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DEPARTMENT OF THE TREASURY
W ASHINGTON, D.C. 20220
OFFICE OF
INSPECTOR GENERAL
August 1, 2024
MEMORANDUM FOR JESSICA MILANO, CHIEF PROGRAM OFFICER, OFFICE OF
CAPTIAL ACCESS, DEPARTMENT OF THE TREASURY
FROM: Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT: Desk Review of Bucks County, Pennsylvania’s Use of
Coronavirus Relief Fund Proceeds
(OIG-CA-24-019)
Please find the attached desk review memorandum 1 on Bucks County,
Pennsylvania’s (Bucks County) use of Coronavirus Relief Fund (CRF) proceeds.
The CRF is authorized under Title VI of the Social Security Act, as amended by
Title V, Division A of the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act). Under a contract monitored by our office, Castro & Company, LLC
(Castro), a certified independent public accounting firm, performed the desk
review. Castro performed the desk review in accordance with the Council of the
Inspectors General on Integrity and Efficiency Quality Standards for Federal
Offices of Inspector General standards of independence, due professional care,
and quality assurance.
In its desk review, Castro personnel reviewed documentation for a non-statistical
selection of 15 transactions reported in the quarterly Financial Progress Reports
(FPR) and identified a combination of unsupported and ineligible questioned costs
of $5,000 and $106,423, respectively, with total questioned costs across all
payment types of $111,423 (see attached schedule of monetary benefits). 2
1
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) assigned the Department of
the Treasury Office of Inspector General with responsibility for compliance monitoring and
oversight of the receipt, disbursement, and use of Coronavirus Relief Fund (CRF) payments. The
purpose of the desk review is to perform monitoring procedures of the prime recipient’s receipt,
disbursement, and use of CRF proceeds as reported in the grants portal on a quarterly basis.
2
Questioned costs consist of ineligible subscription costs incurred outside of the covered period,
ineligible indirect costs, unsupported costs related to the Bucks Back to Work grant program, and
ineligible payroll expenses.
Page 2
Castro determined that the expenditures related to Contracts greater than or equal
to $50,000, Aggregate Reporting less than $50,000, 3 and Aggregate Payments to
Individuals 4 payment types do not comply with CARES Act and Treasury’s
guidance. Additionally, Castro determined that Bucks County’s risk of unallowable
use of funds is moderate.
Castro recommends that the Department of the Treasury (Treasury) Office of
Inspector General (OIG) follow-up with Bucks County’s management to confirm
the transactions noted as unsupported or ineligible expenditures within Contracts
greater than or equal to $50,000, Aggregate Reporting less than $50,000, and
Aggregate Payments to Individuals are recouped or reallocated to other eligible
uses. Castro also identified other matters throughout the course of the desk
review and recommends that Treasury OIG follow-up with Bucks County’s
management to 1) perform an assessment over whether there were any additional
indirect costs claimed within its Contracts greater than or equal to $50,000 CRF
submission above those questioned based on the specific transactions reviewed;
2) determine the feasibility of performing additional follow-up with Bucks County
to determine if there were other instances of unsupported balances within the
Bucks Back to Work grant program in addition to the costs specifically reviewed
and questioned; 3) determine the feasibility of following up on the remaining
balance of $72,353 within Aggregate Payments to Individuals for specific
departments identified with concerns, and determine if these departments have
other ineligible expenditures; and 4) request Bucks County management to
perform an assessment over claimed non-substantially dedicated payroll costs 5 to
determine if there were any additional departments with employees with
ineligible costs.
Treasury OIG and Castro met with Bucks County management to discuss the
questioned costs. Bucks County management concurred with the findings of
ineligible costs and will provide documentation to reallocate those funds to
eligible expenditures. Bucks County management also stated they would provide
additional documentation to Treasury OIG to support the questioned costs
identified as unsupported by Castro.
3
Recipients are required to report CRF transactions greater than or equal to $50,000 in detail in the
grants portal. Transactions less than $50,000 can be reported as an aggregate lump-sum amount
by type (contracts, grants, loans, direct payments, and transfers to other government entities).
4
Obligations and expenditures for payments made to individuals, regardless of amount, are
required to be reported in the aggregate in the grants portal to prevent inappropriate disclosure of
personally identifiable information.
5
Non-substantially dedicated payroll costs consist of payroll costs for non-public health and safety
personnel who were not substantially dedicated to mitigating or responding to the COVID-19
public health emergency and only worked on COVID-19 tasks on a part-time basis.
