Hearings — Assessing the Federal Government’s COVID–19 Relief and Response Efforts (2021)
Summary
Remote hearings before the Committee on Transportation and Infrastructure, House of Representatives, titled Assessing the Federal Government’s COVID–19 Relief and Response Efforts and Its Impact (Parts 1 and 2), 117–24. Part 1 is dated Thursday, July 29, 2021 and Part 2 Thursday, September 30, 2021. Part 1 witnesses include Michael E. Horowitz, Chair, Pandemic Response Accountability Committee, and Eric J. Soskin, Inspector General, U.S. Department of Transportation. Part 2 witnesses include Paul P. Skoutelas, American Public Transportation Association, Michael J. Boskin of the Hoover Institution, and Wendy Edelberg of The Hamilton Project. The Part 1 Summary of Subject Matter states that Congress included $5.9 trillion dollars of relief and job protection measures.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“Hearings — Assessing the Federal Government’s COVID–19 Relief and Response Efforts (2021).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-117hhrg46369-5b36d2dc16ef/
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ASSESSING THE FEDERAL GOVERNMENT’S
COVID–19 RELIEF AND RESPONSE EFFORTS AND
ITS IMPACT (PARTS 1 AND 2)
(117–24)
REMOTE HEARINGS
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND
INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
THURSDAY, JULY 29, 2021 (Part 1)
THURSDAY, SEPTEMBER 30, 2021 (Part 2)
Printed for the use of the
Committee on Transportation and Infrastructure
(
Available online at: https://www.govinfo.gov/committee/house-transportation?path=/
browsecommittee/chamber/house/committee/transportation
U.S. GOVERNMENT PUBLISHING OFFICE
46–369 PDF WASHINGTON : 2022
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
PETER A. DEFAZIO, Oregon, Chair
ELEANOR HOLMES NORTON, SAM GRAVES, Missouri
District of Columbia DON YOUNG, Alaska
EDDIE BERNICE JOHNSON, Texas ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas
RICK LARSEN, Washington BOB GIBBS, Ohio
GRACE F. NAPOLITANO, California DANIEL WEBSTER, Florida
STEVE COHEN, Tennessee THOMAS MASSIE, Kentucky
ALBIO SIRES, New Jersey SCOTT PERRY, Pennsylvania
JOHN GARAMENDI, California RODNEY DAVIS, Illinois
HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia JOHN KATKO, New York
ANDRÉ CARSON, Indiana BRIAN BABIN, Texas
DINA TITUS, Nevada GARRET GRAVES, Louisiana
SEAN PATRICK MALONEY, New York DAVID ROUZER, North Carolina
JARED HUFFMAN, California MIKE BOST, Illinois
JULIA BROWNLEY, California RANDY K. WEBER, SR., Texas
FREDERICA S. WILSON, Florida DOUG LAMALFA, California
DONALD M. PAYNE, JR., New Jersey BRUCE WESTERMAN, Arkansas
ALAN S. LOWENTHAL, California BRIAN J. MAST, Florida
MARK DESAULNIER, California MIKE GALLAGHER, Wisconsin
STEPHEN F. LYNCH, Massachusetts BRIAN K. FITZPATRICK, Pennsylvania
SALUD O. CARBAJAL, California JENNIFFER GONZÁLEZ-COLÓN,
ANTHONY G. BROWN, Maryland Puerto Rico
TOM MALINOWSKI, New Jersey TROY BALDERSON, Ohio
GREG STANTON, Arizona PETE STAUBER, Minnesota
COLIN Z. ALLRED, Texas TIM BURCHETT, Tennessee
SHARICE DAVIDS, Kansas, Vice Chair DUSTY JOHNSON, South Dakota
JESÚS G. ‘‘CHUY’’ GARCÍA, Illinois JEFFERSON VAN DREW, New Jersey
ANTONIO DELGADO, New York MICHAEL GUEST, Mississippi
CHRIS PAPPAS, New Hampshire TROY E. NEHLS, Texas
CONOR LAMB, Pennsylvania NANCY MACE, South Carolina
SETH MOULTON, Massachusetts NICOLE MALLIOTAKIS, New York
JAKE AUCHINCLOSS, Massachusetts BETH VAN DUYNE, Texas
CAROLYN BOURDEAUX, Georgia CARLOS A. GIMENEZ, Florida
KAIALI‘I KAHELE, Hawaii MICHELLE STEEL, California
MARILYN STRICKLAND, Washington
NIKEMA WILLIAMS, Georgia
MARIE NEWMAN, Illinois
TROY A. CARTER, Louisiana
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CONTENTS Page
Hearing held on Thursday, July 29, 2021, Part 1 ......................................... 1
Summary of Subject Matter .................................................................................... 2
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Peter A. DeFazio, a Representative in Congress from the State of Or-
egon, and Chair, Committee on Transportation and Infrastructure, opening
statement .............................................................................................................. 17
Prepared statement .......................................................................................... 19
Hon. Sam Graves, a Representative in Congress from the State of Missouri,
and Ranking Member, Committee on Transportation and Infrastructure,
opening statement ................................................................................................ 20
Prepared statement .......................................................................................... 20
WITNESSES
Hon. Michael E. Horowitz, Chair, Pandemic Response Accountability Com-
mittee, oral statement ......................................................................................... 22
Prepared statement .......................................................................................... 23
Heather Krause, Director, Physical Infrastructure, U.S. Government Account-
ability Office, oral statement ............................................................................... 30
Chris P. Currie, Director, Homeland Security and Justice, U.S. Government
Accountability Office †
Joint prepared statement of Ms. Krause and Mr. Currie ............................. 32
Hon. Eric J. Soskin, Inspector General, U.S. Department of Transportation,
oral statement ...................................................................................................... 42
Prepared statement .......................................................................................... 44
James Izzard, Jr., Assistant Inspector General for Investigations, U.S. De-
partment of Homeland Security, oral statement ............................................... 53
Prepared statement .......................................................................................... 54
SUBMISSIONS FOR THE RECORD
Submissions for the Record by Hon. Thomas Massie:
Article entitled, ‘‘Foreign Workers Living Overseas Mistakenly Received
$1,200 U.S. Stimulus Checks,’’ by Sacha Pfeiffer, NPR, August 5, 2020 . 66
Article entitled, ‘‘IRS Says Its Own Error Sent $1,200 Stimulus Checks
to Non-Americans Overseas,’’ by Sacha Pfeiffer, NPR, November 30,
2020 ................................................................................................................ 68
APPENDIX
Questions from Hon. Salud O. Carbajal to Heather Krause, Director, Physical
Infrastructure, U.S. Government Accountability Office .................................... 93
Question from Hon. Salud O. Carbajal to Chris P. Currie, Director, Homeland
Security and Justice, U.S. Government Accountability Office ......................... 94
Questions to Hon. Eric J. Soskin, Inspector General, U.S. Department of
Transportation, from:
Hon. Steve Cohen ............................................................................................. 96
Hon. Stephen F. Lynch .................................................................................... 96
† Chris P. Currie, Director, Homeland Security and Justice, U.S. Government Accountability
Office, did not deliver an oral statement.
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IV
Page
Hearing held on Thursday, September 30, 2021, Part 2 ............................. 97
Summary of Subject Matter .................................................................................... 98
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Peter A. DeFazio, a Representative in Congress from the State of Or-
egon, and Chair, Committee on Transportation and Infrastructure, opening
statement .............................................................................................................. 104
Prepared statement .......................................................................................... 105
Hon. Eric A. ‘‘Rick’’ Crawford, a Representative in Congress from the State
of Arkansas, opening statement .......................................................................... 107
Prepared statement .......................................................................................... 107
Hon. Eddie Bernice Johnson, a Representative in Congress from the State
of Texas, prepared statement .............................................................................. 203
WITNESSES
Paul P. Skoutelas, President and Chief Executive Officer, American Public
Transportation Association, oral statement ....................................................... 108
Prepared statement .......................................................................................... 110
Juan Manuel Ortiz, Director, Office of Emergency Management and Home-
land Security, City of Austin, Texas, on behalf of the International Associa-
tion of Emergency Managers, oral statement .................................................... 115
Prepared statement .......................................................................................... 117
Michael J. Boskin, Ph.D., Tully M. Friedman Professor of Economics and
Wohlford Family Senior Fellow, Hoover Institution, Stanford University,
on behalf of himself, oral statement ................................................................... 124
Prepared statement .......................................................................................... 126
Wendy Edelberg, Ph.D., Director, The Hamilton Project, The Brookings Insti-
tution, on behalf of herself, oral statement ........................................................ 130
Prepared statement .......................................................................................... 132
Gregory R. Regan, President, Transportation Trades Department, AFL–CIO,
oral statement ...................................................................................................... 149
Prepared statement .......................................................................................... 151
SUBMISSIONS FOR THE RECORD
Definition of Social Justice, Submitted for the Record by Hon. Nikema Wil-
liams ...................................................................................................................... 198
Statement of John Samuelsen, International President, Transport Workers
Union of America, AFL–CIO, Submitted for the Record by Hon. Peter
A. DeFazio ............................................................................................................ 203
APPENDIX
Questions to Paul P. Skoutelas, President and Chief Executive Officer, Amer-
ican Public Transportation Association, from:
Hon. Frederica S. Wilson ................................................................................. 209
Hon. Jenniffer González-Colón ........................................................................ 209
Questions to Juan Manuel Ortiz, Director, Office of Emergency Management
and Homeland Security, City of Austin, Texas, on behalf of the Inter-
national Association of Emergency Managers, from:
Hon. Frederica S. Wilson ................................................................................. 209
Hon. Jenniffer González-Colón ........................................................................ 213
Questions from Hon. Jenniffer González-Colón to Michael J. Boskin, Ph.D.,
Tully M. Friedman Professor of Economics and Wohlford Family Senior
Fellow, Hoover Institution, Stanford University, on behalf of himself ............ 213
Questions to Wendy Edelberg, Ph.D., Director, The Hamilton Project, The
Brookings Institution, on behalf of herself, from:
Hon. Frederica S. Wilson ................................................................................. 214
Hon. Nikema Williams ..................................................................................... 214
Hon. Jenniffer González-Colón ........................................................................ 215
Questions to Gregory R. Regan, President, Transportation Trades Depart-
ment, AFL–CIO, from:
Hon. Frederica S. Wilson ................................................................................. 216
Hon. Nikema Williams ..................................................................................... 216
Hon. Jenniffer González-Colón ........................................................................ 217
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ASSESSING THE FEDERAL GOVERNMENT’S
COVID–19 RELIEF AND RESPONSE EFFORTS
AND ITS IMPACT
THURSDAY, JULY 29, 2021
HOUSE OF REPRESENTATIVES,
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
WASHINGTON, DC.
The committee met, pursuant to call, at 11:02 a.m. in room 2167
Rayburn House Office Building and via Zoom, Hon. Peter A. DeFa-
zio (Chair of the committee) presiding.
Members present in person: Mr. DeFazio, Mr. Larsen, Mr.
Malinowski, Ms. Williams of Georgia, Ms. Newman, Mr. Graves of
Missouri, Mr. Webster, Mr. Rodney Davis, Mr. Weber, Mr.
LaMalfa, Mr. Westerman, Mr. Stauber, and Mr. Nehls.
Members present remotely: Ms. Norton, Ms. Johnson of Texas,
Mrs. Napolitano, Mr. Cohen, Mr. Johnson of Georgia, Ms. Titus,
Ms. Brownley, Mr. Payne, Mr. Lowenthal, Mr. DeSaulnier, Mr.
Lynch, Mr. Carbajal, Mr. Brown of Maryland, Mr. Stanton, Ms. Da-
vids, Mr. Garcı́a of Illinois, Mr. Delgado, Mr. Pappas, Mr. Lamb,
Mr. Moulton, Ms. Bourdeaux, Mr. Kahele, Ms. Strickland, Mr. Car-
ter, Mr. Massie, Mr. Mast, Mr. Fitzpatrick, Miss González-Colón,
Mr. Balderson, Mr. Johnson of South Dakota, Dr. Van Drew, Mr.
Guest, Ms. Van Duyne, Mr. Gimenez, and Mrs. Steel.
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JULY 26, 2021
SUMMARY OF SUBJECT MATTER
TO: Members, Committee on Transportation and Infrastructure
FROM: Staff, Committee on Transportation and Infrastructure
RE: Full Committee Hearing on ‘‘Assessing the Federal Government’s
COVID–19 Relief and Response Efforts and Its Impact’’
PURPOSE
The Committee on Transportation and Infrastructure (T&I) will meet on Thurs-
day, July 29, 2021, at 11:00 a.m. EDT in 2167 Rayburn House Office Building and
via Zoom to hold a hearing titled ‘‘Assessing the Federal Government’s COVID–19
Relief and Response Efforts and Its Impact.’’ The hearing will examine the federal
response to the COVID–19 pandemic, efforts to provide oversight of that response,
areas for improvement, and the impact of pandemic relief efforts on the transpor-
tation and infrastructure sectors and their workers.
The Committee will hear testimony from two panels. The first panel will include
federal government witnesses from the Government Accountability Office (GAO), the
Department of Transportation Office of Inspector General (DOT OIG), the Depart-
ment of Homeland Security Office of Inspector General (DHS OIG), and the Pan-
demic Response Accountability Committee (PRAC).1 The second panel will include
witnesses from the American Public Transportation Association (APTA), the Inter-
national Association of Emergency Managers (IAEM), the Hoover Institution at
Stanford University, the Hamilton Project at the Brookings Institution, and the
Transport Workers Union of America (TWU).
BACKGROUND
In response to the COVID–19 pandemic, Congress and the Executive Branch have
taken a series of actions to protect the health and economic security of American
individuals and businesses. Congress included $5.9 trillion dollars of relief and job
protection measures in the CARES Act, the Consolidated Appropriations Act of
2021, the American Rescue Plan, and other legislation.2 Federal agencies, including
the Federal Emergency Management Agency (FEMA), the operating administrations
within the Department of Transportation (DOT), and the U.S. Department of the
Treasury (Treasury) are responsible for administering and overseeing more than
$200 billion in federal assistance provided for transportation and emergency man-
agement.3 These agencies also conduct other pandemic response and recovery func-
1 The CARES Act established the Pandemic Response Accountability Committee (PRAC) as a
committee of the Council of the Inspectors General on Integrity and Efficiency (CIGIE), which
is composed of inspectors general from across the government. See https://
www.pandemicoversight.gov/our-mission/about-the-prac; CARES Act, Pub. L. No. 116–136
(2020), Sec. 15010.
2 CARES Act, Pub. L. No. 116–136 (2020); Consolidated Appropriations Act, 2021, Pub. L. No.
116–260 (2020); American Rescue Plan Act of 2021, Pub. L. No. 117–2 (2021).
3 U.S Department of the Treasury, ‘‘Coronavirus Economic Relief for Transportation Services
(CERTS) Program,’’ accessed on July 26, 2021, available at https://home.treasury.gov/
policy-issues/coronavirus/assistance-for-american-industry/coronavirus-economic-relief-for-
transportation-services, and ‘‘Airline and National Security Relief Programs,’’ accessed on July
26, 2021, available at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-
american-industry/airline-and-national-security-relief-programs; Federal Transit Administration,
‘‘Novel Coronavirus (COVID–19),’’ accessed on July 26, 2021, available at https://
www.transit.dot.gov/coronavirus; National Railroad Passenger Corporation (AMTRAK) Office of
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tions. For example, FEMA helped supply states and localities with personal protec-
tive equipment (PPE) and distributing vaccine and testing supplies, as well as reim-
bursing for many activities tied to response to the COVID–19 pandemic.4 Within
DOT, the Federal Aviation Administration (FAA), the Federal Transit Administra-
tion (FTA) and other department components provided pandemic-related guidance
and support to their respective modes to help keep employees and passengers on
our nation’s transportation systems safe.5
OVERSIGHT OF THE FEDERAL RESPONSE—SUMMARY
The federal oversight community, such as GAO, PRAC, and federal Offices of In-
spectors General (OIGs), have been monitoring agencies’ use of COVID–19 relief and
response funds. These organizations also have assessed the federal government’s ac-
tions, policies, and programs to respond to COVID–19 to identify problems, includ-
ing cases of waste, fraud, abuse, and mismanagement, as well as lessons learned
and areas for improvement.
Historically, federal oversight organizations have found that large-scale federal re-
lief programs can be vulnerable to significant risk of erroneous payments, waste,
and fraud.6 For example, GAO reported that the American Reinvestment and Recov-
ery Act of 2009 posed these types of risks because of the need to spend funds quickly
and because it increased funding for existing programs to a degree that might have
exceeded the capacity of existing controls and oversight mechanisms.7 Similarly, the
DOT OIG reported that significant infusions of federal funding—such as the dis-
aster relief funding provided to FTA for transit agencies in the wake of Hurricane
Sandy—can create the risk of improper payments without appropriate agency over-
sight plans and procedures in place.8 In light of these and other risks, an effective
federal response to COVID–19 fraud risks, according to GAO, should help ensure
that federal programs fulfill their intended purpose, funds are spent effectively, and
assets are safeguarded.9
Other challenges that the oversight community identified include problems with
FEMA’s disaster-management capabilities, interagency coordination, and incomplete
reporting on the use of pandemic relief funds. In its work on FEMA, GAO found
a lack of coordination with the Department of Health and Human Services (HHS)
and other federal partners on the procurement and delivery of essential PPE, short-
ages in staff available to be deployed to disaster areas, and inconsistencies in how
FEMA communicates with states and localities on the use of advance contracting.10
Inspector General, GOVERNANCE: Amtrak Continues to Demonstrate Good Stewardship of Pan-
demic Relief Funds, OIG–MAR–2021–009, (May 12, 2021), available at: https://amtrakoig.gov/
sites/default/files/reports/OIG-MAR-2021-009%20Relief%20Act.pdf; GAO, COVID–19: Continued
Attention Needed to Enhance Federal Preparedness, Response, Service Delivery, and Program In-
tegrity, GAO–21–551, (July 2021), available at https://www.gao.gov/assets/gao-21-551-high-
lights.pdf; Federal Aviation Administration, ‘‘Information for Airports about COVID–19,’’
accessed on July 26, 2021, available at https://www.faa.gov/airports/speciallprograms/
covid-19-airports; House Committee on Transportation and Infrastructure, ‘‘Chair DeFazio Ap-
plauds New Round of Aid for the Hard-Hit Transportation Sector in Omnibus and COVID Relief
Legislation,’’ December 22, 2020, available at https://transportation.house.gov/news/press-re-
leases/chair-defazio-applauds-new-round-of-aid-for-the-hard-hit-transportation-sector-in-omni-
bus-and-covid-relief-legislation-; FEMA, 100 Days of FEMA and Our Partners in Action (April
30, 2021) available at https://www.fema.gov/blog/100-days-fema-and-our-partners-action.
4 FEMA, Pandemic Response to Coronavirus Disease 2019 (COVID–19): Initial Assessment Re-
port, (January 2021), available at https://www.fema.gov/sites/default/files/documents/femal
covid-19-initial-assessment-reportl2021.pdf;
5 FTA, ‘‘FTA COVID–19 Resource Tool’’ (May 7, 2021), available at https://
www.transit.dot.gov/regulations-and-programs/safety/fta-covid-19-resource-tool; and FAA,
Coronavirus Guidance and Resources from FAA (April 19, 2021), available at https://
www.faa.gov/coronavirus/guidancelresources/.
6 GAO, ‘‘COVID–19: Critical Vaccine Distribution, Supply Chain, Program Integrity, and Other
Challenges Require Focused Federal Attention,’’ GAO–21–265, (January 28, 2021), available at
https://www.gao.gov/products/gao-21-265; PRAC, UPDATE: Top Challenges in Pandemic Relief
and Response, (February 3, 2021), available at https://www.pandemicoversight.gov/
media/file/update-top-challenges-pandemic-relief-and-response.
7 GAO, Recovery Act: Opportunities to Improve Management and Strengthen Accountability
over States’ and Localities’ Uses of Funds, GAO–10–999, (September 20, 2010), available at
https://www.gao.gov/assets/gao-10-999.pdf.
8 DOT OIG, Initial Assessment of FTA’s Oversight of the Emergency Relief Program and Hurri-
cane Sandy Relief Funds, MH–2014–008, (December 3, 2013), available at https://
www.oig.dot.gov/sites/default/files/FTA%E2%80%99s%20Oversight%20of%20the%20Emergency
%20Relief%20Program%20and%20Hurricane%20Sandy%20Relief%20Funds%5E12-3-13l1.pdf.
9 Supra n. 4, GAO–21–265.
10 GAO, COVID–19: FEMA’s Role in the Response and Related Challenges, GAO–20–685T
(July 14, 2020), available at https://www.gao.gov/products/gao-20-685t and COVID–19: Federal
Continued
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In addition, GAO criticized the Office of Management and Budget’s (OMB)
issuance of a Compliance Supplement, as part of the Single Audit Act, that is used
to help auditors understand a federal program’s objectives, procedures, and compli-
ance requirements during audits of non-federal recipients of federal funds, such as
local and state governments and nonprofit organizations.11 The 2020 Compliance
Supplement was not released by OMB until August 2020, after initial COVID–19
relief funds had already been dispersed to recipients. However, GAO found the sup-
plement to be incomplete and said the delay in issuing it ‘‘may lead to inconsistent
reporting and affect award recipients’ development of corrective actions.’’ 12 GAO
warned that preparing and providing this guidance to auditors in a timely manner
was ‘‘essential to help ensure that single audits can be performed timely and en-
hance the federal government’s ability to help safeguard billions of dollars in federal
funds, including those provided under COVID–19 relief laws.’’ 13 OMB issued an ad-
dendum to the Compliance Supplement in December 2020, but it did not address
all concerns raised by auditors to conduct these single audits.14 In March 2021,
OMB issued a memorandum to executive branch agencies that outlines steps agen-
cies must take to implement sound financial management of the pandemic relief
funding resources, including complying with the requirements of the Single Audit
Act.15 The memorandum states that when OMB issues its annual compliance sup-
plement later this year, it will include the topic of subaward reporting as a require-
ment for all financial assistance programs that are reviewed under the Single Audit
Act.16
Regarding the use of relief funds, PRAC found that agencies’ initial reporting on
the use of pandemic funds left out important information required by the CARES
Act, such as identifying all subrecipients of the funding.17 PRAC recommended that
OMB issue guidance to agencies to direct them to collect and report the missing in-
formation.18
Another critical component of the oversight efforts of the OIGs and PRAC is sup-
porting federal agency personnel through training and other assistance. For exam-
ple, the DHS OIG has provided training to program staff on how to identify cases
of waste, fraud, or abuse related to COVID–19 relief funding, and PRAC has hosted
a training session on identifying and preventing loan fraud.19 PRAC also supports
federal OIGs’ data analysis capabilities by providing them with non-public data sets
on selected pandemic relief programs and helping them get easier access to data
analytics contractors.20
GOVERNMENT ACCOUNTABILITY OFFICE
The CARES Act directed GAO to monitor and oversee the use of funds made
available to prepare for, respond to, and recover from the COVID–19 pandemic.21
To date, GAO has issued eight reports that assess efforts across the government and
has made 87 recommendations to improve the COVID–19 response.22 However, fed-
eral agencies have only fully implemented 16 of these 87 recommendations so far,
but have generally agreed with 57, or 66 percent, of these recommendations and are
in the process of implementing those.23 GAO has examined, among other things, the
federal government’s management of the medical supply chain and its assistance to
Efforts Could Be Strengthened by Timely and Concerted Actions, GAO–20–701, (September 21,
2020), available at https://www.gao.gov/products/gao-20-701.
11 GAO, COVID–19: Sustained Federal Action Is Crucial as Pandemic Enters Its Second Year,
GAO–21–387, March 2021, available at https://www.gao.gov/assets/gao-21-387.pdf.
12 Id.
13 Id.
14 Id.
15 Office of Management and Budget, Memorandum for the Heads of Executive Departments
and Agencies: Promoting Public Trust in the Federal Government through Effective Implementa-
tion of the American Rescue Plan Act and Stewardship of the Taxpayer Resources, (March 19,
2021) available at https://www.whitehouse.gov/wp-content/uploads/2021/03/Ml21l20.pdf.
16 Id.
17 PRAC, MITRE Report: Transparency in Pandemic-Related Federal Spending: Report of
Alignment and Gaps, (November 2020), available at https://www.pandemicoversight.gov/
media/file/transparency-pandemic-related-federal-spending-full-report.
18 Id.
19 Committee staff briefings with DHS OIG on February 11, 2021, and with PRAC on April
21, 2021.
20 Committee staff briefing with PRAC on April 21, 2021.
21 Pub. L. No. 116–136, § 19010, 134 at 579–81.
22 GAO, ‘‘COVID–19: Continued Attention Needed to Enhance Federal Preparedness, Response,
Service Delivery, and Program Integrity,’’ GAO–21–551, (July 2021), available at https://
www.gao.gov/assets/gao-21-551-highlights.pdf
23 Id.
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state and local emergency management efforts; support provided to airports, air-
lines, and other aviation companies through loans and grants; and FTA’s assistance
to the nation’s transit agencies.24
FEMA Lacked an Adequate Plan and National Strategy for the Supply Chain of
Critical Equipment
GAO reported in September 2020 that FEMA, along with HHS and the Depart-
ment of Defense, had taken steps to mitigate supply chain issues that were leading
to shortages in the availability of PPE and testing supplies.25 Nonetheless, there
continued to be constraints around certain types of PPE and testing supplies. For
example, in the summer of 2020, some states, nursing homes, and an association
of nurses reported PPE shortages, including N95 masks, nitrile gloves, and gowns.26
Thousands of nurses reported that as a result they were required or encouraged to
re-use single-use N95 masks.27 GAO also found that states and public health labora-
tories experienced ongoing shortages of testing supplies, including swabs, reagents,
and tubes, in the summer of 2020.28
In the midst of these supply constraints, GAO revealed that FEMA, along with
HHS, had not developed plans outlining specific actions the federal government
would take to help mitigate remaining medical supply gaps needed to respond to
the pandemic, including through the use of existing Defense Production Act authori-
ties.29 Further, FEMA and HHS had not worked with their federal partners to de-
fine roles and responsibilities for managing the supply chain.30
GAO recommended that HHS, in coordination with FEMA, (1) create such a plan
and (2) document roles and responsibilities for supply chain management.31 Cre-
ating a plan for continued support of the COVID–19 pandemic, according to GAO,
can help inform a longer-term, comprehensive national supply chain strategy, which
in turn could help better position all stakeholders for future public health events.32
GAO indicated that ‘‘transition planning efforts are underway’’ by HHS, but that
they ‘‘have not yet culminated in a written plan,’’ which GAO has suggested HHS
should prepare ‘‘immediately.’’ 33
States, Territories, and Tribes Faced Challenges Managing Supplies and Navi-
gating FEMA Reimbursement Programs
Officials from FEMA regional offices and states also identified problems related
to federal support programs for pandemic supplies and other emergency expenses.
According to GAO, these challenges continue to hamper their efforts to plan for and
carry out their pandemic response plans.
• Some state officials described confusion about the various federal programs
available to pay for PPE and testing supplies, including about reimbursement
and cost share responsibility, and concerns about potential duplication of bene-
fits.34 States had trouble confirming that the right entities received correct and
usable supplies when FEMA-provided supplies were shipped directly to local
points of care, such as hospitals, laboratories, or nursing homes.35
• Some tribal leaders who had trouble completing administrative requirements
for Public Assistance grants said that no FEMA staff were available to assist
them. Further, FEMA failed to conduct sufficient outreach to tribes when deter-
mining items eligible for reimbursement under the Public Assistance program,
even though such outreach is required by FEMA’s own policy.36
In September 2020, GAO recommended that FEMA and HHS work with federal,
state, territorial, and tribal stakeholders to devise interim solutions to help states
enhance their ability to track the status of supply requests and plan for supply
24 See https://www.gao.gov/coronavirus and discussion on following pages.
25 GAO, COVID–19: Federal Efforts Could Be Strengthened by Timely and Concerted Actions,
GAO–20–701, (September 21, 2020), available at https://www.gao.gov/products/gao-20-701.
26 Id.
27 Id.
28 Id.
29 Id.
30 Id.
31 Id.
32 Id.
33 GAO, COVID–19: Federal Efforts Could Be Strengthened by Timely and Concerted Actions,
GAO–20–701, (September 2020), available at: https://www.gao.gov/assets/gao-20-701.pdf
34 Supra, n. 8, GAO–20–701
35 Id.
36 Supra, n. 9, GAO–21–387.
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needs for the remainder of the COVID–19 pandemic response.37 More recently, in
March 2021, GAO recommended that FEMA provide timely and consistent technical
assistance to support tribal governments and that it adhere to its policy on tribal
consultation when developing new policies and procedures related to COVID–19 as-
sistance.38
DOT Needs a National Aviation Preparedness Plan
Since 2015, just after the 2014 Ebola outbreak in West Africa, GAO has reported
on the importance of DOT developing a national aviation preparedness plan so safe-
guards are in place to limit the spread of communicable disease threats and to mini-
mize unnecessary interference with travel and trade.39 Although DOT issued guid-
ance to airports and airlines on measures to mitigate the public health risks associ-
ated with COVID–19, it has still not developed a preparedness plan for future com-
municable disease threats.40 DOT has said that HHS and DHS should lead such
planning efforts since they are responsible for, respectively, communicable disease
response and preparedness planning.41 However, both DHS and HHS have said that
they are not well positioned to develop a pandemic preparedness plan for aviation.42
In February 2021, H.R. 884, the National Aviation Preparedness Plan Act, was re-
introduced by Aviation Subcommittee Chair Rick Larsen.43 This bill would require
DOT, in coordination with HHS and DHS, to develop a national aviation prepared-
ness plan for communicable disease outbreaks.44
Payroll Support Program (PSP) Needs Better Compliance Monitoring
As GAO reported in September 2020, standing up a new financial assistance pro-
gram in a condensed time frame posed challenges both to Treasury and program re-
cipients.45 Aviation industry associations told GAO that their members experienced
confusion about PSP eligibility and other requirements, lack of direct contact at
Treasury for answers to time-sensitive issues and means to check on the status of
an application, and delays in PSP awards.46 Regarding these identified challenges,
Treasury officials said that they published email addresses where applicants could
direct questions and communicated with more applicants, and redesigned the appli-
cation portal to be more user-friendly.47
Further, while PSP funds have benefited recipients, as discussed in the following
paragraph, certain factors added to the risk of funds being used for purposes other
than payroll support.48 Some PSP recipients accessed other assistance under the
CARES Act that may overlap with PSP funds, such as the Small Business Adminis-
tration’s (SBA) Paycheck Protection Program (PPP), while others received PSP
funds in excess of their number of employees. GAO notes that while these actions
might be consistent with program requirements, they make it more difficult to en-
sure PSP funds are used to only pay employees.49 To help mitigate these risks,
Treasury started to monitor PSP recipients’ compliance with program terms; but, it
has not finalized its monitoring plans, determined which automated tests will be
used, or identified factors or thresholds from testing that trigger additional re-
views.50
37 Supra, n. 8 GAO–20–701.
38 Supra, n. 8 and 9 GAO–20–701, GAO–21–387.
39 GAO, Air Travel and Communicable Diseases: Comprehensive Federal Plan Needed for U.S.
Aviation System’s Preparedness, GAO–16–127 (December 16, 2015), available at https://
www.gao.gov/products/gao-16-127; Air Travel and Communicable Diseases: Status of Research
Efforts and Action Still Needed to Develop Federal Preparedness Plan, GAO–20–655T (June 23,
2020), available at https://www.gao.gov/products/gao-20-655t; and COVID–19: Brief Update on
Initial Federal Response to the Pandemic, GAO–20–708, (August 31, 2020), available at https://
www.gao.gov/products/gao-20-708.
40 Id.
41 Id.
42 Supra, n. 8, GAO–20–708.
43 H.R.884, National Aviation Preparedness Plan Act of 2021.
44 Id.
45 Supra, n. 8, GAO–20–701.
46 Id.
47 Supra, n. 8 and 9, GAO–21–387, GAO–20–701.
48 General Aviation Manufacturers Association, Protecting Aviation Manufacturing and Main-
tenance Jobs, (March 10, 2021) available at https://gama.aero/news-and-events/press-releases/
protecting-aviation-manufacturing-and-maintenance-jobs/; Airlines for America, Statement from
A4A CEO and President Nicholas E. Calio on the Passage of the American Rescue Plan (March
10, 2021) available at https://www.airlines.org/news/statement-from-a4a-ceo-and-president-nich-
olas-e-calio-on-the-passage-of-the-american-rescue-plan/.
49 GAO, COVID–19: Urgent Actions Needed to Better Ensure an Effective Federal Response,
GAO–21–191, (November 30, 2020), available at https://www.gao.gov/products/gao-21-191.
50 Supra, n. 9, GAO–21–387.
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Separately, the Treasury OIG found that some air carriers applying for PSP loans
incorrectly calculated payroll amounts, affecting the accuracy of the amounts award-
ed to these recipients.51 Upon learning of the OIG’s findings, Treasury implemented
measures to identify and correct PSP award amounts.52
Action Is Needed to Ensure Assistance to Aviation Industry Is Equitable
Treasury’s assistance to the aviation industry may have disproportionately gone
to large airlines.53 In its report on the CARES Act loan program for aviation, GAO
found that small businesses were less likely to receive loans under this program and
that Treasury prioritized applications from large passenger carriers.54 The Regional
Airline Association expressed concerns that Treasury delayed action on smaller air-
lines’ PSP loan applications, while approving applications for large air carriers.55 In-
dustry associations reported to GAO that for applicants such as smaller air carriers
and ticket agents, the amount of time Treasury took to evaluate loan applications,
as well as other challenges, affected the number of loans executed.56 To better en-
gage the aviation community, GAO reported that Treasury could have made greater
use of DOT to design the program, communicate with businesses, and help in the
application evaluation process or loan program, as many eligible businesses have es-
tablished relationships with DOT.57 Looking forward, GAO made suggestions for
better ensuring equity among businesses of different sizes and types: 58
• Establish multiple programs, or multiple paths within a program, to better ac-
commodate businesses of varied types and sizes.59
• Communicate clear timelines and expectations for borrowers to avoid frustra-
tion among applicants regarding the loan application process and the time need-
ed to make loans.60
Airport Grants
The CARES Act provided substantial additional funding for airports through a
program similar to the Airport Improvement Program (AIP), and though FAA al-
ready had processes for administering grants of this type, it nonetheless faced chal-
lenges administering and monitoring the funding.61 To address the increased work-
load of processing and monitoring more grants under expedited timeframes, FAA
hired staff, streamlined the invoicing process to reduce workload, and provided con-
solidated information to airports about eligibility.62 According to FAA officials, FAA
staff review all reimbursement requests from airports to help ensure that only eligi-
ble costs are reimbursed with CARES Act funding.63
FAA officials have also taken actions to oversee and monitor compliance with
workforce retention requirements. The CARES Act required that most airports ac-
cepting grants must continue to employ at least 90 percent of the number of individ-
uals employed prior to the pandemic.64 FAA’s actions include reviewing quarterly
reports from airports, sending letters to the airports that had not submitted the re-
quired reports, and comparing airports’ current workforce numbers to those from
March 2020 to ensure they meet the 90 percent threshold.65 FAA told GAO that,
51 Department of the Treasury Office of Inspector General, Interim Audit Update—Air Carrier
and Contractor Certifications for Payroll Support Program (March 31, 2021), available at https://
oig.treasury.gov/sites/oig/files/2021-04/OIG-21-025.pdf.
52 Id.
53 GAO, Financial Assistance: Lessons Learned from CARES Act Loan Program for Aviation
and Other Eligible Businesses, GAO–21–198 (December 10, 2020), available at https://
www.gao.gov/products/gao-21-198.
54 Id.
55 Regional Airline Association President Faye Malarkey Black letter to Treasury Secretary
Janet Yellen (March 11, 2021) available at https://www.raa.org/wp-content/uploads/2021/03/
20210311-RAA-Treasury-Letter-PSP2-delays-PSP3-requestlFINAL.pdf.
56 GAO–21–198.
57 Id.
58 Id.
59 Id.
60 Id.
61 CARES Act, Pub. L. No. 116–136 (2020), Federal Aviation Administration, Grants-in-Aid for
Airports; see also supra, n. 8, GAO–20–701.
62 Supra n.42 and 9, GAO–21–191, GAO–21–387
63 Supra, n. 8, GAO–20–701.
64 CARES Act, Pub. L. No. 116–136 (2020), Federal Aviation Administration, Grants-in-Aid for
Airports.
65 Supra, n. 42, GAO–21–191; supra n. 9, GAO–21–387.
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as of January 2021, no airports had requested a waiver from the workforce retention
requirements.66
Grants to Transit Agencies
In all, FTA received nearly $70 billion in COVID-relief aid for transit agencies.67
According to GAO, FTA has not experienced any notable challenges with admin-
istering the $25 billion in grants from the CARES Act or overseeing recipients’ use
of the funds, due to the funds being provided through existing programs that have
well established procedures for administration and oversight.68 FTA officials told
GAO that FTA continues regular outreach to recipients through industry calls, and
regional staff are in regular contact with recipients.69 These officials also told GAO
that they updated the oversight guidance for the grant programs with information
on CARES Act requirements, and that FTA plans to oversee the funding through
its existing review programs.70 In addition, daily reports on CARES Act obligations
and disbursements to transit agencies are sent to the FTA Office of the Adminis-
trator, ensuring that the agency’s leadership is both engaged and well informed on
these issues.71
Similarly, transit agencies appear to have had little difficulty with the CARES
Act-funded grants. Officials from 22 transit agencies GAO interviewed for its No-
vember 2020 report said they had not experienced challenges related to the distribu-
tion of CARES Act grants from FTA, and officials from all but one of these transit
agencies said they had not faced challenges getting help from FTA during the
awards process.72 Early on, some transit agencies had trouble understanding the ex-
panded list of activities eligible for CARES Act funding. In response, FTA provided
technical assistance through webinars, guidance on its website, and support from
regional staff.73
DEPARTMENT OF TRANSPORTATION OFFICE OF INSPECTOR GENERAL (DOT OIG)
The DOT OIG identified several key risk areas in DOT’s oversight of CARES Act
funding. These areas, some of which are described below, are based on previous OIG
work on DOT’s implementation of funds for economic stimulus or emergency relief,
such as the American Recovery and Reinvestment Act of 2009.74
Improved Monitoring and Increased Outreach Can Help Prevent Waste, Fraud,
and Abuse
The DOT OIG observed that the volume of CARES Act funds and the speed with
which they are disbursed puts these funds at a higher risk for improper payments,
fraud, waste, and abuse.75 For example, the CARES Act provided $10 billion for air-
ports, much more than the approximately $3 billion in annual funding for airports
that FAA normally oversees.76 Further, the OIG has found weaknesses in DOT’s fi-
nancial management systems, resulting in incomplete and inaccurate expenditure
data20.77 Implementing procedures for tracking funds and detecting improper pay-
ments could help DOT better ensure effective stewardship of its funds.78 The DOT
OIG also suggested that DOT mitigate these risks by increasing its outreach and
education efforts to enhance understanding among DOT staff, grantees such as air-
66 Supra, n. 9, GAO–21–387.
67 Federal Transit Administration, Novel Coronavirus, (last accessed July 21, 2021) https://
www.transit.dot.gov/coronavirus.
68 Supra n. 11, GAO–21–387; supra, n. 42, GAO–21–191; supra n. 8, GAO–20–701.
69 Supra, n. 42, GAO–21–191.
70 GAO–21–191.
71 Supra, n. 8, GAO–20–701.
72 Supra, n. 42, GAO–21–191.
73 Supra, n. 8, GAO–20–701.
74 DOT OIG, Memorandum from the Office of Inspector General of the U.S. Department of
Transportation to the Secretary of Transportation: Information: Key Potential Risk Areas for the
Department of Transportation in Overseeing CARES Act Requirements (June 17, 2020) available
at https://www.oig.dot.gov/library-item/37926.
75 Id.
76 Supra, n. 42, GAO–21–191; CARES Act, Pub. L. No. 116–136 (2020), Federal Aviation Ad-
ministration, Grants-in-Aid for Airports.
77 DOT OIG, Quality Control Review of the Independent Auditor’s Review of DOT’s DATA Act
Implementation (October 29, 2019), available at https://www.oig.dot.gov/sites/default/files/
DOT%20DATA%20Act%20QCR%20Final%20Report%5E10-29-19.pdf.
78 DOT OIG, June 2020 memorandum, available at https://www.oig.dot.gov/sites/default/files/
OIG%20Memorandum%20to%20the%20Secretary%20-%20Key%20Risk%20Areas%20for%20DOT
%20in%20Overseeing%20CARES%20Act%20Requirements.pdf.
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ports and transit agencies, and their contractors on how to recognize and prevent
potential fraud to the appropriate authorities.79
Airport Grants Require Effective Risk-Based Oversight
The DOT OIG identified some aspects of CARES Act funding for airports that
FAA should focus its management and oversight activities on, including the fol-
lowing:80
• FAA will need to ensure that recipient airports comply with the workforce re-
tention requirements of the CARES Act.
• The CARES Act authorized the federal share of approved project costs to be in-
creased to 100 percent, eliminating the local share of the costs. As a result, FAA
could face risks related to controlling project costs, since localities are less
incentivized to do so.
• Because FAA is overseeing a vast number of grants with its limited resources,
it should follow a risk-based oversight approach and ensure that its existing
risk assessments are sufficient given new program requirements and restric-
tions.
In February 2021, the DOT OIG initiated an audit of FAA’s award and oversight
of CARES Act airport grants. The audit’s purpose is to assess whether FAA’s poli-
cies and procedures for awarding and overseeing CARES Act grants are sufficient
to protect taxpayer interests.81
Prudent Oversight of Pandemic Waivers Is Needed
To account for conditions caused by COVID–19, the CARES Act allows DOT to
temporarily waive certain existing federal requirements, such as some for the state
highway safety programs that the National Highway Traffic Safety Administration
(NHTSA) administers.82 The DOT OIG noted that it will be vital for DOT to monitor
the use and impact of these waivers.83
The DOT OIG has other audits under way that it expects will identify ways that
the operating administrations can improve their COVID–19 responses. These in-
clude reports on FTA’s financial management system that support CARES Act fund-
ing and its management of Hurricane Sandy emergency funding.84
Amtrak’s Use and Accounting of Funds
Amtrak received more than $3 billion, a total of $1.7 billion in COVID–19 relief
funds, including $1.7 billion in March 2021.85 In April 2020, the Amtrak OIG began
an audit of the use of pandemic relief funds appropriated to support Amtrak serv-
ices and its state and commuter rail partners.86 The Amtrak OIG issued reports in
August 2020 87 and December 2020.88 In May 2021 it issued another report stating
79 Id.
80 Id.
81 DOT OIG, New Audit Announcement: Audit Initiated of FAA’s Award and Oversight of
CARES Act Funds (February 19, 2021), available at https://www.oig.dot.gov/library-item/38296.
82 DOT OIG, June 2020 memorandum, available at https://www.oig.dot.gov/sites/default/
files/OIG%20Memorandum%20to%20the%20Secretary%20-%20Key%20Risk%20Areas%20for
%20DOT%20in%20Overseeing%20CARES%20Act%20Requirements.pdf.
83 Id.
84 DOT OIG, Audit Initiated of FTA’s Hurricane Sandy Funding Progress (January 15, 2020)
available at https://www.oig.dot.gov/library-item/37684; Audit Initiated of Security Controls for
FTA’s Financial Management Systems That Support CARES Act Funding (November 12, 2020),
available at https://www.oig.dot.gov/library-item/38114. Although the Hurricane Sandy report is
not expected to explicitly address pandemic relief funding, DOT OIG officials told Committee
staff in an April 2020 briefing that they expect the report’s findings to be relevant to pandemic
relief funding because FTA uses the same systems and procedures to manage both funding
sources.
85 See: Department of Transportation, ‘‘U.S. Transportation Secretary Elaine L. Chao An-
nounces $1 Billion for Amtrak in Response to COVID–19,’’ DOT Press Release, (April 10, 2020),
available at: https://railroads.dot.gov/newsroom/press-releases/us-transportation-secretary-elaine-
l-chao-announces-1-billion-amtrak and National Railroad Passenger Corporation (AMTRAK) Of-
fice of Inspector General, ‘‘GOVERNANCE: Amtrak Continues to Demonstrate Good Stewardship
of Pandemic Relief Funds,’’ OIG–MAR–2021–009, (May 12, 2021), available at: https://
amtrakoig.gov/sites/default/files/reports/OIG-MAR-2021-009%20Relief%20Act.pdf
86 Amtrak Office of Inspector General, GOVERNANCE: Observations on Amtrak’s Use of CARES
Act Funds (August 5, 2020) available at https://amtrakoig.gov/sites/default/files/reports/
OIG-MAR-2020-013%20CARES%20Act%20Review.pdf.
87 Id.
88 Amtrak Office of Inspector General, GOVERNANCE: Final Observations on Amtrak’s Use of
CARES Act Funds (December 15, 2020) available at https://amtrakoig.gov/sites/
default/files/reports/OIG-MAR-2020-013%20CARES%20Act%20Review.pdf.
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that Amtrak ‘‘continues to be a good steward of the funds Congress has provided’’
but also that Amtrak could be more transparent in its communications and report-
ing, and made recommendations for improvement.89
DEPARTMENT OF HOMELAND SECURITY OFFICE OF INSPECTOR GENERAL (DHS OIG)
Investigating and Preventing Fraud against the Government
The DHS OIG has opened at least 120 potential fraud investigations 90 since the
start of the pandemic and has uncovered numerous fraud schemes.91 According to
DHS OIG officials, ongoing investigations include those related to theft of public
funds, hoarding of scarce materials, and fictitious or fraudulent claims against the
government.92 For programs within FEMA’s purview, the two focus areas for these
investigations, according to DHS OIG officials, have been unemployment insurance
fraud and misrepresentations regarding PPE.93 For example, the DHS OIG inves-
tigated a Virginia businessman who fraudulently attempted to obtain a multi-mil-
lion-dollar PPE contract from FEMA.94 As part of his scheme, the individual falsely
stated to procurement officials from FEMA that he was in possession of large quan-
tities of PPE, including N95 masks. Based on the false statements, FEMA awarded
the individual’s company a contract valued at $3,510,000, though according to
FEMA, the funds were not provided to this individual.95 The individual pleaded
guilty in February 2021 of making false statements to federal agencies and faces
up to 35 years in prison for these and other related charges.96
The DHS OIG is working with FEMA and other DHS components, as well as with
its federal partners such as SBA, the Department of Veterans Affairs, the Federal
Bureau of Investigation (FBI), and the U.S. Secret Service, to identify and prevent
fraud. Further, the DHS OIG provides training to FEMA employees on tools they
can use to prevent and detect fraud. DHS OIG officials said that this training is
updated regularly to reflect new types of fraud schemes investigators are finding.97
However, the DHS OIG’s previous work indicates that training for FEMA employees
is not always effectively implemented. In 2019, the OIG assessed FEMA’s compli-
ance with a statutory requirement that it provide training on the prevention of
waste, fraud, and abuse in federal disaster relief assistance programs.98 The OIG
found that most of FEMA’s employees had not completed this required annual train-
ing and recommended that FEMA establish monitoring and enforcement mecha-
nisms to ensure training requirements are met.99
DHS OIG Is Reviewing FEMA’s Role in Pandemic Response and Preparedness
The DHS OIG has previously found FEMA’s management of disaster relief grants
and funds to be inadequate and reported last year that improving FEMA’s grant
management would be one of DHS’s top challenges in responding to the COVID–
19 pandemic.100 The DHS OIG has identified a pattern of FEMA management fail-
ures in overseeing procurements and reimbursing procurement costs, and it con-
tinues to see systemic problems and operational difficulties.101 At times, according
to the DHS OIG, FEMA has not followed procurement laws, regulations, and proce-
89 Amtrak Office of Inspector General, GOVERNANCE: Amtrak Continues to Demonstrate Good
Stewardship of Pandemic Relief Funds (May 12, 2021) available at https://amtrakoig.gov/
sites/default/files/reports/OIG-MAR-2021-009%20Relief%20Act.pdf.
90 E-mail from DHS OIG staff to T&I staff, July 23, 2021.
91 Committee staff briefing with DHS OIG, February 11, 2021.
92 Id.
93 Committee staff briefing with DHS OIG, February 11, 2021.
94 United States Attorney’s Office, Eastern District of Virginia, CEO Pleads Guilty to Defraud-
ing Multiple Federal Agencies (accessed on March 9, 2021) https://www.justice.gov/
usao-edva/pr/ceo-pleads-guilty-defrauding-multiple-federal-agencies.
95 Id.
96 Id.
97 Id.
98 DHS OIG, FEMA Must Take Additional Steps to Demonstrate the Importance of Fraud Pre-
vention and Awareness in FEMA Disaster Assistance Programs (July 24, 2019), available at
https://www.oig.dhs.gov/reports/2019/fema-must-take-additional-steps-demonstrate-importance-
fraud-prevention-and-awareness-fema-disaster-assistance-programs/oig-19-55-jul19.
99 Id.
100 PRAC, TOP CHALLENGES FACING FEDERAL AGENCIES: COVID–19 Emergency Relief and Re-
sponse Efforts, (June 17, 2020), available at https://www.oversight.gov/sites/default/files/oig-
reports/Top%20Challenges%20Facing%20Federal%20Agencies%20-%20COVID-19%20Emergency
%20Relief%20and%20Response%20Effortsl1.pdf.
101 DHS OIG, FEMA Contracting: Reviewing Lessons Learned from Past Disasters to Improve
Preparedness, Testimony before U.S. House of Representatives Committee on Homeland Secu-
rity (May 9, 2019), available at https://www.oig.dhs.gov/sites/default/files/assets/TM/2019/oigtm-
daig-aud-katherine-trimble-050919.pdf.
