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DEPARTMENT OF THE TREASURY
W ASHINGTON, D.C. 20220
OFFICE OF
INSPECTOR GENERAL
December 12, 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 Dallas County, Texas’ Use of
Coronavirus Relief Fund Proceeds
(OIG-CA-25-014)
Please find the attached desk review memorandum 1 on Dallas County, Texas’
(Dallas 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 23 transactions reported in the quarterly Financial Progress Reports
(FPR) and identified unsupported questioned costs of $16,423,761 (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 grant-reporting portal on a quarterly
basis.
2 Questioned costs consist of unsupported expenditures related to property acquisition, an
emergency housing assistance program, payroll expenses, and other COVID-19 mitigation
expenses.
Page 2
Castro determined that the expenditures related to Transfers greater than or equal
to $50,000 3 and Aggregate Reporting less than $50,000 4 payment types complied
with the CARES Act and Department of the Treasury’s (Treasury) Guidance. Castro
determined that the expenditures related to the Contracts greater than or equal to
$50,000, Grants greater than or equal to $50,000, Direct Payments greater than or
equal to $50,000, and Aggregate Payments to Individuals5 payment types did not
comply with the CARES Act and Treasury’s Guidance. Additionally, Dallas
County’s risk of unallowable use of funds is moderate.
Castro recommends that Treasury Office of Inspector General (OIG) follow-up with
Dallas County’s management to confirm the transactions noted as unsupported or
ineligible expenditures within the Contracts greater than or equal to $50,000,
Grants greater than or equal to $50,000, Direct Payments greater than or equal to
$50,000, and Aggregate Payments to Individuals payment types are recouped or
replaced by other eligible expenditures, not previously charged to CRF, that were
incurred during the period of performance. Based on Dallas County
management’s responsiveness to Treasury OIG’s requests and management’s
ability to provide sufficient documentation, Castro recommend Treasury OIG
determine the feasibility of conducting an audit for the Contracts greater than or
equal to $50,000, Grants greater than or equal to $50,000, Direct Payments greater
than or equal to $50,000, and Aggregate Payments to Individuals payment types.
Castro also identified other matters throughout the course of the desk review and
recommends that Treasury OIG determine the feasibility of performing additional
follow up with Dallas County to determine if there were other instances of
unsupported balances with the untested amount of $12,874,460 in the
substantially dedicated payroll 6 portion of the Aggregate Payments to Individuals
payment type.
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
grant-reporting 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 grant-reporting portal to prevent inappropriate
disclosure of personally identifiable information.
6 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 states:
“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.”
Page 3
Treasury OIG and Castro met with Dallas County management to discuss the
report. Dallas County management stated that they would provide
additional documentation to Treasury OIG to support the questioned costs.
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 Dallas County’s use of CRF proceeds. Castro is responsible
for the attached desk review memorandum and the conclusions expressed
therein. Our review found no instances in which Castro did not comply in all
material respects with Quality Standards for Federal Offices of Inspectors General.
We appreciate the courtesies and cooperation provided to Castro and our staff
during the desk review. If you have any questions or require further information,
please contact me at (202) 486-1420, or a member of your staff may contact Lisa
DeAngelis, 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
Wayne Ference, Partner, Castro & Company, LLC
Charles Reed, Assistant County Administrator for Government Affairs,
County of Dallas
Page 4
Attachment
Schedule of Monetary Benefits
According to the Code of Federal Regulations, 7 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). 8 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 $16,423,761
The questioned cost represents amounts provided by Treasury under the
Coronavirus Relief Fund. As discussed in the attached desk review, $16,423,761 is
Dallas County’s expenditures reported in the grant-reporting portal that lacked
supporting documentation.
7
2 CFR § 200.84 – Questioned Cost
8
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 Dallas County, Texas
December 12, 2024
OIG-CA-25-014
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM: Wayne Ference
Partner, Castro & Company, LLC
SUBJECT: Desk Review of Dallas County, Texas
On January 30, 2024, we initiated a desk review of Dallas County, Texas’ (Dallas
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 Dallas 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 Dallas 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
Dallas 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 Dallas 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
1
Desk Review of Dallas County, Texas
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 Dallas 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 Dallas 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 Dallas County’s uses of CRF proceeds;
7) interviewed key personnel responsible for preparing and certifying Dallas
County’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 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 obtain an annual audit of those Federal funds.
