Desk Review of the State of South Dakota’s Use of Coronavirus Relief Fund Proceeds (OIG-27-006)
Summary
A Department of the Treasury Office of Inspector General memorandum, OIG-27-006, dated October 2, 2026, from Pauletta P. Battle, Assistant Inspector General for Audit, to Jeffrey W. Stout, Acting Chief Program Officer, Office of Capital Access. It reports on a desk review, initiated December 1, 2020, of the State of South Dakota's use of Coronavirus Relief Fund (CRF) proceeds authorized under Title VI of the Social Security Act as amended by the CARES Act. The review was initiated in response to a complaint referral to the OIG's Office of Investigations. Its objective was to evaluate South Dakota's documentation supporting its uses of CRF proceeds.
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DEPARTMENT OF THE TREASURY
W ASHINGTON, D.C. 20220
OFFICE OF
INSPECTOR GENERAL
October 2, 2026
OIG-27-006
MEMORANDUM FOR JEFFREY W. STOUT, ACTING CHIEF PROGRAM
OFFICER, OFFICE OF CAPITAL ACCESS, DEPARTMENT
OF THE TREASURY
FROM: Pauletta P. Battle /s/
Assistant Inspector General for Audit
SUBJECT: Desk Review of the State of South Dakota’s Use of
Coronavirus Relief Fund Proceeds
On December 1, 2020, we initiated a desk review of the State of South Dakota’s
(South Dakota) use of the Coronavirus Relief Fund (CRF) proceeds, authorized
under Title VI of the Social Security Act, as amended by Title V, Division A of the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act). 1 This review was
initiated in response to a complaint referral submitted to the Department of the
Treasury (Treasury) Office of Inspector General (OIG), Office of Investigations. The
objective of our desk review was to evaluate South Dakota’s documentation
supporting its uses of CRF proceeds as reported in the GrantSolutions 2 portal and
to assess the risk of unallowable use of funds. The scope of our desk review
covered South Dakota’s obligation and expenditure data for the period
March 1, 2020, through December 31, 2020 (cycles 1-3), as reported in
GrantSolutions.
As part of our desk review, we performed the following:
1) reviewed South Dakota’s quarterly Financial Progress Reports (FPRs)
submitted in GrantSolutions through December 31, 2020;
2) reviewed the Treasury’s Coronavirus Relief Fund Guidance (Guidance) as
published in the Federal Register on January 15, 2021; 3
1
P.L. 116-136 (March 27, 2020)
2
GrantSolutions, a grant and program management Federal shared service provider under the U.S.
Department of Health and Human Services, developed a customized and user-friendly reporting
solution to capture the use of CRF payments from recipients.
3
Coronavirus Relief Fund Guidance as published in the Federal Register (January 15, 2021)
https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf
1
3) reviewed Treasury OIG’s Coronavirus Relief Fund Frequently Asked
Questions Related to Reporting and Recordkeeping; 4
4) reviewed Treasury OIG’s Coronavirus Relief Fund Reporting and Record
Retention Requirements;
5) reviewed Treasury OIG’s monitoring checklists 5 of South Dakota’s quarterly
FPR submissions for reporting deficiencies;
6) reviewed other audit reports issued, such as Single Audit Act reports, and
those issued by the Government Accountability Office and other applicable
Federal agency OIGs for internal control or other deficiencies that may pose
a risk or impact to South Dakota’s use of CRF proceeds;
7) reviewed Treasury OIG Office of Investigations, the Council of the Inspectors
General on Integrity and Efficiency Pandemic Response Accountability
Committee (PRAC), 6 and Treasury OIG Office of Counsel input on issues that
may pose risk or impact to South Dakota’s use of CRF proceeds;
8) interviewed key personnel responsible for preparing and certifying South
Dakota’s quarterly FPR submissions, as well as officials responsible for
obligating and expending CRF proceeds;
9) made a non-statistical selection of Contracts greater than or equal to
$50,000, Grants greater than or equal to $50,000, Transfers greater than or
equal to $50,000, 7 Direct Payments greater than or equal to $50,000, and
Aggregate Payments to Individuals 8 data identified through GrantSolutions
reporting; and
10) evaluated documentation and records used to support South Dakota’s
quarterly FPRs.
Based on the results of our desk review, South Dakota’s documentation supporting
the uses of CRF proceeds complied with the CARES Act and Treasury’s Guidance.
4
Treasury OIG, Coronavirus Relief Fund Frequently Asked Questions Related to Reporting and
Recordkeeping OIG-20-028R (March 2, 2021)
5
The checklists were used by Treasury OIG personnel to monitor the progress of prime recipient
reporting in the GrantSolutions portal. GrantSolutions quarterly submission reviews were
designed to identify material omissions and significant errors, and where necessary, included
procedures for notifying prime recipients of misreported data for timely correction. Treasury OIG
follows the CRF Prime Recipient Quarterly GrantSolutions Submissions Monitoring and Review
Procedures Guide, OIG-CA-20-029R to monitor the prime recipients on a quarterly basis.
