Oig Ca 25 012 Desk Review Of The Commonwealth Of Pennsylvania S Use Of Coronavirus R
- Issuer
- Inspector general and oversight reports
- Document type
- Oig Ca 25 012 Desk Review Of The Commonwealth Of Pennsylvania S Use Of Coronavirus R
- Case
- Oig Ca 25 012 Desk Review Of The Commonwealth Of Pennsylvania S Use Of Coronavirus R
Summary
A Department of the Treasury Office of Inspector General memorandum, OIG-CA-25-012, dated December 4, 2024 and signed by Assistant Inspector General for Audit Deborah L. Harker, transmitting a desk review by Castro & Company, LLC of the Commonwealth of Pennsylvania's use of Coronavirus Relief Fund proceeds. Castro reviewed a non-statistical selection of 25 transactions and identified unsupported and ineligible questioned costs of $55,971,453 and $258,465, plus $5,052,994 in unsupported costs from reconciliation, for total questioned costs of $61,282,912. It determined that Pennsylvania's risk of unallowable use of funds is high and recommends that Treasury OIG follow up and recoup costs if support is not provided. The memorandum states that Pennsylvania management will make supporting documentation available at Treasury OIG's follow-up review in 2025.
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
December 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 Commonwealth of Pennsylvania’s
Use of Coronavirus Relief Fund Proceeds
(OIG-CA-25-012)
Please find the attached desk review memorandum 1 on the Commonwealth of
Pennsylvania’s (Pennsylvania) 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
(FPR) and identified a combination of unsupported and ineligible questioned costs
of $55,971,453 and $258,465, respectively, with total questioned costs across all
payment types of $56,229,918. In addition, as part of Castro’s reconciliation
procedures, Castro identified other unsupported questioned costs totaling
$5,052,994 which were separate from the sample of transactions tested. The total
questioned costs for the reconciliation issues increased total questioned costs to
$61,282,912 (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 unsupported expenditures related to Pennsylvania’s small business
assistance grant program, unsupported and ineligible expenditures related to transfers made to
local governments, ineligible subscription costs incurred outside of the covered period,
unsupported expenditures for grants awarded to nursing home facilities, and unsupported
questioned costs as a result of reconciliation procedures.
Page 2
Castro determined that the expenditures related to Grants greater than or equal to
$50,000, Transfers greater than or equal to $50,000, 3 Direct payments greater than
or equal to $50,000, and Aggregate Reporting less than $50,000 4 payment types
did not comply with CARES Act and Department of the Treasury’s (Treasury)
Guidance. Castro also determined that the expenditures related to the Contracts
greater than or equal to $50,000 payment type complied with the CARES Act but
did not comply with Treasury’s Guidance. Castro noted that the Aggregate
Payments to Individuals5 complied with both the CARES Act and Treasury’s
guidance. Castro determined that Pennsylvania’s risk of unallowable use of funds
is high.
Castro recommends that Treasury Office of Inspector General (OIG) follow-up with
Pennsylvania management to confirm if the transactions noted as unsupported
within the Grants greater than or equal to $50,000, Transfers greater than or equal
to $50,000, Direct Payments greater than or equal to $50,000, and Aggregate
Reporting less than $50,000 payment types can be supported. If support is not
provided, Treasury OIG should recoup the unsupported and ineligible questioned
costs or request that Pennsylvania management provide support for replacement
expenses, not previously charged, that were eligible during the CRF period of
performance. Further, based on Pennsylvania’s responsiveness to our requests
and management’s ability to provide sufficient documentation and/or replace
unsupported and ineligible transactions charged to the CRF with valid
expenditures, Castro recommends Treasury OIG determine the feasibility of
conducting an audit for the Grants greater than or equal to $50,000, Transfers
greater than or equal to $50,000, Direct Payments greater than or equal to $50,000,
and Aggregate Reporting less than $50,000 payment types.
Castro also identified seven other matters throughout the course of its desk
review that are detailed in its report. Castro recommends that Treasury OIG
follow-up with Pennsylvania management on these issues.
The Commonwealth of Pennsylvania management opted to forgo meeting with
Treasury OIG and Castro to further discuss the questioned costs. Pennsylvania
management stated that Pennsylvania has collected supporting documentation
for items identified in the desk review as unsupported and will make the support
available when Treasury OIG conducts its follow-up review in 2025.
3 A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
4
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).
5
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.
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 Pennsylvania’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, Audit Director, 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
John Kaschak, Deputy Secretary for Comptroller Operations,
Commonwealth of Pennsylvania Office of the Budget
Jamie Jerosky, Assistant Director,
Commonwealth of Pennsylvania Office of the Budget
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 Treasury’s Joint Audit Management
Enterprise System (JAMES).7 The amount will also be included in the 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 $61,282,912
The questioned costs represent amounts provided by Treasury under the
Coronavirus Relief Fund. As discussed in the attached desk review, $61,282,912 is
Pennsylvania’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 the Commonwealth of Pennsylvania
December 4, 2024
OIG-CA-25-012
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM: Wayne Ference
Partner, Castro & Company, LLC
SUBJECT: Desk Review of the Commonwealth of Pennsylvania
On September 7, 2023, we initiated a desk review of the Commonwealth of
Pennsylvania’s (Pennsylvania) 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 Pennsylvania’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
June 30, 20233 in the GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed Pennsylvania’s quarterly Financial Progress Reports (FPRs)
submitted in the GrantSolutions portal through June 30, 2023;
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
Pennsylvania fully expended their total CRF proceeds as of June 30, 2023. Castro set the scope
end date to June 30, 2023, which was the date of Pennsylvania’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
1
Desk Review of the Commonwealth of 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 checklists6 of Pennsylvania’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 Pennsylvania’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 Pennsylvania’s uses of CRF proceeds;
7) interviewed key personnel responsible for preparing and certifying
Pennsylvania’s GrantSolutions portal quarterly FPR submissions, as well as
officials responsible for obligating and expending CRF proceeds;
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 quarterly.
7
The Single Audit Act of 1984, as amended in 1996, subject entities who receive federal funds in
excess of $750,000 to one audit of those federal funds as opposed to separate audits over each of
the Federal program funding sources received. This 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 of Federal
awards administered by non-Federal entities. 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, the CARES Act, 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.
2
Desk Review of the Commonwealth of Pennsylvania
8) made a non-statistical selection of Contracts, Grants, Transfers, 9 Direct
Payments, Aggregate Reporting,10 and Aggregate Payments to Individuals11
data identified through GrantSolutions reporting; and
9) evaluated documentation and records used to support Pennsylvania’s
quarterly FPRs.
Based on our review of Pennsylvania’s documentation supporting the uses of its
CRF proceeds as reported in the GrantSolutions portal, we determined that the
expenditures related to the Grants greater than or equal to $50,000, Transfers
greater than or equal to $50,000, Direct Payments greater than or equal to $50,000,
and Aggregate Reporting less than $50,000 payment types did not comply with
the CARES Act and Treasury’s Guidance. We also determined that the
expenditures related to the Contracts greater than or equal to $50,000 payment
type complied with the CARES Act but did not comply with Treasury’s Guidance.
We noted that the Aggregate Payments to Individuals payment type complied
with both the CARES Act and Treasury’s Guidance.
From our testing of selected transactions, we identified unsupported and ineligible
questioned costs of $55,971,453 and $258,465, respectively, with total questioned
costs of $56,229,918 from these transactions. In addition, as part of our
reconciliation procedures, Castro identified other unsupported questioned costs
totaling $5,052,994 which were separate from the sample of transactions tested.
