COVID-19: Urgent Actions Needed — United States Government Accountability Office Report to Congressional Committees

Summary

A United States Government Accountability Office report to congressional committees, COVID-19: Urgent Actions Needed to Better Ensure an Effective Federal Response, GAO-21-191, dated November 2020. The Highlights state that as of November 12, 2020 the U.S. had over 10.3 million cumulative reported cases of COVID-19 and about 224,000 reported deaths. They state that, as of September 30, 2020, of the $2.6 trillion appropriated by the relief acts, the federal government had obligated a total of $1.8 trillion and expended $1.6 trillion, as reported by federal agencies. GAO states that it is making 11 new recommendations for agencies and raising one matter for congressional consideration.

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“COVID-19: Urgent Actions Needed — United States Government Accountability Office Report to Congressional Committees.” Original at www.gao.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/ppr-int-5a002af276d1bde8-gaps-181960dc92-5034355374/, SHA-256 75eab7174316bbf0ae4534e1f8234b846faa189cab4c09aada7de8f98df73a03.

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United States Government Accountability Oﬃce

Report to Congressional Committees

November 2020

COVID-19
Urgent Actions Needed to Better
Ensure an Eective Federal
Response

GAO-21-191 www.gao.gov
November 2020
2020

COVID-19
Urgent Actions Needed to Better Ensure an Effective
Federal Response
Highlights of GAO-21-191, a report to
congressional committees

Why GAO Did This Study What GAO Found
As of November 12, 2020, the U.S. The COVID-19 pandemic has resulted in catastrophic loss of life and substantial
had over 10.3 million cumulative damage to the global economy, stability, and security. According to federal data, the
reported cases of COVID-19 and about U.S. had an average of 116,000 new COVID-19 cases per day from November 1
224,000 reported deaths, according to through November 12, 2020. Between January 2020 and October 2020, at least
federal agencies. The country also 237,000 more deaths occurred from all causes, including COVID-19, than would
continues to experience serious normally be expected, according to data from the Centers for Disease Control and
economic repercussions. Prevention (CDC).
Four relief laws, including the CARES Further, while the economy has improved since July 2020, many people remain
Act, were enacted as of November unemployed, including both those temporarily laid off and those who have
2020 to provide appropriations to permanently lost their job (see figure). Also, more households have become seriously
address the public health and delinquent on mortgage payments during the pandemic. In addition, GAO’s review of
economic threats posed by COVID-19. academic studies suggests the pandemic will likely remain a significant obstacle to
As of September 30, 2020, of the $2.6 more robust economic activity.
trillion appropriated by these acts, the
Number of Unemployed Workers Permanently Losing Jobs and on Temporary
federal government had obligated a
Layoff, January 2019 through October 2020
total of $1.8 trillion and expended $1.6
trillion of the COVID-19 relief funds, as
reported by federal agencies.
The CARES Act included a provision
for GAO to report on its ongoing
monitoring and oversight efforts related
to the COVID-19 pandemic. This report
examines the federal government’s
continued efforts to respond to and
recover from the COVID-19 pandemic.
GAO reviewed data, documents, and
guidance from federal agencies about
their activities and interviewed federal
and state officials. GAO also sent a
survey to public health and emergency
management officials in the 50 states,
Washington, D.C., and the five U.S.
territories regarding medical supplies. In response to the pandemic and its effects, Congress and the administration have
taken a series of actions to protect the health and well-being of Americans. However,
What GAO Recommends as the end of 2020 approaches, urgent actions are needed to help ensure an
GAO is making 11 new effective federal response on a range of public health and economic issues.
recommendations for agencies that are Medical Supplies
detailed in this Highlights and in the
report. GAO is also raising one matter While the Department of Health and Human Services (HHS) and the Federal
for congressional consideration. Emergency Management Agency (FEMA) have made numerous efforts to mitigate
supply shortages and expand the medical supply chain, shortages of certain supplies
persist. In September 2020, GAO reported that ongoing constraints with the
availability of certain types of personal protective equipment (PPE) and testing
supplies remain due to a supply chain with limited domestic production and high
global demand. In October 2020, GAO surveyed public health and emergency
View GAO-21-191. For more information, management officials from all states, the District of Columbia, and U.S. territories
contact A. Nicole Clowers, (202) 512-7114 or (hereafter states) and found the following:
clowersa@gao.gov.

United States Government Accountability Office
Highlights of GAO-21-191 (Continued)

• Testing supplies. Most states reported no shortages of swabs or transport media, but about one-third to one-half
reported shortages in other types of testing supplies (see figure).
State-Reported Testing Supply Shortages, as of October 2020

GAO surveyed officials in the 50 states; Washington, D.C.; and the five U.S. territories and received responses from 47 of the 56 locations, representing
41 states; Washington, D.C.; and all five territories. Not all states responded to every question.

• PPE. The majority of states that responded were mainly able to fulfill requests for supplies from organizations and
entities within their states. However, availability constraints continue with certain PPE, such as nitrile gloves.
• Supplies for future vaccine needs. About one-third of states that responded stated that they were “greatly” or
“completely” concerned about having sufficient vaccine-related supplies to administer COVID-19 vaccines. An
additional 21 states indicated that they were moderately concerned.
In September 2020, GAO recommended that HHS, in coordination with FEMA, should
• further develop and communicate to stakeholders plans outlining specific actions the federal government will take
to help mitigate supply chain shortages for the remainder of the pandemic;
• immediately document roles and responsibilities for supply chain management functions transitioning to HHS,
including continued support from other federal partners, to ensure sufficient resources exist to sustain and make
the necessary progress in stabilizing the supply chain; and
• devise interim solutions, such as systems and guidance and dissemination of best practices, to help states
enhance their ability to track the status of supply requests and plan for supply needs for the remainder of the
pandemic response.
HHS and the Department of Homeland Security disagreed with these recommendations, noting, among other things, the
work that they had done to manage the medical supply chain and increase supply availability. In November 2020, HHS
repeated its disagreement with GAO’s recommendations and noted its efforts to meet the needs of states.
In light of the surge in COVID-19 cases, along with reported shortages, including GAO’s nationwide survey
findings, GAO underscores the critical imperative for HHS and FEMA to implement GAO’s September 2020
recommendations.
Vaccines and Therapeutics
In a recent GAO report (GAO-21-207), GAO found that there has been significant federal investment to accelerate
vaccine and therapeutic development, such as through Operation Warp Speed, a partnership between the Department of
Defense and HHS that aims to accelerate the development, manufacturing, and distribution of COVID-19 vaccines and
therapeutics. Separately, Emergency Use Authorizations (EUA), which allow for the emergency use of medical products
without Food and Drug Administration (FDA) approval or licensure provided certain statutory criteria are met, have also
been used for therapeutics. As of November 9, 2020, FDA had made four therapeutics available to treat COVID-19
through EUAs. In that report, GAO recommended that FDA identify ways to uniformly disclose information from its
scientific review of safety and effectiveness data when issuing EUAs for therapeutics and vaccines. By doing so,
FDA could help improve the transparency of, and ensure public trust in, its EUA decisions. HHS neither agreed nor
disagreed with the recommendation, but said it shared GAO’s goal of transparency.
COVID-19 Testing Guidance
HHS and its component agencies have taken several key actions to document a federal COVID-19 testing strategy and
provide testing-related agency guidance. However, this guidance has not always been transparent, raising the risk of
confusion and eroding trust in government. In particular, while it is expected that guidance will change as new information
Highlights of GAO-21-191 (Continued)

about the novel virus evolves, frequent changes to general CDC testing guidelines have not always been communicated
with a scientific explanation. GAO recommends that HHS ensure that CDC clearly discloses the scientific rationale
for any change to testing guidelines at the time the change is made. HHS concurred with this recommendation.
Types of COVID-19 Testing Approaches

Nursing Home Care
In September 2020, the Coronavirus Commission on Safety and Quality in Nursing Homes (established by the Centers for
Medicare & Medicaid Services (CMS) in June 2020) made 27 recommendations to CMS on topics such as testing, PPE,
and visitation. CMS released a response to the commission that broadly outlined the actions it has taken to date, but it
has not fully addressed the commission’s recommendations or provided an implementation plan to track and report
progress toward implementing them.
While CMS is not obligated to implement all of the commission’s recommendations, the agency has not indicated any
areas where it does not plan to take action. GAO recommends that CMS quickly develop a plan that further details
how it intends to respond to and implement, as appropriate, the commission’s recommendations. HHS neither
agreed nor disagreed with this recommendation and said it would refer to and act upon the commission’s
recommendations, as appropriate.
In addition, the Department of Veterans Affairs (VA) partners with state governments to provide nursing home care to
more than 20,000 veterans in over 150 state veterans homes. In March 2020, VA instructed its contractor to stop in-
person inspections due to concerns about COVID-19. As of September 2020, these inspections had not resumed, leaving
veterans at risk of receiving poor quality care. Additionally, VA does not collect timely data on the number of COVID-19
cases and deaths occurring at each state veterans home, hindering its ability to monitor and take steps to mitigate the
spread of COVID-19 in these homes. GAO recommends that VA (1) develop a plan to resume inspections of state
veterans homes, which may include using in-person, a mix of virtual and in-person, or fully virtual inspections,
and (2) collect timely data on COVID-19 cases and deaths in each state veterans home. VA concurred with both
recommendations.
Economic Impact Payments
The CARES Act included economic impact payments (EIP) for eligible individuals to address financial stress due to the
pandemic. As of September 30, 2020, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS)
had disbursed over 165.8 million payments to individuals, totaling $274.7 billion. According to IRS data, more than 26
million non-filers—individuals who do not normally file a tax return and may be hard to reach—received a payment (see
figure). However, everyone that was supposed to receive a payment was not reached. Starting in September 2020, IRS
sent notices to nearly 9 million individuals who had not yet received an EIP.
Number of Filers and Non-Filers Issued an Economic Impact Payment, as of September 30, 2020
Highlights of GAO-21-191 (Continued)

Treasury and IRS officials did not plan to track and analyze the outcomes of their EIP notice mailing effort until 2021. The
lack of timely analysis deprives Treasury and IRS of data they could use to assess the effectiveness of their notice
strategy and redirect resources as needed to other outreach and communication efforts. GAO recommends that
Treasury, in coordination with IRS, should begin tracking and publicly reporting the number of individuals who
were mailed an EIP notification letter and filed for and received an EIP, and use that information to inform
ongoing outreach and communications efforts. Treasury agreed with this recommendation.
Unemployment Insurance
The CARES Act created three federally funded temporary programs for unemployment insurance (UI) that expanded
benefit eligibility and enhanced benefits. In its weekly news releases, the Department of Labor (DOL) publishes the
number of weeks of unemployment benefits claimed by individuals in each state during the period and reports the total
count as the number of people claiming benefits nationwide. DOL officials told GAO that they have traditionally used this
number as a proxy for the number of individuals claiming benefits because they were closely related. However, the
number of claims has not been an accurate estimate of the number of individuals claiming benefits during the pandemic
because of backlogs in processing a historic volume of claims, among other data issues.
Without an accurate accounting of the number of individuals who are relying on these benefits in as close to real time as
possible, policymakers may be challenged to respond to the crisis at hand. GAO recommends that DOL (1) revise its
weekly news releases to clarify that in the current unemployment environment, the numbers it reports for weeks
of unemployment claimed do not accurately estimate the number of unique individuals claiming benefits, and (2)
pursue options to report the actual number of distinct individuals claiming benefits, such as by collecting these
already available data from states. DOL agreed with the recommendation to revise its weekly news releases, and
partially agreed with the recommendation to pursue options to report the actual number of distinct individuals claiming
benefits.
Tax Relief for Businesses
To provide liquidity to businesses during the pandemic, the CARES Act included tax measures to help businesses receive
cash refunds or other reductions to tax obligations. Some taxpayers need to file an amended income tax return to take
advantage of these provisions; at the same time, IRS faces an increase in mail and paper processing delays due to the
pandemic, which may delay the timely processing of this paperwork and issuance of these refunds. GAO recommends
that IRS update its form instructions to include information on its electronic filing capability for tax year 2019. IRS
agreed with this recommendation.
Program Integrity
Although the extent and significance of improper payments associated with COVID-19 relief funds have not yet been
determined, the impact of these improper payments, including those that are the result of fraud, could be substantial. For
example, numerous individuals are facing federal charges related to attempting to defraud the Paycheck Protection
Program (PPP), UI program, or other federal programs, and many more investigations are underway. To address the risk
of improper payments due to fraud and other causes, GAO previously recommended the following:
• The Small Business Administration (SBA) should develop and implement plans to identify and respond to
risks in the PPP to ensure program integrity, achieve program effectiveness, and address potential fraud.
Highlights of GAO-21-191 (Continued)

• The Office of Management and Budget (OMB), in consultation with Treasury, should issue timely
guidance for auditing new and existing COVID-19-related programs, including Coronavirus Relief Fund
payments, as soon as possible. Audits of entities that receive federal funds are critical to the federal
government’s ability to help safeguard those funds. Also, Congress should amend the Social Security Act
to explicitly allow the Social Security Administration to share its full death data with Treasury for data
matching to prevent payments to ineligible individuals.
GAO maintains that implementing these recommendations fully is critically important in order to protect federal funds from
improper payments resulting from fraud and other risks.
In this report, GAO also identifies new concerns about the timely reporting of improper payments for COVID-19 programs.
The COVID-19 relief laws appropriated over a trillion dollars that may be spent through newly established programs to
fund response and recovery efforts, such as SBA’s PPP. However, unlike the supplemental appropriations acts that
provided for disaster relief related to the 2017 hurricanes and California wildfires, the COVID-19 relief laws did not require
agencies to deem programs receiving these relief funds that expend more than a threshold amount as "susceptible to
significant improper payments." In addition, based on OMB guidance, improper payment estimates associated with new
COVID-19 programs established in March 2020 may not be reported until November 2022, in some instances. GAO is
making two recommendations:
• OMB should develop and issue guidance directing agencies to include COVID-19 relief funding with
associated key risks, such as changes to existing program eligibility rules, as part of their improper
payment estimation methodologies, especially for existing programs that received COVID-19 relief
funding.
• SBA should expeditiously estimate improper payments and report estimates and error rates for PPP due
to concerns about the possibility that improper payments, including those resulting from fraudulent
activity, could be widespread.
GAO is also suggesting that Congress consider, in any future legislation appropriating COVID-19 relief funds,
designating all executive agency programs and activities making more than $100 million in payments from
COVID-19 relief funds as “susceptible to significant improper payments.”
Aviation Assistance and Preparedness
GAO identified concerns about efforts to monitor CARES Act financial assistance to the aviation sector. Treasury’s Payroll
Support Program (PSP) provides $32 billion in payroll support payments and loans to help the aviation industry retain its
employees. While recipients have begun submitting required compliance reports, Treasury has not yet finalized a
monitoring system to identify and respond to the risk of noncompliance with PSP agreement terms, potentially hindering
its ability to detect program misuse in a timely manner. GAO is recommending that Treasury finish developing and
implement a compliance monitoring plan that identifies and responds to risks in the PSP. Treasury neither agreed
nor disagreed with this recommendation, but committed to reviewing additional measures that may further enhance its
compliance monitoring and ensure that PSP funds are used as intended.
In June 2020, GAO suggested that Congress take legislative action to require the Secretary of Transportation to
work with relevant agencies, such as HHS, the Department of Homeland Security, and other stakeholders, to
develop a national aviation-preparedness plan to limit the spread of communicable disease threats and minimize
travel and trade impacts. GAO originally made this recommendation to the Department of Transportation in December
2015. GAO urges Congress to take swift action to require such a plan, without which the U.S. will not be as prepared to
minimize and quickly respond to ongoing and future communicable disease events.
Contents

Matters for Congressional Consideration.............................................................................. 1

Recommendations for Executive Action................................................................................ 2

Introduction................................................................................................................................... 4

Background.................................................................................................................................... 8
Timeline of Key Congressional and Administrative Actions................................................................... 8
Federal COVID-19 Funding and Spending........................................................................................ 10

Executive Summary................................................................................................................... 13
Overview..................................................................................................................................... 13
Medical Supply Shortages............................................................................................................. 15
COVID-19 Testing......................................................................................................................... 18
COVID-19 Vaccines and Therapeutics.............................................................................................. 18
Nursing Home Care...................................................................................................................... 20
Assistance to Individuals and Businesses........................................................................................ 21
Program Integrity......................................................................................................................... 23
Additional Matters for Congress and Agency Recommendations......................................................... 26

Closing........................................................................................................................................... 29

Congressional Addressees....................................................................................................... 30

Appendixes and Enclosures..................................................................................................... 32
Appendix I: Enclosures.................................................................................................................. 32
Health Care Indicators.................................................................................................................. 33
Economic Indicators..................................................................................................................... 39
Relief for Health Care Providers..................................................................................................... 53
Nursing Homes............................................................................................................................ 59
Strategic National Stockpile........................................................................................................... 71
COVID-19 Testing Guidance........................................................................................................... 84
Medicaid Spending....................................................................................................................... 96
Medicare Telehealth Waivers....................................................................................................... 103
Indian Health Service.................................................................................................................. 108
Veterans Health Care.................................................................................................................. 114

Page i GAO-21-191
Military Health........................................................................................................................... 120
Defense Support of Civil Authorities............................................................................................. 127
HHS COVID-19 Funding............................................................................................................... 134
Health Disparities....................................................................................................................... 141
Behavioral Health....................................................................................................................... 151
States’ Perspectives on Medical Supply Availability......................................................................... 165
COVID-19 Cyber Response.......................................................................................................... 176
Nutrition Assistance................................................................................................................... 181
Child Welfare............................................................................................................................. 189
Leave Beneﬁts and Tax Relief for Employers.................................................................................. 195
HUD Programs.......................................................................................................................... 206
Unemployment Insurance Programs............................................................................................. 212
Economic Impact Payments......................................................................................................... 226
SSA Disability Service Delivery..................................................................................................... 236
Employee Payroll Tax Deferrals.................................................................................................... 243
Tax Relief for Businesses............................................................................................................. 247
Financial Assistance to Aviation and Other Eligible Businesses......................................................... 254
Agriculture Spending.................................................................................................................. 260
Federal Food Safety Inspections and Inspectors’ Exposure to COVID-19............................................. 267
USDA Support for Rural America.................................................................................................. 271
Community Economic Development Support................................................................................. 275
Paycheck Protection Program...................................................................................................... 280
Economic Injury Disaster Loan Program........................................................................................ 285
Federal Reserve Lending Facilities................................................................................................ 290
Cleaning Federal Buildings.......................................................................................................... 297
Amtrak Grants........................................................................................................................... 301
Assistance for Fishery Participants............................................................................................... 308
K-12 Education.......................................................................................................................... 313
Transit Industry.......................................................................................................................... 319
FEMA Disaster Relief Fund.......................................................................................................... 325
Airport Grants........................................................................................................................... 332
Federal Contracts and Agreements for COVID-19............................................................................ 337
International Trade..................................................................................................................... 344
Payment Integrity....................................................................................................................... 348
Appendix II: List of Ongoing GAO Work Related to COVID-19, as of November 10, 2020........................ 357
Appendix III: Status of Our Recommendations............................................................................... 361
Appendix IV: Comments from the Department of Health and Human Services.................................... 368
Appendix V: Comments from the Department of Housing and Urban Development............................ 373
Appendix VI: Comments from the Internal Revenue Service............................................................. 375
Appendix VII: Comments from the Department of Labor................................................................. 378
Appendix VIII: Comments from the Small Business Administration.................................................... 380
Appendix IX: Comments from the Social Security Administration...................................................... 381
Appendix X: Comments from the Department of the Treasury......................................................... 382

Page ii GAO-21-191
Appendix XI: Comments from the Department of Veterans Aﬀairs.................................................... 384

Contacts..................................................................................................................................... 387

Tables
Table 1: COVID-19 Relief Appropriations, Obligations, and Expenditures, as of September 30, 2020.......... 12
Summary of the Provider Relief Fund ($175 billion) Allocations and Disbursements, as of September 30,
2020........................................................................................................................................... 55
Strategic National Stockpile Personal Protective Equipment Inventory and Status of Contract Awards....... 76
Status of Strategic National Stockpile Pharmaceutical Contract Awards and Inventory............................ 78
Strategic National Stockpile Testing Supply Inventory........................................................................ 80
HHS’s Reported Obligations and Expenditures for Testing-Related COVID-19 Response Activities, as of Oct.
31, 2020..................................................................................................................................... 87
Federal Medicaid COVID-19 and Total Expenditures, by State and Territory, as of October 31, 2020.......... 99
Allocation and Obligation of Supplemental Funding Provided to the Indian Health Service (IHS) to Address
COVID-19.................................................................................................................................. 110
Number of COVID-19 Cases Reported by the Department of Defense, as of September 30, 2020........... 122
Funds Available for the Department of Defense to Transfer from the CARES Act Appropriations for the Army
and Air National Guards’ Personnel and Operations and Maintenance Accounts................................. 129
Supplemental Appropriations to HHS for COVID-19 Response.......................................................... 135
Department of Health and Human Services (HHS) Reported Appropriations, Obligations, and Expenditures
for COVID-19 Response, by Agency, as of October 31, 2020............................................................. 137
Department of Health and Human Services (HHS) Reported Allocations, Obligations, and Expenditures for
COVID-19 Response, by Selected Key Response Activity, as of October 31, 2020.................................. 139
Substance Abuse and Mental Health Services Administration (SAMHSA) COVID-19 Related Grants......... 160
Department of Health and Human Services’ (HHS) Collaborative Eﬀorts to Respond to Increased
Cyberattacks Associated with COVID-19 since March 2020............................................................... 178
Key Information on Federal Nutrition Assistance Programs during the COVID-19 Pandemic.................. 183
Examples of ACF Guidance and Flexibilities Provided to Help State Child Welfare Agencies Respond to
Pandemic Concerns Described by National Organizations............................................................... 193
Number and Type of Compliance Actions Related to Families First Coronavirus Response Act Paid Leave
Provisions, as of September 16, 2020........................................................................................... 201
New FFCRA-related Performance Measures for Department of Labor’s Wage and Hour Division............ 202
Summary of Claims Requested on Filed Quarterly Employment Tax Returns, as of October 29, 2020...... 203
Groups That Can Expect a Corrected Economic Impact Payment (EIP) in 2020..................................... 232
CARES Act Net Operating Loss (NOL) and Alternative Minimum Tax (AMT) Tentative Refund Cases, as of
October 19, 2020....................................................................................................................... 250
CARES Act Application for Tentative Refund Cases Received via E-fax, by Refund Amount, as of October 19,
2020......................................................................................................................................... 251
Funding Amounts and Funding Sources for Coronavirus Food Assistance Program (CFAP) 1 and 2 Direct
Payments to Agricultural Producers, as of September 30, 2020........................................................ 264
Federal Reserve Lending Facilities with CARES Act Funding, as of October 15, 2020............................. 292

Page iii GAO-21-191
Federal Reserve Lending Facilities without CARES Act Funding, as of October 15, 2020......................... 295
Amtrak Expenditure of CARES Act Funds by Grant Program, as of September 30, 2020......................... 303
Allocation of CARES Act Funding for Fishery Participants Made to States, Tribes, and Territories on May 7,
2020......................................................................................................................................... 310
Transit Agency Obligations of CARES Act Grant Funds by Expense Category in Urban, Rural, and Tribal Areas,
as of September 30, 2020........................................................................................................... 321
Steps Oﬃcials from 22 Transit Agencies Reported Having Taken to Mitigate the Spread of COVID-19 among
Passengers and Employees......................................................................................................... 323
CARES Act Airport Grants by Funding Group.................................................................................. 333
Federal Aviation Administration Obligations and Expenditures for CARES Act Airport Grants, by Funding
Group, as of September 30, 2020................................................................................................. 334

Figures
Number of Unemployed Workers Permanently Losing Jobs and on Temporary Layoﬀ, January 2019 through
October 2020...............................................................................................................................H1
State-Reported Testing Supply Shortages, as of October 2020.............................................................H2
Types of COVID-19 Testing Approaches............................................................................................H3
Number of Filers and Non-Filers Issued an Economic Impact Payment, as of September 30, 2020.............H4
Figure 1: Report Enclosures by Topic Area......................................................................................... 6
Figure 2: Selected Federal Actions That Congress and the Administration Have Taken Related to COVID-19, as
of November 2020......................................................................................................................... 9
Figure 3: Higher-Than-Expected Weekly Mortality, January to October 2020.......................................... 13
Figure 4: Number of Unemployed Workers Permanently Losing Jobs and on Temporary Layoﬀ, January 2019
through October 2020.................................................................................................................. 14
Figure 5: Extent of States’ Conﬁdence in Ability to Fulﬁll Future Requests for Selected Personal Protective
Equipment (PPE).......................................................................................................................... 16
Figure 6: State-Reported Supply Shortages for Testing Sites or Laboratories......................................... 17
Figure 7: Operation Warp Speed Timeline for a Potential Vaccine Candidate......................................... 19
Indicators for Areas of the Economy Supported by the Federal Pandemic Response, July 2020 through
October 2020, cumulative change since February 2020..................................................................... 40
Percentage Change in Employment by Sector, February through October 2020..................................... 42
Number of Unemployed Workers Permanently Losing Jobs and on Temporary Layoﬀ, January 2019 through
October 2020.............................................................................................................................. 42
Serious Delinquency Rates on Single-Family Residential Mortgages, January 2019 through August 2020.... 43
State and Local Government Tax Revenue, First Quarter 2019 through Second Quarter 2020.................. 45
Weekly Conﬁrmed COVID-19 Cases and Deaths among U.S. Nursing Home Residents and Staﬀ, as Reported
by Medicare- and Medicaid-Certiﬁed Nursing Homes, Weeks Ending May 31, 2020 through October 4,
2020........................................................................................................................................... 62
Federal Entities Involved in Management of the Strategic National Stockpile (SNS) Supplies during the
COVID-19 Pandemic..................................................................................................................... 73
Primary Use of Pharmaceutical Products the Oﬃce of the Assistant Secretary for Preparedness and
Response Will Include in the Strategic National Stockpile................................................................... 77

Page iv GAO-21-191
Contents of One Type of Strategic National Stockpile COVID-19 Vaccination Kit That Supports 100
Vaccinations................................................................................................................................ 81
HHS Deﬁnitions and Applicable Requirements, by Type of COVID-19 Testing Approach........................... 88
Timeline of Selected Changes to Centers for Disease Control and Prevention (CDC) Testing Guidelines for
Asymptomatic Individuals with Known or Suspected Exposure........................................................... 93
Supplemental Appropriations to HHS for COVID-19 Response and HHS’s Reported Obligations and
Expenditures, as of October 31, 2020........................................................................................... 136
Cumulative COVID-19-Associated Hospitalization Rates per 100,000 Population from Select Counties in 14
States, Adjusted for Age, by Race and Ethnicity, March 1, 2020 through October 10, 2020..................... 144
COVID-19 Death Rates, by Race and Ethnicity, through October 7, 2020............................................. 145
Deaths in 2020 as a Percentage of 2015-2019 Deaths, by Race and Ethnicity, January through October
2020......................................................................................................................................... 146
Distribution of COVID-19 Deaths, by Race and Ethnicity and Age Group, through October 14, 2020........ 148
Centers for Disease Control and Prevention (CDC) Reported Survey Findings Regarding Suicidal Ideation,
June 24–30, 2020....................................................................................................................... 155
Centers for Disease Control and Prevention (CDC) Reported Survey Findings Regarding Substance Use, June
24–30, 2020............................................................................................................................... 156
Examples of Personal Protective Equipment.................................................................................. 166
Examples of COVID-19 Testing Supplies........................................................................................ 167
Extent that States and Territories Fulﬁlled Requests for Selected Personal Protective Equipment (PPE).... 169
Number of States Reporting 30-day Stockpiles of Selected Personal Protective Equipment (PPE)............ 170
Extent of States’ Conﬁdence in Ability to Fulﬁll Future Requests for Selected Personal Protective Equipment
(PPE)......................................................................................................................................... 171
State-Reported Supply Shortages for Testing Sites or Laboratories.................................................... 172
States’ Anticipated Supply Shortages for Testing Sites or Laboratories............................................... 172
Status of Supplemental CARES Act Funding for HUD Programs, as of September 30, 2020.................... 207
Weekly Initial Claims Submitted Nationwide for Regular Unemployment Insurance (UI) and Pandemic
Unemployment Assistance (PUA) Beneﬁts..................................................................................... 215
Over-reporting of Individuals Claiming Pandemic Unemployment Assistance (PUA)............................. 218
Number of Filers and Non-Filers Issued an Economic Impact Payment as of September 30, 2020........... 228
Number of Non-Filers Who Used IRS Non-Filers Tool to File for and Received an Economic Impact
Payment................................................................................................................................... 230
Social Security Administration Initial-level Disability Determination Workloads, March 2019 through
September 2020........................................................................................................................ 239
Daily Average Number of Social Security Administration Disability Hearings Held, March 20, 2020 through
October 16, 2020....................................................................................................................... 241
Obligations and Purchases for Each Round of the U.S. Department of Agriculture’s Farmers to Families Food
Box Program, as of September 30, 2020....................................................................................... 265
U.S. Department of Agriculture Food Safety and Inspection Service’s Personal Protective Equipment
Purchases by Type, Quantity, and Cost, as of September 30, 2020.................................................... 269
Economic Development Administration Grants Awarded with CARES Act Funds by State and U.S. Territory, as
of September 30, 2020............................................................................................................... 277
Paycheck Protection Program (PPP) Loan Forgiveness Process Time Frames....................................... 282

Page v GAO-21-191
Average Dollar Amount of Economic Injury Disaster Loans Relative to the Total Number of Small Businesses
in Each State, as of October 4, 2020............................................................................................. 286
Amtrak Ridership Actuals and Forecast, October 2018–September 2021............................................ 304
Monthly Disaster Relief Fund Balance, February 2020 through October 2020...................................... 326
FEMA Obligations from the Disaster Relief Fund for COVID-19 by State and Territory, as of October
2020......................................................................................................................................... 327
COVID-19 Obligations from the Disaster Relief Fund by Program or Activity, as of September 2020......... 328
Four Federal Agencies Tasked with the Most Mission Assignments.................................................... 329
Obligations from the Disaster Relief Fund for COVID-19 and the Five Costliest Storms, as of October
2020......................................................................................................................................... 330
Contract Obligations in Response to COVID-19 by Federal Agency, as of October 15, 2020.................... 339
Government-wide Contract Obligations Related to COVID-19 by Week, February–October 2020............. 340
Contract Obligation Amounts for Goods and Services Most Procured in Response to COVID-19, as of October
15, 2020................................................................................................................................... 341
Monthly U.S. Imports of Categories Containing COVID-19-Related Products by Type, January 2019–August
2020......................................................................................................................................... 345
Example Timeline for Newly Established COVID-19 Programs’ Reporting of Improper Payment
Estimates.................................................................................................................................. 354

Page vi GAO-21-191
Abbreviations

CDC Centers for Disease Control and Prevention
CMS Centers for Medicare & Medicaid Services
COVID-19 Coronavirus Disease 2019
CRF Coronavirus Relief Fund
DHS Department of Homeland Security
DOD Department of Defense
DOL Department of Labor
DOT Department of Transportation
EIP economic impact payment
EUA emergency use authorization
FDA Food and Drug Administration
FEMA Federal Emergency Management Agency
GTAS Governmentwide Treasury Account Symbol Adjusted Trial Balance
System
HHS Department of Health and Human Services
HUD Department of Housing and Urban Development
IRS Internal Revenue Service
NCHS National Center for Health Statistics
NIA National Interest Action
OMB Office of Management and Budget
PPE personal protective equipment
PPP Paycheck Protection Program
PSP Payroll Support Program
SBA Small Business Administration
SNS Strategic National Stockpile
SSA Social Security Administration
SVH state veterans home
Treasury Department of the Treasury
UI unemployment insurance
USDA United States Department of Agriculture
VA Department of Veterans Affairs
WHO World Health Organization

GAO’s Mission

Page vii GAO-21-191
The Government Accountability Oﬃce, the audit, evaluation, and investigative arm of Congress, exists
to support Congress in meeting its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people. GAO examines the use of public
funds; evaluates federal programs and policies; and provides analyses, recommendations, and other
assistance to help Congress make informed oversight, policy, and funding decisions. GAO’s commitment
to good government is reﬂected in its core values of accountability, integrity, and reliability.

This is a work of the U.S. government and is not subject to copyright protection in the United States. The
published product may be reproduced and distributed in its entirety without further permission from
GAO. However, because this work may contain copyrighted images or other material, permission from
the copyright holder may be necessary if you wish to reproduce this material separately.

Page viii GAO-21-191
Matters for Congressional Consideration
• To hold agencies accountable and increase transparency, Congress should consider, in any
future legislation appropriating COVID-19 relief funds, designating all executive agency
programs and activities making more than $100 million in payments from COVID-19 relief
funds as “susceptible to signiﬁcant improper payments” for purposes of 31 U.S.C. § 3352.

Page 1 GAO-21-191
Recommendations for Executive Action
Recommendations for Executive Action

We are making a total of 11 recommendations to federal agencies:

• The Secretary of Health and Human Services should ensure that the Director of the
Centers for Disease Control and Prevention clearly discloses the scientiﬁc rationale for any
change to testing guidelines at the time the change is made. (Recommendation 1)
• The Administrator of the Centers for Medicare & Medicaid Services should quickly develop
a plan that further details how the agency intends to respond to and implement, as
appropriate, the 27 recommendations in the ﬁnal report of the Coronavirus Commission
on Safety and Quality in Nursing Homes, which the Centers for Medicare & Medicaid
Services released on September 16, 2020. Such a plan should include milestones that allow
the agency to track and report on the status of each recommendation; identify actions
taken and planned, including areas where the Centers for Medicare & Medicaid Services
determined not to take action; and identify areas where the agency could coordinate with
other federal and nonfederal entities. (Recommendation 2)
• The Department of Veterans Aﬀairs Under Secretary for Health should develop a plan to
ensure inspections of state veterans homes occur during the COVID-19 pandemic—which
may include using in-person, a mix of virtual and in-person, or fully virtual inspections.
(Recommendation 3)
• The Department of Veterans Aﬀairs Under Secretary for Health should collect timely data
on COVID-19 cases and deaths in each state veterans home, which may include using data
already collected by the Centers for Medicare & Medicaid Services. (Recommendation 4)
• The Secretary of the Treasury, in coordination with the Commissioner of Internal Revenue,
should begin tracking and publicly reporting the number of individuals who were mailed
an economic impact payment notiﬁcation letter and subsequently ﬁled for and received
an economic impact payment, and use that information to inform ongoing outreach and
communications eﬀorts. (Recommendation 5)
• The Commissioner of Internal Revenue should update the Form 1040-X instructions to
include information on the electronic ﬁling capability for tax year 2019. (Recommendation
6)
• The Secretary of Labor should ensure the Oﬃce of Unemployment Insurance revises
its weekly news releases to clarify that in the current unemployment environment, the
numbers it reports for weeks of unemployment claimed do not accurately estimate the
number of unique individuals claiming beneﬁts. (Recommendation 7)
• The Secretary of Labor should ensure the Oﬃce of Unemployment Insurance pursues
options to report the actual number of distinct individuals claiming beneﬁts, such as by
collecting these already available data from states, starting from January 2020 onward.
(Recommendation 8)
• The Director of the Oﬃce of Management and Budget should develop and issue guidance
directing agencies to include COVID-19 relief funding with associated key risks, such as
provisions contained in the CARES Act and other relief legislation that potentially increase

Page 2 GAO-21-191
the risk of improper payments or changes to existing program eligibility rules, as part of
their improper payment estimation methodologies. This should especially be required for
already existing federal programs that received COVID-19 relief funding. (Recommendation
9)
• The Administrator of the Small Business Administration should expeditiously estimate
improper payments and report estimates and error rates for the Paycheck Protection
Program due to concerns about the possibility that improper payments, including those
resulting from fraudulent activity, could be widespread. (Recommendation 10)
• The Secretary of the Treasury should ﬁnish developing and implement a compliance
monitoring plan that identiﬁes and responds to risks in the Payroll Support Program
to ensure program integrity and address potential fraud, including the use of funds for
purposes other than for the continuation of employee wages, salaries, and beneﬁts.
(Recommendation 11)

Page 3 GAO-21-191
Introduction
November 30, 2020

Congressional Committees

The Coronavirus Disease 2019 (COVID-19) pandemic has resulted in catastrophic loss of life and
substantial damage to the global economy, stability, and security. Worldwide, as of November 12,
2020, there were about 51,548,000 cumulative reported cases and 1,276,000 reported deaths due
to COVID-19; within the U.S., there were about 10,314,000 cumulative reported cases and 224,000
reported deaths.1

Following a downward trend in August and early September, the number of COVID-19 cases began
to increase again in mid-September. By November 1–12, 2020, reported new COVID-19 cases per
day had peaked at about 116,000, on average—higher than at any other previous time. Between
October 16 and November 12, 2020, reported COVID-19 cases per day, on average, increased in 49
states and jurisdictions and held steady in three states.2

During this most recent spike in cases, some states have taken measures to prevent their health
care systems from being overwhelmed. For example, the Wisconsin Department of Health Services
opened an alternate care facility at the Wisconsin State Fair Park near Milwaukee on October 14,
2020. This facility is intended to serve as overﬂow for hospitals across the state and supports
patients who are not severely ill but require continued medical support. In addition, the Acting
Secretary of the New Mexico Department of Health issued an order, beginning November 16,
2020, to close non-essential businesses, prohibit indoor or outdoor dining at food and beverage
establishments, and restrict occupancy at essential retail establishments to the lesser of 25
percent of maximum occupancy or 75 customers, among other restrictions.3

1Worldwide data from the World Health Organization reﬂect laboratory-conﬁrmed cases and deaths reported by
countries and areas. Data on COVID-19 cases in the U.S. are based on aggregate case reporting to the Centers for
Disease Control and Prevention (CDC) and include probable and conﬁrmed cases as reported by states and jurisdictions.
According to CDC, the actual number of COVID-19 cases is unknown for a variety of reasons, including that people who
have been infected may have not been tested or may have not sought medical care. CDC’s National Center for Health
Statistics COVID-19 death counts in the U.S. are based on provisional counts from death certiﬁcate data, which do not
distinguish between laboratory-conﬁrmed and probable COVID-19 deaths. Provisional counts are incomplete due to an
average delay of 2 weeks (a range of 1–8 weeks or longer) for death certiﬁcate processing.
2The 52 states and jurisdictions include all 50 states and the District of Columbia and New York City. COVID-19 case
counts for New York City are reported separately from New York State. We deﬁned states as holding steady if they had
less than a 1 percent increase or decrease in average daily new cases over the time frame. The average percent change
in daily new cases was calculated as the average of the daily rates of change of the 7-day moving average between
October 16 and November 12, 2020. CDC COVID Data Tracker data were accessed on November 13, 2020.
3See New Mexico Department of Health, “Public Health Emergency Order Clarifying that Current Guidance Documents,
Advisories, and Emergency Public Health Orders Remain in Eﬀect; and Amending Prior Public Health Emergency
Orders to Provide Additional Temporary Restrictions Due to COVID-19,” November 13, 2020. Accessed at https://
cv.nmhealth.org/public-health-orders-and-executive-orders/ on November 15, 2020.

