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DEPARTMENT OF THE TREASURY
W ASHINGTON, D.C. 20220
OFFICE OF
INSPECTOR GENERAL
October 23, 2024
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 Baltimore County, Maryland’s Use of
Coronavirus Relief Fund Proceeds (OIG-CA-25-004)
Please find the attached desk review memorandum 1 on Baltimore County,
Maryland’s (Baltimore 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 21 transactions reported in the quarterly Financial Progress Reports
(FPR) and identified unsupported questioned costs of $620,189 (see attached
schedule of monetary benefits).
Castro determined that the expenditures related to Aggregate Reporting less than
$50,000 2 did not comply with the CARES Act and Department of the Treasury’s
(Treasury) Guidance. Also, Castro determined that the expenditures related to the
Direct Payments greater than or equal to $50,000 payment type complied with the
CARES Act but did not comply with Treasury’s Guidance. Additionally, Castro
determined that Baltimore County’s risk of unallowable use of funds is moderate.
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
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).
Page 2
Castro recommends that Treasury Office of Inspector General (OIG) follow-up with
Baltimore County’s management to confirm the transactions noted as
unsupported expenditures of $620,189 within Aggregate Reporting less than
$50,000 are recouped or replaced by other eligible expenditures, not previously
charged to CRF, that were incurred during the period of performance. Based on
Baltimore County’s responsiveness to Treasury OIG’s requests and its ability to
provide sufficient documentation, Castro recommended that Treasury OIG
determine the feasibility of conducting an audit for Aggregate Reporting less than
$50,000.
Regardless of a determination of a full audit of Aggregate Reporting less than
$50,000 payments, Castro identified a matter related to the Baltimore County
Department of Economic and Workforce Development (DEWD) payroll that
warrants follow-up by Treasury OIG. Specifically, Castro identified $2,617 in
unsupported questioned costs in the Baltimore County DEWD Aggregate
Reporting less than $50,000 payroll expenditure testing. As such, Castro
recommends that Treasury OIG determine the feasibility of performing additional
follow-up with Baltimore County to determine if there were other instances of
unsupported payroll expenditures within the remaining $259,411 DEWD payroll
transaction population.
Treasury OIG and Castro met with Baltimore County management to discuss the
questioned costs. Baltimore County management stated they would provide
additional documentation to Treasury OIG to support the questioned costs or
replace them with other eligible expenditures.
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 Baltimore County’s use of the 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 the Quality Standards for Federal Offices of Inspectors
General.
Page 3
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: 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
Kevin D. Reed, Director of Budget and Finance, Baltimore County, Maryland
Page 4
Attachment
Schedule of Monetary Benefits
According to the Code of Federal Regulations, 3 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). 4 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 405.
Recommendation Questioned Costs
Recommendation No. 1 $620,189
The questioned cost represents amounts provided by Treasury under the
Coronavirus Relief Fund. As discussed in the attached desk review, $620,189 is
Baltimore County’s total expenditures reported in the grant-reporting portal that
lacked supporting documentation.
3
2 CFR § 200.84 – Questioned Cost
4
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 Baltimore County, Maryland
October 23, 2024
OIG-CA-25-004
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM: Wayne Ference
Partner, Castro & Company, LLC
SUBJECT: Desk Review of Baltimore County, Maryland
On November 9, 2023, we initiated a desk review of Baltimore County, Maryland’s
(Baltimore 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 Baltimore 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, 2022, 3 as reported in the GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed Baltimore County’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
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
Baltimore County 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 Baltimore 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 Baltimore County, Maryland
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 Baltimore 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 Baltimore 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 Baltimore County’s use of CRF
proceeds;
7) interviewed key personnel responsible for preparing and certifying
Baltimore 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 Direct Payments and Aggregate
Reporting 9 data identified through GrantSolutions portal reporting; and
F
9) evaluated documentation and records used to support Baltimore County’s
quarterly FPRs.
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).
2
Desk Review of Baltimore County, Maryland
Based on our review of Baltimore County’s documentation supporting the uses of
its CRF proceeds as reported in the GrantSolutions portal, we determined that the
expenditures related to the Aggregate Reporting less than $50,000 payment type
did not comply with the CARES Act and Treasury’s Guidance. We also determined
that the Direct Payments greater than or equal to $50,000 payment type complied
with the CARES Act but did not comply with Treasury’s Guidance. We identified
unsupported questioned costs of $620,189. We also determined Baltimore
County’s risk of unallowable use of funds is moderate.