The total questioned costs for the reconciliation issues increased our total
questioned costs to $61,282,912. We also determined Pennsylvania’s risk of
unallowable use of funds is high.
Castro recommends that Treasury OIG follow-up with Pennsylvania management
to confirm if the transactions noted as unsupported within the Grants greater than
or equal to $50,000, Transfers greater than or equal to $50,000, Direct Payments
greater than or equal to $50,000, and Aggregate Reporting less than $50,000
payment types can be supported. If support is not provided, Treasury OIG should
recoup the unsupported and ineligible questioned costs or request that
Pennsylvania management provide support for replacement expenses, not
previously charged, that were eligible during the CRF period of performance.
Further, based on Pennsylvania’s responsiveness to Treasury OIG’s requests and
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.
3
Desk Review of the Commonwealth of Pennsylvania
its ability to provide sufficient documentation and/or replace unsupported and
ineligible transactions charged to the CRF with valid expenditures, we recommend
Treasury OIG determine the feasibility of conducting an audit for the Grants
greater than or equal to $50,000, Transfers greater than or equal to $50,000, Direct
Payments greater than or equal to $50,000, and Aggregate Reporting less than
$50,000 payment types.
Non-Statistical Transaction Selection Methodology
Treasury issued a $3,935,169,363 CRF payment to Pennsylvania. As of
June 30, 2023, Pennsylvania expended all of its CRF funds. Pennsylvania’s
cumulative obligations and expenditures by payment type are summarized below.
Cumulative Cumulative
Payment Type Obligations Expenditures
Contracts >= $50,000 $ 193,143 $ 193,143
Grants >= $50,000 $ 783,258,336 $ 783,258,336
Loans >= $50,000 $ - $ -
Transfers >= $50,000 $ 625,000,000 $ 625,000,000
Direct Payments >= $50,000 $ 790,391,485 $ 790,391,485
Aggregate Reporting < $50,000 $ 1,736,326,399 $ 1,736,326,399
Aggregate Payments to Individuals
(in any amount)12 $ - $ -
Totals $ 3,935,169,363 $ 3,935,169,363
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
Castro’s review of Pennsylvania’s underlying general ledger (GL) detail resulted in identification
of reconciling reporting errors that Castro deemed to be misclassifications that did not comply
with Treasury’s Guidance. For instance, the Aggregate Reporting less than $50,000 payment type
included a misclassification of $1,598,685,120. Included in this amount was $2,064 which should
have been reported in the Grants greater than or equal to $50,000 payment type, $25,540,595,
which should have been reported in the Direct Payments greater than or equal to $50,000 payment
type and $1,573,142,461 that should have been reported in the Aggregate Payment to Individuals
payment type. Pennsylvania confirmed that it made these reporting corrections within its
September 30, 2023 GrantSolutions portal submission due to reporting misclassifications brought
to their attention by Castro. Since Pennsylvania 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 June 30, 2023, we subjected the balance in this payment type from the GL as part of our
transaction selections, and our transaction selections were made as of September 30, 2023 from
the updated GL data. See Population Reconciling and Financial Reporting Controls Issues within
the Desk Review Results section below for a summary of these classification changes that
Pennsylvania made.
4
Desk Review of the Commonwealth of Pennsylvania
information and risks identified in reviewing audit reports, the GrantSolutions
portal reporting anomalies13 identified by the Treasury OIG CRF monitoring team,
and review of Pennsylvania’s FPR submissions. Pennsylvania 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 was based on Pennsylvania’s
total CRF award amount and Castro’s overall risk assessment of Pennsylvania. 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),
we compared the total payment type dollar amounts as a percentage of
cumulative expenditures as of September 30, 2023.
Additionally, Treasury OIG provided information on anomalies identified for
Pennsylvania. We selected eight outlier anomalies within our original transaction
selections. Treasury OIG also identified additional anomalies in the form of
potential duplicate transactions, which had not already been included within our
transaction selection, of which we selected 12 potential duplicates. We performed
limited testing on these 12 potential duplicate payments to determine whether the
payments were duplicates, and we identified exceptions within this potential
duplicate testing. See Other Matter for Treasury OIG Consideration - Direct
Payments - Potential Duplicate Anomalies for further discussion. The transactions
selected for testing were not selected statistically, and therefore results could not
be extrapolated to the total universe of transactions.
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.
5
Desk Review of the Commonwealth of Pennsylvania
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 $3,935,169,363
CRF payment to Pennsylvania. 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
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.
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.
15
Section 15011 of P.L. 116-136, the CARES Act, 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, the CARES Act, 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, the CARES Act, defined large, covered funds as covered funds that
amounted to more than $150,000.
6
Desk Review of the Commonwealth of Pennsylvania
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 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 Pennsylvania’s quarterly FPRs through June 30, 2023, and found
that Pennsylvania 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, and the quarterly FPR for the period ending
June 30, 2023; however, Pennsylvania personnel did not submit a quarterly FPR
for the period ending March 31, 2023.
Population Reconciling and Financial Reporting Control Issues
Castro’s review of Pennsylvania’s GrantSolutions portal reported expenditures as
of June 30, 2023 as compared to the underlying general ledger (GL) detail,
resulted in the identification of a significant amount of reporting errors that Castro
deemed to be misclassifications that did not comply with Treasury’s Guidance.
For instance, the Aggregate Reporting less than $50,000 payment type included a
misclassification of $1,598,685,120. Included in this amount was $2,064 that
should have been reported in Grants greater than or equal to $50,000 payment
type, $25,540,595 which should have been reported in Direct Payments greater
than or equal to $50,000 payment type, and $1,573,142,461 that should have been
reported in the Aggregate Payments to Individuals payment type. Pennsylvania
confirmed that it made these reporting corrections within its September 30, 2023
GrantSolutions portal submission after the reporting misclassifications were
brought to their attention by Castro. See below for a summary of these
classification changes made by Pennsylvania management.
7
Desk Review of the Commonwealth of Pennsylvania
Cumulative Cumulative Expenditures
Payment Type Expenditures per FPR Per GL Detail Population Difference
Contracts >= $50,000 $ 193,143 $ 193,143 $ -
Grants >= $50,000 $ 783,258,336 $ 783,260,400 $ 2,064
Loans >= $50,000 $ - $ - $ -
Transfers to Other
Government
Agencies >= $50,000 $ 625,000,000 $ 625,000,000 $ -
Direct Payments >=
$50,000 $ 790,391,485 $ 815,932,080 $ 25,540,595
Aggregate Reporting
< $50,000 $ 1,736,326,399 $ 137,641,279 $ (1,598,685,120)
Aggregate Payments
to Individuals (in any
amount) $ - $ 1,573,142,461 $ 1,573,142,461
Totals $ 3,935,169,363 $ 3,935,169,363 $ -
Castro noted that these changes did not result in a change to the total
expenditures claimed. Even after Pennsylvania’s classification adjustments, Castro
identified additional classification errors within the Pennsylvania reported values.
For instance, we identified Pennsylvania incorrectly classified a grant we tested to
Pennsylvania sub-recipients within the Contracts greater than or equal to $50,000
payment type, when it should have been reported within the GrantSolutions
portal as Grants greater than or equal to $50,000. See testing results below for
additional discussion.
Summary of Testing Results
We found that the Grants greater than or equal to $50,000, Transfers greater than
or equal to $50,000, Direct Payments greater than or equal to $50,000, and
Aggregate Reporting less than $50,000 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 period. We also determined
that the Contracts greater than or equal to $50,000 payment type complied with
the CARES Act but did not comply with Treasury’s Guidance. We noted that the
Aggregate Payments to Individuals 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
unsupported and ineligible expenditures tested and identified as questioned
costs, which did not comply with the CARES Act and Treasury’s Guidance. See
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.