Page 4 GAO-21-191
The country also continues to experience serious economic repercussions and turmoil as a result
of the pandemic. As of October 2020, there were 11 million unemployed individuals, compared to
nearly 5.9 million individuals at the beginning of the calendar year.4

In response to this unprecedented global crisis, Congress and the administration have taken
a series of actions to protect the health and well-being of Americans. Notably, in March 2020,
Congress passed, and the President signed into law, the CARES Act, which provided over $2
trillion in emergency assistance and health care response for individuals, families, and businesses
aﬀected by COVID-19.5

The CARES Act includes a provision for us to conduct monitoring and oversight of the federal
government’s eﬀorts to prepare for, respond to, and recover from the COVID-19 pandemic.6
We are to report on, among other things, the eﬀect of the pandemic on public health, the
economy, and public and private institutions. To date, we have issued four reports in response
to this provision, and made 20 recommendations and raised three matters for congressional
consideration to improve the federal government’s response eﬀorts.7

This report examines the federal government’s continued eﬀorts to respond to and recover
from the COVID-19 pandemic, and makes 11 new recommendations to federal agencies and
raises one new matter for congressional consideration. Areas covered include medical supply
shortages, COVID-19 testing, COVID-19 vaccines and therapeutics, nursing home care, assistance
to individuals and businesses, and program integrity. This report includes 44 enclosures about a
range of federal programs and activities across government, including the status of health care
and economic indicators that could help monitor the nation’s response to and recovery from the
COVID-19 pandemic, as well as its preparedness for future outbreaks (see app. I). Figure 1 lists
these enclosures by topic area and highlights those with recommendations.

4Bureau of Labor Statistics, Unemployment Level (UNEMPLOY), retrieved from FRED, Federal Reserve Bank of St. Louis,
accessed November 9, 2020, https://fred.stlouisfed.org/series/UNEMPLOY.
5Pub. L. No. 116-139, 134 Stat. 281 (2020). As of November 12, 2020, three other relief laws were also enacted in
response to the COVID-19 pandemic: the Coronavirus Preparedness and Response Supplemental Appropriations Act,
2020, Pub. L. No. 116-123, 134 Stat. 146; Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No.
116-139, 134 Stat. 620 (2020); and Families First Coronavirus Response Act, Pub. L. No. 116-127, 134 Stat. 178 (2020). In
this report, we refer to these four laws, each of which was enacted as of November 12, 2020, and provides supplemental
appropriations for the COVID-19 response, as “COVID-19 relief laws,” and the supplemental funding appropriated by
these laws as “COVID-19 relief funds.”
6Pub. L. No. 116-136, § 19010, 134 Stat. at 579-81.
7GAO, COVID-19: Federal Eﬀorts Accelerate Vaccine and Therapeutics Development, but More Clarity Needed, GAO-21-207
(Washington D.C.: Nov. 17, 2020); COVID-19: Federal Eﬀorts Could Be Strengthened by Timely and Concerted Actions,
GAO-20-701 (Washington, D.C.: Sept. 21, 2020); COVID-19: Brief Update on Initial Federal Response to the Pandemic,
GAO-20-708 (Washington, D.C.: Aug. 31, 2020); and COVID-19: Opportunities to Improve Federal Response and Recovery
Eﬀorts, GAO-20-625 (Washington, D.C.: June 25, 2020).

Page 5 GAO-21-191
Figure 1: Report Enclosures by Topic Area

Given the government-wide scope of this report, we undertook a variety of methodologies to
complete our work, including examining a wide range of data sources and conducting interviews
with federal and state agencies and other entities.8 We examined federal laws, agency documents
and guidance, and published reports and research papers. In each enclosure we include a
summary of the methodology speciﬁc to the work conducted.

See appendix II for a list of ongoing GAO work related to COVID-19 and appendix III for the status
of recommendations made in our June and September 2020 CARES Act reports and in a November
2020 report on vaccines and therapeutics.

A draft of this report was provided to agencies for comment. Summaries of those comments and
our response have been included in each enclosure. General comments provided by agencies are
reproduced in appendixes IV–XI.

8We report on appropriations, obligations, and expenditures of government-wide COVID-19 relief funds, including
the six largest spending areas. For this ﬁnancial data, we requested the funding and spending information for the six
largest areas as of October 31, 2020, from the applicable agencies. We did not receive all of the necessary information
to include in this report; it will be incorporated into our January report. Therefore, we are reporting the amounts as of
September 30, 2020.

Page 6 GAO-21-191
We conducted this performance audit from May 2020 to November 2020 in accordance with
generally accepted government auditing standards. Those standards require that we plan and
perform the audit to obtain suﬃcient, appropriate evidence to provide a reasonable basis for our
ﬁndings and conclusions based on our audit objectives. We believe the evidence obtained provides
a reasonable basis for our ﬁndings and conclusions based on our audit objectives.

Page 7 GAO-21-191
Background

Timeline of Key Congressional and Administrative Actions
In response to the far-reaching public health and economic crisis, Congress and the administration
have taken a series of actions. Figure 2 shows selected federal actions taken from January through
November 2020.

Page 8 GAO-21-191
Figure 2: Selected Federal Actions That Congress and the Administration Have Taken Related to COVID-19, as of
November 2020

Note: The selected federal actions included in this ﬁgure are examples of the types of COVID-19-related actions taken by the
Congress and the administration. The list is not all-inclusive. Additional federal actions, such as the enactment of legislation
providing limited and targeted relief to certain individuals and presidential actions authorizing federal support for states and
individuals, also occurred during this time frame.
a
The Secretary of Health and Human Services may declare a public health emergency if the Secretary determines that (1) a
disease or disorder presents a public health emergency or (2) a public health emergency, including signiﬁcant outbreaks of
infectious disease or bioterrorist attacks, otherwise exists. 42 U.S.C. § 247d.
b
The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 provided $7.8 billion to agencies for
health emergency prevention, preparedness, and response activities related to COVID-19, with HHS appropriated a majority of
the funds. Pub. L. No. 116-123, 134 Stat. 146 (2020).
c
A declaration under the National Emergencies Act authorizes the President to activate existing emergency authorities in other
statutes, and the President must cite the authorities being exercised. 50 U.S.C. § 1621. A governor may request an emergency
declaration under the Staﬀord Act if the situation is of such severity and magnitude that eﬀective response is beyond the
capabilities of the state and the aﬀected local governments, and federal assistance is necessary. 42 U.S.C. § 5191. According to

Page 9 GAO-21-191
the Federal Emergency Management Agency, the President declared a nationwide emergency pursuant to 42 U.S.C. § 5191(b) to
avoid governors needing to request individual emergency declarations.
d
The Families First Coronavirus Response Act provided supplemental appropriations for nutrition assistance programs and
public health services and authorized the Internal Revenue Service to provide tax credits for paid emergency sick leave and
expanded family medical leave that the act requires certain employers to provide. In addition, the act provided states with
ﬂexibility to temporarily modify provisions of their unemployment insurance laws and policies related to certain eligibility
requirements and provided additional federal ﬁnancial support to the states. Pub. L. No. 116-127, 134 Stat. 178 (2020).
e
The Defense Production Act gives the President broad authority to mobilize domestic industry in service of national defense
(including programs for certain military activities, homeland security, stockpiling, space, and emergency preparedness activities
under the Staﬀord Act, among other things). 50 U.S.C. § 4501 et seq.
f
The CARES Act provided supplemental appropriations for federal agencies to respond to COVID-19. In addition, it also funded
various loans, grants, and other forms of assistance for businesses, industries, states, local governments, and hospitals;
provided tax rebates for certain individuals; temporarily expanded unemployment beneﬁts; and suspended payments and
interest on federal student loans. Pub. L. No. 116-136, 134 Stat 281 (2020).
g
The Paycheck Protection Program and Health Care Enhancement Act provided additional appropriations for small business
loans, grants to health care providers, and COVID-19 testing. Pub. L. No. 116-139, 134 Stat. 620 (2020).
h
The Paycheck Protection Program Flexibility Act of 2020 expanded the amount of time Paycheck Protection Program
borrowers have to use program funds and modiﬁed several key program components, such as forgiveness eligibility criteria and
limits on the use of funds for nonpayroll costs. Pub. L. No. 116-142, 134 Stat. 641.
i
The Secretary of Health and Human Services previously announced an extension of the public health emergency on July 23,
2020.

Federal COVID-19 Funding and Spending
As of September 30, 2020, about $2.6 trillion had been appropriated to fund response and
recovery eﬀorts for—as well as to mitigate the public health, economic, and homeland security
eﬀects of—COVID-19.9 As of September 30, 2020, the most recent date for which government-
wide information was available at the time of our analysis, the federal government had obligated a
total of $1.8 trillion and expended $1.6 trillion of the COVID-19 relief funds as reported by federal
agencies to the Department of the Treasury’s (Treasury) Governmentwide Treasury Account
Symbol Adjusted Trial Balance System (GTAS).10

The Business Loan Programs, Economic Stabilization and Assistance to Distressed Sectors
programs, unemployment insurance, economic impact payments, the Public Health and Social
Services Emergency Fund, and the Coronavirus Relief Fund represent $2.2 trillion, or 85 percent,
of the total amounts appropriated.11 For these six largest spending areas, agencies reported
obligations totaling $1.5 trillion and expenditures totaling $1.4 trillion as of September 30, 2020.

9An appropriation provides legal authority for federal agencies to incur obligations and make payments out of the U.S.
Treasury for speciﬁed purposes.
10An obligation is a deﬁnite commitment that creates a legal liability of the U.S. government for the payment of goods
and services ordered or received, or a legal duty on the part of the U.S. government that could mature into a legal
liability by virtue of actions on the part of the other party beyond the control of the U.S. government. An expenditure is
the actual spending of money, or an outlay. Expenditures include some estimates, such as estimated subsidy costs for
direct loans and loan guarantees. Increased spending in Medicaid is not accounted for in the appropriations provided by
the COVID-19 relief laws. Federal agencies use GTAS to report proprietary ﬁnancial reporting and budgetary execution
information to Treasury. Federal agency certiﬁed information was obtained from GTAS on November 6, 2020.
11The Small Business Administration’s Business Loan Program account includes activity for the Paycheck Protection
Program and certain loan subsidies.

Page 10 GAO-21-191
Table 1 provides additional details on government-wide COVID-19 relief funds, including the six
largest spending areas, appropriations, obligations, and expenditures.12

12We requested the funding and spending information for the six largest areas as of October 31, 2020, from the
applicable agencies. We did not receive all of the necessary information to include in this report; it will be incorporated
into our January report. Therefore, we are reporting the amounts as of September 30, 2020.

Page 11 GAO-21-191
Table 1: COVID-19 Relief Appropriations, Obligations, and Expenditures, as of September 30, 2020
Total Total Total
a b b
appropriations obligations expenditures
Major spending area ($ billions) ($ billions) ($ billions)

Business Loan Programs
c
(Small Business Administration) 687.3 540.1 533.7

Economic Stabilization and Assistance to Distressed Sectors
c
(Department of the Treasury) 500.0 31.8 19.3

Unemployment Insurance
(Department of Labor) 394.3 358.0 345.5

Economic Impact Payments
(Department of the Treasury) 282.0 274.7 274.7

Public Health and Social Services Emergency Fund
(Department of Health and Human Services) 231.7 141.7 108.1

Coronavirus Relief Fund
(Department of the Treasury) 150.0 150.0 149.5

Other Areas 388.3 294.1 191.4

d
Total 2,633.6 1,790.4 1,622.1

Source: GAO analysis of data from the Department of the Treasury and applicable agencies. | GAO-21-191

a
COVID-19 relief appropriations reﬂect amounts appropriated under the Coronavirus Preparedness and Response
Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134 Stat. 146; Families First Coronavirus Response Act, Pub. L.
No. 116-127, 134 Stat. 178 (2020); CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020); and Paycheck Protection Program and
Health Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620 (2020). These data are based on appropriations warrant
information provided by the Department of the Treasury as of September 30, 2020. These amounts could increase in the future
for programs with indeﬁnite appropriations, which are appropriations that, at the time of enactment, are for an unspeciﬁed
amount. In addition, this table does not represent transfers of funds that federal agencies may make between appropriation
accounts or transfers of funds they may make to other agencies.
b
Obligation and expenditure data are based on data reported by applicable agencies.
c
These expenditures relate to the loan subsidy costs (the loan’s estimated long-term costs to the United States government).
d
The sum of amounts may not agree due to rounding.

Page 12 GAO-21-191
Executive Summary

Overview
COVID-19 continues to take a devastating toll on the U.S. According to federal data, the U.S. had
about 10,314,000 cumulative reported cases and 224,000 reported deaths as of November 12,
2020. According to data from CDC’s National Center for Health Statistics, at least 237,000 more
deaths occurred from all causes (COVID-19 and other causes) than would be normally expected
between January and October 2020, highlighting the eﬀect of the pandemic on U.S. mortality (see
ﬁg. 3).13 Further, preliminary research suggests that individuals who have had COVID-19, including
those who have been hospitalized, may suﬀer long-term health outcomes, such as heart, brain, or
lung abnormalities.

Figure 3: Higher-Than-Expected Weekly Mortality, January to October 2020

Note: The ﬁgure shows the number of deaths from all causes in a given week through October 10, 2020, reported in the U.S.
that exceeded the upper bound threshold of expected deaths calculated by CDC’s National Center for Health Statistics on the
basis of variation in mortality experienced in prior years. See CDC’s National Center for Health Statistics webpage on excess
deaths for further details on how CDC estimates this upper bound threshold: https://www.cdc.gov/nchs/nvss/vsrr/covid19/
excess_deaths.htm, accessed on November 9, 2020. The number of deaths in recent weeks should be interpreted cautiously as
this ﬁgure relies on provisional data that are generally less complete.

While the national economy has improved since July 2020, employment remains substantially
lower than before the pandemic. Among the unemployed, the number of individuals on
temporary layoﬀ decreased considerably from 18.1 million in April 2020 to 3.2 million in October

13On October 20, 2020, CDC released an article in its Morbidity and Mortality Weekly Report that estimated 299,028 more
deaths than would be expected between January 26, 2020, and October 3, 2020. According to CDC, two-thirds of those
deaths were attributable to COVID-19. While the Morbidity and Mortality Weekly Report reported excess deaths as the
diﬀerence between observed deaths and the expected number of deaths, we reported a more conservative estimate,
the diﬀerence between observed deaths and the upper bound (95 percent conﬁdence interval) of the expected deaths.
See L.M. Rossen et al., “Excess Deaths Associated with COVID-19—by Age and Race and Ethnicity—United States, January
26–October 3, 2020,” Morbidity and Mortality Weekly Report, vol. 69, no. 42 (2020).

Page 13 GAO-21-191
2020, but the number of unemployed individuals permanently losing jobs increased from 2.0
million in April 2020 to 3.7 million in October 2020 (see ﬁg. 4). Additionally, our review of academic
studies suggests that the pandemic will likely remain a signiﬁcant obstacle to more robust
economic activity. These studies consistently found that a decline in consumer demand related to
COVID-19 concerns played a large role in reducing economic activity during the initial stages of the
pandemic. We found some evidence based on these studies that economic activity tended to drop
more signiﬁcantly when the number of local COVID-19 cases and deaths increased. Our review of
these studies also suggests that the initial reopening of nonessential businesses and lifting of stay-
at-home orders likely had only a small eﬀect on economic activity.

Figure 4: Number of Unemployed Workers Permanently Losing Jobs and on Temporary Layoﬀ, January 2019
through October 2020

Note: The total number of workers losing jobs excludes individuals who completed temporary jobs but were not on "temporary
layoﬀ,” deﬁned as people who have been given a date to return to work or who expect to return to work within 6 months.

To date, we have made 20 recommendations and raised three matters for congressional
consideration to improve the federal government’s response eﬀorts.14 Most recently, our
November 17, 2020, report on COVID-19 vaccines and therapeutics included a recommendation
for the Food and Drug Administration (FDA) to uniformly disclose information from its review
of safety and eﬀectiveness data to the public when issuing emergency use authorizations for
therapeutics and vaccines.

In this report, we are making 11 new recommendations and raising one matter for congressional
consideration to address additional areas where signiﬁcant challenges or risks remain or where
the federal government’s response eﬀorts could be improved. Below we provide details on

14See GAO-20-701, GAO-20-625, and GAO-21-207.

Page 14 GAO-21-191
our new and previous recommendations and matters for congressional consideration in areas
throughout the federal government.

Medical Supply Shortages
The U.S. continues to face shortages of personal protective equipment (PPE), testing supplies, and
other medical supplies needed for the COVID-19 pandemic. In September 2020, we reported on
plans by the Department of Health and Human Services (HHS) to restructure the Strategic National
Stockpile (SNS), including eﬀorts to build a 90-day supply of certain key items. We also reported
on progress HHS has made in meeting its goal of building a 90-day supply to prepare for potential
surges in COVID-19 cases, and plans to add some materials, such as testing supplies, that had not
been held in the stockpile prior to COVID-19. However, the continued need for supplies by state,
tribal, and territorial governments, as well as point-of-care providers, such as nursing homes,
combined with continued supply chain constraints may present challenges to HHS in achieving its
goal of building a 90-day supply by the end of 2020.

Our October 2020 survey of senior state and territorial health and emergency management
oﬃcials found that states and territories continue to report limitations in the availability of
certain medical supplies, such as nitrile gloves and reagents used for COVID-19 testing. From
October 10 through October 21, 2020, we ﬁelded a survey to senior public health and emergency
management oﬃcials in the 50 states; Washington, D.C.; and the ﬁve U.S. territories to gain their
perspectives on the availability of PPE, testing, and vaccine administration supplies.15 We received
47 survey responses representing 41 states; Washington, D.C.; and all ﬁve territories. Key ﬁndings
from our nationwide survey are detailed below.

• States are fulﬁlling PPE requests, but supplies of some PPE remain constrained.
The majority of states that responded to our survey received requests for supplies from
organizations and entities within their states, and were mainly able to fulﬁll them. However,
availability constraints continue with certain PPE, such as nitrile gloves. More than half the
states reported having obtained supplies from either the commercial market or the Federal
Emergency Management Agency (FEMA) in the past 30 days, indicating that states could not
completely fulﬁll requests from supplies they had on hand. Almost three-quarters of states
(34) reported having obtained PPE from FEMA, which indicates challenges in procuring these
supplies from the commercial market, as states would only request supplies from FEMA
when they were unable to meet their needs through the commercial market. States varied
in their level of conﬁdence in their ability to fulﬁll PPE requests they may receive in the 60
days following the survey. For example, 32 states were greatly or completely conﬁdent in their
ability to fulﬁll future requests for face shields and goggles. In contrast, about one-third (17) of
states were greatly or completely conﬁdent in their ability to fulﬁll future requests for nitrile
gloves; 15 states responded that they were only slightly or not at all conﬁdent in their ability to
fulﬁll future requests for nitrile gloves (see ﬁg. 5).

15We also asked about supply availability within the 30 days preceding the survey, as well as projected availability
over the 60 days following the survey. The survey also contained questions designed to obtain senior state oﬃcials’
perspectives on working with the federal government to meet supply needs.

Page 15 GAO-21-191
Figure 5: Extent of States’ Conﬁdence in Ability to Fulﬁll Future Requests for Selected Personal Protective
Equipment (PPE)

Note: We sent a survey to senior oﬃcials in the public health and/or emergency management departments of all 50 states;
Washington, D.C.; and the U.S. territories (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, Puerto
Rico, and the U.S. Virgin Islands), ﬁelded from October 10 through October 21, 2020. We received responses from 47 of the 56
locations, representing 41 states, Washington D.C., and all ﬁve territories. Not all states responded to each survey question. For
this survey question, we asked states the extent to which they were conﬁdent in their ability to fulﬁll requests for selected PPE
items in the 60 days following the survey. All 47 states responded for all PPE types listed above except for non-surgical masks
(46) and boot covers (45).

• Shortages reported for three of ﬁve types of testing supplies. About one-third to one-
half of the states that responded to our survey reported shortages in three types of testing
supplies at their testing sites or laboratories in the 30 days preceding the survey: reagents
(21 states), testing instruments (16 states), and rapid point-of-care tests (24 states) (see ﬁg.
6). Similarly, when asked about testing supply availability for the 60 days following the survey,
half the states (22) expected shortages in rapid point-of-care tests, and 20 states expected
shortages in reagents. This is consistent with our September 2020 report, where we reported
that oﬃcials in several states we interviewed identiﬁed diﬃculties in acquiring reagents and
test kits from the commercial market.

Page 16 GAO-21-191
Figure 6: State-Reported Supply Shortages for Testing Sites or Laboratories

Note: We sent a survey to senior oﬃcials in the public health and/or emergency management departments of all 50 states;
Washington, D.C.; and the U.S. territories (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, Puerto
Rico, and the U.S. Virgin Islands); ﬁelded from October 10 through October 21, 2020. We received responses from 47 of the 56
locations, representing 41 states; Washington, D.C.; and all ﬁve territories. Not all states responded to each survey question.
For this survey question, we asked states whether testing sites or laboratories had experienced shortages of selected testing
supplies in the 30 days preceding the survey. Forty-six states responded for all testing supply types listed above.

• Planning for future COVID-19 vaccine supply needs. Most states (38) responding to our
survey expressed concerns about having adequate supplies to distribute and administer a
future COVID-19 vaccine. In open-ended responses, senior oﬃcials from six states stated that
they were speciﬁcally concerned about the federal government’s ability to supply needles,
given reports of shortages; three of those states also reported challenges maintaining supplies
of needles for their states’ ﬂu vaccination eﬀorts.

• Working with the federal government to meet supply needs. In September 2020, we
reported that state and other nonfederal partners experienced three types of challenges
in working with the federal government to meet supply needs: (1) knowing which federal
supplies would arrive and when; (2) conﬁrming the right entities received correct and usable
supplies when federal programs delivered them directly to local organizations or entities; and
(3) determining how to plan and budget for future supply needs. Our survey results indicate
that while most states did not report challenges in knowing which supplies would arrive and
when, many states continue to experience other types of challenges. Speciﬁcally, a majority
of states reported experiencing challenges in tracking supplies that were delivered directly
to local points of care (26 states); gaining clarity on the state’s share of the cost for supplies
already requested and delivered (27 states); and budgeting for future supply needs (40 states).

Given these ongoing supply challenges and the surge in COVID-19 cases, we underscore the
critical imperative of implementing our September 2020 recommendations on medical supply
shortages. We recommended that (1) HHS, in coordination with FEMA, further develop and
communicate to stakeholders plans outlining speciﬁc actions the federal government will take
to help mitigate remaining medical supply gaps necessary to respond to the remainder of the
pandemic; (2) HHS and FEMA help states enhance their ability to track the status of supply
requests and plan for supply needs for the remainder of the pandemic response; and (3) HHS,

Page 17 GAO-21-191
in coordination with FEMA, document roles and responsibilities for supply chain management
functions. In November 2020, HHS repeated its disagreement with our recommendations and
noted its eﬀorts to meet the needs of states. We continue to monitor the implementation of our
recommendations and review the medical supply chain, including pharmaceuticals, supplies for
testing, and the management of the SNS.

COVID-19 Testing
Testing supply shortages have contributed to delays in turnaround times for testing results, which
can in turn exacerbate outbreaks by allowing COVID-19 to spread undetected. In September
2020, we reported on challenges with testing supply availability, and since then we have identiﬁed
challenges with federal testing strategy and guidance. HHS agencies have taken several key actions
to support testing, including procuring tests for long-term care settings and schools, obtaining
stakeholder input, and issuing guidance. For example, CDC, the Centers for Medicare & Medicaid
Services (CMS), and FDA have issued guidance to assist health departments, medical providers,
nursing homes, schools, workplaces, and laboratories, including for implementing and prioritizing
testing.

However, CDC testing guidelines have been changed several times over the course of the
pandemic, with little scientiﬁc explanation of the rationale behind the changes, raising the risk
of confusion and eroding trust in important federal partners. We are recommending that HHS
ensure that CDC clearly discloses the scientiﬁc rationale for any change to testing guidelines at the
time the change is made. HHS concurred with our recommendation.

COVID-19 Vaccines and Therapeutics
In September 2020, we recommended that HHS, with support from the Department of
Defense (DOD), set a time frame for documenting and sharing a national plan for distributing
and administering a COVID-19 vaccine, and ensure that the plan is consistent with project
planning best practices and outlined vaccine coordination eﬀorts across federal agencies and
nonfederal entities. On September 16, 2020, HHS and DOD released a strategy for the distribution
and administration of any COVID-19 vaccine, including guidance to assist state, territorial,
and local public health programs and their partners plan and operationalize local vaccination
response to COVID-19.16 However, representatives of state and local public health oﬃcials
and health care providers have identiﬁed several areas where federal planning eﬀorts needed
additional information and assistance, such as the criteria for vaccine allocation to state and
local jurisdictions and the roles and expectations of states in distributing a COVID-19 vaccine. We
continue to examine the federal government’s vaccine distribution planning eﬀorts.

16Department of Health and Human Services, Centers for Disease Control and Prevention, COVID-19 Vaccination
Program Interim Playbook for Jurisdiction Operations (Washington, D.C.: Sept. 16, 2020) and Department of Defense and
Department of Health and Human Services, From the Factory to the Frontlines: The Operation Warp Speed Strategy for
Distributing a Vaccine (Washington, D.C.: Sept. 16, 2020). HHS and DOD subsequently released an updated version of
CDC’s COVID-19 Vaccination Program Interim Playbook for Jurisdiction Operations on October 29, 2020. See Department of
Health and Human Services, Centers for Disease Control and Prevention, COVID-19 Vaccination Program Interim Playbook
for Jurisdiction Operations, version 2.0 (Washington, D.C.: Oct. 29, 2020).

Page 18 GAO-21-191
More recently, on November 17, 2020, we reported on eﬀorts to develop, manufacture, and
distribute COVID-19 vaccines and therapeutics. 17 These eﬀorts include Operation Warp Speed, a
partnership between HHS and DOD that aims to accelerate the development, manufacturing, and
distribution of COVID-19 vaccines and therapeutics (see ﬁg. 7). The goal of Operation Warp Speed
is to produce 300 million doses of a COVID-19 vaccine, with initial doses available by January 2021.
As of October 15, 2020, Operation Warp Speed had publicly announced more than $10 billion in
obligations for the development and manufacturing of six COVID-19 vaccine candidates, as well as
funds for the development and manufacturing of COVID-19 therapeutics.

Figure 7: Operation Warp Speed Timeline for a Potential Vaccine Candidate

Note: An FDA Authorization for Emergency Use (or Emergency Use Authorization) allows for emergency use of medical products
without FDA approval or licensure during a declared emergency, provided certain statutory criteria are met. See 21 U.S.C. §
360bbb-3.

As of November 9, 2020, FDA had approved one therapeutic—remdesivir—and made four
available through Emergency Use Authorizations (EUA)—which allows for emergency use of
medical products without FDA approval or licensure, provided certain statutory criteria are met.
18 However, the evidence to support FDA’s COVID-19 therapeutic authorization decisions has not

always been transparent, in part because FDA does not uniformly disclose its scientiﬁc review of
safety and eﬀectiveness data for EUAs, as it does for approvals of new drugs and biologics. To
improve the transparency of, and ensure public trust in, its EUA decisions, we recommended
that FDA identify ways to uniformly disclose information from its scientiﬁc review of safety and
eﬀectiveness data to the public when issuing EUAs for therapeutics and vaccines, and, if necessary,
seek authority to do so. HHS neither agreed nor disagreed with the recommendation, but said it
shared GAO’s goal of transparency and would explore approaches to achieve this goal.

17GAO-21-207.
18Under 21 U.S.C. § 360bbb-3, the Secretary of Health and Human Services may declare that circumstances, prescribed
by statute, exist justifying the emergency use of certain medical products. Since March 24, 2020, when the Secretary of
Health and Human Services declared that circumstances existed justifying emergency use of drugs and biologics during
the COVID-19 pandemic, FDA had issued four EUAs for therapeutics as of November 9, 2020: (1) new use for two existing
drugs—chloroquine and hydroxychloroquine—on March 28, 2020, (2) new drug—remdesivir—on May 1, 2020, (3) new
biologic—COVID-19 convalescent plasma—on August 23, 2020, and (4) another new biologic—bamlanivimab—on
November 9, 2020.

Page 19 GAO-21-191
While no vaccines were available to prevent COVID-19 at the time of our November 17 report
on vaccine development and EUAs, several candidates were under development. On November
20, 2020, Pﬁzer announced in a press release that it submitted an EUA request for its COVID-19
vaccine candidate. On November 16, Moderna announced in a press release that it also planned to
submit an EUA request for its candidate.

In addition, DOD has allocated approximately $1.64 billion from the CARES Act for ﬁscal years
2020 through 2021 to support medical research and development eﬀorts for COVID-19,
including vaccines, diagnostics, and therapeutics, through partnerships between military health
system components and various academic and commercial partners. In September 2020, DOD
announced that it will support clinical trials for an Operation Warp Speed vaccine candidate at
ﬁve of its military medical treatment facilities. DOD also has ﬁve vaccine development projects,
three of which could have applications for the general population but are not candidates of
Operation Warp Speed. DOD stated that it is producing thousands of doses of one of these
vaccine candidates for availability by the end of 2020. DOD noted that the other vaccine projects
are being designed to meet DOD’s operational needs, so that, for example, the vaccines can be
stored and used in more austere locations.

Nursing Home Care
The health and safety of the 1.4 million elderly or disabled residents in the nation’s more than
15,000 Medicare- and Medicaid-certiﬁed nursing homes—who are often in frail health and
living in close proximity to one another—has been a particular concern during the COVID-19
pandemic. According to CDC case reporting data, as of October 4, 2020, these nursing homes had
cumulatively reported a total of 252,785 resident and 206,052 staﬀ conﬁrmed cases of COVID-19,
along with 59,576 resident and 954 staﬀ deaths as a result of the virus—about 29 percent of the
total COVID-19 deaths across the U.S. (208,821 on October 4, as reported by CDC).19

In September 2020, we recommended that HHS, in consultation with CMS and CDC, develop
a strategy to capture more complete data on conﬁrmed COVID-19 cases and deaths in nursing
homes, and clarify the extent to which nursing homes have reported prior data. As of October 23,
2020, no speciﬁc actions had been taken by HHS, although the agency indicated that it continues
to consider how to implement this recommendation.

We have identiﬁed new concerns related to HHS’s response to recommendations made by the
Coronavirus Commission on Safety and Quality in Nursing Homes (which we refer to as the
Nursing Home Commission). In June 2020, CMS established the Nursing Home Commission
to conduct a comprehensive and independent assessment of the response to the COVID-19

19These numbers are likely underreported because they do not include data for the 818 nursing homes (about 5.3
percent) that did not report COVID-19 data to CDC for the week ending October 4, 2020, or that submitted data that
failed data quality assurance checks. Additionally, as we reported in September 2020, CMS does not require nursing
homes to report data prior to May 8, 2020; while some nursing homes may have reported such data, the dataset does
not currently identify which reported cases and deaths occurred prior to May 8.

Page 20 GAO-21-191
pandemic in nursing homes. In September 2020, the Nursing Home Commission made 27
recommendations on topics such as testing, PPE, and visitation.20

CMS released a response to the Nursing Home Commission that broadly outlined the actions it
has taken to date as part of its response to the COVID-19 pandemic. However, CMS has not fully
addressed the Nursing Home Commission’s recommendations, or provided an implementation
plan that would allow it to track and report progress toward implementing them. CMS also stated
that some of the recommendations are outside its authority and better addressed by other
stakeholders. However, as the lead federal agency for nursing home quality and safety, CMS has
an important role in coordinating with federal, state, and other long-term care stakeholders, as
speciﬁed in multiple Nursing Home Commission recommendations.

To better inform its response, and that of other key stakeholders, to COVID-19 in nursing homes,
we are recommending that CMS quickly develop a plan that further details how it intends to
respond to and implement, as appropriate, the Nursing Home Commission’s recommendations.
The plan should (1) include milestones that allow CMS to track and report on the status of each
recommendation; (2) identify actions taken and planned, including areas where CMS determined
not to take action; and (3) identify areas where CMS could coordinate with other federal and
nonfederal entities. HHS neither agreed nor disagreed with our recommendation, and said it
would refer to and act upon the Commission’s recommendations, as appropriate.

Additionally, we have identiﬁed shortcomings in the Department of Veterans Aﬀairs (VA)
inspections of state veterans homes (SVH), which provide nursing home care to more than 20,000
veterans in over 150 facilities. The health and safety of these veterans has been of particular
concern because almost half of all veterans in SVHs are aged 85 or older—the age group at the
greatest risk for severe illness from COVID-19, according to CDC data.

In March 2020, VA—the federal agency that conducts routine inspections of all SVHs—instructed
its contractor to stop inspections of SVHs, which had been conducted in person, due to concerns
about COVID-19; as of September 2020, these inspections had not resumed, leaving veterans at
risk of receiving poor quality care. Additionally, VA does not collect timely data on the number of
COVID-19 cases and deaths occurring at each SVH, and, as a result, cannot monitor and take steps
to mitigate the spread of COVID-19 in SVHs. We are recommending that VA (1) develop a plan to
ensure inspections of SVHs occur during the pandemic, which may include using in-person, a mix
of virtual and in-person, or fully virtual inspections, and (2) collect timely data on COVID-19 cases
and deaths in each SVH. VA concurred with both recommendations.

Assistance to Individuals and Businesses
As the pandemic’s economic eﬀects persist, we have identiﬁed actions federal agencies could take
to help ensure that ﬁnancial relief for individuals and businesses provided under the CARES Act
reaches eligible recipients.

20MITRE, Coronavirus Commission on Safety and Quality in Nursing Homes: Commission Final Report, PRS Release Number
20-2382, September 2020.

Page 21 GAO-21-191
Speciﬁcally, the CARES Act included direct payments, or economic impact payments (EIP), for
eligible individuals to address ﬁnancial stress due to the pandemic—up to $1,200 per eligible
individual or $2,400 for individuals ﬁling a joint tax return, plus up to $500 per qualifying child.21
We have made three recommendations related to EIPs. In June 2020, we recommended that the
Internal Revenue Service (IRS) consider cost-eﬀective options for notifying ineligible recipients on
how to return payments. Treasury and IRS have taken steps to implement this recommendation
and are considering further actions. For example, IRS has instructions on its website requesting
that individuals voluntarily return by mail the appropriate EIP amount sent to a decedent.

In September 2020, we recommended that Treasury, in coordination with IRS, update and reﬁne
estimates of eligible recipients who have yet to ﬁle for an EIP and share this information with
outreach partners to aid in outreach and communications eﬀorts. Treasury and IRS have taken
several actions consistent with our recommendations, such as using tax return information to
identify individuals that they may be eligible for an EIP. Starting on September 17, 2020, IRS sent
a notice to around 9 million individuals who had not received an EIP. On November 10, 2020, IRS
and outreach partners launched a ﬁnal push to encourage non-ﬁlers to register to receive an EIP.
However, Treasury and IRS are not monitoring the eﬀectiveness of the outreach notices. Further,
Treasury and IRS said that they do not plan to track and analyze the outcomes of their EIP notice-
mailing strategy until February or March 2021.

The lack of timely analysis deprives Treasury and IRS of data they could use to assess the
eﬀectiveness of their notice strategy, and redirect resources as needed to other outreach and
communication eﬀorts. We are recommending that Treasury, in coordination with IRS, begin
tracking and publicly reporting the number of individuals who were mailed an EIP notiﬁcation
letter and subsequently ﬁled for and received an EIP, and use that information to inform ongoing
outreach and communications eﬀorts. Treasury agreed with our recommendation.

To provide liquidity to businesses during the pandemic, the CARES Act also included tax measures
to help businesses, including sole proprietors, receive cash refunds or other reductions to tax
obligations.22 Some taxpayers need to ﬁle an amended income tax return to take advantage of
these provisions; at the same time, IRS faces an increase in mail and paper processing delays due
to the pandemic, which may delay the timely processing of this paperwork and issuance of these
refunds. In a draft of this report, we recommended that IRS update its temporary procedures for
taxpayers to include information on its new electronic ﬁling capability to enable taxpayers to ﬁle
amended returns and refund claims more eﬀectively. IRS implemented this recommendation
prior to the report’s ﬁnal issuance. However, IRS form instructions were not updated with the new
e-ﬁle information. As a result, some taxpayers who go directly to the form instructions may not
know about the e-ﬁle option. We are recommending that IRS also update its form instructions to
include information on its new electronic ﬁling capability. IRS agreed with our recommendation.

Further, the federal government should take additional steps to clarify its reporting of the number
of individuals claiming unemployment beneﬁts during the COVID-19 pandemic. The CARES Act
created three federally funded temporary programs for unemployment insurance (UI)—a federal-
state partnership that provides temporary ﬁnancial assistance to eligible workers who become

21Pub. L. No. 116-136, § 2201, 134 Stat. at 335–340 (codiﬁed at 26 U.S.C. § 6428).
22Pub. L. No. 116-136, §§ 2301–2306, 134 Stat. at 347–359.

Page 22 GAO-21-191
unemployed through no fault of their own—that expanded UI beneﬁt eligibility and enhanced
beneﬁts. As some of these programs approach their scheduled expiration in December 2020, the
UI system continues to experience high numbers of claims as a result of the pandemic.

We found that some of the Department of Labor’s (DOL) reporting has improperly presented UI
claims counts as the number of individuals claiming beneﬁts, which has complicated eﬀorts to
understand how the size of the population being supported has changed during the pandemic
and the potential eﬀects of the expiration of CARES Act UI beneﬁts. Each week, DOL publishes
the number of weeks of unemployment beneﬁts claimed by individuals in each state during
the period, and reports the total count as the number of people claiming beneﬁts nationwide.
However, the number of claims has not been an accurate approximation of the number of
individuals claiming beneﬁts during the pandemic because of backlogs in processing a historic
volume of claims as well as other data issues.