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dures, nor has it ensured disaster grant recipients and subrecipients understand
and comply with these authorities.102
The DHS OIG has several ongoing audits related to how well FEMA is carrying
out its responsibilities related to the COVID–19 pandemic. These audits are exam-
ining the following issues: 103
• How FEMA managed and distributed medical supplies and equipment in re-
sponse to COVID–19;
• To what extent FEMA followed federal and departmental procedures and guide-
lines for awarding COVID–19 contracts to prospective vendors under unusual
and compelling circumstances; and
• How effectively FEMA has supported and coordinated federal efforts to dis-
tribute PPE and ventilators in response to the COVID–19 outbreak.
PANDEMIC RESPONSE ACCOUNTABILITY COMMITTEE (PRAC)
Congress established the PRAC in the CARES Act ‘‘to promote transparency,’’ ‘‘en-
sure coordinated, efficient, and effective comprehensive oversight by the Committee
and Inspectors General over all aspects of covered funds and the Coronavirus re-
sponse,’’ and ‘‘prevent and detect fraud, waste, abuse, and mismanagement.’’ 104 The
PRAC is comprised of 22 federal inspectors general, has its own dedicated staff, and
works closely with inspectors general across the government to identify the most
pressing challenges in managing and overseeing pandemic relief funds in several
areas.105
Preventing and Detecting Fraud against Government Programs
With the unprecedented amount of disaster response funds appropriated to sup-
port the country’s pandemic response, the opportunities for defrauding government
programs have significantly increased, according to the PRAC.106 The work con-
ducted by OIGs to date indicates that one of the primary fraud risks associated with
the administration of pandemic response funds stems from the failure to ensure that
information from applicants is accurate.107 This can result in payments to individ-
uals who are not in fact eligible for program benefits; it can also result in outright
fraud, such as in the case of the N95 mask fraud scheme that the DHS OIG uncov-
ered.108
Data Transparency and Completeness
Another key challenge that PRAC identified was a lack of detailed data on pan-
demic relief funds, which is needed to inform funding and oversight decisions as
well as to provide full transparency on the use of these funds.109 Even before the
pandemic, inspectors general reported that the ability of agencies to track and re-
port financial data was insufficient to meet agency needs and was a top manage-
ment and performance challenge.110 According to the non-profit Project on Govern-
ment Oversight, ‘‘[r]obust oversight and reporting are especially important given the
ongoing public health and economic emergencies that these relief funds were in-
tended to help mitigate.111
The CARES Act and related legislation included detailed reporting requirements
for agencies to help ensure transparency and accountability in their use of pandemic
relief funds.112 In April 2020, OMB issued guidance directing agencies to use exist-
ing reporting processes to meet the CARES Act requirements, with only minor modi-
fications.113 These existing processes, established pursuant to the Federal Funding
102 Id.
103 DHS OIG, Ongoing Projects (accessed on May 12, 2021) https://www.oig.dhs.gov/reports/on-
going-projects.
104 CARES Act, Pub. L. No. 116–136 (2020), Sec. 15010
105 PRAC, UPDATE: Top Challenges in Pandemic Relief and Response (February 3, 2021) avail-
able at https://www.pandemicoversight.gov/media/file/update-top-challenges-pandemic-relief-and-
response.
106 Id.
107 Id.
108 Id.
109 Id.
110 PRAC, TOP CHALLENGES FACING FEDERAL AGENCIES.
111 Project on Government Oversight, Administration Seeks to Minimize Transparency of
Coronavirus Relief Funds (May 13, 2020) available at https://www.pogo.org/analysis/2020/05/ad-
ministration-seeks-to-minimize-transparency-of-coronavirus-relief-funds/.
112 PRAC, TOP CHALLENGES FACING FEDERAL AGENCIES.
113 OMB, Implementation Guidance for Supplemental Funding Provided in Response to the
Coronavirus Disease 2019 (COVID–19) (April 10, 2020) available at https://www.whitehouse.gov/
Continued
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and Transparency Act of 2006 as amended by the Digital Accountability and Trans-
parency Act (DATA Act), include making information on all financial awards of
more than $25,000 publicly available on USASpending.gov.114 OMB’s guidance stat-
ed that no additional reporting by agencies or recipients should be necessary to
meet the requirements of these sections of the CARES Act.115
However, PRAC found that the data federal agencies had been reporting, as ini-
tially directed by OMB, did not satisfy all of the requirements in the CARES Act,
in part because the act required more extensive reporting for certain awards.116 For
example, the CARES Act explicitly directed agencies to collect new data on funding
awards of $150,000 or more, including the name and description of the project or
activity that received funding, the estimated number of jobs created or retained, and
detailed information on subcontracts and subgrants.117 The information agencies re-
port to USASpending.gov leaves out some of this required information, including job
creation numbers, detailed project descriptions, and sub-award loan information,
making it difficult to track the recipients of funds and the impact of the federal gov-
ernment’s efforts.118 PRAC also found problems with the accuracy of the agency-re-
ported data, including potentially incorrect award amounts and mismatched location
information.119 GAO, likewise, has reported on challenges related to the accuracy,
completeness, and timeliness of the data contained on USASpending.gov, which
limit users’ ability to appropriately interpret the data.120
Some federal OIGs have also found problems related to the reporting of CARES
Act data.121 The General Services Administration (GSA) OIG cited control weak-
nesses as a potential impediment to accurately reporting CARES Act spending, ref-
erencing a November 2019 audit that found errors in how GSA reports certain data
to USASpending.gov.122 According to the GSA OIG, GSA will need to address these
errors to ensure that its CARES Act reporting is accurate.123 Similarly, the DHS
OIG reported that key DHS financial systems do not comply with federal require-
ments, and that this potentially will impact financial planning, payments, and inter-
nal controls related to CARES Act funding.124
OMB has taken steps to ensure that agencies submit data that better meets the
requirements of the CARES Act.125 In June 2020, OMB issued a set of frequently
asked questions to expand upon and clarify its April guidance memorandum.126
And, in August 2020, it issued a Controller Alert directing agencies to improve the
quality of award description information in USASpending.gov.127
‘‘Multi-Dipping’’
PRAC and others have identified the risk of recipients receiving funding from
multiple federal programs for the same purpose (i.e., ‘‘multi-dipping’’).128 The Spe-
cial Inspector General for Pandemic Recovery (SIGPR) reported that several airlines
received payments from both the Paycheck Protection Program and the Payroll Sup-
port Program, a potential case of multi-dipping.129 SIGPR cautioned that the exist-
wp-content/uploads/2020/04/Implementation-Guidance-for-Supplemental-Funding-Provided-in-
Response.pdf.
114 https://www.usaspending.gov/about, accessed on June 3, 2021.
115 Supra, n. 95, OMB, Implementation Guidance.
116 PRAC, MITRE Report.
117 CARES Act, Pub. L. No. 116–136 (2020).
118 PRAC, MITRE Report.
119 Id.
120 Supra, n. 34, GAO–20–708. See also GAO, Data Act: Quality of Data Submissions Has Im-
proved but Further Action is Needed to Disclose Known Data Limitations, (November 8, 2019)
available at https://www.gao.gov/products/gao-20-75.
121 PRAC, TOP CHALLENGES FACING FEDERAL AGENCIES.
122 GSA OIG, Audit of the Completeness, Accuracy, Timeliness, and Quality of GSA’s 2019
DATA Act Submission, (November 1, 2019), available at https://www.gsaig.gov/sites/default/files/
audit-reports/A190040l1.pdf.
123 GSA OIG, TOP CHALLENGES FACING THE GENERAL SERVICES ADMINISTRATION: COVID–19
Emergency Response and Relief Efforts (June 23, 2020) available at https://www.gsaig.gov/sites/
default/files/management-challenges/GSA%20Top%20Challenges.pdf.
124 PRAC, TOP CHALLENGES FACING FEDERAL AGENCIES.
125 PRAC, MITRE Report.
126 OMB, CARES Act and M–20–21 Recipient Frequently Asked Questions (June 24, 2020),
available at https://www.cfo.gov/wp-content/uploads/2020/07/M-20-21lFAQl07312020l
UPDATED.pdf.
127 OMB, Controller Alert: Award Description Data Quality for Financial Assistance Awards
(August 2020) available at https://www.cfo.gov/wp-content/uploads/2020/08/CONTROLLERl
ALERTlAUGUSTl2020lFAlAwardlDes.pdf.
128 Id.
129 SIGPR, Initial Report to Congress (August 3, 2020) available at https://www.sigpr.gov/sites/
sigpr/files/2020-09/SIGPR-Initial-Report-to-Congress-August-3-2020l0.pdf.
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ence of programs resulting in multiple forms of financial support to a single indi-
vidual or entity creates an increased risk of fraud and abuse.130 In January 2021,
PRAC initiated work on pandemic relief funds received by tribal governments, and
it expects to be able to identify CARES Act programs where multi-dipping has oc-
curred.131
IMPACT OF FEDERAL COVID–19 RESPONSE AND RELIEF EFFORTS
The policies and programs the federal government has implemented over the
course of the pandemic have had multiple challenges, as discussed on the previous
pages, but also many benefits, as is described below. States and localities received
assistance to help vaccinate their residents.132 Businesses and public sector agencies
retained workers that they otherwise would have laid off.133 The nation’s transpor-
tation systems continued to operate safely, providing transportation for essential
workers and others.134 Moreover, the economy as a whole is beginning to recover
as the economy opens back up with gross domestic product expected to show a sub-
stantial increase this year after plunging at an annual rate of 31.4 percent in Q2
2020.135 However, there are concerns about the effect of inflation on this recov-
ery.136
FEMA’s Assistance to States, Localities, Tribes, Territories, and Individuals
The COVID–19 pandemic posed an unprecedented challenge to the disaster re-
sponse capabilities of states, localities, tribes, and territories. As the lead federal
agency for the COVID–19 response, FEMA has undertaken expansive efforts to help
them, as well as to assist individuals suffering from the economic hardships of the
pandemic.137 Since January 2020, FEMA has taken the following actions, among
others:
• Provided more than $4.75 billion in support of vaccination efforts in commu-
nities across the country.138
• Worked with its federal, state, and local partners to establish 1,732 new com-
munity vaccination centers.139
• Coordinated with HHS to deliver, as of September 2020, 249 million N95
masks, 1.1 billion surgical masks, 46.7 million eye and face shields, 432 million
surgical gowns or coveralls, and more than 28.6 billion gloves.140
• Provided funding to nonprofits, faith-based organizations, and government enti-
ties that provide shelter, food, transportation, COVID–19 testing and medical
care to their communities.141
• Obligated, as of the end of September 2020, $42.6 billion as a supplemental ben-
efit for unemployment insurance benefits.142
• In January 2021, the federal cost share for a majority of eligible FEMA assist-
ance for all COVID–19 related Emergency and Major Disasters was expanded
to 100 percent and made applicable to costs of eligible activities from the begin-
130 Id.
131 PRAC, Multi-Dipping of Pandemic Response Funds Provided to Tribal Government (Janu-
ary 29, 2021) available at https://www.pandemicoversight.gov/oversight/reports?f%5B0
%5D=submittinglorganization%3APandemic%20Response%20Accountability%20Committee.
132 FEMA, 100 Days of FEMA and Our Partners in Action (April 30, 2021) available at https://
www.fema.gov/blog/100-days-fema-and-our-partners-action.
133 General Aviation Manufacturers Association, Protecting Aviation Manufacturing and Main-
tenance Jobs, (March 10, 2021) available at https://gama.aero/news-and-events/press-releases/
protecting-aviation-manufacturing-and-maintenance-jobs/, Amalgamated Transit Union, Relief
on the way for transit and working families with American Rescue Plan (March 10, 2021) avail-
able at https://www.atu.org/media/releases/atu-relief-on-the-way-for-transit-and-working-fami-
lies-with-american-rescue-plan.
134 Id.
135 Congressional Research Service, COVID–19 and the U.S. Economy (May 11, 2021) avail-
able at https://crsreports.congress.gov/product/pdf/R/R46606.
136 Rachel Siegel, Biden Says Fed ‘should take whatever steps it deems necessary’ to respond
to inflation, WASH. POST. (July 19, 2021), available at https://www.washingtonpost.com/us-policy/
2021/07/19/biden-powell-inflation-economy/.
137 FEMA, 100 Days.
138 Id.
139 Id.
140 Id.
141 Id.
142 FEMA, Pandemic Response to Coronavirus Disease 2019 (COVID–19): Initial Assessment
Report. FEMA’s Lost Wages Assistance (LWA) program was unprecedented because it was insti-
tuted as a new program despite another discrete Stafford Act section on disaster unemployment
assistance (Sec. 410). FEMA failed to provide the Committee with a legal justification memo ex-
plaining why or how LWA was administered as it was despite section 410.
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ning of the pandemic incident period on January 20, 2020, to September 30,
2021.143
Aviation Industry
As a result of the pandemic, air passenger demand fell far below prior years and,
according to some industry analysts, a return to pre-pandemic traffic levels might
not occur until 2023.144 The number of passengers going through Transportation Se-
curity Administration (TSA) checkpoints increased throughout the spring of 2021
but was still far below pre-pandemic levels. In June 2021, for example, TSA traveler
throughput was 26 percent lower than in June 2019.145 As a result of this decline
in passenger demand and other factors, U.S. passenger airlines are projecting pre-
tax losses of $18 billion this year, according to Airlines for America.146 Similarly,
Airports Council International–North America (ACI–NA) expects that U.S. airports
will lose at least $40 billion by March 2022 because of the prolonged decline in com-
mercial aviation traffic.147
The PSP was created to prevent layoffs in this hard-hit sector. Congress has ap-
propriated $63 billion to this program, which provides financial assistance to air-
lines, manufacturers, and other related businesses for employee wages, salaries, and
benefits.148 According to the General Aviation Manufacturers Association, PSP has
allowed companies to keep highly skilled workers in the industry and supported
some of the smaller companies that needed assistance to maintain operations.149
Airlines were able to preserve the jobs of flight attendants, pilots, mechanics, gate
agents and others, according to Airlines for America.150
Congress also appropriated about $20 billion in grant assistance to help airports
respond to the COVID–19 pandemic, including funds for operating expenses, debt
service, and other expenses.151 The additional grants are helping airports offset
some of the financial damage from the abrupt, unexpected drop in air travel that
resulted from precautions to limit the spread of COVID–19, according to ACI–NA.152
Transit Agencies
COVID–19 and the resulting shelter-in-place orders, business closures, suspension
of tourism, and increasing unemployment and increasing numbers of employees
working from home significantly decreased public transit and commuter rail rider-
ship.153 Nationally, transit ridership in 2020 was down a historic 79 percent at the
143 FEMA, FEMA Statement on 100% Cost Share (February 3, 2021) available at https://
www.fema.gov/press-release/20210203/fema-statement-100-cost-share.
144 GAO, COVID–19 Pandemic: Preliminary Observations on Efforts toward and Factors Affect-
ing the Aviation Industry’s Recovery, GAO–21–412T (March 2, 2021) available at https://
www.gao.gov/assets/gao-21-412t.pdf.
145 See, e.g., TSA, TSA Checkpoint Travel Numbers, (last accessed July 19, 2021). https://
www.tsa.gov/coronavirus/passenger-throughput.
146 Statement of Mr. Nicholas E. Calio, President and Chief Executive Officer, Airlines For
America, ‘‘COVID–19’s Effects on U.S. Aviation and The Flight Path to Recovery’’ before the
United States House Committee on Transportation and Infrastructure Subcommittee on Avia-
tion, (March 2, 2021) available at https://transportation.house.gov/imo/media/doc/
Calio%20Testimony.pdf.
147 Airports Council International, Airports Council Applauds Passage of $8 Billion in COVID–
19 Relief for Airports (last accessed July 19, 2021), available at https://airportscouncil.org/
presslrelease/airports-council-applauds-passage-of-8-billion-in-covid-19-relief-for-airports/
148 House Committee on Transportation and Infrastructure, Chair DeFazio Applauds Inclusion
of T&I Provisions, Including Payroll Support Program Extension, in House Democrats’ Latest
COVID–19 Relief Package, (September 29, 2020), available at https://transportation.house.gov/
news/press-releases/chair-defazio-applauds-inclusion-of-tandi-provisions-including-payroll-sup-
port-program-extension-in-house-democrats-latest-covid-19-relief-package; U.S. Department of
the Treasury, Airline and National Security Relief Programs (accessed on May 7, 2021) https://
home.treasury.gov/policy-issues/coronavirus/assistance-for-american-industry/airline-and-na-
tional-security-relief-programs.
149 General Aviation Manufacturers Association, Protecting Aviation Manufacturing and Main-
tenance Jobs, (March 10, 2021) available at https://gama.aero/news-and-events/press-releases/
protecting-aviation-manufacturing-and-maintenance-jobs/.
150 Airlines for America, Statement from A4A CEO and President Nicholas E. Calio on the Pas-
sage of the American Rescue Plan (March 10, 2021) available at https://www.airlines.org/news/
statement-from-a4a-ceo-and-president-nicholas-e-calio-on-the-passage-of-the-american-rescue-
plan/.
151 GAO, COVID–19: Sustained Federal Action Is Crucial as Pandemic Enters Its Second Year,
GAO–21–387 (March 31, 2021) available at https://files.gao.gov/reports/GAO-21-387/index.html.
152 Airports Council International, Airports Council Statement on CARES Act Grants (last
accessed July 19, 2021) available at https://airportscouncil.org/presslrelease/airports-council-
international-north-america-statement-on-cares-act-grants/.
153 Abby Vesoulis, The Future of American Public Transit Depends on Congress, Time (Decem-
ber 17, 2020) available at https://time.com/5921917/mass-transit-covid-congress/.
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start of the pandemic compared to 2019 levels.154 Transit agencies anticipate long-
term consequences from the COVID–19 pandemic, including reduced demand for
service, increased operating costs, and limited state and local funding.155 According
to the American Public Transportation Association (APTA), when the economy does
begin to recover, transit agencies will still be challenged with severe fiscal con-
straints as a result of physical distancing requirements that reduce vehicle capacity,
increased costs of facility and vehicle cleaning and disinfection, and decreased rider-
ship due to the dramatic increase in telework.156
The CARES Act and subsequent pandemic relief funding have provided about
$69.5 billion in grant assistance to help transit agencies manage these fiscal con-
straints.157 Federal relief funds also allowed transit agencies to keep critical service
running, avoid layoffs, and provide workers and riders with COVID–19 protec-
tions.158 As a result, some transit agencies across the country have restored pre-
viously reduced service or have cancelled plans to further cut service.159 Transit
agencies have also used the funds to mitigate the spread of COVID–19, including
through enhanced cleaning and sanitation and social distancing.160 Further, restor-
ing transit service is expected to help the nation’s economic recovery, such as in
New York City, where the economy depends on trains and buses to carry riders to
businesses, including theaters, retail stores, and restaurants, that have been crip-
pled by the pandemic.161
Other Transportation Sectors
Operators of motorcoaches, school buses, and passenger vessels have also suffered
the financial effects of lower demand for their services due to the pandemic. For ex-
ample, though passenger ships operating exclusively inside the United States have
begun to resume operations, virtually the entire U.S. domestic commercial pas-
senger fleet, including overnight excursions, day charters, and tours, was forced to
shut down for a year.162 Companies operating commuter shuttle buses and private
bus charters also were forced to suspend service due to lack of passengers, and some
went out of business entirely, according to the American Bus Association.163
The Coronavirus Economic Relief for Transportation Services (CERTS) Program
was created to support companies such as motorcoach, school bus, passenger vessel,
and pilot vessel companies that were affected by the COVID–19 pandemic.164 Under
the program, up to $2 billion in grants is made available to eligible companies that
certify they have experienced an annual revenue loss of 25 percent or more as a di-
rect or indirect result of COVID–19.165 Grant funds administered through the
154 American Public Transportation Association, The Impact of the COVID–19 Pandemic on
Public Transit Funding Needs in the U.S. (January 27, 2021) available at https://www.apta.com/
wp-content/uploads/APTA-COVID-19-Funding-Impact-2021-01-27.pdf.
155 Supra, n. 9, GAO–21–387.
156 American Public Transportation Association, The Impact of the COVID–19 Pandemic on
Public Transit Funding Needs in the U.S. (January 27, 2021) available at https://www.apta.com/
wp-content/uploads/APTA-COVID-19-Funding-Impact-2021-01-27.pdf.
157 This includes $25 billion from the CARES Act, $14 billion from the Consolidated Appro-
priations Act, 2021, and $30 billion from the American Rescue Plan. See https://
www.transit.dot.gov/coronavirus.
158 Amalgamated Transit Union, Relief on the way for transit and working families with Amer-
ican Rescue Plan (March 10, 2021) available at https://www.atu.org/media/releases/atu-relief-on-
the-way-for-transit-and-working-families-with-american-rescue-plan.
159 NEW YORK TIMES, Transit Got $30 Billion in Stimulus Aid. What Does That Mean for Rid-
ers? (March 15, 2021) available at https://www.nytimes.com/2021/03/15/nyregion/biden-stimulus-
public-transportation.html.
160 Supra, n. 9, GAO–21–387.
161 NEW YORK TIMES, Transit Got $30 Billion in Stimulus Aid. What Does That Mean for Rid-
ers? (March 15, 2021) available at https://www.nytimes.com/2021/03/15/nyregion/biden-stimulus-
public-transportation.html.
162 Letter from Passenger Vessel Association to Speaker Nancy Pelosi (April 8, 2020) available
at http://www.passengervessel.com/downloads/letters/2020-CARES-ACT-2-Speaker-Pelosi.pdf;
The Maritime Executive, American Coastal and River Cruising is Resuming (March 16, 2021)
available at https://www.maritime-executive.com/article/american-coastal-and-river-cruising-is-
resumming.
163 American Bus Association, New Report Details Motorcoach Industry’s Dire Situation (Au-
gust 10, 2020), available at https://www.buses.org/news/article/new-report-details-motorcoach-in-
dustrys-dire-situation.
164 U.S. Department of the Treasury, Coronavirus Economic Relief for Transportation Services
(CERTS) Program, available at https://home.treasury.gov/policy-issues/coronavirus/assistance-
for-american-industry/coronavirus-economic-relief-for-transportation-services.
165 Id., and Guidelines for the Coronavirus Economic Relief for Transportation Services
(CERTS) Grant Program (May 6, 2021), available at https://home.treasury.gov/policy-issues/
Continued
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CERTS program are primarily used to cover payroll costs but may also be used to
cover the acquisition of services, supplies, and the cost of operating and maintaining
equipment, among other things.166
These federal relief efforts have been critical to the nation’s economic and public
health recovery from COVID–19. They helped to get needed supplies to states and
local governments and financial relief to transportation workers and U.S. businesses
impacted by the pandemic. However, the federal oversight community has identified
various instances of abuse by individual recipients of these funds and areas where
federal agencies can improve their oversight of the government’s pandemic relief
and response efforts. The hearing will provide an opportunity for Members to dis-
cuss both the oversight of the government’s COVID–19 relief efforts and the impact
of those actions on the transportation industry and its workers.
WITNESS LIST—PANEL I
• The Honorable Michael E. Horowitz, Chair, Pandemic Response Accountability
Committee
• Ms. Heather Krause, Director, Physical Infrastructure Issues, Government Ac-
countability Office
• Mr. Chris Currie, Director, Homeland Security and Justice Issues, Government
Accountability Office
• The Honorable Eric J. Soskin, Inspector General, Department of Transportation
• Mr. James Izzard, Assistant Inspector General for Investigations, Department
of Homeland Security
WITNESS LIST—PANEL II
• Mr. Paul Skoutelas, President & CEO, American Public Transportation Associa-
tion (APTA)
• Mr. Juan Ortiz, Director of Homeland Security and Emergency Management,
City of Austin, Texas—on behalf of the International Association of Emergency
Managers (IAEM)
• Dr. Michael J. Boskin, T.M. Friedman Professor of Economics and Senior Fel-
low, Hoover Institution, Stanford University
• Dr. Wendy Edelberg, PhD, Director, The Hamilton Project, The Brookings Insti-
tution
• Mr. John Samuelsen, Transport Workers Union of America (TWU)
coronavirus/assistance-for-american-industry/coronavirus-economic-relief-for-transportation-serv-
ices.
166 U.S. Department of the Treasury, Coronavirus Economic Relief for Transportation Services
(CERTS) Program and Guidelines for the Coronavirus Economic Relief for Transportation Serv-
ices (CERTS) Grant Program (May 6, 2021), available at https://home.treasury.gov/policy-issues/
coronavirus/assistance-for-american-industry/coronavirus-economic-relief-for-transportation-serv-
ices. According to the CERTS guidelines Treasury published on May 6, 2021, to be eligible for
payments under this program, companies must be established or organized in the United States
or pursuant to federal law and must have a majority of employees in the United States, among
other things. Further, passenger vessel companies must carry out their principal business using
one or more passenger vessels of the United States (as each is defined in 46 USC § 2101) that
(a) are for hire with a capacity of 6 to 2,400 passengers and (b) have U.S. Coast Guard (USCG)
issued Certificates of Inspection (COI).
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Mr. DEFAZIO. I call the Committee on Transportation and Infra-
structure to order.
As I did yesterday, during yesterday’s markup, I am reading an
announcement from the Office of the Attending Physician.
The physician has once again imposed a requirement that Mem-
bers, staff, and all others physically present in an enclosed House
of Representatives-controlled space—i.e., this room and others like
it—and the floor of the House will be required to wear masks, un-
less speaking.
I view this as a safety issue, therefore an important matter of
order and decorum. I assert my responsibility to preserve order and
decorum with respect to the wearing of masks. The chair would
greatly prefer that all present simply uphold the decorum of the
committee by complying with reasonable safety standards rec-
ommended by the Attending Physician, and respectful of all the oc-
cupants of the room.
With that, the committee will come to order.
I ask unanimous consent that chair be authorized to declare re-
cess at any time during today’s hearing.
Without objection, so ordered.
As a reminder, please keep your microphone muted while speak-
ing, blah blah blah. If you make noise, I will shout at you.
To insert a document into the record, please email it to
DocumentsT&I@mail.house.gov.
With that I would go to my opening statement, which I put some-
where. Oh, who took it? Yes, here we go, OK.
Today we will hear about the impact the Government’s COVID–
19 relief funding has had on the transportation sector and its work-
ers who were heavily hit. Many transportation workers died. Many,
many more became ill. But they kept the trains, the planes, and
the buses running during this, and the light rail, anything that is
related to transportation. And obviously, ridership went down. But
they provided essential transportation to many, many critical work-
ers during that time. And the economy would have been way worse
off without their incredible sacrifice.
So today we are here to look at the Government’s response, and
see that these Federal funds have been utilized efficiently and ef-
fectively. The pandemic, obviously, has had a huge and ongoing im-
pact, and Congress took unprecedented steps to deal with that.
The Federal oversight community, which will be our first panel,
has been tracking this economic aid to determine if it has been
used appropriately and to identify ways to ensure it is used as pro-
ductively as possible. The oversight—I forgot I can take my mask
off while I am talking—the oversight community has also worked
to identify weaknesses in agencies’ management of COVID–19 re-
lief programs and to ferret out individual cases of fraud, which, in
this sector, are quite rare, not so much in the Paycheck Protection
Program or unemployment programs, but in this it was rare, rel-
atively rare.
Our hearing today will examine both these issues: oversight of
the funds and the impact of the aid on the industry’s stakeholders.
There are always going to be individual bad actors attempting to
defraud or financially abuse a program or take advantage of a cri-
sis. And some programs may have had poor management or ineffec-
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18
tive leadership. And that is what we want to hear: the oversight
community can identify loopholes, or how people might have been
enabled to commit fraud, and make recommendations to improve
the management of those programs.
In some cases, Federal agencies, many that are outside our com-
mittee’s jurisdiction, have not moved quickly enough to close these
oversight gaps, and to learn the lessons from past national emer-
gencies. GAO, for instance, has issued 87 COVID–19-related rec-
ommendations since the pandemic began, and only 16 have been
fully implemented.
Despite these issues, the economic relief was necessary. Gov-
ernors, mayors, local officials, labor organizations, and business as-
sociations, have all applauded the support Congress provided
through legislation. It helped to slow the spread of the virus,
thwart the loss of American jobs, and bolster the economic security
of the U.S. and small businesses.
Unfortunately, we may never know how successful these efforts
were, because Government agencies failed to track the number of
jobs that were saved. I look forward to hearing from our Govern-
ment witnesses about how to increase transparency on this front,
hopefully retrospectively, but certainly in the future. This won’t be
our last national crisis. Who knows what the next one will be?
I also look forward to hearing ideas to enhance accountability,
improve Federal crisis planning and emergency management pro-
grams, and strengthen transparency of Government expenditures.
While I believe the COVID–19 relief funding was absolutely critical
in addressing the dire economic situation and public health catas-
trophe, I also commend the oversight community for identifying
problems, highlighting cases of ineffective management, and spot-
ting cases of waste, fraud, and abuse to improve the management
of Federal programs to help Americans impacted by COVID.
There are several questions I hope will be addressed by the
panel: What recommendations do you have to help the Govern-
ment’s coordinated response to national public health and other
emergencies, particularly for the Federal Emergency Management
Agency?
I would note that we are not touching on aviation today, but the
Department of Transportation was ordered, under the Obama ad-
ministration, to develop an emergency response plan to deal with
pandemics. We are still waiting.
And secondly, how can we improve reporting and transparency
related to the use of Federal disaster assistance funds?
How can we learn from the Federal oversight community’s identi-
fication of problems in the Federal response to the COVID–19 pan-
demic to improve the response during the next national crisis?
And from the standpoint of transportation stakeholders, our sec-
ond panel, what worked well, in terms of the Government response
to helping them confront the crisis, and how can we help support
transportation workers and the critical transportation infrastruc-
ture we all depend upon in order to mitigate the impact of future
national public health emergencies?
Thanks to all of you for being here today, and I yield to the rank-
ing member for his opening statement.
[Mr. DeFazio’s prepared statement follows:]
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f
Prepared Statement of Hon. Peter A. DeFazio, a Representative in Con-
gress from the State of Oregon, and Chair, Committee on Transportation
and Infrastructure
Today we will hear about the impact the government’s COVID–19 relief funding
has had on the transportation sector and its workers, and the challenges in over-
seeing the government’s response efforts and ensuring that these federal funds are
managed efficiently and effectively.
The onslaught of the COVID–19 pandemic has had devastating consequences for
our nation and the world. In the United States it has infected more than 34 million
Americans and resulted in the deaths of more than 600,000 individuals. The federal
government was called upon to respond to this public health crisis in a way that
was unprecedented on a national scale for such a prolonged period of time, and it
continues to do this work on a daily basis across our country.
The pandemic also wreaked havoc on our economy, decimating the financial liveli-
hood of many American workers and businesses, particularly in the transportation
sector. Congress took unprecedented actions to help cushion the economic blow to
workers, families, and small businesses.
The federal oversight community has been tracking this economic aid to deter-
mine if it has been used appropriately and to identify ways to ensure it is used as
productively as possible. The oversight community has also worked to identify weak-
nesses in agencies’ management of COVID–19 relief programs and to ferret out indi-
vidual cases of fraud. Our hearing today will examine both of these issues: the over-
sight of these funds by federal Offices of Inspectors General and the U.S. Govern-
ment Accountability Office and the impact of this aid to transportation industry
stakeholders.
Challenges do exist. There will always be individual bad actors seeking to defraud
or financially abuse a program or federal agency whose mission is to serve the pub-
lic and the nation. Some programs may also be impeded by poor management and
ineffective leadership. The oversight community has been keeping tabs on these
funds, identifying these fraudsters, and making recommendations to improve the
management of federal COVID–19 relief actions and programs.
But in some cases, federal agencies, many outside our committee’s jurisdiction,
have not moved quickly enough to close these oversight gaps and to learn the les-
sons from past national emergencies. The Government Accountability Office, for in-
stance, has issued 87 COVID–19 related recommendations since the pandemic
began and only 16 of those have been fully implemented.
Despite these issues, COVID–19 economic relief was necessary. Governors, may-
ors and local officials, labor organizations and business associations have all ap-
plauded the support Congress provided through legislation that helped to slow the
spread of the COVID–19 virus, thwarted the loss of American jobs, and bolstered
the economic security of U.S. small businesses. Unfortunately, we may not know
how successful these relief efforts were because government agencies failed to track
the number of jobs that were saved. I look forward to hearing from our government
witnesses about how to increase transparency on this front. I also look forward to
hearing ideas to enhance accountability, improve federal crisis planning and emer-
gency management programs, and strengthen transparency of government expendi-
tures in the future.
While I believe the COVID–19 relief funding was absolutely critical to addressing
the dire economic situation and the public health catastrophe, I also commend the
oversight community for identifying problems, highlighting cases of ineffective man-
agement and spotting cases of waste, fraud and abuse to improve the management
of federal programs to help Americans impacted by the COVID–19 pandemic.
There are several questions I hope our panelists will help us understand today.
• What recommendations does the oversight community have to helping improve
the government’s coordinated response to national public health and other
emergencies, particularly for the Federal Emergency Management Agency
(FEMA)?
• How can we improve reporting and transparency related to the use of federal
disaster assistance funds?
• How can we learn from the federal oversight community’s identification of prob-
lems in the federal response to the COVID–19 pandemic to improve the re-
sponse during the next national crisis?
• From the standpoint of transportation stakeholders, what worked well in terms
of the government’s response to helping them confront this crisis and how can
we help support transportation workers and the critical transportation infra-
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structure we all depend upon in order to mitigate the impact of future national
public health emergencies?
Thank you to all of our witnesses for being here today. I look forward to your tes-
timony. With that I yield to Ranking Member Graves for his opening statement.
Mr. GRAVES OF MISSOURI. Thank you, Mr. Chairman.
Since the beginning of the pandemic, the Government has spent
$5.9 trillion on combating COVID–19; $1.9 trillion has been author-
ized by Congress just this year. Some of this money was legiti-
mately needed to help us respond and recover from a once-in-a-life-
time pandemic. With it, we were able to do things like Operation
Warp Speed, distribute personal protective equipment, or PPE, set
up medical clinics, and provide transportation for essential work-
ers. I am glad today’s hearing is going to focus on oversight and
look at how these funds have been used or potentially misused.
Unfortunately, a lot of recent funding has been masqueraded as
pandemic-related relief. For example, more than $1 billion for Am-
trak, school funds for critical race theory, and loads of extraneous
green projects. And now the majority wants to add another $3.5
trillion to the tab through its ‘‘human infrastructure’’ bill, which
will be jammed through using the partisan budget reconciliation
process. This would be the highest level of funding for any legisla-
tive measure in the history of our country, costing the American
taxpayers about $50,000 per U.S. household.
We cannot just casually throw around trillion-dollar figures like
we are playing with Monopoly money. We have to consider where
these astronomical amounts of money are coming from. Unfortu-
nately, it is going to come from the pockets of the taxpayers, and
the pockets of future taxpayers who haven’t even been born yet.
The effects of this cumulative, unchecked spending are real, and we
are seeing it every day. The price of consumer goods has gone up
nearly across the board. Gasoline is up 56 percent, airlines are up,
our airfares are up 24 percent. Used cars are up 30 percent from
last year. And even the cost of chicken wings has increased more
than 58 percent.
Let’s not forget, we still don’t know how this virus started, de-
spite its high cost. More than 600,000 U.S. lives have been lost,
and we are still paying the economic toll of recovery.
I look forward to hearing from today’s panels on how this spend-
ing is impacting our economy, and how it is impacting jobs, and
whether or not Congress was as targeted as we ought to have been
when spending such large sums of money.
With that, Mr. Chairman, I am looking forward to hearing from
our witnesses, and I do appreciate the hearing, and I yield back the
balance of my time.
[Mr. Graves of Missouri’s prepared statement follows:]
f
Prepared Statement of Hon. Sam Graves, a Representative in Congress
from the State of Missouri, and Ranking Member, Committee on Trans-
portation and Infrastructure
Thank you, Chair DeFazio.
Since the beginning of the pandemic, the government has spent $5.9 trillion on
combating COVID–19. $1.9 trillion has been authorized by Congress this year alone.
Some of this money was legitimately needed to help us respond and recover from
a once-in-a-lifetime pandemic. With it we were able to do things like Operation
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Warp Speed, distribute personal protective equipment (PPE), set up medical clinics,
and provide transportation for essential workers.
I am glad today’s hearing will focus on oversight and look at how these funds
have been used—and potentially misused.
Unfortunately, a lot of recent funding has masqueraded as pandemic-related re-
lief. For example: more than $1 billion for Amtrak, school funds for critical race the-
ory, and loads of extraneous green projects. And now the Majority wants to add an-
other $3.5 trillion to the tab through its ‘‘human infrastructure’’ bill which will be
jammed through using the partisan budget reconciliation process. This would be the
highest level of funding for any legislative measure in our history—costing the
American taxpayers about $50,000 per U.S. household.
We cannot casually throw around trillion-dollar figures now like we’re playing
with Monopoly money. We must consider where these astronomical amounts of
money are actually coming from. Unfortunately, it’ll come from the pockets of the
taxpayers, and the pockets of future taxpayers who haven’t even been born yet.
The effects of this cumulative, unchecked spending are real. And we’re seeing it
every day. The price of consumer goods has gone up nearly across the board. For
example, gasoline is up 56 percent, airfares are up 24 percent, used cars are up 30
percent from last year, and even the cost of chicken wings has increased by more
than 58 percent.
And let’s not forget that we still don’t know how this virus started despite its high
cost. More than 600,000 U.S. lives were lost and we’re still paying the economic toll
of recovery.
I look forward to hearing from today’s panels on how this spending is impacting
our economy, jobs, and whether or not Congress was as targeted as we ought to
have been when spending such huge sums of money.
Mr. DEFAZIO. I thank the gentleman for his brevity. I will now
turn to our witnesses.
We will be hearing testimony from witnesses, two panels, with
each panel followed by questions from Members.
I would now like to welcome witnesses on our first panel: the
Honorable Michael E. Horowitz, Chair, Pandemic Response Ac-
countability Committee; Ms. Heather Krause, Director of Physical
Infrastructure, Government Accountability Office; Mr. Chris
Currie, Director of Homeland Security and Justice, Government Ac-
countability Office; the Honorable Eric J. Soskin, inspector general,
Department of Transportation; and Mr. James Izzard, assistant in-
spector general for investigations, Department of Homeland Secu-
rity.
Thanks for joining us today. I look forward to your questions.
Without objection, the full statements will be included in the
record.
Since your written statement has been made a part of the record,
the committee requests that you extract the most relevant points,
and restrict yourself to 5 minutes.
With that, Chairman Horowitz, you are recognized for 5 minutes.
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TESTIMONY OF HON. MICHAEL E. HOROWITZ, CHAIR, PAN-
DEMIC RESPONSE ACCOUNTABILITY COMMITTEE; HEATHER
KRAUSE, DIRECTOR, PHYSICAL INFRASTRUCTURE, U.S. GOV-
ERNMENT ACCOUNTABILITY OFFICE; CHRIS P. CURRIE, DI-
RECTOR, HOMELAND SECURITY AND JUSTICE, U.S. GOVERN-
MENT ACCOUNTABILITY OFFICE; HON. ERIC J. SOSKIN, IN-
SPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPOR-
TATION; AND JAMES IZZARD, JR., ASSISTANT INSPECTOR
GENERAL FOR INVESTIGATIONS, U.S. DEPARTMENT OF
HOMELAND SECURITY
Mr. HOROWITZ. Thank you, Mr. Chairman and Ranking Member
Graves, and members of the committee. Thank you for inviting me
to testify at today’s important hearing.
Congress created the Pandemic Response Accountability Com-
mittee, or PRAC, which is comprised of 22 Federal inspectors gen-
eral, to oversee the more than $5 trillion in Federal pandemic relief
spending. And I am proud to report on our accomplishments to
date at today’s hearing.
PRAC’s mission is to work with IGs to help ensure that taxpayer
money is used effectively and efficiently, and to address the pan-
demic-related public health and economic needs that the Congress
funded, as well as to root out waste, fraud, abuse, and misconduct.
Oversight of a program of this magnitude takes a monumental and
whole-of-Government effort. Our efforts at the PRAC have focused
on three pillars: transparency, coordinated oversight, and account-
ability.
In order to foster transparency and enable the public to know
how its money is being spent, the PRAC established a website,
PandemicOversight.gov, and I hope people will go and look at the
website. We continually update it with new datasets and spending
data, and develop new features to enhance it as a tool for the pub-
lic.
For example, just this month we updated our data visualizations
on the Paycheck Protection Program, and for the first time were
able to incorporate loan forgiveness data.
The website also contains accountability information, including
audit and inspection reports from Federal IGs, as well as from the
Government Accountability Office.
We also track recommendations that IGs have made to agencies
to help improve the operations of Government programs related to
the pandemic.
I am particularly pleased to report that, as a result of the
PRAC’s outreach efforts to our State and local oversight partners,
PandemicOversight.gov now includes reports from State, county,
and city auditors overseeing pandemic response funds. The website
contains over 125 reports so far. These oversight entities—and
there will be more to come—involving unemployment insurance,
use of coronavirus relief funds, pandemic preparedness, contract
tracing, and more.
With regard to our accountability efforts, the PRAC and Federal
IGs have been performing rigorous, independent oversight for 16
months now. To date, these efforts have resulted in the issuance
of about 250 oversight reports related to pandemic spending, and
the Government’s response to the pandemic.
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In addition, the PRAC issued an agile products toolkit to assist
with oversight efforts, and has held a series of public forums and
programs to inform the public about our oversight efforts.
And just this month, the PRAC announced the creation of a new
working group focused on preventing and addressing identity fraud
in pandemic response programs. The PRAC Identity Fraud Reduc-
tion and Redress Working Group seeks to help reduce identity
fraud in Government programs, and very importantly, assist vic-
tims in recovering from what can be devastating impacts from
identity fraud.
Additionally, the PRAC and the IG community is committed to
bringing to justice those who, unfortunately, seek to defraud and
steal from pandemic programs. Earlier this year the PRAC estab-
lished a Pandemic Fraud Working Group, comprised of law enforce-
ment agents from across the IG community. And the work of IG
agents has resulted in hundreds of arrests and prosecutions to
date, and we have many more ongoing, open, and significant inves-
tigations.
We are using all of the tools that Congress has given us, civil
and criminal authorities, and suspension and debarment, among
others, to prevent and detect wrongdoing. One of the most impor-
tant tools that has enabled us to effectively identify and prevent
misconduct is data analytics. That is why the PRAC is excited
about the development of our Pandemic Analytics Center of Excel-
lence, or PACE, and I look forward to talk about this at today’s
hearing.
The PACE will allow the IG community to conduct data analysis
and visualization of all pandemic response funds, provide fraud-
fighting tools to the IG community, enable the broad sharing of
data and leading practices among IGs, and assist investigations
and audits with expanded data for open source investigative intel-
ligence.
In the coming months, I look forward to providing even more in-
formation about the PACE, as we continue to build what promises
to be one of the more important tools in helping IGs root out fraud,
waste, abuse, and protect taxpayer money.
Thank you again for your continued strong support of the IG
community. The extraordinary team at the PRAC and the entire IG
community is committed to advancing transparency and account-
ability through our independent oversight efforts.
That concludes my remarks, and I would be pleased to answer
any questions the committee may have.
[Mr. Horowitz’s prepared statement follows:]
f
Prepared Statement of Hon. Michael E. Horowitz, Chair, Pandemic
Response Accountability Committee
Mr. Chairman, Ranking Member Graves, and Members of the Committee:
Thank you for inviting me to testify today to discuss the work of the Pandemic
Response Accountability Committee (PRAC), which was created as part of the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March 2020. In
addition to serving as the Inspector General of the Department of Justice since
2012, for the past 15 months, I have served as acting Chair and permanent chair
of the PRAC.
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The PRAC is a Committee of the Council of the Inspectors General on Integrity
and Efficiency (CIGIE) and is comprised of 22 federal Inspectors General (IGs) who
are working collaboratively to oversee the more than $5 trillion in federal pandemic-
relief emergency spending. Our primary mission at the PRAC is to work with Of-
fices of the Inspector General (OIG) to ensure that taxpayer money is used effec-
tively and efficiently to address the pandemic-related public health and economic
needs that were funded through the various COVID–19 relief bills. My testimony
today will focus on the PRAC’s role in coordinating oversight of the pandemic re-
sponse, and what lessons we have learned thus far.
To put it in perspective, the more than $5 trillion in relief provided to address
the pandemic and its health and economic impact to Americans is more than the
federal government’s total spending in 2019 for all discretionary, mandatory, and in-
terest on the debt. Oversight of a program of this magnitude takes a monumental
and whole-of-government effort. The speed at which funds were disbursed last year,
and the sheer amount of money involved, put the funds at high risk of fraud and
misuse, making the work of oversight entities like the PRAC and IGs essential to
a successful national recovery.
The PRAC was established to serve the American public by promoting trans-
parency and facilitating coordinated oversight of the Federal Government’s COVID–
19 pandemic response and associated spending with the goal to identify major risks
that cross program and agency boundaries, and to assist agencies in preventing and
detecting fraud, waste, abuse, and mismanagement. We also seek to provide the
public with accessible, timely, accurate, and comprehensive data about the over $5
trillion in COVID–19 relief spending. To date, the 22 PRAC IGs, as well as other
IGs whose agencies received emergency pandemic funding, have issued 250 over-
sight reports related to pandemic spending and the government’s response to the
pandemic. Recognizing the need to provide policymakers with timely insights into
pandemic relief spending, the IGs have issued many agile oversight products, in-
cluding inspections conducted remotely, flash reports, agency program funding snap-
shots, management alerts, and white papers. These reports have included specific
reviews of the Department of Transportation and Department of Homeland Secu-
rity, which are covered in detail in Inspector General Soskin and Assistant Inspec-
tor General for Investigation Izzard’s remarks.
PRAC’S WORK TO DATE
In response to the COVID–19 outbreak, Congress authorized historic levels of
emergency funding for federal agencies to provide relief to individuals, businesses,
state and local governments, and public services. Since last March, the PRAC has
worked with member IGs to conduct oversight that seeks to identify programmatic
and systemic risks, and to develop recommendations for program improvements,
refer matters for criminal and civil investigations, and identify misspent covered
funds for recovery. I will briefly mention a few examples of the PRAC’s work over
the past year to fulfill this mission and its plans for the future.
Promoting Transparency through PandemicOversight.gov
The PRAC fosters greater transparency of the government’s pandemic-related
spending through our robust, publicly accessible website, PandemicOversight.gov.
The website includes important information about the PRAC and makes publicly
available a wide range of data related to how emergency pandemic funds have been
spent. For example, the website includes pandemic spending data from
USASpending.gov, Paycheck Protection Program (PPP) data from the Small Busi-
ness Administration (SBA), and an updated list of all ongoing work from member
IGs related to the pandemic. In addition, our website provides direct access to re-
cipient and sub-recipient level reporting and the expenditures made using
Coronavirus Relief Funds. Our website is currently the only place where this data
is available to the public.
We are continuing to update PandemicOversight.gov with additional datasets and
have been designing and developing new content and features that further enhance
the site’s effectiveness as a transparency tool for the public, Congress, and other key
stakeholders. In May, we provided updated Coronavirus Relief Fund data to in-
cludes all funds spent from March 1, 2020 through March 31, 2021. In June, we
incorporated Provider Relief Fund data from hospitals and healthcare providers that
we obtained from the U.S. Department of Health and Human Services into our
website. Most recently, in July, we updated our data visualizations on the Paycheck
Protection Program and for the first time incorporated loan forgiveness data.
The website also contains accountability information, including findings from
OIGs, such as completed audits and inspections, as well as Government Account-
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ability Office (GAO) reports. We also track recommendations that IGs have made
to agencies to help them improve the operations of government programs related to
the pandemic.
I am particularly pleased to report that, as a result of the PRAC’s outreach effort
to our oversight partners at the state and local levels, PandemicOversight.gov also
now includes reports from state, county, and city auditors overseeing pandemic re-
sponse funds. The website contains over 125 reports [https://www.
pandemicoversight.gov/oversight/reports?f%5B0%5D=reportltypeltaxonomy
%3A123] on unemployment insurance, use of Coronavirus Relief Funds, pandemic
preparedness, contact tracing, and more. The reports can be found alongside the
PRAC’s pandemic oversight reports by federal auditors. A searchable database of
state and local reports allows policy makers and the public to better understand
pandemic response oversight at all levels and helps federal oversight agencies, like
the PRAC, better monitor and protect the $5 trillion in pandemic relief distributed
across the United States. For example, a report issued by the California State Audi-
tor in August 2020 designated the management of Federal pandemic response funds
as high risk for the state, stating that California must be able to properly account
for and report on the use of funds; specifically, the report stated that California
must effectively track and justify the costs of its COVID–19-related emergency pro-
tective measures to ensure that it maximizes the reimbursement that FEMA will
provide. The California State Auditor further noted that mismanagement of
COVID–19 funds could result in serious detriment to the state and its residents. In
another example, work completed by the New York Comptroller’s Office (which in-
cludes the state’s audit function) provided a data snapshot of the impact of the pan-
demic on subway ridership as well as the impact of the pandemic on the Metropoli-
tan Transit Authority’s debt profile and highlighting that ridership levels will likely
not reach pre-pandemic levels until sometime in 2021. These reports highlight the
need for proper management of funds, as well as provide key insights and informa-
tion about the impact of the pandemic on the ground.
We also have worked closely with GAO and its leadership to ensure that federal
oversight efforts are well coordinated and seamless. The outstanding reports issued
by GAO have been an integral part of the federal oversight effort and we look for-
ward to continuing to partner with GAO, as well as our state and local oversight
colleagues, as we conduct our independent oversight efforts on behalf of the tax-
payers.
Work on Cross-Cutting Issues that Transcend Federal Agencies
In February 2021, the PRAC issued a ‘‘Top Challenges in Pandemic Relief and
Response’’ report [https://www.oversight.gov/sites/default/files/oig-reports/PRAC/
PRAC-Update-Top-Challenges-Pandemic-Relief-and-Response.pdf], which updated a
similar June 2020 report [https://www.oversight.gov/sites/default/files/oig-reports/
Top%20Challenges%20Facing%20Federal%20Agencies%20-%20COVID-
19%20Emergency%20Relief%20and%20Response%20Effortsl1.pdf] by the PRAC,
and highlighted the major management challenges facing federal agencies during
the pandemic. The PRAC report also identified cross-cutting issues for policymakers
to consider as they implement the relief funding in the American Rescue Plan.