The law 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.
2
Desk Review of Dallas County, Texas
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 portal reporting; and
9) evaluated documentation and records used to support Dallas County’s
quarterly FPRs.
Based on our review of Dallas County’s documentation supporting the uses of its
CRF proceeds as reported in the GrantSolutions portal, we determined that the
expenditures related to the Transfers greater than or equal to $50,000 and
Aggregate Reporting less than $50,000 payment types complied with the CARES
Act and Treasury’s Guidance. Additionally, we determined that the expenditures
related to the Contracts greater than or equal to $50,000, Grants greater than or
equal to $50,000, Direct Payments greater than or equal to $50,000, and Aggregate
Payments to Individuals payment types did not comply with the CARES Act and
Treasury’s Guidance.
We identified unsupported questioned costs of $16,423,761. We also determined
Dallas County’s risk of unallowable use of funds is moderate.
Castro recommends that Treasury OIG follow-up with Dallas County’s
management to confirm if the $16,423,761 noted as unsupported expenditures
within the Contracts greater than or equal to $50,000, Grants greater than or equal
to $50,000, Direct Payments greater than or equal to $50,000, and Aggregate
Payments to Individuals payment types can be supported. If support is not
provided, Treasury OIG should recoup the funds or request Dallas County
management to provide support for replacement expenses, not previously
charged, that were eligible during the CRF period of performance.
Further, based on Dallas County management’s responsiveness to Treasury OIG’s
requests and its ability to provide sufficient documentation and/or replace
unsupported transactions charged to CRF with valid expenditures, we recommend
Treasury OIG determine the feasibility of conducting an audit for the Contracts
greater than or equal to $50,000, Grants greater than or equal to $50,000, Direct
Payments greater than or equal to $50,000, and Aggregate Payments to
Individuals payment types.
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 Dallas County, Texas
Non-Statistical Transaction Selection Methodology
Treasury issued a $239,952,373 CRF payment to Dallas County. As of
December 31, 2022, Dallas County expended all of its CRF proceeds. Dallas
County’s cumulative obligations and expenditures by payment type are
summarized below.
Cumulative Cumulative
Payment Type Obligations Expenditures
Contracts >= $50,000 $ 70,339,417 $ 70,339,417
Grants >= $50,000 $ 400,000 $ 400,000
Loans >= $50,000 $ - $ -
Transfers >= $50,000 $ 46,269,761 $ 46,269,761
Direct Payments >= $50,000 $ 67,758,277 $ 67,758,277
Aggregate Reporting < $50,000 $ 12,951,365 $ 12,951,365
Aggregate Payments to
Individuals (in any amount) $ 42,233,553 $ 42,233,553
Totals $ 239,952,373 $ 239,952,373
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
information and risks identified in reviewing audit reports, the GrantSolutions
portal reporting anomalies12 identified by the Treasury OIG CRF monitoring team,
and review of Dallas County’s FPR submissions. Dallas County did not obligate or
expend CRF proceeds to the Loans greater than or equal to $50,000 payment type;
therefore, we did not make a selection of transactions from this payment type.
The number of transactions (23) we selected to test were based on Dallas
County’s total CRF award amount and our overall risk assessment of Dallas
County. To allocate the number of transactions (23) 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 payment type total dollar amounts as a percentage
of cumulative obligations as of December 31, 2022. The transactions selected for
testing were not selected statistically, and therefore results could not be
extrapolated to the total universe of transactions.
12
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.
4
Desk Review of Dallas County, Texas
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 $239,952,373
CRF payment to Dallas 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 authority to recoup funds in the event that it is determined
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 Dallas County, Texas
a 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 Dallas County’s quarterly FPRs through December 31, 2022, and
found that Dallas County timely filed quarterly FPRs in the GrantSolutions portal
in compliance with Treasury OIG’s reporting requirements for the periods ending
June 30, 2020 through December 31, 2022.