8
Desk Review of the Commonwealth of Pennsylvania
Table 1 – Summary of Expenditures Testing and Recommended Results
As of September 30, 202318
Cumulative Unsupported Ineligible
Expenditure GL Cumulative Tested Tested Total Tested
Population Expenditure Questioned Questioned Questioned
Payment Type Amount Tested Amount Costs Costs Costs
Contracts >= $50,000 $ 193,143 $ 193,143 $ - $ - $ -
Grants >= $50,000 $ 783,260,400 $ 17,706,493 $ 1,677,874 $ - $ 1,677,874
Loans >= $50,000 $ - $ - $ - $ - $ -
Transfers to Other Government
Agencies >= $50,000 $ 625,000,000 $ 4,663,950 $ 4,121,714 $ 2,250 $ 4,123,964
Direct Payments >= $50,000 $ 815,932,080 $ 52,356,942 $ 50,133,833 $ 18,151 $ 50,151,984
Aggregate Reporting < $50,000 $ 137,641,279 $ 1,912,226 $ 38,032 $ 238,064 $ 276,096
Aggregate Payments to
Individuals (in any amount) $ 1,573,142,461 $ 1,234,173,142 $ - $ - $ -
Totals $ 3,935,169,363 $ 1,311,005,896 $ 55,971,453 $ 258,465 $ 56,229,918
18
Castro’s review of Pennsylvania’s underlying GL detail resulted in identification of reporting errors that Castro deemed to be
misclassifications that did not comply with Treasury’s Guidance. For instance, the Aggregate Reporting less than $50,000 payment type
included a misclassification of $1,598,685,120. Included in this amount was $25,540,595, which should have been reported in the Direct
Payments greater than or equal to $50,000 payment type and $1,573,142,461 that should have been reported in the Aggregate Payment
to Individuals payment type. Pennsylvania confirmed that it made these reporting corrections within its September 30, 2023
GrantSolutions portal submission due to reporting misclassifications brought to their attention by Castro. Since Pennsylvania 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 June 30, 2023, we selected our transactions for testing from the September 30, 2023 GL population. See Population
Reconciling and Financial Reporting Controls Issues within the Desk Review Results section for summary of these classification changes
that Pennsylvania made.
9
Desk Review of the Commonwealth of Pennsylvania
Castro identified other matters which we considered to be questioned costs, but which were not identified as a
result of the testing of our judgmental transaction selections. The following table combines the tested questioned
costs identified in Table 1 above with the questioned costs from the other matters identified. We have included a
“Total Questioned Costs (Tested & Other Matters)” column that summarizes the total amount of questioned costs.
All these questioned costs did not comply with the CARES Act and Treasury’s Guidance. See 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.
Table 2 – Summary of Expenditures Testing and Other Matters and Recommended Results
As of September 30, 2023
(E)
(B) (C=A+B) Ineligible (F=D+E)
(A) Unsupported Total (D) Questioned Total (G=C+F)
Unsupported Questioned Unsupported Ineligible Costs Ineligible Total
Questioned Costs (Other Questioned Questioned (Other Questioned Questioned
Payment Type Costs (Tested) Matters) Costs Costs (Tested) Matters) Costs Costs
Contracts >= $50,000 $ - $ - $ - $ - $ - $ - $ -
Grants >= $50,000 $ 1,677,874 $ 4,121,902 $ 5,799,776 $ - $ - $ - $ 5,799,776
Loans >= $50,000 $ - $ - $ - $ - $ - $ - $ -
Transfers >= $50,000 $ 4,121,714 $ - $ 4,121,714 $ 2,250 $ - $ 2,250 $ 4,123,964
Direct Payments >= $50,000 $ 50,133,833 $ 931,092 $ 51,064,925 $ 18,151 $ - $ 18,151 $ 51,083,076
Aggregate Reporting <
$ -
$50,000 $ 38,032 $ 38,032 $ 238,064 $ - $ 238,064 $ 276,096
Aggregate Payments to
Individuals (in any amount) $ - $ - $ - $ - $ - $ - $ -
Totals $ 55,971,453 $ 5,052,994 $ 61,024,447 $ 258,465 $ - $ 258,465 $ 61,282,912
10
Desk Review of the Commonwealth of Pennsylvania
Contracts Greater than or Equal to $50,000
We determined Pennsylvania’s Contracts greater than or equal to $50,000
complied with the CARES Act but did not comply with Treasury’s Guidance. The
single contract transaction selected for $193,143 related to Pennsylvania’s sub-
recipient purchasing food items for a food bank. Pennsylvania residents were
experiencing record layoffs and shutdowns due to COVID-19 that negatively
impacted their earnings, leading to many families having an increased need to
rely on food banks and food pantries.
Castro was able to test the reported expenditure amount within the
GrantSolutions portal without exception; however, Castro identified a
misclassification reporting error that did not comply with Treasury's Guidance.
Castro reviewed the purchase order between Pennsylvania and the not-for-profit
sub-recipient responsible for running this food bank. We determined that this
selection should have been classified as a Grant greater than or equal to $50,000
instead of as Contract greater than or equal to $50,000 transaction. Castro
considered Pennsylvania a pass-through entity19 that provided a sub-award to the
not-for-profit as the sub-recipient.
Grants Greater Than or Equal to $50,000
We determined Pennsylvania’s Grants greater than or equal to $50,000 did not
comply with the CARES Act and Treasury’s Guidance. We tested five grants
totaling $17,706,493. The grants tested included expenditures for the purchase of
nutrition assistance for childcare; personal protective equipment; expenses to
provide a health care seminar; COVID-19 testing reimbursement from testing
laboratories; and nursing home facility support to include testing equipment,
installation, setup, and training for use of the testing equipment. We identified
exceptions related to four different tested grants, which resulted in unsupported
questioned costs of $1,677,874, as detailed below.
Additionally, we identified unsupported questioned costs of $4,121,902 from an
Other Matter not included within our testing but identified during Castro’s
reconciliation procedures performed over Pennsylvania’s sub-recipient GL detail
to Grants entries within GrantSolutions, as detailed below.
19
A pass-through entity means a non-Federal entity that provides a sub-award to a sub-recipient to
carry out part of a Federal program.
11
Desk Review of the Commonwealth of Pennsylvania
Grant 1 – Subsidized Childcare Grant
Pennsylvania claimed $22,443,700 in CRF expenses for a Subsidized Childcare
Grant. Castro noted that Pennsylvania awarded 1,443 businesses a total of
$22,443,700 and we tested four transactions totaling $189,400 related to this grant.
Castro asked Pennsylvania management if they used any other federal funding
related to these programs, and management responded, “The Commonwealth of
PA did not conduct an audit of these entities. Pennsylvania claimed these
expenditures under the Coronavirus Relief Fund and are unaware of these
expenditures being claimed under any other federal funded program.”
We identified exceptions related to all four transactions and the total amount
tested. The Pennsylvania Department of Human Services (DHS) Office of
Childhood Development & Early Learning incurred CRF costs related to facilities
costs, personnel costs, and the cost associated with fulfilling the implementation
of the Social Services Block Grant and the Child Care Development Fund grant.
Pennsylvania established these grant programs to provide CRF funding to families
receiving funding and eligible under the Temporary Assistance for Needy Families
(TANF) and Supplemental Nutrition Assistance Programs. Pennsylvania designed
these CRF grants to cover the increased costs of health and safety practices
incurred by grant recipients as a result of the COVID-19 pandemic (for costs such
as childcare and transportation).
