percent of all FHA purchase and reﬁnance borrowers were minorities, 52.6 percent of

FHA forward mortgage borrowers were of low-to-moderate income, and 84.6 percent of home purchasers under
the FHA forward mortgage insurance program were ﬁrst-time homebuyers. See Department of Housing and Urban
Development, FHA Annual Management Report Fiscal Year 2021. FHA forbearance have expired for borrowers who
requested an initial forbearance before October 1, 2020. On the other hand, FHA allowed servicers to initiate new
forbearance between October 1, 2021 and the end of the COVID-19 national emergency. This report also includes an
enclosure on Homeowner Assistance Fund, designed to prevent mortgage delinquencies and defaults, foreclosures, loss
of utilities or home energy services, and displacement of homeowners experiencing ﬁnancial hardship associated with
the coronavirus pandemic (see the Homeowner Assistance Fund enclosure in app. I).

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previously expected.59 Speciﬁcally, higher inﬂation has been evident across most of our inﬂation
indicators. Some level of inﬂation on average can help promote stable economic conditions, but
persistently high levels of inﬂation can cause ﬁnancial challenges that are experienced more
acutely by low-income households.
If demand grows considerably faster than supply for an extended period of time, for example,
then consumer price inﬂation could meaningfully increase. The extent to which higher inﬂation
will persist for a longer period of time will depend on many factors that remain uncertain, for
example, how the current state of global supply chain issues constrain production or how the
pandemic inﬂuences consumer demand across the economy.
The Federal Reserve System’s Federal Open Market Committee (FOMC) aims for inﬂation of 2
percent on average over time and aims to achieve rates of inﬂation that are above 2 percent for
some time after periods in which inﬂation is persistently below 2 percent.60
In previous work, we identiﬁed a number of indicators of inﬂation to facilitate ongoing and
consistent monitoring of the inﬂation experience of consumers to help assess the extent to which
higher inﬂation would persist over time, including indicators of current consumer price inﬂation,
as well as expectations of future inﬂation.61 Based on data available in March 2022 covering price
trends through February 2022, inﬂation has generally increased in recent months (see table).

59Inﬂation is the increase in the price of goods and services over time, and is typically measured as the percentage

change in those prices over a set period, often 1 year. For example, an inﬂation rate of 2 percent would mean that the
prices of goods and services, on average, increased 2 percent over the last year.
60See the FOMC’s 2020 Statement on Longer-Run Goals and Monetary Policy Strategy.

61Higher levels of inﬂation over short periods—described as transitory—are not unusual and are less cause for concern.

The prices of goods and services regularly shift in response to economic changes, and any impact on household ﬁnances
is more limited because prices increase more rapidly for only a short period of time. In contrast, high levels of inﬂation
that persist for long periods are more cause for concern, and can reduce the pace of economic growth.

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Indicators of Inﬂation, Feb. 2021–Feb. 2022, and Average Inﬂation Rates, 2000–2019

Note: Underlined, red text indicates a higher rate of inﬂation than the previous month while black text indicates a lower rate
of inﬂation than the previous month but with prices still rising overall. Deﬂation, or falling prices, would be indicated with a
negative sign. All indicators of inﬂation are rounded to two decimal places. As a result, indicators may appear equal across
months in the table but are actually diﬀerent when not rounded.
a

PCE is based on the PCE price index, which reﬂects changes in the prices of goods and services purchased by or on behalf of
consumers in the U.S. The Federal Open Market Committee states its longer-run inﬂation goal in terms of PCE inﬂation and
typically aims for inﬂation of 2 percent on average over time, including by aiming to achieve inﬂation rates above 2 percent for
some time after periods in which inﬂation is persistently below 2 percent.
b

CPI is based on data from the Consumer Price Index for all urban consumers (CPI-U), in which year-over-year change is
computed from the not-seasonally-adjusted series, and the month-over-month change is computed from the seasonally
adjusted series.
c

Median CPI is based on the 1-month inﬂation rate of the component whose expenditure weight is in the 50th percentile of
price changes. By omitting outliers (small and large price changes) and focusing on the interior of the distribution of price
changes, the median CPI may provide a better signal of the underlying inﬂation trend than the all-items CPI.
d

The 16 percent trimmed-mean CPI is based on a weighted average of 1-month inﬂation rates of components whose
expenditure weights fall below the 92nd percentile and above the 8th percentile of price changes. By omitting outliers (small
and large price changes) and focusing on the interior of the distribution of price changes, the 16 percent trimmed-mean CPI
may provide a better signal of the underlying inﬂation trend than the all-items CPI.
e

The 10-year expected inﬂation rate comes from a model that decomposes the TIPS to nominal Treasury spread into three
components: inﬂation expectations, the inﬂation risk premium, and a third component that may capture the TIPS liquidity
premium or other factors that inﬂuence the relative demand for TIPS. See S. D'Amico, D. H. Kim, and M. Wei, "Tips from TIPS:

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The Informational Content of Treasury Inﬂation-Protected Security Prices," Journal of Financial and Quantitative Analysis, vol. 53,
no. 1 (2018): pp. 395–436.
f

Professional forecast of inﬂation is an average forecast of expected CPI inﬂation in 2023 (annualized) from forecasts collected
by Bloomberg. Absent data for January 2021, we have used black text for February 2021 data based on the data for 10-year
expected CPI inﬂation from TIPS.

Inﬂation remains higher than averages in recent decades and headline indicators of more recent
price pressures (measured relative to the previous month) increased in January and February
2022. However, the median and trimmed mean CPIs, which omit outliers and focus on underlying
inﬂation trends, decreased in February 2022 compared to the previous month (see ﬁgure). These
trends suggest that price pressures in February 2022 may have been driven by a relatively small
group of goods and services. All measures of inﬂation that we monitor relative to the previous
year increased in January and February 2022, while the measures of inﬂation expectations are
more mixed.
Percentage Change in Inﬂation Indicators from the Previous Month, Jan. 2020–Feb. 2022

Methodology
To identify indicators for monitoring areas of the economy supported by the federal response to
the COVID-19 pandemic, in particular by the six COVID-19 relief laws, we reviewed a number of
sources. Speciﬁcally, we used prior GAO work, data from federal statistical agencies, information
from the Board of Governors of the Federal Reserve System (Federal Reserve) and relevant federal
agencies responsible for the pandemic response and oversight of the health care system, data
available on the Bloomberg Terminal, and input from internal GAO experts. We reviewed the
most recent data from these sources as of March and the beginning of April 2022, depending on
availability.
To identify indicators for monitoring inﬂation, we reviewed data from federal statistical agencies,
academic and other research literature, information from the Federal Reserve, the Federal Open
Market Committee, written responses to our questions provided by the Bureau of Labor Statistics

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and the Federal Reserve, data available on the Bloomberg Terminal, and input from internal GAO
experts.
We assessed the reliability of the economic indicators we used through a number of steps,
including reviewing relevant documentation, reviewing prior GAO work, and interviewing data
providers. Collectively, we determined the indicators were suﬃciently reliable to provide a general
sense of (1) how the areas of the economy supported by the federal pandemic response were
performing and (2) trends in the inﬂation experience of consumers.

Agency Comments
We provided the Department of Housing and Urban Development (HUD), the Department of
Labor (DOL), the Department of the Treasury (Treasury), the Federal Reserve, and the Oﬃce of
Management and Budget (OMB) with a draft of this enclosure. DOL, Treasury, and the Federal
Reserve provided technical comments, which we incorporated as appropriate. HUD and OMB did
not provide comments on this enclosure.
Contact information: Michael Hoﬀman, (202) 512-6445, hoﬀmanme@gao.gov

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COVID-19 Surveillance
The Centers for Disease Control and Prevention could be better positioned to lead the nation’s
eﬀorts to detect and monitor COVID-19, in coordination with state, tribal, local, and territorial
partners (collectively, jurisdictions) and public health partner organizations. This could be
accomplished by including in the agency’s existing surveillance approach speciﬁc objectives for
how it will achieve its goals and a description of how it will assess progress towards meeting them.
Entities involved: The Centers for Disease Control and Prevention, within the Department of
Health and Human Services

Recommendation for Executive Action
The Director of the Centers for Disease Control and Prevention, in coordination with state,
tribal, local, and territorial jurisdictions and public health partner organizations, should ensure
the agency builds upon its existing COVID-19 surveillance approach by detailing speciﬁc
objectives for how it will achieve its COVID-19 surveillance goals and describing how it will assess
progress toward meeting them. The Department of Health and Human Services agreed with our
recommendation, and the Centers for Disease Control and Prevention noted that it will continue
eﬀorts to develop a document summarizing its COVID-19 surveillance goals and how it will assess
progress towards meeting them.

Background
According to the Centers for Disease Control and Prevention (CDC), public health surveillance is
the ongoing, systematic collection, analysis, and interpretation of health-related data essential
for planning, implementation, and evaluation of public health practice.62 Surveillance is intended
to guide eﬀorts to detect and monitor disease and injuries, assess the impact of interventions
and assist in the management of, and recovery from, large-scale public health incidents.63 In the
U.S., public health surveillance is a shared eﬀort between CDC and thousands of agencies at the
federal, state, local, tribal, and territorial levels (which we refer to collectively as “jurisdictions”),
along with health care providers, laboratories, and others.
For surveillance of COVID-19, CDC’s approach is to collect multiple types of data, including data
on cases, testing, hospitalizations, emergency department visits, hospital capacities, and variants.
CDC uses this COVID-19 surveillance data in several ways, including to track the spread of the
virus, identify geographic or other areas of concern, and inform decision-makers accordingly.
These data contribute to CDC’s development of guidance for the public, at-risk groups, and
health care providers. In addition, CDC provides information to the Department of Health and

62Public health practice involves the application of proven methods to monitor the health status of the community,

investigate unusual occurrences of diseases or other conditions, and implement preventive control measures
based on current understanding within public health sciences. See https://www.cdc.gov/training/publichealth101/
surveillance.html, accessed March 3, 2022, for more information about public health surveillance.
63Centers for Disease Control and Prevention. Surveillance Strategy. 2014. https://www.cdc.gov/ddphss/docs/cdc-

surveillance-strategy-ﬁnal.pdf, accessed Nov. 17, 2021.

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Human Services’ (HHS) leadership and to the White House to help direct the federal government’s
pandemic response.
In our May 2018 report, we found that routine federal public health funding to jurisdictions
had generally decreased over the years. The COVID-19 pandemic prompted new funding to
support public health activities at all levels of government. Speciﬁcally, the CARES Act, American
Rescue Plan Act of 2021 (ARPA), and annual appropriations acts for ﬁscal years 2020 and 2021
together provided CDC with $1.1 billion to support data modernization and COVID-19 surveillance
activities.64

Overview of Key Issues
CDC’s COVID-19 surveillance approach outlines goals and activities for what the agency wants
to achieve, but it does not detail how it will achieve its stated goals or how it will measure its
progress—two components of an eﬀective strategy we have noted in our past work. By including
speciﬁc objectives that detail how CDC’s actions will allow it to meet its goals and describing
measures to assess its progress towards reaching its goals, CDC could better ensure it is able to
eﬀectively monitor COVID-19 nationwide.
Given the many entities and numerous sources of data used, surveillance is a complex interagency
and intergovernmental eﬀort. (See our related Public Health Data Collection and Standardization
and Public Health Situational Awareness Network Capabilities enclosures.) In our prior work, we
found that such eﬀorts can beneﬁt from a strategy that clearly deﬁnes what the agency is aiming
to achieve (goals), how goals will be achieved (objectives), and metrics for assessing progress
(measures), among other things. Over time, some public health oﬃcials, researchers, and other
infectious disease preparedness and response experts have emphasized the need for updated
COVID-19 surveillance-related strategies, particularly as the pandemic shows signs of beginning
to move from a period of crisis to a period of control. For example, in a January 2022 paper in
the Journal of the American Medical Association, three experts noted that updated strategies for
COVID-19 response and preparedness—including addressing data-related issues for improving
and updating surveillance approaches—were needed going forward for moving from pandemic
crisis to control.65
CDC‘s COVID-19 surveillance approach includes a framework that is based on eight COVID-19
surveillance goals and several broader initiatives, according to agency oﬃcials (see table).

64CARES Act, Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 554 (2020); ARPA, Pub. L. No. 117-2, § 2404, 135 Stat. 4,

42. Committee reports accompanying the Further Consolidated Appropriations Act, 2020, Pub. L. No. 116-94, and the
Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, speciﬁed that $50 million from each law was to be used for
data modernization. See H.R. Rep. No. 38-679, at 107 (2020); and H.R. Rep. No. 43-750, pt.2, at 1608 (2021).
65David Michaels, Ezekiel J. Emanuel, and RickA. Bright, “Viewpoint: A National Strategy for COVID-19: Testing,

Surveillance, and Mitigation Strategies,” JAMA, vol. 327, no. 3, 213-214. See also Center for Infectious Disease Research
and Policy (CIDRAP), University of Minnesota, COVID-19: CIDRAP Viewpoint: Part 5: SARS-CoV-2 Infection and COVID-19
Surveillance: A National Framework, July 9, 2020; and Mark McClellan, Scott Gottlieb, Farzad Mostashari, Caitlin Rivers,
and Lauren Silvis, Duke University, Margolis Center for Health Policy, A National COVID-19 Surveillance System: Achieving
Containment, Durham, N.C.: Apr. 7, 2020.

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Goals and Selected Initiatives in CDC’s Framework for COVID-19 Surveillance
Goals and Initiatives

Description

CDC’s eight COVID-19 surveillance goals

1. Monitor trends and intensity of COVID-19 transmission, identify
outbreaks, and provide data to initiate case and contact
investigations.
2. Understand disease severity and the spectrum of illness.
3. Monitor and track vaccine distribution, uptake, and eﬀectiveness.
4. Describe risk factors for severe disease and transmission.
5. Monitor for variants.
6. Assess impact on health care systems.
7. Estimate disease burden, and forecast trends, impact, and clinical
and public health needs.
8. Monitor impact of disease and interventions on health equity.

2014 Surveillance Strategy for improving
a

capabilities

Describes a number of eﬀorts to improve CDC’s and the public health
system’s overall surveillance capabilities by improving the timeliness
and quality of surveillance data.

Public Health Science Agenda for COVID-19, last Describes priority public health science questions organized around
b
topic areas, including surveillance-related ones, such as testing or
updated January 5, 2022
health equity. The priority questions outline critical scientiﬁc gaps
identiﬁed by CDC or its public health partners that, if addressed, could
provide improvements in public health outcomes.
Individual surveillance activity strategies

Strategies that are speciﬁc to 10 individual surveillance activities such
as those for monitoring cases, deaths, hospitalizations, and other
types of COVID-19 data.

Data Modernization Initiative, launched in 2020

An initiative launched in 2020 to modernize public health surveillance
infrastructure with the goal of improving data integration to prevent or
reduce problems. For more information on CDC’s Data Modernization
Initiative, see the Public Health Data Collection and Standardization
enclosure in this report.

COVID Data Tracker, updated daily

Online dashboard for CDC’s public reporting of COVID-19 surveillance
data including maps and charts tracking cases, deaths, and trends of
COVID-19.

Source: GAO summary of information from the Centers for Disease Control and Prevention (CDC). | GAO-22-105397.

See Centers for Disease Control and Prevention, Public Health Surveillance: Preparing for the Future (Atlanta, Ga.: 2014).

For the Public Health Science Agenda for COVID-19 see https://www.cdc.gov/coronavirus/2019-ncov/science/science-agendacovid19.html, accessed January 31, 2022.

For the COVID Data Tracker see https://covid.cdc.gov/covid-data-tracker/#datatracker-home, accessed March 2, 2022.

To meet the eight COVID-19 surveillance goals, CDC oﬃcials told us the agency uses data collected
for COVID-19 through existing systems that also collect data for other pathogens (e.g., by adding
COVID-19 case reporting to CDC’s case surveillance system) or by modifying existing systems
to collect new types of information. CDC oﬃcials noted they work with jurisdictions to scale
up existing surveillance activities and stand up new ones to monitor for COVID-19, based on

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longstanding shared work during both routine and emergency disease surveillance activities with
these partners.
While CDC’s COVID-19 surveillance approach includes goals and activities conducted for each
goal, which we have noted in our prior work as being desirable of an eﬀective strategy, it lacks
speciﬁc objectives for how the activities will help it achieve these surveillance goals, and measures
to assess its progress meeting the goals. Speciﬁcally, in our prior work we noted that a desirable
characteristic of an eﬀective strategy includes a description of what the strategy is trying to
achieve, steps to achieve those results, and performance measures to gauge results.66
One example of how CDC could include objectives and measures to build on its approach and
ensure it best meets its goals for COVID-19 surveillance is in wastewater testing. CDC oﬃcials told
us that part of the agency’s COVID-19 surveillance approach is to conduct wastewater testing,
a form of testing that can be used in communities where timely clinical testing is unavailable.
Wastewater surveillance is an activity that contributes to two of CDC’s COVID-19 surveillance goals:
monitoring trends and identifying outbreaks (goal 1 in the table above); and estimating disease
burden, and forecasting trends, impact, and clinical and public health needs (goal 7 in the table
above), according to agency oﬃcials. However, CDC has not detailed the speciﬁc objectives that
describe how wastewater surveillance contributes to achieving these goals. CDC also has not
developed measures that would allow it to understand how well current wastewater surveillance
contributes to progress in meeting these goals.
One potential objective that CDC could set, for example, could be the use of wastewater
surveillance where clinical testing is limited in order to help the agency achieve its goal of
monitoring and identifying outbreaks nationwide.67 CDC could then set targets for the percentage
of communities with wastewater being tested that would allow it to measure how well its
wastewater surveillance is contributing to CDC’s larger COVID-19 surveillance eﬀorts, such as
ﬁlling gaps in communities where other types of testing is more limited. A deﬁned measure for
the level of wastewater surveillance needed to ensure eﬀective monitoring of COVID-19 could also
help CDC coordinate and align surveillance activities with jurisdictions and public health partner
organizations.68
CDC oﬃcials told us that its approach to COVID-19 surveillance must change over time, and that
a strategy, once written down, could become static and may not be as useful. However, a strategy
that includes deﬁning how the agency’s activities will help it to achieve its goals and how it will
gauge progress would not limit CDC’s ability to adapt to changing circumstances. An eﬀective
national strategy that includes both objectives and measures would allow CDC to better adapt to
changing circumstances, such as when new variants arise, and better ensure that public health
partners are able to adapt and move in the same direction for a nationwide approach.

66Other characteristics relate to purpose, problem deﬁnition, risk management, coordination, and implementation.
67This objective and measure is intended to be illustrative only and not prescriptive of an actual objective we are

proposing that the agency employ.

68Jurisdictional participation in wastewater surveillance is voluntary, according to CDC information.

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CDC oﬃcials told us they are thinking about the future of COVID-19 surveillance, as did all three
public health partner organizations we interviewed.69 One of the partner organizations further
noted they are looking for leadership from CDC to help with this transition and to better ensure
that surveillance approaches nationally align with their members’ approaches at the jurisdictional
level. This moment—as CDC and partners think about the future of COVID-19 surveillance and the
need to shift with changing circumstances—oﬀers an ideal opportunity for CDC to incorporate
objectives and measures into its COVID-19 surveillance approach.
According to CDC oﬃcials, they have discussed the use of diﬀerent surveillance approaches, such
as sentinel surveillance, and the amount of case data required to monitor trends.70 Oﬃcials told
us that they had these discussions in the summer of 2021, and that while they continued those
and other discussions related to strategies for the future of COVID-19 surveillance, they had to
shift their focus temporarily to respond to the rising COVID-19 cases from the Delta and Omicron
variants.
CDC’s approach for surveillance going forward may be most eﬀective by being adaptable to the
changing nature of the pandemic and aligned with the White House’s COVID-19 and larger public
health emergency planning and priorities. For example, the latest White House pandemic plan,
released March 2, 2022, lays out a role for CDC surveillance leadership and includes preparing
for new variants as one of four key goals in COVID-19 preparedness.71 Having speciﬁc objectives
and measures related to variant surveillance, also one of CDC’s eight goals, would better ensure
that CDC is able to meet its own surveillance goal on variants, align with the White House plan,
and better ensure that jurisdictions and public health partner organizations are aligned with this
surveillance approach as well.
At this critical time, the U.S. needs a forward-looking approach to its surveillance strategy. We
recognize the challenges of adapting a COVID-19 surveillance strategy to plan for the future
while simultaneously responding to the present pandemic. We also recognize that a strategy
that is ﬂexible and adaptable to new information as it becomes available is only a starting
point. Nevertheless, whether the nation enters a period of recovery or surge, CDC could be
better positioned to lead the nation and coordinate with jurisdictions and public health partner
organizations to detect and monitor COVID-19 by including in its existing surveillance approach
speciﬁc objectives for how it will achieve its goals and a description of how it will assess progress
towards meeting them.

69These three CDC public health partner organizations support COVID-19 surveillance activities and, collectively,

represent state, local, and territorial public health agencies, and state epidemiologists.

70In sentinel surveillance, a network of health care providers or other relevant entities regularly report speciﬁed health

events such as cases or hospitalizations. According to oﬃcials, sentinel surveillance has been used for monitoring
inﬂuenza, where the goal of surveillance is information on trends rather than individual case investigation.

71The White House, National COVID-19 Preparedness Plan. March 2, 2022. https://www.whitehouse.gov/covidplan/, last

accessed March 9, 2022.

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Methodology
To understand CDC’s COVID-19 surveillance approach, we reviewed relevant CDC documents
and agency webpages related to its COVID-19 surveillance and key initiatives that support the
framework for surveillance, such as CDC’s Science Agenda webpage.72 We also interviewed
oﬃcials from CDC, as well as HHS, and obtained written information. We assessed CDC’s eﬀorts
against characteristics of an eﬀective national strategy that we identiﬁed in previous work.
Speciﬁcally, we compared CDC’s approach against a characteristic that eﬀective strategies include
goals, objectives, activities, and performance measures.
To gather perspectives from CDC’s public health partners involved in COVID-19 surveillance, we
interviewed representatives from the three national organizations that support public health
surveillance activities and that collectively represent local, state, and territorial public health
agencies, and state epidemiologists: the Association of State and Territorial Health Oﬃcials, the
National Association of County and City Health Oﬃcials, and the Council of State and Territorial
Epidemiologists.

Agency Comments
We provided a draft of this enclosure to HHS and the Oﬃce of Management and Budget (OMB).
HHS agreed with our recommendation, and its comments are reproduced in appendix VII. CDC
noted that it will continue eﬀorts to develop a document summarizing its COVID-19 surveillance
goals and describe how it will assess progress towards meeting them. The document will describe
surveillance goals, objectives, core surveillance approaches used to address the surveillance
objectives, and additional layered surveillance approaches that provide additional situational
awareness. CDC also noted that progress towards meeting surveillance goals is aﬀected by agency
eﬀorts as well as jurisdictional activities, funding, data use agreements, and reporting authorities
that are outside of its control.
CDC also provided technical comments, which we incorporated as appropriate. OMB did not
provide comments.

GAO’s Ongoing Work
We will continue to review federal eﬀorts related to COVID-19 surveillance.

GAO’s Prior Recommendations
The table below presents our recommendations on testing from prior bimonthly and quarterly
CARES Act reports.

72See https://www.cdc.gov/coronavirus/2019-ncov/science/science-agenda-covid19.html, accessed January 31, 2022.

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Prior GAO Recommendations Related to COVID-19 Testing
Recommendation

Status

The Director of the Centers for Disease Control
and Prevention should work with appropriate
stakeholders—including public health and private
laboratories—to develop a plan to enhance laboratory
surge testing capacity. This plan should include
timelines, deﬁne agency and stakeholder roles and
responsibilities, and address any identiﬁed gaps from
preparedness exercises (July 2021 report).

Open— partially addressed. The Department of Health and
Human Services (HHS) agreed with our recommendation and
has begun to implement it. CDC informed us in January 2022,
that the agency has, in collaboration with internal and external
partners, drafted a plan to enhance laboratory surge testing
capacity outside of CDC and public health laboratories. This
is a positive step forward and we will review the plan once it
is ﬁnalized. In March 2022, CDC informed us they expect to
ﬁnalize their plan and provide it to us for review in May.

The Director of the Centers for Disease Control and
Closed— addressed. The Department of Health and Human
Prevention should assess the agency's needs for goods Services (HHS) agreed with our recommendation that the
and services for the manufacturing and deployment of Director of CDC assess the agency’s needs for goods and
services for the manufacturing and deployment of test kits in
diagnostic test kits in public health emergencies. This
assessment should evaluate how establishing contracts public health emergencies. CDC informed us in March 2022,
that the agency had assessed its existing contract mechanisms,
in advance of an emergency could help the Centers
ﬂexibilities, and contract options and their ability to address
for Disease Control and Prevention quickly and costeﬀectively acquire these capabilities when responding COVID-19 response needs. CDC informed us that lessons
learned from the COVID-19 response led the agency to institute
to future public health emergencies, including those
additional ﬂexibilities and contract options for existing, new,
caused by novel pathogens, and should incorporate
and future contracts mechanisms. CDC informed us that these
lessons learned from the COVID-19 emergency (July
changes could support the emergency production of goods
2021 report).
and services during an emergency. As a result, we believe
CDC’s actions address our recommendation.
The Secretary of Health and Human Services (HHS)
should develop and make publicly available a
comprehensive national COVID-19 testing strategy
that incorporates all six characteristics of an eﬀective
national strategy. Such a strategy could build upon
existing strategy documents that HHS has produced
for the public and Congress to allow for a more
coordinated pandemic testing approach (January 2021
report).

Open—partially addressed. HHS partially agreed with our
recommendation. In January 2021, HHS agreed that the
department should take steps to more directly incorporate
some of the elements of an eﬀective national strategy, but
expressed concern that producing such a strategy at this time
could be overly burdensome on the federal, state, and local
entities that are responding to the pandemic, and that a plan
would be outdated by the time it was ﬁnalized or potentially
rendered obsolete by the rate of technological advancement.
In March 2022, the White House updated its general COVID-19
strategy, which provided new strategic elements related
to testing, but does not contain all of the elements of an
eﬀective national strategy, such as clearly deﬁned performance
metrics and benchmarks. As of March 2022, HHS had not fully
addressed this recommendation.

To improve the federal government’s response to
COVID-19 and preparedness for future pandemics,
the Secretary of Health and Human Services should
immediately establish an expert committee or
use an existing one to systematically review and
inform the alignment of ongoing data collection and
reporting standards for key health indicators. This
committee should include a broad representation of
knowledgeable health care professionals from the
public and private sectors, academia, and nonproﬁts
(January 2021 report).

Open—not addressed. HHS partially agreed with our
recommendation. As of July 2021, HHS stated that it planned
to consider ways to establish more permanent work groups
to incorporate best practices for ongoing interagency data
needs and to scale up as necessary during future public health
emergencies. We maintain that immediately establishing an
expert committee—not limited to federal agency oﬃcials—that
includes knowledgeable health care professionals from the
public and private sectors, academia, and nonproﬁts is an
important and worthwhile eﬀort to help improve the federal
government's response to the COVID-19 pandemic and its

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Recommendation

Status
preparedness for future pandemics. As of March 2022, we
were awaiting updates from the agency.

The Secretary of Health and Human Services should
ensure that the Director of the Centers for Disease
Control and Prevention (CDC) clearly discloses the
scientiﬁc rationale for any change to testing guidelines
at the time the change is made (November 2020
report).

Open—partially addressed. HHS agreed with our
recommendation and has begun to implement it. Speciﬁcally,
in April 2022, CDC outlined for GAO steps the agency plans
to take to ensure that future updates to testing guidance
include clear links to the underlying scientiﬁc rationale. For
instance, agency oﬃcials plan to include on the agency’s
testing guidance a hyperlink to the science brief page with
underlying scientiﬁc rationale supporting the guidance. We
will continue to monitor the implementation of these planned
steps.

Source: GAO. I GAO-22-105397

Related GAO Products
Science & Tech Spotlight: Wastewater Surveillance. GAO-22-105841 Washington, D.C.: April 11, 2022.
Infectious Disease Threats: Funding and Performance of Key Preparedness and Capacity-Building
Programs. GAO-18-362. Washington, D.C.: May 24, 2018.
Biosurveillance: Eﬀorts to Develop a National Biosurveillance Capability Need a National Strategy and a
Designated Leader. GAO-10-645. Washington, D.C.: June 30, 2010.
Combating Terrorism: Evaluation of Selected Characteristics in National Strategies Related to Terrorism.
GAO-04-408T. Washington, D.C.: February 3, 2004.
Contact information: SaraAnn Moessbauer, 202-512-4943, MoessbauerS@gao.gov, and Mary
Denigan-Macauley, 202-512-7114, DeniganMacauleyM@gao.gov

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HHS COVID-19 Funding
The Department of Health and Human Services was appropriated approximately $484 billion in
COVID-19 relief funds. It reported that it had obligated about $418 billion and expended about
$269 billion of this amount—about 86 percent and 55 percent, respectively—as of February 28,
2022.
Entity involved: Department of Health and Human Services

Background
The Department of Health and Human Services (HHS) received approximately $484 billion in
COVID-19 relief appropriations from six COVID-19 relief laws enacted as of February 28, 2022. HHS
COVID-19 relief funds may be used for a range of purposes, such as assistance to health care or
child care providers; testing, therapeutic, or vaccine-related activities; or procurement of critical
supplies. Many HHS COVID-19 relief funds are available for a multiyear period or until expended.

Overview of Key Issues
As of February 28, 2022, HHS reported that it had obligated about $418 billion (86 percent) and
expended about $269 billion (55 percent) of the approximately $484 billion in COVID-19 relief
funds appropriated (see ﬁgure below).

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HHS-Reported COVID-19 Relief Appropriations, Obligations, and Expenditures from COVID-19 Relief Laws, as of
Feb. 28, 2022

These amounts reﬂect appropriations provided in Divisions M and N of the Consolidated Appropriations Act, 2021, that are
speciﬁcally designated for COVID-19 relief.

The table below shows HHS appropriations, obligations, and expenditures by COVID-19 relief law
that HHS reported as of February 28, 2022.

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HHS-Reported COVID-19 Relief Appropriations, Obligations, and Expenditures, by Relief Law, as of Feb. 28, 2022
Date of Appropriations
enactment
$ in millions

Legislation

Obligations
$ in millions
(% obligated)

Expenditures
$ in millions
(% expended)

Coronavirus Preparedness and Response
Supplemental Appropriations Act, 2020
(Pub. L. No. 116-123)

March 6, 2020

6,497

5,830 (90)

4,491 (69)

Families First Coronavirus Response Act
(Pub. L. No. 116-127)

March 18, 2020

1,314

1,309 (100)

1,276 (97)

CARES Act

March 27, 2020

142,833

139,386 (98)

127,470 (89)

April 24, 2020

100,000

80,927 (81)

70,027 (70)

December 27, 2020

73,175

68,138 (93)

26,296 (36)

March 11, 2021

160,494

122,073 (76)

39,166 (24)

484,313

417,843 (86)

268,725 (55)

(Pub. L. No. 116-136)

Paycheck Protection Program and Health
Care Enhancement Act
(Pub. L. No. 116-139)
Consolidated Appropriations Act, 2021
(Pub. L. No. 116-260)

American Rescue Plan Act of 2021
(Pub. L. No. 117-2)
Total

Source: Department of Health and Human Services (HHS) data. | GAO-22-105397

HHS reported that it transferred $289 million from CARES Act appropriations to the Department of Homeland Security; this
amount is not included in HHS’s reported obligations or expenditures.
b

These amounts reﬂect appropriations provided in Divisions M and N of the Consolidated Appropriations Act, 2021 that
are speciﬁcally designated for COVID-19 relief. An additional $638 million in COVID-19 relief funds were appropriated under
Division H to the Administration for Children and Families, an agency within HHS, to prevent, prepare for, and respond to the
coronavirus, for necessary expenses for grants to carry out a low-income household drinking water and wastewater emergency
assistance program. These funds were not included in the HHS-reported data on HHS COVID-19 relief appropriations,
obligations, and expenditures, as HHS noted that the funds were not considered COVID-19 relief funding for USAspending.gov
reporting purposes.
c

The percent obligated was 99.6 percent, which we show as 100 percent due to rounding.

The table below shows allocations, obligations, and expenditures of COVID-19 relief appropriations
made to HHS under the six relief laws by agency or key fund as of February 28, 2022.

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HHS-Reported Allocations, Obligations, and Expenditures of COVID-19 Relief Funding, by Agency or Key Fund, as
of Feb. 28, 2022
Allocations
($ millions)

Obligations
($ millions)

Expenditures
($ millions)

Administration for Children and Families

65,257.5

65,093.0

21,204.3

Administration for Community Living

3,200.0

2,995.8

1,216.9

12.5

11.0

Centers for Disease Control and Prevention

27,225.9

20,041.1

7,878.4

Centers for Medicare & Medicaid Services

935.0

719.3

107.2

Enhanced Use of Defense Production Act

10,000.0

1,473.3

142.2

718.0

270.1

112.2

Health Resources and Services Administration

11,729.8

10,542.2

4,515.5

Indian Health Service

7,980.0

5,458.8

4,991.4

National Institutes of Health

3,001.3

2,587.8

1,615.8

Oﬃce of Inspector General

17.0

7.9

6.7

346,001.4

301,032.2

226,114.7

5,267.8

4,992.9

4,313.6

32,723.8

25,922.6

15,168.9

45,994.2

44,419.2

22,023.5

178,000.0

159,066.0

154,415.7

84,015.6

66,631.5

30,193.0

8,235.0

7,608.5

808.7

484,313.4

417,842.5

268,725.0

Agency or key fund

Agency for Toxic Substances and Disease Registry

Food and Drug Administration

Public Health and Social Services Emergency Fund (PHSSEF)

Oﬃce of the Assistant Secretary for Health

Oﬃce of the Assistant Secretary for Preparedness and Response
c

Biomedical Advanced Research and Development Authority
c, d

Provider Relief Fund
c

Other PHSSEF

Substance Abuse and Mental Health Services Administration
Grand total

Source: Department of Health and Human Services (HHS) data. | GAO-22-105397

Note: For the purpose of this table, the term allocation includes both direct appropriations and transfers between HHS
agencies. For example, according to HHS, the agency transferred $1,063.5 million to the Administration for Children and
Families’ Unaccompanied Children Program from National Institutes of Health appropriations provided in the Consolidated
Appropriations Act, 2021, Pub. L. No. 116-260, 134 Stat. 1182, 1913 (2020), citing the Secretary’s authorities under that act.
HHS reported that it transferred $289 million to the Department of Homeland Security that is not included in the reported
obligations or expenditures. With respect to the Consolidated Appropriations Act, 2021, the amounts reﬂect appropriations
speciﬁcally designated for COVID-19 in Divisions M and N of the act.

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These amounts do not reﬂect Medicaid and Medicare expenditures that resulted from statutory changes to these programs
under the COVID-19 relief laws.
b

PHSSEF is an account through which funding is provided to certain HHS oﬃces, such as the Oﬃce of the Assistant Secretary
for Preparedness and Response. Amounts have been appropriated to this fund for the COVID-19 response to support certain
HHS agencies and response activities. The PHSSEF allocation amount includes $289 million that HHS reported it transferred to
the Department of Homeland Security and is not included in the reported obligations or expenditures. Amounts appropriated
to the PHSSEF and transferred to agencies within HHS listed in the table are included in the allocation amounts for the speciﬁed
receiving agencies. For example, the National Institutes of Health received transfers from the PHSSEF and these amounts are
included in the agency allocation rather than in the PHSSEF total.
c

The italicized amounts are subtotals of the PHSSEF and are already reﬂected in amounts listed for the PHSSEF.

The Provider Relief Fund reimburses eligible health care providers for health care-related expenses or lost revenues that
are attributable to COVID-19. Provider Relief Fund expenditures also may be referred to as disbursements. For additional
information about Provider Relief Fund allocations and disbursements, see the Relief for Health Care Providers enclosure.

HHS reported allocations, obligations, and expenditures of appropriations from the six COVID-19
relief laws for a variety of COVID-19 response activity categories (see the table below). When
response activities had spending related to multiple categories, they were only assigned to one.
For example, certain funds for testing and vaccine distribution were included in the response
activity category for support to states, localities, territories, and tribal organizations rather than in
the testing or vaccine activity categories.
HHS oﬃcials noted that allocations for COVID-19 response activities are determined by
appropriations made by Congress in combination with approved spend plan decisions. The timing
of obligations and expenditures of allocations for response activities can vary due to a variety of
factors, including the timing of the appropriations and the planned uses of funds. For example,
some research programs are planned in phases, which aﬀects the timing of the release of the
funds.

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HHS-Reported Allocations, Obligations, and Expenditures by Selected COVID-19 Response Activity, as of Feb. 28,
2022
COVID-19 response
activity

Description

Allocations
Obligations
($ in millions) ($ in millions)

Expenditures
($ in millions)

Provider Relief Fund

Includes reimbursements to eligible
health care providers for health carerelated expenses or lost revenues that are
attributable to COVID-19.

178,000.0

159,066.0

154,415.7

Testing

Includes procurement and distribution
of testing supplies, community-based
testing programs, testing in high-risk and
underserved populations and in Indian
Health Services’ programs, screening in
schools, Centers for Disease Control and
Prevention (CDC) testing-related activities
such as technical assistance, and other
activities.

57,582.1

43,685.9

19,865.7

Includes funding for states and other
governments for child care subsidies for
eligible families and quality improvement
activities, sub-grants to child care providers
to stabilize the child care market, and
payments for child care assistance.

52,450.0

52,449.7

15,143.2

Vaccines

Includes Biomedical Advanced Research and
Development Authority (BARDA) funding
for vaccine development and procurement;
National Institutes of Health (NIH) research
activities; and CDC vaccine distribution,
administration, and technical assistance
related activities.

41,508.2

37,346.7

17,721.1

Support to state,
local, territorial, and
tribal organizations’
preparedness

Includes funding for states and other
governments to support testing, contact
tracing, and surveillance; vaccine
distribution; and other activities.

40,116.6

39,572.9

14,244.0

Drugs and
therapeutics

Includes BARDA funding for development
and procurement of therapeutics and NIH
research activities.

17,546.8

15,932.8

7,168.5

Strategic National
Stockpile

Includes funds for acquiring, storing, and
maintaining ventilators, testing supplies, and
personal protective equipment (PPE) and
increasing manufacturing capacity for certain
PPE.

13,919.9

10,512.5

8,449.4

Health centers

Includes support for COVID-19-related
activities—such as testing—at health centers,
which provide health care services to
individuals regardless of their ability to pay.

9,620.0

9,487.4

4,073.4

Child Care and

Development Fund

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COVID-19 response
activity

Description

Allocations
Obligations
($ in millions) ($ in millions)

Expenditures
($ in millions)

Rural provider
payments

Includes assistance for rural providers and
suppliers, administered using the same
mechanism as the Provider Relief Fund.

8,500.0

7,245.9

7,246.6

Mental health
and substance
use–related services

Includes substance abuse prevention and
treatment, community-based mental health
services, and other activities.

8,315.0

7,623.6

811.4

Diagnostics research
and development

Includes BARDA diagnostic development
programs and NIH projects, such as the
Rapid Acceleration of Diagnostics Initiative.

2,411.4

1,958.8

1,298.5

Head Start

Includes grants to local programs for
high-quality learning experiences and to
respond to other immediate and ongoing
consequences of COVID-19.

2,000.0

1,998.9

862.5

b
Testing for uninsured Includes reimbursements to eligible
providers for COVID-19 testing for individuals
who are uninsured.

2,000.0

1,998.7

1,983.1

Global disease
Includes support to governments and other
detection and
organizations to rapidly diagnose cases and
emergency response to ensure readiness to implement vaccines
and therapeutics.

1,550.0

732.1

336.1

Telehealth

Includes eﬀorts to support safety-net health
care providers transitioning to telehealth,
telehealth access—especially for vulnerable
maternal and child health populations—and
a telehealth website.

284.2

176.6

154.3

Other response

Includes additional activities such as
activities conducted by the Administration
for Community Living, certain CDC-wide
activities and program support, and
activities conducted by the Food and Drug
Administration.

48,509.2

28,054.0

14,951.5

484,313.4

417,842.5

268,725.0

activities

Total

Source: Department of Health and Human Services (HHS) data, written HHS responses, and GAO analysis of HHS spend plans. | GAO-22-105397

Notes: The selected response activities represent examples of certain targeted activities that fall within particular HHS agencies,
such as funding for health centers or Head Start, as well as broader categories of response activities that may span HHS
agencies, such as testing-, vaccine-, and therapeutics-related response activities.
HHS reported allocations, obligations, and expenditures for these activities based on the primary programmatic recipient
organization of the funds, although some activities apply to multiple categories. For example, certain funds in the “support to
state, local, territorial, and tribal organizations for preparedness” category were provided for testing but are not reﬂected in the
“testing” category. However, HHS also noted that testing-related funding awarded to states or localities that was appropriated
under the American Rescue Plan Act of 2021 (ARPA) was included in the “testing” category. HHS oﬃcials explained that the
activity names align with how funds were appropriated under diﬀerent COVID-19 relief laws.
According to HHS oﬃcials, the allocations reported for the key activities above are based on amounts appropriated for these
activities in the COVID-19 relief laws, HHS transfers of funds, and approved spend plan decisions made by HHS in coordination

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with the Oﬃce of Management and Budget. According to HHS, the agency used about $1.7 billion in appropriations provided
under ARPA, including $1.2 billion appropriated for COVID-19 testing, contact tracing, and mitigation activities, for the
Administration for Children and Families’ Unaccompanied Children Program, citing the Secretary’s authorities under the Public
Health Service Act and the Consolidated Appropriations Act, 2021. See Pub. L. No. 116-260, div. H, tit. II, § 204, 134 Stat. 1182,
1589 (2020); 42 U.S.C. 238j(a). With respect to the Consolidated Appropriations Act, 2021, the amounts reﬂect appropriations
speciﬁcally designated for COVID-19 in Divisions M and N of the act. HHS reported that it transferred $289 million to the
Department of Homeland Security that is not included in the reported obligations or expenditures.
a

According to HHS oﬃcials, HHS has allocated an additional $4.8 billion to the testing for the uninsured program from section
2401 of ARPA, which HHS included in the “testing” response activity category.
c

According to HHS oﬃcials, the agency transferred $1,063.5 million from NIH appropriations for research and clinical trials
related to long-term studies of COVID-19 and $850 million from the Public Health and Social Services Emergency Fund, Strategic
National Stockpile, to the Administration for Children and Families’ Unaccompanied Children Program citing authority provided
in section 304 of the Consolidated Appropriations Act, 2021 for both transfers. See Pub. L. No. 116-260, div. M, tit. III, § 304, 134
Stat. at 1913, 1916, 1923 (2020).

Methodology
We obtained HHS data on appropriations, allocations, obligations, and expenditures of COVID-19
relief funds by HHS agency and by selected response activity, as of February 28, 2022. We reviewed
the six COVID-19 relief laws and also reviewed appropriation warrant information provided by the
Department of the Treasury as of February 28, 2022. To assess the reliability of the data reported
by HHS, we reviewed HHS documentation, Department of the Treasury appropriation warrant
information, and other available information on HHS’s use of COVID-19 relief funds. We did not
independently validate the data provided by HHS. We determined that the HHS-reported data
were suﬃciently reliable for the purposes of our reporting objective.

Agency Comments
We provided HHS and the Oﬃce of Management and Budget with a draft of this enclosure. Neither
agency provided comments on this enclosure.

GAO’s Ongoing Work
We will continue to examine HHS’s use of COVID-19 relief appropriations contained in COVID-19
relief laws and HHS’s oversight of these funds.

GAO’s Prior Recommendation
The table below presents our recommendation related to HHS COVID-19 funding from a prior
quarterly CARES Act report.

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Prior GAO Recommendation Related to Department of Health and Human Services (HHS) COVID-19
Funding
Recommendation

Status

To communicate information about and facilitate oversight
of the agency’s use of COVID-19 relief funds, the Secretary of
Health and Human Services should provide projected time
frames for the planned spending of COVID-19 relief funds in
the Department of Health and Human Services’ spend plans
submitted to Congress. (July 2021 report).

Open-partially addressed. As of January, 2022,
HHS reported that it had incorporated projected
time frames of planned spending for certain
activities, such as select grants and cooperative
agreements. HHS stated that the department
is unable to provide speciﬁc time frames for all
relief funds due to the evolving environment of
the COVID-19 response and the need to remain
ﬂexible in responding to incoming requests for
response activities.

Source: GAO. I GAO-22-105397

Contact information: Carolyn L. Yocom, (202) 512-7114, yocomc@gao.gov

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Relief for Health Care Providers
As of February 28, 2022, the Department of Health and Human Services had disbursed payments
to providers totaling about $154.4 billion (about 87 percent) of the $178 billion appropriated by
COVID-19 relief laws to the Provider Relief Fund. Moreover, HHS announced recently that all of
the Provider Relief Fund has been allocated. The Health Resources and Services Administration
has begun Provider Relief Fund payment integrity oversight by identifying payment integrity risks
and conducting eﬀorts to respond to and mitigate the risks, such as post-payment reviews of relief
payments it has made, recovery of overpayments, and audits of providers’ use of payments.
Entities involved: Department of Health and Human Services, including its Health Resources and
Services Administration

Background
Relief funds to health care providers have been allocated and disbursed by the Department of
Health and Human Services (HHS) through the following programs:73
Provider Relief Fund. To respond to the pandemic, three of the six COVID-19 relief laws
appropriated a total of $178 billion to the Provider Relief Fund (PRF) to reimburse eligible
providers for health care-related expenses or lost revenues attributable to COVID-19:
• the CARES Act appropriated $100 billion,
• the Paycheck Protection Program and Health Care Enhancement Act appropriated $75 billion,
and
• the Consolidated Appropriations Act, 2021, appropriated $3 billion for this purpose.74
HHS’s Health Resources and Services Administration (HRSA) administers payments from the
PRF, including allocations to the COVID-19 Uninsured Program and to the COVID-19 Coverage
Assistance Fund.75 In addition to the PRF, the American Rescue Plan Act of 2021 appropriated $8.5
billion for payments to eligible rural health care providers for health-care-related expenses and
lost revenues attributable to COVID-19.76
HRSA oversees the PRF and the American Rescue Plan Rural Distribution and established the
Provider Relief Bureau Program and Payment Integrity Branch to increase payment integrity

73Providers may have also received other assistance from several sources, including the Department of the Treasury,

the Small Business Administration, the Federal Emergency Management Agency, the Paycheck Protection Program, and
local, state, and tribal government assistance sources.
74Pub. L. No. 116-260, div. M, tit. III, 134 Stat. 1182, 1920 (2020); Pub. L. No. 116-139, div. B, tit. I, 134 Stat. 620, 622

(2020); Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 563 (2020).

75HRSA’s COVID-19 Uninsured Program covers treatment, testing, and administering the vaccine for the uninsured, and

its COVID-19 Coverage Assistance Fund covers the cost of administering the vaccine for the underinsured.

76Pub. L. No. 117-2, § 9911, 135 Stat. 4, 236-38. According to HHS oﬃcials, these funds are administered using the same

mechanism as the PRF. HRSA began disbursing these funds to rural providers in November 2021.

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through recovery of overpayments.77 Some of HRSA’s post-payment oversight activities include
(1) risk analysis and post-payment reviews of payment discrepancy types to determine whether
HRSA made PRF overpayments (i.e., payments made to ineligible providers or made in incorrect
amounts), (2) recovery eﬀorts seeking repayment of overpayments, and (3) post-payment audits
to determine whether PRF funds were used by providers in accordance with laws and terms and
conditions of the program.78
The HHS Oﬃce of Inspector General (OIG) has identiﬁed concerns related to fraud schemes that
divert PRF payments based on misrepresentation, among other things. For example, HHS OIG
is currently investigating several cases where providers may have falsely attested that they were
eligible to receive PRF payments or otherwise received PRF payments despite being ineligible,
resulting in overpayments.
Accelerated and Advance Payments. HHS’s Centers for Medicare & Medicaid Services’ (CMS)
Accelerated and Advance Payments Program provides loans to active Medicare providers and
suppliers. Section 3719 of the CARES Act authorized the expansion of this program due to the
COVID-19 pandemic, though no new loans have been made since January 2021.79 Of the $107.3
billion in COVID-19-related loans disbursed under the program as of February 28, 2022, $63.3
billion in repayments have been made by providers and suppliers, and the current outstanding
loan balance for the program is $43.9 billion.

Overview of Key Issues
Provider Relief Fund allocations, disbursements, and returned funds. As of February 28, 2022,
HHS had allocated all of the $178 billion appropriated to the PRF, and disbursed about $154.4
billion. HHS allocated PRF funds as follows:
• $86.3 billion for general distributions, for general relief to health care providers,
• $55.8 billion for targeted distributions, for certain types of providers and facilities; and
• $36.0 billion for other distributions.80
Allocated and undisbursed funds. In March 2022, HHS oﬃcials told us that the remaining funds
we previously reported as unallocated were being reserved to meet future demands of the
77According to HRSA’s post-payment standard operating procedures, the agency seeks repayment and recovery of

inaccurate and improper payments, which it deﬁnes as any payment that should not have been made or that was made
in an incorrect amount.
78In addition to audits, oﬃcials told us that they also conduct assessments to determine appropriate use of PRF funds

in accordance with the terms and conditions of the program. According to oﬃcials, assessments are generally used to
review the use of payments from the COVID-19 Uninsured Program distributions rather than payments from general and
targeted distributions.
79Pub. L. No. 116-136, § 3719, 134 Stat. at 426.

80Other distributions also included funding for treatment, testing, and vaccine administration, as well as funding for

administrative contracts and full-time equivalents to support PRF activities.

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ongoing COVID-19 pandemic—speciﬁcally, claims reimbursement programs, through the COVID-19
Uninsured Program and the COVID-19 Coverage Assistance Fund. Oﬃcials also told us that the
timing of these remaining distributions will depend on several factors, including when claims are
submitted by providers to HHS for reimbursement of COVID-19 testing, treatment, and vaccine
administration.81
Fund disbursements. According to our analysis of information provided by HRSA, as of February 28,
2022, HRSA had disbursed about $74.8 billion from general distribution allocations, about $55.1
billion from the targeted allocations, and $24.5 billion for other distributions.82 As of February 28,
2022, 439,304 providers had received 753,625 payments made from the PRF.
HRSA’s general distributions to providers have been distributed in phases, beginning April 10,
2020, with Phase I distributions to providers billing Medicare fee-for-service, to its recent Phase IV
distributions, beginning December 16, 2021, of $17 billion in general distributions to a broad range
of providers who could document COVID-related revenue loss and expenses from July 1, 2020,
through March 31, 2021. HRSA oﬃcials told us that as of February 28, 2022, HRSA had disbursed
about $10.7 billion of this $17 billion to providers who had successfully set up payment accounts
to receive the disbursed funds.83
See table below for a summary of PRF allocations and disbursements as of February 28, 2022.

81According to the White House, as of March 2022, the COVID-19 Uninsured Program stopped accepting new claims for

testing and treatment, and as of April 2022, the COVID-19 Uninsured Program and COVID-19 Coverage Assistance Fund
stopped accepting claims for vaccinations for the uninsured and underinsured.

82The disbursement of $74.8 billion represents about 87 percent of allocations of the current general distributions, and

$55.1 billion represents about 99 percent of allocations from the targeted distributions.

83HRSA oﬃcials told us that there may be a few weeks of lag time between when providers successfully set up a

payment account and when the funds are transferred.

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Provider Relief Fund: Summary of Allocations and Disbursements, as of February 28, 2022
Allocation
($ in billions)

Disbursement
($ in billions)

Date of initial
disbursement

Phase I: Medicare

42.816

41.907

April 10, 2020

Phase II: Medicaid and Children’s Health Insurance
Program (CHIP) providers

3.678

3.159

July 3, 2020

Phase II: dental providers

1.002

0.995

July 28, 2020

Phase II: assisted living facilities

0.405

0.381

September 25, 2020

Phase III: general distribution

21.361

17.706

November 14, 2020

Phase IV: general distribution

17.000

10.671

December 16, 2021

Subtotal of general distributions

86.262

74.819

n/a

10.990

10.726

May 6, 2020

High-impact hospitals

20.685

20.655

May 7, 2020

Skilled nursing facilities

4.785

4.750

May 22, 2020

Indian health care providers

0.520

0.499

May 29, 2020

Safety net hospitals

13.074

12.838

June 12, 2020

Children’s hospitals

1.063

1.061

August 20, 2020

Nursing home infection control, quality, and
performance

4.650

4.528

August 27, 2020

Subtotal of targeted distributions

55.767

55.057

n/a

Subtotal of general and targeted distributions

142.029

129.876

n/a

18.300

12.375

May 15, 2020

Vaccine and therapeutic development and
procurement activities

16.691

12.030

November 25, 2020

Administration

0.980

0.136

n/a

Description
General distributions

Targeted distributions
Rural health care facilities

Other distributions
Treatment, testing, and vaccine administration for
the uninsured and underinsured

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Description

Allocation
($ in billions)

Disbursement
($ in billions)

Date of initial
disbursement

35.971

24.541

n/a

0.000

n/a

178.000

154.417

n/a

Subtotal other distributions
e

Unallocated funds

Total Provider Relief Fund
Legend: n/a = not applicable
Source: Summary of Department of Health and Human Services (HHS) funding data. | GAO-22-105397

Provider Relief Fund disbursements may also be referred to as expenditures.

On March 22, 2022, Health Resources and Services Administration (HRSA) announced that it had released for disbursement an
additional $413 million to providers, bringing the total to nearly $12 billion released for disbursement to 82,000 providers, out
of the $17 billion allocated for Phase IV general distributions. HRSA also announced, as of March 22, 2022, that 89 percent of
applications from providers for Phase IV general distributions had been processed, and HRSA oﬃcials told us they expected to
process the remaining Phase IV applications by the end of spring 2022.
c

High-impact hospitals are hospitals that have a high number of conﬁrmed COVID-19 inpatient admissions.

HRSA covers treatment, testing, and administering the vaccine for the uninsured through its COVID-19 Uninsured Program,
and covers the cost of administering the vaccine for the underinsured through its COVID-19 Coverage Assistance Fund.
e

According to HRSA, all funding for the Provider Relief Fund had been allocated as of February 28, 2022.

Returned funds. Providers can return funds at any time and do so on a regular basis.84 According
to HRSA, providers had returned $9.8 billion from previous disbursements from the general and
targeted distributions, as of February 28, 2022, an increase of $1 billion from the $8.8 billion
in returned funds we previously reported, as of August 31, 2021.85 According to HRSA, most of
the returned funds were linked to payments automatically issued to providers based on HRSA’s
determination of provider eligibility and payment calculation, rather than on providers’ applying
for the funds.86

84HRSA oﬃcials explained that providers may return funds for a variety of reasons, including if they believe (1) the

original payment calculation sent to them was too high or they expect a reissuance of a diﬀerent amount from
HRSA—possibly a corrected lower amount or a reissuance to a diﬀerent entity in their health care system—or (2) the
funds were not needed and they have no intention of receiving a new amount through a reissued payment.
85HRSA oﬃcials told us that payments returned to HRSA’s claims reimbursement programs, including those for

the uninsured and underinsured, are used for future payments by those programs and not reallocated by HRSA.
These returned payments include overpayment amounts returned by a provider and overpayment amounts that
are subtracted from a provider’s subsequent claims submitted to the program. There were no returned funds for
administrative expenditures.
86When funds are returned, the disbursement totals reported are calculated after deducting the returned funds.

Oﬃcials said that returned funds are not included in the disbursement totals shown in the above table and are available
for subsequent allocations. The Consolidated Appropriations Act, 2021, provided that not less than 85 percent of PRF
funds unobligated as of the date of enactment and funds recovered from providers after the date of enactment shall
be for any successor to the Phase III General Distribution to reimburse health care providers based on applications that
consider ﬁnancial losses and changes in operating expenses attributable to COVID-19 occurring in the third and fourth
quarters of 2020 and the ﬁrst quarter of 2021.

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Provider Relief Fund payment integrity. HRSA has begun PRF payment integrity oversight by
identifying payment integrity risks and taking actions such as post-payment reviews, recovery of
overpayments, and audits.87
Post-payment reviews of relief payments made by HRSA. As of March 2022, HRSA was conducting
or planning post-payment reviews of all payment discrepancy types, which HRSA designed for
reviews to identify potential overpayments due to computation errors and ineligible providers,
among other things. For example, a computation error could be due to incorrect data used to pay
providers, and an ineligible provider could be a deceased provider or a provider with a Medicare
or Medicaid fraud conviction.88 HRSA conducts post-payment reviews of PRF general and targeted
distributions to identify overpayments—payments made in incorrect amounts or to ineligible
providers. As of February 2022, about $27.4 million had been identiﬁed for recovery from ineligible
providers.
HRSA oﬃcials told us they plan to conduct post-payment reviews of all 753,625 PRF general and
targeted distribution payments made to 439,304 providers, which total over $129 billion.89 In
preparation for this undertaking, the agency has conducted assessments to evaluate and mitigate
the risks to payment integrity and planned to use these assessments to prioritize its post-payment
reviews.90
Agency oﬃcials have also developed a post-payment manual and matrix. HRSA’s post-payment
manual speciﬁes that it will prioritize post-payment reviews according to the following criteria:
high visibility cases, total dollar amount, number of providers impacted, suspected fraud, and
complexity required to investigate. HRSA oﬃcials told us that they track reviews of payment
discrepancy types in a post-payment matrix, which they regularly adjust to reﬂect current priorities
based on the criteria above.
For ﬁnal resolution of post-payment reviews, HRSA’s manual also speciﬁes that a ﬁnal discrepancy
memo will be used to establish the decision for repayment by documenting the analysis and
evidence of overpayments. This ﬁnal discrepancy memo may be reviewed by HRSA’s Oﬃce
of General Counsel and other stakeholders prior to HRSA taking action to recover funds from
providers. According to agency oﬃcials, key elements of a ﬁnal repayment memorandum include
a deﬁnition of the payment discrepancy type, targeting criteria, relevant data sources, factors
considered, and procedures for conducting the post-payment reviews. The post-payment matrix
supplements the manual and lists all identiﬁed payment discrepancy types for conducting postpayment reviews and the status of completion—open or closed—based on each of the types.

87Throughout the enclosure, the term “post-payment reviews” refers to HRSA’s post-payment quality control reviews.
88As of January 2022, HRSA had identiﬁed 57 payment discrepancy types, and at least 15 were related to ineligible

providers. HRSA oﬃcials updated this information to 58 payment discrepancy types as of March 2022.

89The number of payments was 753,625 as of February 28, 2022; the number of payments will grow over time as HRSA

continues to disburse PRF payments while the COVID-19 pandemic continues and funds are available. Oﬃcials noted
that payments may be reviewed multiple times as the payments may fall under multiple payment discrepancies.

90The agency has conducted two PRF risk assessments—one as part of the OMB A-123 requirement and another as an

internal programmatic evaluation. HRSA has also conducted post-payment analyses to identify risks of overpayments.
HRSA oﬃcials told us in January 2022 that they planned to use the risk assessment implemented as part of its
programmatic risk evaluation in order to prioritize internal controls.

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As of February 2022, one ﬁnal discrepancy memo—for the pilot post-payment review of renal
dialysis payments—had been issued.91 Final discrepancy memos had not been issued for the
additional nine payment discrepancy types that had funds identiﬁed for repayment and for which
HRSA was seeking repayment. In addition, another nine payment discrepancy types, which did
not identify funds for repayment, were closed without a ﬁnal memo. Agency oﬃcials told us that
they do not issue memos for all closed discrepancy types, but they plan to begin producing ﬁnal
discrepancy memos to document repayment decisions for reviews that identify overpayments for
recovery.
As of January 2022, there were a total of 57 payment discrepancy types for review, with 10 closed
and 47 remaining open. The status of payment discrepancy types for review as of October 2021
was similar; there were a total of 55 payment discrepancy types for review, with 10 closed and 45
open (see table below).92

91In March 2022, HRSA oﬃcials told us that they had completed four additional ﬁnal discrepancy memos but did not

provide supporting reporting documentation.

92HRSA oﬃcials told us that post-payment reviews may remain open (1) to allow for further analysis, (2) to allow oﬀsets

by future payments, or (3) for policy decisions that may determine that repayments will not be sought.

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Status and Total of Payment Discrepancy Types for Post-payment Review
Status of Payment Discrepancy
Types for Post-payment Review

Total as of
October 2021

January 2022

Open payment discrepancy types
scheduled for review

Open payment discrepancy types to
be scheduled for review in 2022

Closed payment discrepancy types for

Open payment discrepancy types for
a

post-payment review

Total payment discrepancy types for
post-payment review

Source: GAO analysis of Health Resources and Services Administration (HRSA) data. | GAO-22-105397

HRSA oﬃcials noted that the post-payment matrix shows when reviews are scheduled to begin, but it does not show an
anticipated completion date since distributions are continuing. Oﬃcials noted that reviews must remain open until no future
payments are determined to be at risk or a control is put in place to prevent the discrepancy from occurring.
b

According to the post-payment manual, ﬁnal resolution of post-payment reviews that are closed are to be documented with
a ﬁnal discrepancy memo. At the time of our review, 10 payment discrepancy types were closed, but only one memo was
available. As of March 2022, oﬃcials told us that they had completed four additional ﬁnal discrepancy memos, but did not
provide supporting documentation.
c

HRSA designed payment discrepancy types for post-payment reviews to identify potential overpayments due to computation
errors and ineligible providers, among other things. For example, a computation error could be due to incorrect data used
to pay providers, and an ineligible provider could be a deceased provider or a provider with a Medicare or Medicaid fraud
conviction. As of January 2022, HRSA had identiﬁed 57 payment discrepancy types, and at least 15 were related to ineligible
providers. In March 2022, HRSA oﬃcials told us that they had identiﬁed 58 payment discrepancy types as of March 2022, of
which 21 remain open, 4 are closed, 8 are closed due to consolidation, nine are scheduled to close pending a ﬁnal discrepancy
memo, and 16 are scheduled for review but not yet open for analysis. HRSA did not provide supporting documentation.

HRSA oﬃcials told us that the agency will continue to conduct post-payment reviews of payment
discrepancy types until those types will have no more PRF payments. At that point, HRSA noted, it
will consider the payment status ﬁnal for all providers and then all post-payment reviews will be
ﬁnalized and closed. As part of this process, HRSA also plans to issue ﬁnal discrepancy memos for
payment discrepancy types where the agency has identiﬁed funds for recovery but has not taken
action to seek repayment.
As of March 2022, HRSA was in the process of addressing our recommendation from October
2021 to ﬁnalize post-payment oversight through actions such as establishing time frames
for completing post-payment reviews to promptly address identiﬁed risks and identifying all
overpayments made from the PRF.93 Agency oﬃcials told us that HRSA and its contractor meet
weekly to determine which payment discrepancy types will be reviewed in the upcoming week,
93GAO-22-105051: Additional Actions Needed to Improve Accountability and Program Eﬀectiveness of Federal Response.

Washington, D.C., October 27, 2021.

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and that they are continuously evaluating the prioritization order. HRSA provided the following
reasons why it prioritizes post-payment reviews this way:
• Oﬃcials said that reviews of diﬀerent discrepancy types often run parallel to one another,
since HRSA does not wait for one discrepancy review to be completed before starting a review
of a diﬀerent discrepancy.
• Oﬃcials added that reviews of a particular discrepancy type may be temporarily suspended or
delayed while another discrepancy type review moves forward, due to factors such as resource
limitations, policy decisions, and case study investigations.
According to HRSA oﬃcials, their plan is to schedule, conduct, and close reviews in 2022, but
the agency has not indicated when in 2022 all of its reviews of payments will be scheduled or
completed. They also noted that continuous evaluations of priorities for post-payment reviews
may result in processing payment discrepancy types in a concurrent manner. We maintain that
establishing time frames for completing post-payment reviews of all payment discrepancy types
and implementing recovery eﬀorts expeditiously will help the agency succeed in recovering
overpayments, particularly since disbursement of PRF funds began in April 2020.
HRSA recovery of overpayments. In October 2021, we recommended that HRSA ﬁnalize and
implement post-payment recovery eﬀorts to recoup overpayments. HRSA partially concurred and
stated that payment recovery eﬀorts will occur in the future. HRSA’s post-payment review process
identiﬁes potential overpayments for recovery, but not all will result in actions to seek repayment
as not all will ultimately be determined to be overpayments, oﬃcials noted. For example, HRSA
oﬃcials told us that it will not seek repayment of all potential overpayments identiﬁed from postpayment reviews because
• Some potential overpayments have been oﬀset by subsequent PRF distributions and resulted
in a net correct payment amount, or
• Some potential overpayments are below the minimum threshold under HRSA’s policy.
In addition, oﬃcials noted that some potential overpayments due to miscalculations may later
be found (during the course of HRSA audits) to have been used appropriately by providers, and
therefore would not be subject to repayment. For example, in the case of duplicate overpayments,
HRSA’s notice to providers gives them the option of using the overpayment on expenses due to
coronavirus or lost revenue, instead of submitting a repayment to HRSA.
Challenges to prompt action to review and recover have been further exacerbated by recent
events.
• As of March 2022, HRSA had suspended its recovery eﬀorts for overpayments in order to
establish a dispute process for providers to challenge HRSA’s repayment decisions. Oﬃcials
told us that there are two instances of providers that are challenging the need to return funds

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(about $551,000 in disputed overpayments of the $187.3 million in identiﬁed overpayments
that HRSA will seek for repayment), and therefore the agency is developing a dispute process.
• Additionally, oﬃcials told us that they had encountered technical issues in seeking funds from
providers with identiﬁed overpayments due to missing bank trace numbers that are used to
seek repayment.94 The agency is trying to resolve the issue which may continue in the future,
since oﬃcials told us that bank practice is to delete and reuse trace numbers after 12 months.
Oﬃcials told us the agency will resume recovery eﬀorts once the dispute process is established,
however, it is unclear why HRSA is suspending its recovery eﬀorts, since recovery eﬀorts could
continue while a dispute process is developed. There may be recovery steps HRSA can continue
to take, such as sending notiﬁcation letters to those providers with identiﬁed overpayments or
continuing to identify potential overpayments.
Prior to its suspension of recovery eﬀorts, as of August 2021, HRSA had taken actions to seek
repayment of about 9 percent (about $15.1 of $167 million) of funds identiﬁed as overpayments
in its post-payment reviews. In contrast, as of December 2021, HRSA had taken actions to seek
repayment of about 14 percent (about $26.3 million of $187.3 million) of funds identiﬁed as
overpayments in its post-payment reviews. Of the overpayments sought by HRSA, the agency had
recovered about $2.9 million of $15.1 million as of August 2021 and about $14.1 million of $26.3
million as of December 2021. See table below.

94HRSA oﬃcials told us that the bank that issues PRF payments uses trace numbers to process payments and

repayments.

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Provider Relief Funds (PRF) Identiﬁed as Potential Overpayments and Overpayments Sought by Health
Resources and Service Administration (HRSA) for Repayment

Agency Eﬀorts Regarding Recovery of PRF Overpayments
Potential overpayments HRSA identiﬁed through post-payment
reviews

Amount as of
August 2021
(millions)

Amount as of Amount as of
December 2021 February 2022
(millions)
(millions)

$305.0

$313.2

HRSA will not seek repayment

$138.0

$125.9

HRSA eﬀorts to seek repayment

$167.0

$187.3

HRSA has taken action to seek repayment

$15.1

$26.3

HRSA has recovered overpayments

$2.9

$14.1

$22.8

$151.9

$161.0

HRSA plans to seek repayment but has not yet taken
action
Source: GAO analysis of HRSA data. | GAO-22-105397

Note: Based on HRSA summary reports for total funds identiﬁed for recovery for August 2021 and December 2021, the
potential overpayments went to about 3,000 providers.
a

HRSA will not seek repayment of these potential overpayments because (1) some have been oﬀset by subsequent PRF
distributions and resulted in a net correct PRF payment, or (2) some potential overpayments are below the minimum threshold
under HRSA’s policy.
b

HRSA takes action to seek repayment by sending notiﬁcation letters to providers requesting return of overpayment funds.

Post-payment audits of providers’ use of payments. HRSA has ﬁnalized its audit strategy manual
expected to guide the agency’s audits on provider compliance with requirements for the use of
PRF funds, and plans to begin audits later this year.95
According to oﬃcials, HRSA has initiated four pilot audits, involving four randomly selected
providers and their 30 subsidiaries totaling $32.8 million from the ﬁrst round of provider reports.96
These pilot audits are being conducted to test audit procedures and plans and are estimated to be
completed by July 2022.
In March 2022, according to oﬃcials, HRSA plans to audit a risk-based selection of providers that
received funds. The selection of providers will be based on risk factors such as payment amount,
95The audits will determine whether providers used payments to cover only COVID-19 eligible expenses or related

revenue losses not reimbursed from other sources in accordance with laws and HRSA guidance. Providers may
have received other assistance from several sources, including the Department of the Treasury, the Small Business
Administration, the Federal Emergency Management Agency, the Paycheck Protection Program, and local, state, and
tribal governments.

96HRSA oﬃcials noted that they would schedule audits to follow the receipt of the ﬁrst round of provider reports, which

were due by September 30, 2021—this deadline was subsequently extended until November 30, 2021. For the ﬁrst PRF
payments disbursed from April 10 to June 30, 2020, providers were required to use the funds by June 30, 2021, and
report on the use of these funds no later than September 30, 2021—which was subsequently extended to November 30,
2021.

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prior single audit, and eligibility to receive payments, and on the risk score assigned to each
provider based on these risk factors. In spring 2022, HRSA will begin the risk-based audit selection
of all providers who reported in the ﬁrst and second phases. According to oﬃcials, the audits will
begin within a few weeks after selection of providers.

Methodology
To conduct our work, we examined publicly released HHS information, federal laws and agency
guidance, and obtained information from CMS and HRSA in the form of written responses to
questions, documents (including payment integrity oversight materials), and a data set. Our review
of the data sources provides reasonable assurance of the data’s reliability. The Provider Relief
Fund dataset, which includes disbursements as of February 28, 2022, came from HRSA, which is
the only available source for the disbursement data. The allocation amounts and categories that
were provided by HRSA were consistent with publicly available information. CMS provided data
on the current status for loans and repayments under the Accelerated and Advance Payments
program, as of February 28, 2022. Our review and analysis of HRSA’s payment integrity oversight
eﬀorts includes data received through February 18, 2022. Where appropriate we also included
updated information provided by HRSA in late March 2022; however, we were not able to verify
that data.

Agency Comments
We provided HHS and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
OMB did not provide comments on this enclosure. HHS provided technical comments on this
enclosure, which we incorporated as appropriate. In its technical comments, HRSA provided
updated data as of March 2022 on its payment integrity oversight eﬀorts, speciﬁcally related to the
post-payment reviews of payment discrepancy types and recovery of overpayments, but did not
provide supporting documentation. We were not able to verify these data.

GAO’s Ongoing Work
As HHS works to distribute funds for COVID-19 relief activities and to eligible providers, it will
continue to be important that HHS oﬃcials ensure funds are appropriately distributed and used.
We plan to conduct additional work examining HHS’s COVID-19 relief funds, including payment
oversight and funds returned by providers to HRSA.

GAO’s Prior Recommendations
The table below presents our recommendations from prior reports related to a post-payment
review process for the PRF, and the Uninsured Program, funded from the PRF.

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Prior GAO Recommendations Related to Department of Health and Human Services (HHS) Relief for Health Care
Providers
Recommendation

Status

The Secretary of Health and Human
Closed—Addressed. HHS agreed with our recommendation to ﬁnalize
Services should ﬁnalize and implement a and implement a post-payment review process. In July 2021, HHS stated it
post-payment review process to validate was developing the post-payment review audit strategy for the Uninsured
COVID-19 Uninsured Program claims
Program, which includes detailed protocol and procedures for the
and to help ensure timely identiﬁcation assessments of the Uninsured Program to be executed by audit contractors.
of improper payments, including those
In March 2022, HHS provided us a copy of its COVID-19 Uninsured Program
resulting from potential fraudulent
Assessment Strategy Manual. The manual provides detailed protocols
activity, and recovery of overpayments. and procedures for assessing the Uninsured Program claims to identify
(March 2021 report)
overpayments for recovery. As such, we believe this manual addresses our
recommendation.
The Administrator of the Health
Resources and Services Administration
should establish time frames for
completing post-payment reviews to
promptly address identiﬁed risks and
identify overpayments made from the
Provider Relief Fund, such as payments
made in incorrect amounts or payments
to ineligible providers.
(October 2021 report)

The Administrator of the Health
Resources and Services Administration
should ﬁnalize procedures and
implement post-payment recovery of
any Provider Relief Fund overpayments,
unused payments, or payments not
properly used.
(October 2021 report)

Open—not addressed. HRSA partially concurred with this recommendation.
HRSA has a broad schedule of plans to conduct post-payment reviews.
According to HRSA oﬃcials, they plan to schedule reviews in 2022, but
the agency has not indicated when all of its reviews of payments will be
scheduled or completed. In March 2022, HRSA reported that it started
performing post-payment reviews in October 2020. HRSA also stated that
it has identiﬁed 58 types of reviews, each of which is currently either open,
closed, scheduled for review, or to be scheduled for review. HRSA stated that
it tracks the status and schedule of reviews, and the schedule is regularly
revised to reﬂect emerging priorities. HRSA stated that it will continue
reviews until no future payments are at risk or HRSA puts a control in place
to prevent the risk. Absent time frames for conducting and completing
reviews, however, it is unclear how promptly the agency is identifying risks
and overpayments and may delay the agency in expeditiously identifying
and recovering overpayments. We will continue to monitor HRSA’s progress
towards completion of its post payment review process.
Open—not addressed. HRSA partially concurred with this recommendation.
Despite initial actions to address this recommendation, HRSA has suspended
its post-payment recovery eﬀorts. In March 2022, HRSA provided updated
data for the total funds identiﬁed for recovery or potential repayment.
HRSA has two categories of unused funds for which the agency will seek
repayment. HRSA stated that it will seek repayment for all PRF payments
reported as unused. For providers who HRSA required to report and
failed to do so, they may submit a request to report late or may submit
repayment of unreported payment amounts. However, HRSA told us that it
has suspended its recovery eﬀorts in order to establish a dispute process
for providers to challenge HRSA’s repayment decisions. In addition, HRSA
has encountered technical challenges in seeking funds from providers with
identiﬁed overpayments due to missing bank trace numbers that are used to
seek repayment. The agency is trying to resolve the issue which may continue
in the future. We will continue to monitor HRSA’s progress towards recovery
of overpayment, unused payments, or payments not properly used.

Source: GAO. I GAO-22-105397

Contact information: Carolyn L. Yocom, (202) 512-7114, yocomc@gao.gov

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Public Health Situational Awareness Network Capabilities
The federal government lacks an interoperable network of systems for near real-time public health
situational awareness 15 years after federal law ﬁrst mandated that the Department of Health and
Human Services establish such a network. Across our body of work in this area, we have made a
total of six recommendations to help ensure the department has made progress in establishing
network capabilities—four of which remain unaddressed as of March 2022.
Entities involved: Department of Health and Human Services, including the Centers for Disease
Control and Prevention, the Oﬃce of the Assistant Secretary for Preparedness and Response, and
the Oﬃce of the Chief Information Oﬃcer

Background
Public health oﬃcials across the U.S. and its territories rely on a variety of information from a
number of sources to create the situational awareness they need to prepare for and respond to
a disease outbreak, environmental threat, or other public health emergency. The rapid spread of
COVID-19 and the ensuing COVID-19 pandemic have underscored the importance of having access
to real-time, high-quality data. Access to timely and accurate data can help the federal government
understand the eﬀects of diseases on public health throughout the U.S. and its territories. Timely
and accurate data can also help to inform agencies’ allocation of resources and help them make
timely and responsive decisions related to public health and safety. We have described challenges
related to public health data for nearly two decades, including challenges related to sharing
and standardizing data and the coordination needed to do so. (See also our related COVID-19
Surveillance and the Public Health Data Collection and Standardization enclosures in this report.)
To address such challenges, Congress and the President have enacted three laws since 2006
aimed at establishing a near real-time electronic nationwide public health situational awareness
capability through an interoperable network of systems.97 This network would incorporate
data from diﬀerent sources and be used to enhance early detection of and rapid response
to potentially catastrophic infectious disease outbreaks and other public health emergencies
that originate domestically or abroad. The most recent act—the Pandemic and All-Hazards
Preparedness and Advancing Innovation Act of 2019—reiterated that the Department of Health
and Human Services (HHS) is to establish the network. In addition, this network is to be built on
existing U.S. state and territory situational awareness systems or enhanced systems that enable
interoperability. The 2019 act also required us to conduct a review of the progress HHS has made
in implementing the legal requirements.

97Pandemic and All-Hazards Preparedness Act, Pub. L. No. 109-417, 120 Stat. 2831 (2006); Pandemic and All-Hazards

Preparedness Reauthorization Act of 2013, Pub. L. No. 113-5, 127 Stat. 161 (2013); Pandemic and All-Hazards
Preparedness and Advancing Innovation Act of 2019, Pub. L. No. 116-22, 133 Stat. 905 (2019).

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Overview of Key Issues
HHS has yet to establish an interoperable network of systems for public health situational
awareness and biosurveillance, as required by law.98 As a result, the federal government still lacks
this capability. Our prior work in December 2010 and September 2017 noted that HHS had made
little progress in planning and establishing the network, respectively. Across both reports, we
made a total of six recommendations to assist HHS in ensuring progress in establishing network
capabilities—four of which remain unaddressed as of March 2022. For example, in September
2017, we recommended that HHS task an integrated project team with including speciﬁc actions in
the implementation plan for conducting all activities needed to establish and operate the network.
We also recommended that the team be tasked with developing a project management plan that
includes measurable steps. HHS has not taken action on these recommendations.
HHS developed a platform, called HHS Protect, to help integrate COVID-19 data and other types
of health information collected by various federal, state, and local public health and commercial
entities. However, we have previously reported that some public health and state organizations
have raised questions about the completeness and accuracy of some of the COVID-19 data
included in HHS Protect that are intended to support the federal government’s response to the
pandemic. In our August 2021 report on HHS’s eﬀorts to collect hospital capacity data, we noted
that HHS identiﬁed the need for timely, complete, and high-quality data to support the federal
government’s response to pandemics was a key lesson learned.
The limited progress made by HHS in establishing the network capabilities required by the
Pandemic and All-Hazards Preparedness and Advancing Innovation Act of 2019 could negatively
aﬀect the timeliness and accuracy of data utilized by federal and state governments for public
health. This limited progress, coupled with concerns regarding the completeness and accuracy
of some of the COVID-19 data in HHS Protect, could reduce the ability of public health oﬃcials to
comprehensively monitor and eﬀectively respond to COVID-19 and future pandemics.

Methodology
To conduct our ongoing work related to the establishment of network capabilities required by
Pandemic and All-Hazards Preparedness and Advancing Innovation Act of 2019, we analyzed
available documentation, such as descriptions of systems that are key to public health situational
awareness and biosurveillance. We also followed up on related recommendations we have
made in previous reports and administered a survey to public health oﬃcials from the 50 states,
the District of Columbia, and ﬁve U.S. territories to obtain information on lessons learned and
challenges from the COVID-19 pandemic. We also interviewed relevant oﬃcials from HHS,
including the Centers for Disease Control and Prevention, the Oﬃce of the Assistant Secretary
for Preparedness and Response, the Oﬃce of the Chief Information Oﬃcer, and the Oﬃce of the
National Coordinator for Health Information Technology.

98The Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 added biosurveillance activities to the

measurable steps that HHS was to include in the implementation plan required to develop the network.

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Agency Comments
We provided HHS and the Oﬃce of Management and Budget with a draft of this enclosure. Neither
agency provided comments on this enclosure.

GAO’s Ongoing Work
We will continue to monitor HHS’s progress toward implementing our prior recommendations
and establishing an electronic nationwide public health situational awareness capability through
an interoperable network of systems. Such work will also include any challenges and lessons
learned from COVID-19 that HHS, states, and territories could incorporate in the planning and
implementation of the capability.

Related GAO Products
COVID-19: HHS’s Collection of Hospital Capacity Data. GAO-21-600. Washington, D.C.: August 5, 2021.
Public Health Information Technology: HHS Has Made Little Progress toward Implementing Enhanced
Situational Awareness Network Capabilities. GAO-17-377. Washington, D.C.: September 6, 2017.
Public Health Information Technology: Additional Strategic Planning Needed to Guide HHS’s Eﬀorts to
Establish Electronic Situational Awareness Capabilities. GAO-11-99. Washington, D.C.: December 17,
2010.
Contact information: Jennifer R. Franks, (404) 679-1831, franksj@gao.gov

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Public Health Data Collection and Standardization
The Centers for Disease Control and Prevention needs to deﬁne speciﬁc action steps and time
frames to ensure that its Data Modernization Initiative reaches its full potential. Through the Data
Modernization Initiative, the agency intends to improve data collection and sharing, strengthen
data reporting and analytics, and advance surveillance to monitor the spread of infection of
COVID-19 and other public health threats, among other goals. In ﬁscal years 2020 and 2021, the
Centers for Disease Control and Prevention received $1.1 billion in funds for public health data
modernization.
Entity involved: Centers for Disease Control and Prevention, within the Department of Health and
Human Services

Recommendation for Executive Action
The Director of the Centers for Disease Control and Prevention should deﬁne speciﬁc action steps
and time frames for the agency’s data modernization eﬀorts. The Department of Health and
Human Services agreed with this recommendation.

Background
The evolving nature of the COVID-19 pandemic has underscored the importance of accurate and
timely data and a robust public health surveillance infrastructure for monitoring the spread of
infection and disease progression across the population.99 As the nation’s lead public health
agency, the Centers for Disease Control and Prevention (CDC), within the Department of Health
and Human Services (HHS), maintains over 100 surveillance systems for uses which include
tracking infectious diseases, noninfectious health conditions (e.g., lead poisoning), and risk factors
and exposures (e.g., tobacco use). (See also our related COVID-19 Surveillance and Public Health
Situational Awareness Network Capabilities enclosures in this report.)
CDC’s COVID-19 surveillance approach includes existing and new surveillance systems to collect,
analyze, and publish data on COVID-19 cases, deaths, testing, hospitalizations, and vaccinations.
Two such systems are the National Vital Statistics System (which includes information about
events such as births and deaths) and the National Notiﬁable Diseases Surveillance System (which
collects individual case data on approximately 120 notiﬁable diseases—including COVID-19—from
hospitals, health care providers, laboratories, and other sources, through state, territorial, and
local health departments).100

99Public health surveillance refers to the ongoing, systematic collection, analysis, and interpretation of health-related

data essential to planning, implementation, and evaluation of public health practice. Deﬁnition adapted from Stephen
B. Thacker and Guthrie S. Birkhead, “Surveillance,” in Field Epidemiology, ed. Michael B. Gregg (Oxford: Oxford University
Press, 2008), 38-66.
100The Council of State and Territorial Epidemiologists works with CDC to recommend which diseases should be

included in the National Notiﬁable Diseases Surveillance System and the development of standardized case deﬁnitions
for these diseases each year. Through this system, about 3,000 local health departments transmit data electronically to
60 state, territorial, and other health departments, which in turn share the data with CDC.

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CDC relies on state and local public health departments and health care facilities to collect and
voluntarily report needed data. CDC also provides technical assistance, guidance, and grants to
these health departments to support activities related to collecting and reporting data.
The pandemic highlighted limitations in both the data that CDC collects, including COVID-19 data,
such as test results and case reports from state and local public health departments, and in the
public health surveillance systems CDC uses to collect and share these data. Speciﬁcally, since
June 2020, we and others have identiﬁed concerns with federal COVID-19 data. For example, we
reported in January 2021 that the federal government generally lacks consistent and complete
COVID-19 data due, in part, to inconsistently reported state data, which complicates comparisons
of COVID-19 case counts and rates across geographic areas and populations. Further, according to
CDC oﬃcials, the pandemic highlighted limitations of the agency’s reliance on voluntary reporting
from health departments and health care facilities.
CDC also has noted that the COVID-19 pandemic has underscored the need to improve how it
collects, uses, and shares data. Further, stakeholders, such as the Association of Public Health
Laboratories and the Association of State and Territorial Health Oﬃcials, have noted that public
health surveillance systems lack timely and reliable data to protect against health threats.
Both the CARES Act and the American Rescue Plan Act of 2021 (ARPA) provided funding to
CDC to support modernizing the nation’s public health surveillance infrastructure.101 CDC’s
Data Modernization Initiative, launched in 2020, aims to improve data collection and sharing,
strengthen data reporting and analytics, and advance surveillance of future public health threats,
among other goals. More speciﬁcally, CDC’s initiative includes modernizing existing public health
surveillance systems, such as the National Notiﬁable Diseases Surveillance System. CDC reported
that its surveillance systems will require continued updating and maintenance, and noted that
eﬀorts to modernize the data collection infrastructure will evolve with innovations in information
technology.

Overview of Key Issues
Several challenges hinder CDC public health data collection and surveillance. CDC faces
several challenges to collecting accurate and timely data and conducting surveillance across
the U.S. We identiﬁed four key challenges that aﬀect CDC’s public health data collection and
surveillance infrastructure.
Manual collection and transmission of data. Outdated methods to collect and transmit data—such
as manual entry or fax transmission—require more time for input and may increase the risk for
101CARES Act, Pub. L. No. 116-136, div. B, tit. VII, 134 Stat. 281, 554. In addition to public health data modernization,
ARPA includes a provision to “establish, expand, and maintain eﬀorts to modernize the United States disease warning
system to forecast and track hotspots for COVID–19, its variants, and emerging biological threats, including academic
and workforce support for analytics and informatics infrastructure and data collection systems.” Pub. L. No. 117-2, §
2404, 135 Stat. 4, 42. CDC has received additional appropriations that may be used for data modernization. For example,
the Paycheck Protection Program and Health Care Enhancement Act appropriated money to CDC that can be used for
a variety of purposes, including public health data surveillance and analytics infrastructure modernization. Pub. L. No.
116-139, div. B, tit. I, 134 Stat. 620, 624 (2020).

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errors, and in turn, the timeliness and usefulness of the data. CDC oﬃcials said that state and local
health departments, the primary source of data for case surveillance, have varying capabilities
to send and receive data. According to CDC oﬃcials, most state and local health departments
transmit data electronically, but some departments, especially smaller ones, still send data
manually, such as by fax.
Outdated methods to transmit data are also burdensome to health departments and health care
providers. CDC estimated that thousands of providers began submitting data for integration
into health departments’ public health surveillance systems during the COVID-19 pandemic.
Accordingly, this led to a substantial increase in the volume of data submitted to public health
departments.
Inconsistent and incomplete data. Currently, CDC and state, territorial, local, and tribal health
departments lack common data standards across surveillance systems, which leads to
inconsistencies in the data reported to CDC.102 State, local, and territorial public health
departments’ surveillance systems are the primary sources of data that states send to CDC.
CDC has established voluntary data standards for state and territorial health department
reporting; jurisdictions often apply diﬀerent standards for information they obtain from their
local health departments and share with CDC. Applying diﬀerent standards leads to inconsistent
data reporting, which could ultimately limit some of the data’s usefulness for comparing across
jurisdictions and other analyses. Although CDC has attempted to facilitate the collection of more
consistent and complete data by creating and making available data applications that incorporate
uniform data standards, such as the National Electronic Disease Surveillance System Base System,
many state and local health departments have not adopted this application.103
In addition, some public health surveillance systems do not capture data for the entirety of the
U.S. For example, according to CDC, the National Syndromic Surveillance Program—which includes
data on symptoms that could indicate a COVID-19 diagnosis—does not include data from 29
percent of the nation’s emergency departments as of February 2022.104
Lack of interoperability among key public health data collection and surveillance systems. The lack of
interoperability—the ability of data collection systems to exchange information with and process
information from other systems—creates barriers to data sharing and places additional burden
on stakeholder entities that collect and transmit data. For state health departments that collect
data from systems that cannot directly exchange information with CDC, it takes longer for CDC to
receive data.

102Data standards, for the purposes of this enclosure, refer to speciﬁcations for discrete data elements to be collected

by public health entities, such as patient characteristics (e.g., name, sex, and race) and clinical information (e.g.,
diagnosis and test results), that include deﬁnitions, inclusion criteria, and formatting.

103CDC’s National Electronic Disease Surveillance System Base System integrates and transmits electronic data

on infectious diseases from multiple sources, including state health departments, laboratories, and health care
organizations. Also, according to CDC, states have the option of procuring commercial systems that are based on
National Electronic Disease Surveillance System standards.

104According to CDC oﬃcials, CDC’s National Syndromic Surveillance Program also includes, to a lesser extent, data from

inpatient care facilities and outpatient care facilities, such as urgent care centers.

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Furthermore, funding from CDC that local public health departments receive to support
surveillance activities is often tied to programs focused on speciﬁc conditions and diseases.
According to CDC oﬃcials, this traditional approach to funding data collection and surveillance
systems has resulted in multiple public health surveillance systems. Accordingly, multiple standalone public health surveillance systems hinder interoperability.
Lack of suﬃcient workforce, particularly staﬀ with information technology skills. Public health
departments struggle to maintain their workforces generally.105 In addition, CDC oﬃcials and
stakeholders noted concerns with developing and maintaining workforces with the requisite
skills to steward and use advanced information technology systems and CDC data proﬁciently.
Speciﬁcally, CDC and stakeholders noted that sustained funding for state and local health
departments for public health agencies’ workforce development is critical to improve the
broader information technology capabilities of the public health data collection and surveillance
infrastructure generally and over the long-term.
CDC oﬃcials also noted that, among these challenges, the agency generally lacks authority to
require reporting of public health data.
CDC has made some progress in modernizing the public health data collection and
surveillance infrastructure. CDC has made progress in modernizing the U.S. public health data
collection and surveillance infrastructure through its Data Modernization Initiative. For example,
CDC, in coordination with the Association of Public Health Laboratories and other public health
organizations, implemented the COVID-19 Electronic Laboratory Reporting system in spring 2020.
According to CDC, state and territorial public health departments use this system to electronically
submit COVID-19 laboratory testing data to CDC. This new system facilitates electronic reporting
of large volumes of COVID-19 testing data from laboratories that were equipped to submit data
using the applicable standards. By April 2021, all 56 state and territorial health departments were
reporting de-identiﬁed COVID-19 testing results data for their jurisdictions electronically to CDC.
The COVID-19 Electronic Laboratory Reporting system reﬂected CDC’s eﬀorts to facilitate the
implementation of a new requirement enacted under the CARES Act for laboratories to report
standardized data on the COVID-19 tests that they were processing.106 Under the act, laboratories
are required to submit testing data directly to state or local public health departments, which
then submit de-identiﬁed data to CDC on a daily basis. While laboratories are able to report
electronically when possible, they are not required to do so. To implement the law, HHS
established requirements for the data that the laboratories were obligated to report that detailed
the speciﬁc data elements and how they should be formatted. Unlike other data systems CDC
created in the past, which were dependent on data collected from the state health departments
in the format of the state’s choosing, this new system helped to ensure that the data submitted
would be comparable across jurisdictions.