Three of these challenges particularly incorporate elements related to this Commit-
tee’s jurisdiction:
1. Financial Management of Relief Funding. Even in non-pandemic times, finan-
cial management controls and proper oversight of government contracts pose a chal-
lenge to federal agencies and programs. The substantial increase in funding for cer-
tain programs and an expedited timetable for the distribution of CARES Act and
other pandemic-related funds heightens the risks. Since the pandemic began in
March 2020, OIGs have found that payments have been made without the appro-
priate checks and controls in place to verify the expenditures. A soon to be issued
PRAC report found that noncompetitively awarded contracts increase the risk of
higher prices and decreased contractor performance and may require additional
oversight. In addition, OIGs have identified contracts that pose potential conflicts
of interest and contractors that have not delivered products by the specified due
dates. Further, federal agencies may face challenges maintaining their agency oper-
ations and programming, especially those supported by contracts if the contractors
are unable to fulfill existing requirements due to COVID–19 restrictions. As the
pandemic continues, federal agencies must continue to ensure they get what they
pay for in their pandemic response-related contracts as well as guard against fraud
and improper payments.
2. Informing and Protecting the Public from Pandemic-Related Fraud. PRAC
member OIGs have also found that Americans are being targeted in greater num-
bers by dishonest people taking advantage of the crisis to harm individuals and
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businesses through scams and harassment. Identity theft is on the rise and three
pandemic-related benefit programs have been particularly hard hit: the Department
of Labor’s unemployment insurance (UI) program and the Small Business Adminis-
tration’s Economic Injury Disaster Loan (EIDL) program and Paycheck Protection
Program (PPP). According to the Federal Trade Commission, identity thieves tar-
geted pandemic unemployment insurance in record numbers, with over 394,000 peo-
ple reporting that their personal information was misused to apply for a government
benefit—an increase of nearly 3,000% from 2019.1
In July, the PRAC announced formation of a new working group focused on pre-
venting and addressing identity fraud in pandemic response programs. The PRAC
Identity Fraud Reduction & Redress Working Group is a joint effort of multiple In-
spectors General who are members of the PRAC. The Working Group is taking a
holistic approach in seeking to help reduce identity fraud in government programs
and assist victims in recovering from what can be devastating impacts from identity
fraud. As an oversight community, we have identified several internal controls that
can prevent identity fraud in federal programs to avoid the scale of fraud that took
place in 2020.
To educate the public about what watchdogs at all levels of government—federal,
state, and local—have found in their work related to identity theft in pandemic re-
lief programs, the PRAC has added an interactive timeline [https://
www.pandemicoversight.gov/our-mission/identity-theft-in-pandemic-benefits-pro-
grams] to our website. The timeline takes a user through the oversight community’s
audit and investigative efforts to protect pandemic relief funds.
3. Report on Data Gaps. A third challenge we identified concerns data trans-
parency and completeness. A study commissioned by the PRAC with MITRE
[https://www.pandemicoversight.gov/our-mission/publications-reports/gaps-in-cares-
act-and-how-to-close-them] identified key gaps in data sources and opportunities to
close those gaps. The PRAC is actively reviewing federal data sets to identify areas
where high impact programs contain reporting gaps that could affect the ability of
agencies, OIGs, and the PRAC to properly oversee their use of pandemic response
funds. We have been working with OMB, the Chief Financial Officers Council, OIGs
and agencies on these gaps and are working to improve data quality and trans-
parency.
An important result from these recent discussions was OMB Memorandum M–21–
20 [https://www.whitehouse.gov/wp-content/uploads/2021/03/Ml21l20.pdf], Pro-
moting Public Trust in the Federal Government through Effective Implementation of
the American Rescue Plan Act and Stewardship of the Taxpayer Resources, issued
on March 19, 2021. This guidance addresses some of the concerns PRAC leadership
and staff have been discussing with OMB since March 2020, particularly the need
for detailed and accurate award descriptions, enhanced transparency of spending
through use of disaster and emergency funding codes, and working with the PRAC
and IGs to strengthen payment integrity. The guidance specifically mentions the
Administration’s commitment to working with the PRAC and agency IGs to
strengthen payment integrity in order to minimize the risk of waste, fraud, and
abuse. Additionally, the guidance notes that ‘‘OMB anticipates continued collabora-
tion with the PRAC to include joint communications on issues related to ARP relief
that will raise awareness on specific challenges and opportunities for payment integ-
rity.’’
We continue to work with partner IGs, OMB, and the American Rescue Plan im-
plementation team to address program level data gaps and opportunities to promote
public trust and enhance payment integrity. In April, we issued a Joint Alert with
OMB [https://www.pandemicoversight.gov/media/file/omb-and-prac-payment-integ-
rity-alert] on payment integrity. It is imperative that executive departments and
agencies incorporate in program design, tracking, and reporting the lessons learned
from previous rounds of COVID–19 stimulus. OMB and the PRAC’s joint alert iden-
tifies risk factors and mitigating strategies that agencies can consider when assess-
ing impact to their respective programs. And just last week we issued a second Joint
Alert [https://www.pandemicoversight.gov/news/articles/joint-announcement-john-
pasquantino-acting-omb-controller-and-michael-horowitz-prac-0] with OMB, this one
on the benefits of using automation and data analytics in reducing the risk of im-
proper payments of government funds.
Coordinating Oversight Across the PRAC IGs
To facilitate coordination and collaboration between the PRAC and its member
IGs, as well as with the GAO and state and local oversight entities, the PRAC has
1 Federal Trade Commission’s Staff Report, Protecting Consumers During the COVID–19 Pan-
demic: A Year in Review (April 2021).
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established five subcommittees and four issue groups for healthcare, financial insti-
tutions, data sharing, and identity fraud—chaired by PRAC members—to share on-
going oversight and accountability efforts, best practices, and lessons learned. These
efforts include:
• ongoing reviews of multi-dipping, or recipients of pandemic funds using mul-
tiples sources of funds for the same purpose,
• a PPP working group that is discussing outcomes related from oversight and in-
spections of PPP fraud and misuse, and
• sharing of data analytics and data across the pandemic response community to
create a more cohesive response to pandemic oversight,
• GAO, state and local coordination with the federal community on high risks and
areas of concern.
Specifically on state and local coordination, we regularly interface with state and
local auditors [https://www.pandemicoversight.gov/media/file/statelocal-infographic]
to keep the lines of communication open to federal offices. We created a series of
monthly listening posts to discuss challenges that are faced by federal, state, and
local audit program, and fiscal partners in their oversight of CARES Act funds, such
as challenges completing Single Audit Act requirements, fraud risks associated with
the unemployment programs, and sharing reports or methodologies used for similar
oversight activities, and to help find solutions to these problems. Attendees include
PRAC member OIGs, GAO, the National Association of State Auditors, Comptrollers
and Treasurers, the Association of Local Government Auditors, and entities respon-
sible for Tribal oversight.
We also have conducted new coordination efforts with state and local oversight
offices for pandemic-related hotlines and investigations so that states can provide
the PRAC, or the applicable federal agency, with hotline information outside of their
purview or applicable to a federal pandemic response program. Additionally, the
PRAC has initiated quarterly briefings to share investigative best practices or fraud
indicators identified by federal investigators that would benefit state and local in-
vestigators and auditors.
The PRAC Audit Subcommittee issued the Agile Products Toolkit [https://
www.pandemicoversight.gov/sites/default/files/2020-11/Agile%20Products%20
Toolkitl0.pdf] to assist members in providing expeditious oversight of federal re-
sponse in a crisis like the pandemic. The PRAC Healthcare issue group released a
report on COVID–19 testing, a risk area the group identified [https://
www.oversight.gov/sites/default/files/oig-reports/PRAC/Federal-COVID-19-Testing-
Report.pdf] that cuts across agencies, and collaborated to create a data brief on
COVID–19 testing administered between February 2020 and August 2020 in six se-
lect federal health care programs. This report highlights critical areas for policy-
makers to consider to improve testing for Americans, including availability, accessi-
bility, and cost effectiveness of tests. The PRAC Financial Institutions issue group
brought together expert stakeholders to gather their insights concerning the Federal
government’s pandemic response efforts in small business and housing relief pro-
grams. The group released a series of videos highlighting those perspectives of lend-
ers [https://www.pandemicoversight.gov/news/pandemic-response-perspectives-from-
banking-industry], small business and borrowers [https://
www.pandemicoversight.gov/news/pandemic-response-perspectives-from-borrowers],
and housing stakeholders [https://www.pandemicoversight.gov/news/pandemic-re-
sponse-housing-insights].
To help assess the impact of CARES Act funding, as well as discuss lessons
learned, we held a virtual forum on March 25, 2021—CARES Act One Year Later:
Oversight of America’s Investment in Pandemic Response [https://
www.pandemicoversight.gov/news/events/cares-act-one-year-later]. The event was at-
tended live by 550 participants and featured prerecorded remarks from Sen. Gary
Peters, Rep. Carolyn Maloney, Rep. James Comer, and Rep. Jim Clyburn. To share
these insights widely with the public, the PRAC posted the event video on
PandemicOversight.gov and our YouTube channel. In August, we will host a virtual
roundtable webinar to discuss the impact of pandemic spending on underserved
communities, whether the funds reached those they were intended to help, and what
changes may be needed in connection with future disaster relief efforts.
Meanwhile, OIGs and our law enforcement partners at the Department of Justice
and elsewhere have been aggressively pursuing fraud cases. The investigative work-
load for a number of PRAC IGs has been substantial and, regrettably, continues to
grow. The PRAC is working to assist these IGs, including through the PRAC’s pan-
demic fraud task force, which I discuss below. Those who engage in fraud and other
wrongdoing in connection with pandemic-related programs will be held accountable,
and we hope that these efforts will have the necessary and important deterrent ef-
fect.
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To date, there have been 900 defendants publicly charged with criminal offenses
based on fraud schemes connected to the COVID–19 pandemic. The first civil settle-
ment to resolve allegations of fraud against the Paycheck Protection Program (PPP)
occurred on January 12, 2021 in the Eastern District of California. Additionally, reg-
ulatory agencies like the Food and Drug Administration, have issued 7 civil injunc-
tions and restraining orders against companies and individuals who are falsely
claiming to have treatments or cures for the coronavirus.
The Offices of Inspectors General are actively engaged in combating this criminal
behavior and have led or participated in investigations leading to over 481 indict-
ments or complaints, 436 arrests, and 131 convictions thus far. PPP and EIDL fraud
continue to trend as the largest number of publicly announced investigations, fol-
lowed by Unemployment Insurance fraud, and investigations related to testing sup-
plies/treatments/vaccines.
The PRAC is also continuing to track scam and fraud alerts issued by our member
agencies, to ensure the broadest dissemination on our website and social media plat-
forms. Most recently, the PRAC worked with HHS OIG to publish an alert on the
vaccine scams that have begun targeting the public.
Shared Services Support to OIGs
The PRAC is seeking to use the resources and tools that Congress have given us
to enhance shared services across the IG community, and to fill gaps to help our
partners meet the challenge of overseeing this pandemic spending. For example, we
are working with data science programs at leading academic institutions to recruit
and hire data science fellows and build a talent pipeline for the OIG community.
The PRAC is also providing resources to PRAC members to combat fraud in pan-
demic relief programs. The PRAC hosted an Educational Loan Fraud Forum on
April 22, 2021, that highlighted activities in the oversight community related to
loan fraud schemes. This allowed OIG investigators to hear from SBA OIG, FDIC
OIG, and FHFA OIG about their experiences in pursuing PPP and EIDL cases; as
well from the Department of Justice and the Special Inspector General for Pandemic
Relief (SIGPR) related to their ongoing efforts in this area. Further, the PRAC Data
Sharing workgroup coordinates regular meetings of OIGs to discuss data sharing op-
portunities to identify potential cross cutting initiatives, to share lessons learned
from OIG data-related oversight work, and to consider ways to prevent and detect
fraud, waste, and abuse using data analytics. For example, the workgroup organized
a two-day Data Expo to share information among OIGs in terms of their data ana-
lytic capabilities, tools, and ongoing projects.
Additionally, the PRAC Data Sharing workgroup held an International Data
Forum with counterparts from the United Kingdom and Australia in early July. The
event featured discussion of pandemic relief programs in each country, the chal-
lenges faced in overseeing those relief programs, and how innovative approaches to
data sharing and analytics allowed officials to address those challenges.
The PRAC also launched a hotline complaint site on its webpage (https://
www.PandemicOversight.gov/contact/abouthotline) to enable whistleblowers and the
public to report alleged wrongdoing related to federal pandemic programs without
having to determine which OIG office has primary responsibility for a particular
government program. All of the complaints made to the PRAC hotline are reviewed
by staff and then forwarded to the appropriate OIG. As of July 20, 2021, the PRAC
has received 1,787 complaints, and has made 1,363 referrals to OIGs (since some
hotline complaints impact multiple programs and offices). Additionally, PRAC hot-
lines are provided to the PRAC Task Force for investigative follow-up where applica-
ble.
PRAC INITIATIVES
Having highlighted some of the work of the IG community and PRAC to date, let
me briefly discuss some of the initiatives that the PRAC is currently undertaking
or planning to initiate going forward.
Pandemic Analytics Center of Excellence
We greatly appreciate Congress’s continued support of the PRAC, including the
$40 million provided in the American Rescue Plan Act of 2021. Fulfilling the PRAC’s
mission of rooting out waste, fraud, and abuse in COVID response spending requires
better technological tools, including the use of advanced data analytics that can be
used to identify and stop fraudulent payments before they are made, to strengthen
compliance and audit efforts, and detect fraud and support efforts to recover any
ill-gotten gains. To that end, the PRAC is operating the Pandemic Analytics Center
of Excellence (PACE) to: (1) conduct data analysis and visualization of all pandemic
response funds; (2) provide fraud-fighting tools and central shared services to the
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IG community; (3) enable the broad sharing of data, analytics and leading practices
across the oversight and law enforcement community; and (4) assist investigations
and audits of pandemic relief programs with expanded data for open source inves-
tigative intelligence.
The PACE is providing the enhanced capacity needed to ensure that pandemic re-
sponse funds are used for their intended purpose, and not wasted or misused. The
PACE is comprised of three primary functional capabilities (IT & Data Manage-
ment; Analytics Visualization & Reporting; and Investigative Support) to execute
and operate its mission:
• Analytic support tools include data matching, anomaly detection, risk modeling,
social network analysis, robotic process automation, geospatial analysis, link
analysis, business intelligence, and open-source intelligence. Currently, we are
using robotic process automation to assist a member OIG to automate tasks as-
sociated with monitoring of pandemic spending that are currently manual re-
views. This project will save critical time for both the OIG and the recipients
that report spending information. In addition, we are assisting OIGs with devel-
opment of risk models to help them identify high-risk recipients of pandemic
funds for additional oversight. Our social network analysis assists in investiga-
tive work to uncover insights on networks of individuals who may have de-
frauded pandemic relief programs.
• Data science staff will utilize the tools to identify trends, patterns and anoma-
lies and generally develop insights to detect and prevent potential or suspected
fraud, waste, abuse and mismanagement of covered funds based upon best
available data and analytic techniques. Currently, we have augmented the data
science talent focused on pandemic relief in the oversight community with 12
data science fellows placed at the PRAC and member OIGs.
• Development of capabilities necessary to identify, acquire, and curate data that
can be used for pandemic oversight to allow for a flexible and adaptable cloud-
based platform to analyze data. This should include capabilities to support data
governance, data quality, data policies and standards, data inventory, and data
security.
Cross-Cutting Oversight Work
The PRAC has eight ongoing cross-cutting oversight projects. One of the projects
is reviewing the spend rate data across five federal pandemic response programs
that provided a large majority of their funds to states for expenditure, such as the
Coronavirus Relief Fund. On another project, with member OIGs, we are identifying
programs where multi-dipping has occurred, or there is a risk of it occurring. Addi-
tionally, we are examining COVID–19 contracting data from Fiscal Year 2020 where
first-time federal contractors or limited competition was used. Further, with the
Audit Subcommittee, the PRAC developed an acquisition and grant workforce data
call to assess qualifications of personnel and resources provided, as required by Sec-
tion 15110(d)(1)(B)(vii–viii) of the CARES Act. The data call will go out to the acqui-
sition and grant workforce in early Fiscal Year 2022. With MITRE, we are research-
ing best practices and lessons learned from pandemic response in state unemploy-
ment insurance (UI) benefits programs. As I previously mentioned, the PRAC is re-
viewing the degree of transparency provided in publicly available award-level data
for federal pandemic relief and assistance spending to provide Congress, policy-
makers, and the public with specific examples of gaps in reporting. We are also eval-
uating whether fraud controls that SBA applied in phase III of the Paycheck Protec-
tion Program (PPP) (and which we understand are being applied in the SBA’s new
Restaurant Revitalization Fund program) would have likely detected known fraud
that occurred during last year’s distribution of PPP funds. Finally, we are collabo-
rating with member OIGs to conduct impact case studies at six different locations
to identify the federal pandemic response funds provided to those locations, the pur-
pose of those funds, and whether the federal program spending aligned with the in-
tended goals and objectives. Access to information about the total amount of funds
received, the purpose of those funds, and the progress made toward achieving the
program goals and objectives is not always centralized and can be difficult for the
public to track down or may not even be available to the public.
In May, we also issued a report on COVID–19 in prisons and detention facilities
pulling together insights and trends across multiple agencies and programs, pre-
senting a comprehensive cross-agency view with Department of Justice OIG, De-
partment of Homeland Security OIG, and Department of Interior OIG. This report
is the first in a series of cross-agency reviews.
Our staff is also working on deconfliction with OIGs and GAO, as well as the
tracking of all work in the community to identify cross-agency trends and patterns,
as required by our authorization in the CARES Act 151109d)(1)(B)(i) through our
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strategic plan to ensure coordinated, efficient, and effective comprehensive over-
sight. Some examples of these efforts include the development of a systematic co-
ordination and deconfliction tracker that is regularly updated, distribution of a
monthly report that provides a list of all ongoing pandemic response oversight
projects to all pandemic OIGs and GAO, and monthly meetings with GAO to share
key activities and priorities.
PRAC Fraud Task Force
Earlier this year, the PRAC stood up a Fraud Task Force to serve as a resource
for the IG community by surging investigative resources into those areas where the
need is the greatest: pandemic loan fraud. As of July, we have 28 agents from 8
OIGs who have been detailed to work on Task Force cases. These agents have
partnered with prosecutors at the Department of Justice’s Fraud Section and at
United States Attorneys’ Offices across the country.
The idea behind our Task Force is to harness the expertise of the oversight com-
munity and attack this problem with every tool we have: criminal, civil, forfeitures
of money and property, suspension and debarments. Our PRAC Fraud Task Force
works closely with other initiatives to combat pandemic fraud such as the Depart-
ment of Justice COVID–19 Fraud Enforcement Task Force.
Additionally, the PRAC adopted a subpoena policy in April 2021. This policy di-
rectly supports the Fraud Task Force and our member IGs, and contributes to the
IG community’s efforts to stop the large-scale fraud we are seeing in pandemic re-
sponse programs.
CONCLUSION
The PRAC was created 16 months ago in the midst of a pandemic, yet our ex-
traordinarily talented staff, working with our member OIGs and our oversight part-
ners at GAO and at the state and local level, have fulfilled the independent over-
sight responsibilities that the CARES Act placed on us and that the public expects
from us. While we know oversee more than $5 trillion in federal spending, I am con-
fident that the IG community is up to the task of doing what we can to advance
transparency and accountability through our oversight efforts.
Thank you again for your strong support for our work, and we look forward to
working with the Congress and the Administration as the PRAC and our IG part-
ners continue to fulfill our crucial oversight mission. This concludes my prepared
statement, and I would be pleased to answer any questions that you may have.
Mr. DEFAZIO. Thank you.
We would now move to Ms. Heather Krause, Director of Physical
Infrastructure, Government Accountability Office.
Ms. KRAUSE. Chairman DeFazio, Ranking Member Graves, and
members of the committee, thank you for the opportunity to dis-
cuss our work on the Federal Government’s response to and recov-
ery from the COVID–19 pandemic.
While COVID–19 cases remain significantly lower than the peak
in January 2021, the recent increases in cases illustrate the risk
of known and emerging variants, and the associated public health
and economic challenges. The CARES Act and other COVID relief
laws included billions in funding to provide disaster assistance to
State, local, Tribal, and Territorial governments, and financial re-
lief to the transportation industry.
FEMA, DOT, and the Department of the Treasury undertook ad-
ditional responsibilities and, in some cases, set up new programs
to distribute these funds. Our testimony today is based on our work
examining these efforts, and focuses on, one, the status of select re-
lief programs administered by FEMA, DOT, and Treasury; and
two, lessons learned, and actions to improve the Federal response.
First, FEMA, DOT, and Treasury continue to play critical roles
in the ongoing Federal response to COVID–19. For example, FEMA
continues to assist individuals, as well as State, local, Tribal, and
Territorial governments in response to the pandemic, and it has ob-
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ligated over $79 billion from its disaster relief fund. This fund,
which is generally used to provide assistance following a natural
disaster, had never been used to provide assistance for a nation-
wide public health emergency on the scale required by the COVID–
19 pandemic.
FEMA’s efforts have included providing assistance to individuals
for lost wages, crisis counseling, and funerals, and reimbursing
States, Territories, and Tribes for pandemic-related costs, such as
for testing supplies, personal protective equipment, National Guard
activities, and vaccine distribution.
DOT and Treasury continue to make available the approximately
$200 billion in financial assistance to the transportation sector, in-
cluding to air carriers, airports, motorcoach and schoolbus opera-
tors, Amtrak, and transit agencies. According to transportation in-
dustry representatives we have spoken with, this assistance has
been critical during a period of sharp declines in travel demand,
and uncertainty about the pace and nature of the recovery, and en-
abled recipients to avoid layoffs, maintain service, and ramp up op-
erations as demand for their service improves.
As the Federal Government’s response and recovery efforts con-
tinue, we identified key lessons and additional actions FEMA and
DOT can take to help improve these efforts and prepare for future
public health emergencies.
For example, we found that clearly established and defined roles
and responsibilities among Federal agencies is important for an ef-
fective Federal response. The COVID–19 pandemic highlighted
once again the need for a National Aviation Preparedness Plan to
coordinate aviation and public health sector efforts, and ensure
safeguards are in place to limit the spread of communicable disease
threats from abroad, while minimizing any unnecessary disruptions
with travel and trade.
We recommended that DOT work with the Federal partners to
develop such a plan. However, DOT maintains that the Depart-
ments of Health and Human Services and Homeland Security
should lead that effort. Without such a plan, the U.S. may not be
as prepared to minimize and quickly respond to future commu-
nicable disease events.
In addition, Federal agencies’ efforts to effectively collect and
analyze data are key to making critical decisions on program oper-
ations. For example, FEMA faced challenges collecting and ana-
lyzing data on requests for supplies, such as personal protective
equipment, made through the Federal Government. We rec-
ommended that DOT develop an interim solution to help States
track the status of their supply requests, and plan for supply
needs, which it has not yet taken steps to address. Until FEMA de-
velops a solution, States, Tribes, and Territories may continue to
face challenges that hamper the effectiveness of their COVID–19
response.
In closing, the size and scope of the Federal Government’s re-
sponse efforts, from distributing funding to implementing new pro-
grams, demands strong accountability and oversight. It is critical
for agencies to implement our recommendations to help improve
the Government’s ongoing efforts, as well as prepare for future
public health emergencies. We will continue to monitor the imple-
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mentation of these programs and our recommendations, as part of
our ongoing oversight efforts.
This concludes our statement. We look forward to answering
your questions.
[The joint prepared statement of Ms. Krause and Mr. Currie fol-
lows:]
f
Joint Prepared Statement of Heather Krause, Director, Physical Infrastruc-
ture, U.S. Government Accountability Office and Chris P. Currie, Direc-
tor, Homeland Security and Justice, U.S. Government Accountability Of-
fice
COVID–19 PANDEMIC: ACTIONS NEEDED TO IMPROVE FEDERAL OVERSIGHT OF
ASSISTANCE TO INDIVIDUALS, COMMUNITIES, AND THE TRANSPORTATION INDUSTRY
HIGHLIGHTS OF GAO–21–105202, A TESTIMONY BEFORE THE COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE, HOUSE OF REPRESENTATIVES
Why GAO Did This Study
In response to the public health and economic crises created by the COVID–19
pandemic, Congress provided billions of dollars across a range of agencies to miti-
gate the effects of COVID–19. This included billions to:
• FEMA’s Disaster Relief Fund to provide assistance to individuals as well as
state, local, tribal, and territorial governments, and
• DOT and Treasury to provide financial assistance to the transportation sector.
This statement describes: (1) the federal response and selected relief programs ad-
ministered by FEMA, DOT, and Treasury and (2) lessons learned based on GAO’s
reviews of selected COVID–19 relief programs, including related recommendations
and their implementation status. This statement is based on GAO’s body of work
on the CARES Act issued from June 2020 through July 2021.To update this infor-
mation, GAO reviewed agency documentation; and interviewed agency officials, in-
dustry associations, and selected businesses that applied to these programs on the
latest implementation efforts.
What GAO Recommends
GAO has made numerous recommendations to help improve the government’s on-
going response and recovery efforts and prepare for future public health emer-
gencies, including the six identified in this statement. While Treasury took action
to develop a compliance monitoring program, the other five recommendations to
FEMA and DOT still need to be implemented.
What GAO Found
The Federal Emergency Management Agency (FEMA), Department of Transpor-
tation (DOT), and Department of the Treasury (Treasury), among others, continue
to provide financial assistance to mitigate the effects of the COVID–19 pandemic.
• FEMA reported obligating over $79 billion from its Disaster Relief Fund to re-
spond to COVID–19. Through several programs, FEMA is providing help to in-
dividuals with funeral costs; reimbursing communities for vaccine distribution;
and funding federal agencies’ efforts to support communities, including National
Guard deployments.
• DOT and Treasury continue to make available the over $200 billion appro-
priated by COVID–19 relief laws for financial assistance to the transportation
sector, including to air carriers, airports and airport tenants, Amtrak, and tran-
sit agencies. Through several financial assistance programs, GAO’s work has
found DOT and Treasury have provided critical support to the transportation
sector during a period of sharp declines in travel demand and uncertainty about
the pace and nature of the recovery. Depending on the program, financial as-
sistance has reportedly enabled recipients to avoid layoffs, maintain service,
and ramp up operations as demand for their services improves.
Based on GAO’s prior work examining responses to public health and fiscal emer-
gencies, including the COVID–19 pandemic, GAO has (1) identified key lessons
learned that could improve the federal response to emergencies, and (2) made sev-
eral related recommendations, including ones that highlight the importance of ap-
plying these lessons learned.
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Lessons Learned
• Coordinate, establish, and define roles and responsibilities among those
responding to the crisis and address key capability gaps.
• Provide clear, consistent communication.
• Collect and analyze data to inform decision-making and future prepared-
ness.
• Establish mechanisms for accountability and transparency to help ensure
program integrity and address fraud risks.
• Consider challenges posed by setting up new programs quickly.
Source: GAO, GAO–21–105202
For example, DOT has not developed a national aviation preparedness plan to co-
ordinate, establish, and define roles and responsibilities for communicable diseases
across the federal government. GAO recommended in 2015 that DOT work with fed-
eral partners to develop such a plan, but it has not taken any action. Without such
a plan, the U.S. is less prepared to respond to future communicable disease events.
In addition, FEMA has faced challenges collecting and analyzing data on requests
for supplies, such as personal protective equipment, made through the federal gov-
ernment. In 2020, GAO recommended that FEMA work with relevant stakeholders
to develop an interim solution to help states track the status of their supply re-
quests and plan for supply needs. FEMA has not taken action on this recommenda-
tion, and until the agency develops a solution, states, tribes, and territories will like-
ly continue to face challenges that hamper the effectiveness of their COVID–19 re-
sponse.
Chairman DeFazio, Ranking Member Graves, and Members of the Committee:
We are pleased to be here today to discuss our work assessing the federal re-
sponse to the Coronavirus Disease 2019 (COVID–19) pandemic, particularly as it re-
lates to supporting state, local, and tribal governments and the transportation sec-
tor. As of mid-July 2021, the U.S. had nearly 34 million reported cases of COVID–
19 with more than 600,000 reported deaths. In addition, serious economic repercus-
sions from the pandemic continue to affect the transportation sector, as travel has
not fully returned to prepandemic levels across many modes.
In March 2020, Congress took action in response to this unprecedented global cri-
sis to protect the health and well-being of Americans. Notably, Congress passed, and
the President signed into law, the CARES Act, which provided over $2 trillion in
emergency assistance and health care response for individuals, families, and busi-
nesses affected by COVID–19.1 The CARES Act and other COVID–19 relief laws ap-
propriated $95 billion to the Federal Emergency Management Agency’s (FEMA) Dis-
aster Relief Fund to provide disaster assistance to state, local, tribal, and territorial
governments, among other things.2 These laws also appropriated approximately
$200 billion in financial relief to programs supporting the transportation industry.
The Department of Transportation (DOT) and Department of the Treasury (Treas-
ury) undertook new responsibilities and, in some cases, set up new programs to dis-
tribute these funds.
Recognizing the need for robust monitoring and oversight of new authorities and
funding, the CARES Act includes a provision for us to report regularly on the fed-
eral response to the pandemic.3 In the course of these reviews, we have identified
key lessons learned that support an effective federal response to crisis.
Our statement today is based on our work examining federal actions in response
to the public health emergency and economic effects on the transportation sector
caused by COVID–19. Specifically, this statement describes (1) the federal response
1 Pub. L. No. 116–136, 134 Stat. 281 (2020). As of March 11, 2021, five other relief laws were
also enacted in response to the COVID–19 pandemic: the American Rescue Plan Act of 2021,
Pub. L. No. 117–2, 135 Stat. 4; the Consolidated Appropriations Act, 2021, Pub. L. No. 116–
260, 134 Stat. 1182 (2020); Paycheck Protection Program and Health Care Enhancement Act,
Pub. L. No. 116–139, 134 Stat. 620 (2020); Families First Coronavirus Response Act, Pub. L.
No. 116–127, 134 Stat. 178 (2020); and the Coronavirus Preparedness and Response Supple-
mental Appropriations Act, 2020, Pub. L. No. 116–123, 134 Stat. 146. We refer to these six laws,
each of which was enacted as of March 11, 2021, and provides appropriations for the COVID–
19 response, as ‘‘COVID–19 relief laws,’’ and the funding appropriated by these laws as
‘‘COVID–19 relief funds.’’
2 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. at 543. In March 2021, the American Res-
cue Plan Act of 2021 appropriated $50 billion to the Disaster Relief Fund. Pub. L. No. 117–2,
§ 4005, 135 Stat. 4, 79.
3 Pub. L. No. 116–136, § 19010, 134 Stat. at 579–81.
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and selected relief programs administered by FEMA, DOT, and Treasury and (2)
lessons learned based on our reviews of these and other COVID–19 relief programs,
including related GAO recommendations and their implementation status.
In preparing this statement, we relied primarily on our body of work issued from
June 2020 through July 2021 that reviewed, among other things, FEMA’s efforts to
coordinate the federal government’s response to the COVID–19 public health emer-
gency and provide assistance to states, localities, and tribes in obtaining supplies
to prepare for and cope with COVID–19. This body of work also reviewed DOT and
Treasury’s efforts to support air carriers, aviation contractors and repair station op-
erators, ticket agents, airports and airport tenants, transit agencies, and Amtrak,
among others.4
For those reports, we reviewed FEMA, DOT, and Treasury documentation, ana-
lyzed program data, and interviewed agency officials. We also interviewed industry
associations representing businesses eligible to apply to these federal assistance pro-
grams and selected applicants. More detailed information on the scope and method-
ology can be found in our June 2020, August 2020, September 2020, November
2020, January 2021, March 2021, and July 2021 reports. For this statement, we also
included information from interviews with agency officials, industry associations,
and selected businesses that applied to these programs on the latest implementation
efforts as part of our ongoing work on the COVID–19 relief programs. In addition,
we obtained updated data on the status of financial assistance provided by FEMA,
DOT, and Treasury.
We conducted the work on which this statement is based in accordance with gen-
erally 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 that the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
FEMA, DOT, AND TREASURY CONTINUE TO PLAY CRITICAL ROLES COORDINATING
FEDERAL RESPONSE TO COVID–19 AND PROVIDING FINANCIAL ASSISTANCE TO
HARD-HIT ENTITIES
FEMA continues to play a key role in the ongoing COVID–19 pandemic response
effort, and its workforce has taken on additional responsibilities, including sup-
porting COVID–19 vaccine distribution. FEMA’s Disaster Relief Fund is a major
source of federal disaster recovery assistance for state, local, and territorial govern-
ments when a disaster occurs. As we reported in July 2021, this fund—generally
used to provide assistance following a natural disaster—had never been used to pro-
vide assistance for a nationwide public health emergency on the scale required by
the COVID–19 pandemic.5 However, as of July 20, 2021, according to agency offi-
cials, FEMA had obligated over $79 billion from the Disaster Relief Fund for the
following three types of disaster assistance to respond to COVID–19:
• Individual Assistance. These grants provide disaster survivors assistance to
cover necessary expenses and serious needs—such as housing, counseling, or fu-
neral costs—which cannot be met through insurance or low-interest loans. For
the COVID–19 response, as we reported in March 2021 and July 2021, FEMA
has used this program to provide lost wages assistance, crisis counseling, and
funeral assistance. For example, FEMA provided funeral assistance in all 50
states, D.C., Puerto Rico, Guam, Commonwealth of the Northern Mariana Is-
lands, American Samoa, and the U.S. Virgin Islands. According to FEMA offi-
cials, the agency had obligated about $40 billion from the Disaster Relief Fund
for Individual Assistance grants as of July 20, 2021. This includes $38.8 billion
for Lost Wages Assistance and $1 billion for Funeral Assistance.6
4 See COVID–19: Opportunities to Improve Federal Response and Recovery Efforts, GAO–20–
625 (Washington, D.C.: June 25, 2020); COVID–19: Brief Update on Initial Federal Response
to the Pandemic, GAO–20–708 (Washington, D.C.: Aug. 31, 2020); COVID–19: Federal Efforts
Could Be Strengthened by Timely and Concerted Actions, GAO–20–701 (Washington, D.C.: Sept.
21, 2020); COVID–19: Urgent Actions Needed to Better Ensure an Effective Federal Response,
GAO–21–191 (Washington, D.C.: Nov. 30, 2020); COVID–19: Critical Vaccine Distribution, Sup-
ply Chain, Program Integrity, and Other Challenges Require Focused Federal Attention, GAO–
21–265 (Washington, D.C.: Jan. 28, 2021); COVID–19: Sustained Federal Action is Crucial as
Pandemic Enters Its Second Year, GAO–21–387 (Washington, D.C.: Mar. 31, 2021); and
COVID–19: Continued Attention Needed to Enhance Federal Preparedness, Response, Service
Delivery, and Program Integrity, GAO–21–551 (Washington, D.C.: July 19, 2021).
5 GAO–21–551.
6 Pursuant to an August 2020 presidential memorandum, upon receiving a FEMA 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 presi-
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• Public Assistance. These grants provide assistance to state, local, tribal, and ter-
ritorial governments, and certain types of private nonprofit organizations so
that communities can quickly respond to and recover from major disasters or
emergencies. On February 2, 2021, the President issued a memorandum that
directed FEMA to fully reimburse states, territories, and tribes for all work eli-
gible for emergency protective measures, which includes costs associated with
vaccine distribution and the purchase of testing supplies and personnel protec-
tive equipment.7 FEMA officials stated that as of July 20, 2021, FEMA had re-
ceived 25,798 project applications for Public Assistance and awarded $29.7 bil-
lion. If all of the remaining approximately 16,000 applicants submit projects,
FEMA anticipates it will receive a minimum of approximately 32,000 additional
public assistance projects for an estimated additional $27.8 billion as of the end
of fiscal year 2021.
• Mission assignments. FEMA also issues mission assignments—work orders di-
recting 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 assist in recov-
ery efforts. As of July 21, 2021, according to agency officials, FEMA had obli-
gated about $7.5 billion from the Disaster Relief Fund for mission assignments.
FEMA’s workforce has also been tasked with taking on additional responsibilities
to establish mass vaccination sites and provide funeral assistance to families im-
pacted by the COVID–19 pandemic.
• Mass vaccination sites. In January 2021, the President tasked FEMA with es-
tablishing mass vaccination sites as part of a national effort to speed the pace
of COVID–19 vaccination campaigns and to ensure equitable access to vaccina-
tions. In response, FEMA established Pilot Community Vaccination Centers
(CVC). As of June 20, 2021, FEMA reported that the Pilot CVCs had given more
than 5.6 million doses of vaccines across 39 locations, including sites that have
extended their participation in the pilot program.8 As of June 20, 2021, accord-
ing to agency officials, FEMA stood down its pilot CVCs while continuing to
support state-run vaccination efforts. Specifically, FEMA is coordinating with
other federal agencies to support the distribution of COVID–19 vaccines by de-
ploying additional personnel to vaccination sites and providing funding to
states, tribes, and territories for vaccine distribution. As of July 20, 2021, ac-
cording to agency officials, FEMA had obligated almost $5.7 billion through the
Public Assistance program for vaccine distribution.
• Funeral assistance. The COVID–19 Funeral Assistance Program provides fu-
neral assistance for COVID–19 related deaths that occurred after January 20,
2020. In December 2020, the Consolidated Appropriations Act, 2021, appro-
priated $2 billion to the Disaster Relief Fund for eligible funeral expenses for
individuals or households with COVID–19-related funeral expenses.9 As we re-
ported in July 2021, the scope of FEMA’s funeral assistance program for
COVID–19 related deaths is unprecedented.10 On April 12, 2021, FEMA began
accepting and processing applications for Funeral Assistance via a dedicated
call center number. According to agency officials, as of July 20, 2021, the call
center had received and is processing 241,664 applications, and FEMA had ap-
proved 109,319 applications and awarded approximately $723.7 million in fu-
neral assistance.
dential memorandum directed that the program would end 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. The White House, Memorandum on Authorizing the Other Needs Assistance Pro-
gram for Major Disaster Declarations Related to Coronavirus Disease 2019 (Aug. 8, 2020).
7 For all 59 major disaster declarations for COVID–19, FEMA has authorized Public Assist-
ance grants for emergency protective measures only. This may include eligible medical care, pur-
chase and distribution of food, non-congregate medical sheltering, operation of Emergency Oper-
ations Centers, and the purchase and distribution of personal protective equipment (PPE).
White House, Memorandum on Maximizing Assistance from the Federal Emergency Management
Agency, February 2, 2021. For natural disasters, Public Assistance grants can be used for emer-
gency cleanup and for permanent reconstruction projects to, for example, rebuild damaged pub-
lic infrastructure. White House, Memorandum on Maximizing Assistance from the Federal Emer-
gency Management Agency, February 2, 2021.
8 The initial pilot period for each location was eight weeks; however, jurisdictions were able
to request an extension of an additional four weeks, during which period of time the site would
receive federal staffing and support, but not an additional vaccine allocation.
9 Pub. L. No. 116–260, div. M, tit. II, 134 Stat. at 1910.
10 GAO–21–551.
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COVID–19 relief laws appropriated over $95 billion for DOT to provide financial
assistance to airports and airport tenants, Amtrak, aviation manufacturers and re-
pair station operators, and transit agencies.11 Based on the most recent data we
have, DOT has expended close to $27 billion with the level of expenditure varying
by program.12 DOT’s Federal Aviation Administration (FAA), Federal Railroad Ad-
ministration (FRA), and Federal Transit Administration (FTA) continue to provide
financial assistance through these programs, as described below.
• Airport grants. Administered by FAA, these grants provide funds for eligible
airports to prevent, prepare for, and respond to the effects of the COVID–19
pandemic. The allocation of funds and certain allowable uses of funds differ by
COVID–19 relief law.13 By accepting these funds, certain recipients must meet
workforce retention requirements.14 Airport association representatives told us
that the federal funding provided has been critical. According to FAA officials,
federal aid has allowed airports to maintain operations, pay their employees,
and meet their debt obligations while airports experienced historic decreases in
revenue and passenger demand for air travel due to the COVID–19 pandemic.
As of May 14, 2021, according to FAA data sources, the agency had processed
a total of 5,397 grant applications for the CARES Act and the Consolidated Ap-
propriations Act, 2021 funds. Specifically, officials stated that in February 2021,
FAA began allowing airports to amend their initial CARES Act airport grant
agreements to use grant funds for near-term airport development, such as con-
struction projects for the airfield, terminal, or parking. Airports were required
to submit additional information about proposed construction projects. As we re-
ported in July 2021, FAA also continues to process Consolidated Appropriations
Act, 2021 grant applications.15 FAA has also begun processing grant applica-
tions for the American Rescue Plan Act of 2021. According to FAA officials, as
of July 2021, FAA had expended approximately $6.9 billion of the $20 billion
appropriated to provide grants to airports, including grants for the benefit of
eligible airport concessions.16
• Amtrak grants. Amtrak, which receives federal funding through grants from
FRA, is to use these funds to prevent, prepare for, and respond to COVID–19
and has used these funds to address shortfalls in ticket revenue, pay employee
salaries, and cover other operating, debt, and capital expenses. As we reported
in March 2021, COVID–19 relief laws directed that funding is to be used to sup-
port Amtrak’s state and commuter partners, avoid additional employee fur-
loughs, and restore daily long-distance service.17 As of May 31, 2021, according
to agency officials, Amtrak had expended $1.95 billion of the $3.7 billion appro-
priated to provide financial assistance.
• Aviation Manufacturing Jobs Protection program. DOT, in setting up this new
program, is to use these funds to provide financial assistance payments to busi-
nesses engaged in aviation manufacturing activities and services, or mainte-
nance, repair, and overhaul activities and services.18 These funds are to be used
11 In addition to the over $95 billion appropriated for COVID–19 relief, the Airport and Air-
ways Trust Fund received a $14 billion appropriation from the general fund. Continuing Appro-
priations Act, 2021 and Other Extensions Act, Pub. L. No. 116–159, § 1205, 134 Stat. 709, 728.
12 Some of these programs received funds in March 2021 and are still being rolled-out.
13 Under the CARES Act, funds were available for any purpose for which airport revenues
may lawfully be used. Under the Consolidated Appropriations Act, 2021 and the American Res-
cue Plan Act of 2021 funds were generally available for costs related to operations, personnel,
cleaning, sanitization, janitorial services, combating the spread of pathogens at the airport, and
debt service payments. Additionally, under the Consolidated Appropriations Act, 2021 and the
American Rescue Plan Act of 2021, certain amounts were made available to provide relief from
rent and minimum annual guarantees to airport concessions.
14 Specifically, airport sponsors of small, medium, and large-hub airports accepting CARES
Act grant funds were required to continue to employ, through December 31, 2020, at least 90
percent of the number of individuals employed as of March 27, 2020. The Consolidated Appro-
priations Act, 2021 extended this requirement through February 15, 2021, and the American
Rescue Plan Act of 2021 extended this requirement through September 30, 2021. Nonhub and
nonprimary airports, as defined under 49 U.S.C. § 47102, were excluded from the workforce re-
tention requirement under each of the three COVID–19 relief laws. Additionally, DOT could
waive the workforce retention requirement if DOT determined that the airport was experiencing
economic hardship as a direct result of the requirement, or the requirement would reduce avia-
tion safety or security.
15 GAO–21–551.
16 FAA grants to airports are made on a reimbursable basis, meaning that airports submit
requests for costs already incurred. According to FAA officials, many airports have already in-
curred reimbursable costs for their grant amounts, even though FAA’s expenditures appear low.
17 GAO–21–387.
18 To be eligible, a business must show it involuntarily furloughed or laid off at least 10 per-
cent of its workforce in 2020 as compared to 2019 or has experienced at least a 15 percent de-
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for wages, salaries, and benefits. Recipients must agree to refrain from con-
ducting involuntary layoffs or furloughs or reducing pay rates and benefits for
the eligible employee group for the duration of the agreement. Based on DOT’s
estimated timeframes, DOT will start allocating funds out of the $3 billion ap-
propriated by the end of September 2021.
• Transit grants. Transit agencies are to use these funds to prevent, prepare for,
and respond to COVID–19. These funds were initially available to transit agen-
cies for any expenses incurred related to COVID–19 on or after January 20,
2020, although now these funds must be directed, to the maximum extent pos-
sible, to payroll and operations expenses.19 Officials from 22 agencies we inter-
viewed said they had used CARES Act grants for operating expenses such as
covering employee salaries, providing PPE to employees, and implementing en-
hanced cleaning and sanitation procedures on their vehicles. One transit agency
we spoke with said the federal funding they received allowed the agency to
meet its local match responsibilities, which had been disrupted during the pan-
demic. Furthermore, transit association representatives told us that federal
funding used to cover payroll, and for cleaning and disinfecting equipment and
stations, has been critical to instilling the confidence of transportation workers
and passengers in transit systems. As of May 1, 2021, according to officials,
FTA had awarded $26.2 billion of the $69 billion appropriated to provide grants
to transit agencies and transit agencies had expended $18.4 billion. FTA is to
allocate these funds primarily through existing formula grant programs with
some limitations.
COVID–19 relief laws appropriated over $110 billion for Treasury to provide fi-
nancial assistance through programs directed at air carriers, aviation contractors,
repair station operators, ticket agents, motor coach operators, school bus operators,
and the passenger and pilot vessel industries. Based on the most recent data we
have, Treasury has made available over $80 billion in financial assistance as loans
and payments, as described below. With continued uncertainty over when and how
travel demand will return to pre-pandemic levels, industry associations representing
aviation and other businesses that applied to these programs and selected compa-
nies that applied for funding from these programs said that although there were
challenges, these programs provided critical financial assistance that, for example,
allowed companies to remain operational, maintain their workforce levels, and pre-
vent bankruptcies.
• Aviation Worker Payroll Support Programs (PSP1, PSP2, PSP3). These funds
are to be used by air carriers and aviation contractors for employee wages, sala-
ries, and benefits.20 As of July 2021, based on our analysis of Treasury data,
613 PSP1 agreements were signed, 479 PSP2 agreements were signed, and 453
PSP3 agreements were signed.21 In total, Treasury has signed agreements to
provide $59 billion of the $63 billion appropriated and continues to sign PSP3
agreements. Industry associations and selected companies we interviewed re-
ported that these funds provided critical support and helped keep employees on
payroll. By taking these funds, businesses agreed to refrain from conducting in-
voluntary terminations or furloughs for specified periods, among other require-
ments.22
• Loans for Aviation and National Security Businesses. Treasury provided loans
to aviation and national security businesses, which were intended to provide li-
quidity to these sectors. As we reported in December 2020, Treasury executed
35 loans valued at $21.9 billion from the $46 billion in funds available through
cline in 2020 revenues as compared to 2019. These businesses also may not have received fed-
eral financial assistance under specified COVID relief programs, such as the Paycheck Protec-
tion Program.
19 As 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 Transpor-
tation that the recipient has not furloughed any employees. Consolidated Appropriations Act,
2021, div. M, tit. IV, 134 Stat. 1182, 1947.
20 Passenger air carriers were eligible for the initial payroll support program (PSP1) and the
two extensions of the program (PSP2 and PSP3). Cargo air carriers were only eligible for PSP1.
21 Many businesses received funding from multiple iterations of the program, and only PSP2
recipients are eligible for PSP3 payments.
22 Treasury developed taxpayer protections for certain payments made under PSP1, PSP2, and
PSP3. Passenger air carriers receiving over $100 million of payroll support are required to pro-
vide notes equal to 30 percent of the payroll support provided over $100 million with a 10-year
term. Contractors receiving over $37.5 million of payroll support must provide notes equal to
44 percent of the payroll support provided over $37.5 million with a 10-year term. In addition,
certain recipients issued warrants to Treasury providing the right to purchase shares of common
stock.
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this program.23 As we reported in July 2021, this loan program provided critical
assistance to large passenger air carriers, but fewer benefits to smaller busi-
nesses.24 As of July 1, 2021, according to a Treasury report, 7 loans with a total
anticipated value of $18.3 billion have been fully repaid. Of the $3.6 billion an-
ticipated value of outstanding loans, 36 percent ($1.3 billion) was disbursed by
Treasury to loan recipients.
• Coronavirus Economic Relief for Transportation Services (CERTS) program.
Treasury will provide these funds to businesses that operate motor coaches,
school buses, and passenger or pilot vessels—to be used by recipients primarily
to cover payroll. Treasury’s application portal was open to applicants for four
weeks, opening in late June and closing on July 19, 2021. After the application
period closed, Treasury reported it would use information from the complete ap-
plicant pool to determine the amount of each grant award. As of July 19, 2021,
based on Treasury’s estimated timeline, the agency has not started awarding
funds out of the $2 billion appropriated. Among other eligibility requirements,
businesses must have experienced revenue losses of 25 percent or more from
2019 to 2020 as a direct or indirect result of COVID–19 pandemic. Additionally,
Treasury may adjust the size of individual grants based on other sources of fed-
eral assistance provided to the applicant.25 Finally, these recipients must agree
to certain conditions, including refraining from conducting involuntary fur-
loughs or reducing pay rates or benefits for nonexecutive employees.
LESSONS LEARNED FROM SELECTED FEDERAL RESPONSE EFFORTS TO THE COVID–19
PANDEMIC
Based on our prior body of work examining responses to public health and fiscal
emergencies, including the COVID–19 pandemic, we have identified key lessons
learned that could improve the federal response to emergencies.26 We have also
made numerous recommendations related to improving the federal response, which
agencies have taken some steps to address. Below we highlight selected findings and
six recommendations from our prior work on FEMA, DOT, and Treasury that dem-
onstrate the importance of applying these lessons learned.