This enabled low-income parents and parents receiving TANF to work or to
participate in the educational or training programs they needed in order to work
during the pandemic. The transactions tested related to grant funding provided to
the sub-recipient that then provided funding to childcare center business
beneficiaries that sustained losses due to COVID-19. Pennsylvania did not provide
sufficient documentation needed for Castro to verify that the grant
applicants/beneficiaries were eligible to receive these grant awards. As a result,
Castro questioned $189,400 as unsupported costs due to the following:
The Subsidized Childcare Grant application requested that childcare providers
itemize the total of COVID-19 expenditures incurred, but Pennsylvania did not
obtain underlying expenditure support from its sub-recipients to corroborate
the CRF expenditure amounts claimed.
We requested information for the Subsidized Childcare Grant applications, to
include completed applications signed and certified by the applicants. For
three out of the four transactions tested, Pennsylvania provided a spreadsheet
file version of the grant application form with responses to questions in the
application and electronic certification by the applicant. The spreadsheet was
developed by an accounting firm hired by Pennsylvania to assist with sub-
12
Desk Review of the Commonwealth of Pennsylvania
recipient monitoring. However, no application was provided for the fourth
transaction.
To be eligible for the grant, per Pennsylvania House Bill ACT 2020-24,
applicants must have suffered a loss due to COVID-19 and provide proof of
necessary expenditures or lost revenues attributable to COVID-19. However,
for all $189,400 tested, Pennsylvania management did not provide financial
statements or other evidence of lost revenues attributable to COVID-19 from
the grant applicants for Castro to verify applicants suffered such a loss.
Castro noted that two of the transactions tested included funds provided to
childcare centers that contained a Pennsylvania GL detail field “License
Status” of “Expired” and “Revoked.” Pennsylvania responded that at the time
the childcare providers applied for the grant, their license was in good
standing but sometime after they received grant funding, their license status
changed. As these expenditures were still included within Pennsylvania’s CRF
claim and were listed as expired and revoked, Castro was not able to confirm
that funds were paid to active childcare providers.
Other Matter for Treasury OIG Consideration – Additional Potential Unsupported
Subsidized Childcare Grant Program Costs
Castro noted that Pennsylvania awarded 1,443 businesses a total of $22,443,700 in
grant funds within its Subsidized Childcare Grant Program, including our reported
Grants greater than equal to $50,000 unsupported questioned costs of $189,400.
Since Castro identified unsupported questioned costs within the Subsidized
Childcare Grant payments we tested, we recommend that Treasury OIG determine
the feasibility of performing additional follow-up with Pennsylvania to determine
if there were other instances of unsupported balances within the Subsidized
Childcare Grant Program.
Grant 2 – COVID-19 Relief Statewide Small Business Assistance Grant Program
Pennsylvania claimed $225,000,000 in expenses for a COVID-19 Relief Statewide
Small Business Assistance Grant Program. These funds were to provide relief to
small businesses through distribution by a statewide association of Community
Development Financial Institutions.20 We tested one transaction valued at
$10,000,000 related to administrative expenses incurred for COVID-19 Relief
Statewide Small Business Program Impact Reports that included creative briefs,
20
The purpose of a Community Development Financial Institutions Program is to promote
economic revitalization and community development through investment in and assistance to
Community Development Financial Institutions. These funds provide financial and technical
assistance to Community Development Financial Institution recipients selected to enhance their
ability to provide financial products, financial services, and development services to and in their
target markets.
13
Desk Review of the Commonwealth of Pennsylvania
impact report pagination, content editing and proofreading; drafted social media
posts; and news release development, media outreach, and follow-up.
Pennsylvania was only able to provide us with invoices that supported $8,625,924
of the $10,000,000 to verify the eligibility of the expenditures claimed. Castro
questioned the remaining $1,374,076 in expenditures as unsupported.
For an additional $50,000 transaction tested related to this grant, the transaction
consisted of payments to a grant beneficiary. Pennsylvania’s grant award listed
eligible use of funds for purchases such as payroll costs, costs related to the
continuation of group health care benefits during periods of paid sick, medical, or
family leave, insurance premiums, rent payments, and utility payments.
Pennsylvania did not provide any underlying grant recipient expenditure support.
Castro requested grant applications with sufficient detail needed to verify the
eligibility of the applicants. Pennsylvania provided us with partial responses,
including the grant agreement, bank statements, application self-certifications,
W-9s,21 and award letters proving the $50,000 was deposited and received. The
Federal Register allows prime recipients to design their grant program for awards
to small businesses, and details that prime recipients can provide economic
support to those suffering from employment or business interruptions due to
COVID-19-related business closures. To verify eligibility of its applicants,
Pennsylvania designed its grant program to require applicants to submit the most
recent tax return filed (2019 or 2018), as well as statements of profit and loss both
prior to the start of COVID-19 (December 31, 2019) and after COVID-19 started (as
of March 31, 2020). The application included a self-certification by the business
that it suffered a loss but did not include any pre-and post-COVID self-reported
profit and loss amounts along with this assertion. Further, Pennsylvania did not
provide Castro with any profit or loss statements to supplement the application.
Without this information being included within the self-assertion or being
provided along with the grant applicant’s submission, Castro was unable to
corroborate that Pennsylvania verified that the business suffered a loss due to
COVID-19 and was eligible for the grant. Likewise, Castro could not confirm this
business was eligible to receive this grant because of the COVID-19 pandemic.
Castro questioned the $50,000 in expenditures as unsupported.
Other Matter for Treasury OIG Consideration – Additional Potential Unsupported
COVID-19 Relief Statewide Small Business Assistance Grant Program Costs
Castro noted that Pennsylvania awarded 10,964 businesses and Community
Development Financial Institutions a total of $225,000,000 within its COVID-19
Relief Statewide Small Business Assistance Grant Program. Since Castro
21
A W-9 is a U.S. Internal Revenue Service document utilized to obtain the tax identification
number of an individual or business entity and is utilized for eligibility verification purposes.
14
Desk Review of the Commonwealth of Pennsylvania
identified unsupported questioned costs within the COVID-19 Relief Statewide
Small Business Assistance Grant Program payments we tested, we recommend
Treasury OIG determine the feasibility of performing additional follow-up with
Pennsylvania to determine if there were other instances of unsupported balances
within the COVID-19 Relief Statewide Small Business Assistance Grant Program.
Grant 3 - Regional Response Health Collaborative Grant
Pennsylvania claimed $12,403,353 in grant expenses for a Regional Response
Health Collaborative in the Northeast Region of Pennsylvania, primarily to
promote health and stabilize the economy by directly supporting COVID-19
readiness and response in healthcare facilities and improving the quality of care
related to infection prevention and other priority healthcare conditions common to
facilities.
One transaction tested for $1,995,344 related to this grant consisted of operating
expenses incurred by the sub-recipient to run the grant program such as
purchases for personal protective equipment. Pennsylvania provided us with
invoices that only supported $1,993,208 of the expenditures claimed but did not
provide invoices to support the remaining $2,136. Castro questioned $2,136 in
expenditures as unsupported.
Grant 4 - Pre-K Counts and Head Start State Supplemental Assistance Program
Pennsylvania claimed $62,262 in CRF related expenditures that it disbursed to the
grant recipients eligible for the Pre-K Counts and the Head Start State
Supplemental Assistance Programs to offset expenses associated with COVID-19.
Castro asked Pennsylvania management if they used any other federal funding
related to these CRF programs, and management responded, “The
Commonwealth of PA did not conduct an audit of these entities. Pennsylvania
claimed these expenditures under the Coronavirus Relief Fund and are unaware of
these expenditures being claimed under any other federal funded program.”