105For example, according to the National Association of County and City Health Oﬃcials, the number of full-time

equivalent employees in local public health departments decreased from 5.2 per 10,000 people in 2008 to 4.1 per 10,000
in 2019.
106Pub. L. No. 116-136, § 18115, 132 Stat. at 574. This requirement is in eﬀect for the duration of the COVID-19 public

health emergency declaration.

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CDC also reports that it has expanded electronic case reporting and begun modernizing other
public health surveillance systems, including the National Syndromic Surveillance Program, the
National Notiﬁable Diseases Surveillance System, and the National Vital Statistics System. For
example, according to CDC, the National Notiﬁable Diseases Surveillance System implemented
a COVID-19 Message Mapping Guide at the start of the pandemic, which standardized the data
elements that states provide to CDC.107 In addition, CDC reports it has made improvements to
increase cloud-based capabilities and building platforms for a scalable emergency response.108
CDC’s Data Modernization Initiative’s strategic implementation plan lacks speciﬁc
actions and time frames for achieving its goals. According to CDC oﬃcials, the agency’s data
modernization plans include bolstering existing surveillance systems; automating data collection
among state, territorial, tribal, and local public health entities; building a highly-skilled public
health workforce; enhancing CDC’s data sharing and analysis; and improving access to data. CDC
oﬃcials indicated a time frame of 4 years to spend the funds for data modernization it received
from the CARES Act and ARPA. See the table below for the Data Modernization Initiative’s strategic
implementation plan’s priorities and objectives.

107According to CDC, a disease-speciﬁc message mapping guide is similar to a data dictionary and indicates the data

elements (generic or disease-speciﬁc) and the valid values for those data elements and how they should be packaged
into a case notiﬁcation. The case notiﬁcation is the set of information sent on an individual case from the state or local
health department for inclusion in the surveillance data systems at CDC.
108According to CDC, the agency monitors its progress on a growing number of modernization projects through the

Data Modernization Monitoring and Evaluation Hub. Through the hub, CDC reports it can monitor how the agency is
using initiative-related investments, impacts individual projects are making, and impacts of the initiative. According
to CDC, it also hosts a Data Modernization Implementation Support website (at https://www.cdc.gov/csels/dmisupport/index.html) that provides resources and information outlining CDC’s priority eﬀorts to support public health
departments and partners in implementing data modernization activities.

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Centers for Disease Control and Prevention’s (CDC) Priorities and Objectives for Its Data Modernization Initiative

Priorities

Objectives

Build the right foundation: strengthen and unify
critical infrastructure for a response-ready public
health ecosystem

1a. Develop a shared vision
1c. Modernize and connect key surveillance systems
and sources

Accelerate data into action to improve decisionmaking and protect health

2a. Increase interoperability through data standards

Faster, more interoperable data provides high-quality
information that, in turn, leads to knowledge and
provides a more real-time, comprehensive picture to
improve decision-making and protect health

2c. Advance forecasting and predictive analytics

Develop a state-of-the-art workforce

Support and extend partnerships

1d. Transform legacy systems, processes, and activities
1e. Store, discover, analyze, and visualize data

2b. Increase data linkages
2d. Implement tools for scalable response
2e. Promote health equity

3a. Identify CDC workforce needs
Identify, recruit, and retain critical workforce in Health
Information Technology, Data Science, and Cybersecurity 3b. Increase CDC data science capacity
Specialists to be stewards of larger quantities of data and 3c. Facilitate state, tribal, local, and territorial data
tools – better and faster – to generate meaningful public science upskilling
health insights

Engage with state, territorial, local, and tribal partners
to ensure transparency, address policy challenges, and
create new strategic partnerships to solve problems
5.

1b. Expand foundational infrastructure

Provide a secure and scalable foundation with
appropriate automated data sources to enable timely,
complete data sharing for public health action; break
down silos that keep critical data disconnected; and
reduce the burden on state, tribal, local, and territorial
partners for collecting and reporting data

4a. Ensure partner alignment and collaboration
4b. Support policies for data exchange

Manage change and governance to support new ways 5a. Govern policies, planning, and resources
of thinking and working
5b. Manage culture change

Provide the necessary structure to support modernization 5c. Create a culture of innovation
and aid adoption of uniﬁed technology, data, and data
5d. Streamline acquisition processes
products
5e. Evaluate Data Modernization Initiative activities and
projects
Source: CDC. | GAO-22-105397

Although CDC has plans to improve its data collection and infrastructure through the Data
Modernization Initiative, its strategic implementation plan for this initiative does not articulate the
speciﬁc actions needed to achieve its objectives, roles and responsibilities for actions or objectives,
or time frames for achieving these objectives.
In addition, CDC has not fully developed plans for how it will allocate ARPA funds for data
modernization. While the agency’s draft spend plan includes estimates for how it will spend the
$500 million from ARPA—such as $200 million for a data forecasting center—the draft spend plan
lacks speciﬁc actions and associated time frames for such spending.

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According to CDC oﬃcials, the agency is currently gathering its subject matter experts to further
build out the initiative’s framework with more detailed activities necessary to achieve key results.
CDC oﬃcials told us the initiative largely remains in the planning phase due to the complexity
of modernization projects that require agency-wide eﬀort as well as state and local stakeholder
participation. CDC oﬃcials also noted that its activities for the COVID-19 response are a competing
priority.
Federal internal control standards state that management should deﬁne objectives and risk
tolerances for federal programs. As part of this standard, management deﬁnes objectives in
speciﬁc terms so they are understood at all levels of the entity, which involves clearly deﬁning
what is to be achieved, who is to achieve it, how it will be achieved, and the time frames for
achievement.
Without more speciﬁc, actionable plans, including time frames for achieving data modernization
objectives, spending plans, and the entities that are responsible for taking actions, CDC may not
be able to gauge its progress on the initiative or achieve key results in a timely manner. In addition,
such lack of progress to implement enhanced surveillance systems could aﬀect the quality and
timeliness of data needed to respond to future public health emergencies.

Methodology
To identify key challenges that aﬀect CDC’s ability to improve its public health data collection
infrastructure, we reviewed relevant CDC documents and written responses from agency oﬃcials.
We also spoke with public health stakeholders who represent entities involved in collecting and
transmitting data to CDC, such as laboratories and state and local health departments. Speciﬁcally,
we spoke with representatives from the Association of State and Territorial Health Oﬃcials, the
Council of State and Territorial Epidemiologists, the National Association of County and City Health
Oﬃcials, and the Association of Public Health Laboratories.
To determine what progress CDC has made to improve its public health data collection systems
and what is known about this progress, we reviewed relevant laws and CDC documents. We
also obtained written information from and interviewed agency oﬃcials about these eﬀorts.
We also interviewed the stakeholders named above to obtain their perspectives on CDC’s data
modernization eﬀorts.

Agency Comments
We provided a draft of this enclosure to HHS and the Oﬃce of Management and Budget (OMB) for
review and comment. HHS agreed with our recommendation and its comments are reproduced
in appendix VII. In these comments, CDC noted that the Data Modernization Initiative will initially
focus on developing objectives and key results that are measurable and associated with time
frames for items critical for data modernization.
CDC also provided technical comments, which we incorporated as appropriate. OMB did not
provide comments.

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GAO's Ongoing Work
GAO will continue to monitor federal health care data surveillance and sharing eﬀorts.
Contact information: Leslie V. Gordon, (202) 512-7114, GordonLV@gao.gov

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Public Health Supply Chain Resilience
The Department of Health and Human Services and its interagency partners are using planning
documents that have the potential to be eﬀective tools for implementing the National Strategy
for a Resilient Public Health Supply Chain. The Department also plans to publicly release an annual
implementation progress report. Releasing such information will help ensure Congress and other
stakeholders have clear and consistent information on the complex, whole-of-nation actions
needed to achieve the vision of the National Strategy—the creation of a resilient public health
supply chain that can withstand future public health emergencies.
Entities involved: Department of Health and Human Services, Department of Defense,
Department of Homeland Security, and Department of Veterans Aﬀairs.

Background
As we have reported throughout the COVID-19 pandemic, this public health emergency triggered
a signiﬁcant increase in worldwide demand for medical supplies (including personal protective
equipment and supplies for testing and vaccine administration) and disrupted global supply
chains, limiting availability of critical supplies for U.S. health care providers.
In January 2021, Executive Order 14001 directed the Department of Defense, Department of
Health and Human Services (HHS), and Department of Homeland Security, among others, to
develop a supply chain resilience strategy to include an approach to design, build, and sustain
long-term capability in the U.S. to manufacture medical supplies for future pandemics and
biological threats.109
In September 2021, the National Strategy for a Resilient Public Health Supply Chain (National
Strategy), signed by the Secretaries of Defense, Health and Human Services, Homeland Security,
and Veterans Aﬀairs, was publicly released. The National Strategy designates HHS as the lead
agency for overseeing its implementation. Within HHS, the Oﬃce of the Assistant Secretary for
Preparedness and Response (ASPR) is charged with this lead role, according to oﬃcials.
ASPR oﬃcials stated that they see the oﬃce’s lead role as one of coordinating implementation
across all interagency partners involved, given the whole-of-nation approach needed to achieve
the vision of the National Strategy.110 According to the National Strategy, this whole-of-nation
approach involves gathering supply chain intelligence, making investments in domestic medical
countermeasure manufacturing, identifying gaps and shortages, addressing vulnerabilities
proactively, and incentivizing pandemic preparedness at the federal level; at the state, local, tribal,
and territorial levels; and across the U.S. health care system.
The National Strategy has three main goals:

109A Sustainable Public Health Supply Chain, Exec. Order No. 14001, § 4, 86 Fed. Reg. 7,219, 7220-21 (Jan. 26, 2021).

110HHS and its interagency partners are referred to as an Interagency Policy Committee, which was established through

the White House Domestic Policy Council system. Interagency partners include the Departments of Commerce, Defense,
Energy, Homeland Security, State, and Veterans Aﬀairs and the Oﬃce of Management and Budget, among others.

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• building a diverse public health supply chain and sustaining domestic manufacturing capacity;
• transforming governments’ ability to monitor and manage the public health supply chain
through stockpiles, visibility, and engagement; and
• establishing standards, systems, and governance to manage the supply chain.
To support these goals, the National Strategy includes objectives and recommendations. For
example, to support the ﬁrst goal, there is an objective to “safeguard supply chain diversity
through policy, incentive, regulation, and other tools to reduce dependence on a single region,
source, or product” and a recommendation for “bold investments and incentives for the American
industrial base,” including “support for American-made supplies in the U.S. health care sector.”
We have previously identiﬁed six desirable characteristics—and individual elements that comprise
those characteristics—that national strategies should contain in order to serve as eﬀective,
comprehensive management tools. (See ﬁgure below.)
Six Desirable Characteristics of Eﬀective National Strategies

Overview of Key Issues
HHS and its interagency partners are developing plans to implement the National Strategy.
As an initial step to implementing the National Strategy, HHS, its interagency partners, and the
White House created “action items” stemming from the objectives and recommendations in the
National Strategy. While they could still evolve, there are currently 22 action items identiﬁed
to implement the National Strategy, according to ASPR oﬃcials in February 2022. These action
items include, for example, creating an operational industrial base expansion plan, leveraging
partnerships to strengthen regional and global public health supply chains, and strengthening the
U.S. public health supply chain workforce.
Workgroups were also established to implement each action item and include a lead agency and
support agencies. For example, HHS is designated the lead agency for 17 of these 22 action items,

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though each action item also involves a number of support agencies.111 During the fall of 2021
through February 2022, the workgroups have been developing for each action item a separate
Plan of Action and Milestones (POAM) to facilitate implementation, according to ASPR oﬃcials.
To do so, the workgroups have followed a template developed by the White House that outlines
speciﬁc sections of information to include in each POAM and related guidance.
Given ASPR’s lead role coordinating the implementation of the National Strategy, ASPR is
consolidating the POAMs into a master implementation schedule for the National Strategy overall.
ASPR oﬃcials said that because many of the action items are inter-related, they need all of the
POAMs to design an implementation schedule that ensures interdependencies between action
items are eﬀectively coordinated. As of February 2022, ASPR oﬃcials told us they were waiting on
POAMs for two action items before they could complete the master schedule. Oﬃcials expected to
receive the remaining POAMs soon but could not provide an anticipated date.
The National Strategy and related plans provide reasonable assurance that an eﬀective
national supply strategy is being developed. Our review of the National Strategy along with
POAM documentation—the POAM template, as well as draft POAMs for seven selected action
items—indicates that ASPR and its interagency partners are in the process of developing an
eﬀective national strategy for making the public health supply chain more resilient, if they
continue to develop and implement the POAMs as planned.112
Speciﬁcally, we found that the POAM template complements the National Strategy by outlining
many of the characteristics we have identiﬁed that national strategies should contain in order to
serve as eﬀective, comprehensive management tools. For example, the POAM template directs
workgroups to provide details on the tasks, milestones, and schedules needed for implementation
of the action item. It also directs them to communicate resources and capabilities needed, risks to
implementation, and the responsible entities for each task.
Our review of seven draft POAMs indicates that the template is being utilized by the workgroups,
though at varying levels of completion. For example, one of the POAMs we reviewed was not
speciﬁc about resources required, but instead stated that ASPR will conduct an initial review to
identify resource and capability needs, among other actions.
ASPR oﬃcials stated that the POAMs are still evolving and that the intention is that they will all
align with the details outlined in the template. As a result, if the template is fully utilized for each of
the 22 action items, the POAMs have the potential to be eﬀective implementation tools to achieve
the vision of the complex National Strategy. (See ﬁgure below.)

111The other ﬁve action items are each led by a diﬀerent agency: (1) Department of State, (2) Department of Energy, (3)

Federal Emergency Management Agency within the Department of Homeland Security, (4) the Oﬃce of Management
and Budget, and (5) Department of Labor.
112We reviewed six POAMs for which HHS is the lead, and one POAM for which the Federal Emergency Management

Agency within the Department of Homeland Security is the lead.

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How the National Strategy and Plan of Action and Milestones Template, if Fully Implemented, Align with Six
Desirable Characteristics of an Eﬀective National Strategy

Oﬃcials from the Oﬃce of the Assistant Secretary for Preparedness and Response told us that workgroups are in the
preliminary stages of determining performance metrics, and that language is reﬂected in the template. The plan is to develop
performance metrics more thoroughly as the workgroups move forward.

ASPR plans to report implementation progress. ASPR is in charge of submitting an
annual “progress report” on the National Strategy by the end of July each year to the White
House. According to ASPR oﬃcials, the annual “progress report” will serve as a summary of
implementation progress on the National Strategy and will be a consolidation of the performance
metrics information from each of the action items’ POAMs. In March 2022, ASPR oﬃcials stated
they were on track to submit the ﬁrst progress report to the White House in July 2022. ASPR
oﬃcials also told us that, subsequent to White House review, the progress report would become
publicly available.113
Creating a resilient public health product supply chain will be a complex eﬀort and require
signiﬁcant, continued eﬀorts across the U.S. government; state, local, tribal and territorial entities;
and other stakeholders, such as the private sector and U.S. health care system. Reporting
information on National Strategy implementation progress to Congress and other external
stakeholders, will help ensure all involved have clear and consistent information on the complex
and coordinated actions needed to achieve the vision of the National Strategy.

113ASPR oﬃcials stated that a version of the progress report would be made publicly available. However, some

information may be national-security sensitive information, for example, and not be publicly released.

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Reporting on implementation progress to external stakeholders could also help ASPR ensure it
has the resources and capacity needed to coordinate implementation of the National Strategy
while also leading 13 of the 17 action items assigned to HHS. In January 2022, we reported
concerns about ASPR’s workforce capacity to take on the leadership of the development,
manufacturing, and distribution of COVID-19 vaccines transferring to the agency and made related
recommendations. Additionally, in our Public Health Industrial Base Expansion enclosure in this
report, we cite concerns and make a related recommendation about ASPR’s lack of workforce
planning for its new oﬃce, which is providing leadership of several action items in the National
Strategy. ASPR’s capacity and related workforce planning to address its many responsibilities,
including new responsibilities stemming from COVID-19, is a concern we recently cited when we
raised HHS’s leadership and coordination of public health emergencies to our high risk-list in
January 2022. We continue to monitor HHS eﬀorts to address this new high-risk area, including
ASPR’s capacity and workforce planning.

Methodology
We assessed the National Strategy for a Resilient Public Health Supply Chain and the POAM template
against GAO’s six characteristics of an eﬀective national strategy. Speciﬁcally, we looked at the
elements that comprise each characteristic and assessed the extent to which the National Strategy
or POAM template contained information related to the element, such as whether they contained
adequate speciﬁcity and detail to identify the elements of the characteristics.
We also reviewed seven draft POAMs to see if they followed the POAM template. The seven
included six from HHS that were most readily available for the agency to provide to us, according
to ASPR oﬃcials (of the 17 the HHS is the lead for), and one from DHS—the only action item it
leads.
We interviewed oﬃcials from HHS, as well as the Departments of Defense, Homeland Security
and Veterans Aﬀairs, to obtain information on their role in developing the National Strategy
and related implementation planning—the leadership of all four departments were signers of
the National Strategy. Within HHS, we interviewed ASPR oﬃcials charged with coordinating the
National Strategy implementation eﬀort.

Agency Comments
We provided HHS, DOD, DHS, VA, and the Oﬃce of Management and Budget with a draft of this
enclosure. These agencies did not have any comments related to this enclosure.

GAO’s Ongoing Work
We continue to conduct work examining federal eﬀorts related to the resilience of the
public health supply chain, including work on the Strategic National Stockpile and advanced
manufacturing.

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GAO’s Prior Recommendations
See table below for our past related recommendations on public health supply chain resilience
from prior CARES Act reports.

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Prior GAO Recommendations Related to Public Health Supply Chain Resilience during COVID-19
Recommendation

Status

The Secretary of Health and Human Services in coordination
Open—not addressed. HHS disagreed with our
with the Administrator of the Federal Emergency Management
recommendation. In a May 2021 update, the Oﬃce
Agency—who head agencies leading the COVID-19 response
of the Assistant Secretary for Preparedness and
through the Uniﬁed Coordination Group—should immediately
Response (ASPR) noted that since March 2020, supply
document roles and responsibilities for supply chain
chain responsibility, coordination, and execution
management functions transitioning to the Department of Health have been incorporated and integrated into ASPR.
and Human Services (HHS), including continued support from
However, HHS has yet to document roles and
other federal partners, to ensure suﬃcient resources exist to
responsibilities for supply chain management that
sustain and make the necessary progress in stabilizing the supply are transitioning. As of March 2022, HHS had not
chain, and address emergent supply issues for the duration of
provided any updated information.
the COVID-19 pandemic (September 2020).
The Secretary of Health and Human Services in coordination
Open—partially addressed. HHS disagreed with our
with the Administrator of the Federal Emergency Management
recommendation. However, HHS has taken action
Agency—who head agencies leading the COVID-19 response
to help mitigate medical supply gaps. HHS oﬀered
through the Uniﬁed Coordination Group—should further develop several examples of HHS and ASPR's supply chain
and communicate to stakeholders plans outlining speciﬁc actions work, including restocking the SNS. While HHS did not
provide an update in March 2022, we believe these
the federal government will take to help mitigate remaining
are good steps. We will continue to monitor HHS's
medical supply gaps necessary to respond to the remainder of
the pandemic, including through the use of Defense Production eﬀorts.
Act of 1950 authorities. (September 2020 report).
The Secretary of Health and Human Services and the
Open—partially addressed. In September 2020,
Administrator of the Federal Emergency Management Agency
both HHS and the Department of Homeland Security
—who head two of the agencies leading the COVID-19 response (DHS) disagreed with our recommendation, noting,
through the Uniﬁed Coordination Group—consistent with their
among other things, the work that the departments
had done to manage the medical supply chain
roles and responsibilities, should work with relevant federal,
and increase supply availability, such as restocking
state, territorial, and tribal stakeholders to devise interim
solutions, such as systems and guidance and dissemination
the SNS (as noted above). HHS and DHS have
reported separate actions taken as part of supply
of best practices, to help states enhance their ability to track
management eﬀorts within their separate purviews;
the status of supply requests and plan for supply needs for the
remainder of the COVID-19 pandemic response (September 2020 however, HHS has not articulated how they have
worked with DHS and other relevant federal, state,
report).
territorial, and tribal stakeholders to devise interim
solutions to help states better track, manage, and
plan for supply needs for the remainder of the
COVID-19 pandemic. HHS did not provide an update
in March 2022.
The Assistant Secretary for Preparedness and Response should
establish a process for regularly engaging with Congress and
nonfederal stakeholders, including state, local, tribal, and
territorial governments and private industry, as HHS reﬁnes and
implements a supply chain strategy for pandemic preparedness,
to include the role of the SNS (January 2021 report).

Open—not addressed. HHS generally agreed with
our recommendation, while noting that the term
"engage" is vague and unclear, and that they regularly
engage with Congress and nonfederal stakeholders.
HHS added that improving the pandemic response
capabilities of state, local, tribal, and territorial
governments is a priority. As of March 2022, HHS had
not provided any updated information.

Source: GAO. | GAO-22-105397

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Related GAO Products
COVID-19: HHS and DOD Transitioned Vaccine Responsibilities to HHS, but Need to Address Outstanding
Issues. GAO-22-104453. Washington, D.C.: January 19, 2022.
Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.:
September 10, 2014.
Combating Terrorism: Evaluation of Selected Characteristics in National Strategies Related to Terrorism,
GAO-04-408T. Washington, D.C.: February 3, 2004.
Contact information: Mary Denigan-Macauley, 202-512-7114, DeniganMacauleyM@gao.gov

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Public Health Industrial Base Expansion
The Department of Health and Human Services created the Innovation and Industrial Base
Expansion Program Oﬃce to address medical product supply vulnerabilities highlighted during
the pandemic so that the nation is better prepared for future public health emergencies. However,
the department has not fully assessed the workforce skills and competencies needed to support
the mission and goals of the oﬃce, nor has it developed strategies to address those needs. Critical
workforce planning is needed to ensure sustainment and success of the oﬃce.
Entities involved: The Department of Health and Human Services, Department of Homeland
Security, and General Services Administration.

Recommendations for Executive Action
We recommend that the Assistant Secretary for Preparedness and Response within the
Department of Health and Human Services conduct a workforce assessment of its Innovation and
Industrial Base Expansion Program Oﬃce to determine the critical skills and competencies needed
to support and sustain the oﬃce, and develop corresponding workforce strategies to address
those needs. HHS agreed with our recommendation, and stated that the agency will conduct a
workforce assessment in the future.

Background
The COVID-19 pandemic made it abundantly clear how important it is to the health and security
of the nation to maintain and ensure a robust and resilient public health industrial base—goods
and services needed to overcome a health emergency, such as personal protective equipment
(PPE), diagnostics, therapeutics, vaccines, and related supplies. As we have previously reported,
the pandemic response has highlighted our dependence on foreign suppliers for certain types of
medical products, as well as limitations in our own domestic production of medical supplies.
The Department of Health and Human Services’ (HHS) Oﬃce of the Assistant Secretary for
Preparedness and Response (ASPR) leads the nation’s medical and public health preparedness
for, response to, and recovery from disasters and public health emergencies, including the
COVID-19 pandemic. As part of this role and to address supply challenges that have plagued the
nation’s pandemic response, ASPR is responsible for actively restoring and strengthening supply
capabilities depleted during the pandemic, such as the Strategic National Stockpile, and securing
the public health supply chain going forward, according to the agency’s website.
ASPR’s eﬀorts to address these needs include forming a new Innovation and Industrial Base
Expansion Program (IBx) Oﬃce, beginning in September 2020. According to ASPR’s website, the
mission of the IBx Oﬃce is to strengthen and expand the U.S. public health industrial base and
deliver innovative solutions to counter health security threats. To meet this mission, the oﬃce has
been chieﬂy set up to

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• focus on expanding, securing, and building resilience across the U.S. public health industrial
base to address vulnerabilities highlighted during the pandemic, such as critical deﬁciencies in
certain medical supplies needed to respond, and
• coordinate strategic public health industrial base expansion and innovation eﬀorts across
ASPR, federal partners, academia, and the private sector to facilitate the development and
implementation of novel solutions and practices for response and recovery operations.

Overview of Key Issues
ASPR has been primarily using detailees from other federal agencies to support the IBx Oﬃce,
and has begun hiring some staﬀ; however, the agency has not yet assessed the critical workforce
skills and competencies needed to support and sustain the mission and goals of the oﬃce, nor
has it developed strategies to achieve those workforce needs. Such an assessment would be
consistent with key principles of strategic workforce planning we have previously identiﬁed,
including (1) determining the critical skills and competencies needed to achieve current and future
programmatic results, and (2) developing strategies to address gaps in the number of staﬀ and
their skills and competencies, in order to meet those results.
As of February 2022, 12 detailees from the General Services Administration (GSA) and Department
of Homeland Security (DHS) have supported the IBx Oﬃce. ASPR oﬃcials told us that to determine
the need for detailees, ASPR oﬃcials held a series of meetings, including with White House oﬃcials
in March 2021 to identify the staﬃng resources required to quickly implement the American
Rescue Plan Act of 2021 (ARPA). This law appropriated $10 billion to support use of the Defense
Production Act of 1950 (DPA) for medical supplies, including industrial base expansion projects.
The IBx Oﬃce was initially tasked with implementing eﬀorts to plan for, and obligate, this $10
billion, according to ASPR oﬃcials. ASPR identiﬁed a baseline need of 20 full-time staﬀ for the IBx
Oﬃce to address this task, but oﬃcials said they were unable to get all 20 needed employees due
to limited resource availability in GSA and DHS. Instead,
• since June 2021, eight detailees from GSA have been supporting the IBx Oﬃce. ASPR and GSA
oﬃcials expect the details to end in June 2022.
• since September 2021, four detailees from DHS have supported the oﬃce. Three ended
their details in January 2022 and the fourth may continue their detail until September 2022,
according to ASPR oﬃcials.
The GSA and DHS detailees have expertise in project management, acquisitions, contracting, and
data analytics, among other skills sought by ASPR to help rebuild its public health industrial base,
according to GSA and DHS oﬃcials.
Additionally, since October 2021, ASPR has begun taking actions to hire 25 staﬀ for the IBx Oﬃce
under “term positions”—positions for deﬁned amounts of time. ASPR oﬃcials stated that they
were using term positions for two reasons. First, the positions are being funded with ARPA
appropriations for DPA activities, which are available through ﬁscal year 2025. Second, ASPR

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oﬃcials cannot yet support permanent positions without annual appropriations for the IBx
Oﬃce. Oﬃcials stated that they have submitted a baseline budget request to fund the IBx Oﬃce
to inform the President’s ﬁscal year 2023 budget. ASPR oﬃcials also stated that term-position
employees could be easily transitioned to permanent positions, if and when funding is available.
The term positions are for an initial period of up to 13 months, with the potential to extend to up
to 4 years. As of February 2022,
• ASPR had posted positions to hire a total of 20 staﬀ and had hired and brought on board
two of those 20, according to oﬃcials. Positions posted included management and program
analysts, and acquisitions management professionals.
• ASPR oﬃcials indicated that they were actively working on posting additional term positions to
hire ﬁve more staﬀ, including program analysts and contract specialists.
Although it has started hiring, in January 2022, ASPR oﬃcials told us they had not yet conducted a
workforce needs assessment for the IBx Oﬃce for several reasons, including the following:
1. Competing demands have required ASPR staﬀ to take immediate actions in other areas
to address the needs of ongoing COVID-19 pandemic response, including recent eﬀorts to
coordinate acquisition and distribution of over-the-counter COVID-19 tests and masks for the
American public, as well as supporting testing programs at schools, long term care facilities,
and federally qualiﬁed health centers.
2. The roll-out of various COVID-19-related strategies, plans and laws, including the National
Strategy for a Resilient Public Health Supply Chain and the Infrastructure Investment and
Jobs Act have had implications for the scope of the IBx Oﬃce that need to be considered
before conducting such an assessment. For example, the National Strategy for a Resilient
Public Health Supply Chain, which was publicly released in September 2021, includes action
items that the IBx Oﬃce is to lead, such as enhancing and maintaining supply chain visibility
capabilities, and leveraging advanced manufacturing technology, according to oﬃcials.
More recently, in a report released in February 2022, HHS announced plans for adding DPA
related activities to the IBx oﬃce. Additionally, the Infrastructure Investment and Jobs Act
(IIJA) includes provisions related to investments in manufacturing capacity, which could aﬀect
the scope of the oﬃce, according to oﬃcials. For example, the IIJA has a requirement for
government contracts for personal protective equipment to be longer-term to incentivize
production of these medical products in the U.S.
3. Potential realignment of ASPR by the Assistant Secretary for Preparedness and Response to
better position the oﬃce to support its expanded responsibilities over the past several years,
including from the COVID-19 response, may aﬀect the role of the IBx Oﬃce and the workforce
it requires.
4. The lack of baseline non-emergency funding makes it diﬃcult to plan within budget
constraints, according to ASPR oﬃcials.

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In her January 11, 2022, statement to Congress, the Assistant Secretary for Preparedness and
Response explained the importance of dedicated and persistent management and engagement
in the expansion of the public health industrial base by ASPR. She also noted her eﬀorts to
institutionalize this mission in ASPR.
Because of the ongoing response to the ever-evolving COVID-19 pandemic and related changing
circumstances, it may take some time for ASPR to deﬁne the long-term scope of the IBx Oﬃce,
as well as to determine related resource needs. However, without conducting a workforce
assessment in the near term based on current goals, ASPR risks not knowing if it is hiring and
prioritizing the most appropriate positions. This includes the 27 term position hires that ASPR is
currently hiring or planning to hire, which could become permanent hires. Furthermore, taking
these critical workforce planning steps will help ensure ASPR is able to develop reliable budget
estimates for the resources they need, target the right number of people with the right skills, and
make well-informed hiring decisions, as well as any future decisions to extend details.
Until ASPR conducts a workforce capacity assessment to determine the critical skills and
competencies needed to support and sustain the newly created IBx Oﬃce, and develops
corresponding workforce strategies to address those needs, ASPR risks not being able to achieve
the management and engagement that the Assistant Secretary described as essential for
expanding and building resilience in the public health industrial base. Further, it places the current
mission and goals of the IBx Oﬃce at risk—an oﬃce that was established to help secure the
public health supply chain going forward so that the nation is better prepared for future public
health emergencies. Lastly, the IBx Oﬃce is providing leadership for several action items from the
National Strategy for a Resilient Public Health Supply Chain. (For more information see the Public
Health Supply Chain Resilience enclosure.) A workforce with capabilities to provide such leadership
will be critical to successful implementation of this important strategy.

Methodology
To conduct our review, we reviewed documentation related to the staﬃng of ASPR’s IBx Oﬃce,
such as memorandums of understanding between GSA and ASPR and between DHS and ASPR
regarding detailees assigned to the IBx Oﬃce. We interviewed oﬃcials in the ASPR Oﬃce of
Strategy Policy, Planning, and Requirements, which provides leadership of the IBx Oﬃce. We
received written responses from oﬃcials in ASPR’s Human Capital Oﬃce to obtain information
about hiring for the IBx Oﬃce, and interviewed oﬃcials from HHS’s Staﬃng Recruitment
Operations Center (the agency within HHS that conducts some hiring actions on behalf of ASPR).
Lastly, we received written responses from GSA and DHS oﬃcials to collect information on
detailees assigned to ASPR for the IBx Oﬃce. We assessed ASPR’s workforce planning against key
principles of strategic workforce planning that we have identiﬁed in previous work, focusing our
analysis on those principles that are related to determining current and future workforce needs
and establishing strategies to fulﬁll those needs.

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Agency Comments
We provided HHS, DHS, GSA, and the Oﬃce of Management and Budget (OMB) with a draft
of this enclosure. HHS agreed with our recommendation, in comments noted in Appendix VII.
ASPR oﬃcials noted that a workforce assessment is an important component for supporting
and sustaining the Innovation and Industrial Base Expansion Oﬃce, and agreed to conduct an
assessment in the future. HHS did not provide any technical comments. DHS, GSA and OMB did
not have any comments related to this enclosure.

GAO’s Ongoing Work
We continue to conduct work examining federal eﬀorts to support medical product supply chain
resilience and industrial base expansion, such as work examining federal eﬀorts to support
advanced manufacturing.

Related GAO Product
Human Capital: Key Principles for Eﬀective Strategic Workforce Planning, GAO-04-39. Washington,
D.C.: December 13, 2003.
Contact information: Mary Denigan-Macauley, 202-512-7114, DeniganMacauleyM@gao.gov

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Initial Vaccine Allocation
When COVID-19 vaccines ﬁrst became available in December 2020, the federal government used a
population-based methodology, with some adjustments, to allocate the limited supply of vaccines
to states, other jurisdictions, and some federal agencies. The government stopped using this
methodology in June 2021 when suﬃcient vaccine supply was available to meet demand.
Entities involved: The Department of Defense and the Department of Health and Human
Services

Background
In 2020—early in the pandemic—federal oﬃcials anticipated that COVID-19 vaccines would be
available in limited supplies following authorization, so they developed a means for allocating
available doses. Speciﬁcally, Operation Warp Speed—a partnership between the Department
of Health and Human Services (HHS) and the Department of Defense (DOD)114—created a
methodology to allocate the available supply of COVID-19 vaccine doses directly to jurisdictions (50
states, eight territories, and four cities) as well as ﬁve federal agencies.115 Federal oﬃcials referred
to these 67 entities collectively as “awardees.”116
Operation Warp Speed oﬃcials said they began evaluating approaches for allocating available
vaccines in June 2020, with input from federal agencies such as HHS’s Centers for Disease
Control and Prevention (CDC) and its Oﬃce of the Assistant Secretary for Preparedness and
Response (ASPR). Oﬃcials told us they considered approaches that would take into account
priority populations (i.e., individuals with high occupational exposure, advanced age, or multiple
comorbidities). Ultimately, they proposed basing allocation amounts primarily on each awardee’s
population of adults, aged 18 and older, in an attempt to increase simplicity and transparency in
communicating the methodology to the awardees. The Secretary of Health and Human Services
and the Secretary of Defense approved the methodology on November 6, 2020.117
In December 2020, HHS’s Food and Drug Administration (FDA) authorized the ﬁrst COVID-19
vaccines for use, and Operation Warp Speed began implementing its vaccine allocation
methodology.118 FDA authorized Pﬁzer’s two-dose vaccine for emergency use on December 11,
114Operation Warp Speed was established in May 2020 to accelerate the development, manufacturing, and distribution

of COVID-19 vaccines. The name of this partnership was changed to the HHS-DOD COVID-19 Countermeasures
Acceleration Group in April 2021, but for the purposes of this enclosure, we will refer to both iterations of the
partnership as Operation Warp Speed.

115The ﬁve federal agencies were the Bureau of Prisons, DOD, Department of State, Department of Veterans Aﬀairs,

and Indian Health Service (IHS). The Department of Homeland Security was initially an awardee but chose to receive its
vaccine doses through the Department of Veterans Aﬀairs.
116In addition to vaccine allocations to awardees—the focus of this enclosure—in February 2021, the federal

government separately implemented additional vaccine distribution programs, such as to retail pharmacies, as we
described in two GAO reports issued in November 2021 and February 2022.

117According to DOD oﬃcials, the Coordinator of the White House Coronavirus Response reviewed and reaﬃrmed the

population-based allocation methodology on January 22, 2021 following the transition to the new administration.

118FDA generally licenses biologics, including vaccines, through review of a biologics license application. See 42 U.S.C.

§ 262. An emergency use authorization (EUA) allows for the temporary use of vaccines without FDA licensure, provided

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2020, and a week later on December 18, 2020, it authorized Moderna’s two-dose vaccine.119
Allocation eﬀorts also included Janssen’s single-dose vaccine after it was authorized by FDA on
February 27, 2021.120

Overview of Key Issues
The federal government used a population-based methodology to allocate available vaccine doses
across 67 awardees, generally on a weekly basis, from December 2020 through late-June 2021.
Awardees could order up to their allocated amount for distribution to their populations. Operation
Warp Speed oﬃcials applied the methodology separately for the doses available from each
vaccine company, which initially involved two sets of weekly calculations—one each for the Pﬁzer
and Moderna vaccines—and then grew to three sets of weekly calculations after FDA authorized
Janssen’s vaccine in February 2021. Because the Pﬁzer and Moderna vaccines each required two
doses, oﬃcials allocated the entire two-dose regimen at the same time but usually shipped doses
separately, with the second dose arriving 2 or 3 weeks after the ﬁrst dose.
On June 24, 2021, the federal government stopped using its allocation methodology because
vaccine supply had increased to suﬃcient levels to meet the needs of jurisdictions and federal
agencies, according to federal oﬃcials. Oﬃcials told us that because suﬃcient vaccine doses were
available after this date, awardees could order as many doses as they needed.121
The methodology involved a complex, iterative process, in which oﬃcials would go through
calculations multiple times to ensure all available vaccine doses were allocated according to
population, while also making three key adjustments. To start the allocation methodology,
Operation Warp Speed oﬃcials totaled the adult populations for all awardees, and calculated each
awardee’s proportion of that total.122 Oﬃcials then divided the amount of available vaccine doses
based on each awardee’s proportion and made the three adjustments. For these adjustments,
oﬃcials

certain statutory criteria are met. For example, it must be reasonable to believe that the vaccine may be eﬀective and
that the known and potential beneﬁts of the vaccine outweigh the known and potential risks. See 21 U.S.C. § 360bbb-3.
119Pﬁzer’s COVID-19 vaccine was developed in collaboration with BioNTech.
120Janssen Pharmaceutical Companies are a part of Johnson & Johnson.

121Separate from the population-based allocation methodology, federal oﬃcials explained that beginning in September

2021, they implemented thresholds for the number of doses that jurisdictions could order, to help decrease the
potential for expired doses and vaccine wastage. According to oﬃcials, they set and adjusted the thresholds based on
distribution and administration rates, and communicated to jurisdictions that they should maintain 4-6 weeks of supply.
Jurisdictions could also submit requests and receive approval to order doses above the threshold when necessary.
122For the 50 states and four cities, Operation Warp Speed oﬃcials used population data from the 2018 American

Community Survey. For Puerto Rico, oﬃcials used the 2018 Puerto Rico Community Survey. For the other seven
territories, oﬃcials used the population data as of November 2020 provided by the Central Intelligence Agency’s
“World Factbook.” With the exception of DOD, each federal agency provided an estimate of the population it served to
Operation Warp Speed in November 2020. Operation Warp Speed, which included DOD oﬃcials, estimated a population
number for DOD. According to Operation Warp Speed oﬃcials, populations served by each federal agency may also
be represented in the populations of the states, territories, and cities. A DOD oﬃcial told us that the federal agency
populations were relatively small, and therefore any double counting did not signiﬁcantly aﬀect allocations to states or
cities.

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• allocated vaccine doses to geographically isolated awardees on a monthly basis, rather than
weekly;
• rounded allocations up to minimum order quantities based on the size of company vaccine
trays (the containers holding vials of vaccine doses used for shipping); and
• adjusted allocations for jurisdictions with tribal populations that received vaccine doses
through their jurisdictions rather than through the Indian Health Service (IHS).
Oﬃcials allocated vaccine doses to geographically isolated awardees on a monthly basis,
rather than weekly. Operation Warp Speed oﬃcials made this adjustment for eight awardees to
account for challenges with shipping or other logistical issues. Therefore, these eight awardees
would receive a larger allocation during the ﬁrst week of each month, and then not be allocated
additional vaccine doses in the following weeks of the month. These geographically isolated
awardees were Alaska, American Samoa, the Federated States of Micronesia, Guam, Northern
Mariana Islands, the Republic of the Marshall Islands, the Republic of Palau, and the Department
of State—due to the location of its employees around the world.123
Oﬃcials rounded up to minimum order quantities based on the size of company vaccine
trays. The minimum order quantity for each available vaccine varied depending on the vaccine
company’s product shipment conﬁgurations—that is, the tray sizes and how many vials and
subsequent doses a tray could hold. In December 2020, at the beginning of vaccine allocation,
Pﬁzer’s vaccine was shipped in trays that held 975 doses each, so its minimum order quantity
was 1,950 doses—one tray of ﬁrst doses and one tray of second doses. Moderna’s vaccine was
shipped in trays of 100 doses, so its minimum order quantity was 200 doses. When Janssen’s
vaccine became available in February 2021, it was shipped in trays of 100 doses. Because Janssen’s
vaccine only required one dose, its minimum order quantity was also 100 doses.124
Operation Warp Speed oﬃcials said they rounded up to the next minimum order quantity each
week when calculating allocations for each awardee. To allow for this rounding up, early in the
weekly allocation process, oﬃcials set aside a small portion of the available vaccine doses for
calculation purposes (about 3 percent in the ﬁrst week) to ensure they had enough doses to align
with minimum order quantities. If oﬃcials found that they set aside more doses than needed, they
allocated the remaining amount to awardees according to the methodology.

123According to Operation Warp Speed oﬃcials, the Republic of the Marshall Islands, the Federated States of Micronesia,

and the Republic of Palau did not have ultra-cold freezer capacity or dry-ice-making capabilities necessary to store the
Pﬁzer vaccine. Therefore, oﬃcials did not allocate Pﬁzer vaccine doses to those three awardees, but instead provided
the equivalent amount of the other available vaccines. In addition, according to Operation Warp Speed oﬃcials, the
monthly allocation of vaccine to the Department of State allowed for the eﬃcient transportation of vaccines by plane to
the department’s diplomatic locations worldwide.
124Pﬁzer’s minimum order quantity was originally 1,950 doses because each order was a minimum of two trays, each

tray held 195 vials, and each vial held ﬁve doses. Then, in January 2021, FDA determined that up to 6 doses of Pﬁzer’s
vaccine could be extracted from a vial instead of 5, so the minimum order quantity increased to 2,340. According to HHS
oﬃcials, as of February 24, 2022, Pﬁzer’s vaccine was available in minimum dose orders of 300 (for individuals aged 12
years and older) and in minimum dose orders of 100 (for individuals aged 5 through 11); Moderna’s vaccine in minimum
dose orders of 100; and Janssen’s vaccine in minimum dose orders of 100.

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The minimum order quantity adjustment generally resulted in a larger percentage increase for
small states. For example, before adjusting for minimum order quantities, a state with a small
population (Montana) and a state with a large population (California) would have each been
allocated vaccine doses in proportion to their adult populations. However, Montana’s ﬁrst week
of Pﬁzer’s allocation increased by about 10 percent to factor in the minimum order quantity
adjustment. California’s allocation also increased based on the minimum order quantity, but this
increase was a much smaller percentage—about 0.2 percent—due to California’s larger population
size. See the ﬁgure below.
Example of Allocation Calculations before and after Minimum Order Quantity Adjustments for Two States with
Diﬀerent Population Sizes

Note: The numbers in this ﬁgure are based on the ﬁrst week of the Pﬁzer vaccine allocation, and the populations are adults
aged 18 and older from the 2018 American Community Survey.

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Oﬃcials adjusted allocations for jurisdictions with tribal populations that received vaccine
doses through jurisdictions rather than through IHS. In the fall of 2020, the IHS polled its tribal
health programs and Urban Indian Organizations nationwide, asking each one to decide whether
to receive vaccine doses through IHS or from their state or local jurisdiction.125 Operation Warp
Speed based its allocation of vaccine doses to IHS—one of the 67 awardees—on the population
served by federally-operated IHS facilities, as well as the populations served by tribal health
program and Urban Indian Organizations that would receive vaccine doses from IHS. Tribal health
programs and Urban Indian Organizations in 18 states and 1 city chose not to receive vaccine
doses from IHS and therefore received vaccine doses from their respective states or city, according
to documentation we reviewed. Because these awardees—the 18 states and one city—supplied
vaccine doses for the populations served by tribal health programs or Urban Indian Organizations
in their jurisdictions, Operation Warp Speed created a “sovereign nation supplement.” When the
sovereign nation population adjustment was large enough to result in allocation of additional
vaccine shipping trays, these states and city received increased allocations of vaccine doses.
For example, after adjusting for the sovereign nation supplement, New Mexico received about
6 percent more doses in the ﬁrst week of the Pﬁzer vaccine allocation compared to before the
adjustment, with similar eﬀects in subsequent weeks. See the ﬁgure below.
Example of Allocation before and after the Sovereign Nation Supplement for One State

Note: The numbers in this ﬁgure are based on the ﬁrst week of the Pﬁzer vaccine allocation, and the populations are adults
aged 18 and older from the 2018 American Community Survey.
125IHS is an agency within HHS that provides health care for more than 2 million American Indians and Alaska Natives

who are members or descendants of federally recognized tribes.

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The three adjustments combined to aﬀect vaccine allocations for states with more than one
of the characteristics described above—geographically isolated, small populations, or large
sovereign nation populations. For example, due to its location, Alaska received its entire month’s
allocation of the Pﬁzer vaccine on December 14, 2020, when Operation Warp Speed made the
ﬁrst weekly allocation. Alaska also has a small population, so the eﬀect of the minimum order
quantity adjustment was greater, and it additionally received a large sovereign nation supplement.
Therefore, in the ﬁrst week of the Pﬁzer vaccine allocation, Alaska received about 57,880 (or nearly
6 times) more vaccine doses compared to its allocated amount before these adjustments were
calculated.

Methodology
To conduct this work, we reviewed HHS and DOD documentation about the COVID-19 vaccine
allocation methodology developed by Operation Warp Speed and interviewed Operation Warp
Speed oﬃcials on how they created and implemented the methodology. We reviewed population
data by comparing the data Operation Warp Speed used in its allocation methodology to the
population data for the 50 states, four cities, and Puerto Rico, based on data published in the
2018 American Community Survey, a yearly survey conducted by the U.S. Census Bureau. We
determined the data were suﬃciently reliable for the purposes of our reporting objective.

Agency Comments
We provided DOD, HHS, and the Oﬃce of Management and Budget with a draft of this enclosure.
None of the agencies provided comments on this enclosure.

GAO’s Ongoing Work
As the pandemic continues, the federal government continues to play a role in distributing and
administering vaccines to help prevent the spread of COVID-19. We will continue to monitor the
federal government’s vaccine response.

Related GAO Products
COVID-19: Federal Eﬀorts to Provide Vaccines to Racial and Ethnic Groups. GAO-22-105079.
Washington, D.C.: February 7, 2022.
COVID-19: HHS Agencies’ Planned Reviews Of Vaccine Distribution and Communication Eﬀorts Should
Include Stakeholder Perspectives. GAO-22-104457. Washington, D.C.: November 4, 2021.
Contact information: Alyssa M. Hundrup, (202)-512-7114, hundrupa@gao.gov

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Vaccine Distribution and Administration
Federal, state, and local eﬀorts have led to an estimated 70 percent of the eligible U.S. population
being fully vaccinated against COVID-19. As vaccination eﬀorts continue, stakeholders—including
those representing state, territorial, and local health oﬃcials and health care providers—have
reported ongoing challenges vaccinating children and administering booster doses.
Entities involved: Department of Health and Human Services, including the Oﬃce of the Assistant
Secretary for Preparedness and Response, the Centers for Disease Control and Prevention, and
the Food and Drug Administration

Background
COVID-19 vaccination, including the administration of booster doses, remains a high priority for
the federal government. As of March 26, 2022, about 70 percent of the U.S. population eligible for
vaccination (i.e., individuals aged 5 years and older) were fully vaccinated, according to estimates
from the Centers for Disease Control and Prevention (CDC).126 Vaccination coverage varied,
however, among population groups. For example, a higher proportion of adults aged 65 years and
older were fully vaccinated compared to younger adults. Additionally, about 46 percent of fully
vaccinated individuals eligible to receive a booster dose (i.e., individuals aged 12 years and older)
had received one, according to CDC estimates.127
In response to the pandemic, the federal government has provided substantial funding for
COVID-19 vaccine-related activities. As of February 28, 2022, the Department of Health and Human
Services (HHS) reported that $41.5 billion of its COVID-19 relief funding was for vaccine-related
activities, such as vaccine development, procurement, and distribution. Of this amount, HHS
reported that about $37.3 billion had been obligated, and over $17.7 billion had been expended as
of the same date.128
As of April 1, 2022, three COVID-19 vaccines were available in the U.S. The Pﬁzer vaccine was
available for individuals aged 5 years and older, and the Moderna and Janssen vaccines were
available for individuals aged 18 years and older.129 As of April 1, 2022, the primary vaccination
126As of April 1, 2022, CDC considered individuals to be fully vaccinated if they had received their primary series of
COVID-19 vaccines—that is, for most people, that they had received either two doses of a two-dose vaccine or one dose
of the single-dose vaccine. See CDC, “COVID Data Tracker: COVID-19 Vaccinations in the United States,” accessed April 1,
2022, https://covid.cdc.gov/covid-data-tracker/#vaccinations_vacc-total-admin-rate-total.
127A booster dose is a subsequent dose of vaccine administered to improve protection, which may have waned over

time after primary series vaccination, according to CDC.

128This amount does not include all vaccine-related funding. HHS reported allocations, obligations, and expenditures for

a variety of COVID-19 response activity categories, including vaccines. When funding was related to multiple response
categories, it was only assigned to one. For example, certain funds for vaccine distribution were included in the response
activity category for “support to states, localities, territories, and tribal organizations” rather than in the “vaccine activity”
category.
129As of April 1, 2022, the Pﬁzer vaccine, which was developed in collaboration with BioNTech, was licensed for

individuals aged 16 years and older (Comirnaty) and was also available under an emergency use authorization (EUA) for
individuals aged 5 years and older. Typically, the Food and Drug Administration (FDA) must license a vaccine before it
can be marketed in the U.S. See 42 U.S.C. § 262. However, during an emergency, FDA may temporarily allow the use of
unlicensed vaccines through an EUA, provided certain statutory criteria are met. See 21 U.S.C. § 360bbb-3. The Moderna

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series for individuals in the general population included two doses of the Pﬁzer or Moderna
vaccines or a single dose of the Janssen vaccine. For certain immunocompromised individuals, a
third dose of the Pﬁzer vaccine (for individuals aged 5 years and older) or Moderna vaccine (for
individuals aged 18 years and older) was authorized for their primary vaccination series.130 For
certain immunocompromised individuals who received a single dose of the Janssen vaccine, a
second dose of the Pﬁzer or Moderna vaccine was authorized for their primary vaccination series.
In addition, booster doses were authorized for individuals aged 12 years and older after
completion of their primary vaccination series. In March 2022, a second booster dose was
authorized to be administered to certain populations, including individuals aged 50 years and
older.
State and local health oﬃcials have played a key role in federal eﬀorts to distribute, administer,
and communicate about COVID-19 vaccines. In November 2021, we recommended that HHS
agencies obtain input from state and local health oﬃcials when identifying lessons learned from
federal COVID-19 vaccination eﬀorts. Speciﬁcally, we recommended that HHS agencies, including
CDC, obtain feedback from, and incorporate perspectives of, state and local health oﬃcials and
other key stakeholders as the agencies conduct their after action reviews. CDC concurred with this
recommendation.131

Overview of Key Issues
COVID-19 vaccine for children. The Food and Drug Administration (FDA) authorized the Pﬁzer
vaccine for children aged 5–11 years at the end of October 2021, and CDC recommended its use
for this age group a few days later in early November 2021.132 Before then, FDA had authorized
and CDC recommended the Pﬁzer COVID-19 vaccine for those aged 16–17 years and older in
December 2020.133 Then, in May 2021, FDA also authorized and CDC recommended that vaccine
for children aged 12–15 years.

vaccine was licensed for individuals aged 18 years and older (Spikevax), and the Janssen vaccine was available under an
EUA for individuals 18 years and older. Janssen Pharmaceutical Companies are a part of Johnson & Johnson.

130These are individuals considered to be moderately or severely immunocompromised who have a weakened immune

system because of certain conditions or treatments, such as people who have undergone solid organ transplantation
and are taking medicine to suppress the immune system, according to CDC.
131In November 2021, CDC said it had not established a timeline for an after action review, as the agency remained

involved in the response to the pandemic. CDC said that in the meantime it continued to incorporate continuous
feedback from stakeholders.

132On February 1, 2022, Pﬁzer requested FDA amend the EUA for its COVID-19 vaccine to include children aged 6

months through 4 years. Due to additional ﬁndings from an ongoing clinical trial, FDA postponed a decision and, as of
April 1, 2022, had not authorized the Pﬁzer vaccine for children under 5 years.

133Although COVID-19 vaccine was available to individuals aged 16-17 years in December 2020, adults were prioritized

for vaccination until May 2021, according to CDC oﬃcials.

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Child Receiving COVID-19 Vaccination

As of March 26, 2022, CDC estimates showed that about one-third of children aged 5–11 years had
received the ﬁrst dose of the Pﬁzer vaccine, and over one-quarter had been fully vaccinated. In
comparison, a larger proportion of older children (who had been eligible longer) were vaccinated,
although at lower rates than for the adult population. (See table.)

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Estimated COVID-19 Vaccination by Age Group, as of Mar. 26, 2022
When age
group was
recommended
by CDC for
a

First dose
Percentage of age
group

Fully vaccinated
Number (in Percentage of age
millions)
group

Number (in
millions)

Age group

vaccination

5-11 years

November 2021

34.3

9.9

27.6

7.9

12-15 years

May 2021

66.7

11.3

56.8

9.6

16-17 years

December 2020

72.0

6.0

61.7

5.2

18 years and older

December 2020

88.3

228.0

75.4

194.7

Source: GAO analysis of Centers for Disease Control and Prevention (CDC) data and information. | GAO-22-105397

Notes: See CDC, “COVID Data Tracker: Demographic Characteristics of People Receiving COVID-19 Vaccinations in the
United States,” accessed April 1, 2022, https://covid.cdc.gov/covid-data-tracker/#vaccination-demographic and “COVID
Data Tracker: COVID-19 Vaccinations in the United States,” accessed April 1, 2022, https://covid.cdc.gov/covid-data-tracker/
#vaccinations_vacc-total-admin-rate-total. As of April 1, 2022, the only vaccine authorized or licensed for children under age 18
years was the Pﬁzer vaccine, which was developed in collaboration with BioNTech. No COVID-19 vaccines had been authorized
or licensed for children under 5 years as of April 1, 2022.
a

After the Food and Drug Administration authorizes or licenses a vaccine, CDC’s Advisory Committee on Immunization
Practices, a panel of medical and public health experts, typically meets to review available data and make recommendations on
vaccines. The advisory committee’s recommendations become oﬃcial CDC recommendations if they are approved by the CDC
Director.
b

As of April 1, 2022, CDC counts individuals as being “fully vaccinated” if they received two doses on diﬀerent days (regardless of
time interval) of the two-dose vaccines or received one dose of the single-dose vaccine.

Additionally, the pace of vaccinations has varied over time for children eligible for COVID-19
vaccination. In mid-November 2021, children aged 5–11 years were receiving their ﬁrst doses of
vaccine at an average of more than 250,000 a day, according to CDC data. By mid-March 2022, the
daily average had declined to fewer than 10,000 doses.134
A number of factors could be contributing to the declining pace of vaccinations for children,
according to health care providers and others. For example, it was anticipated that a number of
parents would be eager to get their children vaccinated soon after they became eligible, while
other parents might defer their decisions because of questions they have about vaccinating young
children against COVID-19.135
Some stakeholders representing state, territorial, and local health oﬃcials we interviewed
characterized the rollout of COVID-19 vaccine for children aged 5–11 years as fairly successful
134See CDC, “COVID Data Tracker: Demographic Characteristics of People Receiving COVID-19 Vaccinations in the United

States,” accessed April 1, 2022, https://covid.cdc.gov/covid-data-tracker/#vaccination-demographic.

135For example, in early 2022, an estimated 32 percent of parents with children aged 5–11 years said their child had

received at least one dose of COVID-19 vaccine, 8 percent said their child will get vaccinated, 27 percent said their
child would probably get vaccinated or were unsure, and 33 percent said their child probably or deﬁnitely will not get
vaccinated, according to CDC. These estimates are from CDC’s National Immunization Survey Child COVID Module, data
collection period January 30 through February 26, 2022, according to CDC. See https://covid.cdc.gov/covid-data-tracker/
#vaccine-conﬁdence, accessed April 1, 2022.

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but some also noted challenges. They said CDC had released helpful planning materials and
held listening sessions with stakeholders, such as local health departments, prior to the rollout.
However, these stakeholders and a stakeholder representing health care providers noted
challenges, including the following:
• Provider capacity and enrollment. Some providers’ capacity to administer COVID-19 pediatric
vaccine was challenged by competing limited staﬀ, according to some stakeholders. For
example, one stakeholder said that pediatricians had widely reported that vaccines for
younger children became available at one of the hardest stages of the pandemic when
parents were seeking COVID-19 testing and provider practices were experiencing ongoing staﬀ
limitations. In addition, some stakeholders noted that some providers were having diﬃculties
registering for or receiving vaccine in their clinics.
• Limited use of local expertise. One stakeholder representing local health departments noted
that the federal government did not seem to take into account the expertise of local health
departments when planning the rollout of vaccines for children aged 5–11 years. The
stakeholder said the federal government’s vaccination plans centered on using pharmacies
and health care providers to administer vaccine and did not take into account local health
departments’ relationships with schools, community centers, libraries, and other organizations
that can target hard-to-reach families and children.
COVID-19 vaccine booster doses. Beginning in September 2021, FDA authorized, and CDC
recommended, booster doses of COVID-19 vaccine because of waning protection from COVID-19
infection or severe illness over time after initial vaccination.136 Over the next several months,
FDA and CDC expanded the populations eligible for receiving a booster dose. This was in part
because data had shown that booster doses can help broaden and strengthen protection against
the Omicron variant and other COVID-19 variants, according to CDC.
As of April 1, 2022, FDA authorized, and CDC recommended, that individuals aged 12 years or
older receive a booster dose after completing their primary vaccination series. For the general
population, a booster dose is recommended at least 2 months after the single primary dose of
the Janssen vaccine or at least 5 months after completion of the primary vaccination series of the
Pﬁzer or Moderna vaccines. In addition, a second booster dose may be administered to individuals
aged 50 years and older and to certain immunocompromised individuals aged 12 years and older,
at least 4 months after receipt of a ﬁrst booster dose.137 (See table.) FDA also authorized the use
of vaccine booster doses on a “mix and match” basis—that is, any available COVID-19 vaccine
may be used as a booster dose regardless of which COVID-19 vaccine was used for the primary
vaccination series.138
136After FDA authorizes or licenses a COVID-19 vaccine, CDC’s Advisory Committee on Immunization Practices, a panel

of medical and public health experts, typically meets to review available data and make recommendations on vaccines.
CDC’s vaccine recommendations are formulated by the advisory committee’s recommendations and approved by the
CDC Director.

137In March 2022, CDC also recommended that adults who received a primary and booster dose of the Janssen vaccine

receive a second booster dose of the Pﬁzer or Moderna vaccines.

138In December 2021, CDC recommended that in most situations, the Pﬁzer or Moderna vaccines are preferred over the

Janssen vaccine for primary and booster vaccination due to the risk of a rare but serious adverse event with the Janssen

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vaccine. The Janssen vaccine may be considered in some situations, according to CDC, including for persons who (1)
had a severe reaction after a dose of Pﬁzer or Moderna vaccine or have a severe allergy to an ingredient in the Pﬁzer
or Moderna vaccines; (2) who would otherwise remain unvaccinated for COVID-19 due to limited access to Pﬁzer and
Moderna vaccines; or (3) who want to get the Janssen vaccine despite the safety concerns.

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CDC Guidance on COVID-19 Booster Doses as of April 2022
When booster dose may be
administered

Which vaccine may be administered
as booster dose

Booster

Who may get a booster

First booster dose

Individuals aged 12 years At least 5 months after the primary
and older
vaccination series of either the Pﬁzer
a

or Moderna vaccines.

At least 2 months after the single

Pﬁzer or Moderna vaccines are
preferred in most cases. However,
individuals aged 12-17 years may only
receive the Pﬁzer vaccine.

primary dose of the Janssen vaccine.

Certain
At least 3 months after the third dose Pﬁzer or Moderna vaccines are
immunocompromised
in the primary vaccination series of
preferred in most cases. However,
individuals aged 12 years either the Pﬁzer or Moderna vaccines. individuals aged 12-17 years may only
c
receive the Pﬁzer vaccine.
and older
At least 2 months after the second
dose in a primary vaccination series of
the Janssen vaccine
Second booster
dose

Individuals aged 50 years At least 4 months after the ﬁrst
Pﬁzer or Moderna vaccines
and older
booster dose of any COVID-19 vaccine
Certain
At least 4 months after the ﬁrst
Pﬁzer or Moderna vaccines for
immunocompromised
booster dose of the Pﬁzer or Moderna individuals aged 18 years and older.
individuals aged 12 years vaccines
However, individuals aged 12-17 years
c
may only receive the Pﬁzer vaccine.
and older
Adults who received a
primary vaccine and
booster dose of the
Janssen vaccine

At least 4 months after the Janssen
booster dose

Pﬁzer or Moderna vaccines

Source: Information from the Centers for Disease Control and Prevention (CDC). | GAO-22-105397

Pﬁzer developed its COVID-19 vaccine in collaboration with BioNTech.

b
c

Janssen Pharmaceutical Companies are a part of Johnson & Johnson.

These are individuals considered to be moderately or severely immunocompromised who have a weakened immune system
because of certain conditions or treatments, such as people who have undergone solid organ transplantation and are taking
medicine to suppress the immune system, according to CDC.

As of March 26, 2022, about 97 million people had received a booster dose, or about 46 percent of
the 209 million people aged 12 years and older who had been fully vaccinated, according to CDC
estimates.139 The extent to which diﬀerent age groups had received a booster dose, however, has
varied. For example, CDC estimated that about 67 percent of individuals aged 65 years or older
who were fully vaccinated had received a booster dose.

139CDC counts people as having received a booster dose if they are fully vaccinated and received another dose of

COVID-19 vaccine since August 13, 2021. CDC’s count does not distinguish if an individual is immunocompromised and
received an additional dose as part of a primary series. According to CDC, these data may underestimate booster doses
because of challenges in linking doses when an individual is vaccinated in diﬀerent jurisdictions or by diﬀerent providers.
See CDC, “COVID Data Tracker: COVID-19 Vaccinations in the United States,” accessed April 1, 2022, https://covid.cdc.gov/
covid-data-tracker/#vaccinations_vacc-total-admin-rate-total.

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Some stakeholders we interviewed acknowledged the tremendous public health accomplishment
of administering hundreds of millions of COVID-19 vaccine doses, but all said they faced ongoing
challenges administering booster doses. As we previously recommended, obtaining feedback
from stakeholders, including state and local health oﬃcials, is critical as HHS identiﬁes lessons
learned from federal COVID-19 vaccination eﬀorts. The challenges stakeholders identiﬁed related
to booster doses included the following:
• Competing public health priorities and staﬃng issues. Similar to what we reported in April
2021, some stakeholders reported competing public health priorities and staﬃng issues
as challenges. When the federal government began rolling out booster doses, state and
local health oﬃcials and providers were already busy with other pandemic-related activities,
including continued outreach to unvaccinated individuals, administering pediatric COVID-19
vaccines, and managing testing, according to some stakeholders. In addition, health oﬃcials
were also addressing other public health priorities at the time. For example, local health
departments were busy providing routine childhood vaccinations, including those missed
during the pandemic, and preparing for seasonal inﬂuenza vaccinations, while also dealing
with limited health staﬀ, according to one stakeholder. Pharmacies were also reporting
staﬃng shortages at this time, which one stakeholder said had aﬀected the availability of
vaccination appointments.
• Administrative procedures for ordering COVID-19 vaccine. Some stakeholders representing state,
territorial, and local health oﬃcials said requirements for ordering vaccine doses, including
booster doses, above federally set thresholds were burdensome and frustrating for some
states. Since September 2021, each time states wanted to order more doses than their
threshold, they were required to notify HHS, submit a justiﬁcation request for additional doses,
and wait for HHS’s evaluation and response, according to HHS oﬃcials.140 The stakeholders
said the extra work required by this process placed a heavy burden on already exhausted
public health staﬀ. It also resulted in delays or cancellations of provider orders, according to
one stakeholder representing state immunization managers. In addition, these stakeholders
said that it was frustrating for states to face these additional requirements to meet increased
demand for vaccine, including booster doses, when the federal government was promoting
booster doses and saying there was plenty of vaccine.
• Communication related to complex and changing federal recommendations. Some stakeholders
representing state, territorial, and local oﬃcials said communications regarding the complex
and changing authorizations and recommendations for booster doses led to confusion among
the public and health care providers. The challenges noted by one or more stakeholders
included: (1) multiple changes in the populations eligible for booster doses, (2) diﬀerences in
when to get booster doses depending on the vaccine, and subsequent changes to these time
frames, (3) the diﬀerent dosage for the Moderna vaccine booster (half the size of a full dose
used for primary vaccination), (4) the diﬀerence between CDC recommendations on those who
“should” get a booster dose and those who “may” get a booster dose, and (5) the diﬀerence

140According to HHS oﬃcials, the threshold system was implemented to help decrease the potential for expired

doses and vaccine wastage. Thresholds were established to try to “right size” the inventory in the ﬁeld based
on how much vaccine was administered, how much vaccine remained in inventory, and how much vaccine was
ordered, according to HHS oﬃcials.

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between a third primary series dose recommended for certain immunocompromised
individuals and a booster dose.141
Between September 22, 2021 (when booster doses were ﬁrst authorized), and April 1, 2022,
FDA amended COVID-19 vaccine EUAs regarding booster doses ten times, including the age
groups for whom booster doses were authorized. CDC similarly updated its recommendations
on booster doses and also made additional recommendations for individuals who are
moderately or severely immunocompromised. One stakeholder representing local health
departments said the more nuances there are in the recommendations, the harder it is to
implement booster dose vaccinations on the ground, and that diﬀerent caveats for diﬀerent
shots and language like “may” versus “should” make it very complicated to communicate to the
public on booster doses.
• Not receiving advance notice of changes.Some stakeholders we interviewed expressed
frustration with learning about the changes to booster dose recommendations only when
they were announced to the public and the media and not receiving advance notice from
the federal government. They said advance notice is important to help state and local health
oﬃcials prepare for potential questions from the public and to prepare communication
materials for their communities.
One stakeholder also noted that when multiple changes occurred within a few days,
without advance notiﬁcation, states had to conduct the same work—including outreach to
providers—multiple times in a short period. For example, after FDA and CDC changed the time
frame for receiving a booster dose of the Pﬁzer vaccine from at least 6 months to at least 5
months after individuals were fully vaccinated, states revised their educational and outreach
materials, including in various languages, noting that the time frame before getting a booster
for Pﬁzer had changed but the time frame for the Moderna vaccine was still 6 months. A
few days later, when FDA and CDC also reduced this time frame to at least 5 months for the
Moderna vaccine, state health oﬃcials had to repeat their work to update all their materials
again.
• Limited information on vaccine shipments. Some stakeholders representing state, territorial,
and local oﬃcials said some states and local health departments continued to have
limited information on the locations where vaccine doses were being sent within their
communities—for example to pharmacies and federally supported health centers. In
November 2021, we reported that the lack of information on where doses were going made
it challenging for states to optimally and equitably distribute the supplies of vaccine they had
received from the federal government.
Minimum order sizes and vial sizes. Some stakeholders we interviewed also noted that
minimum order sizes posed challenges for providing COVID-19 vaccine—both for primary series
and booster doses—in manageable quantities to providers with smaller patient loads, including
141For example, in September 2021, CDC’s recommendation stated that some groups “should” receive a Pﬁzer
vaccine booster dose, including individuals aged 50–64 years with underlying medical conditions who received
the Pﬁzer vaccine as their primary series. At the same time, however, CDC’s recommendation stated that other
groups “may” receive a Pﬁzer vaccine booster dose, including individuals aged 18–49 years with underlying medical
conditions who received the Pﬁzer vaccine as their primary series.

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pediatricians and health care providers in rural areas. As of February 2022, the minimum order
sizes for COVID-19 vaccines ranged from 100 to 300 doses, depending on the vaccine, according
to HHS oﬃcials. In January 2021, we reported that a lesson learned from the 2009 H1N1 inﬂuenza
pandemic was that a 100-dose minimum order was problematic because states had to break
down the shipments into smaller sizes to be shipped to health care providers, which reportedly
required signiﬁcant staﬀ time and delayed when providers received vaccine. We noted the
minimum order sizes for COVID-19 vaccines (which at that time were 975 doses for Pﬁzer vaccine
and 100 doses for Moderna vaccine) could pose similar or even greater challenges.
In January 2022, some stakeholders noted these challenges related to minimum order sizes.
Stakeholders noted that although the minimum order size for Pﬁzer vaccine was smaller than
earlier, some states still had to break down vaccine shipments to send to smaller providers.
Some stakeholders also said the vial sizes—that is, the amount of vaccine included in each multidose vial of COVID-19 vaccine—are a challenge because all of the vaccine in the vial must be used
within hours of opening the vial and administering the ﬁrst dose. (See table.) These stakeholders
said some health care providers, such as those in rural areas, may not be able to administer
all doses in a vial in a single day due to their small patient populations and have to discard any
unused doses in the vial. As a result, vaccinators in such circumstances need a much larger supply
of vaccine on hand, according to one stakeholder representing state immunization managers.
Additionally, in some places, the concern about the potential for wasting vaccine doses coupled
with the burden of enrolling led some pediatricians not to enroll or defer enrolling as COVID-19
vaccine providers, according to another stakeholder.

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Minimum Order Sizes, Number of Hours in Which Doses in Opened Vials Must Be Used, and Vial Sizes for
Available COVID-19 Vaccines, as of February 2022
a

Pﬁzer
(12 years and
older)

Pﬁzer
(5–11 years)

Moderna
(18 years and older)

Janssen
(18 years and older)

Minimum order size (in
doses)

300

100

How long vaccine can be
used after vial is opened

12 hours

6 hours refrigerated;
2 hours at room
temperature

Number of doses per vial

6 doses

10 doses

10–11 doses

5 doses

Sources: GAO analysis of Food and Drug Administration (FDA) and Department of Health and Human Services (HHS) information. | GAO-22-105397

Pﬁzer developed its COVID-19 vaccine in collaboration with BioNTech.

b
c

Janssen Pharmaceutical Companies are a part of Johnson & Johnson.

The Pﬁzer vaccine available for individuals aged 12 years and older comes in two formulations. The formulation that does
not require dilution must be used within 12 hours of puncturing the vial. In February 2022, the U.S. government was only
ordering the formulation that does not require dilution, and as of December 23, 2021, only this formulation was available for
jurisdictions to order for individuals aged 12 years and older, according to HHS oﬃcials. The other authorized formulation,
which must be diluted before administration, must be used within 6 hours of dilution.
d

For Moderna’s vaccine, the number of doses per vial reﬂects the number of doses available for primary series vaccinations;
a larger number of doses may be extracted if used for booster doses. The number of doses is shown as a range because the
type of syringe used may aﬀect the number of doses that can be extracted from a vial. The Moderna vaccine is available in two
diﬀerent vial sizes for primary vaccination—one with 10-11 doses per vial and one with 13-15 doses per vial. Since November
10, 2021, the smaller vial containing 10-11 doses vial replaced the larger vial as the product available for ordering, according to
HHS oﬃcials.

Methodology
To conduct this work, we reviewed CDC data on COVID-19 vaccines administered as of March
26, 2022. We determined the data were suﬃciently reliable for the purposes of presenting CDC
vaccination estimates. We also reviewed agency information from CDC, FDA, and HHS. In addition,
we reviewed information and interviewed oﬃcials from stakeholders representing state oﬃcials,
health oﬃcials—including state, territorial and local health oﬃcials—and health care providers.142

Agency Comments
We provided HHS, including CDC, and the Oﬃce of Management and Budget a draft of this
enclosure. CDC provided technical comments, which we incorporated as appropriate. The Oﬃce of
Management and Budget did not provide comments on this enclosure.

142For perspectives of state, territorial, and local oﬃcials, including health oﬃcials, we interviewed representatives

from the Association of Immunization Managers, the Association of State and Territorial Health Oﬃcials, the National
Association of County and City Health Oﬃcials, and the National Governors Association. For perspectives of providers,
we interviewed representatives from the American Academy of Pediatrics.

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GAO’s Ongoing Work
We will continue to monitor HHS agencies’ eﬀorts to gather information for and conduct after
action reviews.

GAO’s Prior Recommendations
The table below presents our recommendation on vaccine distribution and administration from a
prior bimonthly CARES Act report.

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Prior GAO Recommendation Related to COVID-19 Vaccine Distribution and Administration
Recommendation

Status

The Secretary of Health and Human
Closed—not addressed. Since September 2020, the Centers
Services, with support from the Secretary of
for Disease Control and Prevention (CDC) and the White House
Defense, should establish a time frame for
issued vaccine planning documents, including a National Strategy
documenting and sharing a national plan
for the COVID-19 Response and Pandemic Preparedness that
for distributing and administering COVID-19
broadly outline various programs for vaccine distribution. These
vaccine, and in developing such a plan ensure documents contained general information on federally supported
that it is consistent with best practices for
vaccine distribution activities, but did not provide details related
project planning and scheduling and outlines to how the federal government was coordinating its eﬀorts or
an approach of how eﬀorts will be coordinated information on the speciﬁc roles of the federal agencies and nonacross federal agencies and nonfederal
federal entities. We closed this recommendation in April 2022
entities. (September 2020 report)
because the time frame for its implementation had passed, due to
widespread distribution and administration of COVID-19 vaccines.
Source: GAO. | GAO-22-105397

Related GAO Products
COVID 19: HHS Agencies’ Planned Reviews of Vaccine Distribution and Communication Eﬀorts Should
Include Stakeholder Perspectives. GAO-22-104457. Washington, D.C.: November 4, 2021.
COVID-19: Eﬀorts to Increase Vaccine Availability and Perspectives on Initial Implementation.
GAO-21-443. Washington, D.C.: April 14, 2021.
Contact information: Alyssa M. Hundrup, (202) 512-7114, hundrupa@gao.gov

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Health Insurance during COVID-19
Employer-sponsored health insurance rates declined in 2020, but federal surveys estimated
uninsurance rates did not increase signiﬁcantly because of the pandemic, due in part to increased
Medicaid and health insurance exchange enrollment. Some policy researchers we interviewed
suggested options to help mitigate disruptions in health insurance coverage during economic
downturns.
Entity involved: The Centers for Medicare & Medicaid Services, within the Department of Health
and Human Services

Background
COVID-19 and the associated economic downturn caused massive job loss in the U.S., raising
concerns about associated loss of health insurance provided by an individual’s employer, called
employer-sponsored insurance (ESI). Congress included provisions in COVID relief laws supporting
enrollment in health coverage alternatives to ESI, including in the following areas:143
Medicaid. Medicaid is a joint federal-state health ﬁnancing program for certain low-income and
medically needy individuals. States and territories administer their Medicaid programs within
broad federal rules and according to state plans approved by the Centers for Medicare & Medicaid
Services (CMS).144
Through the Families First Coronavirus Response Act, Congress temporarily increased the Federal
Medical Assistance Percentage (FMAP), the percentage of expenditures for most Medicaid services
that the federal government pays, by 6.2 percentage points.145 To receive this increase during
each quarter in which it is eﬀect, states have to meet certain conditions, including not disenrolling
Medicaid beneﬁciaries who were enrolled on or after March 18, 2020, through the end of the
month in which the public health emergency ends (referred to as the continuous coverage
requirement). On April 12, 2022, the Secretary of the Department of Health and Human Services
extended the public health emergency for 90 days or through the duration of the emergency.146
Health insurance exchanges. Through federal and state health insurance exchanges (exchanges),
individuals can compare and select among plans oﬀered by participating private insurers that

143Actions taken also included a 100 percent subsidy through September 30, 2021, for beneﬁts under the Consolidated

Omnibus Budget Reconciliation Act of 1985 (COBRA) and COBRA-like provisions for state and local employees. COBRA
provides certain individuals who lose their employer-sponsored health coverage the option to continue it for limited
periods of time under certain circumstances.
144States are responsible for determining applicants’ eligibility for Medicaid, including re-determining eligibility at

regular intervals and disenrolling individuals who are no longer eligible. In assessing eligibility for Medicaid, states must
determine whether applicants meet eligibility criteria, such as ﬁnancial and citizenship requirements.
145See Families First Coronavirus Response Act, Pub. L. No. 116-127, div. F, § 6008, 134 Stat. 205 (2020) (“FFCRA”).

146The Department of Health and Human Services declared a public health emergency for COVID-19 on January 31,

2020. Since then, the public health emergency has been extended several times, most recently on April 12, 2022.

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meet certain federal standards.147 The American Rescue Plan Act of 2021 expanded eligibility
for tax credits that help cover exchange premiums to those making above 400 percent of the
poverty level and also increased premium tax credits for those making between 100 and 400
percent of the poverty level for 2021 and 2022.148 The Act also provided additional premium tax
credits to consumers from households in which a tax ﬁler received or was approved to receive
unemployment compensation for any week beginning in 2021.

Overview of Key Issues
Trends in health insurance coverage in 2020. Federal survey data as of February 2022
suggested that the overall rate of non-elderly American adults without health insurance did not
increase signiﬁcantly in 2020 (see ﬁgure below), even with the COVID-19 economic downturn and
associated job loss.149 Uninsurance rates were likely relatively stable because ESI loss was less
than originally expected and also because some ESI loss was oﬀset by increases in enrollment in
Medicaid and the exchanges.150

147According to CMS, for the 2022 plan year, 33 states are using the HealthCare.gov platform, including the federallyfacilitated exchange and state-based exchanges, and 13 states and the District of Columbia operate their own statebased exchanges.
148Pub. L. No. 117-2, § 9661, 135 Stat. 4, 182 (codiﬁed as amended at 26 U.S.C. § 36B).

149According to oﬃcials responsible for federal surveys, COVID-19 may have aﬀected federal survey collection eﬀorts

and therefore the accuracy of 2020 estimates. For example, the U.S. Census Bureau switched from its usual in-person
data collection eﬀorts to telephone data collection for the Annual Social and Economic Supplement of the Current
Population Survey in March 2020. They reported that the March 2020 response rate was 10 points lower than prior years
for this survey. Further, due to COVID-19 data collection challenges, the 2020 American Community Survey results were
released as experimental estimates, which the U.S. Census Bureau deﬁnes as innovative statistical products created
using new data sources or methodologies in the absence of other relevant products, but which may not meet all of the
U.S. Census Bureau’s quality standards.
150An example of ESI loss expectations is detailed in an October 2020 issue brief by the Commonwealth Fund that

predicted that COVID job losses would result in an 8 percent reduction in total ESI coverage in the United States. See
Paul Fronstin and Stephen A. Woodbury, “How Many Americans Have Lost Jobs with Employer Health Coverage During
the Pandemic,” Commonwealth Fund (October 2020).

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Federal Survey Estimates of Uninsurance Rates among Non-Elderly Adults, 2018-2020

Notes: For more information about the survey data presented, including 2020 sources, collection methods, associated error
rates, and other limitations, see the U.S. Department of Commerce, U.S. Census Bureau, Health Insurance Coverage in the
United States: 2020 (Washington, D.C.: September 2021), available at https://www.census.gov/library/publications/2021/
demo/p60-274.html, last accessed March 2, 2022 and its “2020 ACS 1-Year Experimental Data Tables,” available at https://
www.census.gov/programs-surveys/acs/data/experimental-data/1-year.html, last accessed March 2, 2022 and the U.S.
Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics,
Demographic Variation in Health Insurance Coverage: United States, 2020 (Hyattsville, Md..: February 2022), available at https://
www.cdc.gov/nchs/data/nhsr/nhsr168.pdf, last accessed March 2, 2022. We also used 2018 and 2019 data from these surveys
to compile the ﬁgure presented.
The Annual Social and Economic Supplement of the US Census Bureau’s Current Population Survey and the American
Community Survey consider non-elderly adults to be respondents ages 19-64, while the National Center for Health Statistics’
National Health Interview Survey considers non-elderly adults to be respondents age 18-64. Further, the Annual Social and
Economic Supplement of the Current Population Survey considers individuals to be uninsured if they do not have health
insurance coverage for the entire calendar year. Therefore, if the respondent had insurance at some point in the year but
subsequently became uninsured, they would not be counted as uninsured for that year by that survey. In contrast, the National
Health Interview Survey and American Community Survey asked survey respondents if they were uninsured at the time of the
survey.
COVID-19 may have aﬀected federal survey collection eﬀorts and therefore the accuracy of 2020 estimates. The U.S. Census
Bureau reported that due to data collection challenges during COVID-19, the 2020 American Community Survey results were
released as experimental estimates, which the U.S. Census Bureau deﬁnes as innovative statistical products created using
new data sources or methodologies in the absence of other relevant products, but which may not meet all of the U.S. Census
Bureau’s quality standards.

Racial and ethnic disparities. Disparities in uninsurance rates among racial and ethnic groups
persisted during the COVID-19 pandemic. According to the National Center for Health Statistics’s
National Health Interview Survey, Hispanics of all races and non-Hispanic Blacks had higher
uninsurance rates than non-Hispanic Whites and Asians prior to the pandemic. These disparities
persisted in 2020 (see ﬁgure below).

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National Health Interview Survey’s Estimated Non-Elderly Adult Uninsurance Rate by Race and Hispanic Origin,
2018-2020

Notes: The National Health Interview Survey asked survey respondents if they were uninsured at the time of the survey. For
more information about the survey data presented, including 2020 sources, collection methods, associated error rates, and
other limitations, see U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National
Center for Health Statistics, Demographic Variation in Health Insurance Coverage: United States, 2020 (Washington, D.C.: February
2022), available at https://www.cdc.gov/nchs/data/nhsr/nhsr168.pdf, last accessed March 2, 2022. We also used 2018 and 2019
data from this survey to compile the ﬁgure presented.
COVID-19 may have aﬀected federal survey collection eﬀorts and therefore the accuracy of 2020 estimates. Non-elderly adults
were those aged 18-64.

Trends in employer-sponsored insurance. Data from federal surveys found modest decreases in
rates of health insurance coverage provided by an individual’s employer, called ESI, during the
pandemic in 2020.151 According to the Annual Social and Economic Supplement of the U.S. Census
Bureau’s Current Population Survey, the estimated rate of Americans with ESI at the time of the
survey declined 1.1 percentage points, from 54 percent in early 2019 to 52.9 percent in early 2021,
a diﬀerence which was not statistically signiﬁcant.152 Further, data from the Agency for Healthcare
Research and Quality’s Medical Expenditure Panel Survey found that the decline in the estimated

151Like for federal survey data about uninsurance, some oﬃcials have raised concerns about the quality of federal
survey data for ESI coverage in 2020. According to the Department of Health and Human Services, the COVID-19
pandemic created challenges in conducting government-administered surveys that provide the most robust
measurement of insurance coverage. As a result, survey measurement of insurance may have more uncertainty than
normal, though the magnitude of these impacts are not yet known.
152See U.S. Department of Commerce, U.S. Census Bureau, Health Insurance Coverage in the United States: 2020

(Washington, D.C.: September 2021).

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number of private-sector workers enrolled in ESI between 2019 and 2020—a decrease from 62.5
million to 60.8 million—was not statistically signiﬁcant.153
There are several reasons ESI loss during the COVID-19 pandemic was lower than originally
anticipated, including the following:
• Many people who lost their jobs during the COVID-19 pandemic had never been enrolled in ESI
through their jobs. According to the Congressional Budget Oﬃce, the highest COVID-19-related
job loss was in small companies and lower-wage industries less likely to oﬀer health insurance,
such as retail and food service.154
• Some job loss and any associated ESI loss may have been temporary. A policy researcher
noted that COVID-19 and the associated economic downturn diﬀered from previous
downturns, such as the ﬁnancial crisis of 2008, because employers saw it as a temporary issue
and were less likely to make permanent employment changes.155 Similarly, a Bureau of Labor
Statistics survey estimated that of the 13.5 million people who reported not working in June
2020, 10.6 million (or 79 percent) expected to be recalled to work at some point.156
• Many individuals were able to retain their ESI while furloughed as the pandemic continued
through 2020. According to another Bureau of Labor Statistics survey, 42 percent of
establishments surveyed paid a portion or all health insurance premiums for some or all
furloughed employees while they were not working in calendar year 2020.157
Medicaid. Medicaid total enrollment increased 14.9 million, or about 23 percent, between February
2020 and November 2021. CMS attributes the increased enrollment primarily to a larger share
of individuals retaining their Medicaid coverage due to the continuous coverage requirement
under the Families First Coronavirus Response Act rather than to an increase in new Medicaid
enrollees.158 According to CMS, the number of new applications for Medicaid and the Children’s
Health Insurance Program, a public coverage program for eligible low-income children, was more
than 30 percent higher in April 2020 than in 2018 and 2019 due to COVID-19 and the associated
economic downturn, but dropped to normal or below normal levels after May 2020.159

153See Agency for Healthcare Research and Quality, Statistical Brief #536: Trends in Health Insurance at Private Employers,
2008-2020 (Rockville, Md..: September 2021).

154See Congressional Budget Oﬃce, Federal Subsidies for Health Insurance Coverage for People Under 65: 2020 to 2030

(September 2020).

155See U.S. Department of Labor, Bureau of Labor Statistics, As the COVID-19 pandemic aﬀects the nation, hires and

turnover reach record highs in 2020 (Washington, D.C.: June 2021).

156See U.S. Department of Labor, Bureau of Labor Statistics, The Employment Situation—June 2020, (Washington,

D.C.: July 2, 2020).

157See U.S. Department of Labor, Bureau of Labor Statistics, Business Response Survey to the Coronavirus Pandemic,

(Washington, D.C.: Dec. 7, 2020).

158See FFCRA § 6008(b)(3), 134 Stat. at 208 (continuous coverage requirement for temporary increase of Medicaid

FMAP).

159See Department of Health and Human Services, Centers for Medicare & Medicaid Services, October and November

2021 Medicaid and CHIP Enrollment Trends Snapshot.

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In addition to implementing the continuous coverage requirement, many states took steps to
expand Medicaid coverage for their populations during the COVID-19 pandemic through waivers
and state plan amendments, which allow states ﬂexibility in operating their Medicaid programs
within federal parameters. In March 2020, CMS created a Medicaid state plan amendment
template and instructions to assist states in responding to the COVID-19 national emergency. In
December 2020, CMS reported that it had approved more than 600 waivers or other ﬂexibilities
aimed at addressing obstacles to beneﬁciary care and program enrollment through the COVID-19
public health emergency. The Kaiser Family Foundation reported that as of July 2021, 18 states
had used Medicaid waivers and state plan amendments to relax eligibility documentation
requirements and allow individuals to attest to the information they provide on Medicaid
applications.160
Some policy researchers we interviewed said COVID-19 relief provisions related to Medicaid were
eﬀective in stabilizing the health insurance system and preventing large increases in the uninsured
population due to COVID-19 and the associated economic downturn. Further, in our January 2022
report on the CARES Act, Medicaid oﬃcials in eight selected states said that the 6.2 percentage
point FMAP increase was critical in enabling them to maintain program operations while they
faced increased enrollment and decreased tax revenue. For example, New Hampshire oﬃcials
noted their Medicaid enrollment increased 25 percent during the COVID-19 pandemic, and they
said they would have faced serious ﬁnancial challenges without the FMAP increase.
The continuous coverage requirement and FMAP increase will end following the end of the public
health emergency.161 Speciﬁcally, as authorized by section 6008 of the Families First Coronavirus
Response Act, the continuous coverage requirement is in eﬀect through the end of the month in
which the public health emergency ends, and the FMAP increase is available through the end of
the calendar quarter in which the public health emergency ends. In October 2021, some policy
researchers we interviewed raised concerns about disruptions in coverage for current Medicaid
enrollees when these eligibility re-determinations resume, including inappropriate disenrollment
of those who are actually eligible. However, under new guidance released in March 2022, states
will have up to 12 months to initiate eligibility assessments for all individuals enrolled in Medicaid
and Children’s Health Insurance Program and two additional months to complete all renewals
and other pending actions initiated during the 12-month unwinding period. As a part of this
guidance, CMS identiﬁed ﬁve strategies states may use to promote continuity of coverage and
prevent inappropriate disenrollment of those who are actually eligible during the unwinding
period, including renewal for individuals based on Supplemental Nutrition Assistance Program
eligibility and partnering with managed care plans to update beneﬁciary contact information.162
160See Kaiser Family Foundation’s “Medicaid Emergency Authority Tracker: Approved State Actions to Address COVID-19”

(July 1, 2021), accessed January 21, 2022, https://www.kﬀ.org/coronavirus-covid-19/issue-brief/medicaid-emergencyauthority-tracker-approved-state-actions-to-address-covid-19/.
161On April 12, 2022, the Secretary of the Department of Health and Human Services extended the public health

emergency for 90 days or through the duration of the emergency.

162See Department of Health and Human Services, Centers for Medicare & Medicaid Services, RE: Promoting Continuity of

Coverage and Distributing Eligibility and Enrollment Workload in Medicaid, the Children’s Health Insurance Program (CHIP), and
Basic Health Program (BHP) Upon Conclusion of the COVID-19 Public Health Emergency, SHO# 22-001 (Baltimore, Md.: March
2022). Prior guidance suggested all renewals and other actions must be completed within the 12-month unwinding
period. See Department of Health and Human Services, Centers for Medicare & Medicaid Services, RE: Updated Guidance
Related to Planning for the Resumption of Normal State Medicaid, Children’s Health Insurance Program (CHIP), and Basic

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Exchange coverage. Enrollment in federal and state exchanges increased during the COVID-19
pandemic, supported by increased availability of premium tax credits and special enrollment
periods. Based on the most recent data available at the time of this report, plan selection during
the 2022 open enrollment period in federal and state exchanges was higher than in any previous
open enrollment period.163 CMS data show that there were about 3.1 million (27 percent) more
individual plan selections during the 2022 open enrollment period than during the 2020 open
enrollment period, which occurred before the COVID-19 pandemic.164
Further, CMS reported that more than 2.1 million people obtained coverage through a federallyfacilitated exchange during a special enrollment period held in 2021, exceeding total special
enrollment plan selections during the same time period in plan years 2019 and 2020.165 On
January 28, 2021, the administration announced this new special enrollment period for the
federally-facilitated exchange in response to the 2021 COVID-19 public health emergency; the
exchange was available for enrollment from February 15, 2021, through August 15, 2021.166 It was
open to all individuals and, unlike previous special enrollment periods, no qualifying life event was
required to obtain coverage.167 According to CMS, the special enrollment period was accompanied
by an outreach campaign to raise awareness among the uninsured about the availability of
ﬁnancial assistance to pay for premiums for those who qualiﬁed.
Some policy researchers said the special enrollment periods made available during the COVID-19
pandemic helped increase enrollment in the exchanges. The ability to access a special enrollment
period without needing a qualifying event may have increased enrollment because documenting
a qualifying event may delay or prevent some consumers from enrolling.168 However, other policy
researchers said the COVID-19 special enrollment period was not necessary because consumers
could have qualiﬁed for a special enrollment period if they experienced a qualifying event, such as
losing ESI.
Some policy researchers said that the expanded exchange premium tax credits may have
temporarily mitigated certain impediments to enrollment in the exchanges, but said that the
issues will re-emerge if the credits end. Speciﬁcally, some policy researchers raised concerns
about exchange coverage being unaﬀordable for some families because of the “family glitch.”
The family glitch refers to the policy that bases eligibility for premium tax credits on whether
Health Program (BHP) Operations Upon Conclusion of the COVID-19 Public Health Emergency, SHO #21-002 (Baltimore, Md.:
August 2021).
163The 2022 open enrollment period extended from November 1, 2021, through January 15, 2022.