We are recommending that DOL (1) revise its weekly news releases to clarify that in the current
unemployment environment, the numbers it reports for weeks of unemployment claimed do not
accurately estimate the number of unique individuals claiming beneﬁts and (2) pursue options
to report the actual number of distinct individuals claiming beneﬁts, such as by collecting these
already available data from states, starting from January 2020 onward. DOL agreed with our ﬁrst
recommendation and partially agreed with our second recommendation. DOL did not agree
with the retroactive reporting of the number of distinct individuals claiming UI beneﬁts, in part
because state UI programs may face challenges in implementing any new reporting requirements,
particularly retroactively. We maintain that DOL should pursue options to report these data
retroactively because they are vital to understanding how many individuals are receiving UI
beneﬁts, as well as the size of the population supported by the UI system during the pandemic.

Program Integrity
We continue to identify areas to improve program integrity and reduce the risk of improper
payments for programs funded by the COVID-19 relief laws now that federal agencies have
obligated and expended about half of the $2.6 trillion appropriated for response and recovery
eﬀorts. We previously raised one matter for congressional consideration and made two
recommendations to federal agencies to improve oversight of key COVID-19 relief programs and
reduce improper payments; to date, these recommendations remain open. We again call attention
to these critical areas.

• In June 2020, we urged Congress to amend the Social Security Act to explicitly allow the Social
Security Administration (SSA) to share its full death data with Treasury for data matching to
prevent payments to ineligible individuals. In June 2020, the Senate passed S. 4104, referred
to as the Stopping Improper Payments to Deceased People Act. If enacted, the bill would allow
SSA to share these data with Treasury’s Bureau of the Fiscal Service to help prevent making
improper payments to deceased individuals.

• In June 2020, we recommended that the Small Business Administration (SBA) develop and
implement plans to identify and respond to risks in the Paycheck Protection Program (PPP)
to ensure program integrity, achieve program eﬀectiveness, and address potential fraud.
The CARES Act and the Paycheck Protection Program and Health Care Enhancement Act

Page 23 GAO-21-191
appropriated a total of $670 billion for PPP under SBA’s 7(a) small business lending program.23
Consistent with our recommendation, SBA told us it has developed oversight plans to review
PPP loans, but it has not yet provided requested documentation detailing its plans and how
it will implement them, such as documents that would allow us to evaluate the eﬃcacy of
the reviews in identifying noncompliance and potential fraud. According to SBA and Treasury,
SBA’s loan review process will test loans for compliance with program requirements and
evaluate the accuracy of PPP borrowers’ self-certiﬁcations.

• In September 2020, we recommended that the Oﬃce of Management and Budget (OMB),
in consultation with Treasury, issue guidance for auditing new and existing COVID-19-related
programs, including Coronavirus Relief Fund (CRF) payments, as soon as possible. The CRF is
the largest program established in the four COVID-19 relief laws that provides aid to states,
the District of Columbia, localities, tribal governments, and U.S. territories. Audits of entities
that receive federal funds, including CRF payments, are critical to the federal government’s
ability to help safeguard those funds. OMB said that it planned to issue this guidance in mid-
November 2020. Delays in issuing this guidance could adversely aﬀect auditors’ ability to issue
consistent and timely reports.

In this report, we also identify new concerns about the timely reporting of improper payments
for COVID-19 programs. The COVID-19 relief laws appropriated over a trillion dollars that may be
spent through newly established programs to fund response and recovery eﬀorts, such as PPP
and UI. While the extent and signiﬁcance of improper payments associated with these funds has
not yet been determined, the impact of improper payments, including those that are the result of
fraud, could be substantial. We also have concerns about the possibility that improper payments
could be widespread based on indications of fraud across these programs. For example:

• Eight individuals pleaded guilty to federal charges of defrauding COVID-19 relief
programs—including SBA’s PPP and Economic Injury Disaster Loan program, and DOL’s UI
program—from March through September 2020. In one case, an individual pleaded guilty to
conspiring to defraud the U.S. by applying for 18 separate PPP loans for four shell companies,
falsely claiming, among other things, that the businesses had employees and needed the loans
to pay employees’ salaries, thereby fraudulently inducing banks to distribute approximately
$1.4 million in loans.

• There are 130 individuals facing federal charges related to attempting to defraud these
programs.24

• Numerous fraud-related investigations have been initiated by Oﬃces of Inspector General and
other law enforcement agencies.25

23See Pub. L. No. 116-136, §§ 1102(b), 1107(a)(1), 1112, 134 Stat. at 293, 301; Pub. L. No. 116-139, § 101(a), 134 Stat.
at 620.
24A charge is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a
reasonable doubt in a court of law.
25In addition, federal hotlines have received numerous complaints from the public alleging potential fraud involving
COVID-19 relief funds. For example, the Inspector General for SBA testiﬁed on October 1, 2020, that the hotline

Page 24 GAO-21-191
According to OMB guidance, agencies should complete a risk assessment to determine
susceptibility to signiﬁcant improper payments after the ﬁrst 12 months of program operations,
and such a determination of susceptibility triggers reporting requirements for the following
ﬁscal year.26 Given the rapid timeline of COVID-19 program-related spending, such time lags
in assessing risk and developing corrective actions may result in improper payment issues in
COVID-19 programs, including those resulting from fraudulent activities, not being identiﬁed or
addressed until after most or even all funds are disbursed.

It is especially important for agencies with large appropriated amounts, such as SBA, to
expeditiously estimate their improper payments, identify root causes, and develop corrective
actions when there are concerns about the possibility of widespread fraud. It is also important
that existing programs that have received signiﬁcant COVID-19 relief funding and have previously
reported high estimated improper payment rates, such as the Medicaid program, develop reliable
improper payment estimates and corrective action plans.

In addition, previous supplemental appropriations acts that provided for disaster relief related
to the 2017 hurricanes and California wildﬁres required agencies to deem all programs receiving
these relief funds that expended more than $10 million in any one ﬁscal year as "susceptible to
signiﬁcant improper payments."27 Agencies were therefore required to report improper payment
estimates for such programs without the need to conduct a risk assessment. The COVID-19 relief
laws did not contain a similar provision.

To hold agencies accountable and increase transparency, we are suggesting that Congress
consider, in any future legislation appropriating COVID-19 relief funds, designating all executive
agency programs and activities making more than $100 million in payments from COVID-19 relief
funds as “susceptible to signiﬁcant improper payments.”

We are also making two recommendations: (1) OMB should develop and issue guidance
directing agencies to include COVID-19 relief funding with associated key risks, such as provisions
contained in the CARES Act and other relief legislation that potentially increase the risk of
improper payments or changes to existing program eligibility rules, as part of their improper
payment estimation methodologies, especially for existing programs that received COVID-19
funding, and (2) SBA should expeditiously estimate improper payments and report estimates
and error rates for PPP due to concerns about the possibility that improper payments, including
those resulting from fraudulent activity, could be widespread. OMB and SBA neither agreed nor
disagreed with our recommendations. SBA stated that it is planning to conduct improper payment
testing for the PPP, but has not ﬁnalized its plan.

operated by his oﬃce has received tens of thousands of allegations of wrongdoing. Similarly, from March 13, 2020,
through September 30, 2020, our hotline—known as FraudNet—received over an estimated 1,000 complaints
related to the CARES Act, many of which involve SBA’s PPP and Economic Injury Disaster Loan program.
26Oﬃce of Management and Budget, Appendix C to OMB Circular A-123, Requirements for Payment Integrity Improvement,
OMB Memorandum M-18-20 (Washington, D.C.: June 26, 2018).
27Supplemental Appropriations for Disaster Relief Requirements Act, 2017, Pub. L. No. 115-56, div. B, 131 Stat. 1129,
1136 (2017), Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2017, Pub. L. No. 115-72,
div. A, 131 Stat. 1224, 1224-1229 (2017), and Further Additional Supplemental Appropriations for Disaster Relief
Requirements Act, 2018, Pub. L. No. 115-123, div. B, subdiv. 1, 132 Stat. 64, 65-110 (2018).

Page 25 GAO-21-191
We also identiﬁed concerns about eﬀorts to monitor the ﬁnancial assistance that the CARES Act
authorized Treasury to provide to the aviation sector. Treasury’s Payroll Support Program (PSP)
provides $32 billion in payroll support payments and loans to help the aviation industry retain its
employees.28 The CARES Act requires PSP recipients to report quarterly to Treasury information on
their compliance with PSP agreement terms, which include refraining from involuntary furloughs
or reductions in pay rates and beneﬁts until September 30, 2020, and certain share buybacks,
dividend payments, and other capital distributions until September 30, 2021, among other
conditions.29

However, Treasury has not yet completed its plan and guidance to fully describe how it will
monitor recipients’ compliance with the terms of this assistance or to take action if noncompliance
is found, potentially hindering Treasury’s ability to detect misuse in a timely manner that allows for
remediation, such as the use of PSP funds for purposes other than the continuation of employee
wages, salaries, and beneﬁts. To ensure program integrity and address potential fraud, we are
recommending that Treasury ﬁnish developing and implement a compliance monitoring plan
that identiﬁes and responds to risks in PSP. Treasury neither agreed nor disagreed with our
recommendation, but committed to reviewing additional measures that may further enhance its
compliance monitoring and ensure that PSP funds are used as intended.

Additional Matters for Congress and Agency
Recommendations
Beyond these six key areas, we also made recommendations and matters for congressional
consideration in other areas throughout the federal government in our June 2020 and September
2020 reports on the federal response to COVID-19.

In June 2020, we urged Congress to take action on areas related to aviation preparedness and
Medicaid funding to states.

• To limit the spread of communicable disease threats and minimize travel and trade impacts,
we recommended that Congress take legislative action to require the Department of
Transportation (DOT) to work with relevant agencies and stakeholders, such as HHS, the
Department of Homeland Security (DHS), members of the aviation and public health sectors,
and international organizations, to develop a national aviation-preparedness plan. We
originally made this recommendation to DOT in December 2015.30

In May 2020, the House of Representatives passed H.R. 6800, referred to as the HEROES
Act, which would require DOT, in coordination with HHS, DHS, and other appropriate federal
departments and agencies, to develop a national aviation preparedness plan. Most recently, in
September 2020, the Senate passed S. 3681, Ensuring Health Safety in the Skies Act of 2020,
which would require HHS, DHS, and DOT to form a joint task force on air travel during and

28See Pub. L. No. 116-136, § 4112, 134 Stat. at 498.
29Pub. L. No. 116-136, § 4114(a), 134 Stat. at 499.
30GAO, Air Travel and Communicable Disease: Comprehensive Federal Plan Needed for U.S. Aviation System’s
Preparedness, GAO-16-127 (Washington, D.C.: Dec. 16, 2015).

Page 26 GAO-21-191
after the COVID-19 public health emergency, among other provisions. Also, in October 2020,
H.R. 8712, National Aviation Preparedness Plan Act of 2020, was introduced. If enacted, this
bill would require DOT, in collaboration with DHS, HHS, and other aviation stakeholders, to
develop a national plan to prepare the aviation industry for future communicable disease
outbreaks.
We again urge Congress to take swift action to require a national aviation-preparedness plan,
without which the U.S. will not be as prepared to minimize and quickly respond to ongoing and
future communicable disease events.

• To help ensure that federal funding is targeted and timely, we urged Congress to use GAO’s
Federal Medical Assistance Percentage formula to determine the timing and increase in
Federal Medical Assistance Percentage—which determines the amount of federal Medicaid
funding provided to states—for any future changes to the current or any future economic
downturn. Our past work has found that during economic downturns—when Medicaid
enrollment can rise and state economies weaken—the formula, which is based on each state’s
per capita income, does not reﬂect current state economic conditions. No congressional action
has been taken to date.

In September 2020, we made recommendations to CDC, DOD, and DHS regarding their
management and oversight of certain COVID-19 response eﬀorts.

• To ensure the successful implementation of CDC’s COVID-19 Response Health Equity
Strategy—which aims to reduce disparities in indicators of COVID-19, among other health
equity eﬀorts—we recommended that CDC (1) evaluate whether to require the reporting of
race and ethnicity information for COVID-19 data and, if so, seek authority from Congress
to do so, (2) involve key stakeholders to ensure the complete and consistent collection of
demographic data, and (3) ensure its ability to assess the long-term health outcomes of
persons with COVID-19, including by race and ethnicity. In response to our recommendations,
CDC stated that the agency is committed to having discussions with stakeholders to assess
whether having the authority to require states and jurisdictions to report race and ethnicity
information for COVID-19 cases would result in improved reporting. CDC also said that it is
developing a plan to monitor the long-term health outcomes of persons with COVID-19 by
identifying health care surveillance systems that can electronically report health conditions to
state and local health departments. We continue to examine CDC and HHS eﬀorts related to
COVID-19 indicators and disparities that exist for various populations.

• To ensure state and local school district oﬃcials have clear guidance to make decisions about
the safety of school buildings and opening schools for in-person instruction, we recommended
that CDC ensure that updates to its guidance on schools’ operating status is cogent, clear, and
internally consistent. Since September 2020, CDC has made progress in updating its reopening
guidance. However, this recommendation remains open as of November 12, 2020 because the
guidance remains inconsistent and unclear in places. We continue to review CDC guidance.

• To ensure HHS component agencies involved in supporting the critical health care
infrastructure and systems responding to COVID-19 are protected from cybersecurity threats,
we recommended that HHS expedite the implementation of our prior recommendations
to address cybersecurity weaknesses at its component agencies. FDA, CMS, and CDC have

Page 27 GAO-21-191
implemented an additional 54 cybersecurity recommendations since September 2020. This
brings the total number of implemented cybersecurity recommendations to 404 (of 434)—a 12
percent increase of corrective actions taken to bolster cybersecurity at these agencies.

• To enhance the visibility and proper tracking of contract actions and associated obligations
related to COVID-19, we recommended that DOD and DHS revise the National Interest Action
(NIA) code memorandum of agreement to, among other things, obtain input from key federal
agencies prior to extending or closing an NIA code. In October 2020, DOD and DHS told us that
they planned to review and update the memorandum of agreement by the end of calendar
year 2020 to include additional details on practices for communicating with other agencies. We
maintain that revising the memorandum of agreement is necessary to ensure consistency and
increase transparency on extending and closing NIA codes.

Page 28 GAO-21-191
Closing

As we approach the end of 2020, the federal government must be agile to address the ongoing
and evolving challenges and risks associated with the COVID-19 pandemic. Our recommendations
identify new opportunities for the federal government to make midcourse corrections to its eﬀorts
by improving the communication of pandemic-related guidance and information, the collection
and reporting of key public health and economic data, and the oversight and accountability of
CARES Act programs. We will continue to monitor the federal government’s response to the
COVID-19 pandemic and identify any needed improvements.

We are sending copies of this report to the appropriate congressional committees, the Director
of the Oﬃce of Management and Budget, the White House Coronavirus Task Force, and other
relevant agencies. In addition, the report is available at no charge on the GAO website at https://
www.gao.gov.

If you or your staﬀ have any questions about this report, please contact me at (202) 512-5500
or dodarog@gao.gov. Questions can also be directed to Kate Siggerud, Chief Operating Oﬃcer,
at (202) 512-5600; A. Nicole Clowers, Managing Director, Health Care, at (202) 512-7114 or
clowersa@gao.gov; or Orice Williams Brown, Managing Director, Congressional Relations, at (202)
512-4400 or williamso@gao.gov. Contact points for our Oﬃces of Congressional Relations and
Public Aﬀairs may be found on the last page of this report.

Gene L. Dodaro

Comptroller General of the United States

Page 29 GAO-21-191
Congressional Addressees
The Honorable Richard C. Shelby
Chairman
The Honorable Patrick J. Leahy
Vice Chairman
Committee on Appropriations
United States Senate

The Honorable Lamar Alexander
Chairman
The Honorable Patty Murray
Ranking Member
Committee on Health, Education, Labor, and Pensions
United States Senate

The Honorable Ron Johnson
Chairman
The Honorable Gary C. Peters
Ranking Member
Committee on Homeland Security and Governmental Aﬀairs
United States Senate

The Honorable Nita M. Lowey
Chairwoman
The Honorable Kay Granger
Ranking Member
Committee on Appropriations
House of Representatives

The Honorable Frank Pallone, Jr.
Chairman
The Honorable Greg Walden
Republican Leader
Committee on Energy and Commerce
House of Representatives

The Honorable Bennie Thompson
Chairman
The Honorable Mike D. Rogers
Ranking Member
Committee on Homeland Security
House of Representatives

Page 30 GAO-21-191
The Honorable Carolyn B. Maloney
Chairwoman
The Honorable James R. Comer
Ranking Member
Committee on Oversight and Reform
House of Representatives

Page 31 GAO-21-191
Appendixes and Enclosures
Appendix I: Enclosures

Page 32 GAO-21-191
Health Care Indicators
Overview of indicators to help guide federal monitoring of the health system’s response,
recovery, and preparedness. In our June and August 2020 reports, we outlined eight health care
(and related economic) indicators that could help the federal government monitor the status of
the U.S. health system’s response to and recovery from the COVID-19 pandemic, as well as its
preparedness for future outbreaks.31 For this report, we obtained input from a selection of ﬁve
experts that we identiﬁed in collaboration with the National Academies of Sciences, Engineering,
and Medicine (National Academies) with backgrounds in public health (infectious disease and
epidemiology), health systems, and health care costs.

We asked each expert a core set of questions to obtain their input on the indicators we previously
reported on and on other indicators that should be monitored in the following broad areas: (1) the
eﬀects of the pandemic on population health outcomes; (2) the ability of the public health system
to help reduce disease transmission; (3) the capacity of the health care system to provide needed
care; and (4) the economic eﬀects of the pandemic on the health care sector. In addition, we asked
experts to provide input on any limitations associated with such indicators.

All ﬁve experts generally agreed that it is important for the federal government to monitor
indicators in the broad areas we identiﬁed. They also stated that the eight indicators we had
previously reported on generally reﬂect these broad areas and provided considerations regarding
their use, limitations, and interpretation. Experts also identiﬁed additional indicators for the
federal government to monitor to better understand the broad areas we identiﬁed. We provide
updates to data on indicators we previously reported on in cases where suﬃciently reliable data
are available.32 We plan to continue working with additional experts identiﬁed by the National
Academies to obtain their input on these and other indicators.

Population health eﬀects of COVID-19. Experts recommended tracking indicators of population
health outcomes, including two types of mortality measures. First, three experts told us that
tracking the total number of deaths speciﬁcally attributed to COVID-19 would help the federal
government to better understand the direct eﬀect of the pandemic on mortality. However, two
experts noted that the insights provided by this measure are constrained by inconsistencies in
how COVID-19 cases are identiﬁed and counted across diﬀerent jurisdictions and at diﬀerent
points in time. To varying degrees, the number of reported COVID-19 deaths is likely to be
undercounted.33 In total, the Centers for Disease Control and Prevention’s (CDC) National Center

31The health system indicators we reported on in June and August 2020 include higher than expected deaths, COVID-19
test positivity rate (as a measure of testing suﬃciency), contact tracing performance, and intensive care unit (ICU) bed
availability. The four related economic indicators we reported on included health care employment, health care services
portion of personal consumption expenditures, volume of elective procedures, and hospital operating margins.
32We took a number of steps to assess the reliability of these data, including reviewing relevant documentation and
reviewing prior GAO work. We found that the data we reported on were suﬃciently reliable for our purposes.
33In addition, mortality data are often incomplete due to delays in the reporting of deaths and there are challenges with
correctly categorizing the cause of death. Reporting on provisional COVID-19 mortality data from the Centers for Disease
Control and Prevention’s National Center for Health Statistics (NCHS) currently lags by an average of 1–2 weeks with a
range of 1–8 weeks. NCHS continuously revises provisional death counts as it receives new and updated death certiﬁcate
data from the states.

Page 33 GAO-21-191
of Health Statistics (NCHS) reported that the number of reported COVID-19 deaths was about
219,000 as of November 6, 2020.34

In addition to monitoring COVID-19 deaths, all the experts we met with also recommended
monitoring higher than expected deaths. This is an indicator we describe in our August 2020
report that measures mortality from all causes compared to historical norms; it can be used to
address the imperfect reporting of COVID-19 deaths. Three experts explained that the number of
higher than expected deaths provides insights into the total eﬀect of the pandemic on population
health. Speciﬁcally, the indicator measures both the direct eﬀect of the pandemic on mortality
(i.e., through COVID-19 deaths whether recognized as such or not) and the indirect eﬀect that
includes deaths from causes other than COVID-19. As an example of an indirect eﬀect, one expert
explained that the number of deaths due to chronic conditions such as cardiovascular disease
and diabetes may be elevated during this pandemic due to the disruption in access to routine,
preventative health care services.35 According to data from CDC’s NCHS, at least 237,000 more
deaths occurred from all causes (COVID-19 and other causes) than would be normally expected,
between January and October 2020.36

Three experts that we spoke with also emphasized the importance of examining these mortality
measures over time and by age, race, and ethnicity to assess the burden of COVID-19 deaths
across demographic groups.37 For example, two experts noted that examining mortality indicators
in relation to the incidence of COVID-19 infections over time would allow oﬃcials to understand
what proportion of the population may still be vulnerable to infection and death from COVID-19.
The same rate of COVID-19 mortality or higher than expected deaths would be more concerning in
areas that had not previously experienced a substantial level of COVID-19 cases.

In addition to mortality, three experts suggested monitoring other indicators of disease burden
could be beneﬁcial, such as incidence rates of other conditions (compared to historical norms),
because mortality indicators alone do not fully capture the eﬀects of the pandemic on population
health. For example, there are certain health conditions (e.g., heart attacks, strokes) that can be
tracked readily that may occur at higher rates in the absence of routine care due to the disruptions
in the health care system resulting from the pandemic. Furthermore, although data are not yet
available, three experts noted that some patients with COVID-19 who survive will experience
persistent complications of COVID-19 and should be tracked over time to understand the long-
term eﬀects and resulting health conditions.

Public health system’s ability to help reduce disease transmission. All experts generally
suggested tracking indicators that reﬂect the ability of the public health system to help reduce

34These data are based on oﬃcial death certiﬁcates. CDC also reports a COVID-19 death count that includes preliminary
deaths reported daily by state, local, and territorial health departments.
35Two experts recognized that while disruptions in the health care system have occurred during the pandemic, an
increase in telemedicine services has also occurred.
36This total represents the number of deaths that exceeded the upper bound threshold of expected deaths as
estimated using CDC’s 95 percent conﬁdence interval. See CDC’s National Center for Health Statistics web page on
excess deaths for more details on the approach: https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm,
accessed on November 9, 2020.
37See our COVID-19 Health Disparities enclosure in this report for more information about our analysis of data that
demonstrates racial and ethnic disparities for COVID-19 deaths, hospitalizations, and cases.

Page 34 GAO-21-191
disease transmission may be helpful in responding to the pandemic. These indicators include the
test positivity rate, contact tracing performance, and COVID-19 testing turnaround time. As we
previously reported, the proportion of COVID-19 viral tests in a given population that are positive
for infection (the positivity rate) is one indicator of the suﬃciency of testing.38 To reduce disease
transmission, testing must be suﬃcient to determine the magnitude of the disease. For example, a
higher positivity rate could indicate that not enough testing is being conducted to ﬁnd and isolate
infected individuals before they spread the disease further.

The experts described several limitations associated with the calculation and interpretation of
positivity rates39:

• Short-term repeated testing. One expert expressed concerns that some states include the
results from repeated testing of the same individuals (e.g., college students) over a short
period of time to calculate the positivity rate. This expert explained that including results from
successive tests in the calculation of positivity rate in this manner could bias the positivity
rate toward a lower point if the individuals tested repeatedly are at lower risk for COVID-19
infection.

• Non-standardized data. Two experts also expressed concerns with how the collection of
COVID-19 testing data is not standardized across states. As an example, the experts told us
that some states combine viral and antibody tests when collecting testing data.

• Interpretation of test positivity rate. One expert emphasized that the positivity rate should be
used as a measure of testing suﬃciency and not as an indicator of the prevalence of COVID-19
in a community. The reported rate will be aﬀected by the criteria being used to determine
who should be tested, which may not include all who might be at risk. For example, if mainly
symptomatic people are tested, then test positivity rates are expected to overestimate the true
community prevalence. The proportion is expected to decline as testing expands to include
those that are not infected. This expert noted that states often misinterpret the positivity rate
as the percentage of the population that is infected with COVID-19 and use this information as
a basis for decisions to impose restrictions to contain COVID-19 (e.g., travel restrictions).

In addition to positivity rate, three experts suggested it might be beneﬁcial to monitor contact
tracing performance and COVID-19 test turnaround times to gain further insight into the ability
of the public health system to help reduce disease transmission. Contact tracing is a process in
which trained public health oﬃcials attempt to limit disease transmission by identifying infected
individuals, notifying their “contacts”—all the people they may have transmitted the disease
to—and asking infected individuals and their contacts to quarantine, if appropriate.

Two experts suggested focusing on outcome measures for contact tracing performance, such
as the percent of new COVID-19 cases identiﬁed among quarantined contacts (of infected

38Viral tests provide data on ongoing infections, while antibody tests provide data on prevalence of past infections.
39We reported in September 2020 that the Department of Health and Human Services (HHS) continues to have
challenges in collecting complete and consistent COVID-19 testing data. (For more information about testing data that
would be used to calculate positivity rate, see our Testing Guidance enclosure in this report.)

Page 35 GAO-21-191
individuals). They noted that such measures reﬂect how eﬀective contact tracing is in helping to
reduce disease transmission.40 However, few states publicly report on such indicators.41

To be most eﬀective, the contacts of infected individuals must be rapidly identiﬁed and notiﬁed.
However, two experts noted signiﬁcant challenges in doing so. One expert said that some infected
individuals may not willingly identify their contacts and as a result, contact tracers are unable to
notify them about their risk. Another expert told us that notifying identiﬁed contacts in a timely
manner is unrealistic in areas with a large number of COVID-19 cases.

As for test turnaround times, three of the experts proposed monitoring the number of days from
specimen collection to reporting of COVID-19 test result as an additional indicator. This is a telling
indicator, two experts noted, because infected individuals may not quarantine quickly enough to
prevent ongoing community transmission if test results are delayed, limiting the value of the tests.
One expert said this measure will likely have more limited applicability in the future as point-of-
care tests, which feature rapid results, become more available at provider oﬃces or for patients to
use at home.

Health care system’s capacity to provide needed care. The ability of the nation’s health care
system to provide needed care during the pandemic is critical to monitor through indicators,
our experts generally agreed. Indicators that assess this ability include the proportion of staﬀed
intensive care unit (ICU) beds available to treat patients, other measures of hospital capacity, and
the provision of health services unrelated to COVID-19.

In our August 2020 report, we stated that monitoring ICU bed availability over time oﬀers insight
on changes in our health care system’s capacity to care for the sickest patients with COVID-19
(i.e., those that may require respiratory support on a ventilator to survive). We have ongoing work
examining the quality of hospital data that hospitals report to the Department of Health and
Human Services (HHS).42

Three experts suggested examining ICU bed availability geographically because health care
resources vary across areas, such as by state or region. The experts also provided insight into
some limitations of ICU bed availability:

• ICU bed classiﬁcation. Two experts noted that this measure can vary based on how hospitals
classify their beds. For example, as demand increases, some hospitals may be able to
reclassify for the short term some of their non-ICU beds as ICU beds (given available

40Ideally, most or all new COVID-19 cases would be identiﬁed through contact tracing. For this to occur, nearly all
COVID-19 cases need to be found and all contacts need to be identiﬁed, quarantined, and tested.
41As we reported in August 2020, CDC has recently begun collecting data on contact tracing measures as a part of one
of its cooperative agreements. CDC oﬃcials told us the agency plans to use the measures to ensure that cooperative
agreement recipients are making progress toward the goals of the agreement. As of September 30, 2020, CDC has
collected data for four of the six metrics for one month and begun collecting data for the other two metrics, which are
reported on a quarterly basis.
42As of July 15, 2020, hospitals are to report data on ICU bed availability and other measures directly to the Department
of Health and Human Services’s (HHS) Protect system, or states may submit these data on behalf of hospitals to HHS
Protect. For ICU bed availability, hospitals are to include in their reports all staﬀed ICU beds (including staﬀed overﬂow
and surge ICU beds).

Page 36 GAO-21-191
equipment and staﬃng). While this allows those hospitals to meet the needs of additional
patients, it also makes it challenging to determine the ICU bed capacity of those hospitals.

• Evolving level of importance. Three experts told us that ICU bed availability may not be as
valuable of a measure as it was early on in the pandemic given that a growing number of
individuals hospitalized for COVID-19 do not require ICU care.

Given such limitations, the experts said it is important to monitor other indicators of hospital
capacity in addition to ICU capacity to obtain a more complete understanding of hospital capacity.
For example, experts suggested COVID-19 hospitalization rates and hospital bed availability
(including ICU beds) as additional indicators.43 One of these experts told us these indicators
provide a more complete picture of hospitals’ capacity to provide necessary care for COVID-19
patients given that many do not require ICU care.

In addition, all ﬁve experts stated that the federal government should monitor indicators that
reﬂect the capacity of the health care system to provide necessary services unrelated to COVID-19.
For example, two experts suggested it may be beneﬁcial to monitor whether individuals are
able to receive care unrelated to COVID-19, including care for acute or chronic conditions, such
as heart attacks and cancer treatments, and preventive care, such as vaccines for children and
mammograms.

Health care sector economic eﬀects of COVID-19. The ﬁve experts told us the indicators
we identiﬁed in our June and August 2020 reports were appropriate to monitor eﬀects of the
pandemic on the health care sector of the economy, including hospital operating margin.44

One expert told us that additional information beyond hospital operating margin is needed
to more accurately assess the ﬁnancial condition of hospitals. Hospital operating margins are
calculated with revenues and costs related to patient care and do not include revenue from other
sources such as income from investments. Speciﬁcally, this expert stated that it is valuable to
consider additional measures of hospital ﬁnances that include revenue from these other sources.

The expert explained that larger hospitals often have cash reserves from investments and other
sources that are set aside for the purposes of emergencies and such reserves are not reﬂected
in their operating margins. Without considering such reserves, hospital operating margins may
indicate that some hospitals are in ﬁnancial distress when they have adequate ﬁnancial reserves
available to make up for losses in revenue from patient care.

43One expert told us that COVID-19 hospitalization rates may also be used to measure the burden of COVID-19 on
population health.
44In addition to hospital operating margin, we also reported on health care employment, health care personal
consumption expenditures, and volume of elective procedures across settings in our June and August 2020 reports.See
our Economic Indicators enclosure in this report, for data on health care employment and health care personal
consumption expenditures.

Page 37 GAO-21-191
Agency Comments
We provided HHS and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
HHS and OMB did not provide comments on this enclosure.

Contact information: Jessica Farb, 202-512-7114, farbj@gao.gov

Related GAO Products
COVID-19: Data Quality and Considerations for Modeling and Analysis. GAO-20-635SP. Washington,
D.C.: July 30, 2020.

Science & Tech Spotlight: Contact Tracing Apps. GAO-20-666SP. Washington, D.C.: July 28, 2020.

Page 38 GAO-21-191
Economic Indicators
The national economy has improved since July 2020 while key areas of the economy we are
monitoring had mixed performance, with a slow recovery and weak conditions in some areas. 45
Indicators of access to credit for investment grade corporations, for example, have returned to
levels that were typical prior to the pandemic. However, employment remains substantially lower
than before the pandemic and more households have become seriously delinquent on mortgage
payments during the pandemic. Our review of academic studies suggests that the pandemic will
likely remain a signiﬁcant obstacle to more robust economic activity.

Aggregate economic conditions in the U.S. improved in recent months according to the Federal
Reserve Bank of New York’s Weekly Economic Index, which combines high-frequency economic
data from a wide range of sources. 46 Nevertheless, the index suggests a large drop in economic
activity relative to a year ago. Similarly, U.S. gross domestic product rose at a 33.1 percent annual
rate in the third quarter of 2020, but remained 2.9 percent lower than a year ago. As we noted in
our June 2020 report, the impact of the pandemic on the economy will reduce federal tax revenues
while the ﬁscal response from the COVID-19 relief laws and heightened demands on federal social
programs will increase expenditures. Federal debt held by the public increased from $20.6 trillion
in July 2020 to $21 trillion in September 2020—growing at a slower rate but over $3 trillion higher
than in February 2020—while 3-month Treasury interest rates fell 2 basis points from 0.13 percent
to 0.11 percent between July 2020 and September 2020. 47

Both imports to and exports from the U.S. rose in July and August 2020 as the economy continued
to recover. Trade in transportation and travel services in August 2020 continued to be substantially
below their levels from a year ago. Travel exports in August 2020, for example, were 77 percent
lower than in August 2019. Measures of economic and ﬁnancial stress in advanced and emerging
market economies improved in August and were largely unchanged in September and October.

Indicators of areas of the economy supported by the federal pandemic response saw mixed
performance, with slow employment growth and some weakening indicators of state and local
government ﬁnances (see table).

45We identiﬁed a number of economic indicators to facilitate ongoing and consistent monitoring of areas of the
economy supported by the federal pandemic response. To the extent that federal pandemic responses are eﬀective, we
would expect to see improvements in outcomes related to these indicators. However, while trends in these indicators
may be suggestive of the eﬀect of provisions of the COVID-19 relief laws over time, those trends will not on their own
provide deﬁnitive evidence of eﬀectiveness.
46Daniel J. Lewis, Karel Mertens, and Jim Stock, U.S. Economic Activity during the Early Weeks of the SARS-Cov-2 Outbreak,
Federal Reserve Bank of New York Staﬀ Report No. 920 (April 2020).
47A basis point is 1/100th of a percentage point. The 3-month Treasury interest rate is the constant maturity rate from
the Federal Reserve’s H.15 Selected Interest Rates release.

Page 39 GAO-21-191
Indicators for Areas of the Economy Supported by the Federal Pandemic Response, July 2020 through October
2020, cumulative change since February 2020

a
The employment-to-population ratio represents the number of employed people as a percentage of the civilian
noninstitutional population 16 years and over and is subject to misclassiﬁcation errors with respect to consistently identifying
workers as employed and absent from work or unemployed on temporary layoﬀ.
b
Higher levels in the Consumer Credit Default Composite Index indicate more defaults on consumer loans, including auto loans,
bank cards, and mortgages. The Consumer Credit Default Composite Index could be subject to seasonal variation but is not
seasonally adjusted.
c
Lower levels in the Small Business Health Index indicate higher utilization of credit, delayed payments on credit, and more
small business failures. The Small Business Health Index is published under license and with permission from Dun & Bradstreet
and no commercial use can be made of these data.
d
Corporate bond spreads are option-adjusted spreads on dollar-denominated investment grade corporate bonds and are
th
measured in basis points or 1/100 of a percentage point. Higher spreads reﬂect higher perceived risk among corporate
borrowers by investors.
e
Spreads on municipal bonds are calculated relative to interest rates on Treasury securities based on the Bloomberg-Barclays
th
Municipal Bond Index and are measured in basis points or 1/100 of a percentage point. Higher spreads reﬂect higher
perceived risk among municipal borrowers by investors.
f
Expenditures are in real (inﬂation-adjusted) dollars using chained 2012 dollars and are seasonally adjusted at annual rates.

Labor market conditions. The labor market has been recovering slowly as the employment-
to-population ratio increased from 56.6 percent in September 2020 to 57.4 percent in October
2020—up from a historic low of 51.3 percent in April 2020 but substantially lower than before the

Page 40 GAO-21-191
pandemic. 48 Speciﬁcally, the employment-to-population ratio in October 2020 was 3.7 percentage
points lower than in February 2020. 49 The monthly increase in total nonfarm employment slowed,
adding 1.8 million, 1.5 million, 0.7 million, and 0.6 million jobs in July, August, September, and
October 2020, 50 respectively, compared with the 4.8 million jobs added in June 2020. 51 Black and
Hispanic workers saw larger percentage declines in the employment-to-population ratios from
February to October 2020 compared with White workers. These declines were also larger for those
without a bachelor’s degree. While the overall labor market has improved since May, net losses in
employment compared with in February 2020 for the leisure and hospitality, mining and logging,
and educational services sectors remained substantial (see ﬁgure). According to U.S. Bureau of
Labor Statistics, employment for the federal government increased in August, reﬂecting the hiring
of temporary 2020 Census workers, and decreased in October, driven by the loss of temporary
2020 Census workers.

48The employment-to-population ratio represents the number of employed people as a percentage of the civilian
noninstitutional population 16 years and over.
49From March through October 2020, employment data from the Bureau of Labor Statistics (BLS) household survey,
including the employment-to-population ratio, have been subject to misclassiﬁcation errors with respect to consistently
identifying workers as employed and absent from work or unemployed on temporary layoﬀ. However, according to BLS,
the share of responses that may have been misclassiﬁed was much smaller in July, August, September, and October
2020 than in prior months after BLS took steps to improve the reliability of the data after the May 2020 employment
data were released. While BLS measures employment and labor force statistics in its household survey, it also measures
an alternative measure of employment called nonfarm employment in its establishment survey. According to BLS, the
establishment survey was not subject to the misclassiﬁcation error. See the “Coronavirus (COVID-19) Impact on October
2020 Establishment and Household Survey Data” in BLS’s Employment Situation Summary for more details.
50The data for September and October are preliminary and are subject to revision by the Department of Labor.
51Initial unemployment claims data are omitted from the list of indicators presented in the ﬁrst table. Beginning with
the Weekly Claims News Release issued Thursday, September 3, 2020, the Department of Labor changed its approach
to seasonal adjustment of national unemployment insurance claims, rendering trends from September 3 and thereafter
no longer comparable with earlier data. Moreover, California announced a 2-week pause in its processing of initial
claims for unemployment insurance beneﬁts beginning September 19, 2020. In the Weekly Claims News Release issued
Thursday, October 22, 2020, the Department of Labor noted that California has completed its pause in processing of
initial claims and has resumed reporting actual unemployment insurance claims data based on their weekly claims
activity.

Page 41 GAO-21-191
Percentage Change in Employment by Sector, February through October 2020

Notes: The data for October are preliminary and are subject to revision by the Department of Labor.

Among the unemployed, the number of individuals on temporary layoﬀ decreased considerably
from 18.1 million in April 2020 to 3.2 million in October 2020. However, the number of
unemployed individuals permanently losing jobs increased from 2.0 million in April 2020 to 3.7
million in October 2020 (see ﬁgure). While workers on temporary layoﬀ expect to return to work,
the increase in unemployed workers with permanent job losses could indicate more lasting
economic disruption and greater diﬃculty returning to the labor market.