This grant covered increased costs above those covered by the Pre-K Counts and
Head Start State Supplemental Assistance Programs that arose as a result of the
pandemic such as personal protective equipment for children and staff, bleach
and soap for cleaning and disinfecting classrooms, hand wipes for office cleaning,
and hand sanitizer.
Pennsylvania provided a sub-recipient GL entry for all expenses paid under this
grant, however, Pennsylvania could not identify the specific expenditure amounts
that agreed to the payments in question, as Pennsylvania did not require its
grantees to submit invoices. Pennsylvania stated that per their grant agreement,
15
Desk Review of the Commonwealth of Pennsylvania
both grantees were paid a pre-determined amount every month and did not
submit invoices to be reimbursed because the amount was paid in advance. The
monthly payments were deposited in the vendor’s bank account where funds
were drawn as needed. Given that the vendors were not required to submit
invoices to reimburse expenses, neither the vendor nor Pennsylvania was able to
identify any underlying expenditure supporting documentation for any specific
monthly payment. Castro determined that without this information, Pennsylvania
did not perform sufficient grantee monitoring to verify that its grantees expended
CRF proceeds appropriately as required by the Federal Register;22 therefore,
Castro could not determine whether the sub-recipients expended funds on eligible
CRF expenditures. Castro questioned $62,262 as unsupported costs.
Other Matter for Treasury OIG Consideration - Grants Greater Than or Equal to
$50,000 Sub-Recipient Population Reconciliation: Unsupported Incentive Payment
Reinvestment Back into the Grant Program
During our sub-recipient GL detail reconciliation procedures performed related to
Grants greater than or equal to $50,000, Castro noted $4,121,902 in incentive costs
Pennsylvania allocated to two sub-recipients that were required to promote health
by directly supporting COVID-19 readiness and response in facilities, improving
the quality of care related to infection prevention, and prioritizing health care
conditions common to facilities. This CRF funding expanded COVID-19 testing to
include asymptomatic staff and residents in facilities to expand public health
surveillance and implement best practices in infection control. Castro identified
that incentive payments constituted a total of 12 percent of the costs of one of the
grant agreements. Pennsylvania further allocated the 12 percent in incentives
across additional incentive groups such as 2.5 percent to successful completion of
all aspects of a rapid response event, 1.5 percent to baseline universal testing, and
1.5 percent for onsite facility consultations. Pennsylvania then measured the grant
sub-recipient’s performance as compared to set metrics to determine whether to
make an award for that specific incentive group (e.g., if the grant recipient
achieved actual performance metrics above the target metric of 90 percent).
The grant incentive support provided included a summary of incentive payments
and progress met towards meeting specified milestones. The grant agreement
also required the sub-recipient to reinvest these funds into the grant program to
help achieve the objectives of the program. Pennsylvania provided a sub-recipient
assertation that stated “the incentive funds were reinvested in the sub-recipient to
support the following: sub-recipient related staff wages, benefits and mileage;
leased swing space; PPE [personal protective equipment]; contractual costs
22
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
16
Desk Review of the Commonwealth of Pennsylvania
related to transportation, float pool staffing, testing services, and cleaning
services; and supplies and equipment;” however, Pennsylvania did not provide
any direct cost support evidencing these funds were utilized in this manner.
Castro questioned $4,121,902 as unsupported.
Based on Pennsylvania’s responses to Treasury OIG’s follow-ups over obtaining
support to evidence that grant sub-recipients reinvested the $4,121,902 grant
incentive costs back into the grant program, we recommend Treasury OIG
determine the feasibility of following up with Pennsylvania determine whether it
has claimed any additional unsupported CRF expenditures in this manner.
Transfers Greater Than or Equal to $50,000
We determined Pennsylvania’s Transfers greater than or equal to $50,000 did not
comply with the CARES Act and Treasury’s Guidance. We tested four transfers
totaling $4,663,950. The transfers tested included expenditures for the purchase of
personal protective equipment; establishment of a grant program to assist small
businesses, and tourism businesses; purchase of COVID-19 test kits; and creation
of a COVID-19 planning committee, which met on a weekly basis. We identified
exceptions related to four different transfers, which resulted in unsupported and
ineligible questioned costs of $4,121,714 and $2,250 respectively, as detailed
below.
Transfer 1 – Transfer to York County for COVID-19 Related Expenditures
Pennsylvania claimed $40,553,915 in expenditures transferred to York County.
Castro tested one transaction related to this transfer totaling $1,997,249 used for
reimbursing unbudgeted expenditures of county and municipal governments and
non-profit organizations related to COVID-19 and for the establishment of a grant
program to assist small and tourism businesses. Funds were also used to expand
rural broadband access in unserved and underserved areas of the county.
Pennsylvania provided an aggregate level obligation and allocation of total
funding to the various zones, but Castro did not consider these obligations
sufficient to support the actual expenditures incurred. Pennsylvania did not
provide the information needed to make detailed selections at the invoice level or
expenditure support at the invoice level needed to determine the eligibility of the
CRF amounts claimed. Castro questioned $1,997,249 as unsupported.
Other Matter for Treasury OIG Consideration – Additional Potential Unsupported
Transfer to York County for COVID-19 Related Expenditures
Castro noted that Pennsylvania claimed $40,553,915 in expenditures transferred to
York County for COVID-19 related expenditures. Since Castro identified
17
Desk Review of the Commonwealth of Pennsylvania
unsupported questioned costs of $1,997,249 within the transfer transactions that
we tested, we recommend Treasury OIG determine the feasibility of performing
additional follow-up with Pennsylvania to determine if there were other instances
of unsupported balances within the transfer to York County for COVID-19 related
expenditures.
Transfer 2 – Transfer to Cumberland County for a COVID-19 County Relief Block
Grant
Pennsylvania claimed $22,881,555 in expenditures transferred to Cumberland
County. Castro tested one transaction related to this transfer totaling $1,287,298
for a COVID-19 County Relief Block Grant. The funds were designed to address
COVID-19 needs of the broader community including county government,
businesses, and nonprofit organizations. Castro noted that this transaction was an
aggregate level transaction and Pennsylvania did not provide the underlying
expenditure support such as invoices, payroll distribution reports, and any
additional sub-recipient GL detail to support the eligibility of the CRF amounts
claimed. Castro questioned $1,287,298 as unsupported because no supporting
documentation for the uses of funds was provided at the transaction level.
Other Matter for Treasury OIG Consideration – Additional Potential Unsupported
Transfer to Cumberland County for a COVID-19 County Relief Block Grant
Castro noted that Pennsylvania claimed $22,881,555 in expenditures transferred to
Cumberland County for a COVID-19 County Relief Block Grant. Since Castro
identified unsupported questioned costs of $1,287,298 within the transfer
transactions that we tested, we recommend Treasury OIG determine the feasibility
of performing additional follow-up with Pennsylvania to determine if there were
other instances of unsupported balances within the transfer to Cumberland
County for a COVID-19 County Relief Block Grant.
18
Desk Review of the Commonwealth of Pennsylvania
Transfer 3 – Transfer to Columbia County for Administration of the CARES Act
Grant
Pennsylvania claimed $5,866,825 in expenditures transferred to Columbia County.
We tested one transaction totaling $117,336 for expenditures incurred to pay a
consultant to assist with administering the CARES Act Grant, including mileage
and liability insurance reimbursement. Castro reviewed the sub-recipient provided
consultant invoices and were able to reconcile $49,068 out of the $117,336
claimed but identified a variance of $68,268. Pennsylvania did not provide
invoices to support the eligibility of the full amount of $117,336 claimed for this
transaction. Therefore, Castro questioned $68,268 as unsupported.