164See Centers for Medicare & Medicaid Services, Health Insurance Marketplaces 2022 Open Enrollment Report.

165See Centers for Medicare & Medicaid Services, 2021 Final Marketplace Special Enrollment Period Report.

166All of the states that operated their own exchanges also opened similar special enrollment periods in response to

COVID-19, though timeframes varied.

167Qualifying life events include losing minimum essential health coverage, which may include ESI. Health insurance that

meets the deﬁnition of “minimum essential coverage” includes certain types of government-sponsored coverage (such
as Medicare Part A or most Medicaid coverage) as well as most types of private insurance plans that provide beneﬁts
consistent with the law, but does not include coverage that provides limited beneﬁts.

168A 2016 study by the Urban Institute suggested that the special enrollment period veriﬁcation process would probably

reduce enrollment among eligible people because consumers are less likely to enroll when administrative requirements
are added. See Stan Dorn, “Helping Special Enrollment Periods Work under the Aﬀordable Care Act,” Urban Institute (June
2016).

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ESI is considered aﬀordable for the employee only, not whether ESI is considered aﬀordable for
their whole family. In other words, the employee’s family is not eligible for premium tax credit
assistance as long as the cost of coverage for the employee only is considered aﬀordable under
the current policy. Some researchers suggested that Congress address this issue by making the
expanded premium tax credits under the American Rescue Plan Act permanent. However, on April
7, 2022, the Biden Administration proposed a new rule to eliminate the family glitch.169 According
to the Administration, if ﬁnalized, the rule would allow family members of workers who are oﬀered
aﬀordable self-only exchange coverage but unaﬀordable family coverage to qualify for premium
tax credits to buy exchange coverage.
Policy options for future economic downturns. Despite relatively modest changes in the
rate of uninsurance due to the COVID-19 pandemic, some policy researchers suggested that
opportunities remain to strengthen access to health insurance for individuals during economic
downturns. We spoke with policy researchers about a range of policy options related to access to
health insurance, including those related to ESI, Medicaid, and federal and state health insurance
exchanges:
Consumer outreach for health insurance exchanges. Some policy researchers emphasized that
consumers would beneﬁt from additional outreach to understand their exchange coverage
options and premium tax credit availability.170 A survey by the Urban Institute found that, in April
2021, fewer than half (48.2 percent) of uninsured nonelderly adults reported having heard “a lot”
or “some” about the exchanges, and fewer than a third (32.2 percent) reported having heard a lot
or some about the expanded premium tax credits; the remainder of both groups had heard only a
little or nothing at all.171
CMS funds consumer outreach for the federal exchange partially through user fees paid by
insurers who list a health insurance plan on the federal exchange. Currently, these outreach
activities include television advertising and the use of navigators, community-based customer
service representatives or groups who help consumers understand their exchange options
and complete their application for coverage.172 Some policy researchers said navigators are
crucial to reaching underserved communities that may have been disproportionally aﬀected by
COVID-19 and the associated economic downturn. However, the executive director of a statebased exchange said while navigator programs, which all exchanges are required to establish,
have an important role in enrolling consumers in exchange coverage, insurance agents and selfservice options were more eﬀective than navigators at enrolling consumers during the state’s
COVID-19 special enrollment period.

169See 87 Fed. Reg. 20,354 (proposed April 7, 2022).

170A 2018 Health Aﬀairs article reported that found that people living in counties with higher numbers of exchange ads

sponsored by the federal government were signiﬁcantly more likely to shop for and enroll in an exchange plan. See
Sarah E. Gollust, et. al., “TV Advertising Volumes Were Associated With Insurance Marketplace Shopping And Enrollment
In 2014,” Health Aﬀairs (June 2018).
171See Jennifer M. Haley and Erik Wengle, “Uninsured Adults’ Marketplace Knowledge Gaps Persisted in April 2021,”

Urban Institute (September 2021).

172According to CMS, navigators may also assist consumers in determining their eligibility for and enrolling in Medicaid.

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CMS oﬃcials told us that the agency has obligated more than $300 million dollars in federal
exchange user fees for marketing and outreach activities for the federal exchange in ﬁscal year
2021. However, CMS also told us that it has more than $1.1 billion in unspent exchange user fees
as of December 2021.173 According to CMS oﬃcials, the agency signiﬁcantly increased spending
on consumer information and outreach activities, including funding for navigators. Speciﬁcally,
CMS reported $80 million in funding for 60 navigator programs serving consumers for the 2022
plan year, signiﬁcantly higher than the $10 million in annual funding awarded in plan years 2019
through 2021. Further, CMS reported that outreach will be targeted to communities with lower
access to health care and will be conducted in partnership with cultural marketing experts, for
example, to target campaigns to African Americans, Spanish and English-speaking Latinos, and
Asian American and Paciﬁc Islander communities in multiple languages.
Automatic Medicaid FMAP increase. Some researchers said the FMAP should be automatically
increased during future economic downturns to support states’ Medicaid programs, which could
be faced with absorbing a large number of individuals experiencing disruptions in their ESI. Other
researchers said the 2020 FMAP increase was not necessarily eﬀective at addressing the eﬀects of
COVID-19 because the funding did not speciﬁcally target populations vulnerable to losing their ESI.
In our June 2020 CARES Act report, we reported that using a diﬀerent formula that we had
previously recommended could help make any future changes to the FMAP during COVID-19 and
any future economic downturns more timely and targeted. The formula’s automatic trigger would
improve timely targeted assistance using readily available economic data based on (1) increases in
state unemployment and (2) reductions in total wages and salaries.
Automatic enrollment. Some policy researchers said that to prevent health insurance disruptions
during economic downturns, Congress should examine options to make enrollment in Medicaid or
the exchanges more automatic for those most vulnerable to the eﬀects of the downturn, including
low-income and uninsured individuals. One of these researchers noted that millions of uninsured
Americans are eligible for either Medicaid or subsidized coverage through an exchange.
According to a policy researcher we interviewed, in an automatic enrollment system, individuals
might indicate their health insurance status and desire for coverage on their federal tax forms.
Then the uninsured could be automatically placed on Medicaid or in a low-premium exchange
plan through a federal-state partnership and given the option to opt out if they did not want to be
enrolled. This would provide coverage to consumers who otherwise would not enroll because of
cost concerns or diﬃculty navigating the application process.
According to a 2018 Health Aﬀairs article, health programs that use automatic enrollment with
opt-out options—such as Medicare Part B—have achieved high take-up levels. 174 However,
according to a 2021 research article and CMS oﬃcials, implementation of an automatic enrollment
option would require systemic changes, such as aligning the timing of eligibility checks for
exchange tax credits and Medicaid, determining ways to share complete and accurate consumer
173CMS oﬃcials told us that due to contracts that have grant award dates early in the ﬁscal year, CMS requires a
reasonably substantial account balance to ensure suﬃcient funds are in place at time of the grant award.

174See Stan Dorn, James C. Capretta, Lanhee J. Chen, “Making Health Insurance Enrollment As Automatic As Possible

(Part 1),” Health Aﬀairs (May 2018)

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eligibility information between federal and state governments, policy decisions on the veriﬁcation
of consumer data, and ensuring inclusion of insurance information on federal tax forms.175
Additionally, the author of a 2017 research article on automatic enrollment proposals suggested
that even if an automatic enrollment system could be implemented, it would be complex and
diﬃcult to administer. Further, the author noted that many policy proposals for automatic
enrollment assume that the necessary data would come largely from the information that the
Internal Revenue Service already collects. This means that states would automatically enroll
people in a health insurance coverage for the coming year based on their income, coverage, and
family status from two years earlier, which could be out of date in many cases.176

Methodology
For this work, we spoke with federal oﬃcials, reviewed federal publications and documentation,
reviewed the results of a literature search, and conducted Internet searches to identify federal
survey and administrative data sources for information on health insurance market composition.
We reviewed documentation for the data sources and spoke with oﬃcials to better understand
their methodologies and processes for gathering these data. We also conducted a literature
search to identify policy options to mitigate the loss of ESI or provide coverage through an
alternative. We reviewed CMS data and reports on enrollment in exchanges from 2014 to 2022
and on enrollment in Medicaid from February 2020 to June 2021. We assessed the reliability
of these data using manual checks and discussions with CMS oﬃcials and determined they
were suﬃciently reliable for our purposes. Through our literature search, we identiﬁed policy
researchers who had published work on policy options related to health coverage options, such as
federal and state exchanges and Medicaid, and we made a judgmental selection of 12 individuals
to achieve variation across the group with respect to educational training, organizational aﬃliation,
and policy perspective.

Agency Comments
We provided the Department of Health and Human Services (HHS) and the Oﬃce of Management
and Budget (OMB) with a draft of this enclosure. HHS provided technical comments, which we
incorporated as appropriate. OMB did not provide us with comments on this enclosure.

GAO’s Ongoing Work
We will continue to monitor trends in health insurance.
Contact information: John Dicken, (202) 512-7114, dickenj@gao.gov

175 James C. Capretta, “Covering the Uninsured in the United States’ Multi-Payer Health System,” American Enterprise

Institute (May 2021).

176See Paul N. Van De Water, “Automatic Enrollment in Health Insurance Would Be Complex and Diﬃcult to Administer.”

Center on Budget and Policy Priorities (June 2017).

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Unemployment Insurance Programs
From January through mid-March 2022, weekly claims for regular unemployment insurance
beneﬁts generally remained similar to prepandemic levels, as they had since late 2021. Even
so, states continued to address challenges resulting from historic numbers of claims during the
COVID-19 pandemic—such as delayed beneﬁt payments, increased amounts of overpayments,
and potential fraud—that have future implications.
Entity involved: Department of Labor

Background
The unemployment insurance (UI) system is a federal-state partnership that provides temporary
ﬁnancial assistance to eligible workers who become unemployed through no fault of their own.
States design and administer their own UI programs within federal parameters. The Department
of Labor (DOL) oversees states’ compliance with federal requirements, such as by reviewing state
laws to conﬁrm they are designed to ensure payment of beneﬁts when due. Regular UI beneﬁts
are funded primarily through state taxes levied on employers.177 These beneﬁts are intended to
replace a portion of a claimant’s previous employment earnings, according to DOL.
The CARES Act created three federally funded temporary UI programs that expanded beneﬁt
eligibility and enhanced beneﬁts during the COVID-19 pandemic. These programs, which were
amended by the Consolidated Appropriations Act, 2021 and the American Rescue Plan Act of 2021,
expired in September 2021. About half of the states, however, ended their participation in at least
one of these programs in June or July 2021, according to DOL. These temporary UI programs were:
1. Pandemic Unemployment Assistance (PUA), which authorized UI beneﬁts for individuals not
otherwise eligible for UI beneﬁts, such as self-employed and certain gig economy workers,
who were unable to work as a result of speciﬁed COVID-19-related reasons.178
2. Federal Pandemic Unemployment Compensation (FPUC), which generally authorized an
additional weekly beneﬁt for individuals who were eligible for weekly beneﬁts under the
regular UI or CARES Act UI programs.179
3. Pandemic Emergency Unemployment Compensation (PEUC), which generally authorized
additional weeks of UI beneﬁts for those who had exhausted their regular UI beneﬁts.180
In addition, the Consolidated Appropriations Act, 2021 created the Mixed Earner Unemployment
Compensation (MEUC) program, which was extended by the American Rescue Plan Act of 2021

177To be eligible for regular UI beneﬁts, applicants generally must be able and available to work and actively seeking
work. 42 U.S.C. § 503(a)(12). Administration of the regular UI program is ﬁnanced by a federal tax on employers,
according to DOL.
178Pub. L. No. 116-136, § 2102, 134 Stat. 281, 313 (2020), as amended.
179Pub. L. No. 116-136, § 2104, 134 Stat. at 318, as amended.
180Pub. L. No. 116-136, § 2107, 134 Stat. at 323, as amended.

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and expired in September 2021.181 According to DOL, the MEUC program was intended to cover
regular UI claimants whose beneﬁts did not account for signiﬁcant self-employment income and
who thus may have received a lower regular UI beneﬁt than they would have received had they
been eligible for PUA.182
DOL required participating states to process and pay PUA, FPUC, PEUC, and MEUC beneﬁts
to eligible claimants for all weeks of unemployment before the programs ended due to early
termination or expiration. In August 2021, the Secretary of the Treasury and the Secretary of Labor
issued a joint letter to Congress aﬃrming that states and territories also had the option to use
Coronavirus State and Local Fiscal Recovery Funds from the American Rescue Plan Act of 2021 to
provide additional weeks of income support to workers whose beneﬁts had expired in September
2021 and to workers who were not covered by the regular UI program. As of late March 2022, the
Department of the Treasury noted it was reviewing reports it had received and was not yet able to
provide complete information about particular uses of funds.
UI claimants who exhausted their regular UI and PEUC beneﬁts in certain states also had access
to the Extended Beneﬁts program. The program, which existed before the pandemic and provides
up to an additional 13 or 20 weeks of beneﬁts, is activated in states during periods of high
unemployment, according to DOL.183
Because of high numbers of regular UI claims during the pandemic, some states have held
substantial federal loans to pay UI beneﬁts.184 As of March 31, 2022, nine states and one territory
held federal loans totaling about $37.6 billion, approximately $2.3 billion less than the total held
at the end of 2021, which we reported in January 2022. Following guidance from Treasury, some
states used Coronavirus Relief Fund payments to reduce or prevent federal loan balances.185 In

181The MEUC program, which was voluntary for states, authorized an additional $100 weekly beneﬁt for certain UI

claimants who received at least $5,000 of self-employment income in the most recent tax year prior to their application
for UI beneﬁts. Pub. L. No. 117-2, § 9013(a), 135 Stat. 4, 119; Pub. L. No. 116-260, div. N, tit. II, § 261(a)(1), 134 Stat. 1182,
1961.

182According to DOL, 51 states and territories elected to participate in the MEUC program, with Idaho and South Dakota

opting not to participate, but 23 states terminated their participation in June or July 2021. The remaining 28 states and
territories continued participating in the MEUC program until it expired in September 2021, including Maryland, which
intended to terminate participation but did not because of litigation at the state level, according to DOL. As of February
7, 2022, not all participating states and territories had begun paying MEUC beneﬁts, according to DOL.
183After the PEUC program ended in September 2021, Extended Beneﬁts were available to claimants who exhausted

their regular UI beneﬁts in certain states.DOL reported that as of April 10, 2022, the Extended Beneﬁts program was not
activated in any state. The Extended Beneﬁts program was activated in all states and territories except South Dakota at
some point during the pandemic, according to DOL.
184While the CARES Act UI programs were federally funded, regular UI is funded primarily through state and federal

taxes on employers. When a state exhausts the funds available for regular UI beneﬁts, it may borrow from the federal
government. According to DOL data, even before the pandemic, many states were not collecting enough UI tax revenue
to satisfy the solvency standard speciﬁed in DOL regulations providing for interest-free loans to states. See 20 C.F.R. §
606.32.
185The CARES Act established the $150 billion Coronavirus Relief Fund to provide payments to state, local, territorial,

and tribal governments to cover the costs of necessary expenditures incurred because of the COVID-19 pandemic. Pub.
L. No. 116-136, § 5001, 134 Stat. 281, 501-504. In its guidance on the Coronavirus Relief Fund, Treasury reported that
states may use this funding to make payments to their state UI trust funds to prevent expenses related to the COVID-19
public health emergency from causing these UI trust funds to become insolvent. The Consolidated Appropriations Act,

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addition, states may use Coronavirus State and Local Fiscal Recovery Funds from the American
Rescue Plan Act of 2021 to restore their UI trust funds or to repay federal loan balances.186 While
interim reports for some states indicated that they planned to contribute some of these funds to
their UI trust funds, as of late March 2022, Treasury noted it was still reviewing reports on use of
funds.

Overview of Key Issues
From January through mid-March 2022, claims for regular UI beneﬁts generally remained
similar to prepandemic levels. Initial and continued claims for regular UI beneﬁts have generally
been similar to prepandemic levels since November 2021.187 Although the numbers ﬂuctuated
somewhat week-to-week, from January through March 2022, the average number of regular
UI initial claims submitted each week was about 5 percent higher than the average number
submitted during the corresponding weeks in 2019. During the week ending on March 26, 2022,
DOL reported that 195,460 initial claims for regular UI beneﬁts were submitted nationwide.188
According to DOL oﬃcials, the number of continued claims may be a better measure of continuing
demand for beneﬁts than the number of initial claims. From January through mid-March 2022, the
average number of regular UI continued claims submitted each week was about 8 percent lower
than the average number submitted during the corresponding weeks in 2019.189 During the week
ending on March 12, 2022, DOL reported that about 1.7 million continued claims for regular UI
beneﬁts were submitted nationwide.190
During the pandemic, the number of regular UI continued claims submitted each week declined
overall after the peak in late April and early May 2020 through mid-March 2022, though the
number has remained relatively consistent since mid-October 2021 (see ﬁgure). Some of the
decline in regular UI claims was due to claimants ﬁnding employment. However, some of the
2021 extended the period for states and other entities to use these funds through December 31, 2021. Pub. L. No.
116-260, div. N, tit. X, § 1001, 134 Stat. 1182, 2145.

186Coronavirus State and Local Fiscal Recovery Funds, 86 Fed. Reg. 26,786, 26,822 (May 17, 2021). Funds may be used to
restore a state’s unemployment trust fund to its balance on January 27, 2020, or to pay back advances received for the
payment of beneﬁts between January 27, 2020, and May 17, 2021. 31 C.F.R. § 35.6(b)(5).
187For this enclosure and prior enclosures, we used claims numbers that are not seasonally adjusted. Claims counts

are from DOL data we obtained on April 4, 2022, and include any adjustments submitted by states and territories as of
then. States and territories may revise and resubmit data for 3 years, according to DOL oﬃcials. An initial claim is the
ﬁrst claim ﬁled by an individual to determine eligibility for UI beneﬁts after separating from an employer. According to
DOL, after ﬁling an initial claim to establish eligibility for UI beneﬁts, individuals then generally ﬁle a continued claim on a
weekly basis to claim beneﬁts for the preceding week of unemployment.
188Counts for the week ending on March 26, 2022, reﬂect advance initial claims, which are preliminary and subject to

revision.

189The number of regular UI continued claims submitted each week from December 12, 2021, through March 12, 2022,

was lower than the number submitted during each of the corresponding weeks in 2019.

190During the week ending on March 12, 2022, states also reported that 57,474 continued claims were submitted in

other programs, including Extended Beneﬁts, programs for federal employees and former service members, other
state beneﬁt programs, and Short-Time Compensation or work-sharing. In addition, states reported continued claims
submitted that week for the PUA and PEUC programs, which expired on September 6, 2021. According to DOL, these
continued claims were for weeks of unemployment before the programs expired.

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decline was also likely due to other factors, such as claimants exhausting regular UI beneﬁts and
beginning to claim other beneﬁts. For example, eligible individuals who exhausted their regular UI
beneﬁts could then claim PEUC beneﬁts instead, prior to that program’s expiration in September
2021.191 Thus, some of the decline in regular UI claims during the period when PEUC and PUA
were in eﬀect likely represents claimants switching between programs.
Weekly Continued Claims Submitted Nationwide for Regular UI, PEUC, and Extended Beneﬁts, Mar. 1, 2020–Mar.
12, 2022

Note: After exhausting regular UI beneﬁts—generally available for up to 26 weeks in most states, according to the Department
of Labor (DOL)—eligible individuals were generally able to apply for (1) PEUC; then (2) the Extended Beneﬁts program, if
activated in a state; and then (3) Pandemic Unemployment Assistance (PUA) beneﬁts, in certain circumstances. PEUC and
PUA expired on September 6, 2021. The weekly counts of continued claims shown are not seasonally adjusted. Counts are
from DOL data we obtained on April 4, 2022, and include any adjustments submitted by states as of then. All 53 states and
territories reported regular UI claims in each week shown. The number of states and territories reporting PEUC claims varied
by week; for example, fewer than half of the states and territories reported data before mid-May 2020 and at least 50 states
and territories reported data each week from mid-July 2020 through mid-June 2021, when certain states began terminating
their PEUC programs. The number of states reporting Extended Beneﬁts claims each week varied, partly on the basis of the
number of states with the program activated each week. The Extended Beneﬁts program, which existed before the pandemic, is
activated in states during periods of high unemployment, according to DOL.

191After exhausting regular UI beneﬁts—generally available for up to 26 weeks in most states, according to

DOL—eligible individuals were generally able to apply for (1) PEUC; then (2) the Extended Beneﬁts program, if activated
in a state; and then (3) PUA beneﬁts, in certain circumstances.

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As we have regularly noted in our CARES Act reports, because of backlogs in processing historic
numbers of claims in many states and other data issues, the number of continued claims did
not approximate the number of individuals claiming beneﬁts during the pandemic. For example,
backlogs in claims processing led to individuals submitting claims for multiple weeks of beneﬁts
in a single reporting period, which states counted as multiple claims for that reporting period,
particularly in the PUA program. As a result, reliable conclusions about trends in the number of
individuals claiming beneﬁts throughout the pandemic cannot be drawn from data on continued
claims.
Timeliness of regular UI ﬁrst payments improved in late 2021 and in January 2022,
but declined again in February 2022 and remained below DOL’s acceptable level of
performance. As we have previously reported, the percentage of regular UI ﬁrst payments made
within 3 weeks of a claimant’s initial eligibility has ﬂuctuated during the pandemic.192 Nationwide,
regular UI ﬁrst-payment timeliness dropped precipitously early in the pandemic, had improved
by April 2021, and then generally declined again through October 2021 (see ﬁgure). First payment
timeliness improved again in November and December 2021 and rose to 75.5 percent in January
2022, before declining again to 63.4 percent in February 2022, which was 23.6 percentage points
below DOL’s acceptable level of performance of 87 percent.193 In February 2022, DOL oﬃcials
reiterated that ﬁrst-payment timeliness levels may be due to enhanced fraud prevention eﬀorts
and to the time it took states to resolve and pay eligible claims that were initially identiﬁed as
potentially fraudulent. We have previously reported in October 2021 and January 2022 other
reasons DOL identiﬁed, such as the additional time and eﬀort needed for states to process
backlogs of claims requiring adjudication and appeals.

192One of DOL’s core performance measures is the percentage of all regular UI ﬁrst payments made within either 14 or

21 days of the ﬁrst week of beneﬁts for which claimants are eligible; DOL considers 87 percent to be an acceptable level
of performance. For the purposes of this enclosure, we focus on payments made within 21 days.

193We analyzed ﬁrst-payment timeliness data that states had reported to DOL as of March 28, 2022. At that point, all 53

states and territories had reported data for February 2022 and prior months.

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Timeliness of Nationwide First Payments of Regular Unemployment Insurance (UI) Beneﬁts, Jan. 2020–Feb. 2022

Note: We analyzed regular UI ﬁrst-payment timeliness data that states had reported to the Department of Labor (DOL) as
of March 28, 2022. At that point, all 53 states and territories had reported data for February 2022 and prior months. One of
DOL’s core performance measures is the percentage of all regular UI ﬁrst payments made within either 14 or 21 days of the
ﬁrst week of beneﬁts for which claimants are eligible, depending on whether the state requires that eligible claimants serve
a waiting period before receiving beneﬁts. DOL considers 87 percent to be an acceptable level of performance. We focus on
payments made within 21 days because in guidance released at the start of the pandemic DOL recommended that states
consider temporarily waiving their waiting week requirements.

In some states, many regular UI claimants continue to face delays before receiving their ﬁrst
payments. For example, in 13 states, at least half of regular UI claimants who received their ﬁrst
beneﬁts in February 2022 had been waiting longer than 3 weeks. In addition, nationwide, about 18
percent of regular UI claimants who received their ﬁrst beneﬁts in February 2022 had been waiting
longer than 10 weeks. By comparison, of the regular UI claimants nationwide who received their
ﬁrst beneﬁts in March 2020, less than 3 percent had been waiting longer than 3 weeks and less
than 1 percent had been waiting longer than 10 weeks.
States and territories have continued to identify overpayments in UI programs, and more
have begun submitting data to DOL on recovered and waived PUA overpayments since
we last reported. DOL reported that as of March 28, 2022, states and territories had identiﬁed
approximately $35.1 billion in overpayments made in UI programs during the ﬁrst 7 quarters of
the pandemic combined (April 2020 through December 2021). These reported overpayments are
not necessarily a result of fraud, though states have reported that some are, and the amount that
is due to fraud is not yet fully known.194 This $35.1 billion in reported overpayments includes

194While some overpayments may be caused by unintentional error, fraud involves obtaining something of value

through willful misrepresentation. Whether an act is fraudulent is determined through the judicial process or other
adjudicative systems. According to DOL, in the case of these payments made by states, whether an act is fraudulent is
deﬁned by states and must be determined through the appropriate adjudication process.

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• $13.3 billion in PUA overpayments,195
• $11.8 billion in FPUC overpayments,196
• $8.1 billion in regular UI and Extended Beneﬁts overpayments, and
• $2.0 billion in PEUC overpayments.197
States and territories reported recovering about $0.7 billion in overpayments in the PEUC and
FPUC programs combined from April 2020 through December 2021 (i.e., during the 7 quarters
since these programs were created).198 In response to a recommendation in our January 2021
CARES Act report, DOL updated its state reporting requirements for the PUA program to include
the collection of data on recovered PUA overpayments. As of March 28, 2022, 39 states and
territories had reported some data on recovered PUA overpayments, reporting a combined total
of about $1.3 billion recovered from April 2020 through December 2021.199
When overpayments are not due to fraud or the fault of the claimant, states and territories may
waive the recovery of the overpayment in certain circumstances.200 States and territories reported
195States and territories report PUA overpayments data to DOL on a monthly basis, and the total amount shown

includes overpayments related to identity theft. We accessed the PUA overpayments data on March 28, 2022;
these data are subject to change as more states report data and as states revise previously reported data. For
consistency with the regular UI overpayment data, which states and territories report on a quarterly basis, the
PUA overpayment amount shown is for April 2020 through December 2021. As of March 28, 2022, 43 states and
territories had reported approximately $0.5 billion of additional PUA overpayments since December 2021. The
number of states and territories that have reported PUA overpayments data varies by month; for example, 46
reported overpayment amounts in December 2021, and 26 reported overpayment amounts in February 2022.
196FPUC beneﬁts were paid in addition to other UI beneﬁts. About 92 percent of reported FPUC overpayment

amounts were paid on regular UI or PUA claims.

197Due to rounding, the sum of these overpayment amounts by program diﬀers from the total overpayment

amount. States and territories report regular UI, Extended Beneﬁts, PEUC, and FPUC overpayments data to DOL
on a quarterly basis. We accessed the data on March 28, 2022. At that point, not all states and territories had
reported overpayment amounts for all programs in all quarters. States and territories may revise the amount of
overpayments they have identiﬁed for 3 years after the reporting quarter, according to DOL oﬃcials.

198We accessed the recovered overpayments data on March 28, 2022; these data are subject to change as more states
and territories report data and as states and territories revise previously reported data.
199The total PUA amount shown also includes recovered overpayments related to identity theft. As of March 28, 2022,

35 states had reported about $13 million of additional PUA overpayments recovered since December 2021. As of March
28, 2022, states and territories had also reported recovering about $2.0 billion in the regular UI and Extended Beneﬁts
programs from April 2020 through December 2021. However, the amounts recovered for any quarter may be from
overpayments established in many previous periods. Thus, the total amount does not measure the extent to which
overpayments made during the pandemic have been recovered.
200According to DOL, states generally may waive a nonfraud overpayment, in accordance with state law and an

established waiver policy, if the overpayment was not the fault of the claimant and if requiring repayment would be
against equity and good conscience or would otherwise defeat the purpose of the UI law. States were authorized
to waive PUA overpayments under the Consolidated Appropriations Act, 2021. According to this act, if an individual
receives PUA beneﬁts they were not entitled to, the state must generally require such individuals to repay the amount;
however, the state can waive that requirement if the individual was without fault and repayment would be contrary to
equity and good conscience. Pub. L. No. 116-260, div. N, tit. II, § 201(d), 134 Stat. 1182, 1952. According to DOL, states are
able to retroactively waive PUA overpayments from the beginning of the program onward.

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waiving about $1.6 billion of regular UI, Extended Beneﬁts, PEUC, and FPUC overpayments from
April 2020 through December 2021.201 In response to a recommendation in our March 2021
CARES Act report, DOL updated state reporting requirements for the PUA program in September
2021 to include the collection of data on waived PUA overpayments.202 As of March 28, 2022, 24
states had reported some data on waived PUA overpayments, reporting a combined total of about
$0.4 billion waived from April 2020 through December 2021.203
Because of the limited number of states and territories that had reported data to DOL on
recovered and waived PUA overpayments as of March 28, 2022, our related recommendations
from our January and March 2021 CARES Act reports remain open. Sustained reporting by more
states is needed to help inform DOL, policymakers, and the public about the amount of PUA
overpayments that states have waived and recovered and about the amount that remains
outstanding.
States and territories also report the amounts of overpayments that are due to fraud—a subset
of the total overpayment amounts.204 During the ﬁrst 7 quarters of the pandemic (April 2020
through December 2021), states and territories reported that about $2.9 billion in overpayments
they had identiﬁed resulted from fraud across the UI programs, including about $1.2 billion from
PUA, $0.9 billion from FPUC, $0.6 billion from the regular UI and Extended Beneﬁts programs, and
$0.1 billion from PEUC.205 However, according to DOL, states do not report such overpayments
as fraud-related until investigations are complete and fraud has been conﬁrmed, which may
take a long time to accomplish. As a result of ongoing investigations, additional amounts of
overpayments due to fraud could be reported in the coming months.
In addition to reporting overpayments, states conduct independent assessments of representative
samples of paid and denied claims in permanent UI programs to determine the accuracy
of UI beneﬁt payments and estimate the amount and rate of improper payments, including
overpayments and underpayments.206 According to the Oﬃce of Management and Budget’s
(OMB) paymentacccuracy.gov, DOL reported an estimated improper payment amount of $78.1
201We accessed the waived overpayments data on March 28, 2022; these data are subject to change as more states and
territories report data and as states and territories revise previously reported data.
202Department of Labor, Pandemic Unemployment Assistance (PUA) Program: Updated Operating Instructions and Reporting

Changes, UIPL 16-20, Change 6 (Washington, D.C.: Sept. 3, 2021).

203As of March 28, 2022, 19 states had reported about $0.1 billion of additional PUA overpayments waived since

December 2021.

204According to DOL guidance, an overpayment is established when a formal notice of determination has been issued.

Whether an act is fraudulent is determined through the judicial or other adjudicative systems. According to DOL,
because states may use diﬀerent deﬁnitions for categorizing an overpayment as fraudulent, an overpayment that is
classiﬁed as fraudulent in one state might not be classiﬁed as fraudulent in another state.

205Due to rounding, the sum of these fraud overpayment amounts by program diﬀers from the total fraud overpayment

amount. We accessed the fraud overpayments data on March 28, 2022; these data are subject to change as more states
and territories report data and as states and territories revise previously reported data. The total PUA amount shown
also includes fraud overpayments related to identity theft. As of March 28, 2022, 35 states and territories had reported
about $26 million of additional PUA fraud overpayments since December 2021.
206An improper payment is deﬁned as any payment that should not have been made or that was made in an incorrect

amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally
applicable requirements. 31 U.S.C. § 3351(4).

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billion with an estimated improper payment rate of 18.92 percent for ﬁscal year 2021.207 According
to DOL oﬃcials, the estimated improper payment amount includes the regular UI, Extended
Beneﬁts, PEUC, and FPUC programs, and excludes PUA.
According to DOL oﬃcials, because PUA has unique and distinct eligibility requirements,
applying the improper payment methodology used for the regular UI program and reported on
paymentaccuracy.gov is not appropriate. Oﬃcials said they are exploring methods to estimate
improper payments for PUA that will not be overly burdensome for states. At the end of February
2022, DOL reiterated its plans to submit the improper payment estimation methodology to OMB
by June 2022 and to include the estimates in its ﬁscal year 2022 reporting.208
We have previously reported that the identiﬁcation of improper payments could suggest that a
program is vulnerable to fraud; however, it is important to note that fraudulent overpayments are
a speciﬁc type of improper payment and that improper payment estimates are not intended to
measure fraud in a particular program.
DOL continues to address potential fraud in the UI programs, equitable access to UI
beneﬁts, and timely payment of those beneﬁts. In early 2022, DOL continued implementing its
plan for using $2 billion in funding provided by the American Rescue Plan Act of 2021 to combat
potential UI fraud, promote equitable access to UI beneﬁts, and ensure timely payment of those
beneﬁts.209 As we reported in January 2022, DOL deployed teams of experts to states to provide
assistance and make recommendations related to payment timeliness, equity, technology, and
fraud; solicited grant applications from states to address equity issues; awarded grants to help
states address potential fraud and recover overpayments; awarded purchase agreements to
vendors that states can use to combat identity-related fraud; and worked with the Social Security
Administration to establish a secure incarceration data exchange, among other eﬀorts.
Agency oﬃcials said that DOL had taken the following additional actions since our last report to
address potential fraud, equitable access, and timely payments.
Began work to deploy expert teams to six additional states, for a total of 18 states. According to DOL
oﬃcials, as of March 2022, 12 states—Alabama, Colorado, Connecticut, Iowa, Kansas, Kentucky,
Nebraska, Nevada, Pennsylvania, Virginia, Washington, and Wisconsin—had received assistance
from teams of experts in fraud, beneﬁt payment timeliness, technology, and equity. Oﬃcials said
expert teams began working with six more states between January and March 2022: Arizona,
Delaware, Illinois, Michigan, New Hampshire, and Oregon. For the status of the expert teams’
activities in each of these states as of March 2022, see the ﬁgure below.

207The estimated improper payment amount and rate include unknown payments. For the purpose of producing an

improper payment estimate, when the executive agency cannot determine, due to lacking or insuﬃcient documentation,
whether a payment is proper or not, the payment shall be treated as an improper payment. 31 U.S.C. § 3352(c)(2).
208According to OMB guidance, OMB does not formally approve improper payment estimation methodologies

submitted by agencies prior to implementation. See Oﬃce of Management and Budget, Appendix C to OMB Circular
A-123, Requirements for Payment Integrity Improvement, OMB Memorandum M-21-19 (Washington, D.C.: Mar. 5, 2021).

209See Department of Labor, “Fact Sheet: Unemployment Insurance Modernization: American Rescue Plan Act Funding

for Timely, Accurate and Equitable Payment in Unemployment Compensation Programs,” Aug. 11, 2021, https://
oui.doleta.gov/unemploy/pdf/FactSheet_UImodernization.pdf.

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Status of DOL’s Expert Team Activities in 18 States as of March 2022, By Cohort of Participating States

DOL oﬃcials said expert teams have found that states face similar challenges related to
adjudication, backlogs, call center operations, and balancing fraud prevention with expedient and
equitable payment of beneﬁts. However, they noted that expert teams’ recommendations may
need to be contextualized to acknowledge diﬀerences between states, including diﬀerences in
business process workﬂows, technological capabilities, staﬀ training, and state UI laws. According
to oﬃcials, examples of expert teams’ recommendations include simplifying communication with
claimants, standardizing translation services, streamlining adjudication processes, implementing
fraud risk scoring capabilities, and ensuring that states are following guidance from DOL. Oﬃcials
said they are currently in the process of using the expert teams’ ﬁndings to identify best practices
and solutions for common challenges, which they plan to make available as a resource for all
states.
Reviewed and provided feedback on grant applications from 49 states and territories to address equity
issues, and awarded the ﬁrst two rounds of grants to seven states and the District of Columbia. As we
reported in January 2022, DOL solicited grant applications from states for eﬀorts to address equity
issues, such as improving access to the regular UI program for individuals with disabilities or for
those who have limited or no internet access, and improving parity across all demographic groups
and underserved populations.210 At the end of January 2022, DOL oﬃcials said they were in the
process of reviewing the grant applications they had received from 49 of 53 states and territories.
Oﬃcials noted that they were providing feedback and technical assistance to states on a rolling
basis to help them meet the requirements for approval. On March 1, 2022, DOL announced it had
awarded an initial round of grants totaling $20.5 million to three states—Oregon, Pennsylvania,
Virginia—and the District of Columbia. On March 29, DOL announced it had awarded a second
round of grants totaling $15.9 million to four states—Alabama, Idaho, Missouri, and New Mexico.
Announced a competitive grant opportunity for states to improve access to the UI program. In January
2022, DOL announced the availability of up to $15 million for selected states to participate in the
American Rescue Plan Act UI Navigator Program. According to DOL, the purpose of the program
210For more information about these grants, including other allowable uses of these funds, see Department of Labor,

Grant Opportunity for Promoting Equitable Access to Unemployment Compensation (UC) Programs, UIPL 23-21 (Washington,
D.C.: Aug. 17, 2021). State grant applications were due on December 31, 2021.

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is to help workers learn about, apply for, and, if eligible, receive UI beneﬁts and related services,
as well as to support state agencies in delivering timely beneﬁts to workers, especially those who
have faced obstacles to accessing UI beneﬁts in the past. Speciﬁcally, selected states will partner
with community-based organizations experienced in assisting UI claimants or unemployed job
seekers to engage in activities that include outreach, training, education, and general assistance
with completing applications for unemployment beneﬁts, especially for individuals in groups
that are historically underserved, marginalized, and adversely aﬀected by persistent poverty and
inequality.211
Initiated work to form partnerships with several selected states to analyze UI beneﬁt equity on a limited
scale. In early February 2022, DOL noted that it had begun working with several selected states to
establish partnerships for sharing UI claims records and wage data with DOL’s Chief Evaluation
Oﬃce to analyze equity-related indicators, including UI applications and denials by demographic
characteristics. According to DOL, though the eﬀort is in its early stages, the analysis is intended to
test for demographic diﬀerences within and across states, including by race and ethnicity, which
can inform eﬀorts to improve program administration and outreach.
Continued to develop modular technology solutions. As we reported in January 2022, DOL oﬃcials
said they have been working with OMB’s U.S. Digital Service to develop modular technology
solutions that can be integrated with state IT systems. In January 2022, oﬃcials said they planned
to begin pilot testing the ﬁrst module, which is focused on the claimant experience, with Arkansas
and New Jersey in late March 2022. In addition, oﬃcials said they held a town hall meeting with
states in January 2022 to update them on the claimant experience pilot and share ideas for future
pilot projects.

Methodology
To conduct this work, we analyzed regularly reported DOL data for calendar years 2019 through
early 2022, having obtained the most recent data on April 4, 2022. We reviewed relevant federal
laws and DOL guidance. We interviewed DOL oﬃcials about program data and agency actions, and
we also interviewed DOL Oﬃce of Inspector General oﬃcials. In addition, we reviewed data ﬁle
documentation and written responses from DOL oﬃcials. Further, we interviewed DOL oﬃcials
about the UI database, PUA claims data ﬁles, and data on outstanding federal loans to pay UI
beneﬁts, speciﬁcally related to state-reported data on claims counts, overpayments, payment
timeliness, and loan balance amounts. We examined the data for outliers, missing values, and
errors. We determined that the DOL data we used were suﬃciently reliable for the purposes of
this report.

211For more information about these grants, see Department of Labor, Grant Opportunity for States to Participate in the

American Rescue Plan Act (ARPA) Unemployment Insurance (UI) Navigator Program, UIPL 11-22 (Washington, D.C.: Jan. 31,
2022).

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Agency Comments
We provided DOL, OMB, and Treasury with a draft of this enclosure. DOL and Treasury provided
technical comments on this enclosure, which we incorporated as appropriate. OMB did not
provide any comments.

GAO’s Ongoing Work
In our ongoing work on the UI program, we will soon be issuing three reports that address, among
other issues, (1) implementation and administration of CARES Act UI programs; (2) implementation
of the PUA program and the experiences of contingent workers during the pandemic; and (3)
broad challenges facing the UI system, which includes UI programs that were established prior
to and during the COVID-19 pandemic (e.g., the regular UI program, Extended Beneﬁts, PUA, and
others). As part of this body of work, we are assessing whether the challenges we and others have
identiﬁed place the UI system at signiﬁcant risk of impaired service delivery and ﬁnancial loss.
This ongoing work, once complete, may lead us to designate the UI system as an issue on GAO’s
High-Risk List, which highlights federal programs and operations that we have determined are in
need of transformation or vulnerable to fraud, waste, abuse, and mismanagement. We also have
ongoing work examining (1) measures of the extent of fraud in the UI program and the status of
DOL’s fraud risk management eﬀorts; and (2) UI IT systems modernization.

GAO’s Prior Recommendations
The table below presents our recommendations on UI programs from prior CARES Act reports.

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Prior GAO Recommendations Related to Unemployment Insurance (UI) Programs
Recommendation

Status

The Secretary of Labor should designate a dedicated entity
and document its responsibilities for managing the process
of assessing fraud risks to the unemployment insurance
program, consistent with leading practices as provided in our
Fraud Risk Framework. This entity should have, among other
things, clearly deﬁned and documented responsibilities and
authority for managing fraud risk assessments and for facilitating
communication among stakeholders regarding fraud-related
issues (October 2021 report).

Open–not addressed. The Department of
Labor (DOL) neither agreed nor disagreed with
our recommendation. In late February 2022,
DOL clariﬁed that its Employment and Training
Administration, in partnership with DOL’s Oﬃce
of Chief Financial Oﬃcer, is responsible for fraud
risk management in the UI program. We maintain
that, consistent with our Fraud Risk Framework,
it is important for DOL to clearly document
this designation and these oﬃcials’ antifraud
responsibilities in policies and procedures.

The Secretary of Labor should identify inherent fraud risks facing
the unemployment insurance program (October 2021 report).

Open–not addressed. DOL neither agreed nor
disagreed with our recommendation. In late
February 2022, DOL reiterated that its current
process allows it to identify, evaluate, and manage
risks and identify mitigation strategies for such risks.
However, DOL also said that it will use our Fraud
Risk Framework in its risk assessment activities for
the UI program, and that work on developing the
assessment in the UI program using the framework
will occur in ﬁscal year (FY) 2022. We will continue to
monitor DOL’s fraud risk assessment activities.

The Secretary of Labor should assess the likelihood and impact of Open–not addressed. DOL neither agreed nor
inherent fraud risks facing the unemployment insurance program disagreed with our recommendation. In late
(October 2021 report).
February 2022, DOL reiterated that its current
process allows it to identify, evaluate, and manage
risks and identify mitigation strategies for such risks.
However, DOL also said that it will use our Fraud
Risk Framework to assess the likelihood and impact
of inherent fraud risks facing the UI program, and
that work on developing the assessment in the
UI program using the framework will occur in FY
2022. We will continue to monitor DOL’s fraud risk
assessment activities.
The Secretary of Labor should determine fraud risk tolerance for
the unemployment insurance program (October 2021 report).

Open–not addressed. DOL neither agreed nor
disagreed with our recommendation. In late
February 2022, DOL reiterated that its current
process allows it to identify, evaluate, and manage
risks and identify mitigation strategies for such risks.
However, DOL also said that it will use our Fraud
Risk Framework to determine fraud risk tolerance
for the UI program, and that work on developing the
assessment in the UI program using the framework
will occur in FY 2022. We will continue to monitor
DOL’s fraud risk assessment activities.

The Secretary of Labor should examine the suitability of existing
fraud controls in the unemployment insurance program and
prioritize residual fraud risks (October 2021 report).

Open–not addressed. DOL neither agreed nor
disagreed with our recommendation. In late
February 2022, DOL reiterated that its current
process allows it to identify, evaluate, and manage

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Recommendation

Status
risks and identify mitigation strategies for such
risks. However, DOL also said that it will use our
Fraud Risk Framework to examine the suitability
of existing fraud controls for the UI program and
prioritize residual fraud risks, and that work on
developing the assessment in the UI program
using the framework will occur in FY 2022. We will
continue to monitor DOL’s fraud risk assessment
activities.

The Secretary of Labor should document the fraud risk proﬁle for
the unemployment insurance program (October 2021 report).

Open–not addressed. DOL neither agreed nor
disagreed with our recommendation. In late
February 2022, DOL reiterated that its current
process allows it to identify, evaluate, and manage
risks and identify mitigation strategies for such risks.
However, DOL also said that it will use our Fraud
Risk Framework to document the fraud risk proﬁle
for the UI program, and that work on developing the
assessment in the UI program using the framework
will occur in FY 2022. We will continue to monitor
DOL’s fraud risk assessment activities.

The Secretary of Labor should ensure the Oﬃce of Unemployment Open—partially addressed. DOL agreed with our
Insurance collects data from states on the amount of
recommendation and on September 3, 2021, issued
overpayments waived in the Pandemic Unemployment Assistance PUA program guidance and updated instructions
(PUA) program, similar to the regular UI program (March 2021
for states to report PUA overpayments waived. As of
March 28, 2022, 24 states had reported some data
report).
on PUA overpayments waived. Sustained reporting
by more states is needed to help inform DOL,
policymakers, and the public about the amount
of PUA overpayments states and territories have
waived. We will continue to monitor state reporting
of PUA overpayments waived.
The Secretary of Labor should ensure the Oﬃce of Unemployment Open—partially addressed. DOL agreed with our
Insurance collects data from states on the amount of
recommendation and on January 8, 2021, issued
overpayments recovered in the PUA program, similar to the
PUA program guidance and updated instructions
regular UI program (January 2021 report).
for states to report PUA overpayments recovered.
As of March 28, 2022, 39 states and territories
had begun reporting some data on the amount of
PUA overpayments recovered. Sustained reporting
by more states is needed to help inform DOL,
policymakers, and the public about the amount
of PUA overpayments states and territories have
recovered. We will continue to monitor state
reporting of PUA overpayment recovery data.
The Secretary of Labor should ensure the Oﬃce of Unemployment Open—partially addressed. DOL partially agreed
Insurance pursues options to report the actual number of distinct with our recommendation. Speciﬁcally, DOL
individuals claiming beneﬁts, such as by collecting these already
agreed to pursue options to report the actual
available data from states, starting from January 2020 onward
number of distinct individuals claiming UI beneﬁts.
(November 2020 report).
However, DOL did not agree with the recommended
retroactive eﬀective date of the reporting. In a letter
dated March 30, 2021, DOL stated that it had begun
developing a new state report that would capture

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Recommendation

Status
data related to distinct individuals claiming regular
UI beneﬁts; DOL estimated that this data collection
might begin in early 2022.
In November 2021, DOL oﬃcials said their work
on the new state report that would capture data
related to distinct individuals claiming regular UI
beneﬁts had not yet been completed, due to other
competing priorities. In late February 2022, oﬃcials
said they plan to have the new data collection
instrument ready to submit for public notice and
comment early in 2022.
DOL expressed concerns about the feasibility of
states’ reporting this information retroactively,
including for the pandemic UI programs, without
detracting from their primary obligation for timely
and accurate claims processing.
We maintain that DOL should pursue options to
report the actual number of distinct individuals
claiming UI beneﬁts, retroactive to January 2020.
Even if the information is unavailable for some time,
these data are vital to understanding how many
individuals received UI beneﬁts as well as the size of
the population supported by the UI system during
the pandemic. Given the substantial investment
in UI programs during the pandemic, an accurate
accounting of the size of the population supported
by this funding may be critical to understanding the
eﬃciency and eﬀectiveness of the nation’s response
to unemployment during the pandemic. An accurate
accounting may also be critical to helping DOL and
policy makers identify lessons learned about the
administration and use of regular and expanded UI
beneﬁt programs.

The Secretary of Labor should ensure the Oﬃce of Unemployment Closed—addressed. DOL’s weekly news release
Insurance revises its weekly news releases to clarify that in the
of December 10, 2020, clariﬁed that the numbers
reported for weeks of UI beneﬁts claimed do not
current unemployment environment, the numbers it reports for
weeks of unemployment claimed do not accurately estimate the
represent the number of unique individuals claiming
number of unique individuals claiming beneﬁts (November 2020 beneﬁts.
report).
The Secretary of Labor should, in consultation with the Small
Closed—addressed. DOL issued guidance on
Business Administration (SBA) and the Department of the
August 12, 2020, clarifying that individuals working
Treasury, immediately provide information to state unemployment full time and being paid through PPP are not eligible
agencies that speciﬁcally addresses SBA's Paycheck Protection
for UI. The guidance also clariﬁed that individuals
working part time and being paid through PPP
Program (PPP) loans, and the risk of improper payments
would be subject to certain state policies, including
associated with these loans (June 2020 report).
state policies on partial unemployment, to
determine their eligibility for UI beneﬁts. Further,
the guidance clariﬁed that individuals being paid
through PPP but not performing any services would
similarly be subject to certain provisions of state
law. Finally, the guidance noted that an individual

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Recommendation

Status
receiving full compensation would be ineligible for
UI.

Source: GAO. I GAO-22-105397

Contact information: Thomas M. Costa, (202) 512-4769, costat@gao.gov and Seto J. Bagdoyan,
(202) 512-6722, bagdoyans@gao.gov

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Homeowner Assistance Fund
Treasury has disbursed about $9.1 billion from the Homeowner Assistance Fund and approved
program plans for most states and territories that received an award. However, states and
territories have only spent about 1 percent of their allocations. In addition, Treasury has not
developed monitoring procedures for the program, which are needed to ensure program
compliance and deter improper payments.
Entities involved: Department of the Treasury

Recommendation for Executive Action
The Secretary of the Treasury should develop and implement written procedures to monitor
Homeowner Assistance Fund participants’ programs and uses of funds for compliance with
program requirements and improper payments. Treasury agreed with our recommendation and
said it was developing a monitoring framework for its pandemic recovery programs to identify
potential areas of noncompliance for remediation.

Background
The Homeowner Assistance Fund (HAF), created on March 11, 2021, under the American Rescue
Plan Act of 2021, provides about $10 billion to mitigate ﬁnancial hardships associated with the
pandemic and prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home
energy services, and displacement of homeowners.212 Treasury administers the HAF program
and disburses allocations to participants—states, territories, tribal entities, and the Department
of Hawaiian Home Lands—to develop local programs that provide assistance to homeowners.
Treasury calculated HAF allocations for states, Washington, D.C., and Puerto Rico based on their
numbers of unemployed individuals and delinquent mortgages (with a minimum allocation of $50
million).213
HAF participants can use the funds to assist homeowners with mortgage and utility payments,
delinquent property taxes and insurance, and other eligible uses.214 HAF participants may also
commit up to 15 percent of their total award for administrative expenses, planning, community
engagement, and needs assessment.215 Homeowners are eligible to receive HAF assistance if they
212The American Rescue Plan Act of 2021 appropriated $9.961 billion for the HAF and set aside up to $40 million for

Treasury to administer and oversee the fund, and up to $2.6 million for the Treasury Oﬃce of Inspector General to
oversee the fund. See Pub L. No. 117-2, tit. III, §§ 3206(a),(d), 135 Stat. 4, 63 (2021).

213Department of the Treasury, Data and Methodology for State and Territory Allocations (Washington, D.C.: April 14,

2021). The act also set aside a total of $30 million for territories (Guam, American Samoa, the U.S. Virgin Islands, and
the Commonwealth of the Northern Mariana Islands), which were allocated based on population. Tribal allocations
were based on the formulas used for the Emergency Rental Assistance Program under the Consolidated Appropriations
Act, 2021. See American Rescue Plan Act of 2021 §§ 3206(d),(f) (to be codiﬁed at 15 U.S.C. 9058d(d),(f)); Consolidated
Appropriations Act, Pub. L. No. 116-260, div. N, tit. V, § 501(b)(2)(A), 134 Stat. 1182, 2069-78 (2020) (to be codiﬁed at 15
U.S.C. § 9058a(b)(2)(A).
214American Rescue Plan Act of 2021 § 3206(c)(1) (to be codiﬁed at 15 U.S.C. § 9058d(c)(1)). Department of the Treasury,

Homeowner Assistance Fund Guidance, (Washington, D.C.: Feb. 24, 2022).

215Treasury’s guidance does not specify how much of the 15 percent participants can spend on each allowable activity.

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experienced ﬁnancial hardship after January 21, 2020, and have income at or below 150 percent
of their area median or below 100 percent of the national median (whichever is greater).216
Participants may also waive, or rely on self-attestations from households that they meet, the
program’s income and ﬁnancial hardship requirements. In addition, HAF participants are required
to target at least 60 percent of their funds to assist homeowners with incomes at or below
100 percent of the area median or 100 percent of the national median (whichever is greater).
Participants must also prioritize remaining funds to socially disadvantaged individuals.217
Participants are required to receive Treasury’s approval of their program plans to receive their
full allocation. Treasury provided initial payments to HAF participants equal to 10 percent of their
allocation. To receive the remaining 90 percent, participants must submit a HAF program plan
for Treasury’s review and approval. HAF plans were required to describe several components,
including the needs of local homeowners, program design, performance goals, readiness, and
budget. Treasury encouraged participants to use their initial allocations to develop and test pilot
programs while it reviewed their HAF plans.
Prior to the HAF program, the federal government took steps to limit mortgage defaults and
foreclosures during the pandemic. The CARES Act, enacted in March 2020, temporarily prohibited
most foreclosures of federally backed properties and required mortgage servicers to provide
borrowers with federally backed mortgages the option to suspend or reduce their mortgage
payments, known as forbearance.218 Federal agencies that guarantee and insure mortgages and
the government-sponsored enterprises (which securitize mortgages) extended those provisions
and introduced new loss mitigation options to help borrowers modify their loans, repay missed
payments, and avoid foreclosure. In addition, the Consumer Financial Protection Bureau amended
its regulations for mortgage servicers in June 2021 to establish temporary procedural safeguards
intended to limit avoidable foreclosures until January 1, 2022.219

Overview of Key Issues
Many borrowers may need assistance from the HAF program as foreclosures resume and
borrowers exit forbearances. New foreclosure starts increased by 702 percent (from about 4,100
to 32,900) in one month from December 2021 to January 2022, according to the mortgage data
provider Black Knight.220 According to Black Knight, nearly half of the new foreclosure starts in
216Department of the Treasury, Homeowner Assistance Fund Guidance.

217American Rescue Plan Act of 2021 § 3206(c)(2) (to be codiﬁed at 15 U.S.C. § 9058d(c)(2)). Treasury deﬁnes socially

disadvantaged individuals as those whose ability to purchase or own a home has been impaired due to diminished
access to credit on reasonable terms as compared to others in comparable economic circumstances, based on
disparities in homeownership rates in the HAF participant’s jurisdiction as documented by the U.S. Census. Department
of the Treasury, Homeowner Assistance Fund Guidance.
218Pub. L. No. 116-136, div. A, § 4022, 134 Stat. 490 (2020). Federally backed mortgages are those that federal entities

insure, guarantee, directly originate, purchase, or securitize.

219Consumer Financial Protection Bureau, Protections for Borrowers Aﬀected by the COVID-19 Emergency Under the Real

Estate Settlement Procedures Act (RESPA), Regulation X, 86 Fed. Reg. 34848 (June 30, 2021).

220Black Knight, Black Knight’s First Look At January 2022 Mortgage Data, February 24, 2022; Black Knight, Mortgage Monitor

December 2021 Report, February 7, 2022.

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January 2022 were among borrowers who became delinquent during the pandemic (March 2020
or later). New foreclosure starts increased signiﬁcantly from December 2021 to January 2022
because the Consumer Financial Protection Bureau’s foreclosure rule limiting new foreclosures
expired at the end of December 2021. The agency’s rule went into eﬀect in August 2021 after the
federal foreclosure moratorium expired in July 2021. According to Treasury, these foreclosure
protections informed its timeline for approving and funding HAF programs. The spike in new
foreclosures starts generally reﬂects the backlog of foreclosures and a return to prepandemic
levels (about 43,000 in January 2020).
At the same time, the rate of mortgages that were delinquent for 30 or more days declined to 3.3
percent in January 2022—near the prepandemic rate of 3.2 percent in January 2020—as borrowers
exited forbearances and returned to making payments, according to Black Knight. However,
available data suggest that some borrowers exiting forbearance may need additional assistance.
As of January 2022, about 11 percent of the nearly 8 million borrowers that entered forbearance
during the pandemic had not yet exited and repaid their missed payments. An additional 379,000
borrowers had exited forbearance and ﬁnished loss mitigation (such as a loan modiﬁcation or
payment deferral) but not resolved their delinquency.
We previously reported that borrowers who were in forbearance or delinquent for extended
periods during the pandemic had accrued large arrearages and generally had higher-risk ﬁnancial
characteristics, including lower credit scores and higher ratios of mortgage debt to income. Given
that some of these borrowers may need additional assistance to reinstate their mortgage and
mitigate other housing-related ﬁnancial challenges in the coming months, it is critical that HAF
participants begin disbursing funds.
Treasury has approved plans for and disbursed full payments to most HAF participants, but
most have spent little of their allocation. As of March 2022, Treasury had approved HAF plans
for and made second payments to 50 of the 56 state and territorial participants (or 89 percent)
and was in the process of reviewing HAF plans for three participants (Iowa, Mississippi, and Virgin
Islands). Three participants had not submitted HAF plans (Delaware, Washington, and American
Samoa). In addition, Treasury had disbursed about $9.1 billion to all participants through March
20, 2022, including payments to state, territorial, and tribal participants, and the Department of
Hawaiian Home Lands.
At the same time, state and territorial participants had spent about $121 million (or about 1
percent) of the nearly $9.4 billion allocated to them, according to interim reporting data provided
by Treasury (see ﬁgure).221 Participants had obligated about $331 million (or about 4 percent of
their allocations), according to the data.

221Illinois requested a reduced second payment because its HAF plan included some but not all of its planned program

elements. Treasury oﬃcials said Illinois plans to submit another HAF plan in the future detailing the remaining use of its
allocation.

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Status of Homeowner Assistance Fund (HAF) Programs and Percentage of Allocation Spent by State and
Territory, as of March 2022

Note: Spending data were unavailable for some participants because they had not submitted interim reports to Treasury by the
March 3, 2021 deadline.

Treasury oﬃcials we interviewed were in communication with participants that have not submitted
HAF plans and expected them to submit plans in the coming months. In addition, Treasury
oﬃcials said they had provided feedback to the participants that submitted plans but not
received approval and were generally waiting for these participants to submit updated HAF
plans. According to Treasury oﬃcials, the process for developing, reviewing, and approving
HAF plans is iterative and occurs in stages. Treasury oﬃcials said they introduced the HAF plan
requirement to ensure participants develop programs that are compliant and consistent with
agency guidance. In addition, the planning requirement encourages participants to consider how
they can maximize the beneﬁt of HAF funds and not replace other homeowner protections and
loss mitigation options. In general, Treasury provides participants with feedback on their initial
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HAF plan submissions, which participants are encouraged to incorporate before resubmitting an
updated plan for ﬁnal review and approval.
Monitoring procedures are needed to ensure program compliance. Treasury has not
developed and implemented written procedures that describe how it will monitor HAF
participants’ compliance with program requirements and eﬀorts to prevent improper payments.
Federal internal control standards highlight the importance of designing control activities to
achieve objectives and of implementing control activities through policies. According to its interim
reporting guidance, Treasury plans to use participant-reported data to monitor compliance with
program requirements.222 The Oﬃce of Recovery Programs, which oversees HAF and Treasury’s
other pandemic relief programs, is in the process of developing a post-award compliance
monitoring process that would apply to all of its programs, according to a Treasury oﬃcial. In
addition, Treasury is in the process of developing monitoring procedures speciﬁc to the HAF
program. Treasury also plans to monitor compliance through single audits and is developing
guidance for external auditors on evaluating participants’ HAF programs for the Oﬃce of
Management and Budget’s 2022 compliance supplement.
However, Treasury had not ﬁnished and implemented any of these monitoring eﬀorts as of late
March 2022 and did not provide documentation we could evaluate to assess progress. Treasury
required HAF participants to describe in their program plans the staﬃng, systems, contracts, and
partners they planned to use to ensure eﬀective program compliance. Yet, without written and
implemented procedures to monitor compliance, Treasury cannot have reasonable assurances
that participants have implemented these plans and are meeting program requirements and
managing improper payment risks.
It is critical that Treasury clarify its monitoring procedures now as HAF participants begin initiating
full programs. We reported in February 2022 that use of self-attestation of eligibility in another
Treasury housing assistance program—Emergency Rental Assistance Program—increased
improper payment risks, and a lack of timely monitoring procedures limited the agency’s ability
to manage those risks and conduct required oversight. As we reported in our framework for
managing fraud risks, preventive controls designed to deter improper payments are generally
preferable and more cost-eﬀective than managing improper payment risks after agencies have
made payments. Written and implemented monitoring procedures will help clarify Treasury’s
expectations around such controls.

Agency Comments
We provided Treasury and OMB with a draft of this enclosure. Treasury provided written
comments, which are reproduced in appendix X, and technical comments, which we incorporated
as appropriate. OMB did not provide comments.
Treasury agreed with our recommendation and stated that it is in the process of establishing
a risk-based, data-driven framework for providing accountability and stewardship of recovery
222Department of the Treasury, Homeowner Assistance Fund Guidance on Required Interim Report (Washington, D.C.:

Feb. 17, 2022).

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programs to achieve program goals and objectives. According to Treasury, this framework will
include procedures to analyze participant-reported and single audit data to identify potential
areas of noncompliance for remediation. We will continue to monitor how Treasury applies this
framework to the HAF program.

Methodology
To conduct this work, we interviewed Treasury oﬃcials and reviewed agency data and
documentation on HAF program implementation, payments to participants (disbursements),
participant expenditures, and oversight. We assessed the reliability of Treasury’s data and found
them to be suﬃciently reliable for describing HAF payments and expenditures. We evaluated
Treasury’s oversight eﬀorts against federal internal controls standards for control activities. We
also reviewed data on mortgage delinquencies and foreclosures from Black Knight, a leading
provider of mortgage servicing data and analytics. We assessed the reliability of Black Knight’s
data and found them to be suﬃciently reliable for describing mortgage delinquencies and
foreclosures.

GAO’s Ongoing Work
We will continue to monitor HAF participants’ expenditures and Treasury’s oversight eﬀorts in
future reports.

Related GAO Products
COVID-19 Housing Protections: Mortgage Forbearance and Other Federal Eﬀorts Have Reduced Default
and Foreclosure Risks. GAO-21-554. Washington, D.C.: July 12, 2021
Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.:
September 10, 2014
Emergency Rental Assistance: Additional Grantee Monitoring Needed to Manage Known Risks.
GAO-22-105490. Washington, D.C.: February 10, 2022
A Framework for Managing Fraud Risks in Federal Programs. GAO-15-593SP, Washington, D.C.: July 28,
2015
Contact Information: Daniel Garcia-Diaz, (202) 512-8678, GarciaDiazD@gao.gov

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Advance Child Tax Credit and Economic Impact Payments
Treasury and the Internal Revenue Service took steps to facilitate accurate tax reporting and
address likely errors on 2021 tax returns, however, millions of taxpayers may still experience
refund delays. Enhanced collaboration and performance measures would strengthen Treasury’s
and the Internal Revenue Service’s abilities to clearly communicate key information to individuals
eligible for the child tax credit.
Entities involved: Internal Revenue Service and the Department of the Treasury

Recommendations for Executive Action
The Secretary of the Treasury, in coordination with the Commissioner of Internal Revenue, should
enhance collaboration among departmental components for refundable tax credit communication
and outreach eﬀorts by including relevant participants and clearly deﬁning participant outcomes,
roles, and responsibilities. Treasury neither agreed nor disagreed with this recommendation,
stating that it supports the goal of the recommendation and continues to work with IRS to
raise awareness on current and future communication and outreach eﬀorts. We maintain that
without additional actions, such as including relevant participants and clearly deﬁning outcomes,
roles, and responsibilities, Treasury and IRS will continue to miss opportunities to leverage their
resources and expertise on communication and outreach eﬀorts.
The Commissioner of Internal Revenue should enhance internal collaboration among its
stakeholder outreach and education oﬃces for refundable tax credit communications and
outreach eﬀorts by clearly establishing outcomes, roles, and responsibilities, and by developing
resources to facilitate joint interactions and methods to document information sharing. IRS
neither agreed nor disagreed with this recommendation, stating that it has clearly established
roles and responsibilities for its communication and outreach functions, which coordinate
with each other regularly and look for ways to improve their joint eﬀorts. We maintain that
IRS oﬃces overseeing stakeholder outreach and education do not consistently document and
share key information. Without additional actions, such as developing resources to facilitate
joint interactions and methods to document information sharing, IRS will continue to miss
opportunities to fully leverage the knowledge and expertise that resides among its staﬀ.
The Commissioner of Internal Revenue should collect suﬃcient, relevant, and comparable data
on the usefulness and accessibility of its communications and outreach eﬀorts for refundable
tax credits and use these data to develop performance metrics to assess the eﬀectiveness of
ongoing eﬀorts. IRS neither agreed nor disagreed with this recommendation, stating that it obtains
feedback, but its eﬀorts are not easily captured or translated into performance metrics. We
maintain that IRS is not collecting or using other types of information to assess what aspects of
their communications and outreach eﬀorts were eﬀective in reaching diﬀerent audiences. This
data could help inform future IRS eﬀorts to educate individuals about refundable tax credits and
more reliably measure the success of such eﬀorts.

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Background
The American Rescue Plan Act of 2021 (ARPA) authorized the Internal Revenue Service (IRS) and
the Department of the Treasury to issue advance payments of the child tax credit (CTC).223 As
required by ARPA, IRS and Treasury were responsible for issuing half of the CTC through periodic
advance payments (advance CTC). Eligible individuals received monthly advance CTC payments
from July 2021 through December 2021, unless they elected not to receive the payments.224 IRS
reported that as of April 6, 2022, it had disbursed more than 216.8 million advance payments
totaling nearly $93.5 billion—an average payment of $431 (see ﬁgure).
Information on Advance Child Tax Credit Payments, July 2021–Dec. 2021, as of April 6, 2022

Average number of monthly payments is the average volume of advance child tax credit payments IRS disbursed electronically
or by paper check on a monthly basis between July and December 2021.
b

Total number of advance payment opt-outs is the cumulative volume of taxpayers who elected not to receive advance
payments.
c

Average number of monthly children beneﬁciaries is the average volume of qualifying children for whom eligible individuals
received advance child tax credit payments on a monthly basis between July and December 2021.

In August 2021, the U.S. Census Bureau’s Household Pulse Survey found that individuals
who received the July 2021 advance CTC payment reported less ﬁnancial hardship and food
insuﬃciency after receiving the payment.225 Survey results collected after the advance CTC
223Pub. L. No. 117-2, § 9611, 135 Stat. 4, 144–150 (2021), codiﬁed at 26 U.S.C. §§ 24(i)-(j), 7527A. ARPA made several

temporary changes that expanded eligibility for the CTC to additional qualiﬁed individuals and increased the amount
of the credit. These changes included temporarily eliminating the earned income requirement for eligible individuals to
receive the refundable CTC. ARPA also temporarily increased the maximum amount of the CTC—raising it from $2,000
per any qualifying child to $3,600 for a young qualifying child (0 to 5 years old) and $3,000 for an older qualifying child (6
to 17 years old).
224ARPA required Treasury to establish an online portal that allowed taxpayers to elect not to receive advance CTC

payments, among other things. Pub. L. No. 117-2, § 9611, 135 Stat. at 147, codiﬁed at 26 U.S.C. § 7527A(c)(1). As of
December, 31, 2021, 2.1 million individuals with eligible children had used the CTC Update Portal to make such an
election. Individuals who elected not to receive the advance CTC payments were eligible for the total amount when they
ﬁled their 2021 taxes in 2022.
225United States Census Bureau, “Economic Hardship Declined in Households with Children as Child Tax Credit

Payments Arrived” (Washington, D.C.: Aug. 11, 2021), accessed February 18, 2022, https://www.census.gov/library/
stories/2021/08/economic-hardship-declined-in-households-with-children-as-child-tax-credit-payments-arrived.html.
The Household Pulse Survey surveyed individuals from June 23, 2021, to August 2, 2021, prior to and after the ﬁrst round
of advance CTC payments.

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payments ended found that more households with children had diﬃculty paying for usual
household expenses.226
Advance CTC payments. In general, to determine advance CTC payments, IRS used the reported
information on an individual’s most recent tax return to estimate the total amount of the CTC
that an individual qualiﬁed for under the law.227 Beginning in July 2021, IRS sent 50 percent of that
amount divided across 6 monthly payments to recipients. In 2022, individuals were required to
ﬁle a 2021 tax return to receive the remaining portion of the credit. At that time, individuals were
responsible for reporting the total amount of advance CTC payments they received in 2021.
When IRS processes an individual’s 2021 tax return it determines whether the individual claimed
the correct amount of the 2021 CTC based on the individual’s ﬁling status, modiﬁed adjusted gross
income, and number of qualifying children. IRS then calculates the diﬀerence between the total
2021 CTC and the amount received in advance payments. Based on these calculations, individuals
may receive a higher amount of CTC as a federal tax refund or a reduction in federal income taxes
owed. In other circumstances, some individuals may owe a balance in excess of their refund.228
Economic Impact Payments. Treasury and IRS also issued a third round of Economic Impact
Payments (EIP 3) to most eligible individuals.229 IRS reported that as of December 31, 2021, it had
disbursed more than 175 million EIP 3 payments totaling over $409 billion.230 Eligible individuals
who did not receive EIP 3—or their maximum applicable EIP 3 amounts—could claim a recovery
rebate credit (RRC) on their 2021 tax return.231
IRS began accepting and processing 2021 tax returns on January 24, 2022.232 Additionally, IRS
issued a revenue procedure for individuals who were not otherwise required to ﬁle 2021 federal
226United States Census Bureau, “Harder to Pay the Bills Now That Child Tax Credit Payments Have Ended” (Washington,

D.C.: Feb. 28, 2022), accessed March 31, 2022, https://www.census.gov/library/stories/2022/02/harder-to-pay-bills-nowthat-child-tax-credit-payments-have-ended.html. The Household Pulse Survey surveyed individuals from late January
2022 to early February 2022 after the last round of advance CTC payments. Individuals were randomly selected and may
not have been the same individuals interviewed for the August 2021 survey.
227When IRS processed the advance CTC payments, IRS used individuals’ most recent 2020 tax return, or the 2019

return if the 2020 return was not available. Eligible individuals who used IRS’s Non-Filer Sign-up Tool in 2020 or 2021 also
received advance CTC payments.
228Taxpayers who would otherwise be required to repay advance CTC payments to IRS as an additional income tax

may be protected by a statutory safe harbor. Taxpayers will not qualify for any repayment protection if their modiﬁed
adjusted gross income is at or above certain amounts based on the ﬁling status on their 2021 tax return. These amounts
are $120,000 for those who are married and ﬁling a joint return or are ﬁling as a qualifying widow or widower; $100,000
for those who are ﬁling as a head of household; and $80,000 for single ﬁlers or for those who are married and ﬁling a
separate return. Pub. L. No. 117-2, § 9611(b)(2), 135 Stat. at 148–149, codiﬁed at 24 U.S.C. § 24(j).
229Pub. L. No. 117-2, § 9601, 135 Stat. at 138–144. The CARES Act (in March 2020) and the Consolidated Appropriations

Act, 2021 (in December 2020) respectively authorized Treasury and IRS to issue EIP 1 and EIP 2 as direct payments to
help individuals address ﬁnancial stress due to the pandemic. Pub. L. No. 116-136, § 2201, 134 Stat. 281, 335–340 (2020);
Pub. L. No. 116-260, § 272, 134 Stat. 1182, 1965–1976 (2020). IRS issued EIP 3 from March 17, 2021 to December 31,
2021. Pub. L. No. 117-2, § 9601(a), 135 Stat. at 140–141, codiﬁed at 26 U.S.C. § 6428B.
230The last day IRS issued EIP 3 payments was December 17, 2021.

231The amount of the RRC would equal the amount of the credit, as reduced by the amount of any EIP 3.

232The ﬁling deadline for most individuals to complete a 2021 tax return was April 18, 2022. Individuals requesting an

extension may have until October 17, 2022.

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income tax returns.233 The procedure provided instructions for individuals to ﬁle simpliﬁed returns
to receive the CTC, the RRC, and the earned income tax credit (EITC). The procedure also provided
instructions for individuals to ﬁle electronic returns if they have zero adjusted gross income.

Overview of Key Issues
IRS is working to address return errors, but some refund delays are likely. IRS has taken
several steps since the 2021 ﬁling season to facilitate accurate tax reporting and address likely
errors on returns ﬁled in 2022. However, millions of taxpayers may still experience refund delays
during the 2022 ﬁling season.
As we reported, IRS experienced multiple challenges during the 2021 ﬁling season as it struggled
to respond to an unprecedented workload that included delivering COVID-19 relief. In late
January 2022, IRS began the 2022 ﬁling season with about 4 million unprocessed 2021 individual
tax returns. As of early April 2022, this volume had decreased to about 2.4 million individual
returns. IRS is processing the remaining backlogged 2021 returns and incoming 2022 returns
simultaneously.
To help individuals ﬁle accurate 2021 tax returns during the 2022 ﬁling season, IRS took several
steps. Starting in December 2021, IRS began mailing millions of letters to advance CTC and EIP
3 recipients. The letters contained information on the total amount of advance CTC and EIP
3 payments individuals received in 2021. Through notices, alerts, and press releases, IRS also
encouraged recipients to access the “Your Online Account” webpage to retrieve information on
the total amount of payments received in 2021. IRS also continuously revised its FAQ for both the
advance CTC and the RRC.
IRS oﬃcials said IRS is trying to answer most advance CTC and EIP 3 questions through automated
phone services. Callers may use an interactive voice program to receive answers to some
frequently asked questions or may speak with a live assistor who can help with general advance
CTC or EIP 3 questions.234 Callers who still have questions may then be redirected to an IRS
customer service representative, who has access to taxpayer accounts. However, callers may
have a diﬃcult time reaching IRS representatives due to high call volumes. In November
2021, IRS estimated that customer service representatives would be able to answer about 35
percent of incoming calls during the 2022 ﬁling season.235 From January to late March 2022, IRS
representatives answered almost 16 percent of taxpayers’ calls seeking live assistance.
IRS could still face challenges to quickly reconcile the advance CTC payments and issue refunds.
From January to November 2021, IRS held for review about 35 million individual and business 2020

233Rev. Proc. 2022-12, 2022-7 I.R.B. 494.

234IRS established a vendor hotline to address EIP phone calls to reduce the number of phone calls to IRS’s customer

service. In the summer 2021, IRS established a similar hotline to address advance CTC questions. The customer service
vendor does not have access to taxpayer accounts.
235IRS deﬁnes its telephone “level of service” as the percentage of taxpayers seeking and reaching live assistance. This

estimated target is based on IRS’s projections for the volume of incoming calls and staﬃng levels.

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tax returns in its Error Resolution System.236 In mid-2021, IRS projected that about 20 million 2021
tax returns could have advance CTC errors and 6 million returns could have EIP 3 errors.
IRS oﬃcials said they created an automated tool to use during the 2022 ﬁling season to identify
electronically ﬁled tax returns with speciﬁc errors related to advance CTC and EIP reconciliation.
IRS oﬃcials said the tool would save processing time by automatically addressing these errors.
IRS staﬀ must manually review individual tax returns suspended due to errors that cannot be
automatically addressed by the tool. As we have previously reported, the need to manually review
and correct errors during the 2021 ﬁling season led to refund delays of up to several months for
millions of taxpayers.237 As of February 28, 2022, IRS had processed over 11 million 2021 individual
tax returns claiming the CTC and over 2 million returns claiming the RRC. As of March 30, 2022, IRS
oﬃcials said that IRS has resolved 7.2 million returns with errors using the automated tool.
Taxpayer Advocate Service oﬃcials and some of IRS’s tax industry partners raised concerns
about CTC-related mistakes that cannot be automatically addressed. They said the advance CTC
notiﬁcation letter that IRS sent may be confusing to married couples who ﬁle their taxes jointly.
Couples may be confused because IRS sent separate letters to each spouse. Each letter reported
half the total payment amount received but the total number of reported children. The letter
instructs couples to add the two amounts when they ﬁle. However, if the letters have identical
amounts, individuals and their preparers may not realize they need to add the two amounts.
IRS oﬃcials said it sent separate letters because they cannot know an individual’s 2021 ﬁling
status until the return is ﬁled. There is also the risk that taxpayers may throw away the letters, not
realizing the letters contain tax information. IRS oﬃcials said to mitigate these risks, IRS placed
“Important Tax Document Enclosed” on the advance CTC notiﬁcation envelope and formatted the
letter to look like a tax statement. Additionally, IRS issued FAQs and press releases.
Tax industry partners and Low Income Taxpayer Clinic oﬃcials said they were also concerned
about situations when a child custody agreement is not clear. To help address this challenge, IRS
oﬃcials said it issued FAQs to include commonly asked shared custody questions. As we have
previously reported, child custody issues are an ongoing challenge for IRS’s administration of
refundable tax credits that have child residency and relationship requirements.
IRS eﬀorts to authenticate the identity of online account users raise security, privacy, and
access concerns. As we reported in October 2021, IRS contracted with a third-party vendor for
ID.me licenses for identity prooﬁng and authentication for the CTC Update Portal.238 In November
2021, IRS stated that several IRS online services, including Your Online Account, would require
individuals to establish a new account with ID.me by summer 2022 to access their tax records.

236IRS’s Error Resolution System is a computer program that allows for review and correction to systemically identiﬁed

errors on tax returns prior to completing the processing of the return. IRS has the authority to correct some types of
errors; other errors require the taxpayer to provide additional information.

237IRS suspends returns that contain errors and prevent IRS’s systems from processing the returns automatically. Such

errors include math errors or discrepancies in income amounts reported on the taxpayer’s return that do not match IRS
records.
238The CTC Update Portal allowed qualiﬁed individuals to check their eligibility for the advance payments, opt out of

receiving the payments, update their bank account information, and change their mailing address. Individuals could
make changes from June to November 2021.

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In January 2022, the Information Technology Acquisition Advisory Council (IT-AAC)—a nonproﬁt,
public-private partnership that works with federal agencies to identify and meet IT modernization
and cybersecurity challenges—sent an initial letter to IRS expressing concerns about privacy,
security, and access issues that were disproportionately aﬀecting lower-income individuals related
to IRS’s use of ID.me licenses. Additionally, numerous members of Congress expressed their
concerns with IRS’s use of facial recognition technology to verify individuals’ identities to access
IRS’s online services.
Treasury and IRS took several steps to respond to these concerns. On February 21, 2022, IRS
announced a temporary solution for individuals to access IRS online services during the 2022
ﬁling season. IRS stated that individuals could choose to verify their identity virtually with an ID.me
agent without the need to provide a selﬁe. ID.me oﬃcials said that as of March 13, 2022, the wait
time to see an ID.me virtual agent was approximately 20 minutes. Individuals still had the option
to authenticate their identities using biometric information, and IRS stated that new requirements
were in place to ensure that the images were deleted. On March 15, 2022, ID.me oﬃcials told IRS
that between March 4 and March 11, 2022, ID.me deleted the biometric data for approximately
11 million existing account holders. However, IRS oﬃcials said that aﬀected individuals were not
notiﬁed that their biometric information had been deleted.
According to IRS oﬃcials, IRS has also been working with the General Services Administration
to provide a second option—Login.gov—that the public can use to sign in to access IRS online
services.239 IRS oﬃcials said that Login.gov will not be available until it meets federal standards
for fraud and security. Oﬃcials anticipate Login.gov will be available for IRS users in November
or December 2022. In the meantime, individuals will have to authenticate their identity using the
revised ID.me processes.
As we reported in June 2018, designing authentication programs involves a balancing act—IRS
needs to prevent fraudsters from using stolen taxpayer information to authenticate, but it
must balance that against the burden of authentication on legitimate taxpayers. If IRS makes
the authentication process too stringent, legitimate taxpayers may not be able to successfully
authenticate.
IRS and Treasury missed opportunities to collaborate on outreach eﬀorts related to the
child tax credit. IRS and Treasury worked with federal, state, and local partners to encourage
individuals to ﬁle taxes to claim credits they were eligible to receive, but missed opportunities to
collaborate.
IRS led eﬀorts to educate individuals about refundable tax credits, including the advance CTC, and
available resources to ﬁle a 2021 tax return. IRS provided multilingual outreach resources, both
online and in printed notices. IRS leveraged its partnerships with tax professionals to disseminate
information to their clients and coordinated with the Federation of Tax Administrators to share
information with state and local governments. These governments may use Coronavirus State and
Local Fiscal Recovery Funds to conduct outreach eﬀorts to increase individual uptake of federal tax

239Login.gov is a General Services Administration shared service that allows the public to use one common login to

interact with participating agencies’ systems.

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credits.240 During the 2022 ﬁling season, IRS conducted in-person events to help individuals ﬁle a
tax return.241 IRS identiﬁed 89 Taxpayer Assistance Centers to conduct “Taxpayer Experience Days”
that provided individuals more opportunities for in-person assistance while ﬁling a return. As of
March 12, 2022, IRS oﬃcials said over 5,000 individuals attended these events.242
Treasury also engaged in outreach activities focused on educating individuals about the CTC.
According to Treasury oﬃcials, they worked with community-based organizations to train
“navigators”—community-based guides—to help enroll individuals for the CTC. On January 24,
2022, Treasury and White House oﬃcials announced a new website, ChildTaxCredit.gov to help
individuals ﬁle their taxes and access the remainder of the CTC or the full amount of the CTC.
The website also provides resources and tools for partners to help reach families about the CTC
and the EITC (a separate refundable tax credit for which many low-income workers are eligible).
Treasury and the White House also conducted a Day of Action on February 8, 2022, to encourage
state, local, and nonproﬁt organizations to assist individuals in ﬁling taxes to receive the CTC and
other refundable credits.
However, Treasury and IRS missed opportunities to collaborate on these outreach eﬀorts.
For example, some key IRS oﬃcials responsible for stakeholder partnerships, education, and
communications, said they were not involved in the planning of the Day of Action event. The
oﬃcials said they were ﬁrst notiﬁed of the event 4 days prior when Treasury oﬃcials requested
that IRS review the materials Treasury had developed, and IRS provided Treasury with its contact
list. IRS oﬃcials also said they were not involved in the development or launch of the Treasury and
White House website. Treasury oﬃcials said their intent with the ChildTaxCredit.gov website was to
create a plain-language resource on a trusted government domain for new or infrequent tax ﬁlers.
As of April 11, 2022, IRS.gov did not include a link to ChildTaxCredit.gov on its website.
According to federal standards on internal control, management should internally communicate
the necessary quality information to enable personnel to perform and achieve agency objectives.
Moreover, we have previously identiﬁed leading practices that agencies can use to enhance
and sustain their collaborative eﬀorts that include clearly deﬁning outcomes, roles, and
responsibilities. According to Treasury oﬃcials, Treasury and IRS meet weekly to coordinate
outreach and to ensure they are sharing consistent information. Regularly-scheduled meetings
with relevant participants are one helpful tool for collaboration. Developing materials aimed
at diﬀerent audiences can also be helpful. Even so, some key IRS oﬃcials said they were not
always aware of Treasury’s eﬀorts. The lack of collaboration and transparent communication
between Treasury and IRS resulted in a missed opportunity to leverage resources and expertise on
communication and outreach eﬀorts.
IRS missed opportunities to coordinate internally on child tax credit outreach. Various
IRS oﬃces overseeing stakeholder outreach and education—such as Communications &
240The Coronavirus State and Local Fiscal Recovery Fund, established under the ARPA and administered by Treasury,
allocated $350 billion to the states, the District of Columbia, local governments, tribal governments, and U.S. territories
to help cover a broad range of costs stemming from the ﬁscal eﬀects of the COVID-19 pandemic. Pub. L. No. Pub. L. No.
117-2, § 9901, 135 Stat. at 223, codiﬁed at 42 U.S.C. §§ 802-803; 87 Fed. Reg. 4338, 4362, 4369 (Jan. 27, 2022).
241Taxpayer Experience Days were conducted on February 12, March 12, April 9, and May 14, 2022.

242At the time of publication, IRS was unable to provide the attendance level of the April 9, 2022 event.

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Liaison and Stakeholder Partnerships, Education and Communication—missed opportunities to
collaborate internally and leverage their expertise and resources to establish new community
partnerships. According to IRS oﬃcials, each of these oﬃces independently maintain contact
lists of stakeholders and community partners, but there are no formal mechanisms for sharing
this information. IRS oﬃcials also said that staﬀ from these oﬃces conduct informal discussions
on their outreach eﬀorts, but the results of these meetings are not documented and thus are
not disseminated among oﬃces. We have previously reported that practices such as developing
resources to facilitate joint interactions and methods to document information sharing can also
enhance collaboration.
In January 2021, IRS issued the Taxpayer First Act Report to Congress, which included a new
Taxpayer Experience Strategy.243 According to IRS, the report included input and feedback from
taxpayers, tax professionals, and the tax community on how to improve the taxpayer experience.
Among other things, the Strategy described the need to reorganize outreach and education
functions to eliminate redundant activities, better leverage best practices, realize economies of
scale, and amplify its reach and eﬀectiveness with messaging spanning across its service and
compliance programs. On March 4, 2022, IRS announced the establishment of the new Taxpayer
Experience Oﬃce to help drive the agency’s strategic direction for improving the taxpayer
experience. Establishing the new oﬃce could provide a timely opportunity to implement the
Taxpayer Experience Strategy and by doing so, address the internal collaboration challenges we
observed. In the meantime, IRS will continue to miss opportunities to fully leverage the knowledge
and expertise that resides among its staﬀ.
IRS lacks performance data and measures to evaluate the eﬀectiveness of refundable tax
credit outreach eﬀorts. IRS has developed communications plans and strategies for each of
the following: EIP, RRC, the advance CTC, refundable tax credits, and the 2021 and 2022 ﬁling
seasons. However, these plans and strategies do not include metrics for assessing the usefulness
and accessibility of these outreach eﬀorts. Such metrics would inform management of these
eﬀorts and help focus resources on what works. According to federal standards on internal
controls, management should establish and operate monitoring activities and evaluate the results.
Moreover, management should use information that is suﬃcient, relevant, timely, and comparable
to make informed decisions and evaluate the agency’s performance in achieving key objectives.
According to IRS oﬃcials, IRS has an informal process for collecting and responding to partners’
and stakeholders’ feedback in real time. IRS oﬃcials said this allows them to adjust their
messaging through press releases, social media updates, and changes to their FAQ page to
address taxpayer questions and other issues as they learn about them. However, they are not
collecting or using other types of information that could be helpful for assessing the usefulness
or accessibility of their communications and outreach eﬀorts. For example, in the Taxpayer
Experience Strategy, IRS described plans to conduct three to ﬁve case studies in ﬁscal year 2021 to
assess whether improved and increased social media presence inﬂuences taxpayer behavior. IRS
oﬃcials said that they had not completed this survey because the oﬃce responsible for this review
had not yet been established. In a March 4, 2022, press release, IRS announced the establishment
of the new Taxpayer Experience Oﬃce, with plans to add staﬀ in the coming months.
243Department of the Treasury Internal Revenue Service, Taxpayer First Act Report to Congress, Publication 5426 Catalog

Number 74637F (Washington, D.C.: January 2021).

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Although the EIP and advance CTC outreach eﬀorts are now complete, IRS plays a key role and
devotes considerable resources to educating taxpayers as well as those who are not in contact
with the tax system about other refundable tax credits and eligibility. These include the EITC,
the Child Tax Credit, and Additional Child Tax Credit, which provide tax beneﬁts to millions of
taxpayers—many of whom are low-income—who are working and raising children. For the past
2 years, through three rounds of economic impact payments and 6 months of advance CTC
payments, IRS expanded its outreach and communication eﬀorts to a larger and diverse audience.
IRS’s outreach eﬀorts included ﬁrst-time ﬁlers as well as individuals who do not have a ﬁling
requirement and do not generally interact with the IRS. IRS’s communication eﬀorts informed
individuals about their eligibility for these payments and the claims process. Without suﬃcient,
relevant, timely, and comparable data on its outreach eﬀorts, IRS is missing information it could
use to develop performance metrics and assess which aspects of their communications and
outreach strategy were eﬀective in reaching diﬀerent audiences. Collecting information on the
usefulness and accessibility of the various outreach eﬀorts from the past 2 years could help
inform future IRS eﬀorts to educate individuals about refundable tax credits and more reliably
measure the success of such eﬀorts.

Methodology
To conduct this work, we examined Treasury and IRS data as of April 2022, in addition to federal
laws and agency guidance. We interviewed Treasury and IRS oﬃcials to determine whether the
data were suﬃciently reliable to describe the number and amount of payments disbursed, and
we determined that the data were suﬃciently reliable for this purpose. We also interviewed
Social Security Administration oﬃcials to learn about their coordination with Treasury and IRS
to inform and respond to the public about the advance CTC. We also interviewed several IRS
industry partners such as external organizations, for-proﬁt businesses, and software developers.
We conducted two discussion groups with 11 IRS Relationship Managers representing a mix of
regions and urban and rural areas to receive examples of IRS’s community outreach eﬀorts. Their
views cannot be generalized to all Relationship Managers.