Coordinate, establish, and define roles and responsibilities among those responding
to the crisis and address key capability gaps. As part of our review of the govern-
ment-wide COVID–19 response over the last year and a half, we have found that
without clearly established and defined roles and responsibilities among federal
agencies, the federal response is not as effective.27 With multiple agencies working
to address and mitigate the public health and economic effects of the COVID–19 cri-
sis across the U.S., coordination is essential. For example:
• The COVID–19 pandemic has highlighted—once again—the need for a national
aviation-preparedness plan for communicable diseases that clearly establishes
roles and responsibilities. In 2015, we found that such a plan could establish
a mechanism of coordination between aviation and public health sectors to more
effectively prevent and control a communicable disease threat while minimizing
unnecessary disruptions to the national aviation system. We recommended that
DOT work with federal partners to develop such a plan in light of the effect
of communicable diseases, such as Ebola, on air travel and public health; how-
ever, DOT maintains that the Departments of Health and Human Services and
Homeland Security should lead the effort.28 With no action taken, in June 2020,
we urged Congress to take legislative action to require the Secretary of Trans-
portation to work with relevant agencies and stakeholders, such as the Depart-
ments of Health and Human Services and Homeland Security, and members of
the aviation and public health sectors, to develop a national aviation-prepared-
23 GAO, Financial Assistance: Lessons Learned from CARES Act Loan Program for Aviation
and Other Eligible Businesses, GAO–21–198, (Washington D.C.: Dec.10, 2020).Under the CARES
Act, Treasury may not issue loans or loan guarantees to recipients unless the recipient is a pub-
licly traded company and Treasury receives a warrant or equity instrument in the company, or
in the case of a private company, if Treasury receives a warrant, equity instrument, or senior
debt instrument in the company.
24 GAO–21–551.
25 Under the Consolidated Appropriations Act, 2021, Treasury may reduce the amount of as-
sistance it provides to these businesses to ensure that the total federal assistance from all rel-
evant relief programs does not exceed a business’s 2019 revenues. In determining the amount
of assistance to be provided, Treasury must consider, among other requirements, other sources
of federal assistance provided to the provider of transportation services.
26 GAO–21–387.
27 GAO–21–387.
28 GAO, Air Travel and Communicable Diseases: Comprehensive Federal Plan Needed for U.S.
Aviation System’s Preparedness, GAO–16–127, (Washington D.C.: Dec.16, 2015).
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ness plan.29 As we reported in July 2021, Congress has considered but not
passed legislation to require a national aviation preparedness plan.30 Without
such a plan, the U.S. will be less prepared to minimize and quickly respond to
future communicable disease events.
• Our prior work on National Preparedness found that FEMA uses several sce-
narios—including a pandemic influenza similar to COVID–19—to allow states,
territories and other jurisdictions to assess their own emergency response and
recovery capabilities (e.g., how quickly they can restore electricity, or how much
emergency housing they can provide).31 While this information has provided
useful information about capability gaps at the state and local level, FEMA has
not used the information to determine the nation’s capability gaps across all
levels of government. Moreover, FEMA has yet to determine what steps are
needed to address the capability gaps once they are identified, including capa-
bility gaps that have been known since 2012. If FEMA had determined what
steps are needed to address capability gaps, the nation may have been more
prepared to respond to COVID–19. In May 2020, we reported that FEMA had
yet to: (1) determine what steps are needed to address the nation’s capability
gaps across all levels of government; and (2) informed key stakeholders, such
as Congress, about what resources will be needed across all levels of govern-
ment.32 To address this, we recommended that FEMA should, following the
completion of the 2021 National Preparedness Report, determine what steps are
needed to address the nation’s emergency management capability gaps across
all levels of government and inform key stakeholders, such as the Office of Man-
agement and Budget and Congress, about what level of resources will be nec-
essary to address the known gaps.
In June 2021, FEMA officials stated that they are planning to complete the
National Preparedness Report by December 31, 2021. In addition, FEMA is
planning to complete the National Stakeholder Preparedness Review and Na-
tional Preparedness Investment Strategy to identify capability gaps and estab-
lish priorities that align with those gaps. FEMA anticipates it will identify re-
sources and capabilities needed to address the national gaps by December 31,
2022.
Provide clear, consistent communication. In a crisis, federal agencies should pro-
vide clear and consistent communication, specifically to those they are trying to as-
sist.33 We previously reported that Treasury and FEMA did not always commu-
nicate effectively with applicants and recipients of programs they administered or
managed, which left these entities unable to fully benefit from the programs:
• In prior reviews, we found that Treasury did not communicate in a clear, con-
sistent way with applicants and recipients—particularly smaller businesses—of
the Payroll Support Programs and Loans for Aviation and National Security
Businesses program.34 For example, we reported in December 2020 that when
designing and implementing the loan program, Treasury viewed itself as a lend-
er of last resort but did not state this view in published documents.35 This omis-
sion led to some applicants being surprised by parts of the process, such as
when Treasury encouraged over a third of all applicants to apply to another
loan program before continuing to pursue a loan from Treasury. Since Treas-
ury’s authority to make new loans under this program was set to expire in De-
cember 2020, we highlighted lessons for Congress and Treasury for designing
and implementing program like this type in the future, including setting and
communicating clear program goals and communicating clear timelines for ac-
tions. As Treasury implements new federal assistance programs, such as
CERTS, it has opportunities to engage in clearer, more consistent communica-
tion with eligible businesses and their representatives. According to Treasury
officials, they are working to ensure CERTS program eligibility is easily under-
stood, and they have reached out to industry associations representing potential
applicants to share information about the programs and to inform program de-
sign.
29 GAO–20–625.
30 GAO–21–551.
31 See for example, GAO, National Preparedness: Additional Actions Needed to Address Gaps
in the Nation’s Emergency Management Capabilities, GAO–20–297 (Washington, D.C.: May 4,
2020).
32 GAO–20–297.
33 For example, see GAO–21–387 and GAO–20–701.
34 GAO–21–551; GAO–21–198; GAO–20–701.
35 GAO–21–198.
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• FEMA did not always communicate effectively with Public Assistance appli-
cants, specifically tribal governments. As we reported in March 2021, several
tribal governments reported challenges related to completing administrative re-
quirements-such as activating an emergency operations plan and submitting a
tribal Public Assistance Administrative Plan—to request and receive Public As-
sistance program funding directly from FEMA.36 Although FEMA’s Tribal Pilot
Guidance states that tribes may request technical assistance, tribal representa-
tives we interviewed reported that many tribal governments were given little
or no technical assistance when they requested support. Without the avail-
ability of consistent and timely technical assistance across regions, some tribal
entities may be unable to request and receive Public Assistance directly from
FEMA to help respond to the COVID–19 pandemic. Further, we reported that
FEMA did not consult with tribal entities in advance of issuing its policy on
eligible Public Assistance costs early in the COVID–19 pandemic. In March
2021, we recommended that the FEMA Administrator provide timely and con-
sistent technical assistance to support tribal governments’ efforts to request and
receive Public Assistance directly from FEMA, including providing additional
personnel, if necessary, to ensure that tribal nations are able to effectively re-
spond to COVID–19.37 The Department of Homeland Security (DHS) concurred
with our recommendation. DHS stated that FEMA’s Recovery Directorate will
publish a memorandum that will contain direction to FEMA regions regarding
the assignment of Public Assistance program delivery managers to promote eq-
uitable delivery of Public Assistance to tribal governments. As we reported in
July 2021, FEMA stated that it plans to send the draft memorandum to tribal
governments in July 2021.38
We also recommended that the FEMA Administrator adhere to the agency’s
protocols listed in its updated 2019 Tribal Consultation Policy by obtaining trib-
al input via the four phases of the tribal consultation process when developing
new policies and procedures related to COVID–19 assistance. DHS concurred
with our recommendation. As we reported in July 2021, DHS stated that
FEMA’s National Tribal Affairs Adviser, based in the Office of External Affairs,
will coordinate with other FEMA offices and directorates, as appropriate, to re-
view the agency’s adherence to protocols listed in the Tribal Consultation pol-
icy.39
Collect and analyze data to inform decision-making and future preparedness.
Without data, federal agencies face difficulties making critical decisions to inform
efforts and program operations. In our review of FEMA’s COVID–19 activities, we
found it faced challenges at the national and regional levels collecting the data
needed to make decisions and allow for the prioritization of resources.40 In Sep-
tember 2020, we reported that these challenges included tracking supply requests,
including those for personal protective equipment, made through the federal govern-
ment and budgeting for ongoing needs. As a result, we recommended that the
FEMA Administrator work with relevant federal, state, territorial, and tribal stake-
holders 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.
As we reported in July 2021, FEMA has not taken action to devise interim solu-
tions 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 critical sup-
plies required for a response of this scale.41 Without action across the board to help
states ensure they have the support they need to track, manage, and plan for sup-
36 GAO–21–387.
37 GAO–21–387.
38 GAO–21–551.
39 GAO–21–551.
40 GAO–21–387; GAO–20–701.
41 GAO–21–551. DHS disagreed with this recommendation, noting, among other things, work
that FEMA had already done to manage the medical supply chain and increase supply avail-
ability. Although FEMA disagreed with our recommendation, it began taking some action in
March 2021. 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. Although both DHS and HHS have reported
separate actions, taken as part of other efforts within each separate purview, neither has articu-
lated how they worked with the other nor how they assessed whether the actions changed the
experiences of state officials who reported issues during our prior work.
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plies, states, tribes, and territories on the front lines of the whole-of-nation COVID–
19 response will likely continue to face challenges that hamper their effectiveness.
Establish mechanisms for accountability and transparency to help ensure program
integrity and address fraud risks. With over $200 billion in financial assistance ap-
propriated to support the transportation sector, ensuring the funds are spent as in-
tended is critical to reduce fraud and ensure the programs support recovery. Our
work on COVID relief to the transportation sector underscores the importance of es-
tablishing, documenting, and implementing processes and procedures to ensure ac-
countability and guard against fraud.42
We found that DOT and Treasury initially experienced challenges related to the
oversight of COVID relief monies and programs, although early difficulties are di-
minishing.43 These challenges underscore the tension between getting the funds out
as quickly as possible and setting up robust, risk-based oversight and monitoring
processes:
• FAA reported difficulties administering the COVID relief programs while simul-
taneously setting up monitoring and compliance systems to oversee funds. More
specifically, FAA officials said it was challenging and resource-intensive to es-
tablish and oversee a grant program with more eligible uses than allowed under
existing airport grant programs. FAA has since taken steps to manage this in-
creased workload, including establishing a dedicated team—two full-time em-
ployees and three annuitants with prior airport grant management experience—
to review and process airport payment requests. Additionally, in late 2020, FAA
hired a contractor to develop a monitoring dashboard and develop auditing poli-
cies and procedures. In July 2021, we reported that FAA continues to track re-
cipient compliance with statutory workforce requirements. We continue to re-
view FAA’s oversight efforts.
• Treasury officials also told us that developing a compliance monitoring system
for hundreds of PSP recipients from scratch was time-consuming and initially
involved trial-and-error. In November 2020, we reported while PSP recipients
had begun submitting required compliance reports, Treasury had not yet final-
ized a monitoring system to identify and respond to the risk of noncompliance
with PSP agreement terms, potentially hindering its ability to detect program
misuse in a timely manner.44 We recommended that Treasury finish developing
and implement a compliance monitoring plan that identified and responds to
risks of noncompliance. In April 2021, we confirmed that Treasury had devel-
oped, documented, and implemented a risk-based approach to monitor PSP re-
cipients’ compliance with the terms of their financial assistance. We continue
to review Treasury’s compliance monitoring of PSP recipients.
In our reviews, we have found that DOT and Treasury are tracking recipient com-
pliance with statutory requirements. For example, the Payroll Support Programs
(PSP1, PSP2, and PSP3) agreements require recipients to 1) limit executive com-
pensation and 2) not engage in involuntary furloughs or terminations for specific pe-
riods of time. Concerns continue to be raised by other oversight bodies and members
of Congress about certain actions taken by recipients that may not be serving the
interests of taxpayers and aviation workers.45 With regard to federal assistance to
the transportation sector, specific concerns have been raised, including the fol-
lowing:
• Businesses ‘‘double-dipping’’ or obtaining funds from more than one federal fi-
nancial assistance program, and
• Businesses furloughing employees prior to signing PSP agreements with work-
force retention requirements and outsourcing jobs after workforce retention re-
quirements for federal financial assistance have expired.
However, the laws that authorized these programs did not prohibit businesses
from accessing other federal financial assistance, and the requirement for busi-
nesses to retain employees expires for PSP3 recipients in either September of this
year or the date on which assistance provided is exhausted, whichever is later.
New programs authorized in December 2020 and March 2021, CERTS and Avia-
tion Manufacturing Jobs Protection program, do take into account other COVID–19
relief funding provided to eligible recipients. According to DOT and Treasury offi-
cials, these and other relevant requirements regarding eligibility will be clearly laid
out and built into the application and review process.
42 GAO–21–191.
43 GAO–21–551; GAO–21–191; GAO–20–701.
44 GAO–21–191.
45 Some have suggested that these concerns could be addressed by federal agencies imposing
additional requirements on recipients of federal assistance.
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Consider challenges posed by setting up new programs quickly. In a crisis, federal
agencies may be called upon to set up new programs to address urgent needs. In
our reviews, DOT and Treasury acknowledged challenges in standing up new
COVID relief programs and getting funds out quickly through these programs. For
example:
• DOT was tasked with setting up the Aviation Manufacturing Jobs Protection
program under the American Rescue Plan Act of 2021 in March 2021. Setting
up this program included establishing program rules and guidelines, creating
a public website, conducting public outreach, selecting an application portal,
and moving personnel within the department to lead this effort and provide as-
sistance. DOT officials said setting up a new program for a sector that has not
historically received federal financial assistance, requires a balance between
distributing the funds quickly while ensuring necessary oversight is in place.
• With regard to PSP, the loan program, and CERTS, Treasury also noted the
challenges of setting up emergency financial programs with intense industry ex-
pectations for the quick distribution of funds.46 Also, Treasury officials noted
the challenge of providing assistance to industry sectors for which the agency
had no prior experience and that included a wide-range of applicants, from
those with only a few employees to those with tens of thousands.
In our reviews, we found that distributing funds through existing programs was
relatively straightforward.47 Unlike the Aviation Manufacturing Jobs Protection
program and the programs implemented by Treasury; FRA and FTA allocated funds
primarily through existing programs, as directed by law. For example, FTA was able
to distribute grants to transit agencies quickly using its existing program formulas.
In addition, many of the transit grant recipients were well-known by FTA.
As part of our ongoing work, we will continue to assess how FEMA, DOT, and
Treasury are implementing the federal response as the country recovers from the
public health and economic crises brought on by COVID–19 pandemic. This work
includes examining how DOT and FAA are supporting research and development re-
lated to protecting the health of air travelers during pandemics while also maintain-
ing aviation safety, security, and efficiency. In addition, we will continue to monitor
issues related to FEMA’s Disaster Relief Fund, workforce, and funeral assistance for
COVID–19 related deaths.
Chairman DeFazio, Ranking Member Graves, and Members of the Committee,
this completes our prepared remarks. It is critical for agencies to implement our rec-
ommendations to help improve the government’s ongoing response and recovery ef-
forts as well as prepare for future public health emergencies. We will continue to
assess these issues as part of our ongoing work, including making recommendations
as appropriate, and will be happy to assist the Committee as you work to support
the federal efforts to recover from the pandemic. We would be pleased to respond
to any questions that you may have at this time.
Mr. DEFAZIO. Thank you for your testimony.
We now move on to the Honorable Eric J. Soskin, inspector gen-
eral, DOT.
Mr. SOSKIN. Chairman DeFazio, Ranking Member Graves, and
members of the committee, thank you for inviting me today to dis-
cuss DOT’s response to the challenges created by the COVID–19
pandemic.
As you know, COVID–19’s impact on the transportation industry
has seriously affected jobs, businesses, and the lives of most Ameri-
cans.
DOT is committed to the safety and efficiency of our transpor-
tation system. And DOT agencies have moved quickly to release
the more than $106 billion that Congress provided to DOT to help
workers, families, and businesses deal with the pandemic. How-
46 The CARES Act required Treasury to publish procedures for PSP1 not later than 5 days
after the date of enactment of the act, and for the loan program within 10 days after enactment
of the act. Additionally, the CARES Act directed Treasury to make initial payments to air car-
riers and contractors that submitted requests for financial assistance approved by the Secretary
no later than 10 days after enactment of the act.
47 GAO–21–387; GAO–21–191.
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ever, the large volume of funds makes it critical for DOT to enforce
internal controls to prevent fraud, waste, and abuse.
Today I will focus on the five risk areas my office has identified
to help DOT effectively steward its COVID relief funds. Those are
airport grants management; surface transportation oversight; con-
tract and grant execution; financial management systems; and pre-
vention of fraud, waste, and abuse.
As to the first risk area, FAA must make effective use of the $20
billion in COVID relief funds it received for American airports. We
have recommended stronger controls over grantee reimbursements,
and a risk-based approach for detecting fraud, waste, and abuse.
To its credit, FAA has begun assigning appropriate risk levels to
grantees, and adjusting its oversight accordingly. FAA will also
benefit from enforcing existing policies to verify grant spending and
check cost increases. A focus on controlling costs is critical, given
the 100-percent Federal share the CARES Act provides for ap-
proved projects.
Second, DOT’s surface agencies must adapt their oversight to
mitigate risks. These agencies received most of DOT’s COVID relief
funds, about $83 billion. And the volume also presents operational
challenges. FTA and FRA, for example, received much more for
some programs they oversee than in a typical year. While FTA
quickly allocated these funds, transit agencies may take years to
actually expend the grants, time during which the specific recipi-
ents and purposes can change. FTA must, therefore, ensure that it
correctly awards funds, and tracks them over time. FRA faces simi-
lar challenges, with monitoring the $3.7 billion in supplemental
funding Congress provided for Amtrak through FRA.
At the same time, agencies must contend with the pandemic’s
operational impact and increased program risks. For example, FTA
postponed its in-person oversight reviews in 2020, but has since re-
sumed them, and now plans additional oversight reviews for
COVID funding recipients this year.
The third risk area for DOT is better managing contracts and
grants. This is key, given the massive influx of COVID funds, in
addition to its already substantial annual funding for contracts and
grants that will be critical for DOT to address weaknesses our prior
work has found.
Specifically, DOT must, one, foster competition and obtain rea-
sonable pricing for services and programs; two, ensure that con-
tractors and grantees expend funds to achieve desired outcomes;
three, have sufficient numbers of adequately trained and super-
vised personnel to ensure compliance with Federal requirements;
and four, DOT must maintain the integrity of its multiple financial
management systems, particularly given the recent increase in
cyber attacks on Federal and private-sector information systems.
DOT must, likewise, maintain its vigilance on efforts to prevent
improper payments, as the drastic increase in disbursements and
transactions could make compliance with Federal requirements
more difficult.
Finally, we are increasing our outreach to transportation agen-
cies, as COVID relief funds are susceptible to fraud, waste, and
abuse. Early detection and intervention will be critical, and it will
be important for DOT agencies to use high-quality tracking and
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monitoring procedures. We are working to inform DOT staff and
grantees about red-flag indicators of fraud, and how to report that
fraud, as well as tracking and monitoring information.
We are committed to using our audits and investigations to help
maximize the Department’s COVID funding, and to help it meet its
mission. And we will keep the committee apprised of our work.
This concludes my prepared statement. I will be happy to answer
any questions that you, Mr. Chairman, or other members of the
committee may have. Thank you.
[Mr. Soskin’s prepared statement follows:]
f
Prepared Statement of Hon. Eric J. Soskin, Inspector General, U.S.
Department of Transportation
CHALLENGES FACING THE DEPARTMENT OF TRANSPORTATION’S COVID–19 RESPONSE
EFFORTS
Chairman DeFazio, Ranking Member Graves, and Members of the Committee:
Thank you for inviting me here today to discuss the Department of Transpor-
tation’s (DOT) response to the challenges caused by the Coronavirus Disease 2019
(COVID–19) pandemic. As you know, COVID–19 has had a major impact on the
U.S. transportation industry in ways that affect the Nation’s economy and the jobs,
businesses, and way of life of the American people. We note the Department’s com-
mitment to the success of recovery efforts through its work to ensure the safety and
efficiency of the American transportation system while also protecting the safety
and well-being of DOT employees.
The Department has moved quickly to make the over $106 billion that Congress
provided 1 to DOT agencies available to help American workers, families, and busi-
nesses deal with the pandemic (see exhibit A). The volume of the funds and the
speed with which they have been made available, however, present serious oversight
challenges beyond those we have highlighted in past reports to the Secretary of
Transportation and Congress. In June 2020, to help DOT promote effective steward-
ship of the over $36 billion provided by the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, we identified five potential risk areas to help the Department
bolster its oversight of these funds: managing airport grants efficiently; adapting
surface transportation oversight approaches when necessary; executing contracts
and grants effectively; tracking and monitoring funds accurately; and preventing
and detecting fraud, waste, and abuse. These risk areas, and our suggestions to
mitigate them, were drawn largely from our prior work helping DOT oversee a sig-
nificant influx of funds for economic and emergency relief.2 Since that time, the
Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and
American Rescue Plan (ARP) Act have added over $70 billion to this huge invest-
ment in DOT programs. These additional appropriations make the Department’s at-
tention to spending risks and internal controls even more critical for efficient and
compliant expenditures and prevention of fraud, waste, and abuse.
My testimony today will focus on the five risk areas mentioned above and how
we are working to support the Department’s efforts to help ensure funds achieve
their vital purpose.
SUMMARY
DOT has received billions of dollars to fund its efforts to respond to and mitigate
COVID–19 across all modes of transportation. For example, the Federal Aviation
Administration (FAA) received over $20 billion to support airports’ continuing oper-
ations and replace lost revenue resulting from the sharp decline in passenger traffic
and other airport business due to the pandemic. To mitigate the challenges associ-
ated with this huge influx of funds, we found that FAA must establish controls to
1 The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 (Pub. L. 16–136)
provided over $36 billion to DOT. The Coronavirus Response and Relief Supplemental Appro-
priations (CRRSA) Act of 2021 (Pub. L. 116–220) provided over $27 billion and the American
Rescue Plan (ARP) Act of 2021 (Pub. L. 117–2) provided over $43 billion. See exhibit A for the
breakdown by agency.
2 The American Recovery and Reinvestment Act of 2009 (ARRA), Pub. L. 111–5.
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ensure grantees adhere to Federal requirements and increase its own reporting
transparency. The Agency is taking positive steps toward establishing a risk-based
oversight approach and has categorized all COVID-related relief grants as ‘‘high
risk,’’ thus strengthening its ability to manage these grant funds. DOT’s surface
transportation agencies received about $83 billion in COVID–19 relief funding and
also face challenges in overseeing these funds and carrying out normal operations
under COVID–19 constraints. Further, DOT agencies have started to adjust their
oversight approaches to ensure that recipients meet Federal requirements and will
need to continue to do so. We also highlighted that the Department must increase
emphasis on how it awards and administers contracts and grants, ensure that indi-
viduals making agency or recipient awards have appropriate authority and training,
improve procedures to maintain its overall low improper payment rate, and main-
tain the availability and integrity of its multiple financial management systems.
Layered atop these challenges is the fact that the volume of COVID–19 relief funds
and the speed at which they must be disbursed puts them at a higher than usual
risk for fraud, waste, and abuse. For this reason, we found that it will be critical
for all DOT agencies to implement data-quality procedures for tracking and moni-
toring and to be aware of ‘‘red flag’’ indicators of fraud schemes. To assist DOT in
achieving that end, we are conducting outreach and education efforts to enhance un-
derstanding about how to recognize, prevent, and report fraud to the appropriate
authorities.
EFFECTIVELY MANAGING GRANTS TO SUPPORT AIRPORTS
Since March 2020, FAA has received $20 billion in COVID-relief funds 3 for
grants-in-aid through the Airport Improvement Program (AIP)—more than the
amount it received through AIP in the preceding 5 fiscal years combined. While AIP
has been DOT’s main vehicle for providing grants to airports across the Nation for
many years, FAA’s receipt of this unprecedented injection of funds for COVID–19
relief comes with challenges similar to those our prior work has identified. To en-
sure these funds are put to effective use, FAA needs to establish increased controls
over grantee reimbursements and implement a risk-based approach to detect poten-
tial fraud, waste, and abuse.
Establish Controls To Prevent Lapses in Grantee Adherence to Federal Requirements
and Increase Reporting Transparency
Our work has previously identified challenges that FAA faces in its efforts to ef-
fectively manage large allocations of funds. Audits we conducted following Hurri-
canes Katrina and Rita in 2005 and the economic recession of 2009, as well more
recent assessments, found lapses in grantee adherence to Federal laws and regula-
tions, including those regarding improper payments, periods of performance, and
grant documentation.4 Our 2021 AIP audit, for example, identified misused funds,
false claims, and insufficient supporting documentation for reimbursement re-
quests—issues with a total impact on AIP obligations of $298.1 million. Resolving
these issues is critical, in part because the CARES Act authorizes the Federal share
of approved projects to be increased to 100 percent, potentially reducing the incen-
tives for localities to rigorously control project costs. Therefore, the Agency will ben-
efit from enforcing existing policies that require program managers to verify grant
fund expenditures and cost increases.
Our prior AIP audit work has also identified concerns about FAA’s grant report-
ing practices. For example, FAA did not update over 75 percent of the American Re-
covery and Reimbursement Act (ARRA) estimated grant amounts it published online
with its actual awards to recipients. In particular, 25 of the 319 project cost esti-
mates were off by more than 50 percent. Similarly, we identified issues with the
accuracy of FAA-provided data for AIP grants during our 2021 review.
Use a Risk-Based Approach for Grant Oversight
In addition, FAA is following through on recommendations made in our past work
to establish a risk-based oversight approach, assign the appropriate risk level to
grantees, and adjust the Agency’s oversight accordingly. Given FAA’s need to target
3 FAA received $10 billion through the CARES Act, $2 billion through CRRSA, and $8 billion
through the ARP Act.
4 Oversight of Airport Improvement Program Hurricane Grants (OIG Report Number AV–
2007–014), December 13, 2006. FAA Fulfilled Most ARRA Requirements in Awarding Airport
Grants (OIG Report Number AV–2011–053), February 17, 2011. Gaps in FAA’s Oversight of the
AIP State Block Grant Program Contribute to Adherence Issues and Increase Risks (OIG Report
No. AV2021017), February 10, 2021. OIG reports are available on our website: https://
www.oig.dot.gov/.
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its resources to oversee the vast number of grants that will be supported by
COVID–19 funds, we initiated an audit assessing FAA’s policies and procedures for
the award and oversight of CARES Act funds. While this audit is currently under-
way, we have found that FAA has categorized all of its COVID-related relief grants
as ‘‘high risk’’-generating additional oversight and review responsibilities for Agency
officials. In addition, FAA has primarily centralized those oversight and review re-
sponsibilities within its Headquarters personnel; it took this action to ensure that
the process is standardized and to accelerate awareness of potential implementation
issues due to the unique nature of the relief funding. For example, FAA is planning
to collect and review documentation for the Aviation Manufacturing Jobs Protection
Program.5 These steps will strengthen the Agency’s mitigation strategy for identi-
fying financial errors and inconsistencies in order to detect and prevent improper
payments. Our future work will continue to focus on FAA’s efforts to protect tax-
payers’ interests related to the oversight and management of these COVID-related
grants.
LEVERAGING STEWARDSHIP AND OVERSIGHT APPROACHES TO ENHANCE
TRANSPARENCY AND MITIGATE RISK
DOT’s surface transportation agencies received extensive COVID–19 relief fund-
ing—about $83 billion. In particular, the Federal Transit Administration (FTA) has
received about $69 billion to help transit systems in the United States mitigate the
impacts of COVID–19, including support for their operating expenses. Congress also
provided $10 billion to the Federal Highway Administration (FHWA) for highway
infrastructure programs; over $3.7 billion to the Federal Railroad Administration
(FRA) to support Amtrak; approximately $4.1 million to the Maritime Administra-
tion; and $150,000 to the Federal Motor Carrier Safety Administration. Based on
our work, we have identified challenges these agencies may face in overseeing their
funds in addition to carrying out normal operations under COVID–19 constraints.
Track and Report on Funding Progress and Accountability
Sound processes for accurate tracking and reporting on funding progress and ac-
countability are important for transparency and mitigating the risk of misuse.6 FTA
and FRA, for example, received substantially more for the programs funded through
COVID relief than they typically receive annually for the same programs and for
recent disasters, such as Hurricane Sandy. While FTA has expeditiously allocated
its COVID-relief funds, our work examining FTA’s progress in using about $10 bil-
lion in Hurricane Sandy funds shows that transit agencies receiving grant funds can
take years to expend large amounts.7 In addition, the amounts allocated to specific
recipients and purposes can change over time. Therefore, FTA will need to pay ongo-
ing attention to ensure that it correctly awards funds to recipients and that obli-
gated amounts do not exceed limitations. Similarly, FRA oversees annual Federal
funding for Amtrak, which in the last fiscal year amounted to $2 billion. In June
2021, we reported on FRA’s program to oversee Amtrak’s use of these Federal
funds.8 The $3.7 billion in supplemental funding appropriated to ameliorate the im-
pact of COVID–19 on Amtrak makes FRA’s oversight even more critical. Our work,
which was also applicable to FRA’s oversight of the supplemental funding, found
that the Agency has taken steps to improve its Amtrak oversight program and has
plans to address weaknesses in its processes and systems for monitoring expendi-
tures and tracking and following up on issues. FRA’s completion of this work will
enhance its ability to oversee Amtrak’s use of both annual and COVID–19 supple-
mental funding.
5 The Aviation Manufacturing Jobs Protection Program, established by the American Rescue
Plan Act of 2021, provides funding to eligible businesses, paying up to half of their compensation
costs for certain categories of employees for up to 6 months.
6 According to GAO’s Government Auditing Standards (GAO–21–368G), April 2021, as re-
flected in applicable laws, regulations, agreements, and standards, Federal program officials and
managers are responsible for providing reliable, useful, and timely information for transparency
and accountability of these programs and their operations.
7 Our work supporting FTA’s Hurricane Sandy funding oversight includes: FTA Made Progress
in Providing Hurricane Sandy Funds but Weaknesses in Tracking and Reporting Reduce Trans-
parency Into Their Use (OIG Report No. ST2021032), July 21, 2021; FTA’s Limited Oversight
of Grantees’ Compliance With Insurance Requirements Puts Federal Funds and Hurricane Sandy
Insurance Proceeds at Risk (OIG Report No. ST2020005), October 30, 2019; and FTA Has Not
Fully Implemented Key Internal Controls for Hurricane Sandy Oversight and Future Emergency
Relief Efforts (OIG Report No. ST2015046), June 12, 2015.
8 Fully Implementing a Grants Management Framework Will Enhance FRA’s Amtrak Funding
Oversight (OIG Report No. ST2021027), June 30, 2021.
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Adapt Oversight Processes To Address COVID–19 Impact and Program Risks
The Department also must contend with the pandemic’s impact on program risks
and operations, such as in-person inspections and travel. For example, while FTA
was monitoring and providing guidance to grant recipients, it postponed the over-
sight reviews planned for fiscal year 2020 until fiscal year 2021. In April 2021, FTA
reported that it has since incorporated oversight of COVID–19 relief funds into the
Agency’s existing oversight program and developed a new proactive approach to
COVID–19 relief funding oversight that focuses on both technical assistance and
supplemental oversight.9 The Agency added that, starting in early summer 2021, it
will begin supplemental oversight activities for COVID–19 relief funding recipients
not scheduled for a Triennial or State Management Review this year. These steps
by FTA to enhance oversight of COVID-relief funding are laudable and indicate
progress toward addressing the potential risk areas we identified for stewardship
of these funds. Such actions are also particularly important in light of the ways in
which COVID-relief laws changed how recipients can use FTA funds, such as by al-
lowing all recipients, regardless of size or urbanized area population, to charge oper-
ating expenses to FTA grants on a 100-percent Federal share basis. Other DOT
agencies may face similar challenges and also may need to adjust their oversight
approaches to ensure that recipients meet Federal requirements and use funds only
for eligible purposes. We anticipate that future audits will examine the Depart-
ment’s performance in this area and also assess DOT’s tracking and reporting ef-
forts. We recently announced our audit of FTA’s COVID–19 relief funding oversight.
EXECUTING CONTRACTS AND GRANTS EFFECTIVELY TO ACHIEVE DESIRED OUTCOMES
Given the large influx of COVID–19 funds the Department has received, DOT
agencies will need to pay even greater attention to the ways in which they award
and administer contracts and grants. As of July 6, 2021, DOT had received over
$106.3 billion in COVID–19 funding and had obligated over $47 billion of those
funds. This obligation was in addition to its annual contract and grant obligations,
which totaled over $74 billion in fiscal year 2019. Based on our previous work, un-
less the Department sustains focus on its award and oversight practices, it will face
a number of risks to the effective use of these funds. Specifically, the Department
needs to ensure that DOT agencies foster competition and receive reasonable pricing
for services and programs; contractors and grantees expend funds as intended and
to achieve desired outcomes; and that adequately trained and supervised personnel
manage funds in accordance with Federal requirements. Our future work will focus
on whether the Department is able to effectively manage the use and expenditure
of DOT grant and contract funds, including those for COVID relief.
Foster Competition to the Extent Practical and Ensure Reasonable Pricing
To achieve efficiency and effectiveness and realize the best value for taxpayers,
DOT will need to promote competition to the extent practicable and verify fair and
reasonable pricing before agency-funded contracts are awarded. These activities
should include developing sound independent Government cost estimates, con-
ducting price and/or cost analyses, and requiring adequate justification for single
bids. However, our past work—which has covered oversight of FHWA’s ARRA-re-
lated spending—identified deficiencies in these areas that could put billions in Fed-
eral funds at risk. For example, our 2012 audit of ARRA-funded FHWA contracts
showed that even minimal increases in the number of bids received could have a
significant impact.10 Prices for contracts with one or two bids averaged 11 percent
higher than prices for contracts with three bids—resulting in a total projected price
difference of at least $179 million. In addition, in 2019, we assessed FAA’s competi-
tive award practices for major acquisition program contracts and subsequently rec-
ommended that the Agency could put up to $4.9 billion in Federal funds to better
use by improving its ability to establish contract pricing that is fair, reasonable, and
realistic.11 Specifically, FAA put billions of dollars at risk by awarding some com-
petitive contracts without developing required Government cost estimates or ade-
quately justifying several noncompetitive awards.
Ensure That Contractors and Grantees Expend Funds as Intended
As is the case with the Department’s annual contract and grant spending, it is
vital that DOT provide clear direction to contractors and grantees on Federal re-
9 FTA, ‘‘Dear Colleague’’ Letter, April 20, 2021.
10 Lessons Learned From ARRA: Improved FHWA Oversight Can Enhance States’ Use of Fed-
eral-Aid Funds (OIG Report No. ZA–2012–084), April 5, 2012.
11 FAA’s Competitive Award Practices Expose Its Major Program Contracts to Cost and Per-
formance Risks (OIG Report No. ZA2020020), March 9, 2020.
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quirements for verifying and documenting expenditures of COVID–19 funds. How-
ever, our past work has found that DOT could do more to direct grantees to provide
supporting documentation for their reimbursement requests and reviews to avoid
improper payments. For example, in 2019, we reported that the Department did not
routinely require grantees to provide support showing that the costs they submitted
for reimbursement were reasonable or allowable.12 In addition, our review of FTA’s
oversight of Hurricane Sandy funds determined that FTA did not verify that grant-
ees were using those funds solely for eligible expenditures, including an instance
where a grantee had inappropriately spent over $17 million that had to be returned
to the Federal Government.13 We also recently reported that FAA did not always
award and administer contracts in accordance with the domestic content laws,14
which direct Federal agencies, with certain exceptions, to purchase American-made
materials and goods to strengthen our economic and national security.15 This lack
of compliance highlights another potential risk area for the Department as it strives
to maximize the extent to which COVID-relief funding fulfills the goal of supporting
our Nation’s economic well-being.
In the coming months, we will continue our work to assess the Department’s ef-
forts to effectively monitor the use of its COVID–19 funds. Planned audits include
assessing FAA’s oversight of CARES Act-funded airport development contracts and
evaluating whether other DOT or grantee contracts using COVID–19 funds were
awarded and expended for their intended purpose and accurately tracked for trans-
parency.
Appropriately Train and Manage Personnel Who Administer Federal Funds
Our previous reviews of DOT and grantee contracting activities also identified
issues with the authorization and training of staff who award funds—within the De-
partment and at recipient organizations. Given the distinct requirements associated
with the COVID–19 funds, DOT must require that individuals administering agency
or recipient awards have the appropriate authority and training to ensure compli-
ance with applicable laws and regulations and that funds are used for intended pur-
poses, an area in which our previous work has found gaps.16 In other work, we
found that two DOT agencies—representing 69 percent of the Department’s overall
COVID funding—did not ensure that oversight support staff consistently docu-
mented their reviews or that resulting recommendations were tracked and resolved
at the grantee and Federal levels.17
ENSURING THE AVAILABILITY AND INTEGRITY OF DOT’S SYSTEMS FOR TRACKING AND
MONITORING FEDERAL FUNDS
Effective stewardship of COVID relief funds depends on DOT’s ability to effec-
tively track and monitor spending, to detect errors in grant activities, and keep er-
rors in expenditures low. These efforts require the Department to maintain the
availability and integrity of its financial management systems.
Maintain the Availability and Integrity of DOT’s Systems for Tracking and Moni-
toring Federal Funds
A major possible risk area for the Department is maintaining the confidentiality,
availability, and integrity of the financial management systems 18 that process
CARES Act grants and monitor and disburse payments. Due to an increase in
cyberattacks on Federal and private sector information systems since March 2020,
12 Stronger Guidance and Internal Controls Would Enhance DOT’s Management of Highway
and Vehicle Safety R&D Agreements (OIG Report No. ZA–2019–051), May 1, 2019.
13 FTA Can Improve Its Oversight of Hurricane Sandy Relief Funds (OIG Report No.
ZA2016077), July 21, 2016.
14 Domestic content laws include the Buy American Act (BAA), 41 U.S.C. §§ 8301–8305, and
Buy American Preference (BAP), 49 U.S.C. § 50101.
15 Gaps in Guidance, Training, and Oversight Impede FAA’s Ability To Comply With Buy
American Laws (OIG Report No. ZA2021026), June 2, 2021.
16 MWAA’s Weak Policies and Procedures Have Led to Questionable Procurement Practices,
Mismanagement, and a Lack of Overall Accountability (OIG Report No. AV–2013–006), Novem-
ber 1, 2012.
17 FTA Did Not Adequately Verify PATH’s Compliance With Federal Procurement Require-
ments for the Salt Mitigation of Tunnels Project (OIG Report No. ZA2016057), March 28, 2016;
Opportunities Exist To Improve FRA and Volpe’s Acquisition and Use of Oversight Contractors
(OIG Report No. ZA2019056), July 10, 2019; FTA Has an Opportunity To Improve the Integrity
Monitor Program for Hurricane Sandy Grantees (OIG Report No. ZA2019064), September 9,
2019.
18 FTA uses three financial management systems—Transit Award Management System, Fi-
nancial Management System and ECHO–WEB, which interfaces with the DOT-wide financial
management system, Delphi.
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we are currently assessing the security of the financial systems the Department
uses to track and monitor COVID relief funds. For example, our review of FTA’s
ability to mitigate threats from cyberattacks found security control weaknesses, in-
cluding that the Agency does not require over 4,600 external users to use multi-
factor authentication, such as a username and password or a personal identification
verification card, to access its financial management systems. Cyberattacks are
among the biggest security threats facing the Federal Government today, as evi-
denced by a May 2021 Executive order that requires agencies to implement multi-
factor authentication within 180 days.
Given the multiple financial management systems involved in tracking COVID re-
lief grants, the Department will face security risks in tracking and monitoring these
funds. For instance, an attacker could exploit vulnerabilities to take control over
certain systems, cause a denial of service attack, or gain unauthorized access to crit-
ical files and data. To protect the integrity, availability, and confidentiality of sen-
sitive information and mitigate risks to its financial management systems, DOT will
need to effectively select, assess, and monitor its security controls and detect and
correct weaknesses. For example, consistent updating of financial management sys-
tems with software patches will be vital whenever a security flaw is uncovered.
Also, to mitigate risks to data availability, DOT must maintain adequate disaster
recovery plans to quickly restore systems after unexpected disruptions. We will keep
this committee apprised of DOT’s progress in these and other areas when we com-
plete our current audit work.
Maintain Compliance With Improper Payment Reporting
During previous reviews,19 we found that some errors, such as improper pay-
ments, were caused by insufficient documentation, a program design or structural
issue, or an administrative or process error made by State or local agency grantees.
We also reported that DOT complied with the requirements of the Improper Pay-
ments Elimination and Recovery Act of 2010 and the Payment Integrity Information
Act of 2019 and had reported an overall improper payment rate below 10 percent
for each reviewed program and activity.20 However, the drastic increase in disburse-
ments and volume of transactions under the COVID relief statutes could make it
difficult for DOT to keep its reported improper payments below the 10-percent
threshold. Sustained focus on procedures to detect improper payments could help
mitigate this risk.
INCREASING OUTREACH AND EDUCATION TO TRANSPORTATION AGENCIES TO PREVENT
AND DETECT FRAUD, WASTE, AND ABUSE
The volume of COVID–19 relief funds and the speed with which they are dis-
bursed puts them at a higher than usual risk for fraud, waste, and abuse by recipi-
ents. Given that these funds will be spent on multiple purposes, with disparate re-
quirements and restrictions, existing risk assessments may not be sufficient. Based
on our prior assessments of DOT’s oversight of large funding amounts—such as
through ARRA and other initiatives—early detection and intervention is essential
to mitigate misuse of funds. Thus, it will be critical for all DOT agencies to imple-
ment data quality procedures for tracking and monitoring. We are reviewing finan-
cial datasets—from the Department and from other Government resources—to de-
termine whether DOT agencies are using COVID–19 funds properly.
An important way to deter fraud is for DOT staff and grantees to be aware of
certain ‘‘red flag’’ indicators typically associated with fraud schemes. For example,
any mismarking or mislabeling of products and materials might indicate product
substitution fraud; see exhibit B for descriptions of other fraud indicators. The best
way to make individuals aware of these indicators is to conduct systematic fraud
prevention education in the field. To that end, we are working with the Department
to conduct outreach and education efforts to enhance understanding about how to
recognize, prevent, and report potential fraud to the appropriate authorities, includ-
ing our office.
Since March 2020, our Office of Investigations has conducted over 1,200 hours of
outreach focusing on education and deterrence related to the Department’s COVID-
19 DOT’s Fiscal Year 2019 IPERA Compliance Review (OIG Report No. FS2020029), April 27,
2020; DOT’s Fiscal Year 2018 IPERA Compliance Review (OIG Report No. FI2019054), June 3,
2019; DOT’s Fiscal Year 2017 IPERA Compliance Review (OIG Report No. FI2018055), May 14,
2018.
20 See OIG Report No. FS2020029. The Payment Integrity Information Act of 2019 (PIIA),
Public Law 116–117, superseded the Improper Payments Elimination and Recovery Act of 2010
(IPERA), Pub. Law 111–204 (July 2010); see DOT’s Fiscal Year 2020 Payment Integrity Informa-
tion Act Compliance Review (OIG Report No. FI2021031), July 14, 2021.
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relief funds. In fact, this year we have almost doubled the hours we spent on
COVID-relief outreach a year ago. In addition to hosting training events for our own
investigators, we have conducted 139 COVID-funding-related outreach activities
with DOT officials, regional modal partners, State grant recipients, and Federal law
enforcement partners across the country—38 of which included information on fraud
indicators. In addition, we are greatly involved with the work of the Pandemic Re-
sponse and Accountability Committee, and we continue to seek out innovative meth-
ods of analyzing data and leveraging the experiences of others working on pandemic
relief efforts across the inspector general community. These added outreach efforts
will likely result in an increase in reporting of suspected mismanagement and indi-
cators of criminal activity related to DOT-disbursed COVID–19 funds.
Our experience with the rapidly dispersed ARRA stimulus funds resulted in 24
investigations, 57 indictments, and 49 convictions representing over 38 years of in-
carceration and $85 million in restitution, recoveries, forfeitures and fines. For ex-
ample, one investigation revealed that from 2004 to 2010, a CEO of an FTA grantee
conspired and embezzled Federal ARRA funds. The CEO was sentenced to 30
months of incarceration, 36 months of supervised release, and $1.3 million in res-
titution. It will also be essential for DOT, when notified of wrongdoing by grantees
or contractors, to take timely action to suspend andor debar these individuals or
firms that have defrauded the Government or are otherwise known to be irrespon-
sible. By doing so, the Department can help protect other Federal programs from
fraud and other wrongdoing by the same individuals and entities. Timely action in
response to indications of fraud will better protect against misuse of public funds
by fraudulent or unethical firms or individuals in the future.
CONCLUSION
COVID–19 has had a wide-reaching impact on the transportation industry and
our economy. In response, DOT has taken quick action to distribute COVID relief
funds and implement requirements established by the CARES, CRRSA, and ARP
acts. Our office is committed to assisting the Department in its efforts to maximize
the efficacy of these funds and meet its mission in these exceptional times. By main-
taining focus on the most significant risk areas and establishing robust internal con-
trols, DOT can spend COVID relief funds effectively, prevent fraud, waste, and
abuse, ensure compliance with the law, and carry out its safety mission. Meeting
these goals will maximize the value of taxpayer dollars during this critical time.
In fulfillment of our own responsibilities pertaining to these funds, we will an-
nounce future work related to COVID oversight as needed and continue to deter and
pursue wrongdoers who target COVID spending. We look forward to continuing to
work with DOT in support of our shared goal to safeguard these critical funds from
fraud, waste, and abuse and sustain our ongoing economic recovery.
This concludes my prepared statement. I will be happy to answer any questions
you or other Members of the Committee may have.
EXHIBIT A. COVID–19 RELIEF FUNDS PROVIDED TO THE DEPARTMENT OF
TRANSPORTATION, AS OF JULY 6, 2021
Coronavirus Aid, Relief, and Economic Security (CARES) Act
DOT Agency Funds Provided
Federal Aviation Administration ..................................................................................... $10,025,000,000
Federal Transit Administration ....................................................................................... $25,000,000,000
Federal Railroad Administration ..................................................................................... $1,018,250,000
Office of the Secretary of Transportation ...................................................................... $57,753,000
Federal Motor Carrier Safety Administration .................................................................. $150,000
Maritime Administration ................................................................................................. $4,134,000
Office of Inspector General ............................................................................................. $5,000,000
Total Amount Provided by the CARES Act ................................................................. $36,110,287,000
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Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act
DOT Agency Funds Provided
Federal Aviation Administration ..................................................................................... $2,000,000,000
Federal Highway Administration ..................................................................................... $10,000,000,000
Federal Transit Administration ....................................................................................... $14,000,000,000
Federal Railroad Administration ..................................................................................... $1,000,000,000
Office of the Secretary of Transportation ...................................................................... $23,332,000
Total Amount Provided by the CRRSA Act ................................................................. $27,023,332,000
American Rescue Plan (ARP) Act
DOT Agency Funds Provided
Federal Aviation Administration ..................................................................................... $8,009,000,000
Federal Transit Administration ....................................................................................... $30,461,356,000
Federal Railroad Administration ..................................................................................... $1,700,000,000
Office of the Secretary of Transportation ...................................................................... $3,000,000,000
Total Amount Provided by the ARP Act ..................................................................... $43,170,356,000
Source: DOT Office of the Chief Financial Officer
EXHIBIT B. RED FLAG INDICATORS FOR COMMON FRAUD SCHEMES AND HOW TO
REPORT SUSPECTED FRAUD
The following pages include brief descriptions of selected fraud schemes commonly
seen on transportation projects, along with sample ‘‘red flag’’ indicators for each
scheme. It is important to note that the presence of one or more indicators does not
prove fraud and that the indicators shown are not all-inclusive for each of the
schemes described.
Bid Rigging and Collusion
In bid rigging and collusion schemes, contractors misrepresent the competition
against each other when, in fact, they agree to cooperate on the winning bid to in-
crease job profit. Watch for:
• Unusual bid patterns: too close, too high, rounded numbers, or identical win-
ning margins or percentages.
• Different contractors making identical errors in contract bids.
• Bid prices dropping when a new bidder enters the competition.
• Rotation of winning bidders by job, type of work, or geographic area.
• Losing bidders hired as subcontractors.
• Apparent connections between bidders: common addresses, personnel, or phone
numbers.
• Losing bidders submitting identical line item bid amounts on nonstandard
items.
Materials Overcharging
In materials overcharging schemes, a contractor misrepresents how much con-
struction material was used on the job and is then paid for excess material to in-
crease job profit. Watch for:
• Discrepancies between contractor-provided quantity documentation and ob-
served data, including yield calculations.
• Refusal or inability to provide supporting documentation.
• Contractor consistently loading job materials into equipment away from inspec-
tor oversight.
• Truck weight tickets or plant production records with altered or missing infor-
mation.
• Photocopies of quantity documentation where originals are expected.
• Irregularities in color or content of weight slips or other contractor documents
used to calculate pay quantities.
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Time Overcharging
In a time overcharging scheme, a consultant misrepresents the distribution of em-
ployee labor on jobs in order to charge for more work hours or a higher overhead
rate, to increase profit. Watch for:
• Unauthorized alterations to time cards and other source records.
• Billed hours and dollars consistently at or near budgeted amounts.
• Time cards filled out by supervisors, not by employees.
• Photocopies of timecards where originals are expected.
• Inconsistencies between a consultant’s labor distribution records and employee
timecards.
Product Substitution
In product substitution schemes, a contractor misrepresents the product used in
order to reduce costs for construction materials. Watch for:
• Any mismarking or mislabeling of products and materials.
• Contractor restricting or avoiding inspection of goods or service upon delivery.
• Contractor refusing to provide supporting documentation regarding production
or manufacturing.
• Photocopies of necessary certification, delivery, and production records where
originals are expected.
• Irregularities in signatures, dates, or quantities on delivery documents.
• High rate of rejections, returns, or failures.
• Test records reflect no failures or a high failure rate but contract is on time and
profitable.
• Unsigned certifications.
Disadvantaged Business Enterprises (DBE) Fraud
In disadvantaged business enterprises schemes, a contractor misrepresents who
performed contract work in order to appear to be in compliance with contract goals
for involvement of minority or women-owned businesses. Watch for:
• Minority owner lacking background, expertise, or equipment to perform sub-
contract work.
