OIG Ca 25 002 Desk Review Of The State Of Georgia S Use Of Coronavirus Relief Fund Proceeds
Summary
A Department of the Treasury Office of Inspector General memorandum dated October 4, 2024, OIG-CA-25-002, transmitting a desk review of the State of Georgia's use of Coronavirus Relief Fund (CRF) proceeds performed under contract by Castro & Company, LLC. The review states Treasury issued a $3,502,871,330 CRF payment to Georgia and that Georgia expended all of its funds as of December 31, 2022, returning $632,477. Castro tested a non-statistical selection of 25 transactions and reported no questioned costs. It found that most payment types complied with the CARES Act but not with Treasury's Guidance, citing misclassification reporting errors, while transfers complied with both. The review rates Georgia's risk of unallowable use of funds as low and makes no follow-up recommendations.
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
Full text
DEPARTMENT OF THE TREASURY
W ASHINGTON, D. C. 20220
OFFICE OF
October 4, 2024
INSPECTOR GENERAL
MEMORANDUM FOR JESSICA MILANO, CHIEF PROGRAM OFFICER, OFFICE OF
CAPITAL ACCESS, DEPARTMENT OF THE TREASURY
FROM: Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT: Desk Review of the State of Georgia’s Use of
Coronavirus Relief Fund Proceeds
(OIG-CA-25-002)
Please find the attached desk review memorandum1 on the State of Georgia’s
(Georgia) 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 25 transactions reported in the quarterly Financial Progress Reports
and did not report any questioned costs.
Castro determined that the expenditures related to the Contracts greater than or
equal to $50,000, Grants greater than or equal to $50,000, Direct Payments greater
than or equal to $50,000, Aggregate Reporting less than $50,000, 2 and Aggregate
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
Prime recipients were required to report CRF transactions greater than or equal to $50,000 in
detail in the grants 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).
Page 2
Payments to Individuals3 payment types complied with the CARES Act but not
with Department of the Treasury’s (Treasury) Guidance. Additionally, Castro
determined that the Transfers4 greater than or equal to $50,000 payment type
complied with the CARES Act and Treasury’s Guidance. Castro determined
Georgia’s risk of unallowable use of funds is low and did not identify any follow-
up items for the Treasury Office of Inspector General.
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 Georgia’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: Trey Bennett, Grants Division Director, Governor’s Office of Planning and
Budget
Stephanie Beck, Deputy Director, Governor’s Office of Planning and Budget
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
Wayne Ference, Partner, Castro & Company, LLC
3
Obligations and expenditures for payments made to individuals, regardless of amount, were
required to be reported in the aggregate in the grants portal to prevent inappropriate disclosure of
personally identifiable information.
4
A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
1635 King Street
Alexandria, VA 22314
Phone: 703.229.4440
Fax: 703.859.7603
www.castroco.com
Desk Review of the State of Georgia
October 4, 2024
OIG-CA-25-002
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM: Wayne Ference
Partner, Castro & Company, LLC
SUBJECT: Desk Review of the State of Georgia
On September 19, 2023, we initiated a desk review of the State of Georgia’s
(Georgia) 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 Georgia’s documentation supporting its uses of CRF proceeds as
reported in the GrantSolutions2 portal and to assess the risk of unallowable use of
funds. The scope of our desk review was limited to obligation and expenditure
data for the period of March 1, 2020 through December 31, 2022, 3 as reported in
the GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed Georgia’s quarterly Financial Progress Reports (FPRs) submitted
in the GrantSolutions portal through December 31, 2022;
2) reviewed the Department of the Treasury’s (Treasury) Coronavirus Relief
Fund Guidance as published in the Federal Register on January 15, 2021; 4
3) reviewed Treasury Office of Inspector General’s (OIG) Coronavirus Relief
Fund Frequently Asked Questions Related to Reporting and
Recordkeeping;5
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
Georgia fully expended their total CRF proceeds as of December 31, 2022. Castro set the scope
end date to December 31, 2022, which was the date of Georgia’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
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.