Page 3
In connection with our contract with Castro, we reviewed Castro’s desk review
memorandum and related documentation and inquired of its representatives. Our
review, as differentiated from an audit performed in accordance with generally
accepted government auditing standards, was not intended to enable us to
express an opinion on Bucks County’s use of CRF proceeds. Castro is responsible
for the attached desk review memorandum and the conclusions expressed
therein. Our review found no instances in which Castro did not comply in all
material respects with Quality Standards for Federal Offices of Inspectors General.
We appreciate the courtesies and cooperation provided to Castro and our staff
during the desk review. If you have any questions or require further information,
please contact me at (202) 486-1420, or a member of your staff may contact Lisa
DeAngelis, Deputy Assistant Inspector General for Audit, at (202) 487-8371.
cc: Margaret McKevitt, Chief Operating Officer, Bucks County Administration
Michelle. A. Dickerman, Deputy Assistant General Counsel, Department of
the Treasury
Danielle Christensen, Deputy Chief Program Officer, Office of Capital
Access, Department of the Treasury
David Morley, Director of Data and Reporting, Office of Capital Access,
Department of the Treasury
Katharine Richards, Senior Advisor, Department of the Treasury
Wayne Ference, Partner, Castro & Company, LLC
Page 4
Attachment
Schedule of Monetary Benefits
According to the Code of Federal Regulations, 6 a questioned cost is a cost that is
questioned due to 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). 7 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 5 USC Section 405(b) of the Inspector General Act of 1978.
Recommendation Questioned Costs
Recommendation No. 1 $ 111,423
The questioned cost represents amounts provided by Treasury under the
Coronavirus Relief Fund. As discussed in the attached desk review, $111,423 is
Bucks County’s expenditures reported in the grant-reporting portal that were
ineligible or lacked supporting documentation.
6
2 CFR § 200.84 – Questioned Cost
7
JAMES is Treasury’s audit recommendation tracking system.
1635 King Street
Alexandria, VA 22314
Phone: 703.229.4440
Fax: 703.859.7603
www.castroco.com
Desk Review of Bucks County, Pennsylvania
August 1, 2024
OIG-CA-24-019
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM: Wayne Ference
Partner, Castro & Company, LLC
SUBJECT: Desk Review of Bucks County, Pennsylvania
On September 11, 2023, we initiated a desk review of Bucks County,
Pennsylvania’s (Bucks County) use of the Coronavirus Relief Fund (CRF)
authorized under Title VI of the Social Security Act, as amended by Title V,
Division A of the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act). 1 The objective of our desk review was to evaluate Bucks County’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 was limited to obligation and expenditure data for the
period of March 1, 2020 through December 31, 2021, 3 as reported in the
GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed Bucks County’s quarterly Financial Progress Reports (FPRs)
submitted in the GrantSolutions portal through December 31, 2021;
2) reviewed the Department of the Treasury’s (Treasury) Coronavirus Relief
Fund Guidance as published in the Federal Register on January 15, 2021; 4
1
P.L. 116-136 (March 27, 2020).
2
GrantSolutions, a grant and program management Federal shared service provider under the
United States (U.S.) Department of Health and Human Services, developed a customized and user-
friendly reporting solution to capture the use of CRF payments from prime recipients.
3
Bucks County fully expended their total CRF proceeds as of December 31, 2021. Castro set the
scope end date to December 31, 2021, which was the date of Bucks County’s last reporting
submission within the GrantSolutions portal.
4
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
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Desk Review of Bucks County, Pennsylvania
3) reviewed Treasury Office of Inspector General’s (OIG) Coronavirus Relief
Fund Frequently Asked Questions Related to Reporting and
Recordkeeping; 5
4) reviewed Treasury OIG’s monitoring checklists 6 of Bucks County’s quarterly
FPR submissions for reporting deficiencies;
5) reviewed other audit reports issued, such as Single Audit Act reports, 7 and
those issued by the Government Accountability Office and other applicable
Federal agency OIGs for internal control or other deficiencies that may
pose risk or impact Bucks County’s uses of CRF proceeds;
6) reviewed Treasury OIG Office of Investigations, the Council of the
Inspectors General on Integrity and Efficiency Pandemic Response
Accountability Committee, 8 and Treasury OIG Office of Counsel input on
issues that may pose risk or impact Bucks County’s use of CRF proceeds;
7) interviewed key personnel responsible for preparing and certifying Bucks
County’s GrantSolutions portal quarterly FPR submissions, as well as
officials responsible for obligating and expending CRF proceeds;
8) made a non-statistical selection of Contracts, Aggregate Reporting, 9 and F
Aggregate Payments to Individuals 10 data identified through
GrantSolutions portal reporting; and
5
Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked
Questions Related to Reporting and Recordkeeping OIG-20-028R; March 2, 2021.
6
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
followed 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.
