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DEPARTM ENT OF THE TREASURY
WASHINGTON, D.C. 20220
OFFICE OF
INSPECTOR GENERAL
January 9, 2023
Mr. John A. Mastromarino
Town of Hempstead Comptroller
1 Washington Street
Hempstead, New York 11550
Re: Town of Hempstead Uses of Coronavirus Relief Fund Payment (OIG-CA-23-
006)
Dear Mr. Mastromarino:
Please find the attached desk review memorandum1 on the Town of Hempstead’s
use of Coronavirus Relief Fund (CRF) proceeds. The CRF is authorized under Title
VI of the Social Security Act, as amended by Title V Division A of the Coronavirus
Aid, Relief, and Economic Security Act (CARES Act). Under a contract monitored
by our office, Castro & Company, LLC (Castro), a certified independent public
accounting firm, performed the desk review. Castro performed the desk review in
accordance with the Council of the Inspectors General on Integrity and Efficiency,
Quality Standards for Federal Offices of Inspector General.
Based on a review of the Town of Hempstead’s documentation supporting the uses
of CRF proceeds, Castro determined that the expenditures comply with the CARES
Act and Treasury’s Guidance. Additionally, the Town of Hempstead’s risk of
unallowable use of funds is low. As such, Castro is not recommending Treasury
OIG perform an audit of the Town of Hempstead.
In connection with the contract, we reviewed Castro’s desk review memorandum
and related documentation and inquired of its representatives. Our review, as
differentiated from an audit performed in accordance with generally accepted
government auditing standards, was not intended to enable us to express an
opinion on the Town of Hempstead’s use of the CRF proceeds. Castro is
responsible for the attached desk review memorandum and the conclusions
expressed therein. Our review found no instances in which Castro did not comply
in all material respects, with quality standards for Federal Offices of Inspector
General.
1 The CARES Act assigned the Department of the Treasury, Office of Inspector General with
responsibility for compliance monitoring and oversight of the receipt, disbursement, and use of CRF
payments. The purpose of the desk review is to perform monitoring procedures of the prime recipient’s
receipt, disbursements, and uses of CRF proceeds as reported in GrantSolutions portal on a quarterly
basis.
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We appreciate the courtesies and cooperation provided to Castro and our staff
during the desk review. If you have any questions or require further information,
please contact me at (202) 486-1420, or a member of your staff may contact Lisa
DeAngelis, Deputy Assistant Inspector General for Audit, at (202) 487-8371.
Sincerely,
/s/
Deborah L. Harker
Assistant Inspector General for Audit
Attachment
cc:
Michelle. A. Dickerman, Deputy Assistant General Counsel, Department of
the Treasury
Victoria Collin, Chief Compliance & Finance Officer, Office of Recovery
Programs, Department of the Treasury
Wayne Ference, Partner, Castro & Company, LLC
1635 King Street
Alexandria, VA 22314
Phone: 703.229.4440
Fax: 703.859.7603
www.castroco.com
Desk Review of the Town of Hempstead
January 9, 2023
OIG-CA-23-006
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM:
Wayne Ference
Partner, Castro & Company, LLC
SUBJECT:
Desk Review of the Town of Hempstead, New York
On August 10, 2021, we initiated a desk review of the Town of Hempstead’s use
of the Coronavirus Relief Fund (CRF) authorized under Title VI of the Social
Security Act, as amended by Title V Division A of the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act)1. The objective of our desk review was to
evaluate the Town of Hempstead’s documentation supporting its uses of CRF
proceeds as reported in the GrantSolutions2 portal and to assess the risk of
unallowable use of funds. The scope of our desk review was limited to obligation
and expenditure data for the period of March 1, 2020 through June 30, 2021 as
reported in Cycles 1 through 5 in the GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed the Town of Hempstead’s quarterly Financial Progress Reports
(FPRs) submitted in the GrantSolutions portal through June 30, 2021;
2) reviewed the Department of the Treasury’s (Treasury) Coronavirus Relief
Fund Guidance as published in the Federal Register on January 15, 20213;
3) reviewed Treasury Office of Inspector General (OIG) Coronavirus Relief Fund
Frequently Asked Questions Related to Reporting and Recordkeeping4;
1 P.L. 116-136 (March 27, 2020)
2 GrantSolutions, a grant and program management Federal shared service provider under the U.S.
Department of Health and Human Services, developed a customized and user-friendly reporting
solution to capture the use of CRF payments from recipients.