1
Desk Review of the State of Georgia
4) reviewed Treasury OIG’s monitoring checklists6 of Georgia’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 Georgia’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 Georgia’s use of CRF proceeds;
7) interviewed key personnel responsible for preparing and certifying
Georgia’s GrantSolutions portal quarterly FPR submissions, as well as
officials responsible for obligating and expending CRF proceeds;
8) made a non-statistical selection of Contracts, Grants, Transfers,9 Direct
Payments, Aggregate Reporting, 10 and Aggregate Payments to Individuals11
F
data identified through GrantSolutions portal reporting; and
9) evaluated documentation and records used to support Georgia’s quarterly
FPRs.
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. 1o4-156 (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 an annual audit of those Federal funds. 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 16 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
A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
10
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).
11
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
Desk Review of the State of Georgia
Based on our review of Georgia’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, Grants
greater than or equal to $50,000, Direct Payments greater than or equal to $50,000,
Aggregate Reporting less than $50,000, and Aggregate Payments to Individuals
payment types complied with the CARES Act but not with Treasury’s Guidance.
We also found that Transfers greater than or equal to $50,000 payment type
complied with the CARES Act and Treasury’s Guidance. We also determined
Georgia’s risk of unallowable use of funds is low.
Non-Statistical Transaction Selection Methodology
Treasury issued a $3,502,871,330 CRF payment to Georgia. As of
December 31, 2022, Georgia expended all of its CRF funds, which included a
return of $632,477 of CRF proceeds to the U.S. Treasury. Georgia’s cumulative
obligations and expenditures by payment type are summarized below.
Cumulative Cumulative
Payment Type Obligations Expenditures
Contracts >= $50,000 $ 765,426,362 $ 765,426,362
Grants >= $50,000 $ 58,707,581 $ 58,707,581
Loans >= $50,000 $ - $ -
Transfers >= $50,000 $ 358,513,139 $ 358,513,139
Direct Payments >= $50,000 $ 2,169,574,161 $ 2,169,574,161
Aggregate Reporting < $50,000 $ 150,017,610 $ 150,017,610
Aggregate Payments to
Individuals (in any amount)12 $ - $ -
Totals $ 3,502,238,853 $ 3,502,238,853
Castro made a non-statistical selection of payments in the 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,
Aggregate Reporting less than $50,000, and Aggregate Payments to Individuals
payment types. Selections were made using auditor judgment based on
12
See Reconciling GrantSolutions to Georgia’s General Ledger Detail and Related Financial
Reporting Control Issues within the Desk Review Results section below for misclassifications
identified in Direct Payments greater than or equal to $50,000 and Aggregate Payments to
Individuals in Georgia’s December 31, 2022 GrantSolutions portal submission. Georgia reported
$150,017,610 in Aggregate Reporting less than $50,000 but corrected this balance to $149,911,245
within its offline general ledger population to GrantSolutions portal reconciliation. Georgia
reported $0 in Aggregate Payments to Individuals, but corrected this balance to $1,917,428,596
within its offline general ledger reconciliation. Castro considered these to be reporting errors that
did not comply with Treasury’s Guidance. Since Georgia had a significant number of expenditures
that should have been reported in the Aggregate Payments to Individuals payment type as of our
scope period of December 31, 2022, we subjected the balance in this payment type from the
general ledger as part of our transaction selections. A table reflecting the revised balances is
included later in this report.
3
Desk Review of the State of Georgia
information and risks identified in reviewing audit reports, the GrantSolutions
portal reporting anomalies13 identified by the Treasury OIG CRF monitoring team,
and review of Georgia’s FPR submissions. Georgia did not obligate or expend CRF
proceeds to Loans greater than or equal to $50,000; therefore, we did not select
transactions from this payment type.
The number of transactions (25) we selected to test were based on Georgia’s total
CRF award amount and Castro’s overall risk assessment of Georgia. To allocate
the number of transactions (25) by payment type (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, Aggregate
Reporting less than $50,000, and Aggregate Payments to Individuals payment
types), we compared the total payment type dollar amounts as a percentage of
cumulative expenditures as of December 31, 2022. 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 $3,502,871,330
CRF payment to Georgia. 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, 2021.14
13
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.
14
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.