Other Matter for Treasury OIG Consideration – Additional Potential Unsupported
Transfer to Columbia County for Administration of the CARES Act Grant
Castro noted that Pennsylvania claimed $5,866,825 in expenditures transferred to
Columbia County for administration of the CARES Act Grant. Since Castro
identified unsupported questioned costs of $68,268 within the transfer
transactions that we tested, we recommend Treasury OIG determine the feasibility
of performing additional follow-up with Pennsylvania to determine if there were
other instances of unsupported balances within the transfer to Columbia County
for administration of the CARES Act Grant.
Transfer 4 – Transfer to Forest County for the Purchase of IT Services
Pennsylvania claimed $1,000,000 in expenditures transferred to Forest County. We
tested one transaction totaling $784,028 related to the purchase of information
technology (IT) services for setting up telework equipment during the months of
April and May 2020, and the purchase of telework equipment needed to
participate in remote webinars and trainings due to COVID-19. Castro reviewed
the invoices and was able to reconcile $12,879 out of the $784,028 expenditures
claimed.
Castro determined the remaining $771,149 consisted of the County’s payroll
expenses. Pennsylvania provided earnings registers, but those earnings registers
did not include a grand total of expenditures claimed, and Pennsylvania did not
provide a payroll distribution report needed to recalculate the total payroll
claimed. Without this detail, we determined that Pennsylvania was unable to
furnish a reconciliation to support that they performed sufficient sub-recipient
monitoring over this balance to include verifying the payroll amounts reconciled
to the total amount claimed.
19
Desk Review of the Commonwealth of Pennsylvania
Additionally, Pennsylvania did not provide the payroll distribution reports that
detailed specific employee names, positions, departments worked, hours charged,
pay type charge codes, and pay amounts that agreed to total payroll costs claimed
of $771,149. Without the department and employee positions, Castro could not
verify whether these employees were public health and safety23 personnel or
whether they were substantially dedicated24 – See the “Aggregate Payments to
Individuals” section below for descriptions of these expenditure categories.
During our review of the earnings register provided, Castro identified bonuses to
a county employee totaling $2,250. Forest County responded that these bonuses
were court mandated to compensate the individual for providing overall
administration of the Forest County driving under the influence program, which
included responsibilities for planning, implementation, and monitoring of the total
driving under the influence program and the Forest Area Drug Education
Program. Despite the bonuses being court ordered, Treasury's Guidance in the
Federal Register explicitly disallowed the prime recipient from claiming workforce
bonuses other than hazard pay or overtime. Treasury’s Guidance in the Federal
Register number 2925 states, “The Guidance includes workforce bonuses as an
example of ineligible expenses but provides that hazard pay would be eligible if
otherwise determined to be a necessary expense.” Therefore, Castro questioned
$2,250 as ineligible costs and the remaining $768,899 as unsupported costs.
23
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.”
24
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.”
25
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
20
Desk Review of the Commonwealth of Pennsylvania
Direct Payments Greater Than or Equal to $50,000
We determined Pennsylvania’s Direct Payments greater than or equal to $50,000
did not comply with the CARES Act and Treasury’s Guidance. We tested four
direct payments totaling $52,356,942. The direct payments tested included
expenditures for payments to beneficiaries under a rental assistance grant
program as an emergency response to the COVID-19 pandemic; expenses to
facilitate distance learning, including technological improvements in connection
with school closings to enable compliance with COVID-19 precautions, as well as
expenses to improve telework capabilities for public employees to enable
compliance with COVID-19 public health precautions; computer equipment
(laptops) provided to university personnel who did not have access to these
resources and had been primarily using desktops/workstations in their office
spaces prior to the pandemic.
We identified exceptions related to three different tested direct payments, which
resulted in unsupported and ineligible questioned costs of $50,133,833 and
$18,151 respectively. Additionally, we identified one unsupported questioned cost
of $931,092 from an Other Matter related to a potential duplicate transaction for
Direct Payments greater than or equal to $50,000.
We also identified two GrantSolutions reporting portal misclassifications related
to Direct Payments greater than or equal to $50,000, where we determined three
transactions should have been reported as Grants greater than or equal to
$50,000, and one transaction should have been reported as Contracts greater than
or equal to $50,000, which we considered non-compliant with Treasury’s
Guidance. See detail below for additional discussion.
Direct Payment 1 – Grant Provided to the Nursing Home Assistance COVID
Community Health Choices Managed Care Organizations
Pennsylvania claimed $22,172,894 in expenditures granted to Nursing Home
Assistance COVID Community Health Choices Managed Care Organizations. For
this expenditure, Pennsylvania had an existing relationship with the nursing home
and provided Castro with Pennsylvania House Bill ACT 2020-24 that detailed that
Pennsylvania should enter into a grant agreement with at least one eligible health
collaborative applicant from each region, to provide operations, management,
and administration to protect residents in nursing home facilities from COVID-19,
and to expand COVID testing in the facility. Pennsylvania did not provide a formal
grant agreement detailing the terms between the Nursing Home Assistance
COVID Community Health Choices Managed Care Organizations sub-recipient and
Pennsylvania. Specifically, there was no bilaterally signed grant agreement that
detailed the dollar amount of the award, the eligibility requirements needed to
21
Desk Review of the Commonwealth of Pennsylvania
receive these funds, and the COVID-19 specific requirements that the nursing
home should follow. Pennsylvania also provided internal accounting system
screenshots showing payments made to the sub-recipient, but did not provide any
invoices or detailed underlying expenditure support, nor any evidence of grant
award applications to verify eligibility. Castro questioned the balance of
$22,172,894 as unsupported.
Castro determined the balances were misclassified as Direct Payments greater
than or equal to $50,000 and should have been reported as Grants greater than or
equal to $50,000.
Direct Payment 2 – Grants and Hazard Payments to Nursing Homes
Pennsylvania claimed $27,960,939 in expenditures granted to an entity that
provided its sub-recipients with grants and hazard payments to nursing homes.
For this expenditure, Pennsylvania submitted Pennsylvania House Bill ACT 2020-
24 that detailed the criteria, eligibility, and expenditure requirements for the CRF
proceeds to be provided to the sub-recipient. Castro noted that there was no
bilaterally signed grant agreement that detailed the dollar amount of the award,
the eligibility requirements needed to receive these funds, and the COVID-19
specific requirements that the nursing home should follow. For the hazard
payments, Pennsylvania performed a calculation of the sub-recipient’s time
worked by utilizing 2019 data from health care workers as an estimate of amounts
to be claimed. Castro requested the actual expenditure documentation to
determine if the sub-recipient incurred sufficient actual payroll expenses to
support amounts claimed during the eligible CRF covered period, but
Pennsylvania personnel did not maintain this documentation. Castro determined
that the estimated payroll expenses were unsupported because Pennsylvania did
not provide documentation to support actual payroll expenses incurred to verify
eligibility during the covered period. Castro questioned $27,960,939 as
unsupported costs.
Castro determined the balances were misclassified as Direct Payments greater
than or equal to $50,000, and the transactions should have been reported as
Grants greater than or equal to $50,000.