3 Coronavirus Relief Fund Guidance as published in the Federal Register (January 15, 2021)
https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf
4 Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked
Questions Related to Reporting and Recordkeeping OIG-20-028R; March 2, 2021
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Desk Review of the Town of Hempstead
4) reviewed Treasury OIG’s monitoring checklists5 of the Town of Hempstead’s
quarterly FPR submissions for reporting deficiencies;
5) reviewed other audit reports issued, such as Single Audit reports, and those
issued by the U.S. Government Accountability Office and other applicable
Federal agency OIGs for internal control or other deficiencies that may pose
risk or impact the Town of Hempstead’s uses of CRF proceeds;
6) reviewed Treasury OIG Office of Investigations, the Council of the Inspectors
General on Integrity and Efficiency Pandemic Response Accountability
Committee (PRAC)6, and Treasury OIG Office of Counsel input on issues that
may pose risk or impact the Town of Hempstead’s uses of CRF proceeds;
7) interviewed key personnel responsible for preparing and certifying the Town
of Hempstead’s GrantSolutions portal quarterly FPR submissions, as well as
officials responsible for obligating and expending CRF proceeds;
8) made a non-statistical selection of contracts, grants, aggregate reporting
data7, aggregate payments to individuals8, and anomalies9 identified through
GrantSolutions reporting; and
9) evaluated documentation and records used to support the Town of
Hempstead’s quarterly FPRs.
Based on the results of our desk review, documentation supporting the uses of CRF
proceeds comply with the CARES Act and Treasury’s Guidance. Additionally, the
Town of Hempstead’s risk of unallowable use of funds is low. As such, Castro is
not recommending Treasury OIG perform an audit of the Town of Hempstead.
5 The checklists are used by the Treasury OIG to monitor the progress of prime recipient reporting in
the GrantSolutions portal. GrantSolutions quarterly submission reviews are designed to identify
material omissions and significant errors, and where necessary, include procedures for notifying
prime recipients of misreported data for timely correction. Treasury OIG follows the CRF Prime
Recipient Quarterly GrantSolutions Submissions Monitoring and Review Procedures Guide, OIG-CA-
20-029R to monitor the prime recipients quarterly.
6 Section 15010 of P.L. 116-136 established the Pandemic Response Accountability Committee
within the Council of the Inspectors General on Integrity and Efficiency to promote transparency and
conduct and support oversight of covered funds (see Footnote 13 for a definition of covered funds)
and the coronavirus response to (1) prevent and detect fraud, waste, abuse, and mismanagement;
and (2) mitigate major risks that cut across program and agency boundaries.
7 Recipients are required to report CRF transactions greater than or equal to $50,000 in detail in the
GrantSolutions portal. Transactions less than $50,000 can be reported as an aggregate lump-sum
amount by type (contracts, grants, loans, direct payments, and transfers to other government
entities).
8 Obligations and expenditures for payments made to individuals, regardless of amount, are required
to be reported in the aggregate in the GrantSolutions portal to prevent inappropriate disclosure of
personally identifiable information.
9 Treasury OIG has a pre-defined list of risk indicators that are triggered based on data submitted by
recipients in the FPR submissions that meet certain criteria. Castro reviewed these results provided
by Treasury OIG for the Town of Hempstead.
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Desk Review of the Town of Hempstead
Non-Statistical Transaction Selection Methodology
Castro made a non-statistical selection of Contracts >= $50,000, Grants >=
$50,000, Aggregate Reporting < $50,000, and Aggregate Payments to
Individuals. Selections were made using auditor judgment based on information and
risks identified in reviewing audit reports, the GrantSolutions portal reporting
anomalies identified by the Treasury OIG CRF monitoring team, and review of the
Town of Hempstead’s FPR submissions. Castro noted the Town of Hempstead did
not obligate or expend CRF proceeds to Loans >= $50,000, Transfers >=
$50,00010, or Direct Payments >= $50,000; therefore, we did not make a
selection of transactions from these categories.