Summary of Testing Results
We found that the Transfers greater than or equal to $50,000 and Aggregate
Reporting less than $50,000 payment types complied with the CARES Act and
Treasury’s Guidance. Additionally, we determined that the Contracts greater than
or equal to $50,000, Grants greater than or equal to $50,000, Direct Payments
greater than or equal to $50,000, and Aggregate Payments to Individuals payment
types did not comply with the CARES Act and Treasury’s Guidance because we
were unable to determine if all tested expenditures were necessary due to the
COVID-19 public health emergency, were not accounted for in the budget most
recently approved as of March 27, 2020, and were incurred during the covered
period. The transactions selected for testing were not selected statistically, and
therefore results could not be extrapolated to the total universe of transactions.
Within the table below, we have included a summary of unsupported
expenditures identified as questioned costs as a result of our detailed testing of
transactions. The unsupported costs in Table 1 totaling $16,299,761 are a portion
of the total questioned costs of $16,423,761. See Table 2 of this report for detail on
the remaining $124,000 in questioned costs. See the Desk Review Results section
below table 2 for a detailed discussion of questioned costs and other issues
identified throughout the course of our desk review.
6
Desk Review of Dallas County, Texas
Table 1 - Summary of Expenditures Testing and Recommended Results
As of December 31, 2022
Cumulative Unsupported Ineligible
Expenditure Cumulative Tested Tested
Population Expenditure Questioned Questioned Total Tested
Payment Type Amount Tested Amount Costs Costs Questioned Costs
Contracts >= $50,000 $ 70,339,417 $ 36,837,394 $ 15,843,967 $ - $ 15,843,967
Grants >= $50,000 $ 400,000 $ 6,000 $ - $ - $ -
Loans >= $50,000 $ - $ - $ - $ - $ -
Transfers >= $50,000 $ 46,269,761 $ 9,808,481 $ - $ - $ -
Direct Payments >=
$50,000 $ 67,758,277 $ 1,961,580 $ 446,902 $ - $ 446,902
Aggregate Reporting
< $50,000 $ 12,951,365 $ 2,289 $ - $ - $ -
Aggregate Payments
to Individuals (in any
amount) $ 42,233,553 $ 13,241,212 $ 8,892 $ - $ 8,892
Totals $ 239,952,373 $ 61,856,956 $ 16,299,761 $ - $ 16,299,761
7
Desk Review of Dallas County, Texas
Castro also identified other matters throughout the course of our desk review,
which we considered to be questioned costs, but which were not part of our
judgmental transaction selections. The following table combines the tested
questioned costs identified in Table 1 above with these other matters identified
through our desk review. We have included a “Total Questioned Costs” column
that summarizes the total amount of questioned costs identified throughout the
course of our desk review. 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.
8
Desk Review of Dallas County, Texas
Table 2 – Summary of Expenditures Tested and Other Matters and Recommended Results
As of December 31, 2022
(C=A+B) (E) (F=D+E)
(A) (B) Total (D) Ineligible Total
Unsupported Unsupported Unsupported Ineligible Questioned Ineligible (G=C+F)
Questioned Costs Questioned Costs Questioned Questioned Costs (Other Questioned Total Questioned
Payment Type (Tested) (Other Matters) Costs Costs (Tested) Matters) Costs Costs
Contracts >=
$50,000 $ 15,843,967 $ - $ 15,843,967 $ - $ - $ - $ 15,843,967
Grants >= $50,000 $ - $ 124,000 $ 124,000 $ - $ - $ - $ 124,000
Loans >= $50,000 $ - $ - $ - $ - $ - $ - $ -
Transfers >=
$50,000 $ - $ - $ - $ - $ - $ - $ -
Direct Payments
>= $50,000 $ 446,902 $ - $ 446,902 $ - $ - $ - $ 446,902
Aggregate
Reporting <
$50,000 $ - $ - $ - $ - $ - $ - $ -
Aggregate
Payments to
Individuals (in any
amount) $ 8,892 $ - $ 8,892 $ - $ - $ - $ 8,892
Totals $ 16,299,761 $ 124,000 $ 16,423,761 $ - $ - $ - $ 16,423,761
9
Desk Review of Dallas County, Texas
Contracts Greater Than or Equal to $50,000
We determined Dallas County’s Contracts greater than or equal to $50,000 did not
comply with the CARES Act and Treasury’s Guidance. We tested six contracts
totaling $36,837,394. The contracts tested included expenditures for the
acquisition of property for election activities; acquisition of property for housing
assistance for placement of individuals that tested positive for COVID-19 and to
serve as transitional housing to low-income residents; building modifications to
incorporate COVID-19 safety measures; construction costs such as touch-free
fixtures, updates to furniture to allow social distancing, and upgrades to improve
air quality; a program to reimburse applicants for rent and mortgage payments;
and a program for forgivable loans for operating costs for Dallas County
businesses. We identified exceptions related to two contracts, which resulted in
unsupported questioned costs of $15,843,967 as detailed below.