22
Desk Review of the Commonwealth of Pennsylvania
Direct Payment 3 – Purchase of IT Services and Equipment and Subscriptions to
Support Remote Classes and Workforce
Pennsylvania claimed $1,053,017 in expenditures paid to an entity to purchase IT
services, virtual desktop infrastructure hardware, desktops, and subscriptions to
support remote classes and remote workforce during the pandemic. Castro
determined that Pennsylvania purchased a 2-year extended warranty, 3-year
subscriptions and technical support, and a 5-year prepaid computer subscription
license during the pandemic, but we noted that the subscriptions would be active
through 2023 and 2025, which was outside of the period to use CRF funding (after
September 30, 2022).26 We performed an analysis to determine the portion of
these prepaid subscriptions that occurred within the scope of the CRF period that
began on March 1, 2020, and that was extended to September 30, 2022 (eligible
portion) and the portion of these expenses that occurred out of scope (ineligible
portion). As a result of our analysis, Castro questioned amounts for subscriptions
that would be outside of the period of performance of $18,151 as ineligible
prepaid expenses.
For this selection, Castro determined the balances were misclassified as Direct
Payments greater than or equal to $50,000, and the transactions should have been
reported as Contracts greater than or equal to $50,000.
Other Matter for Treasury OIG Consideration - Direct Payments - Potential
Duplicate Anomalies
Castro selected 12 potential duplicate anomaly Direct Payments greater than or
equal to $50,000 transactions totaling $1,161,092. Castro tested these Treasury
OIG identified anomalies to determine if these were duplicate transactions and
Castro was able to determine that two of the expenditures were not duplicate
payments, and as such were adequately supported. However, Pennsylvania did
not provide sufficient expenditure documentation for 10 of the 12 transactions
selected. As a result, we questioned $931,092 as unsupported costs.
26
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.”
23
Desk Review of the Commonwealth of Pennsylvania
Castro noted that there were 32 additional potential duplicate transactions totaling
$2,637,710 identified as anomalies by Treasury OIG. We recommend Treasury OIG
determine the feasibility of performing additional follow-up to determine if there
were other instances of unsupported balances with the additional potential
duplicate transactions identified.
Aggregate Reporting Less Than $50,000
We determined Pennsylvania’s Aggregate Reporting less than $50,000 did not
comply with the CARES Act and Treasury’s Guidance. We tested two transactions
totaling $1,912,226. The transactions tested included expenditures related to an
Institutional Assistance Grants program to assist independent post-secondary
institutions that did not receive a state appropriation in maintaining enrollment
and stabilizing their educational costs to facilitate utilization of all postsecondary
resources in Pennsylvania, and the estimated future impact of waived interest
costs on student loans on the bond fund issued by the Pennsylvania Higher
Education Assistance Agency (PHEAA).27 We identified ineligible and unsupported
questioned costs of $238,064 and $38,032, respectively, as detailed below.
We also identified a GrantSolutions portal reporting misclassification related to
Aggregate Reporting less than $50,000 that we determined should have been
reported as Aggregate Payment to Individuals, which we consider non-compliant
with Treasury’s Guidance.
We have questioned the following expenditures as both ineligible and
unsupported:
For one transaction, Pennsylvania provided calculations regarding the estimated
future impact of waived interest costs on student loans on the bond fund.
Pennsylvania also provided payment support to show a $1.9 million payment
from the PHEAA to a trust fund to "implement a program to place specified
PHEAA private student loans into forbearance status due to COVID‐19, to suspend
all required payments, and to waive the interest accrual on those loans, from
March 13, 2020, through September 30, 2020. Pennsylvania was able to provide
$1.9 million of support for payments made to the trust fund without exception.
27
The Pennsylvania Higher Education Assistance Agency (the "Agency") previously issued its
$41,870,000 Education Loan Revenue Bonds Senior Series 2020A (Tax-Exempt AMT Fixed Rate
Bonds) and $5,700,000 Education Loan Revenue Bonds Subordinate Series 2020B (Tax-Exempt
AMT Fixed Rate Bonds) (collectively, the “2020A&B Bonds”). The Board of Directors of the Agency
previously established its PA Forward Student Loan Program as a program designed to assist
students or parents (or both) in meeting their expenses of attending approved institutions of
higher education in the Commonwealth of Pennsylvania or elsewhere. All 2020 A&B Loans were
deemed “COVID-19 Affected Loans” and interest was waived from March 13, 2020 to
September 30, 2020.
24
Desk Review of the Commonwealth of Pennsylvania
Castro reviewed the Resolution of the Board of Directors of PHEAA adopted on
June 18, 2020, which stated that the purpose of the transaction was for the
Capitalized Interest Fund to offset the costs of such relief programs and to provide
additional security for the bonds issued. Castro requested a population with
details of actual expenditures incurred needed to support that there were
sufficient actual underlying interest forbearance expenditures available to support
the $1.9 million in payments made to the Capitalized Interest Fund. Pennsylvania
provided waived student loan interest balances, and valuation and legal fee
invoices as partial expenditure support, which we tested without exception.
Castro determined that Pennsylvania provided acceptable expenditure support to
verify eligibility for $1,623,904 out of $1,900,000 in expenditures claimed. Castro
questioned $238,064 as ineligible costs and $38,032 as unsupported costs. See
below for additional discussion of these questioned costs.
Pennsylvania claimed $238,064 in indirect future interest lost under this Student
Loan Interest Forbearance Program. Pennsylvania provided calculations regarding
the estimated future impact of waived interest costs; however, Castro considered
the future cash flow impact of $238,064 to be ineligible, because by the time the
estimated future impact of these waived interest costs realized on the bond fund,
they would have been incurred outside the period to use CRF funding of
September 30, 2022. Additionally, Castro did not consider the estimated future
impact on a bond fund's costs to represent expenditures that were necessary due
to COVID-19, as this $238,064 in future estimated cash flow payment was
benefiting the bond fund’s investors as opposed to the students that this program
was designed to help. Pennsylvania did not provide any actual underlying waived
student loan interest costs to support this balance, therefore Castro questioned
$238,064 as ineligible.
Castro considered $38,032 to be unsupported, as Pennsylvania did not provide
any underlying payroll distribution reports to support employee project time
associated with working on implementing the CARES Act programs. Pennsylvania
personnel did provide a summary of the tasks performed on the project, along
with the names, rates, and hours worked on the project which agreed to the total
of project time claimed. However, Pennsylvania personnel responded that PHEAA
did not use a specific cost code to charge time to the project, and as such, was not
able to provide any actual payroll distribution reports detailing actual hours
worked and associated dollar amounts claimed for each of these project
personnel. Castro questioned $38,032 as unsupported.
25
Desk Review of the Commonwealth of Pennsylvania
We have noted the following expenditures as a reporting misclassification:
For one transaction selection, PHEAA indicated payments to the trust fund were
not being provided to the individuals and therefore, they did not report amounts
as Aggregate Payments to Individuals. After further review and discussions with
Pennsylvania, Castro determined that the students were beneficiaries of the
waived interest forbearance payments, therefore should have been categorized as
Aggregate Payments to Individuals.
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.28 Prime recipients may or may not have claimed all of these
types of expenditures.
28
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
26
Desk Review of the Commonwealth of Pennsylvania
Public Health and Safety Payroll29 – consisted of payroll costs for public
health and safety department personnel.
Substantially Dedicated Payroll30 – 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 Payroll31 – 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.
29
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.”
30
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.”
31
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 guidance 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.”
27
Desk Review of the Commonwealth of Pennsylvania
The Pennsylvania Aggregate Payments to Individuals balance consisted of the
following payroll and non-payroll transactions from the following types of claimed
costs.
Aggregate Payments to Individuals Total Expenses
Category Types Claimed32
Public Health and Safety Payroll $ 1,559,513,301
Substantially Dedicated Payroll $ 2,202,856
Non-Substantially Dedicated Payroll $ 4,769,283
Non-Payroll Expenditures $ 6,657,021
Totals $ 1,573,142,461
Castro noted that public health and safety payroll transactions were subject to
Treasury’s administrative accommodation,33 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 and non-substantially dedicated payroll balances
were not subject to this administrative accommodation, and therefore, Castro
tested these transactions by reviewing the prime recipient’s documentation of the
"substantially dedicated" conclusion with respect to its employees and payroll
distribution files, and by performing tests over specific employee timesheet
submissions.
