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DEPARTMENT OF THE TREASURY
W ASHINGTON, D.C. 20220
OFFICE OF
INSPECTOR GENERAL
October 17, 2023
MEMORANDUM FOR JESSICA MILANO
ACTING CHIEF RECOVERY OFFICER
FROM: Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT: City of Springfield, Massachusetts – Use of Coronavirus
Relief Fund Proceeds (OIG-CA-24-003)
The Pandemic Response Accountability Committee (PRAC) 1 was created in
March 2020 by the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act) 2 to promote transparency and provide oversight of pandemic funds and the
federal government’s pandemic response. Pursuant to this mission, the PRAC
coordinated with ten of its member Offices of Inspector General (OIG) to conduct
case studies at six selected communities 3 across the nation to identify the federal
pandemic funds provided to these communities, the purpose of those funds, and if
federal program spending aligned with the programs’ intended goals and objectives.
The Department of the Treasury (Treasury) OIG was one of the ten federal OIGs
participating in the case study-based review.
The PRAC conducted the case study-based review in two phases. Phase 1 focused
on identifying the federal pandemic response funds provided to the selected
communities. 4 Phase 2 focuses on determining how the selected communities (1)
1
Section 15010 of P.L. 116-136 established the Pandemic Response Accountability Committee
(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. Section 15010 defines covered funds as any funds,
including loans, that are made available in any form to any non-Federal entity, not including an
individual, under Public Laws 116-123, 127, and 136, as well as any other law which primarily
makes appropriations for Coronavirus response and related activities.
2
P. L. 116-136 (March 27, 2020).
3
The six selected communities include Springfield, Massachusetts; Coeur d’Alene, Idaho; Sheridan
County, Nebraska; Marion County, Georgia; the White Earth Nation Reservation in Minnesota; and
the Jicarilla Apache Nation Reservation in New Mexico. These communities are defined by the
geographic boundary lines for the cities and counties.
4
PRAC published the Phase 1 report “Tracking Pandemic Relief Funds that Went to Local
Communities Reveals Persistent Data Gaps and Data Reliability Issues” in July 2023.
https://www.pandemicoversight.gov/media/file/practracking-pandemic-relief-fundsimpact-phase-
i2pdf.
spent the pandemic response funds in alignment with program goals and
objectives, and (2) believe that federal funding impacted (positively or negatively)
each community’s ability to respond to the pandemic. The PRAC will report on the
results of Phase 2 for the six communities in future PRAC reports.
In May 2022, Treasury OIG initiated Phase 2 of the case study, focused on the
Coronavirus Relief Fund (CRF) use of funds by the six selected communities. CRF
was established under the CARES Act. Congress appropriated $150 billion for
Treasury to assist states, eligible units of local governments, 5 the District of
Columbia, U.S. territories, 6 and tribal governments (collectively referred to as
“prime recipients”).
This report focuses only on the results for the City of Springfield (“Springfield” or
“the City”) related to the first objective in phase 2 of the PRAC project (whether
they spent the pandemic response funds in alignment with program goals and
objectives). Springfield is one of the subrecipients 7 of the Commonwealth of
Massachusetts.
We reviewed Springfield’s uses of CRF proceeds to determine if they aligned with
the program’s goals and objectives. Based on our analysis of Springfield’s sampled
expenditures, 8 the City’s uses of CRF funds generally complied with the CARES
Act, Treasury Guidance, 9 and Treasury OIG guidance; 10 however, the City’s
5
Title V of the CARES Act defines a unit of local government as a county, municipality, town,
township, village, parish, borough, or other unit of general government below the State level with a
population that exceeds 500,000. An eligible unit of local government serves a population of over
500,000 and certified its proposed uses of the funds received from the CRF.
6
The U.S. territories are as follows: United States Virgin Islands, Guam, American Samoa, Puerto
Rico, and the Commonwealth of the Northern Mariana Islands.
7
A subrecipient is an entity that received CRF payments from a prime recipient that received a CRF
award directly from Treasury. Subrecipients also include recipients of transfers from a prime
recipient that is a State, territory, local government, or tribal government. Individuals and
organizations (e.g., businesses, non-profits, or educational institutions) that directly benefit from an
assistance program established using payments from CRF are not considered subrecipients, but are
considered beneficiaries. Treasury OIG requires that the prime recipient report on expenditures made
by subrecipients, as well as payments made to beneficiaries in the GrantSolutions reporting system
(see footnote 11 for a definition of the GrantSolutions reporting system).