Number of Unemployed Workers Permanently Losing Jobs and on Temporary Layoﬀ, January 2019 through
October 2020

Household ﬁnancial conditions. Serious delinquency rates for single family mortgage
loans—loans that are 90 or more days past due or in foreclosure—have increased substantially
compared with May 2020 (see ﬁgure below), suggesting economic challenges facing homeowners.

Page 42 GAO-21-191
Serious delinquency rates increased on both conventional loans, speciﬁcally those guaranteed by
Fannie Mae and Freddie Mac, as well as on loans insured by the Federal Housing Administration
(FHA). Increases in delinquencies to some extent reﬂect borrowers taking advantage of mortgage
forbearance provisions of the CARES Act but may also indicate ﬁnancial challenges facing
households. 52 Increases in delinquency rates on FHA loans in particular could indicate that
minority and low-income households have experienced more ﬁnancial hardship since the onset of
the pandemic as FHA loans disproportionately serve minority and low-income borrowers. 53

Serious Delinquency Rates on Single-Family Residential Mortgages, January 2019 through August 2020

Note: The serious delinquency rate on conventional loans is calculated based on a weighted average of serious delinquency
rates of conventional loans guaranteed by Fannie Mae and Freddie Mac based on loan counts as of April 2020. Single-family
seriously delinquent loans are 3 months or more past due or in the foreclosure process.

The Consumer Credit Default Composite Index—a broad measure of households’ ability to make
scheduled payments—improved in September 2020. In addition, subindexes for bank cards and
ﬁrst mortgages improved in September 2020 relative to August 2020, but defaults on auto loans
had increased during the same time period. 54

52The CARES Act provides temporary protections for millions of households against foreclosure and eviction, as well as
temporary forbearance on mortgage payments.
53In ﬁscal year 2019, for example, 33.6 percent of all FHA purchase and reﬁnance borrowers were minorities and 58.4
percent of FHA forward mortgage borrowers were of low-to-moderate income. U.S. Department of Housing and Urban
Development, FHA Annual Management Report Fiscal Year 2019.
54The S&P/Experian Consumer Credit Default Composite Index measures the proportion of consumer credit account
balances that enter default across auto loans, ﬁrst and second mortgages, and bank cards each month. Although
changes in these indexes over time should provide a general indication of changes in the ﬁnancial condition of
households, forbearance arrangements could aﬀect how delinquencies are reported and therefore the measurement of
consumer credit defaults in the near term.

Page 43 GAO-21-191
Small business ﬁnancial and credit conditions. The Small Business Health Index—a broad
measure of the ﬁnancial condition of small businesses from Dun & Bradstreet—improved slightly
in September 2020. 55 As of September 2020, small businesses in the retail and automotive sectors
had deteriorated the most since January 2020, with increases in business failures and growing
delinquencies on credit cards driving the changes.

Despite improving ﬁnancial conditions of small businesses in recent months, more banks have
been tightening than loosening underwriting standards on the credit they extend to small
businesses through the third quarter of 2020, according to data collected by the Federal Reserve.
56 In addition, more banks have been raising than lowering the premiums they charge small

businesses during the same time period. These changes indicate that banks anticipated greater
risk associated with making these loans going forward.

Corporate credit market conditions. Spreads on investment grade corporate bonds were largely
unchanged in recent months, but remained very close to their prepandemic averages, suggesting
that perceived risk among corporate borrowers and access to credit for corporations were similar
to levels that were typical during the past few years, prior to the pandemic. 57

State and local government ﬁnances. Tax revenue collected by state and local governments in
nd
the 2 quarter of 2020 fell by 20.9 percent relative to the same quarter in 2019, greater than the
largest year-over-year decline in state and local tax revenue during the Great Recession, and over
17 percent from the previous quarter (see ﬁgure), illustrating the ﬁscal challenges state and local
governments have faced as a result of the COVID-19 pandemic. 58

55The Small Business Health Index combines information on the timeliness of payments, failure rates, and utilization of
credit for a sample of over 10 million active small businesses with fewer than 100 employees. The Small Business Health
Index is published under license and permission from Dun & Bradstreet and no commercial use can be made of these
data.
56Survey data from the Senior Loan Oﬃcer Opinion Survey, conducted by the Board of Governors of the Federal Reserve
System quarterly.
57Spreads on corporate bonds relative to benchmark interest rates (e.g., Treasury interest rates) measure the premium
corporate borrowers must pay to compensate lenders for taking on the risk of loss due to default (risk premium) and
for foregoing investments in more liquid assets (liquidity premium). We report spreads on aggregations of dollar-
denominated investment grade corporate bonds available via Bloomberg.
58See Quarterly Summary of State and Local Tax Revenues, Census Bureau. We report year-over-year percentage
changes based on nonseasonally adjusted data in order to compare with nonseasonally adjusted data that were
available during the Great Recession. We use seasonally adjusted data to compare revenue lost in the second quarter
of 2020 relative to data from the previous quarter. State and local governments also faced disruptions in the timing of
revenue collections. For example, most states extended their individual income tax ﬁling deadlines to match the federal
government’s shift in the deadline for ﬁling federal income tax returns from April 15 to July 15. It is not clear how much
of the second quarter decline can be attributed to the delayed tax ﬁling deadline.

Page 44 GAO-21-191
State and Local Government Tax Revenue, First Quarter 2019 through Second Quarter 2020

Spreads on municipal bonds have improved slightly since July 2020, suggesting that perceived
risk among municipal borrowers and access to credit for state and local governments have also
improved slightly. 59 State and local government employment, a timely measure of ﬁscal stress
facing state and local governments as well as an indicator of the capacity of state and local
governments to provide services to the public, increased in August but fell in September and
October.

Financial condition of the health care sector. Recovery in health care sector employment
continued in October 2020, with over 58,000 jobs added that month. 60 This increase brings the
total number of health care jobs regained in the past 6 months to about 988,000, or about 63
percent of the almost 1.6 million jobs lost in March and April 2020 at the start of the COVID-19
pandemic. As of October 2020, health care employment was 4 percent below the February 2020
prepandemic level, with about 590,000 jobs lost.

In May through October 2020, ambulatory health care establishments, such as physicians’ and
dentists’ oﬃces, recovered about four-ﬁfths (82 percent) of the more than 1.3 million ambulatory
care jobs lost in March and April 2020 and accounted for most of the health care employment

59Spreads on municipal bonds relative to benchmark interest rates (e.g., Treasury interest rates) incorporate the
favorable tax treatment received by municipal debt and may also reﬂect any premium state and local borrowers pay to
compensate lenders for taking on the risk of loss due to default (risk premium) and for tying up their investment funds
for a period of time (liquidity premium). We report spreads calculated based on the Bloomberg Barclays Municipal Bond
Index. Spreads are calculated using yield to worst, which results in a conservative—that is, lower—estimate of potential
returns on callable bonds.
60Employment numbers are based on seasonally adjusted data from the Bureau of Labor Statistics Current Employment
Statistics Survey of establishments as of November 6, 2020. September and October 2020 data are preliminary.

Page 45 GAO-21-191
gains in October 2020. Hospitals, which lost about 161,000 jobs in April and May 2020, regained
almost one-third (31 percent) by October 2020. In contrast, employment in nursing and residential
care facilities continued to decline for most of this period. From May through October 2020, these
facilities lost about 115,000 jobs, for a total of 238,000 jobs lost since February 2020.

In September 2020, personal consumption expenditures for health care rose for the ﬁfth
consecutive month since plummeting in March and April 2020. 61 However, at about $2.1 trillion
(annualized), spending remained 6 percent below the February 2020 prepandemic level. 62 While
expenditures for outpatient and hospital care began to rebound in May 2020, expenditures for
nursing home care have continued to decline every month since April 2020. As of September 2020,
expenditures for nursing home care ($141 billion annualized) were 13 percent below February
2020, consistent with persistent job losses in those facilities.

The decline in nursing home care expenditures may reﬂect reported COVID-19-related deaths
among nursing home residents and decreased admissions due to factors including the
postponement of nonessential surgeries that require post-acute care and concerns about
increased infection risk posed by congregate living facilities. Some individuals in need of
rehabilitative or long-term care may have instead opted for home health care, if possible, during
this time as personal consumption expenditures for such care have risen every month since May
2020, and in September 2020, at $116 billion (annualized), were 2 percent higher than in February
2020.

Literature on COVID-19 and the economy. To better understand the major drivers of economic
activity during the pandemic—including factors that are likely to inﬂuence the economic indicators
we are monitoring—and the interdependence between the pandemic and the economy, we
conducted a review of relevant empirical research. We reviewed research that assessed the
potential eﬀect of state and local government mandates, including shelter-in-place orders, and
voluntary changes in economic behavior 63 on economic activity during the pandemic. 64

While the manner in which the pandemic inﬂuences economic activity could change over time,
our review of academic studies suggests that the pandemic will likely remain a signiﬁcant obstacle
to more robust economic activity. These studies consistently found that a decline in consumer
demand related to concerns about COVID-19 played a large role in reducing economic activity

61Personal consumption expenditures, a component of the gross domestic product, is the value of goods and services
purchased by or on behalf of U.S. residents.
62Expenditures are in real (inﬂation-adjusted) dollars using chained (2012) dollars and are seasonally adjusted at annual
rates. Expenditure data are from the Bureau of Economic Analysis, as of October 30, 2020.
63 “Voluntary changes” in economic behavior refer to actions taken prior to government mandates or those that
individuals would have taken even absent government mandates.
64We conducted an in-depth review of 20 studies that met our criteria for relevance and methodological rigor. Of those
studies, 9 speciﬁcally measure demand (e.g., consumer spending on goods and services) or a proxy for demand (e.g.,
visits to local businesses) and 11 measure mobility in general. We identiﬁed a number of data and methodological
limitations in the studies we reviewed. For example, data used in these studies may only imperfectly measure or capture
mobility, the severity of COVID-19, and state and local government policies. Moreover, because of the methods adopted,
researchers may have diﬃculty disentangling any causal relationships that may exist or accounting for any spillover
eﬀects of state and local government policies. In addition, most of the cited papers had not yet undergone a peer-
review process at the time of writing and are subject to revision. Nevertheless, collectively the literature provides useful
information on factors inﬂuencing the economy during the pandemic.

Page 46 GAO-21-191
during the initial stages of the pandemic. We found some evidence based on these studies that
this reduction was associated with the severity of the pandemic. For example, economic activity
tended to drop more signiﬁcantly when the number of local COVID-19 cases and deaths increased.
Finally, our review also suggests that the initial reopening of nonessential businesses and lifting of
stay-at-home orders likely had only a small eﬀect on economic activity.

Researchers consistently found that a decline in consumer demand related to concerns about
COVID-19 had a signiﬁcant impact on the economy during the initial stages of the pandemic.
Consumers decided to voluntarily postpone or forgo purchases of certain types of goods and
services, and reduced visits to businesses, before government stay-at-home mandates 65 went
into eﬀect. 66 Similarly, in the studies we reviewed researchers found consistent evidence that the
impact of state and local government mandated restrictions further reduced economic activity.
67 For example, using data on foot traﬃc at individual businesses, one U.S. study found that foot

traﬃc started to drop before the shelter-in-place orders were in place and that shelter-in-place
orders further contributed to changes to consumer behavior. 68

Similarly, another U.S. study found that for industries specializing in discretionary goods and
services, such as entertainment and restaurants, more than two thirds of the decline in foot traﬃc
was a voluntary response on the part of individuals and was not due to mandated restrictions. 69
One study compared Denmark with Sweden, where both countries were similarly exposed to the
pandemic but only Denmark imposed signiﬁcant restrictions on social and economic activities.
The study found that aggregate spending dropped by around 25 percent in Sweden compared
with 29 percent in Denmark. 70 Another study found that the drop in restaurant reservations in the

65Note that closures of nonessential businesses may have gone into eﬀect prior to the stay-at-home mandates in some
states. Studies generally use “shelter-in-place” and “stay-at-home” orders interchangeably. In addition to voluntary
behavior by consumers, businesses and organizations voluntarily limited, substantially altered, or ceased operations in
response to falling demand or in order to reduce the risk of contagion among their employees.
66Studies analyzing mobility in general–not as a measure of consumer demand–consistently found that the decline in
mobility predated the government stay-at-home mandates and government mandated restrictions further reduced
mobility already cut back voluntarily by individuals. For example, see James Sears, J. Miguel Villas-Boas, Vasco Villas-Boas,
Soﬁa Berto Villas-Boas, “Are We #Stayinghome to Flatten the Curve?” University of California, Berkeley, Department of
Agricultural & Resource Economics, CUDARE Working Papers (2020). See also Hunt Allcott, Levi Boxell, Jacob Conway,
Billy Ferguson, Matthew Gentzkow, and Benny Goldman, “Economic and Health Impacts of Social Distancing Policies
during the Coronavirus Pandemic,” SSRN working paper (2020).
67There is some evidence that voluntary behavior played a larger role than mandated restrictions in reducing economic
activity, based on a number of studies that compared the relative magnitudes of these factors, although the literature
does not yet reﬂect a deﬁnitive conclusion on this question. For example, see William Maloney and Temel Taskin,
“Determinants of Social Distancing and Economic Activity during Covid-19: A Global View,” Covid Economics, CEPR Press,
issue 13 (2020): pp. 157–177. See also Alexander Bartik, Marianne Bertrand, Feng Lin, Jesse Rothstein and Matt Unrath,
“Measuring the Labor Market at the Onset of the COVID-19 Crisis,” NBER Working Paper No. 27613 (2020).
68Austan Goolsbee and Chad Syverson, “Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic
Decline 2020,” NBER Working Paper No. 27432 (2020).
69Christopher Cronin and William Evans, “Private Precaution and Public Restrictions: What Drives Social Distancing and
Industry Foot Traﬃc in the COVID-19 Era?” NBER Working Paper No. 27531 (2020). Regulations they considered include
stay-at-home orders, bans on indoor dining, gatherings of more than 50 people, gyms and entertainment, and public
school closures.
70While the general conclusions from this study are corroborated by U.S.-based studies, social and economic behaviors
in response to the pandemic could diﬀer in Denmark and Sweden compared with in the United States. Adam Sheridana,
Asger Lau Andersen, Emil Toft Hansen, and Niels Johannesen, “Social Distancing Laws Cause Only Small Losses of

Page 47 GAO-21-191
U.S. predated the closing of nonessential businesses and that revenues dropped oﬀ entirely for
Swedish movie theaters even though Sweden had no restrictions on nonessential businesses. 71

We found some evidence that falling economic activity in the U.S. was associated with the severity
of the pandemic. That is, consumer demand and mobility tended to drop more signiﬁcantly
when the number of local COVID-19 cases and deaths increased. For example, one study found
that the ﬁrst death in a county had a large and statistically signiﬁcant impact on measures
of mobility—typically mobile-phone based measures of how extensively individuals move
around—and in most cases, the impact of the ﬁrst death was larger than the eﬀect of any
single policy. 72 Another study found that the decline in consumer visits to businesses was
associated with the number of COVID-19 deaths in a county. 73 Finally, using electricity as a proxy
for economic activity, one study found that an increase in the number of COVID-19 cases led to a
decrease in electricity usage. 74

Studies analyzing consumption and mobility suggest that the initial reopening of nonessential
businesses and lifting of stay-at-home orders likely had only a small eﬀect on economic activity.
For example, one U.S. study found that consumer spending trended similarly in states that
reopened earlier relative to comparable states that reopened later. The authors concluded
that governments may have limited capacity to restore economic activity through reopenings,
especially if those reopenings are not interpreted by consumers as a clear signal of reduced health
risk. 75 Another U.S. study found that the eﬀect of repealing stay-at-home orders on consumer
visits to stores was small. 76 In addition, using real-time customer traﬃc data to malls in China,
one study found that 9 weeks after reopening the economy, mall traﬃc had only recovered to 64
percent of its level before the outbreak. 77

To better understand how growing economic activity—and attendant social interactions—might
inﬂuence the pandemic, we also reviewed ﬁve studies that examined the relationship between

Economic Activity during the COVID-19 Pandemic in Scandinavia,” Proceedings of the National Academy of Sciences of
the United States of America (PNAS), vol. 117, no. 34, (2020): pp.1-6.
71Maloney and Taskin, “Determinants of Social Distancing and Economic Activity during Covid-19: A Global View.”
72Christopher Cronin and William Evans, “Private Precaution and Public Restrictions: What Drives Social Distancing
and Industry Foot Traﬃc in the COVID-19 Era?” NBER Working Paper No. 27531 (2020). Mobility measures include foot
traﬃc to nonessential retail, essential retail, entertainment, hotel, restaurant, and business services and at home rate.
Policies considered include bans on gathering of 50 or more people, restaurant dine-in bans, bans on the entertainment
industry, and public school closures.
73Goolsbee and Syverson, “Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020.”
74Sophia Chen, Deniz Igan, Nicola Pierri, and Andrea F. Presbitero, “Tracking the Economic Impact of COVID-19 and
Mitigation Policies in Europe and the United States,” IMF Research (2020).
75Raj Chetty, John Friedman, Nathaniel Hendren, Michael Stepner, and the Opportunity Insights Team, “The Economic
Impacts of COVID-19: Evidence from a New Public Database Built from Private Sector Data,” Working Paper (2020).
International Monetary Fund researchers similarly concluded that lifting lockdowns is unlikely to rapidly bring economic
activity back to potential if health risks remain. See Francesca Caselli, Francesco Grigoli, Weicheng Lian, and Damiano
Sandri, “The Great Lockdown: Dissecting the Economic Eﬀects,” World Economic Outlook Reports, Chapter 2 (2020).
76Goolsbee and Syverson, “Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020.”
77Cheng He, Tong Wang, Xiaopeng Luo, Zhenzi Luo, Jiayi Guan, Haojun Gao, Keyan Zhu, Lu Feng, Yuehao Xu, Yuan Cheng,
Yu Jeﬀrey Hu, “Surviving COVID-19: Recovery Curves of Mall Traﬃc in China,” SSRN Working Paper (2020). Malls in the
Hubei province, the epicenter of the Covid-19 in China are excluded.

Page 48 GAO-21-191
social distancing and the spread of COVID-19. 78 The studies we reviewed highlight some
suggestive evidence that increases in social distancing were associated with decreases in the
spread of COVID-19. For example, one study of 211 U.S. counties found that a decrease in visits
to nonessential businesses was associated with a decrease in overall COVID-19 transmission
rates. 79 The ways in which economic activity and social interactions might inﬂuence the spread
of COVID-19 could change over time as public health responses and individual behaviors evolve.
Additional research could establish with greater conﬁdence how increasing economic and social
activity aﬀect the spread of COVID-19.

Agency Comments
We provided the Department of Commerce (Commerce), the Department of Health and Human
Services (HHS), the Department of Housing and Urban Development (HUD), the Department of
Labor (Labor), the Department of Treasury (Treasury), the Board of Governors of the Federal
Reserve System (Federal Reserve), the Federal Housing Finance Agency (FHFA), and the Oﬃce of
Management and Budget (OMB) with a draft of this enclosure. FHFA, the Federal Reserve, and
Treasury provided technical comments, which we incorporated as appropriate. Commerce, HHS,
HUD, Labor, and OMB did not provide comments on this enclosure.

GAO’s Methodology
To identify indicators for monitoring the economy, we reviewed a number of sources, including
prior GAO work, releases from federal statistical agencies, data from Fannie Mae and Freddie Mac,
information from the Federal Reserve, and relevant federal agencies responsible for the pandemic
response and oversight of the health care system, data available on the Bloomberg Terminal,
and input from internal GAO experts. We assessed the reliability of the data we intend to use for
monitoring and reporting on areas of the economy supported by the federal pandemic response,
in particular the COVID-19 relief laws. We took a number of steps to determine the reliability of

78We reviewed ﬁve peer-reviewed journal articles of U.S.-based studies, or studies that included U.S.-speciﬁc results
that we identiﬁed in a nonsystematic search of the literature. Social distancing measures included policies enacted or
mobility measured by mobile phone data, and COVID spread measures included case and transmission rates. There
are several limitations to each of these studies, including potential undercounts of cases due to testing availability,
asymptomatic infections, and other limitations (see GAO-20-635SP and GAO-20-701 for a discussion of case and testing
data limitations), unmeasured factors that are not accounted for in the analysis, and accuracy of the mobile phone data
and policy enactment information.
79David Rubin, Jing Huang, Brian T. Fisher, Antonio Gasparrini, Vicky Tam, Lihai Song, XiWang, Jason Kaufman, Kate
Fitzpatrick, Arushi Jain, Heather Griﬃs, Koby Crammer, Jeﬀrey Morris and Gregory Tasian, “Association of Social
Distancing, Population Density, and Temperature with the Instantaneous Reproduction Number of SARS-CoV-2 in
Counties Across the United States,” JAMA Network Open, vol. 3, no. 7, e2016099 (2020): pp. 1-12. Decreases in visits to
nonessential businesses were measured relative to a 4-week baseline period from February 10 through March 8, 2020.
This study focused on more populous counties that had at least one reported COVID-19 case as of February 25, 2020
and, as such, the ﬁndings are not generalizable to smaller, rural counties.

Page 49 GAO-21-191
proposed data sources and indicators, including reviewing relevant documentation, reviewing
prior GAO work, and interviewing data providers. Collectively, the indicators were suﬃciently
reliable to provide a general sense of how these areas of the economy are performing.

For our review of empirical research, we considered studies from COVID-19 economic working
paper series published from March 2020 through August 2020, and conducted keyword searches
in various databases, including Proquest, EBSCO, Scopus, and DIALOG.80 We started our review of
abstracts with over one thousand economic papers related to COVID-19 and selected 59 studies
within our scope for further review. We then conducted in-depth reviews and selected empirical
academic papers that were retrospective in nature, based on suﬃciently reliable data sources
and that used rigorous statistical methods. We focused primarily on studies that analyzed the U.S.
but also reviewed studies that analyzed countries in Europe and Asia. Ultimately we included 20
studies in our literature review and recorded the studies’ data, methodology, assumptions, key
ﬁndings, and limitations and used this information to summarize relevant researching ﬁndings.
We also reviewed ﬁve peer reviewed journal articles on the impact of social distancing—U.S.-based
studies, or studies that included U.S.-speciﬁc results—that we identiﬁed in a nonsystematic search
of the literature.

Studies included in our literature review

Abouk, R., and B. Heydari. “The Immediate Eﬀect of COVID-19 Policies on Social Distancing
Behavior in the United States.” SSRN Working Paper (2020).

Allcott, H., L. Boxell, J. Conway, B. Ferguson, M. Gentzkow, and B. Goldman. “Economic and Health
Impacts of Social Distancing Policies during the Coronavirus Pandemic.” SSRN working paper
(2020).

Balla-Elliott, D., Z. Cullen, E. Glaeser, M. Luca, and C. Stanton. “Business Reopening Decisions and
Demand Forecasts During the COVID-19 Pandemic.” Harvard Business School Working Paper
20-132 (2020).

Bartik, A., M. Bertrand, F. Lin, J. Rothstein, and M. Unrath. “Measuring the Labor Market at the
Onset of the COVID-19 Crisis.” NBER Working Paper No. 27613 (2020).

Brzezinski, A., G. Deiana, V. Kecht, and D. V. Dijcke. “The COVID-19 Pandemic: Government versus
Community Action across the United States.” Covid Economics. CEPR Press. Issue 7 (2020).

Chen, S., D. Igan, N. Pierri, and A. F. Presbitero. “Tracking the Economic Impact of COVID-19 and
Mitigation Policies in Europe and the United States.” IMF Research (2020).

80Economic working paper series we considered were from the National Bureau of Economic Research; the Center for
Economic and Policy Research; the International Monetary Fund; the IZA Institute of Labor Economics; and the Social
Science Research Network. Keywords used include COVID or coronavirus, mobility, reopening, words beginning with
“econom,” supply and demand, Google mobility, Apple mobility, Safegraph, and Cuebiq.

Page 50 GAO-21-191
Chetty, R., J. Friedman, N. Hendren, M. Stepner, and the Opportunity Insights Team. “The Economic
Impacts of COVID-19: Evidence from a New Public Database Built from Private Sector Data.”
Working Paper (2020).

Cronin, C., and W. Evans. “Private Precaution and Public Restrictions: What Drives Social Distancing
and Industry Foot Traﬃc in the COVID-19 Era?” NBER Working Paper No. 27531 (2020).

Elenev, V., L. Quintero, A. Rebucci, and E. Simeonova. “Staggered Adoption of Nonpharmaceutical
Interventions to Contain COVID-19 across U.S. Counties: Direct and Spillover Eﬀects.” SSRN
Working Paper (2020).

Engle, S., J. Stromme, and A. Zhou. “Staying at Home: Mobility Eﬀects of Covid-19.” Covid
Economics. CEPR Press. Issue 4 (2020).

Goolsbee, A., and C. Syverson. “Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic
Economic Decline 2020.” NBER Working Paper No. 27432 (2020).

Gupta, S., T. Nguyen, F. L. Rojas, S. Raman, B. Lee, A. Bento, K. Simon, and C. Wing. “Tracking Public
and Private Responses to the COVID-19 Epidemic: Evidence from State and Local Government
Actions.” NBER Working Paper No. 27027 (2020).

Gupta, S., K. Simon, and C. Wing. “Mandated and Voluntary Social Distancing during the COVID-19
Epidemic.” Brookings Papers on Economic Activity. BPEA Conference Drafts (2020).

He, C., T. Wang, X. Luo, Z. Luo, J. Guan, H. Gao, K. Zhu, L. Feng, Y. Xu, Y. Cheng, and Y. J. Hu.
“Surviving COVID-19: Recovery Curves of Mall Traﬃc in China.” SSRN Working Paper (2020).

Holtz, D., M. Zhao, S. Benzell, C. Cao, M. A. Rahimian, J. Yang, J. Allen, A. Collis, A. Moehring, T.
Sowrirajan, D. Ghosh, Y. Zhang, P. S. Dhillon, C. Nicolaides, D. Eckles, and S. Aral. “Interdependence
and the Cost of Uncoordinated Responses to COVID-19.” Proceedings of the National Academy of
Sciences of the United States of America. (PNAS) (2020).

Maloney, W., and T. Taskin. “Determinants of Social Distancing and Economic Activity during
Covid-19: A Global View.” Covid Economics. CEPR Press. Issue 13 (2020): pp. 157 – 177.

Nguyen, T., S. Gupta, M. Andersen, A. Bento, K. Simon, and C. Wing. “Impacts of State Reopening
Policy on Human Mobility.” NBER Working Paper No. 27235 (2020).

Porcher, S., and T. Renault. “Social Distancing Beliefs and Human Mobility: Evidence from Twitter.”
arXiv: 2008.04826v1 (2020).

Sears, J., J. M. Villas-Boas, V. Villas-Boas, S. B. Villas-Boas. “Are We #Stayinghome to Flatten the
Curve?” University of California, Berkeley. Department of Agricultural & Resource Economics.
CUDARE Working Papers (2020).

Sheridana, A., A. L. Andersen, E. T. Hansen, and N. Johannesen. “Social Distancing Laws Cause Only
Small Losses of Economic Activity during the COVID-19 Pandemic in Scandinavia.” Proceedings of

Page 51 GAO-21-191
the National Academy of Sciences of the United States of America (PNAS). Vol. 117. No. 34, (2020):
pp.1-6.

Contact information: Lawrance L. Evans, Jr., (202) 512-8678, evansl@gao.gov

Recent GAO work on COVID-19 data issues
COVID-19: Data Quality and Considerations for Modeling and Analysis. GAO-20-635SP. Washington,
D.C.: July 30, 2020.

Page 52 GAO-21-191
Relief for Health Care Providers
To help support health care providers and ﬁnance care for COVID-19 patients and underserved
populations, the Department of Health and Human Services has disbursed about $101 billion
(58 percent) of $175 billion appropriated by COVID-19 relief laws for the Provider Relief Fund,
as of September 30, 2020. It also loaned about $106.5 billion to health care providers through a
program expanded by the CARES Act.

Entities involved: Department of Health and Human Services, including its Centers for Medicare
& Medicaid Services and Health Resources and Services Administration

Key Considerations and Future GAO Work
As the Department of Health and Human Services (HHS) works to get funds to eligible providers,
it will continue to be important that robust internal controls are in place to help ensure funds are
appropriately disbursed and used, notwithstanding the imperative of a quick federal response
to the COVID-19 crisis. We plan to conduct additional work to examine HHS’s eﬀorts to provide
assistance to providers.

Background
Provider Relief Fund. To respond to the pandemic, the COVID-19 relief laws appropriated
$175 billion to reimburse eligible providers for health-care-related expenses or lost revenues
attributable to COVID-19, known as the Provider Relief Fund. Speciﬁcally, the CARES Act
appropriated $100 billion and the Paycheck Protection Program and Health Care Enhancement
Act appropriated an additional $75 billion for the fund.81 The Health Resources and Services
Administration (HRSA), within HHS, administers payments from the Provider Relief Fund.

Accelerated and Advance Payments Program. HHS’s Centers for Medicare & Medicaid Services’
(CMS) Accelerated and Advance Payments Program provides loans to providers and suppliers
when there is a disruption in claims submission or processing, including during a public health
emergency or a presidentially-declared disaster.82 Section 3719 of the CARES Act authorized the
expansion of this program due to the COVID-19 pandemic. Under the expanded program, active
Medicare providers and suppliers could apply for loans of up to 100 percent or 125 percent of
the Medicare payments they received for a prior 3-month or 6-month period, depending on the
type of provider or supplier. On April 26, 2020, CMS announced that provider applications for
the Advance Payments Program were discontinued in light of grant payments made available

81Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 563 (2020); Pub. L. No. 116-139, div. B, tit. I, 134 Stat. 620, 622 (2020).
82The Accelerated Payments Program provides loans to inpatient prospective payment system hospitals, children’s
hospitals, cancer hospitals, and critical access hospitals. The Advanced Payments Program provides loans to all other
providers and suppliers.

Page 53 GAO-21-191
for similar purposes through the Provider Relief Fund. The Accelerated Payments Program was
discontinued on October 8, 2020.

Overview of Key Issues
Provider Relief Fund. As of September 30, 2020, HHS had allocated about $145 billion from the
Provider Relief Fund, with about $30 billion not yet allocated.83 Of the total allocated ($145 billion),
about $101 billion had been disbursed and about $44 billion was yet to be disbursed.84 According
to HHS oﬃcials, the agency allocated $88 billion for general relief for health care providers and
about $56 billion for seven targeted areas. See table below for a summary of Provider Relief Fund
allocations and disbursements.

83HHS uses the term “allocations” to describe the funding amounts it has set aside for particular purposes or for
particular types of health care providers.The $145 billion includes the allocation of $0.896 billion for uninsured
treatment and $0.142 billion for administration, which are added to the subtotal of general and targeted allocations of
$144 billion.
84The $101 billion includes the disbursement of $0.896 billion for uninsured treatment and $0.009 for administration.

Page 54 GAO-21-191
Summary of the Provider Relief Fund ($175 billion) Allocations and Disbursements, as of September 30, 2020
Allocation Dates of initial Disbursement
Description ($ billions) disbursement ($ billions)

General distributions

Phase I: Medicare 47.0 April 10, 2020 42.768

Phase II: Medicaid and Children’s Health 15.0 July 3, 2020 2.249
Insurance Program (CHIP) providers

Phase II: dental providers 3.0 July 28, 2020 0.878

Phase II: assisted living facilities 3.0 September 25, 2020 0.01

Phase III: general distribution 20.0

Subtotal of general distributions 88.0 45.905

Targeted distributions

Rural health care facilities 11.3 May 6, 2020 11.109

High-impact hospitals 22.0 May 7, 2020 20.921

Skilled nursing facilities 4.9 May 22, 2020 4.772

Indian health care providers 0.5 May 29, 2020 0.494

Safety net hospitals 13.3 June 12, 2020 13.095

Children’s hospitals 1.4 August 20, 2020 0.963

Nursing home infection control, quality, and 2.5 August 27, 2020 2.469
performance

Subtotal of targeted distributions 55.9 53.823

Subtotal of general and targeted distributions 143.9 99.728

Other

Administration 0.142 0.009

Uninsured treatment
a 0.896 May 15, 2020 0.896

Unallocated funds/uninsured treatment
b 30.1

Total 175.0 100.633

Source: Summary of Health and Human Services funding data. | GAO-21-191

a
The total amount that will be allocated for uninsured treatment is unspeciﬁed. As of September 30, 2020, $0.896 billion had
been allocated and disbursed for uninsured treatment.

Page 55 GAO-21-191
b
Health Resources and Services Administration (HRSA) oﬃcials told us that the amount of unallocated funds/uninsured
treatment is available for treatment of the uninsured and for future allocations. HRSA did not specify the amount available for
each purpose.

Summary of fund disbursements. As of September 30, 2020, about $101 billion of the
approximately $145 billion allocated from the Provider Relief Fund had been disbursed to
providers. The amount disbursed was less than the amount allocated because some of the
disbursements were in progress and HRSA told us that providers had declined about $5 billion
so far from previous disbursements; those funds are available for subsequent allocations. HRSA
told us that the returned funds are not reﬂected in the above table. According to our analysis of
information provided by HRSA, as of September 30, 2020, HHS had disbursed about $46 billion
from general distribution allocations and about $54 billion from the targeted allocations.

Many health systems are structured such that a single health system could be eligible for multiple
allocations, such as the rural health disbursement and the skilled nursing disbursements.
Consequently, many providers received funds from multiple diﬀerent allocations. For example,
one large health system received payments from 11 of the 13 distribution categories resulting
in about $423 million in total payments to this system. A health system in New York received
more than $1.2 billion in payments from 8 allocations. Similarly, a community hospital in Indiana
received two payments from the general distribution and a rural health distribution which, when
combined, amounted to about $5.7 million.

On October 1, 2020, HHS announced it planned to disburse $20 billion in a new general
distribution (Phase III) of the Provider Relief Fund. Health care providers eligible to apply for these
funds include providers who previously were eligible to receive funding from the Provider Relief
Fund, as well as previously ineligible providers, such as those who began practicing in 2020, and
an expanded group of behavioral health providers. (See our enclosure on Behavioral Health.)
Providers had from October 5, 2020, to November 6, 2020, to apply for the Phase III General
Distribution funds.

Provider Relief Fund reporting requirements. According to HRSA guidance issued on October
22, 2020, Provider Relief Fund recipients receiving more than $10,000 will be required to submit
documents to substantiate that funds they received were 1) used for increased health care-related
expenses or lost revenue attributable to COVID-19 and 2) were not reimbursed from another
source.85 Such providers must report use of the funds disbursed in 2020 starting January 15,
2021, with a ﬁrst reporting deadline on February 15, 2021, and a ﬁnal deadline of July 31, 2021, for
providers who did not fully spend funds prior to December 31, 2020. For all payments received,
regardless of the disbursement amount, the provider must abide by the disbursement-speciﬁc
terms and conditions and be able to meet the Provider Relief Fund reporting requirements that

85HRSA initially issued guidance on September 19, 2020, for reporting on the use of Provider Relief Fund distributions.
In response to concerns raised, HRSA amended the reporting instructions on October 22, 2020, to increase ﬂexibility
around how providers can apply Provider Relief Fund money toward lost revenues attributable to COVID-19.HRSA told
us providers that receive $10,000 or less in the aggregate from the Provider Relief Fund are not required to report.
HRSA told us that overall, providers who are subject to the reporting requirement received more than 99 percent of the
Provider Relief Fund payments. As of September 21, 2020, about 254,000 providers had received payments of $10,000
or less, for a total of about $730 million. These requirements do not apply to the Nursing Home Infection Control
distribution or the Rural Health Clinic Testing distribution.

Page 56 GAO-21-191
document how the funds were used to meet the Provider Relief Fund statutory mandates. If the
provider subsequently determines it cannot meet the terms and conditions for the respective
disbursement and/or cannot meet the reporting requirements, the provider must return the
funds.

According to the guidance, providers are required to document health care-related expenses
attributable to COVID-19 that another source has not reimbursed and is not obligated to
reimburse. Payment amounts not fully expended on health care expenses attributable to
COVID-19 are then applied to lost revenues, represented as negative changes in year-over-year,
actual revenue from patient care-related sources net of health care-related expenses attributable
to COVID-19. Recipients may apply Provider Relief Fund payments toward lost revenue, the
diﬀerence between their 2019 and 2020 actual patient care revenue.

HRSA told us that if a provider received funding but is subsequently identiﬁed to be ineligible,
such as having been terminated from participation in Medicare, HRSA will send a notiﬁcation letter
(referred to as a Debt Demand letter) to the provider requesting the provider return the Provider
Relief Funds. If the provider does not return the funds in response to the Debt Demand letter,
then HRSA will refer the debt to the Program Support Center, which has the authority to collect
the funds themselves or with the aid of the Department of the Treasury and the Department of
Justice.

Accelerated and Advance Payments Program. Under the expanded Accelerated and Advance
Payments Program, amended by the CARES Act, CMS made accelerated and advance payments
totaling about $106.5 billion as of October 8, 2020. The preponderance of the programs’ loans
($78.4 billion) went to short-stay hospitals. Skilled nursing facilities borrowed $3.2 billion and
critical access hospitals, $2.6 billion.86 In total, Medicare Part B providers and suppliers received
$8.5 billion, about 8 percent of the total amount advanced by CMS. Overall, 25 hospitals or health
systems borrowed more than $250 million each. The largest accelerated payment, about $990
million, went to a health care organization based in California.

Initially, recoupment of the accelerated and advance payments, through the oﬀsetting of new
Medicare claims, was to begin not more than 120 days after the funds were disbursed and
continue for 3 or 8 months, depending on the type of provider or supplier. Thus, recoupment was
scheduled to begin in late July 2020. However, the Continuing Appropriations Act, 2021 and Other
Extensions Act included a provision that delayed repayment until 1 year after the accelerated
or advance payment was made, with recoupment of Medicare payments owed to providers
beginning at 25 percent for the ﬁrst 11 months, and at 50 percent for the following 6 months.87
The provision also allows 29 months from the date of the ﬁrst payment to a provider or a supplier
before requiring the outstanding balance be paid in full.