4
Desk Review of the State of Georgia
Section 15011 of the CARES Act required each covered recipient 15 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 funds16,17 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 Georgia’s quarterly FPRs through December 31, 2022, and found
that Georgia 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, 2022.
Reconciling GrantSolutions to Georgia’s General Ledger Detail and Related
Financial Reporting Control Issues
Castro’s review of Georgia’s underlying general ledger (GL) detail resulted in
identification of two GrantSolutions portal reconciling errors that we deemed to
be reporting misclassifications that did not comply with Treasury’s Guidance, as
detailed below.
The Direct Payments greater than or equal to $50,000 payment type included a
misclassification of $1,917,428,596, which should have been reported in the
Aggregate Payments to Individuals payment type. This was primarily related to
a $1,805,299,880 payment to replenish Georgia’s Unemployment Trust Fund.
15
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.
16
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.
17
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 the State of Georgia
See Aggregate Payments to Individuals Desk Review Results section below for
further detail.
We also identified a second instance where the Aggregate Reporting less than
$50,000 payment type included a reporting misclassification of $106,365. The
$106,365 should have been reported in the Grants greater than or equal to
$50,000 payment type because the transaction was greater than $50,000.
See below for a summary of these offline classification changes that Georgia made
within the general ledger detail reconciliations.
Corrected
Cumulative Expenditures per
Expenditures General Ledger
Payment Type per FPR Detail Population Difference
Contracts>= $50,000 $ 765,426,362 $ 765,426,362 $ -
Grants >= $50,000 $ 58,707,581 $ 58,813,946 $ (106,365)
Loans >= $50,000 $ - $ - $ -
Transfers to Other Government
$ 358,513,139 $ 358,513,139 $ -
Agencies >= $50,000
Direct Payments >= $50,000 $2,169,574,161 $ 252,145,565 $ 1,917,428,596
Aggregate Reporting < $50,000 $ 150,017,610 $ 149,911,245 $ 106,365
Aggregate Payments to
Individuals (in any amounts) $ - $ 1,917,428,596 $ (1,917,428,596)
Totals $3,502,238,853 $ 3,502,238,853 $ -
Castro noted that these changes did not result in a change to the total
expenditures claimed. Even after Georgia’s offline classification changes, which
we have summarized in the table above, Castro identified additional classification
errors within the Georgia reported values within our testing results. For instance,
we identified that Georgia incorrectly classified a negative reversal amount within
an aggregate payment type when it should have been reported to Contracts
greater than or equal to $50,000.
Summary of Testing Results
We found that the Contracts greater than or equal to $50,000, Grants greater than
or equal to $50,000, Direct Payments greater than or equal to $50,000, Aggregate
Reporting less than $50,000, and Aggregate Payments to Individuals payment
types complied with the CARES Act but not with Treasury’s Guidance due to the
misclassification errors. We also found that Transfers greater than or equal to
$50,000 payment type complied with the CARES Act and Treasury’s Guidance.
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 tested amounts. Castro
did not identify any questioned costs through our desk review.
6
Desk Review of the State of Georgia
Corrected
Expenditures Cumulative Unsupported Ineligible Total
Payment Type18 per General Expenditure Questioned Questioned Questioned
Ledger Detail Tested Amount Costs Costs Costs
Population
Contracts >=
$50,000 $ 765,426,362 $ 38,803,148 $ - $ - $ -
Grants >= $50,000 $ 58,813,946 $ 423,700.00 $ - $ - $ -
Loans >= $50,000 $ - $ - $ - $ - $ -
Transfers >=
$50,000 $ 358,513,139 $ 7,803,706 $ - $ - $ -
Direct Payments
>= $50,000 $ 252,145,565 $ 1,550,315 $ - $ - $ -
Aggregate
Reporting <
$50,000 $ 149,911,245 $ 10,600 $ - $ - $ -
Aggregate
Payments to
Individuals (in any
amount)19 $1,917,428,596 $ 1,911,093,794 $ - $ - $ -
Totals $3,502,238,853 $ 1,959,685,263 $ - $ - $ -
Contracts Greater Than or Equal to $50,000
We determined Georgia’s Contracts greater than or equal to $50,000 complied
with the CARES Act but did not comply with Treasury’s Guidance. We tested 23
invoices totaling $38,803,148 that Georgia claimed under 12 contracts totaling
$647,869,173, and identified no testing exceptions. Transactions tested included
expenditures for staffing and consulting services at healthcare facilities identified
by the Georgia Department of Community Health, in consultation with the Georgia
Emergency Management Agency and other relevant state entities; expenditures to
establish a temporary alternative medical site at the Georgia World Congress
18
Castro also tested six potential duplicate payments totaling $3,114,552 for Contracts greater than
or equal to $50,000 and eight potential duplicate payments for Direct Payments greater than or equal
to $50,000 totaling $4,308,880. We found no errors. We excluded these duplicate payment amounts
from our testing results table above.