The number of transactions (21) we selected to test were based on the Town of
Hempstead’s total CRF award amount and our overall risk assessment of the Town
of Hempstead. To allocate the number of transactions (21) by obligation type
(Contracts >= $50,000, Grants >= $50,000, Aggregate Reporting < $50,000,
and Aggregate Payments to Individuals), we compared the obligation type dollar
amounts as a percentage of cumulative obligations for Cycle 5. Additionally,
Treasury OIG identified an anomaly transaction that resulted in one additional
transaction, for a total of 22 transactions tested.
Background
The CARES Act appropriated $150 billion to establish the CRF. Under the CRF,
Treasury made payments for specified uses to States; eligible units of local
governments; the District of Columbia; U.S. Territories, including the
Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands; and Tribal
governments. Treasury issued a CRF payment to the Town of Hempstead for
$133,832,095.50. The CARES Act stipulates that a recipient may only use the
funds to cover costs that—
(1) are necessary expenditures incurred due to the public health emergency
with respect to the coronavirus disease 2019 (COVID-19);
(2) were not accounted for in the budget most recently approved as of
March 27, 2020; and
10 A transfer to another government entity is a disbursement or payment to a government entity that
is legally distinct from the prime recipient.
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Desk Review of the Town of Hempstead
(3) were incurred between March 1, 2020 and December 31, 2021.11
Section 15011 of the CARES Act, requires each covered recipient12 to submit to
Treasury and the PRAC, no later than 10 days after the end of each calendar
quarter, a report that contains (1) the total amount of large covered funds13,14
received from Treasury; (2) the amount of large covered funds received that were
expended or obligated for each project or activity; (3) a detailed list of all projects
or activities for which large covered funds were expended or obligated; and (4)
detailed information on any level of subcontracts or subgrants awarded by the
covered recipient or its subcontracts or subgrantees.
The CARES Act assigned Treasury OIG the responsibility for compliance monitoring
and oversight of the receipt, disbursement, and use of CRF proceeds. Treasury OIG
also has authority to recoup funds in the event that it is determined a recipient
failed to comply with requirements of subsection 601(d) of the Social Security Act,
as amended, (42 U.S.C. 801(d)).
Desk Review Results
Our review of the Town of Hempstead’s quarterly FPR submissions through June
30, 2021 did not identify reporting issues or variances. Transactions selected for
detailed review were supported by documentation and were allowable expenditures
in accordance with the CARES Act and Treasury’s guidance. We noted that the
tested contracts, grants, aggregate reporting <$50,000, aggregate payments to
individuals, and anomalies were necessary expenditures due to the COVID-19
public health emergency, were not accounted for in the budget most recently
approved as of March 27, 2020, and were incurred during the covered period. The
transactions selected for testing were not selected statistically, and therefore
results cannot be extrapolated to the total universe of transactions.
11 P.L. 116-260 (December 27, 2020). The period of performance end date of the CRF was
extended through December 31, 2021 by the Consolidated Appropriations Act, 2021. The period of
performance end date for tribal entities was further extended to December 31, 2022 by the State,
Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act,
Division LL of the Consolidated Appropriations Act, 2023, P.L. 117-328, December 29, 2022, 136
Stat. 4459.
12 Section 15011 of P.L. 116-136 defines a covered recipient as any entity that receives large
covered funds and includes any State, the District of Columbia, and any territory or possession of
the United States.
13 Section 15010 of P.L. 116-136 defines covered funds as any funds, including loans, that are
made available in any form to any non-Federal entity, not including an individual, under Public Laws
116-123, 127, and 136, as well as any other law which primarily makes appropriations for
Coronavirus response and related activities.
14 Section 15011 of P.L. 116-136 defines large covered funds as covered funds that amount to
more than $150,000.
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Desk Review of the Town of Hempstead
Conclusion
Based on our review of the Town of Hempstead’s documentation supporting the
uses of CRF proceeds as reported in the GrantSolutions portal, we determined
that the expenditures comply with the CARES Act and Treasury’s Guidance.
Additionally, the Town of Hempstead’s risk of unallowable use of funds is low. As
such, Castro is not recommending Treasury OIG perform an audit of the Town of
Hempstead.
*****
All work completed with this letter complies with the Council of the Inspectors
General on Integrity and Efficiency’s Quality Standards for Federal Offices of
Inspectors General, which require that the work adheres to the professional
standards of independence, due professional care, and quality assurance to
ensure the accuracy of the information presented15. We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
15 https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
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