Agency Comments
We provided Treasury, IRS, and the Oﬃce of Management and Budget with a draft of this
enclosure. Treasury and IRS provided comments, which are reproduced in appendix IX and X,
respectively. The Oﬃce of Management and Budget did not provide comments on this enclosure.
In its comments, reproduced in appendix X, Treasury neither agreed nor disagreed with our
ﬁrst recommendation. Treasury stated that it supports the goal of our recommendation and
continues to work with IRS to help ensure that all eligible families receive the remaining amount
of the CTC on their 2021 tax return. Additionally, Treasury stated it continues to work with IRS
on other credits such as the EITC and will coordinate with IRS regarding future outreach eﬀorts.
As we reported, Treasury and IRS have taken actions to inform individuals to ﬁle their taxes to
claim credits they were eligible to receive. Still, some key IRS oﬃcials responsible for stakeholder
partnerships, education, and communications said they were not always aware of Treasury’s
eﬀorts. The lack of collaboration and transparent communication between Treasury and IRS

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resulted in a missed opportunity to leverage resources and expertise on communication and
outreach eﬀorts.
In its comments, reproduced in appendix IX, IRS neither agreed nor disagreed with our other
recommendations. In regard to our recommendation to enhance internal collaboration, IRS stated
it has established roles and responsibilities for its communication and outreach functions. IRS
also stated that all relevant functions continue to be involved in a coordinated communication,
education, and outreach eﬀort designed to inform and educate taxpayers about the availability
of tax beneﬁts under the American Rescue Plan—including eligibility requirements—and steps
required to claim those beneﬁts.
As we reported, IRS has expanded its outreach and communication eﬀorts to reach a larger
and more diverse audience. However, IRS also missed opportunities to collaborate internally
and leverage employee expertise and resources to establish new community partnerships. For
example, IRS oﬃces overseeing stakeholder outreach and education independently maintain
contact lists of stakeholders and community partners, but there are no formal mechanisms for
documenting or disseminating this information. IRS’s new Taxpayer Experience Strategy includes
plans to reorganize its outreach and education functions to eliminate redundant activities, better
leverage best practices, realize economies of scale, and amplify its reach and eﬀectiveness with
messaging spanning across its service and compliance programs. Until IRS completes these
eﬀorts, it will continue to miss opportunities to fully leverage the knowledge and expertise that
resides among its staﬀ.
In regard to our recommendation to collect relevant data and develop performance metrics
to assess the eﬀectiveness of outreach and communications eﬀorts, IRS stated that it obtains
feedback through activities such as conducting surveys and monitoring social media trends. IRS
further stated that during crisis periods like the pandemic, this ad hoc feedback is critical for
communications and outreach leadership to quickly adapt and adjust eﬀorts to address emerging
issues. IRS also stated that in many situations, spending the time solving and addressing emerging
issues can be a much more eﬃcient use of limited staﬃng resources than simply logging data.
We recognize and have reported on the value of IRS’s informal processes for collecting and
responding to partners’ and stakeholders’ feedback. However, as we have also reported, IRS is not
collecting or using other types of information that could be helpful for assessing the usefulness
or accessibility of their communications and outreach eﬀorts. As the country moves beyond the
crisis of the pandemic, IRS has an opportunity to assess what aspects of their communications and
outreach eﬀorts were eﬀective in reaching diﬀerent audiences, including individuals experiencing
poverty or ﬁnancial hardship and in need of economic assistance. Collecting information on the
usefulness and accessibility of the various outreach eﬀorts from the past 2 years requires a more
comprehensive process than simply relying on anecdotal feedback. IRS should initiate steps to
collect suﬃcient, relevant, and comparable data on the usefulness of its communications and
outreach eﬀorts for refundable tax credits and use these data to develop performance metrics to
assess the eﬀectiveness of future and ongoing eﬀorts.

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GAO’s Ongoing Work
We continue to monitor IRS’s and Treasury’s progress to reconcile the advance CTC and EIP 3
payments as part of our 2022 ﬁling season audit. We will continue to monitor IRS’s and Treasury's
eﬀorts to improve communication and outreach to those without a ﬁling requirement.

GAO’s Prior Recommendations Related to Economic Impact Payments
and Advance Child Tax Credit
The table below presents our recommendations on the advance child tax credit and economic
impact payments from our prior bimonthly and quarterly CARES Act reports.

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Prior GAO Recommendations Related to Advance Child Tax Credit and Economic Impact Payments
Recommendation

Status

The Secretary of the Treasury, in coordination with the
Commissioner of Internal Revenue, should estimate the
number of individuals, including nonﬁlers, who are eligible
for advance child tax credit payments, measure the 2021
participation rate based on that estimate, and use that
estimate to develop targeted outreach and communications
eﬀorts for the 2022 ﬁling season; the participation rate
could include individuals who opt in and out of the advance
payments (October 2021 report).

Open-Not addressed. The Department of the
Treasury neither agreed nor disagreed with this
recommendation, stating that while it supports
the goal of the recommendation, it has not
estimated the eligible population for the advance
child tax credit. Treasury also stated that it and
the Internal Revenue Service (IRS) continue to
undertake advance child tax credit outreach,
education, and media campaign eﬀorts.

The Secretary of the Treasury, in coordination with the
Open—not addressed. The Department of the
Commissioner of Internal Revenue, should release interim
Treasury neither agreed nor disagreed with this
ﬁndings on the eﬀectiveness of the notices it sent in September recommendation and stated that it shares the
2020 to nonﬁlers who are potentially eligible for economic
underlying goal of reaching as many nonﬁlers as
impact payments; incorporate that analysis into IRS outreach possible to encourage them to claim Economic
eﬀorts as appropriate; and then, if necessary, release an
Impact Payment (EIP) online. However, Treasury
update based on new analysis after the 2021 ﬁling season (July does not plan to release any interim ﬁndings until
2021 report).
it completes its analysis. According to Treasury
oﬃcials, they needed additional time to process
and analyze data as the 2021 ﬁling season was
extended to October 15, 2021. Treasury oﬃcials
also said outreach eﬀorts for the advance
Child Tax Credit (CTC) included reminders that
individuals who had not ﬁled a 2020 federal
income tax return could be eligible to receive EIP
and recovery rebate credits (RRC).
According to Treasury oﬃcials, in December
2021, they started to analyze the income
tax ﬁling responses of individuals who were
mailed the ﬁrst-round EIP outreach letters in
September 2020. They said that preliminary
results—which could change as more data
become available—suggest that the letters to
non-ﬁlers modestly increased take-up of the ﬁrstround EIP.
The Commissioner of Internal Revenue should periodically
Closed—addressed. IRS took steps to implement
review control activities for issuing direct payments to
our recommendations, such as updating control
individuals to determine that the activities are designed and
procedures for issuing direct payments to
individuals. Additionally, individuals had the
implemented appropriately as IRS disburses a third round of
economic impact payments (EIP 3) and prepares for advance
opportunity to update their bank account
payments on the child tax credit. These control activities should information during the 2021 ﬁling season, which
include appropriate testing procedures, quality assurance
ran from February 12 through May 17, 2021.
reviews, and processes that ensure payments distributed by tax IRS oﬃcials said that the updated procedures
resulted in the transmission of a small number of
partners reach the intended recipients (March 2021 report).
EIP 3 payments to incorrect bank accounts. The
oﬃcials said they anticipated the same for July
2021 advance CTC payments.
The number of direct payments that were
rejected was over 5.3 million for the second
round of EIP and close to 2.5 million for EIP 3.
Additionally, over 500,000 direct payments were
rejected for the July 2021 advance CTC payments.

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The Secretary of the Treasury, in coordination with the
Open—partially addressed. Treasury and IRS
Commissioner of Internal Revenue, should begin tracking and agreed with this recommendation. According
publicly reporting the number of individuals who were mailed to Treasury oﬃcials, Treasury began analyzing
EIP notiﬁcation letter and subsequently ﬁled for and received data in January 2021 on those individuals who
an EIP and should use that information to inform ongoing
received a notice and subsequently ﬁled for, and
outreach and communications eﬀorts (November 2020 report). received, a ﬁrst-round EIP (EIP 1). According to
Treasury oﬃcials, they needed additional time
to process and analyze data, because the 2021
ﬁling season had been extended to October 15,
2021. Treasury oﬃcials also said that outreach
eﬀorts for the advance CTC included reminders
to individuals who had not ﬁled a 2020 federal
income tax return that they could be eligible to
receive EIPs and RRC.
According to Treasury oﬃcials, in December
2021, they started to analyze the income
tax ﬁling responses of individuals who were
mailed the ﬁrst-round EIP outreach letters in
September 2020. They said that preliminary
results—which could change as more data
become available—suggest that the letters to
non-ﬁlers modestly increased take-up of the ﬁrstround EIP.
The Secretary of the Treasury, in coordination with the
Commissioner of Internal Revenue, should make estimates
of eligible recipients who have yet to ﬁle for an EIP, and other
relevant information, available to outreach partners to raise
awareness about how and when to ﬁle for EIPs (September
2020 report).

Page 166

Open—partially addressed. Treasury and
IRS neither agreed nor disagreed with this
recommendation, but they took some actions
that were consistent with it. For example,
in September 2020, the agencies used tax
return information to identify nearly 9 million
individuals who had not received an EIP 1
and then notiﬁed these individuals that they
may be eligible for a payment. The letters also
provided instructions for requesting a payment.
In addition, IRS publicly released detailed zip
code data from the notices to help community
outreach partners with their own outreach
eﬀorts.
Treasury oﬃcials said they needed additional
time to process and analyze the data to
determine who did or did not claim an EIP or
RRC, because the 2021 ﬁling season had been
extended to October 15, 2021. Oﬃcials also said
that a challenge to conduct this analysis is the
information tax returns used in developing the
September 2020 notices do not contain enough
information to determine eligibility, limiting
Treasury’s ability to make a determination.
Treasury oﬃcials said that because of resource
constraints, Treasury and IRS focused on
delivering the advance CTC. In June 2021,
Treasury published a ﬁle containing, by zip code,
the number of children who may be eligible to
be claimed for the advance CTC but who had not
been claimed on a recent tax return.

GAO-22-105397

The Secretary of the Treasury, in coordination with the
Commissioner of Internal Revenue, should update and reﬁne
the estimate of eligible recipients who have yet to ﬁle for
an EIP to help target outreach and communications eﬀorts
(September 2020 report).

Open—partially addressed. Treasury and
IRS neither agreed nor disagreed with this
recommendation, but they took some actions
that were consistent with it. For example, in
January 2021, Treasury revised its estimate of
eligible recipients who had not yet ﬁled for an
EIP 1 to 8 million. According to Treasury oﬃcials,
this estimate is based on the 9 million notices
IRS sent in September 2020. Treasury oﬃcials
stated that some of the 9 million recipients likely
have since claimed the EIP, but Treasury did not
provide data supporting this claim.
Treasury oﬃcials said they needed additional
time to process and analyze the data to
determine who did or did not claim an EIP or RRC
because the 2021 ﬁling season was extended
to October 15, 2021. Oﬃcials also said that a
challenge to conducting this analysis is that the
information tax returns used in developing the
September 2020 notices do not contain enough
information to determine eligibility, limiting
Treasury’s ability to make these determinations.
Treasury oﬃcials said that because of resource
constraints, Treasury and IRS focused on
delivering the advance CTC. In June 2021,
Treasury published a ﬁle containing, by zip code,
the number of children who may be eligible to
be claimed for the advance CTC but who had not
been claimed on a recent tax return.
According to Treasury oﬃcials in December
2021, they started to analyze the income
tax ﬁling responses of individuals who were
mailed the ﬁrst-round EIP outreach letters in
September 2020. They said that preliminary
results—which could change as more data
become available—suggest that the letters to
non-ﬁlers modestly increased take-up of the ﬁrstround EIP.

The Commissioner of Internal Revenue should consider costeﬀective options for notifying ineligible recipients on how to
return payments (June 2020 report).

Closed—addressed. Treasury and IRS took steps
to implement our recommendation, such as
requesting on the IRS website that individuals
voluntarily mail the appropriate EIP amount sent
to decedents back to IRS, for both electronic and
paper check payments. Treasury has also held
and canceled payments made to decedents,
along with payments that have been returned.
As of April 30, 2021, around 57 percent (just over
$704 million) of the $1.2 billion in EIP 1 sent to
deceased individuals had been recovered.
As of March 2021, Treasury and IRS had not
taken any further action to recoup unreturned
payments to decedents. IRS oﬃcials determined
that further actions, such as initiating erroneous
refund cases against decedents’ estates that had
not returned payments, could be burdensome to

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taxpayers, the federal court system, and IRS. As
a result, IRS oﬃcials concluded that doing so was
not prudent at that time.
Source: GAO. | GAO-22-105397

Related GAO Products
Tax Filing: 2021 Performance Underscores Need for IRS to Address Persistent Challenges.
GAO-22-104938. Washington, D.C.: April 11, 2022.
Tax Filing: Preliminary Observations on IRS’s Eﬀorts to Address Persistent Challenges. GAO-22-105802.
Washington, D.C: February 17, 2022.
Refundable Tax Credits: Comprehensive Compliance Strategy and Expanded Use of Data Could
Strengthen IRS's Eﬀorts to Address Noncompliance. GAO-16-475. Washington, D.C.: May 27, 2016.
Identity Theft: IRS Needs to Strengthen Taxpayer Authentication Eﬀorts. GAO-18-418. Washington, D.C.:
June 22, 2018.
Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.:
September 10, 2014.
Managing For Results: Key Considerations for Implementing Interagency Collaborative Mechanisms.
GAO-12-1022. Washington, D.C: September 27, 2012.
Contact information: James R. McTigue, Jr., (202) 512-6806, mctiguej@gao.gov

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Economic Injury Disaster Loan Program
The Small Business Administration has partially addressed the four prior recommendations we
made for the Economic Injury Disaster Loan program for COVID-19, to assess and manage fraud
risks, develop an oversight plan, and develop and implement portfolio-level data analytics. In
December 2021, the agency provided a fraud risk assessment that had been prepared by its
contractor, and in February 2022, it designated an antifraud entity that will be responsible for
developing a comprehensive antifraud action plan. In March 2022, agency oﬃcials said they were
working with a vendor to develop portfolio-level analytics. Looking forward, lessons learned from
the program—which include the importance of incorporating strong internal controls from the
beginning of the program, taking steps to assess and manage fraud risks, and ensuring clear
communication with small businesses—could be applied to future emergency lending and grant
programs.
Entities involved: Small Business Administration

Background
Since March 2020, the Small Business Administration (SBA) has provided over $348 billion in
loans and $7.6 billion in grants (called advances) through the Economic Injury Disaster Loan
(EIDL) program to assist small businesses and nonproﬁts experiencing economic injury caused
by COVID-19.244 SBA provided these funds as a result of legislative actions and changes to certain
EIDL program application requirements that were in place under the Small Business Act (see
table).
For example, in the Paycheck Protection Program and Health Care Enhancement (PPPHCE) Act,
enacted on April 24, 2020, Congress appropriated $50 billion in loan credit subsidies for SBA
to cover the cost of making EIDL loans.245 Additionally, in the CARES Act and the PPPHCE Act,
Congress appropriated $20 billion for EIDL advances, a new component of the program that
provided direct payments of up to $10,000 to qualifying small businesses that did not have to be
repaid.246 On July 11, 2020, SBA announced that it had fully allocated the $20 billion in funding for
EIDL advances.
On December 27, 2020, under the Consolidated Appropriations Act, 2021, Congress appropriated
an additional $20 billion for targeted EIDL advances to eligible entities with 300 or fewer

244All references to the EIDL program in this report refer to the program administered in response to the COVID-19

pandemic unless otherwise noted.

245EIDL loans are limited by statute to a maximum of $2 million. However, SBA set lower maximum amounts for periods

in 2020 and 2021. From March 16, 2020 through May 3, 2020, SBA limited the maximum loan amount to $500,000,
even if the calculated economic injury exceeded that amount. From May 4, 2020, through April 5, 2021, SBA limited
the maximum loan amount to $150,000. Beginning on April 6, 2021, SBA increased the loan limit back to $500,000. In
September 2021, SBA increased the loan limit to $2 million.
246When implementing the advances under the CARES Act, SBA provided advances in the amount of $1,000 per

employee up to a maximum of $10,000.

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employees that are located in low-income communities and experienced an economic loss of
greater than 30 percent.247 Qualifying entities may receive up to $10,000 in targeted advances.248
On March 11, 2021, under the American Rescue Plan Act of 2021 (ARPA), Congress appropriated
additional funding for entities that qualiﬁed for targeted EIDL advances under the Consolidated
Appropriations Act, 2021. Congress appropriated an additional $10 billion for eligible entities
that have not received the full amount of $10,000 in targeted EIDL advances. Congress also
appropriated $5 billion to provide an additional $5,000 in supplemental targeted advances
for eligible entities in low-income communities that suﬀered an economic loss greater than
50 percent and employed not more than 10 employees. The $5,000 is available in addition
to advances obtained under the CARES Act or targeted advances under the Consolidated
Appropriations Act, 2021.
ARPA also appropriated $70 million for EIDL loans and additional funding for SBA administrative
expenses for several programs, including the targeted advance programs and the EIDL loan
program. The Infrastructure Investment and Jobs Act, signed into law on November 15, 2021,
rescinded $13.5 billion of the EIDL loan appropriations and approximately $17.6 billion from the
targeted EIDL advance appropriations.249

247The Consolidated Appropriations Act, 2021 deﬁnes economic loss as the amount by which the gross receipts of

the covered entity declined during an 8-week period between March 2, 2020, and December 31, 2021, relative to a
comparable 8-week period immediately preceding March 2, 2020, or during 2019. For seasonal businesses SBA shall
determine the economic loss as appropriate.
248These eligible entities qualify for the full amount of $10,000 in targeted advances—regardless of their number of

employees—minus the amount they received under the CARES Act advances, which SBA based on employee numbers.
249The Infrastructure Investment and Jobs Act rescinded the unobligated amount up to $17.6 billion for the targeted

EIDL advances provided under the Consolidated Appropriations Act, 2021, but according to SBA only approximately
$15.8 billion was unobligated at the time of rescission.

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Key Legislation Aﬀecting the Economic Injury Disaster Loan (EIDL) Program in Response to COVID-19
Legislation and date enacted

Appropriation amount

Coronavirus Preparedness
and Response Supplemental
Appropriations Act, 2020 March 6,
2020

None

• Deemed COVID-19 a disaster under the Small
Business Act, making economic injury caused by
COVID-19 eligible for EIDL loans

CARES Act

$10 billion for EIDL advances

• Authorized the Small Business Administration
(SBA) to provide eligible applicants with EIDL
advances of up to $10,000 that do not need to
be repaid

March 27, 2020

Key provisions and changes

• Removed the requirement that applicants must
not be able to obtain credit elsewhere
• Expanded eligibility for the EIDL program
• Restricted SBA from obtaining federal tax
transcripts as part of the EIDL application
process
Paycheck Protection Program and
Health Care Enhancement Act

• Expanded EIDL eligibility to agricultural
enterprises previously ineligible

April 24, 2020

$10 billion for EIDL advances
and $50 billion for loan
subsidies

Consolidated Appropriations Act,
2021

$20 billion for targeted EIDL
advances

• Removed restriction that SBA cannot obtain
federal tax transcripts as part of the EIDL
application process

December 27, 2020

• Extended deadline to apply for EIDL loans and
advances by 1 year, from December 31, 2020, to
December 31, 2021
• Provided targeted advances up to the full
amount of $10,000 to certain eligible businesses
and nonproﬁts that have fewer than 300
employees, are located in low-income areas, and
have experienced at least a 30 percent loss in
income
American Rescue Plan Act of 2021
March 11, 2021

$10 billion for targeted EIDL
advances and $5 billion for
supplemental targeted EIDL
advances

• Provided additional funding for targeted
advances of up to $10,000 for the same entities
eligible under the Consolidated Appropriations
Act, 2021
• Provided an additional $5,000 in supplemental
targeted advances for eligible entities in lowincome communities that suﬀered economic
loss of greater than 50 percent and employed
not more than 10 employees

The Infrastructure Investment and None
Jobs Act

• Rescinded the unobligated amount up to about
$17.6 billion for the targeted EIDL advances

November 15, 2021

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Legislation and date enacted

Appropriation amount

Key provisions and changes
provided under the Consolidated Appropriations
Act, 2021

Source: GAO analysis of legislation. | GAO-22-105397

Overview of Key Issues
Recent changes and current status of EIDL. On December 31, 2021, SBA stopped accepting
both new loan and targeted advance applications. However, already approved borrowers can
still request increases up to their maximum eligible loan amount for up to 2 years after their
loan origination date, or until the funds are exhausted. Similarly, SBA stopped accepting new
reconsideration and appeal requests for EIDL applications after December 31, 2021. It will
continue to review requests received on or before that date if the reconsideration or appeal
was received within the time frames in the regulation—6 months from the date of decline for
reconsiderations and 30 days from the date of reconsideration decline for appeals, unless funding
is no longer available.
As of March 3, 2022, SBA had approved more than 3.9 million EIDL loans totaling about $349
billion. According to SBA, the agency has approved more EIDL loans for COVID-19 than for all
previous disasters combined. It has assisted more than 3.8 million businesses employing more
than 20 million people. SBA has also funded 603,953 targeted advances totaling about $5.3 billion
and 455,229 supplemental targeted advances totaling about $2.3 billion as of March 3, 2022.
On March 15, 2022, SBA granted an additional 6-month deferment of principle and interest
payments to SBA’s existing COVID EIDL borrowers. Thus, borrowers approved for COVID EIDL loans
in calendar years 2020, 2021, and 2022 have a total deferment of 30 months.
Recent data and trends in processing. SBA had a backlog of millions of applications for both
loan modiﬁcations and for targeted and supplemental targeted advances, according to our
analysis of data from the last 6 months of the program, June 1, 2021 through December 31, 2021.
(See ﬁgure.) Both of these backlogs largely resolved by September 2021. Speciﬁcally, applications
for loan modiﬁcations “in processing” (those SBA had received but not yet made loan decisions for)
peaked in June 2021 and remained at more than one million applications until mid-August 2021.
Similarly, the backlog of applications for targeted and supplemental targeted advances peaked
and remained at more than one million until September 2021.

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Number of EIDL Applications in Processing by Type and Week, June 1, 2021 through Dec. 31, 2021

Our analysis for the same 6-month period also showed the following:
• SBA approved only 6 percent of new EIDL loan applications, while automatically declining 60
percent of new applications because of reasons including poor credit.250
• SBA approved 22 percent of the applications for targeted and supplemental targeted
advances.251
• SBA approved 59 percent of applications for loan modiﬁcations for existing EIDL borrowers,
providing about $140 billion in additional proceeds to borrowers.252
• Of applicants who had their original application denied by SBA, 60 percent also had their
requests for reconsideration or application to appeal denied by SBA.253

250We excluded from this calculation the 70,936 withdrawn applications. Applications can also be automatically

declined because of fraud alerts, the lack of an economic injury, or if the loans were to be used for a prohibited
activity.
251We excluded from this calculation the 115,658 withdrawn applications.
252We excluded from this calculation the 141,934 withdrawn applications.

253We excluded from this calculation the 3,458 withdrawn applications. Declined applicants can request that SBA

reconsider their applications. Applicants who have their reconsideration requests denied can appeal SBA’s decision.
We reported in February 2020 that SBA received about 15,000 requests for reconsideration following the 2017
hurricanes. Of the requests SBA accepted, about half had their applications approved, about 30 percent were
denied, and about 20 percent were withdrawn.

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Lessons learned for future pandemic-related EIDL programs. In response to the adverse
eﬀects of the pandemic on small businesses, Congress expanded existing SBA programs, including
the EIDL program, and appropriated additional funding to help aﬀected businesses. To help these
businesses, SBA rapidly processed loans and advances to millions of small businesses aﬀected by
COVID-19. Our evaluation of SBA’s implementation of EIDL in response to COVID-19, along with
challenges highlighted by small business industry group representatives and oﬃcials from the SBA
Oﬃce of Inspector General (OIG), oﬀer potential lessons learned for future emergency lending and
grant programs.
Incorporate strong internal controls from the beginning of the program. In part to help small
businesses quickly, the EIDL program in response to COVID-19 was implemented with fewer
safeguards than the traditional EIDL program. For example, SBA normally uses applicants’ federal
tax returns to validate elements in an EIDL application, but the CARES Act prohibited SBA from
obtaining these returns from applicants.254 Although SBA stated that its internal controls at the
time were robust, oﬃcials acknowledged that it was challenging to verify applicant eligibility for
EIDL without the ability to obtain tax records.
Our work as well as the work of the SBA OIG indicated potential gaps in internal control that
may have led to fraud and the provision of EIDL funding to ineligible entities. As we reported in
January 2021, SBA had provided about $182 million in loans and advances to potentially ineligible
businesses as of September 30, 2020.255 Similarly, the SBA OIG reported in October 2020 that its
preliminary review revealed strong indicators of widespread potential fraud in the program and
that there were indications of deﬁciencies in internal control.
SBA has begun taking steps to address the recommendation we made in January 2021 to help
mitigate the likelihood and impact of fraud. Speciﬁcally, in response to our recommendation to
develop and implement portfolio-level data analytics across EIDL program loans and advances,
SBA has started implementing fraud indicators for EIDL application data. In addition, when SBA
transitioned the COVID EIDL program from the Oﬃce of Disaster Assistance to the Oﬃce of Capital
Access (OCA) in July 2021, oﬃcials told us that OCA implemented additional controls, such as
making the log-in process more secure, to help detect potential fraud. However, by incorporating
stronger controls from the beginning of the program, SBA could have prevented additional
fraudulent applications from getting approved.
Conduct a risk assessment when designing and implementing a new EIDL program. SBA has a process
to identify and address potential risks in programs, but the process was not followed for EIDL in
response to COVID-19.256 Within SBA, two oﬃces are responsible for working with program oﬃces
254The CARES Act restricted SBA from obtaining federal tax transcripts—typically a component of SBA’s review of a
disaster loan application—as part of the EIDL application process. The Consolidated Appropriations Act, 2021 removed
this restriction. SBA said they had other controls available, such as validations from secretaries of state to conﬁrm that
the borrowers were in business at the time they claimed they were.

255SBA had provided about 5,000 advances totaling about $26 million to potentially ineligible businesses in three types

of industries—adult entertainment, casino gambling, and marijuana retail—as of July 14, 2020. In addition, SBA had
approved at least 3,000 loans totaling about $156 million to businesses that SBA policies state were ineligible for the
EIDL program, such as real estate developers and multilevel marketers, as of September 30, 2020.

256In September 2015, we recommended that SBA develop its enterprise risk management consistent with GAO's risk

management framework and document the speciﬁc steps that the agency planned to take to implement its enterprise

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to identify and respond to potential risks. More speciﬁcally, the Oﬃce of Continuous Operations
and Risk Management is responsible for, among other things, agency-wide recovery response
for disasters and the evaluation and assessment of SBA’s critical risks and nonﬁnancial internal
controls. In addition, according to an SBA oﬃcial, when SBA implements a new program, the
Oﬃce of Internal Controls coordinates with the program oﬃce to plan proper internal controls
and ensure they are implemented. However, neither oﬃce was involved in the design or initial
implementation of program controls for EIDL in response to COVID-19.
In addition, according to SBA oﬃcials, formal risk assessments for EIDL did not occur, as they
usually do, during program planning. As part of its responsibilities, the Oﬃce of Continuous
Operations and Risk Management oversees SBA’s Enterprise Risk Management program.257
According to SBA guidance, program oﬃces should identify and assess potential risks to a
program, both initially and on an ongoing basis, to identify new, emerging, or changing risks.
Potential risks include fraud, improper payments, infrastructure (such as information technology)
problems, funding that is insuﬃcient to address program need, or issues with external audits.258
Once risks have been identiﬁed and assessed, SBA guidance states that a program oﬃce should
strategize its response to minimize the risks and then implement and monitor those plans.
Due to the emergency nature of the program, the EIDL risk assessment did not follow SBA
guidance, but rather, according to SBA oﬃcials, was conducted informally. Oﬃcials also
acknowledged that the program faced some nonfraud risks, such as repayment deferment. By
including expertise across SBA and following its standard practices regarding risk assessments,
SBA could have identiﬁed and potentially minimized some risks and challenges, such as the risk
that available funding would not be suﬃcient to meet the needs of small businesses that sought
assistance (discussed below). Similarly, completing a risk assessment that included a risk tolerance
could have helped SBA better determine what controls needed to be in place, given the need to
take action rapidly under the circumstances.
Take early steps to assess and manage fraud risks. While the program began making loans and
advances in March 2020, it did not begin to formally assess the potential fraud risks to the
program until May 2021. In March 2021, we reported growing concerns about fraud risk
management in the EIDL program. Speciﬁcally, we noted that the Department of Justice and law
enforcement agencies had reported ongoing eﬀorts related to potential fraud. Law enforcement
oﬃcials we spoke with for that report noted a large number of ongoing investigations and hotline
complaints related to loans made under the EIDL program and reported systemic patterns of
fraud across EIDL investigations.

risk management process. In response to our recommendation, SBA developed additional guidance on its process in
June 2016.
257Enterprise risk management is an agency-wide approach to addressing the full spectrum of the organization’s

signiﬁcant risks by understanding the combined impact of risks as an interrelated portfolio, rather than addressing risks
only within silos.
258SBA’s ﬁscal year 2020 and 2021 consolidated ﬁnancial statements received a disclaimer of opinion, meaning the

auditor was unable to express an opinion due to insuﬃcient evidence. As the basis for the disclaimers, the auditor
reported that SBA was unable to provide adequate evidence to support a signiﬁcant number of transactions and account
balances due to inadequate processes and controls related to its implementation of its programs authorized under the
CARES Act and related legislation, including EIDL.

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Speciﬁcally we reported in March 2021 that SBA had not conducted a comprehensive fraud risk
assessment in alignment with leading practices, nor documented its antifraud strategy outlining
a strategic approach to managing fraud risks to EIDL. Consequently, we recommended in March
2021 that SBA (1) conduct and document a fraud risk assessment for the EIDL program and
(2) develop a strategy that outlines speciﬁc actions to address assessed fraud risks in the EIDL
program on a continuous basis.
SBA has begun taking steps to implement these recommendations. For example, an SBA
contractor conducted a fraud risk assessment for EIDL in October 2021. The assessment
found that even though SBA implemented controls to minimize fraud over the course of the
program—such as implementing potential fraud ﬂags that require manual review and approval
prior to the disbursement of EIDL loans and verifying the identity of businesses through public
records—EIDL continued to be susceptible to fraud risks that require mitigation and management.
The contractor identiﬁed 21 active fraud risks in EIDL and made four recommendations to SBA
to aid the agency in establishing a fraud governance process and inform its fraud tolerance
approach.259
If SBA had conducted a fraud assessment earlier in the program, it could have targeted its
controls to further minimize risks. Although the timing of the assessment limited its usefulness
for managing the program, SBA could use the results of this fraud assessment to inform future
emergency lending and grant programs. Based on our initial review of the assessment, SBA
adhered to many fraud risk management leading practices, but missed key steps such as
determining its fraud risk tolerance.
In addition, we found in March 2021 that one factor that contributed to the lack of a timely fraud
risk assessment was that while SBA’s Oﬃce of Continuous Operations and Risk Management
oversees risk management for the full spectrum of program risks, SBA did not have a dedicated
entity to lead fraud risk management activities. As discussed in GAO’s Fraud Risk Framework,
it is a leading practice to designate an entity to design and oversee fraud risk management
activities. In carrying out its role, the antifraud entity, among other things, manages the fraud risk
assessment process. According to documentation provided by SBA, the agency designated such an
entity in February 2022 that is responsible for the oversight and coordination of SBA’s fraud risk
prevention, detection, and response activities.
Make informed decisions on program design to meet borrower needs. SBA implemented EIDL for
COVID-19 based on legislative actions that changed traditional EIDL program requirements in
place under the Small Business Act. SBA was faced with making decisions about the design of the
program, primarily regarding how to maximize the extent that loans would meet borrower needs.
For example, SBA changed the limits on the caps for EIDL loans several times as it attempted to
assist as many borrowers as possible but may have hampered some borrowers from obtaining
suﬃcient funds for their economic losses. SBA’s standard operating procedures for EIDL state
that the legislative limit of $2 million applies to EIDLs, depending on the ﬁnancial eﬀect of the
disaster.260 According to SBA oﬃcials, when SBA ﬁrst began to provide EIDLs related to COVID-19,
it limited the loans to 6 months of working capital up to a maximum of $500,000. As SBA began
259As noted below, SBA is taking steps to complete its fraud risk assessment including designating an antifraud entity.

260These standard operating procedures apply to the EIDL program broadly, not only in response to COVID-19.

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to process thousands of applications, the agency lowered the cap to $15,000 for several days as
it monitored available funding before restoring the maximum to $500,000. When SBA reopened
its EIDL application portal on May 4, 2020, it established the maximum loan amount at $150,000,
and on April 6, 2021, SBA increased the loan limit back to $500,000. In September 2021, SBA
announced an increase in the limit to $2 million.
SBA oﬃcials said they provided assistance to as many small businesses as possible with the
funds available, and the program began allowing requests for increases in the original loan
amounts. However, for some small businesses, in particular larger small businesses, loan caps
were insuﬃcient to cover operating expenses. We reported in July 2021 that for the initial $500,000
loan limit in place from March 16, 2020, through May 3, 2020, SBA approved about 7,000 EIDL
loans in the amount of $500,000 for applicants with an economic injury greater than $500,000. The
changes in loan limits may have placed these businesses at risk of shuttering because they did not
obtain timely funding to cover a better part of their economic losses.
By the deadline for accepting new applications for the EIDL program in response to COVID-19, as
discussed above, $13.5 billion of EIDL loan appropriations were unused and had been rescinded.
Implementing an approach that maximized meeting the loan demands earlier in the program
could have aﬀorded more funding to small businesses and avoided the billions in appropriations
that were rescinded.261
Ensure clear communication with small businesses. Although SBA moved quickly under challenging
circumstances to provide EIDL funding to applicants, we reported in July 2021 that lack of
important program information and application status put pressure on SBA’s resources and
negatively aﬀected applicants’ experiences. Despite distributing information about the EIDL
program through various channels including media, its website, and resource partners, like Small
Business Development Centers (SBDCs), SBA did not communicate key information (such as
processing times and loan limits) and loan status to potential and actual applicants in an eﬀective,
consistent, or timely manner. For example, as discussed above, SBA lowered the loan maximum
to $150,000 in May 2020, but did not provide this information on its website, in its press releases,
or within the EIDL application. The ﬁrst time SBA broadly announced the $150,000 loan maximum
was in February 2021 when it updated its FAQ document. Consequently, we recommended that
SBA develop a comprehensive strategy for communicating with potential and actual program
applicants in the event of a disaster.
While SBA had not completed this strategy as of December 2021, it has taken steps and
communication has improved over time, albeit to varying degrees, according to industry groups
we met with that represent small businesses. For example, industry group representatives
noted that SBA did a good job providing information related to program and policy changes
in September 2021. However, based on our discussions with these groups in January 2022,
borrowers continued to face challenges with customer service, including the inability to
communicate with an SBA representative about their speciﬁc applications. By providing clear
261In addition, approximately $15.8 billion of appropriations for targeted and supplemental targeted EIDL advances
were unused and had been rescinded by the deadline for accepting new applications for the EIDL program in response
to COVID-19. By statute, these advances were limited to entities in low-income areas suﬀering economic losses greater
than 30 percent and 50 percent, respectively. We reported in January 2022 that SBA oﬃcials said that demonstrating the
requisite revenue decline was burdensome for borrowers.

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communication, SBA could prevent confusion among applicants and lessen the burden on its
Customer Service Center, which was often overwhelmed with calls. Similarly, SBA could better
leverage SBDCs to facilitate communication on the program to participants, given their role to
partner with the agency in providing support to small businesses.

Methodology
To conduct this work, we reviewed our prior reports on EIDL and reports issued by the SBA OIG. In
addition, we analyzed SBA’s data on the processing of loans, targeted advances, and supplemental
targeted advances from June 1, 2021 through December 31, 2021. We assessed the reliability of
SBA data by interviewing SBA oﬃcials. We determined that the data were suﬃciently reliable for
reporting the status of EIDL loans and targeted advances. We also interviewed small business
industry group representatives and SBA oﬃcials.

Agency Comments
We provided SBA and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
SBA provided technical comments, which we incorporated as appropriate. OMB did not provide
comments on this enclosure.

GAO’s Ongoing Work
Our work on the EIDL program is ongoing. We continue to examine the fraud risks in the program.
We will also continue to monitor SBA’s progress toward developing and implementing corrective
actions to address the material weaknesses identiﬁed in December 2020 and November 2021 by
its independent ﬁnancial statement auditor.

GAO’s Prior Recommendations
The table below presents our recommendations on the EIDL program from prior bimonthly and
quarterly CARES Act reports.

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Prior GAO Recommendations Related to the Economic Injury Disaster Loan Program
Recommendation

Status

The Administrator of the Small Business Administration (SBA)
should conduct and document a fraud risk assessment for the
Economic Injury Disaster Loan (EIDL) program. (March 2021
report)

Open—partially addressed. SBA agreed with
the recommendation, stating that it would work
to ensure that a fraud risk assessment for the
EIDL program is completed. In December 2021,
SBA provided a fraud risk assessment that had
been prepared by its contractor. Based on our
initial review of the assessment, it adhered to
many fraud risk management leading practices,
but for example, SBA did not determine its
fraud risk tolerance as called for by leading
practices. In February 2022, SBA designated an
antifraud entity that, according to SBA oﬃcials,
would be responsible for determining a risk
tolerance and implementing the fraud risk
assessment’s recommendations. We will continue
to monitor the agency's actions to address this
recommendation.

The Administrator of SBA should develop a strategy that
outlines speciﬁc actions to address assessed fraud risks in the
EIDL program on a continuous basis. (March 2021 report)

Open—partially addressed. SBA agreed with
the recommendation, stating that it would
work to ensure that fraud risks are monitored
on a continuous basis. In December 2021,
SBA provided a fraud risk assessment, which
would inform an antifraud strategy. In February
2022, SBA designated an antifraud entity that
is responsible for oversight and coordination
of SBA’s fraud risk prevention, detection, and
response activities. SBA oﬃcials previously told
us that once designated, the entity would work
to develop an agency-wide comprehensive
antifraud action plan. We will continue to
monitor the agency's actions to address this
recommendation.

The Administrator of SBA should implement a comprehensive Open—partially addressed. SBA agreed with the
oversight plan to identify and respond to risks in the EIDL
recommendation, stating that it will implement
a comprehensive oversight plan. In February
program to help ensure program integrity, achieve program
eﬀectiveness, and address potential fraud. (March 2021 report) 2022, SBA designated an antifraud entity that
is responsible for oversight and coordination
of SBA’s fraud risk prevention, detection,
and response activities We will continue to
monitor the agency's actions to address this
recommendation.
The Administrator of SBA should develop and implement
Open—partially addressed. At the time of our
portfolio-level data analytics across EIDL program loans and
report, SBA neither agreed nor disagreed with
advances made in response to COVID-19 as a means to detect this recommendation. In December 2021, SBA
potentially ineligible and fraudulent applications. (January 2021 stated that the agency had implemented fraud
report)
indicators for EIDL application data. SBA also
stated that the agency shared these indicators
with the Pandemic Response Accountability
Committee for review. In March 2022, SBA stated
that it was working with a vendor to develop

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Recommendation

Status
portfolio-level analytics. We will continue to
monitor the agency's actions to address this
recommendation.

Source: GAO. I GAO-22-105397

Related GAO Products
Economic Injury Disaster Loan Program: Additional Actions Needed to Improve Communication with
Applicants and Address Fraud Risks. GAO-21-589. Washington, D.C.: July 30, 2021.
Small Business Administration: Disaster Loan Processing Was Timelier, but Planning Improvements and
Pilot Program Evaluation Needed. GAO-20-168. Washington, D.C.: February 7, 2020.
Small Business Administration: Leadership Attention Needed to Overcome Management Challenges.
GAO-15-347. Washington, D.C.: September 22, 2015.
A Framework for Managing Fraud Risks in Federal Programs, GAO-15-593SP. Washington, D.C.: July 28,
2015.
Contact information: William B. Shear, (202) 512-8678, shearw@gao.gov

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Federal Reserve Lending Facilities
As of March 31, 2022, the Federal Reserve’s lending programs (also known as facilities) supported
by CARES Act funds had about $16.9 billion in outstanding assets and about $18.8 billion in
outstanding loans borrowed from the Federal Reserve Banks. As of the same date, only the Main
Street Lending Program’s facilities had reported losses—a total of about $23 million—but these
and any future losses are covered by the funding that the Department of the Treasury invested in
the Main Street facilities pursuant to the CARES Act. The Federal Reserve’s oversight of the facilities
is ongoing and focuses on previously identiﬁed risk areas.
Entities involved: Department of the Treasury, Federal Reserve System

Background
In response to the economic eﬀects of COVID-19, the CARES Act authorized at least $454 billion
for Treasury to support the Board of Governors of the Federal Reserve System (Federal Reserve)
in establishing facilities to provide liquidity to the ﬁnancial system. With the Secretary of the
Treasury’s approval, the Federal Reserve established nine facilities supported by CARES Act
funding.262 These programs were established to provide liquidity to the ﬁnancial system that
supports lending to states, tribes, municipalities, eligible businesses, and nonproﬁt organizations
by purchasing assets (such as qualifying corporate bonds) from, or initiating lending to, eligible
entities. In accordance with the Consolidated Appropriations Act, 2021, all nine facilities stopped
purchasing assets or extending credit by January 2021. The facilities conducted a total of about
$41 billion in transactions.
The Federal Reserve also established four facilities with the Treasury Secretary’s approval that did
not receive CARES Act-appropriated funds.263 These non-CARES Act facilities conducted a total of
$403 billion in transactions. They were designed to provide liquidity to the ﬁnancial sector and
businesses. The last of these facilities stopped extending credit on July 30, 2021.

Overview of Key Issues
Status of facilities. As of March 31, 2022, the nine CARES Act facilities had about $16.9 billion in
outstanding assets, of which about $12.7 billion were held by the Main Street Lending Program.
The facilities also had about $18.8 billion in outstanding loans borrowed from the Federal Reserve
Banks managing the facilities. For the non-CARES Act facilities, as of March 31, 2022, a total of
about $23.5 billion remained outstanding in loans that eligible lenders borrowed through the
Paycheck Protection Program Liquidity Facility—the facility established to encourage use of the
262The facilities were authorized under Section 13(3) of the Federal Reserve Act, which permits the Federal Reserve to

provide emergency lending, and were approved by the Secretary of the Treasury. The CARES Act-supported facilities
were the Primary Market Corporate Credit Facility, Secondary Market Corporate Credit Facility, Municipal Liquidity
Facility, Term Asset-Backed Securities Loan Facility, and ﬁve facilities under the Main Street Lending Program—the Main
Street New Loan Facility, Main Street Priority Loan Facility, Main Street Expanded Loan Facility, Nonproﬁt Organization
New Loan Facility, and Nonproﬁt Organization Expanded Loan Facility.

263The facilities not supported with CARES Act funds were the Commercial Paper Funding Facility, Money Market Mutual

Fund Liquidity Facility, Primary Dealer Credit Facility, and the Paycheck Protection Program Liquidity Facility.

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Paycheck Protection Program.264 The other three non-CARES Act facilities have repaid all of their
loans to the Federal Reserve Banks.
CARES Act facilities. For the facilities that received CARES Act funds, outstanding assets—that is,
assets (for example, corporate and municipal bonds) the facilities purchased and had not disposed
of through sale or other means—peaked between November 2020 and January 2021.265 These
outstanding assets have since declined, and as of August 31, 2021, all of the Secondary Market
Corporate Credit Facility’s holdings in exchange-traded funds and corporate bond assets had
either matured or been sold.266 Additionally, of the two entities that borrowed from (sold eligible
notes to) the Municipal Liquidity Facility, one has repaid all of its borrowings.267 See the ﬁgure
below for outstanding assets held by the facilities as of March 2022.
Outstanding Assets of Federal Reserve Lending Facilities Supported by CARES Act Funding, June 2020–Mar. 2022

Note: Beginning on Feb. 24, 2021, the amount of the Main Street Lending Program’s outstanding assets is reported net of
an allowance for loan losses, which is updated quarterly. The Main Street lending facilities purchased a participation interest
in newly issued eligible loans that eligible lenders made to eligible small and midsized for-proﬁt borrowers and nonproﬁt
organizations.

The Federal Reserve analyzes all of the CARES Act facilities on a quarterly basis to determine if
it is necessary to set aside an allowance for potential loan losses in accordance with generally
accepted accounting principles. As of December 31, 2021, the most recent data available, only
the Main Street Lending Program reﬂected a loan loss allowance, in the amount of approximately
264The Federal Reserve established the Paycheck Protection Program Liquidity Facility under its Section 13(3) authority

to encourage lender participation in the Paycheck Protection Program. Although the Paycheck Protection Program was
established through the CARES Act, the Paycheck Protection Program Liquidity Facility did not receive support through
CARES Act funds.
265The Term Asset-Backed Securities Loan Facility provided loans in exchange for eligible asset-backed securities.
266The Primary Market Corporate Credit Facility did not conduct any transactions.

267As of January 2022, the State of Illinois had repaid all of its borrowings from the Municipal Liquidity Facility.

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$2 billion.268 Of this amount, a speciﬁc allowance of $1.1 billion is for loans for which it has been
determined to be probable that the program will be unable to collect all of the contractual interest
and principal payments as scheduled in the loan agreement. The remaining $905 million is a
general allowance for all other outstanding loans under the program.
As of March 31, 2022, the most recent data available, the Main Street facilities had reported about
$23 million in actual losses. According to Federal Reserve oﬃcials, the losses were recognized
for a small number of loans due to credit events, such as a bankruptcy ﬁling or other adverse
business-related event that led to the acceleration of the loan by the lender or made liquidation or
bankruptcy appear imminent. These, and any future losses, are covered by the funding Treasury
invested in the Main Street facilities pursuant to the CARES Act. As of January 2022, a total of about
$21.3 billion of Treasury’s investment was available to cover losses incurred by the CARES Act
facilities. In its most recent report to Congress in April 2022, the Federal Reserve said it continued
to expect that none of the facilities will result in a loss to the Federal Reserve.
Non-CARES Act facilities. As of October 14, 2020, the Commercial Paper Funding Facility had
fully repaid all loans used to purchase commercial paper (short-term debt issued primarily by
corporations). As of May 9, 2021, the Primary Dealer Credit Facility and the Money Market Mutual
Fund Liquidity Facility had also fully repaid all loans to Federal Reserve Banks. None of the three
facilities resulted in a loss to the Federal Reserve. According to the Federal Reserve’s combined
annual ﬁnancial statement, as of December 31, 2021, the Paycheck Protection Program Liquidity
Facility did not require an allowance for loan losses. As of March 31, 2022, a total of about $23.5
billion remained outstanding in loans that eligible lenders borrowed through the facility.
Oversight of facilities. The Federal Reserve’s Division of Reserve Bank Operations and Payment
Systems is in its third phase of oversight reviews. The division leveraged ﬁndings from previous
oversight activities to identify risk areas for continued oversight, including collateral and asset
management, conﬂicts of interest, risk management, and internal controls.269
Through its phase two oversight reviews, the division identiﬁed opportunities to enhance
processes and controls across several facilities. For example, the division noted opportunities
to improve a facility’s credit evaluation model and to document facilities’ comprehensive risk
assessments. Based on our review of Federal Reserve documents, the facilities have either
addressed or continue to make progress in addressing these enhancement opportunities. Federal
Reserve oﬃcials told us that the division is planning additional oversight reviews and will continue
to use previous ﬁndings to inform these reviews.

Methodology
To conduct this work, we reviewed Federal Reserve documentation on the facilities, including
reports to Congress, and the most recent Federal Reserve data available on the facilities’
268The allowance for loan losses is an estimate of potential losses based on the Main Street Lending Program’s holdings

as of December 31, 2021, and does not indicate losses experienced by the program.

269We have previously reported on the Federal Reserve’s continued monitoring and oversight of the CARES Act lending

facilities; see the October 2021 and December 2020 reports in Related GAO Products.

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outstanding loans and assets, as of March 2022. We assessed the reliability of the data on
outstanding asset purchases and loans by reviewing published data on the facilities and obtaining
information from Federal Reserve oﬃcials on the collection, maintenance, and compilation of the
data. We found these data to be reliable for our purposes. We also interviewed Federal Reserve
oﬃcials.

Agency Comments
We provided a copy of this enclosure to the Federal Reserve, Treasury, and the Oﬃce of
Management and Budget (OMB) for review. The Federal Reserve and Treasury provided technical
comments, which we incorporated where appropriate. OMB did not provide comments on this
enclosure.

GAO’s Ongoing Work
In our ongoing work on the Federal Reserve facilities, we will continue to monitor outstanding
assets and loans and the Federal Reserve’s oversight of the facilities.

Related GAO Products
Federal Reserve Lending Programs: Credit Markets Served by the Programs Have Stabilized, but
Vulnerabilities Remain. GAO-22-104640. Washington, D.C.: October 19, 2021.
Federal Reserve Lending Programs: Use of CARES Act-Supported Programs Has Been Limited and Flow of
Credit Has Generally Improved. GAO-21-180. Washington, D.C.: December 10, 2020.
Contact information: Michael E. Clements, (202) 512-8678, clementsm@gao.gov

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Airport Grants
The Federal Aviation Administration has obligated nearly all funds and expended nearly $11 billion
of the $20 billion made available for grants to help the nation’s airports respond to and recover
from the economic eﬀects of the COVID-19 pandemic.
Entity involved: Federal Aviation Administration, within the Department of Transportation

Background
Historic decreases in passenger demand for air travel due to the COVID-19 pandemic signiﬁcantly
aﬀected U.S. airports’ abilities to generate the revenue needed for operating and infrastructure
costs. According to data ﬁled with the Department of Transportation (DOT), U.S. airlines carried
about 27 percent fewer passengers in calendar year 2021 than in 2019, before the onset of the
COVID-19 pandemic. However, according to airport associations, changes in passenger traﬃc
have not been evenly distributed among airports, as some airports have seen stronger rebounds
in passenger traﬃc than others. Airport associations reported that U.S. airports continue to
experience an uneven recovery as domestic leisure traﬃc has begun to recover while international
and business travel continues to lag.
The CARES Act, the Consolidated Appropriations Act, 2021, and the American Rescue Plan Act of
2021 (ARPA) provided a combined total of $20 billion in federal funding for U.S. airports to respond
to the COVID-19 pandemic, although funding allocation and certain allowable uses diﬀer under
each act.
Obligations and expenditures. Of the $20 billion combined total in federal COVID-19 relief
funding for U.S. airports provided by the CARES Act, Consolidated Appropriations Act, 2021, and
ARPA, nearly all has been obligated and nearly $11 billion expended by the Federal Aviation
Administration (FAA) as of February 28, 2022, according to FAA oﬃcials.270
CARES Act. The CARES Act, signed into law on March 27, 2020, provided $10 billion to support
U.S. airports of all sizes to prevent, prepare for, and respond to the COVID-19 pandemic. Airport
owners—also known as airport sponsors—may use CARES Act grant funds for any purpose for
which airport revenues may be lawfully used, including for airport operating expenses, capital
improvements, and debt service directly related to the airport.
As of February 28, 2022, FAA had processed CARES Act grant applications for 3,215 U.S. airports
and obligated nearly $10 billion in grant funding. As of the same date, FAA had expended over $8
billion to reimburse airports for eligible costs and to increase the federal share for the ﬁscal year
2020 Airport Improvement Program (AIP) and supplemental discretionary grants, according to FAA
oﬃcials (see table).

270This $20 billion amount includes up to 0.1 percent of the airport grant funding provided by the CARES Act, the

Consolidated Appropriations Act, 2021, and ARPA that the FAA is authorized to retain to fund the award and oversight by
FAA of grants made under these acts. Pub. L. No. 116-136, div. B, tit. XII, 134 Stat 281, 597; Pub. L. No. 116-260, div. M, tit.
IV, 134 Stat. 1182, 1941 (2020); Pub. L. No. 117-2, § 7102, 135 Stat. 4, 98.

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Federal Aviation Administration (FAA) Obligations and Expenditures for CARES Act Airport Grants, as of Feb. 28,
2022
Funding group
a

Increase federal share for 2020 Airport Improvement Program (AIP) grants
b

Commercial service airports
c

Primary airports

General aviation airports

Reallocated CARES Act funds

Total

Obligations
($ thousands)

Expenditures
($ thousands)

$548,672

$446,272

$7,195,771

$6,313,085

$1,630,750

$1,069,639

$100,459

$81,179

$290,775

$232,497

$9,766,427

$8,142,673

Source: GAO analysis of CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020) and data from the FAA. | GAO-22-105397

Note: The CARES Act directed FAA to allocate funding to these groups through various formulas. In addition, the CARES Act
provides FAA the authority to retain up to 0.1 percent of the $10 billion (up to $10 million) provided for Grants-in-Aid for
Airports to fund the award and oversight by FAA of grants made under the CARES Act. Pub. L. No. 116-136, div. B, tit. XII, 134
Stat 281, 597.
a

Approximately 3,300 U.S. airports are part of the National Plan of Integrated Airport Systems and are eligible to receive federal
AIP grants to fund the planning and development of eligible infrastructure projects. The CARES Act appropriated at least $500
million to increase the federal share to 100 percent for AIP grants awarded for airport infrastructure projects under ﬁscal year
2020 and supplemental discretionary grants.
b

Commercial service airports are publicly owned airports with at least 2,500 passenger boardings per year and scheduled air
service.
c

Primary airports are large, medium, and small hub and non-hub airports with more than 10,000 passenger boardings per year.

General aviation airports are public-use airports with fewer than 2,500 passenger boardings per year or no scheduled air
service.
e

Under the Consolidated Appropriations Act, 2021, unallocated CARES funds as of December 27, 2020 were to be allocated
under the Consolidated Appropriations Act, 2021 using the primary commercial service and certain cargo airports allocation
formula. According to FAA oﬃcials, FAA calculated that $290,774,557 in CARES Act funds were available for reallocation under
the Consolidated Appropriations Act, 2021.

Consolidated Appropriations Act, 2021. The Consolidated Appropriations Act, 2021, enacted on
December 27, 2020, provided $2 billion in additional federal grants to help eligible airports and
certain airport concessions prevent, prepare for, and respond to COVID-19.271 Airports must use
Consolidated Appropriations Act, 2021 grant funding for costs related to operations, personnel,
cleaning, sanitization, janitorial services, combating the spread of pathogens at the airport, and
debt service payments.272 Certain amounts are also available to provide relief from rent and
minimum annual guarantees to eligible airport concessions.
271Pub. L. No. 116-260, div. M, tit. IV, 134 Stat. 1182, 1939-41 (2020). Division M of the Consolidated Appropriations

Act, 2021 is also referred to as the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSA).
The Consolidated Appropriations Act, 2021, made up to $5 million of the $2 billion in funding available for the Small
Community Air Service Development Program.

272The 31 airports that received CARES Act funds in excess of four times their annual operating expenses are excluded

from receiving Consolidated Appropriations Act, 2021 funding. See Pub. L. No. 116-260, 134 Stat. at 1939. Speciﬁc

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As of February 28, 2022, FAA had processed Consolidated Appropriations Act, 2021 grant
applications for 2,966 U.S. airports and had obligated about $2 billion in grant funds. As of the
same date, FAA had expended over $1 billion to reimburse airports for eligible costs, according to
FAA oﬃcials (see table).

amounts appropriated by the Consolidated Appropriations Act, 2021 are also available to cover lawful expenses to
support FAA contract tower operations and to provide relief from rent and minimum annual guarantees to on-airport car
rental, on-airport parking, and in-terminal concessions.

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Federal Aviation Administration (FAA) Obligations and Expenditures for the Consolidated Appropriations Act,
2021 Airport Grants, as of Feb. 28, 2022
Obligations
($ thousands)

Expenditures
($ thousands)

Primary commercial service airports and certain cargo airports

$1,751,347

$1,085,049

$38,854

$16,258

$4,782

$1,137

$199,416

$65,674

$4,000

$1,998,400

$1,172,119

Funding group

Non-primary commercial service and general aviation airports

Non-primary airports participating in the FAA Contract Tower program

Concessions relief for primary commercial service airports
d

Small Community Air Service Development Program
Total

Source: GAO analysis of the Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, div. M, tit. IV, 134 Stat. 1182, 1939-41 (2020), and data from the FAA. | GAO-22-105397

Note: The Consolidated Appropriations Act, 2021 directed FAA to allocate funding to these groups through various formulas.
In addition, the Consolidated Appropriations Act, 2021, provides FAA the authority to retain up to 0.1 percent of the $2 billion
(up to $2 million) provided for Grants-in-Aid for Airports to fund the award and oversight by FAA of grants made under the
Consolidated Appropriations Act, 2021. Pub. L. No. 116-260, div. M, tit. IV, 134 Stat. 1182, 1941 (2020).
a

Primary commercial service airports are publicly owned airports with more than 10,000 passenger boardings per year and
scheduled air service. Cargo airports are airports that, in addition to any other air transportation services that may be available,
are served by aircraft providing air transportation of only cargo with a total annual landed weight of more than 100 million
pounds.
b

Non-primary commercial service airports have at least 2,500 and no more than 10,000 passenger boardings each year.
General aviation airports are public-use airports with fewer than 2,500 passenger boardings per year or no scheduled air
service.
c

Non-primary airports are the same as non-primary commercial service airports, and have at least 2,500 and no more than
10,000 passenger boardings each year. The Federal Contract Tower Program, established in 1982, allows the agency to contract
out the operation of certain towers.
d

The Small Community Air Service Development Program is a grant program designed to help small communities address air
service and airfare issues.

American Rescue Plan Act of 2021. ARPA, enacted on March 11, 2021, provided an additional $8
billion for airport assistance.273 The allowable uses of grant funds are similar to those for the
Consolidated Appropriations Act, 2021.274 Certain amounts are available to increase the federal
share for AIP grants and to provide relief from rent and minimum annual guarantees to eligible
airport concessions.
As of February 28, 2022, FAA had processed ARPA grant applications for 2,982 U.S. airports and
obligated about $8 billion in grant funds. As of that same date, it had expended over $1 billion to
reimburse airports for eligible costs, according to FAA oﬃcials (see table).

273 Pub. L. No. 117-2, § 7102(a), 135 Stat. 4, 96.

274As with the Consolidated Appropriations Act, 2021, the 31 airports that received CARES Act funds in excess of four

times their annual operating expenses are excluded from receiving ARPA funding.

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Federal Aviation Administration (FAA) Obligations and Expenditures for the American Rescue Plan Act of 2021
(ARPA) Airport Grants, as of Feb. 28, 2022
Funding group
a

Primary commercial service airports and certain cargo airports

Increase federal share for 2021 and select 2020 Airport Improvement
Program (AIP) grants
Non-primary commercial service and general aviation airports
c

Concessions relief for primary commercial service airports
Total

Obligations
($ thousands)

Expenditures
($ thousands)

$6,486,987

$1,193,186

$490,590

$219,854

$95,244

$13,534

$782,828

$1,007

$7,855,649

$1,427,580

Source: GAO analysis of the American Rescue Plan Act of 2021, Pub. L. No. 117-2, § 7102, 135 Stat. 4, 96-98, and data from the FAA. | GAO-22-105397

Note: ARPA directed FAA to allocate funding to these groups through various formulas. In addition, ARPA provides FAA the
authority to retain up to 0.1 percent of the $8 billion (up to $8 million) provided for Relief for Airports to fund the award and
oversight by FAA of grants made under ARPA. Pub. L. No. 117-2, § 7102, 135 Stat. 4, 98.
a

Primary commercial airport sponsors may only use these funds to provide relief from rent and minimum annual guarantees
to in-terminal airport concessions, subject to additional conditions. An eligible large airport concession is one that is in-terminal
and has maximum gross receipts, averaged over the previous 3 ﬁscal years, of more than $56,420,000. An eligible small airport
concession is one that is in-terminal and is a small business with maximum gross receipts, averaged over the previous 3 ﬁscal
years, of less than $56,420,000, or is a joint venture. In general, a joint venture as deﬁned in 49 C.F.R. § 23.3 is an association
of an airport concession disadvantaged business enterprise ﬁrm and one or more other ﬁrms to carry out a single business
enterprise.

Overview of Key Issues
Airport grant administration. Under the three COVID-19 relief laws, FAA has administered
three new airport grant programs, developed program guidance, determined funding allocations,
processed grant applications, and reimbursed thousands of U.S. airports and, in some cases,
completed close-out reports, which we discuss in more detail below. As previously stated, while
nearly all of the COVID-19 relief funding available for airports under the CARES Act, Consolidated
Appropriations Act, 2021, and ARPA has been obligated, a smaller portion of the ARPA grant funds
for airports has been expended. More speciﬁcally, as of February 28, 2022, FAA had expended less
than $1.5 billion of $8 billion in total ARPA grant funding.
In October 2021, we reported airport association representatives’ perspective that FAA had been
slow to administer and implement ARPA in the spring and summer of 2021, in part because
FAA was administering multiple airport grant programs at the same time. According to airport
association representatives, since we last reported, FAA’s implementation of the ARPA grant

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program had progressed in the fall and winter of 2021, as airports began to receive funds
from FAA. These representatives also identiﬁed challenges related to administering the airport
concessions relief portions of ARPA and the Consolidated Appropriations Act, 2021, which we
discuss below under airport concessions relief.
As we reported in October 2021, FAA had identiﬁed ongoing challenges to administering these
COVID-19 airport grant programs as well as taken some steps to help address those challenges.
The need to process thousands of grants under expedited timeframes, with expanded eligible
uses for these funds, were among the challenges FAA identiﬁed. As of August 2021, FAA had
established a dedicated payment request processing team to help address these challenges, which
included two full-time employees and three annuitants with prior airport grant management
experience, and detailed additional personnel to assist in reviewing concessions relief plans.
As of March 2022, in order to address an increasing workload, FAA stated it had hired four
additional employees to assist in all aspects of the COVID-19 grant programs. FAA oﬃcials noted
that the grant application process is only one aspect of the COVID-19 airport grant programs
and that FAA’s workload continues to be substantial. For example, FAA oﬃcials stated that FAA’s
review team is currently processing three times as many reimbursement requests as before the
Consolidated Appropriations Act, 2021, and will continue to do so until the ARPA airport grant
program concludes in 2025. FAA further stated that it has been reviewing and approving general
ARPA reimbursement requests with a two-week turnaround time, which they said is consistent
with all grant payment requests.
Use of airport grant funds. FAA has continued to collect and consolidate data from airports
on general spending categories for CARES Act funding through grant close-out reports, which
are completed once all allocated airport funds for a grant agreement have been expended.
Speciﬁcally, as of February 28, 2022, FAA oﬃcials reported that 918 CARES Act airport grants have
been closed out, totaling over $3 billion. According to FAA oﬃcials, the majority of CARES Act
airport grant funds have been used for payroll and debt servicing.
As of March 2022, FAA oﬃcials reported that they have not yet begun to close out Consolidated
Appropriations Act, 2021 or ARPA grants. Airport association representatives said that airport
sponsors are likewise generally using Consolidated Appropriations Act, 2021 and ARPA grants to
pay down debt and pay for operating expenses such as payroll. Representatives from one airport
association noted that using grant funds for any purpose, such as paying down debt, gives airport
sponsors ﬂexibility to manage other funds for other purposes, such as hiring staﬀ.
Airport association representatives told us that the federal funding provided has been critical in
helping airports maintain operations as revenues declined and ﬂuctuated over the past 2 years.
For example, by using federal funds to help maintain operations, airports were able to avoid some
of the challenges of adjusting to steep declines and subsequent increases in passenger traﬃc and
revenues. Airport association representatives also said that U.S. airports are continuing to work
to manage increased costs as they seek to retain and hire employees to meet increasing travel
demand.
Airport grant monitoring and oversight. Since we last reported in October 2021, an FAA
contractor completed its review of FAA’s reimbursement processes for CARES Act airport grants

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and found that the program was not susceptible to signiﬁcant improper payments, and therefore
did not recommend any corrective actions.275 According to oﬃcials, FAA hired the same contractor
to conduct reviews of Consolidated Appropriations Act, 2021 and ARPA grant funds. For both
programs, FAA expects the contractor to sample and test airport payment requests, including
payments for concessions relief, with testing for the Consolidated Appropriations Act, 2021 funds
to begin within the next few months. In addition, DOT’s Oﬃce of Inspector General is currently
conducting an audit of FAA’s award and oversight of CARES Act funds, and FAA oﬃcials stated that
if the agency takes actions in response to that audit, then FAA will also consider whether those
actions are appropriate for the Consolidated Appropriations Act, 2021 and ARPA airport grant
programs.
As we reported in October 2021, as non-federal entities, public airport sponsors that receive
federal grants are also subject to the Single Audit Act, requiring the sponsors to undergo a single
audit of those awards annually when their expenditures meet a certain dollar threshold—currently
$750,000 or more in a ﬁscal year.276 Single audits of an entity’s ﬁnancial statements and federal
awards can help identify deﬁciencies in an award recipients’ compliance with applicable laws and
regulations, help ensure the appropriate use of federal funds, and reduce the likelihood of federal
improper payments.
FAA oﬃcials stated that, in accordance with Single Audit Act requirements, the agency notiﬁes
airport sponsors if the amount of their expenditures triggers the $750,000 threshold. The
airport sponsor must then conﬁrm annually that the audit was completed and uploaded to the
Federal Audit Clearinghouse. FAA oﬃcials explained that airport sponsors’ independent auditors
conduct the Single Audits and that FAA often provides them with technical assistance about
grant expenditures. The DOT Oﬃce of Inspector General may check compliance and review
single audit reports for DOT fund recipients, and recently reviewed DOT’s processes for verifying
that these audits have been submitted, among other things.277 The Oﬃce of Inspector General
275More speciﬁcally, the contractor identiﬁed improper payment amounts within three sampled reimbursement claims

made out of 102 samples tested. Based on these results, the contractor determined that the estimated improper
payment rate was below the statutory threshold established by OMB Circular A-123, Appendix C.

276The Single Audit Act is codiﬁed, as amended, at 31 U.S.C. §§ 7501-06, and implementing Oﬃce of Management and

Budget guidance is reprinted in 2 C.F.R. part 200. The Single Audit Act establishes requirements for nonfederal entities
(deﬁned as states, localities, and nonproﬁt organizations) that receive federal awards to undergo audits of those awards
annually (unless a speciﬁc exception applies) when their expenditures meet a certain dollar threshold. More speciﬁcally,
nonfederal entities that expend $750,000 or more in federal awards in a ﬁscal year are required to undergo a single
audit—that is, an audit of an entity’s ﬁnancial statements and federal awards, or a program-speciﬁc audit, for the ﬁscal
year. 31 U.S.C. § 7502; 2 C.F.R. § 200.501. If public airport sponsors do not meet this threshold in a ﬁscal year, then
they are subject to applicable local and state audit requirements. Because private owners of public-use airports are
not nonfederal entities as deﬁned by the Single Audit Act, private owners of public-use airports are not subject to the
Single Audit Act; however, they are still subject to grant assurances that they agree to when they accept federal airport
grants. For example, under one grant assurance, a private owner of a public-use airport would agree to keep all project
accounts and records which fully disclose the amount and disposition by the recipient of the proceeds of this grant, the
total cost of the project in connection with which this grant is given or used, and the amount or nature of that portion of
the cost of the project supplied by other sources, and such other ﬁnancial records pertinent to the project. Additionally,
private owners of public-use airports must make any documents pertinent to a grant available to the Comptroller
General for the purpose of audit and examination. Finally, DOT may require that an appropriate audit be conducted by a
recipient.
277Department of Transportation, Oﬃce of Inspector General, DOT Does Not Ensure Compliance With All Single Audit

Provisions of OMB’s Uniform Guidance, FS2022024 (Washington, D.C.: March 2022).

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made recommendations to ensure that FAA and other DOT operating administrations verify the
complete and timely submission of their recipients’ single audits and follow up on ﬁndings to
ensure that recipients have taken corrective actions. According to the Oﬃce of Inspector General,
DOT concurred with these recommendations, and the Inspector General considers them resolved
but open pending completion of planned actions.
Airport concessions relief. As part of the Consolidated Appropriations Act, 2021 and ARPA
requirements, airport sponsors that accept concessions relief funds are to waive for eligible
airport concessions some rent and minimum annual guarantee obligations due after December
27, 2020 and March 11, 2021, respectively, until the relief equals the total concessions relief
allocation amount and to the extent permissible under state and local laws.278 Eligible
airport concessions under both acts include in-terminal concessions, with the Consolidated
Appropriations Act, 2021 also including on-airport car rental and on-airport parking concessions.
The concessions relief funds are intended to help provide airport concessionaires with support
during the pandemic, including small airport concessions businesses.279
Since we last reported in October 2021, FAA has continued to process airport’s concessions
relief applications under the Consolidated Appropriations Act, 2021, which were due to FAA by
September 30, 2021. FAA also began processing applications for ARPA concessions relief but has
not yet ﬁnalized a due date for these applications.280 FAA is requesting that airport sponsors
provide concessions relief plans with their payment requests when they are ready to accept their
concessions-relief funding. For both Consolidated Appropriations Act, 2021 and ARPA concessions
relief funds, FAA oﬃcials said they are reviewing these plans to ensure that airport sponsors are
providing relief according to the law and FAA guidance prior to approving payment.281
According to FAA oﬃcials, as of February 28, 2022, FAA had obligated $199 million and expended
$66 million of the $200 million provided by the Consolidated Appropriations Act, 2021 for
concessions relief, and had obligated $783 million and expended $1 million of the $800 million
provided by ARPA.282 FAA stated that these totals reﬂect the agency’s prioritization of reviewing
airport concessions rent relief plans and reimbursement under Consolidated Appropriations Act,
2021 concessions grants. According to FAA oﬃcials, the agency has recently used additional staﬀ
to accelerate its review of ARPA airport concessions relief plans and expects an increase in related
ARPA expenditures, which we discuss in more detail below.

278Both the Consolidated Appropriations Act, 2021, and ARPA direct airport sponsors to provide such relief to the extent

permissible under state laws, local laws, and applicable trust indentures.

279167 Cong. Rec. H1196, H1283 (Mar. 10, 2021) (Explanatory Statement language accompanying selected provisions of

bill H.R. 1319, enacted as the America Rescue Plan Act of 2021, drafted by the Committee on Financial Services).
280Airport concessions relief allocation amounts were calculated based on each airport’s passenger boardings

compared to total passenger boardings of all airports eligible for concessions relief for calendar year 2019. ARPA
appropriated a certain amount of funding for small airport concessions and a certain amount for large airport
concessions.

281According to FAA guidance, FAA requires airport concessions to provide certiﬁcations of eligibility directly to airport

sponsors, which then keep the documentation on ﬁle for possible audits.

282According to oﬃcials, 53 of the 379 eligible primary commercial service airports declined their Consolidated

Appropriations Act, 2021 concessions relief funds by the time funding expired on September 30, 2021, and 64 of those
airports had declined ARPA concessions relief funding as of February 28, 2022.

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As we reported in October 2021, airport representatives noted that varying concessions
agreements made it complex to determine concessions eligibility and to provide concessions
relief proportionately under the Consolidated Appropriations Act, 2021. Airport association
representatives stated that this variability has again presented challenges for some airports
in allocating ARPA concessions relief funds. For example, they noted that ARPA distinguishes
between funding for large and small airport concessions as well as between business models.
They also said that many airport sponsors have had to work one-on-one with FAA to resolve
questions unique to their airport’s circumstances.
Airport association representatives also stated that implementation of ARPA concessions
relief have been slow overall—sometimes requiring months of correspondence before FAA
approves an airport’s application—and attributed this in part to FAA’s new responsibilities
and workload. Monitoring concessions relief funding and understanding the various airportconcessionaire contractual structures are new scopes of work for FAA’s Oﬃce of Airports.
While time-consuming for both the airport sponsor and FAA staﬀ, FAA oﬃcials stated that the
development of concessions relief plans is necessary to ensure that the appropriate concessions
are obtaining relief. Oﬃcials said that it is not unusual for FAA to contact airport sponsors at least
once to obtain additional information about their plans, and FAA meets with sponsors in some
cases. FAA oﬃcials added that they have encouraged concessionaires concerned about the timing
of funding allocations to contact their airport sponsor to understand the concessions relief plan
process.
As discussed above, FAA has hired additional staﬀ to help address some of these challenges,
including an employee who has experience with airport concessions and their contract
relationships with airport sponsors. FAA oﬃcials told us that they also collaborated with staﬀ
from the Oﬃce of Civil Rights, who have subject matter expertise in the relationship between
airports and concessionaires, to publish guidance for airports on how to develop a plan for
providing concessions relief proportionally, as required. FAA oﬃcials further stated that the
agency published additional guidance on airport concessions relief grants in November 2021 that
incorporated lessons learned from reviewing airports’ concessions relief plans and addressed
common questions from airport sponsors. Following release of that guidance, FAA’s approval of
concessions relief plans and reimbursement under payment requests accelerated, according to
FAA oﬃcials.
For both concessions relief programs, FAA also provided presentations, posted sample forms
online, and conducted webinars, such as a February 2022 webinar for airport sponsors to explain
how to complete their concessions relief plans and discuss updated guidance. FAA stated they
are currently prioritizing approval and reimbursement under Consolidated Appropriations Act,
2021 concessions rent relief grants; however, with additional staﬀ and the recent webinar, FAA
expects a quicker disbursement of funds of both Consolidated Appropriations Act, 2021 and ARPA
concessions funding.
A representative of an airport concessionaires association told us that dedicated concessions
relief continues to be important to help airport businesses respond to the impacts of COVID-19.
However, echoing what we heard from airport association representatives, the concessionaires’
representative said that FAA’s work to clarify these types of issues with airports has been time
consuming, and that disbursements from FAA to airport sponsors have been slow as a result.

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The representative noted that airport concessionaires continue to face challenges due to
the uncertainty of passenger traﬃc, diﬃculty recruiting and hiring staﬀ, and increased costs.
An airport concessions employee union told us that while many businesses in airports have
reopened, there are no employee retention requirements associated with the concessions relief
funds that they are aware of, and not all businesses are hiring enough workers to meet increasing
demand. The employee union representatives stated that employment levels for their members
had not increased since the summer of 2021 and remain at about 40 percent of pre-pandemic
levels.

Methodology
To conduct this work, we analyzed FAA data on airport funding as of February 28, 2022. We
determined the data were suﬃciently reliable for the purposes of our reporting by performing
interviews with agency oﬃcials and reviewing relevant documentation. We also reviewed the
CARES Act, the Consolidated Appropriations Act, 2021, and American Rescue Plan Act of 2021 and
related agency guidance, and conducted interviews with agency oﬃcials and representatives from
two airport associations, an airport concessions association, and an airport concessions employee
union, selected to represent a wide variety of industry and airport types.

Agency Comments
We provided FAA and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
FAA provided technical comments that we incorporated as appropriate. OMB did not have any
comments on this enclosure.

GAO’s Ongoing Work
We will continue to monitor aviation operations, impacts, and lessons from the COVID-19
pandemic through other ongoing work.
Contact information: Heather Krause, (202) 512-2834 or krauseh@gao.gov

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Aviation Manufacturing Jobs Protection Program
The Department of Transportation oﬀered $717 million to 596 eligible applicants in the aviation
manufacturing industry and has developed a plan to monitor recipients’ compliance with the
terms and conditions of their Aviation Manufacturing Jobs Protection Program agreements.
Entity involved: Department of Transportation

Background
In March 2021, the American Rescue Plan Act of 2021 (ARPA) was enacted, establishing the
Aviation Manufacturing Jobs Protection (AMJP) Program.283 Through this program, the Department
of Transportation (DOT) is to provide up to $3 billion in funding to eligible aviation manufacturing
companies to pay up to half of the companies’ compensation costs for certain categories of
employees, for up to 6 months.284
While some aviation manufacturing companies were eligible for other federal COVID-19 relief
programs such as the three rounds of the Payroll Support Program (PSP) and the Paycheck
Protection Program, others were not eligible due to their size, among other reasons.285 In
response to reduced commercial passenger demand during the COVID-19 pandemic, airlines
parked or retired a substantial portion of their aircraft ﬂeet, which in turn reduced demand for
new commercial airplanes, engines, and spare parts, and also aﬀected companies that provide
aircraft maintenance services.
Eligible applicants can use AMJP program funds to help cover employee wages, salaries, and
beneﬁts and to facilitate the retention, rehire, or recall of employees.286 For a company to be
eligible, it must have involuntarily furloughed or laid oﬀ at least 10 percent of its workforce in 2020
as compared to 2019 or experienced a 15 percent decline in 2020 revenues compared to 2019.287
Companies that received ﬁnancial assistance from the ﬁrst round of the Payroll Support Program

283Pub. L. No. 117-2, §§ 7201-02, 135 Stat. 4, 101-07.

284Under ARPA, DOT may use up to 1 percent of the funds appropriated ($30 million) for implementation costs and

administrative expenses. Pub. L. No. 117-2 § 7202(a), 135 Stat. at 103.

285The Payroll Support Programs provided funds to be used by air carriers and aviation contractors for employee

wages, salaries, and beneﬁts. To be an eligible contractor for the Payroll Support Programs, the CARES Act and Treasury
guidance deﬁned a contractor as a person that, under contract with a passenger air carrier conducting operations
under 14 C.F.R. pt. 121, performs catering functions or functions on airport property that are directly related to the air
transportation of persons, property, or mail, such as ground-handling of aircraft, among other things. Eligibility for the
Paycheck Protection Program was limited to small businesses (as deﬁned by provisions authorizing the program).

286Funds cannot be used for back pay of returning rehired or recalled employees. Pub. L. No. 117-2, § 7202(b), 135 Stat.

at 103.

287For a company to be eligible for AMJP funding, it must be a company that actively manufactures an aircraft,

aircraft engine, propeller, or a component, part, or systems of an aircraft or aircraft engine under a Federal Aviation
Administration production approval; hold speciﬁc certiﬁcations; or operate certain certiﬁed processes, among other
requirements. The company must also be established, created, or organized under U.S. laws and have signiﬁcant
operations in and the majority of employees engaged in aviation manufacturing or maintenance, repair, and overhaul
activities and services based in the U.S.

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(PSP1) or that were still expending Paycheck Protection Program assistance as of the date of their
application to the AMJP program were ineligible for the program.288
When applying to the AMJP program, a company was required to identify a group of employees
eligible for payroll support through the program.289 Employees in the eligible employee group
have to meet certain criteria, including that they: (1) do not exceed 25 percent of a company’s U.S.
workforce as of April 1, 2020, (2) do not have a total compensation level greater than $200,000 per
year, and (3) must be engaged in aviation manufacturing or maintenance, repair, and overhaul
activities or services.
In order to receive AMJP funding, companies also had to make several commitments regarding
the eligible employee group, including—but not limited to—a commitment not to involuntarily
furlough or lay oﬀ employees in their eligible employee group for the duration of the agreement
and receipt of public contributions under the AMJP program.290
DOT accepted applications for the program in three separate periods and recently completed
executing the last round of agreements. The ﬁrst application period was from June 15, 2021
through July 13, 2021, the second period was from August 4, 2021 through September 1, 2021,
and the ﬁnal period was from November 8, 2021 through December 13, 2021. DOT oﬃcials told
us they entered into the ﬁrst AMJP agreements on September 13, 2021 with companies that
applied during the ﬁrst application period. By statute, DOT must enter into all AMJP agreements
within 6 months of the ﬁrst agreement being executed; DOT oﬃcials told us they entered into all
agreements by March 8, 2022.
Overview of Key Issues
DOT oﬀered over $717 million to 596 eligible AMJP applicants.291 DOT oﬀered funding to 313
companies that applied in the ﬁrst application period, 156 companies that applied in the second
288See Pub. L. No. 117-2, §7202(c), 135 Stat. at 104.

289Each company has to identify its eligible employee group and the amount of the total compensation level for the

eligible employee group, supported by sworn ﬁnancial statements or other appropriate data.

290Speciﬁcally, entities with certain certiﬁcates related to passenger airplanes with a seating capacity of 50 or more,

must agree to refrain from conducting involuntary layoﬀs or furloughs or reducing pay rates and beneﬁts for the eligible
employee group until September 30, 2021, or the duration of the agreement and receipt of funds, whichever period
ends later. Entities that do not fall within this group must agree to refrain from these actions for the duration of the
agreement and receipt of funds. If an approved company experiences natural attrition within the eligible employee
group, or terminates any employee in the eligible employee group due to performance or conduct issues in accordance
with employer policy, DOT will not require the company to backﬁll vacancies. However, the company will be required to
disclose any reduction in the total compensation costs for the eligible employee group, and DOT may make comparable
reductions in the actual disbursements to the company. For the duration of the agreement and receipt of funds,
companies must provide DOT with immediate notice and justiﬁcation of involuntary furloughs or layoﬀs that exceed 10
percent of the company’s workforce for whom they are not receiving AMJP funding. In addition, for the duration of the
AMJP agreement, a company must also commit that it will fund all compensation costs for the eligible employee group
that are not paid from AMJP funds. This company-provided funding must be at least 50 percent of the compensation
costs for the eligible employee group. According to DOT guidance, ﬁnancial beneﬁts from any other federal or state
ﬁnancial assistance program that help the business cover its payroll costs during the term of the AMJP agreement will
reduce DOT’s public contribution under the AMJP agreement.
291In certain cases, holding companies elected to submit separate applications for AMJP awards for their subsidiaries.

According to DOT guidance for AMJP applications, if the subsidiary was a truly independent business, the subsidiary

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application period, and 127 companies that applied in the third application period. The average
AMJP contribution oﬀered to these applicants was $1.2 million; funding oﬀers ranged in size from
$2,500 to $75.5 million.292
Companies were oﬀered funding for eligible employee groups as small as one employee and as
large as 3,214 employees. On average, companies had 55 employees in their eligible employee
group, and DOT approved award amounts that resulted in an average of approximately $22,000
per eligible employee. As of March 8, 2022, DOT disbursed $337 million to the eligible companies
that entered into AMJP agreements.
Aviation Manufacturing Jobs Protection (AMJP) Program Eligible Recipients, by Funding Oﬀer Amount, as of Mar.
8, 2022

DOT oﬃcials told us that 86 percent of applicants across all three application periods were oﬀered
funding; the remaining 14 percent were determined to be ineligible or disqualiﬁed.293 According to
oﬃcials, common reasons applications were ineligible or disqualiﬁed included missed submission
could apply separately and needed to ensure there was no overlap or redundancy in requested funding or covered
costs. For reporting purposes, DOT treats each of these entities that applied as a separate company, and we have
done the same. Additionally, two companies that applied in the second application period declined the AMJP oﬀers
and subsequently reapplied during the third application period and received new oﬀers, which they accepted. For the
purposes of calculating the number of eligible applicants, we counted each of these companies once. For the purposes
of calculating program summary statistics throughout this report, such as the total amount oﬀered to eligible applicants
and average award oﬀered, we excluded the data from these companies’ second application period oﬀers.
292DOT oﬀered companies AMJP funding based on what DOT determined to be the “maximum public contribution”

based on the companies’ eligible employee group size, the maximum 6 month term of the agreement, and the statutory
requirement to provide 50 percent of the cost of the eligible employee group’s total base compensation and beneﬁts
as they existed on April 1, 2020 (excluding overtime, premium pay, and payroll taxes). According to DOT oﬃcials, 58
companies from the three application periods requested an award that was less than they were entitled to by statute.
293DOT oﬃcials told us that they received 744 applications across all three application periods. However, 48 of those

applications were either withdrawn or superseded by newer applications from the applicants; as a result, DOT evaluated
a total of 696 applications. Of those, DOT determined 97 were either ineligible or disqualiﬁed and 598 were initially
deemed eligible.

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deadlines, incomplete supporting documentation, and not meeting the eligibility criteria, such as
not holding the required certiﬁcations. Additionally, oﬃcials told us that three applicants declined
their funding oﬀers after DOT made announcements of the award oﬀers and a fourth applicant
did not respond to DOT about their award oﬀer.294 DOT oﬃcials said that two of the applicants
did not provide a reason for declining the AMJP oﬀer, and the third told oﬃcials the program’s
reporting requirements would be too complicated for the company because it was a temporary
staﬃng company and therefore the employees on its payroll changed on a weekly basis.
DOT re-opened the AMJP program applications for a third time due to a correction regarding
program eligibility. DOT guidance for the ﬁrst and second application periods stated that DOT
could not enter into an AMJP agreement with a company that was allowed the Employee Retention
Credit for the quarter immediately prior to the one in which an AMJP agreement was to be entered
into.295 However, DOT oﬃcials later realized the restriction on allowing the Employee Retention
Credit only applied if a company was allowed the credit for a calendar quarter occurring prior to
July 1, 2021 because of the way applicable legal provisions were structured.296
During the ﬁrst and second application periods, DOT provided a space in the AMJP application
where companies could indicate if they accrued the Employee Retention Credit in the quarter prior
to the quarter in which they anticipated receiving an AMJP award, and they could ask DOT oﬃcials
to defer award of the AMJP agreement with the company.297 However, according to DOT oﬃcials,
some companies told them they did not apply to the AMJP program because of the program’s
restriction on the Employee Retention Credit.
Therefore, upon determining the Employee Retention Credit restriction did not apply for credits
taken after July 1, 2021, DOT reopened the application process for a third period from November
8, 2021 through December 13, 2021. DOT updated its application and guidance materials to clarify
that Employee Retention Credits accrued after July 1, 2021, did not aﬀect DOT’s ability to award
294According to DOT oﬃcials, after reaching out to the applicant that did not respond to DOT about their AMJP award
oﬀer, DOT received an automated response that the business had initiated Chapter 7 bankruptcy proceedings and
ceased operations.
295As we reported in July 2021, eligible employers of any size—including tax-exempt entities, certain governmental

entities, and self-employed individuals with employees—can claim the refundable Employee Retention Credit, as
established under the CARES Act, extended by the Consolidated Appropriations Act, 2021, and as provided by ARPA. The
credit amount is based on qualiﬁed wages paid to employees, including certain health care expenses. DOT oﬃcials refer
to this as the Employee Retention Tax Credit. By statute, DOT cannot enter into an AMJP agreement with a company that
was allowed the Employee Retention Credit under section 2301 CARES Act (Pub. L. No. 116-136 § 2301, 134 Stat. 281,
347 (2020) (codiﬁed at 26 U.S.C. § 3111 note)) for the immediately preceding calendar quarter from the quarter in which
they enter the AMJP agreement. Pub. L. No. 117-2, § 7202(c), 135 Stat. at 104. The Consolidated Appropriations Act, 2021
extended section 2301 of the CARES Act; after that, ARPA created a new provision for Employee Retention Credits.
296DOT currently interprets the AMJP statute as not disqualifying an applicant that accrued an Employee Retention

Credit after July 1, 2021 from receiving an AMJP award because the statute creating AMJP only cites to Section 2301 of
the CARES Act, which was extended to wages paid before July 1, 2021 by the Consolidated Appropriations Act, 2021. Pub.
L. No. 116-260, div. EE, tit. II § 207(a), 134 Stat. at 3062. Credits taken after July 1, 2021 were authorized by section 9651
of ARPA, which did not amend the CARES Act or extend the existing Employee Retention Credit, but instead created a
new provision for Employee Retention Credits. Therefore, DOT oﬃcials told us they realized that this new provision did
not pose a continued restriction under the AMJP statutory provisions, which is a change from information DOT conveyed
about the program for the ﬁrst two application periods.
297According to DOT oﬃcials, 46 eligible applicants from the ﬁrst and second application periods requested delayed

AMJP awards.

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an AMJP agreement to an otherwise eligible applicant. All other requirements for the program
remained the same.
DOT oﬃcials have developed a plan to monitor recipients’ compliance with the terms and
conditions of the AMJP agreements. DOT oﬃcials told us that all AMJP recipients are subject to
post-award reporting requirements, performance assessment, and compliance reviews. Standard
reporting will occur at three points:
• Eligible employee group composition report. Within 10 days of a company entering into an AMJP
agreement, the company is required to submit an eligible employee group composition report
to DOT. According to DOT oﬃcials, this report provides DOT with validated or updated baseline
information on which employees are in the recipient’s eligible employee group that DOT can
use for evaluating any changes to the group over the course of the award period and the
company’s adherence to its commitments made in the AMJP agreement.298
• Interim ﬁnancial reports. These reports are required from companies that DOT designated
as higher risk.299 DOT oﬃcials told us they review interim reports to check the validity of
allowable costs and consistency with the eligible employee group reporting. DOT determines
whether a company is higher risk at the time of award, and the additional interim reporting
requirements are included in the company’s AMJP agreement.
Oﬃcials told us they use a number of criteria to determine if a company is higher risk. For
example, companies that disclosed in their application that they were engaged in legal
or business proceedings such as mergers, acquisitions, or bankruptcy proceedings are
designated as higher risk. Oﬃcials also classify companies that told DOT that they were
delinquent on a debt or companies that received more than $1.25 million in AMJP funding as
higher risk. According to oﬃcials, as of March 8, 2022, 209 recipients had been designated as
higher risk.300
• Final report. DOT requires a ﬁnal report from recipients before the ﬁnal payment request is
made. According to DOT oﬃcials, this allows them to monitor expenses incurred and compare
the ﬁnal eligible employee group to the original eligible employee group composition report.
It also allows DOT to identify any claimed costs that do not correspond with the designated
members of the eligible employee group.

298The AMJP application required data on the eligible employee group to be based on corporate data as of April 1,

2020. DOT oﬃcials told us they recognized that most companies experienced some level of change in organizational
structure, staﬃng, or both between April 1, 2020 and when a company entered into an AMJP agreement. According
to DOT oﬃcials, the company is able to replace employees in their eligible employee group, but this must be
documented and reported to DOT.
299DOT oﬃcials told us that companies that request an interim disbursement of award funds are also required

to submit interim ﬁnancial reports. Requesting an interim disbursement of award funds does not impact the
company’s risk designation by DOT.

300DOT oﬃcials told us that they have separated the 209 higher risk companies into “moderate risk” and “elevated

risk” groups. 203 of the companies fall in the “moderate risk” group and six companies fall into the “elevated risk”
group. The six companies in the “elevated risk” group had to fulﬁll additional special conditions imposed by DOT
before DOT authorized the initial disbursement of funds to those companies.

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DOT oﬃcials told us they hired a ﬁnancial support contractor to assist in initial evaluation of
applications and to conduct the initial review of the post-award reports and payment requests, as
well as to follow-up with recipients on any identiﬁed discrepancies. The contractor can elevate any
unresolved issues to the cross-organizational DOT team that manages the AMJP program. The DOT
team authorizes awards and disbursements and is responsible for making determinations about
post-award compliance.
DOT oﬃcials told us they are also examining approaches for post-award compliance reviews of
certain eligibility criteria. For example, DOT oﬃcials are comparing AMJP recipients to the public
list of Paycheck Protection Program recipients and asking any recipients of both programs to
provide documentation to DOT that shows when the recipient ﬁnished expending or repaying their
Paycheck Protection Program loans.301 Additionally, oﬃcials are exploring whether companies’ tax
ﬁlings will suﬃciently identify if they were allowed Employee Retention Credits for the calendar
quarter prior to July 1, 2021 for those recipients for which it is relevant. Oﬃcials told us this could
potentially allow them to conduct post-award reviews of Employee Retention Credit eligibility
restrictions.302
Finally, DOT has added information on the AMJP website to make it easy for the public to learn
about how to report concerns about the use of AMJP funds, whistleblower protections, and
information on how to contact the DOT Oﬃce of Inspector General.