86These ﬁgures reﬂect $100.3 billion in loans that were distributed to providers as of May 8, 2020. See Department of
Health and Human Services, Centers for Medicare & Medicaid Services, Medicare Accelerated and Advance Payments State-
by-State and by Provider Type, May 8, 2020. On October 8, 2020, CMS announced that it had made additional loans of $6.2
billion, but did not describe the types of providers receiving the new loans. We will follow up on this issue in future work.
87Pub. L. No. 116-159, § 2501, 134 Stat. 709, 733 (2020).

Page 57 GAO-21-191
Agency Comments
We provided HHS and the Oﬃce of Management and Budget (OMB) with the draft of this
enclosure. HHS provided technical comments on this enclosure, which we incorporated as
appropriate. OMB did not provide comments on this enclosure.

GAO’s Methodology
To conduct our work, we examined publicly released HHS information, and obtained information
from CMS and HRSA in the form of written responses to questions, documents, and datasets. Our
review of the data sources we used provides reasonable assurance of the data’s reliability.

Contact information: James Cosgrove, (202) 512-7114, cosgrovej@gao.gov

Page 58 GAO-21-191
Nursing Homes
Nursing homes continue to face COVID-19 challenges, including those related to testing,
restrictions on nursing home visitors, personal protective equipment shortages, and staﬃng
shortages.

Entities involved: Centers for Disease Control and Prevention and Centers for Medicare &
Medicaid Services, both within the Department of Health and Human Services.

Recommendation for Executive Action
We are making the following recommendation to the Administrator of the Centers for Medicare &
Medicaid Services:

The Administrator of the Centers for Medicare & Medicaid Services should quickly develop a plan
that further details how the agency intends to respond to and implement, as appropriate, the
27 recommendations in the ﬁnal report of the Coronavirus Commission on Safety and Quality
in Nursing Homes, which the Centers for Medicare & Medicaid Services released on September
16, 2020. Such a plan should include milestones that allow the agency to track and report on the
status of each recommendation; identify actions taken and planned, including areas where the
Centers for Medicare & Medicaid Services determined not to take action; and identify areas where
the agency could coordinate with other federal and nonfederal entities.

Key Considerations and Future GAO Work
In September 2020, we recommended that the Secretary of Health and Human Services, in
consultation with the Centers for Medicare & Medicaid Services (CMS) and the Centers for Disease
Control and Prevention (CDC), develop a strategy to capture more complete data on conﬁrmed
COVID-19 cases and deaths in nursing homes retroactively back to January 1, 2020, and to clarify
the extent to which nursing homes have reported data before May 8, 2020. We recommended
that this strategy to capture more complete data should, to the extent feasible, incorporate
information nursing homes previously reported to the CDC or to state or local public health
oﬃces.

The Department of Health and Human Services (HHS) partially agreed with this recommendation
by noting the value of having complete data, but expressed concern about the burden of collecting
it. As of October 23, 2020, no speciﬁc actions have been taken by HHS, though the department
indicated that it continues to consider how to implement this recommendation. We maintain the
importance of collecting these data to inform the government’s continued response and recovery,
and we believe that HHS could ease the burden by incorporating data previously reported to CDC
or to state or local public health oﬃces.

Page 59 GAO-21-191
Since September 2020, we have identiﬁed new concerns related to the completeness of HHS’s
response to the recommendations of the Coronavirus Commission on Safety and Quality in
Nursing Homes (which we refer to as the Nursing Home Commission); to CMS’s initiative to
provide nursing homes with antigen diagnostic tests for COVID-19, which have been underutilized
by nursing homes; and to restrictions on nursing home visitors, which have negatively aﬀected
residents’ mental and physical health. In addition, we have ongoing concerns with testing,
personal protective equipment (PPE), and staﬃng shortages in nursing homes that we will
continue to examine in future reports. We also have ongoing work on oversight of infection
prevention and control and emergency preparedness in nursing homes.

Background
The health and safety of the 1.4 million elderly or disabled residents in the nation’s more than
15,000 Medicare- and Medicaid-certiﬁed nursing homes—who are often in frail health and living in
close proximity to one another—has been a particular concern during the COVID-19 pandemic.88
CMS, an agency within HHS, is responsible for ensuring that nursing homes meet federal quality
standards to participate in the Medicare and Medicaid programs. To monitor compliance with
these standards, CMS enters into agreements with state survey agencies in each state government
to conduct inspections, including recurring comprehensive standard surveys and as-needed
investigations.

Congress appropriated $100 million in the CARES Act for this oversight, and it directed CMS to
prioritize the use of funds for nursing home facilities in localities with community transmission of
COVID-19.89 According to CMS, of this amount, the agency plans to provide state survey agencies
approximately $81 million through September 30, 2023, to be used to ensure that all nursing
homes receive targeted infection control surveys, among other things.90 According to CMS, it has
set aside the remaining $19 million to enhance survey system technology, to fund PPE for federal
surveyors, and to implement improvements recommended by the Nursing Home Commission.
In addition, HHS announced in May that it would contribute $4.9 billion from the Provider Relief
Fund, established with funds provided under the CARES Act, as direct payments to assist nursing
homes with responding to COVID-19. In July, HHS announced that it would provide an additional
$5 billion from the fund.

In response to the pandemic, HHS, primarily through CMS and CDC, has taken a range of actions
to address infection prevention and control in nursing homes, which we reported on in our June
and September 2020 reports. These actions include providing guidance and technical assistance

88COVID-19 has aﬀected vulnerable populations in other settings beyond nursing homes, including assisted living
facilities. However, as the federal role in oversight of nursing homes is more signiﬁcant than in other settings such as
assisted living facilities, the federal response has been more focused on nursing homes.
89Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 557 (2020).
90According to CMS, as of August 31, 2020, it has obligated $15 million out of a planned $17 million in ﬁscal year 2020.

Page 60 GAO-21-191
to nursing homes to improve infection control practices and shifting to targeted infection control
surveys of nursing homes.91

Overview of Key Issues
COVID-19 cases and deaths in nursing homes. According to CDC case-reporting data, as of
October 4, 2020, about 91 percent of Medicare- and Medicaid-certiﬁed U.S. nursing homes had
reported at least one conﬁrmed resident or staﬀ case, and about 46 percent had reported at least
one resident or staﬀ COVID-19 death.92 Also as of October 4, nursing homes had cumulatively
reported a total of 252,785 resident and 206,052 staﬀ conﬁrmed cases of COVID-19, along with
59,576 resident and 954 staﬀ deaths as a result of the virus—about 29 percent of the total
COVID-19 deaths across the U.S. (208,821 as of October 4, as reported by CDC).

Examining the data over time, for the weeks ending May 31 to October 4, there have been
ﬂuctuations in new weekly conﬁrmed cases and deaths, with both decreasing slightly in June,
increasing to a peak in the week ending July 26, at 11,872 resident and 11,875 staﬀ conﬁrmed
cases, and then gradually decreasing through the end of September.93 (See ﬁgure.) Combined
nursing home resident and staﬀ deaths from COVID-19, as a percentage of total COVID-19 deaths
in the U.S., remained largely unchanged throughout this time period (increasing slightly from
about 28 percent on May 31 to about 29 percent on October 4), indicating that the changing
weekly COVID-19 death counts in nursing homes paralleled changes in the country as a whole.

91Compared to standard surveys, which are comprehensive, targeted infection control surveys use a more streamlined
review checklist. According to CMS, this is to minimize the impact on provider activities while ensuring that providers are
implementing actions to protect the health and safety of individuals in response to the COVID-19 pandemic.
92A conﬁrmed case is deﬁned as having a positive COVID-19 test resulting from a molecular test, a nucleic acid test, or
an antigen test, including antigen point of care test results. These numbers are likely underreported because they do
not include data for the 818 nursing homes (about 5.3 percent) that did not report COVID-19 data to CDC for the week
ending October 4, 2020 or that submitted data that failed data quality assurance checks. Additionally, as we reported in
September, CMS does not require nursing homes to report data prior to May 8, 2020; while some nursing homes may
have reported such data, the data set does not currently identify which reported cases and deaths occurred prior to May
8. We recommended that the Secretary of Health and Human Services—in consultation with CMS and CDC—develop
a strategy to capture more complete data on conﬁrmed COVID-19 cases and deaths in nursing homes retroactively to
January 1, 2020.
93The week ending May 31 is the ﬁrst single week of data reported to CDC. The only earlier week of data, for the week
ending May 24, could potentially include cases and deaths for multiple weeks dating back to January 1, 2020, for those
homes which voluntarily reported such data, and is therefore not comparable with data for other weeks.

Page 61 GAO-21-191
Weekly Conﬁrmed COVID-19 Cases and Deaths among U.S. Nursing Home Residents and Staﬀ, as Reported by
Medicare- and Medicaid-Certiﬁed Nursing Homes, Weeks Ending May 31, 2020 through October 4, 2020

Notes: Dates refer to the end of a week (e.g., May 31 refers to the entire week from May 25 through May 31).
We excluded data for the week ending May 24, 2020 because it is the ﬁrst week for which data are available from the Centers
for Disease Control and Prevention (CDC) and could include cases and deaths from multiple weeks dating back to January 1,
2020.
Weekly and cumulative case and death counts are likely underreported because they do not include data for the nursing homes
that did not report COVID-19 data to CDC for that week or from nursing homes that submitted data that failed data quality
assurance checks. Additionally, as we reported in September, the Centers for Medicare & Medicaid Services (CMS) does not
require nursing homes to report data prior to May 2020, although nursing homes may do so voluntarily. We recommended that
the Secretary of Health and Human Services—in consultation with CMS and CDC—develop a strategy to capture more complete
data on conﬁrmed COVID-19 cases and deaths in nursing homes retroactively to January 1, 2020.
Weekly staﬀ deaths reported for the weeks ending May 31 through October 4 ranged from 19 (week ending September 20) to
68 (week ending May 31).

Results from required targeted infection control surveys. State survey agencies have been
conducting targeted infection control surveys and high-priority complaint investigations in nursing

Page 62 GAO-21-191
homes rather than traditional comprehensive standard surveys and lower priority complaint
investigations since March.94 According to CMS, as of September 30, 2020, 15,351 nursing homes
(100 percent) nationwide had received a targeted infection survey or high-priority complaint
investigation.

In our review of the survey results, we found that about 5 percent of the nursing homes (742
out of 14,232 homes) receiving targeted infection control surveys or high priority complaint
investigations from March 4 through August 31, 2020, had infection control deﬁciencies.95
Examples of the infection control deﬁciencies cited included lack of, or incorrect use of, PPE;
challenges related to identifying and isolating residents diagnosed with COVID-19; and staﬃng
shortages. About 90 percent of the infection control deﬁciencies from the targeted infection
control surveys were classiﬁed by surveyors as not severe, meaning the surveyor determined that
residents were not harmed, but the potential for harm existed based on the facility’s practices;
nearly all of the remaining deﬁciencies were classiﬁed as presenting immediate jeopardy to
resident health or safety. On August 17, CMS authorized traditional comprehensive standard
surveys and lower-priority complaint investigations to resume as soon as state survey agencies
have the resources, such as staﬀ and PPE.96

Nursing Home Commission report. In June 2020, CMS announced the establishment of the
Nursing Home Commission, consisting of 25 members representing nursing home residents,
owners, and administrators; consumer advocates; infectious disease experts; academics;
state authorities; and others. The Nursing Home Commission was tasked with conducting a
comprehensive and independent assessment of the response to the COVID-19 pandemic in
nursing homes and delivering a report to CMS in early fall 2020. CMS has said the purpose of
the report is to inform immediate and future responses to COVID-19 in nursing homes. CMS
released the Nursing Home Commission’s ﬁnal report in September 2020, which includes 27
recommendations organized under 10 themes—such as Testing and Screening, Equipment and
PPE, and Visitation—that are paired with over 100 speciﬁc action steps for CMS.97

94States had until July 31, 2020, to complete the targeted infection surveys in all nursing homes or be subject to
corrective action plans and then they had an additional 30 days to complete their surveys to avoid a reduction of their
CARES Act supplemental funding. See Department of Health and Human Services, Centers for Medicare & Medicaid
Services, COVID-19 Survey Activities, CARES Act Funding, Enhanced Enforcement for Infection Control Deﬁciencies, and Quality
Improvement Activities in Nursing Homes,QSO-20-31-All, (Baltimore, Md.: June 1, 2020).
95At the time of our review, CMS had posted data on the completion status for targeted infection surveys and high
priority complaint investigations by state through October 2, 2020. However, the results of these surveys and complaint
investigations were only available through August 31, 2020.
96See Department of Health and Human Services, Centers for Medicare & Medicaid Services, Enforcement Cases Held
During the Prioritization Period and Revised Survey Prioritization,QSO-20-35-ALL, (Baltimore, Md.: Aug. 17, 2020). The August
17 guidance revised survey re-prioritization guidance issued on June 1, which CMS had issued as part of its nursing
home reopening strategy. Speciﬁcally, the June 1 guidance had authorized state survey agencies to expand beyond
conducting targeted infection control surveys and high-priority complaint investigations once a state entered phase
3—a threshold based on factors including case status in the community and the nursing home, as well as access to
testing, PPE, and adequate staﬃng. See Department of Health and Human Services, Centers for Medicare & Medicaid
Services, COVID-19 Survey Activities, CARES Act Funding, Enhanced Enforcement for Infection Control Deﬁciencies, and Quality
Improvement Activities in Nursing Homes, QSO-20-31-ALL, (Baltimore, Md.: June 1, 2020).
97MITRE, Coronavirus Commission on Safety and Quality in Nursing Homes: Commission Final Report, PRS Release Number
20-2382, September 2020.

Page 63 GAO-21-191
CMS released a response to the report broadly outlining the actions that the agency has taken
to date as part of its response to the COVID-19 pandemic, but the agency has not provided
an implementation plan that would allow it to track and report progress toward the Nursing
Home Commission’s recommendations. According to agency oﬃcials, the response released
on September 16, 2020, represents the majority of the eﬀorts that CMS plans to undertake to
address the recommendations. However, as we describe later in this enclosure, CMS has not fully
addressed the Nursing Home Commission’s recommendations.

While CMS may not be obligated to implement all of the Commission’s recommendations, the
response the agency released does not indicate disagreement with any of the recommendations
or indicate areas where the agency does not plan to take action. CMS oﬃcials also stated that
some of the recommendations are outside of CMS’s authority and would be better addressed by
other federal and nonfederal stakeholders. However, as the lead federal agency for nursing home
quality and safety, CMS has an important role in coordinating with stakeholders, especially given
that the agency established the Nursing Home Commission and that CMS’s role in coordinating
with federal, state, and other long-term care stakeholders was directly speciﬁed in multiple
Nursing Home Commission recommendations.

As we have previously reported, fully implementing agency reform eﬀorts, including eﬀorts
to streamline and improve the eﬀectiveness of government operations, requires careful and
close management, such as the development of an implementation plan with key milestones
and deliverables to track implementation progress.98 Successful reforms require an integrated
approach that involves key stakeholders, and it is important for agencies to directly and
continuously involve these key stakeholders—such as other federal partners and state and local
governments—in the development of reform.

Further, standards for internal control state that management should communicate the necessary
quality information externally to achieve the entity’s objectives and address related risks.99 By
developing an implementation plan that includes milestones and deliverables, and that tracks and
reports the actions taken—including areas where CMS has determined not to take action—on the
Nursing Home Commission’s recommendations, CMS could better inform its response, and that of
other key stakeholders, to COVID-19 in nursing homes.

Challenges meeting testing requirements. In September 2020, HHS, through CMS, began
requiring nursing homes to test all staﬀ and residents for COVID-19 as part of its requirements for
the Medicare and Medicaid programs.100 According to CDC data, as of October 4, about 52 percent

98GAO, Government Reorganization: Key Questions to Assess Agency Reform Eﬀorts, GAO-18-427 (Washington, D.C.: June 13,
2018).
99GAO, Standards for Internal Control in the Federal Government, GAO-14-704G (Washington, D.C.: Sept. 10, 2014).
100
Medicare and Medicaid Programs, Clinical Laboratory Improvement Amendments (CLIA), and Patient Protection and
Aﬀordable Care Act; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency;
85 Fed. Reg. 54,820 (Sept. 2, 2020) (to be codiﬁed at 42 C.F.R. § 483.30(h)).
CMS later released guidance on these testing requirements, noting that nursing homes should prioritize testing staﬀ
and residents with symptoms of COVID-19 ﬁrst, followed by performing testing of all staﬀ and residents in the case
of an outbreak, and ﬁnally, routine staﬀ testing based on the degree of community spread, ranging from testing staﬀ
once a month in counties with low community spread to twice a week in counties with high community spread. On

Page 64 GAO-21-191
of nursing homes self-reported that they had tested both staﬀ and residents in the prior week,
while about 25 percent reported testing staﬀ only and about 3 percent reported testing residents
only. The number of nursing homes testing for COVID-19 has increased since the week ending
August 16, the ﬁrst week for which testing data were available, when about 35 percent of nursing
homes reported testing both residents and staﬀ in the prior week, about 13 percent reported
testing staﬀ only, and about 9 percent reported testing residents only.

For the week ending October 4, about 200 nursing homes (about 1 percent) reported that they
would be unable to test all staﬀ or residents within the next week, if needed, due to issues such
as a lack of supplies and lack of access to a laboratory. This is an improvement from the week
ending August 16, the ﬁrst week for which testing data were available, when about 1,000 nursing
homes (about 7 percent) reported that they would be unable to test all staﬀ within the next week,
if needed, and about 900 nursing homes (about 6 percent) reported that they would be unable
to test all residents. (For more information on testing for COVID-19, see our COVID-19 Testing
Guidance enclosure.)

National provider association oﬃcials we interviewed said that some nursing homes were
challenged to implement a testing program within the short time frames allowed by the
requirements, especially in states that had not previously prioritized testing. Additionally,
provider association oﬃcials and researchers we interviewed expressed concern about nursing
homes being able to pay for additional testing supplies after using up supplies provided by the
federal government and state governments, with oﬃcials noting that routine staﬀ testing is not
reimbursed by insurance.

Challenges with utilization of HHS tests and testing instruments. Since July 2020, HHS
has procured and distributed antigen diagnostic tests and associated point-of-care (POC)
testing instruments to nursing homes in COVID-19 hotspots across the country.101 From July
through September, the agency distributed two types of antigen POC testing systems, and, as
of September 29, 2020, HHS reported that 13,850 nursing homes had received about 14,000 of
these testing instruments and approximately 4.9 million associated tests.102 Then, beginning in
September, HHS began to distribute a third type of antigen POC testing system to nursing homes.
According to HHS, as of the week ending October 17, 2020, over 5.2 million of these tests had been
distributed to nursing homes.

September 29, 2020, CMS announced an update to the methodology for determining the level of community spread,
adding consideration of the number of tests performed in a county to the existing consideration of a county’s positivity
rate. Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS), CMS Updates COVID-19
Testing Methodology for Nursing Homes (Baltimore, Md.: Sept. 29, 2020), accessed Oct. 1, 2020, https://www.cms.gov/
newsroom/press-releases/cms-updates-covid-19-testing-methodology-nursing-homes.
101Antigen tests are an alternative to molecular tests for diagnosing active COVID-19 infections. See our Testing
Guidance enclosure in this report.
102After the initial distribution of these antigen diagnostic tests and instruments, nursing homes are responsible for
procuring additional tests directly from the manufacturer. National provider association oﬃcials we interviewed told us
that nursing homes have not been able to order additional test supplies for one of the two testing systems, explaining
that HHS had purchased the company’s entire stockpile. By the week ending October 4, 2020, about 12 percent of the
nursing homes that reported having a POC testing machine were reporting that they did not have enough supplies to
test all staﬀ or personnel using their POC testing machine.

Page 65 GAO-21-191
Antigen tests are a new development in nursing homes’ ability to test for COVID-19, as molecular
tests were the only diagnostic test available for the ﬁrst months of the pandemic. The antigen
tests provided by HHS can produce results within approximately 15 minutes, which can be
signiﬁcantly faster than waiting for results from molecular tests, which rely on polymerase-chain
reaction technology and typically must be processed in a laboratory.103 The ability to receive test
results in a timely manner is important so that nursing homes can quickly identify and separate
residents and staﬀ infected with COVID-19 and limit the spread of the disease. This is particularly
true of identifying asymptomatic carriers of the disease, who may show no symptoms. However,
there may also be risks associated with the use of antigen testing; according to the Food and Drug
Administration (FDA), antigen tests have a higher chance of false negatives compared to molecular
tests.104

While the federally provided antigen diagnostic tests and testing instruments could help address
nursing homes’ previously noted challenges obtaining testing supplies and receiving results in
a timely manner, CDC data indicate that many nursing homes are not yet utilizing these tests
and testing instruments. Speciﬁcally, as of the week ending October 4, 2020, about 51 percent
of nursing homes had reported to CDC that they had ever used a POC test for residents or
staﬀ.105 About 15 percent of nursing homes reported that they did not have a POC testing system
available, and about 34 percent reported that they had a POC testing system but had not used
it to test residents or staﬀ. During the period for which testing data are available, the number of
homes that reported ever having tested using the POC testing system was about half the number
that reported any form of testing, indicating that many homes doing testing were still relying on
molecular testing.106

As we describe in our Testing Guidance enclosure in this report, some stakeholder groups
and an expert we interviewed attributed this to confusion about how to use the new antigen
tests, especially with regard to interpreting and reporting the results. See our Testing Guidance
enclosure for more information.

Challenges with restrictions on nursing home visitors. From March through September
2020, CMS restricted visitors and non-essential health care personnel in nursing homes, except

103For example, new CDC data show that, between September 21 and October 4, 2020, about 30 percent of nursing
homes reported an average time of between 3 and 7 days to receive resident test results (33 percent for staﬀ test
results), and another 1 percent reported an average time of more than 7 days for both resident and staﬀ test results.
CDC guidance for COVID-19 testing in nursing homes states that results should be reported in 24 hours or less in order
to facilitate eﬀective interventions, and the CMS testing requirements recommend using laboratories that can report
results within 48 hours.
104FDA states that negative antigen test results may need to be conﬁrmed with a molecular test before making
treatment decisions.
105Testing data are available from CDC beginning with the week ending August 16, 2020. Some nursing homes may have
used POC testing prior to CDC beginning its collection of testing data.
106Between the weeks ending August 16, 2020 and October 4, 2020, when asked about COVID-19 testing in general,
about 12,400 nursing homes reported testing residents at least once and about 13,800 reported testing staﬀ at least
once. By contrast, when asked about POC tests speciﬁcally, only about 5,400 nursing homes reported testing residents
and about 7,100 reported testing staﬀ.

Page 66 GAO-21-191
in certain compassionate care situations, to reduce the transmission of COVID-19.107 According
to national association oﬃcials and a researcher we interviewed, this restriction of visitors has
limited oversight of facilities through the exclusion of resident advocates, such as family members
and ombudsmen, and has negatively aﬀected residents’ mental and physical health.108 The
Nursing Home Commission made four recommendations related to visitation, including that CMS
streamline and consolidate visitation directives, guidance, and resources and help nursing home
staﬀ assess and improve residents’ mental health generally, including after the pandemic.

In response to the Nursing Home Commission’s visitation recommendations, CMS pointed
to, among other things, its visitation guidance, which was issued on September 17. This new
guidance allows nursing homes to resume visitations depending on the degree of community
spread and requires that these visitations be conducted according to a nursing home’s structure
and resident needs.109 The guidance provides various ways a nursing home can safely facilitate
in-person visitation to address the psychosocial needs of residents. For example, it notes that
outdoor visits are preferred due to the reduced risk of transmission, recommends limits on
the number of visitors, and recommends that visitors be tested for COVID-19 prior to visiting.
Although this guidance generally addresses one of the Nursing Home Commission’s four visitation
recommendations, including most of the related action steps, more work remains to address the
other three recommendations. Additionally, while allowing visitors in nursing homes will likely
have positive impacts on the mental and physical health of nursing home residents, it raises new
challenges in light of existing shortages of testing supplies, PPE, and available staﬀ, all of which are
needed to ensure that visits are conducted safely.

PPE challenges persist. The percentage of nursing homes experiencing PPE shortages decreased
from when we reported in September, but shortages remain an issue.110 According to data
nursing homes self-reported to CDC, as of October 4, about 15 percent of nursing homes (a
decrease of 7 percentage points) did not have a one-week supply of at least one of the following:
N95 respirators, surgical masks, gloves, eye protection, or gowns.111 Of these, N95 respirators
were the most needed, with about 12 percent of nursing homes (a decrease of 5 percentage
points) reporting they did not have a one-week supply, followed by surgical gowns (about 9
percent of nursing homes, a decrease of 3 percentage points).

107End-of-life situations are an example of a compassionate care situation. Department of Health and Human Services,
Centers for Medicare & Medicaid Services, Guidance for Infection Control and Prevention of Coronavirus Disease 2019
(COVID-19) in Nursing Homes (REVISED), QSO-20-14-NH (Baltimore, Md.: Mar. 13, 2020). On May 18, 2020, CMS issued
reopening recommendations for nursing homes that generally prohibited visitation until the nursing home entered
phase 3—a threshold based on factors including case status in the community and the nursing home, as well as access
to testing, PPE, and adequate staﬃng. Department of Health and Human Services, Centers for Medicare & Medicaid
Services, Nursing Home Reopening Recommendations for State and Local Oﬃcials, QSO-20-30-NH, (Baltimore, Md.: May 18,
2020).
108CMS guidance states that in-person ombudsmen access should be restricted if there are concerns about infection
control and transmission of COVID-19, although the guidance also emphasizes that facilities must facilitate resident
communication with ombudsmen (e.g., by phone) in cases where in-person access is restricted.
109Centers for Medicare & Medicaid Services, Nursing Home Visitation—COVID-19, QSO-20-39-NH, (Baltimore, Md.: Sept.
17, 2020).
110Our September report covered data nursing homes self-reported to CDC as of July 26, 2020.
111As of October 4, 2020, about 6 percent of nursing homes (a decrease of 2 percentage points) reported that they had
no remaining supplies of at least one of these types of PPE.

Page 67 GAO-21-191
This lack of PPE is particularly challenging because nursing home staﬀ are required to wear
adequate PPE when collecting specimens for required resident and staﬀ COVID-19 testing,
in addition to having adequate supplies of PPE for ongoing resident care. The Nursing Home
Commission made three recommendations related to PPE, including that CMS assume
responsibility for a collaborative process—with federal, state, local, tribal, and territorial
government partners—to ensure that nursing homes can procure and sustain a 3-month supply
of high-quality PPE, and that CMS collaborate with other federal and state agencies to provide
additional PPE guidance.112

Staﬃng challenges persist. The percentage of nursing homes experiencing staﬃng shortages
did not improve from when we reported in September.113 According to data nursing homes self-
reported to CDC, as of October 4, about 19 percent of nursing homes had a shortage of aides (an
increase of 1 percentage point), about 16 percent had a shortage of nursing staﬀ (unchanged),
about 10 percent had a shortage of other staﬀ (an increase of 1 percentage point), and about 2
percent had a shortage of clinical staﬀ (unchanged).114

In addition, required routine testing of staﬀ in nursing homes could exacerbate existing staﬃng
shortages as new cases of COVID-19 are identiﬁed and aﬀected staﬀ are unable to work. The
Nursing Home Commission made nine recommendations related to the nursing home workforce,
including short-term solutions, such as that CMS assess how federal relief funds could be used
for hazard pay, and long-term solutions, such as increasing wages for nursing home staﬀ,
through Medicare and Medicaid payment reform, to disincentivize staﬀ from working for multiple
employers.115

112CMS’s response to the report notes that, among other things, the Federal Emergency Management Agency (FEMA)
provided 14-day supply shipments to nursing homes beginning in April 2020 and that HHS shipped N95 respirators from
the Strategic National Stockpile to nursing homes beginning in August 2020. This consisted of sending a 7-day supply
of N95 respirators to about 3,336 nursing homes. However, one-time shipments of 1- to 2-week supplies of PPE do not
meet the Nursing Home Commission’s recommendation that CMS help homes to sustain a 3-month supply of PPE on an
ongoing basis. Additionally, as we reported in September, there were concerns about the quality and usability of the PPE
supplied by FEMA. CMS told GAO that PPE acquisition is outside the agency’s purview.
113Our September report covered data nursing homes self-reported to CDC as of July 26, 2020.
114According to CDC, aides include certiﬁed nursing assistants, nurse aides, medication aides, and medication
technicians; nursing staﬀ include registered nurses, licensed practical nurses, and vocational nurses; clinical staﬀ include
physicians, physician assistants, and advanced practice nurses; and other staﬀ include any staﬀ not included in the
other three categories, such as cooks, pharmacists, and physical therapists.
115CMS’s response to the Nursing Home Commission’s report indicated that the agency had taken some actions
related to these recommendations. However, according to our analysis, these actions do not fully address the
recommendations. For example, the Nursing Home Commission recommended that CMS identify and deploy infection
preventionist resources to provide immediate assistance to nursing homes without full-time infection prevention
support, prioritizing facilities in COVID-19 hotspots. In response, CMS said that the agency had encouraged collaboration
between nursing homes and hospitals to help with infection prevention best practices; while potentially helpful, this
action does not directly address the Nursing Home Commission’s concern.

Page 68 GAO-21-191
Agency Comments
We provided HHS and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
HHS provided general comments, which are reproduced in Appendix IV. In its comments,
HHS neither agreed nor disagreed with our recommendation to quickly develop a plan that
further details how the agency intends to respond to and implement, as appropriate, the
recommendations in the Nursing Home Commission’s ﬁnal report. HHS oﬃcials highlighted
actions that CMS has taken related to Commission recommendations and said it would refer to
and act upon the Commission’s recommendations, as appropriate. We maintain that developing
a plan that details how CMS will proceed with remaining recommendations, includes milestones,
and demonstrates coordination with other federal and nonfederal stakeholders would improve
CMS’s ability to systematically consider the Commission’s recommendations going forward.

HHS also provided technical comments, which we incorporated as appropriate. OMB did not have
comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed CMS and CDC data, agency guidance, the Nursing Home
Commission ﬁnal report, and other relevant information on HHS’s response to the COVID-19
pandemic. We also spoke to CMS and CDC oﬃcials, as well as representatives from national
organizations representing nursing homes, residents, and their families, and researchers with
experience in nursing home infection control.

In addition, we analyzed CMS data on targeted infection control surveys and complaint
investigations conducted in nursing homes, which included data from March 4, 2020 through
August 31, 2020, and CDC data on COVID-19 reported by nursing homes for the week ending
October 4, 2020.116 We analyzed the CDC data as they were reported by nursing homes to CDC
and publicly posted by CMS.

We did not otherwise independently verify the accuracy of the information with these nursing
homes. We assessed the reliability of the data sets used in our analyses by checking for missing
values and obvious errors and reviewing relevant CMS and CDC documents. We determined the
data were suﬃciently reliable for the purposes of our reporting objective.

Contact information: John E. Dicken, (202) 512-7114, dickenj@gao.gov

116We analyzed the most recent data available on October 15, 2020. The CMS targeted infection control and complaint
surveys were accessed on September 30, 2020, from https://www.cms.gov/ﬁles/zip/nursing-home-infection-control-
surveys.zip. The CDC data on COVID-19 in nursing homes were accessed on October 15, 2020, for the week ending
October 4, 2020, from https://data.cms.gov/Covid19-nursing-home-data. For the data on COVID-19 in nursing homes, we
analyzed and reported data that had been determined by CDC and CMS to pass quality assurance checks.

Page 69 GAO-21-191
Related GAO Products
Infection Control Deﬁciencies Were Widespread and Persistent in Nursing Homes Prior to COVID-19
Pandemic. GAO-20-576R. Washington, D.C.: May 20, 2020.

Science & Tech Spotlight: COVID-19 Testing. GAO-20-584SP. Washington, D.C.: May 20, 2020.

Nursing Homes: Better Oversight Needed to Protect Residents from Abuse. GAO-20-259T. Washington,
D.C.: November 14, 2019.

Page 70 GAO-21-191
Strategic National Stockpile
The Department of Health and Human Services, in conjunction with federal partners, has taken
steps to replenish and expand the portfolio of supplies in the Strategic National Stockpile to
enable the Department to respond to a potential resurgence of COVID-19 and future public health
emergencies.

Entities involved: Department of Defense; the Federal Emergency Management Agency, within
the Department of Homeland Security; and the Oﬃce of the Assistant Secretary for Health and the
Oﬃce of the Assistant Secretary for Preparedness and Response, within the Department of Health
and Human Services.

Key Considerations and Future GAO Work
In June 2020, we reported that the Administration planned to restructure the Strategic National
Stockpile (SNS), overseen by the Department of Health and Human Services’ (HHS) Oﬃce of the
Assistant Secretary for Preparedness and Response (ASPR), based on lessons learned from recent
pandemics, including COVID-19.

In September 2020, we reported on some of these restructuring plans, including eﬀorts to build
a 90-day supply of certain key items. We found that ASPR had made progress in meeting the
agency’s goal of building a 90-day supply to prepare for potential surges in COVID-19 cases. In
addition, we noted then that ASPR planned to add some materials, such as testing supplies, which
had not been held in the SNS prior to COVID-19.

We also previously reported that the Food and Drug Administration had identiﬁed shortages of
certain supplies, including personal protective equipment (PPE) and testing supplies, many of
which the SNS is trying to acquire.117 These shortages are expected to last for the duration of the
pandemic, according to the Food and Drug Administration.

The continued need for supplies by state, tribal, and territorial governments, as well as point-of-
care providers, such as nursing homes, combined with continued supply chain constraints may
present challenges to ASPR in achieving its goal of building a 90-day supply by the end of 2020.
ASPR has also begun other eﬀorts to modernize the SNS to better position it to respond to future
pandemics, according to agency oﬃcials. We will continue to monitor ASPR’s eﬀorts, which are still
in the early stages of development.

117See Food and Drug Administration, Medical Device Shortages During the COVID-19 Public Health Emergency, (Sept.
24, 2020), accessed November 7, 2020, https://www.fda.gov/medical-devices/coronavirus-covid-19-and-medical-devices/
medical-device-shortages-during-covid-19-public-health-emergency.

Page 71 GAO-21-191
Background
We previously reported that the nationwide need for critical PPE and other supplies to protect
responders and to treat individuals sickened with COVID-19 exceeded the quantity contained
in the SNS. In March 2020, ASPR began distributing supplies from the SNS to states and other
entities, and within 1 month, the inventory of requested supplies was largely exhausted.118

According to ASPR oﬃcials, the SNS was not designed or funded to provide states with supplies at
the scale necessary to respond to a nationwide event such as the COVID-19 pandemic. However,
in response to lessons learned thus far from the COVID-19 response, ASPR has begun eﬀorts
to reassess, replenish, and restructure the SNS. These eﬀorts, referred to as “SNS 2.0: Next
Generation,” are intended to create a modernized stockpile that will, among other things, ensure
a suﬃcient reserve of all major items associated with COVID-19-like pandemics on a nationwide
scale, according to ASPR’s website and other information regarding its modernization plans.

Although overall responsibility for modernizing the SNS belongs to ASPR, multiple federal agencies
have contributed to these eﬀorts. (See ﬁgure below.)

• The Supply Chain Task Force, now known as the Supply Chain Advisory Group, was one of eight
task forces run by the Uniﬁed Coordination Group.119 This group was tasked with maximizing
the nationwide availability of supplies needed for the COVID-19 response. This included
providing advice on how the SNS could better position itself to respond to the ongoing
pandemic and future pandemics.

• The Department of Defense (DOD), including through its Joint Acquisition Task Force which
became the Defense Assisted Acquisition Cell on September 30, 2020, executed multiple
contracts on behalf of ASPR, including for the purchase of supplies to replenish the SNS.120

• The Logistics, Supply Chain, Next Generation SNS Work Group, comprised of representatives
from various federal agencies and the White House, was formed to develop and implement
objectives and activities that would enable the SNS “to better protect the health and safety
of the nation.” One area of focus for this group was determining and acquiring the critical

118The SNS maintains an $8 billion supply of other materials, such as antibiotics, vaccines, antitoxins, and antivirals,
according to HHS oﬃcials.
119As of June 2020, the Supply Chain Task Force led by a logistics expert on detail from the Department of
Defense (DOD) transitioned into the Supply Chain Advisory Group. In contrast to the Supply Chain Task Force,
the Advisory Group has an advisory and assistance role, focused on transitioning responsibilities to other federal
stakeholders. We refer to the Supply Chain Task Force as the Supply Chain Advisory Group in this enclosure. The
Uniﬁed Coordination Group is the primary ﬁeld entity for the federal response. The group integrates diverse federal
authorities and capabilities and coordinates federal response and recovery operations. The Uniﬁed Coordination
Group is jointly led by the Administrator of the Federal Emergency Management Agency (FEMA), the Assistant
Secretary for Preparedness and Response, and a representative of the Centers for Disease Control and Prevention.
120DOD established the Joint Acquisition Task Force on March 25, 2020, to support the acquisition needs of federal
agencies in their public health response activities and to provide access to DOD’s acquisition capabilities, tools, and
skill sets. On September 30, 2020, DOD created the Defense Assisted Acquisition Cell to provide policy guidance and
oversight of future DOD support to interagency partners.

Page 72 GAO-21-191
items to hold in the SNS to enable it to respond to the needs of the nation in the event of a fall
resurgence of COVID-19.

This work group was also responsible for determining inventory requirements and strategies to
meet future surges in demand. Many of the objectives and activities outlined by this Work Group
are still in progress although the Work Group itself no longer exists, according to ASPR oﬃcials.

Federal Entities Involved in Management of the Strategic National Stockpile (SNS) Supplies during the COVID-19
Pandemic

a
The White House Coronavirus Task Force, chaired by the Vice President, is responsible for coordinating a whole-of-government
response to COVID-19.
b
The Secretary for Health and Human Services transferred the responsibility for the control and maintenance of the SNS
from the Centers for Disease Control and Prevention to the Oﬃce of the Assistant Secretary for Preparedness and Response

Page 73 GAO-21-191
(ASPR) in October 2018. Allocation and distribution of supplies from the SNS at certain times during the COVID-19 pandemic
were made by the UCG and implemented by ASPR’s Division of the SNS; however, ASPR always maintained control of the SNS,
according to ASPR and Federal Emergency Management Agency oﬃcials. In addition, although the Department of Defense
(DOD) made procurements to replenish the SNS and managed the awarded contracts, ASPR set the procurement requirements
and provided funding, according to ASPR and DOD oﬃcials.

The four relief laws enacted to assist the COVID-19 response as of November 1, 2020,
appropriated funding for HHS activities including, but not limited to, the SNS.121 As of October
31, 2020, HHS reported it obligated $8.9 billion of the $10.7 billion it planned to use for the SNS
to purchase PPE and ventilators for immediate use as well as to replenish SNS inventory, among
other purposes, and had expended about $4.1 billion.