19
Castro’s review of Georgia’s underlying general ledger (GL) detail resulted in identification of
reconciling errors that Castro deemed to be misclassifications that did not comply with Treasury’s
reporting guidance. Specifically, the Direct Payments greater than or equal to $50,000 expenditure
category included a misclassification of $1,917,428,596. The $1,917,428,596 should have been
reported in Aggregate Payments to Individuals. The Aggregate Reporting less than $50,000
expenditure category included a misclassification of $106,365. The $106,365 should have been
reported in Grants greater than or equal to $50,000. These amounts were misclassifications and not
considered questioned costs for the table above. See the Reconciling GrantSolutions to Georgia’s
General Ledger Detail and Related Financial Reporting Control Issues section of this report for
details.
7
Desk Review of the State of Georgia
Center to treat COVID-19 patients; and expenditures for information technology
support services for Georgia state agencies.
Related to the expenditures for information technology support services for
Georgia state agencies, with the onset of the pandemic and sudden shift to fully
remote work for the Georgia Department of Human Services, thousands of
employees from the Georgia Department of Human Services were working
remotely and so Georgia paid for information technology contractors to make
system modifications to its various client benefit systems and to provide wireless
and remote access devices for staff to continue working. In addition, Georgia
incurred expenses for licenses for a platform to allow for Georgia Division of
Family and Children Services staff to access voice services via state-issued
laptops while working remotely due to COVID-19.
Castro identified a misclassification error where Georgia included downward
adjusting entries within the Aggregate Reporting less than $50,000 payment type,
when it should have reported those downward adjusting entries to the Contracts
greater than or equal to $50,000 payment type. This resulted in understating the
Aggregate Reporting less than $50,000 and overstating the Contracts greater than
or equal to $50,000 payment types. Castro confirmed this was a net zero reporting
error that impacted reporting by payment type and Georgia’s reported sub-
recipients’ expenditure amounts, which did not impact the overall expenditure
amounts reported. This reporting error also did not result in any questioned costs
within the related tested balances. Castro considers this a reporting error that did
not comply with Treasury’s Guidance.
Grants Greater Than or Equal to $50,000
We determined Georgia's Grants greater than or equal to $50,000 complied with
the CARES Act but not with Treasury’s Guidance. We tested one grant totaling
$423,700 and identified no exceptions. The transactions tested included
expenditures incurred to enhance efforts to keep COVID-19 from entering and
spreading through nursing homes, and testing residents and staff based on
parameters and a frequency set forth by the U.S. Department of Health and
Human Services Secretary. Also, Georgia provided this nursing home grant to a
senior care center to reimburse the entity for its costs associated with
administering COVID-19 test kits to facility staff for processing through an external
commercial vendor or in-person at a commercial laboratory.
Castro’s review of Georgia’s underlying general ledger detail resulted in
identification of GrantSolutions portal reconciling errors that we deemed to be
reporting misclassifications that did not comply with Treasury’s Guidance.
8
Desk Review of the State of Georgia
Transfers Greater Than or Equal to $50,000
We determined Georgia's Transfers greater than or equal to $50,000 complied
with the CARES Act and Treasury’s Guidance. We tested six transactions totaling
$7,803,706 for transfers to three different counties totaling $9,791,247 and
identified no exceptions. The transactions tested related to public health and
safety police and fire department’s payroll claims, and a Forsyth County payment
for a small business grant program to assist with businesses who suffered a loss
due to the COVID-19 pandemic. The grant reimbursed the small businesses for
weekly rent expenses incurred.