7
P. L. 104-156 (July 5, 1996) The Single Audit Act of 1984, as amended in 1996, requires entities
who receive federal funds in excess of $750,000 to undergo an annual audit of those Federal funds.
The act was enacted for the purpose of promoting sound financial management, including
effective internal controls, with respect to Federal awards administered by non-Federal entities and
to establish uniform requirements for audits. This prime recipient was subject to those audit
requirements, and Castro reviewed applicable prior year single audit reports as part of our desk
review risk assessment procedures.
8
Section 15010 of P.L. 116-136 established the Pandemic Response Accountability Committee
within the Council of the Inspectors General on Integrity and Efficiency to promote transparency
and conduct and support oversight of covered funds (see Footnote 15 for a definition of covered
funds) and the coronavirus response to (1) prevent and detect fraud, waste, abuse, and
mismanagement; and (2) mitigate major risks that cut across program and agency boundaries.
9
Prime recipients were required to report CRF transactions greater than or equal to $50,000 in
detail in the GrantSolutions portal. Transactions less than $50,000 could be reported as an
aggregate lump-sum amount by type (contracts, grants, loans, direct payments, and transfers to
other government entities).
10
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.
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Desk Review of Bucks County, Pennsylvania
9) evaluated documentation and records used to support Bucks County’s
quarterly FPRs.
Based on our review of Bucks County’s documentation supporting the uses of its
CRF proceeds as reported in the GrantSolutions portal, we determined that the
expenditures related to the Contracts greater than or equal to $50,000, Aggregate
Reporting less than $50,000, and Aggregate Payments to Individuals payment
types did not comply with the CARES Act and Treasury’s Guidance.
We identified unsupported and ineligible questioned costs of $5,000 and $106,423,
respectively, with total questioned costs of $111,423. We also determined Bucks
County’s risk of unallowable use of funds is moderate.
Castro recommends that Treasury OIG confirm the transactions noted as
unsupported or ineligible expenditures within Contracts greater than or equal to
$50,000, Aggregate Reporting less than $50,000, and Aggregate Payments to
Individuals are recouped or reallocated to other eligible uses by Bucks County in
conformity with Treasury’s Guidance. Based on Bucks County’s responsiveness to
Treasury OIG’s requests and its ability to provide sufficient documentation, we
recommend Treasury OIG determine the feasibility of conducting an audit for
Contracts greater than or equal to $50,000, Aggregate Reporting less than $50,000,
and Aggregate Payments to Individuals.
Non-Statistical Transaction Selection Methodology
Treasury issued a $109,628,270 CRF payment to Bucks County. As of
December 31, 2021, Bucks County expended all of its CRF funds. Bucks County’s
cumulative obligations and expenditures by payment type are summarized below.
Cumulative Cumulative
Payment Type
Obligations Expenditures
Contracts >= $50,000 $ 41,849,436 $ 41,849,436
Grants >= $50,000 $ - $ -
Loans >= $50,000 $ - $ -
Transfers >= $50,000 $ - $ -
Direct Payments >= $50,000 $ - $ -
Aggregate Reporting < $50,000 $ 29,016,473 $ 29,016,473
Aggregate Payments to
Individuals (in any amount) $ 38,762,361 $ 38,762,361
Totals $ 109,628,270 $ 109,628,270
Castro made a non-statistical selection of payments in the Contracts greater than
or equal to $50,000, Aggregate Reporting less than $50,000, and Aggregate
Payments to Individuals payment types. Selections were made using auditor
judgment based on information and risks identified in reviewing audit reports, the
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Desk Review of Bucks County, Pennsylvania
GrantSolutions portal reporting anomalies 11 identified by the Treasury OIG CRF
monitoring team, and review of Bucks County’s FPR submissions. Bucks County
did not obligate or expend CRF proceeds to Grants greater than or equal to
$50,000, Loans greater than or equal to $50,000, Transfers 12 greater than or equal
to $50,000, or Direct Payments greater than or equal to $50,000 payment types;
therefore, we did not select transactions from these payment types.
The number of transactions (15) we selected to test were based on Bucks County’s
total CRF award amount and Castro’s overall risk assessment of Bucks County. To
allocate the number of transactions (15) by payment type (Contracts greater than
or equal to $50,000, Aggregate Reporting less than $50,000, and Aggregate
Payments to Individuals), we compared the total payment type dollar amounts as
a percentage of cumulative expenditures as of December 31, 2021. The
transactions tested were not selected statistically, and therefore 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 $109,628,270
CRF payment to Bucks County. The CARES Act stipulates that a prime recipient
may only use the funds to cover costs 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 covered period between March 1, 2020 and
December 31, 2021. 13
11
Treasury OIG had a pre-defined list of risk indicators that were triggered based on data
submitted by prime recipients in the FPR submissions that met certain criteria. Castro reviewed
these results provided by Treasury OIG for the prime recipient.