• Employees shuttling back and forth between prime contractor and minority-
owned business payrolls.
• Business names on equipment and vehicles covered with paint or magnetic
signs.
• Orders and payment for necessary supplies made by individuals not employed
by minority-owned business.
• Prime contractor facilitated purchase of minority-owned business.
• Minority-owned business owner never present at job site.
• Prime contractor always uses the same minority-owned business.
Quality-Control Testing Fraud
In quality-control testing schemes, a contractor misrepresents the results of qual-
ity control (QC) tests to falsely earn contract incentives or to avoid production shut-
down in order to increase profits or limit costs. Watch for:
• Contractor employees regularly taking or labeling QC samples away from in-
spector oversight.
• Contractor insisting on transporting QC samples from the construction site to
the lab.
• Contractor not maintaining QC samples for later quality assurance (QA) test-
ing.
• Contractor challenging results, or attempting to intimidate QA inspectors who
obtain conflicting results.
• Photocopies of QC test results where originals are expected.
• Alterations or missing signatures on QC test results.
Bribery
In bribery schemes, a contractor compensates a government official to obtain a
contract or permit contract overcharges. Watch for:
• Other government inspectors at the job site noticing a pattern of preferential
contractor treatment.
• Government official having a lifestyle exceeding his/her salary.
• Contract change orders lacking sufficient justification.
• Oversight officials socializing with or having business relationships with con-
tractors or their families.
Source: OIG
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Mr. DEFAZIO. OK, I thank the gentleman.
And last would be Mr. James Izzard, assistant inspector general
for investigations, Department of Homeland Security.
Mr. IZZARD. Chairman DeFazio, Ranking Member Graves, and
members of the committee, thank you for inviting me here today
to discuss OIG’s oversight of FEMA’s response to the COVID–19
pandemic.
The CARES Act provided DHS OIG $3 million in supplemental
funding to conduct oversight of the nearly $50 billion of COVID–
19 relief. DHS OIG is strategically initiating work to have the
highest impact to help improve DHS programs and operations.
Since January 2020, DHS OIG has received more than 6,000
complaints, and initiated 120 investigations related to COVID–19.
We continue to investigate COVID–19 fraud perpetrated by compa-
nies and individuals seeking to exploit DHS-affiliated Government
programs, including relief programs that FEMA administers.
A number of our open investigations are under review for pos-
sible criminal prosecution by U.S. attorneys offices nationwide.
Since the passage of the CARES Act, we have been at the forefront
to detect, deter, and investigate COVID–19 fraud perpetrated
against DHS and its components through our participation in
working groups, coordination with FEMA and the PRAC, and
leveraging the expertise of our professional staff to identify and in-
vestigate fraud schemes.
For example, on February 3, 2021, as a result of an investigation
we worked jointly with the VA OIG, the FBI, and the U.S. Attor-
ney’s Office for the Eastern District of Virginia, a defendant plead-
ed guilty to wire fraud, theft of Government funds, and making
false statements. The investigation determined that the defendant
repeatedly and falsely claimed to Federal officials that he was in
possession of large quantities of PPE, including N95 masks.
Based on the defendant’s statements, VA and FEMA awarded his
company contracts for more than $38 million to deliver 6.5 million
N95 masks. The VA intended to use the PPE to protect employees
and patients at VA facilities, and FEMA intended to procure the
N95 masks for the national stockpile. Despite the defendant’s
claims, he failed to supply any PPE or N95 masks to the Federal
Government. On June 16, 2021, the defendant was sentenced to 21
months incarceration, and nearly $349,000 in restitution.
In another instance, we led a task force that used data analytics
to identify a major facilitator of fraudulent unemployment insur-
ance claims. In November 2020, DHS OIG determined the indi-
vidual and her co-conspirators were involved in facilitating close to
a half million dollars in fraudulent unemployment insurance bene-
fits, which included fraudulently using the identities of State pris-
oners.
On April 8, 2021, the United States Attorney’s Office for the
Eastern District of Virginia issued a nine-count indictment charg-
ing four defendants with conspiracy to commit fraud in connection
with major disaster benefits.
Recognizing the magnitude and potential of these fraud schemes
related to FEMA and unemployment insurance programs, we des-
ignated a team of special agents to investigate major unemploy-
ment insurance facilitated fraud schemes involving FEMA funds.
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Over the last 10 months, this team has executed 15 search war-
rants and seizures, recovered $3 million, and realized 10 judicial
actions. Our team continues to open new investigations nationwide
that will likely yield high-impact results.
In addition, since March 2020, we have initiated nine new audits
related to CARES Act funds and FEMA’s response to COVID–19,
including audits of FEMA’s Federal coordination efforts and med-
ical supply chain. We look forward to reporting the results of those
audits when they are complete.
Earlier this month, we completed an audit that was initiated in
2019, and is directly relevant to FEMA’s ability to deliver crucial
supplies in response to the pandemic. We found FEMA personnel
didn’t always take the necessary steps to ensure prospective con-
tractors could deliver goods and services during compressed dis-
aster response timeframes. Between March and May 2020, FEMA
awarded and canceled at least 22 contracts, valued at $184 million,
for crucial supplies in response to the national COVID–19 pan-
demic. We made one recommendation to FEMA, which is currently
open.
Thank you again for Congress’ continued funding for our mission,
which supports our robust oversight of the Department to help
make its programs and operations more efficient and effective.
Mr. Chairman, this concludes my testimony. I am happy to an-
swer any questions you or other members of the committee may
have.
[Mr. Izzard’s prepared statement follows:]
f
Prepared Statement of James Izzard, Jr., Assistant Inspector General for
Investigations, U.S. Department of Homeland Security
Chairman DeFazio, Ranking Member Graves, and Members of the Committee:
Thank you for the opportunity to discuss the Department of Homeland Security,
Office of Inspector General’s (OIG) critical oversight of the Federal Emergency Man-
agement Agency’s (FEMA) preparedness, response, and recovery efforts related to
the coronavirus (COVID–19) pandemic. Since the beginning of the pandemic, we
have provided significant and timely information about the Department and its
COVID–19 response through our audits, inspections, evaluations, and investiga-
tions. We are committed to transparency and keeping you and your fellow Members
of Congress fully informed of our findings and recommendations.
Annually, DHS OIG provides taxpayers with a substantial return on their invest-
ment. Each fiscal year DHS OIG issues hundreds of recommendations to improve
the integrity, accountability, and performance of the Department. In FY 2020, DHS
OIG identified $7,500,553,271 in questioned costs and funds put to better use
through audits and inspections. In FY 2020, DHS OIG achieved more than $1.1 mil-
lion in recoveries, $389,000 in fines, and more than $15.3 million in restitutions.
The DHS Inspector General (IG) is one of nine statutory IGs who are members
of the Pandemic Response Accountability Committee (PRAC), created by Congress
through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. We close-
ly coordinate with the PRAC, as appropriate, to share model practices and enhance
our effectiveness.
The CARES Act provided DHS $45.9 billion for COVID–19 relief and provided
DHS OIG $3 million in supplemental funding, through a transfer from the Disaster
Relief Fund (DRF), to conduct oversight of those funds. Given this funding and the
range of associated mandates, DHS adopted a layered response to deliver critical
supplies and services. FEMA, along with other Federal partners, is the DHS compo-
nent responsible for managing the Federal Government’s COVID–19 pandemic re-
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sponse.1 On August 8, 2020, then-President Trump authorized FEMA to expend up
to $44 billion from the DRF for lost wage payments.2
On December 27, 2020, the Consolidated Appropriations Act first required FEMA
to provide funeral assistance through its Individual and Household Programs for
deaths related to the COVID–19 pandemic. The Act provided $2 billion to reimburse
funeral expenses incurred through December 31, 2020, at a 100 percent Federal cost
share. On March 11, 2021, President Biden signed the American Rescue Plan Act
(ARPA), which appropriated $50 billion to FEMA for costs associated with major
disaster declarations, including for funeral assistance and did not limit the date for
expenses incurred.3 As of July 12, 2021, FEMA has provided over $606 million to
more than 91,000 people to assist with COVID–19-related funeral costs for deaths
occurring on or after January 20, 2020.4 DHS OIG did not receive an additional allo-
cation to oversee those monies, but nonetheless, we initiated work to oversee
FEMA’s funeral assistance efforts, as described below.
INVESTIGATIONS
Since January 2020, DHS OIG has received a substantial number of COVID–19
fraud complaints nationwide and continues to investigate fraud perpetrated by com-
panies and individuals seeking to exploit DHS-affiliated government programs, in-
cluding relief programs that FEMA administers. To date, DHS OIG has received
more than 6,000 complaints and initiated 120 investigations. Many of our investiga-
tions involve individuals who have also attempted to defraud other COVID–19 pro-
grams.
Since the passage of the CARES Act, DHS OIG has been at the forefront to detect,
deter, and investigate COVID–19 fraud perpetrated against DHS and its compo-
nents through our participation on working groups, coordination with FEMA, and
reliance on the expertise of our professional staff.
Our special agents participate in various working groups and task forces at the
local, state, and regional level. This includes partnering with the Small Business
Administration (SBA) OIG, Department of Labor OIG, Veterans Affairs OIG, United
States Postal Inspection Service, Homeland Security Investigations (HSI), United
States Secret Service, Federal Bureau of Investigation (FBI), and United States At-
torney’s Offices.
We also participate in national working groups and task forces including the:
• Department of Justice (DOJ) Stimulus Funds Fraud Working Group;
• COVID–19 Fraud Enforcement Task Force;
• National Unemployment Insurance Fraud Task Force;
• DOJ Procurement Collusion Strike Force;
• DOJ Grant Fraud Working Group; and
• PRAC.
We interface with FEMA through a joint Fraud Working Group. That Fraud
Working Group provides fraud training, including indicators and fraud scheme
awareness, that is tailored to assist FEMA employees with preventing and reporting
suspected fraud. With respect to FEMA’s funeral assistance program, DHS OIG spe-
cial agents are actively and independently collaborating with FEMA to facilitate
early detection of fraud.
DHS OIG also developed an innovative approach to enhance the way we identify
COVID–19 fraud schemes. Our team of special agents, forensic accountants, ana-
lysts, digital forensic examiners, and data scientists provides a multidisciplinary ap-
proach to analyzing large and complex data sets to identify fraud indicators and de-
velop investigative leads. Using its expertise and a suite of cutting-edge data ana-
lytics tools, along with support from other Federal, state, and local partners, DHS
OIG has uncovered complex, multi-million-dollar fraud schemes involving FEMA
personal protective equipment (PPE) contracts and facilitators of major unemploy-
ment insurance fraud schemes involving FEMA funds. Over the last 10 months, our
team has executed 15 search warrants and seizures, recovered $3 million, and real-
ized 10 judicial actions, and our team continues to open new investigations that will
likely yield high-impact results. We also developed an analytical dashboard to iden-
1 ‘‘The Federal Emergency Management Agency’s Response to COVID–19 and Other Chal-
lenges.’’ Statement of Robert Fenton, Senior Official Performing the Duties of the Administrator,
FEMA. April 14, 2021. See also, ‘‘Known for Disaster Aid, FEMA Prepares for New Challenge
with Coronavirus Relief’’, NPR, March 19, 2020.
2 Presidential Memoranda, Memorandum on Authorizing the Other Needs Assistance Program
for Major Disaster Declarations Related to Coronavirus Disease 2019, August 8, 2020.
3 American Rescue Plan Act of 2021, P.L. 117–2.
4 FEMA press release HQ–21–134, July 12, 2021.
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tify fraudulent FEMA vendors who were contracted to provide PPE for the National
Stockpile. We have shared our model practice with the Inspector General commu-
nity and through the PRAC.
In addition, we established an internal COVID–19 fraud investigation team dedi-
cated to identifying and investigating unemployment insurance fraud. This team is
comprised of geographically dispersed agents who conduct high impact COVID–19
fraud investigations nationwide. In addition to investigating fraud associated with
FEMA COVID–19 funding, these agents coordinate with task forces, working
groups, and United States Attorney’s Offices nationwide.
Examples of our high-impact FEMA COVID–19 fraud investigations include:
Personal Protective Equipment Contract Fraud
On February 3, 2021, the Chief Executive Officer (CEO) of Federal Government
Experts, LLC (FGE) pleaded guilty to making false statements, wire fraud, and
theft of government funds. The investigation determined the CEO repeatedly, and
falsely, claimed to contracting officials from FEMA and Veteran’s Affairs (VA) that
he was in possession of large quantities of PPE, including N95 masks.
Based on the CEO’s statements, FEMA and the VA awarded FGE contracts to de-
liver more than 6 million N95 masks for a total cost of $38.5 million. FEMA in-
tended to procure the N95 masks for the National Stockpile, and the VA intended
to use the PPE to protect employees and patients at various VA facilities. Despite
the CEO’s claims, FGE failed to supply any PPE to FEMA and the VA. Ultimately,
it was determined that the company was never in possession of large quantities of
PPE or N95 masks despite the CEO’s fraudulent claims.
In addition, it was determined the CEO applied for various loans on behalf of
FGE under the Federal Payroll Protection Program (PPP) and the Economic Injury
Disaster Loan (EIDL) Program. The loan applications submitted by the CEO falsely
stated the number of FGE employees and the amount of FGE’s payroll. Specifically,
the CEO claimed FGE had 37 employees when, in fact, the company had 9. The
CEO also claimed he had a monthly payroll of $322,000 when, in fact, FGE’s month-
ly payroll was $13,907. FGE was awarded PPP and EIDL loans in the amount of
$1.06 million. On June 16, 2021, the CEO was sentenced to 21 months in Federal
prison, with 3 years of supervised release, and paid $348,714 in restitution.
Lost Wages Assistance Fraud
In November 2020, DHS OIG determined that an individual and her co-conspira-
tors fraudulently acquired $436,834 in FEMA Unemployment Insurance (UI) bene-
fits, which included using the identities of state prisoners. On April 8, 2021, the
United States Attorney’s Office for the Eastern District of Virginia issued a nine-
count indictment charging four defendants with conspiracy to commit fraud in con-
nection with major disaster benefits, fraud in connection with major disaster bene-
fits, and mail fraud. One of the defendants pleaded guilty on June 24, 2021, and
is scheduled to be sentenced in October 2021. Judicial outcomes regarding the three
co-defendants are pending.
In a similar scheme, an individual pleaded guilty on June 11, 2021 to mail fraud
for her role in fraudulently obtaining FEMA unemployment benefits for 22 prison
inmates. With the assistance of an inmate co-conspirator, the individual used the
identities of prisoners to file fraudulent UI claims to collect at least $223,984 in un-
employment benefits.
We continue to build and maintain relationships with our Federal, state, and local
law enforcement counterparts and to use data analytics to identify significant fraud
rings that impacted FEMA’s Lost Wages Assistance Program. Given our current
limited funding, we are focusing on Federal, state and local partners in areas most
heavily impacted by unemployment insurance fraud. As we identify new fraud
schemes, the number of cases will continue to grow.
AUDITS
Between 2014 and 2017, DHS OIG issued three reports on DHS’ readiness to con-
tinue mission essential functions during a pandemic. In FY 2014, we reported 5 that
DHS did not adequately assess its needs before purchasing pandemic preparedness
supplies and did not effectively manage its stockpile of pandemic PPE and antiviral
medical countermeasures. In FY 2016, we reported 6 DHS did not ensure sufficient
coordination, adequate training, and consistent screening of people arriving at U.S.
5 DHS Has Not Effectively Managed Pandemic Personal Protective Equipment and Antiviral
Medical Countermeasures (OIG–14–129).
6 DHS’ Ebola Response Needs Better Coordination, Training, and Execution (OIG–16–18).
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ports of entry during its response to Ebola. In FY 2017, we reported 7 that DHS may
not be able to effectively execute its preparedness plans during a pandemic. In total,
we made 28 recommendations and those recommendations are closed. In FY 2021,
we conducted a verification review of DHS’ efforts to determine the adequacy and
effectiveness of DHS’ corrective actions to our prior recommendations.8 While the
Department provided adequate documentation of its initial plans and actions to ad-
dress the 28 recommendations, DHS did not effectively implement corrective actions
to address three recommendations intended to provide operational efficiencies and
controls needed in the current pandemic. We made three recommendations to en-
sure we improved department-wide oversight of PPE and pandemic planning. The
Department concurred with the three recommendations and they remain open.9
We recently completed an audit that is directly relevant to FEMA’s ability to de-
liver crucial supplies in response to COVID–19 but was initiated prior to the
COVID–19 pandemic: FEMA Must Strengthen Its Responsibility Determination Proc-
ess (OIG–21–44). We conducted this audit to determine whether FEMA contracting
personnel followed Federal regulations, DHS policies, and FEMA procedures when
awarding disaster response contracts. We found FEMA contracting personnel did
not always take the necessary steps to ensure prospective contractors could deliver
goods and services during compressed disaster response timeframes. As a result of
inadequate guidance, FEMA personnel awarded contracts without making fully in-
formed determinations as to whether prospective contractors could meet contract de-
mands. Between March and May 2020, FEMA awarded and canceled at least 22
contracts, valued at $184 million, for crucial supplies in response to the national
COVID–19 pandemic. By awarding contracts without ensuring prospective contrac-
tors can meet contract demands, FEMA will continue wasting taxpayer dollars and
future critical disaster and pandemic assistance will continue to be delayed. We
made one recommendation to strengthen FEMA’s responsibility determination proc-
ess. FEMA concurred with our recommendation and it remains open.
In the early days of the COVID–19 pandemic, DHS OIG identified the need to
collect data before launching audit work in this unprecedented area. Therefore, in
March 2020, DHS OIG began gathering DHS and the U.S. Department of Health
and Human Services (HHS) pandemic response data in real time. We observed daily
and semi-weekly interagency conference calls hosted by FEMA and HHS officials
and monitored FEMA and HHS’ daily national COVID–19 situation reports. OIG
used this information to inform ongoing and proposed projects related to the pan-
demic.
Since June 2020 our auditors have been monitoring FEMA’s use of CARES Act
funds in addition to FEMA’s vaccine support role. Our auditors participate with
Federal, state, and local oversight officials on various working groups, including the
PRAC and the National Association of State Auditors, Comptrollers and Treasurers’
COVID–19 Accountability Work Group, to coordinate oversight work across local,
state, and Federal agencies and to identify issues related to the administration of
CARES Act and the ARPA funding. Finally, our Office of Audits is actively involved
in DHS OIG’s Disaster Relief Working Group, which focuses on our COVID–19 over-
sight work. This group collectively identifies common oversight issues and facilitates
coordination and deconfliction.
Since March 2020, we have initiated nine new audits related to FEMA’s response
to COVID–19, including audits of FEMA’s Federal coordination efforts and medical
supply chain. Our ongoing audits of FEMA’s COVID–19 response include:
• FEMA’s Federal Medical Supply Chain in Response to COVID–19: Our objective
is to determine to what extent FEMA managed and distributed medical supplies
and equipment in response to COVID–19.
• FEMA’s Federal Coordination Efforts in Response to COVID–19: Our objective
is to determine how effectively FEMA supports and coordinates Federal efforts
to distribute PPE and ventilators in response to the COVID–19 outbreak.
• FEMA Emergency Food and Shelter Program (EFSP) Administration of CARES
Act Funding: Our objective is to determine whether FEMA is administering
CARES Act funding for the EFSP in accordance with Federal requirements to
meet program goals.
7 DHS Pandemic Planning Needs Better Oversight, Training, and Execution (OIG–17–02).
8 Ineffective Implementation of Corrective Actions Diminishes DHS’ Oversight of Its Pandemic
Planning (OIG–21–14).
9 A recommendation is considered open when agreed-upon corrective action has not been im-
plemented. A recommendation is resolved when the Component management official and OIG
agree on (1) the reported findings and recommendations, (2) the corrective actions to be taken,
and (3) where appropriate, target completion dates.
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• FEMA’s Response to Declaration Requests for States, Tribes, and Territories:
Our objective is to determine whether FEMA follows its policies and procedures
consistently when responding to state, tribal, and territorial declaration re-
quests.
• FEMA’s Controls of Mission Assignments in Response to COVID–19: Our objec-
tive is to determine to what extent FEMA develops and oversees mission assign-
ments for COVID–19 in accordance with FEMA’s policies and procedures.
• FEMA’s Disaster Relief Fund for Lost Wages Assistance to DHS Employees: Our
objective is to determine to what extent eligible DHS employees received
FEMA’s DRF for supplemental state lost wages assistance.
• FEMA’s DRF Lost Wages Assistance to States and Territories: Our objective is
to determine to what extent FEMA ensured states and territories distributed
supplemental state lost wage assistance from the DRF to eligible recipients.
• FEMA’s Funeral Assistance for COVID–19: Our objective is to determine how
effective FEMA’s policies, procedures, and internal controls are in providing
proper oversight of its funeral assistance program for COVID–19.
• FEMA’s Workforce Management during Concurrent Events: Our objective is to
determine whether FEMA is effectively planning, managing, and deploying its
workforce to successfully respond to concurrent and consecutive disasters and
emergencies, including assisting other DHS components or Federal agencies.
We look forward to reporting the results of these audits when they are complete.
Our oversight of the Department and its components would not be possible with-
out the continued, bipartisan support from Congress that we have received for our
budget requests. Because of that support, we expanded our ability to obtain and
analyze a growing volume of digital forensic evidence, initiated efforts to modernize
our information technology infrastructure, and we augmented our program and sup-
port staff to enhance our effectiveness. For example, we hired experts to help us im-
prove our business information systems, improve the strength of our processes, and
increase the efficiency of our workforce. In addition, we hired additional special
agents in our Major Frauds and Corruption Unit to expand our ability to combat
COVID–19 fraud. Congress’ support has directly enhanced our ability to promote ac-
countability and deter future fraud against DHS and its programs.
Thank you for the opportunity to discuss the important work of DHS OIG and
our continued oversight of the Department and FEMA’s COVID–19 response. This
concludes my testimony, and I look forward to answering any questions you may
have.
Mr. DEFAZIO. Thank you for that. We will now proceed to ques-
tions to the first panel, and I think I will start with you, Mr.
Izzard.
Congratulations on the fraud you identified. Obviously, part of
the problem was the lack of stockpile and preparedness that DHS
had. And then, as I understand, some of the stockpile was out-
dated, proved to be otherwise not usable. Where are we at now?
We are looking now—we are wearing masks again. That is just
the Delta variant. Who knows what Epsilon, or Foxtrot, or what-
ever the next two are going to be. Where are we at in doing a bet-
ter job of having a stockpile, so we don’t have to go out for bids
to unknown, specious vendors, and get ripped off?
Mr. IZZARD. Thank you for that question, sir. As mentioned, we
have a number of ongoing projects that are looking at FEMA’s
readiness and preparedness to handle the pandemic. They are on-
going. And I would really be happy to take that back as a get-back,
to make sure that we provide you a specific and detailed response
to answer your question.
Mr. DEFAZIO. I would appreciate that. I have read recently that
we are now sourcing the N95s in the United States, which would
be greatly preferable.
I got involved—there was a gentleman in Texas who had—when
3M abandoned the U.S. to go get cheap labor in China, they aban-
doned a plant, and this gentleman bought it, and he was running
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it with just one line, because he didn’t have a lot of business, and
then he wanted to ramp it up, but it took quite a bit of convincing
and cajoling to get FEMA to work with him, as opposed to all this
stuff we were trying to fly in from China.
So I would like to get an update on that.
And then I also—for Mr. Currie—no, that is all right, we have
covered that.
I had another question here.
Well, if you could all just sort of generally give a 30-second—in
the areas which you oversee, a 30-second summary of what we can
do to make this better in the future, and answer whether or not
it requires specific changes in authorization or authority by Con-
gress, or if this has all been internal to the bureaucracies and the
Federal administrative rules.
I know that is a lot to say, but give it a try. So we would start
with the first panelist. That would be Michael Horowitz.
Mr. HOROWITZ. Mr. Chairman, just a couple of things. I do think
that work can continue to be done, as you referenced earlier, to ad-
vance transparency, to ensure that all information, all data is get-
ting out there about how money has been spent, and where it has
been spent, and to whom the money has gone to.
We also think additional controls need to be put in place, and we
have been working over the last many months with OMB leader-
ship, and with the ARP implementation team leadership to do that.
In terms of additional efforts that could be done from a congres-
sional standpoint, or legislative standpoint, I think some of the
needs of various programs, to ensure that they are taking the steps
they are legally allowed to take with regard to, for example, data
matching, and identity theft, that those agencies can undertake
those efforts to try and address what are pretty substantial con-
cerns in both of those spaces.
Mr. DEFAZIO. OK, thank you.
Ms. Krause?
Ms. KRAUSE. Sure. Yes, I would say there is a mix of things that
both can be done when you are setting up programs in the future,
as well as things that can still be handled on an ongoing basis, as
we continue to respond.
We identified some lessons learned, so coordinating, and identi-
fying, defining roles and responsibilities when you are setting up
the programs, and also as you are executing things, providing clear
and consistent communication. I think we saw some challenges
with that, with some of the program implementation.
But there are opportunities, as, say, Treasury rolls out the
CERTS Program, and FAA rolls out the Aviation Manufacturing
Jobs Protection Program to sort of improve communications, and
provide clear and consistent communications.
I think, again, establishing strong accountability and trans-
parency mechanisms, those are things that, I think, as you heard
from the panel today, a lot of us are continuing to look at, and
audit, and oversee as agencies begin to set those up.
Mr. DEFAZIO. OK, thank you. And then Mr. Izzard?
Mr. IZZARD. Thank you, sir, for the question. I would echo the
comments of my fellow panel members, except just to add, again,
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to really highlight what we believe is important, is accountability
and transparency in the programs and processes.
From an oversight perspective, we continue to allow our existing
work to inform our future work. So, as we continue to learn more
things in our existing work, I think that will help to tell us where
we go next.
As well as maintaining collaboration with FEMA, we do cur-
rently have collaborative efforts with FEMA within the lanes of our
mission space, to ensure that they are able to detect fraud, and un-
derstand what types of things that we need to look for in their pro-
grams. So that is, I think, how we would answer that, from a DHS
OIG perspective.
Mr. DEFAZIO. OK, thank you. My time has expired.
OK, I recognize Representative Webster for 5 minutes.
[Pause.]
Mr. WEBSTER. Thank you, Chair. I have a question, I think, of
Mr. Horowitz, and that is, do you think that, if there is—I don’t
know if you investigated the fact that the money may have been
spent properly, it may have been the right price at the right time,
so forth, but if the science was flawed, would that have affected
something that you might ask, in that we are buying things, but
we don’t even need to buy them?
Was there anything in your reports or any of the things that you
did that would distinguish between right and wrong in that area?
Mr. HOROWITZ. Congressman, we wouldn’t generally look at try-
ing to assess that kind of a question. Our HHS OIG, Health and
Human Services inspector general, has done a fair amount of work
on the healthcare-related issues, and I can certainly follow up with
her in that office to see if there is anything in particular that
would address your question. But I am not aware of it, as I sit here
today.
Mr. WEBSTER. Yes, well, for 60 years there has been an accept-
ance of some flawed information that has been proven flawed in
the last month or so, dealing with the size of particles, and are
they airborne, an aerosol, or are they droplets that fall to the
ground.
So there were, literally, millions of these [indicating hand sani-
tizer bottle] bought by who knows who, everybody. And there was
a bunch of dots that are on the ground—some of them are still out
there—to keep 5 to 6 feet of distance between other people. All of
that, basically, if this disease was carried from air particles, would
be flawed, in that we would have spent millions, maybe billions of
dollars on things that really didn’t do any good, and it has been
proven in this report that came out a couple of weeks ago from Lin-
sey Marr, who is an aerosol scientist at Virginia Tech, but also is
one of the few people in the world who is also studying infectious
diseases.
So in the end, we ended up buying things that may have been
the right price, we just didn’t need them. And I just wondered if
there is—I mean, that may be just as fraudulent as charging too
much for some sanitizer.
[Pause.]
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Mr. WEBSTER. So I guess my question would be is there anything
in the future that you might be looking at that would also make
sure that what we are buying is what we need?
Mr. HOROWITZ. Well, I will say, Congressman, as an IG commu-
nity, we do look at questions about whether what has been pur-
chased is consistent with what is needed. Obviously, over time, as
information is learned and issues come up, that could evolve. But
it is certainly something that we would look at in the context of
what has been purchased, generally.
And I will just say, in terms of the website,
PandemicOversight.gov, we are trying to put out there so that the
public can see how money has been used, and where it has been
used. Much of what we do, as inspectors general, is to get informa-
tion out to the public, so that they can assess how that spending
has occurred.
Mr. WEBSTER. Yes. Well, unfortunately, the bedrock of the
science in every medical journal and medical book and doctors and
their training, and so forth, stress hand washing, which is a good
thing to do, and doesn’t have anything to do with this, and
distancing, in that the particles are—6 feet is enough distance. And
therefore, that is OK.
And so that was sort of the basis of all of the protection that was
being done, including in this chamber. I remember telling some of
the leadership, ‘‘You don’t have to be washing the doorknobs. It is
in the air.’’ But CDC and WHO were both saying, no, it is not, it
gets into a droplet, falls to the ground, which was totally inac-
curate, and has been proven false.
I don’t know, I just think we spent a lot of money on some things
that didn’t really need to be bought. But my time has run out, and
I would love to discuss this further.
I yield back.
Mr. LARSEN [presiding]. The Representative’s time has expired.
The Chair recognizes Congresswoman Norton for 5 minutes.
Ms. NORTON. Mr. Chairman, can you hear me?
Mr. LARSEN. We can hear you, yes.
Ms. NORTON. I very much appreciate this hearing, as we try to
focus on what we have learned for the future.
My first question is for Inspector General Soskin. The District is
Amtrak’s hub, so I am particularly interested that Congress pro-
vided almost $4 billion in supplemental appropriations for Amtrak,
in response to COVID–19 earlier this summer. You did an audit re-
port on the Federal Railroad Administration’s program of oversight
of Amtrak’s use of Federal funding. Your report found a range of
problems at FRA: incomplete policies to assess Amtrak’s adherence
to programs, et cetera. You made several recommendations to FRA
to improve its oversight.
Can you describe FRA’s response to your office’s findings, and
the specific steps it plans to take to implement the recommenda-
tions?
Mr. SOSKIN. Yes, Representative Norton, I can.
That audit report on FRA’s oversight of Amtrak grant spending
recognized in it its likely application, and the application of those
recommendations to the future spending through CARES Act and
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other coronavirus relief funds that actually exceed the amount of
grant funding that FRA typically administers for Amtrak.
And we made several recommendations, which FRA has accept-
ed, and is in the process of implementing, I believe, with target
dates for closure later in 2021. Those recommendations include
that they create measurable oversight goals and metrics for their
oversight of Amtrak spending; that they create and develop policies
and procedures by which they can track, on a comprehensive basis,
the issues that are identified in their oversight, so that they don’t
just identify issues, and then those remain unaddressed by Am-
trak; and relatedly, that they develop a more robust set of proce-
dures to identify issues they identify that may need to be escalated
to a higher level, to work with Amtrak to assure compliance with
what has been identified in FRA’s oversight.
We believe that, if these recommendations are implemented, and
implemented successfully, and executed upon, they will greatly as-
sist FRA’s oversight of those Amtrak supplemental funds in the
COVID relief legislation.
Ms. NORTON. I appreciate that you set target dates, and that, ap-
parently, these dates are being adhered to.
My next question is for Mr. [sic] Krause of GAO.
I am chair of the subcommittee that has just passed the trans-
portation infrastructure bill. And the District, of course, has Metro,
and is dependent on transit. So I am particularly interested in the
billions in grant assistance to help transit agencies that Congress
provided to manage their fiscal restraints.
So, Mr. [sic] Krause, I would like to ask, how did the Federal
Transit Administration perform in managing such a large influx of
funds, and getting it to transit agencies in a timely manner?
Ms. KRAUSE. Thank you, Congresswoman Norton. This is actu-
ally Heather responding to your question, Heather Krause.
So FTA, we found that they had some initial implementation
challenges, because the use of funds was expanded beyond what
they typically did. But when we have talked to transit agencies,
they identified very few challenges that they have experienced in
getting the funds.
As it has been implemented, and as we get into the newer funds
that have come out, there are more challenges at the local level,
as they figure out how to allocate the funds among different enti-
ties at the local level.
But otherwise, we have heard few challenges from the transit
agencies, in terms of implementation. I know that our colleagues
at the DOT IG are looking more closely at——
Mr. LARSEN. The gentlewoman’s time has expired.
The Chair recognizes Representative Davis of Illinois for 5 min-
utes.
Mr. DAVIS. Thank you, Mr. Chair. My first question would be to
Mr. Horowitz.
First off, I want to say thank you for the work that you and your
team have done on a wide variety of issues that you and your team
and this country has faced over the last few years.
I do want to raise an issue that falls outside the realm of trans-
portation and infrastructure, though. But you raised it in your tes-
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timony, and that is because it affects many of my constituents, in-
cluding me, and it is the issue of unemployment insurance fraud.
Does your committee have data on how many individuals were
victims of identity theft during the pandemic, as it relates to at-
tempts to defraud the unemployment insurance system, and how
much money has the Federal Government been defrauded?
Mr. HOROWITZ. Congressman, we have worked, the PRAC, closely
with the IG at the Labor Department on these issues, and the De-
partment of Labor OIG has done a lot of work in this space, and
has made some estimates that the amount of fraud could be up-
wards of 10 percent at this point. But it is still unknown, I should
emphasize, as we are investigating and looking at these issues.
But one of the significant issues, as I mentioned, and as you ref-
erenced, has been identity theft, and the number of people that we
have heard from have expressed concerns about having their iden-
tity stolen, of course. There are two problems, two very serious
problems that arise from that, as you know. One is the program
itself gets defrauded. But then, separately, you have the victim,
whose identity has been used, who has to deal with the fallout from
their credit, other issues, security clearances, perhaps, if you are a
Federal employee, or employed in a sensitive position, and a num-
ber of challenges that arise as a result of that.
And that is why we set up the Identity Fraud Working Group
that we did, to try and tackle that problem.
Mr. DAVIS. Well, thank you, Mr. Horowitz. As I mentioned, I was
a victim myself, in my home State of Illinois. And after going
through that ordeal, we tried to make sure that all of our constitu-
ents who were affected knew the right steps to take to protect
themselves, and protect their families, and their own identity.
But with that being said, sir, do you have any policy rec-
ommendations that you could lay out that might make it into any
final report or recommendation?
Mr. HOROWITZ. We have, as a community, put out some—actu-
ally, the Labor Department IG and the SBA IG have public reports
that they have recently issued on that, and certainly would be
happy to send them to you. Much of it focused on what the agen-
cies can do to both detect potential identity theft before it occurs,
so stop it in its tracks, and then also, when it does occur, how to
help victims of identity theft address those problems.
So, for example, ensuring—and some of these are maybe obvious
steps, but steps that—SBA OIG, for example, has recommended,
with regard to the Economic Injury Disaster Loan Program, [in-
audible] the importance, for example, of just maintaining and
tracking identity theft complaints, processing information about
identity theft, and helping to restore identity theft victims to their
condition prior to the fraud, including stopping loan billing state-
ments, preventing delinquency collections, taking what may seem
like commonsense steps, but steps that aren’t necessarily yet being
done. And the IG there, and the IG at the Labor Department has
also made recommendations that they are following up on. I am
happy to——
Mr. DAVIS. Thank you.
Mr. HOROWITZ [continuing]. Talk with you further about that.
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Mr. DAVIS. Thank you. With that, you know, we tried to address
the issue of unemployment in our initial funding given to States.
Like, my home State of Illinois got $40 million to—over $40 mil-
lion, I believe, to implement a pandemic unemployment insurance
system to avoid some of these issues.
Is there any work being done at the DOJ to investigate where
those administrative fees might have gone, and what States could
have done better to actually address identity theft on the front end,
and unemployment fraud on the front end, since they got that ad-
ministrative money before the pandemic unemployment insurance
system was in place?
Mr. HOROWITZ. That is an excellent question, and important
question, Congressman. I would have to follow up with the Depart-
ment on what they may be doing, investigatively, in that regard.
But I do know, from working with and speaking with the Labor
Department IG, and with our meetings that we have had ongoing
with OMB leadership, that this an important area that the Labor
Department IG has been following up on, and taking steps to look
to address within the UI program, and that we have been raising
consistently at the PRAC level, and are going to continue to try
and move forward on to get the steps taken to try and address this
very serious problem.
Mr. LARSEN. The Representative’s time has expired. I now recog-
nize myself for 5 minutes, and my first question is for Ms. Krause
of the GAO.
Since 2015, I have called for a National Aviation Preparedness
Plan, following, in fact, your agency’s recommendation from 2015.
We have learned some lessons over the last year, and you have
mentioned it in your testimony and report. Ms. Krause, could you
elaborate on the GAO’s recommendation for such a plan, and any
new issues that ought to be addressed since your recommendation
was released?
Ms. KRAUSE. Thank you, Mr. Larsen. We continue to advocate
that this is something important that DOT needs to follow through
on.
Given how the pandemic rolled out at the beginning, I think it
would have benefitted by having a National Aviation Preparedness
Plan to more clearly outline roles and responsibilities, as well as
airlines and airports have individual plans that can feed into a na-
tional plan, so that we are better prepared.
Mr. LARSEN. I note, as well, for maybe Mr. Currie, the joint testi-
mony states the Department of Transportation maintains that the
HHS and Homeland Security should lead the effort to develop a
preparedness plan. Are those agencies in a position to work with
DOT in developing a plan?
Mr. CURRIE. Yes, sir. It is a good question. Those agencies are
definitely more broadly responsible for national biodefense strate-
gies, and so they should include those types of agencies, and work
with them.
But I totally agree that, in the space of the aviation environment,
the Department of Transportation would be the one expected to
take the lead on something like that, working with their industry.
DHS and HHS just have too much to do across the board to focus
in on every single industry.
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Mr. LARSEN. Yes, thanks. I think we always saw, though, upon
the announcement that, basically, U.S. citizens had to get back to
the U.S., and were given very few days to do that—I think that
was in February or March—clearly, DHS has a role, as Americans
flooded immigration turnstiles throughout the country.
So with this apparent conflict of agencies saying, ‘‘It is not our
job, it is their job, it is not our job, it is their job,’’ is there a dif-
ferent agency—does the NSC, National Security Council, need to
get heads together to make this happen?
How do we get past the gridlock of finger-pointing at the bu-
reaucracies? Have you thought through that, either Mr. Currie or
Ms. Krause?
Mr. CURRIE. This is Chris Currie, I can take that. Absolutely.
So what we have been recommending for years, and what is
being done right now is there has been a national biodefense strat-
egy, even well before the pandemic, that is supposed to work across
the entire Federal Government. And the Aviation Pandemic Plan
would just be a piece of that, a sub-piece of that within the indus-
try.
So it is pretty well spelled out, who is responsible at the highest
level. HHS and DHS have that broad authority to develop the
strategy, and work with the White House and NSC, as you have
said. But as I mentioned, I totally agree with Ms. Krause, that the
Department of Transportation would have the lead in working spe-
cifically with their industry.
Mr. LARSEN. That is great. Thank you both very much.
And just a reminder to Members, I have a bill to direct the DOT
to develop a National Aviation Preparedness Plan, and would wel-
come cosponsors on that bill.
Continuing on, Ms. Krause, I think it is page 17 of your testi-
mony, and if you could just quickly address the Aviation Manufac-
turing Jobs Protection Program, which we approved in the Amer-
ican Rescue Plan, it has been set up, the first round of applications
are in, DOT has reopened the application process through August
4th—I think I got the dates right.
Have you started to look at the DOT’s rollout of the application
process, or will you wait a certain amount of time before GAO looks
at the rollout of the plan?
Ms. KRAUSE. Yes, we have already begun work on that, in meet-
ing with DOT and understanding how they are implementing the
program, as well as talking to some of the industry associations to
get a sense as to how the implementation has been going.
I mean, initial conversations is they feel like the communication
has been good from DOT with that program. But obviously, we will
be following closely, and expect to report out on the status of that
implementation later this fall, in October.
Mr. LARSEN. And one of your points in your report is that a lot
of these programs were rolled out through existing mechanisms
throughout the agencies. This was one program that sort of had to
be created from whole cloth. Is it one of the things you are looking
at, the compare-and-contrast of that, of those activities?
Ms. KRAUSE. Yes, certainly. I think what we found, as we have
looked at all the different transportation programs, whether it is at
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Treasury or DOT, is if they are going through existing programs,
that does help facilitate implementation.
But when you are setting up new programs, or with entities that
you don’t typically either work with or have that kind of relation-
ship with the agency, like DOT, or get this type of funding, typi-
cally, it is taking some time to get the program stood up, the guide-
lines out there, and then, obviously, some mechanisms on the back
end to track the funds.
Mr. LARSEN. That is great. Thanks. My time has expired. I ap-
preciate the answers from the both of you very much. And I now
recognize Representative Massie of Kentucky for 5 minutes.
Representative Massie.
Mr. MASSIE. Thank you, Chairman Larsen. I would like to ask
unanimous——
Mr. LARSEN. Mr. Massie, could you try your volume? And we will
try on our end to increase your volume, as well, thank you.
Mr. MASSIE. All right, can you hear me?
Mr. LARSEN. A little better, thank you, yes.
Mr. MASSIE. All right, I would like to ask unanimous consent to
submit to the record two articles from NPR. The first one is from
August 5, 2020, titled, ‘‘Foreign Workers Living Overseas Mistak-
enly Received $1,200 U.S. Stimulus Checks,’’ and the second article
is, ‘‘IRS Says Its Own Error Sent $1,200 Stimulus Checks to Non-
Americans Overseas.’’
Mr. LARSEN. Without objection.
[The information follows:]
f
Article entitled, ‘‘Foreign Workers Living Overseas Mistakenly Received
$1,200 U.S. Stimulus Checks,’’ by Sacha Pfeiffer, NPR, August 5, 2020, Sub-
mitted for the Record by Hon. Thomas Massie
FOREIGN WORKERS LIVING OVERSEAS MISTAKENLY RECEIVED $1,200 U.S. STIMULUS
CHECKS
by Sacha Pfeiffer
NPR, August 5, 2020
https://www.npr.org/2020/08/05/898903600/foreign-workers-living-overseas-mistak-
enly-received-1-200-u-s-stimulus-checks
Thousands of foreign workers who entered the U.S. on temporary work visas re-
ceived $1,200 checks in error during the first round of stimulus payments, and
many of them are spending the money in their home nations. One tax preparation
firm told NPR that it has clients from 129 countries who mistakenly received stim-
ulus checks, including Brazil, Canada, China, India, Nigeria and South Korea.
Government officials and tax experts say the mistake happened because many for-
eign workers, whether unintentionally or on purpose, file incorrect tax returns that
make them appear to be U.S. residents. Some of them are now trying to amend
their returns because they worry that having mistakenly received a stimulus check
will jeopardize their visa status, green card application or ability to return to the
U.S.
How much stimulus money was mistakenly sent to foreign workers living overseas
is difficult to quantify. But Sprintax, which does U.S. tax preparation for non-
residents, did about 400 amended returns last year for people who mistakenly filed
as U.S. residents, and so far this year it has done 5,000—almost 5% of the total
federal tax returns it filed last year, according to the company. If just 5% of last
year’s more than 700,000 student and seasonal workers with F–1 and J–1 visas re-
ceived a stimulus check in error, that would total $43 million.
The ‘‘economic impact payments’’ sent erroneously to non-U.S. citizens are the lat-
est in a series of mishaps involving coronavirus relief efforts, including nearly $1.4
billion in stimulus checks sent to dead Americans. As Congress debates another
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pandemic relief package, it’s considering a second round of payments that would ex-
clude the deceased, but its new bill does not address the problem of $1,200 checks
having mistakenly gone to foreign workers in other countries.
Many of those workers are college students, often from Eastern Europe and South
and Central America, who travel to the United States for temporary and seasonal
low-wage jobs such as waiters, lifeguards and hotel housekeepers at ski resorts,
amusement parks and beach destinations. In a typical year, the U.S. issues work
visas to several hundred thousand foreign students.
One of them is a 24-year-old citizen of the Dominican Republic who spent last
summer working at a Cape Cod grocery store and this spring received a $1,200
stimulus check signed by President Donald J. Trump.
‘‘I was really surprised because I was not expecting that money,’’ the man told
NPR, which agreed not to identify him because he is concerned that receiving the
check could put him at odds with the U.S. government.
‘‘I don’t want . . . any problems,’’ added the man, whose former Cape Cod landlord
received the check and sent it to him in the Dominican Republic. ‘‘If they say that
we have to return it, I will return it. It is not a problem.’’
He said numerous foreign student workers he knows have also received stimulus
checks, including people in Bulgaria, Colombia, Jamaica and Montenegro. Some-
times the checks were directly deposited into bank accounts on file with the IRS.
Sometimes the checks were mailed to their former U.S. addresses and forwarded to
them. And some checks could have been mailed to them directly overseas.
The payments were intended to stimulate the U.S. economy by giving consumers
spending money, but this Dominican man is not able to work on Cape Cod this sum-
mer because the Trump administration’s freeze on foreign work visas has prevented
seasonal workers from coming to the U.S.—so he’ll be spending his stimulus pay-
ment in his own country.
‘‘This money, to be honest, is a big help,’’ he said, ‘‘because we can buy food, we
can pay the cable services, and we also can pay the university,’’ referring to a school
in the Dominican Republic where he takes online classes.
Only U.S. citizens and U.S. ‘‘resident aliens’’ are eligible for stimulus money, but
the Dominican man interviewed by NPR and some of his friends do not meet that
eligibility standard. A ‘‘resident alien’’ is a federal tax classification, and to qualify
for it an individual needs a green card or must have been in the U.S. for a certain
amount of time.
The U.S. government acknowledges that some stimulus checks were improperly
sent to foreign workers and told NPR that the Treasury Department is ‘‘exploring
possible options’’ to prevent that from happening again.
Most foreign workers should file a form 1040–NR—the NR stands for non-
resident—but instead mistakenly file a 1040, the form most commonly used by indi-
vidual U.S. taxpayers, according to Georgia attorney Clayton Cartwright, who spe-
cializes in immigration tax law and has a background in accounting.
LEFT: Stimulus checks are prepared on May 8, 2008, in Philadelphia. In 2020, stimulus checks again went
to many Americans, this time during the pandemic’s economic fallout. Some of that money went to thou-
sands of foreign workers not eligible to receive the funds. Jeff Fusco/Getty Images
RIGHT: Thousands of foreign workers mistakenly received economic stimulus checks from the U.S. govern-
ment, likely because many filled out an IRS 1040 tax form instead of a nonresident 1040–NR form.
Daniel Acker/Bloomberg via Getty Images
‘‘I would say probably anywhere to a third to a half [of first-time foreign filers]
are filing the wrong return,’’ especially if they use e-filing software such as
TurboTax that is intended only for U.S. residents, Cartwright said.
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When foreign workers file the wrong form, ‘‘I don’t know if the IRS would even
be able to tell,’’ he added. ‘‘I mean, they have no way of knowing. You don’t mark
on your [Form 1040] tax return whether you’re a citizen.’’
If a foreign worker files an incorrect tax form and also has a U.S. address, a bank
account on file with the IRS, and a Social Security number—as many foreigners
with work visas do—that increases the likelihood that the IRS would mistakenly
mail them a stimulus check, he said.
Some foreign workers did not realize they had filed incorrect tax forms until they
received a stimulus check in error this spring, and they are now scrambling to
amend their returns, said Sprintax’s vice president, Enda Kelleher.
‘‘We saw a huge number of people contacting us after the first stimulus payment
because they said, ‘Hey, I got this check. I never asked for it, I didn’t think I was
entitled to it, and how can I correct it?’ ’’ he said.
Those clients were from 129 different countries, including Argentina, Zimbabwe,
Peru, Colombia, Vietnam, Pakistan, Spain, Japan, Germany, Ghana, Russia, Nepal,
Mongolia, Uzbekistan and the Philippines, according to Kelleher.
‘‘It’s a serious issue,’’ he added, noting that in a recent Sprintax survey of more
than 500 schools, 43% reported they had students or scholars who think they re-
ceived stimulus checks in error. As a result, many schools ‘‘believe it’s a significant
problem,’’ he said.
‘‘It doesn’t surprise me that that would have happened,’’ said Cartwright, the
Georgia attorney. ‘‘Now, does that make good policy sense? Probably not.’’
Cartwright said Congress was in ‘‘panic mode’’ in March as the U.S. economy was
shutting down over the pandemic, so it rushed stimulus funding out the door. ‘‘You
know—damn the torpedoes, full steam ahead. We’ve got to get the money out,’’ he
added. ‘‘So they just do it and just live with the consequences,’’ including unintended
ones.
‘‘That is spillage,’’ Cartwright said of the money that accidentally leaked overseas
as Congress tried to flood the U.S. economy with stimulus money. ‘‘I don’t mean to
sound flip or cavalier, but it’s spillage.’’
The IRS says non-U.S. residents who received stimulus money in error should re-
turn it. But Kelleher anticipates that if additional stimulus payments are distrib-
uted, some foreign workers who tried to send back their first mistaken check will
get a second one.
f
Article entitled, ‘‘IRS Says Its Own Error Sent $1,200 Stimulus Checks to
Non-Americans Overseas,’’ by Sacha Pfeiffer, NPR, November 30, 2020,
Submitted for the Record by Hon. Thomas Massie
IRS SAYS ITS OWN ERROR SENT $1,200 STIMULUS CHECKS TO NON-AMERICANS
OVERSEAS
by Sacha Pfeiffer
NPR, November 30, 2020
https://www.npr.org/2020/11/30/938902523/irs-says-its-own-error-sent-1-200-stim-
ulus-checks-to-non-americans-overseas
The IRS now acknowledges that its own error caused some citizens of other coun-
tries to mistakenly receive $1,200 coronavirus relief payments—and that the mis-
take is likely to happen again if more stimulus money goes out.
When reports of the mistake first surfaced, the U.S. government placed the blame
on those non-Americans, saying that many noncitizens erroneously received stim-
ulus checks because they had filed incorrect tax returns that made them appear to
be American.