Castro recommends that Treasury OIG confirm the transactions noted as
unsupported expenditures within Aggregate Reporting less than $50,000 are
recouped or replaced by other eligible expenditures, not previously charged to
CRF, that were incurred during the period of performance. Based on Baltimore
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 Aggregate Reporting less than $50,000.
Non-Statistical Transaction Selection Methodology
Treasury issued a $144,369,685 CRF payment to Baltimore County. As of
December 31, 2022, Baltimore County expended all of its CRF funds. Baltimore
County’s cumulative obligations and expenditures by payment type are
summarized below.
Cumulative Cumulative
Payment Type Obligations Expenditures
Contracts >= $50,000 $ - $ -
Grants >= $50,000 $ - $ -
Loans >= $50,000 $ - $ -
Transfers >= $50,000 $ - $ -
Direct Payments >= $50,000 $ 42,113,722 $ 42,113,722
Aggregate Reporting < $50,000 $ 102,255,963 $ 102,255,963
Aggregate Payments to
Individuals (in any amount) $ - $ -
Totals $ 144,369,685 $ 144,369,685
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Desk Review of Baltimore County, Maryland
Castro made a non-statistical selection of payments in the Direct Payments
greater than or equal to $50,000 and Aggregate Reporting less than $50,000
payment types. Selections were made using auditor judgment based on
information and risks identified in reviewing audit reports, the GrantSolutions
portal reporting anomalies 10 identified by the Treasury OIG CRF monitoring team,
and review of Baltimore County’s FPR submissions. Baltimore County did not
obligate or expend CRF proceeds to the Contracts greater than or equal to
$50,000, Grants greater than or equal to $50,000, Loans greater than or equal to
$50,000, Transfers 11 greater than or equal to $50,000, or Aggregate Payments to
Individuals 12 payment types; therefore, we did not select transactions from these
payment types.
The number of transactions (21) we selected to test were based on Baltimore
County’s total CRF award amount and Castro’s overall risk assessment of
Baltimore County. To allocate the number of transactions (21) by payment type
(Direct Payments greater than or equal to $50,000 and Aggregate Reporting less
than $50,000), 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.
Additionally, Treasury OIG identified additional anomalies in the form of potential
duplicates, which had not already been included within our transaction selection,
of which we selected 17 potential duplicates. We performed limited testing on
these 17 potential duplicate payments and determined that the payments were
not duplicates.
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 $144,369,685
10
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.
11
A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
12
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 Baltimore County, Maryland
CRF payment to Baltimore 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
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)).
13
P.L. 116-260 (December 27, 2020). The covered period end date of the CRF was extended through
December 31, 2021 by the Consolidated Appropriations Act, 2021. The covered period 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.
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 Baltimore County, Maryland
Desk Review Results
Financial Progress Reports
We reviewed Baltimore County’s quarterly FPRs through December 31, 2022, and
found that Baltimore 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, 2022.
Summary of Testing Results
We found that the Aggregate Reporting less than $50,000 payment type 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 period. Also, we
found that the Direct Payments greater than or equal to $50,000 payment type
complied with the CARES Act but did not comply with 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 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.
6
Desk Review of Baltimore County, Maryland
Summary of Expenditures Testing and Recommended Results
As of December 31, 2022
Cumulative
Expenditure Cumulative Unsupported Ineligible Total
Population Expenditure Questioned Questioned Questioned
Payment Type Amount Tested Amount Costs Costs Costs
Contracts >= $50,000 $ - $ - $ - $ - $ -
Grants >= $50,000 $ - $ - $ - $ - $ -
Loans >= $50,000 $ - $ - $ - $ - $ -
Transfers >= $50,000 $ - $ - $ - $ - $ -
Direct Payments >=
$50,000 $ 42,113,722 $ 7,694,693 $ - $ - $ -
Aggregate Reporting <
$50,000 $ 102,255,963 $ 826,394 $ 620,189 $ - $ 620,189
Aggregate Payments to
Individuals (in any
amount) $ - $ - $ - $ - $ -
Totals $ 144,369,685 $ 8,521,087 $ 620,189 $ - $ 620,189
Direct Payments Greater Than or Equal to $50,000
We determined Baltimore County’s Direct Payments greater than or equal to
$50,000 complied with the CARES Act but did not comply with Treasury’s
Guidance. We tested eight direct payments totaling $7,694,693 and identified no
testing exceptions. The direct payments tested included expenditures for janitorial
supplies, personal protective equipment, costs of food programs, and County
building modifications.