12
A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
13
P.L. 116-260 (December 27, 2020). The period of performance end date of the CRF was extended
through December 31, 2021 by the Consolidated Appropriations Act, 2021. The period of
performance end date for tribal entities was further extended to December 31, 2022 by the State,
Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act,
Division LL of the Consolidated Appropriations Act, 2023, P.L. 117-328, December 29, 2022, 136
Stat. 4459.
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Desk Review of Bucks County, Pennsylvania
Section 15011 of the CARES Act required each covered recipient 14 to submit to
Treasury and the Pandemic Response Accountability Committee, no later than 10
days after the end of each calendar quarter, a report that contained (1) the total
amount of large covered funds 15,16 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.
Treasury OIG also has the authority to recoup funds in the event it is determined a
prime recipient failed to comply with requirements of subsection 601(d) of the
Social Security Act, as amended, (42 U.S.C. 801(d)).
Desk Review Results
Financial Progress Reports
We reviewed Bucks County’s quarterly FPRs through December 31, 2021, and
found that Bucks County timely filed quarterly FPRs in the GrantSolutions portal in
compliance with Treasury OIG’s reporting requirements for the period of
June 30, 2020 through December 31, 2021. Bucks County fully expended their total
CRF proceeds as of December 31, 2021; however, Bucks County personnel did not
mark their last FPR submission as final within the GrantSolutions portal.
Summary of Testing Results
We found that the Contracts greater than or equal to $50,000, Aggregate
Reporting less than $50,000, and Aggregate Payments to Individuals payment
types did not comply with the CARES Act and Treasury’s Guidance because we
were unable to determine if all tested expenditures 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
14
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.
15
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.
16
Section 15011 of P.L. 116-136 defined large covered funds as covered funds that amounted to
more than $150,000.
5
Desk Review of Bucks County, Pennsylvania
period. The transactions selected for testing were not selected statistically, and
therefore results could not be extrapolated to the total universe of transactions.
Within the table below, we have included a summary of unsupported and
ineligible expenditures identified as questioned costs, which did not comply with
the CARES Act and Treasury’s Guidance. See the Desk Review Results section
below this table for a detailed discussion of questioned costs and other issues
identified throughout the course of our desk review.
Summary of Expenditures Testing and Recommended Results
As of December 31, 2021
Cumulative
Expenditure Cumulative Unsupported Ineligible Total
Population Expenditure Questioned Questioned Questioned
Payment Type Amount Tested Amount Costs Costs Costs
Contracts >= $50,000
$ 41,849,436 $ 15,062,255 $ - $ 94,172 $ 94,172
Grants >= $50,000 $ - $ - $ - $ - $ -
Loans >= $50,000 $ - $ - $ - $ - $ -
Transfers >= $50,000 $ - $ - $ - $ - $ -
Direct Payments >=
$50,000 $ - $ - $ - $ - $ -
Aggregate Reporting <
$50,000 $ 29,016,473 $ 81,979 $ 5,000 $ - $ 5,000
Aggregate Payments to
Individuals (in any
amount) $ 38,762,361 $ 20,350,604 $ - $ 12,251 $ 12,251
Totals $ 109,628,270 $ 35,494,838 $ 5,000 $ 106,423 $ 111,423
Contracts Greater Than or Equal to $50,000
We determined Bucks County’s Contracts greater than or equal to $50,000 did not
comply with the CARES Act and Treasury’s Guidance. We tested 20 invoices
related to six contracts, which amounted to $15,062,255. The contracts tested
included expenditures for the purchase of information technology equipment;
personal protective equipment and sanitization products; costs related to a Bucks
County grant program; advertisements that spoke to public safety to promote
investment and the safe return to Bucks County; and transactions related to the
purchase of postal, parcel, and e-commerce to promote a safe 2020 general
election. We identified exceptions below related to three different contracts, which
resulted in ineligible questioned costs of $94,172.
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Desk Review of Bucks County, Pennsylvania
Additionally, we identified misclassifications related to Contracts greater than or
equal to $50,000 that we determined should have been reported as Grants greater
than or equal to $50,000 in the GrantSolutions portal.
Contract 1 – Information Technology Improvements
We tested all seven of the invoices totaling $5,433,794 that Bucks County claimed
under a contract for CRF expenditures related to information technology to
improve telework capabilities of Bucks County employees, to include the purchase
of items necessary to upgrade its phone systems, implementation of unified
communications systems and the purchase of communication hardware and
software necessary for Bucks County employees to work remotely during the
COVID-19 pandemic.