Direct Payments Greater Than or Equal to $50,000
We determined Georgia’s Direct Payments greater than or equal to $50,000
complied with the CARES Act but not with Treasury’s Guidance. We tested five
COVID-19 medical claims made under Georgia's self-insurance program totaling
$1,498,742 out of $198,866,377 in self-insurance claims. Additionally, we tested all
29 invoices totaling $51,573 made to a vendor who provided meals to a Georgia
state prison. During the pandemic, to reduce the mixing of prison populations and
prevent the spread of COVID-19, use of the prison store and other shared facilities
was curtailed. The total tested value was $1,550,315. All transactions were tested
without exception.
Castro’s review of Georgia’s underlying general ledger detail resulted in
identification of GrantSolutions portal reconciling errors that we deemed to be
reporting misclassifications that did not comply with Treasury’s Guidance.
Georgia’s Self-Insurance Program
The Georgia Department of Community Health (DCH) administers the State Health
Benefit Plan (SHBP) insurance risk pool for the State. The DCH Board has the
authority to establish a health insurance plan; provide rules and regulations; and
general provisions of the plan. The plan is managed as an enterprise fund and is
used to manage and pay for health care expenses incurred by the state for its
employees and certain county government/local education agency employees
responsible for executing state programs paid through state funded allocations to
their counties for that purpose. The SHBP is the plan administrator for
approximately 450 organizations (state, county, and local education agencies) and
provides health coverage to more than 600,000 employees, teachers, retirees, and
their dependents. All SHBP financial activity is reported entirely within the state’s
Annual Comprehensive Financial Report, as it is wholly a fund of the State of
Georgia. Castro noted the following key points with respect to this insurance risk
pool.
9
Desk Review of the State of Georgia
State of Georgia’s Federal funding awards used to pay for claims: Georgia
confirmed that CRF proceeds were the only Federal funds used to pay for excess
claims experienced due to COVID-19. All other excess COVID-19 claim expenses
were paid from the regular employer and employee payroll contributions made to
the fund.
Members of the insurance risk pool: Georgia confirmed that all payroll locations
were Georgia based. There were no out-of-state employer entities in the SHBP.
With regards to the COVID-19 claim expenses provided to the state from the third-
party administrators (TPAs) administering benefit plans offered by SHBP to plan
members, documentation of claim expenses provided to the state did not contain
individual employer information. Expenses were paid on behalf of plan members
through the state contracted TPAs. The TPAs invoiced the state for all claims paid
for a given period, not on an individual claim by claim basis. These invoices cover
all SHBP members, both active and retirees, and from all payroll locations (i.e.
individual employers) with members in the Plan. As the State directly funds the
majority of the employer contributions made through payroll through
appropriations to state agencies, county public health offices, and local education
agencies, increasing employer payroll contributions to maintain the health of the
Fund due to an unexpected and unbudgeted surge in claims caused by the COVID-
19 pandemic would have had an additional direct negative impact on state
appropriations. As a result, Georgia used $198,866,377 of CRF proceeds to offset
COVID-19 specific claim expenses of $278,418,726 that were claimed within the
covered period, approximately 71 percent of costs incurred to the fund on behalf
of participating members.
Aggregate Reporting Less Than $50,000
We determined Georgia’s Aggregate Reporting less than $50,000 complied with
the CARES Act but not with Treasury’s Guidance. We tested one transaction
totaling $10,600 and identified no exceptions. The one transaction tested was for a
grant from Georgia to the town of Alapaha for the reimbursement of public safety
payroll expenses for direct law enforcement staff responsible for enforcing shelter
in place and other state and federal safety measures during the pandemic.
Treasury encouraged state governments to provide CRF proceeds to smaller cities
and counties who did not receive CRF funding directly.
Castro’s review of Georgia’s underlying general ledger detail resulted in
identification of GrantSolutions portal reconciling errors that we deemed to be
reporting misclassifications that did not comply with Treasury’s Guidance.
10
Desk Review of the State of Georgia
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. The Aggregate Payments to
Individuals payment type includes four broad types of potential costs, which are
discussed below and are defined in Treasury’s guidance as published in the
Federal Register.20 Prime recipients may or may not have claimed all these types
of expenditures.