Additionally, we identified reporting misclassifications that did not comply with
Treasury’s Guidance related to Direct Payments greater than or equal to $50,000
that we determined should have been reported as Contracts greater than or equal
to $50,000 in the GrantSolutions portal.
Aggregate Reporting Less Than $50,000
We determined Baltimore County’s Aggregate Reporting less than $50,000 did not
comply with the CARES Act and Treasury’s Guidance. We tested 13 transactions
totaling $826,394 and identified four exceptions with total unsupported
questioned costs of $620,189, as detailed below. The aggregate reporting
transactions tested included expenditures related to grant payments made for
7
Desk Review of Baltimore County, Maryland
business and economic recovery, payroll for public health and safety employees, 17
payroll for substantially dedicated 18 and non-substantially dedicated employees, 19
equipment usage costs, eviction prevention program payments, and laptop
purchases to facilitate telework capabilities for Baltimore County employees
during the pandemic.
Additionally, we identified reporting misclassifications that did not comply with
Treasury’s Guidance related to Aggregate Reporting less than $50,000 that we
determined should have been reported as Direct Payments greater than or equal
to $50,000 in the GrantSolutions portal.
Aggregate Reporting Exception 1 - Small Business and Economic Recovery Grant
Baltimore County provided $30,000 to a company for a small business and
economic recovery grant to provide training due to COVID-19 pandemic impacts.
The grant agreement between Baltimore County and the grant recipient specified
that the grant proceeds would be utilized by the company to provide training to
members to assist the small businesses during the pandemic. The grant
agreement adequately outlined the terms and conditions of the grant as well as
conditions for non-compliance; however, Baltimore County was unable to provide
the requested documentation that was outlined within the agreement as required
17
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.”
18
Substantially dedicated payroll costs meant that personnel must have dedicated over 50 percent
of their time to responding to 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.”
19
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 that recipients should: “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.”
8
Desk Review of Baltimore County, Maryland
documentation. Specifically, Baltimore County did not provide expenditure
support such as invoices or other operating expense support to evidence the costs
incurred. Additionally, Baltimore County provided a list of virtual training classes
held by the company, but Castro looked through the grant recipient’s website and
was unable to find any classes matching those listed to evidence that they
occurred. We also requested evidence of participants for the classes such as
meeting attendee reports; however, Baltimore County did not provide any such
support. As a result, Castro determined the grant award amount of $30,000 was
unsupported, resulting in questioned costs of $30,000.
Aggregate Reporting Exception 2 - Small Business Restaurant Reimbursement
Grant
Baltimore County provided $30,000 to a company for a small business restaurant
reimbursement grant to assist with expenses incurred as a result of the COVID-19
pandemic. We requested that Baltimore County provide supporting
documentation to evidence that the CRF proceeds were utilized as listed in the
grant agreement and that the claimed expenses were eligible under Treasury’s
Guidance. The grant agreement specified that the grantee would furnish to the
County, upon request, evidence of payment of expenses incurred for the
permitted uses and documentation that demonstrated that the information
provided within the application was true. We noted that in their application, the
grant recipient indicated that it would use the grant funds to reimburse rent,
payroll, supplies, and utilities. We asked Baltimore County management for the
expenditure support that was submitted with the application that evidenced the
costs which the grant funds reimbursed. Baltimore County was unable to provide
documentation to support that the grant funds were utilized to reimburse the
expenditures noted within the application.
In addition, within their application, the grant recipient indicated that it lost an
estimated $500,000 in revenue due to COVID-19; however, the financial
information section of their application indicated that revenue for March/April
2019 was $201,140, while revenue for March/April 2020 was $256,165. This
information does not support the estimated revenue loss in the application.
Baltimore County personnel did not provide financial documentation as proof of
the net revenue loss incurred, and no further responses were provided to our
inquiry for confirmation if this amount was budgeted or the actual number for the
revenue in March/April 2020. Baltimore County failed to provide sufficient and
appropriate evidence that the amounts reimbursed by the CRF were related to the
expenditures noted within the grant agreement. In addition, Baltimore County did
not maintain an appropriate record of the expenditures. Castro determined these
expenditures were unsupported, resulting in questioned costs of $30,000.
9
Desk Review of Baltimore County, Maryland
Aggregate Reporting Exception 3 – Public Health and Safety Payroll
Baltimore County claimed $3,004,802 in expenditures for the Baltimore County
Police Department’s payroll costs for public health and safety personnel during
the pandemic. Castro tested a total of $4,725 related to public health and safety
payroll and did not identify any exceptions with the actual testing performed.