For $380,194 in costs related to one invoice claimed under this contract, Castro
determined that one of Bucks County’s sub-recipients purchased 5 & 10-year
prepaid subscriptions during the CRF covered period, which required obligations
to be made by December 31, 2021. Castro considered Bucks County to have
obligated the funds for the contract within the covered period.
Castro noted that the subscriptions would be active through 2025 and 2030, which
was outside Treasury’s final period for Bucks County to expend obligated funds
from the CRF, September 30, 2022. 17 For each subscription, we determined the
amount of time that would fall after September 30, 2022, and utilized this to
calculate the dollar amount associated with the portion of these prepaid
subscriptions that was unused and therefore not fully expended prior to
September 30, 2022.
Castro determined the ineligible portion of the total prepaid expenditures claimed
by Bucks County was $46,068, which consisted of questioned costs of $41,491 for
the 5-year subscription plan prepayments and questioned costs of $4,577 for the
10-year subscription plan prepayments. Castro is questioning these costs as
17
Coronavirus Relief Fund Guidance as published in the Federal Register (December 14, 2021)
CRF-Guidance_Revision-Regarding-Cost-Incurred.pdf (Treasury.gov) states: “Costs incurred during
the period that begins on March 1, 2020, and ends on December 31, 2021. The CARES Act provides
that payments from the Fund may only be used to cover costs that were incurred during the period
that begins on March 1, 2020, and ends on December 31, 2021 (the “covered period”). A cost
associated with a necessary expenditure incurred due to the public health emergency is
considered to have been incurred by December 31, 2021, if the recipient has incurred an obligation
with respect to such cost by December 31, 2021. Treasury defines obligation for this purpose as an
order placed for property and services and entry into contracts, subawards, and similar
transactions that require payment. Recipients are required to expend their funds received from the
CRF to cover these obligations by September 30, 2022.”
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Desk Review of Bucks County, Pennsylvania
ineligible since the amounts associated with the subscription time were outside of
Treasury’s period to expend funds received from the CRF.
Contract 2 – Community Support for Education, Cleaning Supplies, and Personal
Protective Equipment
We tested two invoices totaling $404,260 that Bucks County claimed under a
$5,000,000 contract for a sub-recipient to manage a grant program for community
support related to primary, secondary, and technical school assistance. The costs
were primarily related to the purchase of cleaning supplies and personal
protective equipment to respond to the COVID-19 pandemic, as well as an
upgrade to the Bucks County internet wireless fidelity (Wi-Fi) systems necessary
to practice social distancing and remote learning.
For one of the two invoices totaling $104,260, Castro determined that Bucks
County’s sub-recipient obligated CRF funds for a 5-year subscription during the
covered period ending December 31, 2021. Castro noted that the subscription
would be active through 2025, which was outside of Treasury’s final period for
Bucks County to expend obligated funds received from the CRF,
September 30, 2022. Castro determined the ineligible questioned cost portion of
the prepaid subscription expenditures was $6,870.
Contract 3 – Administrative and Indirect Costs, Bucks Back to Work Program
We tested six invoices totaling $3,385,278 that Bucks County claimed under a
$3,767,980 contract. For these invoices, Bucks County spent CRF proceeds for
administrative costs and indirect programmatic costs for a sub-recipient running
the Bucks Back to Work (BBTW) grant program.
For one out of the six invoices relating to the BBTW program totaling $41,234,
Bucks County expended CRF funds for administrative costs to support the BBTW
grant program. Administrative expenses included tasks such as corresponding
with county and program administrators on program guidelines, notifying
businesses of program and application procedures through phone calls and
electronic correspondence, fielding phone calls from prospective applicants, and
reviewing and processing submitted applications for completeness and
qualifications.
Bucks County provided us with a sub-recipient claim invoice that agreed to the
expenditure amount claimed but showed these costs to be calculated using an
indirect administrative cost estimate based on general and administrative
expenses from the sub-recipient’s financial statements, and applying a 10%
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Desk Review of Bucks County, Pennsylvania
estimate instead of direct administrative costs as required by Treasury’s CRF
guidance.
Bucks County and its sub-recipient claimed indirect cost rates by employing
guidance from the Code of Federal Regulations (CFR), 2 CFR 200.414(f)), Grants
and Agreements, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards, Direct and Indirect (F&A) Costs. 18 This
guidance defined indirect cost rates and sets forth the 10% de minimis 19 indirect
cost rate that could be used indefinitely instead of charging the actual
administrative costs.
However, Treasury’s CRF guidance published in the Federal Register stated that
this provision did not apply to the use of CRF funds and recipients could not apply
their indirect costs rates to payments received from the CRF. Therefore, Bucks
County, by applying the indirect cost rate, did not comply with Treasury’s
requirement, resulting in an unallowable use of CRF funding in the amount of
$41,234.