But many non-Americans who received stimulus money do not file U.S. tax re-
turns. One of them is Susanne Wigforss, a 78-year-old Swedish citizen who lives in
Stockholm.
Wigforss was surprised in July to get a $1,200 check in the mail from the U.S.
Treasury. It was followed by a letter from the White House signed by President
Trump, addressed to ‘‘My Fellow American’’ and informing her that ‘‘your economic
impact payment has arrived.’’
‘‘I thought, ‘I can’t believe it,’ ’’ Wigforss recalled. ‘‘They’re sending it to me. Why?
I mean, it’s crazy, isn’t it?’’
Only U.S. citizens and U.S. ‘‘resident aliens’’ are eligible for stimulus money—
‘‘resident alien’’ is a federal tax classification, and to qualify an individual needs a
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69
green card or must have been in the U.S. for a certain amount of time—and
Wigforss is neither.
Asked about this by NPR, the IRS acknowledged it mistakenly sent checks to
some noncitizens who receive Social Security and other federal benefits—such as
Wigforss, who receives a small Social Security payment from having worked in Cali-
fornia for several years.
‘‘This is so wrong,’’ Wigforss said, ‘‘because I saw that a number of people were
being evicted every month in Chicago, for instance, and I thought one of those fami-
lies would have needed this stimulus check. Why should a Swedish citizen living
abroad receive $1,200?’’
‘‘There’s no way I’m going to cash this money—it doesn’t belong to me,’’ she added.
‘‘But how much money is bleeding out from the Treasury Department because of
these [misdirected] stimulus checks, I wonder?’’
The U.S. government cannot answer that question. The Treasury Inspector Gen-
eral for Tax Administration did find that, as of late May, $34 million in stimulus
money had gone to people who filed a tax return with a foreign address.
But that includes eligible people, such as U.S. citizens living abroad, and does not
include ineligible foreign citizens who received a check at a U.S. address. For exam-
ple, NPR interviewed a citizen of the Dominican Republic who was not eligible yet
received a $1,200 economic impact payment at his former address in Massachusetts.
That $34 million also does not include people, such as Wigforss, who received a
check but did not file a U.S. tax return.
Since Congress passed its coronavirus relief package in a hurry in March, the U.S.
government has put no mechanisms in place to prevent these mistakes from hap-
pening again. As a result, if a new relief plan with more stimulus payments passes
in the final weeks of the Trump administration or during the Biden administration,
some of that money is likely to mistakenly end up in mailboxes overseas again.
U.S. Treasury officials said they are ‘‘continuing to assess the accuracy of the eco-
nomic impact payments . . . and the recovery efforts for any erroneous payments.’’
In the meantime, they told NPR, the IRS is ‘‘relying on individuals to voluntarily
return these payments.’’
‘‘I think the poor folks in the IRS don’t have the bandwidth to go chasing this,’’
said Enda Kelleher, a vice president at Sprintax, which does U.S. tax preparation
for nonresidents, ‘‘but it would be great if they did, because I believe that there’s
millions of dollars that have gone to people that weren’t entitled to it, or they’re
certainly not the intended recipients.’’
Kelleher said Sprintax has clients from about 150 countries who mistakenly re-
ceived stimulus checks, mostly commonly in India, China, South Korea, Vietnam
and the United Kingdom, as well as numerous nations in Latin America.
‘‘It’s awful when we hear of millions of dollars going into the wrong hands,’’ he
added, ‘‘but it was probably within a somewhat acceptable threshold of error or mar-
gin of error’’ because Congress opted for speed over accuracy when it flooded the
U.S. economy with money last spring.
Many non-Americans who erroneously received a check are trying to return it be-
cause they worry it will jeopardize their visa or immigration status, ‘‘but there’s
equally thousands that are saying, ‘Well, if they were silly enough to make this mis-
take, it’s their mistake and I’m not going to give it back until they ask for it,’ ’’
Kelleher said.
Van Shockley falls in that category. He’s 74 and was born in Pennsylvania, but
he moved to Australia after becoming disillusioned with U.S. politics in the 1960s.
‘‘I had always been depressed when JFK was killed,’’ he explained. ‘‘I just couldn’t
get over that, so I started looking for someplace else [to] start all over.’’
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LEFT: Susanne Wigforss, a Swedish citizen, poses with the letter she received from the White House about
the $1,200 economic impact payment she received. Susanne Wigforss
RIGHT: Van Shockley, who gave up his U.S. citizenship and has been an Australian citizen for about
a half-century, mistakenly received a stimulus check and suspects he got it because he receives Social
Security from having worked in the U.S. before moving overseas. Van Shockley
Shockley gave up his U.S. citizenship and has now been an Australian citizen for
about a half-century. His last trip to the U.S. was 40 years ago. But he, too, received
stimulus money, even though he is not eligible for it and does not file a U.S. tax
return.
‘‘That was the weirdest thing ever,’’ he recalled. ‘‘I checked the mail and I pulled
out a check. It had a Federal Reserve/Treasury thingamajig on it with the eagle and
all that. It’s made out to me. I thought: ‘What’s it from—America? What the hell’s
going on here? Why am I getting a check from the government?’ ’’
Shockley suspects he mistakenly got a check because he receives Social Security
from having worked in the U.S. before moving overseas.
‘‘At first, I thought it was a joke,’’ he said, ‘‘and then I went down to the bank
and I said, ‘Do you have some way of verifying that this is legal?’ And the girl came
back after five minutes and said, ‘It’s legal. You got the money.’ ’’
‘‘I didn’t ask for the money. I didn’t expect any money,’’ Shockley added. ‘‘But as
soon as I got it, I stuck it in the bank. You ain’t getting it back!’’
He attributes the mistake to U.S. government incompetence.
‘‘Oh, complete stupidity. They’re just not doing their job properly,’’ Shockley said.
‘‘But I’m not complaining totally because I was happy with the money!’’
Mr. MASSIE. Mr. Horowitz, I want to focus on these stimulus
checks that were sent overseas to folks that weren’t American citi-
zens. These articles were from last year.
But disturbingly, not only were the $1,200 checks sent, I am
aware of a situation where somebody who hasn’t even worked in
the United States since the 1970s received not just the $1,200
check, but the $600 check and the $1,400 check. This individual
does not file a U.S. tax return, and so there was no way to know
whether the individual even met the constraints or requirements
on income in order to receive these checks.
Can you tell me what the IG’s office has done to investigate
these?
Mr. HOROWITZ. Yes, Congressman. So last year, for example, the
tax IG that oversees the IRS issued a report outlining a series of
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problems with payments by the agency of stimulus checks. And the
GAO actually reported on that, as well, last year, and outlined
some of the matching that failed to occur at the IRS with sending
out the stimulus checks.
I would have to follow up with the tax IG about what ongoing
work they may have done with regard to the subsequent checks
that have been sent out. I am not familiar, frankly, as I sit here
today, with the ongoing work, and I believe GAO may have some
followup work, as well, in that space.
Mr. MASSIE. OK, if you could send those to my office, I would ap-
preciate it, as it comes out in real time.
Mr. HOROWITZ. Will do.
Mr. MASSIE. I am afraid, since all three checks went to the par-
ticular person that I am aware of, and that this person does not
file a U.S. tax return—this person actually worked in the United
States in the late 1960s and early 1970s, and for that reason is
somehow in the database. This person does not file a U.S. tax re-
turn. This person does not have a green card. This person is not
a U.S. citizen or a dual citizen of the United States. And I would
hope that we have the measures in place to keep this money from
going to these individuals, or maybe Congress needs to acknowl-
edge that they wrote a law that sends money overseas to people
who aren’t citizens.
One of two things is true. We are either sending money to people
who don’t qualify on the income level, people who don’t file tax re-
turns, to people who don’t work in the United States, people who
don’t live in the United States. That is the other thing. These
checks are going to foreign addresses. I would hope that would be
a trigger to do a check to see if this person is a citizen, if we are
sending it to a foreign address. Maybe we should check to see if
they have filed a tax return.
I know U.S. citizens who didn’t get checks. Some still haven’t
gotten their checks, who are U.S. citizens, and it had something to
do with their tax return, yet this didn’t keep people who are foreign
nationals from getting these checks, who don’t file tax returns,
haven’t filed tax returns in, you know, in at least 40 years.
So I hope we will keep a check on that. And I don’t want to take
any more of your time, and I appreciate you looking into it. And
I will yield back the balance of my time. Thank you.
Mr. HOROWITZ. Thank you.
Mr. DEFAZIO [presiding]. Representative Napolitano?
Mrs. NAPOLITANO. Thank you, Mr. Chair.
Ms. Krause and Mr. Soskin, I want to follow up on Representa-
tive Norton’s question regarding assistance at transit agencies.
Ms. Krause, you mentioned problems cities are having. Can you
expand on that? Can you tell us about those problems you men-
tioned?
Ms. KRAUSE. What I was getting at is more the time that it takes
at the local level to determine how to distribute the funds, when
you are at the urbanized area and the funds are down at that level.
There are some discussions at the local level as to how to dedicate
those funds to the different and often multiple providers that are
at the local level. So that is what is playing out, in terms of some
of the transit funding now.
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Mrs. NAPOLITANO. Are there any problems other than that?
Ms. KRAUSE. No. As I said before, when we have talked to transit
agencies, largely implementation has gone—they found few chal-
lenges with implementation of the program from FTA.
Mrs. NAPOLITANO. Thank you.
Mr. Soskin, Ms. Krause mentioned you would be able to expand
on the issues of assistance to transit agencies. Can you please ex-
plain your work and findings on assistance to transit agencies?
Mr. SOSKIN. Absolutely, Congresswoman Napolitano. We have
two audits planned on Federal Transit Administration relief fund-
ing oversight. It is a sort of a two-phase audit, one of which will
be the design of the FTA’s controls for requirements and oversight
risks during the awarding and life cycle of the grants that they are
providing to transit agencies, and the second phase, or second audit
will be a look at the implementation of their controls.
In the relief funding management challenges report that we iden-
tified for the Department of Transportation last year, we also rec-
ognized several of the other oversight challenges, the challenges
the transit agencies will face with these funds.
One is that there is an interesting hybrid here of providing funds
through an existing program, but providing them for new purposes,
in terms of the operating expenses, and the 100-percent Federal
share of those operating expenses. And we look forward in our
work to examining how the oversight and how the expenditures
work, given that new purpose within an existing program.
And the other challenge we highlight is monitoring funding and
FTA’s past reliance, in many cases, on either self-certifications by
transit agencies of their compliance with eligibility and funding
conditions, as well as the reliance on oversight contractors, over-
sight support personnel who can be contractors, who, of course, are
a valuable, important resource when the spigot of funds opens sud-
denly, as it has with pandemic relief funding, and as it has with
hurricane relief funding in the past, with the ARRA funding a dec-
ade ago.
But ensuring that those support personnel are properly trained,
that they are familiar with the Federal oversight restrictions, and
that they have methods to ensure that attention is brought to their
recommendations and issues they identify will be critical.
Mrs. NAPOLITANO. Well, one of the transit agencies indicated
that they were having problems securing the PPEs. Can you tell
me why?
Mr. SOSKIN. I am not familiar with the details of that issue of
securing PPEs. I am not sure if we have done work in that area,
but my staff and I would be happy to follow up with you about that
question, and work with the Department to try and get you a spe-
cific and accurate response.
Mrs. NAPOLITANO. Thank you very much. I think it would be im-
portant to find out why the distribution was held up to the States,
and then filtered down to the counties. And it made a great prob-
lem for my transit agencies, especially the little ones, too.
Thank you very much. Mr. Chair, I yield back.
Mr. DEFAZIO. Representative LaMalfa.
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Mr. LAMALFA. Thank you, Mr. Chairman. I did want to touch on
the issue of commercial aircraft, and the mask-wearing issue with
COVID, and I wanted to address this to Mr. Soskin.
Last month, 27 of us sent a letter to TSA and CDC about their
decision to renew the mandate through September 13, at least—not
even sure when they are going to review the length of time. But
we asked them to review the policy, and remove or modify it for
passenger commercial aircraft. What we are getting is reports of 75
percent of the unruly passengers reports this year are because of
the mask situation.
I think we have all seen the videos of people getting pretty
roughed up there, with the—if their 2-year-old doesn’t have the
mask on, or it is not on the right way, and this while people are
on the plane that are not even wearing theirs correctly, with the
enforcement or what have you.
So we know that the aircraft themselves have extremely efficient
filters that do a good job through the HEPA filters, of circulating
the air through the aircraft, and cleaning it. So the situation is
such that people are getting extremely frustrated, and that we are
asking TSA and CDC to look at this sooner, rather than after the
complete summer season is over with.
So what was the consideration for the social effects for people
that are on passenger planes, and the interaction this would cause
with passengers and flight personnel on the aircraft?
Has that been considered by DOT at all, are you aware of, Mr.
Soskin?
Mr. SOSKIN. Well, Representative LaMalfa, first let me express
that we take extremely seriously the issue of unruly passengers on
aircraft, and the potential impact on aviation safety. Our criminal
jurisdiction here overlaps with the FBI’s. And it is important to
note that FAA has instituted a zero tolerance policy, and can pur-
sue civil penalties, including increasingly more significant fines for
unruly passengers, as they work to keep the onboard environment
safe.
We haven’t done any work at this time in looking at the mask
policy, specifically. As you know, it is an evolving public health en-
vironment. We saw the new CDC guidance and OMB guidance, as
well as that from the—I understand the congressional doctors over
the last few days, regarding masking in nonaviation environments.
I do appreciate your highlighting, however, the efficiency of the
filters on commercial aircraft. I think it is, of course, important for
members of the traveling public to recognize all the safety meas-
ures that are in place to keep commercial aviation safe.
Mr. LAMALFA. Well, it is exciting to hear about the zero tolerance
policy, but I am talking about real people that are trying to travel
here. And if they do have kids, if they do have people with special
needs, it seems there is some really overzealous enforcement going
on. And I think, for the flight personnel themselves, I hear the
browbeating by the people announcing, as the flight is going along,
‘‘Wear the mask,’’ you know. Basically, it is really becoming an at-
mosphere that is not pleasant for something that has been on the
wane here lately for, you know, the mask mandates.
Now we are seeing we are going back and forth on mask man-
dates in this very body here—a lot of politics being played around
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it, as you might be hearing, that on one side of the building, in the
House, it is a strong mandate. And on the Senate side, it doesn’t
seem to be as big of a problem. So somewhere in the rotunda there
is a transition of how big the threat is.
But I think we need to take a really good look at how this is af-
fecting the morale of passengers, as flights are picking up once
again, people with special needs, people with small children, and
just a general attitude. It is not helping the airlines, it is not help-
ing those personnel to have to be these hardcore enforcers on that.
So is that something that you see there being an issue, Mr.
Soskin?
Mr. SOSKIN. Again, we have not engaged in any work to look spe-
cifically at the mask mandate or its effects. It is an area of overlap-
ping responsibility among DOT and TSA, as well as the FBI, for
enforcement. And I think my staff and I would be happy to discuss
that question——
Mr. LAMALFA. I am interested in that FBI piece there. So that
is something. OK, well, I thank you for your time.
Mr. Chairman, I will yield back.
Ms. DAVIDS [presiding]. Mr. Cohen, you are now recognized for
5 minutes.
Mr. COHEN. Thank you very much. And first I would like every-
body—if you can notice in the background, there is a television
screen in my office, where the Washington Nationals are playing
a baseball game. Four of their players are on COVID restrictions.
Eight of their personnel are on COVID restrictions. I think they—
masks is a good idea, and especially on airplanes, and where the
public gathers in small spaces.
But I want to thank Chairman DeFazio and Member Graves for
holding this hearing.
Most of the transportation industry was devastated, with signifi-
cant declines because of COVID–19, people afraid to fly, and con-
cerned about flying next to people. And even with masks, it is still
somewhat concerning.
We resuscitated the industry with lots of aid, but some of it was
far from perfect in how it was delivered. One issue I worked on ex-
tensively was the disproportionate share of CARES Act grants that
were awarded to certain smaller, less-trafficked airports at the ex-
pense of our major commercial-hub airports, who service most of
the public, and do most of the work, and need most of the money,
including Memphis, which is the world’s largest cargo airport in
the world.
These award amounts were based on a formula developed by the
Senate and the Federal Aviation Administration that produced
massive windfalls for certain small airports. As many as 31 air-
ports received grants for at least 4 years’ worth of operating ex-
penses, and over and above—so they would have had 4 years’
worth of operating expenses without any moneys that they would
otherwise have received. Fortunately, the wrong-headed formula
was changed, and the airports, for the future funding, didn’t re-
ceive a disproportionate share of funding from two subsequent re-
lief bills based on the pandemic. Nevertheless, the amounts that
were awarded to certain airports for the CARES Act were far more
than needed or were fair.
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Mr. Soskin, can you tell me why the formula was written this
way in the first place, and what your office is doing to monitor the
smaller airports, and their use of that money, and to see to it that
it is properly spent, in accordance with FAA grant requirements?
Mr. SOSKIN. Congressman Cohen, as Ms. Krause highlighted ear-
lier, one of the tradeoffs that we face in awarding emergency relief
funding, like in the CARES Act and CRRSA and the ARP, is the
tradeoff between doing something new and unfamiliar for the agen-
cies administering funds, and making use of existing mechanisms,
existing programs, and existing formulas.
And in this case, I think it is instructive. The responsive ap-
proach that was taken by FAA when it identified the multiyears
of operating expenses that you referenced, and updated and limited
the funding beyond a certain point, and then Congress, in the
CRRSA, extended that, and narrowed the scope——
Mr. COHEN. Mr. Soskin, I know the history. I know the history.
I have been through it, and found it difficult to get through it. The
question was why was it written that way in the first place?
It wasn’t using a formula that we already had. It was a new for-
mula that the Senate and the FAA came up with. Why did they
do that?
Mr. SOSKIN. That is a question that we may look at, as part of
our current audit in the FAA’s award and oversight of CARES Act
funds. And, you know, beyond its potential inclusion in that ongo-
ing audit work, those are——
Mr. COHEN. Mr. Soskin, thank you. You are not answering the
question, but I will go on to Ms. Krause, and hopefully she will be
better at doing that.
What can you tell us about how much of the grants that were
awarded to these small airports has been used, and whether larger,
commercial service airports are getting enough funding from the
FAA to meet their needs?
Ms. KRAUSE. Yes, we have some data, and we can give you more
specifics. But at the highest level, the larger airports, when you are
looking across the different funding streams, have expended more
funds than the smaller ones.
So when you are looking at the large-hub airports, you are seeing
about 75 percent of their funds that they have received across the
3 buckets of money having been expended, where you are seeing
lesser funds closer—you know, it all depends. We can give you
more details, but when you get to the smaller airports, it is a
smaller percentage, but in some cases, you know, around 50 per-
cent or so.
So I am happy to give you more details on sort of the spend rates
across airport——
Mr. COHEN. If you can. And if they are spending that money on
superfluous things, they had plenty of funds. They, basically, have
long, dirt runways and a windsock, and they didn’t really need all
that money. And what are they spending it on now? Is it extra-
neous things, just to spend the money?
This was horrific. And if you would, let me know about that.
Mr. Soskin, if you would, give me your report, and let me know
why that was done, and what is being done to oversee it, and make
sure that the money is being spent properly.
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With that, I yield back the balance of my time.
Ms. DAVIDS. Thank you. The gentleman yields back. Mr. Johnson
from South Dakota is now recognized for 5 minutes.
Mr. JOHNSON OF SOUTH DAKOTA. Thank you very much, Madam
Chair. My question will be for any of the panelists that want to
weigh in, because I am sure you all have some expertise on this
front. And I would compliment the chair on pulling together this
panel. Clearly, we should all care about the efficiency and the effec-
tiveness of Federal dollars invested in infrastructure, certainly dur-
ing COVID, as well as during any time.
So I think my preference would be this, to remind all of us about
how inefficient much of our investment in infrastructure is in this
country. Environmental reviews in this country commonly run in
excess of 1,000 pages. That is not typical across the world. Our en-
vironmental reviews take, on average, five times longer than they
do in Canada, and twice as long as they do in the European Union.
Of course, building subways is expensive, but the New York sub-
way capital construction costs per project are quadruple the global
average for urban subway systems.
And so I think my question for the panelists is, as you did your
analysis of these infrastructure investments during COVID, did we
get a sense of what the financial cost of compliance to these envi-
ronmental and historical reviews were?
And do we have any sense about how they compare to what we
would see in other parts of the world?
Mr. SOSKIN. Representative Johnson, I can take that question
first, because I think it is important to understand that, at this
point, a lot of the funds that have so far been allocated and award-
ed have been on the operating expense, upfront.
So we are going to see the reviews and the infrastructure awards
flow out over a period of years, and, you know, that is something
that we have observed in our work on the Hurricane Sandy relief
funding, where, in our report earlier this year, we highlighted that,
although $10 billion in hurricane resilience and recovery funds
were awarded shortly after Hurricane Sandy, even at this point
only about $4 billion of those funds have been expended.
So at this point——
Mr. JOHNSON OF SOUTH DAKOTA. Mr. Soskin, give this committee
some—as we look forward, because, you are right, sort of the next
tranche of capital investment is likely coming—given your histor-
ical experience, give us some sense of what the financial costs of
those environmental and historical reviews would be.
Mr. SOSKIN. So I don’t have readily at hand the details of what
some of those expenses are. Anecdotally, I believe the elements of
your question are correct, that planning and environmental reviews
can take longer than in some other countries. I think that is a
problem that has been recognized across the Government, and it is
something we would be happy to follow up on if we have some work
in that area we can share with you.
Mr. JOHNSON OF SOUTH DAKOTA. Maybe for all the panelists, just
so we can focus on solutions, given your deep expertise, and as you
have done analyses in inefficient and efficient governmental spend-
ing, are there things that could be changed in the Federal infra-
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structure, environment, landscape, statutes that could make for a
more efficient investment?
Are we getting in the way? And if so, how?
Ms. KRAUSE. I can jump in. This is Heather.
So I would say, as infrastructure funding gets rolled out, depend-
ing on what folks are looking for out of the investment, being clear
about and defining what the program is, if there are certain inten-
tions, if there are certain outcomes that you are looking for; really,
being clear on what you want the outcomes to be, and sort of think-
ing about how to measure that, I think upfront, is really important.
Mr. JOHNSON OF SOUTH DAKOTA. Thank you very much.
Anybody else?
Mr. CURRIE. I will jump in, sir——
Mr. JOHNSON OF SOUTH DAKOTA. Mr.——
Mr. CURRIE. Yes, I will jump in. This is Chris Currie from GAO.
And so I do a lot of our work on disaster response and recovery,
multibillion-dollar recovery programs, which, though, for disasters
go to rebuild infrastructure.
And the issue you talked about of EHP reviews, or whether it is
engineering reviews, or whatever it might be, has been a huge
challenge in these infrastructure programs.
Another thing that I wanted to point out, though, it is not just
within individual grants or programs. There are so many different
funding streams from different agencies that—all of which often
have different requirements and different timeframes.
So one of the things we hear from State and locals is, ‘‘I may
have to do an EHP review for FEMA projects, and do a separate
one for HUD, and then do a separate one for FTA, and do a sepa-
rate one for Federal Highway.’’ I think that is something that could
be looked at in this area, as well.
Mr. JOHNSON OF SOUTH DAKOTA. Oh, thank you very much. That
is an excellent tactical suggestion, Mr. Currie.
And for any of the other experts, if you have other suggestions,
I am out of time, but I would love to have any comments from you.
And we will work together, I am sure, on the committee in a bipar-
tisan way to try to make these investments even more efficient.
And with that I would yield back. Thank you.
Ms. DAVIDS. Thank you. The gentleman yields back. The Chair
now recognizes Mr. Johnson from Georgia for 5 minutes.
Mr. JOHNSON OF GEORGIA. Thank you, Madam Chair, for holding
this hearing. And thank you to the witnesses for your time and
your testimony. The amount of $5.9 trillion is a significant sum of
money, a lifeline for hard-working Americans, and the sum total of
relief and job protection measures provided in the CARES Act.
Last year, Congress acted decisively during a once-in-a-century
pandemic. But our work is far from done. We are obligated to en-
sure that relief aid arrived to the folks who needed it most, espe-
cially Black Americans, communities of color, and low-income
groups already in poorer health, due to being without healthcare
coverage. Communities of color were the essential workers who dis-
proportionately bore the brunt of sickness, hospitalization, and
death due to COVID–19, and who were exposed throughout the
pandemic, while enabling us to work from home. They are the peo-
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ple who have too often been underserved and unserved by the Fed-
eral Government.
Mr. Izzard, your office has found FEMA’s management of dis-
aster relief grants and funds to be inadequate. You reported last
year that improving FEMA’s management of these grants would be
one of DHS’s top challenges in responding to the COVID–19 pan-
demic. What is the impact of these deficiencies on FEMA’s ability
to get disaster relief grants to communities of color and Black
Americans?
Mr. IZZARD. Well, thank you for the question, sir. As you rightly
stated, we have done a lot of work in this area, and we have ongo-
ing work now.
One particular audit that was done—and I will just say that I
am much more attuned to our criminal investigative work, but
have some general visibility on our audit work, and one particular
audit that was done looked at FEMA strengthening its responsi-
bility determination process, to ensure that contracts are granted
properly in the right place and the right time. That audit, actually,
was awarded and then cancelled, cancelled 22 contracts valued at
about $184 million.
So we were able to identify, as a part of that audit, that there
were deficiencies that FEMA had, in not providing guidance to the
contracting personnel, and we provided a recommendation to them,
as well, in order to fix that.
Also looking at——
Mr. JOHNSON OF GEORGIA. Let me ask you this. Has FEMA made
any improvements in helping the underserved and underrep-
resented since your report was released?
Mr. IZZARD. Well, we do have other projects ongoing now that
speak to equity, and one in particular that is going on now is we
are looking at some work that will actually deal with equity in how
things are handled. We are planning work that is related to that.
So that is ongoing. And so we would hope to have an answer for
you more specifically here, in the near future.
But we will take that as a get-back, because we believe that is
very important work.
Mr. JOHNSON OF GEORGIA. All right, thank you.
Ms. Krause, the GAO reported on the CARES Act loan program
for aviation, and found that small businesses were less likely to re-
ceive loans under this program, and that Treasury prioritized ap-
plications from large passenger carriers.
That said, small businesses are more likely to be led by minori-
ties and women. As a result of Treasury’s actions, what has been
the impact on minority-owned small businesses and Black-owned
small businesses from prioritizing the large carriers?
Ms. KRAUSE. So we didn’t get into that level of detail, in terms
of who is impacted, in terms of the types of—or that level of detail
in the data.
I think what we did find, though, with that program, and some
of the challenges that the small businesses faced, was some lessons
to be learned if there is another similar type of program in the fu-
ture. So having potentially multiple paths, or multiple programs to
be able to support the diversity of businesses that might be apply-
ing for that type of assistance.
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Mr. JOHNSON OF GEORGIA. Thank you.
Mr. Izzard, what key things do you believe FEMA still needs to
do to improve their grant management oversight, especially for the
grantees who desperately need these funds, whose livelihood and
families depend on relief aid?
Mr. IZZARD. Well, as you stated, sir, that is a very, very impor-
tant area to look into. We certainly remain in collaborative [inaudi-
ble] with FEMA to ensure that they are continuing to direct their
attention——
[Audio malfunction.]
Mr. IZZARD [continuing]. Gaps and deficiencies.
In fact, our recommendations in my audit works are intended to
actually point them in the direction of where the greatest defi-
ciencies are. So we will continue our collaboration with them, and
continue to—in the hopes that they will move in the direction
that——
Ms. DAVIDS. Thank you, the gentleman’s time has expired.
Mr. JOHNSON OF GEORGIA. Thank you.
Ms. DAVIDS. The Chair now recognizes Mr. Nehls from Texas for
5 minutes.
Mr. NEHLS. Thank you, Madam Chairwoman.
Mr. Izzard, I thank you for being here. It is good to see you. In
your written testimony, it states that each fiscal year, DHS, De-
partment of Homeland Security, OIG issues hundreds of rec-
ommendations to improve the integrity, accountability, and per-
formance of the Department, the Department of Homeland Secu-
rity.
The DHS inspector general is one of nine statutory IGs who are
members of the Pandemic Response Accountability Committee, or
PRAC. We know that the CARES Act provided DHS, Department
of Homeland Security, almost $46 billion for COVID–19 relief, and
I believe your Department, sir, you have around $3 million of that
to conduct oversight of those funds.
So my question for you is, Mr. Izzard, are you monitoring the re-
sources the Biden administration uses on border missions?
Mr. IZZARD. Thank you, sir. We have a number of ongoing
projects with regard to the border at this time. In fact, our inspec-
tor general has recently made a number of trips to the border to
personally take a look at the humanitarian crisis that is occurring
at the border.
And so, as a result of that trip, our office has initiated additional
projects. So there are projects that are ongoing. I am happy to get
back with our staff, and make sure we provide details of what
those projects entail, and what they will cover, what they are in-
tended to cover.
Mr. NEHLS. Thank you. And as you stated, the humanitarian cri-
sis—how much is the border crisis costing the American people?
In other words, how much money has DHS used to address the
1 million people who have been apprehended at our southern bor-
der since the start of the year?
Mr. IZZARD. That is a great question, sir, and I don’t have that
information and detail available. I prefer not to speak anecdotally
to it, but I will certainly make sure that we get you the detailed
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information. I believe we have done work in that area, and we will
look at that to get that answer back to you.
Mr. NEHLS. That is fair enough, and thank you for that.
And recently, the city of La Joya, in Texas, issued a public health
warning due to the potential spread of COVID from infected mi-
grants. And what took place? About July 26th, just a couple of days
ago, there was an undocumented migrant family at a Whataburger,
and they were coughing and sneezing while they were inside this
Whataburger, and they weren’t wearing any masks. And so a cit-
izen contacted the La Joya Police Department, and the officer ap-
proached them and asked that family, ‘‘What are you doing here?
What is going on?’’ And that family said that they were released
by Border Patrol because they had COVID–19. The family also
stated that a local charity group paid for their room at a local
hotel.
We do know that the Hidalgo County judge, Mr. Richard Cortez,
called on Federal immigration officials to stop releasing infected
migrants into their communities.
So has the Department of Homeland Security—has your office
examined how many migrants have been released from custody
with COVID? If so, how many?
Mr. IZZARD. We do have an open project that looks at DHS’s pro-
tocols, and how they handle matters such as that at the border. I
will make sure we get that information to you. But yes, sir, to di-
rectly answer your question, we do have an open project. It is ongo-
ing. We look forward to providing and publishing the final report,
once it is complete.
Mr. NEHLS. Thank you. And I can’t wait to receive that answer.
And you stated earlier that you have a collaborative effort with
FEMA. And so is FEMA being deployed to the border?
Mr. IZZARD. I am aware that there are reports that FEMA has
been represented at the border. That is my understanding.
Mr. NEHLS. All right, so what—so you don’t really know what op-
erations have been impacted due to FEMA’s deployment at the
southern border? You couldn’t answer that. Fair enough.
Is FEMA spread too thin, sir?
And the reason I ask that is will FEMA be able to respond, as
hurricane season bears down on the gulf coast?
I represent southwest Houston, southwest Texas, and hurricane
season is coming. Will FEMA be able to handle that, with the re-
sponsibility that I believe they also have at the southern border?
Mr. IZZARD. Well, I certainly understand that question, sir, and
I appreciate it. We believe that our independence and objectivity is
really the bedrock of what we do, and so we will continue to con-
duct our oversight work to ensure that we address issues that
arise. And if there are gaps that arise, that we will address those.
I don’t know that we would opine on whether they are spread too
thin, or their role and how they function, but we certainly will, in
an oversight capacity, address any gaps that do arise as a result
of how they lay out their programs.
Mr. NEHLS. Thank you, Mr. Izzard, and I look forward to hearing
back from you. And thank you for your candidness.
Madam Chair. I yield back.
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Ms. DAVIDS. Thank you. The gentleman yields back. Ms. Titus is
now recognized for 5 minutes.
[Pause.]
VOICE. Muted.
VOICE. You are muted, Ms. Titus.
Ms. DAVIDS. Ms. Titus, I believe that your microphone is muted.
Ms. TITUS. Is that better?
Ms. DAVIDS. We can hear you now.
Ms. TITUS. Oh, OK——
Ms. DAVIDS. You are recognized for 5 minutes.
Ms. TITUS. I was addressing this to Mr. Currie.
Early on in the pandemic, there were several reports from State
and local emergency responders, alleging that their orders for sup-
plies were getting redirected. The chairman and I raised some con-
cerns with the former Administrator, and it seemed that the former
President’s son-in-law was heavily involved in some of the coordi-
nation efforts under FEMA.
One example was in Arizona. The Phoenix fire chief complained,
‘‘We have ordered millions of dollars of personal protective equip-
ment that keeps getting hijacked before getting to the city of Phoe-
nix.’’ I wonder what steps FEMA has taken to prevent this kind of
unpredictability from happening again in the future.
And is there any investigation still going on about that, or what
can we do to take additional steps to be sure that we don’t have
a bridge to nowhere?
Mr. CURRIE. Yes, ma’am, thanks for the question. That was actu-
ally one of our recommendations last year, still early on in the pan-
demic. There is no doubt there was a ton of confusion early on be-
tween FEMA and the State and local governments about who was
making decisions, where Federal supplies wound up, and where
they didn’t. We heard lots of stories from States about supplies
showing up that they didn’t ask for, and then supplies that they
asked for never showing up.
So one of our recommendations was that, obviously, FEMA need-
ed to get a better handle on communication and coordination with
the States on that prioritization.
Actually, back when we made that, they disagreed. They thought
we were already doing that. But they have taken a number of steps
to improve that. And we have heard some improvements. But I will
say that the need for the PPE and the supplies, as you know, has
drastically been reduced over the last 6 months or so.
So my concern, moving forward, if we face another surge, and we
get into the need for the Federal Government to begin airlifting
and providing those supplies again, that we are going to face simi-
lar challenges moving ahead.
Ms. TITUS. Well, that distresses me because Las Vegas is becom-
ing a hot spot, and we see on the news every night hospitals are
being backed up, we need more testing to complement the vaccine.
So I hope all these things you hear about supply chain are not
going to apply to the work that you all are doing. So I am glad you
are trying to get on top of that.
I would add that, while most of the people you worked with were
good actors, there were a number of kind of schemes that we heard
about, fraud schemes, theft of public funds, hoarding of scarce ma-
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terials, fictitious claims against the Government. Are you all work-
ing with the State and local law enforcement to try to either go
after those people, or be sure that it doesn’t happen in the future,
or what we need to put in place to prevent it?
Mr. CURRIE. Yes, ma’am. A couple of things I will say, and then
I want the DHS IG to talk about some of their investigative work,
too.
But one of the things we saw in the pandemic that creates that
situation is when there was a run on supplies, FEMA and DHS
were looking around, trying to find anybody that could provide
that. And, of course, mixed up in that were people that were look-
ing to defraud the system and could never provide the supplies.
We saw the same thing after 2017, with the disasters, people
promising they could provide a certain amount of meals or water
in Puerto Rico, and things like that, and they never could. So, you
know, whenever there is——
Ms. TITUS. There is also price gouging, I am sure.
Mr. CURRIE. Oh, yes, ma’am, absolutely, and that is one of the—
I mean, that is not outright fraud, but that is one of the most im-
portant roles of the Federal Government, to make sure that is not
going on.
So we have looked at that from the standpoint of, like, how do
we get better at contracting, so we don’t have these kind of gaps
and deficiencies. But I know Mr. Izzard has also done a lot of in-
vestigative work on that side, too.
Ms. TITUS. Thank you.
Mr. Izzard?
Mr. IZZARD. Yes, ma’am. So, as Mr. Currie mentioned, we have
done and continue to do a lot of investigative work on that front.
We found that the amount of fraud, as it relates to identity theft,
misuse of the lost wage assistance program is continuing to grow.
We identified additional misconduct allegations and threats to that
program that we have to wind up initiating investigations on.
So we are using sort of a parallel approach with initiating audits
that address potential gaps in the program, as well as going after
the bad actors who have defrauded the system.
It would not be a stretch or an exaggeration to say that we have
seen it across the entire Nation. And so we believe that we are
going to continue to find those pockets in areas where there are in-
dividuals who have exploited the system to personally enrich them-
selves, financially,
Ms. TITUS. Well, thank you. I serve also on the Homeland Secu-
rity Committee, so be sure you reach out and let me know if we
can be helpful in that in any way with our local State officials,
working together with you.
Thank you both, and thank you, Mr. Chairman. I yield back.
Ms. DAVIDS. Thank you. The gentlelady yields back. The Chair
now recognizes Mr. Stauber for 5 minutes.
Mr. STAUBER. Thank you, Madam Chair.
You know, I first would like to speak a little about some of the
jaw-dropping scenes we have seen over the past several months,
where entire classes of individuals have been refused service and
the ability to fly because they have a disability.
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I have a son with Down syndrome, and I understand the difficul-
ties that parents must deal with when traveling with children with
disabilities. I will say this loud and clear: Just because someone
has a mental or physical disability does not mean they are less of
a human, or have less of a right to fly than you and I. And yet we
have seen this exact situation play out all over the country.
Those with disabilities and their families have been shamed, em-
barrassed, and harassed, all because a child may take down their
mask unintentionally, or someone has such a severe disability that
it precludes them from wearing a face covering. This type of dis-
crimination is not what America should look like. It is unaccept-
able. And I urge President Biden to stop encouraging these types
of rigid and inflexible mandates that both put our transportation
workers in uncomfortable positions, and discriminate against those
with disabilities.
And now, shifting gears, Mr. Horowitz, according to your testi-
mony it is your responsibility to ‘‘ensure that taxpayer money is
used effectively and efficiently to address the pandemic-related
public health and economic needs that were funded through the
various COVID–19 relief bills,’’ It is clear that the last 12 months
may account for the largest amount of financial fraud to ever be
committed against the United States. We have seen countless sto-
ries of algorithms and bots applying for fake unemployment insur-
ance, identity theft, misuse of PPP, and idle grants and loans, and
an array of other crimes that we haven’t even heard about yet.
And Mr. Horowitz, are you aware that the EIDL program alone
has $80 billion—that is with a ‘‘B’’—$80 billion in fraud?
Mr. HOROWITZ. Congressman, I am aware of various reports to
that effect, in terms of the numbers. And frankly, there are still in-
vestigations ongoing.
Mr. STAUBER. Yes, and just so——
Mr. HOROWITZ. How that was distributed——
Mr. STAUBER. Just so we are on the same page, you are aware
of $80 billion worth of fraud, and——
Mr. HOROWITZ. I am aware of reports——
Mr. STAUBER. Yes, and how about the PPP, Mr. Horowitz? How
about the PPP? Do we know how much fraud is in there yet? And
can you give us an estimate?
Mr. HOROWITZ. I don’t have an estimate. I can get back to you
on what the SBA IG has reported on. And he has put out——
Mr. STAUBER. Sure.
Mr. HOROWITZ [continuing]. A number of reports about his con-
cerns regarding how that—both of those programs, frankly, were
handled certainly a year ago, when——
Mr. STAUBER. Yes, Mr. Horowitz, I think that, if you would get
back to the committee on what the PPP fraud is, or what you think
it is—and I know that, working with the SBA, you can get a really,
really good idea. And I appreciate that.
And I hope that it concerns you as much as it does me that there
are everyday Americans who were being denied loans and assist-
ance because the accounts had run dry, while at the same time
there were criminals collecting, in one example, $20 million from
these relief funds for fake small businesses.
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And I understand that you aren’t working to combat these
crimes, but these crimes against the taxpayer should never have
been able to be committed in the first place. And I thank you for
testifying today, and I think that before my colleagues on the other
side of the aisle prepare to pass another $4.5 trillion in spending
that we can’t afford, we should address this fraud, corruption, and
abuse that has already plagued the Federal Government and hurt
everyday Americans.
Mr. Currie, with my 1 minute remaining, you had mentioned
that FEMA was doing all they could in reference to the supply
chain, getting the supplies wherever they could. Mr. Currie, would
you agree that bringing back manufacturing to our shores, bringing
back pharmaceutical manufacturing to this country, bringing back
PPE-making in this country, and bringing back critical minerals
mining to this country to hold the destiny of this great country into
our own hands, would you agree with that?
Mr. CURRIE. Sir, there is no doubt that the pandemic exposed
that we are reliant on foreign sources for many of our products,
pharmaceutical, all the things that you mentioned. So the——
Mr. STAUBER. And if we don’t—Mr. Currie, if we don’t learn from
that, shame on us, correct?
Mr. CURRIE. Yes, sir.
Mr. STAUBER. OK, thank you. I yield back.
Ms. DAVIDS. Thank you. The gentleman yields back. The Chair
now recognizes Ms. Brownley for 5 minutes.
Ms. BROWNLEY. Thank you, Madam Chair. I appreciate it. My
first question is to Mr. Horowitz.
And just in general, do you feel like you have enough resources,
in general, to appropriately oversee fraud and abuse?
Mr. HOROWITZ. So, Congresswoman, I think we have been cer-
tainly very appreciative in the community about the support com-
ing from Congress. But frankly, several IGs have noted the chal-
lenge they have, overseeing billions of dollars in spending in their
agency, compared to what they have gotten in terms of additional
relief.
I know DHS OIG is one of the IGs that have mentioned this
problem, and Mr. Izzard could speak to that, about, I think, getting
a few million dollars to oversee tens of billions of dollars has been
a challenge, for example, for DHS OIG. And I know some other IGs
have also raised that concern.
We have demonstrated, as IGs, as a track record, that we have
returned multiples of investments in our efforts because of the
wrongdoings that we find, the efficiencies we find. And so invest-
ment in IGs have proven, over our 40-year history, to be very good
investments for the taxpayers.
Ms. BROWNLEY. I couldn’t agree with you more.
And Mr. Izzard, if you have anything to add to that?
Mr. IZZARD. Oh, yes, ma’am, thank you. I agree 100 percent with
Mr. Horowitz, and appreciate his response.
The Department received, I believe it was, over $40 billion to as-
sist with our CARES—from the CARES Act, and we were—OIG re-
ceived about $3 million, too, for oversight work. And so we have
found it at times challenging. However, we forged ahead. And I be-
lieve we have been successful in our efforts, and certainly
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leveraging our relationships and partnerships, for example, with
the PRAC, which is a relationship that we thoroughly appreciate,
as well as the other OIGs in the community.
So also, funeral assistance is a new one, a newer one, where
there was tens of billions of dollars allocated to support that. And
we have not gotten any supplementals for that. However, we have
moved ahead. We actually have projects ongoing now to address fu-
neral assistance.
So I think, with more, we certainly can do more. But notwith-
standing, we are going to continue to forge ahead and do every-
thing we can to address the challenges that the pandemic has
brought with it.
Ms. BROWNLEY. Thank you, sir. And I just wanted to say to you,
I know that you personally are not responsible for Homeland Secu-
rity priorities, and particularly around FEMA. But I was con-
cerned, in your response to another question with regards to
FEMA’s readiness, in terms of extreme weather conditions. I mean,
I think we all have to look ahead and know that that is coming.
I am from California. There is no question that our fire season
has started very early. And I just anticipate across the country that
we are going to continue to experience more extreme weather con-
ditions. And coupled with that, we don’t know whether there is
going to be another surge in this pandemic, where we are going to
have to call upon FEMA, as well.
So I would just like to say, I hope that FEMA is doing the appro-
priate planning and expressing what their needs may be in order
to be ready for any pandemic issues or any extreme weather condi-
tions experienced across the country.
And my last question is, again, back to Mr. Horowitz. On the
CARES Act and other related legislation, there were detailed re-
porting requirements to ensure transparency and accountability.
And then, going on OMB’s guidance to agencies, then, was to say
we don’t really need any more additional information.
Your office has come back and said that that your office rec-
ommended that OMB issue the guidance to agencies to collect the
missing information. So I was just wondering if that actually hap-
pened.
Mr. HOROWITZ. Thank you for asking about that, Congress-
woman, because that has—you are right—been a very important
issue for us. We were very concerned last year, when OMB issued
its guidance initially after the CARES Act, without consulting with
the PRAC, that basically said USAspending.gov would be the tool
that you will use to report through.
We have identified in another report that is on our website that
we issued in November some of the significant problems with that.
And we are pleased that OMB——
[Audio malfunction.]
Mr. HOROWITZ [continuing]. This year issued a revised memo
that tried to address some of that. Of course, it’s very difficult to
go back from a year ago to get that kind of data that we need.
Ms. BROWNLEY. Well——
Mr. HOROWITZ. We are working with leadership to do that.
Ms. BROWNLEY. Thank you. I believe my time is up.
I yield back, Madam Chair.
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Ms. DAVIDS. The gentlewoman yields back. The Chair now recog-
nizes Mr. Westerman for 5 minutes.
Mr. WESTERMAN. Thank you, Madam Chair. And thank you to
the witnesses.
Mr. Soskin, at the end of the 116th Congress, Congress author-
ized a Maritime Transportation System Emergency Relief Program.
But the administration has not requested any funds for this pro-
gram.
The U.S. maritime industry estimates it needs $3.5 billion in
emergency relief, as a result of unanticipated COVID costs, and
has requested those funds be provided under the MTS Emergency
Relief Program. Are you monitoring the maritime industry’s re-
sources?
Mr. SOSKIN. Mr. Westerman, I am not actually familiar with the
maritime industry funding issue that you have identified. I would
be happy to consult with my staff, and we can follow up with you
on your question about that area.
Mr. WESTERMAN. OK, thank you. I would appreciate that.
Mr. Soskin, in March, Administrator Fenton, in talking about
testing on the border, he said that testing is happening, COVID
testing, and that there is less than a 6-percent positive rate on the
border. Are you aware if this testing is still happening, and if those
testing rates have increased, those positive rates?
Mr. SOSKIN. I am not familiar with that issue, but I think DHS
Assistant IG Izzard might have more awareness about testing on
the border.
Mr. WESTERMAN. Yes, I was going to ask him that question, as
well.
Mr. Izzard, do you have any information on that?
Mr. IZZARD. I do know that we have ongoing projects. And as I
said earlier, our inspector general recently made personal visits to
the border, which has resulted in some of the projects.
I don’t know specifically the answer to that question, but I will
make sure we get you a response, directly.
Mr. WESTERMAN. Thank you, sir. I was on the border last week-
end, down in the Rio Grande Valley, and I saw reports on Monday
that there were 671 additional COVID-positive tests in Hidalgo
County. And I have seen reports that say the COVID infection rate
is up 900 percent along the border.
One thing that I took back from the trip to the border, along
with many what I would call crisis areas, was on the flight back
out of McAllen. I noticed, in the airport, there were several pas-
sengers that were holding manila envelopes that, on one side, it
was printed. I think it was something like, ‘‘Please help me. I do
not speak or read English. Please help me get on the right air-
plane.’’ And then, on the other side of the envelopes, it would have
flights outlined on it, departing airports, arriving airports, and the
times on that.
Mr. Izzard, can you confirm if those were migrants, or was that
just a group of people carrying envelopes through the airport?
Mr. IZZARD. Sir, I can’t confirm, I really don’t know. I am sorry,
I just don’t know the answer to that.
Mr. WESTERMAN. So you don’t know if DHS is putting migrants
on commercial airlines, and shipping them around the country?
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Mr. IZZARD. Well, I do know that we have an open audit at this
point that looks at that specific area. It is ongoing. So I can’t speak
to the findings of that at this point, but I certainly look forward
to providing that at the point in which the audit is finalized. We
do have an audit working that direction, though.
Mr. WESTERMAN. So if you don’t know if commercial airlines are
being used to move migrants around the country, you also wouldn’t
know if those migrants are being tested for COVID, or being vac-
cinated before being moved around the country.
Mr. IZZARD. I don’t know the answer to that. Perhaps that is
something that our project may look into. But I will make sure to
take note of that, to take that back for consideration with our staff.
Mr. WESTERMAN. Yes, I would appreciate that, if you could look
at that sooner than later, and get an answer back on that issue.
And Madam Chair, I yield back.
Ms. DAVIDS. The gentleman yields back. The Chair now recog-
nizes Mr. Lowenthal for 5 minutes.
Mr. LOWENTHAL. Thank you. Thank you, Chair. And I want to
focus on a specific program that means a lot to me that Mr. Currie
and Ms. Krause had mentioned in their testimony. And if you
could, just help me with that, and that is the Coronavirus Eco-
nomic Relief for Transportation Services, or what is known also as
the CERTS Program.
As you highlighted, none of the $2 billion provided by Congress
has been allocated. You note that Treasury faced a huge challenge
setting up a new program to support industries where the agency
had no experience, and where there were many small stakeholders.
And you pointed out that Treasury is working to learn from its ex-
perience with the Payroll Support Program and other pandemic re-
lief programs to communicate clearly, for instance, and that is very
encouraging.
But I want to be clear. The relief that Congress provided was
vital to prevent dislocation and disruption in critical infrastructure.
And no matter what sector we are talking about, aid prevented job
loss, and kept businesses and agencies we all rely on, it kept them
afloat.
So my question is that climate change and many other chal-
lenges make this world, I understand, much less predictable, and
we need to get better at responding to unique and unexpected chal-
lenges.
So my question, then, is what can we do to build our capacity to
implement programs like the CERTS Program?
Ms. KRAUSE. Thank you for the question. This is Heather Krause
at GAO, and my colleague can jump in, as well.
I would say, when you have an agency implementing a program
where they don’t, in Treasury’s case, work with this applicant
pool—and as you mentioned, it is a big, broad number of applicants
there—it is really important that they work closely with the other
Federal agencies that may have information or knowledge of those
industries.
So in this case, we are in the process of looking at the CERTS
Program. We know that Treasury has reached out to DOT, and has
worked with them to figure out—as well as the Coast Guard—to
figure out how to determine eligibility for this program, because
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you do have a lot of different operators. And DOT can look and sort
of see what are the operators and applicants that might—you
know, ways to check eligibility.
As we understand, the application process just closed on July
19th. So it is still in progress. But, in terms of implementing pro-
grams where they are new, and it is a new entity you work with,
it is important to work with the industry, understand the industry,
and work with those Federal agencies to better understand how
you might effectively implement the program.