Overview of Key Issues
ASPR has made progress toward replenishing and expanding the SNS inventory despite facing
challenges due to supply chain constraints. The agency and its federal partners identiﬁed the most
critical types of supplies needed in the COVID-19 pandemic and developed a 90-day supply target
for each type of item. ASPR’s progress in amassing 90 days of supplies varies by item as shortages
of certain items—such as nitrile gloves—continue and other challenges aﬀect progress.

ASPR anticipates that it will reach its 90-day supply inventory targets for many items by the end
of the year. As ASPR moves towards completion of this immediate goal, it continues to address
additional goals such as determining how to best manage the inventory to meet future surges in
demand and the agency plans to add other supplies not previously held in the SNS.

Identiﬁcation and acquisition of critical supplies for the SNS. ASPR and its federal
partners determined the SNS needed to acquire a 90-day supply of three categories of critical
supplies—PPE, pharmaceuticals, and testing supplies—based on requests received from states
and other entities during the response eﬀort and recommendations from the Supply Chain
Advisory Group and the Oﬃce of the Assistant Secretary for Health (OASH), within HHS.

Depending on the item, oﬃcials with the Supply Chain Advisory Group, the Logistics, Supply Chain
Next Generation SNS Work Group, or OASH developed 90-day targets for obtaining the three
categories of critical supplies it identiﬁed. ASPR oﬃcials explained that 90 days is the amount
of time manufacturers told them it would take to ramp up production of respiratory devices to
meet surges in demand. Thus, having a 90-day supply in the SNS would enable it to serve as a
short-term stop-gap buﬀer until the commercial supply chain can meet demand. ASPR’s progress
towards acquiring these critical supplies at the target volume levels varies by item.

PPE. Based on input from the Supply Chain Advisory Group, ASPR decided to build a 90-day
inventory of PPE to include the most requested PPE during COVID-19: gloves, N95 respirators,

121As of November 1, 2020, the four relief laws enacted to assist the response to COVID-19 were the Coronavirus
Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134 Stat. 146; Families First
Coronavirus Response Act, Pub. L. No. 116-127, 134 Stat. 178 (2020); CARES Act, Pub. L. No. 116-136, 134 Stat. 281
(2020); and Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620 (2020).

Page 74 GAO-21-191
surgical and procedural masks, gowns and coveralls, and eye protection such as face shields,
according to federal oﬃcials.

In September 2020, ASPR oﬃcials reported that with one exception, they had awarded contracts
that would enable them to acquire a 90-day inventory of those PPE items by the end of 2020.
Some of the contracts included a priority rating, which according to the Defense Production Act,
requires a contractor to give preference to these contracts over any other unrated contracts if the
contractor cannot meet all required delivery date needs for all contracts.122

In October 2020, ASPR oﬃcials told us that ASPR and DOD had awarded about $1.8 billion to
acquire a 90-day inventory of PPE (ASPR awarded 13 contracts totaling about $606.8 million and
DOD had awarded 29 contracts totaling about $1.2 billion). ASPR oﬃcials told us that a contract
awarded by DOD for nitrile gloves was not fulﬁlled because the subcontractor sold them to
another entity, but that DOD was continuing to work with the contractor to ﬁll the order. According
to ASPR oﬃcials, while this did not result in a loss of government funds, ASPR may not meet the
90-day supply target for gloves by the end of the year. ASPR oﬃcials told us they will continue to
coordinate with DOD to acquire gloves, which continue to be in short supply. (See table below for
more on the SNS’s inventory, before and during COVID-19, through October 2020.)

122See 50 U.S.C. § 4511.

Page 75 GAO-21-191
Strategic National Stockpile Personal Protective Equipment Inventory and Status of Contract Awards

Dec. 2019 July 2020 Oct. 2020 Planned
Personal protective Status of contract inventory on inventory on inventory on 90-day
a b
equipment awards as of Oct. 2020 hand hand hand inventory

Gloves ◒ 16.9 million 1 million 2 million 4.5 billion

N95 respirators ● 12.6 million 38 million 107 million 300 million

Surgical or procedural ● 30.8 million 8 million 157 million 400 million
masks

Gowns or coveralls ● 4.8 million 1.2 million 1 million 265 million

Eye protection or face ● 5.8 million 1.2 million 19 million 18 million
shields

Legend:
● The Oﬃce of the Assistant Secretary for Preparedness and Response (ASPR) oﬃcials noted that they had awarded all contracts that
will enable the Strategic National Stockpile (SNS) to meet the planned 90-day inventory targets.
◒ ASPR oﬃcials noted they had awarded some, but not all, contracts that would enable the SNS to meet the 90-day inventory targets.
Source: Oﬃcials with the Oﬃce of the Assistant Secretary for Preparedness and Response within the Department of Health and Human Services. | GAO-21-191

Note: The SNS continues to deploy supplies in response to requests and to certain health care providers, such as nursing
homes. These deployments may aﬀect the ability to reach the SNS inventory targets, according to ASPR oﬃcials. Deployments
could also result in some ﬂuctuation in inventory quantities over time.
a
The inventory on hand as of December 2019 was procured in response to the 2009 H1N1 pandemic, according to ASPR
oﬃcials.
b
The 90-day supply inventory goals were established during the COVID-19 pandemic, according to ASPR oﬃcials.

Pharmaceuticals. ASPR and FEMA oﬃcials told us that the pandemic called attention to the need
for the SNS to have in its inventory sedatives for use with ventilators, and other drugs, such as an
antibiotic, not previously contained in the SNS. An initial set of these drugs were identiﬁed by the
Supply Chain Advisory Group in consultation with various health care stakeholders, according to
ASPR and FEMA oﬃcials. Later, HHS and the Supply Chain Advisory Group identiﬁed additional
priority drugs. In total, the SNS is building an inventory of 21 ﬁnished pharmaceuticals.

In addition, ASPR plans to include 25 active pharmaceutical ingredients in the SNS inventory,
although these products will be stored by the product vendor.123 Below (ﬁgure) are groups of
pharmaceutical products ASPR will include in its 90-day supply inventory based on their primary
uses.

123An active pharmaceutical ingredient refers to any substance that is intended for incorporation into a ﬁnished
pharmaceutical and is intended to furnish pharmacological activity or other direct eﬀect in the diagnosis, cure,
mitigation, treatment, or prevention of disease, or to aﬀect the structure or any function of the body.

Page 76 GAO-21-191
Primary Use of Pharmaceutical Products the Oﬃce of the Assistant Secretary for Preparedness and Response
Will Include in the Strategic National Stockpile

ASPR oﬃcials told us the agency awarded all of the contracts needed to supply the SNS with these
ﬁnished pharmaceuticals, and anticipated acquiring a 90-day supply of these drugs by the end of
2020. In October 2020, ASPR oﬃcials told us they had awarded seven contracts totaling $129.1
million for these supplies.

Additionally, according to ASPR oﬃcials in October 2020, the agency was evaluating technical
proposals received in response to the agency’s solicitation for the production and storage of active
pharmaceutical ingredients and planned to award contracts by the end of October 2020. ASPR
oﬃcials told us that they intend to have an initial quantity of active pharmaceutical ingredients
under the control of the SNS by the end of 2020; however, the amounts will be dependent on their
availability and cost.124 (See table below for more on the SNS’s contract awards and inventory
through October 2020.)

124We have ongoing work examining overseas manufacturing of critical pharmaceutical products purchased by federal
agencies and the extent to which federal eﬀorts exist to overcome barriers to domestic drug manufacturing.

Page 77 GAO-21-191
Status of Strategic National Stockpile Pharmaceutical Contract Awards and Inventory
Status of contract
Dec. 2019 inventory on awards to meet 90-day Status of 90-day
a
Pharmaceuticals Hand inventory as of Oct. 2020 inventory as of Oct. 2020

Finished pharmaceuticals 8 of 21 products stocked ● ◒
(21 products)

Active pharmaceutical 0 of 25 ingredients stocked ○ ○
ingredients
b
(25 ingredients)

Legend:
● Completed.
◒ Partially completed.
○ No contract awards made or no pharmaceutical products acquired.
Source: Oﬃcials with the Oﬃce of the Assistant Secretary for Preparedness and Response (ASPR) within the Department of Health and Human Services. | GAO-21-191

Note: The Strategic National Stockpile is building an inventory of pharmaceutical products in response to the COVID-19
pandemic: it will include 21 ﬁnished pharmaceuticals.
a
The 90-day supply inventory goals were established during COVID-19, according to ASPR oﬃcials.
b
An active pharmaceutical ingredient refers to any substance that is intended for incorporation into a ﬁnished pharmaceutical
and is intended to furnish pharmacological activity or other direct eﬀect in the diagnosis, cure, mitigation, treatment, or
prevention of disease, or to aﬀect the structure or any function of the body.

Testing supplies. HHS’s OASH, which leads federal eﬀorts to support states in their COVID-19 testing
plans and directs ASPR oﬃcials on the stockpiling of testing supplies, identiﬁed the need to build
a 90-day supply of nasal swabs, transfer media, and pipette tips (disposable plastic attachments
used to uptake and dispense small volumes of liquid) in the SNS. Prior to COVID-19, the SNS did
not hold these testing supplies.125 According to an OASH oﬃcial with responsibility for testing
supply acquisition, additional testing supplies may be added to the SNS in the future.

As of November 2020, ASPR had completed contract awards for some testing supplies. Speciﬁcally,
at the direction of OASH, ASPR focused on acquiring swabs and transport media to ﬁll states’
needs for these supplies. In November 2020, ASPR oﬃcials told us that they had awarded seven
contracts and obligated about $122 million for the purchase of nasal swabs and transport
media.126 ASPR oﬃcials told us they distribute these supplies to states and other entities at the
direction of OASH and any surplus is added to the SNS on a weekly basis.

125The COVID-19 Strategic Testing Plan that HHS issued in May 2020 identiﬁed additional testing supplies such as
collection tubes and pipettes that the SNS would stockpile; however, an OASH oﬃcial we spoke with in October 2020
noted changes in these plans. For example, this individual told us that collection tubes and transport media are now
packaged together, so there is no longer a need to purchase (and stock) tubes separately in the SNS. Department of
Health and Human Services (HHS), Report to Congress: COVID-19 Strategic Testing Plan (May 24, 2020). HHS is required
under the Paycheck Protection Program and Health Care Enhancement Act to update the plan every 90 days until funds
provided under the act are expended. Pub. L. No. 116-139, div. B, tit. I, 134 Stat. at 626-27. The subsequent testing plan
issued in August 2020 did not contain information on the planned SNS inventory of testing supplies but may be included
in future plans, according to an OASH oﬃcial.
126HHS’s Program Support Center, a shared service provider to the federal government that provides acquisition
management services, among other things, also obligated about $380 million for the purchase of transport media.

Page 78 GAO-21-191
Due to demand for these items, the SNS has been able to accumulate very little of these materials,
according to ASPR oﬃcials. Because of recent increases in production, an OASH oﬃcial told us
that the SNS is projected to accumulate a 90-day supply of transport media by January 2021 and
nasal swabs several months later. In contrast, this oﬃcial noted the supply of pipette tips does not
currently meet demand, so there is no excess supply to add to the SNS at this time. Moreover, this
OASH oﬃcial told us that due to the demand for pipette tips, the agency is currently airlifting this
supply into the United States from overseas. Further, the oﬃcial anticipated demand for pipette
tips would continue to outpace supply and noted this anticipated demand indicated the need to
stockpile pipette tips in the SNS in the future. (See the table below for more on the SNS’s inventory
of testing supplies prior to, and during COVID-19, through October 2020.)

Page 79 GAO-21-191
Strategic National Stockpile Testing Supply Inventory
Dec. 2019 inventory on Oct. 2020 inventory on Planned 90-day
a b
Testing supplies hand hand inventory

Nasal swabs N/A 18 million 54 million

Transport media N/A 36 million 36 million

Pipette Tips
c N/A 0 36 million

Source: Oﬃcials with the Oﬃce of the Assistant Secretary for Preparedness and Response (ASPR) and the Oﬃce of the Assistant Secretary for Health (OASH), within the Department
of Health and Human Services, as well as Department of Health and Human Services, Report to Congress: COVID-19 Strategic Testing Plan (May 24, 2020). | GAO-21-191

Note: The Strategic National Stockpile continues to deploy supplies in response to requests and to areas of need such as
nursing homes. These deployments may aﬀect the ability to reach the SNS inventory targets, according to ASPR oﬃcials.
Deployments could also result in some ﬂuctuation in inventory quantities over time.
a
Testing supplies were not stocked in the SNS prior to COVID-19.
b
The 90-day supply inventory goals were established during COVID-19, according to ASPR oﬃcials.
c
The supply of pipette tips (disposable plastic attachments used to uptake and dispense small volumes of liquid) does not
currently meet demand so there is no excess supply to add to the SNS at this time, according to an OASH oﬃcial we spoke with
in October 2020.

Planned acquisition beyond that identiﬁed for the 90-day SNS inventory. In addition to
supplies ASPR and its federal partners identiﬁed for the 90-day inventory, ASPR intends to include
other supplies not previously held in the SNS based on feedback ASPR received from states.127 For
example, ASPR oﬃcials told us they anticipated that oxygen tubes needed to operate ventilators
would be readily available in hospitals and as a result, ASPR did not stockpile them or provide
them to states when it distributed ventilators during COVID-19. However, ASPR found that states
did not have these tubes and as a result, plans to stock these items in the SNS in the future.

ASPR is also procuring and bundling vaccine supplies into kits in conjunction with DOD in support
of Operation Warp Speed.128 Speciﬁcally, the SNS is working with the vendor who is performing
several tasks such as assembling and storing a total of 6.7 million vaccination kits based on the
requirements of any speciﬁc vaccine’s administration, since multiple vaccine candidates are in
development.129 For example, the vendor will assemble 5.6 million standard vaccination kits
containing surgical masks, face shields, needles, and syringes to be distributed along with any
COVID-19 vaccine. (See ﬁgure below.)

In addition, the vendor will assemble other types of vaccine administration kits based on the
requirements for any speciﬁc vaccine’s administration, including pediatric populations and
vaccines to be distributed in other dosage quantities, according to ASPR oﬃcials. In October
2020, ASPR oﬃcials told us that ASPR and DOD had awarded $675.2 million for the supplies, kit

127See our related States’ Perspectives on Medical Supplies enclosure in this report for more on state reporting on
needs nationwide.
128Operation Warp Speed is a partnership between DOD and HHS that aims to accelerate the development,
manufacturing, and distribution of COVID-19 vaccines and therapeutics. A primary goal is to deliver 300 million doses of
a safe and eﬀective vaccine for COVID-19 with initial doses available by January 2021.
129As of October 15, 2020, Operation Warp Speed, had publicly announced ﬁnancial support for the development and
manufacturing of six vaccine candidates for COVID-19.

Page 80 GAO-21-191
assembly, storage, and shipment of any COVID-19 vaccine (ASPR awarded four contracts totaling
$438.4 million and DOD awarded nine contracts totaling $236.8 million).

Contents of One Type of Strategic National Stockpile COVID-19 Vaccination Kit That Supports 100 Vaccinations

Note: Each standardized kit, as depicted above, contains supplies to administer 100 vaccine doses. In addition to this type of
vaccination kit, the Department of Health and Human Services (HHS), through its Strategic National Stockpile, has contracted
for the assembly of other kits, such as to administer any vaccine to pediatric populations or for vaccines to be distributed in
other dosage quantities, according to HHS oﬃcials.

Challenges in replenishing the SNS inventory. ASPR’s eﬀorts to replenish the SNS inventory are
aﬀected by broader medical supply chain issues:

• Delayed delivery to reduce commercial supply constraints. ASPR oﬃcials reported that they have
delayed delivery of some contracted items to the SNS to enable manufacturers to make them
available in the commercial market to alleviate supply constraints. For example, ASPR oﬃcials
told us that they delayed delivery of N95 masks to the SNS to permit these materials to ﬂow to
commercial distributors and then to hospitals to support ﬁrst-line needs.

Page 81 GAO-21-191
• Deployment of supplies to areas of need. For example, in August 2020, HHS announced it had
released 1.5 million N95 respirators from the SNS for distribution to about 3,336 nursing
homes that had less than a 3-day supply.130

• Global competition for supplies. For example, ASPR oﬃcials told us that because the expected
contract for nitrile gloves was not completed, they anticipated needing to acquire gloves
incrementally through multiple contracts. As we previously reported, the speed at which ASPR
will be able to build a 90-day supply of PPE will depend on demand that may be aﬀected by an
increase in the spread of COVID-19.

We recently reported that HHS and DOD plan to use about $1.6 billion in CARES Act funding to
increase domestic production of some critical medical supplies, such as N95 respirators and
ﬁlter material that is used in the respirators, which may help alleviate some of these supply chain
issues.131 We are tracking these eﬀorts and recently reported on their status in our November
2020 report.

Addressing other SNS modernization goals. According to ASPR oﬃcials, the agency is taking
additional steps to prepare the SNS to respond to future pandemics by further developing the SNS
inventory and reﬁning strategies for its management. In May 2020, ASPR solicited feedback from
industry and others about the types and amounts of pandemic-related supplies to stockpile.132 In
addition, the agency requested feedback on how items could be managed by vendors to enable
quicker responses to surges in demand, and ensure quality by, for example, requiring the vendor
to perform preventative maintenance so that items are in working condition and deployable in
a public health emergency such as COVID-19. For example, according to ASPR oﬃcials, although
media reports indicated that ventilators deployed from the SNS in response to COVID-19 were
inoperable, ASPR found no evidence of this and noted that the SNS has an extensive quality
assurance program that ensures that ventilators are maintained in accordance with commercial
process standards to prevent such an occurrence.

ASPR received 138 responses to the solicitation that included suggestions for additional items to
include in the SNS to prepare for future pandemics. For example, several responses suggested
ASPR include shoe and hair covers, disinfectant and sanitizing supplies, pharmaceuticals for use in
sedation and treating infections, as well as other items in the SNS. ASPR oﬃcials told us that they
plan to use these responses to inform the SNS’s strategy for its continuing COVID-19 response and
future pandemic responses. In November 2020, ASPR oﬃcials told us they had provided a draft
document to agency leadership and then to its interagency partners for review. ASPR oﬃcials also
told us that they plan to ﬁnalize the strategy by the end of November 2020.

130These shipments were to Medicare and Medicaid certiﬁed nursing homes only and were intended to provide a 7-
day supply of N95 respirators for an entire shift of healthcare workers in that facility.
131HHS plans to use about $1.3 billion in CARES Act funding it received to expand domestic production of medical
supplies and DOD is using $313 million of the $1 billion it received in CARES Act DPA Title III funding for the same
purpose. DOD plans to use the remaining $687 million to address defense industrial base issues caused by COVID-19.
132The NextGen SNS Request for Information was posted to the System for Award Management website (SAM.gov) on
May 15, 2020.

Page 82 GAO-21-191
Agency Comments
We provided a draft of this report to DOD, HHS, the Department of Homeland Security, and the
Oﬃce of Management and Budget for review and comment. These agencies did not provide
comments on this enclosure.

GAO’s Methodology
To understand federal eﬀorts to replenish the SNS, we reviewed information on HHS’s website and
solicitation information posted by HHS on the System for Award Management website (SAM.gov).
We reviewed responses to the “Nextgen SNS RFI” solicitation as well as contract and interagency
agreement information provided to us by ASPR. In addition, we obtained written responses and
interviewed oﬃcials from HHS and the Supply Chain Advisory Group between July and November
2020 about how they developed and implemented the 90-day supply requirements for the SNS
and other past or current activities related to SNS modernization.

Contact information: Mary Denigan-Macauley, (202) 512-7114, deniganmacauleym@gao.gov

Related GAO Products
Defense Production Act: Opportunities Exist to Increase Transparency and Identify Future Actions to
Mitigate Supply Chain Issues. GAO-21-108. Washington, D.C.: November 19, 2020.

COVID-19: Federal Eﬀorts Accelerate Vaccine and Therapeutic Development, but More Transparency
Needed on Emergency Use Authorizations. GAO-21-207. Washington, D.C.: November 17, 2020.

Page 83 GAO-21-191
COVID-19 Testing Guidance
The Department of Health and Human Services and its agencies have taken several key actions
to document a testing strategy and provide testing-related agency guidance, but the rationale for
changes to testing guidelines has not always been transparent.

Entities involved: The Department of Defense and the Department of Health and Human
Services, including its Centers for Disease Control and Prevention, Centers for Medicare &
Medicaid Services, Food and Drug Administration, National Institutes of Health, and the Oﬃce of
the Assistant Secretary for Health

Recommendation for Executive Action
The Secretary of Health and Human Services should ensure that the Director of the Centers for
Disease Control and Prevention clearly discloses the scientiﬁc rationale for any change to testing
guidelines at the time the change is made.

Key Considerations and Future GAO Work
We reported in June 2020 that while the Department of Health and Human Services (HHS)
had taken steps to meet the unprecedented need for COVID-19 testing data, those data were
incomplete and inconsistent. In September 2020, we reported on challenges with testing
supply availability, and recommended that HHS, in coordination with the Federal Emergency
Management Agency (FEMA), further develop and communicate to stakeholders plans outlining
speciﬁc actions the federal government would take to help mitigate remaining medical supply
gaps necessary to respond to the remainder of the pandemic—including testing supply shortages.
For more information, see the States’ Perspectives on Medical Supply Availability enclosure.

Since September 2020, we have identiﬁed challenges with federal testing strategy and guidance.
HHS agencies have taken several key actions to support testing, including procuring tests for long-
term care settings and schools, obtaining stakeholder input, and issuing guidance. However, these
agencies face challenges in developing clear guidance to facilitate consistent and appropriate
use, and interpretation, of antigen tests and their results, and HHS is taking steps to address
these challenges. Furthermore, while it is expected that guidance will change as new information
about the novel virus evolves, frequent changes to general CDC testing guidelines were not
always communicated with a scientiﬁc rationale. Until HHS ensures that CDC clearly discloses the
scientiﬁc rationale for any changes to its testing guidelines at the time the changes are made, the
agency risks creating confusion and eroding trust in important federal partners.

We will continue to conduct work examining HHS and its component agencies’ roles with regard
to COVID-19 testing, including the development and authorization of tests, the collection and
reporting of testing data, the development of testing guidance, and the availability of testing
supplies.

Page 84 GAO-21-191
Background
Testing people for COVID-19 and isolating those who test positive are of paramount importance
to help control the virus’s spread in the community, according to the Centers for Disease Control
and Prevention (CDC), the agency charged with conducting critical science and providing health
information to protect the country against health threats like COVID-19. Over the duration of the
pandemic, the volume and types of tests to detect the virus that causes COVID-19 have evolved,
and new testing technologies have emerged that have implications for use in testing approaches.

Speciﬁcally, the Food and Drug Administration (FDA), the agency in charge of regulating medical
device products marketed in the United States for use in detecting or diagnosing COVID-19
infections, has issued emergency use authorizations for two types of viral diagnostic tests:
molecular and antigen tests.133 These tests either require processing with specialized laboratory
equipment, or are processed rapidly at the point of care (rapid tests), such as in a clinic, nursing
home, or school setting. We previously reported that at times during the pandemic, laboratory
capacity, where most molecular tests are processed, has been constrained due to shortages in
supplies and equipment, as well as increased demand for tests associated with emerging hotspots
in disease transmission, leading to delays in turnaround times for testing results. Because rapid
antigen tests do not rely on the use of specialized laboratory equipment and provide quick results
at the point of care, they may help alleviate the burden on these facilities.

As the coordinating agency for the federal response to public health and medical emergencies,
HHS leads the development and implementation of the federal COVID-19 testing strategy. Under
this strategy, states manage their own COVID-19 testing programs with federal support from the
Oﬃce of the Assistant Secretary for Health (OASH). As of October 20, 2020, HHS had submitted
two required strategic testing plans (May and August) to Congress.134 In the latest plan, submitted
in August 2020, HHS deﬁned the federal role as setting the overall strategy and requirements,
securing the supply chain, securing scarce resources, and providing technical guidance, among
other things.

133Molecular diagnostic viral tests detect the presence of genetic material from SARS-CoV-2, the virus that causes
COVID-19. The antigen viral tests detects the presence of a protein that is part of SARS-CoV-2. As of November 3, 2020,
FDA had issued emergency use authorizations for 223 molecular tests and 7 antigen tests. In addition, FDA issued
emergency use authorizations for 57 serology tests to detect antibodies produced in the bodies of patients who have
had COVID-19, known as antibody tests. FDA may issue an emergency use authorization if the agency determines that
certain medical products, such as a test, “may be eﬀective” at diagnosing, treating, or preventing a disease, among other
criteria. See 21 U.S.C. § 360bbb-3. An emergency use authorization allows tests and other products to be made available
in a much shorter time frame than typically would be necessary for approval or clearance, in part because it requires a
lower level of evidence than the “eﬀectiveness” standard that is required for FDA product approvals and clearances. To
approve tests outside of an emergency, FDA determines whether there is reasonable assurance that the tests are safe
and eﬀective for their intended clinical use or that they otherwise meet the applicable statutory standard.
134Department of Health and Human Services, Report to Congress: COVID-19 Strategic Testing Plan (May 24, 2020) and
Department of Health and Human Services, Report to Congress: COVID-19 Strategic Testing Plan (August 22, 2020). The
Paycheck Protection Program and Health Care Enhancement Act requires HHS to update the plan every 90 days until
funds provided under the act are expended. Pub. L. No. 116-139, div. B, tit. I, 134 Stat. at 626-27.

Page 85 GAO-21-191
The COVID-19 relief laws appropriated a total of $26.5 billion to HHS to support COVID-19 testing,
among other things. HHS reported total testing-related obligations of about $17.3 billion as of
October 31, 2020, a majority of which was awarded to states, localities, territories, and tribal
organizations, and total expenditures of $3.4 billion.135 According to HHS oﬃcials, award recipients
draw down funds in accordance with their own jurisdictional policies and practices. In addition,
the length of time it will take to spend all federal appropriations allocated for testing is dependent
on the progression of the COVID-19 pandemic and its impact within speciﬁc geographic locations
and on speciﬁc populations. See table for HHS-reported obligations and expenditures for testing-
related activities.

135According to CDC oﬃcials, $10.25 billion in funds appropriated by the Paycheck Protection Program and Health Care
Enhancement Act were obligated for awards to states, territories, and local jurisdictions through CDC’s Epidemiology
and Laboratory Capacity for Prevention and Control of Emerging Infectious Diseases cooperative agreement to help
them expand their testing and contact tracing capacity, among other things. In addition, the Indian Health Service (IHS)
will provide $750 million in funds appropriated by the Paycheck Protection Program and Health Care Enhancement Act
to IHS, tribal, and urban Indian Health programs to expand testing capacity and testing-related activities.

Page 86 GAO-21-191
HHS’s Reported Obligations and Expenditures for Testing-Related COVID-19 Response Activities, as of Oct. 31,
2020
Percentage of obligated
Obligations Expenditures amounts expended, as
Key activity ($ billions) ($ billions) of Oct. 31, 2020

Support to state, local, territorial, and 13.134 1.769 13
tribal organizations’ preparedness

Testing for uninsured 0.669 0.667 100

Testing 3.545 0.981 28

Total 17.348 3.417 20

Source: GAO analysis of Department of Health and Human Services (HHS) information | GAO-21-191

Note: The percentages represent the share of obligated amounts for each key activity that were expended as of Oct. 31, 2020.

Overview of Key Issues
HHS has outlined its testing strategy and has taken several key actions to execute its
plan. The August HHS Strategic Testing Plan outlines several testing priorities, including rapid
hospital diagnosis, protecting vulnerable populations—especially those in long-term care
facilities—and supporting the safe reopening of schools and businesses. The plan notes that
targeted testing approaches—such as through diagnostic testing coupled with intermittent
surveillance testing—will reduce the spread of COVID-19 when combined with public health
mitigation measures. The advantage of these targeted approaches, according to the plan, is to
decrease burden on laboratories, which have experienced capacity constraints at times due to
supply shortages and other issues. HHS deﬁnes three types of COVID-19 testing approaches:
diagnostic, screening, and surveillance. (See ﬁgure below.)

Page 87 GAO-21-191
HHS Deﬁnitions and Applicable Requirements, by Type of COVID-19 Testing Approach

Notes: Most laboratories that perform testing on humans are required to meet certain federal requirements under the Clinical
Laboratory Improvement Amendments of 1988 (CLIA). Under CLIA, a laboratory is generally deﬁned as a facility that performs
testing on materials derived from the human body for the purpose of providing information on the diagnosis, prevention, or
treatment of diseases in humans and may include providers, such as nursing homes and physician oﬃces. 42 C.F.R. § 493.2
(2019).

The August HHS Strategic Testing Plan details several key actions HHS has taken to support
COVID-19 testing.

Investing in tests and test supplies. Federal agencies invested in, procured, and supplied certain
rapid tests, as well as test collection supplies to states, localities, territories, tribal organizations,
and other federal agencies. In addition:

• According to HHS, as of November 4, 2020, the agency reported providing almost 7.4 million
Abbott BinaxNOW™ rapid antigen tests to nursing homes (see our related Nursing Homes
enclosure), over 2 million to assisted living facilities, about 632,000 to home health and
hospice organizations, 450,000 tests to the Indian Health Service, 389,000 tests to historically
Black colleges and universities, and almost 120,000 to disaster operations in at least four
states.136 HHS and White House oﬃcials also announced plans to deliver 100 million more
of these tests to states and territories, and as of November 4, 2020, had delivered roughly

136As we reported in September 2020, and discuss in our Nursing Homes enclosure, HHS also previously provided
two rapid antigen tests to over 13,800 nursing homes starting in July, 2020. See also Department of Health and
Human Services and COVID-19 Joint Information Center, “Daily Communications Report – October 17, 2020.” In
September 2020, CMS began requiring nursing homes to test all staﬀ and residents for COVID-19 as part of its
requirements for the Medicare and Medicaid programs. See Medicare and Medicaid Programs, Clinical Laboratory
Improvement Amendments (CLIA), and Patient Protection and Aﬀordable Care Act; Additional Policy and Regulatory
Revisions in Response to the COVID-19 Public Health Emergency; 85 Fed. Reg. 54,820 (Sept. 2, 2020) (to be codiﬁed
at 42 C.F.R. § 483.30(h)).

Page 88 GAO-21-191
42 million of those tests.137 HHS is distributing tests to governors based on population, and
has suggested states and territories use them in schools, for ﬁrst responders, in the event of
outbreaks, as well as for screening and surveillance in congregate settings.

• HHS also partnered with the Rockefeller Foundation to provide rapid antigen tests to select
cities and states for use in a pilot program designed to identify and share best practices in
COVID-19 community screening, with a focus on K-12 schools.

• HHS continues to invest in new testing technologies—including rapid tests and tests with new
sampling technologies—through its Rapid Acceleration of Diagnostics (RADx) initiative, led by
the National Institutes of Health in collaboration with the Biomedical Advanced Research and
Development Authority. Through three rounds of contracts, according to NIH, the initiative is
expected to increase nationwide testing capacity by 2.7 million tests before the end of 2020.

• HHS, in collaboration with the Department of Defense, is funding six domestic production
expansion projects for swabs and test kits. Combined, manufacturers are expected to increase
their annual domestic production of swabs by almost 953 million and of test kits by 181 million
once they reach full rate production in 2021.138 In addition, in October 2020, HHS announced
contracts with three additional companies to expand production of certain tests, including
some rapid tests.

Seeking regular stakeholder feedback. HHS created the National Testing Implementation Forum,
which consists of bi-weekly meetings with a rotating roster of individuals from stakeholder groups,
such as laboratory and medical groups for the purpose of information sharing and feedback.
The forum commenced in July, and has since covered topics such as the testing supply chain,
surveillance and reopening strategies, and engaging minority and underserved communities.

Issuing federal guidance. Over the course of the pandemic, HHS agencies, including CDC, the
Centers for Medicare & Medicaid Services (CMS), and FDA, have issued guidance to assist health
departments, medical providers, nursing homes, schools, workplaces, and laboratories, for
example, in implementing and prioritizing testing.139

Both the May and August Strategic Testing Plans detail the implementation of the White House
Testing Blueprint—the formal national strategy, according to HHS.140 Although the May Strategic
Testing Plan was made public, HHS has not made the August plan available to the public.141

137White House, “Remarks by President Trump in an Update on the Nation’s Coronavirus Testing Strategy,”
accessed September 30, 2020: https://www.whitehouse.gov/brieﬁngs-statements/remarks-president-trump-
update-nations-coronavirus-testing-strategy/ and Department of Health and Human Services and COVID-19 Joint
Information Center, “Daily Communications Report – November 4, 2020.”
138See GAO, Defense Production Act: Opportunities Exist to Increase Transparency and Identify Future Actions to Mitigate
Medical Supply Chain Issues, GAO-21-108 (Washington, D.C.: November 19, 2020).
139CMS is the HHS component agency that is responsible for ensuring that nursing homes meet federal quality
standards in order to participate in the Medicare and Medicaid programs.
140The White House issued a testing blueprint for states in April that establishes broad roles and principles for states,
localities, tribes, the federal government, and the private sector in facilitating expansion of needed testing capacity.

Page 89 GAO-21-191
Proper use and interpretation of rapid antigen tests poses guidance-related challenges.
In keeping with its federal testing strategy, HHS took action to alleviate laboratory constraints by
quickly procuring rapid antigen tests and distributing them to certain settings, such as nursing
homes and states. However, the interpretation of rapid antigen test results can be complex and
provides a challenge for agencies in setting clear guidance on their use and interpretation:

• Lack of user familiarity. As we describe in our Nursing Homes enclosure, nursing homes had
previously relied on lab-based, molecular testing. In addition, in suggesting that states use
rapid antigen tests to support the opening of K-12 schools, HHS is providing schools with a tool
they had likely not used before.

• Higher likelihood of false negative results. Rapid antigen tests carry a higher chance of producing
false negatives than do molecular tests, according to the FDA. Negative test results are
generally considered “presumptive” and may need to be conﬁrmed with molecular testing in
certain situations, such as when a negative result is unexpected given clinical symptoms.142

• Potential for false positive results. CDC guidance notes that false positives are rare, but also
notes that clinicians should understand antigen test performance characteristics in order
to recognize potentially false positive results, which can occur with any diagnostic test given
that no test is 100 percent accurate. False positive results may make up a greater proportion
of total positive results in populations where prevalence is low. Some states and nursing
homes have expressed concerns with the frequency with which false positive test results have
occurred given the implications for that setting.143

• FDA-indicated use. As of November 4, 2020, FDA has authorized antigen tests for use in
individuals suspected of having COVID-19 within a speciﬁc number of days since the onset
of symptoms—as opposed to use in screening asymptomatic individuals. CLIA-certiﬁed
laboratories, which can include nursing homes and other settings, are required by CMS
regulations to follow the manufacturer’s instructions for use when performing laboratory
testing.144 However, HHS has announced that CMS will temporarily exercise enforcement
discretion for the duration of the COVID-19 public health emergency for use of antigen
tests on asymptomatic individuals. In particular, such testing might occur outside of the
authorized indication, such as for routine screening in nursing homes and other settings, HHS

White House, Centers for Disease Control and Prevention, and Food and Drug Administration, Testing Blueprint:
Opening Up America Again (Apr. 27, 2020).
141The Paycheck Protection Program and Health Care Enhancement Act directed the Secretary of HHS to report to
various congressional committees on a COVID-19 strategic testing plan 30 days after enactment and every 90 days
thereafter. Pub. L. No. 116-139, div. B, tit. I,134 Stat. 620, 626-627 (2020). Congress made public the May Strategic
Testing Plan. HHS oﬃcials noted that the agency does not publicly issue reports that it is required by law to report to
committees of Congress that have jurisdiction over the agency.
142While the sensitivity of antigen tests tends to be lower than that of molecular tests, the speciﬁcity—indicative of
the likelihood of producing false positives—tends to be similar.
143For example, Nevada issued a directive in early October to discontinue the use of antigen tests due to concerns
of false positive results with two of the antigen tests provided to nursing homes by HHS. The state subsequently
reversed this directive after HHS notiﬁed state oﬃcials citing the directive as a violation of federal law.
144See 42 C.F.R. § 493.1252(a) (2019).

Page 90 GAO-21-191
has acknowledged.145 In late October, FDA updated its guidance to encourage rapid antigen
test developers to conduct clinical validation studies to support their use in asymptomatic
individuals, as applicable.146

• Inconsistent data reporting requirements. While HHS requires that all COVID-19 test results
be federally reported, including those for rapid antigen tests, some states do not require
reporting of antigen test results.147 In October, 2020, CDC supplemented previous HHS
reporting guidance on its website, providing additional detail for the reporting of antigen
among other tests, and introduced an option for long term care facilities to report point-of-
care test results through the National Healthcare Safety Network.148

Given HHS’s Strategic Testing Plan priority of protecting vulnerable populations, including those in
nursing homes, and HHS recommendations for use of rapid antigen tests in other settings such as
schools, clear guidance on the use and interpretation of antigen tests is important so that they are
used properly and consistently. Several stakeholder groups and two experts we interviewed told
us that some nursing homes and other providers have been confused about how to use the new
antigen tests, especially with regard to interpreting and reporting the results; for example, some
noted that nursing homes may not understand when to seek a conﬁrmatory test.

HHS oﬃcials acknowledged the challenges in providing guidance on rapid antigen tests and have
taken action to clarify guidance. For example,

• On October 30, 2020, CMS announced the launch of the Nursing Home Resource Center,
which will serve as a centralized hub bringing together the latest information, guidance, and
data on nursing homes for facilities, frontline providers, residents and their families, including
information on COVID-19 testing.149

145See Department of Health and Human Services, Guidance for PREP Act Coverage for COVID-19 Screening Tests at
Nursing Homes, Assisted-Living Facilities, Long-Term-Care Facilities, and other Congregate Facilities (Washington, D.C.:
Aug. 31, 2020).
146Food and Drug Administration, “Antigen Template for Test Developers,” accessed November 5, 2020: https://
www.fda.gov/media/137907/download.
147A recent national survey from research organization Kaiser Health also raised the issue of states not accepting
antigen test results. Although GAO has not independently conﬁrmed these data, Kaiser Health reported in
September that 21 states and D.C. do not report all antigen test results, that 15 states and D.C. do not count positive
results from antigen tests as COVID cases, that two states do not require antigen test providers to report results
at all, and that ﬁve states only require positive antigen results to be reported. Rachana Pradhan, Lauren Weber,
and Hannah Recht, “Lack of Antigen Test Reporting Leaves Country ‘Blind to the Pandemic,’” Kaiser Health News
(Sept. 16, 2020), accessed Oct. 23, 2020, https://khn.org/news/lack-of-antigen-test-reporting-leaves-country-blind-
to-the-pandemic/. An August 5, 2020 update to the Council of State and Territorial Epidemiologists case deﬁnition
recommended that conﬁrmed and probable cases, including those from antigen tests results, be included in state
COVID-19 case counts reported outside the public health agency.
148Centers for Disease Control and Prevention, “How to Report COVID-19 Laboratory Data,” accessed October 19,
2020: https://www.cdc.gov/coronavirus/2019-ncov/lab/reporting-lab-data.html.
149See Centers for Medicare & Medicaid Services, “CMS’ New One-Stop Nursing Home Resource Center Assists
Providers, Caregivers, Residents,” accessed November 5, 2020: https://www.cms.gov/newsroom/press-releases/
news-alert-october-30-2020.