Methodology
To conduct this work, we reviewed the CARES Act, the Consolidated Appropriations Act, 2021,
the American Rescue Plan Act of 2021, and DOT’s Federal Register notices related to the AMJP
program. We also reviewed DOT guidance, documents, and webinars, and interviewed DOT
oﬃcials. We reviewed AMJP data as of March 8, 2022. We reviewed these data for consistency and
completeness, and we determined that DOT’s data were suﬃciently reliable for the purposes of
our enclosure.

Agency Comments
We provided DOT and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
DOT provided technical comments, which we incorporated as appropriate. OMB did not provide
comments on this enclosure.

301As noted earlier, under ARPA, companies that received ﬁnancial assistance from the ﬁrst round of the Payroll

Support Program (PSP1) established by section 4113 of the CARES Act or that are still expending Paycheck Protection
Program assistance as of the date of application to the AMJP program are ineligible for the program. Similar to Employee
Retention Credits taken after July 1, 2021, ARPA does not address employers that have received ﬁnancial assistance
under two programs similar to PSP1 established under new statutes, the Payroll Support Program Extension (PSP2)
established by the Consolidated Appropriations Act, 2021, and the Payroll Support Program Extension (PSP3) established
by ARPA. Prior to the ﬁrst application deadline, DOT corrected its application to reﬂect that receiving PSP2 or PSP3 funds
did not disqualify an applicant from receiving AMJP funding.
302This would apply to 280 recipients who signed their AMJP agreement prior to September 30, 2021.

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Contact information: Heather Krause, (202) 512-2834, krauseh@gao.gov

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Payroll Support Assistance to Aviation Businesses
The Department of the Treasury has nearly completed making payroll support payments to the
aviation industry and continues to monitor recipients’ compliance with the terms and conditions
of the Payroll Support Program agreements.
Entity involved: Department of the Treasury

Background
In March 2020, Congress passed the CARES Act, which established the Payroll Support Program
(PSP1). PSP1 provided $32 billion for passenger air carriers, cargo air carriers, and aviation
contractors.303 In December 2020, the Consolidated Appropriations Act, 2021 established the
Payroll Support Program Extension (PSP2), which provided up to $16 billion for passenger air
carriers and contractors.304 In March 2021, the American Rescue Plan Act of 2021 (ARPA) created
another round of the program (PSP3), which provided up to $15 billion in ﬁnancial assistance for
passenger air carriers and aviation contractors.305
As required by statute, payments from PSP1, PSP2, and PSP3 were to be used exclusively for the
continuation of payment of wages, salaries, and beneﬁts to employees of the recipient air carrier
or eligible contractor. Eligible contractors may include those who perform catering functions or
functions on airport property directly related to air transportation, such as security or airport
ticketing. Recipients who receive payments agree to abide by the terms and conditions of the
Payroll Support Program agreement, including statutory requirements such as refraining from
conducting involuntary furloughs or terminations for speciﬁed amounts of time.
Treasury evaluates recipients’ compliance with statutory requirements and the applicable Payroll
Support Program agreement through its compliance monitoring process, which consists of two
levels of review—a set of automated testing rules that all recipients are assessed against, and
for certain recipients, a more in-depth review by a Treasury analyst. Additionally, as allowed by
statute to protect taxpayer interests, Treasury required that certain recipients provide notes,
warrants, or both as appropriate compensation for the provision of ﬁnancial assistance.306
Passenger air carriers that received payments of more than $100 million and contractors that
received more than $37.5 million were required to provide notes. In addition, cargo carriers that
received payments through PSP1 were required to provide notes equal to 56 percent of the payroll
support over $50 million. Payroll Support Program recipients that received payroll support over
the dollar amounts listed above were also required to provide warrants, if they are publicly traded
companies.

303Pub. L. No. 116-136, § 4112, 134 Stat. 281, 498 (2020) (codiﬁed at 15 U.S.C. § 9072).

304Pub. L. No. 116-260, div. N, tit. IV, § 402, 134 Stat. 1182, 2053 (2020) (codiﬁed at 15 U.S.C. § 9092).
305Pub. L. No. 117-2, § 7301, 135 Stat. 4, 104-107.

306Notes are ﬁnancial instruments whose value is a percentage of the payroll support provided over a certain threshold

and must be repaid by recipients. Warrants represent the right to buy shares of a company’s stock at a predetermined
price before a speciﬁed date.

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Overview of Key Issues
Treasury has made $59 billion in payments out of $63 billion available for PSP1, PSP2,
and PSP3. Treasury has nearly completed making Payroll Support Program payments, and
Treasury oﬃcials said that, as of March 2022, one PSP3 agreement is still awaiting Treasury’s
approval. Based on data available in March 2022, across PSP1, PSP2, and PSP3, Treasury has made
payments totaling $50.1 billion to the 10 largest air carriers. The remaining passenger air carriers
received $3.4 billion, and aviation contractors received $4.6 billion, across PSP1, PSP2, and PSP3.
Through PSP1, cargo air carriers received $827.4 million.307 In total, according to Treasury oﬃcials,
Treasury provided payments to 699 companies through PSP1, PSP2, and PSP3. This included 405
passenger air carriers, 256 contractors, and 38 cargo air carriers.
Treasury required some Payroll Support Program recipients to provide notes, warrants,
or both as taxpayer protection. According to information provided by Treasury oﬃcials, as of
January 2022, for PSP1, 36 recipients were required to provide notes, 12 of which have repaid
their notes. For PSP2, 20 recipients were required to provide notes, two of which have repaid
their notes. For PSP3, 19 recipients were required to provide notes, two of which have repaid their
notes. All of the notes have a duration of 10 years.
As previously noted, passenger air carriers that received payroll support over $100 million,
contractors receiving payroll support over $37.5 million, and cargo carriers receiving payroll
support over $50 million were required to provide warrants, if they are publicly traded companies.
In total, as of the most recent data available in March 2022, across PSP1, PSP2, and PSP3, 14
recipients met the criteria and provided warrants, according to Treasury data. These warrants will
start to expire in 2025.
Treasury’s compliance monitoring continues for PSP1, PSP2, and PSP3 recipients. To ensure
compliance with the applicable Payroll Support Program agreement, Treasury has developed a
compliance monitoring approach that involves two levels of compliance testing.308 The ﬁrst level
of compliance testing is based on quarterly compliance reports, which recipients must submit
to Treasury at the end of each quarter via an online portal.309 If a recipient does not submit a
quarterly compliance report, Treasury follows up with the recipient to try to ensure it is submitted
and may levy penalties for non-compliance.
According to Treasury oﬃcials, recipients who fail to submit their quarterly compliance report
may be required to return to Treasury all Payroll Support Program payments made to date, and
Treasury may withhold any additional payroll support payments. Treasury oﬃcials said that since
307Cargo air carriers were only eligible to receive ﬁnancial support through PSP1.

308The Treasury Inspector General also provides oversight of Payroll Support Program funds. The amount of payroll

support that a recipient receives is based on its reported employee salaries and beneﬁts. Some carriers report this
information to the Department of Transportation. However, other carriers do not, and instead submit certiﬁed
wage and salary documentation to Treasury. For some of these recipients, the Treasury Inspector General conducts
certiﬁcation audits. According to the Treasury Inspector General, the purpose of these audits is to evaluate the accuracy,
completeness, and suﬃciency of the documentation submitted, which is used to determine the amount of payroll
support the recipient may receive.
309A recipient that receives ﬁnancial assistance from multiple rounds of the Payroll Support Program generally submits

a single quarterly report, according to Treasury oﬃcials.

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the start of the Payroll Support Program, 99 percent of quarterly compliance reports have been
submitted as required. According to these oﬃcials, for the most recent quarter of compliance
testing, 682 recipients submitted quarterly compliance reports.310
All recipients then undergo Level 1 compliance testing, which consists of a set of automated
business rules that are applied to each recipients’ quarterly compliance report. For example,
according to Treasury documentation, one of Treasury’s business rules relates to salaries and
wages, and allows Treasury to ensure recipient’s compliance with the prohibition to reduce
employee salaries and wages during certain time periods. Treasury oﬃcials said that discrepancies
identiﬁed in Level 1 testing are considered potential indicators of risk of non-compliance. Across
all recipients and all rounds of testing, according to Treasury, about 2 percent of the critical
business rules that Treasury assesses for Level 1 testing are ﬂagged for additional follow-up.
If a discrepancy is identiﬁed in Level 1 testing, the recipient is elevated to Level 2 testing.311 Level
2 testing involves a more in-depth review by a Treasury analyst, who can follow-up with recipients
for additional information. During this review, a Treasury analyst conducts an in-depth review of
information the recipient submitted in the online portal and other information provided by the
recipient to determine compliance with the terms of the Payroll Support Program agreement.
Upon the conclusion of Level 2 testing, according to Treasury oﬃcials, many of the Level 1 ﬂags
across all rounds of testing were instances where, for example, a recipient did not understand the
question to which they were responding to in its quarterly compliance report.
A limited number of recipients have been found to be noncompliant with the Payroll
Support Program agreement. If a recipient fails to submit a quarterly compliance report after
Treasury follows up with the recipient or is found noncompliant through Level 2 testing, Treasury
will issue a ﬁnding of noncompliance. As of January 2022, according to Treasury oﬃcials, 23
recipients, or about 3 percent of all recipients, over the duration of the program have been issued
a ﬁnding of noncompliance. Of the 23 recipients that were issued a ﬁnding of noncompliance:
• 11 recipients were issued a ﬁnding of noncompliance because of failure to submit quarterly
compliance reports,
• 10 recipients were issued a ﬁnding of noncompliance because of unallowable involuntary
terminations, and
• two recipients were issued a ﬁnding of noncompliance because payroll support funds were
spent in an unallowable period.

310According to Treasury oﬃcials, the number of recipients that have submitted quarterly compliance monitoring
reports ﬂuctuates due to the timing of when Payroll Support Program agreements are fully executed. Across all quarters
of compliance monitoring, between 490 and 682 recipients have been tested.
311According to Treasury oﬃcials, there are other reasons beyond a Level 1 discrepancy that may result in a recipient

being elevated to Level 2 testing. For example, Treasury may receive information from a union or an inspector general
that results in the recipient being elevated to Level 2 testing. Treasury also provides additional scrutiny to recipients who
were required to provide taxpayer protections because of the size of their Payroll Support Program payment.

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Recipients that are found to be noncompliant with the terms of their Payroll Support Program
agreements may be subject to remedial action or penalties. In accordance with the remedies
set out in those agreements, Treasury may take action it deems appropriate. According to
Treasury oﬃcials, as of January 2022, seven of the 23 recipients that were issued a ﬁnding of
noncompliance were subjected to monetary penalties, and the remaining recipients have been
notiﬁed of noncompliance and the proposed remedy. Other penalties may extend the length of
time a prohibition imposed by the Payroll Support Program agreement is applied to a recipient.
For example, Treasury oﬃcials said that in at least one case, they have extended the end date of
the requirement that prohibits involuntary terminations. Treasury oﬃcials said that all penalties
must be approved by senior oﬃcials and the penalty that a recipient may face varies depending on
severity of noncompliance.
For most recipients, Treasury expects that Payroll Support Program compliance monitoring
will end in early 2023. Treasury oﬃcials said that for most recipients the last quarterly
compliance report will be due to Treasury in the second quarter of 2023.312 However, if the
recipient has a note, warrant, or other ﬁnancial instrument associated with its Payroll Support
Program payment, the recipient must continue to submit a quarterly report until the note,
warrant, or other ﬁnancial instrument is no longer outstanding or held by the federal government,
which could be up to 10 years. In these cases, Treasury would continue to conduct compliance
testing for as long as the note, warrant, or other ﬁnancial instrument is held.
Treasury has not yet developed policies and procedures to guide action on the warrants. In
October 2021, we recommended that the Secretary of the Treasury should develop policies and
procedures to determine when to act on warrants obtained as part of the Payroll Support Program
to provide appropriate compensation to the federal government. According to Treasury oﬃcials,
they are developing these policies and procedures but told us in February 2022 that they do not
have a time frame as to when these plans will be completed and implemented.
Through the Payroll Support Program, Treasury holds warrants that give it the option to purchase
shares of stock in 14 recipients.313 These warrants will start to expire in 2025, after which Treasury
cannot exercise them. As we and others have noted, air carriers’ earnings and share prices
have historically been volatile due to their sensitivity to economic, political, and health-related
conditions that aﬀect the cost of doing business and the demand for passenger travel. Further,
as we and others have reported, the pandemic has had and continues to have an eﬀect on air
carriers’ ﬁnancial conditions and by extension on their share prices. This volatility has a direct
eﬀect on the amount of money for which Treasury can expect to redeem the warrants. We
maintain that developing policies and procedures immediately will help ensure that Treasury has
312The Payroll Support Program Agreement lays out the time period that recipients are required to undergo compliance

monitoring. According to the PSP3 agreement, recipients are required to report to Treasury until the calendar quarter
that begins after the later of January 1, 2023, or the date on which no taxpayer protection instrument is outstanding.
PSP1 recipients were required to report to Treasury until the calendar quarter that begins after the later of March 24,
2022, or the date on which no taxpayer protection instrument is outstanding, and PSP2 recipients were required to
report to Treasury until the calendar quarter that begins after the later of October 1, 2022, or the date on which no
taxpayer protection instrument is outstanding.

313These 14 businesses include passenger air carriers and a cargo air carrier, speciﬁcally: Alaska Airlines, Allegiant Air,

Atlas Air, American Airlines, Delta Air Lines, ExpressJet Airlines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways,
Republic Airlines, Southwest Airlines, SkyWest Airlines, Spirit Airlines, and United Airlines.

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the information needed for informed decision-making that helps maximize the value of exercised
warrants.

Methodology
To conduct this work, we reviewed the CARES Act, the Consolidated Appropriations Act, 2021, and
ARPA. We also reviewed agency documentation and interviewed Treasury oﬃcials to understand
Treasury’s implementation and oversight processes for PSP1, PSP2, and PSP3. We reviewed PSP1
data as of March 25, 2022, PSP2 data as of March 23, 2022, and PSP3 data as of February 10, 2022.
We reviewed these data for outliers and missing information, and we determined that Treasury’s
data were suﬃciently reliable for the purposes of summarizing the number, value, and timing of
Payroll Support Program payments.

Agency Comments
We provided Treasury and the Oﬃce of Management and Budget (OMB) with a draft of this
enclosure. Treasury provided technical comments, which we incorporated as appropriate. OMB
did not provide comments on this enclosure.

GAO’s Ongoing Work
We will continue to monitor Treasury’s response to our prior recommendation.

GAO’s Prior Recommendations
The table below presents our recommendations on payroll support assistance for aviation
businesses from prior quarterly CARES Act reports.

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Prior GAO Recommendations Related to Payroll Support Assistance for Aviation Businesses
Recommendation

Status

The Secretary of the Treasury should ﬁnish developing and
Closed-implemented. In April 2021, GAO conﬁrmed
implement a compliance monitoring plan that identiﬁes and
that the Department of the Treasury (Treasury)
responds to risks in the Payroll Support Program (PSP) to ensure
had developed, documented, and implemented
program integrity and address potential fraud, including the use
a risk-based approach to monitor PSP recipients’
of funds for purposes other than for the continuation of employee compliance with the terms of the assistance.
wages, salaries, and beneﬁts. (November 2020 report)
Treasury’s risk-based approach entails a two
level compliance review. In the ﬁrst level review,
automated testing is conducted on all recipients’
quarterly reports using factors/thresholds that can
trigger recipients being moved to the next review. In
the second level review, Treasury analysts conduct
a more detailed review of recipients that failed
the ﬁrst level review or were selected for other
reasons. Treasury has also developed penalties
and a process for remediating noncompliance with
PSP agreement terms through Payroll Support
Program agreements. As of April 2021, Treasury has
identiﬁed noncompliance by recipients and applied
penalties, as appropriate.
The Secretary of the Treasury should develop policies and
procedures to determine when to act on warrants obtained
as part of the Payroll Support Program to provide appropriate
compensation to the federal government. (October 2021 report)

Partially addressed. Treasury agreed with
our recommendation and said the agency is
in the process of creating a policy to dispose
of the warrants obtained as part of the Payroll
Support Program. As of February 2022, Treasury
is developing these policies and procedures but it
does not have a time frame as to when these plans
will be completed and implemented.

Source: GAO I GAO-22-105397

Contact information Heather Krause, (202) 512-2834, krauseh@gao.gov

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Loans for Aviation and Other Eligible Businesses
The Department of the Treasury continues to monitor 23 borrowers for risk of non-payment of
their outstanding loans and all 35 original borrowers’ compliance with loan terms and conditions,
which remain eﬀective for 1 year after loans have been fully repaid.
Entity involved: Department of the Treasury

Background
The CARES Act authorized the Department of the Treasury to provide up to $46 billion in loans
and loan guarantees to certain aviation businesses and other businesses deemed critical to
maintaining national security (national security businesses).314 This loan program was intended to
provide liquidity to these sectors. Treasury executed 35 loan agreements with businesses in these
targeted sectors, totaling about $22 billion, of which $2.7 billion was disbursed.315
Of these 35 loans, as of April 1, 2022, 12 loans have been fully repaid and the total value of
outstanding loans is about $1 billion, as shown in the table below.316 Consistent with the CARES
Act, the executed loans have a duration of 5 years or less. No more loans will be executed through
this program.

314CARES Act, Pub. L. No. 116-136, § 4003, 134 Stat. at 470 (codiﬁed at 15 U.S.C. § 9042). The CARES Act did not
provide criteria for which businesses were “critical to maintaining national security.” Treasury established the following
deﬁnition: (1) performing under a “DX”-priority-rated contract or order under the Defense Priorities and Allocations
System regulations (15 C.F.R. pt. 700) or (2) operating under a valid top secret facility security clearance under the
National Industrial Security Program regulations (32 C.F.R. pt. 2004). Treasury guidance further noted that applicants that
did not meet either of these criteria may still be considered for loans, if based on the recommendation and certiﬁcation
by the Secretary of Defense or the Director of National Intelligence, the applicant’s business is critical to maintaining
national security.
315Of the 35 executed loans, seven borrowers did not draw down the full authorized amount of their loan. These seven

companies, all passenger air carriers, drew down about $1.6 billion of the $20.8 billion in loan funds Treasury made
available to them. According to Treasury oﬃcials, the obligated but undisbursed loan amounts were obligated by the
non-budgetary ﬁnancing account, and amounts not disbursed by the loan draw date were deobligated within the
ﬁnancing account.

316As directed by the CARES Act, Treasury coordinated with the Department of Transportation (DOT) to determine the

eligibility of certain applicants. DOT conﬁrmed applicants held the appropriate air carrier certiﬁcates and the status
of their operations, and reported this information to Treasury, according to DOT. Treasury also coordinated with the
Department of Defense to determine the eligibility of applicants.

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Executed and Outstanding Loans for the CARES Act Loan Program for Aviation and Other Eligible Businesses as
of Apr. 1, 2022

Number
of loans
executed

Total loan
amount
approved by
Treasury
($ millions)

Total loan
amount
disbursed by
Treasury
($ millions)

Number of loans
outstanding

Passenger and cargo air
carrier

21,116

1,903

237

Repair station operator

Ticket agent

0.6

National security business

736

745

Total

21,891

2,678

1,002

Loan category

Total outstanding
loan amount

($ millions)

Source: GAO analysis of Department of the Treasury data. |GAO-22-105397

Note: Section 4003 of the CARES Act authorized maximum assistance available through loans in three categories: passenger air
carrier, repair station operator, and ticket agent ($25 billion); cargo air carrier ($4 billion); and businesses critical to maintaining
national security ($17 billion). CARES Act, Pub. L. No. 116-136, § 4003, 134 Stat. 281, 470 (2020). To match the Department of the
Treasury’s reporting on these loans, and because air carriers that received loans could provide both passenger and cargo air
services, we combined all air carriers into a single category.
a

Includes all loan disbursements and increases in loan principal amount arising from payment-in-kind interest, less any
repayments of principal.

The CARES Act set out conditions for this loan program, including that borrowers, among other
things, (1) not reduce employment levels by more than 10 percent from levels as of March 24,
2020, through September 30, 2020, (2) refrain from share buybacks and dividend payments, and
(3) limit compensation to employees with salaries over certain amounts until 1 year after the
date the loan or loan guarantee is no longer outstanding. Additionally, the CARES Act permitted
Treasury to make loans to publicly traded companies only if those businesses provided a
warrant—an option to buy shares of stock at a predetermined price before a speciﬁed date—or an
equity interest in the company to Treasury.317 This enclosure satisﬁes a provision in the CARES Act
that directs us to submit annual reports regarding the loan program.318

317For other businesses, Treasury had discretion to obtain a warrant or equity interest or senior debt instrument.

318Speciﬁcally, the CARES Act directs GAO to submit a report to speciﬁed committees on the Section 4003 loan program

within 9 months of the enactment of the Act, and then annually thereafter through the year succeeding the last year
for which the loans, loan guarantees, or other investments made from the loan program are outstanding. Pub. L. No.
116-136, § 4026(f), 134 Stat. at 496 (codiﬁed at 15 U.S.C. § 9060). Our report in December 2020 (GAO-21-198) satisﬁed the
initial 9 month reporting requirement, our enclosure in our July 2021 recurring CARES Act oversight report (GAO-21-551)
satisﬁed our ﬁrst annual reporting requirement, and this enclosure satisﬁes our second annual reporting requirement
as it pertains to the loans to passenger air carriers (and certain speciﬁed related businesses), cargo air carriers, and
businesses critical to maintaining national security under sections 4003(b)(1)-(3).

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Overview of Key Issues
Treasury continues to assess borrowers’ risk. According to oﬃcials, Treasury has developed and
applies a rating system to gauge the riskiness of a borrower and the likelihood the borrower may
not be able to pay oﬀ its loan balance. Treasury takes other steps to ensure borrowers are able
to meet the ﬁnancial terms of their loan agreements, including requiring submission of ﬁnancial
reports; reviewing recipient ﬁnancial statements; and meeting with recipients’ management to
discuss areas of concern. The Bank of New York Mellon, which serves as the ﬁnancial agent for
Treasury, also monitors the principal and interest payments from borrowers.
According to Treasury oﬃcials, all outstanding loan principal and interest are due on the loan’s
maturity date, which ranges from September 2024 to November 2025. Before that date, borrowers
may pay down the principal of their loan and, pay all, some, or none of the interest. Accrued
interest left unpaid is added to their outstanding loan balance. As of April 2022, 12 of the 35
borrowers have fully repaid the principal and any interest accrued on their loans. Of the remaining
23 borrowers with outstanding loan balances:
• two have repaid some of the loan principal, while 21 have not paid any loan principal; and
• three have consistently paid oﬀ the accrued loan interest as it became due, while six have paid
oﬀ some of the accrued interest, and 14 have not paid oﬀ any of the accrued interest.
According to Treasury oﬃcials, there is a possibility that some of the higher risk borrowers may
default on their loans. If a default were to occur, there are two paths. A company may have to
liquidate its assets in order to repay its debt. Alternatively, a company may have to restructure its
debt.
Treasury continues to monitor loan recipients’ compliance with agreement terms and
conditions. Each quarter, recipients answer questions, through an online portal, about their
compliance with loan agreement terms. These questions focus on employee headcount, internal
controls, and other loan agreement requirements.
• First level review. Treasury uses an automated process to verify that the answers submitted by
the recipient indicate compliance with loan agreement terms and conditions.
• Second level review. If a potential compliance issue is identiﬁed through the ﬁrst level review,
then a Treasury analyst conducts a second, more detailed review of the answers and related
documents submitted by the recipient. In this second review, a Treasury analyst will also
contact the recipient to discuss the issue, if needed. During this review, potential compliance
issues are cleared or determined to be an actual compliance issue that requires remediation.
As required by statute, certain terms and conditions of the loan agreements, including restrictions
on paying dividends to shareholders and compensation for employees with salaries over certain
thresholds, are in eﬀect for 1 year after loans have been repaid in full. Once the 1-year anniversary
of repayment passes, borrowers are no longer subject to Treasury’s loan program compliance
monitoring. With the repayment of 10 loans in 2021, Treasury expects to continue monitoring all

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loan recipients’ compliance with loan agreement terms and conditions through at least the ﬁrst
quarter of 2022. For example, Ovation Travel Group, Inc. paid in full all outstanding principal and
interest on January 21, 2021. Therefore, this company would submit its ﬁnal compliance report in
the ﬁrst quarter of 2022. Since the loans can have a duration of up to 5 years, depending on the
repayment status, Treasury may keep this compliance monitoring process in place through 2026.
Treasury addresses noncompliance issues as they arise. According to Treasury oﬃcials,
as of January 2022, Treasury has found one borrower to be materially noncompliant with
loan agreement terms and conditions. However, the borrower remedied the noncompliance,
and Treasury does not plan to take further action.319 Treasury oﬃcials expect that additional
compliance issues, if any, will be found through the compliance monitoring process detailed
above. If Treasury determines that a borrower is noncompliant, these cases may be referred to the
Treasury Oﬃce of Inspector General for investigation.
Most of the penalties for noncompliance are laid out in the terms and conditions of each
loan agreement; however, according to Treasury oﬃcials, they have the authority to negotiate
amendments to agreements and address compliance violations as appropriate. Under the
terms of the loan agreements, in certain circumstances Treasury has the ability to accelerate the
loan—require payment of the loan before the terms of the loan agreement specify—in whole or in
part.
Treasury has not yet developed policies and procedures to determine when it will act on
warrants. In October 2021, we recommended that the Secretary of the Treasury should develop
policies and procedures to determine when to act on warrants obtained as part of the loan
program for aviation and other eligible businesses to beneﬁt the taxpayers. According to Treasury
oﬃcials as of February 2022, they are developing these policies and procedures but do not have a
time frame as to when these plans will be completed and implemented.
Through the loan program, Treasury holds warrants that give it the option to purchase shares
of stock in nine passenger air carriers.320 These warrants expire in 2025, after which Treasury
cannot exercise them. As we and others have noted, air carriers’ earnings and share prices
have historically been volatile due to their sensitivity to economic, political, and health-related
conditions that aﬀect the cost of doing business and the demand for passenger travel. Further,
as we and others have reported, the pandemic has had and continues to have an eﬀect on air
319On August 3, 2021, Treasury issued a Notice of Non-Compliance to Caribbean Sun Airlines, Inc., a borrower through
the Treasury loan program, because this borrower did not respond to a request from the Special Inspector General for
Pandemic Recovery (SIGPR) to ﬁll out a survey about its experience with the loan program. Pursuant to this Notice of
Non-Compliance, if Caribbean Sun Airlines, Inc. did not respond to the survey by September 2, 2021, an event of default
would occur, which would allow Treasury to pursue remedies including declaring the loan immediately due and payable.
Caribbean Sun Airlines, Inc. did not respond by September 2, 2021, and therefore, an event of default occurred with
the loan. Following the event of default, Treasury again communicated with Caribbean Sun Airlines, Inc. about the need
to complete the survey. Caribbean Sun Airlines, Inc. responded to the survey on September 10, 2021, and responses
were forwarded to SIGPR on September 13, 2021. Therefore, according to Treasury oﬃcials, Caribbean Sun Airlines is
now in compliance with the loan terms and conditions, and Treasury does not plan to take further action on this matter.
According to Treasury oﬃcials, Caribbean Sun Airlines, Inc. has not been found to be out of compliance with other terms
and conditions of the loan agreement.
320These nine passenger air carriers are Alaska Airlines, American Airlines, Frontier Airlines, Hawaiian Airlines, JetBlue

Airways, Mesa Airlines, Republic Airways, SkyWest Airlines, and United Airlines.

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carriers’ ﬁnancial conditions, and by extension on their share prices. This volatility has a direct
eﬀect on the amount of money for which Treasury can expect to redeem the warrants. We
maintain that developing policies and procedures immediately will help ensure that Treasury has
the information needed for informed decision-making that helps maximize the value of exercised
warrants.

Methodology
To conduct this work, we reviewed the most recent Treasury data on the status of executed loans
as of April 1, 2022; reviewed the CARES Act; and interviewed Treasury oﬃcials. We are continuing
to use the data on loans that we have found reliable through interviews with agency oﬃcials on
the data’s consistency and completeness during prior reviews. We determined the data were
suﬃciently reliable for the purposes of our enclosure.

GAO’s Ongoing Work
We will continue to monitor Treasury’s response to our prior recommendation.

GAO’s Prior Recommendations
The table below presents our recommendation on loans for aviation and other eligible businesses
from a prior quarterly CARES Act report.

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Prior GAO Recommendation Related to Loans for Aviation and Other Eligible Businesses
Recommendation

Status

The Secretary of the Treasury should develop
Partially addressed. Treasury agreed with our recommendation
policies and procedures to determine when to act on and said the agency is in the process of creating a policy to
warrants obtained as part of the loan program for
dispose of the warrants obtained as part of the loan program.
aviation and other eligible businesses to beneﬁt the As of February 2022, Treasury is developing these policies and
taxpayers. (October 2021)
procedures but it does not have a time frame as to when these
plans will be completed and implemented.
Source: GAO. | GAO-22-105397

Related GAO Products
Financial Assistance: Lessons Learned from CARES Act Loan Program for Aviation and Other Eligible
Businesses. GAO-21-198. Washington, D.C.: December 10, 2020.
Contact information: Heather Krause, (202) 512-2834, krauseh@gao.gov

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Transit Industry
Sponsors of Capital Investment Grants projects for new transit systems or extensions of existing
transit services are using American Rescue Plan Act of 2021 funds to mitigate increased project
costs and shortfalls in local funding and in some cases to prevent project delays.
Entity involved: Federal Transit Administration, within the Department of Transportation

Background
Millions of Americans rely on public transportation systems for mobility and access to jobs,
education, and essential services, such as medical care and grocery shopping. Within the
Department of Transportation (DOT), the Federal Transit Administration (FTA) provides grants
to state departments of transportation, local public transit systems, and tribes to support and
expand transit services. These services may be provided by various public transportation modes,
including buses, subways, light rail, commuter rail, trolleys, and ferries in urban, rural, and tribal
areas.
The CARES Act appropriated about $25 billion to FTA to support the transit industry through two
formula programs—the Urbanized Area Formula program ($22.7 billion) and the Formula Grants
for Rural Areas program ($2.2 billion).321 CARES Act grant funds were made available to transit
agencies for COVID-19-related expenses incurred on or after January 20, 2020; FTA allocated
the $25 billion to urbanized areas, states, and tribes on April 2, 2020.322 These funds must now
be directed, to the maximum extent possible, to payroll and operating expenses.323 There is no
limit on the amount of funds that recipients may use for operating expenses, and the funds are
available until expended.324

321Pub. L. No. 116-136, 134 Stat. 281, 599 (2020). Formula programs allocate funding to recipients using a distribution
formula set by statute. At the time the CARES Act was enacted, $30 million was set aside for tribal transit programs
from the Rural Area formula program appropriation. The CARES Act provided an additional $75 million set-aside for the
administration and oversight of the appropriated funds.
322An urbanized area is an area that encompasses a population of 50,000 or more and has been deﬁned and

designated as such by the Secretary of Commerce. Designated recipients of FTA Urbanized Area formula funds can
include entities designated by local oﬃcials, state governors, and local public transportation operators; alternatively, a
state or regional authority responsible for public transportation may be the designated recipient. 49 U.S.C. § 5302.
323As of December 27, 2020, recipients were required to direct funds, to the maximum extent possible, to payroll and

operations of public transit (including payroll and expenses of private providers of public transportation), unless the
recipient certiﬁes to the Secretary of Transportation that the recipient has not furloughed any employees. If the recipient
has certiﬁed this, the agency may use relief funds for other uses such as capital or planning expenses. Consolidated
Appropriations Act, 2021, Pub. L. No. 116-260, div. M, tit. IV, 134 Stat. 1182, 1947 (2020).
324These ﬂexibilities are exceptions to the usual program requirements for FTA’s Urbanized Area and Rural Area formula

programs. An additional exception is that there is no requirement for local matching funds for grants provided to large
and small urban areas and rural areas. All other Urbanized Area and Rural Area program requirements apply to CARES
Act funds, with the exception that operating expenses and certain capital expenses do not have to be included in a
transportation improvement program, a long-range transportation or statewide transportation plan, or a statewide
transportation improvement program.

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On December 27, 2020, the Consolidated Appropriations Act, 2021 appropriated an additional $14
billion to FTA for the transit industry to prevent, prepare for, and respond to COVID-19.325 Further,
on March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) appropriated approximately
$30.5 billion to FTA for the same purpose.326 ARPA funds are available for obligation until the end
of ﬁscal year 2024.
Of the funding ARPA provided to FTA, $1.7 billion is allocated to the Capital Investment Grants
program, a discretionary grant program that helps fund new transit systems or expansion of
existing services.327 This enclosure is primarily focused on Capital Investment Grants project
sponsors’ use of ARPA funding, as well as FTA’s administration of that funding.
There are three categories of projects within the Capital Investment Grants program: New Starts;
Core Capacity Improvement; and Small Starts.328 Projects are designed and implemented by
sponsors—usually local transit agencies, but also states’ departments of transportation or local
governments. If selected for a grant award, project sponsors enter into a grant agreement with
FTA, which speciﬁes the maximum amount of federal funding a project may receive.329
FTA distributed ARPA funding for the Capital Investment Grants program among 45 eligible
projects not yet open for service. To be eligible for ARPA funding, New Starts and Core Capacity
Improvement projects must have an existing grant agreement and received an allocation prior
to or for ﬁscal year 2020. However, certain Small Starts projects may be eligible for ARPA funding
without a grant agreement. ARPA funding is additional to the federal funding provided through
grant agreements and is not subject to the maximum amount of federal funding speciﬁed in
these agreements. ARPA funding supplements projects’ non-federal funding, and project sponsors
are not required to provide any matching funds for ARPA funds. ARPA allocates funds to Capital
Investment Grants projects based on the percentage of project funding from sources other than
the Capital Investment Grants program, which are speciﬁed in the grant agreement. Project
sponsors are not required to provide additional justiﬁcations to FTA for use of these funds.
325Pub. L. No. 116-260, div. M, tit. IV, 134 Stat. 1182, 1945. Division M of the Consolidated Appropriations Act, 2021 is

also referred to as the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA).

326Pub. L. No. 117-2, § 3401, 135 Stat. 4, 72. While Consolidated Appropriations Act, 2021 funds are available for

obligation until expended, ARPA funds are available for obligation until the end of ﬁscal year 2024.
327ARPA § 3401(b)(4).

328See 49 U.S.C. § 5309. At the time ARPA was enacted, these projects were generally deﬁned as follows: New Starts

projects were projects for capital investments for which sponsors request $100 million or more in Capital Investment
Grants funding or have an anticipated total project cost of $300 million or more. Core Capacity projects were substantial
capital investments in existing ﬁxed guideway systems that increase the capacity of a transit corridor by not less than 10
percent. Small Starts projects included certain types of projects, such as new ﬁxed guideway capital projects, for which
sponsors were provided, or would be provided, less than $100 million in Capital Investment Grants funding and have
an anticipated total project cost of less than $300 million. The Infrastructure Investment and Jobs Act subsequently
amended the monetary thresholds for New Starts and Small Starts projects. See Pub. L. No. 117-58, § 30005, 135 Stat.
429, 894 (2021) (codiﬁed as amended at 49 U.S.C. § 5309).
329According to FTA, a grant agreement deﬁnes the project, including its cost, scope, schedule, and level of service;

commits to a maximum amount of annual and total Capital Investment Grants program ﬁnancial assistance (subject
to appropriations); establishes the terms and conditions of federal ﬁnancial participation; deﬁnes the period of time
for completion of the project; and helps FTA oversee and the project sponsor manage the project in accordance with
applicable federal statutes and regulations. Upon completion of the payment schedule outlined in the agreement, the
Capital Investment Grants funding commitment has been fulﬁlled.

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Overview of Key Issues
Transit agencies have obligated the majority of COVID-19 relief funds, and have expended
the majority of CARES Act and Consolidated Appropriations Act, 2021 funding. According to
FTA data, as of February 28, 2022, transit agencies had obligated 99 percent of allocated CARES
Act funds and had expended 88 percent of the funds (see table). In addition, transit agencies had
obligated about 91 percent of allocated funds from the Consolidated Appropriations Act, 2021 and
about 80 percent of allocated formula funds from ARPA. FTA oﬃcials reported that as of February
28, 2022, 96 applications for new grants are in process for Consolidated Appropriations Act, 2021
funds and 193 applications are in process for ARPA formula funds.330

330FTA oﬃcials review grant applications to ensure that a transit agency’s proposed expenditures are eligible for

reimbursement by FTA. Only transit agencies whose applications are approved may obligate funding.

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FTA Allocations and Transit Agency Obligations and Expenditures of COVID-19 Relief Formula Funds, as of Feb.
28, 2022
Allocations
($ millions)

Obligations
($ millions)

Expenditures
($ millions)

24,925

24,580

21,628

Consolidated Appropriations, 2021

13,990

12,720

9,217

28,222

22,613

3,848

67,137

59,913

34,693

Funding source
a

CARES Act

American Rescue Plan Act of 2021
d

Total

Source: GAO analysis of Federal Transit Administration (FTA) data. | GAO-22-105397

The CARES Act appropriated $25 billion for transit industry grants.

The Consolidated Appropriations Act, 2021 appropriated $14 billion.

The American Rescue Plan Act of 2021 appropriated about $30.5 billion, approximately $28.2 billion of which was formula
funding.
d
e

Numbers and percentages may not sum to totals because of rounding.

Allocations do not include funding set aside for FTA administration and oversight.

Most Capital Investment Grant projects experienced increased costs during the pandemic,
and seven projects used ARPA funding to mitigate shortfalls in local funding. Most
of the 15 project sponsors we interviewed—responsible for 21 Capital Investment Grants
projects—told us they experienced increased costs during the COVID-19 pandemic. Speciﬁcally, 12
sponsors—responsible for 14 projects—told us they experienced or anticipated experiencing at
least one type of cost increase for at least one of their projects.
According to sponsors, these project cost increases were primarily caused by rising material and
labor costs. For example, 11 projects reportedly experienced increased costs for raw materials,
such as steel and lumber, and for manufactured items, such as spare parts. In addition, ﬁve
projects reportedly experienced increased labor costs, such as increased wages, and ﬁve projects
experienced increased costs related to COVID-19 restrictions and requirements, such as for
additional cleaning and sanitation.
Sponsors of seven projects reported using the ARPA funds to oﬀset shortfalls in their projects’
non-federal sources of funding, primarily local taxes and fare revenue. For example, one project
sponsor initially planned to rely heavily on fare revenue to fund the non-federal share of its
project. As a result of the pandemic, the project sponsor saw ridership drop to about 6 percent of
pre-pandemic levels, and it has since increased to only about 20 to 25 percent of pre-pandemic
levels. The ARPA funds helped the project sponsor oﬀset the dramatic reduction in ridership and
associated fare revenue to keep the project moving forward, according to the project sponsor.
Similarly, another sponsor told us ARPA funding mitigated the shortfall in revenue from sales tax
its project experienced due to the pandemic. Three project sponsors told us that because they
could use ARPA funds as their local match, they were able to fund other capital projects with their
non-federal funds. According to one sponsor, these investments, such as purchasing additional
buses, will help delay or prevent future service or operating cuts.

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While projects may experience construction delays, sponsors generally did not expect these
delays to aﬀect service dates, and about half said ARPA funding helped projects stay on
schedule. Sponsors reported construction delays due to a variety of factors during the pandemic,
but sponsors of 14 out of the 21 projects said these delays would not aﬀect their planned dates
to begin passenger service. For example, oﬃcials from one transit agency told us that while they
had experienced delays in construction, they had built extra contingency time into their project
schedule in anticipation of delays, allowing them to remain on schedule to begin service on
the scheduled date. When projects experienced construction delays, sponsors we interviewed
attributed them to multiple factors:
• Supply chain issues. Eight projects experienced delays related to supply chain issues, such as
increased delivery times for and shortages of materials.
• COVID-19—related requirements. Four projects experienced extended timeframes due to
COVID-19—related restrictions that aﬀected construction. For example, one sponsor told us
social distancing requirements had caused construction delays and ineﬃciencies.
• Labor availability. Four projects experienced delays due to a lack of available labor. For
example, one sponsor experienced extended timeframes due to operational shutdowns at
its vehicle manufacturer. The vehicle manufacturer cited COVID-19 staﬀ illnesses and labor
availability among the reasons for its manufacturing delays.
Sponsors of 11 projects told us that ARPA funds have helped their projects stay on track to meet
their scheduled service dates, even with shortfalls in fare revenue and local taxes. For instance,
one project sponsor told us that ARPA funds ensured full funding was available for its two projects,
which enabled the sponsor to continue awarding contracts and avoid critical project delays.
Another project sponsor told us that the ARPA funds allowed it to absorb cost increases due to
the pandemic, and stay on track awarding contracts. Lastly, another project sponsor said that the
ARPA funds allowed it to proceed with material procurements and mitigate potential delays given
the shortfall of local funds it had experienced.
FTA uses existing procedures to distribute and oversee the use of ARPA funds by Capital
Investment Grant project sponsors. All project sponsors we interviewed said they had not
experienced challenges related to the allocation, obligation, or expenditure of the ARPA funds.
According to some sponsors, this was partly because FTA used existing Capital Investment Grants
program procedures to distribute these funds. For example, oﬃcials from one transit agency told
us that FTA’s use of existing procedures enabled them to draw on their prior funding experience
with FTA and avoid any challenges accessing or obligating ARPA funding.
Similarly, FTA oﬃcials told us their oversight process for ARPA funds that sponsors obligate
for Capital Investment Grants projects is identical to that used for Capital Investment Grants
funding. According to oﬃcials, this oversight is primarily conducted by FTA’s regional oﬃces
and contractors, as well as FTA’s Oﬃce of Safety and Oversight. We previously reported on FTA’s
implementation and oversight of the Capital Investment Grants program in July 2020.
Both FTA and project management oversight contractors play a role in oversight. Speciﬁcally, FTA
oﬃcials said that prior to entering into a grant agreement, FTA reviews several factors, including

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a project’s cost and schedule and risks associated with the project. Oﬃcials told us that after a
grant agreement is in place, FTA relies on project management oversight contractors to monitor
projects to determine whether they are on schedule, within scope, and in compliance with federal
regulations. According to oﬃcials, these contractors review reports from project sponsors on
a quarterly basis, though they may do so on a monthly basis in cases where issues have been
identiﬁed. These reports update project management oversight contractors on the status of
the project, including progress on construction and negotiating contracts, and how the project
aligns with the cost, scope, and schedule set out in the project’s grant agreement. Additionally,
FTA oﬃcials said FTA regional administrators meet with project sponsors on a quarterly basis to
discuss any areas of concern.

Methodology
To conduct this work, we analyzed COVID-19 relief laws, other applicable statutes and regulations,
and FTA data on transit industry grant funding, as of February 28, 2022. To assess the reliability of
these data, we reviewed a 2020 audit of DOT’s ﬁnancial system, reviewed previous GAO reviews of
FTA’s internal controls, and interviewed DOT oﬃcials. We found these data to be reliable for the
purposes of describing federal allocations and transit agency obligations and expenditures.
We interviewed and reviewed written responses from FTA oﬃcials about how they were
implementing provisions of the CARES Act; the Consolidated Appropriations Act, 2021; and ARPA.
In addition, we conducted semi-structured interviews with oﬃcials from 15 Capital Investment
Grants project sponsors. We interviewed oﬃcials, either by phone or through written questions
and responses, to gather information on how project costs and timeframes have changed, if at all,
due to the COVID-19 pandemic, and how project sponsors are using ARPA funding to support their
projects. We also spoke with these oﬃcials to identify any challenges they faced using ARPA relief
funding and steps FTA had taken to address these challenges. We identiﬁed these project sponsors
as being the sponsors for the 20 Capital Investment Grants projects that had obligated ARPA funds
as of January 19, 2022. In some cases, sponsors were responsible for multiple Capital Investment
Grants projects that received ARPA funding, including one additional project which the sponsor
began obligating funding for after January 19, 2022. This addition yielded a total of 21 projects in
our analysis.

GAO’s Ongoing Work
Our work on transit industry COVID-19 relief funds is ongoing.

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Related GAO Products
Capital Investment Grants Program: FTA Should Improve the Eﬀectiveness and Transparency of Its
Reviews. GAO-20-512. Washington D.C.: July 16, 2020.
Contact information: Andrew Von Ah, (213) 830-1011, vonaha@gao.gov

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Paycheck Protection Program
The Small Business Administration has addressed one recommendation we previously made
for the Paycheck Protection Program by developing and implementing an oversight plan for the
program. It has partially addressed the three other recommendations we made. In December
2021, the agency provided a fraud risk assessment that had been prepared by its contractor, and
in February 2022, it designated an antifraud entity that will be responsible for completing the
assessment and developing a comprehensive antifraud action plan. The agency has developed a
sampling plan and intends to report the program’s improper payment rate in its Fiscal Year 2022
Agency Financial Report.
Going forward, there are several lessons learned from the Paycheck Protection Program that could
be applied to future emergency lending programs, including conducting a risk assessment when
designing the program, incorporating strong oversight from the beginning of the program, and
maintaining central documentation of program changes.
Entities involved: Small Business Administration, Department of the Treasury

Background
Since March 2020, Congress has provided commitment authority of about $814 billion for the
Paycheck Protection Program (PPP) under the Small Business Administration’s (SBA) largest
guaranteed loan program, its 7(a) small business lending program.331 PPP loans, made by lenders
but guaranteed 100 percent by SBA, are low interest (1 percent) and fully forgivable if certain
conditions are met.332
PPP closed in May 2021, and as of March 27, 2022, lenders had made about 11.4 million PPP
loans, totaling about $789 billion.333 Of those, lenders made about 5.1 million loans (totaling about
$518 billion) during Round 1 (April through August 2020). SBA relaunched the program (Round
2) on January 11, 2021, following enactment of the Consolidated Appropriations Act, 2021, which
authorized additional PPP loans and made changes to the program. Among other things, the act
expanded the categories of forgivable nonpayroll costs and allowed PPP borrowers to receive a

331See Pub. L. No. 116-136, § 1102(b), 134 Stat. 281, 293-94 (2020); Pub. L. No. 116-139, § 101(a), 134 Stat. 620, 620

(2020); Pub. L No. 116-260, div. N, tit. III, § 323(a) 134 Stat. 1182, 2018-19 (2020); Pub. L. No. 117-2, § 5001(d) 135 Stat. 4,
85 (2021). The program also paid fees to lenders for processing PPP loans.
332As originally implemented by SBA, at least 75 percent of the loan forgiveness amount must have been used for

payroll costs. In addition, the CARES Act required loans to be used within an 8-week period in order for the loans to
be fully forgiven. However, the Paycheck Protection Program Flexibility Act of 2020 modiﬁed this to at least 60 percent
and allowed borrowers to pay or incur those expenses over a 24-week period. Pub. L. No. 116-142, § 3, 134 Stat. 641,
641-42 (2020). Under that act, the loan forgiveness covered period for PPP loans was to end the earlier of 24 weeks
after origination or December 31, 2020. The Consolidated Appropriations Act, 2021 further modiﬁed the covered period
for forgiveness to allow the borrower to choose a covered period ending on any date between 8 and 24 weeks after
origination. Pub. L. No. 116-260, div. N, tit. III, § 306, 134 Stat. 1182, 1997 (2020).
333New applications were accepted through May 31, 2021, and SBA had until June 30, 2021, to process submitted

applications.

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second PPP loan (second draw loans) of up to $2 million, provided that they met certain criteria.334
In Round 2, lenders made about 6.3 million loans totaling about $271 billion.
SBA implemented the program rapidly, and millions of small businesses have beneﬁted from
PPP.335 However, the speed with which SBA implemented the program left it with limited
safeguards to identify and respond to program risks, including susceptibility to improper
payments and fraud. Consequently, we have made four recommendations in our prior bimonthly
and quarterly CARES Act reports to help ensure program integrity, achieve program eﬀectiveness,
and address potential fraud. As discussed below, SBA has addressed one of the recommendations
and partially addressed the other three.

Overview of Key Issues
Status of SBA’s loan forgiveness determinations. Based on our analysis of loan-level SBA data
as of January 2, 2022, of the approximately 11.5 million PPP loans, SBA had received forgiveness
decisions from lenders for about 9.3 million loans (about 81 percent).336 The number of lender
forgiveness decisions submitted to SBA peaked in August 2021 at around 1.3 million and has
decreased each subsequent month, to about 390,000 in December 2021. SBA made forgiveness
determinations on 9.2 million of the submitted forgiveness decisions, resulting in the vast
majority, about 97 percent (9.0 million loans totaling more than $643 billion), receiving full
forgiveness (see ﬁgure). About 104,000 lender forgiveness decisions were still being reviewed by
SBA.337

334The Consolidated Appropriations Act, 2021 expanded the categories of forgivable nonpayroll costs to include

certain operations, property damage, supplier, and worker protection expenditures. PPP borrowers were eligible to
receive a second PPP loan of up to $2 million provided that they met certain criteria, such as having not more than 300
employees, having used the full amount of their initial PPP loan, and having experienced revenue reductions of at least
25 percent in a quarter of 2020 when compared to the same quarter in 2019. Pub. L No. 116-260, div. N, tit. III, § 311, 134
Stat. 1182, 2001-07 (2020); see also 86 Fed. Reg. 3712 (Jan. 14, 2021).
335Treasury worked with SBA to implement PPP. For more information on the economic eﬀects of PPP, see the enclosure

on the Economic Eﬀects of the Paycheck Protection Program in app. I.

336Under SBA rules and guidance, the borrower submits the forgiveness application to the lender. The lender then has

60 days from receipt of the application to review and submit its forgiveness decision (approved in full, approved in part,
or denied) to SBA. SBA reviews the lender decision, makes a ﬁnal forgiveness determination, and remits the appropriate
forgiveness amount to the lender. In general, SBA must remit the forgiveness amount to the lender within 90 days of
that amount being determined. SBA and Treasury oﬃcials told us they interpreted the CARES Act requirement to remit
funds within 90 days to be subject to SBA’s review of loans. The total number of PPP loans in our analysis is slightly
diﬀerent from the number publicly reported by SBA as of March 27, 2022, because of timing.
337According to SBA oﬃcials, lenders had recommended that 2,925 of the approximately 104,000 loans still under SBA

review not receive any forgiveness, as of February 15, 2022. Lenders are responsible for reviewing that a borrower’s
loan forgiveness application is complete and conﬁrming the receipt of suﬃcient documentation to verify payroll and
nonpayroll costs and the borrower’s calculations. A lender may deny forgiveness if it identiﬁes errors in the borrower’s
calculation or material lack of substantiation in the borrower’s supporting documents that cannot be remedied.

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Status of SBA Loan Forgiveness Determinations on Paycheck Protection Program Loans, as of Jan. 2, 2022

Note: As of January 2, 2022, lenders had not submitted loan forgiveness decisions for 2,172,874 PPP loans. Borrowers may not
have submitted loan forgiveness applications to their lenders for these outstanding loans, as they typically have between 2 and
5 years, depending on when the loan was made, to apply for forgiveness.

In general, Community Development Financial Institutions (CDFI), Minority Depository Institutions
(MDI), and nonbanks were the least likely to have submitted loan forgiveness decisions to SBA for
their borrowers, as of January 2, 2022.338 This pattern is more pronounced for loans made in 2021,
as less than two-thirds of borrowers from CDFIs and MDIs (57 percent) and nonbanks (64 percent)
had their loan forgiveness decisions submitted to SBA (see ﬁgure).339 In contrast, smaller banks
and credit unions had submitted loan forgiveness decisions for 81 percent of their borrowers who
received loans in 2021. According to SBA oﬃcials, small banks, as compared to CDFIs and MDIs,
have been working more eﬀectively with their borrowers to collect forgiveness applications and
submit decisions.340
338CFDIs and MDIs target loans to businesses and individuals in traditionally underserved areas, with the goal of
expanding economic opportunity. CDFIs include both banks and nonbanks that are certiﬁed by Treasury as lenders that
share a common goal of expanding economic opportunity in low-income communities by providing access to ﬁnancial
products and services for local residents and businesses. MDIs are generally deﬁned as depositories that meet the
following criteria: (1) if a privately owned institution, 51 percent is owned by socially and economically disadvantaged
individuals; (2) if publicly owned, 51 percent of the stock is owned by socially and economically disadvantaged
individuals; and (3) in the case of a mutual institution, the majority of the board of directors, account holders, and the
community that the institution serves are predominantly minority. The term “minority” means any Black American,
Native American, Hispanic American, or Asian American. 12 U.S.C. § 1463 note; 15 U.S.C. § 636(a)(36)(A)(xi)(II). We
assigned to the CDFI/MDI group all lenders SBA ﬂagged as CDFIs, MDIs, or both, and all remaining lenders to one of the
other groups.
339Borrowers may not have submitted loan forgiveness applications to their lenders for these outstanding loans.

340About 78 percent of the PPP loans made by community ﬁnancial institutions, which include CDFIs and MDIs, were

for less than $150,000, compared to about 50 percent for the program as whole. On July 30, 2021, SBA published an
interim ﬁnal rule with changes meant to simplify the loan forgiveness process for borrowers with the smallest loans. 86
Fed. Reg. 40921 (July 30, 2021). The interim ﬁnal rule gave borrowers with loans of $150,000 or less whose lenders have
opted into using SBA’s direct borrower forgiveness platform the option to apply for forgiveness directly to SBA instead of

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Percentage of Paycheck Protection Program Loans with Loan Forgiveness Decisions Submitted to SBA by Lender
Type and Year, as of Jan. 2, 2022

Note: For this analysis, “banks and credit unions” include banks, credit unions, and savings and loan associations. All
nondepository lenders are categorized as “nonbanks,” including SBA Small Business Lending Companies, SBA Certiﬁed
Development Companies, SBA Microlenders, Business and Industrial Development Corporations, Farm Credit System lenders,
and state-regulated ﬁnancial companies. We excluded 780 loans made in 2020 and 1,797 loans made in 2021 from our analysis
because SBA’s data did not have an asset size for the lender.

Status of program oversight. In January 2022, SBA ﬁnalized an updated Master Review Plan for
the review of loans made under the program and loan forgiveness decisions. The updated plan
builds upon the one SBA provided us in December 2020 and includes an overview of the three
types of reviews that SBA and its contractor conduct: an automated screening of all loans at both
the individual loan and aggregate levels, a manual review of selected loans, and a quality control
review of a sample of loans.341 The updated plan includes additional information and incorporates
changes to some of the reviews.
their lender. Similar to loan forgiveness applications submitted directly to the lender, the lender would approve (or deny)
the loan forgiveness request.
341As we reported in July 2021, an SBA contractor screens all PPP loans using an automated rules-based tool. The tool

compares PPP loan data against publicly available information and applies eligibility and fraud detection rules to identify
anomalies or attributes that may indicate noncompliance with eligibility requirements, fraud, or abuse. Loans that are
identiﬁed by the automated screening process or separately ﬂagged will be considered for manual review for eligibility,
fraud or abuse, or compliance with applicable loan forgiveness rules. A separate contractor will conduct quality control
reviews on a sample of loans to independently review whether the loan review process was executed as designed and
whether the evidence in the loan review ﬁle suﬃciently supported SBA’s loan review decision.

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• Automated review of loans made in 2021. Unlike the 2020 loans where SBA used an automated
system to review loans after they were made, the plan describes additional screening
performed for 2021 ﬁrst and second draw loan applications before the loans were originated.
To screen these loans, the contractor used a subset of the automated screening rules it used
to review the 2020 loans for potential indicators of eligibility or fraud risks. The plan describes
some of the elements included in these reviews and how lenders could resolve identiﬁed
issues.
• Contractor manual review of loans. In its updated plan, SBA revised some aspects of its manual
review process. For example, it no longer requires all loans of $2 million or more to receive a
manual review. Rather, they, like loans of less than $2 million, could receive a manual review
if they were identiﬁed by the automated screening process or separately ﬂagged for manual
reviews. The updated plan also eliminated the loan necessity questionnaires that certain
borrowers previously had to complete (discussed more below). In addition, the updated plan
describes the following steps SBA has taken that aﬀected the number and timing of manual
reviews to be conducted. Speciﬁcally, SBA:
•
cleared (without performing a manual review) batches of loans that were identiﬁed as
being in speciﬁc categories that present minimal risk of noncompliance with eligibility
requirements, fraud, or abuse;
•

prioritized manual reviews based on their perceived risk and not the forgiveness
request date; and

•

applied machine learning to identify alerts that indicated minimal risk of
noncompliance with eligibility requirements, fraud, or abuse and could be cleared
without manual reviews.342

By implementing the updated plan and the more detailed procedures referenced in it, SBA has,
at least in part, addressed our concerns about the initial lack of upfront controls in the PPP loan
approval process.343 Through the backend screening of Round 1 loans, the upfront screening of
Round 2 loans, and more detailed reviews of loans with potential problems, SBA has improved its
oversight of the program.
Lessons learned for future emergency small business lending programs. The negative eﬀects
of the pandemic on small businesses led Congress to create a variety of programs to help aﬀected
businesses. PPP was the largest of these programs. Our evaluation of SBA’s implementation of
the program, along with challenges highlighted by lenders and the SBA Oﬃce of Inspector General
(OIG), oﬀer possible lessons learned for future emergency-lending programs.
• Provide clear legislative direction. Although Congress substantially outlined the structure for PPP
in the CARES Act and subsequent legislation, it left key policy decisions to SBA and Treasury.
342Machine learning is a process through which systems begin with data—generally in large amounts—and

infer rules or decision procedures that aim to predict speciﬁed outcomes. This inference happens when the
system is able to train itself using data to increase the accuracy of its predictions.

343As discussed in more detail later, SBA has not yet developed a strategy to manage fraud risks in the program.

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The agencies’ implementation decisions aﬀected both borrowers and lenders, and Congress
passed subsequent legislation to provide more speciﬁc direction for the program.
While Congress did not put requirements into statute, it did express its views in a Sense of the
Senate statement in the CARES Act that SBA should encourage lenders and agents to prioritize
small business concerns and entities in underserved and rural markets, including veterans
and members of the military community, small business concerns owned and controlled by
socially and economically disadvantaged individuals, and businesses in operation for less
than 2 years.344 However, SBA stated in its initial interim ﬁnal rule that PPP was “ﬁrst-come,
ﬁrst-served.”345 In addition, SBA did not ask for demographic information on the PPP loan
application used in 2020, and few applicants provided this information.346
Subsequently, when Congress appropriated additional funding for PPP in April 2020, it
allocated a total of $60 billion for PPP loans made by certain small insured depository
institutions, certain small credit unions, and community ﬁnancial institutions that are
recognized as more likely to serve minority, underserved, veteran, and women-owned small
businesses than other lending institutions.347 In addition, the Consolidated Appropriations Act,
2021 included a provision that all future PPP applications include a means by which applicants
may, at their discretion, submit demographic information including sex, race, ethnicity, and
veteran status of the owner.348 In January 2021, SBA revised its PPP loan application to request
optional demographic data.
There was also a lack of clarity on the relevance of a business’s need for a PPP loan. When it
created PPP, Congress eliminated the 7(a) program’s requirement that applicants demonstrate
they cannot obtain credit through a conventional lender at reasonable terms—commonly
referred to as the “credit elsewhere” requirement.349 Instead, the CARES Act required
applicants to make a good faith certiﬁcation “that the uncertainty of current economic
conditions makes necessary the loan request to support the ongoing operations of the eligible
recipient,” among other things.

344Pub. L. No. 116-136, § 1102(a), 134 Stat. 281, 293 (2020). A “sense of” provision is a non-binding statement that

expresses the opinion of Congress or the relevant chamber. The resolutions are not legally binding, have no formal
eﬀect on public policy, and have no force of law. See Congressional Research Service, “Sense of” Resolutions and
Provisions, Report No. 98-825 (Washington, D.C.: Oct. 16, 2019).

345According to Treasury oﬃcials, this approach was adopted to get the money out as quickly as possible due to the

economic emergency. They further noted that one issue that arose early in the program was that banks (especially
big banks) placed restrictions on who they would serve, focusing primarily on their existing clients.
346Of the 5.1 million borrowers who received a PPP loan in 2020, 70 percent did not include information on the

applicant’s gender, 84 percent did not provide information on the applicant’s race, and 77 percent did not provide
information on the applicant’s veteran status. SBA did include an optional form for demographic information in the
loan forgiveness application it ﬁrst made available in May 2020.
347Among other things, community ﬁnancial institutions include CDFIs and MDIs. Pub. L. No. 116-139, § 101(d), 134

Stat. 620, 621-22 (2020).

348Pub. L. No. 116-260, div. N, tit. III, § 309, 134 Stat. 1182, 2000 (2020).

349Reasonable terms and conditions take into consideration factors such as the business industry in which the loan

applicant operates, whether the applicant is an enterprise that has been in operation for not more than 2 years, the
adequacy of the collateral available, and the loan term necessary to assure the ability of the applicant to repay the
debt from the cash ﬂow of the business. 15 U.S.C. § 632(h). SBA also requires lenders to certify that 7(a) borrowers
cannot obtain ﬁnancing from personal resources or the resources of the business or its owners of 10 percent or
more.

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However, neither Congress nor SBA elaborated on this “economic necessity” requirement until
after concerns were raised about some publicly traded companies receiving PPP loans. On
April 23, 2020, SBA provided general information in a response to a frequently asked question
(FAQ) published on its website that borrowers should carefully review the required certiﬁcation
to ensure that they qualify.350 In the same response, SBA reiterated that borrowers must
self-certify that their PPP loan was necessary, and stated that it was unlikely that a publicly
traded company with substantial market value and access to capital markets would be able to
make this certiﬁcation in good faith. However, by then, more than 1.6 million businesses had
received a PPP loan, including some publicly traded companies that potentially had access to
alternative forms of credit.351
SBA announced in October 2020 that it would use questionnaires to inform its assessment
of a business’s good faith certiﬁcation of economic necessity. Released in December 2020,
these questionnaires required for-proﬁt and nonproﬁt businesses that, together with their
aﬃliates, received PPP loans with an original principal amount of $2 million or greater to
complete the questionnaire. However, in July 2021, SBA announced that it would no longer use
the questionnaires, explaining that the reviews were resource intensive and had caused delays
beyond the 90-day statutory timeline for forgiveness and that the results of the reviews it had
completed showed that audit resources would be more eﬃciently deployed across all loans.352
While SBA’s updated Master Review Plan discusses the questionnaires’ discontinuance, it does
not mention whether SBA intends to use other means to evaluate an applicant’s economic
necessity certiﬁcation.
Finally, there has been confusion over eligibility for PPP loans. The CARES Act provided
that in addition to small businesses, certain nonproﬁts, veterans’ organizations, and Tribal
business concerns were eligible for PPP loans, but did not specify whether SBA should apply
its existing loan eligibility restrictions or use diﬀerent criteria. In its initial interim ﬁnal rule,
SBA determined that existing eligibility restrictions applicable to SBA business loans would
also apply to PPP loans.353 In addition, the CARES Act did not address whether businesses in
bankruptcy were eligible for PPP loans. SBA determined that an applicant that was the debtor
in a bankruptcy proceeding, either when it submitted the application or at any time before the

350In its response to the FAQ, SBA clariﬁed that borrowers must make the economic necessity certiﬁcation in

good faith, taking into account their current business activity and their ability to access other sources of liquidity
suﬃcient to support their ongoing operations in a manner that is not signiﬁcantly detrimental to the business.

351In subsequent guidance, SBA announced that borrowers who had previously applied for a PPP loan could repay

the loan in full by May 18, 2020, and would be considered to have made their certiﬁcations in “good faith.” Some
publicly traded companies repaid their PPP loans under this option.
352The Associate General Contractors of America, Inc., ﬁled a lawsuit in December 2020 alleging, among other

things, that the necessity questionnaires and the process used to approve them violated the Administrative
Procedure Act and the Paperwork Reduction Act. Among other things, the lawsuit ﬁlings noted that the
questionnaires ask borrowers to describe their business success (or failure) after applying for the loan, not the
status of their operations at the time they applied for the loan.
35385 Fed. Reg. 20811, 20812 (April 15, 2020). The initial interim ﬁnal rule provided that businesses that are

not eligible for PPP loans are identiﬁed in 13 C.F.R. § 120.110 and described further in SBA Standard Operating
Procedure (SOP) 50 10, Subpart B, Chapter 2, with certain exceptions. SBA regulations generally restrict eligibility for
7(a) loans for certain businesses including those engaged in illegal activity; ﬁnancial businesses primarily engaged
in lending; and those that present live performances of a prurient sexual nature. Later issued SBA rules modiﬁed
PPP loan eligibility criteria. See, e.g., 86 Fed. Reg. 3692, 3698 (January 14, 2021); 86 Fed. Reg. 3712, 3718 (January 14,
2021).

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loan was disbursed, was ineligible to receive a PPP loan. These eligibility criteria have been the
subject of litigation.354
For second draw PPP loans, Congress expressly excluded several categories of businesses
by incorporating certain eligibility restrictions contained in SBA regulation and excluding
businesses primarily engaged in lobbying or political activities.355 The statutory exclusion
of speciﬁc categories of borrowers from eligibility for PPP loans could help limit future
controversy involving eligibility.
• Consider available resources and adjust where needed. SBA was able to launch PPP quickly in part
because Congress created it under the 7(a) program. Under the CARES Act, lenders already
approved for the 7(a) program were automatically approved to make PPP loans on a delegated
basis, and SBA and Treasury could approve additional lenders to participate in the program.356
However, nonbanks were largely unable to participate in the initial phase of the program.357
As PPP continued, the proportion of loans made by nonbanks, CDFIs, and MDIs increased
signiﬁcantly, suggesting the need for their services.
SBA also relied on its existing 7(a) loan processing system when it launched PPP. However,
the system was not built to process the volume of loans SBA received. For example, the SBA
OIG reported in January 2021 that some PPP lenders had challenges accessing the system
or experienced slow loan application processing times at the beginning of the program,
which most likely delayed loan funds to some borrowers.358 To address these problems, SBA
oﬃcials told us that they increased the processing system’s memory, expanded the number
of telecommunication lines, established a pacing mechanism to limit the number of loans
any one lender can enter into the system per hour, and established batch ﬁle processing
for lenders. However, SBA oﬃcials noted they could not implement these improvements as
quickly as they wanted because of delays due to COVID-19, such as supply chain issues.
When SBA relaunched PPP in January 2021, it also launched a revised application portal
tailored to PPP. Among other things, this system could support higher volume submissions
and incorporated additional validations to prevent fraud that were not in place in the previous
system, such as cross-referencing applicant information with Treasury’s Do Not Pay List.359

354Lawsuits have been brought by live adult entertainment businesses, lobbying ﬁrms, business owners with

criminal histories, payday lenders, and companies in bankruptcy proceedings.

355Pub. L. No. 116-260, div. N, tit. III, § 311(a), 134 Stat. 1182, 2001-2002 (2020).
356Pub. L. No. 116-136, § 1102(a), 134 Stat. 281, 290 (2020).

357In general, nonbanks provide lending services but do not accept deposits. The CARES Act permitted SBA and

Treasury to approve additional lenders to process, close, disburse, and service PPP loans. The agencies provided
the lender agreement for some lender types prior to the program’s launch, but they did not provide the agreement
for nonbank lenders until 5 days after the program started. PPP was launched on April 3, 2020, and the initial
appropriations were exhausted on April 16, 2020. Congress appropriated additional funding, and the program
resumed lending on April 27, 2020.
358Small Business Administration, Oﬃce of Inspector General, Inspection of SBA’s Implementation of the Paycheck

Protection Program, Report No. 21-07 (Washington, D.C.: Jan. 14, 2021).

359Treasury’s Do Not Pay service is an analytics tool that helps federal agencies detect and prevent improper

payments made to vendors, grantees, loan recipients, and beneﬁciaries. Agencies can use the service to check
multiple data sources to make payment eligibility decisions.

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• Conduct a risk assessment when designing and implementing a new program. For PPP, SBA did not
follow its established process to identify and address potential risks in programs.360 Within
SBA, two oﬃces are responsible for working with program oﬃces to identify and respond to
potential risks. More speciﬁcally, the Oﬃce of Continuous Operations and Risk Management
is responsible for, among other things, agency-wide recovery response for disasters and the
evaluation and assessment of SBA’s critical risks and nonﬁnancial internal controls. The oﬃce
also oversees SBA’s Enterprise Risk Management program.361 In addition, according to an
SBA oﬃcial, when SBA implements a new program, the Oﬃce of Internal Controls coordinates
with the program oﬃce to plan proper internal controls and ensure they are implemented.
However, neither oﬃce was involved in the design or initial implementation of program
controls for PPP.
SBA oﬃcials stated that while risk assessments usually occur during program planning, such
assessments did not occur until PPP was implemented, and then only informally. According
to SBA’s Enterprise Risk Management guidance, program oﬃces should identify and assess
potential risks to a program, both initially and on an ongoing basis, to identify new, emerging,
or changing risks. Potential risks include fraud, improper payments, infrastructure (such
as information technology) problems, or misstatements in SBA’s consolidated ﬁnancial
statements.362 Once risks have been identiﬁed and assessed, a program oﬃce should
strategize its response to minimize the risks and then implement and monitor those plans.
Oﬃcials acknowledged that the guidance was not followed, noting that PPP was atypical, as it
was an emergency program that SBA was mandated to launch in less than 2 weeks.
• Incorporate strong oversight from the beginning of the program. In an eﬀort to launch PPP
quickly and help small businesses, SBA oﬃcials said they put limited initial safeguards in
place to help expedite the loan approval process, consistent with a mandate from Congress
to provide rapid support for small businesses that was reinforced by Treasury. SBA’s initial
interim ﬁnal rule for PPP allowed lenders to rely on borrower self-certiﬁcations to determine
borrowers’ eligibility and use of loan proceeds—which we noted in our March 2020 report
can leave a program vulnerable to exploitation. The interim ﬁnal rule also required limited
lender review of documents provided by borrowers to determine the qualifying loan amount
and eligibility for loan forgiveness. In addition, SBA did not conduct any review of loan or

360In September 2015, we recommended that SBA develop its enterprise risk management consistent with GAO's

risk management framework and document the speciﬁc steps that the agency planned to take to implement its
enterprise risk management process. In response, SBA developed additional guidance on its process in June 2016.
361Enterprise risk management is an agency-wide approach to addressing the full spectrum of the organization’s

signiﬁcant risks by understanding the combined impact of risks as an interrelated portfolio, rather than addressing
risks only within silos.
362SBA’s ﬁscal year 2020 and 2021 consolidated ﬁnancial statements received a disclaimer of opinion, meaning

the auditor was unable to express an opinion due to insuﬃcient evidence. As the basis for the disclaimers, the
auditor reported that SBA was unable to provide adequate evidence to support a signiﬁcant number of transactions
and account balances due to inadequate processes and controls related to its implementation of its programs
authorized under the CARES Act and related legislation, including PPP.

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borrower information beyond looking for duplicate applications before agreeing to guarantee
the loan.363
In June 2020, we found that while SBA and Treasury announced SBA would review loans of
more than $2 million, SBA had not provided details on how it would conduct these reviews.
SBA also had not described any reviews planned for loans of less than $2 million. Therefore,
we recommended that SBA develop and implement plans to identify and respond to risks in
PPP to ensure program integrity, achieve program eﬀectiveness, and address potential fraud.
Consistent with our recommendation, SBA put in place additional oversight. As noted
previously, SBA developed and began to implement a Master Review Plan for the loan review
process, which outlined the three types of reviews it would conduct. To help implement this
process, SBA hired a contractor with expertise in fraud detection. The contractor implemented
an automated rules-based tool to screen all PPP loans to identify anomalies or attributes that
may indicate noncompliance with eligibility requirements, fraud, or abuse, such as whether
the borrower used the tax identiﬁcation number of a deceased person. The contractor
conducted the automated screenings for the approximately 5.1 million Round 1 PPP loans
in August and early September 2020, and applied a version of the screening when SBA
relaunched PPP in January 2021. Loans with identiﬁed potential issues were delayed from
being closed until the issue was resolved.364
However, SBA and its contractor only began reviewing loans after Round 1 had ﬁnished and
some businesses had begun applying for forgiveness.365 In addition, as noted previously,
SBA made revisions to its Master Review Plan after all PPP loans were made and the majority
had been forgiven.366 Although SBA could still attempt to recover funds from ineligible and
fraudulent borrowers, we have previously reported that a leading practice in designing
and implementing an antifraud strategy is to focus on fraud prevention over detection and
response to avoid a “pay-and-chase” model, to the extent possible.367
• Take early steps to estimate improper payments and determine fraud risks. The lack of initial
safeguards for PPP contributed to the increased risk of improper payments, including fraud
that we and others have reported.368 Because SBA had not yet taken steps to address this risk,
363SBA issues a loan number when it agrees to guarantee the loan. According to SBA oﬃcials, this occurs after the

lender approves the loan and submits certain information to SBA and there are no errors with the information. The
lender makes the loan once it receives the loan number from SBA.
364Borrowers who had a hold code placed on their ﬁrst draw loans would have their application for a second draw

loan delayed until the issue was resolved. An application for a ﬁrst draw loan would not receive a loan number until
the issue was resolved.
365According to SBA oﬃcials, SBA did not start conducting reviews of loans of less than $2 million until early

November 2020 and did not start conducting reviews of loans of $2 million or more until January 2021. According to
SBA data, about 92,000 loans totaling about $2.7 billion received forgiveness in October 2020.
366For example, the Master Review Plan no longer requires all loans of $2 million or more to receive a manual

review. Rather, they, like loans of less than $2 million, could receive a manual review if they were identiﬁed by the
automated screening process or separately ﬂagged for manual reviews.

367Similarly, the Oﬃce of Management and Budget has established that for executive oﬃces to be eﬀective, they

should prioritize eﬀorts toward preventing improper payments from occurring to avoid operating in a pay and
chase environment.

368Improper payments are payments that should not have been made or were made in the incorrect amount, and

may suggest that a program is vulnerable to fraud. While an improper payment may be the result of fraudulent

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we recommended in November 2020 that SBA expeditiously estimate improper payments
and report estimates and error rates for PPP. SBA noted in March 2022 that it would oﬃcially
report the improper payment rate for PPP in its Fiscal Year 2022 Agency Financial Report.
However, because SBA will have forgiven most loans by the time SBA reports on its improper
payment testing, the testing will have limited usefulness in preventing improper payments.
Similarly, because SBA had not yet done so, we recommended in March 2021 that it conduct
a comprehensive fraud risk assessment for PPP in alignment with leading practices and
document an antifraud strategy (a strategic approach to managing fraud risks). According to
SBA oﬃcials, because of the rapid response required to execute the program, SBA conducted
an informal fraud risk assessment in late spring and early summer of 2020. This assessment
included an identiﬁcation of potential weaknesses in internal control processes by subject
matter experts in the program oﬃce. The agency did not document ﬁndings from the
assessment.
An SBA contractor ultimately conducted a fraud risk assessment for PPP in October 2021. The
assessment found that SBA implemented additional fraud prevention controls over the course
of the program—such as cross-referencing applicant information with Treasury’s Do Not Pay
List and introducing a set of automated screening rules prior to the release of the SBA loan
guarantee number. However, it noted that PPP continued to be susceptible to fraud risks that
required enhancements to the current mitigation strategies. The contractor identiﬁed 25 active
fraud risks in PPP and made four recommendations to SBA to aid the agency in establishing
a fraud governance process and inform the agency’s fraud tolerance approach. If SBA had
conducted a fraud assessment earlier in the program, it could have targeted its controls to
further minimize risks. Although the timing of the assessment limited its usefulness for PPP,
SBA could use the results of this fraud assessment to inform future programs.
In addition, we found in March 2021 that one factor that contributed to the lack of a timely
fraud risk assessment of PPP was that SBA had not designated a dedicated entity to lead
fraud risk management activities. As discussed in GAO’s Fraud Risk Framework, it is a leading
practice to designate an entity to design and oversee fraud risk management activities.
In carrying out its role, the antifraud entity, among other things, manages the fraud riskassessment process. According to documentation provided by SBA, the agency designated
such an entity in February 2022 that is responsible for the oversight and coordination of SBA’s
fraud risk prevention, detection, and response activities.
• Maintain central documentation of program changes.Throughout its implementation of PPP, SBA
issued rolling guidance. According to SBA oﬃcials, SBA and Treasury continued to develop
and issue rules and guidance in an eﬀort to be responsive to lenders and borrowers and to
implement statutory changes to the program. However, this guidance was often piecemeal
and created confusion among lenders and borrowers.
Because PPP was an emergency program, SBA oﬃcials told us the agency did not issue a
consolidated guidance document (such as a standard operating procedure) when PPP was
launched. Instead, SBA relied on interim ﬁnal rules, updates to FAQs, and procedural notices
to expedite program implementation. As of January 1, 2022, SBA had issued 32 interim ﬁnal
rules and 28 updates to its PPP FAQs. Of these, roughly two-thirds were made from March 31,
activity, not all improper payments are the result of fraud. Fraud involves obtaining something of value through
willful misrepresentation. The judicial or other adjudicative system determines whether an act is fraud.

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2020, when SBA issued the initial program guidance, through August 8, 2020 (the end of the
ﬁrst round).
As we reported in July 2021, our survey of PPP lenders indicated that the changing guidance,
presented in various document types, created challenges during Round 1.369 We estimated
that about 87 percent of PPP lenders thought changes in program rules and guidance were
either very or moderately challenging when approving loan applications.370 One survey
respondent noted that it was particularly challenging when the bank was receiving many
PPP applications at the same time and had to simultaneously read dozens of pages of new
guidance. Similarly, we estimated that 75 percent of lenders thought the lack of a central
document containing the program’s rules and guidance was either very or moderately
challenging.371
By contrast, SBA released a more comprehensive interim ﬁnal rule when it relaunched
PPP in January 2021 and one for the loan forgiveness process a month later.372 While SBA
had to provide subsequent guidance to clarify other aspects of the program, these more
comprehensive documents provided borrowers and lenders easier access to the program’s
rules.
• Ensure clear communication with key constituencies.SBA also could have lessened the impact
of program changes by improving its communication with key constituencies. For example,
as we reported in June 2020, representatives of two lender associations and a small business
association told us that their members found it diﬃcult to reach anyone at SBA district oﬃces
to get clariﬁcation on guidance; when someone did answer, members noted that the person
did not always know the answer or provided incorrect information.
Similarly, SBA did not communicate clearly prior to implementing the additional program
controls when it relaunched PPP in January 2021. Representatives of the four lender
associations we interviewed told us the additional controls created confusion among lenders
and delays in closing loans, in part, because lenders did not know of the additional controls in
advance. In addition, the representatives told us their members were unable to get responses
from SBA when they had questions related to the hold codes SBA placed on some Round 1
loan applications, which aﬀected borrowers’ ability to receive a second draw loan until the
issue was resolved.
Because of these communication challenges, we recommended in July 2021 that SBA develop
and implement a process to help ensure it responds in a timely manner to PPP lender
inquiries on loan reviews. SBA agreed with the recommendation, and SBA oﬃcials told us
369We surveyed a generalizable sample of 1,383 PPP lenders to obtain their perspectives on the loan approval and

loan forgiveness processes and the program in general. The survey closed on April 15, 2021, and we received 781
responses. We obtained a weighted response rate of 57.3 percent.
370The 95 percent conﬁdence interval for this estimate is (84, 89). Survey respondents were asked to rate

challenges using the following scale: very challenging, moderately challenging, somewhat challenging, not at all
challenging, and do not know. According to Treasury oﬃcials, most of these program changes were made at the
request of banks or PPP participants to reduce program burdens or streamline processes.
371The 95 percent conﬁdence interval for this estimate is (72, 78).

372In addition to incorporating regulations required by the Economic Aid Act, the January 2021 rule consolidated

the interim ﬁnal rules issued to date governing borrower eligibility, lender eligibility, and PPP application and
origination requirements for new PPP loans, as well as providing general rules relating to loan increases and loan
forgiveness. The February 2021 loan forgiveness interim ﬁnal rule consolidated prior rules on the loan forgiveness
process.

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in October 2021 that they had taken steps to improve communication with lenders, such as
having a customer service team handle all the lender inquiries from the lender platform and
communicate to lenders reasons for delays or issues with loan reviews.
In March 2022, SBA provided us with documentation on procedures its customer service staﬀ
are to follow and templates for responses to questions. The procedures describe how SBA
staﬀ are to respond and track lender inquiries SBA receives through the platform lenders
use to submit loan forgiveness decisions to SBA. In the sample templates created following
our recommendation, SBA provided its staﬀ with draft responses for communicating with
lenders. For example, one template provides draft language to help lenders submit additional
documentation when there is an identiﬁed problem but the platform does not accept the
submission, allowing the process to continue.
The more extensive outreach that SBA conducted to lenders prior to launching its direct
forgiveness portal, which provides certain PPP borrowers a streamlined process to submit
their forgiveness application to their lender, demonstrates the beneﬁts of early and eﬀective
communication.373 SBA conducted a series of webinars and created a PPP customer service
team to answer questions and directly assist borrowers with their forgiveness applications.
Representatives from one lender association we spoke with noted that their members who
were using the portal reported that the system was working very well, and that SBA and its
vendor had been very accommodating when asked to make adjustments to improve process
operations.

Methodology
To conduct this work, we analyzed SBA loan-level forgiveness data as of January 2, 2022. We
assessed the reliability of the SBA data by performing electronic testing, reviewing documentation,
and interviewing SBA oﬃcials. We determined that the data were suﬃciently reliable for reporting
the status of loan forgiveness determinations. We also reviewed SBA’s most recent oversight plan
for PPP to identify changes, and our prior reports on PPP and reports issued by the SBA OIG to
identify lessons learned.

Agency Comments
We provided SBA, Treasury, and the Oﬃce of Management and Budget (OMB) with a draft of this
enclosure. Treasury provided technical comments, which we incorporated as appropriate. SBA and
OMB did not provide comments on this enclosure.

GAO’s Ongoing Work
Our work on PPP is ongoing. We continue to examine the fraud risks in the program. We also
continue to monitor SBA’s progress toward developing and implementing corrective actions

373Only PPP borrowers who have loans of $150,000 or less and whose lenders opted in to use the direct

forgiveness portal can apply for forgiveness using the portal.

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to address the material weaknesses identiﬁed in December 2020 and 2021 by its independent
ﬁnancial statement auditor.

GAO’s Prior Recommendations
The table below presents our PPP recommendations from prior bimonthly and quarterly CARES
Act reports.

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Prior GAO Recommendations Related to the Paycheck Protection Program
Recommendation

Status

The Administrator of the Small Business Administration Open—partially addressed. SBA agreed with the
(SBA) should conduct and document a fraud risk
recommendation. In December 2021, SBA provided a
assessment for the Paycheck Protection Program (PPP). fraud risk assessment that had been prepared by its
(March 2021 report)
contractor. Based on our initial review of the assessment,
it adhered to many but not all fraud risk management
leading practices. For example, SBA did not determine
its fraud risk tolerance as called for by leading practices.
In February 2022, SBA designated an antifraud entity
that, according to SBA oﬃcials, would be responsible for
determining a risk tolerance and implementing the fraud
risk assessment’s recommendations.
The Administrator of SBA should develop a strategy
that outlines speciﬁc actions to monitor and manage
fraud risks in the Paycheck Protection Program on a
continuous basis. (March 2021 report)

Open—partially addressed. SBA agreed with the
recommendation, stating that it would work to ensure
that fraud risks are monitored on a continuous basis. In
December 2021, SBA provided a fraud risk assessment,
which would inform an antifraud strategy. In February
2022, SBA designated an antifraud entity that is
responsible for oversight and coordination of SBA’s fraud
risk prevention, detection, and response activities. They
had told us previously that once designated, the entity
would work to develop an agency-wide comprehensive
antifraud action plan.

The Administrator of SBA should expeditiously estimate Open—partially addressed. SBA neither agreed nor
improper payments and report estimates and error
disagreed with our recommendation at the time of our
rates for PPP due to concerns about the possibility that report. In response to our recommendation, SBA stated
improper payments, including those resulting from
that it was planning to conduct improper payment testing
for PPP and that it takes improper payments seriously.
fraudulent activity, could be widespread. (November
In July 2021, SBA oﬃcials said that SBA would estimate
2020 report)
both improper payments and error rates for PPP in the
fourth quarter of ﬁscal year 2021. In February 2022, SBA
provided a copy of its sampling plan dated July 2021.
They noted in March 2022 that SBA would oﬃcially report
the improper payment rate in its Fiscal Year 2022 Agency
Financial Report. We will continue to monitor SBA’s
progress in implementing our recommendation.
The Administrator of SBA should develop and
implement plans to identify and respond to risks in
PPP to ensure program integrity, achieve program
eﬀectiveness, and address potential fraud, including in
loans of $2 million or less. (June 2020 report)

Closed—addressed. At the time of our report, SBA
neither agreed nor disagreed with our recommendation.
In late December 2020, SBA provided a Master Review
Plan outlining steps it planned to take to review the PPP
loans made in 2020. The document described three steps
in the process: automated screenings of all loans, manual
reviews of selected loans, and quality control reviews
to ensure the quality, completeness, and consistency of
the review process. Most of the loan reviews were to be
conducted by contractors with SBA oversight. SBA later
updated the plan in January 2022 to incorporate changes
to its oversight, including the screening performed of
2021 loan applications before the loans were originated.
To implement the plan, SBA’s loan review contractor
conducted automated screenings for all of the PPP loans

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Recommendation

Status
made in 2020 in August and early September 2020.
Speciﬁcally, the contractor used an automated rulesbased tool to compare PPP loan data against publicly
available information and apply eligibility and fraud
detection rules to identify anomalies or attributes that
may indicate noncompliance with eligibility requirements,
fraud, or abuse. For example, the tool would ﬂag loans
made to a borrower in active bankruptcy or one who
used the tax identiﬁcation number of a deceased person.
SBA and its contractor began conducting manual reviews
of ﬂagged loans of less than $2 million in early November
2020, and of loans of $2 million or more in January 2021.
Starting in January 2021, SBA screened all PPP loans
before the lender approved the loan. To screen these
loans, the contractor used a subset of the automated
screening rules it used to review the 2020 loans for
potential indicators of non-eligibility or fraud risks.
According to SBA oﬃcials, contractor staﬀ had completed
about 78,000 manual reviews and referred about 8,900
loans to SBA for further review, as of November 15, 2021.
SBA will continue to conduct manual reviews of ﬂagged
loans.

Source: GAO. I GAO-22-105397

Related GAO Products
Paycheck Protection Program: SBA Added Program Safeguards, but Additional Actions Are Needed.
GAO-21-577. Washington, D.C.: July 29, 2021.
Aviation: FAA Needs to Better Prevent, Detect, and Respond to Fraud and Abuse Risks in Aircraft
Registration. GAO-20-164. Washington, D.C.: March 25, 2020.
Small Business Administration: Leadership Attention Needed to Overcome Management Challenges.
GAO-15-347. Washington, D.C.: September 22, 2015.
A Framework for Managing Fraud Risks in Federal Programs. GAO-15-593SP. Washington, D.C.: July 18,
2015.
Contact information: William B. Shear, (202) 512-8678, shearw@gao.gov

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Coronavirus State and Local Fiscal Recovery Funds
The Department of the Treasury has taken actions to collect and analyze planning information
and spending data from states, territories, tribal governments, and local governments.
The Department continues to develop policies and procedures for monitoring recipients of
Coronavirus State and Local Fiscal Recovery Funds.
Entities involved: Department of the Treasury

Background
The Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), established under the American
Rescue Plan Act of 2021 (ARPA) and administered by the Department of the Treasury, allocated
$350 billion to states, the District of Columbia, local governments, tribal governments, and U.S.
territories to help cover a broad range of costs stemming from the ﬁscal eﬀects of the COVID-19
pandemic.374 Local governments consist of metropolitan cities, counties, and smaller local
governments—those typically serving populations of less than 50,000— referred to as nonentitlement units of local government (NEU).375
Treasury had distributed more than $245 billion in CSLFRF allocations to recipients as of March 2,
2022, according to Treasury. The ﬁgure below shows the amounts of funding the CSLFRF allocates
to various recipient types as well as the amount of funding Treasury distributed to each recipient
type as of March 2, 2022. CSLFRF recipients have until December 31, 2024, to incur obligations
with their CSLFRF awards and, according to Treasury, until December 31, 2026, to liquidate those
obligations, in accordance with allowable uses established in ARPA.376

374Pub. L. No. 117-2, tit. IX, subtit. M, § 9901, 135 Stat. 4, 223 (2021) (codiﬁed at 42 U.S.C. §§ 802-803) (ARPA). Sections

602 and 603 of the Social Security Act as added by section 9901 of ARPA appropriated $350 billion in total funding for
two funds—the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund. For purposes
of this report, we discuss these two funds as one—the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF). 42
U.S.C. §§ 802-803. For purposes of the CSLFRF, ARPA establishes that the District of Columbia is considered to be a state.
42 U.S.C. §§ 802(g)(5), 803(g)(9).
37542 U.S.C. §§ 803(g), 5302(a).

376Coronavirus State and Local Fiscal Recovery Funds, 87 Fed. Reg. 4,338, 4,448 (Jan. 27, 2022) (codiﬁed at 31 C.F.R. § 35.5).

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Coronavirus State and Local Fiscal Recovery Funds Allocations and Treasury Distributions as of Mar. 2, 2022, by
Recipient Type

Non-entitlement units of local government (NEU), are local governments typically serving populations of less than 50,000. 42
U.S.C. §§ 803(g)(5), 5302(a)(5). NEUs include cities, villages, towns, townships, or other types of local governments.
b

A metropolitan city is deﬁned as the central city within a metropolitan area (i.e., a standard metropolitan statistical area as
established by the Oﬃce of Management and Budget) or any other city within a metropolitan area that has a population of
50,000 or more. 42 U.S.C. §§ 803(g)(4), 5302(a)(3)-(4). A metropolitan city includes cities that relinquish or defer their status as a
metropolitan city for purposes of receiving allocations under section 5306 of title 42, United States Code, for ﬁscal year 2021.
c

ARPA provides that to receive their Coronavirus State and Local Fiscal Recovery Funds award, states, the District of Columbia,
and U.S. territories must ﬁrst provide Treasury with a signed certiﬁcation stating that they require their award to carry out
allowable activities and will comply with relevant requirements when they use their award. According to Treasury, states
that had experienced a net increase of more than 2 percentage points in their unemployment rate from February 2020
to the date of the latest available data at the time the state certiﬁed for their payment received their full award in a single
payment; other states receive award funds in two equal tranches, with the second tranche provided within 12 months after
certiﬁcation. Governments of U.S. territories will receive an award in a single payment. Treasury is required to distribute awards
to metropolitan cities, states (for distribution to NEUs), and counties in two equal tranches, providing the ﬁrst payment within
60 days after ARPA’s enactment, or May 10, 2021, to the extent practicable, and providing the second payment no earlier than
12 months after the ﬁrst. After receiving award funds for distribution to NEUs, states have 30 days to make those distributions,
unless Treasury grants an extension. According to Treasury, tribal governments received their award funds in two distributions:
the ﬁrst distribution in May 2021 and the second distribution, based on employment data, in August 2021.