Additionally, in the forgivable loan program discussed above, Dallas County
contracted with a non-profit organization to administer CRF proceeds and provide
oversight of Dallas County’s Emergency Business Assistance Program. The
Emergency Business Assistance Program was a forgivable loan program to
provide assistance for small businesses that were adversely affected by the
COVID-19 pandemic. Based on these details, we determined Dallas County should
have initially reported these transactions in the Loans greater than or equal to
$50,000 payment type instead of the Contracts greater than or equal to $50,000
payment type. In addition, since all the loans issued were forgiven, Dallas County
should have made updates in the GrantSolutions portal to remove the
transactions from the Loans greater than or equal to $50,000 payment type and
move them to the Grants greater than or equal to $50,000 payment type. We
determined this reporting misclassification was non-compliant with Treasury’s
Guidance. Other than the reporting misclassification, we did not identify any
exceptions related to the loan program based on our testing procedures.
Contract Exception #1 - Acquisition of Property for Elections Warehouse Facility
and Building Modifications
We tested a contract totaling $15,836,258 that Dallas County claimed for CRF
expenditures related to the acquisition of an Elections Warehouse Facility at fair
market value, including technical improvements, training of election staff
personnel, warehouse storage, and building retrofits. Dallas County contracted
with a development manager and escrow agency to hold the funds in escrow to
receive draw-down requests for completed deliverables and milestones for the
acquisition and construction costs. Dallas County’s justification for the need to
purchase the property was based on fundamental facility challenges encountered
10
Desk Review of Dallas County, Texas
during the 2020 presidential election concurrent with the pandemic. In addition,
Dallas County stated the site would be utilized to facilitate technological
improvements in training the public and election personnel on the safe
administration of elections to enable compliance with COVID-19 precautions.
Dallas County did not provide documentation of any considerations of other cost-
effective alternatives, such as leasing property or improving property already
owned, to support the $15,836,258 purchase (including construction) of the
election site property. Treasury's Guidance in the Federal Register Notice Volume
86, Number 10, for the CRF, FAQ #58, 17 states that "a government must (i)
determine that it is not able to meet the need arising from the public health
emergency in a cost-effective manner by leasing property or equipment or by
improving property already owned and (ii) maintain documentation to support
this determination." As a result, we questioned $15,836,258 as unsupported costs.
Contract Exception #2 – Emergency Housing Assistance Program
Dallas County entered into an agreement with a non-profit organization to
administer the Dallas County Emergency Housing Assistance Program for a total
CRF claimed amount of $1 million issued in four $250,000 installment payments.
We selected one $250,000 installment payment for testing; however, to make the
selection, we obtained the full population for the Emergency Housing Assistance
Program. We identified a total amount of $992,291 in actual expenditures,
generating a variance of $7,709 in obligated CRF proceeds not used of the total
$1 million claimed. Dallas County provided evidence that the variance amount
was reversed in the general ledger and allocated to other CRF eligible costs.