8
Our sample for testing included $14.16 million of the total $18.92 million of Springfield’s CRF
expenditures as of March 31, 2022.
9
Treasury Coronavirus Relief Fund Guidance published in the Federal Register (January 15, 2021)
https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf.
10
Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked
Questions Related to Reporting and Recordkeeping (OIG-CA-20-028R, March 2, 2021). The CARES
Act provides Treasury OIG the responsibility for monitoring and oversight of the receipt,
disbursement, and use of CRF payments. Treasury OIG also has authority to recover funds if it is
determined recipients failed to comply with the requirements of subsection 601(d) of the Social
Security Act, as amended, (42 U.S.C. 801(d)). Treasury OIG provided recipients reporting and
record retention requirements.
City of Springfield, Massachusetts – Use of Coronavirus Relief Fund Proceeds (OIG-CA-24-003)
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Department of Health and Human Services (HHS) did not maintain adequate
support documentation for the use of $300,000 in CRF expenditures. We are
questioning this cost and were unable to determine whether the expenditures were
eligible uses of CRF proceeds.
Scope and Methodology
Our evaluation covered CRF expenditures reported quarterly in the GrantSolutions
reporting system 11 from March 1, 2020 (cycle 1) through March 31, 2022
(cycle 8). As of March 31, 2022, the Commonwealth of Massachusetts awarded or
distributed $34.13 million 12 in CRF proceeds to 23 subrecipients or beneficiaries
that are geographically located in Springfield through transfers, direct payments,
grants, or contracts. As of March 31, 2022, the 23 subrecipients and beneficiaries
had expended approximately $31.48 million of this CRF funding. For detailed
review, we selected a sample of $20.46 million of the $27.4 million 13 in total
expenditures for three specific subrecipients 14 of the Commonwealth of
Massachusetts geographically located in Springfield to determine whether they
used the funds in accordance with the program’s goals and objectives. The City of
Springfield’s CRF expenditures accounted for $14.16 million of the $20.46 million
reviewed. This report focuses on the City of Springfield, one of the three
subrecipients selected that is geographically located in Springfield.
We reviewed applicable laws, regulations, Treasury and Treasury OIG CRF guidance
including: (1) CARES Act; (2) Consolidated Appropriations Act, 2021; 15 (3)
Treasury’s CRF Guidance for State, Territorial, Local, and Tribal Governments
(Guidance) and Frequently Asked Questions (FAQs); and (4) Treasury OIG’s CRF
guidance. Additionally, we reviewed the City of Springfield’s CRF expenditure
reports and payment vouchers; and the Commonwealth of Massachusetts’ CRF
expenditure reports. Further, we interviewed City and Commonwealth of
Massachusetts key officials responsible for administering, monitoring, and using
CRF proceeds.
We conducted this engagement in accordance with the Council of the Inspectors
General on Integrity and Efficiency’s Quality Standards for Inspection and
Evaluation. 16 Those standards require that we perform the evaluation to obtain
sufficient, appropriate evidence to provide a reasonable basis for our finding,
11
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.
12
The City of Springfield received $21.35 million of the $34.13 million in CRF proceeds.
13
City of Springfield’s expenditures accounted for $18.92 million of the $27.4 million.
14
One of the three subrecipients is the City of Springfield.
15
P. L. 116-260 (December 27, 2020).
16
Council of the Inspectors General on Integrity and Efficiency’s Quality Standards for Inspection
and Evaluation (Blue Book – December 2020).
City of Springfield, Massachusetts – Use of Coronavirus Relief Fund Proceeds (OIG-CA-24-003)
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conclusion, and recommendation based on our evaluation objectives. We believe
that the evidence obtained provides a reasonable basis for our finding, conclusion,
and recommendation based on our evaluation objectives.
Background
The CARES Act established the CRF, appropriating $150 billion for Treasury to
assist states, eligible units of local government, the District of Columbia, U.S.
territories, and tribal governments (collectively referred as “prime recipients”). As of
December 31, 2022, Treasury disbursed CRF proceeds to 964 prime recipients,
which subsequently distributed the proceeds to over 90,000 subrecipients and
beneficiaries through contracts, grants, loans, direct payments, or fund transfers.