However, we performed a reconciliation of the underlying details from the general
ledger and payroll records, and compared the amounts charged against the
expenditures charged in GrantSolutions and identified a variance of $557,572. We
requested that Baltimore County management provide an explanation;
management agreed that the payroll costs did not reconcile and stated the
variance may have been an overpayment issue that was not corrected. As such,
Castro determined this variance to be an unsupported questioned cost as the
balance within the GrantSolutions portal exceeded the detailed support by
$557,572 in relation to these payroll costs.
Aggregate Reporting Exception 4 – Baltimore County Payroll Expenditures
Baltimore County claimed $262,028 in expenditures for Baltimore County
Department of Economic and Workforce Development (DEWD) related to payroll
expenditures for Baltimore County employees during the pandemic. DEWD was
the agency that oversaw the planning and distribution of COVID-19 grants to
Baltimore County’s businesses and individuals. Of the $262,028 expenditure
amount, we tested five payroll transactions totaling $2,617. Within Baltimore
County’s population titled “All Payroll with Breakout for PS and HHS vs. Other
County Chargebacks”, the payroll for the selected DEWD employees did not
indicate which of the selected employees were substantially dedicated and non-
substantially dedicated. We requested this information from Baltimore County
management. In its response, Baltimore County indicated that only two out of the
five tested employees would have spent the majority of their time on COVID-19
duties. Of the two individuals who were considered substantially dedicated,
Baltimore County indicated one was responsible for creating, implementing and
monitoring a strategic plan for the agency’s role to fund Baltimore County’s
businesses and residents in response to COVID-19 pandemic, while the other
managed the daily operations through the implementation and disbursement of
funding CRF stimulus grants for the County’s businesses. Treasury’s guidance in
the Federal Register Vol. 86, No. 10 states, “The relevant unit of government
should maintain documentation of the “substantially dedicated” conclusion with
respect to its employees.” Baltimore County did not provide evidence to support
its conclusion with respect to the selected employees as substantially dedicated
as required by the Federal Register.
10
Desk Review of Baltimore County, Maryland
For the employees identified as non-substantially dedicated, Baltimore County did
not provide timesheets that evidenced the amount of time worked on COVID-19
related tasks, or the specific COVID-19 related tasks to which the employees were
assigned. Treasury’s guidance in the Federal Register Vol. 86, No. 10 FAQ No. 47
states, "a State, local, or tribal government may also 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." As a result, we identified unsupported
questioned costs amounting to $2,617 related to noncompliance with CRF
eligibility criteria for the five payroll transactions tested.
Because Castro identified $2,617 in unsupported questioned costs within the
Baltimore County DEWD payroll expenditure testing and adequate internal control
over payroll expenditures charged to CRF was lacking, we recommend Treasury
OIG determine the feasibility of performing additional follow-up with Baltimore
County to determine if there were other instances of unsupported payroll
expenditures within the remaining $259,411 transaction population.
Conclusion
We determined that the expenditures related to the Aggregate Reporting less than
$50,000 payment type did not comply with the CARES Act and Treasury’s
Guidance. Also, we determined the expenditures related to the Direct Payments
greater than or equal to $50,000 payment type complied with the CARES Act but
did not comply with Treasury’s Guidance. We identified unsupported questioned
costs of $620,189 and determined that Baltimore County’s risk of unallowable use
of funds is moderate. We identified GrantSolutions portal reporting
misclassification issues related to Direct Payments greater than or equal to
$50,000 and Aggregate Reporting less than $50,000, which we considered to be
non-compliant with Treasury’s Guidance, but did not result in questioned costs.
As a result of this desk review, we recommend Treasury OIG confirm the
transactions noted as unsupported expenditures of $620,189 within Aggregate
Reporting less than $50,000 are recouped or replaced by other eligible
expenditures, not previously charged to CRF, that were incurred during the period
of performance. Based on Baltimore 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 Aggregate
Reporting less than $50,000.
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Desk Review of Baltimore County, Maryland
Regardless of a determination of a full audit of Aggregate Reporting less than
$50,000 payments, Castro identified a matter related to Baltimore County DEWD
payroll that warrants follow-up by Treasury OIG. Specifically, Castro identified
$2,617 in unsupported questioned costs in the Baltimore County DEWD Aggregate
Reporting less than $50,000 payroll expenditure testing. As such, we recommend
Treasury OIG determine the feasibility of performing additional follow-up with
Baltimore County to determine if there were other instances of unsupported
payroll expenditures within the remaining $259,411 DEWD payroll transaction
population.
*****
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. 20 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
20
https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
12