However, we determined Dallas County did not make the necessary corrections in
17
Treasury's Guidance in the Federal Register Notice Volume 86, Number 10, for the CRF, FAQ #58,
states: “May payments from the Fund be used for real property acquisition and improvements and
to purchase equipment to address the COVID-19 public health emergency? The expenses of
acquiring or improving real property and of acquiring equipment (e.g., vehicles) may be covered
with payments from the Fund in certain cases. For example, Treasury's initial guidance referenced
coverage of the costs of establishing temporary public medical facilities and other measures to
increase COVID-19 treatment capacity, including related construction costs, as an eligible use of
funds. Any such use must be consistent with the requirements of section 601(d) of the Social
Security Act as added by the CARES Act. As with all uses of payments from the Fund, the use of
payments to acquire or improve property is limited to that which is necessary due to the COVID- 19
public health emergency. In the context of acquisitions of real estate and acquisitions of
equipment, this means that the acquisition itself must be necessary. In particular, a government
must (i) determine that it is not able to meet the need arising from the public health emergency in
a cost-effective manner by leasing property or equipment or by improving property already owned
and (ii) maintain documentation to support this determination. Likewise, an improvement, such as
the installation of modifications to permit social distancing, would need to be determined to be
necessary to address the COVID-19 public health emergency.”
11
Desk Review of Dallas County, Texas
the GrantSolutions portal, resulting in an overstatement for the transaction. As a
result, we questioned $7,709 as unsupported costs.
Grants Greater Than or Equal to $50,000
We determined Dallas County’s Grants greater than or equal to $50,000 did not
comply with the CARES Act and Treasury’s Guidance. We tested one grant
awarded to a non-profit organization totaling $6,000 and identified no testing
exceptions. The grant tested included expenditures related to the Dallas County
Childcare Provider Assistance Grant Program for reimbursements to childcare
providers for rent, utilities, food, and personal protective equipment for essential
workers.
However, we identified an Other Matter related to the underlying expenditures
claimed within the GrantSolutions portal as of December 31, 2022, resulting in
unsupported questioned costs of $124,000. Dallas County reported total
cumulative obligations and expenditures of $400,000 in the GrantSolutions portal
related to the Dallas County Childcare Provider Assistance Grant Program. Our
review of the underlying supporting documentation noted that Dallas County
awarded $276,000 in childcare provider grant payments. Dallas County explained
the variance of $124,000 was reallocated to public health and safety payroll
expenses, and we noted Dallas County’s general ledger reflected the cumulative
expenditure amount of $400,000. However, we determined Dallas County did not
make the necessary corrections in the GrantSolutions portal, resulting in an
overstatement of $124,000. We questioned the $124,000 variance as Other Matter
unsupported costs.
Transfers Greater Than or Equal to $50,000
We determined Dallas County’s Transfers greater than or equal to $50,000
complied with the CARES Act and Treasury’s Guidance. We tested four transfers
totaling $9,808,481 and identified no exceptions. The transfers tested included
expenditures for payroll costs for public health and safety personnel; installation
costs for infrared and touchless faucets; advertising costs to promote social
distancing throughout the cities; and purchases of laptops and licenses to support
distance learning.
Direct Payments Greater Than or Equal to $50,000
We determined Dallas County’s Direct Payments greater than or equal to $50,000
did not comply with the CARES Act and Treasury’s Guidance. We tested seven
direct payments totaling $1,961,580. The direct payments tested included
expenditures for the implementation of a contactless water meter program;
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Desk Review of Dallas County, Texas
disinfecting supplies; compliance management services for a temporary hospital
to accommodate recovering COVID-19 patients; and cabling services to ensure a
call center continued operating to track COVID-19 contact tracing activities. We
identified exceptions related to three direct payment transactions, resulting in
unsupported questioned costs of $446,902 as detailed below.
Additionally, we identified one reporting misclassification related to Direct
Payments greater than or equal to $50,000 that should have been reported as a
Contract greater than or equal to $50,000 in the GrantSolutions portal that we
determined was non-compliant with Treasury’s Guidance.
Direct Payment Exception #1 – Contactless Water Meter Program
We tested one transaction totaling $422,090 claimed by the City of Glenn Heights,
which contracted with a vendor to install and provide support services related to a
Contactless Water Meter Program. Dallas County explained that the project was
proposed as a technological tool to eliminate the need for city employees to
physically access private property to read and monitor water meters during the
pandemic. Additionally, Dallas County explained the contactless meters were
intended to reduce physical interaction between city employees and the public at
city hall locations and provide enhanced account management to consumers
during the pandemic.