Public Health and Safety Payroll21 – consists of payroll costs for public
health and safety department personnel.
Substantially Dedicated Payroll22 – consists 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 Payroll23 – consists of payroll costs for
personnel who performed COVID-19 related tasks on a part-time basis.
Non-Payroll Expenditures – consists of financial assistance payments to
citizens due to hardship or loss of income, unemployment claims, and
other non-payroll related expenditures made to individuals.
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
21
Treasury’s Federal Register guidance provides 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 include when personnel 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.”
11
Desk Review of the State of Georgia
The Georgia Aggregate Payments to Individuals balance consisted of payroll and
non-payroll transactions from the following types of claimed costs.
Population
Aggregate Payments to Individuals Category Types
Amount
Public Health and Safety Payroll $ 108,400,649
Substantially Dedicated Payroll $ 3,724,793
Non-Substantially Dedicated Payroll $ 3,274
Non-Payroll Expenditures24 $ 1,805,299,880
Total Aggregate Payments to Individuals Per
Population $ 1,917,428,596
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. Substantially dedicated and 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 and other
documentation.
We determined Georgia’s Aggregate Payments to Individuals complied with the
CARES Act but not with Treasury’s Guidance. We selected three transactions for
public health and safety payroll, ten transactions for substantially dedicated
payroll, and one transaction for non-payroll. This resulted in a total tested value of
$1,911,093,794, with no exceptions identified.
Castro’s review of Georgia’s underlying general ledger detail resulted in
identification of GrantSolutions portal reconciling errors that we deemed to be
reporting misclassifications that did not comply with Treasury’s Guidance.
24
Castro tested this balance without exception within our Aggregate Payments to
Individuals testing selections. Castro tested a $1,805,299,880 payment to replenish
Georgia’s Unemployment Trust Fund. See below for additional information.
25
Treasury’s Federal Register guidance states the following about the administrative
accommodation “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.”
12
Desk Review of the State of Georgia
Unemployment Trust Fund Replenishment Analysis
The non-payroll transaction tested consisted of $1,805,299,880 in payments from
November 2020 through December 2021 to replenish Georgia’s Unemployment
Trust Fund. The Georgia Department of Labor (DOL) performed unemployment
claim analysis supporting how it determined that the change in this balance
(unemployment claims paid) occurred due to the COVID-19 pandemic and not due
to unemployment claims that would have been paid regardless of the pandemic.
Castro obtained and inspected the bank statements to support key Unemployment
Trust Fund balances included within Georgia’s unemployment replenishment
trend analyses and which were needed to justify the eligibility of unemployment
expenditures claimed as CRF expenditures. Castro also obtained a written
confirmation from the DOL personnel responsible for managing the
Unemployment Trust Fund, which stated that Georgia did not claim
unemployment claims for reimbursement under any other Federal program.
Castro concluded that Georgia’s CRF replenishment payment consisted of an
Unemployment Trust Fund replenishment payment and not an augmentation to
the Unemployment Trust Fund. Additionally, Castro determined these payments
were necessary due to the COVID-19 pandemic and did not represent
unemployment claims that would have been paid regardless of the pandemic.
Conclusion
We found that the Contracts greater than or equal to $50,000, Grants greater than
or equal to $50,000, Direct Payments greater than or equal to $50,000, Aggregate
Reporting less than $50,000, and Aggregate Payments to Individuals payment
types complied with the CARES Act but not with Treasury’s Guidance. We also
found that Transfers greater than or equal to $50,000 complied with the CARES
Act and Treasury’s Guidance.
Additionally, we identified GrantSolutions portal misclassification reporting errors
within Contracts greater than or equal to $50,000, Direct Payments greater than or
equal to $50,000, Aggregate Reporting less than $50,000, and Aggregate
Payments to Individuals, which we considered to be non-compliant with
Treasury’s Guidance. Georgia’s risk of unallowable use of funds is low. As a result
of this desk review, Castro has no further recommendations for follow-up for
Treasury OIG.
13
Desk Review of the State of Georgia
*****
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.26 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
26
https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
14
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