Page 91 GAO-21-191
• Previously, in August, 2020, CDC provided guidance speciﬁc to the use of antigen tests in
nursing homes, including a one-page algorithm for the interpretation of antigen test results in
nursing homes.

• CDC and FDA issued guidance and updated FAQ in October and November, 2020, including the
subject of false positive test results, and CDC updated its testing guidance for schools.150

We noted that, as of October 23, 2020, CMS had numerous relevant guidance documents
and, although many linked to other relevant CDC guidance, they do not link directly to the
CDC algorithm. Linking to the algorithm is important because it provides clear and concise
recommendations to nursing homes on how to interpret antigen test results under various
circumstances. CDC oﬃcials told us they plan to coordinate with CMS to ensure that the algorithm
is included in the future. We will continue to conduct work examining federal guidance related to
testing, including those related to rapid antigen testing.

Changes to CDC testing guidelines have not always been communicated in a transparent
manner. While it is to be expected that federal guidelines may change as we learn more about
the novel virus and its underlying science, CDC testing guidelines have been changed several
times over the course of the pandemic, with little scientiﬁc explanation of the rationale behind the
changes.

Our interviews with provider and stakeholder groups found that frequent changes in guidelines,
without transparent rationale, create confusion and erode trust in important federal partners,
and interview groups were particularly struck by the lack of rationale provided for an August
change made to CDC testing guidelines. In September 2020, we reported that CDC changed its
guidelines in late August to de-emphasize the importance of testing asymptomatic individuals who
had been exposed to COVID-19, without an explanation for these changes. According to provider
and public health stakeholder groups, this change sparked confusion and disagreement from the
public health community and others. Further, a number of these groups criticized this change
as inconsistent with science.151 Speciﬁcally, they noted that this change would limit the ability of
public health oﬃcials to test, contact trace, and isolate infected individuals, which is important to
controlling the spread of the virus, according to CDC.

150See Centers for Disease Control and Prevention, Considerations for Interpreting Antigen Test Results in Nursing
Homes (Atlanta, Ga.: Aug. 21, 2020); Clinical Questions about COVID-19: Questions and Answers (Atlanta, Ga.: Oct.
5, 2020); and, Interim Considerations for Testing for K-12 School Administrators and Public Health Oﬃcials (Atlanta,
Ga.: Oct. 13, 2020); and Food and Drug Administration, Potential for False Positive Results with Antigen Tests for
Rapid Detection of SARS-CoV-2 - Letter to Clinical Laboratory Staﬀ and Health Care Providers (Silver Spring, Md.:
Nov. 4, 2020).
151Several public health and medical provider groups, including the American Medical Association, Association of
American Medical Colleges, National Association of County and City Health Oﬃcials, Big Cities Health Coalition, and
the Association for State and Territorial Health Oﬃcials submitted letters to the agency or issued press releases
with concerns about the lack of scientiﬁc basis for the August changes to the testing guidelines. Furthermore, the
National Academies of Science and Medicine commented on allegations of political interference in the CDC guideline
development process. See National Academies of Science and Medicine, “NAS and NAM Presidents Alarmed By Political
Interference in Science Amid Pandemic,” accessed October 21, 2020: https://www.nationalacademies.org/news/2020/09/
nas-and-nam-presidents-alarmed-by-political-interference-in-science-amid-pandemic.

Page 92 GAO-21-191
Almost four weeks after the August change, CDC updated its testing guidelines again to state
that asymptomatic individuals with known exposure should be tested. See ﬁgure below as an
example of selected changes over 4 months to CDC website guidelines for testing of asymptomatic
individuals with little information publicly provided to explain the rationale for these changes.

Timeline of Selected Changes to Centers for Disease Control and Prevention (CDC) Testing Guidelines for
Asymptomatic Individuals with Known or Suspected Exposure

CDC and HHS oﬃcials told us the August changes were made to emphasize testing of symptomatic
and high-risk individuals and to focus on taking appropriate public health measures as a result
of testing, but oﬃcials did not explain why no scientiﬁc rationale was provided at the time. CDC
oﬃcials also told us that the August changes were misinterpreted by many as implying that those
without symptoms who were close contacts of conﬁrmed cases should not be tested, prompting
the September update.

CDC oﬃcials told us they regularly consult with state, city, and local partners regarding guidelines
on recommended practices and considerations, and oﬃcials from public health organizations we
interviewed told us that they are often given an early advisory on such changes to guidelines, and
are sometimes invited to provide feedback on forthcoming CDC guidelines. However, according to
these organizations, no such advisory was given on the August change and, as a result, they were
unable to prepare their members for the change. CDC oﬃcials conﬁrmed that stakeholders were
not provided with an advisory for the August change and told us that the update was coordinated
by HHS and the White House Coronavirus Task Force.

Page 93 GAO-21-191
According to stakeholder groups, the lack of transparency regarding these changes, coupled with
the inconsistent messaging on several changes in a short time frame, led to confusion and could
ultimately hinder consistent application of testing approaches to best control spread of the virus.
This lack of transparency in CDC guideline updates is inconsistent with CDC’s Crisis and Emergency
Risk Communication Manual, which states that “by fully and clearly explaining your messages and
their reasoning, your audiences will be less likely to doubt you.”152

CDC oﬃcials told us that the change to testing guidelines in August did not follow the routine
agency process, which normally involves stakeholder advisory and consultation. Furthermore,
according to CDC oﬃcials, HHS and the White House Coronavirus Task Force coordinated the
change rather than CDC. Until HHS ensures that CDC clearly discloses the scientiﬁc rationale for
any changes to its testing guidelines at the time the changes are made, the agency risks creating
confusion and eroding trust in important federal partners.

Agency Comments
We provided HHS and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
HHS concurred with our recommendation and provided general comments, which are reproduced
in Appendix IV. HHS noted that CDC oﬃcials typically consult with scientiﬁc stakeholders when
issuing guidance and said HHS will continue to evaluate its processes in this area. HHS also
provided technical comments on this enclosure, which we incorporated as appropriate. OMB did
not provide comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed agency guidance and other documentation, and interviewed
HHS agency oﬃcials to obtain information on steps taken to implement, communicate, and
update federal strategy and other guidance on COVID-19 testing. We also conducted interviews
with public health experts and stakeholder groups, including provider groups, to obtain
their perspectives on agency guidance and communication with regard to testing. To select
interviewees, we identiﬁed a variety of groups that were impacted by federal testing strategy
and guidance and that had broad geographic representation, in addition to researchers and
practitioners with work in public health. In doing so, we identiﬁed 17 stakeholder groups; we
spoke with 16 of these groups and obtained written comments from one of them. These groups
represent, across the country

152Centers for Disease Control and Prevention, Crisis and Emergency Risk Communication Manual: Messages and Audience
(2018).

Page 94 GAO-21-191
• over 100,000 state and local public health oﬃcials and epidemiologists, as well as public health
laboratories;

• national, regional, community, and health system clinical laboratories;

• state governors’ oﬃces and staﬀ, as well state education oﬃcials and school administrators;
and

• a variety of providers, including nursing home practitioners, physicians, and nurses.

We also identiﬁed and interviewed ﬁve public health experts who had extensive experience in
medical science and public policy, including one expert with experience in nursing home infection
control. We identiﬁed these experts based on our ongoing related work.

Contact information: Mary Denigan-Macauley, (202) 512-7114, deniganmacauleym@gao.gov

Page 95 GAO-21-191
Medicaid Spending
The potential exists for two Department of Health and Human Services agencies to issue
duplicative or erroneous payments to providers. The department has taken steps to assure
payments are correct, but the eﬀectiveness of agency eﬀorts are unknown.

Entities involved: Centers for Medicare & Medicaid Services and the Health Resources and
Services Administration, within the Department of Health and Human Services.

Key Considerations and Future GAO Work
In our September 2020 report, we found the potential for duplicate or erroneous payments for
COVID-19 testing of uninsured individuals by the Health Resources and Services Administration
(HRSA) and the Centers for Medicare & Medicaid Services (CMS), both within the Department of
Health and Human Services (HHS). While HRSA and CMS have implemented controls, the potential
for these duplicate payments continue to exist. We will continue to monitor these issues going
forward.

Background
Medicaid is one of the nation’s largest sources of funding for health care services for low-
income and medically needy individuals, covering an estimated 77 million people and spending
approximately $673 billion in ﬁscal year 2020.153 States and territories administer their Medicaid
programs within broad federal rules and according to state plans approved by CMS, which
oversees Medicaid at the federal level. The federal government matches states’ spending for
Medicaid services according to a statutory formula known as the Federal Medical Assistance
Percentage (FMAP).154

The Families First Coronavirus Response Act (FFCRA) provides a temporary increase in the FMAP
for all qualifying states and territories.155 FFCRA also created an option for states to provide
Medicaid coverage of COVID-19 diagnostic testing and related services to uninsured individuals.156
The FFCRA and the Paycheck Protection Program and Health Care Enhancement Act each
appropriated $1 billion to reimburse providers for conducting COVID-19 testing of uninsured

153 Department of Health and Human Services, Centers for Medicare and Medicaid Services, 2018 Actuarial Report on the
Financial Outlook on Medicaid (Baltimore, Md.).
154The FMAP is calculated based on each state’s per capita income relative to national per capita income. For the District
of Columbia and U.S. territories, the FMAP is set by statute regardless of their per capita incomes. Additionally, federal
law speciﬁes a maximum amount, or allotment, for federal contributions to Medicaid spending in U.S. territories, in
contrast to the states and the District of Columbia, for which federal Medicaid spending is open-ended.
155 Pub. L. No. 116-127, § 6008, 134 Stat. 178, 208-09 (2020) (“FFCRA”).
156FFCRA, § 6004(a)(3), 134 Stat. at 205-06.

Page 96 GAO-21-191
individuals.157 HRSA is responsible for administering these funds and paying providers that submit
claims for COVID-19 testing.

Overview of Key Issues
Potential duplicate or erroneous payments for COVID-19 testing. HRSA administers a $2
billion program to pay for COVID-19 testing of uninsured individuals. In addition, CMS has
approved 15 states and three territories to make Medicaid payments to providers for COVID-19
testing of uninsured individuals, with the federal government responsible for 100 percent of the
cost.158 The Congressional Budget Oﬃce estimates that the Medicaid payments for testing of
uninsured individuals will total approximately $2 billion in 2020 and 2021.

As of October 28, 2020, HRSA has paid $655 million for COVID-19 testing of uninsured individuals,
with a total of $218 million in payments made to providers in the 15 states and two of three
territories approved to use 100 percent federal Medicaid funds to pay for testing of uninsured
individuals. While state reporting of Medicaid payments for COVID-19 testing is incomplete—an
estimated $336,000 in Medicaid payments for COVID-19 testing for uninsured individuals have
been reported as of October 31, 2020—CMS oﬃcials expect payments to increase in the future.

HRSA is responsible for assuring the payments for COVID-19 testing for uninsured individuals
are not made for individuals who have health insurance coverage, including individuals residing
in states and territories that cover COVID-19 testing for the uninsured through their Medicaid
programs. According to HRSA oﬃcials, the program administrator implemented both prospective
and retrospective payment controls over the last several months for COVID-19 testing payments
for uninsured individuals.

HRSA oﬃcials stated these payment controls are dependent on national clearinghouses that
compile insurance coverage information from health insurance carriers having Medicaid coverage
information. Health care providers and payers may use clearinghouses to check for health
insurance coverage for purposes of billing the appropriate payer.

According to CMS and HRSA oﬃcials, state Medicaid agencies transmit ﬁles with Medicaid
coverage and payment information to the national clearinghouses. As such, these prospective
checks identify individuals with Medicaid coverage, including coverage of COVID-19 testing for
the uninsured, and HRSA will not pay providers that submit claims to HRSA for testing these
individuals, according to HRSA oﬃcials. A retrospective payment control also checks the national
clearinghouses monthly to identify claims for COVID-19 testing for the uninsured for situations in
which Medicaid coverage information is now available but was not available at the time the claims
were submitted and paid.

157 FFCRA, div. A, tit. V, 134 Stat. at 182; Pub. L. No. 116-139, div. B., tit. I, 134 Stat. 620, 626 (2020).
158 Three states—Alabama, Rhode Island, and Washington—were approved to provide coverage, but subsequently
rescinded their coverage. We excluded another state, Montana, because state oﬃcials told us they are not implementing
coverage. CMS oﬃcials noted that Montana has not requested to rescind coverage.

Page 97 GAO-21-191
The eﬀectiveness of these controls hinges on states reporting coverage and payment information
to the clearinghouses. Preliminary data from the states and territories covering COVID-19
testing for uninsured individuals through Medicaid indicate that such reporting is uncertain.
Of the 15 states and three territories with approval to cover testing for uninsured individuals
through Medicaid, 10 told us that they do not submit ﬁles with Medicaid enrollment and
payment information for uninsured individuals with COVID-19 testing coverage to the national
clearinghouses. Oﬃcials from four of these states said they respond to requests from providers
or other payers about Medicaid coverage of speciﬁc individuals, but do not transmit these data
to national clearinghouses. Oﬃcials from ﬁve other states told us that they do submit Medicaid
enrollment and payment information for uninsured individuals with COVID-19 testing coverage to
national clearinghouses.

Because HRSA’s payment controls rely on information submitted to those national clearinghouses,
we continue to have concerns about the potential for duplicate or erroneous payments and plan
to monitor the results of these prospective and retrospective payment controls to assess their
eﬀectiveness. As discussed below, however, states have reported limited Medicaid spending for
COVID-19 testing for uninsured individuals, as of October 31, 2020.

Medicaid spending. As of October 31, 2020, COVID-19-related federal Medicaid expenditures
totaled approximately $23 billion, or 7 percent of total federal spending, on Medicaid services for
this time period.159 The majority of the COVID-19-related spending is for the 6.2 percent FMAP
increase, with about $336,000 for testing payments by the 15 states and three territories approved
to cover COVID-19 diagnostic testing and related services to uninsured individuals under their
Medicaid plans with a 100 percent federal match.

Based on information we obtained from the 14 states and one of the three territories approved to
cover testing for uninsured individuals through Medicaid, the implementation of the coverage has
been slow. For example,

• One state that has implemented coverage of COVID-19 testing for the uninsured stated that
they have received and paid few claims.

• One state that has reported few COVID-19 testing expenditures noted that having two
diﬀerent payment programs for COVID-19 testing for the uninsured adds a level of complexity
to administering the Medicaid coverage and for providers to bill correctly.

The table below summarizes federal Medicaid spending related to the 6.2 percent FMAP increase,
COVID-19 expenditures in Medicaid programs approved to cover testing for uninsured individuals,
and total Medicaid spending for services as of October 31, 2020.

159The most recent available payment information is for the second quarter of ﬁscal year 2020 (January 1, 2020,
through March 31, 2020) through the fourth quarter of ﬁscal year 2020 (July 1, 2020 through October 31, 2020). States
can report payments and adjustments to payments up to 2 years after a quarter ends. The increased federal medical
assistance percentage (FMAP) is available for Medicaid medical assistance expenditures for which each state’s standard
state-speciﬁc FMAP rate is used to determine federal funding.

Page 98 GAO-21-191
Federal Medicaid COVID-19 and Total Expenditures, by State and Territory, as of October 31, 2020
COVID-19-related federal Medicaid COVID-19 related Total federal Medicaid
expenditures from the 6.2- federal expenditures for services expenditures in
percentage-point-increased FMAP uninsured testing 2020
State or territory Dollars in millions Dollars in millions Dollars in millions

Alabama 278 NA 3,546

Alaska
a
49 NA 1,127

Arizona 458 NA 8,994

Arkansas 229 NA 4,101

California
a
2,764 < 1 million 50,674

Colorado 360 < 1 million 4,464

Connecticut
b
202 < 1 million 2,819

Delaware
a
92 NA 1,268

District of Columbia
b
81 NA 1,204

Florida 1,254 NA 13,436

Georgia 520 NA 6,275

Hawaii 81 NA 1,235

Idaho 102 NA 1,549

Illinois 835 0 11,258

Indiana 555 NA 8,567

Iowa
a
212 0 3,006

Kansas
a
183 NA 1,925

Kentucky 377 NA 7,564

Louisiana 414 0 7,412

Maine 134 < 1 million 1,758

Maryland 416 NA 5,762

Massachusetts
a
554 NA 6,420

Michigan 710 NA 10,853

Page 99 GAO-21-191
Minnesota
b
378 < 1 million 3,451

Mississippi 260 NA 3,509

Missouri 494 NA 6,016

Montana 52 NA 1,280

Nebraska 107 NA 1,091

Nevada 131 0 2,353

New Hampshire 89 0 1,119

New Jersey 591 NA 7,716

New Mexico 206 < 1 million 4,083

New York 2,754 NA 35,093

North Carolina
a
489 0 6,023

North Dakota 48 NA 625

Ohio
a
610 NA 8,935

Oklahoma
a
227 NA 2,855

Oregon
a
344 NA 6,297

Pennsylvania
b
925 NA 11,405

Rhode Island 101 NA 1,394

South Carolina 310 NA 3,882

South Dakota 41 NA 486

Tennessee 515 NA 5,957

Texas 2,009 NA 22,599

Utah 115 < 1 million 1,858

Vermont 64 NA 797

Virginia 313 NA 4,414

Washington
b
267 NA 4,254

West Virginia
b
104 0 1,774

Page 100 GAO-21-191
Wisconsin
a
431 NA 3,795

Wyoming 26 NA 273

States total
c
22,858 <1 million 318,552

American Samoa 2 NA 31

Guam 4 NA 95

Northern Mariana 0
Islands 2 32

Puerto Rico 74 0 1,822

Virgin Islands
b
1 0 31

Territories total
c
83 0 2,011

Legend
FMAP = federal medical assistance percentage
NA = Not applicable. States that did not provide COVID-19 testing for uninsured individuals as of October 31, 2020.
Source: GAO analysis of data from the Centers for Medicare & Medicaid Services. | GAO-21-191.

Note: Federal Medicaid payments were available for the second, third and fourth quarters of ﬁscal year 2020—January 1, 2020,
through October 31, 2020—and do not include expenses for program administration.
a
Eleven states that reported expenditures for the fourth quarter, reported uncertiﬁed expenditures. All the states and
territories reported certiﬁed expenditures for the second and third quarters. Certiﬁed state expenditures have been reviewed
by states and are certiﬁed as being Medicaid allowable expenditures. Both certiﬁed and uncertiﬁed state expenditures are
preliminary, as they are subject to further review and are likely to be updated as states continue to report their expenditures
and receive federal matching funds. States can report payments and adjustments to payments up to 2 years after a quarter
ends.
b
Six states and the 1 territory did not report any fourth quarter expenditures as of October 31, 2020.
c
Totals may not sum exactly due to rounding.

Agency Comments
We provided a draft of this enclosure to HHS and the Oﬃce of Management and Budget (OMB) for
review and comment. HHS provided technical comments, which we incorporated as appropriate.
OMB did not provide comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed federal laws, CMS data from its Medicaid expenditure reporting
system, HRSA’s publically available data on payments for COVID-19 testing for uninsured

Page 101 GAO-21-191
individuals, and Congressional Budget Oﬃce spending estimates. We also reviewed CMS Medicaid
guidance, including requirements for administering the optional COVID-19 testing for the
uninsured; and HRSA guidance and requirements for providers to submit claims for COVID-19
testing for uninsured individuals; and our prior work related to Medicaid. We reviewed CMS
guidance to states on reporting COVID-19 expenditures through the Medicaid expenditure
reporting system and conducted data reliability checks on state reported-expenditure data. We
reviewed HRSA documentation and written responses from agency oﬃcials regarding HRSA’s
payment data. We determined that the CMS and HRSA data were suﬃciently reliable for the
purpose of this enclosure. We discussed HRSA’s eﬀorts to prevent duplicate or erroneous
payments with HRSA oﬃcials. We also received information from Medicaid oﬃcials in 14 states
and 1 territory that have implemented Medicaid coverage for COVID-19 testing for the uninsured
to understand how states are implementing this coverage and the extent they share Medicaid
coverage and payment information with national insurance clearinghouses. Their views are not
generalizable across all states.

Contact information: Carolyn L. Yocom, (202) 512-7114, yocomc@gao.gov

Page 102 GAO-21-191
Medicare Telehealth Waivers
Telehealth can provide important access for beneﬁciaries and enable providers to continue
delivering services; however, Medicare also needs to be attentive to the risks associated with
waivers of telehealth payment requirements. The Centers for Medicare & Medicaid Services needs
strong oversight of Medicare telehealth services to prevent fraud, waste, and abuse in light of
waivers of key requirements that widely expanded availability of these services.

Entities involved: Centers for Medicare & Medicaid Services, within the Department of Health and
Human Services

Key Considerations and Future GAO Work
We reported in June 2020 that careful monitoring is required to prevent potential fraud, waste,
abuse, and improper payments that can arise from waiving longstanding requirements and
safeguards in the Medicare program in response to the COVID-19 pandemic.160 Oﬃcials at the
Centers for Medicare & Medicaid Services (CMS) told us that the agency is using existing program
integrity practices and has also implemented new program safeguards to prevent improper
payments and reduce fraud, waste, and abuse related to telehealth waivers. As we have noted
previously when reporting on Medicare program integrity, having safeguards is critical for eﬀective
program management.
Given stakeholder interest in making some telehealth waivers permanent, CMS needs strong
oversight to mitigate these risks as well as guard against potential overutilization of telehealth
because of its convenience. For example, increased utilization of telehealth services may result
in increased Medicare spending, especially if those services are used to supplement, not just
substitute for, in-person visits both during and after the pandemic. We plan to conduct additional
work on the eﬀect of telehealth waivers on utilization, access, and quality of care, as well as CMS’s
continued oversight of these services.

Background
Telehealth services include certain clinical services that are typically furnished in person but are
instead provided remotely via telecommunications technologies. By law, Medicare fee-for-service
generally only pays for these services under limited circumstances; such as when the patient is

160In general, improper payments are payments that should not have been made or were made in the incorrect
amount. Fraud involves an intentional act or representation to deceive with the knowledge that the actions or
representation could result in gain. The judicial or another adjudicative system determines whether an act is fraud.
Waste includes overusing services, such as excessive diagnostic testing. Abuse involves actions inconsistent with
acceptable business or medical practices.

Page 103 GAO-21-191
located in certain health care settings and certain, mostly rural, geographic locations and the
service is performed by certain provider types.161

In response to COVID-19, the Secretary of Health and Human Services declared a public health
emergency on January 31, 2020, and the President declared a national emergency on March
13, 2020. These two actions triggered the availability of authority under section 1135 of the
Social Security Act to temporarily waive or modify certain requirements of the Medicare
program. In addition, Congress passed and the President signed three laws that progressively
expanded or clariﬁed the Secretary’s authority to temporarily waive or modify existing Medicare
telehealth requirements.162 Using these authorities, the Secretary waived or modiﬁed certain
telehealth provisions to increase access to services and give providers more ﬂexibility in treating
beneﬁciaries.163 Among other things, the changes

• allow telehealth services to be provided nationwide, rather than in mostly rural locations;

• allow beneﬁciaries to receive, and providers to furnish, telehealth services from any setting,
including beneﬁciaries’ and providers’ homes;

• temporarily add more than 135 telehealth services to the list of covered telehealth services,
including 11 services that were recently added through an expedited process for approval of
new services instead of the normal rulemaking process which required notice and opportunity
to comment to stakeholders;

• allow certain services to be furnished using audio-only technology such as telephones, instead
of requiring the use of audio and video systems; and expand eligible provider types to include
physical therapists, occupational therapists, and speech language pathologists, among others.

To ensure an adequate supply of providers to respond to the pandemic, CMS also waived other
program requirements that aﬀect the way providers deliver services, including telehealth services.
For example, CMS temporarily removed, when certain conditions are met, Medicare’s requirement
that out-of-state practitioners be licensed in the state where they are providing services. CMS also
waived certain provider screening requirements, including criminal background checks for newly
enrolling home health agencies and opioid treatment programs.

161In addition to services on the Medicare allowable telehealth services list, such as oﬃce visits and oﬃce-based
psychiatry services that may also be provided in person, Medicare also pays for other types of services furnished
commonly using telecommunications technology, including remote evaluation of recorded video or images of patients
and virtual check-ins by a physician or non-physician practitioner who can report oﬃce visits.
162Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, Div. B, § 102,
134 Stat. 146, 155-157; Families First Coronavirus Response Act, Pub. L. No. 116-127, § 6010, 134 Stat. 178, 210 (2020);
CARES Act, Pub. L. No. 116-136, § 3703, 134 Stat. 281, 416 (2020).
163For more information on all waivers related to COVID-19, see Department of Health and Human Services, Centers
for Medicare and Medicaid Services, Physician and Other Clinicians: CMS Flexibilities to Fight COVID-19, Baltimore, Md.: Aug.
20, 2020, accessed August 25, 2020, https://www.cms.gov/ﬁles/document/covid-19-physicians-and-practitioners.pdfand
Centers for Medicare and Medicaid Services, COVID-19 Emergency Declaration Blanket Waivers for Health Care Providers,
Baltimore, Md.: Aug. 20, 2020, accessed August 25, 2020, https://www.cms.gov/ﬁles/document/summary-covid-19-
emergency-declaration-waivers.pdf.

Page 104 GAO-21-191
Overview of Key Issues
Increased telehealth utilization. With the new telehealth waivers, utilization of these services
sharply increased, according to the Department of Health and Human Services’ (HHS) Oﬃce
of the Assistant Secretary for Planning and Evaluation (ASPE). For example, weekly telehealth
primary care visits increased sharply from about 6,700 in mid-March 2020 (just before the
telehealth waivers were issued) to peak at almost 1.3 million in mid-April 2020, while in-person
visits precipitously dropped during this time. The spike in telehealth services began leveling oﬀ as
in-person visits resumed in late April 2020.164

Potential for increased overall Medicare utilization and spending. There is broad interest
among providers and policymakers in permanently adopting some of these telehealth waivers;
however, some experts have cautioned that the convenience of telehealth can increase utilization
of services and, therefore, spending. For example, Medicare providers may begin billing for follow-
up telephone visits (which they could not bill before) after an in-person visit, or beneﬁciaries may
seek, and providers may bill for, treatment of less serious conditions such as the common cold.

Some studies have shown that telehealth can be additive; for example, a 2017 study of Medicare
beneﬁciaries’ use of telehealth services for mental health concluded that these services added
to, rather than substituted for, in-person services.165 ASPE’s analysis also shows stable use of
telehealth services at a higher level than prior to the pandemic after in-person services started
to resume. This suggests that the increased demand for telehealth may continue even after the
pandemic. Since Medicare pays equivalent rates for telehealth as for in-person services, continued
utilization of telehealth services can increase total Medicare spending if it results in an overall
increase in services—both in-person and telehealth combined.

Potential for improper payments and fraud, waste, and abuse. Expansion of telehealth
waivers and the subsequent growth in telehealth utilization have prompted concern among
policymakers and researchers about the potential for improper payments, and fraud, waste,
and abuse in the Medicare program. Fraud schemes involving telehealth have been previously
reported. For example, according to a report issued by the HHS Oﬃce of Inspector General and
the Department of Justice, in ﬁscal year 2019, the federal government ﬁled charges relating to
a telemedicine and durable medical equipment scheme and a genetic testing scheme involving
fraudulent telemedicine companies that together resulted in losses of over $3 billion.166

164See Department of Health and Human Services, Assistant Secretary for Planning and Evaluation (ASPE), Medicare
Beneﬁciary Use of Telehealth Visits: Early Data from the Start of COVID-19 Pandemic. (Washington, D.C.: July 28, 2020), p. 5.
ASPE analyzed preliminary Medicare Part B claims data from January through June 3, 2020, available as of June 16. In its
analysis, ASPE deﬁned primary care visits to include oﬃce visits, preventive and advanced care planning services, but not
communications technology-based services such as virtual check-ins.
165Mehrotra, A., H. A. Huskamp, J. Souza, et al. 2017, ”Rapid growth in mental health telemedicine use among rural
Medicare beneﬁciaries, wide variation across states,” Health Aﬀairs 36, no. 5 (May): 909–917.
166Department of Health and Human Services and Department of Justice, Health Care Fraud and Abuse Control Program,
Annual Report for Fiscal Year 2019 (June 2020), 12.

Page 105 GAO-21-191
CMS oversight activities during the pandemic. According to agency oﬃcials, CMS continues to
utilize existing program integrity tools during the pandemic to prevent improper payments and
reduce fraud, waste, and abuse associated with telehealth services. For example, CMS is

• using its Fraud Prevention System to identify inappropriate Medicare claims prior to payment
and to ﬂag providers with suspicious billing patterns through post-payment screens; and

• analyzing claims data and engaging in increased collaboration with federal law enforcement
agencies to identify and address COVID-19 related fraud schemes.

In addition, according to CMS oﬃcials, after temporarily suspending pre- and post-payment
medical reviews, CMS has resumed post-payment reviews for claims ﬁled prior to March 1,
2020, and has initiated post-payment review for claims ﬁled thereafter for speciﬁc investigative
projects. CMS has also resumed normal provider investigation activities that require written
communications after temporarily limiting them. CMS is allowing reviews that require in person
interactions only with prior CMS approval and consistent with any state and local requirements.

CMS oﬃcials further stated that in response to the pandemic the agency has implemented new
program integrity activities to mitigate the risks of fraud, waste, and abuse related to telehealth
waivers, including:

• closely monitoring billing behaviors in areas particularly prone to fraud;

• conducting stakeholder calls and issuing guidance designed to educate providers on the
additional telehealth ﬂexibilities, including how to appropriately bill for telehealth services;

• informing beneﬁciaries about Medicare coverage of telehealth services through updates to
Medicare.gov and the 2021 “Medicare & You” handbook, and using newspapers, email, and
social media to educate beneﬁciaries about available telehealth services.

CMS has stated that it is actively monitoring telehealth services, but that it is too early to fully
assess the eﬀectiveness of these eﬀorts. We will continue working with CMS to further evaluate
the agency’s program integrity eﬀorts related to telehealth waivers, including review of relevant
policies, documentation of the agency’s existing and new program integrity safeguards, and
examples of potential improper billing or fraudulent activities uncovered through these eﬀorts.

Agency Comments
We provided a draft of this enclosure to HHS and the Oﬃce of Management and Budget (OMB) for
review and comment. HHS provided technical comments on this enclosure, which we incorporated
as appropriate. OMB did not have comments on this enclosure.

Page 106 GAO-21-191
GAO’s Methodology
We reviewed applicable federal laws and regulations, agency guidance and other materials, and
we obtained written answers to questions from CMS oﬃcials.

Contact information: Jessica Farb, (202) 512-7114, farbj@gao.gov

Page 107 GAO-21-191
Indian Health Service
Indian Health Service has obligated $713 million of the $1 billion in supplemental funds directly
appropriated to the agency, as of September 30, 2020, to prevent, prepare, and respond to the
COVID-19 pandemic.

Entity involved: Indian Health Service, within the Department of Health and Human Services

Key Considerations and Future GAO Work
We plan to monitor Indian Health Service’s (IHS) use of funds provided under COVID-19 relief
laws going forward and the agency’s response and recovery eﬀorts to address the pandemic,
including the use of telehealth and coordination with other federal agencies. Separately, we also
plan to examine disparities in health outcomes related to COVID-19 among diﬀerent populations,
including the American Indian and Alaska Native (AI/AN) population, and the behavioral health
impacts of COVID-19.

Background
IHS, an agency within the Department of Health and Human Services (HHS), is charged with
providing health care services to more than 2 million AI/AN people who are members or
descendants of federally recognized tribes.167 IHS provides health care services either directly
through a system of facilities, such as hospitals, health clinics, and health stations that it operates;
or indirectly through facilities operated by tribes or others.168 In addition, IHS awards contracts
and grants to urban Indian organizations that provide health care to AI/AN people residing in
urban centers.

As of October 17, 2020, IHS had reported 61,191 conﬁrmed cases of COVID-19, with some
tribes experiencing more cases per capita than most U.S. states.169 The COVID-19 relief acts
appropriated more than $1 billion in supplemental funding to IHS for its COVID-19 eﬀorts. This
includes $64 million appropriated by the Families First Coronavirus Response Act and about $1
billion appropriated by the CARES Act.170 In addition to funds speciﬁcally appropriated for IHS,

167Federally recognized tribes have a government-to-government relationship with the United States and are eligible to
receive certain protections, services, and beneﬁts by virtue of their status as Indian tribes. The Secretary of the Interior
annually publishes in the Federal Register a list of all tribal entities that the Secretary recognizes as Indian tribes. As of
January 30, 2020, there were 574 federally recognized tribes. See 85 Fed. Reg. 5462 (Jan. 30, 2020).
168As of February 2019, IHS, tribes, and tribal organizations operated 46 hospitals and 353 health centers, as well as a
range of other health facilities, of which 24 hospitals and 50 health centers were federally operated IHS facilities. IHS also
enters into agreements with 41 urban Indian organizations.
169For more information on the number of reported COVID-19 cases among those IHS serves and its response, see
https://www.ihs.gov/coronavirus, accessed October 19, 2020.
170Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 550 (2020); Pub. L. No. 116-127, 134 Stat. 178, 181 (2020).

Page 108 GAO-21-191
HHS also allocated other COVID-19 relief funding to IHS.171 We previously reported in June 2020 on
IHS’s allocation of its supplemental COVID-19 relief funding by program area and activity.

As of September 30, 2020, IHS had obligated most of its supplemental funding to support IHS-
identiﬁed priorities related to COVID-19, including prevention, detection, treatment, and recovery.
(See table below.)

171For example, HHS allocated $500 million to IHS, tribal, and Urban Indian facilities from the Provider Relief Fund,
established to reimburse eligible health care providers for health care related expenses and lost revenues attributable
to coronavirus. See, e.g., Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 563 (2020). HHS also allocated $70 million
to IHS—$30 million of which went to IHS-operated health programs and $40 million of which went to the IHS National
Supply Service Center—from the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020.
In addition, the Paycheck Protection Program and Health Care Enhancement Act appropriated funding speciﬁcally for
tribes, tribal organizations, Urban Indian Health Programs, and health care service providers to tribes, including $750
million for testing. Pub. L. No. 116-139, div. B, tit. I, 134 Stat. 620, 624 (2020).

Page 109 GAO-21-191
Allocation and Obligation of Supplemental Funding Provided to the Indian Health Service (IHS) to Address
COVID-19
Amount obligated as
Amount allocated of 9/30/20
Purpose (dollars in millions) (dollars in millions)
a
CARES Act

IHS federal health programs and Tribal Health Programs $465 $395
(THP). Funding allocated using existing distribution
methodologies for program increases in hospitals and health
clinics, purchased and referred care, alcohol and substance
abuse, mental health, community health representatives, and
public health nursing funding.

Purchased and referred care (PRC). Care for medical or dental 155 117
services provided outside of IHS or tribal health care facilities,
allocated using the PRC distribution formula for new PRC funds.

Telehealth expansion. To support activities across the IHS, 95 0
tribal, and urban Indian organization (UIO) health programs.

Medical equipment. Included within $125 million transfer limit 74 56
to IHS facilities account.

Electronic health record stabilization and support. 65 0.2

Urban Indian Organizations. Funding provided through 50 50
existing contracts under the Indian Health Care Improvement
Act as a one-time amount for each UIO plus an additional
amount based on each UIO’s urban Indian users.

Maintenance and improvements. Included within $125 million 41 32
transfer limit to IHS facilities account.

Unanticipated needs. 30 0

Epidemiology, surveillance, and coordination. Funding 26 12
for Tribal Epidemiology Centers and national surveillance
coordination at IHS headquarters.

Sanitation and potable water. Included within $125 million 10 9
transfer limit to IHS facilities account.

Non-clinical federal staﬀ support. Activities include deep 10 0
cleaning of oﬃce space, equipment for teleworkers, protection
for non-clinical staﬀ, and non-clinical staﬀ overtime.

Public health support activities. Includes partnerships 6 0
with key stakeholders to broaden messaging about COVID-19
prevention, response, and recovery in Indian Country.

Test kits and materials. Supports acquisition and distribution 5 1
to IHS, THPs, and UIOs.

Families First Coronavirus Response Act

Page 110 GAO-21-191
COVID-19 testing. For diagnostic tests and related oﬃce visits. 64 53

Source: GAO review of IHS information. | GAO-21-191

a
The CARES Act included three provisions guiding IHS’s allocations: (1) A minimum of $450 million for distribution to IHS directly
operated programs, tribal health programs, and Urban Indian Organizations; (2) a maximum of $65 million for electronic health
record stabilization and support; and (3) any remaining funds to be allocated at the discretion of the IHS Director for COVID-19
response activities, with a maximum of $125 million allowed to be transferred to the IHS facilities account.

Overview of Key Issues
Allocation of funds. In responding to the pandemic, IHS has quickly obligated and expended
supplemental funding to health care providers and to address facility, sanitation, and equipment
needs; however, certain funds for testing and related activities—appropriated to HHS, but
administered by IHS—have taken longer to obligate and expend.

Direct funding distributions. The CARES Act established a minimum amount of $450 million to be
distributed directly to IHS operated health programs, tribally operated health programs, and
urban Indian organizations. IHS allocated $515 million for this purpose, most of which had been
obligated as of September 30, 2020. IHS oﬃcials said that the agency’s ability to modify tribal
organizations’ contracts under the Indian Self-Determination and Education Assistance Act allowed
it to quickly disburse the funds. Overall, $713 million of the $1.096 billion directly appropriated to
IHS had been obligated as of September 30, 2020, 90 percent of which has been expended.