We noted that one invoice indicated the costs were related to a down payment to
purchase 2,000 contactless water meters. We asked Dallas County for details on
the project milestones and status, including how many contactless water meters
were installed during the covered period, a listing of accumulated project costs,
the reconciliation between these items, and the scope of work related to this
program. Dallas County was unable to provide relevant and appropriate support
to track the claimed expenditures related to the Contactless Water Meter Program.
Based on our review, Dallas County did not adhere to the CRF Guidance as
published in the Federal Register (January 15, 2021) FAQ #20. 18 Since Dallas
County was unable to verify the costs identified in the invoice (water meters) were
received and installed, we determined the support to be insufficient. As a result,
we identified $422,090 in unsupported questioned costs.
18
Coronavirus Relief Fund Guidance as published in the Federal Register (January 15, 2021) FAQ
#20 states: “For purposes of reporting in the GrantSolutions portal, an expenditure is the amount
that has been incurred as a liability of the entity (the service has been rendered or the good has
been delivered to the entity).”
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Desk Review of Dallas County, Texas
Direct Payment Exception #2 – Management Contract for a Temporary Hospital
We tested one transaction totaling $34,835 in which Dallas County contracted with
a vendor to provide compliance management services for a temporary hospital
that served as a step-down facility to accommodate COVID-19 patients. We
determined Dallas County did not provide adequate supporting documentation to
evidence the claimed expenditures for contract management services complied
with the CARES Act and Treasury’s Guidance, resulting in unsupported
questioned costs of $24,732, as detailed below. Additionally, the transaction was
reported by Dallas County as a Direct Payment greater than or equal to $50,000
but should have been reported as a Contract greater than or equal to $50,000 in
the GrantSolutions portal. We determined this reporting misclassification did not
comply with Treasury’s Guidance.
We noted the contract used U.S. General Services Administration pricing
schedules for each of the employees’ positions and hourly rates. We noted the
invoice and labor reports provided did not agree with the scope of work and the
contract’s General Services Administration pricing schedules. Specifically, we
identified several positions and pay rates itemized on the invoice that were
omitted from the pricing schedules. Of the seven employees contracted for
$34,835 to perform the services, only two employee positions and pay rates for a
total of $10,103 referenced in the invoice details matched the scope of work,
creating a variance of $24,732.
As a result, these selected expenditures did not comply with the contractual
terms, which required all expenses to be appropriately tracked and invoiced to
satisfy Federal program reimbursement requirements. Given this information, we
identified unsupported questioned costs of $24,732.
Direct Payment Exception #3 - City of Wilmer COVID-19 Response Efforts
We tested five invoices totaling $925,406 that Dallas County allocated to the City
of Wilmer for reimbursable costs related to mitigation efforts towards the impacts
of the COVID-19 pandemic. These costs included expenses related to building
renovations for COVID-19 related prevention and mitigation compliance,
information technology services and equipment to enhance telecommuting
capabilities, delivery services for senior residents, disinfection costs, and personal
protective equipment.
For one of the five invoices tested, Dallas County could not provide an explanation
for an $80 variance within the supporting documentation for the annual website
subscriptions invoiced between November 1, 2020, through October 1, 2021. We
noted the transaction amount reported in the GrantSolutions portal was $10,000;
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Desk Review of Dallas County, Texas
however, the invoice referenced a total subscription cost of $9,920, which resulted
in an $80 variance. Dallas County could not determine the cause of the variance
identified. As a result, we identified unsupported questioned costs of $80.
Aggregate Reporting Less Than $50,000
We determined Dallas County’s Aggregate Reporting less than $50,000 complied
with the CARES Act and Treasury’s Guidance. We tested one transaction totaling
$2,289 and identified no exceptions. The aggregate reporting transaction tested
included expenditures related to a hotel facility serving as temporary housing for
isolation measures for individuals who tested positive for COVID-19.