6
Section 15010 of P.L. 116-136 established the PRAC within the Council of the Inspectors
General on Integrity and Efficiency to promote transparency and conduct and support oversight
of covered funds and the coronavirus response to (1) prevent and detect fraud, waste, abuse,
and mismanagement; and (2) mitigate major risks that cut across program and agency
boundaries.
7
A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
8
Obligations and expenditures for payments made to individuals, regardless of amount, were
required to be reported in the aggregate in the GrantSolutions portal to prevent inappropriate
disclosure of personally identifiable information.
2
Additionally, we determined that South Dakota’s risk of unallowable use of funds is
low. Accordingly, we will not be conducting an audit of South Dakota.
Non-Statistical Transaction Selection Methodology
Treasury issued a total of $1,250,000,000 in CRF payments to South Dakota. As
of December 31, 2020, South Dakota reported cumulative expenditures totaling
$666,924,985. We made a non-statistical selection of 48 transactions totaling
$258,687,062 from Contracts greater than or equal to $50,000, Grants greater
than or equal $50,000, Transfers greater than or equal to $50,000, Direct
payments greater than or equal to $50,000, and Aggregate Payments to
Individuals. We made selections using auditor judgment based on the total CRF
award amount, amounts claimed within each payment type, and our overall risk
assessment of South Dakota. Because the transactions tested were non-
statistically selected, results could not be extrapolated to the total universe of
transactions.
Background
The CARES Act appropriated $150 billion to establish the CRF. Under the CRF,
Treasury made payments for specified uses to States and certain local
governments; the District of Columbia; and U.S. Territories, including the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa,
and the Commonwealth of the Northern Mariana Islands; and Tribal governments
(collectively referred to as “prime recipients”). Treasury issued a total of
$1,250,000,000 CRF payments to South Dakota. The CARES Act stated that a
prime recipient may only use the funds to cover costs that were—
1. necessary expenditures incurred due to the public health emergency with
respect to the Coronavirus Disease 2019 (COVID–19);
2. not accounted for in the budget most recently approved as of March 27,
2020; and
3. incurred during the period between March 1, 2020, and ended on December
31, 2021, for states, local governments, and territories. In the case of tribal
governments, were incurred during the period that began on March 1, 2020,
and ended on December 31, 2022 (covered period).
Section 15011 of the CARES Act, required each covered recipient 9 to submit to
Treasury and the PRAC, no later than 10 days after the end of each calendar
9
Section 15011 of P.L. 116-136 defined a covered recipient as any entity that received large
covered funds and included any State, the District of Columbia, and any territory or possession
of the United States.
3
quarter, a report that contained (1) the total amount of large covered funds 10,11
received from Treasury; (2) the amount of large covered funds received that were
expended or obligated for each project or activity; (3) a detailed list of all projects
or activities for which large covered funds were expended or obligated; and (4)
detailed information on any level of sub-contracts or sub-grants awarded by the
covered recipient or its sub-recipients.
The CARES Act assigned Treasury OIG the responsibility for compliance monitoring
and oversight of the receipt, disbursement, and use of CRF proceeds.
Desk Review Results
We reviewed the GrantSolutions portal and found that South Dakota timely filed
quarterly FPRs for the period March 1, 2020, through December 31, 2020
(cycles 1-3), as required under Treasury OIG’s Guidance, Coronavirus Relief Fund
Reporting and Record Retention Requirements.
We found that the transactions tested in Contracts greater than or equal to
$50,000, Grants greater than or equal to $50,000, Transfers greater than or equal
to $50,000, Direct Payments greater than or equal to $50,000, and Aggregate
Payments to Individuals payment types were: (1) necessary expenditures incurred
due to the public health emergency with respect to COVID-19, (2) not accounted
for in the budget most recently approved as of March 27, 2020, and (3) incurred
during the covered period. Table 1 shows a summary of expenditure totals and the
results of our testing.
10
Section 15010 of P.L. 116-136 defined covered funds as any funds, including loans, that were
made available in any form to any non-Federal entity, not including an individual, under Public
Laws 116-123, 127, and 136, as well as any other law which primarily made appropriations for
Coronavirus response and related activities.
11
Section 15011 of P.L. 116-136 defined large covered funds as covered funds that amounted to
more than $150,000.