The CARES Act required CRF recipients to use the funds to cover expenses that (1)
were necessary expenditures incurred due to the public health emergency with
respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for
in the budget most recently approved as of March 27, 2020; and (3) were incurred
during the period that begins on March 1, 2020, and ends on December 31,
2021. 17 The CARES Act assigned Treasury OIG the responsibility to conduct
monitoring and oversight of the receipt, disbursement, and uses of CRF proceeds.
Treasury OIG also has authority to recover funds in the event that it is determined
a recipient of CRF proceeds failed to comply with requirements.
City of Springfield
Between March 1, 2020 and March 31, 2022, the City of Springfield, a
subrecipient, received $21.35 million in CRF proceeds from the Commonwealth of
Massachusetts. As of March 31, 2022, the City had expended $18.92 million and
we selected a sample of $14.16 million in CRF expenditures for review. The City
allocated the funds to its departments including HHS, Springfield Public Schools
(SPS), the Elections Commission, Community Development, Police Department, Fire
Department, and the Springfield City Library. These departments used CRF
proceeds to aid vulnerable citizens, communicate pandemic-related information,
ensure student success during remote learning, and assist with a safe return to
school, among other things. Springfield’s HHS created a community member
committee to serve as a liaison to assist with identifying needs and providing
vaccine information to vulnerable residents. SPS used CRF proceeds to provide
low-income families and students with in-home reliable Wi-Fi access at little or no
17
The Consolidated Appropriations Act, 2021, P. L. 116-260 (December 27, 2020), amended the
CARES Act by extending the covered period for recipients of CRF payments to use proceeds
through December 31, 2021. The period of performance end date for tribal entities was further
extended to December 31, 2022 by the State, Local, Tribal, and Territorial Fiscal Recovery,
Infrastructure, and Disaster Relief Flexibility Act, Division LL of the Consolidated Appropriations Act,
2023, P.L. 117-328, December 29, 2022, 136 Stat. 4459.
City of Springfield, Massachusetts – Use of Coronavirus Relief Fund Proceeds (OIG-CA-24-003)
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cost. The SPS Culinary and Nutrition Center distributed more than 8.7 million meals
to families by establishing 23 grab-and-go meal locations and supported the
delivery of more than 14,000 meals to senior centers. Additionally, SPS invested
more than $1.5 million in preparation for a safe return to 55 schools and municipal
buildings by installing ventilation equipment including air cleaners and filters.
Finding
The City of Springfield’s HHS did not maintain adequate supporting documentation
for the use of $300,000 in CRF proceeds it received from the Commonwealth of
Massachusetts. Treasury OIG guidance clarifies that recipients of CRF proceeds
should maintain and make available to Treasury OIG, upon request, all documents
and financial records sufficient to establish compliance with eligible use
requirements. Also, Treasury’s response to its CRF guidance, FAQ B.8 states,
“Fund payments are subject to the following requirements in the Uniform Guidance
(2 CFR part 200): 2 CFR 200.303 regarding internal controls, 2 CFR 200.330
through 200.332 regarding subrecipient monitoring and management, and subpart
F regarding audit requirements.” Specifically, 2 CFR 200.330 through 200.332
require pass-through entities of federal funds to monitor subawards and ensure,
along with other requirements, that subrecipients use awarded funds in accordance
with applicable laws, regulations, and terms of the award and that subrecipients
meet the audit requirements outlined in Subpart F.
As it relates to the transactions at issue in our finding, the Commonwealth of
Massachusetts awarded the City of Springfield $385,017, which was comprised of
$300,000 in CRF for board of health grants and $85,017 in state-funded Public
Health Trust Funds (PHTF). 18 Springfield then allocated $385,017 to its HHS.
Springfield’s HHS did not separately identify and account for the CRF and PHTF
expenditures because the Commonwealth of Massachusetts did not require
Springfield or Springfield’s HHS to maintain separate accounting records for each
funding source, resulting in OIG being unable to establish whether eligible use
requirements were met. As a result, we question the $300,000 in CRF proceeds
issued to the City of Springfield’s HHS. See appendix 1 for definition and schedule
of monetary benefits.