Aggregate Payments to Individuals
CRF payments made to individuals, regardless of amount, were required to be
reported in the aggregate in the GrantSolutions portal to prevent inappropriate
disclosure of personally identifiable information. The Aggregate Payments to
Individuals payment type consists of four broad types of potential costs defined in
Treasury’s guidance as published in the Federal Register. 19 Prime recipients may
or may not have claimed all these types of expenditures. The four types are as
follows:
19
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 Dallas County, Texas
Public Health and Safety Payroll 20 – consisted of payroll costs for public
health and safety department personnel.
Substantially Dedicated Payroll 21 – consisted of payroll costs for non-
public health and safety personnel who were substantially dedicated to
mitigating or responding to the COVID-19 public health emergency.
Non-Substantially Dedicated Payroll 22 – 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.
20
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.”
21
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 states:
“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.”
22
Payroll costs that were not substantially dedicated were payroll costs that were not public health
and safety, and which were not substantially dedicated to performing COVID-19 related tasks.
Treasury’s Federal Register guidance defined more stringent tracking requirements for these types
of payroll costs. Specifically, Treasury’s Federal Register stated: “track time spent by employees
related to COVID-19 and apply Fund payments on that basis but would need to do so consistently
within the relevant agency or department. This means, for example, that a government could
cover payroll expenses allocated on an hourly basis to employees' time dedicated to mitigating or
responding to the COVID-19 public health emergency.”
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Desk Review of Dallas County, Texas
The Dallas County Aggregate Payments to Individuals balance consisted of the
following types of claimed costs.
Aggregate Payments to Individuals Total Expenses
Category Types 23 Claimed
Public Health and Safety Payroll $ 29,336,084
Substantially Dedicated Payroll $ 12,897,469
Totals $ 42,233,553
Castro noted that public health and safety payroll transactions were subject to
Treasury’s administrative accommodation, 24 and therefore, were subject to less
detailed documentation requirements. Castro tested public health and safety
payroll transactions by reviewing itemized payroll distribution reports to support
these balances. Substantially dedicated payroll balances were not subject to this
administrative accommodation, and therefore, Castro tested these transactions by
reviewing documentation provided by the prime recipient to confirm the
“substantially dedicated” conclusion with respect to its employees.
We determined that Dallas County’s Aggregate Payments to Individuals did not
comply with the CARES Act and Treasury’s Guidance. We tested four transactions
totaling $13,241,212. The Aggregate Payments to Individuals transactions tested
included expenditures of $13,218,203 for public health and safety payroll and
$23,009 in payroll costs for substantially dedicated personnel at the Dallas County
Elections Department. We identified exceptions related to two transactions,
resulting in $8,892 of unsupported questioned costs, as detailed below.
23
Dallas County did not report any non-substantially dedicated payroll or non-payroll expenditures
within its Aggregate Payments to Individuals payment type, and so these were not included within
the Aggregate Payments to Individuals Category Types.
24
Treasury’s Federal Register guidance stated 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.”
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Desk Review of Dallas County, Texas
Aggregate Payments to Individuals Exception #1- Substantially Dedicated Payroll
Costs and Benefits: Sick Pay for Government Employees
We tested one transaction for $14,705 in expenditures that Dallas County claimed
for substantially dedicated employees to cover payroll related costs, including sick
pay due to the COVID-19 pandemic. We identified payroll related costs and
benefits that were erroneously duplicated in Dallas County’s payroll registers,
resulting in unsupported questioned costs of $588. The supporting documentation
provided by Dallas County included timecards, statements of earnings, pay rate
information, and payroll registers to substantiate the CARES Sick Pay provided.
During a bi-weekly pay period, an employee would typically have a maximum of
80 hours charged to Sick Pay (40 hours * 2 weeks). We noted the employee
charged 144 hours of coded as CARES Sick Pay during the pay period of
August 29, 2020 through September 11, 2020, resulting in an excess of 64 (144 –
80) hours of CARES Sick Pay.