Mr. LOWENTHAL. Is that what we have learned? If another crisis
occurred, what have we learned to expedite that process now?
Ms. KRAUSE. I think it is really encouraging those agencies to
work together upfront. Clearly communicating to industry sort of
the status of the timelines and what they are doing, those are the
types of things that we certainly learned are—and expectations for
the program, and sort of the timing of when it will roll out. Those
types of communications are really important in these scenarios.
Mr. LOWENTHAL. Thank you. I am also wondering whether the
question can also be answered by—let me just see who that was.
I think that was Mr. Currie.
You also mentioned——
Mr. CURRIE. Yes, sir.
Mr. LOWENTHAL [continuing]. The CERTS Program. What can we
do to build our capacity to implement programs—like the CERTS
Program, which is all new—in the future, when there is a crisis
that comes up?
Mr. CURRIE. Yes, sir. Ms. Krause is definitely an expert on the
CERTS Program, but I cover our work on disaster response and re-
covery, and one of the biggest themes that we see in the prepared-
ness side is that, often, gaps in capabilities at the local level or in
different industries have been identified through prior exercises
and assessments.
The problem is, because the event hasn’t happened yet, we often
don’t take action to address that before it happens, and we don’t
close the gap that we know exists. And I think some of that is just
latency, and especially with the pandemic, of disbelief in thinking
that it is actually going to happen. And that is——
Ms. DAVIDS. Thank you, Mr. Currie.
Mr. CURRIE. That is a key theme——
Mr. LOWENTHAL. Thank you. I yield.
Ms. DAVIDS. The gentleman’s time has expired. The Chair will
now recognize Mr. Guest for 5 minutes.
Mr. GUEST. Thank you, Madam Chair.
Mr. Horowitz, within the Federal Government’s National Dis-
aster Recovery Framework, the EDA serves as a coordinating agen-
cy for the economic recovery support function on behalf of the De-
partment of Commerce. Congress has appropriated $1.5 billion for
EDA’s Economic Adjustment Assistance Program in the CARES
Act and, more recently, $3 billion in EAA funding in the American
Rescue Plan. Twenty-five percent of that funding is dedicated to
addressing employment and gross productivity losses in the travel,
tourism, and outdoor recreation industry.
As an agency that received $3.5 million in fiscal year 2021 appro-
priations, how is the Pandemic Response Accountability Committee
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working with the EDA to ensure that this large appropriation
amount that had been distributed during the pandemic is being
distributed with transparency, and reducing waste, fraud, and
abuse?
Mr. HOROWITZ. So Congressman, what we have been doing at the
Pandemic Response Accountability Committee is working with the
IGs who oversee the specific agencies and the specific programs, to
coordinate and make sure that we have got the right resources and
tools to take those steps and do that oversight.
And I can follow up with the IG to see what kind of work they
have been doing with regard to that specific program.
Mr. GUEST. And let me follow up on your written testimony. You
talk about the fraud task force that, as of July of this year, that
28 agents have been assigned to that task force. Can you talk a lit-
tle bit about the work that the task force is doing?
Mr. HOROWITZ. Absolutely. So one of the things that became
clear early on in the work we have been doing from a law enforce-
ment standpoint—and the IG community has a number of law en-
forcement agencies—is that, first of all, several of the programs,
and several of the IGs were facing extraordinary requests and re-
source needs to deal with some of the fraud that they were dealing
with, the SBA IG and Department of Labor IG being at the front
of that line.
In addition, what we found was that the fraud wasn’t necessarily
isolated, and the wrongdoing wasn’t necessarily isolated to a spe-
cific program, but rather, it cut across programs. And so we needed
to be coordinated with each other to share the learnings we were
seeing.
And then finally, we needed to make sure that what we were
doing with that information, as we saw wrongdoing and fraud, was
interacting with the other parts of the IG community that handled
these issues, like auditors, and making sure that we were taking
steps to go back and try and prevent further fraud and detect fur-
ther fraud. So we were coordinating to do all of those things.
Mr. GUEST. And you also talk about the adoption of the subpoena
policy, and how that has contributed in efforts to stop large-scale
fraud that we are seeing in the pandemic response programs. Can
you talk a little bit about the effect that this subpoena policy has
had on what your agency is doing?
Mr. HOROWITZ. Yes, and I certainly appreciate Congress giving
us that authority in the CARES Act last year.
We have put in place the subpoena authority that we have been
given. IGs generally have documentary subpoena authority. They
don’t, though, have—for almost all of them—testimonial subpoena
authority. [Inaudible] the House passed a bill that would, in fact,
give IGs that authority, it is pending in the Senate, we hope it will
get passed.
And so we have put in place a subpoena policy that will allow
the PRAC to assist IGs who need testimonial subpoenas to get that
authority, so they can ask recipients of the funds, who may have
evidence of wrongdoing, what they know, and help advance those
kinds of investigations.
Mr. GUEST. Well, and last question; Mr. Izzard, here is a ques-
tion for you.
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Several of your recent reports regarding FEMA look at chal-
lenges that occurred during Hurricane Harvey, Hurricane Sandy,
and other large disasters. As we are once again approaching hurri-
cane season, and as Mississippi is one of those States that is typi-
cally in the bull’s-eye of approaching hurricanes, what can Con-
gress do to fix some of these ongoing issues, as a result of the reim-
bursement backlogs, contract controls, and delayed processes?
Mr. IZZARD. Oh, well, thank you for that question. As you stated,
we have a number of projects that we have done with regard to
Hurricanes Harvey, Irma, and Maria, and we learned a lot from
those, and we anticipate that we will learn a lot as we move for-
ward. So I think, as we continue to perform our work, we will just
continue a lot of work to inform the work that we have done in the
past, and inform where we go from here.
So we appreciate all the support that Congress has provided so
far, and we look forward to continuing——
[Audio malfunction.]
Mr. IZZARD [continuing]. Regard.
Ms. DAVIDS. Thank you. The gentleman’s time has expired. The
Chair now recognizes Mr. Carbajal for 5 minutes.
Mr. CARBAJAL. Thank you.
Mr. Currie, the Government Accountability Office, GAO, reported
that some States had difficulty accessing the various Federal pro-
grams available to pay for PPE and testing supplies throughout the
COVID–19 pandemic. My office heard directly from local leaders on
this issue, and many were confused about the reimbursement and
cost share responsibility. In times of crisis, I was disappointed in
the lack of clarity from the Federal Government, and the bureau-
cratic redtape we had to navigate to get the needed resources in
the hands of the American people, including my constituents.
What has FEMA done to remedy this situation so that, in future
emergencies, medical personnel around the country can get the
equipment they need in a timely, efficient manner?
Mr. CURRIE. Thank you, sir. I think I mentioned earlier that one
of our first recommendations in this area was early on in the pan-
demic, was FEMA and its partners, to clarify with the States and
local governments how it was providing supplies, when, and where,
and why.
Across 50 States, multiple Territories, multiple Tribes, all of
which had disaster declarations, that was a little messy, upfront.
I think they have made a lot of progress since then. But as I men-
tioned when Ms. Titus asked about this, my concern is that that
was—you know, the needs have decreased significantly over the
last 6 months or so for PPE. If that need was to explode again in
the coming months, I would hope that what they have done to ad-
dress some of these issues would fix some of those early problems.
But at this point, I don’t know.
Mr. CARBAJAL. Thank you, Mr. Currie. In light of the votes
scheduled that have been called, I have two other questions, but I
am going to submit them for the record.
With that, Madam Chair, I yield back.
Ms. DAVIDS. Thank you. The gentleman yields back.
For the information of all Members and witnesses, we have a
long vote series on the floor, and are going to go into recess. We
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will reconvene as soon as possible after the last floor vote, and we
will come back to the first panel of witnesses.
The committee stands in recess.
[Recess.]
Ms. NORTON [presiding]. At the direction of the chair, in light of
the series of votes and the lateness of the day, the committee now
stands adjourned.
[Whereupon, at 5:26 p.m., the committee was adjourned.]
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APPENDIX
QUESTIONS FROM HON. SALUD O. CARBAJAL TO HEATHER KRAUSE, DIRECTOR,
PHYSICAL INFRASTRUCTURE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Question 1. The COVID–19 pandemic exposed serious flaws in our federal govern-
ment’s preparedness to keep people in the aviation sector and travelers safe. It high-
lighted the need for a national aviation-preparedness strategy to combat commu-
nicable diseases, like COVID–19.
I have introduced H.R. 2387, the Fly Safe and Healthy Act, to establish a pilot
for temperature checks and have supported Chairman DeFazio’s legislation, the
Healthy Flights Act of 2021, that calls for a national aviation strategy.
a. Can you describe the barriers the Department of Transportation and the Fed-
eral Aviation Administration have faced in developing a national strategy?
ANSWER. While the Department of Transportation (DOT) is in the best position
to develop a national aviation-preparedness plan, as we recommended in 2015, DOT
does not believe that it should lead the development of such a plan. Rather, DOT
maintains that those agencies that have both legal authority and expertise for emer-
gency response and public health—namely the Department of Homeland Security
(DHS) and the Department of Health and Human Services (HHS)—are best posi-
tioned to take the lead role in developing such a plan.1 However, in May 2020, DHS
stated that it had reviewed its existing national, sector, and modal plans for pan-
demic preparedness and response activities and determined that it is not best situ-
ated to develop a national aviation-preparedness plan. In June 2020, HHS stated
that it is not in a position to develop a national aviation-preparedness plan because
it does not have primary jurisdiction over the entire aviation sector or the relevant
transportation expertise.2
In June 2020, in the absence of efforts to develop a plan, we urged Congress to
take legislative action to require the Secretary of Transportation to work with rel-
evant agencies and stakeholders, such as HHS and DHS, and members of the avia-
tion and public health sectors, to develop a national aviation-preparedness plan.3
While FAA has provided some guidance to the aviation industry in response to the
COVID–19 pandemic, we continue to believe that DOT is in the best position to
work with its relevant stakeholders to develop a national aviation-preparedness
plan, which could guide preparation for individual airlines and airports, as well as
establish a framework for communication and response for the next communicable
disease outbreak. Furthermore, as we reported in 2020, FAA and DOT have strong-
1 In 2015, we recommended that DOT work with relevant stakeholders, such as HHS, to de-
velop a national aviation-preparedness plan for communicable diseases. See GAO, Air Travel
and Communicable Diseases: Comprehensive Federal Plan Needed for U.S. Aviation System’s
Preparedness, GAO–16–127 (Washington, D.C.: Dec. 16, 2015).
2 GAO, COVID–19: Federal Efforts Could be Strengthened by Timely and Concerted Actions,
GAO–20–701 (Washington, D.C.: September 21, 2020).
3 Priority Open Recommendations: Department of Transportation. GAO–21–591PR. (Wash-
ington, D.C.: Jun. 25, 2021) and GAO, COVID–19: Opportunities to Improve Federal Response
and Recovery Efforts, GAO–20–625 (Washington, D.C.: Jun. 25, 2020). As we reported in July
2021, legislation related to a national aviation-preparedness plan has been introduced in the
current legislative session, as well as in previous sessions. For example, in October 2020, H.R.
8712, National Aviation Preparedness Plan Act of 2020, was introduced. If enacted, this bill
would have required the Department of Transportation, in collaboration with DHS, HHS, and
other aviation stakeholders, to develop a national plan to prepare the aviation industry for fu-
ture communicable disease outbreaks. Further, in February 2021, H.R. 884, the National Avia-
tion Preparedness Plan Act of 2021, was introduced in the House of Representatives, and in May
2021, S. 82, Ensuring Health Safety in the Skies Act of 2021, was reported favorably out of the
Senate Committee on Commerce, Science, and Transportation. For additional information, see
GAO, COVID–19: Continued Attention Needed to Enhance Federal Preparedness, Response, Serv-
ice Delivery, and Program Integrity, GAO–21–551 (Washington, D.C.: July 19, 2021). Since our
July 2021 report, none of these bills have advanced.
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er and deeper ties to, as well as oversight responsibility for, the relevant stake-
holders that would be most involved in such a broad effort, namely airlines, air-
ports, and other aviation stakeholders. In addition, DOT’s Office of the Secretary is
the liaison to International Civil Aviation Organization (ICAO) for Annex 9 to the
Chicago Convention—an international aviation treaty to which the United States is
a signatory—in which the relevant ICAO standard that obligates member states to
develop a national aviation-preparedness plan is contained.4 We urge Congress to
take swift action to require a national aviation-preparedness plan, without which
the U.S. will not be as prepared to minimize and quickly respond to ongoing and
future communicable disease events.
b. Can you also describe the importance of establishing a national aviation strat-
egy?
ANSWER. A national aviation-preparedness plan could help maximize an effective
response to a public health threat, while minimizing potential inefficiencies in the
national response effort and unnecessary disruptions to the national aviation sys-
tem, and could ensure that individual airport and airline plans work in accordance
with one another, among other things.5 For example, while the 14 airports and 3
airlines we reviewed in 2015 had plans that address communicable disease threats
from abroad, representatives from these airports and airlines reported facing mul-
tiple challenges in responding to threats. These challenges included obtaining guid-
ance; communication and coordination among responders; and assuring employees
have appropriate training, equipment, and sanitary workplaces. A national aviation-
preparedness plan to respond to communicable disease outbreaks could help address
these challenges. In addition, as stated above, under the Chicago Convention, the
United States has obligated itself to implement standards that include a national
aviation-preparedness plan for communicable disease outbreaks.6 In 2017, a joint
evaluation of U.S. capacity to prevent, detect and rapidly respond to public health
threats of a natural, deliberate or accidental nature highlighted the absence of a
comprehensive national aviation-preparedness plan aimed at preventing and con-
taining the spread of diseases, which would include points of entry not already cov-
ered by the Centers for Disease Control and Prevention (CDC).7
The COVID–19 pandemic has further highlighted the need for a national aviation-
preparedness plan. Stakeholders publicly highlighted piecemeal response efforts
that may have led to some of the confusion among stakeholders and chaos at certain
airports that occurred earlier in 2020 following travel restrictions as a result of
COVID–19, as well as increased screening efforts. For example, as we reported in
June 2020, stakeholders described actions taken by individual airlines in the ab-
sence of FAA guidance, such as to cease operations to certain countries, and a piece-
meal approach to establishing standards for safely continuing or expanding service.
This piecemeal approach points to the continued need for DOT to implement our
2015 recommendation to develop a coordinated effort to plan for and respond to
communicable disease threats or for Congress to take legislative action, as we rec-
ommended in 2020, to require DOT to work with relevant agencies and stakeholders
to develop such a plan. Without a national aviation-preparedness plan, the United
States remains insufficiently prepared to respond to communicable disease threats,
now and in the future.
QUESTION FROM HON. SALUD O. CARBAJAL TO CHRIS P. CURRIE, DIRECTOR,
HOMELAND SECURITY AND JUSTICE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Question 1. Since 2011, the Government Accountability Office (GAO) has called
for interagency planning to address nationally significant biological events. The on-
going COVID–19 pandemic is showing us the need for a whole-of-government ap-
proach to address biological threats.
What steps has FEMA and the federal government taken to protect our nation
against biological threats?
4 GAO, Air Travel and Communicable Diseases: Status of Research Efforts and Action Still
Needed to Develop Federal Preparedness Plan, GAO–20–655T (Washington, D.C.: Jun. 23, 2020).
5 GAO–16–127.
6 Member states, including the United States, are obligated to establish regulations or take
other appropriate steps to implement International Civil Aviation Organization standards with-
in their own civil aviation systems. Additionally, member states are obligated to notify the Inter-
national Civil Aviation Organization of a ‘‘difference’’ from the international standard, if they
find it impractical to fully comply with an international standard or otherwise differ from the
standard in their regulations or practices. Chicago Convention on International Civil Aviation
art. 38, Apr. 4, 1944, 61 Stat 1180, T.I.A.S. No. 1,591
7 World Health Organization. Joint External Evaluation of IHR Core Capacities of the United
States of America: Mission Report, June 2016. (Geneva: 2017).
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ANSWER. Effectively preparing for and responding to biological incidents, including
infectious disease outbreaks and pandemics, requires engagement and commitment
from the entire biodefense enterprise. At the highest level, national strategies, such
as the National Biodefense Strategy, are designed to help guide preparedness activi-
ties by providing long-range strategic vision to guide policymaking. The Department
of Homeland Security (DHS) was one of four agencies required by law to jointly de-
velop a national biodefense strategy and associated implementation plan.1 The
Strategy outlines a whole-of-government approach intended to help the United
States actively and effectively assess, prevent, prepare for, respond to, and recover
from all types of biological threats, whether they are natural, accidental, or delib-
erate.
In August 2021, we issued a report on steps taken by the federal government to
protect our nation against biological threats.2 Specifically, we found that the key
federal agencies, including the Departments of Homeland Security (DHS), Defense
(DOD), Health and Human Services (HHS), and Agriculture (USDA), developed a
range of interagency response plans to prepare for nationally significant biological
incidents. These strategic, operational, and tactical level plans address responding
to a broad spectrum of biological threats, including those that are natural, acci-
dental, or deliberate. At the time of our review, agencies were reviewing and revis-
ing a key planning document for responding to biological incidents. Officials GAO
interviewed stated this revision would incorporate lessons learned from the ongoing
COVID–19 pandemic, as well as lessons learned from a major biological incident ex-
ercise conducted in 2019 (Crimson Contagion).
DHS, DOD, HHS, and USDA conducted numerous interagency exercises to help
prepare for and respond to a wide variety of biological incidents, such as anthrax
attacks, influenza pandemics, and diseases affecting plants and animals. Specifi-
cally, GAO identified 74 interagency biological incident exercises conducted from cal-
endar years 2009 through 2019.
GAO also reported that FEMA’s initial review of the COVID–19 response dem-
onstrated that capabilities needed for nationally significant biological incidents were
underdeveloped. In its January 2021 assessment of its response activities during the
initial phase of the pandemic, FEMA recognized that its ability to anticipate state,
local, and other nonfederal requirements during the pandemic was affected by an
insufficient understanding of projected consequences and capabilities of such part-
ners.
Through the National Exercise Program, FEMA facilitates interagency feedback
and reviews after-action reports to develop priorities for the next National Exercise
Program cycle. However, analysis of after-action reports submitted to the program
do not reflect the comprehensive view of all exercises conducted across the nation.
The National Exercise Program is only one line of effort to conduct exercises, mean-
ing analysis done through this effort does not encapsulate all exercise or real-world
incident findings.
In our August 2021 report, we found that the Biodefense Coordination Team is
uniquely positioned to carry out activities to enhance preparedness and response for
future biological incidents.3 For example, based on our analysis of after-action re-
ports for selected interagency biological incident exercises and real-world incidents,
as well as findings from the COVID–19 response, we found that the biodefense en-
terprise has gaps in its capabilities-based approach to response planning. Specifi-
cally, we found the biodefense enterprise lacked elements necessary for preparing
for nationally significant biological incidents, including:
• a set of defined capabilities that account for the unique elements specific to re-
sponding to nationally significant biological incidents;
• a process at the interagency level for agencies to assess and communicate prior-
ities for exercising capabilities;
• a process to consistently report on those capabilities in after-action reviews; and
1 Signed into law on December 23, 2016, the National Defense Authorization Act for Fiscal
Year 2017 required the Secretaries of Defense, Health and Human Services, Homeland Security,
and Agriculture to jointly develop a national biodefense strategy and associated implementation
plan, which shall include a review and assessment of biodefense policies, practices, programs
and initiatives. Such Secretaries shall review and, as appropriate, revise the strategy biennially.
See Pub. L. No. 114–328, div. A, title X, subtitle G, § 1086, 130 Stat. 2000, 2423–24 (2016) (clas-
sified, as amended, at 6 U.S.C. § 104).
2 GAO, Biodefense: After-Action Findings and COVID–19 Response Revealed Opportunities to
Strengthen Preparedness, GAO–21–513 (Washington, D.C., Aug. 4, 2021).
3 The Biodefense Coordination Team helps carry out the strategic goals and objectives of the
National Biodefense Strategy on behalf of the secretaries of participating departments and agen-
cies, including the Secretary of Homeland Security.
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• routine monitoring at the interagency level of exercises and real-world incidents
in order to evaluate lessons learned across the government, identify patterns
and possible root causes for systemic challenges, and make recommendations to
address these challenges.
We made four recommendations to DHS to help ensure the Biodefense Coordina-
tion Team develops ways to address the above stated deficiencies. We reported that
the ability to monitor and assess the outcomes of interagency biological incident ex-
ercises and real-world events could be instrumental in identifying persistent chal-
lenges and their root causes before they become systemic, intractable problems.
Identifying these issues could also help agencies prioritize which capabilities need
further development or exercising.
QUESTIONS FROM HON. STEVE COHEN TO HON. ERIC J. SOSKIN, INSPECTOR GENERAL,
U.S. DEPARTMENT OF TRANSPORTATION
Question 1. In June of last year, your office sent a letter to the Secretary of Trans-
portation outlining key potential risk areas for the Department in overseeing its im-
plementation of the CARES Act and suggesting actions to mitigate these risks. One
of the areas you identified as being subject to risk included airport grants.
a. What were the key potential risk areas that your office identified?
ANSWER. We identified 5 key potential risk areas: effectively managing grants to
support the Nation’s airports; adapting existing stewardship and oversight ap-
proaches while making prudent use of waivers in surface transportation; executing
contracts and grants effectively to achieve transportation program and project out-
comes; tracking and monitoring CARES Act funds while ensuring the availability
and integrity of DOT’s financial management systems; and increasing outreach and
education to transportation agencies to prevent and detect fraud, waste, and abuse.
b. What if anything did your office hear back from the previous Secretary last
year after sending this letter?
ANSWER. After sending this memorandum, we did not hear back from the previous
Secretary on this subject.
Question 2. Can you describe in detail what your office is doing to make sure that
the smaller airports that received these unusually large grants are spending it prop-
erly and in accordance with FAA grant requirements?
ANSWER. To ensure that the unusually large grants given to smaller airports are
used appropriately and in accordance with FAA grant requirements, we are con-
ducting a thorough audit to assess whether FAA’s policies and procedures for
awarding and overseeing CARES Act grants are sufficient to protect taxpayer inter-
ests. Our assessment of FAA’s oversight includes a review of airports’ grant expendi-
ture rates and compliance with the Revenue Use Policy. We will also assess airports’
action plans for funds in excess of the initial grant amount—which FAA capped at
four times the airport’s annual operating expenses—as well as FAA’s approach for
monitoring unexpended funds. We expect to complete this work in the winter of
2022.
QUESTION FROM HON. STEPHEN F. LYNCH TO HON. ERIC J. SOSKIN, INSPECTOR
GENERAL, U.S. DEPARTMENT OF TRANSPORTATION
Question 1. We recently had a brand new N93 mask manufacturer set up shop
in my district, in Bridgewater, Massachusetts. They anticipated they would be wel-
comed by hospitals, schools, businesses and State, local and Federal Government
agencies. However, they have struggled to obtain any sizable contracts for PPE be-
cause the purchasing agents of local hospitals, businesses and government agencies
continue to maintain contracts with Chinese suppliers. These purchasing agents
have lucrative contracts with these Chinese manufacturers and don’t want to let
that go. The Chinese manufacturers have also lowered their prices and made it
more profitable for these purchasing agents and companies and agencies.
I would like to know the terms to the actual supply contracts at DOT. Can we
have copies of their PPE purchasing contracts? These should be a matter of public
record so we know to whom and how much our agencies are spending.
ANSWER. We do not have ongoing audit work related to DOT’s supply contracts
and do not have copies of the referenced supply contracts in our audit files. Copies
of DOT’s executed contracts or modifications to such contracts are a matter of public
record; however, the Agency would have to gather and provide copies of these con-
tracts and/or modifications in order to make this information publicly accessible. For
this reason, we believe the answers to Representative Lynch’s questions could be an-
swered more expeditiously by requesting this information directly from DOT.
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ASSESSING THE FEDERAL GOVERNMENT’S
COVID–19 RELIEF AND RESPONSE EFFORTS
AND ITS IMPACT—PART 2
THURSDAY, SEPTEMBER 30, 2021
HOUSE OF REPRESENTATIVES,
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
WASHINGTON, DC.
The committee met, pursuant to call, at 10:05 a.m., in room 2167
Rayburn House Office Building and via Zoom, Hon. Peter A. DeFa-
zio (Chair of the committee) presiding.
Members present in person: Mr. DeFazio, Mr. Larsen, Mr.
Garamendi, Mr. Carbajal, Mr. Lamb, Mr. Auchincloss, Ms. Wil-
liams of Georgia, Mr. Crawford, Mr. Webster, Mr. Perry, Mr.
Graves of Louisiana, Mr. Rouzer, Mr. Weber, Mr. LaMalfa, Mr.
Westerman, Mr. Balderson, Mr. Burchett, Mr. Guest, and Mr.
Nehls.
Members present remotely: Ms. Norton, Ms. Johnson of Texas,
Mrs. Napolitano, Mr. Johnson of Georgia, Ms. Brownley, Mr.
Payne, Mr. Lowenthal, Mr. DeSaulnier, Mr. Brown of Maryland,
Mr. Stanton, Ms. Davids, Mr. Garcı́a of Illinois, Mr. Delgado, Mr.
Moulton, Mr. Carter of Louisiana, Mr. Massie, Mr. Katko, Mr.
Fitzpatrick, Miss González-Colón, Mr. Johnson of South Dakota,
Dr. Van Drew, Mr. Gimenez, and Mrs. Steel.
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SEPTEMBER 24, 2021
SUMMARY OF SUBJECT MATTER
TO: Members, Committee on Transportation and Infrastructure
FROM: Staff, Committee on Transportation and Infrastructure
RE: Full Committee Hearing on ‘‘Assessing the Federal Government’s
COVID–19 Relief and Response Efforts and Its Impact: Part II’’
PURPOSE
The Committee on Transportation and Infrastructure (T&I) will meet on Thurs-
day, September 30, 2021, at 10:00 a.m. EDT in 2167 Rayburn House Office Building
and via Zoom to hold a hearing titled ‘‘Assessing the Federal Government’s COVID–
19 Relief and Response Efforts and Its Impact: Part II.’’ Part I of this hearing series
was held on July 29, 2021, and testimony was received by government witnesses
on the federal government’s COVID response and relief efforts. This hearing will ex-
amine the federal response to the COVID–19 pandemic and the impact of pandemic
relief efforts on the transportation and infrastructure sectors and their workers.
The Committee will hear testimony from the American Public Transportation As-
sociation (APTA), the International Association of Emergency Managers (IAEM), the
Hoover Institution at Stanford University, the Hamilton Project at the Brookings
Institution, and the Transport Workers Union of America (TWU).
BACKGROUND
In response to the COVID–19 pandemic, Congress and the Executive Branch took
a range of actions to protect the health and economic security of American individ-
uals and businesses. Congress included $5.9 trillion of relief and job protection
measures in the CARES Act, the Consolidated Appropriations Act of 2021, the
American Rescue Plan, and other legislation.1 Federal agencies, including the Fed-
eral Emergency Management Agency (FEMA), the operating administrations within
the Department of Transportation (DOT), and the U.S. Department of the Treasury
(Treasury) are responsible for administering and overseeing more than $200 billion
in federal assistance provided for transportation and emergency management.2
1 CARES Act, Pub. L. No. 116–136 (2020); Consolidated Appropriations Act, 2021, Pub. L. No.
116–260 (2020); American Rescue Plan Act of 2021, Pub. L. No. 117–2 (2021).
2 U.S Department of the Treasury, ‘‘Coronavirus Economic Relief for Transportation Services
(CERTS) Program,’’ (accessed on July 26, 2021), available at https://home.treasury.gov/policy-
issues/coronavirus/assistance-for-american-industry/coronavirus-economic-relief-for-transpor-
tation-services, and ‘‘Airline and National Security Relief Programs,’’ accessed on July 26, 2021,
available at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-american-industry/
airline-and-national-security-relief-programs; Federal Transit Administration, ‘‘Novel
Coronavirus (COVID–19)’’ (accessed on July 26, 2021), available at https://www.transit.dot.gov/
coronavirus; National Railroad Passenger Corporation (AMTRAK) Office of Inspector General,
GOVERNANCE: Amtrak Continues to Demonstrate Good Stewardship of Pandemic Relief Funds,
OIG–MAR–2021–009, (May 12, 2021), available at https://amtrakoig.gov/sites/default/files/re-
ports/OIG-MAR-2021-009%20Relief%20Act.pdf; GAO, COVID–19: Continued Attention Needed to
Enhance Federal Preparedness, Response, Service Delivery, and Program Integrity, GAO–21–551,
(July 2021), available at https://www.gao.gov/assets/gao-21-551-highlights.pdf; Federal Aviation
Administration, ‘‘Information for Airports about COVID–19,’’ (accessed on July 26, 2021), avail-
able at https://www.faa.gov/airports/speciallprograms/covid-19-airports; House Committee on
Transportation and Infrastructure, ‘‘Chair DeFazio Applauds New Round of Aid for the Hard-
Hit Transportation Sector in Omnibus and COVID Relief Legislation,’’ December 22, 2020, avail-
able at https://transportation.house.gov/news/press-releases/chair-defazio-applauds-new-round-of-
aid-for-the-hard-hit-transportation-sector-in-omnibus-and-covid-relief-legislation-; FEMA, 100
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These agencies also conduct other pandemic response and recovery functions. For
example, FEMA helped supply states and localities with personal protective equip-
ment, distributed vaccine, and testing supplies, and reimbursed for many activities
tied to the COVID–19 pandemic response.3 Within DOT, the Federal Aviation Ad-
ministration (FAA), the Federal Transit Administration (FTA), and other depart-
ment components provided pandemic-related guidance and support to their respec-
tive modes to help keep employees and passengers on our nation’s transportation
systems safe.4
PART I OF THE HEARING: OVERSIGHT OF THE FEDERAL RESPONSE
During Part I of this hearing series, the Committee heard testimony from the
Government Accountability Office (GAO), the Department of Transportation Office
of Inspector General (DOT OIG), the Department of Homeland Security Office of In-
spector General (DHS OIG), and the Pandemic Response Accountability Committee
(PRAC).5 These witnesses discussed the work they have done to monitor agencies’
use of COVID–19 relief and response funds, assess the federal government’s actions,
policies, and programs to respond to COVID–19, and identify areas for improve-
ment.
IMPACT OF FEDERAL COVID–19 RESPONSE AND RELIEF EFFORTS
The policies and programs the federal government has implemented over the
course of the pandemic have had wide-ranging and significant impacts. States and
localities received assistance to help vaccinate their residents.6 Businesses and pub-
lic sector agencies retained workers that they otherwise would have laid off.7 The
nation’s transportation systems continued to operate safely, providing transpor-
tation for essential workers and others.8 Moreover, the economy as a whole is begin-
ning to recover as the economy opens back up with gross domestic product expected
to show an increase this year after dropping to an annual rate of 31.4 percent in
Q2 2020.9 However, there are concerns about the effect of inflation on this recov-
ery.10 The current Consumer Price Index (CPI) rose 5.3 percent over the year ending
in August 2021.11
FEMA’s Assistance to States, Localities, Tribes, Territories, and Individuals
The COVID–19 pandemic posed an unprecedented challenge to the disaster re-
sponse capabilities of states, localities, tribes, and territories. As the lead federal
agency for the COVID–19 response, FEMA has undertaken expansive efforts to help
them, and to assist individuals suffering from the economic hardships of the pan-
demic.12 Since January 2020, FEMA has taken the following actions, among others:
Days of FEMA and Our Partners in Action (April 30, 2021), available at https://www.fema.gov/
blog/100-days-fema-and-our-partners-action.
3 FEMA, Pandemic Response to Coronavirus Disease 2019 (COVID–19): Initial Assessment Re-
port, (January 2021), available at https://www.fema.gov/sites/default/files/documents/
femalcovid-19-initial-assessment-reportl2021.pdf;
4 FTA, ‘‘FTA COVID–19 Resource Tool’’ (May 7, 2021), available at https://
www.transit.dot.gov/regulations-and-programs/safety/fta-covid-19-resource-tool; and FAA,
Coronavirus Guidance and Resources from FAA (April 19, 2021), available at https://
www.faa.gov/coronavirus/guidancelresources/.
5 The CARES Act established the Pandemic Response Accountability Committee (PRAC) as a
committee of the Council of the Inspectors General on Integrity and Efficiency (CIGIE), which
is composed of inspectors general from across the government. See https://
www.pandemicoversight.gov/our-mission/about-the-prac; CARES Act, Pub. L. No. 116–136
(2020), Sec. 15010.
6 FEMA, 100 Days of FEMA and Our Partners in Action (April 30, 2021), available at https://
www.fema.gov/blog/100-days-fema-and-our-partners-action.
7 General Aviation Manufacturers Association, Protecting Aviation Manufacturing and Mainte-
nance Jobs, (March 10, 2021), available at https://gama.aero/news-and-events/press-releases/pro-
tecting-aviation-manufacturing-and-maintenance-jobs/, Amalgamated Transit Union, Relief on
the way for transit and working families with American Rescue Plan (March 10, 2021), available
at https://www.atu.org/media/releases/atu-relief-on-the-way-for-transit-and-working-families-
with-american-rescue-plan.
8 Id.
9 Congressional Research Service, COVID–19 and the U.S. Economy (May 11, 2021), available
at https://crsreports.congress.gov/product/pdf/R/R46606.
10 Rachel Siegel, Biden Says Fed ‘should take whatever steps it deems necessary’ to respond
to inflation, Wash. Post. (July 19, 2021), available at https://www.washingtonpost.com/us-policy/
2021/07/19/biden-powell-inflation-economy/.
11 U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index (Sept. 14,
2021), available at https://www.bls.gov/news.release/cpi.nr0.htm.
12 FEMA, 100 Days.
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• Provided more than $4.75 billion in support of vaccination efforts in commu-
nities across the country.13
• Worked with its federal, state, and local partners to establish 1,732 new com-
munity vaccination centers.14
• Coordinated with the Department of Health and Human Services to deliver, as
of September 2020, 249 million N95 masks, 1.1 billion surgical masks, 46.7 mil-
lion eye and face shields, 432 million surgical gowns or coveralls, and more than
28.6 billion gloves.15
• Provided funding to nonprofits, faith-based organizations, and government enti-
ties that provide shelter, food, transportation, COVID–19 testing, and medical
care to their communities.16
• Obligated, as of the end of September 2020, $42.6 billion as a supplemental ben-
efit for unemployment insurance benefits.17
• In January 2021, the federal cost-share for a majority of eligible FEMA assist-
ance for all COVID–19 related Emergency and Major Disasters was expanded
to 100 percent and made applicable to costs of eligible activities from the begin-
ning of the pandemic incident period on January 20, 2020, to September 30,
2021.18
Aviation Industry
As a result of the pandemic, air passenger demand fell far below prior years and,
according to some industry analysts, a return to pre-pandemic traffic levels might
not occur until 2023.19 The number of passengers going through Transportation Se-
curity Administration (TSA) checkpoints increased in 2021 but remains below pre-
pandemic levels. In August 2021, for example, TSA traveler throughput was almost
23 percent lower than in August 2019.20 As a result of this decline in passenger de-
mand and other factors, U.S. passenger airlines recorded $4.3 billion in pre-tax
losses in the first half of 2021 and are projecting pre-tax losses of $18 billion this
year, according to Airlines for America.21 Similarly, Airports Council International–
North America (ACI–NA) expects that U.S. airports will lose at least $40 billion by
March 2022 because of the prolonged decline in commercial aviation traffic.22
The Payroll Support Program (PSP) was created to prevent layoffs in this hard-
hit sector. Congress has appropriated $63 billion to this program, which provides
financial assistance to airlines, manufacturers, and other related businesses for em-
ployee wages, salaries, and benefits.23 According to the General Aviation Manufac-
turers Association, PSP has allowed companies to keep highly skilled workers in the
13 Id.
14 Id.
15 Id.
16 Id.
17 FEMA, Pandemic Response to Coronavirus Disease 2019 (COVID–19): Initial Assessment Re-
port. FEMA’s Lost Wages Assistance (LWA) program was unprecedented because it was insti-
tuted as a new program despite another discrete Stafford Act section on disaster unemployment
assistance (Sec. 410). FEMA failed to provide the Committee with a legal justification memo ex-
plaining why or how LWA was administered as it was despite section 410.
18 FEMA, FEMA Statement on 100% Cost Share (February 3, 2021) available at https://
www.fema.gov/press-release/20210203/fema-statement-100-cost-share.
19 GAO, COVID–19 Pandemic: Preliminary Observations on Efforts toward and Factors Affect-
ing the Aviation Industry’s Recovery, GAO–21–412T (March 2, 2021) available at https://
www.gao.gov/assets/gao-21-412t.pdf.
20 See, e.g., TSA, TSA Checkpoint Travel Numbers, (last accessed September 3, 2021), avail-
able at https://www.tsa.gov/coronavirus/passenger-throughput.
21 Airlines for America, Impact of COVID–19: Data Updates, (September 2, 2021) (last
accessed September 3, 2021), available at https://www.airlines.org/dataset/impact-of-covid19-
data-updates/; Statement of Mr. Nicholas E. Calio, President and Chief Executive Officer, Air-
lines For America, ‘‘COVID–19’s Effects on U.S. Aviation and The Flight Path to Recovery’’ be-
fore the United States House Committee on Transportation and Infrastructure Subcommittee
on Aviation, (March 2, 2021) available at https://transportation.house.gov/imo/media/doc/
Calio%20Testimony.pdf.
22 Airports Council International, Airports Council Applauds Passage of $8 Billion in COVID–
19 Relief for Airports (March 10, 2021) (last accessed July 19, 2021), available at https://
airportscouncil.org/presslrelease/airports-council-applauds-passage-of-8-billion-in-covid-19-re-
lief-for-airports/
23 House Committee on Transportation and Infrastructure, Chair DeFazio Applauds Inclusion
of T&I Provisions, Including Payroll Support Program Extension, in House Democrats’ Latest
COVID–19 Relief Package, (September 29, 2020), available at https://transportation.house.gov/
news/press-releases/chair-defazio-applauds-inclusion-of-tandi-provisions-including-payroll-sup-
port-program-extension-in-house-democrats-latest-covid-19-relief-package; U.S. Department of
the Treasury, Airline and National Security Relief Programs (accessed on May 7, 2021), avail-
able at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-american-industry/air-
line-and-national-security-relief-programs.
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industry and supported some of the smaller companies that needed assistance to
maintain operations.24 Airlines were able to preserve the jobs of flight attendants,
pilots, mechanics, gate agents, and others, according to Airlines for America.25
Congress also appropriated about $20 billion in grant assistance to help airports
respond to the COVID–19 pandemic, including funds for operating expenses, debt
service, and other expenses.26 The additional grants are helping airports offset some
of the financial damage from the abrupt, unexpected drop in air travel that resulted
from precautions to limit the spread of COVID–19, according to ACI–NA.27
Transit Agencies
COVID–19 and the resulting shelter-in-place orders, business closures, suspension
of tourism, increasing unemployment, and increasing numbers of employees working
from home significantly decreased public transit and commuter rail ridership.28 Na-
tionally, transit ridership in 2020 was down a historic 79 percent at the start of the
pandemic compared to 2019 levels.29 Transit agencies anticipate long-term con-
sequences from the COVID–19 pandemic, including reduced demand for service, in-
creased operating costs, and limited state and local funding.30 According to APTA,
when the economy does begin to recover, transit agencies will still be challenged
with severe fiscal constraints as a result of physical distancing requirements that
reduce vehicle capacity, increased costs of facility and vehicle cleaning and disinfec-
tion, and decreased ridership due to the dramatic increase in telework.31
The CARES Act and subsequent pandemic relief funding have provided about
$67.25 billion in grant assistance to help transit agencies manage these fiscal con-
straints.32 So far, $37.94 billion, or 56 percent of the funds, has been obligated and
$23.45 billion, or 35 percent, has been spent.33 Federal relief funds also allowed
transit agencies to keep critical service running, avoid layoffs, and provide workers
and riders with COVID–19 protections.34 As a result, some transit agencies across
the country have restored previously reduced service or have canceled plans to fur-
ther cut service.35 Transit agencies have also used the funds to mitigate the spread
of COVID–19, including through enhanced cleaning and sanitation and social
distancing.36 Further, restoring transit service is expected to help the nation’s eco-
nomic recovery, such as in New York City, where the economy depends on trains
and buses to carry riders to businesses, including theaters, retail stores, and res-
taurants, that have been crippled by the pandemic.37
24 General Aviation Manufacturers Association, Protecting Aviation Manufacturing and Main-
tenance Jobs, (March 10, 2021), available at https://gama.aero/news-and-events/press-releases/
protecting-aviation-manufacturing-and-maintenance-jobs/.
25 Airlines for America, Statement from A4A CEO and President Nicholas E. Calio on the Pas-
sage of the American Rescue Plan (March 10, 2021), available at https://www.airlines.org/news/
statement-from-a4a-ceo-and-president-nicholas-e-calio-on-the-passage-of-the-american-rescue-
plan/.
26 GAO, COVID–19: Sustained Federal Action Is Crucial as Pandemic Enters Its Second Year,
GAO–21–387 (March 31, 2021) available at https://files.gao.gov/reports/GAO-21-387/index.html.
27 Airports Council International, Airports Council Statement on CARES Act Grants (last
accessed July 19, 2021) available at https://airportscouncil.org/presslrelease/airports-council-
international-north-america-statement-on-cares-act-grants/
28 Abby Vesoulis, The Future of American Public Transit Depends on Congress, Time (Decem-
ber 17, 2020), available at https://time.com/5921917/mass-transit-covid-congress/.
29 American Public Transportation Association, The Impact of the COVID–19 Pandemic on
Public Transit Funding Needs in the U.S. (January 27, 2021), available at https://www.apta.com/
wp-content/uploads/APTA-COVID-19-Funding-Impact-2021-01-27.pdf.
30 Supra, n. 9, GAO–21–387.
31 American Public Transportation Association, The Impact of the COVID–19 Pandemic on
Public Transit Funding Needs in the U.S. (January 27, 2021), available at https://www.apta.com/
wp-content/uploads/APTA-COVID-19-Funding-Impact-2021-01-27.pdf.
32 This includes $25 billion from the CARES Act, $14 billion from the Consolidated Appropria-
tions Act, 2021, and $28.25 billion from the American Rescue Plan. See https://
www.transportation.gov/mission/budget/usdot-covid-19-relief-funding.
33 U.S. Department of Transportation COVID–19 Relief Funding Status (last updated Sept. 13,
2021), available at https://www.transportation.gov/mission/budget/usdot-covid-19-relief-funding.
34 Amalgamated Transit Union, Relief on the way for transit and working families with Amer-
ican Rescue Plan (March 10, 2021) available at https://www.atu.org/media/releases/atu-relief-on-
the-way-for-transit-and-working-families-with-american-rescue-plan.
35 Christina Goldbaum and Pranshu Verma, Transit Got $30 Billion in Stimulus Aid. What
Does That Mean for Riders?, The New York Times (March 15, 2021), available at https://
www.nytimes.com/2021/03/15/nyregion/biden-stimulus-public-transportation.html.
36 Supra, n. 9, GAO–21–387.
37 Goldbaum and Verma, Transit Got $30 Billion.
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Other Transportation Sectors
Operators of motorcoaches, school buses, and passenger vessels have also suffered
the financial effects of lower demand for their services due to the pandemic. For ex-
ample, though passenger ships operating exclusively inside the United States have
begun to resume operations, virtually the entire U.S. domestic commercial pas-
senger fleet, including overnight excursions, day charters, and tours, was forced to
shut down for a year.38 Companies operating commuter shuttle buses and private
bus charters also were forced to suspend service due to lack of passengers, and some
went out of business entirely, according to the American Bus Association.39
The Coronavirus Economic Relief for Transportation Services (CERTS) Program
was created to support companies such as motorcoach, school bus, passenger vessel,
and pilot vessel companies that were affected by the COVID–19 pandemic.40 Under
the program, up to $2 billion in grants is made available to eligible companies that
certify they have experienced an annual revenue loss of 25 percent or more as a di-
rect or indirect result of COVID–19.41 Grant funds administered through the
CERTS program are primarily used to cover payroll costs but may also be used to
cover the acquisition of services, supplies, and the cost of operating and maintaining
equipment, among other things.42 Applications for CERTS grants were due to Treas-
ury by July 19, 2021, and grants will be paid out with two payments, the first rep-
resenting approximately 80 percent of the award amount, with the remaining 20
percent to be paid out to the extent funds are available.43 The first grant agree-
ments were made on August 13, 2021, with 1,327 grant agreements and first pay-
ments issued as of September 1, 2021.44
Federal Requirements for Masking on Transportation
In addition to providing financial assistance to mitigate the pandemic’s economic
impact, the federal government also took action to promote mask-wearing on trans-
portation systems as a way to help reduce the spread of the virus. In January 2021,
the Centers for Disease Control (CDC) issued an order requiring the wearing of
masks by all passengers and workers on public conveyances (e.g., airplanes, ships,
ferries, trains, subways, buses, taxis, and rideshares) in the United States.45 Shortly
38 Letter from Passenger Vessel Association to Speaker Nancy Pelosi (April 8, 2020), available
at http://www.passengervessel.com/downloads/letters/2020-CARES-ACT-2-Speaker-Pelosi.pdf;
The Maritime Executive, American Coastal and River Cruising is Resuming (March 16, 2021),
available at https://www.maritime-executive.com/article/american-coastal-and-river-cruising-is-
resumming.
39 American Bus Association, New Report Details Motorcoach Industry’s Dire Situation (August
10, 2020), available at https://www.buses.org/news/article/new-report-details-motorcoach-indus-
trys-dire-situation.
40 U.S. Department of the Treasury, Coronavirus Economic Relief for Transportation Services
(CERTS) Program, available at https://home.treasury.gov/policy-issues/coronavirus/assistance-
for-american-industry/coronavirus-economic-relief-for-transportation-services.
41 Id., and Guidelines for the Coronavirus Economic Relief for Transportation Services
(CERTS) Grant Program (May 6, 2021), available at https://home.treasury.gov/policy-issues/
coronavirus/assistance-for-american-industry/coronavirus-economic-relief-for-transportation-serv-
ices.
42 U.S. Department of the Treasury, Coronavirus Economic Relief for Transportation Services
(CERTS) Program and Guidelines for the Coronavirus Economic Relief for Transportation Serv-
ices (CERTS) Grant Program (May 6, 2021), available at https://home.treasury.gov/policy-issues/
coronavirus/assistance-for-american-industry/coronavirus-economic-relief-for-transportation-serv-
ices. According to the CERTS guidelines Treasury published on May 6, 2021, to be eligible for
payments under this program, companies must be established or organized in the United States
or pursuant to federal law and must have a majority of employees in the United States, among
other things. Further, passenger vessel companies must carry out their principal business using
one or more passenger vessels of the United States (as each is defined in 46 USC § 2101) that
(a) are for hire with a capacity of 6 to 2,400 passengers and (b) have U.S. Coast Guard issued
Certificates of Inspection.
43 U.S. Department of the Treasury, Coronavirus Economic Relief for Transportation Services
(CERTS) Program and Guidelines for the Coronavirus Economic Relief for Transportation Serv-
ices (CERTS) Grant Program (May 6, 2021, updated August 12, 2021) (accessed September 3,
2021), available at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-american-
industry/coronavirus-economic-relief-for-transportation-services
44 U.S. Department of the Treasury, Coronavirus Economic Relief for Transportation Services
(CERTS) Grant Payments, (Data set published September 1, 2021) (accessed on September 3,
2021), available at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-american-
industry/coronavirus-economic-relief-for-transportation-services/Coronavirus-Economic-Relief-for-
Transportation-Services-CERTS-Grant-Payments
45 CDC, ‘‘Order Under Section 361 of the Public Health Service Act (24 U.S.C. 264) and 42
Code of Federal Regulations 70.2, 71.31(b), 71.32(b) Requirement for Persons to Wear Masks
While on Conveyances and at Transportation Hubs,’’ January 29, 2021) available at https://
www.cdc.gov/quarantine/pdf/Mask-Order-CDClGMTFl01-29-21-p.pdf.
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thereafter, the TSA issued Security Directives and an Emergency Amendment to
implement the CDC order and President Biden’s Executive Order on Promoting
COVID–19 Safety in Domestic and International Travel that required passengers
and workers to wear face masks ‘‘in airports, bus and rail stations, as well as while
on passenger aircraft, public transportation, passenger railroads, and over-the-road
buses operating on scheduled fixed-routes.’’ 46 The TSA directives currently expire
January 18, 2022.47 The operating administrations within DOT have also taken
steps to ensure that operators under their purview implement this requirement. For
example, in February 2021, FTA updated its Master Agreement for grantees to in-
clude compliance with CDC’s mask order, and in May 2021, FAA released interim
health and occupational safety guidance for airlines discussing requirements for
mask-wearing.48
CONCLUSION
These federal relief efforts have been critical to the nation’s economic and public
health recovery from COVID–19. They helped to get needed supplies to states and
local governments and financial relief to transportation workers and U.S. businesses
impacted by the pandemic. Having heard from federal government witnesses on
their oversight work to monitor the use of COVID–19 relief and response funds in
Part I of this hearing series in July 2021, Members will now have an opportunity
to discuss the impact of the federal government’s actions on the transportation in-
dustry and its workers.
WITNESS LIST
• Mr. Paul Skoutelas, President & CEO, American Public Transportation Associa-
tion (APTA)
• Mr. Juan Ortiz, Director of Homeland Security and Emergency Management,
City of Austin, Texas—on behalf of the International Association of Emergency
Managers (IAEM)
• Dr. Michael J. Boskin, T.M. Friedman Professor of Economics and Senior Fel-
low, Hoover Institution, Stanford University
• Dr. Wendy Edelberg, PhD, Director, The Hamilton Project, The Brookings Insti-
tution
• Mr. John Samuelsen, Transport Workers Union of America (TWU)
46 TSA, ‘‘TSA to implement Executive Order regarding face masks at airport security check-
points and throughout the transportation network,’’ (January 31, 2021), available at https://
www.tsa.gov/news/press/releases/2021/01/31/tsa-implement-executive-order-regarding-face-
masks-airport-security.