32
Castro’s review of Pennsylvania’s underlying GL detail resulted in identification of reconciling
reporting errors that Castro deemed to be misclassifications that did not comply with Treasury’s
Guidance. For instance, the Aggregate Reporting less than $50,000 payment type included a
misclassification of $1,598,685,120. Included in this amount was $25,540,595, which should have
been reported in the Direct Payments greater than or equal to $50,000 payment type and
$1,573,142,461 that should have been reported in the Aggregate Payment to Individuals payment
type. Pennsylvania confirmed that it made these reporting corrections within its
September 30, 2023 GrantSolutions portal submission due to reporting misclassifications brought
to their attention by Castro. Since Pennsylvania had a significant amount of expenditures that
should have been reported in the Aggregate Payments to Individuals payment type as of our scope
period of June 30, 2023, we selected our transactions for testing from the September 30, 2023 GL
population. See Population Reconciling and Financial Reporting Controls Issues within the Desk
Review Results section for summary of these classification changes that Pennsylvania made.
33
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.”
28
Desk Review of the Commonwealth of Pennsylvania
We determined that Pennsylvania’s Aggregate Payments to Individuals complied
with the CARES Act and Treasury’s Guidance. We tested nine transactions totaling
$1,234,173,142, which included six for public health and safety payroll, two for
non-substantially dedicated payroll, and one for non-payroll.
Conclusion
We determined that the expenditures related to the Grants greater than or equal
to $50,000, Transfers greater than or equal to $50,000, Direct Payments greater
than or equal to $50,000, and Aggregate Reporting less than $50,000 payment
types did not comply with the CARES Act and Treasury’s Guidance. We also
determined that the Contracts greater than or equal to $50,000 payment type
complied with the CARES Act but did not comply with Treasury’s Guidance. We
noted that the Aggregate Payments to Individuals payment type complied with the
CARES Act and Treasury’s Guidance.
We identified from our testing, unsupported and ineligible questioned costs of
$55,971,453 and $258,465, respectively, with total tested questioned costs of
$56,229,918. In addition, as part of our reconciliation procedures, Castro identified
other matter questioned costs totaling $5,052,994 which we identified separately
from the sample of selected transactions tested. The total questioned costs for
these matters increased our total questioned costs to $61,282,912.
Also, we identified GrantSolutions portal reporting misclassification issues related
to Contracts greater than or equal to $50,000, Direct Payments greater than or
equal to $50,000, and Aggregate Reporting less than $50,000, which we
considered to be noncompliant with Treasury’s Guidance.
Additionally, Pennsylvania’s risk of unallowable use of funds is high. As a result of
this desk review, we recommend Treasury OIG:
Confirm with Pennsylvania management if the transactions noted as
unsupported or ineligible expenditures within the Grants greater than or
equal to $50,000, Transfers greater than or equal to $50,000, Direct
Payments greater than or equal to $50,000, and Aggregate Reporting less
than $50,000 payment types can be supported. If support is not provided,
Treasury OIG should recoup the funds or request that Pennsylvania
management provide support for replacement expenses, not previously
charged, that were eligible during the CRF period of performance.
Further, based on Pennsylvania’s responsiveness to Treasury OIG’s
requests and its ability to provide sufficient documentation and/or
replace unsupported and ineligible transactions charged to the CRF with
valid expenditures, we recommend Treasury OIG determine the
29
Desk Review of the Commonwealth of Pennsylvania
feasibility of conducting an audit for the Grants greater than or equal to
$50,000, Transfers greater than or equal to $50,000, Direct Payments
greater than or equal to $50,000, and Aggregate Reporting less than
$50,000 payment types.
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 take action related to the following:
Grants Greater Than or Equal to $50,000 Sub-Recipient Population
Reconciliation – Unsupported Incentive Payment Reinvestment into the
grant program: Based on Pennsylvania’s responses to Treasury OIG’s
follow-ups over obtaining support to evidence that the sub-recipient
reinvested the $4,121,902 grant incentive costs back into the grant
program, we recommend Treasury OIG determine the feasibility of
following up with Pennsylvania determine whether it has claimed any
additional unsupported CRF expenditures in this manner.
Additional Potential Unsupported Subsidized Childcare Grant Program
Costs - Castro noted that Pennsylvania awarded 1,443 businesses a total
of $22,443,700 in granted funds within its Subsidized Childcare Grant
Program, including our reported Grants greater than equal to $50,000
unsupported questioned costs of $189,400. Since Castro identified
unsupported questioned costs within the Subsidized Childcare grant
payments we tested, we recommend Treasury OIG determine the
feasibility of performing additional follow-up with Pennsylvania to
determine if there were other instances of unsupported balances within
the Subsidized Childcare Grant Program.
Additional Potential Unsupported COVID-19 Relief Statewide Small
Business Assistance Grant Program Costs - Castro noted that
Pennsylvania awarded 10,964 business and Community Development
Financial Institutions grant payments totaling $225,000,000 within its
COVID-19 Relief Statewide Small Business Assistance Grant Program,
including our reported Grants greater than $50,000 unsupported
questioned costs of $50,000. Since Castro identified unsupported
questioned costs within the COVID-19 Relief Statewide Small Business
Assistance Grant Program payments we tested, we recommend Treasury
OIG determine the feasibility of performing additional follow-up with
Pennsylvania to determine if there were other instances of unsupported
balances within the COVID-19 Relief Statewide Small Business Assistance
Grant Program.
Castro noted that Pennsylvania claimed $40,553,915 in expenditures
transferred to York County. Since Castro identified unsupported
questioned costs of $1,997,249 within the transfer transactions to York
30
Desk Review of the Commonwealth of Pennsylvania
County that we tested, we recommend Treasury OIG determine the
feasibility of performing additional follow-up with Pennsylvania to
determine if there were other instances of unsupported balances within
the transfer to York County for COVID-19 related expenditures.
Castro noted that Pennsylvania claimed $22,881,555 in expenditures
transferred to Cumberland County for a COVID-19 County Relief Block
Grant. Since Castro identified unsupported questioned costs of
$1,287,298 within the transfer transactions to Cumberland County that we
tested, we recommend Treasury OIG determine the feasibility of
performing additional follow-up with Pennsylvania to determine if there
were other instances of unsupported balances within the transfer to
Cumberland County for a COVID-19 County Relief Block Grant.
Castro noted that Pennsylvania claimed $5,866,825 in expenditures
transferred to Columbia County for administration of the CARES Act
Grant. Since Castro identified unsupported questioned costs of $68,268
within the transfer transactions to Columbia County that we tested, we
recommend Treasury OIG determine the feasibility of performing
additional follow-up with Pennsylvania to determine if there were other
instances of unsupported balances within the transfer to Columbia
County for administration of the CARES Act Grant.
Direct Payments - Potential Duplicate Anomalies - Determine the
feasibility of performing additional follow-up to determine if there were
other instances of unsupported balances within the additional potential
duplicate transactions identified.
*****
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.34 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
34
https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
31
File and source
- File
- OIG-CA-25-012-desk-review-of-the-commonwealth-of-pennsylvania-s-use-of-coronavirus-r.pdf
- Size
- 817,026 bytes
- SHA-256
- 0bad15e0ba6b1b7f9de0edb867f19277e387a153c3a02624d524b4fb0c43ef3b
- Original
- oig.treasury.gov