We noted the employee was non-exempt and recalculated the pay rate
information based on salary details and determined the excess of 64 hours
amounted to $588 charged in the pay period examined. We received clarification
from Dallas County that the excess of 64 hours was earned in a prior pay period
with the date range of August 15, 2020 through August 28, 2020. The 64 hours
were subsequently realized as supplemental pay in the pay period ending
September 11, 2020, and adjusted to reflect the actual hours incurred. However,
Dallas County did not revise the payroll register used to report the CARES Sick
Pay in the GrantSolutions portal. As a result, we identified $588 in unsupported
questioned costs.
Aggregate Payments to Individuals Exception #2- Substantially Dedicated Payroll
Related Costs for the Dallas County Elections Department
We tested $8,304 claimed for substantially dedicated payroll related costs incurred
by the Dallas County Elections Department, where the employees were tasked
with ensuring elections were accessible, secure, and safe for voters during the
2020 election cycle.
Dallas County provided timesheets and paystubs to corroborate the hourly rate
for each individual. We asked Dallas County to provide documentation that
supported the substantially dedicated conclusion for the selected personnel;
however, Dallas County was unable to provide the supporting documentation to
evidence the payroll related costs were in compliance with the CARES Act and
Treasury’s Guidance. Based on our assessment, we determined Dallas County did
not provide documentation of the substantially dedicated conclusion with respect
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Desk Review of Dallas County, Texas
to these employees 25 to justify the use of CRF proceeds resulting in unsupported
questioned costs of $8,304.
Additionally, Castro tested $23,009 out of $12,897,469 of the reported Aggregate
Payments to Individuals expenditures for Dallas employees considered to be
substantially dedicated personnel to mitigating the COVID-19 pandemic. Based on
the information provided, we determined Dallas County did not have proper
controls to ensure the substantially dedicated conclusion was adequately
documented as required by Treasury’s Guidance. We identified unsupported
questioned costs of $8,892 out of the $23,009 tested. Castro recommends
Treasury OIG determine the feasibility of following up on the remaining untested
portion of this balance of $12,874,460 to determine if the remaining balance may
be similarly unsupported.
Conclusion
We determined that the expenditures related to the Transfers greater than or
equal to $50,000 and Aggregate Reporting less than $50,000 payment types
complied with the CARES Act and Treasury’s Guidance. We also determined that
the Contracts greater than or equal to $50,000, Grants greater than or equal to
$50,000, Direct Payments greater than or equal to $50,000, and Aggregate
Payments to Individuals payment types did not comply with the CARES Act and
Treasury’s Guidance.
We identified unsupported questioned costs of $16,423,761. Additionally, Dallas
County’s risk of unallowable use of funds is moderate.
Castro recommends that Treasury OIG follow-up with Dallas County’s
management to confirm if the $16,423,761 noted as unsupported expenditures
within the Contracts greater than or equal to $50,000, Grants greater than or equal
to $50,000, Direct Payments greater than or equal to $50,000, and Aggregate
Payments to Individuals payment types can be supported. If support is not
provided, Treasury OIG should recoup the funds or request Dallas County
management to provide support for replacement expenses, not previously
charged, that were eligible during the CRF period of performance.
25
Treasury’s Federal Register guidance indicates that: “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.”
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Desk Review of Dallas County, Texas
Further, based on Dallas County management’s responsiveness to Treasury OIG’s
requests and its ability to provide sufficient documentation and/or replace
unsupported transactions charged to CRF with valid expenditures, we recommend
Treasury OIG determine the feasibility of conducting an audit for the Contracts
greater than or equal to $50,000, Grants greater than or equal to $50,000, Direct
Payments greater than or equal to $50,000, and Aggregate Payments to
Individuals 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:
Determine the feasibility of performing additional follow up with Dallas
County to determine if there were other instances of unsupported
balances with the untested amount of $12,874,460 in the substantially
dedicated payroll portion of the Aggregate Payments to Individuals
payment type.
*****
All work completed with this letter complies with the Council of the Inspectors
General on Integrity and Efficiency’s Quality Standards for Federal Offices of
Inspectors General, which require that the work adheres to the professional
standards of independence, due professional care, and quality assurance to
ensure the accuracy of the information presented. 26 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
26
https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
20