On May 10, 2021, Treasury released an interim ﬁnal rule for implementing the CSLFRF that
identiﬁed reporting requirements for recipients:377
377Subsequently, on May 17, 2021, Treasury published the interim ﬁnal rule in the Federal Register. See Coronavirus State

and Local Fiscal Recovery Funds, 86 Fed. Reg. 26,786. Treasury provided initial guidance on reporting requirements for
all recipients in the supplemental information section of the interim ﬁnal rule. The text of the rule in the interim ﬁnal
rule did not contain speciﬁc reporting requirements, but rather implemented recipients’ obligation to provide regular
detailed reporting and other information as Treasury requires. This general provision was retained in the ﬁnal rule,
which Treasury released on January 6, 2022. Treasury published the ﬁnal rule in the Federal Register on January 27,
2022. See Department of Treasury, Coronavirus State and Local Fiscal Recovery Funds, 87 Fed. Reg. 4338 (codiﬁed at 31
C.F.R. pt. 35, subpt. A).

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• All recipients—except NEUs—were required to submit an interim report that provided an initial
overview of the status and use of their funding.
• States, U.S. territories, and metropolitan cities and counties with a population that exceeds
250,000 residents are also required to submit to Treasury annually, and post on their public
websites, a recovery plan performance report (recovery plan). These recovery plans are
to discuss planned uses of spending and include, among other things, descriptions of the
projects funded.
• All recipients are required to submit project and expenditure reports on a quarterly or annual
basis—depending on the type of recipient—that provide information on their use of the
funding and projects undertaken with the funding, among other things. Treasury extended the
deadlines to all CSLFRF recipients for submitting the ﬁrst project and expenditure reports.
Treasury released subsequent guidance that provides additional detail and clariﬁcation on the
compliance and reporting responsibilities for each recipient type, including reporting deadlines,
as shown in the ﬁgure below.378 CSLFRF recipients must submit all required reports through
Treasury’s online reporting portal.
Treasury’s Reporting Requirements for the Coronavirus State and Local Fiscal Recovery Funds, by Recipient
Type, as of Feb. 28, 2022

378Department of the Treasury. Compliance and Reporting Guidance: State and Local Fiscal Recovery Funds, ver. 3.0

(Feb. 28, 2022), accessed Mar. 2, 2022, https://home.treasury.gov/system/ﬁles/136/SLFRF-Compliance-and-ReportingGuidance.pdf.

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Under ARPA, Treasury makes payments to states in two tranches (approximately 12 months apart)
for NEUs, and states are required to allocate and distribute those payments to each NEU within
their state.379 According to Treasury, over 26,000 NEUs are receiving CSLFRF awards through their
state governments.380
Treasury has issued guidance that includes steps states should follow for allocating and
distributing funds to NEUs.381 Among other things, these steps include identifying eligible NEUs,
calculating initial allocation amounts, and establishing a process for NEUs to submit requests
for their award.382 Consistent with ARPA, states must also ensure an NEU’s total CSLFRF award
(i.e., the sum of both tranches) does not exceed 75 percent of the NEU’s most recent budget.383
According to Treasury guidance, states have some discretion in calculating the initial allocation
of funds. For example, the guidance explains that states may divide any overlapping population
between NEUs in a number of ways for the purpose of allocating funds.384

Overview of Key Issues
Treasury’s review of CSLFRF interim reports and recovery plan performance reports.
According to Treasury oﬃcials, as of February 28, 2022, Treasury had received an interim report
from 4,467 of the 4,792 recipients required to submit one, representing a 93 percent submission
rate.385 Treasury oﬃcials also told us that Treasury received a recovery plan performance report
(recovery plan) from 379 of the 392 recipients required to submit one, representing a 97 percent

37942 U.S.C. § 803(b)(2), (7). Treasury considers state governments that request their own allocations also to have

requested allocations for NEUs within their states. Treasury will make payments to states from the Coronavirus Local
Fiscal Recovery Fund for distribution to NEUs in two tranches, with the second tranche payment to be made no earlier
than 12 months after the date on which the ﬁrst tranche payment is paid to the state.

380Territories also allocate and distribute payments to NEUs. For purposes of payments to NEUs, ARPA deﬁnes “states”

to include territories (i.e., American Samoa, the Commonwealth of the Northern Mariana Islands, the Commonwealth of
Puerto Rico, Guam, and the U.S. Virgin Islands). 42 U.S.C. § 803(g)(9). However, for purposes of this report we excluded
territories from our analysis.
381Department of the Treasury. Coronavirus Local Fiscal Recovery Fund: Guidance on Distribution of Funds to Non-

entitlement Units of Local Government, accessed Feb. 23, 2022. https://home.treasury.gov/system/ﬁles/136/
NEU_Guidance.pdf.

382ARPA requires states to distribute to NEUs an amount that is the same proportion to the amount of payment as the

population in the NEU as a share of the total population of all NEUs in the state. 42 U.S.C. § 803(b)(2)(C)(i).

383ARPA provides that each NEU’s total distribution (i.e., the total of distributions under both the ﬁrst and second

tranche) is capped at 75 percent of its most recent budget, in eﬀect as of January 27, 2020. 42 U.S.C. § 803(b)(2)(C)(iii).
The supplemental information accompanying Treasury’s interim ﬁnal rule that implements CSLFRF deﬁned a NEU’s
most recent budget for purposes of the cap to mean the NEU’s most recent annual total operating budget, including
its general fund and other funds, as of January 27, 2020. Coronavirus State and Local Fiscal Recovery Funds, 86 Fed. Reg.
26,786, 26,814 (May 17, 2021). Treasury’s ﬁnal rule speciﬁes that the NEU’s total annual budget includes both operating
and capital expenditure budgets, in eﬀect as of January 27, 2020. 87 Fed. Reg. at 4453 (codiﬁed at 31 C.F.R. § 35.12(b)).
384In some states, the boundaries of some NEUs overlap with or encompass other NEUs within the state, typically

resulting in overlapping populations between the larger “parent” NEU and the subsidiary NEU (e.g., a township that
encompasses a city).

385Recipients that submitted these interim reports included states, U.S. territories, tribal governments, and certain local

governments.

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submission rate.386 Treasury has posted to its public website the individual interim reports and
recovery plans that recipients submitted on or after August 31, 2021.387
Treasury oﬃcials told us that, for CSLFRF recipients that did not submit an interim report and
recovery plan, Treasury sent follow-up emails notifying those recipients that they were out of
compliance with the program’s requirements. Oﬃcials also told us that, for the recipients that
remain non-compliant with the reporting requirements, Treasury is developing a remediation
process to enforce compliance, which Treasury has not yet ﬁnalized. According to oﬃcials, the
process will be consistent with the remedial actions described in the award terms and conditions
that all recipients enter into prior to receiving CSLFRF funds.388 Treasury oﬃcials also told us they
are in the process of developing interim procedures to govern recipient non-compliance issues,
including monitoring, remediation, penalty, and potential recoupment of funds. However, Treasury
has not yet provided requested documentation regarding how and when they expect to ﬁnalize
the details of their process.
In our October 2021 report, we recommended that Treasury design and document timely and
suﬃcient policies and procedures for monitoring recipients of CSLFRF. Treasury agreed with
the recommendation, which it has not yet fully implemented. Having timely and suﬃcient
policies and procedures for monitoring CSLFRF recipients—including compliance with reporting
requirements—is critical for providing assurance that recipients are managing their allocations in
compliance with laws, regulations, agency guidance, and award terms and conditions, including
ensuring that expenditures are made for allowable purposes.
Treasury oﬃcials told us that the agency’s review of the interim reports is complete, except for
the portion of the reports related to NEU distributions, due to the additional time states needed
to distribute CSLFRF funds to NEUs and report the data to Treasury. According to oﬃcials, while
Treasury conducted a high-level review for completeness, it is not requiring recipients to correct
or update incorrect data in the interim reports or to submit updated interim reports. Rather,
Treasury has allowed recipients to provide corrected data as part of the recipient’s ﬁrst project and
expenditure report submission, due by either January 31, 2022, or April 30, 2022, depending on
the type of recipient.
Treasury is in the process of reviewing recipients’ recovery plan submissions by performing “highlevel” reviews of the data and contacting recipients to address missing information and to correct
data errors. Further, Treasury oﬃcials told us that, as part of their reviews of the recovery plans,
they are identifying data that may signal ﬁnancial and other compliance risks, such as descriptions
of potentially prohibited uses of the funds; ensuring the reports establish a baseline for future

386Recipients that submitted these recovery plans included states, U.S. territories, and certain local governments.

387See https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/state-and-

local-ﬁscal-recovery-funds/recovery-plan-performance-reports-2021.

388These remedies may include imposing additional conditions on award funds and, if that does not resolve the

noncompliance, pursuing other remedies appropriate in the circumstances, as provided in OMB’s Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards. See, 2 C.F.R. § 200.339.

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reporting; and identifying the extent to which recipients plan to use their funds to support eligible
capital expenditures.389
Treasury oﬃcials said the agency plans to eventually cross-reference data and qualitative
information across recipients’ project and expenditure reports and recovery plans. For example,
Treasury may compare a recipient’s year-over-year spending and identify spending trends across
certain states or other recipients with similar attributes. We asked Treasury oﬃcials about their
plans for analyzing the data—including the agency’s intended uses of the data. Oﬃcials told us
that, given that Treasury is in initial reporting cycles and will not receive the reports to crossreference until sometime mid-year, Treasury views any discussion of the intended uses of the data
as premature.
Treasury’s review of CSLFRF project and expenditure reports. According to Treasury oﬃcials,
as of February 28, 2022, Treasury had received a project and expenditure report from 1,874 of the
1,910 recipients required to submit one by January 31, 2022, representing a 98 percent submission
rate.390 Treasury oﬃcials told us that they are currently following up with recipients who had not
submitted a project and expenditure report by January 31, 2022. They also told us that, for those
that have been submitted, Treasury plans to review the reports’ completeness, whether recipients
addressed the requirements established in Treasury guidance and user guides, and any potential
prohibited uses of funds. According to oﬃcials, Treasury is still ﬁnalizing these plans and could not
provide an estimated target date for completing their review.
Further, as part of their review process, Treasury has developed steps—in the form of a ﬂow
chart—that Treasury program staﬀ are to follow in reviewing the reports. Treasury oﬃcials
told us that they expect the quality of the data submissions to improve over time as recipients
complete multiple reporting cycles, particularly with Treasury’s recipient engagement and
outreach eﬀorts. Treasury oﬃcials also told us Treasury is developing a remediation process
for enforcing compliance—similar to the one oﬃcials described for the interim reports and
recovery plans—which Treasury has not yet ﬁnalized. According to the oﬃcials, this process
will be consistent with the remedial actions described in the award terms and conditions that
all recipients enter into prior to receiving CSLFRF funds.391 However, Treasury did not provide
requested documentation regarding how and when they expect to ﬁnalize the details of their
process.
As we discussed above, our October 2021 report recommended that Treasury should design and
document timely and suﬃcient policies and procedures for monitoring recipients of CSLFRF. We
continue to believe that fully developing and ﬁnalizing these processes—including policies and
procedures—is critical for ensuring that recipients are managing their allocations in compliance
with laws, regulations, agency guidance, and award terms and conditions.
389Capital expenditures means expenditures to acquire capital assets or expenditures to, among other things, make

additions, improvements, modiﬁcations, replacements, or rearrangements to capital assets that materially increase their
value or useful life. 31 C.F.R. § 35.3; 2 C.F.R. § 200.1.
390Recipients that submitted these project and expenditure reports included states, U.S. territories, and certain local

and tribal governments.

391These remedies may include imposing additional conditions on award funds and, if that does not resolve the

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According to Treasury oﬃcials, Treasury is also in the process of hiring and training additional
program staﬀ in its Oﬃce of Recovery Programs, which oversees the CSLFRF program, to review
the report submissions. Treasury oﬃcials also told us they anticipate that these staﬀ will be
trained to review other CSLFRF reports.
Treasury oﬃcials told us that they are in the early stages of determining how and when to make
project and expenditure report data publicly available, including the types of data they plan to post
on Treasury’s website or another public-facing platform and the timeframes for doing so. Treasury
oﬃcials told us that once they have had an opportunity to review the submissions they expect to
have a better understanding of how the data could be made publicly available.
Treasury’s NEU validation eﬀorts. Treasury oﬃcials told us that after states collect the required
information from NEUs for determining their eligibility for receiving CSLFRF allocations, Treasury
will verify and validate the information to create accounts for NEUs in Treasury’s online reporting
portal. According to Treasury oﬃcials, Treasury validated 26,092 eligible NEUs and had created
accounts in its reporting portal for nearly all of them (26,064), as of March 17, 2022.
Treasury continues to create portal accounts for all eligible NEUs, pending accurate NEU
information. Treasury relies on state-provided NEU information to create a portal account for each
NEU. This information includes relevant NEU contact information for individuals responsible for
managing the CSLFRF payments. We reported in January 2022 that Treasury had concerns with
the quality and completeness of NEU contact information. According to Treasury oﬃcials, if states
cannot provide Treasury with accurate NEU contact information, Treasury may be unable to create
a portal account for every NEU in advance of the April 30, 2022, project and expenditure report
submission due date. Treasury oﬃcials told us they are working closely with states to conduct
data quality checks to help ensure that NEUs that received CSLFRF payments have an account in
Treasury’s portal in advance of the ﬁrst project and expenditure report due date.
In addition, Treasury oﬃcials told us they are checking the state-provided NEU data to ensure that
states have not distributed payments to NEUs that exceed 75 percent of the NEU’s most recent
budget that was in eﬀect as of January 27, 2020.392 As of March 17, 2022, ﬁve states provided one
or more NEUs a payment that exceeded the 75 percent budget cap, according to Treasury oﬃcials.
Treasury oﬃcials told us they are coordinating with those states to correct these payments.
According to Treasury’s CSLFRF award terms and conditions, a recipient will owe a debt to the
federal government if the recipient’s CSLFRF payments exceed its authorized funding amount.393
Treasury can take any actions available to it to collect this debt; however, according to Treasury
oﬃcials, they have not yet determined whether and which actions are needed.
Once an NEU’s account is established in Treasury’s reporting portal and prior to the April 30,
2022, due date, an NEU must provide Treasury copies of three documents: (1) an actual budget
document validating the top-line budget total provided to the state as part of the request for
392Treasury’s ﬁnal rule deﬁnes an NEU’s budget for purposes of calculating the 75 percent budget cap as its total annual

budget, including both operating and capital expenditure budgets, in eﬀect as of January 27, 2020. See, 31 C.F.R. §
35.12(b).

393Department of the Treasury, Coronavirus Local Fiscal Recovery Fund Award Terms and Conditions, clause 14. https://

home.treasury.gov/system/ﬁles/136/NEU_Award_Terms_and_Conditions.pdf.

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funding, (2) a signed award terms and conditions agreement, and (3) a signed assurance of
compliance with Title VI of the Civil Rights Act of 1964. NEUs that have a formal budget document
must upload it into the reporting portal. Those without a formal budget document must upload
the certiﬁcation they provided to the state that aﬃrmed their top-line budget, according to
Treasury oﬃcials. Treasury oﬃcials said NEUs will not be able to submit a project and expenditure
report without the required documentation.
Treasury oﬃcials told us they are reaching out to individual NEUs after creating their portal
accounts to initiate contact and facilitate future communication. They also told us that in the
spring of 2022 they plan to send NEUs reminders about uploading the required documentation
for the project and expenditure report submissions. In addition, Treasury oﬃcials said they
established a call center to provide NEUs and other CSLFRF recipients with individualized support.

Methodology
We reviewed federal laws and Treasury regulations, guidance, and documentation regarding
the CSLFRF. We also interviewed Treasury oﬃcials and analyzed Treasury’s written responses to
questions that we posed.

Agency Comments
We provided Treasury and OMB with a draft of this enclosure. Treasury provided technical
comments, which we incorporated as appropriate. OMB did not provide comments on this
enclosure.

GAO’s Ongoing Work
Our work on the CSLFRF is ongoing. We will continue to review how CSLFRF recipients use their
awards, address challenges they face in managing the funds, and evaluate outcomes of their
funded projects. We will continue to monitor Treasury’s eﬀorts to provide CSLFRF guidance and
monitor funds. We will also continue to follow up on open recommendations.

GAO’s Prior Recommendations
The table below presents our recommendation on the CSLFRF from prior bimonthly and quarterly
CARES Act reports.

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Prior GAO Recommendations Related to Coronavirus State and Local Fiscal Recovery Funds (CSLFRF)
Recommendation

Status

The Secretary of the Treasury should design and document
timely and suﬃcient policies and procedures for monitoring
recipients of Coronavirus State and Local Fiscal Recovery Funds to
provide assurance that recipients are managing their allocations
in compliance with laws, regulations, agency guidance, and award
terms and conditions, including ensuring that expenditures are
made for allowable purposes. (October 2021 report)

Open—partially addressed. Treasury agreed with
the recommendation. In December 2021, Treasury
oﬃcials stated the agency expected to have drafts of
internal control policies and procedures for CSLFRF
ﬁnalized in the coming weeks. As of February 2022,
Treasury had not provided those draft policies
and procedures. Treasury oﬃcials also stated they
are taking steps towards developing processes
for monitoring CSLFRF recipients, but had not
yet ﬁnalized those processes. We will continue to
monitor the actions Treasury takes in response to
our recommendation.

Source: GAO. I GAO-22-105397

Contact Information: Jeﬀ Arkin, (202) 512-6806, arkinj@gao.gov

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COVID-19 Relief Funding to States and Localities
As states and localities make progress spending the more than $1 trillion provided to federal
agencies for COVID-19 assistance, some challenges emerged that warrant ongoing attention as
implementation continues in the coming years. These challenges included diﬀerences in states’
and localities’ experiences implementing new versus existing programs and funds, confusion
about which programs and funds should be used for speciﬁc purposes when allowable uses are
similar, and managing diﬀerent reporting requirements.

Background
The coronavirus relief laws enacted between March 2020 and March 2021 provided more than
$1 trillion to federal agencies to provide assistance related to the COVID-19 pandemic to states,
the District of Columbia, localities, U.S. territories, and Indian tribes through existing and newly
created programs and funds.394
The table below lists 13 programs and funds that each received $10 billion or more—exclusively or
primarily for states, the District of Columbia, localities, U.S. territories, and tribes—in at least one
of the six COVID-19 relief laws.

394This total is based on (1) an analysis of the appropriated amounts in the American Rescue Plan Act of 2021 (ARPA),

Divisions M and N of the Consolidated Appropriations Act, 2021, the Paycheck Protection Program and Health Care
Enhancement Act, the CARES Act, the Families First Coronavirus Response Act, and the Coronavirus Preparedness and
Response Supplemental Appropriations Act, 2020 that are available to agencies for assistance to states, the District of
Columbia., localities, U.S. territories, and tribes; and (2) the Congressional Budget Oﬃce’s estimated outlays for Medicaid
resulting from authorized increases in payments to states and U.S. territories under those laws.

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COVID-19 Relief Funding for Federal Programs and Funds That Received $10 billion or More in Aid for States, the
District of Columbia, Localities, U.S. Territories, and Tribes

Programs and funds

Appropriations
($ in
billions)

Descriptions

Coronavirus State and Local
Fiscal Recovery Funds

Administered by the Department of the Treasury, these funds provide
payments to states, the District of Columbia (D.C.), U.S. territories, tribal
governments, and localities to mitigate the ﬁscal eﬀects stemming from
the COVID-19 pandemic.

Elementary and Secondary
School Emergency Relief Fund

Administered by the Department of Education, this fund generally provides
formula grants to states (including D.C. and Puerto Rico) for educationrelated needs to address the impact of the COVID-19 pandemic.

Coronavirus Relief Fund

Administered by Treasury, this fund provides payments to states, D.C.,
localities, U.S. territories, and tribal governments to help oﬀset costs of
their response to the COVID-19 pandemic.

150

Disaster Relief Fund

Administered by the Federal Emergency Management Agency, this fund
provides federal disaster recovery assistance for state, local, tribal, and
territorial governments when a major disaster occurs.

Medicaid

Administered by states and U.S. territories according to plans approved by
the Centers for Medicare & Medicaid Services, which oversees Medicaid at
the federal level. This program ﬁnances health care for certain low-income
and medically needy individuals through federal matching of states’ and
U.S. territories’ health care expenditures. The Families First Coronavirus
Response Act and the American Rescue Plan Act of 2021 temporarily
increased federal Medicaid matching rates under speciﬁed circumstances,
among other changes.

76.9

Transit Grants

Administered by the Federal Transit Administration, these funds are
distributed through existing grant programs to provide assistance to
states, localities, U.S. territories, and tribes to prevent, prepare for, and
respond to the COVID-19 pandemic.

69.5

Child Care and Development

Administered by the Department of Health and Human Services (HHS), this
program provides funds to states, D.C., territories, and tribes to subsidize
the cost of child care for low-income families. COVID-19 relief funds have
supported assistance to health care and other essential workers without
regard to income eligibility requirements. Additional child care stabilization
funding was provided for sub-grants to eligible child care providers to
support the stability of the child care sector during and after the COVID-19
pandemic.

52.5

Administered by Treasury, this program provides assistance to states, D.C.,
U.S. territories, localities, and tribes to assist eligible households with rent,
utilities and home energy costs, and other expenses related to housing

46.6

Fund

Emergency Rental Assistance

and housing stability.

190.3

Public Health and Social Services Administered by HHS, this fund provides for grants to states, U.S.
Emergency Fund
territories, localities, and tribal governments to support COVID-19 testing,
surveillance, and contact tracing, among other uses.

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33.4

GAO-22-105397

Programs and funds

Appropriations
($ in
billions)

Descriptions

Airport Grants

Administered by the Federal Aviation Administration, these grants provide
funds for eligible airports to prevent, prepare for, and respond to the
eﬀects of the COVID-19 pandemic.

Highway Infrastructure

Administered by the Federal Highway Administration, these programs
provide funds to states, D.C., U.S. territories, and tribes for highway
construction and authorize the use of these funds for maintenance,
personnel, and other purposes to prevent, prepare for, and respond to the
COVID-19 pandemic.

Coronavirus Capital Projects
Fund

Administered by Treasury, this fund provides payments to states, D.C.,
U.S. territories, freely associated states, and tribal governments for
critical capital projects that directly enable work, education, and health
monitoring, in response to the COVID-19 pandemic.

State Small Business Credit
Initiative

Administered by Treasury, this program provides funds to states, D.C., U.S.
territories, tribal governments, and eligible municipalities to fund small
business credit support and investment programs.

Source: GAO analysis of federal laws and data from the Congressional Budget Oﬃce. | GAO-22-105397

Note: The COVID-19 relief laws providing the appropriations shown are the American Rescue Plan Act of 2021 (ARPA), Pub.
L. No. 117-2, 135 Stat. 4 (2021), the Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, div. M and N, 134 Stat. 1182
(2020), the Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620 (2020), the
CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020), and the Families First Coronavirus Response Act, Pub. L. No. 116-127, 134
Stat. 178 (2020). The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134
Stat. 146, did not provide any speciﬁed amounts for these programs or funds for states, D.C., localities, territories, or tribes. The
amounts shown are the cumulative amounts for each program or fund under the other ﬁve laws. Some appropriation amounts
include an amount available for administration expenses or for the relevant inspectors general. Numbers are rounded to the
nearest hundred million.
a

Several provisions in the Families First Coronavirus Response Act and ARPA authorized increases in Medicaid payments to
states and U.S. territories. The Congressional Budget Oﬃce estimated that federal expenditures from these provisions would be
approximately $76.9 billion through ﬁscal year 2030. The largest increase to federal Medicaid spending is based on a temporary
funding formula change rather than a speciﬁc appropriated amount. Some of the estimated costs in this total are for the
Children’s Health Insurance Program, permanent changes to Medicaid, and changes not speciﬁcally related to COVID-19.
c

The Child Care and Development Fund is made up of two funding streams: mandatory and matching funding authorized under
section 418 of the Social Security Act, and discretionary funding authorized under the Child Care and Development Block Grant
Act of 1990, as amended. See 42 U.S.C. §§ 618 and 9858m.
d

We refer to ERA1 and ERA2 as the ERA program for convenience. While Treasury uses this approach, it clariﬁed that it
considers them to be two separate programs managed by the same oﬃce.
e

Funds are available to eligible sponsors of airports. Nearly all of these airports are under city, state, county, or public-authority
ownership.

Overview of Key Issues
States and localities generally experienced more challenges implementing COVID-19 relief
under new versus existing programs, although existing programs also faced challenges such
as managing expedited time frames. Some state and local COVID-19 relief programs and funds

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were newly created under the COVID-19 relief laws. For example, the Coronavirus Relief Fund (CRF)
and the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) were newly created under the
CARES Act and American Rescue Plan Act (ARPA), respectively.395 Conversely, existing programs
generally received funding—and in many cases were expanded—under the relief laws.
For example, Highway Infrastructure programs received additional funding and expanded
allowable uses for recipients, including for costs related to preventative maintenance, routine
maintenance, operations, and personnel, including salaries of employees (including for those
on administrative leave), among others.396 Similarly, Federal Transit grant programs received
additional funding and expanded allowable uses, including reimbursement for operating costs
to maintain service and lost revenue due to the coronavirus public health emergency, among
others.397 In addition, the Child Care and Development Fund received additional appropriations
and expanded eligibility for the program.398 Medicaid, the nation’s largest source of funding for
health care services for low-income and medically needy individuals, received authority to provide
enhanced funding to states under the relief laws.399
Oﬃcials from associations representing state and local governments and the three states we
spoke with told us it is more challenging for states and localities to manage newly created
programs than programs that already existed and received additional funding under the COVID
relief laws. States and localities may experience a range of challenges in administering and
managing new programs and funds. Some of these challenges include:
• Capacity. Oﬃcials from the three states and several associations told us that with new
programs, states may face challenges in developing the infrastructure to manage them and
the cognizant federal agencies have less experience administering them. For example, oﬃcials
from one association said it can be diﬃcult for states to hire staﬀ and train them to manage
new programs.
Oﬃcials from another association said it can take states time to develop the capacity to
manage new programs, including having suﬃcient staﬀ with the knowledge and technical skills
needed to manage new programs and the ability to employ technology for grant oversight
and reporting. Oﬃcials from two states we spoke with also said they experienced challenges
395Pub. L. No. 116-136, div. A, tit. V, § 5001(a), 134 Stat. 281, 501, (2020) (codiﬁed as amended at 42 U.S.C. 801) (CRF);

Pub. L. No. 117-2, tit. IX, subtit. M, § 9901, 135 Stat. 4, 223 (2021) (codiﬁed as amended at 42 U.S.C. §§ 802-803) (CSLFRF).
396Pub. L. No. 116-260, div. L, tit. IV, 134 Stat. 1182, 1941-42.

397Pub. L. No. 117-2, tit. III, subtit. D, § 3401, 135 Stat. 4, 72; Pub. L. No. 116-260, div. M, tit. IV, 134 Stat. 1182, 1945, 1947,

and Pub. L. No. 116-136, Div. B. tit. XII, 134 Stat. 281, 599-600.

398Funds may be used to provide child care assistance to health care sector employees, emergency responders,

sanitation workers, and other essential workers without regard to the income eligibility requirements. Pub. L. No. 117-2,
tit. II, subtit. C, § 2201, 135 Stat. 4, 31; Pub. L. No. 116-260, div. M, tit. III, 134 Stat. 1182, 1914-15, and Pub. L. No. 116-136,
div. B, tit. VIII, 134 Stat. 281, 557-558.
399Medicaid did not receive additional funding under the COVID-19 relief laws. As noted above, estimated increases

in federal expenditures for Medicaid resulted from authorized increases in Medicaid payments to states and U.S.
territories in several provisions in the Families First Coronavirus Response Act and ARPA. These two COVID-19 relief laws
provided states with temporary increases to their Federal Medical Assistance Percentage (FMAP) rates in response to the
COVID-19 public health emergency. See Pub. L. No. 116-127, div. F, §§ 6004(a)(3), 6008, 134 Stat. 178, 205, 208 Pub. L. No.
117-2, tit. IX, subtit. J, §§ 9811, 9817, 135 Stat 4, 208, 216.The FMAP is a statutory formula that the federal government
uses to match states’ spending for Medicaid purposes.

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obtaining responses to their questions from federal agencies about implementing new
programs. For example, oﬃcials from one state said they are generally able to reach Treasury
oﬃcials for responses to questions about existing programs, but have experienced delays in
obtaining responses to questions about new programs.
In October 2021, we reported lags in grantee spending of Emergency Rental Assistance (ERA)
funding distributed by Treasury. According to Treasury oﬃcials, most grantees could not
deploy funds immediately because they needed additional time to enhance existing rental
assistance programs or develop new programs in order to accommodate the increased scale
of operations made possible through the funding. Speciﬁcally, grantees had to develop new
policies and procedures, hire additional staﬀ, and develop electronic application and data
collection systems.
• Guidance. Treasury has provided guidance for new programs, but in some cases the guidance
was unclear or untimely. In October 2021 we reported from the results of a survey we
conducted from July through August 2021 that the majority of states (29 of 48) and localities
(29 of 45) that responded to our survey reported needing additional information in the
guidance about allowable uses of CSLFRF funds. In addition, 32 states and 17 localities that
responded to our survey reported needing additional information about CSLFRF reporting
requirements. 400
Treasury is leveraging lessons learned from the roll-out of CRF guidance when implementing
the CSLFRF. In July 2021 we reported that CRF recipients found Treasury’s guidance on eligible
uses of the funds to be unclear. Treasury took steps intended to ensure the clarity of its
CSLFRF guidance for recipients. For example, Treasury oﬃcials told us they consulted with
eligible recipients, including tribes, on various aspects of CSLFRF implementation.
In addition, oﬃcials from one association told us that Treasury was slow to issue guidance on
eligible expenses for the Coronavirus Capital Projects Fund. The oﬃcials said that although
states anticipated the funds could be used for broadband projects, states were slow in
planning for spending on such projects in the absence of clear guidance. Treasury issued
general guidance detailing allowable uses for the program in September 2021. However, it has
not yet issued detailed guidance on reporting requirements.
Similarly, we noted that in October 2021 Treasury updated its ERA program grantee guidance
(known as frequently asked questions) several times to assist grantees in delivering ERA
funds more eﬃciently. However, oﬃcials from one association told us that Treasury’s iterative
guidance did not address states’ questions in a timely manner.
Existing programs also faced challenges, particularly in areas where these programs were already
experiencing challenges prior to the pandemic or in expanding programs under expedited time
frames. For example, we reported in July 2021 that FEMA’s available workforce was already
400In January 2022, Treasury issued a ﬁnal rule on the program which provided, among other things, clariﬁcation

on eligible uses of the funds. Treasury also updated its Compliance and Reporting Guidance in November 2021 and
February 2022 that provided additional detail and clariﬁcation on the compliance and reporting responsibilities for
each recipient type, including reporting deadlines. See Department of the Treasury, Coronavirus State and Local Fiscal
Recovery Funds, Final Rule, 87 Fed. Reg. 4338 (Jan. 27, 2022) (codiﬁed at 31 C.F.R. pt. 35, subpt. A) and Compliance
and Reporting Guidance: State and Local Fiscal Recovery Funds, ver. 2.1 (Nov. 15, 2021) and ver. 3.0 (Feb. 28, 2022),
https://home.treasury.gov/system/ﬁles/136/SLFRF-Compliance-and-Reporting-Guidance.pdf.

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overwhelmed by responding to natural disasters and could be further stretched by COVID-19.
In October 2021 we reported that FEMA then experienced delays in processing applications for
COVID-19 Public Assistance, and it inconsistently interpreted and applied its policies within and
across its regions. Similarly, in January 2022, we reported on challenges that the Centers for
Medicare & Medicaid Services (CMS) faced in implementing enhanced Medicaid funding for certain
services under abbreviated timelines. Speciﬁcally, ARPA increased the federal Medicaid funding
available for Home and Community Based Services to begin 3 weeks after its enactment. Oﬃcials
from CMS said this time frame created challenges for CMS to quickly develop related guidance and
system changes.
Similar allowable uses and varying time frames and availability of COVID-19 relief funds
may aﬀect how states and localities manage them. According to association oﬃcials, there
may be some confusion among states and localities about which streams of funding should be
used for speciﬁc purposes when allowable uses are similar. For example, oﬃcials from states and
associations we met with noted that allowable uses for the CSLFRF funding are broad and may
overlap with other programs. Association oﬃcials said both the CSLFRF and Coronavirus Capital
Projects Fund can be used for broadband investment, and the recently passed Infrastructure
Investment and Jobs Act provides additional broadband funding.401 Similarly, oﬃcials from one
association said some states experienced challenges understanding what allowable uses were for
the CSLFRF relative to the Elementary and Secondary School Emergency Relief Fund (ESSER), and
expressed concern about whether to use CSLFRF or ESSER funding for COVID-19 testing in schools.
Oﬃcials from two states we spoke with said they have been considering the period in which funds
must be spent and the requirements associated with diﬀerent programs when determining how
to use the funding. For example, oﬃcials from one state said they made strategic decisions about
the use of Disaster Relief Fund (DRF) and CRF funding in order to maximize the use and impact of
both programs before the deadline to obligate CRF funds.402 Oﬃcials from another association
said states and localities were concerned about “moving goal posts” for the various streams of
COVID-19 relief funding. Speciﬁcally, when new programs were introduced, jurisdictions were
forced to reassess decisions they had already made. In addition, oﬃcials from one state said
they were carefully considering how to sequence the various streams of funding available for
broadband in order to achieve the state’s infrastructure goals. In October 2021, we reported that
when deciding to use CARES Act funds or annually appropriated Child Care and Development
Funds for providing assistance to child care providers, state administrators we interviewed said
they considered various factors, such as when funding was available, allowable uses, and the
period in which funds must be spent.403
Oﬃcials from states and associations we met with told us the timing of availability of funds and
clarity on eligible uses has aﬀected states’ and localities’ ability to use and manage it. For example,
401Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, div. F, 135 Stat. 429, 1182-1250 (2021).

402CRF recipients had to obligate their funds by December 31, 2021. CARES Act, Pub. L. No. 116-136, div. A, tit. V,

§ 5001(a), 134 Stat. 501 as amended by the Consolidated Appropriations Act, 2021, div. N, tit. X, § 1001, 134 Stat.
2146 (codiﬁed at 42 U.S.C. § 801(d)(3)). See also, Treasury guidance https://home.treasury.gov/system/ﬁles/136/CRFGuidance_Revision-Regarding-Cost-Incurred.pdf.

403States have up to September 30, 2022, to obligate CARES Act funds appropriated for the Child Care and Development

Block Grant program and must spend these funds by September 30, 2023.

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oﬃcials from some associations said it can be challenging when federal and state ﬁscal years do
not align, and told us that it is important that federal agencies ﬁnalize programs’ eligible uses as
quickly as possible because states may have their own appropriations processes that determine
how to spend the funds.404 The oﬃcials said if federal agencies are delayed in ﬁnalizing eligible
uses, it may hinder states’ ability to make appropriations decisions about how they use federal
funds and delay when funds reach intended recipients.
States faced challenges in managing diﬀerent reporting requirements and transparency
over use of funds. Oﬃcials from states and associations we met with told us states and localities
may face challenges managing and meeting the various reporting requirements for multiple
programs. Oﬃcials from one association told us there were concerns that some reporting
requirements were duplicative, and that it would be helpful to have more alignment among
reporting requirements for diﬀerent programs. For example, oﬃcials from two associations
suggested that requested data for reporting on COVID-19 relief programs and funds could be
better aligned with those for the Community Development Block Grants (CDBG), which many
recipients are already familiar with.405
We also previously reported on challenges in recipient reporting and oversight of program
data. For example, in January 2022 we reported that Treasury extended the deadlines to all
CSLFRF recipients for submitting their ﬁrst project and expenditure reports.406 Treasury oﬃcials
told us that the deadline extensions were due, in part, to technological issues with the online
reporting portal. Similarly, an association representing state housing agencies identiﬁed technical
challenges states are facing using Treasury’s reporting portal to submit quarterly reports for the
ERA program, which it asserted could negatively aﬀect the quality of data on the program.
We also reported issues with transparency of grantee or sub-grantee funding. For example,
in March 2021 we reported a gap between when school districts used COVID-19 relief funds
and when the Department of Education recorded the funds as spent. We recommended that
Education regularly collect and publicly report information on school districts’ obligations as well
as expenditures in order to more completely reﬂect the status of their use of federal COVID-19
relief funds. We noted the importance of accurately capturing the status of COVID-19 relief funds
provided to states and school districts to inform the department’s monitoring and technical
assistance, and to provide transparency to the public about uses of the funds. Education agreed
with our recommendation and implemented it by taking a number of steps to work with states
to provide greater clarity on state and school district spending. For example, as of January 2022
404While the federal ﬁscal year runs from October 1 to September 30, most states have diﬀerent ﬁscal years (e.g., 46

states have July 1 to June 30 ﬁscal years).

405The CDBG program provides annual grants on a formula basis to states, cities, and counties to develop viable urban

communities by providing housing and a suitable living environment, and by expanding economic opportunities,
principally for low- and moderate-income persons. Regulations require CDBG grantees to submit an Annual
Performance Report to HUD within 90 days of the close of a grantee's program year.

406While prior Treasury guidance speciﬁed that such reports were originally due on October 31, 2021, states, territories,

certain metropolitan cities and counties and tribal governments allocated more than $30 million were later required to
submit their reports by January 31, 2022, with reports covering the period between March 3, 2021, and December 31,
2021. For Non-entitlement Units, other metropolitan cities and counties, and tribal governments allocated less than $30
million, the ﬁrst reports are now due on April 30, 2022, and will cover the period between March 3, 2021 and March 31,
2022.

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Education updated its data collection instrument on the status of COVID-19 relief funding to more
closely track recipient obligations and expenditures.

Methodology
To conduct this work, we reviewed our prior reports on speciﬁc COVID-19 relief programs and
funds to states and localities and we included relevant prior ﬁndings, such as results from a survey
of states and localities we conducted in summer 2021. To gather additional perspectives about
states’ and localities’ use and management of COVID-19 relief funding across programs and
funds receiving $10 billion or more in appropriations in at least one of the COVID-19 relief laws,
we interviewed representatives from 10 organizations that collectively represent state and local
governments: the Council of State Governments; the Government Finance Oﬃcers Association;
the International City/County Management Association; the National Association of Counties; the
National Association of State Auditors, Comptrollers and Treasurers; the National Association
of State Budget Oﬃcers; the National Conference of State Legislatures; the National Governors
Association; the National League of Cities; and the United States Conference of Mayors. We also
interviewed oﬃcials from three states—Hawaii, North Carolina, and Rhode Island—about their
experiences using and managing COVID-19 relief funding. These interviews were designed to
provide illustrative examples of states’ and localities’ experiences with the use and management
of COVID-19 relief funding, as of the time of our interviews in February 2022. We identiﬁed these
states because they were mentioned by the associations we interviewed as having approaches
they were applying across the programs and funds, such as centralized strategies for managing
the funding and publishing data across programs and funds on their websites.

Agency Comments
We provided the Departments of Education, Health and Human Services, Homeland Security,
Transportation, the Treasury, and the Oﬃce of Management and Budget (OMB) with a draft of this
enclosure. The Departments of Education, Health and Human Services, Transportation, and the
Treasury provided technical comments, which we incorporated as appropriate. The Department of
Homeland Security and OMB had no comments.

GAO’s Ongoing Work
We currently have multiple ongoing or planned reviews of the funding that federal COVID-19 relief
laws appropriated for agencies across the federal government to provide payments to states, the
District of Columbia, localities, territories, and tribes for responding to, and recovering from, the
COVID-19 pandemic.
Contact information: Jeﬀ Arkin, (202) 512-6806, arkinj@gao.gov

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Capital Projects Fund
The Department of the Treasury has documented application and grant review procedures for
the Coronavirus Capital Projects Fund. However, Treasury has not yet begun recipient monitoring
and has not yet documented a comprehensive plan and process that includes the design and
documentation of procedures to monitor recipients’ use of funds for allowable purposes once
funds have been disbursed.
Entity involved: Department of the Treasury

Recommendation for Executive Action
The Secretary of the Treasury should document a comprehensive plan that includes timely and
suﬃcient policies and procedures for monitoring recipients of the Coronavirus Capital Projects
Fund to provide assurance that funds are being used in compliance with laws, regulations, agency
guidance, and award terms and conditions, including ensuring that funds are being used for
allowable purposes. Treasury agreed with this recommendation.

Background
The Coronavirus Capital Projects Fund (CPF) was established in March 2021 under section 9901
of the American Rescue Plan Act of 2021 (ARPA). The fund may provide up to $10 billion to state,
territorial, and tribal governments to support critical capital projects directly enabling work,
education, and health monitoring, in response to the COVID-19 public health emergency.
Under ARPA, Congress allocated the $10 billion as follows: $9.8 billion to states, the District of
Columbia, and Puerto Rico; $100 million to other territories and freely associated states;407
and $100 million to tribal governments and the state of Hawaii (for Native Hawaiian Programs).
Pursuant to implementing Treasury guidance, these funds are required to be expended by
December 31, 2026, and recipients must return to Treasury any funds that are not used by that
date.408 As of February 28, 2022, $1.2 million in obligations and $1.2 million in expenditures of
CPF were reported by Treasury for this program.409 In addition, Treasury reported signiﬁcant
obligations in March 2022, and as of March 18, 2022, a total of $9.9 billion has been obligated.
407Territories and freely associated states consist of the territories of the United States Virgin Islands, Guam, American

Samoa, and the Commonwealth of the Northern Mariana Islands; and the freely associated states of the Republic of the
Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. Freely associated states refer to nations
that are aﬃliated with the United States through a compact of free association. For the purposes of CPF allocations,
Puerto Rico, a territory, is included with states and the District of Columbia.
408ARPA appropriated CPF funding without ﬁscal year limitation. 42 U.S.C. § 804(a). In September 2021, however,

Treasury issued implementing guidance establishing December 31, 2026, as the end of the period of performance for
CPF grants by which grants funds must be expended and unused funds returned to Treasury. In its guidance, Treasury
noted that, at its sole discretion, it may extend the period of performance upon CPF recipient requests.
409An obligation is a deﬁnite commitment that creates a legal liability of the U.S. government for the payment of

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In April 2021, Treasury established the Oﬃce of Recovery Programs (ORP) to oversee programs
authorized through the COVID-19 relief laws (primarily the CARES Act, the Consolidated
Appropriations Act, 2021, and ARPA). The CPF is administered by oﬃcials in a program oﬃce
located within ORP. The program oﬃce is staﬀed with personnel speciﬁcally assigned to CPF,
including one grants specialist. CPF oﬃcials also stated that some CPF program functions are
handled centrally through ORP.

Overview of Key Issues
Treasury’s development of internal controls over CPF. Treasury oﬃcials told us in January 2022
that they were in the early stage of the program and were working on assessing internal control
needs and were planning to establish a risk-based approach to monitoring CPF recipients’ use of
funds. In March 2022, Treasury oﬃcials further stated that they are in the process of establishing
monitoring procedures to include review of recipient-reported data, including single audit data,
and data analysis to identify potential areas of non-compliance for remediation.
Treasury issued application and eligibility guidance. In September 2021, Treasury issued two
guidance documents on CPF to provide information on project eligibility and terms and conditions,
as well as the application process for grants under the CPF program. For states, territories, and
freely associated states, applications were due by December 27, 2021, and grant plans are due
by September 24, 2022.410 For tribal governments, the application and grant plan deadline is
June 1, 2022.411 One guidance document was directed at states, territories, and freely associated
states, and the other was directed at tribal governments. Both guidance documents explained
the process for (1) submitting an initial application for CPF funds through Treasury’s automated
Capital Projects Fund Portal; (2) executing a grant agreement with Treasury; and (3) submitting
a grant plan providing information on the recipient’s intended uses of CPF funds. The guidance
documents provide information to CPF applicants on the application process and on eligible uses
of funds.
Treasury developed application and grant plan review procedures. ORP oﬃcials described Treasury’s
current process for reviewing CPF applications as consisting of both automated reviews of
applicant data in the CPF portal system, and additional manual reviews. Treasury oﬃcials said red
ﬂags identiﬁed in the automated review of an applicant’s submission would prompt further review
and follow-up with the applicant. In the initial application review process, Treasury checks to see
that (1) application entries are not duplicates; (2) an applicant is an authorized representative of
the recipient government; and (3) applicants have requested allowable amounts for administrative
expenses, among other matters.
410For states, territories, and freely associated states, the grant plan is ﬁled separately from the initial application. Grant

plans for these recipients consist of an executive summary; an allocation table showing the broad categories of capital
projects the recipient seeks to undertake using grant funds and how much the recipient intends to spend on each such
category; and one or more program plans, which are intended to provide more detailed information on a particular type
of capital project(s) the recipient intends to undertake. Treasury’s guidance includes a provision for a waiver of the grant
plan deadline at the discretion of the agency.
411For tribal governments, the grant plan is included in the application, and consists of a short description of the

proposed use for the grant funds, documented by either selection of one of the presumptively eligible uses in the
application form, or by brief description of the otherwise eligible use.

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Treasury has documented review procedures for applications from states, territories, and freely
associated states in its “State Review Checklist.” However, grant plans for state, territorial, and
freely associated state recipients are not due until September 24, 2022. In March 2022, Treasury
oﬃcials stated that they have started receiving grant plans and are reviewing the grant plans
on a rolling basis. Treasury oﬃcials stated they are in the process of documenting the review
procedures established for these grant plans.
Treasury’s review procedures for tribal applications and grant plans are documented in procedural
checklists used by the CPF program team staﬀ. The tribal review procedures specify that the
completed review is to be documented in a Tribal Government Application Review Checklist
and an Action Memo. These documents reﬂect the programmatic review of the application, the
administrative record for application-speciﬁc decisions, and Treasury’s approval of the application.
Treasury plans to develop further monitoring procedures. In addition to the application and grant
plan reviews, Treasury’s plans for monitoring recipients’ use of funds include reviews of recipients’
detailed program plans,412 as applicable, recipients’ quarterly project and expenditure reports and
annual performance reports, and CPF-related ﬁndings in recipients’ single audit reports.413 As of
January 2022, Treasury had provided high-level requirements for recipient reporting in its guidance
documents, but speciﬁc details for the reporting process had not been issued.
In developing its monitoring procedures, Treasury oﬃcials noted that they are considering both
the lifecycle of the CPF and lessons learned from other pandemic relief eﬀorts:
• Lifecycle of the CPF. Although CPF recipients are permitted to use program funds for eligible
purposes through December 31, 2026, Treasury may have recipient monitoring responsibility
well beyond this expenditure deadline, in part due to the long-term nature of construction
projects and permissible uses of CPF funds. Speciﬁcally, construction of capital assets may
be multiyear projects and CPF recipients are required to commit that eligible projects will
provide services or activities for at least 5 years from the completion of the project. As a result,
Treasury’s monitoring responsibility of recipients to provide assurance over the allowable use
of CPF funds could extend to several years after 2026. As of March 2022, Treasury oﬃcials
stated that Treasury will publish recipient guidance setting forth the reporting obligations
in advance of the ﬁrst reporting deadlines, and that they are in the process of establishing a
risk-based, data-driven framework for providing accountability and stewardship to achieve
program goals and objectives. This framework will include procedures to review recipientreported data, including single audit data, and data analysis to identify potential areas of
non-compliance for remediation. Treasury expects to have these procedures in place when

412For states, territories, and freely associated states, a program plan included within the grant plan provides more

detailed information on a particular type of capital project(s) the recipient intends to undertake, and constitutes an
eligible applicant’s request for funding for those capital projects. There is no requirement for tribal governments to
submit program plans in their grant plans to Treasury.
413The Single Audit Act is codiﬁed at 31 U.S.C. §§ 7501-06, and implementing Oﬃce of Management and Budget

guidance is reprinted in 2 C.F.R. part 200. Nonfederal entities (states, U.S. territories, Indian tribes, local governments,
and nonproﬁt organizations) that expend $750,000 or more in federal awards in their ﬁscal year are required to undergo
a single audit—that is, an audit of the entity’s ﬁnancial statements and federal awards for the ﬁscal year, or in limited
circumstances, a program-speciﬁc audit. 31 U.S.C. § 7502; 2 C.F.R. § 200.501.

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monitoring begins. Treasury oﬃcials noted they are still considering how they will monitor
recipients’ use of CPF funds beyond December 31, 2026.
• Lessons learned from other pandemic relief eﬀorts. Treasury oﬃcials told us that in
developing the CPF program they plan to take advantage of lessons learned from the agency’s
experience with other pandemic relief programs. Since the start of the COVID-19 public
health emergency, Treasury has been charged with administering multiple pandemic relief
programs beneﬁtting state, territorial, local, and tribal governments—among them the $150
billion Coronavirus Relief Fund enacted in the March 2020 CARES Act, and the $350 billion
Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) enacted in the March 2021
ARPA.414
Beginning with its mandate to administer the Coronavirus Relief Fund in March 2020, Treasury
has faced increasing responsibilities in managing new programs such as CSLFRF and CPF.
For example, Treasury’s role in the Coronavirus Relief Fund included disbursing funds
to recipients and issuing program guidance, while Treasury’s Oﬃce of Inspector General
performed oversight and monitoring of that program, as provided for in the CARES Act. By
contrast, Treasury has been more actively involved in administering CSLFRF and CPF, including
determining recipients’ program eligibility and developing periodic recipient reporting
requirements.
We have previously reported on the challenges Treasury faced in responding to its new and
expansive program management responsibilities under the CARES Act and ARPA. For example,
we noted that recipients of the Coronavirus Relief Fund found Treasury’s guidance on eligible
uses of the funds was unclear before Treasury published ﬁnal guidance on that program in
January 2021, approximately 11 months after the start of the period when recipients could use
funds. In addition, we reported in October 2021 that Treasury had not ﬁnalized its design and
documentation of key internal processes and control activities related to monitoring CSLFRF
recipients’ use of the funds, although it had disbursed approximately $240 billion of those
funds to recipients as of August 31, 2021.
Treasury oﬃcials indicated that they plan to leverage their experience with other programs
such as CSLFRF when determining how to monitor CPF recipients. For example, they stated
they are being more patient on developing reporting requirements and plan on getting the
data collection design right before they issue guidance. In addition, Treasury oﬃcials agreed
with our October 2021 recommendation related to the design and documentation of internal
controls related to CSLFRF recipient monitoring and stated as of December 2021 that they
have taken steps to address this recommendation.
Standards for Internal Control in the Federal Government states that management should design
control activities to achieve objectives and respond to risks and should implement control
414Coronavirus Relief Fund: CARES Act, Pub. L. No. 116-136, § 5001, 134 Stat. 281, 501-04 (2020), as amended

by the Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, div. N, tit. X, § 1001, 134 Stat. 1182, 2146
(2020) (codiﬁed at 42 U.S.C. § 801). CSLFRF: ARPA, Pub. L. No. 117-2, tit. IX, subtit. M, § 9901, 135 Stat. 4, 223 (2021)
(codiﬁed at 42 U.S.C. §§ 802-803). Sections 602 and 603 of the Social Security Act as added by section 9901 of
ARPA appropriated $350 billion in total funding for two funds—the Coronavirus State Fiscal Recovery Fund and
the Coronavirus Local Fiscal Recovery Fund. For purposes of this report, we discuss these two funds as one—the
Coronavirus State and Local Fiscal Recovery Funds (CSLFRF). 42 U.S.C. §§ 802-803.

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activities through policies. As part of this process, management designs control activities in
response to the entity’s objectives and risks to achieve an eﬀective internal control system.
Management then documents the internal control responsibilities in policies at an appropriate
level of detail to allow management to eﬀectively monitor the control activity.
Treasury has developed and documented application and grant review procedures for tribal
CPF recipients and an application review checklist for states, territories, and freely associated
states. However, the agency has not yet completed documentation of its procedures for recipient
monitoring to help ensure that recipients are maintaining eﬀective controls over the funds and
that funds are expended in accordance with federal requirements (e.g., applicable legal provisions
and internal control standards). As a result, development of key procedures is needed to help
ensure program management fulﬁlls its recipient monitoring and oversight responsibilities. For
example, Treasury will also need to plan and document procedures for monitoring recipients’ use
of funds for allowable purposes once CPF funds have been disbursed, and before the recipient
monitoring phase begins.

Methodology
To conduct this work, we interviewed Treasury’s Oﬃce of Recovery Programs oﬃcials to obtain
an understanding of their processes for monitoring CPF recipients’ internal controls to help
ensure allowable use of CPF funding. In addition, we examined Treasury’s review procedures for
evaluating CPF recipient applications and grant plans, as applicable.

Agency Comments
We provided Treasury and the Oﬃce of Management and Budget (OMB) with a draft of this
enclosure. Treasury provided written comments, which are reproduced in appendix X, and
technical comments, which we incorporated as appropriate. OMB did not provide comments.
Treasury agreed with our recommendation, and stated that the Oﬃce of Recovery Programs
— the oﬃce that administers many pandemic-era economic recovery programs, including CPF
— solicited stakeholder input in developing CPF reporting guidance, and it is in the process of
establishing a risk-based, data-driven framework for providing accountability and stewardship to
achieve program goals and objectives. This framework will include procedures to review recipientreported data, including single audit data, and data analysis to identify potential areas of noncompliance for remediation. Treasury expects to have these procedures in place when monitoring
begins. Treasury has stated that it is committed to administering CPF in an eﬀective and timely
manner while also mitigating risks of waste, fraud, and abuse.

GAO’s Ongoing Work
We will continue to monitor the status of Treasury’s management of the CPF program and its
process to oversee CPF recipients.

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Related GAO Products
Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.:
September 2014.
Contact Information: Beryl Davis, (202) 512-2623, davisbh@gao.gov

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Federal Contracts and Agreements for COVID-19
As of March 31, 2022, federal agencies continued to obligate billions of dollars monthly in support
of COVID-19 response eﬀorts through contracts.
Entities involved: Department of Defense, Department of Health and Human Services,
Department of Homeland Security, and the Oﬃce of Management and Budget, among others

Background
Federal agencies have used a variety of contracting mechanisms to provide vital goods and
services in support of federal, state, and local COVID-19 response eﬀorts.415 For example, federal
agencies have reported billions of dollars in obligations on contracts subject to the Federal
Acquisition Regulation—which provides uniform policies and procedures for acquisitions by all
executive agencies.416 Our prior work on disaster contracting has found that contracts play a key
role in federal emergency response eﬀorts, and that contracting during an emergency can present
a unique set of challenges as oﬃcials can face signiﬁcant pressure to provide critical goods and
services as expeditiously and eﬃciently as possible.
The January 2021 National Strategy for the COVID-19 Response and Pandemic Preparedness
emphasizes the important role contracts will continue to play during the response. The strategy
states that the federal government will fully leverage contract authorities to strengthen the vaccine
supply chain; staﬀ vaccination sites; and ﬁll supply shortages for personal protective equipment,
drugs, and therapeutics.
As federal contracting activity through contracts and agreements continues to play a critical role
in response to the pandemic, it is important to ensure that these contracts and agreements in
response to COVID-19 are accurately reported and visible to congressional decision makers,
entities with oversight responsibilities, and taxpayers. National Interest Action (NIA) codes were
established in 2005 following Hurricane Katrina to enable the consistent tracking of emergency
or contingency-related contracting actions in the Federal Procurement Data System (FPDS). The
COVID-19 NIA code was established on March 13, 2020, to track contract actions and associated
obligations in response to the pandemic in FPDS. The Department of Homeland Security (DHS)
and DOD have subsequently extended the code ﬁve times—generally in 6-month increments, and
most recently until September 30, 2022.417

415The CARES Act includes a provision for GAO to provide a comprehensive audit and review of federal contracting

pursuant to the authorities provided in the Act. In addition to speciﬁc contracting reviews, we have reported on federal
contracting in response to the pandemic as part of regularly issued government-wide reports on the federal response to
COVID-19.
416For the purposes of this report, “contract obligations” refers to obligations on procurement contracts that are subject

to the Federal Acquisition Regulation and does not include, for example, grants, cooperative agreements, loans, other
transactions for research, real property leases, or requisitions from federal stock.
417According to the memorandum of agreement guiding the management of the NIA code, DHS and DOD are

responsible for making determinations about whether to establish or close a code, based on a variety of considerations.
The General Services Administration (GSA)—the agency that operates and maintains FPDS—is responsible for adding
or updating the NIA code in the system based on DHS’s and DOD’s decisions. The extensions of the code are consistent
with our prior recommendations to DHS, DOD, and GSA related to the importance of ensuring federal agencies, the

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Overview of Key Issues
Agencies obligated more than $115 billion on federal contracts, with DOD and HHS
accounting for over three-quarters of obligations as of March 31, 2022. At the beginning of
the response, HHS accounted for the most federal contract obligations. However, as the response
has progressed, DOD’s contract obligations exceeded HHS’s. The increase in DOD’s contract
obligations is due, in part, to DOD’s support of interagency acquisition needs, which has included
awarding contracts on behalf of HHS for vaccine and therapeutic production and medical supplies.
As of March 31, 2022, DOD accounted for about 57 percent and HHS for about 20 percent of the
total obligations made by federal agencies in response to the COVID-19 pandemic. See ﬁgure for
obligation amounts by federal agency.
Contract Obligations in Response to COVID-19 by Federal Agency, as of Mar. 31, 2022

In our January 2022 report, we reported that government-wide contract obligations related to
COVID-19 totaled $101.6 billion through December 15, 2021; by March 31, 2022, those obligations
had increased by about $16.4 billion—to $118 billion. DOD accounted for about $11.1 billion, or
about 68 percent of the increase in total contract obligations since December 15, 2021.

public, and Congress have visibility into contract actions and associated obligations related to emergency response
eﬀorts.

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Signiﬁcant increases in obligations early in the pandemic were due to large purchases of medical
equipment and supplies—such as ventilators and personal protective equipment. Large vaccine
and therapeutic purchases have continued to contribute to more recent spikes in obligations. For
example, following purchases of about $4 billion in Pﬁzer and Moderna vaccines in December
2020, multi-billion dollar vaccine purchases by DOD in February, June, and July 2021 as well as
in January 2022 contributed to monthly increases in reported contract obligations. Additionally,
multi-billion dollar purchases of therapeutics from Pﬁzer and Regeneron contributed to monthly
increases in September and November 2021. See ﬁgure for government-wide obligations and
conﬁrmed COVID-19 cases by month.
Government-wide COVID-19-Related Contract Obligations and Conﬁrmed COVID-19 Cases by Month, Feb. 2020–
Mar. 31, 2022

Types of goods and services purchased and competition rate changed over the course of
the pandemic. As the response to the pandemic has progressed, the types of goods and services
purchased have shifted from primarily medical equipment and supplies—such as ventilators
and personal protective equipment—to drugs and treatments, such as COVID-19 vaccines
and therapeutics. Drugs and treatments have become the largest area of government-wide
obligations, accounting for 40 percent of total obligations over the course of the pandemic. These
obligations increased almost ﬁfteen fold from $3 billion as of November 2020, prior to the Food
and Drug Administration’s emergency use authorizations for the Pﬁzer, Moderna, and Janssen
vaccines, to about $47.3 billion as of March 31, 2022.418

418Emergency use authorizations allow for the temporary use of unapproved medical products. Janssen Pharmaceutical

Companies are a part of Johnson & Johnson.

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Since the start of the pandemic, increases in obligations for drugs and treatments have included
$32 billion in obligations for COVID-19 vaccines and therapeutics to Pﬁzer and Moderna, with
recent increases in obligations due to purchases to support booster shots, pediatric vaccinations,
international vaccine donations, and therapeutics to treat COVID-19. Further, the federal
government’s eﬀorts to distribute rapid antigen tests to U.S. households starting in January 2022
have also contributed to recent increases in monthly obligations for medical equipment and
supplies. For example, as of March 31, 2022, DOD had obligated about $4.7 billion in 2022 for
rapid antigen COVID-19 tests.
See ﬁgure for obligation amounts for the most-procured goods and services over time.
Contract Obligation Amounts for Top Five Goods and Services Procured in Response to COVID-19 by month, Feb.
2020–Mar. 31, 2022

Note: In addition to what is reﬂected in the ﬁgure, agencies canceled, or deobligated, $176.5 million and $335.8 million for
drugs and treatments in July 2020 and April 2021, respectively. Obligations for fruits and vegetables were made primarily in
support of the U.S. Department of Agriculture’s Farmers to Families Food Box Program.

As of March 31, 2022, COVID-19-related contracts for goods continued to be competed less
frequently than contracts for services, but competition rates for goods have increased. For
example, we reported in July 2021 that about 97 percent of obligations on drugs and therapeutics
and 85 percent of obligations on medical equipment and supplies were not competed. As of
March 31, 2022, about 74 percent of the $47.3 billion in obligations for drugs and treatments and
about 60 percent of the $14.2 billion in obligations for medical and surgical equipment were on
contracts awarded noncompetitively.

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Overall, the proportion of COVID-19 related contracts identiﬁed as having been awarded
noncompetitively was about 54 percent, or $63.7 billion, as of March 31, 2022.419 Throughout
the course of the pandemic, the percentage of obligations on these noncompetitive contracts
has ﬂuctuated from a high of 93 percent of obligations in July 2021 to a low of 21 percent of
obligations in November 2021. The higher rate of obligations on noncompetitively awarded
contracts in July 2021 was driven in part by large noncompetitive awards for vaccine production.
Agencies must provide for full and open competition when awarding contracts, unless one of
several limited exceptions applies, such as when there is an unusual and compelling urgency for a
needed supply or service. Agencies cited an urgent need for awarding contracts noncompetitively
for about 85 percent, or about $53.9 billion, of the contract obligations associated with
noncompetitive awards.420
Federal agencies’ use of undeﬁnitized contracts increased. Undeﬁnitized contracts are one
technique that agencies have reported using to respond to COVID-19. Undeﬁnitized contracts can
enable the government to quickly fulﬁll requirements that are urgent or need to be met quickly by
allowing contractors to begin work before reaching a ﬁnal agreement with the government on all
contract terms and conditions.421 Undeﬁnitized contract obligations for COVID-19 increased from
about $6.2 billion as of December 15, 2021, to $6.7 billion as of March 31, 2022, continuing to total
about 6 percent of government-wide obligations on contracts awarded in response to COVID-19. A
majority of the increase was driven by undeﬁnitized contracts awarded by HHS for the purposes of
increasing community access to COVID-19 testing at pharmacy and retail locations. DOD continued
to report the highest amount of undeﬁnitized contract obligations, identifying about $4.3 billion,
or about 6 percent of its overall COVID-19-related contract obligations, as being on undeﬁnitized
contracts.
Our prior work reviewed DOD’s, HHS’s, and the Department of Homeland Security’s (DHS) use
of undeﬁnitized contracts in response to COVID-19, including the use of CARES Act ﬂexibilities
for such contracts. We found that the timing of deﬁnitization and amount obligated prior to
deﬁnitization varied across our selected contracts, and that oﬃcials at DOD—which accounted for
the majority of undeﬁnitized contract obligations—cited the ability to quickly award undeﬁnitized
contracts as a major beneﬁt during the pandemic.

419Our methodology for identifying noncompetitive contracts is explained in detail at the end of this enclosure.

420For the purposes of this report, obligations on contracts identiﬁed as using the unusual and compelling urgency

exception include those associated with contracts subject to Federal Acquisition Regulation 6.302-2, as well as orders
under multiple award contracts, which are subject to separate requirements under Federal Acquisition Regulation
subpart 16.5. Speciﬁcally, under Federal Acquisition Regulation 16.505(b)(2), orders on multiple award contracts
require contracting oﬃcers to give every awardee a fair opportunity to be considered for a delivery order or task order
exceeding $3,500, with exceptions, including if the agency need for the supplies or services is so urgent that providing
a fair opportunity would result in unacceptable delays. When using the unusual and compelling urgency exception to
full and open competition, agencies still must request oﬀers from as many potential sources as is practicable under the
circumstances.
421Undeﬁnitized contracts include letter contracts, as well as other undeﬁnitized actions. Letter contracts are a

preliminary contract that authorizes the contractor to begin work immediately, and undeﬁnitized contract actions
include any contract action for which the contract terms, speciﬁcations, or price are not agreed upon before
performance has begun under the action. Federal Acquisition Regulation 16.603 and Defense Federal Acquisition
Regulation Supplement 217.74.

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Opportunities exist to collect and share contracting lessons learned to improve future
emergency response eﬀorts. During the course of the pandemic, agencies identiﬁed a variety of
challenges and positive practices with contracting in response to COVID-19. For example, in July
2021 we reported that contracting oﬃcials from selected agencies identiﬁed challenges with a lack
of contracting personnel, working with vendors that were new to federal contracting or vendors
supplying products they had not previously provided, and contracting for supplies and services
the agency does not typically buy, among others. We also reported that oﬃcials identiﬁed positive
contracting practices—such as establishing centralized email inboxes for vendors to communicate
with agencies about available goods and services, and relying on pre-existing contract vehicles
to more quickly provide some goods and services—that helped them during the response to the
pandemic.
While certain agencies were collecting and sharing lessons learned from the COVID-19 response,
we found that HHS and the Federal Emergency Management Agency (FEMA) within DHS were not
including contracting lessons learned even though they had identiﬁed contracting challenges. We
recommended that HHS and FEMA ensure that contracting lessons learned from COVID-19 and
future emergency response eﬀorts are collected and shared as part of ongoing lessons learned
processes. HHS agreed with the recommendation and said it would use its existing lessons learned
processes to collect, analyze, and share contracting lessons learned. FEMA also agreed and in
December 2021, said it is developing an annual survey for contracting staﬀ that will include a
question asking contracting oﬃcials to identify any lessons learned and areas for improvement in
future emergency response eﬀorts.
We also found that while interagency coordination was critical to the contracting response,
contracting oﬃcials from DOD, HHS, and DHS were not always aware of or involved in
government-wide eﬀorts to collect and share interagency lessons learned. We recommended that
DOD, HHS, and DHS ensure that input from contracting oﬃcials on interagency contracting lessons
learned in response to COVID-19 is collected and shared as part of government-wide eﬀorts to
report on lessons learned. All three agencies agreed and said they will collect, analyze, and report
on interagency contracting lessons learned to share with the other departments and governmentwide reporting eﬀorts.
Further, we identiﬁed variations in how agencies used new contracting authorities provided by
the CARES Act. Speciﬁcally, section 3610 of the CARES Act generally authorized federal agencies
to reimburse contractors for paid leave provided to their employees and subcontractors who
were unable to access work sites due to facility closures or other restrictions, and whose duties
could not be performed remotely during the pandemic. We reported in July 2021, that due to the
urgency of the pandemic, agencies prioritized quick implementation of section 3610 over a more
deliberative process, resulting in variations in how the authority was tracked and used.
We found that selected agencies using the authority had captured or planned to capture lessons
learned from implementing section 3610. However, the Oﬃce of Management and Budget
(OMB)—which coordinates government-wide contracting policy—had not collected and shared
lessons learned. We recommended that after the COVID-19 national emergency, OMB collect
and share lessons learned from federal agencies’ implementation of COVID-19 paid leave
reimbursement. OMB agreed with the recommendation and said they would collect and share

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individual agencies’ lessons learned to promote knowledge management, but has not yet provided
an update on its progress.

Methodology
To identify agencies’ federal contract obligations and competition rate on contracts in response to
COVID-19, we reviewed data reported in FPDS through March 31, 2022.422 We primarily identiﬁed
contract obligations related to COVID-19 using the NIA code. We supplemented the use of the NIA
code by searching for “COVID-19” and “coronavirus” in the contract description ﬁeld to identify
a limited number of additional contract obligations.423 For contract actions over $1 million, we
removed obligations that were identiﬁed in the contract description as not related to COVID-19.
We assessed the reliability of federal procurement data by reviewing existing information about
FPDS and the data it collects—speciﬁcally, the data dictionary and data validation rules—and
by performing electronic testing. We supplemented our FPDS analysis with analysis of agencyprovided data and interviews with agency oﬃcials. We determined that the data were suﬃciently
reliable for the purposes of describing agencies’ reported contract obligations in response to
COVID-19.

Agency Comments
We provided DOD, HHS, DHS, and OMB with a draft of this enclosure. The agencies did not provide
comments on this enclosure.

GAO’s Prior Recommendations
The table below presents our recommendations on federal contracts and agreements for
COVID-19 from prior bimonthly and quarterly CARES Act reports.

422FPDS data from SAM.gov accessed through March 31, 2022. For purposes of this report, “competition rate” is the

percentage of total obligations associated with contracts awarded competitively. We calculated competition rates
as the percentages of obligations on competitive contracts and orders over all obligations on contracts and orders.
Competitive contracts included contracts and orders coded in the FPDS as “full and open competition,” “full and open
after exclusion of sources,” and “competed under simpliﬁed acquisition procedures” as well as orders coded as “subject
to fair opportunity,” “fair opportunity given,” and “competitive set aside.” Noncompetitive contracts included contracts
and orders coded in the FPDS as “not competed,” “not available for competition,” and “not competed under simpliﬁed
acquisition procedures,” as well as orders coded as an exception to “subject to fair opportunity,” including “urgency,”
“only one source,” “minimum guarantee,” “follow-on action following competitive initial action,” “other statutory
authority,” and “sole source.” Even for contracts identiﬁed as noncompetitive, agencies may have solicited more than
one source.
423In November 2019 we identiﬁed some inconsistencies in the information agencies report in the contract description

ﬁeld in the FPDS. Data on DOD contract obligations based on information in the description ﬁeld were available only
through January 1, 2022, due to diﬀerences in the time frames for which DOD data are made publicly available.

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Prior GAO Recommendations Related to Federal Contracts and Agreements for COVID-19
Recommendation

Status

The Secretary of Agriculture should direct the Administrator of
the Agricultural Marketing Service to issue guidance—such as an
acquisition alert or a reminder to contracting oﬃcials—on the use
of the COVID-19 National Interest Action code for the Farmers
to Families Food Box Program or successor food distribution
program to ensure it accurately captures COVID-19-related
contract obligations in support of the program (March 2021
report).

Closed-Addressed. The U.S. Department of
Agriculture (USDA) neither agreed nor disagreed
with our recommendation. In February 2021,
following our identiﬁcation of contract data
reporting challenges using the COVID-19 National
Interest Action code for the Farmers to Families
Food Box Program, Agricultural Marketing Service
oﬃcials said they conducted training with staﬀ
to review National Interest Action code data
entry protocols. At that time, a senior Agricultural
Marketing Service oﬃcial also sent an email
reminder to procurement division personnel
about OMB’s guidance on the use of the COVID-19
National Interest Action code. Following this training
and email, oﬃcials took action to retroactively
report contract actions for the program with
the National Interest Action code. In May 2021,
the Agricultural Marketing Service updated its
instructions for entering contract actions into the
Federal Procurement Data System to include a
reminder to utilize the proper National Interest
Action code, if applicable.

The Secretary of Agriculture should direct the Administrator
of the Agricultural Marketing Service to assess the contracting
personnel needed to fully execute the award and administration
of existing contracts in support of the Farmers to Families Food
Box Program or successor future food distribution program, and
take the necessary steps to ensure it has adequate contracting
staﬀ in place to award and administer any future contracts for the
program (March 2021 report).

Closed-Addressed. USDA neither agreed nor
disagreed with our recommendation, and according
to Agricultural Marketing Service oﬃcials, they have
discontinued the program, and are using other
methods of hunger relief, so they do not anticipate
needing additional permanent staﬀ. However, in
December 2021 the Agricultural Marketing Service
placed an order on an existing USDA contract
vehicle to obtain additional staﬀ support for
contract closeout services and other administrative
needs for the awards that have been made under
the Farmers to Families Food Box Program and
other food purchasing eﬀorts. The statement
of work for the order estimates the number of
contracts the Agricultural Marketing Service needs
contract support services for, and required the
contractor to deliver a staﬃng plan, identifying how
it will meet USDA’s requirements. The contractor’s
April 2022 staﬃng plan identiﬁes a total of three
additional staﬀ to lead and support Agricultural and
Marketing Services contract closeout needs for the
Farmers to Families Food Box Program. The plan
also states that staﬃng needs will be reassessed
and additional resources acquired as needed, which
will help to ensure that Agricultural and Marketing
Services has the needed staﬀ support to ﬁnalize the
closeout of the contracts.

The Assistant Secretary for Preparedness and Response (ASPR), in Open-Partially Addressed. ASPR agreed with
coordination with the appropriate oﬃces within the Department of our recommendation, and as of April 2021, ASPR

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Recommendation

Status

Health and Human Services (HHS), should accurately report data in oﬃcials stated that they have discussed within ASPR
the federal procurement database system and provide information the need to consistently identify other transaction
that would allow the public to distinguish between spending on
agreements in the Federal Procurement Data
other transaction agreements and procurement contracts (January System (FPDS) and explored how their contract
2021 report).
writing system may interface with the FPDS other
transaction agreement module in the future.
In December 2021, ASPR oﬃcials added that
in the meantime, they have issued guidance to
their contracting teams to manually track other
transaction agreements in their contract writing
system. We will continue to monitor ASPR’s eﬀorts
to implement our recommendation.
The Secretary of Homeland Security, in coordination with the
Closed-Addressed. The Department of
Secretary of Defense, should (1) revise the criteria in the 2019
Homeland Security (DHS) did not agree with
National Interest Action (NIA) code memorandum of agreement to our recommendation. However, in March 2021,
clearly identify steps they will take to obtain input from key federal DHS, in coordination with the Department of
Defense (DOD), issued a revised memorandum
agencies prior to extending or closing a National Interest Action
of agreement. The revised agreement establishes
code, (2) establish timelines for evaluating the need to extend
a process and timelines for communicating and
a National Interest Action code, and (3) deﬁne what constitutes
evaluating NIA code extensions by requiring the
a consistent decrease in contract actions and routine contract
activity to ensure the criteria for extending or closing the National General Services Administration to notify other
federal agencies no less than seven days before
Interest Action code reﬂect government-wide needs for tracking
contract actions in longer term emergencies, such as a pandemic a NIA code is set to expire so that agencies can
request an extension as needed. The revised
(September 2020 report).
agreement also more clearly deﬁnes what
constitutes a consistent decrease in contract actions
to ensure criteria for extending or closing a NIA
code is consistently applied.
The Secretary of Defense, in coordination with the Secretary
Closed-Addressed. DOD did not agree with
of Homeland Security, should (1) revise the criteria in the 2019
our recommendation. However, in March 2021
National Interest Action code memorandum of agreement to
DOD, in coordination with DHS, issued a revised
clearly identify steps they will take to obtain input from key federal memorandum of agreement. The revised
agreement establishes a process and timelines for
agencies prior to extending or closing a National Interest Action
communicating and evaluating NIA code extensions
code, (2) establish timelines for evaluating the need to extend
by requiring the General Services Administration
a National Interest Action code, and (3) deﬁne what constitutes
to notify other federal agencies no less than seven
a consistent decrease in contract actions and routine contract
activity to ensure the criteria for extending or closing the National days before a NIA code is set to expire so that
agencies can request an extension as needed. The
Interest Action code reﬂect government-wide needs for tracking
contract actions in longer term emergencies, such as a pandemic revised agreement also more clearly deﬁnes what
constitutes a consistent decrease in contract actions
(September 2020 report).
to ensure criteria for extending or closing a NIA
code is consistently applied.
Source: GAO. I GAO-22-105397

Related GAO Products
COVID-19 Contracting: Opportunities to Improve Practices to Assess Prospective Vendors and Capture
Lessons Learned. GAO-21-528. Washington, D.C.: July 29, 2021.

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COVID-19 Contracting: Contractor Paid Lead Reimbursements Could Provide Lessons Learned for Future
Emergencies. GAO-21-475. Washington, D.C.: July 28, 2021.
COVID-19 Contracting: Actions Needed to Enhance Transparency and Oversight of Selected Awards.
GAO-21-501. Washington, D.C.: July 26, 2021.
COVID-19 Contracting: Observations on Federal Contracting in Response to the Pandemic. GAO-20-632.
Washington, D.C.: July 29, 2020.
DATA Act: Quality of Data Submissions Has Improved but Further Action Is Needed to Disclose Known
Data Limitations. GAO-20-75. Washington, D.C.: November 8, 2019.
Disaster Contracting: FEMA Continues to Face Challenges with Its Use of Contracts to Support Response
and Recovery. GAO-19-518T. Washington, D.C.: May 9, 2019.
2017 Disaster Contracting: Actions Needed to Improve the Use of Post-Disaster Contracts to Support
Response and Recovery. GAO-19-281. Washington, D.C.: April 24, 2019.
2017 Disaster Contracting: Action Needed to Better Ensure More Eﬀective Use and Management of
Advance Contracts. GAO-19-93. Washington, D.C.: December 6, 2018.
Contact information: Marie A. Mak, (202) 512-4841, makm@gao.gov

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International Trade
The costs for importing goods into the U.S. have signiﬁcantly increased since the beginning of
the pandemic. U.S. import values of COVID-19-related products, such as face masks, ventilators,
gloves, and hand sanitizer, have continued to ﬂuctuate, while U.S. exports of COVID-19 vaccines
have increased in recent months.

Background
Global trade has rebounded from the initial decline at the beginning of the COVID-19 pandemic,
but international supply chains continue to experience disruptions. According to United Nations
trade statistics, annual trade in world merchandise was forecasted to grow by 22 percent from the
end of December 2020 through the end of December 2021, after declining by 7 percent from end
of 2019 through the end of 2020.424 An analysis by the World Trade Organization (WTO) suggests
that this trend was driven by a surge in global demand for imported goods after the initial months
of the pandemic.
According to the United Nations, increasing imbalances between global demand and supply
of merchandise during COVID-19 have contributed to congestion at ports around the globe.
According to a 2021 United Nations review of maritime trade, the rebound in trade combined with
pandemic induced restrictions has led to port congestion, shortages in equipment and containers,
less reliable services, and longer dwell times for ships and increased business uncertainty for
importers and exporters. In addition, according to a report from the World Trade Organization
(WTO), the surge in demand for imported items in many countries has led to gridlock at ports of
entry.
The annual trade deﬁcit of goods and services in the United States increased by 49 percent from
$526 billion in 2019, the year before the pandemic started, to $859 billion in 2021. The annual
trade deﬁcit of goods increased by 27 percent from $862 billion in 2019 to over $1 trillion in 2021.
The annual trade surplus of services decreased by 19 percent from $285 billion in 2019 to $232
billion in 2021.

Overview of Key Issues
Increasing shipping costs and port congestion. Import charges, including the cost of shipping
goods across country borders has signiﬁcantly increased in 2021 (see ﬁgure). Throughout 2019
and before the pandemic started in 2020, U.S. importers paid an average of about $283 in import
charges, which includes freight cost, per $10,000 of merchandise imported.425 After March 2020,
424United Nations Conference on Trade and Development, “2021 Handbook of Statistics” (Geneva, Switzerland: United

Nations Publications, Dec. 9, 2021), date accessed February 15, 2022, https://unctad.org/system/ﬁles/oﬃcial-document/
tdstat46_en.pdf.

425U.S. Census import data contains information on total monthly import charges paid on all imported shipments.
Census cannot reliably account for shipments valued below $2,000. As such, Census implements statistical
methodologies to account for imported shipments below $2,000 to account for coverage, timeliness and relevance of
the international merchandise trade statistics. Import charges include cost of freight; insurance; and other charges,
excluding duties.

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the cost relative to dollar imported increased. In December 2021, U.S. importers paid almost $410
per $10,000 of merchandise imported.
Monthly Trends in U.S. Import Charges Relative to Value Imported, from Jan. 2018–Dec. 2021

Note: U.S. Census import data contains information on total monthly import charges paid on all imported shipments into
the U.S. Census cannot reliabily account for shipments valued below $2,000. Therefore, Census implements statistical
methodologies to account for imported shipments below $2,000 to account for coverage, timeliness, and relevance of the
international merchandise trade statistics. Import charges include cost of freight; insurance; and other charges, excluding
duties. December 2021 was the latest month of trade data available at the time of our analysis.

Cost of ocean freight has increased during the pandemic. According to Freightos, a digital booking
platform for international shipping, the price of shipping a container of merchandise across the
Paciﬁc Ocean has stabilized in the beginning of 2022, but remains eight to nine times higher than
pre-pandemic levels. According to the Federal Reserve of St. Louis, the average global market price
of shipping a 40-foot container increased from an average of $1,331 in the ﬁrst week of February
2020 to $11,109 in the second week of September 2021. Since shipping costs are often passed
onto buyers of the imported product, increasing costs for ocean freight could lead to increased
prices for U.S. importers and consumers. According to the Bureau of Labor Statistics, U.S. import
prices increased by 10.9 percent from February 2021 through February 2022.
There are a number of factors that contributed to the increase in shipping prices after the initial
months of the pandemic. According to an analysis by the United States International Trade
Commission (USITC), in June 2020, shipping costs for ocean freight began to increase due to
recovering consumer demand for goods as well as container shortages among other factors.
Speciﬁcally, as noted in the same report, container shipping ﬁrms struggled to keep up with the
resurgence in demand after reducing capacity in response to a decrease in consumer demand
in the ﬁrst months of the pandemic.426 According to the same analysis, increased demand for
426U.S. International Trade Commission, “The Impact of the COVID-19 Pandemic on Freight Transportation Services

and U.S. Merchandise Imports” (Washington, D.C.: USITC), date accessed March 1, 2020, https://www.usitc.gov/
research_and_analysis/tradeshifts/2020/special_topic.html.

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certain types of products in 2020, most notably personal protective equipment (PPE), contributed
to increased air freight shipping costs relative to 2019. In addition, COVID-19 outbreaks, more
stringent health protocols, less ﬂexible working conditions at U.S. ports and labor shortages led to
bottlenecks, which further led to decreases in available containers to transport merchandise and
further increased shipping costs.
The ports of Los Angeles and Long Beach have implemented some changes to their operations
to reduce backlog. According to NASA satellite imagery, dozens of ships were waiting their turn
to unload products at the ports of Los Angeles and Long Beach on October 10, 2021. Using data
from the Marine Exchange of Southern California, NASA concluded that 60 ships were at anchor or
in holding areas waiting to unload containers at the ports of Los Angeles and Long Beach on that
day.427 Using the same data, NASA found a large number of ships in holding areas or at anchor in
June 2020. Before June 2020, cargo ships rarely had to wait to unload their goods. In January 2022,
we reported that the number of shipping containers ﬂowing through the ports of Los Angeles and
Long Beach, which account for around 40 percent of U.S. containerized freight, had increased to
record levels. On October 13, 2021, after a meeting between port leadership and the President,
the U.S. administration announced that the Port of Los Angeles agreed to operate 24/7 in order to
clear the backlog of ships waiting to unload their containers in the U.S.
As of March 22, 2022, most terminals were operating between 17 and 20 hours a day for at least 4
days a week, but none of the 6 Port of Los Angeles terminals had extended operations to 24 hours
a day for 7 days a week.428 At the port of Long Beach, one terminal announced a pilot program to
extend operations closer to 24 hours a day for 4 days a week. However, truckers have rarely set
appointments with the terminals at the port to pick up shipments during the extended hours of
operation according to two news reports.
Fluctuations in U.S. trade of COVID-19-related products. U.S. import values of COVID-19related products (e.g., face masks, ventilators, gloves, and hand sanitizer) have continued to
ﬂuctuate. According to U.S. Census Bureau trade statistics, U.S. import values of products in
categories related to the COVID-19 response increased 13 percent from May through August 2021
before declining by 2 percent from August 2021 through December 2021.429 Import values of
these products in December 2021 were 31 percent higher than in February 2020, the last month
before the declaration of the COVID-19 pandemic by the World Health Organization (see ﬁgure).
Throughout 2021, monthly trends in COVID-related imports remained relatively stable with an
average month-to-month growth of lower than 1 percent.

427The Marine Exchange of Southern California is a non-proﬁt organization dedicated to development and eﬃcient
ﬂow of commerce through the 4 major ports in Southern California that include the ports of Los Angeles and Long
Beach. The Marine Exchange maintains a continuous 24-hour service, and utilizes a state-of-the-art, comprehensive,
computerized database system to provide vital statistics and information on ships calling into both ports.

428One of the six terminals at the Port of Los Angeles operated close to 20 hours each day of the week as of 3/21/2022.
429For the purposes of our analysis, U.S. import values refer to the value of imports for consumption, which is a

measure of merchandise that has physically cleared through customs.

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Monthly U.S. Import Values of COVID-19-Related Products, by Product Type, Jan. 2019–Dec. 2021

Note: U.S. Census Bureau trade statistics—a widely used source analyzing U.S. international trade—do not contain precise data
on import values of COVID-19-related products. As a result, we estimated the import value of all product types and categories
within those types using Harmonized Tariﬀ Schedule of the United States (HTS) statistical reporting numbers and associated
product groupings listed by the U.S. International Trade Commission (USITC). Examples of products included in the “Other”
category of product type include hospital beds and wheelchairs. See U.S. International Trade Commission, COVID-19 Related
Goods: U.S. Imports and Tariﬀs, Investigation No. 332-576, USITC Publication 5073 (Washington, D.C.: June 2020). Some HTS
categories represent more than one product, and some categories contain products that are not directly relevant to COVID-19
response. Product categories that USITC identiﬁed as COVID-19-related refer only to the subset of goods considered to be
COVID-19-related in each HTS-10 statistical reporting number. Furthermore, revisions to the HTS on July 1, 2020; January 1,
2021; and July 1, 2021, provided several new HTS-10 statistical reporting numbers that more narrowly deﬁned some COVID-19related product categories. In order to study import values of these products throughout and before the COVID-19 pandemic,
we identiﬁed product categories that changed since June 2020 and mapped them to back to their original statistical reporting
number in the USITC report mentioned above to provide a consistent time-series of monthly trade in these products. Therefore,
the values shown overestimate the imports of products directly relevant to COVID-19 response. Nevertheless, the values shown
are useful in tracking import value trends for such products throughout and before the start of the COVID-19 pandemic. For
more information about factors inﬂuencing import trends in various types of COVID-19-related products, see U.S. International
Trade Commission, COVID-19 Related Goods: The U.S. Industry, Market, Trade and Supply Chain Challenges, Investigation No.
332-580 (December 2020). December 2021 was the latest month of trade data available at the time of our analysis.

A rise in import values of personal protective equipment (PPE) and testing equipment has been
driving the increase in import value of COVID-19-related products. Import values of PPE increased
more than 500 percent from February 2020 through June 2020. Import values of PPE in December
2021 remained nearly 55 percent greater than in February 2020, before the pandemic, although
import values of PPE declined by 37 percent from August 2021 through December 2021.
Import values of medical testing equipment doubled from February 2020 through August 2021
and further increased by 2 percent from August 2021 through December 2021. In addition, the
monthly average value of medical testing equipment imports in 2021 was 80 percent higher
than in February 2020. This includes a 24 percent increase in import value from November 2021

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through December 2021, during which time WHO announced the Omicron variant as a variant of
concern.
Demand for imported N-95 masks and swabs, key products needed to protect from and test for
the COVID-19 virus, declined in the past year. Import quantities of N-95 masks declined by 91
percent and the unit value of N-95 masks declined by 82 percent from December 2020 through
December 2021. Import quantity of swabs declined by 27 percent and the unit value declined by
5 percent from December 2020 through December 2021.430 Declines in the import quantity and
price suggest that U.S. buyers’ demand for these products from foreign suppliers has decreased.
One possible explanation for this trend is an increased domestic production of these products.
There are many factors that could contribute to ﬂuctuations in import values of COVID-19-related
products. First, changes in import values are related to changes in both the quantity and price
of the imported products. For instance, import values for a speciﬁc product can decrease even
if the number of units imported increases if the decrease in price is large enough.431 In addition,
changes in the number of COVID-19 cases may shift the demand for some COVID-19-related
products, such as pharmaceuticals and diagnostic equipment, over time.
Increased U.S. exports of COVID-19 vaccines. The U.S. has increased exports of COVID-19
vaccines in recent months. According to the World Trade Organization, U.S. exports of vaccine
doses have increased since September 2021. As of January 31, 2021, the U.S. had exported roughly
714.4 million doses of vaccines, accounting for 14 percent of global COVID-19 vaccine exports,
according to the same data source.432
U.S. exports of vaccines signiﬁcantly increased after the ﬁrst COVID-19 vaccine was approved for
emergency use authorization (EUA). According to U.S. Census Bureau trade statistics, the value of
exports of vaccines for human use, which include COVID-19 vaccines, increased over 26-fold from
$92 million in December 2020, when the ﬁrst COVID-19 vaccine was granted EUA, to over $2.4
billion in December 2021 (see ﬁgure).
After December 2020, the majority of U.S. export value of vaccines shifted to countries outside of
the European Union (EU) member countries and the United Kingdom (UK). The value of U.S. export
of vaccines for human use averaged $131 million per month from May 2020 through December
2020, but averaged over $1.7 billion from May 2021 through December 2021. Generally, the
majority of U.S. vaccine exports—by value—prior to December 2020 went to EU member countries
and the United Kingdom (UK), averaging 52 percent per month in 2020. However, the share of
vaccine exports going to EU member countries and the UK dropped to an average of 27 per month
in 2021.

430Unit values equal the total import value of the product divided by the quantity imported. Trends in this measure
serve as a proxy for understanding ﬂuctuations in import price.

431For example, the number of imported N-95 respirators increased by 15 percent from June 2021 through August 2021

while the unit values of these products declined by 42 percent in the same time period. Overall, U.S. import values for
N-95 respirators fell by 33 percent from June 2021 through August 2021.
432World Trade Organization, “WTO-IMF COVID-19 Vaccine Trade Tracker” (Geneva, Switzerland: March 1, 2022), date

accessed March 1, 2022, https://www.wto.org/english/tratop_e/covid19_e/vaccine_trade_tracker_e.htm.

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Value of U.S. Exports of Vaccines for Human Use, Overall and to EU Member Countries and the United Kingdom,
Jan. 2019 – Dec. 2021

Note: Domestic export data for products described in Schedule B code 3002.20.0000 reported in the ﬁgure above contain
exports on all vaccines for human use (See Schedule B code 3002.20.0000—Vaccines for Human Medicine), including
authorized COVID-19 vaccines, to every country. Schedule B product categories are a systematic grouping of commodities
used by the U.S. Census Bureau to track exports of diﬀerent products, which is based on the headings and subheadings in the
International Harmonized System used by WTO members. As of January 2022, Schedule B product categories do not contain
suﬃciently granular information required to identify exports of COVID-19 vaccines speciﬁcally. December 2021 was the latest
month of trade data available at the time of our analysis.