4
Table 1 Summary of Non-Statistical Testing Results
Cumulative Cumulative
Expenditure Expenditure Number of Unsupported Ineligible Total
Population Tested Transactions Questioned Questioned Questioned
Payment Type Amount Amount Tested Costs Costs Costs
Contracts >=
$50,000 $52,024,373 $35,072,664 9 $ - $ - $ -
Grants >=
$50,000 $304,261,860 $73,530,021 18 $ - $ - $ -
Transfers >= $
$50,000 $169,659,383 $87,397,355 5 $ - $ - -
Direct
Payments >=
$50,000 $21,632,997 $17,037,485 15 $ - $ - $ -
Loans >=
$50,000 $ - $ - - $ - $ - $ -
Aggregate
Reporting <
$50,000 $27,599,527 $ - - $ - $ - $ -
Aggregate
Payments to $
Individuals $91,746,845 $45,649,537 1 $ - $ - -
Totals $666,924,985 $258,687,062 48 $ - $ - $ -
Source: Treasury OIG
Contracts greater than or equal to $50,000
We tested nine transactions totaling $35,072,664 without exception. Transactions
tested included expenditures for COVID-19 testing and contact tracing; marketing
material to include paid advertisement outlining the steps taken by South Dakota to
safely reopen and respond to COVIID-19 public health emergency; computer
equipment and accessories for public employees to improve telework capabilities;
and administrative fees to manage South Dakota’s COVID-19 Grants programs.
Grants greater than or equal to $50,000
We tested 18 transactions totaling $73,530,021 without exception. Transactions
tested included expenditures for small business assistance to healthcare providers
and acute care hospitals; assistance for school systems to purchase laptops to
facilitate distance learning, acquire personal protective equipment, and cover costs
related to meeting Centers for Disease Control social-distancing guidelines.
5
Transfers greater than or equal to $50,000
We tested five transactions totaling $87,397,355 without exception. Transactions
tested included expenditures for municipalities public health and safety payroll
expenses; public safety measures in response to COVID-19; and disinfection of
public areas and other facilities.
Direct Payments greater than or equal to $50,000
We tested 15 transactions totaling $17,037,485 without exception. Transactions
tested included expenditures for personal protective equipment; COVID-19 testing
and contact tracing; public safety measures in response to COVID-19; and South
Dakota’s COVID-19 Housing Assistance Program and Medical Claims Program.
Aggregate Payments to Individuals
We tested one transaction totaling $45,649,537 without exception. The
transaction tested included expenditures for reimbursable unemployment insurance
claims associated with record high unemployment, business closures, and shelter in
place orders for non-essential workers during the COVID-19 public health
emergency.
Conclusion
We determined that South Dakota’s expenditures, as tested, were necessary due to
the COVID-19 public health emergency, were not accounted for in the budget most
recently approved as of March 27, 2020, and were incurred during the covered
period that began March 1, 2020, and ended on December 31, 2021.
Overall, we determined that South Dakota’s risk of unallowable use of funds is low.
As a result, we will not be conducting an audit.
South Dakota’s Response
South Dakota concurred with our assessment. On September 1, 2026, South
Dakota provided its written response which is included in its entirety as
Appendix 1.
*****
All work completed complies with the Council of the Inspectors General on
Integrity and Efficiency’s Quality Standards for Federal Offices of Inspectors
General, which require that the work adheres to the professional standards of
6
independence, due professional care, and quality assurance to ensure the accuracy
of the information presented. 12
We appreciate the courtesies and cooperation provided to our staff during the desk
review. If you have any questions or require further information, please contact me
at (202) 927-5400, or a member of your staff may contact Julie Wong, Acting
Deputy Assistant Inspector General for Audit, at (202) 439-6354.
cc: Michelle A. Dickerman, Deputy Assistant General Counsel, Department of
the Treasury
Thao P. Tran, Acting Chief Operating Officer, Office of Capital Access,
Department of the Treasury
Keith Senger, Director, Department of Financial Reporting, South Dakota
12
https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
7
Appendix 1
DEPARTMENT OF EXECUTIVE MANAGEMENT
BUREAU OF FINANCE AND MANAGEMENT
500 East Capitol Avenue Suite 217 I Pierre, South Dakota 57501 I 6()5.773.3411
September 1, 2026
Oliva F Scott, CFE
Audit Manager
Department of The Treasury - OIG
875 15th Street, NW
Washington DC 20005
RE: Desk Review of the State of South Dakota's Use of Coronavirus Relief Fund Proceeds
Management Response
Dear Ms. Scott:
We have reviewed the draft memorandum for the Desk Review of the State of South
Dakota's Use of Coronavirus Relier Fund Proceeds (Project Code: A-CM-21-004) and concur with its
conclusions.
Sincerely,
1 erwI Iger, ommIssIoner Ie1 inancIa Icer
Bureau of Finance and Management
8
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