We also reviewed the Blended and Braided Funding: A Guide for Policy Makers and
Practitioners, 19 to determine whether these funding approaches are applicable to
the City of Springfield’s HHS. According to the guide, blended funding is a funding
18
The Expanded Gaming Act of 2011 was signed into state law by the Commonwealth Governor.
The Act established and also allocates resources to the Public Health Trust Funds to mitigate the
harms associated with gambling through research, prevention, intervention, treatment, and recovery
support services.
19
Blended and Braided Funding: A Guide for Policy Makers and Practitioners, December 2014,
https://www.agacgfm.org/Resources/intergov/BlendedBraidedFunding.aspx.
City of Springfield, Massachusetts – Use of Coronavirus Relief Fund Proceeds (OIG-CA-24-003)
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approach in which multiple individual funding streams are merged into one award to
support a single initiative and each individual award loses its award-specific
identity. Blended funding requires statutory authorization and must be specifically
appropriated. Congress has not permitted blended funding for the CRF program and
this funding approach is therefore not allowed. Braided funding is another funding
approach in which multiple individual funding streams are merged into one award to
support a single initiative, while each individual award maintains its award-specific
identity. Braided funding is not applicable to the City’s HHS because it did not
separately identify and account for each fund. Furthermore, the purpose of the
PHTF is to mitigate the harms associated with gambling and the fund does not
have the same purpose as the CRF.
Commonwealth of Massachusetts officials noted they did not consider Springfield’s
HHS as a subrecipient, but rather as a beneficiary of the CRF assistance program.
The Commonwealth of Massachusetts officials explained that the State designed
this award as part of an assistance program for departments of public
health. Although Springfield’s residents indirectly benefited from the financial
support of the department, the rationale behind the Commonwealth’s payments
was to benefit HHS for unanticipated costs arising directly from the pandemic. The
officials also noted that because Springfield’s HHS was considered a beneficiary,
the City was not responsible for adherence to applicable federal award program
requirements for subrecipients. The Commonwealth of Massachusetts officials told
us that they were not responsible for monitoring the activities of Springfield as is
necessary to ensure that a subaward is used for authorized purposes.
According to Treasury’s response to its FAQ B.13, subrecipients of payments from
the CRF include “recipients of transfers from a State, territory, local government, or
tribal government that received a payment directly from Treasury.” Subrecipients
would not include “individuals and organizations (e.g., businesses, non-profits, or
educational institutions) that are beneficiaries of an assistance program established
using payments from the Fund.” Treasury OIG maintains its position that the City
of Springfield is a local government, which is a subrecipient, as is any smaller
governmental unit to which it in turn passes the funds, such as the City’s HHS.
Therefore, the Commonwealth of Massachusetts, City of Springfield, and its HHS
need to comply with Treasury and the OIG’s CRF guidance.
OIG Recommendation
1. We recommend that Treasury’s Acting Chief Recovery Officer works with
Treasury OIG to obtain adequate documentation from the Commonwealth of
Massachusetts for the HHS $300,000 in expenditures or begin recoupment
proceedings for the disallowed costs.
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Commonwealth of Massachusetts Management Response
As part of our reporting process, we provided the Commonwealth of
Massachusetts management an opportunity to comment on a draft of this
memorandum. In a written response, the Commonwealth of Massachusetts
management stated they did not require Springfield or Springfield’s HHS to
maintain separate accounting records for each of the CRF or PHTF funding
sources. Management continues to consider Springfield’s HHS a beneficiary
of the CRF assistance program, not a subrecipient. As such, they do not
consider themselves responsible for monitoring Springfield or Springfield’s
HHS activities.
The Commonwealth of Massachusetts management stated it will continue to
support the completion of this study-based review, including provision of
documentation for the HHS $300,000 in questioned costs, in conjunction
with the City of Springfield and Springfield’s HHS.
Commonwealth of Massachusetts’ management response, in its entirety, is
included as appendix 2.
OIG Comment
As noted in the Finding section above, we maintain our position that the City
of Springfield is a local government, which is a subrecipient, as is any
smaller governmental unit to which it distributes the funds. Therefore, the
Commonwealth of Massachusetts, City of Springfield, and its HHS need to
comply with Treasury and the OIG’s CRF guidance. According to Treasury’s
response to its FAQ B.13, subrecipients of payments from the CRF include
“recipients of transfers from a State, territory, local government, or tribal
government that received a payment directly from Treasury.” Subrecipients
would not include “individuals and organizations (e.g., businesses, non-
profits, or educational institutions) that are beneficiaries of an assistance
program established using payments from the Fund.”