Furthermore, for this contract, Bucks County misclassified an expenditure
involving a sub-recipient that received CRF funds for administrative expenses
running a grant program. Since the sub-recipient was carrying out a public
purpose as opposed to providing goods or services, Castro determined that this
contract should have been classified in the GrantSolutions portal in the Grants
greater than or equal to $50,000 payment type instead of the Contracts greater
than or equal to $50,000 payment type. We considered this to be a reporting error
and non-compliant with Treasury's reporting guidance.
Other Matter for Treasury OIG Consideration - Additional Potential Ineligible
Indirect Costs Reported within Contracts greater than or equal to $50,000
Castro recommends Treasury OIG request Bucks County perform an assessment
over whether there were any additional indirect costs claimed within its Contracts
18
Code of Federal Regulations (CFR), 2 CFR 200.414(f)), Grants and Agreements, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Direct
and Indirect (F&A) Costs states: “…any non-Federal entity that does not have a current negotiated
(including provisional) rate…may elect to charge a de minimis rate of 10% of modified total direct
costs (MTDC) which may be used indefinitely. No documentation is required to justify the 10% de
minimis indirect cost rate. As described in § 200.403, costs must be consistently charged as either
indirect or direct costs, but may not be double charged or inconsistently charged as both. If
chosen, this methodology once elected must be used consistently for all Federal awards until such
time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may
apply to do at any time.”
19
De minimis means lacking significance or importance: so minor as to merit disregard.
9
Desk Review of Bucks County, Pennsylvania
greater than or equal to $50,000 CRF submission, and identify those for removal
and repayment to Treasury, as applicable.
Aggregate Reporting Less Than $50,000
We determined Bucks County’s Aggregate Reporting less than $50,000 did not
comply with the CARES Act and Treasury’s Guidance. We tested four transactions
totaling $81,979 and identified one exception, with total unsupported questioned
costs of $5,000, as detailed below. Transactions tested included expenditures
associated with the issuance of tax anticipation notes (these sales were usually
conducted in person, and therefore, Bucks County paid for an advertisement to
publicize the virtual tax claim sale during the pandemic); and CRF awards made to
grant recipients under the BBTW grant program for sub-grant award recipients’
rent and utilities expenses.
Unsupported Aggregate Reporting Expenditures
Bucks County management structured the BBTW grant program on a
reimbursable basis and required small business applicants to submit evidence of
expenses incurred prior to grant award. The Bucks County Commissioners carved
out a multimillion-dollar budget originating from CRF funding to develop small
business grants throughout Bucks County. The goal of these grants was to assist
the economy of Bucks County and stimulate local businesses during the COVID-19
pandemic.
To be eligible, Bucks County required grant applicants to submit documentation
with their grant application to corroborate that they suffered a loss due to the
pandemic. Documentation included, but was not limited to receipts for payroll
expenditures, rent and mortgage expenses for the business, and operational
expenses such as lease payments and the cost of personal protective equipment.
Castro selected four beneficiary payments for testing totaling $81,979. For one
transaction totaling $5,000 for the BBTW grant program, Castro reviewed the
reimbursable expenditure support provided by the grant applicant, to include a
grant applicant general ledger detail screenshot showing payments made, and
check registers noting reasons for payments. The check registers detailed that the
grant applicant paid for "April Rent," June Rent," and "Rent and Vehicle
Maintenance." Castro did not consider this to be sufficiently reliable expenditure
support as both documents were internally generated by the grant applicant.
Without external expenditure support, Castro could not verify that the grant
beneficiary incurred expenditures that were necessary due to the COVID-19
pandemic, or that the beneficiary incurred these expenditures during the covered
period that began on March 1, 2020 and ended on December 31, 2021, or were not
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Desk Review of Bucks County, Pennsylvania
previously budgeted before March 27, 2020. Castro questioned $5,000 as
unsupported costs.
Other Matter for Treasury OIG Consideration – Additional Potential Unsupported
BBTW Grant Program Costs
Castro noted that Bucks County awarded 1,581 businesses a total of $25,668,250
in granted funds within its BBTW grant program, including our reported
Aggregate Reporting less than $50,000 questioned costs of $5,000. Since Castro
identified unsupported questioned costs within the BBTW grant we tested, we
recommend Treasury OIG determine the feasibility of performing additional
follow-up with Bucks County to determine if there were other instances of
unsupported balances within the BBTW grant program.
Aggregate Payments to Individuals
CRF 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. Castro notes that the Aggregate
Payments to Individuals payment type consisted of the below broad types of
potential costs, which we have defined from Treasury’s guidance as published in
the Federal Register. 20 Prime recipients may or may not have claimed all of these
types of expenditures.