Methodology
To conduct this work, we reviewed the most recent publicly available U.S. trade statistics from the
U.S. Census Bureau as well as U.S. International Trade Commission data on product categories
that contain COVID-19-related products.433 We also analyzed trends in U.S export data of vaccines
for human use to provide context behind U.S. eﬀorts to supply COVID-19 vaccines to other
countries. We determined that the trade data were suﬃciently reliable to provide an overview of
U.S. trade of COVID-19-related products and the costs related to importing goods into the U.S.

433We compared COVID-19-related HTS-10 statistical reporting numbers before and after July 1, 2020, before and

after January 1, 2021, and before and after July 2021. If no data existed for an HTS-10 statistical reporting number, we
checked USITC guidance to determine whether the original reporting number had been annotated or discontinued. If
it had been annotated or discontinued, we included import values of those codes after July 1, 2020; January 1, 2021;
or July 1, 2021, in our analysis. For instance, on July 1, 2020, according to guidance provided by the USITC, the HTS
statistical reporting number 4818.50.0000 split into two new HTS-10 statistical reporting numbers, 4818.50.0080 and
4818.50.0020. Therefore, we included imports for products contained in 4818.50.0080 and 4818.50.0020 after July
1, 2020, in our calculations. Therefore, we may overestimate the value of imports for COVID-19 related products.
Nevertheless, the values shown are useful indicators for tracking import trends for such products. December 2021 was
the latest month of trade data available at the time of our analysis.

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Agency comments
We provided a draft of this enclosure to the Oﬃce of Management and Budget, which had no
comments on this enclosure.

GAO’s Ongoing Work
We will continue to monitor international supply chain issues and Customs and Border
Protection’s trade facilitation during COVID-19.
Contact information: Kimberly Gianopoulos, (202) 512-8612, gianopoulosk@gao.gov

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Federal Fraud-Related Cases
The extent of fraud associated with the COVID-19 relief funds appropriated to date has not yet
been determined. However, many individuals or entities have already pleaded guilty to federal
charges of defrauding COVID-19 relief programs—including the Small Business Administration’s
Paycheck Protection Program and Economic Injury Disaster Loan program, and the Department
of Labor’s unemployment insurance programs—and several hundred individuals or entities
are facing federal charges. We have made previous recommendations to the Small Business
Administration and the Department of Labor to better manage fraud risks to COVID-19 relief
programs, in accordance with GAO’s Fraud Risk Framework.
Entities involved: Government-wide

Background
The public health crisis, economic instability, and increased ﬂow of federal funds associated with
the COVID-19 pandemic present increased pressures and opportunities for fraud.434 Since March
2020, Congress has provided about $4.6 trillion through the CARES Act and other laws that were
enacted to fund federal eﬀorts to help the nation respond to and recover from the COVID-19
pandemic. By proactively managing fraud risks, federal oﬃcials can help safeguard taxpayer
dollars to ensure they serve their intended purposes.
According to GAO’s A Framework for Managing Fraud Risks in Federal Programs (Fraud Risk
Framework), eﬀective managers of fraud risks refer instances of potential fraud to Oﬃces of
Inspector General (OIG) or other appropriate parties, such as law enforcement entities or the
Department of Justice (DOJ), for further investigation.
Due to the very nature of the government’s need to quickly provide funds and other assistance
to those aﬀected by COVID-19 and its economic eﬀects, federal relief programs are vulnerable to
signiﬁcant risk of fraudulent activities. However, the extent of fraud associated with the COVID-19
relief funds appropriated to date has not yet been determined. One of the many challenges to
that determination is that because of fraud’s deceptive nature, programs can incur ﬁnancial losses
related to fraud that are never identiﬁed, and such losses are diﬃcult to reliably estimate.
However, many individuals have already pleaded guilty to federal charges of defrauding COVID-19
relief programs, including the Small Business Administration’s (SBA) Paycheck Protection Program
(PPP) and Economic Injury Disaster Loan (EIDL) program, the Department of Labor’s (DOL)
unemployment insurance (UI) programs, and economic impact payments (EIP) issued by the
Department of the Treasury and the Internal Revenue Service (IRS).435 Also, six individuals have
434Fraud and “fraud risk” are distinct concepts. Fraud—obtaining something of value through willful

misrepresentation—is challenging to detect because of its deceptive nature. Fraud risk (which is a function of likelihood
and impact) exists when individuals have an opportunity to engage in fraudulent activity, have an incentive or are under
pressure to commit fraud, or are able to rationalize committing fraud. Fraud risk management is a process for ensuring
program integrity by continuously and strategically mitigating the likelihood and impact of fraud. When fraud risks can
be identiﬁed and mitigated, fraud may be less likely to occur. Although the occurrence of fraud indicates there is a fraud
risk, a fraud risk can exist even if actual fraud has not yet been identiﬁed or occurred.
435In July 2021, we reported that SBA’s initial implementation of PPP contributed to increased risk of improper

payments and extensive fraud. Also in July 2021, we reported on eﬀorts SBA has taken to address risks of fraud in the

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been convicted at trial of PPP-related fraud, and ﬁve individuals have been convicted at trial of
fraud related to both the PPP and the EIDL program.436 In addition, numerous others faced related
federal charges as of January 31, 2022.
Further, federal hotlines have received numerous complaints from the public, many of them
alleging potential fraud involving COVID-19 relief funds. For example, from March 2020 through
January 2022, our hotline—known as FraudNet—received about 3,350 complaints related to the
CARES Act, about half of which involve SBA’s PPP and EIDL program, DOL’s UI programs, and EIPs
(see text box).437
Report Fraud, Waste, and Abuse
GAO’s FraudNet supports accountability across the federal government. Allegations of fraud, waste, or abuse can be
submitted via the FraudNet portal or by calling the hotline at 1-800-424-5454.
Source: GAO. | GAO-22-105397

In addition to fraud against federal programs, scammers are also targeting consumers, which
can result in ﬁnancial losses and undermine health and safety. For example, the Federal Trade
Commission (FTC) is tracking complaints related to COVID-19 fraud against consumers. According
to FTC reporting, the agency had received over 292,000 reports about fraud and over 198,000
reports about identity theft as of January 29, 2022.438 The agency also reported that about
45 percent of the reports about fraud indicated a ﬁnancial loss and cost Americans about an
estimated $676 million.
In a March 2022 hearing on transparency and accountability for COVID-19 funds, we noted
that recognizing fraud risks and deliberately managing them in an emergency environment
can help federal managers safeguard public resources while providing needed relief. We also
reported that focusing on fraud prevention can help most eﬀectively manage risks. However,
across our COVID-19 work, we found that agencies did not consistently apply leading practices
to manage fraud risks in COVID-19 spending. Further, we reported that agency OIGs have also
raised concerns about the ability of agencies to strategically manage fraud risks. We reported
that Congress can strengthen fraud risk management practices across the government by
reinstating the requirement for agencies to report on their antifraud controls and agency fraud
risk management eﬀorts in agency ﬁnancial reports.

EIDL program and provision of funds to ineligible applicants. Further, in October 2021, we reported on fraud risks in UI
programs and strategies DOL is implementing to address potential fraud in UI programs.
436We consider convictions to be cases where an individual was convicted of a fraud-related charge at trial.

437The remainder of the complaints relate to a variety of other programs and issues, including other federal programs,

such as the Restaurant Revitalization Fund Grant program and Higher Education Emergency Relief fund; COVID-19related mortgage fraud; grants; and testing and vaccines. While not all of the complaints received involve allegations of
potential fraud, many of them do.
438According to the FTC, the fraud reports reﬂect complaints in the Consumer Sentinel Network that mention COVID,

stimulus, N95, and related terms. The identity theft reports reﬂect complaints that mention COVID, stimulus, or related
terms in the following identity theft subtypes: tax, employment and wage, government beneﬁts, and government
documents.

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In prior CARES Act reports, we made recommendations to SBA and DOL to better manage
fraud risks to COVID-19 relief programs, in accordance with the Fraud Risk Framework.439 For
example, in our March 2021 report, we recommended that SBA conduct and document fraud
risk assessments for the PPP and EIDL program. In our October 2021 report, we made several
recommendations to DOL, including to identify and assess fraud risks facing the UI programs
and to designate a dedicated entity for managing the process of assessing fraud risks. We are
reviewing agency eﬀorts to address these recommendations.

Overview of Key Issues
Since March 2020, DOJ has publicly announced charges in numerous fraud-related cases involving
COVID-19 relief programs, COVID-19-related consumer fraud schemes, or other types of fraud
related to COVID-19.440 The charges—ﬁled across the U.S. and investigated by a range of law
enforcement agencies—include making false statements and engaging in identity theft, wire and
bank fraud, and money laundering.441 The number of individuals facing fraud-related charges has
continued to grow in the past year and will likely increase, as these cases take time to develop.442
Other federal entities also continue to investigate and report on high levels of potential fraud. For
example, as of March 17, 2022, DOL OIG reported opening more than 38,000 investigative matters
involving alleged UI fraud. In October 2021, SBA OIG reported that from March 2020 through
August 2021, it received 215,000 hotline complaints that alleged fraudulent activity in the PPP and
EIDL program and has launched numerous investigations into this fraudulent activity.
Fraud against federal programs. From March 2020 through January 2022, at least 435 individuals
or entities pleaded guilty to federal charges of defrauding COVID-19 relief programs, including
SBA’s PPP and EIDL program and DOL’s UI programs, among others.443 See the ﬁgure below for
the number of individuals or entities who have pleaded guilty to federal fraud-related charges
against COVID-19 relief programs as of January 31, 2022.

439For the status of recommendations related to the PPP, EIDL, and UI programs, see the PPP, EIDL, and UI enclosures in

appendix I.

440A charge is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable

doubt in a court of law.

441The federal government may enforce laws through civil or criminal action. Such action may be resolved through

a trial, a permanent injunction, a civil settlement, or a guilty plea. Since March 2020, DOJ has resolved an EIDL fraudrelated case against one individual and PPP fraud-related cases against ten individuals or entities through civil
settlements. For example, in one case, an individual agreed to pay over $280,000 to settle allegations brought by
a former employee that this individual misappropriated PPP loan proceeds obtained on behalf of this individual’s
company for personal expenses. In addition to the federal government, state governments have brought COVID-19related unemployment insurance and PPP fraud charges.
442The statute of limitations for mail fraud and wire fraud prosecutions is 5 years (18 U.S.C. § 3282), except for mail

and wire fraud schemes that aﬀect a ﬁnancial institution, in which case the statute is 10 years (18 U.S.C. § 3293). Also,
based on our analysis, these cases can take many years to resolve. For example, the Department of Housing and Urban
Development OIG closed cases in 2017–2020 resulting from Hurricane Sandy in 2012.
443Diﬀerences between the numbers reported here and those we reported in March 2022 reﬂect further analysis of

publicly available information on the status of cases.

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Number of Individuals or Entities That Have Pleaded Guilty to Federal Fraud-Related Charges by COVID-19 Relief
Program, as of Jan. 31, 2022

One of these individuals was initially charged related to PPP, EIDL, and UI but only pleaded guilty to a UI-related charge.

Of the 435 individuals or entities who pleaded guilty, 238 had been sentenced as of January 31,
2022. See the ﬁgure below for additional sentencing details.444

444In addition to the individuals who pleaded guilty and had been sentenced, six individuals who were convicted at trial

were sentenced as of January 31, 2022, as discussed later in this enclosure.

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Number of Individuals Who Have Pleaded Guilty to Federal Fraud-Related Charges and Have Been Sentenced, as
of Jan. 31, 2022

Note: Some of these individuals were sentenced for additional charges not related to COVID-19 relief programs. Also, sentences
can include things in addition to prison time such as restitution or other fees.

For example:
• One individual was sentenced to over 9 years in prison and ordered to pay over $1.6 million
in restitution associated with a PPP loan scheme. This individual pleaded guilty to charges
of wire fraud and money laundering after submitting fraudulent PPP loan applications on
behalf of three entities. Among other things, this individual falsely represented the number of
employees and payroll expenses and submitted fraudulent tax records to support the claims.
Further, this individual submitted one application in the name of an individual who died
shortly before the application was submitted. In total, this individual sought over $2.6 million
and actually obtained over $1.6 million in PPP funds, which this individual spent on luxury
goods and to pay oﬀ a loan on a residential property. See the enclosure on the Paycheck
Protection Program in appendix I for more information on the program.
• In another case, an individual was sentenced to 18 months in prison and ordered to pay
nearly $150,000 in restitution after pleading guilty to one count of wire fraud associated with a

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scheme to defraud SBA’s EIDL program. This individual admitted to ﬁling false and fraudulent
applications for EIDL funds on behalf of multiple entities. Among other things, this individual
misrepresented the companies’ gross revenues, cost of goods sold, and number of employees.
In total, this individual sought approximately $473,000, and SBA disbursed approximately
$144,000. See the enclosure on the Economic Injury Disaster Loan Program in appendix I for
more information on the program.
• One individual was sentenced to 10 years in prison after pleading guilty to conspiracy
charges and aggravated identity theft associated with a scheme to defraud UI. This individual
admitted to leading a conspiracy in which the individual, along with others, gathered personal
identiﬁcation information and then submitted unemployment claims for individuals, including
inmates, who were known to be ineligible to receive pandemic unemployment beneﬁts.
This individual charged fees to co-conspirator clients for the service of ﬁling their fraudulent
claims. A co-conspirator, who pleaded guilty to two conspiracy charges associated with the
scheme, was sentenced to 5 years in prison. In total, these individuals and co-conspirators
defrauded the government of more than $1.5 million. For more information on the UI
programs, including information on state and territory reporting of overpayments that are due
to fraud and DOL’s eﬀorts to address potential fraud in the UI programs, see the enclosure on
Unemployment Insurance Programs in appendix I.
• One individual was sentenced to 3 years of probation and ordered to pay $1,200 in restitution
to the IRS after pleading guilty to theft of government funds associated with an EIP. After this
individual’s mother passed away in 2016, the Social Security Administration—which was not
informed of the death—continued to deposit Social Security beneﬁts into the mother’s bank
account for several years, and the U.S. Treasury deposited a $1,200 EIP into the account in
2020. This individual obtained a copy of the bank card for the account and accessed the funds,
including the EIP funds, for personal use.445
• As part of another case, one individual pleaded guilty to ﬁling a false claim with the U.S.
associated with a scheme to defraud the IRS. Speciﬁcally, this individual ﬁled a fraudulent
form with the IRS claiming advance payment of over $625,000 of employer credits under the
Families First Coronavirus Response Act by claiming to have a business with 50 employees and
to have paid over $450,000 in quarterly wages when the business was a sole proprietorship
and the individual was not entitled to the advance payment of credits.446
As of January 31, 2022, eleven individuals had been convicted at trial for COVID-19 relief fraud.447
For example, a federal jury convicted an individual of multiple counts of wire fraud, bank fraud,
445In addition to the $1,200 restitution to the IRS, this individual was also ordered to pay over $80,000 in restitution

to the Social Security Administration.

446The Families First Coronavirus Response Act authorized the IRS to provide advance payment of tax credits to

small and midsize employers to reimburse them for providing paid emergency sick leave and expanded family
medical leave to their employees for leave related to COVID-19. Pub. L. No. 116-127, 134 Stat. 178 (2020).

447Six of these individuals had been sentenced as of January 31, 2022. Sentences ranged from 1 year and 1 day in prison

and an order to pay restitution of over $10.7 million for PPP- and EIDL-related fraud to 17 years in prison and an order to
pay over $1.5 million in restitution for an individual convicted of PPP-related fraud. As of January 31, 2022, there had not
been any convictions at trial related to UI, EIP, or other federal COVID-19 relief programs.

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and money laundering associated with schemes to defraud the PPP and EIDL program. This
individual submitted several fraudulent PPP and EIDL loan applications seeking over $3.5 million
and received over $2.8 million in COVID-19 relief funds as a result of the fraud. Speciﬁcally,
this individual falsiﬁed the number of employees and payroll expenses and submitted fake
tax documents to support applications submitted in the names of businesses with no actual
operations or that were otherwise ineligible. As of January 31, 2022, this individual had not yet
been sentenced.
Federal charges were pending against at least 548 individuals or entities for attempting to defraud
COVID-19 relief programs as of January 31, 2022.448 The majority of these individuals were charged
with attempting to defraud SBA’s PPP and EIDL program and DOL’s UI programs, or fraudulently
accessing EIPs, while others were charged with attempting to defraud other COVID-19 relief
programs.449 For example, one individual was charged with aggravated identity theft and wire
fraud associated with a scheme to allegedly defraud SBA’s EIDL program and the Restaurant
Revitalization Fund. In another case, a city government oﬃcial was charged with wire fraud,
conspiracy to commit federal program theft, and federal program theft associated with a scheme
to allegedly steal federal funds granted to the city through the Coronavirus Relief Fund. See the
enclosure on COVID-19 Relief Funding to States and Localities in appendix I for more information
on the program.
Consumer fraud. In addition to fraud against federal programs, fraud can result in ﬁnancial
losses to consumers and undermine health and safety. From March 2020 through January 2022,
20 individuals or entities pleaded guilty to federal charges related to consumer fraud and one
individual was convicted of a consumer fraud-related charge.450 For example, one individual
pleaded guilty to conspiracy to commit wire fraud in connection with a scheme purporting to
sell COVID-19 vaccines. This individual admitted to conspiring with others to obtain access to a
bank account to be used in a fraud scheme. The fraud scheme involved the creation of a fake
website designed to resemble the website for a legitimate vaccine company. In another case,
an individual pleaded guilty to conspiracy to commit wire fraud. This individual engaged in a
scheme to trick consumers into purchasing pets online that were never delivered and used the
COVID-19 pandemic to extract higher fees from victims, for example by claiming that additional
fees were required for delivery because the pets had been exposed to coronavirus. In another
case, an individual was sentenced to one year of probation after pleading guilty to distribution and
sale of an unregistered pesticide, conspiracy to distribute and sell an unregistered pesticide, and
making false statements to a government agency. This individual sold cards to multiple vendors,

448Some of these individuals also faced federal charges related to consumer fraud or other types of COVID-19-related

fraud.

449Of the 548 individuals or entities, 83 faced charges related to more than one federal COVID-19 relief program. For

example, 56 individuals faced federal charges related to both PPP and EIDL, 12 individuals faced federal charges related
to both EIDL and UI, and one individual faced federal charges related to PPP, the Accelerated and Advance Payments
Program, and the Provider Relief Fund as of January 31, 2022.
450One of the 20 individuals or entities also pleaded guilty to federal charges of defrauding a COVID-19 relief program.

Also, 13 of the 20 individuals or entities had been sentenced as of January 31, 2022. Sentences for individuals ranged
from 6 months of probation and almost $5,000 in restitution to more than 5 years in prison. In addition to these 20
individuals or entities, since March 2020, DOJ resolved a civil complaint of consumer fraud against one entity through a
civil settlement.

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purporting that the cards—which could be worn around the user’s neck—protected against
viruses, among other things.
There were also federal charges pending against 46 individuals or entities related to consumer
fraud as of January 31, 2022.
As of January 31, 2022, the majority of the 67 individuals or entities that had pleaded guilty,
faced federal charges for, or were convicted of COVID-19-related consumer fraud schemes
were allegedly involved in schemes related to prevention or treatment of COVID-19 or personal
protective equipment (PPE) sales (see ﬁgure).
Number of Individuals or Entities That Have Pleaded Guilty to, Faced Federal Charges for, or Were Convicted for
Consumer Fraud, as of Jan. 31, 2022

The “other” category can include individuals or entities that engaged in deceptive business practices, making COVID-19-related
claims that caused consumers to suﬀer or potentially suﬀer ﬁnancial or other losses unrelated to prevention or treatment,
personal protective equipment, or testing. For example, one individual pleaded guilty and was sentenced to 63 months in
prison for, among other things, creating a website to sell other goods that were sought after during the pandemic and not
delivering those goods.

Other federal cases. The federal government is also pursuing charges including conspiracy, wire
fraud, and theft that are related to COVID-19 but separate from consumer fraud and fraud against
the federal programs discussed earlier. From March 2020 through January 2022, 30 individuals or
entities pleaded guilty to these types of federal charges.451

451Nineteen individuals had been sentenced as of January 31, 2022. Sentences ranged from 1 year of probation and

a $2,000 ﬁne in the case of an individual who pleaded guilty to conspiracy associated with a COVID-19 vaccine-related
healthcare fraud scheme to almost 7 years in prison and an order to pay over $61 million in restitution in the case of
an individual who pleaded guilty to conspiracy associated with a Medicare healthcare fraud scheme that exploited
the COVID-19 pandemic. In addition to these 19 individuals, since March 2020, DOJ resolved complaints against four
individuals or entities for activities such as hoarding and price gouging through settlements.

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For example, one individual pleaded guilty to mail fraud and money laundering associated with
a scheme to defraud the company the individual worked for as a human resources manager.
Speciﬁcally, this individual arranged for COVID-19 testing of the company’s employees and issued
a fraudulent invoice to the company in the name of a business owned by the individual when,
in fact, the testing was provided by another entity at a lower cost. This individual then used the
proceeds from the fraud to purchase a speedboat and trailer. This individual was sentenced to 41
months in prison.
In another case, an individual pleaded guilty to making false statements to the Federal Emergency
Management Agency (FEMA) in order to obtain a contract to provide PPE. Speciﬁcally, this
individual oﬀered, through a company, to sell 10 million surgical masks for a total of $56.3 million,
falsely claiming the masks were available immediately when the individual knew that the company
did not have any surgical masks available at the time. FEMA awarded a contract to the company
based in part on these false representations and later terminated the contract when the company
failed to deliver any masks.452
In addition to the individuals or entities who pleaded guilty to these other types of federal charges,
there were also other federal charges pending against 37 individuals as of January 31, 2022. For
instance, as COVID-19 vaccines have become increasingly available and government and private
entities have begun implementing vaccination requirements, non-consumer fraud involving
COVID-19 vaccines has emerged. DOJ has publicly announced charges against individuals for
several such cases.453 In one case, an individual was charged with mail fraud and obstruction
of justice in connection with the alleged distribution of fraudulent COVID-19 vaccination record
cards. In another case, an individual was charged with fraudulently producing identiﬁcation
documents—COVID-19 vaccination record cards—and one count of lying to federal investigators
about this individual’s own alleged role in producing the cards.
Other federal eﬀorts to address and prevent future fraud-related cases. While DOJ has ﬁled
fraud-related charges against individuals and entities for actions related to COVID-19, other federal
agencies have undertaken additional eﬀorts to address fraud-related cases and prevent such
cases in the future.
Taking administrative and other enforcement actions. From late May to late December 2021, the FTC
issued warning letters to more than 20 marketers ordering them to stop making unfounded claims
that their products and therapies could treat or prevent COVID-19. In the letters, the FTC noted
that violators could face monetary penalties under the COVID-19 Consumer Protection Act.454
Also, the Department of Health and Human Services (HHS) OIG reported taking enforcement

452This individual also pleaded guilty to theft of government funds associated with a scheme to defraud the EIDL

program.

453In addition to the federal government, state governments have brought fraud charges related to COVID-19

vaccinations. In prior CARES Act reports, we have reported that, while the extent of vaccine-related fraud is unknown,
DOJ has publicly announced charges or other actions in consumer fraud cases involving individuals or entities that
claimed to oﬀer vaccines to prevent COVID-19.
454The COVID-19 Consumer Protection Act, which became law in December 2020 as part of the Consolidated

Appropriations Act, 2021, gives the FTC authority to seek civil penalties on the ﬁrst oﬀense for scams and deceptive
practices related to the COVID-19 pandemic. Pub. L. No. 116-260, div. FF, tit. XIV, § 1401, 134 Stat. 1182, 3275-3276 (2020).

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action through civil monetary penalties related to potential fraud in the Provider Relief Fund.455
For example, in December 2021, one business and an individual entered into a settlement
agreement with HHS OIG for almost $63,000 for allegedly violating the Civil Monetary Penalties
Law by falsely certifying to their eligibility to receive a CARES Act Provider Relief Fund payment.
Pursuing rulemaking to enhance antifraud eﬀorts. In December 2021, the FTC launched a rulemaking
aimed at combatting government and business impersonation fraud by enabling the FTC to
seek refunds for consumers, in addition to civil penalties. According to the December 2021
press release announcing the rulemaking, the COVID-19 pandemic has led to a sharp increase
in impersonation fraud. Speciﬁcally, according to the FTC, COVID-speciﬁc scam reports since the
pandemic began included over 12,000 complaints of government impersonation and nearly 8,800
complaints of business impersonation.
Providing information to the public about emerging fraud schemes. As a result of complaints from the
public alleging potential fraud involving COVID-19 relief funds received through hotlines and other
fraud detection eﬀorts, federal agencies have warned the public about emerging fraud schemes;
these warnings can help prevent future cases of fraud against federal programs and consumers.
For example:
• As part of the fourth annual “Money Mule Initiative,” in December 2021, federal agencies
educated state agencies and the public about money mules—individuals who receive money
from fraud victims and forward the illicit funds, often to overseas perpetrators. Speciﬁcally,
members of the Attorney General’s Coronavirus Fraud Enforcement Task Force used outreach
materials created by the Pandemic Response Accountability Committee (PRAC) to educate the
public about the use of money mules to steal pandemic relief funds.456
In addition, the FBI released a public service announcement about money mules, noting that
individuals recruited as part of scams—such as employment scams due to the COVID-19
pandemic—can become unwitting or unknowing mules. According to the announcement, in
2020 and 2021, the FBI’s Internet Crime Complaint Center received an increase in complaints
relating to COVID-19 related fraud. The increase could be the result of several factors, such as
increases in remote work, which allowed criminals to instruct money mules to provide copies
of their personal information online.
• As part of an Annual National Tax Security Awareness Week in November 2021, the IRS
and partners warned that taxpayers and tax professionals face an increased risk of fraud
as fraudsters use the COVID-19 pandemic to trick people into sharing sensitive personal
information that can then be used by identity thieves to ﬁle tax returns and steal refunds.
Further, in February 2022, the IRS issued a reminder to taxpayers to protect their personal
and ﬁnancial information and to be alert for IRS impersonation scams. Among other things,
45542 U.S.C. § 1320a-7a. According to HHS OIG, in each Civil Monetary Penalty case resolved through a settlement
agreement, the settling party has contested OIG’s allegations and denied any liability. No Civil Monetary Penalty
judgment or ﬁnding of liability has been made against the settling party.
456The Attorney General established this task force on May 17, 2021, to marshal the resources of DOJ in

partnership with agencies across the government. The task force held its ﬁrst meeting on May 27, 2021, where
task force members discussed priority goals, including increased eﬀorts to combat fraud related to COVID-19 relief
programs.

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the IRS cited an increase in text messages to taxpayers’ smartphones citing COVID-19 or
“stimulus payments” and often containing links to scam websites purporting to be legitimate
IRS websites.
• As part of the 2022 Identity Theft Awareness Week beginning in late January, the PRAC
provided information on identity theft in pandemic beneﬁts programs and eﬀorts by federal,
state, and local oversight entities to address the issue. The PRAC noted that criminals stole
personal information by hacking into social media accounts or through email phishing
schemes and impersonation scams and then used the information to obtain unemployment
checks or business loans.
We previously reported on examples of agency warnings to the public about emerging fraud
schemes in our July 2021, October 2021, and January 2022 CARES Act reports. In addition, in our
October 2021 report, we reported on other federal eﬀorts to address and prevent future fraudrelated cases, such as taking administrative and other enforcement actions and establishing task
forces and working groups.

Methodology
To conduct this work, we reviewed information from DOJ to identify federal fraud-related charges
related to COVID-19 relief funding as of January 31, 2022. We also analyzed related federal court
documents. In addition, we reviewed FTC reports on complaints related to fraud and identity
theft and press releases from other federal entities, including the FTC, describing COVID-19 fraudrelated eﬀorts.

Agency Comments
We provided a draft of this enclosure to the Oﬃce of Management and Budget, which provided no
comments.

GAO’s Ongoing Work
In our ongoing work, we are reviewing fraud risk management and potential fraud in the PPP, EIDL,
and UI programs, among others.

Related GAO Products
Emergency Relief Funds: Signiﬁcant Improvements Are Needed to Ensure Transparency and
Accountability for COVID-19 and Beyond. GAO-22-105715. Washington, D.C.: March 17, 2022.
Economic Injury Disaster Loan Program: Additional Actions Needed to Improve Communication with
Applicants and Address Fraud Risks. GAO-21-589. Washington, D.C.: July 30, 2021.

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Paycheck Protection Program: SBA Added Program Safeguards, but Additional Actions Are Needed.
GAO-21-577. Washington, D.C.: July 29, 2021.
A Framework for Managing Fraud Risks in Federal Programs. GAO-15-593SP. Washington, D.C.: July 28,
2015.
Contact information: Rebecca Shea, (202) 512-6722, shear@gao.gov

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FEMA’s COVID-19 Funeral Assistance and Public Assistance
Program
The Federal Emergency Management Agency could do more to minimize fraud risks to its
COVID-19 Funeral Assistance, and continues to face challenges in providing timely assistance for
its Public Assistance program.
Entity involved: Federal Emergency Management Agency, within the Department of Homeland
Security

Recommendations for Executive Action
The Federal Emergency Management Agency Administrator should take action to identify the
causes of the gaps in internal control in COVID-19 Funeral Assistance and design and implement
additional control activities, where needed, to prevent and detect improper payments and
potential fraud.
The Federal Emergency Management Agency Administrator should address deﬁciencies in the
COVID-19 Funeral Assistance data by updating data records as data are veriﬁed, and adding data
ﬁelds where necessary, to ensure that consistent and accurate data are available for monitoring of
potential fraud trends and identifying control deﬁciencies.
The Department of Homeland Security agreed with both recommendations and stated that it
agreed with the need for internal controls and the importance of maintaining accurate, current
data.

Background
Before the COVID-19 pandemic, the Federal Emergency Management Agency’s (FEMA) Disaster
Relief Fund—the primary source of federal disaster assistance for state, local, tribal, and territorial
governments—had never been used during a nationwide public health emergency.457 As of
February 28, 2022, FEMA had obligated about $95.7 billion from the Disaster Relief Fund to
respond to COVID-19. As of the same date, the Disaster Relief Fund’s balance was about $32.2
billion. See the ﬁgure below.

457The Disaster Relief Fund receives an annual appropriation and has routinely received supplemental appropriations.

In March 2020, the CARES Act was enacted, appropriating $45 billion for the Disaster Relief Fund. Pub. L. No. 116-136,
div. B, tit. VI, 134 Stat. 281, 543 (2020). The Consolidated Appropriations Act, 2021 appropriated $17 billion to the
Disaster Relief Fund for major disasters and an additional $2 billion to provide assistance for COVID-19-related funeral
expenses. Pub. L. No. 116-260, div. F, tit. III, 134 Stat. 1182, 1462 (2020); Pub. L. No. 116-260, div. M, tit. II, 134 Stat. at
1910. In March 2021, the American Rescue Plan Act of 2021 appropriated $50 billion to the Disaster Relief Fund. Pub. L.
No. 117-2, § 4005, 135 Stat. 4, 79.

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Federal Emergency Management Agency’s Disaster Relief Fund Balance, by Month, Feb. 2021–Feb. 2022

In response to the COVID-19 pandemic, FEMA has provided three primary types of disaster
assistance, funded through the Disaster Relief Fund.
1. Individual Assistance. FEMA provides Individual Assistance to disaster survivors to address
necessary expenses and serious needs directly caused by a declared disaster. For the
COVID-19 response, FEMA has provided lost wages assistance, funeral assistance, and crisis
counseling.
2. Mission assignments. FEMA issues mission assignments—work orders directing other federal
agencies to provide direct assistance to state, local, tribal, and territorial governments—to
support disaster response and recovery. For the COVID-19 response, for example, FEMA issued
a mission assignment to the Department of Defense to fund National Guard deployments to
support state and territorial response eﬀorts.
3. Public Assistance. FEMA provides Public Assistance to state, local, tribal, and territorial
governments, and certain types of private nonproﬁt organizations, so that communities can
quickly respond to, and recover from, major disasters or emergencies. After natural disasters,
Public Assistance tends to be used for emergency cleanup and for permanent reconstruction
projects—for example, to rebuild damaged public infrastructure.
For all 59 major disaster declarations for COVID-19, FEMA has authorized Public Assistance
for emergency protective measures only. This may include eligible medical care, purchase and
distribution of food, noncongregate medical sheltering, operation of Emergency Operations
Centers, and the purchase and distribution of personal protective equipment.
On February 2, 2021, the President issued a memorandum that directed FEMA to fully
reimburse state, territorial, and tribal governments for all work eligible for emergency
protective measures assistance through September 30, 2021.458 The President has extended
458White House, Memorandum on Maximizing Assistance from the Federal Emergency Management Agency (Feb.

2, 2021).

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this full reimbursement multiple times, most recently on March 1, 2022, extending full
reimbursement to July 1, 2022.459 According to FEMA oﬃcials, FEMA’s Public Assistance
workforce consists of approximately 2,600 employees, of which about 400 are supporting the
COVID-19 eﬀort as of February 25, 2022.

Overview of Key Issues
FEMA’s use of the Disaster Relief Fund to support COVID-19 activities. As of February 28, 2022,
FEMA had obligated about $95.7 billion from the Disaster Relief Fund to respond to COVID-19
since the beginning of the incident period, January 20, 2020. The ﬁgure below shows FEMA’s
obligations for COVID-19, by program and activity.460
FEMA’s Disaster Relief Fund Obligations for COVID-19 by Program and Activity through March 2022

Note: The amounts shown include Disaster Relief Fund obligations through February 28, 2022, and projections through March
31, 2022. Percentages are rounded to the nearest whole number.

Individual Assistance. On August 8, 2020, a presidential memorandum directed that up to $44
billion be made available from the Disaster Relief Fund to provide lost wages assistance to
supplement unemployment insurance compensation.461 According to FEMA oﬃcials, as of
459White House, Memorandum on Maximizing Assistance to Respond to COVID-19 (Aug. 17, 2021); White

House, Memorandum for the Secretary of Homeland Security and the Administrator of the Federal Emergency
Management Agency on Maximizing Assistance to Respond to COVID-19 (Nov. 9, 2021); White House, Memorandum
on Maximizing Assistance to Respond to COVID-19, Memorandum for the Secretary of Homeland Security, the
Administrator of the Federal Emergency Management Agency (Mar. 1, 2022).

460The amounts shown in the ﬁgure below include Disaster Relief Fund obligations through February 28, 2022, and
projections through March 31, 2022.

461White House, Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations

Related to Coronavirus Disease 2019 (Aug. 8, 2020). Pursuant to the presidential memorandum, upon receiving a FEMA

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February 28, 2022, FEMA had obligated approximately $38 billion for the Lost Wages Assistance
program.
Further, in December 2020, the Consolidated Appropriations Act, 2021, appropriated $2 billion to
the Disaster Relief Fund for eligible funeral expenses for individuals or households with COVID-19related funeral expenses.462 The American Rescue Plan Act of 2021 subsequently provided that
FEMA is to provide ﬁnancial assistance for COVID-19-related funeral expenses and that the $50
billion appropriated to the Disaster Relief Fund for major disasters in the same act was available
for such assistance.463
On April 12, 2021, FEMA began accepting and processing applications for COVID-19 Funeral
Assistance via a dedicated call center number. As of February 28, 2022, the call center had
received and was processing over 444,000 applications and had approved over 296,000
applications for over $1.92 billion. The ﬁgure below shows the obligations made for COVID-19
Funeral Assistance from May 10, 2021, through February 22, 2022.
Cumulative Obligations for Federal Emergency Management Agency’s COVID-19 Funeral Assistance over Time,
May 10, 2021 – Feb. 22, 2022

FEMA Funeral Assistance for COVID-19-related deaths. COVID-19 Funeral Assistance provides up to
$9,000 per deceased individual to applicants who incurred COVID-19-related funeral expenses
on or after January 20, 2020, and meet eligibility requirements. For instance, either the death
grant, states and territories may provide eligible claimants $300 or $400 per week—which includes a $300 federal
contribution—in addition to their Unemployment Insurance beneﬁts. The presidential memorandum directed that the
program would end either when $44 billion had been obligated, the balance of the Disaster Relief Fund reached $25
billion, on December 27, 2020, or upon the enactment of legislation providing supplemental federal unemployment
compensation, whichever comes ﬁrst.
462Pub. L. No. 116-260, div. M, tit. II, 134 Stat. at 1910.

463Pub. L. No. 117-2, § 4006, 135 Stat. at 79. Appropriations to the Disaster Relief Fund are generally not speciﬁc to

individual disasters and may be use for various disaster assistance programs.

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certiﬁcate or a signed statement or letter from the certifying oﬃcial, including the medical
examiner or coroner, must attribute the death to COVID-19.464
The maximum allowable assistance provided to an applicant who incurred expenses for multiple
deaths per state or territory is $35,500. FEMA provides ﬁnancial assistance for eligible funeral
expenses including remains transfer, caskets and urns, burial plots and cremation niches, markers
and headstones, and other itemized expenses from a funeral home considered necessary for the
funeral service.465
FEMA has developed internal controls for its COVID-19 Funeral Assistance, but additional
steps needed to minimize fraud risks. The scope of FEMA’s COVID-19 Funeral Assistance is
unprecedented. In the decade before the COVID-19 pandemic, FEMA had processed approximately
6,000 applications for funeral assistance after other natural disasters, according to FEMA
oﬃcials. As of December 15, 2021—the most recent date for which application-level data were
available—FEMA had awarded about $1.5 billion in assistance in response to about 235,000
applications for nearly 237,000 individuals deceased due to COVID-19. See ﬁgure below for a map
of COVID-19 Funeral Assistance awards by county.

464Speciﬁcally, for deaths that occurred between January 20, 2020, and May 16, 2020, applicants can submit a signed

statement or letter from the certifying oﬃcial on the death certiﬁcate, or from the medical examiner or coroner in the
jurisdiction in which the death occurred, that attributes the death to COVID-19. For deaths occurring after May 16, 2020,
applicants must include a copy of the death certiﬁcate that attributes the death to COVID-19.
465Eligible funeral service expenses include, but are not limited to, transportation for up to two individuals to identify

decedent, transfer of remains, casket or urn, burial plot or cremation niche, marker or headstone, clergy or oﬃciant
services, arrangement of funeral ceremony, use of funeral home equipment or staﬀ; interment, costs associated with
producing and certifying multiple death certiﬁcates, and additional expenses mandated by any applicable state or local
government laws or ordinances. Costs associated with travel to scatter ashes outside of a memorial service and clothing
to attend a funeral service are among expenses not eligible for funeral assistance. Applicants must be U.S. citizens,
noncitizen nationals, or qualiﬁed aliens who incurred funeral expenses that are not covered by other sources, such as
burial insurance.

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COVID-19 Funeral Assistance Awards as of December 15, 2021, by U.S. County

Note: COVID-19 funeral assistance was also awarded to individuals in U.S. territories. Award location reﬂects the reported
location of death for each deceased individual listed on an application. Less than 1 percent of addresses were missing zip code
information required for mapping and are therefore excluded from this map.

Based on our review of the application data, we identiﬁed several gaps in FEMA’s controls, which
were not suﬃcient in preventing improper or potentially fraudulent payments. Speciﬁcally,
we identiﬁed cases in which FEMA’s controls did not prevent funeral assistance provided (1) in
response to duplicate applications listing the same decedents; (2) above the maximum of $9,000
allowed per decedent; and (3) in response to applications listing incorrect applicant identifying
information.466
Duplicate applications for funeral assistance. We found evidence that FEMA’s controls did not
consistently prevent duplication in COVID-19 funeral assistance for the same deceased individuals,
which can result in improper payments or allow for potential fraud. Speciﬁcally, we identiﬁed 374
deceased individuals that were listed on more than one award-receiving application; in total, these
applications received about $4.8 million in assistance.467
FEMA’s 2021 standard operating procedures for COVID-19 funeral assistance state that FEMA
will only award assistance for a deceased individual to a single applicant or co-applicant under
the same application. To prevent such duplication, FEMA case workers follow a set of procedures
including looking for matches in decedent identiﬁers and sending applications containing possible
duplication for additional manual review.
466In this enclosure, funeral assistance refers to COVID-19 Funeral Assistance.

467We identiﬁed duplicate decedents using decedent Social Security Number (SSN). The $4.8 million in assistance

described above may include cases where assistance was also awarded for additional deceased individuals listed on an
application, beyond those we identiﬁed here.

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Most of the 374 deceased individuals that we identiﬁed as listed on more than one application
were listed by diﬀerent applicants. We provided three example applications that identiﬁed
diﬀerent applicants but duplicative decedents to FEMA. According to FEMA oﬃcials, the duplicative
applications were incorrectly awarded funeral assistance due to processing errors. The oﬃcials
provided documentation showing that, following our review, they had initiated recoupment eﬀorts
where necessary for two of the example applications in January 2022.468
About 50 of the 374 deceased individuals were listed on multiple applications from the same
applicant. Although the data FEMA provided indicated that each of these applications was
awarded assistance, FEMA oﬃcials initially told us that the cases reﬂected applicant transfers to
corrected disaster areas and that in each case only one of the applications was paid.469
However, when we provided examples of these applications to FEMA oﬃcials, they conﬁrmed that
in each case, the duplicative applications were paid. The oﬃcials provided documentation showing
that they had initiated recoupment eﬀorts for one of the example duplicative applications in July
2021 and for the remaining two in February 2022, following our review.
Awards above the $9,000 maximum. In addition, we found evidence that FEMA’s controls do not
prevent case workers from authorizing awards that exceed FEMA’s stated maximum of $9,000 per
deceased individual. This can result in applicants receiving more assistance than allowed by FEMA
rules and allows for potential improper payments or fraud.
According to FEMA’s 2021 standard operating procedures for COVID-19 funeral assistance, FEMA
caseworkers review evidence of funeral expenditures for each application and determine the
appropriate amount to award, up to the maximum allowed. However, we identiﬁed approximately
400 applications that were awarded more than this maximum, receiving up to $19,995 for a single
deceased individual and totaling about $4.7 million.
We provided three examples of applications with payments above the maximum allowed to FEMA;
oﬃcials said that each application had experienced a case processing error in which the necessary
amount was not deducted prior to award. The oﬃcials told us that they provided feedback to
the caseworker involved in each case and provided documentation showing they had initiated
recoupment eﬀorts for one of the example applications in September 2021 and the remaining two
example applications by February 2022, following our review.
Incorrect information on applications. We also found evidence that FEMA’s controls do not always
prevent applicants with invalid identity documentation from being awarded funeral assistance,
which can result in improper payments or allow for potential fraud. Speciﬁcally, we identiﬁed
468According to FEMA oﬃcials, FEMA has various quality control measures in place for COVID-19 funeral assistance,

including reviewing application ﬁles for quality and identifying areas for improvement. FEMA identiﬁes improper
payments in various ways including the quality control reviews and initiates recoupment eﬀorts where necessary.
According to the oﬃcials, the recoupment process consists of various phases, including identifying potential debt and
notifying applicants of potential debt; not all applications undergoing the process will ultimately require recoupment.
The oﬃcials stated that as of March 1, 2022, 929 applications were undergoing the recoupment process.
469Applicants are required to apply in the disaster area (i.e., state or territory) where the decedent died. According to

FEMA oﬃcials, if it is discovered during the application process that an applicant applied in an incorrect disaster area,
the original application will be canceled and a new application will be generated in the correct area.

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about 230 award-receiving applications in which the applicant’s or co-applicant’s listed Social
Security Number (SSN) appeared to be incorrect.
FEMA’s 2021 standard operating procedures for COVID-19 funeral assistance state that applicants
are required to provide an SSN and that the decedent’s SSN cannot be listed in the applicant SSN
ﬁeld.470 FEMA oﬃcials stated that FEMA veriﬁes applicant identity—including SSN—using the
LexisNexis data service, which uses national data repositories to calculate fraud risk.471 According
to the oﬃcials, applicants that do not pass the LexisNexis identity veriﬁcation must provide
documentation to prove their identity before FEMA can process the application.
We identiﬁed about 80 applications, awarded a total of about $570,000, in which the applicant or
co-applicant SSN was the same as the decedent SSN listed on the application. We also identiﬁed
about 150 applications, awarded a total of about $1 million, in which the applicant or co-applicant
SSN was listed on the Social Security Administration’s (SSA) December 2021 full death ﬁle with a
death date prior to the application date and under a diﬀerent name and date of birth.472
We provided examples of applications with potentially incorrect SSNs to FEMA. FEMA oﬃcials
stated that based on their review of these applications’ documentation, in most cases, the correct
SSN was obtained during the application review process but never updated in the SSN data
ﬁeld. However, in at least one case, oﬃcials said that the correct SSN documentation was never
obtained and FEMA had initiated eﬀorts to validate the applicant’s identity based on our review.
FEMA oﬃcials provided documentation showing they had initiated recoupment eﬀorts for this
application in February 2022, following our review.
Data quality. Our review also determined that FEMA does not suﬃciently maintain the quality of
its application data in a way that would facilitate oversight of COVID-19 Funeral Assistance and
prevent and detect potential fraud. Our July 2015 Framework for Managing Fraud Risks in Federal
Programs calls for agencies to follow leading practices such as designing and implementing data
analytics and other control activities to prevent and detect fraud. However, we determined that
FEMA lacked consistent data on whether applications were paid, decedent death dates, the
amount of funeral assistance awarded for speciﬁc decedents on an application listing multiple
decedents, and applicant SSNs.

470FEMA policy states that co-applicants are not required to provide SSN.

471In December 2014, we reported that FEMA’s internal controls for identifying invalid SSNs in assistance applications

did not prevent payments to some potentially ineligible recipients, although FEMA had improved its ability to detect
improper and potentially fraudulent payments since the mid-2000s. We recommended, among other things, that FEMA
should collaborate with the Social Security Administration (SSA) to assess the cost and feasibility of checking recipient
SSNs against the Enumeration Veriﬁcation System and the full death ﬁle, and if determined to be cost-beneﬁcial take
steps to implement a partnership to use SSA data. In March 2018, FEMA reported that it had collaborated with SSA and,
based on its analysis, had chosen to maintain its use of the LexisNexis data service, for several reasons including the
costs associated with establishing a new data exchange with SSA.
472SSA does not guarantee the accuracy of the information in this ﬁle. SSA has historically collected death information

about SSN-holders so it does not pay Social Security beneﬁts to deceased individuals and to establish beneﬁts for
survivors. SSA receives death reports from a variety of sources, including states, family members, funeral directors, post
oﬃces, ﬁnancial institutions, and other federal agencies. We refer to SSA’s complete ﬁle of death records as “the full
death ﬁle.” A subset of the full death ﬁle that may not include death data received by the states, which SSA calls “the
Death Master File,” is available to the public.

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While FEMA oﬃcials stated that they are able to obtain accurate data on each application by
manually checking its history, FEMA would be unable to eﬃciently identify which applications
merited manual review if automated checks ﬁrst did not detect the relevant discrepancies. This
information—in particular, information on whether an award that appears in FEMA’s data was
truly paid—would be a key factor in implementing data analytics and managing potential fraud
risk.
For example, we found that FEMA does not maintain consistent data that would allow it to
accurately determine and report on the total number of applications that were awarded or
amount of assistance that was awarded. As described previously, FEMA oﬃcials told us that where
application transfers occurred, the application is duplicated in the data even though the award
was only paid once.473 FEMA oﬃcials told us that they do not have a way to identify which awards
were made or duplicated in the data without manually checking an application’s history.
In addition, FEMA does not maintain consistent data on death date, which is a key factor in
eligibility for assistance.474 We identiﬁed over 11,000 award-receiving applications that had a
missing or invalid death date according to the data that FEMA provided. We provided examples of
these applications to FEMA; oﬃcials told us that they manually checked each application’s history
and it appeared that the correct dates were ultimately obtained during the application process.
However, the death date ﬁeld itself was never updated in FEMA’s data. FEMA oﬃcials told us that
while it has always been a requirement that case workers update this ﬁeld, it was never reinforced.
According to the oﬃcials, FEMA has reiterated the requirement to case workers based on our
review.
FEMA oﬃcials also told us that the database containing the funeral assistance data does not
contain a ﬁeld identifying the amount of assistance awarded for each deceased individual on an
application with multiple decedents.475 Rather, the database is designed such that only the total
amount of assistance awarded per application is maintained in a speciﬁc ﬁeld.
FEMA oﬃcials told us that they must manually check an application’s history to obtain more
detailed information for speciﬁc decedents. Unless FEMA performs a manual review, it is unable
to determine whether an applicant listing multiple decedents received more than the maximum
amount allowed for a given decedent.
As described previously, we identiﬁed about 230 award-receiving applications in which the
applicant or co-applicant SSN appeared to be incorrect and provided examples to FEMA. Upon
their review of each example’s history, oﬃcials stated that in most cases, the correct SSNs were
obtained but the SSN data ﬁelds were never updated.
473As described previously, we identiﬁed evidence showing that in at least some cases, the awards were paid

twice—both for the initial application and for the transferred application.

474To be eligible for assistance, applicants must have incurred funeral expenses on or after January 20, 2020, due to a

death attributed to COVID-19. FEMA oﬃcials told us that while deaths could have occurred prior to this date, FEMA uses
death date as an initial indicator of eligibility and performs additional manual review of applications with earlier death
dates. We deﬁned valid death dates as those occurring between December 1, 2019, and November 30, 2021, as FEMA
oﬃcials stated that our data contained applications submitted through November 30, 2021.
475Approximately 2 percent of the award-receiving applications we reviewed listed more than one decedent.

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However, FEMA would be unable to perform a global analysis of the extent to which it is
successfully verifying identities—for example, through post-award quality control checks—without
manually checking each application’s history for correct SSNs. Further, without verifying the
identities of applicants prior to awarding funeral assistance, FEMA is increasing the risk of
improper payments and potential fraud and creating a potential “pay and chase” scenario for
recovering these payments, which is costly and ineﬃcient.
Without adequate controls and application data—for example, controls that prevent funeral
assistance payments in response to duplicate applications, and consistent data on whether
applications were paid—COVID-19 Funeral Assistance is at risk of improper payments and
potential fraud.
In addition, without consistent data, FEMA lacks assurance that it can use data analytics to prevent
and detect potential fraud as part of its oversight of COVID-19 Funeral Assistance. Of the about
235,000 award-receiving applications we reviewed, the proportion we identiﬁed as at-risk is
relatively small. However, our ﬁndings are signiﬁcant due to the possibility of improper payments
and potential fraud in not only this disaster, but also future disasters.
FEMA’s Disaster Relief Fund continues to support a variety of activities. In addition to
individual assistance and funeral assistance, FEMA has provided mission assignments, a separate
eﬀort to run mobile vaccination units, and Public Assistance.
Mission assignments. FEMA has issued mission assignments to multiple federal agencies—the
Department of Agriculture, Department of Labor, Environmental Protection Agency, and
Department of Defense, among others—to assist in the COVID-19 response.
The presidential memorandum issued on January 21, 2021, provided that FEMA would fully
reimburse expenses to the Department of Defense for mission assignment activities performed
by the National Guard to respond to COVID-19 such as vaccination distribution.476 According to
FEMA, the estimated cost for National Guard assistance totaled nearly $6.6 billion as of February
28, 2022.
Mobile Vaccination Units. FEMA runs mobile vaccination units that oﬀer primary vaccinations,
booster shots, and pediatric vaccines for children ages 5 and above. According to FEMA, these
vaccination units are intended to operate in trusted settings and emphasize convenience and
equity. All states, tribes, and territories may request mobile vaccination units.
Currently, FEMA has the capacity to run 10 mobile vaccination units, and all ten started operating
between December 15, 2021, to January 18, 2022: two in Washington, four in New Mexico, three
in Oregon, and one in Pennsylvania. FEMA reported that as of March 4, 2022, the 10 mobile
vaccination units have administered 136,770 vaccinations.477
476White House, Memorandum to Extend Federal Support to Governors’ Use of the National Guard to Respond to COVID-19

and to Increase other Federal Assistance Provided to States (Jan. 21, 2021). Eligible work under these mission assignments
remains limited to those activities which constitute emergency protective measures, as authorized for and deﬁned by
Public Assistance policies for COVID-19.

477The mobile vaccination units were developed in December 2021 based on a Presidential Statement on December 2,

2021. Mobile vaccination units are independent of FEMA’s other previous vaccination eﬀorts.

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Public Assistance. FEMA oﬃcials stated that as of March 2, 2022, FEMA had received 29,238
applications for Public Assistance. With the emergence of the Delta and Omicron variants of
COVID-19, FEMA oﬃcials stated that there has not been a signiﬁcant increase in COVID-19-related
Public Assistance projects, but costs increased per project.
From the beginning of the COVID-19 incident period (January 20, 2020) through February 28,
2022, FEMA obligated a total of approximately $41.9 billion for Public Assistance for about 14,300
projects.478 The ﬁgure below shows the number of projects and award amount for each of FEMA’s
10 regions from the beginning of the COVID-19 declaration incident period through February 28,
2022.
Number of FEMA Projects and Amounts Obligated for Public Assistance for COVID-19, by Region, through Feb. 28,
2022

As noted above, the major disaster declarations for COVID-19 authorized emergency protective
measures. A January 21, 2021, presidential memorandum provided that FEMA was to make
available assistance for emergency protective measures that may be required to facilitate the safe
478The President issued an emergency declaration for COVID-19 on March 13, 2020, and subsequent major disaster

declarations. However, funding for Public Assistance projects was made retroactive to the start of the incident period,
which is January 20, 2020.

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opening and operation of all eligible facilities, including schools, domestic violence shelters, and
transit systems, among others. Such assistance may include funding for the provision of personal
protective equipment and disinfecting services and supplies.479
A Presidential Memorandum and a subsequent FEMA policy extended the eligibility retroactively
for such assistance to the beginning of the incident period.480 According to FEMA oﬃcials, the
January 2021 memorandum did not have a signiﬁcant impact on their resources and operations.
In addition to FEMA-run mobile vaccination units described above, work and associated costs
to support the distribution and administration of COVID-19 vaccines may be eligible for Public
Assistance. As such, FEMA is coordinating with other federal agencies to meet state, local, tribal,
and territorial needs. Speciﬁcally, FEMA oﬃcials stated that as of March 2, 2022, the agency
had obligated more than $6.6 billion to state, tribal, and territorial governments for vaccine
distribution through Public Assistance.
According to FEMA oﬃcials, eligible work and costs under Public Assistance for vaccine distribution
may include, but is not limited to:
• leasing facilities or equipment to administer and store the vaccine,
• providing staﬃng and training support,
• providing personal protective equipment and other administrative supplies, and
• using technology to register and track vaccine administration.481
States note positive relationships with FEMA’s regional management but challenges remain
with processing and reimbursements with the Public Assistance Program. Our October 2021
CARES Act report includes our ﬁndings on FEMA’s Public Assistance to state governments. We
found that, among other things, FEMA was inconsistently applying COVID-19 Public Assistance
policies. We recommended that FEMA (1) ensure consistency of the agency’s interpretation and
application of the COVID-19 Public Assistance policy within and across regions, and (2) require
training to ensure that COVID-19 Public Assistance policy is applied consistently nationwide.
479White House, Memorandum to Extend Federal Support to Governors’ Use of the National Guard to Respond to

COVID-19 and to Increase other Federal Assistance Provided to States (Jan. 21, 2021).

480A presidential memorandum, issued on February 2, 2021, required FEMA to provide 100 percent cost share

reimbursement for work eligible under Public Assistance for emergency protective measures for work performed
after January 20, 2020. This requirement did not include the operational expenses made eligible by the January 21,
2021, memorandum, which receive 100 percent cost share reimbursement for work performed after January 21, 2021.
White House, Memorandum on Maximizing Assistance from the Federal Emergency Management Agency (Feb. 2,
2021). On August 17, 2021, the President extended this full reimbursement for all work eligible under Public Assistance
retroactively to work performed after January 20, 2020. White House, Memorandum on Maximizing Assistance to
Respond to COVID-19 (Aug. 17, 2021). White House, Memorandum on Maximizing Assistance to Respond to COVID-19
(Aug.17, 2021). FEMA, Coronavirus (COVID-19) Pandemic: Safe Opening and Operation Work Eligible for Public Assistance
(Interim), FEMA Policy 104-21-0003, Version 2 (Sept. 8, 2021).
481See Section C.3.i of Coronavirus (COVID-19) Pandemic: Medical Care Eligible for Public Assistance (Interim)

(Version 2) FEMA Policy #104-21-0004.

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To follow up on the progress FEMA has made to address these recommendations, we solicited
information from 11 state emergency management agencies, with 10 responding to our request
in January and February 2022. State emergency managers indicated that there are some
areas of positive development including good or improving relationships with FEMA’s regional
management, but challenges remain with the Public Assistance program.
For instance, eight state emergency managers we interviewed stated that they have good or
improving relationships with FEMA regional management. Five states indicated that there are
good lines of communication with their FEMA counterparts as they work through COVID-19
issues and all disasters. Four states noted that these relationships have resulted in better support
and technical assistance for issues as they rise. For instance, one state indicated that they have
easier resolution of issues and questions with its regional management than when the COVID-19
declaration ﬁrst started in 2020.
In addition, most states indicated improvement in FEMA’s guidance. Speciﬁcally, six states
indicated that FEMA’s most recent guidance released in January 2021 was adequate, improved,
or helpful. One state noted that the COVID-19 guidance is no longer continuously changing, so
states better understand what expenses are eligible, or are able to talk to FEMA about expenses
that are questionable. The stable guidance helps states better understand what is eligible for
reimbursement.
However, seven states said that there are continued challenges with clarity concerning eligible
reimbursements. For instance, one state emergency manager said that FEMA’s guidance on
ventilators is a continuing challenge. The state asserted that it could clearly identify the needs and
quantities, but FEMA continued to question the needs for the amount of ventilators that the state
procured.
Further, the state oﬃcials said there was too much conversation back and forth with FEMA on
whether ventilators are disposable or permanent equipment, which aﬀects how used ventilators
should be treated and how many ventilators the state should buy. They were still waiting and still
being questioned on these expenditures. There had been no reimbursement on the ventilators as
of January 2022, which cost approximately $30-$60 million.
In addition, seven states indicated that there were undue administrative burdens and tasks with
some documentation requirements, aﬀecting timeliness of getting reimbursed for items. Such
problems reduce the states’ capacity to support their communities. One state emergency manager
we spoke with stated that FEMA was still inconsistent with eligibility guidance at the regional level,
and what qualiﬁes or does not qualify was still unclear.
The state oﬃcial said that the state has spent a lot of time trying to track down if something
is eligible or not. Also, the state oﬃcial stated that when new information such as circulars or
advisories are published, it is not clear what has changed. FEMA has not told the states upfront
what has changed in these publications, if anything, placing the burden on the state agencies to
determine whether there is new information.
A state emergency manager from another state said that FEMA’s expedited processing for
vaccines did not extend to other important projects. The emergency manager stated that

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separating out the diﬀerent projects has hampered the state’s ability to procure services such as
vaccine call centers, testing and lab services, and temporary morgue operations.
In another state, emergency managers stated that FEMA had requested the state’s assistance to
quarantine in non-congregate shelters individuals arriving on cruise ships in March 2020. However,
after quarantining the individuals, FEMA stated that it wanted proof that each individual had
COVID, although the state understood the directive to apply to all the passengers on the cruise
ships. According to the state, nearly 2 years later, FEMA was still questioning the authorization
for the project and requesting the same data repeatedly. As of January 2022, the state is awaiting
reimbursement for the expenses incurred for sheltering the passengers.
Further, another state that requested assistance through one of FEMA’s consolidated resource
centers for project approval and reimbursement said that the centers are receptive to funding new
projects but over-scrutinize projects for COVID-19 program eligibility.482 For example, a locality
purchased sterilization chambers for sterilizing PPE. The “Request for Information” from the
consolidated resource center stated: “Please describe how the UV light sterilization chambers
are an emergency protective measure that prevents the spread of COVID-19.” The state oﬃcial
asserted that this level of scrutiny poses a challenge to the state. FEMA stated that this was an
example of the review process working as it was intended; however, the state believed that it is
well known that UV lights can sterilize PPE.
FEMA Public Assistance oﬃcials acknowledged that they have heard complaints from states about
inconsistent application of eligibility requirements, but they have not received speciﬁc information
to explain what items were inconsistent. However, we were able to identify inconsistencies, which
we share above and in our October 2021 CARES Act report. Because states are still experiencing
challenges in working with the Public Assistance program, our recommendations will remain open
until there is more reported consistency among the regions and states.
Tribal governments continue to struggle to obtain FEMA resources to combat the
COVID-19 pandemic. In our March 2021 CARES Act report, we reviewed FEMA’s assistance
to tribal governments and found that FEMA had not provided timely and consistent technical
assistance and recommended that FEMA do so. To determine FEMA’s progress in addressing this
recommendation, we met with two national tribal associations that represent tribes throughout
the country.
According to one organization, tribes have been under duress because of COVID-19 outbreaks
in their communities, so much so that it has impacted the ability of tribes to get resources from
FEMA or from the states they work with. Further, some tribes lack the emergency management
personnel to address the pandemic as it goes through its communities. The tribal association
stated that while they have tried to reach out to FEMA at all levels of management, they are unable
to communicate with FEMA to talk about how they should get access to needed PPE and other
resources.

482Consolidated Resource Centers are FEMA entities to centralize and standardize the public assistance grant

applications process used by some government state and territorial entities.

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Another tribal organization stated timeliness in getting technical assistance has been diﬃcult.
For example, according to this organization, one tribe submitted to FEMA a number of Public
Assistance projects. While the tribe initially had received positive feedback on the projects’
suitability to be funded, all the projects were rejected for funding without explanation or help to
understand how they could be improved.
In addition, one of the tribal associations stated that FEMA had not provided meaningful data on
how many tribal organizations were receiving funding through FEMA’s programs, which would
help FEMA and tribal organizations assess FEMA’s ability to provide services to tribes. FEMA
stated that such data is readily available from multiple sources and cited three sources. However,
two of three sources cited were internal FEMA documents, and the one online source—titled
OpenFEMA—did not focus on tribal declarations but on all declarations, making it diﬃcult to
navigate without knowing how to focus on tribal data for speciﬁc declarations.483
FEMA Public Assistance oﬃcials stated that they have resources dedicated to communicating
to tribal nations in each region; these resources are meant to help individuals contact the right
people, including being able to contact program delivery managers assigned to the tribes, with
contact information in the tribes’ accounts in FEMA’s Grants Portal, the system by which Public
Assistance projects are managed.
FEMA oﬃcials also stated that they hold question and answer sessions that tribal nations are
encouraged to attend. However, tribal organization oﬃcials stated that the sessions are not
held regularly and it is hard for nations to attend with little notice and little time to prepare.
Moreover, a tribal association stated that FEMA spent most of some sessions explaining the
policies and leaving little time for the tribal government to provide feedback or receive answers
to their questions. Based on the information we received from the tribal organizations, our
recommendation remains open until FEMA provides additional and timely assistance to tribal
governments.

Methodology
To conduct this work, we reviewed FEMA’s monthly Disaster Relief Fund reports to obtain FEMA
obligations data for Individual Assistance, Public Assistance, and mission assignments for February
2021 through February 2022. We reviewed federal laws and FEMA policies and guidance on how
states, local, tribal, and territorial governments may apply for, and receive, assistance to respond
to the COVID-19 pandemic. We also reviewed information on FEMA’s mobile vaccination units,
Public Assistance, and funeral assistance related to COVID-19. In addition, we reviewed previous
GAO reports on FEMA’s response to the COVID-19 pandemic. We found the funeral assistance data
to be reliable to provide the number of claims and costs for the program. Although we present
FEMA data on Public Assistance, we did not independently determine the reliability of the data.
In addition, to assess the extent to which FEMA has implemented controls to help prevent
potential fraud in COVID-19 Funeral Assistance, we requested and reviewed application data
483The OpenFEMA website is https://www.fema.gov/openfema-data-page/public-assistance-applicants-program-

delivery-model-v1.

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from FEMA, reviewed relevant policies, and interviewed FEMA oﬃcials. FEMA provided data for all
applications submitted from the onset of COVID-19 Funeral Assistance on April 12, 2021, through
November 2021, the most current data available at the time of our request.484 The data contained
records for all applicants requesting COVID-19-related funeral assistance as well as the amount of
payment received.
To identify indications of potentially improper payments or fraud, we performed testing of these
data, including determining whether funeral assistance was provided more than once for the
same deceased individual; whether more funeral assistance was provided than the maximum
allowed by FEMA; and whether applicant and decedent SSNs appeared valid. As part of the latter
analysis, we matched the FEMA application data to the SSA full death ﬁle to identify potentially
problematic SSNs, such as applicant SSNs that appeared on the full death ﬁle under a diﬀerent
name and date of birth.485 We used a copy of SSA’s full death ﬁle that was current as of December
2021, the most recent version available at the time we performed the analysis. We plan to share
our ﬁndings with the Department of Homeland Security, Oﬃce of Inspector General for additional
review and action, as appropriate.
To assess the accuracy and reliability of the FEMA application data, we interviewed and obtained
written responses from FEMA oﬃcials and performed electronic testing of the data, including
checks for missing, out of range, or logically inaccurate data. As part of our reliability checks,
where we identiﬁed potential issues such as death dates that appeared invalid, we provided
example application identiﬁcation numbers to FEMA and obtained detailed information from
FEMA oﬃcials on the history and status of those applications. We identiﬁed several reliability
concerns that we describe in this report. Otherwise, we determined that the data were suﬃciently
reliable for the purposes of our report.
To obtain information on states’ perception of FEMA’s Public Assistance program, we interviewed
or otherwise received information from state emergency oﬃcials from California, Idaho, Illinois,
Iowa, Kansas, New Jersey, North Carolina, Pennsylvania, South Carolina, and Washington. Further,
to obtain perceptions on FEMA’s progress working with tribal governments on Public Assistance,
we met with two national tribal associations. Finally, we interviewed FEMA oﬃcials regarding their
eﬀorts to implement COVID-19 Funeral Assistance and the COVID-19 Public Assistance program
for COVID-19.

Agency Comments
We provided a draft of this enclosure to the Oﬃce of Management and Budget (OMB), the
Department of Homeland Security (DHS), and FEMA. OMB had no comments on the enclosure.
In DHS’s comments, which are reproduced in appendix VIII, the department concurred with
both recommendations and agreed with the need for internal controls and the importance of
maintaining accurate, current data.

484According to FEMA oﬃcials, the data contained awards made through December 15, 2021.

485The full death ﬁle contains all of SSA’s death records, including state-reported death information.

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However, FEMA stated that its existing controls were suﬃcient in mitigating the risk of fraud in
COVID-19 Funeral Assistance, citing as evidence the agency’s estimation of improper payments of
less than 1 percent and speciﬁc internal controls currently in place. In addition, FEMA stated that
its funeral assistance data system of record is designed to update all application data in real-time,
and that data elements regarding applicant payments, decedent death dates, and applicant SSN
are maintained at a suﬃciently high quality such that no action is necessary to broadly update
them.
We disagree that FEMA’s existing controls are suﬃcient. Regardless of an agency’s improper
payment rate, agencies are required to assess and manage fraud risks. Our evidence illustrates
that additional steps are needed to do so.
For example, despite FEMA’s existing controls, we identiﬁed cases in which FEMA provided funeral
assistance above the maximum assistance allowed per decedent or to duplicate applications
listing the same decedents. These examples demonstrate that applicants could defraud FEMA
without additional internal controls in place. During the course of our audit, we provided 15
example applications to FEMA illustrating instances in which we identiﬁed possible gaps in FEMA’s
controls. Of these 15 applications, FEMA oﬃcials stated that they had initiated recoupment eﬀorts
for 2 prior to our review, and conﬁrmed the need to initiate recoupment eﬀorts for at least an
additional 8 applications. The examples we provided were emblematic of larger numbers of
applications with issues, suggesting that additional applications may require recoupment eﬀorts.
In addition, our evidence illustrates that FEMA does not maintain the quality of its application data
in a way that would facilitate oversight and prevent and detect fraud. For example, despite FEMA’s
existing data maintenance procedures, we identiﬁed award-receiving applications with missing or
invalid death dates and incorrect applicant identifying information. When we provided example
applications to FEMA, oﬃcials told us that in most cases, the correct information was obtained
during the application process but never updated in the respective data elements. As a result,
these applications may not be compared to accurate data for other applications. Further, without
consistent data, FEMA is less able to perform accurate data analytics as part of its oversight of
COVID-19 Funeral Assistance.
We continue to believe that FEMA should take action to identify the causes of the gaps in internal
control we identiﬁed, design and implement additional control activities, where needed, and
address deﬁciencies in the COVID-19 Funeral Assistance data. We will continue to monitor FEMA’s
actions in these areas to determine if they address our recommendations.

GAO’s Ongoing Work
We will continue to monitor FEMA’s eﬀorts to respond to COVID-19 and assistance provided to
states, local, tribal, and territorial governments.

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GAO’s Prior Recommendations
The table below presents our recommendations on FEMA’s response to COVID-19 from prior
bimonthly and quarterly CARES Act reports.

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Prior GAO Recommendations Related to COVID-19
Recommendation

Status

The Federal Emergency Management Agency Administrator Open-Partially Addressed. In October 2021, the
should improve the consistency of the agency’s
Department of Homeland Security (DHS) concurred
interpretation and application of the COVID-19 Public
with the recommendation and provided a number of
steps it has taken. For instance, the Federal Emergency
Assistance policy within and across regions by further
clarifying and communicating eligibility requirements
Management Agency (FEMA) stated that the applicable
time period of eligibility for reopening was extended
nationwide. (October 2021)
retroactively to the beginning of the incident period
of January 20, 2020, which FEMA stated will improve
consistent interpretation and application of COVID-19
Public Assistance policy nationwide. Further, FEMA stated
that it holds biweekly discussions with FEMA Regional
Recovery Division Directors and FEMA Regional PA Branch
Chiefs, which includes discussion on COVID-19 policy
and needs being faced in localities across the nation.
In December 2021, FEMA provided us with a number
of training sessions it has held via a website that Public
Assistance oﬃcials can access as they have questions
about aspects of COVID-19 assistance. These all are
consistent with the recommendation. However, FEMA has
not explained how it intends to measure the success of its
eﬀorts to ensure that all regions are implementing policy
the same throughout the country. In January and February
2022, we conducted outreach to 10 states to determine
if the states had found that FEMA had improved the
consistency of the agency’s interpretation and application
the Public Assistance Policy. States told us that they were
still facing challenges related to consistency on application
of policy. Therefore, we will keep this recommendation
open.
The Federal Emergency Management Agency Administrator Open-Partially Addressed. In October 2021, FEMA
should require the agency’s Public Assistance program
concurred with the recommendation and stated that it
employees in the regions and at its Consolidated Resource took a number of actions to educate staﬀ on changes to
Centers to attend training on changes to COVID-19 Public COVID-19 Public Assistance policy. For example, FEMA
Assistance policy to help ensure it is interpreted and
conducted a webinar with over 300 staﬀ, which covered
applied consistently nationwide. (October 2021)
a number of issues. Further, FEMA set up a number of
training sessions online so oﬃcials can access them
when needed. However, FEMA has not indicated whether
these training sessions are required, nor whether they
are ensuring the staﬀ understand the content and are
applying it. In January and February 2022, we conducted
outreach to 10 states to determine if the states had found
that FEMA had improved the consistency of the agency’s
interpretation and application the Public Assistance Policy.
States told us that they were still facing challenges related
to consistency on application of policy. Therefore, we will
keep this recommendation open.
The Federal Emergency Management Agency Administrator Closed-Addressed. In March 2021, DHS concurred with
should adhere to the agency’s protocols listed in the
our recommendation. DHS states that FEMA’s National
updated 2019 Tribal Consultation Policy by obtaining tribal Tribal Aﬀairs Advisor, based in the Oﬃce of External Aﬀairs,
input via the four phases of the tribal consultation process will coordinate with other FEMA oﬃces and directorates,
as appropriate, to review the agency’s adherence to

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Recommendation

Status

when developing new policies and procedures related to
COVID-19 assistance. (March 2021).

protocols listed in the Tribal Consultation policy. According
to FEMA oﬃcials, in March 2021, FEMA conducted formal
consultation with Tribal Leaders on COVID-19 Funeral
Assistance before ﬁnalizing the interim policy. In April 2021,
FEMA sent letters to tribal leaders discussing (1) FEMA
policy and procedure for ﬁnancial assistance to individuals
and households for COVID-19 related funeral expenses
incurred after January 20, 2020; and (2) a framework, policy
details and requirements for determining the eligibility
of safe opening and operation work and costs under the
Public Assistance program. According to FEMA oﬃcials,
as of March 2022, no additional COVID-related policies
or regulations are under development. As a result, we
consider this recommendation as closed-addressed.

The Federal Emergency Management Agency Administrator Open-Partially Addressed. In March 2021, DHS concurred
should provide timely and consistent technical assistance with our recommendation. DHS stated that FEMA’s
to support tribal governments’ eﬀorts to request and
Recovery Directorate will publish a memorandum that will
receive Public Assistance as direct recipients, including
contain direction to FEMA regions regarding the assignment
providing additional personnel, if necessary, to ensure that of Public Assistance Program delivery managers to
tribal nations are able to eﬀectively respond to COVID-19. promote equitable delivery of Public Assistance to tribal
(March 2021).
governments. According to FEMA oﬃcials, in August 2021,
FEMA sent a memorandum that provided updates on how
FEMA would deliver assistance. This guidance provides
FEMA’s regional staﬀ the ability to work with all tribal
applicants to understand their capacity to address issues
through their assigned Public Assistance program delivery
manager. FEMA also stated that in September 2021, it
hosted a webinar to further enhance staﬀ readiness to
deliver direct technical assistance and support to tribes.
Further FEMA stated that as of December 2021, 223 out of
355 of the tribal entities that are eligible Public Assistance
applicants have requested and received a program delivery
manager. During the winter of 2022, we reached out to
representatives from the tribal governments to see if the
assistance provided by these program delivery managers
has been reliable and generally has addressed their needs
and concerns. According to two organizations we met
with, communication with FEMA has been unreliable, so
they could not say that FEMA has improved its technical
assistance in a timely or consistent manner. Therefore, we
believe this recommendation should remain open.
The Federal Emergency Management Agency
Administrator—who heads one of the agencies leading
the COVID-19 response through the Uniﬁed Coordination
Group—consistent with their roles and responsibilities,
should work with relevant federal, state, territorial, and
tribal stakeholders to devise interim solutions, such
as systems and guidance and dissemination of best
practices, to help states enhance their ability to track
the status of supply requests and plan for supply needs
for the remainder of the COVID-19 pandemic response.
(September 2020)

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Open- Partially Addressed. In September 2020, the
Department of Homeland Security (DHS) disagreed with
this recommendation, noting, among other things, work
that FEMA had already done to manage the medical
supply chain and increase supply availability. Although
DHS disagreed with our recommendation, it began taking
some actions in March 2021. As of May 2021, DHS had
not demonstrated action to devise interim solutions that
would systematically help states, tribes, and territories
eﬀectively track, manage, and plan for supplies to carry
out the COVID-19 pandemic response in the absence of
state-level end-to-end logistics capabilities that would track

GAO-22-105397

Recommendation

Status
critical supplies required for a response of this scale. We
note that we made this recommendation to both DHS
and the Department of Health and Human Services (HHS)
with the intent that they would work together under the
Uniﬁed Coordination Group to address challenges reported
by state oﬃcials with both public health and emergency
management responsibilities. Moreover, we recommended
they take actions that were consistent with the roles and
responsibilities that were to be more clearly deﬁned as HHS
took a more central role in leading supply distribution. The
recommendation to deﬁne those roles and responsibilities
remains open. Both DHS and HHS have reported separate
actions, taken as part of other eﬀorts within each separate
purview. For instance, FEMA has developed and released
an updated distribution management plan guide that,
according to FEMA, provides actionable guidance for state,
local, tribal, and territorial agencies, among others, to
eﬀectively and eﬃciently distribute critical resources to
disaster survivors in the community. In addition, FEMA
published and put online a logistics technical assistance
program, which assists in the development, readiness,
and enhancement of logistics planning and operational
capabilities for state, local, tribal and territorial agencies.
Further, FEMA provided information about listening
sessions conducted at the regional level. However, as of
February 2022, neither FEMA nor HHS has articulated
how it worked with the other at the headquarters level,
nor how they assessed whether the actions changed the
experiences of state oﬃcials who reported issues during
our prior work. Without systematic and deliberate action
to help states ensure they have the support they need
to track, manage, and plan for supplies, states, tribes,
and territories on the front lines of the whole-of-nation
COVID-19 response may continue to face challenges that
hamper their eﬀectiveness.

Source: GAO. I GAO-22-105397

Related GAO Products
A Framework for Managing Fraud Risks in Federal Programs. GAO-15-593SP. Washington, D.C.: July
2015.
Hurricane Sandy: FEMA Has Improved Disaster Aid Veriﬁcation but Could Act to Further Limit Improper
Assistance. GAO-15-15. Washington, D.C.: December 12, 2014.
Contact information: Chris Currie, (404) 679-1875, curriec@gao.gov and Rebecca Shea, (202)
512-6364, shear@gao.gov

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Critical Manufacturing Sector
The Cybersecurity and Infrastructure Security Agency took steps to respond to the COVID-19
pandemic’s impacts on the Critical Manufacturing Sector but has not assessed lessons learned.
Entity involved: Cybersecurity and Infrastructure Security Agency, within the Department of
Homeland Security

Recommendation for Executive Action
The Director of the Cybersecurity and Infrastructure Security Agency should assess and document
lessons learned from the COVID-19 pandemic’s impacts in the Critical Manufacturing Sector.
The Department of Homeland Security agreed with this recommendation and stated that the
Cybersecurity and Infrastructure Security Agency is working with Critical Manufacturing Sector
stakeholders to identify pandemic impacts in the sector as well as mitigation actions, and plans to
issue a lessons-learned report by December 2022.

Background
The nation’s critical infrastructure provides the essential services that underpin American society.
Critical infrastructure consists of systems and assets so vital that their incapacity or destruction
would have a debilitating impact on the nation’s security, economic security, or public health or
safety.486 The Critical Manufacturing Sector, one of 16 federally deﬁned critical infrastructure
sectors, processes raw materials and produces specialized parts and equipment that are essential
to the operations of other industries and critical infrastructure sectors, such as defense, energy,
and transportation.487 As with other sectors, the COVID-19 pandemic has impacted the Critical
Manufacturing Sector, such as by causing worker shortages, delays in shipments of goods, and
increased cybersecurity vulnerability in critical infrastructure systems and assets.
The Critical Manufacturing Sector is composed of four broad manufacturing industries, as
shown in the ﬁgure below: (1) primary metals manufacturing, (2) machinery manufacturing, (3)
electrical equipment, appliance, and component manufacturing, and (4) transportation equipment
manufacturing. Critical Manufacturing Sector assets are primarily privately owned and operated,
and include manufacturing facilities, processing and distribution facilities, and sales oﬃces. There
were about 62,000 private critical manufacturing establishments, such as manufacturing and
product storage facilities and sales oﬃces—in the U.S., as of June 30, 2021.488

48642 U.S.C. §5195c(e).

487The 16 critical infrastructure sectors are: chemical; commercial facilities; communications; critical manufacturing;

488U.S. Bureau of Labor Statistics. North American Industry Classiﬁcation System 331 (Primary Metal Manufacturing),

333 (Machinery Manufacturing), 335 (Electrical Equipment, Appliance, and Component Manufacturing), and 336
(Transportation Equipment Manufacturing).

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Federally Deﬁned Categories within the Critical Manufacturing Sector

The Cybersecurity and Infrastructure Security Agency Act of 2018 established the Cybersecurity
and Infrastructure Security Agency (CISA) as an agency within the Department of Homeland
Security (DHS).489 CISA leads the national eﬀort to understand, manage, and reduce risk to our
cyber and physical infrastructure. CISA—through its Critical Manufacturing Section—also acts
on behalf of DHS as the lead federal agency, or sector risk management agency, for the Critical
Manufacturing Sector and is responsible for coordinating eﬀorts to protect and improve the
sector’s security and resilience.490 In addition to critical infrastructure, CISA is responsible for
leading cybersecurity programs—such as securing the federal network—and ensuring the nation’s
emergency communications capabilities.
CISA oﬀers manufacturing owners and operators resources to manage risks, improve security
(both physical and cyber), and respond to incidents in the form of training, guidance documents,
cybersecurity services, access to sensitive information, and routine presentations.
DHS’s 2013 National Infrastructure Protection Plan (National Plan) established “partnership
structures” between private sector infrastructure owners and operators and various levels of
governments for each critical infrastructure sector.491 Sector Coordinating Councils (SCC)—one
type of partnership structure—are self-organized and self-governed councils composed of critical
infrastructure owners and operators, their trade associations, and other industry representatives.
The Critical Manufacturing SCC serves as the principal collaboration point between the federal
489Cybersecurity and Infrastructure Security Agency Act of 2018, Pub. L. No. 115-278, § 2(a), 132 Stat. 4168, 4169
(codiﬁed as amended at 6 U.S.C. § 652).

490In January 2021, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 established

“sector risk management agency” responsibilities for federal departments or agencies designated as such for each
critical infrastructure sector or subsector. Pub. L. No. 116-283, § 9002(c), 134 Stat. 3388, 4770. Prior to enactment of the
act, a “sector risk management agency” was called a “sector-speciﬁc agency.” CISA is also the sector risk management
agency for the Chemical; Commercial Facilities; Communications; Dams; Emergency Services; Information Technology;
and Nuclear Reactors, Materials and Waste Sectors.
491Department of Homeland Security, National Infrastructure Protection Plan 2013: Partnering for Critical Infrastructure

Security and Resilience (Washington, D.C.: December 2013). The National Plan outlines how government and private
sector participants in the critical infrastructure community can work together to manage risks and achieve security and
resilience outcomes for critical infrastructure. According to CISA oﬃcials, DHS plans to issue an updated version of the
National Plan in ﬁscal year 2022.

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government and the private sector owners and operators that make up the Critical Manufacturing
Sector.

Overview of Key Issues
CISA took steps to respond to the pandemic’s impacts in the Critical Manufacturing
Sector. According to oﬃcials, CISA focused its pandemic response eﬀorts on supporting entities
involved in the development and deployment of the COVID-19 vaccine—such as hospitals and
pharmaceutical companies—by scanning their IT systems for vulnerabilities and providing other
cybersecurity services, for example. However, CISA also took a variety of steps to respond to the
pandemic’s impacts in the Critical Manufacturing Sector.
CISA shared federal pandemic response information with Critical Manufacturing Sector members. CISA
oﬃcials said they shared information with, and addressed questions from, Critical Manufacturing
Sector members during the pandemic. For example, CISA oﬃcials estimated they convened
approximately 100 conference calls with private critical infrastructure sector members from March
2020 to May 2021 to align and support cross-sector operations among members and government
partners. Oﬃcials said the primary purpose of the calls was to share information about the
pandemic and the federal response with private sector stakeholders. According to oﬃcials, CISA
organized calls twice per week at the start of the pandemic, with almost 10,000 attendees initially.
CISA oﬃcials said they invited Critical Manufacturing Sector members to join the conference calls,
and representatives we spoke with from two manufacturing associations said they participated in
the calls.
Additionally, according to oﬃcials, CISA’s Critical Manufacturing Section also received thousands
of phone calls and emails from private companies and stakeholders seeking guidance in the early
days of the pandemic. Oﬃcials said they provided individualized responses on a variety of topics,
such as workplace safety guidance from the Centers for Disease Control and Prevention. One CISA
oﬃcial said they similarly ﬁelded hundreds of queries about CISA’s Essential Critical Infrastructure
Workforce Guidance (discussed in more detail below), including from members of the Critical
Manufacturing Sector.492
CISA participated in eﬀorts to collect information about the impact of the pandemic on the sector. CISA
initiated and responded to a variety of requests for information about the impact of the pandemic
on critical infrastructure, including the Critical Manufacturing Sector. For example, from February
through May 2020, CISA requested that the sector risk management agencies collect and submit
information about the pandemic’s impact on their respective critical infrastructure sectors on a
weekly basis. According to oﬃcials, CISA incorporated the collected information into brieﬁngs for
senior leadership. Additionally, in April 2020, CISA responded to a request from the White House
asking whether mining or mineral commodity industries—critical manufacturing industries—were
experiencing personal protective equipment shortages.

492Cybersecurity and Infrastructure Security Agency, Guidance on the Essential Critical Infrastructure Workforce: Ensuring

Community and National Resilience in COVID-19 Response (Washington, D.C.: March 19, 2020).

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Additionally, in September 2020, the Critical Manufacturing SCC Executive Committee requested
that CISA administer a survey of SCC members to facilitate information sharing about the
pandemic’s impacts on sector operations and the steps companies took to mitigate the spread of
COVID-19.493 According to CISA oﬃcials, they administered the survey and compiled anonymized
responses for the SCC Executive Committee, but did not analyze or assess the responses. At the
request of the SCC Executive Committee, CISA administered the survey again in August 2021,
with additional questions about the vaccine rollout, and gave the anonymized results to the SCC
Executive Committee.
CISA identiﬁed trends in the pandemic aﬀecting critical infrastructure, including the Critical
Manufacturing Sector. According to oﬃcials, in November 2020, CISA stood up a COVID Task
Force to support the federal government’s COVID-19 response across sectors. While the COVID
Task Force primarily focused on the Healthcare and Public Health Sector, it included the Critical
Manufacturing Sector in its analyses when relevant, according to oﬃcials. For example, CISA’s
COVID Task Force produced weekly Infrastructure Outlook Briefs during the pandemic, which on
occasion included information on trends in the Critical Manufacturing Sector and related supply
chains.
According to CISA oﬃcials, the COVID Task Force’s Infrastructure Outlook Briefs were intended
to identify trends in the pandemic and forecast risks to critical infrastructure, and were shared
with CISA leadership and other federal agencies. The Infrastructure Outlook Briefs prioritized
information about vaccine development and delivery, cybersecurity, and misinformation circulated
about the pandemic. CISA oﬃcials said the briefs helped CISA identify and address priorities
for critical infrastructure, including the Critical Manufacturing Sector, such as issuing additional
cybersecurity guidance for remote work. According to oﬃcials, the briefs included information
about the Critical Manufacturing Sector when it was related to their main priorities. For example,
CISA oﬃcials reported in a May 2020 that manufacturing was among the industries being targeted
by cyber attackers, who were focusing attacks on industries heavily impacted by COVID-19.
Additionally, the COVID Task Force performed two analyses identifying risks to critical
infrastructure that related to the Critical Manufacturing Sector, according to oﬃcials. Oﬃcials
described one analysis in which they cross-checked counties across the U.S. with a high likelihood
of vaccine hesitancy to counties with a high number of critical infrastructure workers, such
as manufacturing workers, to identify locations likely to experience a degradation of critical
infrastructure operations. Oﬃcials described a second analysis that concluded that the Critical
Manufacturing Sector was likely to suﬀer from a lack of cybersecurity expertise in the future,
due to an increase in demand for cybersecurity workers across sectors and low salaries for
cybersecurity workers in manufacturing industries.494
CISA issued essential workforce guidance that included Critical Manufacturing Sector workers. In
response to the pandemic, CISA developed the Essential Critical Infrastructure Workforce
493As of April 2021, the Critical Manufacturing SCC had 96 members.

494CISA published CISA Insights: Cyber Threats to Critical Manufacturing Sector Industrial Control Systems, which further

elaborated on this risk to the Critical Manufacturing Sector. CISA determined there is an increased risk of cyber threats
in the sector because of expanded work-from-home during the pandemic—which increase the risks associated with
authenticating accounts—and the use of remote-based control systems that manage industrial processes.

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Guidance to help jurisdictions and critical infrastructure owners and operators identify essential
critical infrastructure workers.495 According to CISA oﬃcials, the agency took the initiative to
develop the guidance in response to the White House’s March 16, 2020, statement about the
important role of critical infrastructure workers during the pandemic.496 CISA issued the ﬁrst
version of the guidance on March 19, 2020, and issued its sixth, most recent version on August
5, 2021.497 The guidance includes critical manufacturing workers—such as those involved
in manufacturing steel and semiconductors—among the pool of essential workers, such as
physicians, emergency medical technicians, and grocery store workers. See the ﬁgure below for
the critical infrastructure sectors represented in the guidance.
Critical Infrastructure Sectors Represented in the Essential Critical Infrastructure Workforce Guidance

The guidance was intended to help states, local jurisdictions, and critical infrastructure owners
and operators identify essential work functions to ensure that the workers who performed those
functions could continue to access their workplaces during community restrictions, such as stayat-home orders. While the guidance was voluntary, CISA determined that, as of April 28, 2020,
33 states and the District of Columbia had adopted it exclusively or as part of their own essential

495Cybersecurity and Infrastructure Security Agency, Guidance on the Essential Critical Infrastructure Workforce: Ensuring
Community and National Resilience in COVID-19 Response (Washington, D.C.: March 19, 2020).
496The White House, The President’s Coronavirus Guidelines for America (Washington, D.C.: March 16, 2020).

497As of February 2022, CISA has issued six versions of the Essential Critical Infrastructure Workforce Guidance: Version

1.0 on March 19, 2020; Version 2.0 on March 28, 2020; Version 3.0 on April 17, 2020; Version 3.1 on May 19, 2020;
Version 4.0 on August 18, 2020; and Version 4.1 on August 5, 2021.

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worker guidance.498 Additionally, according to oﬃcials, CISA shared the guidance with 24 countries
and six international organizations to help inform the development of their essential workers lists.
According to oﬃcials, the ﬁrst version of the guidance was developed using a variety of inputs,
including:
• Pandemic-related critical infrastructure plans prepared by DHS and the National Infrastructure
Advisory Council;499
• Ongoing decision-making around how to prioritize personal protective equipment across the
country;
• Feedback from federal agencies, such as sector risk management agencies; and
• Vetting by private-sector partnership structures, such as the critical infrastructure SCCs.
Each version of the guidance included a solicitation for feedback from stakeholders—including
the private sector, government agencies, and the public—and after the initial one, revisions
to the subsequent ﬁve versions were primarily based on that feedback. According to oﬃcials,
CISA expanded and added detail to the critical manufacturing category in subsequent versions
as it received feedback and requests for clariﬁcation; in Version 3.0, for instance, CISA added
manufacturing workers related to the aerospace industry because of industry feedback. Oﬃcials
from automobile and electrical manufacturing associations we spoke with said they provided
feedback on the guidance, including the need for more speciﬁcity on the types of industries
included in the guidance. CISA subsequently revised the guidance to clarify what was included in
certain industries, such as by adding vehicle sales to the list of included industries in Version 3.0.
According to CISA oﬃcials, the agency issued updated versions when it received a critical
mass of feedback—a signiﬁcant number of people or entities contacting them with similar
comments—from the private sector or government agencies, and then when a new CISA Director
was conﬁrmed in July 2021. Additionally, CISA oﬃcials said updates reﬂected the evolving nature
of the pandemic; teachers, for example, were not included in early versions of the list because
schools had previously been closed.500

498The Essential Critical Infrastructure Workforce Guidance stated that the list was “advisory in nature,” and should not

be considered a federal directive. State, local, tribal, and territorial governments were responsible for implementing
COVID-19 pandemic response eﬀorts in their jurisdictions.