47 TSA, ‘‘Face Mask Requirements: Security Directives and Emergency Amendment,’’ (last
accessed September 7, 2021), available at https://www.tsa.gov/sd-and-ea.
48 FTA, ‘‘Master Agreement: For Federal Transit Administration Agreements authorized by 49
U.S.C. chapter 53 and Title 23, United States Code (Highways), as amended by the Fixing
America’s Surface Transportation (FAST) Act, the Moving Ahead for Progress in the 21st Cen-
tury Act (MAP–21), the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Leg-
acy for Users (SAFETEA–LU), the SAFETEA–LU Technical Corrections Act of 2008, or other
federal laws that FTA administers,’’ (February 9, 2021) available at https://www.transit.dot.gov/
sites/fta.dot.gov/files/2021-02/FTA-Master-Agreement-v28-2021-02-09.pdf; FAA, ‘‘Safety Alert for
Operators: COVID–19: Updated Interim Occupational Health and Safety Guidance for Air Car-
riers and Crews,’’ (May 25, 2021) available at https://www.faa.gov/otherlvisit/avia-
tionlindustry/airlineloperators/airlinelsafety/safo/alllsafos/media/2020/SAFO20009.pdf.
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Mr. DEFAZIO. The Committee on Transportation and Infrastruc-
ture will come to order.
I ask unanimous consent that the chair be authorized to declare
a recess at any time during today’s hearing. Without objection, so
ordered.
As a reminder, please keep your microphone muted unless speak-
ing. Should I hear inadvertent background noise, I will request the
Member please mute their microphone.
To insert a document into the record, please email it to
DocumentsT&I@mail.house.gov.
In July, we held the first part of this hearing examining over-
sight of the Government’s response to the COVID–19 pandemic
within the purview of this committee.
Today, we will hear about the impact that the Government’s
COVID–19 relief funding and response have had on the transpor-
tation sector and its workers, on the ability of States and localities
to support their communities with COVID–19 testing and vaccina-
tion, and on our Nation’s economy.
We will also hear from our witnesses about how these efforts can
be improved to be even more effective in the future.
The pandemic has had devastating health consequences for our
Nation and the world. More than 42 million Americans have been
infected; 675,000 have died, and the Federal Government was
called upon to maintain a national-scale response to this crisis for
an unprecedented period of time.
The Federal Emergency Management Agency has led the way in
protecting the health and well-being of our communities. They have
helped States and local governments establish community vaccina-
tion centers, provided relief for COVID testing, delivered tens of
millions of N95 masks, surgical gowns, and other personal protec-
tive equipment.
States and local governments are now receiving reimbursement
from FEMA, Federal Emergency Management Agency, for 100 per-
cent of their costs for the safe opening and operation of schools,
hospitals, shelters, and transit systems.
In addition, to prevent the further spread of the virus and pro-
tect the health of transportation workers and passengers, President
Biden has ordered masks to be worn on transportation modes, in-
cluding buses, airplanes, ferries, and other forms of transportation.
It not only hit the health of our citizens; it obviously directly im-
pacted our economy. Commercial airline demand fell to virtually
nothing, affecting revenues for airlines, airports, and associated
businesses.
Today, passenger levels are still 25 percent lower than before the
pandemic and not looking too good in the near term. Transit rider-
ship on buses, subways, and commuter vanpools across the country
has been decimated. Here in DC, ridership on Metrorail decreased
90 percent.
These declines led to devastating economic consequences for
local, regional and State governments, transit agencies, airlines,
and airports, among many others.
Companies operating shuttle buses and private bus charters
were not spared. Some were forced to suspend service due to lack
of passengers. Some went out of business altogether. It will take
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our transportation networks a very long time to recover financially,
and they may be forever altered by changing workplace practices.
Congress took unprecedented actions to help cushion the eco-
nomic blow to these transportation sectors. The programs Congress
created and the funding it authorized helped transit and bus opera-
tors, airlines, airports, and other companies provide paychecks to
their employees and essential transportation services to commu-
nities across the country.
Federal relief funds administered by the Federal Transit Admin-
istration allowed transit agencies to keep critical service running,
avoid layoffs, and provide workers and bus riders with COVID–19
protections.
In aviation, the Payroll Support Program provided financial as-
sistance to airlines—actually, to their employees, administered by
the airlines—manufacturers, and other related businesses for
wages, salaries, and benefits.
Airports, which also suffered revenue losses, received additional
grant assistance from the Federal Aviation Administration for costs
such as salaries and debt service.
Congress also created the Coronavirus Economic Relief for Trans-
portation Services, or CERTS Program, so that motorcoach, school-
bus, and passenger vessel companies affected by the pandemic can
maintain their payroll and hire back employees who were laid off.
These and other pandemic relief programs have helped thou-
sands upon thousands of workers and their families.
According to the Bureau of Labor Statistics, so far this year, job
growth has averaged nearly 600,000 new jobs each month, al-
though not last month.
The economy has also been growing, due in part to a boost from
pandemic relief spending with gross domestic product expected to
show a substantial increase this year.
Governors, mayors, local officials, labor, and business have all
applauded the support Congress provided through legislation that
stopped the hemorrhaging of the economy and helped to fight the
COVID epidemic.
Today we will hear from witnesses about how the Federal Gov-
ernment’s pandemic assistance has helped transportation workers,
emergency managers, and the Nation’s economy.
We will also hear their views on how the Federal Government
can do a better job as it continues to help our country recover from
the impacts of the COVID–19 pandemic and how it can be better
prepared to respond to future disasters.
I thank all our witnesses for being here today. I look forward to
your testimony.
[Mr. DeFazio’s prepared statement follows:]
f
Prepared Statement of Hon. Peter A. DeFazio, a Representative in Con-
gress from the State of Oregon, and Chair, Committee on Transportation
and Infrastructure
In July, we held the first part of this hearing examining oversight of the govern-
ment’s response to the COVID–19 pandemic. Today we will hear about the impact
that the government’s COVID–19 relief funding and response efforts have had on
the transportation sector and its workers, on the ability of states and localities to
support their communities with COVID–19 testing and vaccination, and on our na-
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tion’s economy. We will also hear from our witnesses about how these efforts can
be improved to be even more effective going forward.
The COVID–19 pandemic has had devastating public health consequences for our
nation and the world. In the United States, it has infected more than 42 million
Americans and resulted in over 675,000 deaths. The federal government was called
upon to maintain a national-scale response to this crisis for an unprecedented period
of time.
The Federal Emergency Management Agency (FEMA) has led the way in pro-
tecting the health and well-being of our communities. They have helped states and
local governments establish community vaccination centers, provided funding for
COVID–19 testing, and delivered tens of millions of N–95 masks, surgical gowns,
and other personal protective equipment. States and local governments are now re-
ceiving reimbursement from FEMA for 100 percent of their costs for the safe open-
ing and operation of schools, hospitals, shelters, and transit systems. In addition,
to prevent the further spread of the virus and protect the health of transportation
workers and passengers, President Biden ordered masks to be worn on transpor-
tation modes, including buses, airplanes, ferries, and other forms of transportation.
The pandemic wreaked havoc not only on the health of our citizens, but also on
the health of our economy, and transportation was one of the hardest-hit sectors.
Commercial airline demand fell drastically, affecting revenues for airlines, airports,
and associated businesses. Today, passenger levels in the U.S. are still about 25 per-
cent lower than before the pandemic.
Transit ridership on buses, subways, and commuter vanpools across the country
has been decimated. Here in Washington, D.C., ridership on metro rail decreased
nearly 90 percent in the spring of 2020. These declines led to devastating economic
consequences for local, regional, and state governments, transit agencies, airlines,
and airports, among many others.
Companies operating commuter shuttle buses and private bus charters were not
spared. Some were forced to suspend service due to lack of passengers, and some
went out of business entirely. Our transportation networks will take a long time to
recover financially, and they may be forever altered by changing workplace prac-
tices.
Congress took unprecedented actions to help cushion the economic blow to these
transportation sectors. The programs Congress created and the funding it author-
ized helped transit and bus operators, airlines, airports, and other companies pro-
vide paychecks to their employees and essential transportation services to commu-
nities across the country. Federal relief funds administered by the Federal Transit
Administration allowed transit agencies to keep critical service running, avoid lay-
offs, and provide workers and riders with COVID–19 protections.
In the aviation sector, the Payroll Support Program provided financial assistance
to airlines, manufacturers, and other related businesses for employee wages, sala-
ries, and benefits. Airports, which also suffered revenue losses, received additional
grant assistance from the Federal Aviation Administration for costs such as salaries
and debt service.
Congress also created the Coronavirus Economic Relief for Transportation Serv-
ices, or ‘‘CERTS,’’ program so that motorcoach, school bus, and passenger vessel
companies affected by the pandemic can maintain their payroll and hire back em-
ployees who were laid off.
These and other pandemic relief programs have helped thousands upon thousands
of workers and their families. According to the Bureau of Labor Statistics, so far
this year, job growth has averaged nearly 600,000 new jobs added each month. The
economy has also been growing, due in part to the boost from pandemic relief spend-
ing, with gross domestic product expected to show a substantial increase this year.
Governors, mayors and local officials, labor organizations, and business associations
have all applauded the support Congress provided through legislation that thwarted
the loss of American jobs, bolstered the economic security of U.S. small businesses,
and helped to slow the spread of the COVID–19 virus.
Today we will hear from our witnesses about how the federal government’s pan-
demic assistance has helped transportation workers, emergency managers, and the
nation’s economy. But I also hope to hear their views on how the federal government
can do a better job as it continues to help our country recover from the impacts of
the COVID–19 pandemic and how it can be better prepared to respond to future dis-
asters of this nature.
Thank you to all of our witnesses for being here today. I look forward to your tes-
timony. With that, I yield to Ranking Member Graves for his opening statement.
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Mr. DEFAZIO. With that, I yield to the ranking member, Mr.
Crawford.
Mr. CRAWFORD. I thank the chair and I just want to add a few
comments. The Federal Government has spent at least $5.9 trillion
to combat and respond to COVID–19. Much of this year’s $1.9 tril-
lion relief package, masqueraded as pandemic-related relief, was
really just throwing money at various Pelosi priorities.
House committees also just marked up another $3.5 trillion for
the majority’s reconciliation bill, which, if it is jammed through
Congress, will cost American taxpayers about $50,000 per house-
hold.
Despite throwing around all this money, we still haven’t done our
basic duty of funding the Government, which is hurtling toward a
shutdown.
This unchecked spending is directly contributing to rising infla-
tion, and Americans are feeling this hidden tax every day. We can-
not continue with inflationary increases in prices every month as
we have so far during the Biden Presidency.
Gasoline is up 42 percent. Bacon is up 17 percent. Beef is up
more than 12 percent. Eggs are up 10 percent. And the list goes
on.
What is worse is, despite the high cost of fighting this virus, we
still have done nothing to hold China accountable for it.
I look forward to hearing from our witnesses and thank them for
their patience and returning today. And with that, I yield back the
balance of my time.
[Mr. Crawford’s prepared statement follows:]
f
Prepared Statement of Hon. Eric A. ‘‘Rick’’ Crawford, a Representative in
Congress from the State of Arkansas
Thank you, Chair DeFazio.
The federal government has spent at least $5.9 trillion to combat and respond to
COVID–19.
Much of this year’s $1.9 trillion relief package masqueraded as pandemic-related
relief was really just throwing money at various Pelosi priorities.
House committees also just marked up another $3.5 trillion for the Majority’s rec-
onciliation bill, which, if it is jammed through Congress, will cost American tax-
payers about $50,000 per household.
Despite throwing around all this money, we still haven’t even done our basic duty
of funding the government, which is hurtling towards a shutdown.
This unchecked spending is directly contributing to rising inflation and Americans
are feeling this hidden tax every day.
We cannot continue with inflationary increases in prices every month as we have
so far during the Biden Presidency. Gasoline is up 42 percent. Bacon is up 17 per-
cent. Beef is up more than 12 percent. Eggs are up 10 percent, and the list goes
on.
What’s worse is despite the high cost of fighting this virus, we still have done
nothing to hold China accountable for it.
I look forward to hearing from our witnesses and thank them for their patience
and returning today.
I yield back the balance of my time.
Mr. DEFAZIO. I thank the gentleman for his brevity, and now we
will turn to our witnesses. We will have five witnesses: Mr. Paul
Skoutelas, president and CEO, American Public Transportation As-
sociation, APTA; Mr. Juan Ortiz, director of the Office of Emer-
gency Management and Homeland Security, city of Austin, on be-
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half of the International Association of Emergency Managers; Dr.
Michael J. Boskin, T.M. Friedman Professor of Economics and sen-
ior fellow at the Hoover Institution, Stanford University; Dr.
Wendy Edelberg, director of The Hamilton Project, the Brookings
Institution; and Mr. Greg Regan, the president of the Transpor-
tation Trades Department, AFL–CIO. Thank you for joining us
here today, and I look forward to your testimony.
Without objection, your full witness statement will be included in
the record, and with that, I would recognize Mr. Skoutelas for 5
minutes.
TESTIMONY OF PAUL P. SKOUTELAS, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, AMERICAN PUBLIC TRANSPORTATION
ASSOCIATION; JUAN MANUEL ORTIZ, DIRECTOR, OFFICE OF
EMERGENCY MANAGEMENT AND HOMELAND SECURITY,
CITY OF AUSTIN, TEXAS, ON BEHALF OF THE INTER-
NATIONAL ASSOCIATION OF EMERGENCY MANAGERS; MI-
CHAEL J. BOSKIN, PH.D., TULLY M. FRIEDMAN PROFESSOR
OF ECONOMICS AND WOHLFORD FAMILY SENIOR FELLOW,
HOOVER INSTITUTION, STANFORD UNIVERSITY, ON BEHALF
OF HIMSELF; WENDY EDELBERG, PH.D., DIRECTOR, THE
HAMILTON PROJECT, THE BROOKINGS INSTITUTION, ON BE-
HALF OF HERSELF; AND GREGORY R. REGAN, PRESIDENT,
TRANSPORTATION TRADES DEPARTMENT, AFL–CIO
Mr. SKOUTELAS. Good morning, Chairman DeFazio, Ranking
Member Graves, and members of the committee. Thank you for
this opportunity to testify today on the Federal Government’s
COVID–19 relief and its impacts on public transportation.
My name is Paul Skoutelas. I am the president and CEO of
APTA, the American Public Transportation Association. We are the
only association in North America that represents all modes of pub-
lic transit. We are the voice of public transportation for both public-
and private-sector members of our industry.
Public transportation has always been an essential service for
American families. It provides essential mobility options, supports
economic growth, improves the environment, makes our roads safer
for drivers and pedestrians, and has served critical roles during
natural disasters and other emergencies.
When the COVID–19 pandemic disrupted the lives of every
American, transit, once again, served as an essential lifeline. Public
transit systems brought healthcare professionals to the front lines,
delivering groceries and medicine to at-risk populations, and con-
necting essential workers to their places of work.
Some agencies even provided exceptional services, such as deliv-
ering COVID–19 tests, or retrofitting buses into Wi-Fi hotspots to
help students who would otherwise have difficulty accessing remote
learning.
As States and cities implemented stay-at-home orders and en-
couraged social distancing, ridership for many agencies fell to as
low as 20 percent of pre-pandemic ridership levels and many below
that.
Through it all, healthcare and other essential workers continued
to rely on transit to get to their critical jobs. Most significantly,
transit workers served as heroes on the front lines.
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The public transit industry directly employs some 450,000 work-
ers today, and I would be remiss if I did not mention the signifi-
cant toll that COVID–19 has had on transit agencies’ frontline em-
ployees. Five hundred forty-five transit workers have been lost to
COVID.
At the same time, the pandemic has devastated transit agency
budgets, and we are deeply grateful that Congress recognized tran-
sit’s essential role by passing emergency legislation to provide sig-
nificant support for transit operating costs.
According to a recent APTA survey, nearly one-half of transit
agencies stated that the COVID–19 emergency funding helped
them avoid a complete shutdown of public transit service.
In addition, more than 75 percent of agencies said that COVID
funding helped them avoid layoffs and furloughs. And the agencies
today are putting these emergency funds to work.
According to the Federal Transit Administration, public transit
agencies have obligated 98 percent of CARES Act funds. More than
half of the CRRSAA funds have been obligated, and more than one-
quarter of American Rescue Plan funds.
There should be no doubt that COVID relief funding is being well
spent and has been absolutely critical to the survival of transit
service during this public health emergency.
Public transit agencies are also helping to combat the pandemic
directly. Last spring, APTA created a health and safety commit-
ments program for public transportation agencies to implement in
their own communities.
The goal was simple—control the spread of COVID–19, keep the
riding public and our own workers healthy and safe, and win back
public trust.
The program consists of four commitments to specific practices
and policies for both transit agencies and transit users. They in-
clude following public health guidelines from official sources, pro-
tecting each other by taking appropriate precautions, keeping pas-
sengers informed and empowered to choose the safest times and
routes to ride, and putting health first by requiring riders and em-
ployees to avoid public transit if they have been exposed to
COVID–19 and feel ill.
More than 200 transit agencies participated in the program,
helping to protect millions of people every day, which is leading to
increased public confidence.
At the same time, public transit agencies have made it a priority
to do everything they can to help Americans get vaccinated.
Transit agencies have done everything from ensuring that their
transit employees had access to vaccines to helping the public get
to vaccines by establishing clinics onsite or providing free rides to
vaccine facilities.
The Federal emergency funding makes all of that possible.
Just as transit agencies have served Americans during this ongo-
ing public health emergency, transit is well-poised to be a key driv-
er of building a 21st-century transportation system that will ad-
dress the challenges of our time: economic recovery, equity, climate
change, and global competitiveness.
As the Nation emerges from the pandemic, transit ridership con-
tinues to climb each month. About 6 months ago, the ridership lev-
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els compared to pre-pandemic were about 41 percent; 3 months
ago, national transit ridership was at 50 percent of pre-pandemic
levels; and today, transit ridership is almost two-thirds, about 63
percent of 2019 levels.
We expect increasing transit ridership to continue as Americans
return to offices and become more comfortable resuming normal ac-
tivities in their communities.
As we look to the future, we urge Congress to provide the nec-
essary funding to address the $105 billion state-of-good-repair
backlog that exists which is needed to modernize our systems and
meet the growing and evolving demands of our communities, large
and small, all over the country.
APTA strongly supports the Infrastructure Investment and Jobs
Act, which makes critical investments in surface transportation, in-
cluding $107 billion for public transit——
Mr. DEFAZIO. Thank you, Mr. Skoutelas. If you could summarize
very briefly.
Mr. SKOUTELAS. Sure. Let me conclude with just three facts that
we always need to keep in mind with regard to transit investment.
Every dollar invested in public transportation [inaudible] in eco-
nomic returns; 50,000 jobs are created for every $1 billion of invest-
ment.
Thank you, Mr. Chairman, and I look forward to answering any
questions that the committee may have.
[Mr. Skoutelas’ prepared statement follows:]
f
Prepared Statement of Paul P. Skoutelas, President and Chief Executive
Officer, American Public Transportation Association
INTRODUCTION
Chairman DeFazio, Ranking Member Graves, and Members of the Committee on
Transportation and Infrastructure, on behalf of the American Public Transportation
Association (APTA) and its public- and private-sector member organizations that di-
rectly employ 450,000 transit workers and support several million private-sector
jobs, thank you for the opportunity to testify on ‘‘Assessing the Federal Govern-
ment’s COVID–19 Relief and Response Efforts and its Impact—Part II’’.
My name is Paul Skoutelas, and I am the President and Chief Executive Officer
of APTA, an international association representing all modes of public transpor-
tation—bus, paratransit, light rail, commuter rail, subways, waterborne services,
and high-performance intercity passenger rail.1 I am pleased to have the oppor-
tunity to discuss how public transit agencies have used federal COVID–19 emer-
gency funding during the ongoing pandemic.
TRANSIT’S ESSENTIAL ROLE DURING THE PANDEMIC
Transit has always been an essential service, providing mobility options for Amer-
icans, supporting economic growth, improving the environment, making our roads
safer for drivers and pedestrians, and serving critical roles during natural disasters
and other emergencies. When the COVID–19 pandemic disrupted the lives of every
American, transit served as an essential lifeline. Public transportation systems
brought healthcare professionals to the frontlines, delivered groceries and medicine
to at-risk populations, and connected essential workers to their places of work. Some
agencies even provided exceptional services such as delivering COVID–19 tests or
retrofitting buses into Wi-Fi hotspots to help students who would otherwise have
difficulty accessing remote learning.
1 APTA members include public transportation systems; planning, design, construction, and fi-
nance firms; product and service providers; academic institutions; state transit associations; and
state departments of transportation.
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Given official declarations to close businesses and impose stay-at-home orders, as
well as other measures such as a dramatic increase in remote work, public transit
agencies across the nation faced severe ridership declines and state and local rev-
enue losses. Public transportation continued to serve our communities despite sig-
nificantly increased operating costs and dramatically reduced sources of funding, in-
cluding fares and other revenues. In most places, fare collection was suspended for
safety reasons. State and local transit funding was diverted to address other
COVID-related needs. Most significantly, transit workers served as heroes on the
front lines. The public transit industry directly employs 450,000 workers, and I
would be remiss if I did not mention the significant toll that the COVID–19 pan-
demic has had on transit agencies’ frontline employees—545 transit workers have
been lost to COVID.
We thank Congress for recognizing transit’s essential role by passing emergency
legislation to provide significant support for transit operating costs that was essen-
tial for the very survival of many agencies. The Coronavirus Aid, Relief, and Eco-
nomic Security Act (CARES Act), the Coronavirus Response and Relief Supple-
mental Appropriations Act (CRRSAA), and the American Rescue Plan Act (ARP)
each provided critical support for public transportation. COVID relief funds helped
stabilize agency budgets, which allowed them to continue their capital and construc-
tion programs, maintain jobs, and help the economy recover.
According to a recent APTA survey, almost one-half of public transit agencies (44
percent) stated that COVID–19 emergency funding helped them avoid a complete
shutdown of service. In addition, the overwhelming majority of agencies said that
COVID–19 funding helped them avoid layoffs (77 percent) and furloughs (79 per-
cent).2
In addition, COVID–19 relief funding has enabled public transit agencies to ramp
up service as people start traveling more and return to offices. Today, two-thirds
of public transit agencies (65 percent) are operating at 75 percent or more of their
pre-pandemic service levels.3
Emergency federal funding was vital to keeping public transportation systems op-
erating, but this does not mean those dollars were used to simply maintain pre-pan-
demic functions. Transit agencies pivoted to address urgent needs during the pan-
demic, such as:
• Redesigning routes and revising schedules to better serve riders who most heav-
ily rely on transit;
• Keeping transit workers on the job, often deploying employees in different jobs
that had become priorities due to COVID–19;
• Reallocating resources to ensure essential workers—such as front-line respond-
ers, health care employees, pharmacists, hospital staff, grocery store clerks, and
community service providers—could reach their places of employment;
• Delivering meals and critical supplies to those without resources and carrying
individuals with chronic health issues to life-saving treatments; and
• Ensuring that vaccines were available to transit employees as soon as they were
eligible, and providing free, convenient travel to vaccination sites for the gen-
eral public.
Transit agencies are investing these emergency funds in services that are abso-
lutely vital in their communities. To date, public transit agencies have obligated 98
percent of CARES Act funding. Transit agencies have also obligated more than one-
half of CRRSAA funds and one-quarter of ARP funds. According to APTA’s survey,
one-half of responding agencies (51 percent) expect to exhaust all of their COVID–
19 relief funds by January 2023 and the vast majority of agencies (82 percent) ex-
pect to expend all of their funds within the following year.4
2 APTA Policy Brief, Covid Relief Funding Critical to Transit Survival (APTA Policy Brief)
(July 2021), at 2. This survey was conducted of APTA transit agency members in July 2021.
One hundred thirty-six (136) members responded to the survey, with those agencies carrying
more than three-quarters of U.S. transit ridership.
3 Id. at 1.
4 Id at. 3.
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* Please note that the percentages obligated represent the percentage of formula funds allocated under
the COVID–19 emergency funding acts.
There should be no doubt that COVID–19 emergency funding was critical to the
survival of transit service during the pandemic. Agencies that responded to our sur-
vey had this to say about the impact of COVID emergency funding:
• ‘‘COVID relief funding has prevented the outright cancelation of our commuter
bus program. It has also been a valuable tool to pay front-line staff to self-iso-
late/quarantine when they showed symptoms of COVID. As a result, we have
had no outbreaks amongst staff that have been tied to work.’’
• ‘‘The biggest benefit we saw was the preservation/continuation of employment
and pay for our employees and contract teams, and the provision of essential
service to our community (especially essential workers).’’
• ‘‘COVID-related funding has been a major factor in being able to pay for PPE,
purchase of ion electric cleaners, driver compartment plexiglass barriers, adding
bus/facility cleaners for heightened cleaning to keep our employees and the pub-
lic as safe as possible.’’
Finally, one agency summed it up as follows: ‘‘Receiving the CARES, CRRSAA,
and ARP monies literally saved our region’s public transportation system.’’
APTA members have also done their part in ensuring that their systems were
ready to welcome passengers back, as detailed below.
APTA SAFETY & HEALTH COMMITMENTS PROGRAM
At the outset of the pandemic, APTA members established a Mobility Recovery
& Restoration Task Force, which developed a Health & Safety Commitments Pro-
gram for public transportation agencies to implement in their own communities. The
goal was simple: control the spread of COVID–19, keep the riding public and our
own workers healthy and safe, and win back public trust. The APTA program con-
sists of four commitments to specific practices and policies for both transit agencies
and transit users to follow:
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More than 200 public transit agencies participate in this program, helping to pro-
tect millions of people every day.
Keeping buses on streets and trains on rails—where and when they were needed
most—was our mission, but we also needed to make sure these operations were safe
for passengers and transit employees.
As a result of our agencies’ concerted efforts, ridership continues to climb, albeit
slowly. According to the Federal Transit Administration (FTA), some smaller transit
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systems are reporting ridership nearing 80 percent or more of pre-pandemic levels.5
This is a positive development to see riders return as public transit is essential for
economic recovery and the nation’s well-being.
TRANSIT AGENCIES HELPING VACCINATE AMERICANS
Public transportation agencies and organizations are helping people get to
COVID–19 vaccination sites by providing free rides, and in some cases, transit fa-
cilities have become vaccination clinics. These efforts have been made possible be-
cause of federal emergency funding provided to the public transit industry. There
are countless examples of transit agencies going above and beyond the call of duty
to help in the vaccination effort, and I will describe a few here.
The Tri-State Transit Authority (TTA) (Huntington, WV) has partnered with the
Cabell-Huntington Health Department to provide free rides to and from any vaccine
clinic in Cabell County, available on any TTA bus or dial-a-ride service.
The Jacksonville Transportation Authority (JTA) (Jacksonville, FL) partnered
with a non-profit health center to provide ‘‘Wellness on Wheels’’, a mobile vaccina-
tion service to bring the COVID–19 vaccine directly to seniors and at-risk citizens
throughout Jacksonville, specifically targeting areas where there are gaps in health
equity.
In May, the North Carolina Department of Transportation (NCDOT) reported that
its state’s transit systems had taken more than 8,500 residents to vaccine appoint-
ments. It credited federal COVID–19 emergency funds for enabling 82 North Caro-
lina transit agencies to provide rides to vaccine sites.6
The Santa Clara Valley Transportation Authority (VTA) (San Jose, CA) offered
free rides on its buses and light rail to Levi’s Stadium in Santa Clara, which hosted
a mass vaccination site. VTA also increased the frequency of seven bus routes to
help relieve the impact of passenger pass-ups due to limited capacity necessitated
by the requirements to social distance.
Again, there are countless other examples of transit agencies supporting their
communities in this way, and the work is ongoing across the country.
TRANSIT’S ESSENTIAL ROLE IN REBUILDING OUR ECONOMY
As the nation emerges from the ongoing COVID–19 public health emergency,
transit is poised to be a key driver of building a 21st century transportation system
that will support economic recovery, address equity and climate change, and in-
crease our global competitiveness. Transit ridership continues to climb each month.
Three months ago, national transit ridership was at 50 percent of pre-pandemic lev-
els. Today, transit ridership is almost two-thirds (63 percent) of 2019 levels. Increas-
ing transit ridership is expected to continue as Americans return to offices and be-
come more comfortable resuming normal activities.
I again express our deep gratitude for the federal COVID–19 emergency funding
that supported operations during a time that posed an existential threat to public
transit. While the COVID–19 emergency support was designed to support the oper-
ating budgets of transit agencies,7 we look forward to continuing to work with Con-
gress to invest in transit capital programs. APTA strongly supports the Infrastruc-
ture Investment and Jobs Act (IIJA), which makes critical investments to surface
transportation infrastructure, including $107 billion for public transportation and
$102 billion for commuter rail, Amtrak, and other high-performance rail. APTA also
strongly supports this Committee’s title of the Build Back Better Act, which creates
a new, innovative program to provide $10 billion for competitive grants for public
transit access to affordable housing and to enhance mobility for low-income riders
and residents of disadvantaged communities.
Taken together, these critical investments in public transportation prioritize eq-
uity, health, job creation, and climate action. Investing in public transit will signifi-
5 See FTA Press Release, Americans Riding Public Transportation in Greater Numbers
[https://www.transit.dot.gov/about/news/americans-riding-public-transportation-greater-numbers]
(July 21, 2021).
6 According to NCDOT, ‘‘Since January, NCDOT and NCDHHS have been administering $2.5
million in Coronavirus Relief Funding to local transit agencies in every county. The funds are
being used to offset the operating costs associated with transit rides to and from vaccination
sites for people who are receiving or assisting someone in receiving the COVID–19 vaccine. To
date, 82 transit agencies have reported using the federal funds to take people to and from vac-
cine sites in North Carolina. Those agencies have traveled more than 100,000 miles to take peo-
ple to vaccine appointments.’’ https://www.ncdot.gov/news/press-releases/Pages/2021/05-11-2021-
transit-agencies-8500-vaccine-sites.aspx
7 According to APTA’s July 2021 survey, 90 percent of transit agencies have used their COVID
emergency funding exclusively or mostly for operations.
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cantly reduce greenhouse gas emissions, improve air quality and public health, and
help transform our nation’s transportation network for a sustainable future. To-
gether, the bills reflect key pillars of APTA’s Surface Transportation Authorization
Recommendations,8 addressing the $105 billion state-of-good-repair backlog and pro-
viding the necessary investment to meet the growing and evolving demands of our
communities.
We believe that passing both the IIJA and the Build Back Better Act will provide
the transformational investment in infrastructure that the country so desperately
needs to recover from the COVID–19 pandemic and thrive in the future.
CONCLUSION
On behalf of APTA, thank you for giving me the opportunity to testify about the
tremendous work that transit agencies have been doing throughout this pandemic.
Public transit will continue to be essential for our economic recovery. We stand
ready to work with you on these important infrastructure initiatives and other
issues related to public transportation.
Mr. DEFAZIO. OK. I thank the gentleman.
Mr. Ortiz, you are recognized for 5 minutes.
Mr. ORTIZ. Chair DeFazio, Ranking Member Graves, and mem-
bers of the committee, thank you for the opportunity to testify at
today’s hearing. My name is Juan Manuel Ortiz. I serve as the di-
rector of the city of Austin’s Homeland Security and Emergency
Management Department. I am testifying today on behalf of the
International Association of Emergency Managers, as well as the
city of Austin.
The city of Austin’s Office of Homeland Security and Emergency
Management is responsible for preparedness, response, recovery,
and mitigation for emergencies and disasters, among many other
services.
In the past 18 months, we have responded to a category 4 hurri-
cane, a devastating pandemic, a major winter storm that crippled
our State’s power grid, and many other emergencies.
My testimony today will provide examples of constructive com-
ments with the goal of strengthening Federal, State, and local
emergency management, and improving our ability to meet our
core mission in protecting our community in emergency situations.
Today, I will cover inconsistencies in the application of Federal
rules and law, the necessity for adequate funding for grant oper-
ations, and if time permits, supply chain management.
During the COVID–19 pandemic, providing temporary protective
shelters for Austin’s most vulnerable and at-risk residents proved
to be one of our most difficult and most expensive challenges.
In the wake of an outbreak at Austin’s primary congregate shel-
ter facility, the city took quick action and leased six hotels to pro-
vide noncongregate, protective shelter and isolation facilities for
people at high risk of severe disease from COVID–19, including
people experiencing homelessness.
The city implemented these shelter spaces on the established
rules and guidance from the CDC and FEMA, and staff worked
closely with FEMA region 6 to establish the noncongregate shelter
program in accordance with their policies and guidelines.
8 In October 2019, the APTA Board of Directors adopted APTA’s Recommendations on Surface
Transportation Law [https://www.apta.com/advocacy-legislation-policy/federal-legislative-issues/
authorization/]. The Recommendations detail a funding proposal and programmatic reforms that
will create or sustain more than two million jobs.
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Regrettably, it became very clear months into the process that al-
though the rules and guidance published by the agencies allowed
the local expenditures to protect our most vulnerable population,
our reimbursement from FEMA for the program was at risk be-
cause of the inconsistent enforcement of rules from regional FEMA
offices throughout the Nation.
After pursuing the program for over a year, we have received
strong indications from FEMA region 6 that our reimbursement re-
quest for our pandemic noncongregate shelter program may be de-
nied.
An adverse FEMA decision on noncongregate shelter reimburse-
ment poses serious risk to public health and our budget.
The city of Austin has spent $40 million in noncongregate shel-
ters, and as you can imagine, our frustration has grown with the
thought of no reimbursement as we have learned that expenditures
identical to ours are being reimbursed in other FEMA regions. This
showcases the inconsistencies in the application of laws across the
country.
It is critical that FEMA approve pandemic-related, noncon-
gregate shelter project applications and other requests uniformly
across all 10 FEMA regions. Consistency in the application of pol-
icy from FEMA on these decisions is critical to improving efforts to
protect our residents.
I recognize that I am addressing the authorizing committee and
that annual funding decisions are the responsibility of the Appro-
priations Committee, but I must include a discussion about our
funding, specifically regarding the Emergency Management Per-
formance Grant, EMPG, the Urban Area Security Initiative, UASI.
To improve the Federal, State, and local partnership and our
ability to meet our joint emergency missions, it is essential that
Congress increase funding for these core programs. EMPG and
UASI are the foundation of the local emergency management ef-
forts.
Regrettably, the sequester and the budget austerity that followed
the 2011 budget agreement did not spare these core programs, and
funding has not kept pace with population growth, inflation, and,
most importantly, need. Essentially, local governments are being
asked to do more with much less.
I know that you are all too familiar with what it means for a
community to be at the margins of inclusion in UASI. However,
Austin has not participated in UASI since Congress reduced fund-
ing for the program in fiscal year 2011.
Austin should be a UASI participant just as we were one decade
ago. For metropolitan areas such as ours, the best answer lies not
in tweaking the UASI threat risk assessment, but in Congress in-
creasing funding for the program to ensure that many more Ameri-
cans benefit from UASI.
Local emergency management programs are historically under-
staffed, most consisting of just one person, and are struggling to
keep up with the new demand placed upon them with the pan-
demic.
EMPG funding flows to the local communities through the State
as a subaward. However, there are no requirements for a State to
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allocate funds to local communities, and as a result, access to
EMPG funding varies from State to State.
Even in my State, which is one of the only to have a process to
support local programs, we have seen consistent reductions ranging
from 30 to 60 percent in funding over the past 10 years.
As you all know, the benefits of UASI and EMPG are consider-
able. Communities that are fortunate to participate in the program
are not just better prepared, equipped, and trained, but also able
to benefit from the regional collaboration and cooperation that the
UASI——
Mr. DEFAZIO. If you could summarize, please, sir.
Mr. ORTIZ. In conclusion, that concludes my testimony, and as I
mentioned previously, I am grateful for the opportunity to discuss
these issues with you today. My written testimony provides much
more detail on these issues as well as others. I am happy to answer
any questions you may have for me today. Thank you.
[Mr. Ortiz’s prepared statement follows:]
f
Prepared Statement of Juan Manuel Ortiz, Director, Office of Emergency
Management and Homeland Security, City of Austin, Texas, on behalf of
the International Association of Emergency Managers
INTRODUCTION
Chair DeFazio, Ranking Member Graves, and members of the Committee, thank
you for the opportunity to testify at today’s hearing. My name is Juan Manuel Ortiz.
I serve as the Director for the City of Austin’s Office of Homeland Security and
Emergency Management [https://www.austintexas.gov/department/homeland-secu-
rity-and-emergency-management].
I am testifying today on behalf of the International Association of Emergency
Managers (IAEM) [https://www.iaem.org/]. IAEM is the premier professional organi-
zation for emergency management, with more than 6,000 members worldwide. The
mission of IAEM is to advance our profession by promoting the principles of emer-
gency management; and, to serve our members by providing information, net-
working, and development opportunities. We are a non-profit educational organiza-
tion dedicated to promoting the ‘‘Principles of Emergency Management’’ and rep-
resenting those professionals whose goals are saving lives and protecting property
and the environment during emergencies and disasters. IAEM was founded in 1952
as the U.S. Civil Defense Council, becoming the National Coordinating Council of
Emergency Managers (NCCEM) in 1985, and the International Association of Emer-
gency Managers in 1997. Today, IAEM continues to drive the development of the
profession of emergency management through its promotion of the Principles of
Emergency Management [https://www.iaem.org/About/Principles-of-EM], Certified
Emergency Manager (CEM) Program [https://www.iaem.org/certification/intro] and
IAEM Scholarship Program [https://www.iaem.org/Resources/Scholarships]. The Stu-
dent Council [https://www.iaem.org/council/student/home] now has chapters at uni-
versities around the world and works to engage with future professionals as they
choose their career paths.
The City of Austin [https://www.austintexas.gov/] is a home rule local government
covering 271 square miles and serving nearly 1 million residents and more than 30
million annual visitors each year. Austin is the heart of one of our nation’s fastest
growing (32.4% population growth over the past decade) and most dynamic metro-
politan areas, which is home to 2.2 million people. In addition to state government,
the University of Texas, and major regional health care institutions, we are the
proud home of the Army Futures Command [https://www.army.mil/futures/
?from=org] and of numerous national and regional corporate headquarters, including
such well-known names as Apple, Dell, eBay, IBM, Oracle, NXP Semiconductors,
VRBO, Whole Foods, and Yeti. Austin annually hosts numerous events that draw
tens of millions of visitors, including major internationally known events such as
South by Southwest [https://www.sxsw.com/], the Formula 1 Aramco United States
Grand Prix [http://circuitoftheamericas.com/f1/tickets], and Austin City Limits
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[https://www.aclfestival.com/], in addition to countless other events that draw large
crowds and visitors from around the nation and the world.
The City of Austin Homeland Security and Emergency Management Office is one
of several public agencies charged with keeping our city and metropolitan area safe.
The 14 employees of our Office plan and prepare for emergencies, educate the public
about preparedness, develop volunteers, manage grant funding to improve homeland
security and public safety capabilities, coordinate emergency response and recovery,
support planned events, and work with public and partner organizations to protect
our whole community when it needs us the most. We were the first local emergency
management agency in Texas to earn full accreditation under the Emergency Man-
agement Accreditation Program, placing us among the nation’s leading emergency
management agencies. That distinction is the result of our broad-based work and
our innovative programs, such as Disaster Ready Austin [https://
www.austintexas.gov/department/homeland-security-and-emergency-management/
disaster-ready-austin], a collaborative initiative to educate and empower residents
to be prepared for emergencies and disaster that provides households, businesses,
and schools with emergency planning and preparedness tools, and a recognition of
our comprehensive emergency management program.
We are a comprehensive emergency management operation. In addition to plan-
ning and preparing for events that draw tens of millions of visitors and large
crowds, our work addresses all aspects of emergency management. Indeed, although
large events constitute a sizable portion of our workload, the top five hazards that
Austin and Central Texas residents face and that keep our staff perpetually busy
are floods (Austin is in the heart of ‘‘flash flood alley’’), wildfires, severe weather,
hazardous materials spills, and, especially over the past 18 months, a pandemic.
Our 2020 Annual Report [http://www.austintexas.gov/sites/default/files/files/
HSEM/2020%20Annual%20ReportlWeb.pdf] provides a good snapshot of our work.
Quoting from my opening message in the report:
‘‘2020 proved to be anything but a normal year, not only for emergency
management, but the Austin community with the challenges we faced. It
was a year that brought struggles for many but was also a year that saw
Austinites and other communities come together and lead the way in tack-
ling a global pandemic.
On March 1, 2020, the Austin-Travis County Emergency Operations Cen-
ter (A–TCEOC) was activated in response to COVID–19. In truly historical
times, emergency operations have now been sustained well into 2021—over
a yearlong activation. The COVID–19 response has brought together part-
ners and organizations across the region to provide support and care for in-
dividuals.
While COVID–19 was the headline for 2020, our staff has continually met
additional challenges head on as other events unfolded throughout the
year—staff pursued training and learning how to combat new emergencies
that our community faces and handled numerous severe weather events
ranging from extreme heat to bitter cold. Additionally, Austin became a
shelter for many Hurricane Laura evacuees.
In 2019, we began redevelopment our emergency plans to ensure that our
team maintains both its focus and readiness posture to mitigate, respond
to and recover from all-hazards emergencies that affect our community, and
that mission did not end with COVID–19. These processes carried on well
into 2020 as we adapted and modified plans to meet growing challenges and
is a process that will continue every year.
The lessons learned from 2020 will be invaluable to our vision of being
a disaster-prepared and resilient community and will shape the future of
emergency management responses.
The partnerships forged during the trying year will ensure that we are
more prepared than ever.’’ 1
In 2020, we added nearly 50 temporary staff to help us respond to COVID–19,
created a disaster reserve team to support response needs , logged 1.1 million re-
sponse hours, sheltered thousands of Gulf Coast residents displaced by category 4
Hurricane Laura, coordinated the regional response to record breaking cold that
crippled our state’s power grid, distributed 71,676 units of hand sanitizer, distrib-
uted nearly 12 million pieces of personal protective equipment, housed 536 severely
at-risk individuals in temporary protective shelter, housed more than 2,000 people
in an isolation facility for COVID–19, established an alternate care site for COVID–
1 http://www.austintexas.gov/sites/default/files/files/HSEM/2020%20Annual%20Reportl
Web.pdf
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19 patients, coordinated medical staffing to 31 area hospitals and launched a mobile
phone application to help residents be better prepared for disasters.
Of course, we do not do this on our own. In addition to our City of Austin and
our regional partners, our partnership with the Texas Division of Emergency Man-
agement (TDEM) and with the Federal Emergency Management Agency (FEMA)
are critical to our efforts. We greatly appreciate their partnership and their support
as our work would not be possible without it.
As this Committee and Congress look at how the federal government can better
support local emergency management efforts, my testimony will aim to provide con-
structive guidance with the aim of strengthening these partnerships and improving
our ability to meet our core mission.
RECENT LAWS: FACE ACT OF AND DISASTER RECOVERY REFORM ACT OF 2018
I would be remiss if I did not begin with a recognition of what Congress has done
in recent years to improve the federal-state-local emergency management partner-
ship. The Federal Advance Contracts Enhancement Act (FACE Act/PL 116–272) and
the Disaster Recovery Reform Act of 2018 (PL 115–254) made important improve-
ments to the federal-state-local emergency management partnership. The full Trans-
portation & Infrastructure Committee worked hard on these laws, and we deeply
appreciate those efforts.
Enacted in response to a 2018 General Accountability Office (GAO) report 2, the
FACE Act makes several improvements to the advance contracts process whereby
FEMA provides its state and local partners with goods and services ahead of disas-
ters so that they can be rapidly deployed. The bill implements GAO’s recommenda-
tions to improve the advance contracts process, including providing state and local
partners with updated and full information about available advance contracts, up-
dating program guidance, and regular communication with congressional oversight
committees.
The Disaster Recovery Reform Act of 2018 made even more important improve-
ments. It made it more difficult for FEMA to recapture disaster assistance funds
based on technicalities and put a statute of limitations to recapture disaster assist-
ance funds. There is no question that FEMA should have full authority to recapture
disaster assistance funds that were willfully or carelessly misspent. However, FEMA
all too often recaptures disaster assistance funds on the pretext of small violations
of arcane procedural rules and regulations, the complexity of which are exacerbated
by policy inconsistencies across regions and from year to year. That situation not
only creates an adversarial relationship between FEMA and its state and local part-
ners, but it leads to trepidation among state and local emergency managers and offi-
cials and a focus on bureaucratic minutiae when state and local emergency man-
agers and officials should be focused on a bold and comprehensive disaster response
effort. These provisions in the 2018 law went a long way towards reducing that ad-
versarial relationship and to allowing for a more robust state and local response in
the immediate aftermath of a disaster.
More importantly, Section 1234 of the 2018 law overhauled and bolstered FEMA’s
pre-disaster mitigation efforts, creating the Building Resilient Infrastructure and
Communities (BRIC) and Flood Mitigation Assistance (FMA) programs. This may be
the most important change Congress has made to FEMA programs in a generation.
For too many years, there was much study, discussion, and debate about how our
nation needed to shift from responding to disasters, usually in an ad hoc and in-
creasingly expensive manner, to creating more resilient communities that are better
protected from and prepared for disasters. BRIC and FMA put words into action,
providing a major increase in federal funding for pre-disaster mitigation and better
focusing that funding on local governments that implement local policies to make
their communities more resilient.
Austin has an excellent pre-disaster mitigation story I can share with the Com-
mittee. As I mention above, a major challenge facing Austin and other central Texas
communities is the ever-present danger of flash floods. The combination of local to-
pography, a rocky landscape, and rainfall events that are often severe and localized
lead to flash floods that can quickly turn quiet streams into raging torrents with
little or no warning. It is for good reason that Austin and Central Texas have been
dubbed ‘‘flash flood alley’’.
The City of Austin has taken a proactive approach to this problem, establishing
a Watershed Protection Department [http://www.austintexas.gov/department/water-
shed-protection] charged with protecting lives, property, and the environment by re-
ducing the impact of flood, erosion, and water pollution. Where practicable, City pol-
2 https://www.gao.gov/assets/gao-19-93.pdf
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icy favors a ‘‘natural’’ approach to flood damage protection that focuses on removing
households and people from repetitive risk flood areas. Similarly, City policy pro-
motes a ‘‘natural’’ approach to watershed protection and stormwater management
that uses green infrastructure and natural elements to protect riparian areas and
water quality.
For example, in the Onion Creek watershed in a low- and moderate-income neigh-
borhood in south Austin, the City has partnered with the Army Corps of Engineers
and FEMA to buy out and relocate more than 800 households from a severely flood-
prone neighborhood of single-family homes. After completion of those buyouts, the
City and our federal partners restored the flood plain and its riparian areas to their
natural state and created a new park that provides an array of recreational opportu-
nities.
The City combines these ‘‘natural’’ approaches with traditional grey infrastructure
in areas where relocations are not practicable and natural, green infrastructure ap-
proaches are not practicable or sufficient. For example, to address flooding along
Waller Creek, which runs from the University of Texas through the heart of down-
town Austin before emptying into Lady Bird Lake, the City constructed the Waller
Creek Flood Control Tunnel 3 in downtown Austin. For years, severe flooding, ero-
sion and water quality problems have beset Waller Creek. The Project consists of
a stormwater bypass tunnel that will address high priority flooding, erosion, and
water quality problems along lower Waller Creek. The mile-long tunnel will safely
convey floodwaters by capturing and redirecting floodwater, creating an opportunity
to restore the creek and revitalize the Waller Creek District. The Waller Creek Tun-
nel protects lives from the dangers of flash flooding, removed more than 28 acres
of downtown from the floodplain, protects 42 structures, 12 roadways and creates
an environment suitable for redevelopment in the heart of downtown Austin, a cen-
trally located area that is well served by existing infrastructure and provides easy
and sustainable access (pedestrian, bicycle, and transit) to jobs, education, services,
and other opportunities.
However, the City has been unsuccessful in obtaining much-needed BRIC funding
for mitigation projects, despite the strong benefit cost analysis addressing an area
that has been impacted multiple times, and where power and water plants are cut
off from access. We feel this may be due in part because the State of Texas does
not facilitate the adoption and enforcement of the latest published editions of Build-
ing Codes (IBC/ IRC 2015/ 2018). However, this reduction in points does not factor
in the higher building standards at the local level, and this points system denies
funding opportunities for worthy mitigation projects.
RECENT AUSTIN EXPERIENCE & HOW IT CAN INFORM EFFORTS TO IMPROVE THE
FEDERAL-STATE-LOCAL PARTNERSHIP
As mentioned above, in 2020, HSEM added nearly 50 temporary staff to help us
respond to COVID–19, logged 1.1 million response hours, sheltered thousands of
Gulf Coast residents displaced by category 4 Hurricane Laura, coordinated the re-
gional response to record breaking cold that crippled our state’s power grid, distrib-
uted 71,676 units of hand sanitizer, distributed nearly 12 million pieces of personal
protective equipment, housed 536 severely at-risk individuals in temporary protec-
tive shelter, housed more than 2,000 people in an isolation facility for COVID–19,
established an alternate care site for COVID–19 patients, and launched a mobile
phone application to help residents be better prepared for disasters.
Providing temporary protective shelter for the most vulnerable and at-risk resi-
dents of Austin proved to be one of our most difficult and most expensive challenges.
In the wake of an early COVID–19 outbreak at our congregate shelter facility, the
City acted, fearing that future outbreaks among people experiencing homelessness
would pose a risk to those people and to the larger community, especially in terms
of hospital capacity. Specifically, the City leased six hotels to provide protective
shelter and isolation facilities to provide non-congregate shelter for people at high-
risk of contracting COVID–19, including people experiencing homelessness.
The Austin-Travis County Interim Health Authority established the non-con-
gregate shelter program to provide quarantining and isolation to individuals ex-
posed to, carrying, or at high-risk for severe illness from COVID–19. The City’s ac-
tions were in accordance with FEMA policy allowing reimbursement for non-con-
gregate shelter and support services on a case-by-case basis. In addition, the City
closely consulted with FEMA Region VI and the State and hewed closely to CDC
guidance.
3 http://www.austintexas.gov/department/waller-creek-tunnel
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