20
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
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Desk Review of Bucks County, Pennsylvania
Public Health and Safety Payroll 21 – consisted of payroll costs for public
health and safety department personnel.
Substantially Dedicated Payroll 22 – consisted of payroll costs for non-
public health and safety personnel who were substantially dedicated to
mitigating or responding to the COVID-19 public health emergency.
Non-Substantially Dedicated Payroll 23 – consisted of payroll costs for
personnel who performed COVID-19 related tasks on a part-time basis.
Non-Payroll Expenditures – consisted of financial assistance payments to
citizens due to hardship or loss of income, unemployment claims, and
other non-payroll related expenditures made to individuals.
The Bucks County Aggregate Payments to Individuals balance consisted only of
payroll transactions from the following types of claimed costs.
Aggregate Payments to Individuals Total Expenses
Category Types 24 Claimed
Public Health and Safety Payroll $ 36,254,321
Non-Substantially Dedicated Payroll $ 2,508,040
Totals $ 38,762,361
21
Treasury’s Federal Register guidance provided the following examples of public health and
safety employees: “police officers (including state police officers), sheriffs and deputy sheriffs,
firefighters, emergency medical responders, correctional and detention officers, and those who
directly support such employees such as dispatchers and supervisory personnel…employees
involved in providing medical and other health services to patients and supervisory personnel,
including medical staff assigned to schools, prisons, and other such institutions, and other support
services essential for patient care (e.g., laboratory technicians) as well as employees of public
health departments directly engaged in matters related to public health and related supervisory
personnel.”
22
Substantially dedicated payroll costs meant that personnel must have dedicated over 50 percent
of their time to responding or mitigating COVID-19. Treasury’s Federal Register guidance
indicated: “The full amount of payroll and benefits expenses of substantially dedicated employees
may be covered using payments from the Fund. Treasury has not developed a precise definition of
what "substantially dedicated" means given that there is not a precise way to define this term
across different employment types. The relevant unit of government should maintain
documentation of the "substantially dedicated" conclusion with respect to its employees.”
23
Payroll costs that were not substantially dedicated were payroll costs that were not public health
and safety, and which were not substantially dedicated to performing COVID-19 related tasks.
Treasury’s Federal Register guidance defined more stringent tracking requirements for these types
of payroll costs. Specifically, Treasury’s Federal Register stated: “track time spent by employees
related to COVID-19 and apply Fund payments on that basis but would need to do so consistently
within the relevant agency or department. This means, for example, that a government could
cover payroll expenses allocated on an hourly basis to employees' time dedicated to mitigating or
responding to the COVID-19 public health emergency.”
24
Bucks County did not report any substantially dedicated payroll or non-payroll transactions
within its Aggregate Payments to Individuals payment type, and so these were not included within
the Aggregate Payments to Individuals Category Types.
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Desk Review of Bucks County, Pennsylvania
Castro noted that public health and safety payroll transactions were subject to
Treasury’s administrative accommodation, 25 and therefore, were subject to less
detailed documentation requirements. Castro tested public health and safety
payroll transactions by reviewing itemized payroll distribution reports to support
these balances. Non-substantially dedicated payroll balances were not subject to
this administrative accommodation, and therefore, Castro tested these
transactions by reviewing payroll distribution files and by performing tests over
specific employee timesheet submissions.
We determined that Bucks County’s Aggregate Payments to Individuals did not
comply with the CARES Act and Treasury’s Guidance. We selected three public
health and safety payroll transactions totaling $20,338,353 and two non-
substantially dedicated payroll transactions totaling $12,251. In total, we tested
$20,350,604 in Aggregate Payments to Individuals transactions. Castro found that
the public health and safety payroll expenditures complied with the CARES Act
Treasury’s Guidance. Castro is questioning total expenditures of $12,251 for the
tested non-substantially dedicated payroll transactions as ineligible, as detailed
below.
Ineligible Aggregate Payments to Individuals Expenditures
For all non-substantially dedicated payroll transactions tested in the amount of
$12,251, Bucks County claimed expenditures for payroll costs for Bucks County
personnel who worked at two Bucks County departments: the Recorder of Deeds
Department, and the Prothonotary Department. 26 Castro reviewed timesheets,
which agreed to the CRF claimed expenditure amounts without exception. We
requested activity logs elaborating on the tasks completed by these non-
substantially dedicated employees, to include descriptions of how those tasks
related to COVID-19. Bucks County management responded that the department
heads approved this time but were unable to furnish any other documents
tracking how the time worked was related to the COVID-19 pandemic.