499According to CISA oﬃcials, the most useful pandemic planning document they relied on to develop the Essential

Critical Infrastructure Workforce Guidance was the National Infrastructure Advisory Council’s Chemical, Biological,
and Radiological Events and the Critical Infrastructure Workforce, Final Report and Recommendations by the Council
(January 8, 2008). Oﬃcials also cited Department of Homeland Security, U.S. Critical Infrastructure 2025: A Strategic
Risk Assessment (Washington, D.C.: April 2016), and Department of Homeland Security, Pandemic Impacts to Lifeline
Critical Infrastructure (Washington, D.C.: July 30, 2015).

500Version 4.0, issued on August 18, 2020, introduced an essential worker category for education, which included

teachers.

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After issuing the guidance, CISA matched the essential worker categories to industry-based
classiﬁcation codes.501 According to oﬃcials, this helped critical infrastructure owners and
operators identify which of their workers fell into essential worker categories. CISA oﬃcials
said they shared the coding analysis with the Federal Emergency Management Agency, the
Department of Health and Human Services, and the Centers for Disease Control and Prevention
for the purpose of assisting their eﬀorts to prioritize personal protective equipment and vaccine
distribution to essential workers.
CISA supported the Critical Manufacturing Sector’s application of the Essential Critical Infrastructure
Workforce Guidance. CISA took steps to help sector members apply essential workforce guidance
and continue operations during the pandemic. For example, CISA’s International Aﬀairs Branch
helped foreign essential workers, including those in the Critical Manufacturing Sector, enter the
U.S. to continue critical infrastructure operations during the pandemic. Presidential Proclamation
10052, issued on June 22, 2020, had temporarily suspended the entry of certain nonimmigrants
into the country.502 CISA worked with U.S. Customs and Border Protection to facilitate National
Interest Exceptions to the Proclamation.
Among those potentially eligible for National Interest Exceptions were certain applicants whose
proposed job duties or position indicated the individual would provide signiﬁcant and unique
contributions to an employer meeting a critical infrastructure need. Oﬃcials said they provided
companies with language related to essential workers and critical infrastructure to help justify
the waiver requests, and worked with U.S. Customs and Border Protection to clarify the workers’
travel plans, for example. According to CISA’s records, in 2021, four companies related to critical
manufacturing requested National Interest Exceptions for seven individual workers; six of the
seven requests were granted.503
CISA’s International Aﬀairs Branch also applied the guidance to help the federal government
coordinate with Mexico to determine which critical manufacturing companies were essential
during the pandemic. In March 2020, Mexico issued an emergency health decree that suspended
all “non-essential” activities. The list of essential workers in Mexico’s decree, however, was
narrower than CISA’s guidance, according to oﬃcials. As a result, Mexico’s decree signiﬁcantly
impacted U.S. manufacturing operations and disrupted key U.S. supply chains. For example,
Mexican manufacturing plants that supplied ventilator components or air conditioning units for
U.S. hospitals were ordered closed.
CISA oﬃcials said they worked with the U.S. Chamber of Commerce to facilitate conversations with
the Mexican government and develop a survey of U.S. companies impacted by Mexico’s policy.
CISA oﬃcials also said they used the survey results and the guidance to identify critical companies
that reported having to stop operations because of Mexico’s shutdown, which included critical
manufacturing-related companies. CISA oﬃcials said that, in May 2020, they provided a tiered list
501Classiﬁcation codes group businesses into industries according to similarity. For example, the code for “machinery

manufacturing” can be further narrowed into speciﬁc industry groups, such as “industrial machinery manufacturing,” of
which “semiconductor machinery manufacturing” is a sub-industry.

502See 85 Fed. Reg. 38,263 (June 25, 2020).

503Workers from the four critical manufacturing-related companies that requested National Interest Exceptions were

from countries that included France, South Africa, Germany, and Ireland.

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of critical U.S. companies to National Security Council staﬀ, for the purpose of coordinating with
the Mexican government to ensure those companies could continue operations.
While the guidance provided direction to states and local jurisdictions on which workers across
critical infrastructure sectors should have access to their worksites during community restrictions,
CISA also issued an access request letter on July 13, 2020, speciﬁc to the Critical Manufacturing
Sector. The letter asks that, in the interest of homeland security, jurisdictions extend “any
courtesy”—such as ﬂexibility with local pandemic orders—to critical manufacturing essential
workers during the pandemic. For example, according to oﬃcials, the letter was provided to the
Critical Manufacturing Sector to facilitate essential workers’ travel across county and state borders
to access their worksites.
CISA could beneﬁt from assessing lessons learned from the pandemic speciﬁc to the Critical
Manufacturing Sector. CISA has not performed a lessons-learned analysis from the pandemic’s
impacts in the Critical Manufacturing Sector, although sector members identiﬁed this analysis as a
high-priority need. CISA has collected some information on the pandemic’s impacts that could be
leveraged in a lessons-learned analysis. As described earlier, CISA was involved in several eﬀorts
during the pandemic to collect information directly from sector members. For example, CISA
collected information about supply chain issues and levels of absenteeism among the workforce.
Further, CISA was involved in a similar lessons-learned analysis for other critical infrastructure
sectors. Speciﬁcally, CISA worked with the SCCs from the Information Technology Sector and
Communications Sector to conduct a lessons-learned analysis on the impacts of the pandemic
on those supply chains.504 That assessment identiﬁed key issues from the pandemic’s impacts on
information and communications technology supply chains and included recommendations to
help companies increase the resilience of their supply chains.
In July 2021, CISA issued a report summarizing the ﬁndings from a strategic planning conference
it organized with SCC members (private sector stakeholders representing manufacturing
industries).505 The report identiﬁed general security needs, including the need for sector-speciﬁc
resources that incorporate lessons learned from the impacts of the COVID-19 pandemic on
manufacturing facilities.
According to oﬃcials, CISA’s Critical Manufacturing Section has a team of four staﬀ who are not
equipped to perform in-depth analyses, such as a lessons-learned analysis. However, CISA has
previously used partnerships with contractors and the National Laboratories to conduct analyses,
such as with the strategic planning conference, and has analyst resources within its own National
Risk Management Center to conduct such analyses.
DHS’s National Infrastructure Protection Plan identiﬁes leveraging lessons learned and applying
corrective actions from incidents as one step towards reducing vulnerabilities in critical

504Cybersecurity and Infrastructure Security Agency, Building a More Resilient ICT Supply Chain: Lessons Learned During the
COVID-19 Pandemic, An Analysis (Washington, D.C.: November 2020).

505Cybersecurity and Infrastructure Security Agency, Critical Manufacturing Sector Strategic Planning Initiative: Summary

Report (Washington, D.C.: July 2021).

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infrastructure.506 Additionally, it says DHS is responsible for documenting lessons learned from
actual incidents and applying them to its security and resilience activities. The National Plan also
directs agencies to take actions that enable timely and eﬃcient response after an incident to
reduce its consequences.507 Further, CISA’s Critical Manufacturing Section identiﬁed after-action
reporting as a method to identify key areas for improvements.508
In commenting on a draft of this enclosure, CISA oﬃcials said that, at the request of the Critical
Manufacturing Sector SCC Executive Committee, they plan to pursue a lessons-learned review of
the pandemic’s impacts in the Critical Manufacturing Sector beginning in March 2022. However, as
of February 2022, CISA had not ﬁnalized a plan for developing this review. A documented lessonslearned assessment that examines the impacts of the pandemic in the Critical Manufacturing
Sector, including strengths and weaknesses in the sector’s response, would allow CISA to identify
how it could better support the sector to reduce the consequences of the pandemic and future
incidents. It could also help identify strategies to strengthen the sector’s resilience.

Methodology
To conduct this work, we reviewed relevant federal statutes and regulations, DHS risk
management guidance, DHS’s National Infrastructure Protection Plan, the Critical Manufacturing
Sector-Speciﬁc Plan, and the Strategic Planning Initiative.509 We also examined publicly available
CISA information and guidance, such as the Critical Manufacturing Sector security guide; agency
analyses, such as CISA analyses of pandemic impacts on critical infrastructure sectors; survey
results from conferences or other activities, such as the SCC’s annual survey results; and internal
CISA brieﬁngs on the pandemic.510 In addition, we interviewed CISA oﬃcials regarding steps the
agency has taken to address the pandemic’s impacts on the critical manufacturing sector and to
assess lessons learned.
To obtain industry perspective on the pandemic’s impacts in the Critical Manufacturing Sector
and CISA’s eﬀorts to respond, we reached out to one association representing each of the four
federally deﬁned industry categories, two of which are members of the SCC and two of which
are not, as of April 2021. Of these, two responded to our requests for an interview: the National
Electrical Manufacturers Association and the Alliance for Automotive Innovation. According
to these associations, each represents a large number of manufacturers in their respective
industries.

506Department of Homeland Security, National Infrastructure Protection Plan 2013: Partnering for Critical Infrastructure

Security and Resilience (Washington, D.C.: December 2013).

507Department of Homeland Security, Supplemental Tool: Executing a Critical Infrastructure Risk Management Approach

(Washington, D.C.).

508Department of Homeland Security, Critical Manufacturing Sector-Speciﬁc Plan, An Annex to the NIPP 2013 (Washington,

D.C.: 2015).

509Cybersecurity and Infrastructure Security Agency, Critical Manufacturing Sector, Strategic Planning Initiative: Summary

Report (Washington, D.C.: July 2021).

510Cybersecurity and Infrastructure Security Agency, Critical Manufacturing Sector: Security Guide (Washington, D.C.: July

2020).

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Agency Comments
We provided DHS and OMB with a draft of this enclosure. DHS provided written comments, which
are reproduced in appendix VIII. OMB did not provide comments.
In its comments, DHS agreed with our recommendation and stated that in March 2022 CISA
oﬃcials conducted a lessons-learned workshop with members of the Critical Manufacturing SCC to
identify pandemic impacts on the sector and responses partners have taken—or plan to take—to
mitigate these impacts. DHS stated that CISA plans to compile input from the workshop, and
subsequent stakeholder feedback, into an after-action report that includes recommendations
for sector partners to consider when they address pandemic-related impacts on both daily and
incident response operations. According to DHS, CISA plans to complete the report by December
30, 2022, and share it with Critical Manufacturing Sector partners through the SCC and other
mechanisms. These actions, if fully implemented to include lessons learned, should address the
intent of our recommendation.

GAO’s Ongoing Work
We have additional work underway related to the Critical Manufacturing Sector. We are currently
examining the causes and extent of the current global semiconductor shortage along with the
federal government’s and U.S. manufacturers’ response to the shortage. More broadly, we are also
reviewing the eﬀectiveness of the federal sector risk management agencies in carrying out certain
speciﬁc responsibilities—such as assessing risk and supporting incident management—for the
critical infrastructure sectors.511
Contact Information: Tina Won Sherman, (202) 512-8461 or shermant@gao.gov

511In January 2021, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 established

“sector risk management agency” responsibilities for federal departments or agencies designated as such for each
critical infrastructure sector or subsector. See Pub. L. No. 116-283, § 9002(c), 134 Stat. 3388, 4770.

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Payment Integrity: COVID-19 Spending
Delays in agency reporting of improper payment information related to COVID-19 spending, as
well as changes to processes for reporting improper payments, have impacted the transparency,
timeliness, reliability, and completeness of available improper payments information. These delays
also contributed to the federal government’s inability to identify the full extent to which improper
payments occur and take appropriate actions to reduce them.
Entities involved: Government-wide

Matters for Congressional Consideration
Congress should consider providing the Department of Health and Human Services the authority
to require states to report the data necessary for the Secretary to estimate and report on
improper payments for the Temporary Assistance for Needy Families program in accordance with
31 U.S.C. § 3352.

Recommendations for Executive Action
The Director of the Oﬃce of Management and Budget should require agencies to certify the
reliability of data submitted to PaymentAccuracy.gov. The Oﬃce of Management and Budget
neither agreed nor disagreed with this recommendation.

Background
Agency-reported improper payment estimates for ﬁscal year 2021 totaled about $281 billion—an
increase from the ﬁscal year 2020 total of $206 billion. An improper payment is deﬁned as any
payment that should not have been made or that was made in an incorrect amount (including
overpayments and underpayments) under statutory, contractual, administrative, or other legally
applicable requirements.512 To help ensure that federal funds are appropriately monitored,
executive branch agencies are required to take various steps regarding improper payments under
the Payment Integrity Information Act of 2019 (PIIA) and as directed by Oﬃce of Management and
Budget (OMB) guidance.513

512The Payment Integrity Information Act of 2019 (PIIA) further states that this deﬁnition includes any payment to an

ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any payment for a good or
service not received (except for such payments where authorized by law), and any payment that does not account for
credit for applicable discounts. See PIIA, Pub. L. No. 116-117, 134 Stat. 113, 114 (Mar. 2, 2020), codiﬁed at 31 U.S.C. §
3351(4). PIIA also provides that when an executive agency’s review is unable to discern whether a payment was proper
as a result of insuﬃcient or lack of documentation, this payment must also be included in the improper payment
estimate. 31 U.S.C. § 3352(c)(2).

513 PIIA repealed the prior statutes governing executive agency improper payment reporting, and enacted substantially

similar provisions in a new subchapter of the U.S. Code. However, the core structure of executive branch agency
assessment, estimation, analysis, and reporting of improper payments remains consistent with the prior statutory
framework. See 31 U.S.C. §§ 3351-3352. See also Oﬃce of Management and Budget (OMB), Appendix C to OMB Circular
A-123, Requirements for Payment Integrity Improvement, OMB Memorandum M-21-19 (Washington, D.C.: Mar. 5, 2021);

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PIIA requires agencies to conduct risk assessments of their programs at least once every 3
ﬁscal years, aimed at identifying those with annual outlays exceeding $10 million that may be
susceptible to signiﬁcant improper payments.514 Agencies are then required to develop and
report improper payment estimates, root causes, and corrective action plans for those programs
identiﬁed as susceptible. Under OMB’s guidance, agencies are directed to complete an initial risk
assessment for new programs after the ﬁrst 12 months of a program’s operation.515 For programs
newly identiﬁed as susceptible to signiﬁcant improper payments, OMB guidance instructs agencies
to begin reporting estimates and other information in the ﬁscal year following the risk assessment.
OMB directs agencies to submit their improper payment data to be compiled and published
on PaymentAccuracy.gov, a public website containing current and historical improper payment
information in dashboards and downloadable datasets.
COVID-19 relief laws provided about $4.6 trillion to fund response and recovery eﬀorts. The extent
and signiﬁcance of improper payments associated with COVID-19 relief funds has not yet been
determined. However, the impact of these improper payments, including those that are the result
of fraud, could be substantial.516 Even if improper payments are limited to one percent of the
COVID-19 relief funds provided to date, this would equate to $46 billion.
Federal law enforcement agencies are actively investigating potential fraud. From March 2020
through January 2022, 435 individuals pleaded guilty to federal charges of defrauding COVID-19
relief programs. As of January 31, 2022, 11 individuals had been convicted at trial for COVID-19
relief fraud. Federal charges were pending against 548 individuals for attempting to defraud
COVID-19 relief programs as of January 31, 2022. See the enclosure on Federal Fraud-Related
Cases in appendix I for more information.

Overview of Key Issues
Agencies did not report improper payment estimates for key COVID-19 spending for ﬁscal
year 2021. COVID-19 relief laws did not require agencies to deem all programs receiving COVID-19
relief funds that expended a signiﬁcant amount in any one ﬁscal year as "susceptible to signiﬁcant
improper payments," as we suggested in our November 2020 report on the CARES Act. OMB
staﬀ informed us at that time that OMB would not direct agencies to designate new programs as
susceptible to signiﬁcant improper payments in order to expedite reporting an improper payment
estimate for new COVID-19 programs. OMB staﬀ stated that this decision was due in part to their
assessment that it is unclear whether (1) the current controls and guidance in place to identify
and report improper payments are insuﬃcient and (2) the beneﬁt of increased reporting would
Oﬃce of Management and Budget, Financial Reporting Requirements, Circular No. A-136, (Washington, D.C.: Aug. 10,
2021).
514 A program is considered to be susceptible to signiﬁcant improper payments if, in the preceding ﬁscal year, the

sum of the program’s improper payments and payments whose propriety cannot be determined due to lacking or
insuﬃcient documentation may have exceeded either (1) 1.5 percent of program outlays and $10 million or (2) $100
million (regardless of the improper payment rate). 31 U.S.C. § 3352(a).
515OMB M-21-19.

516While not all improper payments are the result of fraud, all payments made as a result of fraudulent activities are

considered to be improper payments. In addition, improper payment estimates are not intended to measure fraud in a
particular program.

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outweigh the added burden to do so. In our November 2020 report, we also reported that because
of OMB’s guidance on the timing of risk assessments and improper payment reporting for new
programs, improper payment estimates associated with new COVID-19 programs may not be
reported until November 2022.
Six major spending areas received more than $100 billion in COVID-19 relief funding, but none of
these areas reported an improper payment estimate for the risk-susceptible programs for ﬁscal
year 2021 (see table). Three of the major spending areas included at least one program that was
identiﬁed as susceptible to signiﬁcant improper payments: the Small Business Administration’s
Business Loan Programs, the Department of Labor’s Unemployment Insurance Programs, and the
Department of Health and Human Services’ Public Health and Social Services Emergency Fund.

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Fiscal Year 2021 Improper Payment Estimates Reporting for Major Spending Areas Receiving Over $100 Billion in
COVID-19 Funding, as of February 28, 2022
Programs Determined to
be Susceptible to Signiﬁcant
a

Total
COVID-19
Fiscal Year 2021 Estimated
Expenditures
Improper Payments
(billions)
Reporting

Major Spending Area (Agency)

Improper Payments

Economic Impact Payments
(Department of the Treasury)

The Department of the Treasury
(Treasury) determined these
payments are not susceptible to
signiﬁcant improper payments.

Not reported

$850.3

Business Loan Programs
(Small Business Administration)

The Small Business Administration
(SBA) reported that the Economic
Injury Disaster Loan program was
susceptible to signiﬁcant improper
payments.

Not reported

$827.8

SBA did not report on the
susceptibility of the Paycheck
Protection Program (PPP) to
signiﬁcant improper payments.
However, SBA oﬃcials stated that
PPP would report improper payment
estimates in ﬁscal year 2022.
Unemployment Insurance
(Department of Labor)

b
The Department of Labor (Labor)
Partially reported
determined that the Pandemic
Emergency Unemployment
Compensation and Pandemic
Unemployment Assistance programs
were susceptible to signiﬁcant
improper payments.

$673.2

Labor did not report on the
susceptibility of the Federal Pandemic
Unemployment Compensation
and Mixed Earner Unemployment
Compensation programs.
Coronavirus State and Local Fiscal
Recovery Funds
(Treasury)

Treasury did not report on the
susceptibility of Coronavirus State
and Local Fiscal Recovery Funds to
signiﬁcant improper payments.

Not reported

$245.4

Public Health and Social Services
Emergency Fund
(Department of Health and Human
Services)

The Department of Health and
Not reported
Human Services determined that two
Provider Relief Fund programs were
susceptible to signiﬁcant improper
payments.

$226.1

Coronavirus Relief Fund
(Treasury)

Treasury determined that the
Coronavirus Relief Fund was not
susceptible to signiﬁcant improper
payments.

$149.9

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Source: PaymentAccuracy.gov, Treasury, and Department of Labor Oﬃce of the Inspector General. | GAO-22-105397

A program is considered to be susceptible to signiﬁcant improper payments if, in the preceding ﬁscal year, the sum of
the program’s improper payments and payments whose propriety cannot be determined due to lacking or insuﬃcient
documentation may have exceeded either (1) 1.5 percent of program outlays and $10 million or (2) $100 million (regardless of
the improper payment rate). 31 U.S.C. § 3352(a).
b

Labor did not separately report an estimate for the Unemployment Insurance pandemic programs, but instead the reported
improper payment estimate for the Unemployment Insurance program of $78 billion included the Federal Pandemic
Unemployment Compensation and Pandemic Emergency Unemployment Compensation programs. The UI estimate does not
include the Federal Pandemic Unemployment Assistance and Mixed Earner Unemployment Compensation program.

While there may be additional burdens by the agencies that would be susceptible to signiﬁcant
improper payments, we do not believe that the cost of these activities outweigh the beneﬁts of
expediting the estimation and reporting of improper payments. Speciﬁcally, reporting improper
payment estimates quickly for risk-susceptible programs helps hold agencies accountable and
provides additional transparency for Congress and others in their oversight of government-wide
improper payments. In addition, estimating improper payments and identifying root causes,
including those that may contribute to potential fraud, would help ensure that agencies timely
develop and implement corrective actions to help reduce them.
As we reported in November 2020, according to OMB staﬀ, OMB guidance directs agencies to
identify and recover overpayments for all programs regardless of whether a program formally
reports an improper payment estimate or performs an improper payment risk assessment.
Although we acknowledged at that time that agencies may take actions to identify and recover
overpayments, we stated that quickly identifying programs that are susceptible to signiﬁcant
improper payments is critical. This identiﬁcation process is an important step in establishing
controls to prevent future improper payments.
Given that trillions of COVID-19 expenditures were not required to be considered in agencies’ ﬁscal
year 2021 improper payment estimate methodologies, it’s not possible to completely estimate
the government-wide total of improper payments for ﬁscal year 2021. In our November 2020
report, we suggested that Congress consider, in any future legislation appropriating COVID-19
relief funds, designating all executive agency programs and activities making more than $100
million in payments from COVID-19 relief funds as “susceptible to signiﬁcant improper payments.”
In March 2022, we expanded on our suggestion to include all new programs and activities by
amending the PIIA. Speciﬁcally, we suggested that Congress amend the PIIA to designate all new
executive agency programs and activities—such as those that were created speciﬁcally to respond
to the COVID-19 pandemic—making more than $100 million in payments in any one ﬁscal year as
“susceptible to signiﬁcant improper payments” for their initial years of operation to help prevent
such delays in estimating and reporting of improper payments from occurring in the future.
The Department of Health and Human Services does not report improper payment
estimates for the Temporary Assistance for Needy Families program. According to the
Department of Health and Human Services’ (HHS) 2021 agency ﬁnancial report, the Temporary
Assistance for Needy Families (TANF) program—which spent about $17 billion in ﬁscal year
2021—is a risk-susceptible program that has not estimated or reported improper payments.517
517 The TANF program serves as the nation’s major cash assistance program for low-income families with children.

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The American Rescue Plan Act of 2021 provided $1 billion for TANF Pandemic Emergency
Assistance for ﬁscal year 2021.
According to HHS’s ﬁscal year 2021 ﬁnancial report, HHS does not have the authority to require
states to participate in a TANF improper payment measurement.518 Speciﬁcally, HHS indicated
that it is unable to compel states to collect the necessary information required to conduct an
improper payment measurement for TANF due to Section 411 of the Social Security Act, which
speciﬁes the data elements that HHS may require states to report, and Section 417 of the same
Social Security Act, which dictates that the federal government may only regulate the conduct
of states where Congress has given the express authority to do so. Accordingly, HHS states that
it does not have the authority to collect data pertaining to case and payment accuracy for TANF
since the information is not included under the Social Security Act. HHS has previously requested
such authority in its budget proposals.
In its audit reports, HHS’s Oﬃce of Inspector General (OIG) has noted that HHS has not been able
to produce an improper payment estimate for the TANF program and has made recommendations
to pursue legislative authority.519 Providing HHS with the legal authority to collect that data would
help ensure accountability over TANF payments.
Federal internal control standards state that management should use quality information to
achieve the entity’s objectives. Without statutory authorization for HHS to require states to
participate in the measurement of improper payments, Congress and other external stakeholders
will continue to lack key payment integrity information for monitoring improper payments in the
TANF program. In addition, HHS will not be able to collect the required information to implement
and report on the eﬀectiveness of corrective actions on improper payments for the program.
Agencies reported various ways the pandemic negatively impacted improper payment
estimation and reporting. In their ﬁscal year 2021 ﬁnancial reports, agencies identiﬁed multiple
pandemic-related factors that aﬀected the quality and completeness of their improper payment
estimation and reporting. For example:
• HHS reported that it suspended reviews in the Foster Care program to protect the health and
safety of state and federal reviewers and to ensure that state child welfare oﬃcials remain
focused on mission-critical activities serving children and families. These reviews, which occur
onsite, are conducted triennially on a rolling basis to generate a non-statistical estimate of
improper payments. As a result, HHS did not estimate or report on improper payments in the
Foster Care program for ﬁscal year 2021.
• The Department of the Treasury reported that it delayed its plans for reporting improper
payments for the Premium Tax Credit program. Treasury based its decision on a June 17, 2020,
518Department of Health and Human Services, FY 2021 Agency Financial Report (Washington, D.C.: November 2021), pg.

233.

519HHS Oﬃce of Inspector General, Oﬃce of Audit Services, U.S. Department of Health and Human Services Met Many

Requirements, but It Did Not Fully Comply With the Payment Integrity Information Act of 2019 and Applicable Improper
Payment Guidance for Fiscal Year 2020, A-17-21-52000 (Washington, D.C.: May 14, 2021), pg. 14.; U.S. Department of Health
and Human Services Met Many Requirements of the Improper Payments Information Act of 2002 but Did Not Fully Comply for
Fiscal Year 2019, A-17-20-52000 52000 (Washington, D.C.: May 8, 2020), pg. 14.

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memorandum from OMB, which allowed agencies to give priority to audits that are associated
with programs at higher risk due to COVID-19 and to delay work on programs that are lower
risk.520
In their reviews of agencies’ ﬁscal year 2020 PIIA compliance, multiple OIGs noted some additional
impacts on estimating improper payments due to the pandemic. For example, the department’s
OIG reported that Labor permitted state workforce agencies to suspend improper payment
sampling eﬀorts for the ﬁnal quarter of the Unemployment Insurance program year to reduce
the burden on program resources responsible for processing Unemployment Insurance beneﬁt
claims and implementing new COVID-19 pandemic related programs.521 This allowed 74 percent
of program year expenditures to go untested for ﬁscal year 2020 reporting. As a result, those
payments were not considered in Labor’s improper payments rate estimates for ﬁscal year 2020
reporting.522 Labor applied the nine-month improper payment rate against the outlays for the 12month period, which might have lead to an unreliable estimate of improper payment amounts for
ﬁscal year 2020 reporting.
In addition, its OIG reported that the Department of Housing and Urban Development did not test
the complete payment cycle, to include payments issued by state, local, or other agencies due
to the impacts of COVID-19. This was the case for three of the department’s four programs that
are susceptible to signiﬁcant improper payments.523 As a result, the department’s sampling and
estimation methodology was not comprehensive and led to an incomplete estimate of improper
payments.524
OMB guidance has reduced the visibility and quality of agency improper payment
information. The COVID-19 relief laws have provided about $4.6 trillion to fund COVID-19
response and recovery eﬀorts, therefore reporting of improper payment information for such
programs is critical to accountability and transparency over whether appropriated funds were
spent for their intended purposes. This is especially important because much of the funds had to
be disbursed quickly, thereby increasing the risk of improper payments and fraud.
PIIA requires OMB to report annually, among other things, a government-wide improper payment
estimate, recovery actions, improper payment reduction targets, and a discussion of progress
made towards meeting those targets.525 OMB reports the aggregated amount of improper
520Oﬃce of Management and Budget, Risk Based Financial Audits and Reporting Activities in Response to COVID-19

(Washington, D.C.: June 17, 2020).

521Labor’s improper payment rate estimates for ﬁscal year 2020 reporting covers July 1, 2019, through June 30, 2020.

522Department of Labor, Oﬃce of the Inspector General, The U.S. Department of Labor Complied with the Payment Integrity

Information Act for FY 2020, But Reported Unemployment Insurance Information Did Not Represent Total Program Year
Expenses, No. 22-21-007-13-001 (Washington, D.C.: Aug. 6, 2021).

523The three risk-susceptible programs are the Oﬃce of Public and Indian Housing’s Tenant-Based Rental Assistance

Program, the Oﬃce of Multifamily Housing Programs’ Project-Based Rental Assistance Program, and the Oﬃce of
Community Planning and Development’s Disaster Recovery Assistance – Hurricanes Harvey, Irma, Maria.

524Department of Housing and Urban Development Oﬃce of Inspector General, HUD Did Not Fully Comply With the

Payment Integrity Information Act of 2019, 2021-AT-0002 (Atlanta, GA: May 17, 2021).
52531 USC § 3352(f)(2).

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payment estimates from all reporting programs and activities for the federal government in the
dataset provided at PaymentAccuracy.gov.
OMB guidance shifts improper payment reporting from agency ﬁnancial reports to
PaymentAccuracy.gov. OMB’s Circular A-136 Financial Reporting Requirements provides guidance
for agencies on preparing agency ﬁnancial reports, including the reporting of improper payment
information. Beginning with its 2020 update to the Circular, OMB did not direct agencies to include
improper payment information in agency ﬁnancial reports or performance and accountability
reports as had been done in prior years. OMB instructed agencies to report only actions taken to
address recovery auditor recommendations within their ﬁnancial reports and direct readers to
PaymentAccuracy.gov for all other improper payment information.
As shown in the table below, about two-thirds of the government-wide improper payment
estimates were reported in agency ﬁnancial reports for ﬁscal year 2021.

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Fiscal Year 2021 Estimated Improper Payments Reported in Federal Agency Financial Reports
Amount of Estimated Improper Payments Reported in
Agency Financial Reports

$189.2 billion

Amount of Government-wide Estimated Improper
Payments Reported on PaymentAccuracy.gov

$281.2 billion

Percentage of Estimated Improper Payments Reported
in Agency Financial Reports

67%

Source: Oﬃce of Management and Budget (data) and GAO (analysis). | GAO-22-105397

According to OMB oﬃcials, centralized reporting of agencies’ improper payment information
on PaymentAccuracy.gov facilitates eﬃcient analysis of government-wide improper payment
information because data is presented in a more consistent manner. In addition, OMB staﬀ stated
that posting estimated improper payment information only on the website reduced the burden on
agencies. OMB staﬀ stated that they designed the ﬁscal year 2021 reporting format in a manner
that they believe would ensure each program would fulﬁll the individual reporting requirements
required under PIIA and also provide some additional context needed for the user to understand
the payment integrity story associated with the requirements under PIIA.
While we agree that centralized reporting could facilitate analysis, ﬁnancial reports are the
principal means to convey to the President, Congress, and the American people each agency’s
commitment to sound ﬁnancial management and stewardship of public funds, including COVID-19
relief funds. By removing the requirements for agencies to report estimated improper payments,
users of these reports may not be provided additional context in relation to agencies’ ﬁnancial
information, including whether appropriated funds are spent for their intended purposes.
Further, reporting on websites where information can be easily edited raises concerns over the
permanence of the reported information relative to published ﬁnancial reports. In fact, OMB
oﬃcials stated that they make changes to improper payment data on PaymentAccuracy.gov
without notiﬁcation to users. In addition, OMB’s shift to reporting on the website resulted in less
timely information, as agency ﬁnancial reports have generally been published in November, while
PaymentAccuracy.gov did not publish ﬁscal year 2021 data until the end of December.
In March 2022, to improve the transparency of improper payment information, we suggested
that Congress enact legislation to require that improper payment information be reported in the
agencies’ annual ﬁnancial reports.
OMB does not require agency certiﬁcation of reliability for PaymentAccuracy.gov submissions. In
order to prepare the annual datasets for publication on PaymentAccuracy.gov, OMB sends a
request to agencies for submissions of agency- and program-level data, known as “data calls.”
OMB then compiles the information in the data calls to create the ﬁnal dataset and to populate
the interactive program dashboards on PaymentAccuracy.gov. However, OMB does not require
these agency data calls to have any formal review or certiﬁcation by agency management prior to
submission.526 For example, oﬃcials from two agencies told us that when submitting their data

526OMB A-123 Appendix C.

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calls for PaymentAccuracy.gov, there was no place in the submission tool to certify that the data
was reviewed.
OMB staﬀ stated that they did not see a need for data certiﬁcation because no signiﬁcant data
quality issues have been found. However, when we reviewed PaymentAccuracy.gov we found
one agency’s overpayments that had been identiﬁed and recaptured were overstated by nearly
$1.4 billion compared to the information published in the agency’s ﬁnancial report.527 OMB
requires agencies to review ﬁnancial data in their agency ﬁnancial reports. Speciﬁcally, OMB
guidance requires that agency ﬁnancial reports include an assessment by the agency head of
the completeness and reliability of the performance and ﬁnancial data used in the report.528
A similar requirement for agency heads to both assess and attest to information reported to
PaymentAccuracy.gov would help ensure complete and reliable data for users of the website.
Federal internal control standards state that management should use quality information to
achieve the entity’s objectives. OMB’s guidance does not direct agencies to provide suﬃcient
review and certiﬁcation of their data submissions’ reliability to PaymentAccuracy.gov. Further,
not requiring agency data calls to be subject to the same level of oversight as agency ﬁnancial
reports may increase risk of errors and omissions in data published to PaymentAccuracy.gov.
Without suﬃcient direction from OMB for agencies’ management to review and certify the
reliability of their data before submitting to OMB, improper payments information reported on
PaymentAccuracy.gov may be incomplete and unreliable, reducing users’ ability to identify the full
extent to which improper payments occur.

Methodology
To conduct this work, we reviewed relevant improper payment legislation and guidance, agency
ﬁnancial reports, OIG compliance reports, improper payment data requested directly from
agencies, and data submitted for OMB’s PaymentAccuracy.gov website to obtain information
on changes to improper payment reporting requirements and the pandemic’s impact on ﬁscal
year 2021 improper payment estimates. We identiﬁed new program or major funding streams for
existing programs and the agencies responsible and interviewed OMB staﬀ to obtain information
on changes to improper payment reporting requirements.

Agency Comments
We provided HHS, OMB, and Treasury with a draft of this enclosure. OMB and Treasury did not
provide comments on this enclosure. HHS provided technical comments which we incorporated,
as appropriate.

527According to OMB staﬀ, this occurred because one agency failed to convert their recovery amount into millions of

dollars prior to entering it into the OMB data call tool.
528OMB A-136.

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GAO’s Prior Recommendations
The table below presents our matter for congressional consideration and recommendation on
payment integrity from the November 2020 CARES Act report.

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Prior GAO Matters for Congressional Consideration and Recommendations Related to Payment Integrity
Matter for Congressional Consideration or Recommendation

Status

To hold agencies accountable and increase transparency, Congress should Open – not addressed
consider, in any future legislation appropriating COVID-19 relief funds,
designating all executive agency programs and activities making more than
$100 million in payments from COVID-19 relief funds as “susceptible to
signiﬁcant improper payments” for purposes of 31 U.S.C. § 3352. (November
2020)
The Director of the Oﬃce of Management and Budget should develop
and issue guidance directing agencies to include COVID-19 relief funding
with associated key risks, such as provisions contained in the CARES Act
and other relief legislation that potentially increase the risk of improper
payments or changes to existing program eligibility rules, as part of their
improper payment estimation methodologies. This should especially be
required for already existing federal programs that received COVID-19 relief
funding. (November 2020)

Closed – addressed. The Oﬃce of
Management and Budget (OMB)
neither agreed nor disagreed with
our recommendation. In March 2021,
OMB issued new guidance on improper
payments to implement the requirements
from the Payment Integrity Information
Act of 2019. In addition, in January 2022,
OMB added further clariﬁcation in its
platform's question and answer section
for agencies and their Oﬃces of lnspector
General regarding their consideration
of payment integrity risks. Speciﬁcally,
it states that agencies are encouraged
to ensure that signiﬁcant payment
integrity risks are part of the sampling
methodology so that the estimates can be
used to assist in the process of identifying
the root causes of improper payments
and developing corrective action plans to
address them. We believe that OMB has
taken suﬃcient corrective actions which
addressed the recommendation.

Source: GAO. I GAO-22-105397

Related GAO Products
Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.:
September 10, 2014.
Emergency Relief Funds: Signiﬁcant Improvement Are Needed to Ensure Transparency and Accountability
for COVID-19 and Beyond. GAO-22-105715. Washington, D.C.: March 17, 2022.
Contact information: Beryl H. Davis, (202) 512-2623, davisbh@gao.gov

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Single Audit Compliance Supplement
The Oﬃce of Management and Budget annually issues the single audit Compliance Supplement,
which provides guidance to auditors performing audits of certain entities that receive funding
from federal assistance programs. The federal agencies we selected for our review have not
developed comprehensive policies and procedures for providing information to the Oﬃce of
Management and Budget to better enable it to update program information included in the
Compliance Supplement.
Entities involved: The Department of Education; the Department of Health and Human Services;
the Department of the Treasury, and the Oﬃce of Management and Budget.

Recommendations for Executive Action
The Secretary of Education should document policies and procedures for providing information
to the Oﬃce of Management and Budget to better enable it to annually update the Compliance
Supplement that include steps for (1) establishing management’s expectations of staﬀ
competence for key roles (e.g., relevant knowledge, skills and abilities) and providing ongoing
training, and (2) agency oﬃcials proactively involving internal stakeholders (e.g., the inspector
general, general counsel, and chief ﬁnancial oﬃcer) and external stakeholders (e.g., the audit
community) when developing audit procedures, prior to submitting drafts to the Oﬃce of
Management and Budget, in order to ensure the guidance meets users’ needs.
The Secretary of Health and Human Services should document policies and procedures for
providing information to the Oﬃce of Management and Budget to better enable it to annually
update the Compliance Supplement, that include steps for (1) establishing management’s
expectations of staﬀ competence for key roles (e.g., relevant knowledge, skills and abilities) and
providing ongoing training, and (2) agency oﬃcials proactively involving internal stakeholders (e.g.,
the inspector general, general counsel, and chief ﬁnancial oﬃcer) and external stakeholders (e.g.,
the audit community) when developing audit procedures, prior to submitting drafts to the Oﬃce
of Management and Budget, in order to ensure the guidance meets users’ needs.
The Secretary of the Treasury should document policies and procedures for providing information
to the Oﬃce of Management and Budget to better enable it to annually update the Compliance
Supplement, that include steps for (1) establishing management’s expectations of staﬀ
competence for key roles (e.g., relevant knowledge, skills and abilities) and providing ongoing
training, and (2) agency oﬃcials proactively involving internal stakeholders (e.g., the inspector
general, general counsel, and chief ﬁnancial oﬃcer) and external stakeholders (e.g., the audit
community) when developing audit procedures, prior to submitting drafts to the Oﬃce of
Management and Budget, in order to ensure the guidance meets users’ needs.
The Departments of Education, Health and Human Services, and Treasury each agreed with the
recommendation.

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Background
Through provisions enacted in the COVID-19 relief laws, the federal government has provided
billions of dollars in federal funding to state and local governments, U.S. territory and tribal
governments, and nonproﬁt organizations. Many of these recipients will be required to complete
a single audit, some for the ﬁrst time. Under the Single Audit Act and implementing guidance from
the Oﬃce of Management and Budget (OMB), states, the District of Columbia, localities, Indian
tribes, U.S. territories, and nonproﬁt organizations that receive federal awards must undergo
single audits (or, in limited circumstances, program-speciﬁc audits) of these awards annually
(unless a speciﬁc exception applies) when federal award expenditures meet or exceed $750,000.529
Auditors who conduct single audits generally follow implementing guidance in OMB’s annual
Compliance Supplement and agency guidance speciﬁc to their programs to determine whether
the recipient has complied with federal statutes, regulations, and award terms that may have
a direct and material eﬀect on each of the recipient’s major programs. For programs included
in the Supplement—which includes information about a program’s objectives, procedures, and
compliance requirements— an auditor can rely on the program’s compliance requirements
contained in the Supplement. Without the Supplement, which OMB says provides a more
eﬃcient and cost-eﬀective research approach, auditors would need to research many statutes
and regulations for each program under audit to identify compliance requirements that could
have a direct and material eﬀect on that program. For those programs whose compliance
requirements are not contained in the 2021 Compliance Supplement, auditors are directed to its
Part 7 guidance.530
OMB requires federal awarding agencies to provide updates to agency program information
before publishing the Supplement each year. Annual updates to the Supplement are necessary
for many reasons, including adding additional requirements as a result of changes in statutory or
regulatory requirements, such as those in the COVID-19 relief laws. In March 2021, we reported
that auditors who conduct single audits of entities with June 30 year-ends have expressed a need
to obtain the Supplement by no later than April of each year in order to eﬀectively plan their
audits and conduct interim testing. OMB issued the 2021 Compliance Supplement and two related
addendums between August 2021 and January 2022. OMB plans to issue the 2022 Compliance
Supplement at the end of April 2022.

Overview of Key Issues
Three selected agencies, which together received over $2 trillion in COVID-19 relief funding,
generally did not document policies and procedures for their Compliance Supplement
activities. Each year, OMB requires agencies to provide OMB with proposed updates for their
529The Single Audit Act is codiﬁed at 31 U.S.C. §§ 7501-06, and implementing OMB guidance is reprinted in 2 C.F.R. part

200. The Act requires a “single audit” of the entity’s ﬁnancial statements and federal awards for the ﬁscal year. 31 U.S.C. §
7502; 2 C.F.R. § 200.501.
530See 2 C.F.R. § 200.514(d)(3). For any program not contained in the Supplement, auditors must follow the general

guidance in Part 7 of the 2021 Compliance Supplement, which provides guidance in how to identify the compliance
requirements to tests for compliance.

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respective program sections for inclusion in the Supplement. OMB provides agencies with a
Compliance Supplement Preparation Guide (Guide) to assist in preparing, providing updates for, and
reviewing program sections for inclusion in the Supplement.
While the selected agencies—the Department of Education, the Department of Health and Human
Services (HHS), and the Department of the Treasury—stated that their proposed Supplement
updates are vetted by experienced staﬀ, we found that the agencies’ documented policies and
procedures were not comprehensive and lacked speciﬁc details on staﬀ involvement for reviewing
updates prior to submission to OMB for inclusion in the Supplement. For example, Treasury did
not document procedures on how its Single Audit Management Liaison monitors or oversees
the updates provided by the various program oﬃces. According to Treasury oﬃcials, the Single
Audit Management Liaison coordinates internally with individual program oﬃces and directs these
oﬃces to follow OMB’s Guide to complete their respective proposed Supplement section updates.
While Education and HHS had documented policies on review processes in place for their lead
oﬃces or point of contact for the single audit process, neither agency had documented policies
and procedures at the program-oﬃce level, which has primary responsibility for updating the
sections submitted to OMB for inclusion in the Supplement.
HHS stated that standard operating procedures should be developed by OMB and then
implemented by agencies instead of agencies attempting to design their own standard operating
procedures. While OMB provides guidance to assist agencies in updating program sections for
inclusion in the Supplement, it is the agencies’ responsibility to develop internal policies and
procedures on their staﬀ involvement and reviews prior to submission to OMB. The policies and
procedures are needed at both the lead oﬃce and program-oﬃce level to ensure consistency
across the agency.
Federal standards for internal control state that management should implement control activities
through policies. Management documents the internal control responsibilities in policies at
an appropriate level of detail to allow management to eﬀectively implement and monitor the
control activity and communicates to personnel the policies and procedures so that personnel can
implement the control activities for their assigned responsibilities.
Staﬀ competence and training. Oﬃcials from Education and Treasury stated they assign
competent staﬀ to submit updates for inclusion in the Supplement, and the procedures from
Education noted that its general counsel and a senior program oﬃcial should be involved in the
Supplement updates. HHS stated that its senior leadership reviews drafts before submitting to
OMB. However, none of the three agencies’ documented policies and procedures speciﬁed the
level of competence expected for key roles, such as the minimum number of years’ experience.
These agencies also have not documented policies and procedures for training staﬀ on the
process for updating information for the Supplement. Education oﬃcials stated they rely on more
senior staﬀ to train newer staﬀ through practical experience. Treasury oﬃcials stated that new
staﬀ are provided with OMB’s Guide and work with experienced staﬀ who provide on-the-job
training. HHS developed a foundational set of on-demand single audit training courses and is
developing a new course in 2022. However, none of the agencies had documented policies that:
(1) requires staﬀ involved in updating information for the Supplement to either be provided on-

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the-job training—such as by more senior staﬀ—or complete agency developed courses or external
courses, or both and (2) establishes the frequency with which staﬀ should either be trained or
complete courses, or both.
HHS indicated that additional guidance materials and training from OMB could further enhance its
own training courses. Speciﬁcally, HHS suggested that OMB provide guidance and training courses
on topics such as understanding the basics of the Supplement and developing objectives for single
audits. In March 2022, we met with OMB and representatives from the audit community (the
National Association of State Auditors, Comptrollers, and Treasurers (NASACT) and the American
Institute of Certiﬁed Public Accountants (AICPA)). During the meeting, an oﬃcial from the AICPA
stated that a comprehensive training session would be beneﬁcial, especially for agency program
staﬀ that are responsible for working on the Supplement for the ﬁrst time. According to an OMB
oﬃcial, training has been available through an OMB contractor at the request of agencies.
While additional OMB guidance or trainings about the overall process for updating the annual
Supplement would be beneﬁcial, training their staﬀ is the agencies’ responsibility. Speciﬁcally,
agencies can help assure that their staﬀ are properly trained and knowledgeable of the programs
that need to be updated in the Supplement. Training can include information that would be
helpful for staﬀ when tasked with creating submissions for new Supplement sections for programs
created as a result of recent legislation.
Federal standards for internal control state that management establishes expectations of
competence for key roles to help the entity achieve its objectives and evaluate the competence
of personnel across the entity in relation to established policies. Competence includes having
the relevant knowledge, skills, and abilities that staﬀ gain largely from professional experience,
training, and certiﬁcations. Federal standards for internal control also state that personnel need
to possess and maintain a level of competence that allows them to accomplish their assigned
responsibilities as well as understand the importance of eﬀective internal control. Detailed policies
and procedures about performing internal reviews and designating personnel can help ensure
that staﬀ with the requisite expertise and knowledge are involved in the process for updating
information for the Supplement.
Internal and external audit stakeholders’ involvement. We found that HHS and Treasury
did not document policies and procedures detailing the level of involvement and timing of the
internal stakeholders’ review process—including the Oﬃces of Inspectors General (OIG)—before
submitting drafts to OMB for inclusion in the Supplement. Although Education’s standard
operating procedures state that an OIG team member reviews updates and revisions, the
procedures do not specify the level of OIG involvement at the program-oﬃce level. An Education
OIG oﬃcial stated the department did not have a consistent approach, and each program oﬃce
determined the timing and extent of OIG involvement during the internal stakeholders’ review
process.
HHS oﬃcials stated that in addition to a review by the HHS point of contact for the single audit
process, its OIG also reviews drafts of all its Supplement sections to ensure compliance with
auditing standards, statutes, regulations, and award terms and conditions, and to ensure audit
objectives and suggested audit procedures are within the scope of the provisions of the Single

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Audit Act. However, HHS did not document that the OIG review is required in its policies and
procedures.
HHS OIG oﬃcials also stated that OIG does not have written policies or procedures outlining its
own responsibilities for the Supplement review process and that it provides technical assistance
when requested by HHS program oﬃces. HHS OIG oﬃcials stated that they review all audit
community comments on HHS draft Supplement sections, identify fatal ﬂaws, and advise the
agency when it is not in its best interest to accept changes suggested by the audit community.
However, HHS OIG oﬃcials stated that it is ultimately up to the HHS program oﬃcials to decide on
the information to submit to OMB for inclusion in the Supplement.
Treasury oﬃcials stated Treasury engages with its OIG to understand emerging and ongoing risks
and areas to prioritize for oversight across programs, but its OIG generally does not participate in
the Supplement process and that OIG’s involvement depends on its statutory role in a particular
program. Treasury OIG oﬃcials also stated that there are no policies and procedures requiring
Treasury to request OIG input and for OIG to provide input. Other than the Coronavirus Relief
Fund and the Emergency Rental Assistance programs, Treasury has not requested its OIG to
review the Supplement update submissions for the other federal ﬁnancial assistance programs it
administers. Treasury requested its OIG’s input for the Coronavirus Relief Fund and the Emergency
Rental Assistance programs due to its OIG’s responsibilities set forth by the COVID-19 relief laws.
Although there is no statutory requirement for OIGs to review their agencies’ proposed updates
for inclusion in the Supplement, OMB recently issued a memorandum stressing the importance of
agency and OIG collaboration, including proactive, front-end exchange of information to ensure
expertise is applied.531 Furthermore, OMB’s Controller Alert for the 2022 Compliance Supplement
publication schedule encourages agencies to coordinate with their OIGs and the AICPA, as well
as key recipient stakeholders and program oﬃcials, to obtain both program management and
auditor feedback on the clarity of their proposed Supplement updates prior to submitting drafts to
OMB.
Similarly, representatives from NASACT and the AICPA told us that more coordination with agency
OIGs may improve audit guidance in the Supplement, since OIGs are more familiar with the
auditing profession and more aware of information that should be audited.
Education, HHS, and Treasury also did not document policies and procedures detailing the
involvement of external audit stakeholders (the audit community) in developing audit procedures,
prior to submitting proposed Supplement updates to OMB. While these agencies stated they
attend meetings with the audit community where single audit concerns are discussed, the
agencies rely on OMB to coordinate with audit community members after submitting their agency
updates to OMB. Speciﬁcally, OMB obtains feedback from the audit community during the ﬁnal
vetting of the draft Supplement and shares this feedback with the agencies. Treasury oﬃcials
stated that they regularly engage with OMB to obtain additional feedback from external auditors
and has worked to incorporate feedback in developing submission updates for new Supplement

531Oﬃce of Management and Budget, Promoting Accountability through Cooperation among Agencies and Inspectors

General, OMB Memorandum M-22-04 (Washington, D.C.: Dec. 3, 2021).

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guidance. In addition, Education’s standard operating procedures state that consultations with
OMB and the audit community are held as necessary.
As noted in our March 2021 CARES Act report, members of the audit community stated there
is a need for more collaboration between the agencies and the audit community during the
Supplement update process to identify the areas of highest risk and to ensure that suggested
audit procedures are capable of consistent measurement against objective criteria. Further,
the audit community continues to voice concerns that agencies and OMB did not address the
comments they provided during the ﬁnal vetting process. For example, the audit community
stated there continue to be major concerns with the auditing requirements for Education’s
Student Financial Assistance program in the Supplement despite comments from the audit
community during the vetting process. An oﬃcial from the AICPA also stated that there are
situations where the same comments are made on various programs year after year with no
action or response by the agencies or OMB.
Establishing procedures for agencies to work with the audit community, including proactive and
front-end collaboration, could help expedite OMB’s ﬁnal issuance of the Supplement and ensure
agencies and OMB have adequate time to fully resolve concerns prior to issuance. In addition, it
could help strengthen the quality of single audit guidance. For example, the audit community has
suggested that agencies should collaborate with auditors to better ensure they include applicable
and objective criteria when developing the Supplement’s audit requirements. The front-end
collaboration between agency staﬀ and auditors is especially important given that agency staﬀ
developing the Supplement are program experts, but may not have an auditing background.
Federal standards for internal control state that management considers the entity’s overall
responsibilities to external stakeholders and establishes reporting lines that allow the entity to
both communicate and receive information from external stakeholders. Without involving the
audit community, agencies risk providing guidance for OMB’s inclusion in the Supplement that
does not meet the needs of auditors conducting single audits.

Methodology
To conduct this work, we reviewed federal laws and guidance related to OMB’s Compliance
Supplement. We selected for our audit three agencies that together received over $2 trillion
of the total of $4 trillion in COVID-19 relief funding: Education ($1.7 trillion), HHS ($484 billion),
and Treasury ($282 billion). Additionally, we selected Treasury because it is relatively new to
developing submissions for inclusion in the Supplement; prior to the pandemic it was not a large
grant-making agency with experience over awards. We provided questions to and interviewed
oﬃcials from Education, HHS, and Treasury regarding their respective processes for developing
the Supplement, including the agencies’ interactions with OMB and the audit community. We
interviewed representatives from Education, HHS, and Treasury OIGs and oﬃcials from NASACT
and the AICPA to obtain information on their experiences in working with agencies to resolve
issues with single audit guidance in the Supplement. Findings from these three agencies are
not generalizable to agencies that were not included in this review. We reviewed federal internal
control standards to determine relevant guidance for documenting policies and procedures,
commitment to competence, and organizational structures.

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Agency Comments
We provided Education, HHS, Treasury, and OMB with a draft of this enclosure. Education provided
written comments, which are reproduced in appendix VI. In its comments, Education agreed with
our recommendation and stated that it has already established, and will continue to enhance, its
policies and procedures for transmitting the draft Supplement to OMB. Education also stated that
it will review and enhance, where necessary, its current methodology for training and establishing
management expectations of staﬀ competencies and its current engagement with internal and
external stakeholders to ensure collaboration during the Supplement review process.
HHS provided written comments, which are reproduced in appendix VII. In its comments, HHS
agreed with the recommendation and stated it will solidify policies and procedures for updating
the Supplement. HHS also stated that its policies and procedures for updating the Supplement
will include recommendations on staﬀ competence for key roles and training and a description
of internal stakeholders and how to best engage with them. However, as we noted in our
recommendation, we continue to believe it is important for HHS to also include procedures for
collaborating with external stakeholders.
Treasury provided written comments, which are reproduced in appendix X. In its comments,
Treasury agreed with the recommendation and stated it will prepare documentation that includes
steps for (1) establishing management’s expectations of staﬀ competencies for key roles and
providing ongoing training; and (2) involving internal and external audit stakeholders when
developing audit procedures, as appropriate, prior to submitting draft Supplements to OMB.
Treasury also provided technical comments, which we incorporated as appropriate.
OMB did not provide comments on this enclosure.

GAO’s Ongoing Work
Our work on single audits is ongoing. We will monitor the status of our open recommendations
and continue our oversight of single audit eﬀorts and OMB’s guidance for single audits.

GAO’s Prior Recommendations Related to Single Audits and
Coronavirus State and Local Fiscal Recovery Funds
The table below presents our recommendations on the Oﬃce of Management and Budget’s (OMB)
single audit Compliance Supplement from prior bimonthly and quarterly CARES Act reports.

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Prior GAO Recommendations Related to Single Audits and Coronavirus State and Local Fiscal Recovery Funds
Recommendation

Status

The Director of OMB, in consultation with the Secretary of the
Treasury, should issue timely and suﬃcient single audit guidance
for auditing recipients' uses of payments from the Coronavirus
State and Local Fiscal Recovery Funds. (July 2021 report).

Open—partially addressed. OMB neither agreed
nor disagreed with our recommendation. In
December 2021, OMB issued single audit guidance
for the Coronavirus State and Local Fiscal Recovery
Funds in Addendum 1 of the 2021 Compliance
Supplement. We will review Addendum 1 and obtain
feedback from members of the audit community
(e.g., agency Oﬃces of Inspector General; National
Association of State Auditors, Comptrollers, and
Treasurers; and American Institute of Certiﬁed
Public Accountants) to determine if the guidance is
suﬃcient.

The Director of OMB should work in consultation with federal
Open—partially addressed. OMB neither agreed
agencies and the audit community (e.g., agency Oﬃces of
nor disagreed with our recommendation. In its
Inspector General; National Association of State Auditors,
response to the March 2021 report, OMB stated that
Comptrollers, and Treasurers; and American Institute of Certiﬁed it was actively working, to the extent practicable,
to update processes to better ensure that single
Public Accountants), to the extent practicable, to incorporate
audit guidance is issued in a timely manner, and
appropriate measures in OMB’s process for preparing single
audit guidance, including the annual Single Audit Compliance
is responsive to users' input and needs. OMB
also stated that it continued to work with federal
Supplement, to better ensure that such guidance is issued in a
timely manner and is responsive to users’ input and needs (March agencies and the audit communities to develop and
2021 report).
publish single audit guidance for major programs in
the Compliance Supplement.
As we previously reported, auditors who conduct
single audits for entities with June 30 year-ends
have expressed a need to obtain the Compliance
Supplement by no later than April of each year in
order to eﬀectively plan their audits and conduct
interim testing. OMB did not issue the 2021
Compliance Supplement until August 2021, and it
lacked guidance for several American Rescue Plan
Act of 2021 (ARPA) programs.
OMB issued single audit guidance for two ARPA
programs in Addendum 1 of the 2021 Compliance
Supplement in December 2021 and published
Addendum 2 in January 2022. OMB also issued a
Controller Alert in December 2021 that included
a timeline for preparing the 2022 Compliance
Supplement (in collaboration with federal agencies
and the audit community), and estimated it will
publish the Supplement by April 30, 2022. We
continue to meet periodically with OMB and the
audit community to discuss the audit community’s
concerns and additional single audit guidance
needed. We will continue to monitor the actions
OMB takes in response to our recommendation.
Source: GAO. I GAO-22-105397

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Related GAO Products
Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.:
September 2014.
Contact Information: Beryl Davis, (202) 512-2623, davisbh@gao.gov

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Economic Eects of the Paycheck Protection Program
Our review of economic studies provides consistent evidence that the Paycheck Protection
Program strengthened labor markets and improved small businesses’ ﬁnancial condition;
however, challenges in receiving assistance at some businesses may have limited the economic
impact of the program.

Background
The CARES Act, signed into law by the President on March 27, 2020, established the Paycheck
Protection Program (PPP) under section 7(a) of the Small Business Act to provide loans to small
businesses and other organizations—referred to collectively here as “small businesses”—that are
fully forgivable if certain conditions are met. Under the law, qualifying businesses could obtain
loans equal to 2.5 months of average total monthly payments for payroll costs up to $10 million
and were required to self-certify their need for the loan. Qualifying businesses generally include
businesses with 500 or fewer employees or that meet Small Business Administration’s (SBA)
industry-based size standard. When loan approvals ended in June 2021, Congress authorized
for commitment about $814 billion to PPP in three phases (see table). For more details on PPP
implementation, see the Paycheck Protection Program enclosure in appendix I.

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Paycheck Protection Program (PPP) Phases
Phase

Legislation

Date enacted

Commitment
authority provided

CARES Act

March 27, 2020

$349 billion

April 3, 2020–April 16,
2020

Paycheck Protection
April 24, 2020
Program and Health
Care Enhancement Act

$310 billion

April 27, 2020–August
8, 2020

Consolidated
Appropriations Act,
2021

$147.45 billion

January 11, 2021–May

December 27, 2020

American Rescue Plan March 11, 2021
Act of 2021

Application period

31, 2021
$7.25 billion

Source: GAO analysis of relevant laws. | GAO-22-105397

The PPP Extension Act of 2021 extended the application period for Phase 3 from March 31, 2021, to May 31, 2021, and allowed
the Small Business Administration until June 30, 2021, to process those applications. On May 4, 2021, the PPP general fund was
exhausted and closed to new applications, except those processed by a community ﬁnancial institution lender.

Overview of Key Issues
To better understand the economic eﬀects of PPP—one of the largest federal pandemic response
programs—we conducted a review of relevant empirical research. We reviewed studies that
examined the short-run eﬀects of PPP on economic activity, including labor markets and small
businesses’ ﬁnancial conditions.532 These studies collectively provide consistent evidence that PPP
increased small businesses’ employment, especially for businesses with fewer employees, and
improved their ﬁnancial condition. Similarly, these studies also suggest that PPP strengthened
local labor markets. However, some evidence suggests that some portion of PPP assistance
did not initially go to the areas hit hardest by the pandemic and that smaller businesses faced
challenges in obtaining PPP assistance, which may have limited the economic impact of the
program.
Small business employment. Researchers consistently found that PPP increased small
businesses’ employment, especially for businesses with fewer employees. For example, one
study found that recipients’ employment increased by 8 percent within the ﬁrst month of being
approved for a PPP loan.533 The eﬀect decreased over time but remained statistically signiﬁcant
532We conducted an in-depth review of 22 studies that met our criteria for relevance and methodological rigor. We

identiﬁed a number of data and methodological limitations in the studies we reviewed. For example, some studies
used data from only the initial PPP rounds or data on PPP loans that could be combined with data from other sources
and did not include information on all PPP loans. Moreover, studies used methods that may not have fully identiﬁed
causal relationships or fully accounted for possible spillover eﬀects of PPP. In addition, most of the studies had not yet
been peer reviewed at the time of writing and are subject to revision. Nevertheless, collectively, the studies we reviewed
provide useful information on economic eﬀects of PPP during the beginning of the pandemic.
533M. Dalton, “Putting the Paycheck Protection Program into Perspective: An Analysis Using Administrative and Survey

Data,” U.S. Bureau of Labor Statistics Working Paper 542 (2021).

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and positive 7 months after PPP loan approval. Two other studies found a positive, but smaller,
eﬀect of PPP on employment when the authors instead used the number of employees before the
pandemic as an indicator of whether a business was eligible for PPP.534 For example, one study
found that employment at ﬁrms assumed to be eligible increased by 2 percent to 4.5 percent
more than employment at presumed ineligible ﬁrms over the period from the end of March 2020
through the end of May 2020.535
Several studies we reviewed suggest that PPP had a greater eﬀect on employment at smaller
businesses than at larger businesses. For example, one study found the largest eﬀects of PPP in
small establishments and establishments that predominantly employed low-wage workers.536
Another study found that PPP was most eﬀective for relatively smaller ﬁrms.537
Small business ﬁnancial conditions. Researchers found that PPP generally improved small
businesses’ ﬁnancial conditions but may have also encouraged small businesses to stay closed
longer in the beginning of the pandemic. For example, one study found that an increase in the
number of PPP loans per small business in a county was associated with fewer bankruptcy ﬁlings
in the county.538 A diﬀerent study focused on the timing of PPP funding and found that businesses
that received PPP loans earlier (at the end of the ﬁrst round) were less likely to face ﬁnancial
distress, more likely to make timely payments to creditors, and less likely to close permanently
than businesses that received PPP loans later (at the beginning of the second round).539 A third
study found that both small business revenue and the number of open small businesses were

534Qualifying businesses for PPP generally include businesses with 500 or fewer employees or that meet SBA’s industry-

based size standard. To the extent that smaller businesses are more vulnerable to shocks (e.g., due to smaller cash
reserves and poorer access to credit), these ﬁndings suggest that PPP helped small businesses achieve similar, or even
better, employment outcomes compared to larger ﬁrms during the pandemic.
535D. Autor, D. Cho, L. D. Crane, M. Goldar, B. Lutz, J. Montes, W. B. Peterman, D. Ratner, D. Villar, and A. Yildirmaz,

"An Evaluation of the Paycheck Protection Program Using Administrative Payroll Microdata," Working Paper (2020).
Similarly, another study found that employment growth at eligible businesses was about two percentage points higher
than employment growth at larger ﬁrms over the period from early April 2020 to mid-August 2020. R. Chetty, J. N.
Friedman, N. Hendren, M. Stepner, and The Opportunity Insights Team, “How Did COVID-19 and Stabilization Policies
Aﬀect Spending and Employment? A New Real-Time Economic Tracker Based on Private Sector Data,” National Bureau of
Economic Research (NBER) Working Paper No. 27431 (2020).
536Dalton, “Putting the Paycheck Protection Program into Perspective: An Analysis Using Administrative and Survey

Data.” This study, which as discussed above found that recipients’ employment increased by 8 percent on average within
the ﬁrst month of being approved for a PPP loan, also examined PPP’s eﬀects on employment by recipient’s size and
wage class. The study measured size based on average monthly employment in 2019 and measured wage class based
on the establishment-wide average wage paid in 2019.
537R. G. Hubbard and M. R. Strain, “Has the Paycheck Protection Program Succeeded?” NBER Working Paper No. 28032

(2020). The authors measured ﬁrm size based on employment in February 2020.

538C. James, J. Lu, and Y. Sun, "Time is Money: Real Eﬀects of Relationship Lending in a Crisis," Journal of Banking &

Finance vol. 133 (2021): 106283.

539M. Denes, S. Lagaras, and M. Tsoutsoura, "First Come, First Served: The Timing of Government Support and Its Impact

on Firms," SSRN Working paper (2021). There was a 10-day delay between April 16 and 27 in the approval of PPP loans
caused by insuﬃcient initial funding. Therefore, the ﬁrst round of PPP loans ended on April 16, and the second round
started on April 27.

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lower in counties with more PPP lending per dollar of assets in May and June 2020.540 This
suggests that while PPP kept employees on the payrolls, reducing unemployment, the program
may have also encouraged small businesses to remain closed longer and therefore reduced their
revenue.541
Local labor markets and program accessibility. Researchers found that greater PPP loan
concentration likely strengthened local labor markets. For example, two studies we reviewed
found that PPP loan concentration at the county level reduced unemployment rates.542 Similarly,
another study found that an increase in eligible payroll covered by PPP in counties led to a smaller
jump in weekly initial and continuing unemployment insurance claims.543
While PPP likely improved local labor market conditions, funds may not have initially ﬂowed to
geographic areas hardest hit by the pandemic. For example, one study found that before the initial
round of funding was exhausted, areas that had more business shutdowns in the week of March
22nd–March 28th received smaller PPP allocations.544 Moreover, the study did not ﬁnd a strong
relationship between indicators of economic damages in the early part of the pandemic and the
fraction of businesses in an area that received a PPP loan. Similarly, another study found that
early PPP loans ﬂowed to larger ﬁrms and to ﬁrms and counties less aﬀected by the pandemic.
The same study estimated that the second round of the program was much more eﬀective than
the ﬁrst in increasing overall employment, as ﬁrms in the more aﬀected counties at the baseline
received more PPP loans in the second round.545

540P. Kapinos, “Did the Paycheck Protection Program Have Negative Side Eﬀects on Small-Business Activity?" Economics

Letters, vol. 208 (2021): 110045. Importantly, the decision for small businesses to remain closed longer may have helped
mitigate public health risks associated with COVID-19 at the time.
541Other studies found that PPP loan concentration at county level reduced unemployment rates. For example, see P.

Kapinos, "Paycheck Protection Program: County-Level Determinants and Eﬀect on Unemployment," Federal Reserve
Bank of Dallas Working Paper 2105 (2021).
542Kapinos, "Paycheck Protection Program: County-Level Determinants and Eﬀect on Unemployment." The author

measured PPP concentration using county level ratios of PPP loans per jobs lost. The study also suggested that PPP
reduced unemployment the most in counties with smaller populations and with relatively educated labor forces. S.
Barraza, M. Rossi, and T. J. Yeager, "The Short-Term Eﬀect of the Paycheck Protection Program on Unemployment," SSRN
Working Paper (2020). In some speciﬁcations, the study used the 2019 density of Small Business Administration member
bank oﬃces in a county as an instrument for PPP loans originated in that county during April 2020.
543M. Faulkender, R. Jackman, and S. I. Miran, "The Job Preservation Eﬀects of Paycheck Protection Program Loans,"

Oﬃce of Economic Policy Working Paper 2020-01, Department of the Treasury (2020).

544J. Granja, C. Makridis, C. Yannelis, and E. Zwick, “Did the Paycheck Protection Program Hit the Target?” NBER Working

Paper No. 27095 (2021). There was a lack of clarity on determining a business’s need for a PPP loan (see the Paycheck
Protection Program enclosure in appendix I). Although PPP assistance may not have gone to the hardest hit areas, it
may have gone to the hardest hit sectors. We previously reported that businesses in the hardest hit sectors received a
higher share of loans than the share of small businesses in those sectors. See GAO, Paycheck Protection Program: Program
Changes Increased Lending to the Smallest Businesses and in Underserved Locations, GAO-21-601 (Washington, D.C.: Sept. 21,
2021).
545G. Joaquim and F. Netto, "Bank Incentives and the Eﬀect of the Paycheck Protection Program," Federal Reserve Bank

of Boston Working Paper No. 21-15 (2021).

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Studies we reviewed suggest that factors such as banks’ roles in allocating PPP loans and smaller
businesses’ awareness of the program inﬂuenced where PPP funds ﬂowed.546 One study we
reviewed noted that banks prioritized making PPP loans to businesses they already had a
relationship with for two reasons: (1) the application process for existing customers was less
costly for banks than the application process for new customers, and (2) banks had an economic
interest in the long-term survival of their existing borrowers.547 Another study found that ﬁrms
that were larger, paid higher average wages, or had a pre-existing relationship with a bank that did
more PPP lending were more like to apply for a PPP loan.548 A third study found that the smallest
businesses were less aware of PPP and less likely to apply for a PPP loan. When they did apply,
the smallest businesses applied later, faced longer processing times, and were less likely to have
their application approved, controlling for other factors.549 Because PPP likely had a greater eﬀect
on employment at smaller businesses, challenges in receiving assistance at these businesses may
have limited the initial economic impact of the program.550
Total jobs saved and cost per job saved. Researchers estimated the total number of jobs
saved by PPP and the cost per job saved, but also identiﬁed additional factors that would be
needed to provide a more comprehensive cost-beneﬁt assessment of PPP. Studies we reviewed
estimated that PPP likely saved millions of jobs overall.551 However, these estimates are based on
certain assumptions that may not be valid; for example, that relationships between PPP lending
and employment in a limited context could be applied nationwide and over a longer period. In
addition, these estimates varied depending on many factors, including the characteristics of
the data used in the study (e.g., period covered, granularity of information, sample size, and
the population the sample represented), the type of businesses studied (e.g., PPP recipients,
546We previous reported that banks collectively made more than 93 percent of all loans in Phase 1 (April 3-April16

2020). See GAO-21-601. In addition, nonbanks, which generally provide lending services but do not accept deposits,
were largely unable to participate in the initial phase of the program (see the Paycheck Protection Program enclosure in
appendix I).
547L. Li and P.E. Strahan, "Who Supplies PPP Loans (and Does It Matter)? Banks, Relationships and the COVID Crisis,"
Journal of Financial and Quantitative Analysis, vol. 56, no. 7 (2021): 2411-2438. In addition, we previously reported
that minority-owned businesses were less likely to have a relationship with a bank. On the other hand, Community
Development Financial Institutions and Minority Depository Institutions were more likely than other types of lenders to
report that they accepted applications from borrowers with whom they had no prior relationship. See GAO-21-601.
548A. Cole, "The Impact of the Paycheck Protection Program on Small Businesses: Evidence from Administrative Payroll

Data," SSRN Working Paper (2020).

549J. E. Humphries, C. A. Neilson, and G. Ulyssea, "Information Frictions and Access to the Paycheck Protection Program,"

Journal of Public Economics, vol. 190 (2020): 104244. In addition, we previously reported that larger businesses—small
businesses with 10 to 499 employees—received a higher share of loans in Phase 1 (April 3-April 16, 2020) relative to
their share of all small businesses. Speciﬁcally, 42 percent of loans in Phase 1 went to these larger businesses, despite
accounting for only 4 percent of all small businesses in the U.S. See GAO-21-601.
550For examples of studies suggesting that PPP likely had a greater eﬀect on employment at smaller businesses, see

Dalton, “Putting the Paycheck Protection Program into Perspective: An Analysis Using Administrative and Survey Data”
and Hubbard and Strain, “Has the Paycheck Protection Program Succeeded?”

551Jobs saved were generally deﬁned as the number of jobs preserved because of PPP. Researchers generally calculated

the numbers of jobs saved based on their estimates of the eﬀect of PPP on employment and of numbers of employees
working at ﬁrms eligible for PPP loans. For example, one study estimated that PPP saved 1.3 million jobs from April
through August 15, 2020, while another study estimated that PPP had saved 7.5 million jobs as of the beginning
of August 2020. Chetty, Friedman, Hendren, Stepner, and The Opportunity Insights Team, “How Did COVID-19 and
Stabilization Policies Aﬀect Spending and Employment? A New Real-Time Economic Tracker Based on Private Sector
Data.” Joaquim and Netto, "Bank Incentives and the Eﬀect of the Paycheck Protection Program."

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PPP applicants, or PPP-eligible businesses), and how the number of employees working at PPPparticipating ﬁrms was estimated.
Studies we reviewed also reported a wide range of estimates of the cost per job saved by PPP.552
However, these estimates are based on the same assumptions as the estimates of total jobs
saved—assumptions that, as we noted above, may not hold in practice. These estimates also
varied depending on many factors, including assumptions about the duration of each job saved
and all the factors that aﬀected the estimates of total jobs saved.
While most cost-per-job saved estimates appear high relative to replacement salaries, researchers
emphasized that a more complete assessment of the costs and beneﬁts of PPP would include
other factors. For example, by keeping workers on the payroll, PPP may have reduced use of social
insurance programs, like unemployment insurance, and safety net programs, like the federal
Supplemental Nutrition Assistance Program.553 Moreover, PPP likely improved small business
ﬁnancial conditions, so metrics based solely on jobs saved are likely to paint a misleading picture
of the program’s overall eﬀect.554
In addition, a majority of the studies we reviewed estimated the total number of jobs and the cost
per job saved by PPP based on their estimated short-term impacts of PPP on employment, but
the ultimate impact of PPP will take longer to discern. For example, one study noted that it is too
soon to assess the extent to which PPP preserved valuable ﬁrm-speciﬁc human capital, employeremployee matches, and networks.555 Another study noted the long-run economic eﬀect of PPP
will depend in part on the evolution of employment at businesses that received PPP loans versus
those that did not.556 The study also noted that PPP may have preserved valuable intangible
capital, which would have economic beneﬁts in the long run that are not detectable this early in
the recovery process. Finally, the study noted that a thorough evaluation of the eﬀectiveness of
PPP would need to consider the amount of time that PPP’s eﬀects on employment and businesses
last, as well as likely outcomes for workers and businesses in PPP’s absence and the extent to
which new jobs and businesses would have replaced those lost without it.

552For example, one study we reviewed estimated an average cost of between $20,000 and $34,000 for each month that

PPP kept an employee on the payroll, and another study estimated the average cost at between $26,000 and $62,000.
Dalton, “Putting the Paycheck Protection Program into Perspective: An Analysis Using Administrative and Survey Data.”
Cole, "The Impact of the Paycheck Protection Program on Small Businesses: Evidence from Administrative Payroll Data."
553Hubbard and Strain, “Has the Paycheck Protection Program Succeeded?”

554As originally implemented by SBA, at least 75 percent of the loan forgiveness amount must have been for payroll

costs, while the rest of loan forgiveness could also cover mortgage interest, rent, and utility payments, for example. In
addition, the Paycheck Protection Program Flexibility Act of 2020 modiﬁed this to at least 60 percent. The Consolidated
Appropriations Act, 2021 expanded the categories of forgivable non-payroll costs to include certain operations, property
damage, supplier, and worker protection expenditures.
555Hubbard and Strain, “Has the Paycheck Protection Program Succeeded?”

556Autor, Cho, Crane, Goldar, Lutz, Montes, Peterman, Ratner, Villar, and Yildirmaz, "An Evaluation of the Paycheck

Protection Program Using Administrative Payroll Microdata."

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Methodology
For our review of empirical research on the economic eﬀects of PPP, we searched for peer
reviewed journal articles and working papers in various databases including EconLit, Scopus,
ProQuest Research Library, Social Science Research Network, Google Scholar, and IDEAS/RePEc.
Our search was limited to publications with the program name in titles, abstracts, or subject
keywords and that were published in 2020 and 2021. We conducted our literature search between
December 2021 and early January 2022. After an initial screening for relevance, two economists
independently reviewed the abstracts of 119 studies related to the eﬀects of PPP. We identiﬁed 37
studies that used an empirical approach to estimate the impact or eﬀectiveness of PPP for further
review. Two economists then independently conducted in-depth reviews and identiﬁed papers
that were retrospective in nature, based on suﬃciently reliable data, and that used rigorous
statistical methods. Ultimately, we included 22 studies in our literature review and recorded the
studies’ data, methodology, assumptions, key ﬁndings, and limitations—we used this information
to summarize relevant research ﬁndings.

Agency Comments
We provided the Department of the Treasury (Treasury), SBA, and the Oﬃce of Management and
Budget (OMB) with a draft of this enclosure. Treasury provided technical comments, which we
incorporated as appropriate. SBA and OMB did not provide comments on this enclosure.

Studies included in our literature review
Autor, D., D. Cho, L. D. Crane, M. Goldar, B. Lutz, J. Montes, W. B. Peterman, D. Ratner, D. Villar,
and A. Yildirmaz. "An Evaluation of the Paycheck Protection Program Using Administrative Payroll
Microdata." Working Paper (2020).
Barraza, S., M. A. Rossi, and T. J. Yeager. "The Short-Term Eﬀect of the Paycheck Protection
Program on Unemployment." SSRN Working Paper (2020).
Bartlett III, R. P., and A. Morse. "Small-Business Survival Capabilities and Fiscal Programs: Evidence
from Oakland." Journal of Financial and Quantitative Analysis, vol. 56, no. 7 (2021): 2500-2544.
Berger, A. N., P. G. Freed, J. A. Scott, and S. Zhang. "The Paycheck Protection Program (PPP) from
the Small Business Perspective: Did the PPP Help Alleviate Financial and Economic Constraints?"
SSRN Working Paper (2021).
Chetty, R., J. N. Friedman, N. Hendren, M. Stepner, and The Opportunity Insights Team. “How Did
COVID-19 and Stabilization Policies Aﬀect Spending and Employment? A New Real-Time Economic
Tracker Based on Private Sector Data.” NBER Working Paper No. 27431 (2020).
Cole, A. "The Impact of the Paycheck Protection Program on Small Businesses: Evidence from
Administrative Payroll Data." SSRN Working Paper (2020).

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Dalton, M. “Putting the Paycheck Protection Program into Perspective: An Analysis Using
Administrative and Survey Data.” U.S. Bureau of Labor Statistics Working Paper 542 (2021).
Denes, M., S. Lagaras, and M. Tsoutsoura. "First Come, First Served: The Timing of Government
Support and Its Impact on Firms." SSRN Working paper (2021).
Doniger, C., and B. Kay. "Ten Days Late and Billions of Dollars Short: The Employment Eﬀects of
Delays in Paycheck Protection Program Financing.” SSRN Working Paper (2021).
Faulkender, M., R. Jackman, and S. I. Miran. "The Job-Preservation Eﬀects of Paycheck Protection
Program Loans." Oﬃce of Economic Policy Working Paper 2020-01, Department of the Treasury
(2020).
Gertler, M., C. Huckfeldt, and A. Trigari. "Temporary and Permanent Layoﬀs over the Business
Cycle: Evidence, Theory, and an Application to the Covid-19 Crisis." Working Paper (2021).
Granja, J., C. Makridis, C. Yannelis, and E. Zwick. “Did the Paycheck Protection Program Hit the
Target?” NBER Working Paper No. 27095 (2021).
Hubbard, R. G., and M. R. Strain. “Has the Paycheck Protection Program Succeeded?” NBER
Working Paper No. 28032 (2020).
Humphries, J. E., C. A. Neilson, and G. Ulyssea. "Information Frictions and Access to the Paycheck
Protection Program." Journal of Public Economics, vol. 190 (2020): 104244.
James, C., J. Lu, and Y. Sun. "Time is Money: Real Eﬀects of Relationship Lending in a Crisis." Journal
of Banking & Finance, vol. 133 (2021): 106283.
Joaquim, G., and F. Netto. "Bank Incentives and the Eﬀect of the Paycheck Protection Program."
Federal Reserve Bank of Boston Working Paper No. 21-15 (2021).
Kapinos, P. "Did the Paycheck Protection Program Have Negative Side Eﬀects on Small-Business
Activity?" Economics Letters, vol. 208 (2021): 110045.
Kapinos, P. "Paycheck Protection Program: County-Level Determinants and Eﬀect on
Unemployment." Federal Reserve Bank of Dallas Working Paper 2105 (2021).
Kim, P. H., and D. Stillerman. "Incentive Structures and Borrower Composition in the Paycheck
Protection Program." Working Paper (2021).
Kurmann, A., E. Lalé, and L. Ta. "The Impact of COVID-19 on Small Business Dynamics and
Employment: Real-Time Estimates with Homebase Data." Drexel Economics Working Paper Series
WP 2021-15 (2021).
Li, L., and P. E. Strahan. "Who Supplies PPP Loans (and Does It Matter)? Banks, Relationships and
the COVID Crisis." Journal of Financial and Quantitative Analysis, vol. 56, no. 7 (2021): 2411-2438.

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Wheat, C. and C. Mac. "Did the Paycheck Protection Program Support Small Business Activity?"
JPMorgan Chase Institute Research Brief (2021).
Contact information: Michael Hoﬀman, (202) 512-6445, hoﬀmanme@gao.gov

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Appendix II: Highlights Pages from Recently Issued GAO
COVID-19 Products
Federal Prisons Response to COVID-19
We issued Federal Prisons: Monitoring Eﬀorts to Implement COVID-19 Recommendations and
Examining First Step Act Implementation, GAO-22-105691, on January 21, 2022.

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Freedom of Information Act
We issued Freedom of Information Act: Selected Agencies Adapted to the COVID-19 Pandemic but Face
Ongoing Challenges and Backlogs, GAO-22-105040, on January 26, 2022.

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Defense Health Care
We issued Defense Health Care: DOD Expanded Telehealth for Mental Health Care during the COVID-19
Pandemic, GAO-22-105149, on February 3, 2022.

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COVID-19 Vaccination Eorts for Racial and Ethnic Groups
We issued COVID-19: Federal Eﬀorts to Provide Vaccines to Racial and Ethnic Groups, GAO-22-105079,
on February 7, 2022.

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Federal Telework
We issued COVID-19: Federal Telework Increased during the Pandemic, but More Reliable Data Are
Needed to Support Oversight, GAO-22-104282, on February 8, 2022.

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Emergency Rental Assistance
We issued Emergency Rental Assistance: Additional Grantee Monitoring Needed to Manage Known Risks,
GAO-22-105490, on February 10, 2022.

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Defense Contracting
We issued Defense Contracting: More Insight into Use of Financing Payments Could Beneﬁt DOD in
Future Emergencies, GAO-22-105007, on February 17, 2022.

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Long COVID
We issued Science & Tech Spotlight: Long COVID, GAO-22-105666, on March 2, 2022.

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Tribal Epidemiology Centers
We issued Tribal Epidemiology Centers: HHS Actions Needed To Enhance Data Access, GAO-22-104698,
on March 4, 2022.

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DHS Acquisition Programs
We issued DHS Annual Assessment: Most Acquisition Programs Are Meeting Goals Even with Some
Management Issues and COVID-19 Delays, GAO-22-104684, on March 8, 2022.

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Transportation Security
We issued Transportation Security: TSA Eﬀorts to Coordinate with Stakeholders on COVID-19 Security
Directives, GAO-22-104583, on March 14, 2022.

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State Department’s Overseas Operational Response to
COVID-19
We issued COVID-19: State Should Strengthen Policies to Better Maintain Overseas Operations in Future
Crises, GAO-22-104519, on March 16, 2022.

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Paycheck Protection Program
We issued Paycheck Protection Program: Program Changes Increased Lending to Smaller and
Underserved Businesses, GAO-22-105788, on March 16, 2022.

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Emergency Relief Funds
We issued Emergency Relief Funds: Signiﬁcant Improvements Are Needed to Ensure Transparency and
Accountability for COVID-19 and Beyond, GAO-22-105715, on March 17, 2022.

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K-12 Education
We issued K-12 Education: An Estimated 1.1 Million Teachers Nationwide Had At Least One Student Who
Never Showed Up for Class in the 2020-21 School Year, GAO-22-104581, on March 23, 2022.

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COVID-19 Public Education Campaign
We issued COVID-19: Information on HHS's Public Education Campaign, GAO-22-104724, on March 29,
2022.

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Freedom of Information Act
We issued Freedom of Information Act: Selected Agencies Adapted to COVID-19 Challenges but Actions
Needed to Reduce Backlogs, GAO-22-105845, on March 29, 2022.

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Medicaid
We issued Medicaid: CMS Should Assess Eﬀect of Increased Telehealth Use on Beneﬁciaries’ Quality of
Care, GAO-22-104700, on March 31, 2022.

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Indian Health Service
We issued Indian Health Service: Relief Funding and Agency Response to COVID-19 Pandemic,
GAO-22-104360, on March 31, 2022.

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Scientiﬁc Integrity
We issued Scientiﬁc Integrity: HHS Agencies Need to Develop Procedures and Train Staﬀ on Reporting
and Addressing Political Interference, GAO-22-104613, on April 20, 2022.

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Appendix III: List of Ongoing GAO Work Related to COVID-19
as of April 27, 2022
Accountability for Bureau of Indian Education Spending of COVID-19 Funds
Aﬀordable Broadband Program
Air Travel Disease Research and Development
Aviation Contact Tracing
CARES Act Assistance to Farmers
Customs and Border Protection (CBP) Trade Facilitation During COVID-19
Consumer Product Safety Commission Port Inspectors
COVID-19 and CBP Maritime Cargo Security
COVID-19 Diagnostic Testing
COVID-19 Impacts on Aviation Operations
COVID-19 in Nursing Homes: Data and Challenges
COVID-19 in Nursing Homes: Expert Panel
COVID-19 in Nursing Homes: Federal Policies
COVID-19 Meat and Poultry Worker Safety
COVID-19 Supply Chain International Trade Issues
COVID-19 Unemployment Assistance for Contingent Workers
COVID-19 Vaccine Delivery Abroad
COVID-19 Employer Tax Provisions
Economic Incentives for Therapeutic Development for Potential Pandemics
Eﬀects of COVID-19 on Money Market Funds and Liquidity Risks
Election Administration During the COVID-19 Pandemic
Emergency Rental Assistance Program
Federal Eﬀorts to Address Zoonotic Diseases

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Federal Government's COVID-19 Response for Tribes
FEMA's Individuals and Households Program Housing Inspections
Financial Regulatory Oversight During COVID-19
Fraud Risks in Small Business Administration (SBA) Pandemic Relief Programs
Future Aviation Workforce
Health Insurance Loss
Department of Health and Human Services (HHS) Centers for Innovation in Advanced
Development and Manufacturing
HHS High-Risk Research Oversight
HHS Medicare Telehealth Waivers for COVID-19
HHS Scientiﬁc Integrity
HHS's Public Health Situational Awareness Capability
International Family Planning
Learning Loss Supplement
Managing Improper Payments for Emergency Assistance Programs
Maternal Health During COVID-19
Medical Product Advanced Manufacturing
Medical Surge Readiness
Medicare Provider Waivers Due to COVID-19
NextGen Implementation Progress and Impacts
Oversight of Unemployment Insurance (UI) During COVID-19
Pandemic Learning Loss
Pandemic Relief Funding for Disproportionately Aﬀected Communities
Political Interference at Selected HHS Agencies
Post-COVID-19 Federal Space Planning

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Public Health Infrastructure Funding
Regulatory Flexibilities for COVID-19 Response
SBA Assistance to Venues
SBA Restaurant Revitalization Fund
Social Security Administration Service Delivery During COVID-19
State Small Business Credit Initiative Funds for COVID-19 Response
Tax Policy Eﬀects on Businesses by Sex, Race, and Ethnicity
Tax Policy Eﬀects on Households by Sex, Race, and Ethnicity
UI Risks and Transformation
Worker Safety During COVID-19

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Appendix IV: Matters for Congressional Consideration for
Oversight of Federal Spending and Data from GAO’s March 17,
2022 Testimony
When reviewing the federal government’s response to the COVID-19 pandemic, GAO found
that agencies had signiﬁcant shortcomings in their application of fundamental internal controls
and ﬁnancial and fraud risk management practices.557 Such shortcomings—stemming in part
from the need to distribute funds quickly—were exacerbated by existing ﬁnancial management
weaknesses. As a result, billions of dollars were at risk for improper payments, including those
from fraud, providing limited assurance that programs eﬀectively met their objectives.
To help address these shortcomings, GAO suggests Congress take the following 10 legislative
actions:
1. Congress should pass legislation requiring the Oﬃce of Management and Budget (OMB)
to provide guidance for agencies to develop plans for internal control that would then
immediately be ready for use in, or adaptation for, future emergencies or crises and requiring
agencies to report these internal control plans to OMB and Congress.
2. Congress should amend the Payment Integrity Information Act of 2019 to designate all
new federal programs making more than $100 million in payments in any one ﬁscal year as
“susceptible to signiﬁcant improper payments” for their initial years of operation.
3. Congress should amend the Payment Integrity Information Act of 2019 to reinstate the
requirement that agencies report on their antifraud controls and fraud risk management
eﬀorts in their annual ﬁnancial reports.
4. Congress should establish a permanent analytics center of excellence to aid the oversight
community in identifying improper payments and fraud.
5. Congress should clarify that (1) chief ﬁnancial oﬃcers (CFO) at CFO Act agencies have oversight
responsibility for internal controls over ﬁnancial reporting and key ﬁnancial management
information that includes spending data and improper payment information; and (2) executive
agency internal control assessment, reporting, and audit requirements for key ﬁnancial
management information, discussed in an existing matter for congressional consideration in
our August 2020 report, include internal controls over spending data and improper payment
information.
6. Congress should require agency CFOs to (1) submit a statement in agencies’ annual ﬁnancial
reports certifying the reliability of improper payments risk assessments and the validity
of improper payment estimates, and describing the actions of the CFO to monitor the
development and implementation of any corrective action plans; and (2) approve any
methodology that is not designed to produce a statistically valid estimate.

557GAO, Emergency Relief Funds: Signiﬁcant Improvements Are Needed to Ensure Transparency and Accountability for

COVID-19 and Beyond, GAO-22-105715 (Washington, D.C.: Mar. 17, 2022).

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7. Congress should consider legislation to require improper payment information required to
be reported under the Payment Integrity Information Act of 2019 to be included in agencies’
annual ﬁnancial reports.
8. Congress should amend the DATA Act to extend the previous requirement for agency
inspectors general to review the completeness, timeliness, quality, and accuracy of their
respective agency data submissions on a periodic basis.
9. Congress should amend the DATA Act to clarify the responsibilities and authorities of OMB and
Department of the Treasury for ensuring the quality of data available on USAspending.gov.
10. Congress should amend the Social Security Act to accelerate and make permanent the
requirement for the Social Security Administration to share its full death data with the
Department of the Treasury’s Do Not Pay working system.

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Appendix V: Comments from the Department of Defense

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Appendix VI: Comments from the Department of Education

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Appendix VII: Comments from the Department of Health and
Human Services

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Appendix VIII: Comments from the Department of Homeland
Security

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Appendix IX: Comments from the Internal Revenue Service

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Appendix X: Comments from the Department of the Treasury

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Contacts
Report Director(s)

Jessica Farb
Managing Director, Health Care, (202) 512-7114, farbj@gao.gov

Congressional Relations

A. Nicole Clowers, Managing Director, clowersa@gao.gov, (202) 512-4400

Public Aairs

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

Strategic Planning and External Liaison

Stephen J. Sanford, Managing Director,spel@gao.gov, (202) 512-4707

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GAO-22-105397, COVID-19: Current and Future Federal Preparedness Requires Fixes to Improve Health Data and Address Improper Payments

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