Treasury Management Response
Treasury management noted they are not in a position to confirm the OIG’s
findings because they have not reviewed any materials submitted to OIG by
the City of Springfield or the Commonwealth of Massachusetts. However,
Treasury management stated it will continue to support the OIG to work with
the Commonwealth of Massachusetts to ensure appropriate documentation
is submitted to substantiate that CRF funds were expended on eligible costs.
Also, Treasury management stated that recipients and subrecipients were
advised to maintain sufficient records to demonstrate CRF payments have
City of Springfield, Massachusetts – Use of Coronavirus Relief Fund Proceeds (OIG-CA-24-003)
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been used for eligible expenses in accordance with section 601(d) of the
Social Security Act and to establish and maintain effective internal controls
over Federal awards in accordance with 2 CRF 200.300. Treasury’s
management response, in its entirety, is included as appendix 3.
OIG Comment
Treasury management’s planned corrective actions meet the intent of our
recommendation. Management will need to record an estimated completion
date for these actions in Treasury’s Joint Audit Management Enterprise
System (JAMES).
We appreciate the courtesies and cooperation provided to our staff during the
engagement. If you have any questions or require further information, please
contact me at (202) 486-1420, or a member of your staff may contact Lisa
DeAngelis, Deputy Assistant Inspector General for Audit, at (202) 487-8371.
cc: Amanda Shulak, Attorney Advisor, Department of the Treasury
Victoria Collin, Chief Compliance and Finance Officer, Office of Recovery
Programs, Department of the Treasury
David Morley, Acting Director of Data and Reporting, Office of Recovery
Programs, Department of the Treasury
Chris Sawin, Compliance Director of Federal Funds, Commonwealth of
Massachusetts
Danielle Littmann, Deputy Director of Federal Funds, Commonwealth of
Massachusetts
Brendan Dutch, Compliance Counsel, Commonwealth of Massachusetts
TJ Plante, Chief Administrative and Financial Officer, City of Springfield,
Massachusetts
Lindsay Hackett, Deputy Chief Administrative and Financial Officer, City of
Springfield, Massachusetts
Helen Caulton, Health and Human Services Director, City of Springfield,
Massachusetts
City of Springfield, Massachusetts – Use of Coronavirus Relief Fund Proceeds (OIG-CA-24-003)
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Appendix 1: Schedule of Monetary Benefits
According to the Code of Federal Regulations, 20 a questioned cost is a cost that is
questioned by the auditor because of a finding:
(a) which resulted from a violation or possible violation of a statute,
regulation, or the terms and conditions of a Federal award, including for
funds used to match Federal funds;
(b) where the costs, at the time of the review, are not supported by
adequate documentation; or
(c) where the costs incurred appear unreasonable and do not reflect the
actions a prudent person would take in the circumstances.
Questioned costs are to be recorded in the Department of the Treasury’s (Treasury)
Joint Audit Management Enterprise System (JAMES). 21 The amount will also be
included in the Office of Inspector General (OIG) Semiannual Report to Congress. It
is Treasury management's responsibility to report to Congress on the status of the
agreed to recommendations with monetary benefits in accordance with Section
5(b) of the Inspector General Act of 1978, as amended.
Recommendation Questioned Costs
Recommendation No. 1 $300,000
The questioned cost represents amounts provided by Treasury under the
Coronavirus Relief Fund (CRF). As discussed in the Finding, the Commonwealth of
Massachusetts could not provide adequate documentation for the use of $300,000
in CRF proceeds used by its subrecipient, the City of Springfield’s Department of
Health and Human Services (HHS). Due to the lack of documentation, OIG was
unable to determine if the proceeds were used for eligible purposes.
20
2 CFR § 200.84 – Questioned Cost.
21
JAMES is Treasury’s audit recommendation tracking system.
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Appendix 2: Commonwealth of Massachusetts Management Response
City of Springfield, Massachusetts – Use of Coronavirus Relief Fund Proceeds (OIG-CA-24-003)
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Appendix 3: Treasury Management Response
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