Bucks County management also indicated that the Recorder of Deeds Department
and Prothonotary Department employees working during the COVID-19 covered
25
Treasury’s Federal Register guidance indicated that an administrative accommodation was, “In
recognition of the particular importance of public health and public safety workers to State, local,
and tribal government responses to the public health emergency, Treasury has provided, as an
administrative accommodation, that a State, local, or tribal government may presume that public
health and public safety employees meet the substantially dedicated test…This means that, if this
presumption applies, work performed by such employees is considered to be a substantially
different use than accounted for in the most recently approved budget as of March 27, 2020. All
costs of such employees may be covered using payments from the Fund for services provided
during the period that begins on March 1, 2020, and ends on December 31, 2021.”
26
Prothonotary means a chief clerk of any various courts of law.
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Desk Review of Bucks County, Pennsylvania
period were performing their normal work functions. For instance, the Recorder of
Deeds Department employees were processing documents related to real estate
transactions (e.g., deeds, mortgages, subdivision plans, etc.), paying invoices, and
answering calls. The Prothonotary Department employees were docketing,
scanning and processing civil and family court documents, and answering calls.
Castro considered these CRF expenditures to be ineligible, as these employees
were performing their regular work functions, and not tasks related to the COVID-
19 pandemic. Castro questions $12,251 in tested expenditures as ineligible.
Other Matter for Treasury OIG Consideration - Additional Potential Ineligible Non-
Substantially Dedicated Payroll Costs
Although Castro only tested $12,251 out of $84,604 in CRF payroll expenses
claimed for the Bucks County Recorder of Deeds and Prothonotary Departments,
Castro recommends Treasury OIG determine the feasibility of following up on the
remaining untested portion of this balance of $72,353, as the remaining balance
may be similarly ineligible. Additionally, Castro recommends Treasury OIG
request Bucks County perform an assessment over claimed non-substantially
dedicated payroll costs to determine if there were any additional departments
with employees who were not working on COVID-19 related tasks and identify any
potential ineligible costs.
Conclusion
We determined that the expenditures related to the Contracts greater than or
equal to $50,000, Aggregate Reporting less than $50,000, and Aggregate
Payments to Individuals payment types did not comply with the CARES Act and
Treasury’s Guidance.
We identified a combination of unsupported and ineligible questioned costs of
$5,000 and $106,423, respectively, with total questioned costs across all payment
types of $111,423. Also, we identified GrantSolutions portal misclassification
issues related to Contracts greater than or equal to $50,000, which we considered
to non-comply with Treasury’s reporting guidance.
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Desk Review of Bucks County, Pennsylvania
Additionally, Bucks County’s risk of unallowable use of funds is moderate. As a
result of this desk review, we recommend Treasury OIG:
Confirm the transactions noted as unsupported or ineligible expenditures
within Contracts greater than or equal to $50,000, Aggregate Reporting
less than $50,000, and Aggregate Payments to Individuals are recouped
or reallocated to other eligible uses by Bucks County in conformity with
Treasury’s Guidance. Based on Bucks County’s responsiveness to
Treasury OIG’s requests and its ability to provide sufficient
documentation, we recommend Treasury OIG determine the feasibility of
conducting an audit for Contracts greater than or equal to $50,000,
Aggregate Reporting less than $50,000, and Aggregate Payments to
Individuals.
Castro also identified other matters throughout the course of our desk review,
which warrant recommendations to Treasury OIG for additional action. Castro
recommends Treasury OIG:
Request Bucks County perform an assessment over whether there were
any additional indirect costs claimed within its Contracts greater than or
equal to $50,000 CRF submission, and identify those for removal and
repayment to Treasury, as applicable.
Castro noted that Bucks County awarded approximately 1,581 businesses
a total of $25,668,250 in granted funds within the BBTW grant program,
including our reported Aggregate Reporting less than $50,000 questioned
costs of $5,000. Since Castro identified unsupported questioned costs
within the BBTW grant we tested, Castro recommends Treasury OIG
determine the feasibility of performing additional follow-up with Bucks
County to determine if there were other instances of unsupported
balances within this grant program.
Determine the feasibility of following up on the remaining balance of
$72,353 within Aggregate Payments to Individuals for the Recorder of
Deeds and Prothonotary Departments, and determine if it is necessary to
question that balance as ineligible as well.
Request Bucks County perform an assessment over claimed non-
substantially dedicated payroll costs to determine if there were any
additional departments with employees who were not working on
COVID-19 related tasks and identify any potential ineligible costs.
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Desk Review of Bucks County, Pennsylvania
*****
All work completed with this letter complies with the Council of the Inspectors
General on Integrity and Efficiency’s Quality Standards for Federal Offices of
Inspectors General, which require that the work adheres to the professional
standards of independence, due professional care, and quality assurance to
ensure the accuracy of the information presented. 27 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
27
https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
16