Additional costs and improvements. IHS has estimated that billions of dollars are needed to address
a backlog of costs related to facility maintenance and improvements, sanitation and potable water
projects, and medical equipment needs—all of which make responding to COVID-19 more diﬃcult.
In addition to providing funds for health services and operations, the CARES Act authorized IHS
to transfer up to $125 million of the supplemental appropriation for its Indian Health Services
appropriation account to its Indian Health Facilities account. IHS allocated the maximum amount
for these purposes.

IHS’s role in testing and related activities. In addition to CARES Act and Families First Coronavirus
Response Act funding appropriated to IHS for its COVID-19 response, the agency has a role in
disbursing $750 million appropriated to HHS under the Paycheck Protection Program and Health
Care Enhancement Act for COVID-19 testing and testing-related activities.172 According to IHS
oﬃcials, HHS used an Intra-Departmental Delegation of Authority to authorize IHS to provide the
funds to IHS and tribal health programs, but the funds retained their identity as HHS appropriated
amounts. According to IHS, disbursing the funds in this manner required the agency to execute
agreements with each tribe or tribal organization. IHS oﬃcials noted that the execution of these
bilateral amendments creates a capacity concern for IHS and some tribes, especially smaller tribes
and those in hotspots that need to focus on immediate and urgent COVID-19 response activities
within their communities.

172Pub. L. No. 116-139, div. B, tit. I, 134 Stat. 620, 624 (2020).

Page 111 GAO-21-191
Telehealth expansion. In June 2020, we reported that IHS allocated $95 million to expand
access to telehealth services. IHS oﬃcials reported experiencing nearly a twenty-fold increase
in telehealth visits through the agency’s primary telehealth platform. Since the April telehealth
expansion, usage has increased from about 75 visits per week, on average, to a peak of 1,400 per
week, with average use as of October at about 450 visits per week.173 We previously reported on
the challenges IHS experienced with the increased use of telehealth services pushing or exceeding
the limits of broadband availability in remote and rural areas.

IHS reported that the agency reviewed access to acute care facilities and has identiﬁed several
facilities with moderate telehealth bandwidth. Oﬃcials told us that all IHS facilities have
connectivity to support some level of telehealth services; however, the majority of rural patients
lack adequate access to service in their homes. IHS noted that the Federal Communications
Commission (FCC) has provided access opportunities through the COVID-19 Telehealth
Program.174 IHS also continues to support tribal applications and reimbursement through the
Rural Health Care program within FCC’s Universal Services Fund.175

Federal partnerships. During the pandemic, IHS oﬃcials have leveraged federal partnerships
with the Department of Veterans Aﬀairs (VA), Veterans Health Administration, and Federal
Emergency Management Agency (FEMA). Based on the Secretary of Health and Human Services’s
public health emergency declaration, IHS oﬃcials reported that VA expanded access to hospital
care and medical services in its VA network to non-veteran beneﬁciaries. For example, agency
oﬃcials noted that VA provided care to non-veteran patients of a IHS facility that was not able to
provide decompression for patients on ventilators. Doing so freed up the IHS facility to treat other
critical patients.

Additionally, IHS reported that the agency has worked with FEMA under the President’s emergency
declaration. IHS further noted that the agency is working to pursue a formal partnership with the
Strategic National Stockpile to receive supplies, medicines, and devices for life-saving care on a
short-term basis and tribal governments now have the option to request public assistance from
FEMA.

173IHS oﬃcials noted that this number does not include other telehealth modalities such as care provided over the
telephone, which patients use as an alternative to access virtual care in the bandwidth-constrained environments of
Indian country.
174The CARES Act appropriated $200 million to the FCC to develop a new COVID-19 Telehealth Program to help combat
COVID-19 and support eﬀorts of health care providers to provide telehealth services. As of July 8, 2020, the FCC
approved $200 million in funding applications to expand telehealth services during the COVID-19 pandemic. Pub. L. No.
116-136, div. B, tit. VIII, 134 Stat. 281, 531 (2020).
175The FCC designated the Rural Health Care Program, a division of the Universal Service Fund, to provide ﬁscal support
and reduced rates to rural health care providers for telecommunications services and Internet access charges related
to the use of telemedicine and telehealth. IHS and tribal health care providers (eligible clinics, hospitals, and others) can
take advantage of the program to oﬀset the high cost of their rural telecommunication services.

Page 112 GAO-21-191
Agency Comments
We provided a draft of this enclosure to HHS and the Oﬃce of Management and Budget (OMB) for
review and comment. HHS provided technical comments on this enclosure, which we incorporated
as appropriate. OMB did not have comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed federal laws and agency documents, and received written
responses to our questions from agency oﬃcials.

Contact information: Jessica Farb, (202) 512-7114, farbj@gao.gov

Page 113 GAO-21-191
Veterans Health Care
The Department of Veterans Aﬀairs does not have a plan to conduct routine inspections on the
quality of care in all state veterans homes, which provide nursing home care, during the COVID-19
pandemic, nor is it collecting timely data on COVID-19 cases and deaths in these nursing home
facilities.

Entity involved: Veterans Health Administration, within the Department of Veterans Aﬀairs

Recommendations for Executive Action
The Department of Veterans Aﬀairs Under Secretary for Health should develop a plan to ensure
inspections of state veterans homes occur during the COVID-19 pandemic, which may include
using in-person, a mix of virtual and in-person, or fully virtual inspections.

The Department of Veterans Aﬀairs Under Secretary for Health should collect timely data on
COVID-19 cases and deaths in each state veterans home, which may include using data already
collected by the Centers for Medicare & Medicaid Services.

Key Considerations and Future GAO Work
We previously reported shortcomings in the Department of Veterans Aﬀairs’ (VA) inspections of
nursing home facilities, including state veterans homes (SVH), and highlighted these concerns
in our June 2020 report. Nursing home residents, who often are in frail health and living in close
proximity, are at a high risk of being infected with—and dying from—COVID-19, according to the
Centers for Disease Control and Prevention (CDC). (See our enclosure on Nursing Homes.)

Because of these known risks, the health and safety of the more than 20,000 residents in 158 SVHs
VA reports has been a particular concern. For example, according to CDC data, the greatest risk for
severe illness from COVID-19 is among those aged 85 or older and almost half of veterans in SVHs
are in this age group.

In July 2019, we reported that VA does not require its inspection contractor to identify all failures to
meet VA’s quality standards as deﬁciencies. Instead, SVHs can address issues while the contractor
is onsite to avoid being cited for a deﬁciency on the inspection report. Because VA does not
have complete information on deﬁciencies identiﬁed at SVHs, and therefore cannot track this
information to help identify trends in quality across these homes, we recommended that VA
should require all failures to meet standards to be cited as deﬁciencies.

VA concurred with this recommendation. In August 2020, VA modiﬁed its contract to require its
inspection contractor to begin citing all failures to meet standards as deﬁciencies, according to
VA oﬃcials. As of October 2020, VA reported it is in the process of revising its policy to reﬂect this
requirement.

Page 114 GAO-21-191
We also recommended that VA provide information on the quality of all SVHs that is comparable
to the information provided on the other nursing home settings on its website. Although the
Centers for Medicare & Medicaid Services (CMS) inspects approximately two-thirds of SVHs (those
receiving funding from CMS), VA is the only federal entity that conducts regular inspections on the
quality of care in all SVHs.176 Therefore, VA possesses information that is not available elsewhere.
VA concurred in principle and as of October 2020, reported it is exploring options for how to
implement our recommendation.

In the coming years, VA projects an increase in the number of veterans receiving nursing home
care. This makes it particularly important that VA ensure veterans receive quality care. We have
ongoing work reviewing VA’s response to the pandemic in community living centers (CLC)—VA -
owned and-operated nursing homes. We also plan to examine infection prevention at SVHs, and
the quality of care at CLCs.

Background
VA administers one of the largest health care systems in the U.S. and provides health care to
more than 9 million veterans—including more than 39,000 veterans in a variety of nursing home
settings. For example, VA partners with state governments, who own and operate SVHs. According
to VA, in ﬁscal year 2019, VA paid SVHs $1.17 billion for an average daily census of 20,072 veterans
and projects it will pay $1.7 billion to SVHs in ﬁscal year 2022.177 Although VA does not exercise any
supervision or control over the administration, personnel, maintenance, or operation of any SVH,
it conducts annual inspections.178 In addition, VA policy prevents it from making payments to SVHs
until it determines that they meet applicable quality standards.179

The CARES Act contains several provisions to assist SVHs in their response to COVID-19.180
Speciﬁcally, it waives requirements that SVHs maintain a 90 percent overall occupancy rate and
75 percent veteran occupancy rate, to ensure SVHs continue to receive per diem payments
from VA at a time when occupancy rates are declining. VA data show the average number of
veterans receiving care in a SVH declined 6 percent between 2019 and 2020. In addition, the CARES

176CMS provides oversight for the approximately two-thirds of SVHs that receive Medicare or Medicaid payments. CMS
deﬁnes the quality standards that approximately 15,500 nursing homes nationwide must meet in order to participate in
the Medicare and Medicaid programs. See 42 C.F.R. Part 483, Subpart B. To monitor compliance with these standards,
CMS contracts with state survey agencies to conduct inspections of each nursing home not less than once every 15
months.
177For SVHs, 80 percent of veterans receive VA’s partial daily rate that covers about one-quarter of their care costs.
For example, in ﬁscal year 2017, VA’s average SVH per diem was $106 for veterans without eligible service-connected
disabilities. VA paid the full cost of care for the remaining 20 percent of veterans with service-connected disabilities. In
ﬁscal year 2017, the full rate for these veterans averaged $397 per day.
17838 U.S.C. § 1742(b).
179Department of Veterans Aﬀairs, Veterans Health Administration (VHA) Directive 1145.01. Survey Procedures for State
Veterans Homes Providing Nursing Home Care and/or Adult Day Health Care. Washington, D.C.
180Pub. L. No. 116-136, div. B, tit. X, 134 Stat. 281, 584-587 (2020).

Page 115 GAO-21-191
Act included $150 million for SVH construction grants to prevent, prepare for, and respond to
COVID-19.181

Overview of Key Issues
Routine inspections of SVHs have stopped. In March 2020, VA instructed its contractor to
stop routine inspections of SVHs, which had been conducted in person, due to concerns about
COVID-19. As of September 2020, these inspections had not resumed, and VA issued a stop work
order instructing its contractor to halt annual inspections until November 20, 2020. VA policy
requires that every SVH be inspected at least annually.182

According to VA, it is exploring options to resume annual inspections of SVHs, such as using a mix
of virtual and on-site inspection processes.183 Surges in cases of COVID-19, safety of airline travel,
and national contracts for SVH inspections not designed to be conducted virtually are all factors
aﬀecting when and how in-person inspections will resume. However, VA does not have a plan for
how it will assess these factors to determine how and when to continue annual inspections. If
VA—the federal agency that conducts routine inspections on the quality of care for all SVHs—is
not conducting these inspections, it cannot ensure the quality of nursing home care provided to
veterans. This leaves veterans at risk of receiving poor quality care. Further, VA does not have
information on deﬁciencies at all SVHs and therefore cannot track this information to help identify
trends and make any necessary improvements in quality across these homes.

VA oﬃcials said that in the absence of routine inspections, VA can initiate a for-cause inspection of
a SVH to review speciﬁc single or series of incidents, complaints, deﬁciencies, or events that may
jeopardize the health or safety of residents.

According to VA oﬃcials and its contractor, from July to September 2020, VA has initiated four for-
cause inspections at SVHs, which were conducted in-person.

• One inspection was initiated for concerns related to a COVID-19 outbreak. The contractor
found that the facility was in full compliance, and all infection control steps had been taken to
prevent the spread of COVID-19.

• The other three inspections were for non-COVID-19 concerns, such as resident falls. The
contractor identiﬁed deﬁciencies at one of the three SVHs.

181Pub. L. No. 116-136, 134 Stat. at 584 (2020).
182See VHA Directive 1145.01.
183VA’s contractor told us it oﬀered suggestions to VA on how to continue more comprehensive oversight inspections of
SVHs during COVID-19, for example by having fewer inspectors on site and conducting record reviews oﬀ site, but that
VA did not approve these plans.

Page 116 GAO-21-191
Other inspections of long-term care facilities have continued during the pandemic. For
example:

• VA has directed CLCs to use a self-assessment process to adapt the inspection process for
COVID-19 during the pandemic.

• CMS is using a targeted infection survey or high-priority complaint investigation for the
nation’s more than 15,000 Medicare- and Medicaid-certiﬁed nursing homes, including
approximately two-thirds of SVHs, which continues during the pandemic.184 (See our Nursing
Homes enclosure.) However, because approximately one-third of SVHs are not subject to CMS
oversight, these SVHs have not been subject to these inspections and, therefore, have had no
routine federal inspections during the pandemic.185

COVID-19 guidance. In response to COVID-19, VA has communicated with SVHs on a range of
issues. For example:

• noting the steps it took in its CLCs to address COVID-19, including daily assessments of staﬀ
and residents for symptoms of COVID-19, limiting the number of visitors, and social distancing
procedures;

• recommending SVHs follow guidance from CDC, CMS, and their speciﬁc state’s public health
department regarding COVID-19 management and prevention;

• expanding telehealth capabilities to reduce COVID-19 exposure risk for veterans at SVHs;

• contacting their respective local VA medical centers for informal coaching on best practices in
SVH operations, patient care, and employee safety; and

• requesting VA assistance through VA’s civilian public health response eﬀorts and ensuring
SVHs receive per diem payments through the CARES Act waivers, according to oﬃcials from
the National Association of State Veterans Homes (NASVH). As of October 2020, VA oﬃcials
told us that it has supported the needs of 86 SVHs—including obtaining staﬀ, testing, and
PPE—in 38 states and the District of Columbia as they respond to COVID-19.186

VA oﬃcials said it will continue to provide guidance and assistance to SVHs as requested or
needed.

184Compared to standard surveys, which are comprehensive, targeted infection control surveys use a more
streamlined review checklist. According to CMS, this is to minimize the impact on provider activities while ensuring
that providers are implementing actions to protect the health and safety of individuals in response to the COVID-19
pandemic
185In 2019 (see Related GAO Products), we reported that approximately two-thirds of the 148 SVHs across the
country received Medicare or Medicaid payments.
186VA’s civilian public health response is one component of its Fourth Mission, which according to VA, is to
improve the nation’s preparedness for response to war, terrorism, national emergencies, and natural disasters by
developing plans and taking actions to ensure continued service to veterans, as well as support to national, state,
and local emergency management; and to public health, safety, and homeland security eﬀorts.

Page 117 GAO-21-191
Challenges to using construction grants. NASVH representatives stated that SVHs planned
to use the $150 million in additional construction grants provided by the CARES Act to fund a
range of projects to help respond to the pandemic, such as building additional rooms to allow for
separating residents in quarantine or for PPE storage, and making upgrades like adding in-wall
oxygen to rooms. However, NASVH oﬃcials said few SVHs were able to use the additional funds
because they were made available near the end of the annual VA grant cycle.

In addition, NASVH oﬃcials identiﬁed concerns in SVHs’ securing the required matching state
funding, which could prevent some SVHs from taking advantage of the additional funding.187
Speciﬁcally, according to VA and NASVH, there are an estimated 80 pending grant requests with
a total estimated federal contribution of nearly $1.2 billion. This includes $500 million for grants
with state matching funds to address priorities such as life and safety concerns, and $700 million
for grants for which the state needs to ﬁnd matching funds to receive the federal contribution. VA
said the state cost-sharing requirement increases accountability and lowers the risk for fraud and
waste.

Tracking COVID-19 cases and deaths. Timely and accurate data on the number of COVID-19
cases and deaths in each SVH is useful for monitoring trends in infection rates, identifying which
SVHs have already experienced an outbreak, and overseeing whether SVHs have appropriately
and eﬀectively taken steps to prevent and mitigate the spread of COVID-19 to protect residents.
For example, CMS requires nursing homes it inspects, which as previously discussed includes
approximately two-thirds of SVHs, to submit cases and deaths among residents and staﬀ weekly
to CDC. CMS uses this information to track trends and direct targeted response eﬀorts, including
COVID-19 testing.188

VA oﬃcials told us they use an informal process where each Veterans Integrated Service Network
reaches out to SVHs in its jurisdiction bi-monthly to document COVID-19 cases among staﬀ and
residents, recovered cases, and deaths. According to VA, it does not collect more timely data
because SVHs are not required to report these data to VA. Federal internal control standards state
that management should use quality information and externally communicate the necessary
information to achieve the entity’s objectives. If VA does not have timely data on the number of
COVID-19 cases and deaths occurring at each SVH, and does not share this information with its
inspection contractor, then it cannot monitor the spread of COVID-19 in SVHs and take steps to
mitigate the spread and protect residents.

18738 U.S.C. § 8135(a)(1). VA is generally authorized to pay up to 65 percent of construction costs for SVHs, with states
paying the remainder.
188In September 2020, we recommended that the Secretary of Health and Human Services, in consultation with CMS
and CDC, develop a strategy to capture more complete data on conﬁrmed COVID-19 cases and deaths in nursing homes
retroactively to January 1, 2020, and to clarify the extent to which nursing homes have reported data before May 8, 2020.
To the extent feasible, we recommended that this strategy to capture more complete data incorporate information
nursing homes previously reported to CDC or to state or local public health oﬃces.

Page 118 GAO-21-191
Agency Comments
We provided a draft of this enclosure to the Oﬃce of Management and Budget (OMB) and VA
for review and comment. OMB did not have comments on this enclosure. VA provided technical
and general comments on this enclosure, which we incorporated as appropriate. VA’s general
comments are reproduced in appendix XI.

VA concurred with our recommendation to develop a plan to ensure that routine inspections of
SVHs occur during the COVID-19 pandemic and provided a target completion date of November
2021. We urge VA to move up its targeted completion date, because it cannot ensure the quality
of nursing home care provided to veterans in these facilities until it develops a plan to resume
these inspections (virtually, in person, or both). Without these inspections, veterans are at risk of
receiving poor quality care.

VA concurred in principle with our recommendation to collect timely data on COVID-19 cases and
deaths at each SVH. Although VA agreed these data are important to understanding the impact
of COVID-19 on veterans living in SVHs, it has not required states to report all COVID-19-related
deaths at SVHs. VA stated that it would continue to evaluate its voluntary reporting process and
provided a target completion date of April 2021. We reiterate the importance of having timely
data on COVID-19 cases and deaths at SVHs, because as the country proceeds through the winter
months, some experts suggest the number of COVID-19 cases and deaths could increase.

GAO’s Methodology
To conduct this work, we reviewed VA guidance and documents, federal laws, and written
responses from VA about its oversight of and support to SVHs during the pandemic. In addition,
we interviewed oﬃcials from NASVH and VA’s inspection contractor about VA’s response to
COVID-19 in SVHs.

Contact information: Debra A. Draper, (202) 512-7114, draperd@gao.gov; Sharon Silas, (202)
512-7114, silass@gao.gov

Related GAO Products
VA Health Care: VA Needs to Continue to Strengthen Its Oversight of Quality of State Veterans Homes.
GAO-20-697T. Washington, D.C.: July 29, 2020.

VA Nursing Home Care: VA Has Opportunities to Enhance Its Oversight and Provide More Comprehensive
Information on Its Website. GAO-19-428. Washington, D.C.: July 3, 2019.

Page 119 GAO-21-191
Military Health
The Department of Defense continues to pursue a multipronged approach to protect
servicemembers from COVID-19, which includes testing and public health measures, as well as
investing about $1.64 billion from the CARES Act for ﬁscal years 2020 through 2021 toward a
variety of medical research and development projects for COVID-19 countermeasures.

Entity involved: Defense Health Agency, within the Department of Defense

Key Considerations and Future GAO Work
We plan to continue to monitor the Department of Defense’s (DOD) health protection eﬀorts for
servicemembers, including COVID-19 testing and ongoing research and development projects as
part of the response to and recovery from the COVID-19 pandemic.

Background
Congress appropriated $3.8 billion to DOD’s Defense Health Program to prevent, prepare for,
and respond to the COVID-19 pandemic, domestically or internationally.189 DOD, through the
Defense Health Program, provides worldwide medical services to active-duty and other eligible
beneﬁciaries, including costs associated with the delivery of TRICARE beneﬁts. In 2019, DOD
operated 475 military Medical Treatment Facilities to deliver care to the approximately 9.6 million
individuals eligible for DOD health care services, including active-duty and retired servicemembers
and their dependents.

For ﬁscal years 2020 through 2021, DOD has allocated approximately $1.64 billion from the CARES
Act—including $1.35 billion from the Defense Health Program and $291 million from the CARES
Act for Defense-wide Research, Development, Test and Evaluation—to support medical research
and development eﬀorts for COVID-19, including vaccines, diagnostics, and therapeutics through
partnerships between military health system components and various academic and commercial
partners.190 DOD has a long-standing medical research and development program with projects
across various areas of the medical ﬁeld, including infectious diseases.

189Coronavirus Aid, Relief, and Economic Security (CARES) Act, Pub. L. No. 116-136, div. B, title III, 134 Stat. 281, 518
(March 27, 2020). The Families First Coronavirus Response Act, Pub. L. No. 116-127, title II, 134 Stat. 178, 181 (March
18, 2020) also appropriated $82 million to the Defense Health Program. Under the CARES Act, DOD received a total of
$10.5 billion that, in addition to the $3.8 billion enacted for the Defense Health Program, included appropriations for
the National Guard; the defense working capital funds; and the Oﬃce of the Inspector General, among other things. We
discuss the funding provided to the National Guard for personnel and operations and maintenance in the enclosure on
Defense Support of Civil Authorities.
190Remaining amounts from the $3.8 billion Defense Health Program appropriated funds were allocated to other
nonmedical research and development categories, such as medical care, cleaning contracts, nonmedical supplies and
equipment, and for transfer or reprogramming to other COVID-19 response costs.

Page 120 GAO-21-191
The Under Secretary of Defense for Personnel and Readiness and the Assistant Secretary of
Defense for Health Aﬀairs oversee DOD’s COVID-19 medical research and development eﬀorts.
DOD’s COVID-19 medical research and development funding is overseen by the Assistant Secretary
of Defense for Health Aﬀairs and the Under Secretary of Defense for Research and Engineering.
DOD has a number of organizations that conduct and sponsor medical research, such as the
U.S. Army Medical Research and Development Command; the Air Force Research Laboratory; the
Navy Medical Research Center; the Uniformed Services University of the Health Sciences; the Joint
Program Executive Oﬃce for Chemical, Biological, Radiological, and Nuclear Defense; and the
Defense Advanced Research Projects Agency.

Overview of Key Issues
As of September 30, 2020, DOD reported 66,375 cumulative, conﬁrmed cases of COVID-19 among
military servicemembers, their dependents, civilians, and contractors (see table), an increase
of 14 percent since our last report in September 2020.191 Speciﬁcally, as new COVID-19 cases
were reported, the cumulative incidence of COVID-19 among the servicemember population
increased over this time period from 2,367 per 100,000 servicemembers to 3,408 per 100,000
servicemembers. Reserve and National Guard members account for approximately 21 percent of
cumulative cases of COVID-19 among servicemembers.

191A conﬁrmed COVID-19 case in DOD is deﬁned by a positive laboratory test. In September 2020, we reported that,
as of September 9, 2020, DOD had identiﬁed 58,058 cumulative cases of COVID-19 among servicemembers, their
dependents, civilians, and contractors.

Page 121 GAO-21-191
Number of COVID-19 Cases Reported by the Department of Defense, as of September 30, 2020
Cumulative cases Hospitalizations Deaths

Military servicemembers 45,759 618 8

Active component 36,374 458 1

Reserve 4,143 118 5

National Guard 5,242 42 2

Dependents 6,092 131 7

Civilians 10,210 437 59

Contractors 4,314 181 22

Total 66,375 1,367 96

Source: GAO analysis of data from the Department of Defense’s (DOD) COVID-19 Task Force. I GAO-21-191.

Note: A conﬁrmed COVID-19 case in DOD is deﬁned by a positive laboratory test.

According to DOD oﬃcials, the department continues to address the COVID-19 pandemic within its
workforces by applying a conditions-based approach to prevention and mitigation, which includes
testing, closely monitoring health surveillance data (e.g., COVID-19 testing positivity rates and
cases data, among other indicators), leveraging DOD’s public health emergency management
protocols at installations worldwide, and implementing updated guidelines from the Centers for
Disease Control and Prevention, among other things. Concurrently, and in tandem with whole-
of-government eﬀorts, DOD is investing in COVID-19 medical research and development projects
(“projects”) for vaccines, therapeutic treatments, and new and improved testing capabilities for the
beneﬁt of servicemembers and the general population.192 These types of capabilities are referred
to collectively as “medical countermeasures.” In preparation for the availability of a COVID-19
vaccine, DOD is also developing a distribution plan to administer doses across workforces and
beneﬁciaries.

Medical countermeasures research and development projects. According to DOD oﬃcials,
the department’s strategy for COVID-19 research and development is designed to achieve a
balance of short- and long-term countermeasures projects. This strategy includes projects that
complement government-wide eﬀorts with applicability for the general population, and those that
are speciﬁcally tailored to DOD’s unique operational and population needs. Short-term projects
are those aligned with the expedited time frames of the federal government’s Operation Warp
Speed. Longer term projects, according to DOD oﬃcials, are those that may provide enhanced
capabilities, such as easier storage and distribution for the DOD population, a portion of which
operates in remote locations across the globe without ready access to a medical facility.

192Outside of DOD’s eﬀorts to pursue medical research and development projects for COVID-19 vaccines, therapeutics,
and diagnostics as part of its eﬀorts to protect servicemembers, Operation Warp Speed aims to accelerate the
development, manufacturing, and distribution of COVID-19 vaccines and therapeutics, with the goal of producing 300
million doses of a COVID-19 vaccine for the general population, with initial doses available by January 2021.

Page 122 GAO-21-191
According to DOD oﬃcials, in January 2020, department leaders decided to initiate medical
countermeasure projects for COVID-19 in response to the increasing numbers of COVID-19 cases
in Asia among the general population.193 To do so prior to a supplemental appropriation, DOD
oﬃcials stated that they initially applied base budget funding from the Defense Health Program
funds toward new research and development for COVID-19 medical countermeasures. However,
they stated that most of DOD’s portfolio of COVID-19 medical countermeasures projects are now
funded by supplemental appropriations through the CARES Act.

As of September 2020, DOD was applying about $1.64 billion allocated from the CARES Act toward
the advancement of the COVID-19 medical countermeasures portfolio, and a wide variety of other
supporting research studies to improve knowledge about the SARS-CoV-2 virus and COVID-19 in
servicemember populations (e.g., transmission, incidence, disease course, and immunological
response), testing technology, and manufacturing of medical countermeasures. According to
DOD oﬃcials, DOD entities oversee and manage the projects, while academic and commercial
partners execute much of the day-to-day clinical work on many projects through a combination
of grants, cooperative agreements, and contracts. Moreover, DOD provides infrastructure
and manufacturing support to COVID-19 medical countermeasures projects. For example, by
leveraging the department’s clinical trial networks, DOD oﬃcials stated that they were able to
quickly establish protocols to understand the natural history of COVID-19 and have supported
clinical studies evaluating investigational medical countermeasures.194

DOD’s portfolio of medical countermeasures investments for COVID-19 through ﬁscal year 2021
includes a mix of vaccines, diagnostics, and therapeutics in varying stages of maturity.

• Vaccines. DOD has ﬁve vaccine development projects. Three of these projects could have
applications for the general population, but are not candidates of Operation Warp Speed,
according to DOD oﬃcials. DOD oﬃcials also stated that the department’s Advanced
Development and Manufacturing facility is already producing thousands of doses of one
vaccine candidate for availability by the end of 2020.195 The other vaccine projects are being
designed to more speciﬁcally meet the operational needs of the department, such as qualities
that allow for storage and use in more austere locations, according to DOD oﬃcials.

According to DOD documentation, the department’s vaccine investments are leveraging
platforms and technologies available within the department, and those of established
partners. In addition, DOD is leveraging its capabilities in support of an Operation Warp Speed
vaccine candidate that the Department of Health and Human Services is sponsoring and

193On February 26, 2020, U.S. Forces Korea conﬁrmed the ﬁrst positive COVID-19 case in a U.S. servicemember.
194According to the Centers for Disease Control and Prevention, the natural history of a disease refers to the
progression of a disease process in an individual over time, in the absence of treatment.
195DOD has long expressed concerns about its ability to acquire and maintain the capability to research, develop,
and manufacture medical countermeasures (e.g., vaccines, drugs, and diagnostics) against biological warfare threat
agents, toxins, and endemic diseases. In 2013, DOD partnered with a private-sector biopharmaceutical company
to develop an Advanced Development and Manufacturing facility in Alachua, Florida, with the capability to use
disposable equipment enabling timely changes in a production line for medical countermeasures. The facility
became fully operational in March 2017. See Biological Defense: Additional Information That Congress May Find Useful
as It Considers DOD’s Advanced Development and Manufacturing Capability, GAO-17-701 (Washington, D.C.: July 17,
2017).

Page 123 GAO-21-191
funding through a public-private partnership with AstraZeneca. Speciﬁcally, DOD announced
in September 2020 that it will support Phase III clinical trials at ﬁve of its military Medical
Treatment Facilities.

• Diagnostics. DOD is investing in a spectrum of diagnostic testing capabilities. According to
DOD oﬃcials, testing will continue to be a critical component of addressing the COVID-19
threat even after vaccines and therapeutics are developed. The diagnostic testing-based
projects include a mixture of molecular, antigen, and serology testing.196 DOD oﬃcials stated
that the department’s existing relationships with industry partners has facilitated development
and emergency use authorizations from the Food and Drug Administration (FDA) for molecular
diagnostic tests and associated platforms. According to DOD documentation, investments
in antigen testing aim to establish quick and easy access to testing supplies to increase the
screening of large groups of symptomatic individuals. DOD’s serology testing projects aim to
expand knowledge about the presence of antibodies, and how, when, and where antibodies
can be utilized in the COVID-19 response. DOD oﬃcials stated that the department’s vast
serum repository, which includes samples from every servicemember collected at least every 2
years, is a substantial and unique asset for advancing knowledge about antibodies.

• Therapeutics. DOD’s therapeutics-based projects are focused on managing positive COVID-19
cases using appropriate therapeutic agents and treatments. Similar to reasons for investing in
new and improved testing capabilities, DOD oﬃcials stated that investments in therapeutics
are critical for ensuring a balanced strategy of countermeasures to address COVID-19 even
after a vaccine becomes available. DOD investment areas for therapeutics include antivirals,
anti-inﬂammatories, plasma products, and antibodies. According to DOD oﬃcials, the
department sponsored the development of an antiviral pharmaceutical, remdesivir, which
is now used as a COVID-19 treatment after receiving an emergency use authorization from
the FDA for that indication. DOD oﬃcials also stated that, at the outset of COVID-19, the
department pivoted its antibody discovery pipeline toward rapid development of monoclonal
and polyclonal antibodies targeted against SARS-CoV-2.

Since that time, according to DOD oﬃcials, several of the department’s antibody discoveries
have been licensed by pharmaceutical companies for clinical development and commercial
manufacturing. Additionally, DOD is investing to increase manufacturing capabilities for
therapeutics for the short term (through December 2020) and the long term (through calendar
year 2021). For example, DOD’s Advanced Development and Manufacturing Facility is producing
monoclonal antibody doses that are expected to be available by the end of 2020, according to
DOD oﬃcials.

Vaccine distribution plan. In preparation for the FDA’s issuance of an emergency use
authorization for one or more COVID-19 vaccines later in 2020 or in 2021, the Defense
Health Agency established a COVID-19 vaccine working group of subject matter experts with
representation from across the department, such as the military services and the Joint Staﬀ.
According to the Joint Staﬀ Surgeon, various multidisciplinary DOD teams are collaborating

196Molecular diagnostic viral tests detect the presence of genetic material from SARS-CoV-2, the virus that causes
COVID-19. The antigen viral tests detects the presence of a protein that is part of SARS-CoV and SARS-CoV-2.
Serology tests detect antibodies produced in the blood of patients who have had a previous COVID-19 infection.

Page 124 GAO-21-191
with the vaccine working group to plan for the information technology, logistics, and public
health requirements for vaccine distribution both within military medical treatment facilities and
expeditionary, or deployed, settings. The Deputy Secretary of Defense and the Vice Chairman of
the Joint Chiefs of Staﬀ—as co-chairs of DOD’s COVID-19 Task Force—oversee the working group.

According to Defense Health Agency oﬃcials, the working group has been drafting an
implementation plan supporting COVID-19 vaccine distribution. They stated that the uncertainties
about which vaccine (or vaccines) will be authorized and the timing of their availability pose a
challenge at this stage of planning for distribution. DOD would need to seek a waiver from the
President to require servicemembers to receive a COVID-19 vaccination, should the vaccine’s
emergency use authorization include an option to decline vaccination. The working group
anticipates that mass immunization events will likely be required, and vaccination prioritization
tiers will be needed due to vaccine supply limitations.

DOD is communicating updates to its military Medical Treatment Facilities about vaccines in
development and how the facilities may start to prepare for the receipt of one or more vaccines
for SARS-CoV-2. Among other preparation steps, the DOD working group is

• developing policy and guidance on vaccine administration; working on ordering procedures
and cold chain management requirements for the unique shipping and storage needs
anticipated for one or more SARS-CoV-2 vaccines; establishing a public website;

• developing webinars and podcasts for immunization personnel along with clinicians, leaders,
and vaccine recipients; and

• providing education and training to immunization personnel, including a competency
assessment checklist.

Agency Comments
We provided a draft of this enclosure to DOD and the Oﬃce of Management and Budget (OMB)
for review and comment. DOD provided technical comments on this enclosure, which we
incorporated as appropriate. OMB did not have comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed DOD guidance and the most recent DOD data available as of
September 30, 2020. We also interviewed DOD oﬃcials knowledgeable about COVID-19 response
eﬀorts and reviewed publicly available DOD media reports, statements, and documents. The
data were provided to us by the DOD COVID-19 Task Force, which maintains the COVID-19 data
of record for the department and reports them to senior DOD leaders. To assess the reliability

Page 125 GAO-21-191
of the data on COVID-19 cases among servicemembers, dependents, civilians, and contractors,
we discussed the data with agency oﬃcials, reviewed the data for outliers or obvious errors, and
reviewed relevant DOD documents. We determined that the data were suﬃciently reliable for the
purposes of this enclosure. However, we did not independently review the data for accuracy.

Contact information: Brenda S. Farrell, (202) 512-3604, farrellb@gao.gov

Page 126 GAO-21-191
Defense Support of Civil Authorities
The Department of Defense’s support to civil authorities continued to decrease since the peak of
the department’s COVID-19 pandemic response eﬀorts in April 2020, as civil authorities became
better equipped to manage the response and the need for the department’s assistance declined.

Entities involved: Department of Defense, including its active-duty, reserve, and National Guard
forces; the U.S. Army Corps of Engineers; and the Defense Logistics Agency

Key Considerations and Future GAO Work
We continue to examine the support the Department of Defense (DOD) provides to civil
authorities as part of the response to and recovery from the COVID-19 pandemic, and the
coordination among the federal agencies supporting the pandemic response.

Background
DOD has played a prominent role in supporting civil authorities’ response to the COVID-19
pandemic, in addition to other natural and man-made emergencies, such as wildﬁres, hurricanes,
and civil unrest. DOD provides such support through its Defense Support of Civil Authorities
mission, and is authorized to do so when requested by another federal agency and approved
by the Secretary of Defense or when directed by the President.197 In a series of presidential
memorandums sent to the Secretaries of Defense and Homeland Security during March, April,
May, and June 2020, the Federal Emergency Management Agency (FEMA) was directed to fund 100
percent of emergency assistance associated with COVID-19 response activities undertaken by state
National Guards.198

In the CARES Act, Congress appropriated approximately $1.5 billion for National Guard personnel
and operations expenses incurred in responding to COVID-19 to prevent, prepare for, and respond
to the coronavirus domestically or internationally.199 These amounts were required to be obligated
by September 30, 2020. Section 13001 of the CARES Act authorized DOD to transfer amounts
appropriated to the department by the act to other applicable DOD appropriations for expenses

197Requesting agencies could include, for example, the Federal Emergency Management Agency (FEMA), Health and
Human Services (HHS), and the U.S. Department of Agriculture. DOD provides such support through federal military
forces; DOD civilians and contract personnel; and DOD component assets, to include the National Guard and the U.S.
Army Corps of Engineers.
198The requirement for the federal government to fund 100 percent of the costs for the states’ and territories’ use of
National Guard forces was available for orders of any length of authorizing duty through August 21, 2020.
199CARES Act, Pub. L. No. 116-136, div. B, title III, 134 Stat. 281, 518 and 520 (March 27, 2020). As we previously noted
in our September 2020 report, DOD received about $10.5 billion under the act that, in addition to the National Guard
activities, included appropriations for the Defense Health Program; the defense working capital funds; and the Oﬃce of
the Inspector General, among other things.

Page 127 GAO-21-191
incurred in preventing, preparing for, or responding to COVID-19, including in support of other
federal departments and agencies, and state, local, and tribal governments.200

Subsequently, an April 1, 2020, memorandum signed by the acting Undersecretary of Defense
(Comptroller) stated that transfers under section 13001 may be made only to meet the
department’s requirements, stating that DOD does not receive appropriations for, and has no
authority to provide National Guard support to, federal agencies, states, or local, territorial, or
tribal governments on a nonreimbursable basis. Therefore, the transfer authority provided under
section 13001 does not authorize DOD to use its appropriations to support non-DOD entities.201

As of September 30, 2020, the department reprogrammed approximately $1.28 billion of
the approximately $1.5 billion appropriated to the Army and Air National Guards’ Personnel
and Operations and Maintenance accounts to other DOD appropriations.202 According to
USAspending.gov, as of August 31, 2020, the National Guard had obligated about $111.5 million
and spent about $50.9 million of the $1.5 billion it received from the CARES Act.203 See table below
for details about the use and transfer of these funds.

200CARES Act, Pub. L. No. 116-136, div. B, title III, § 13001, 134 Stat. 281, 521 (March 27, 2020).
201Under Secretary of Defense (Comptroller), Availability of National Guard Funding under the “Coronavirus Aid, Relief, and
Economic Security Act” (“CARES” Act) (April 1, 2020).
202In October 2020, DOD oﬃcials in the Comptroller’s oﬃce told us that the department’s report on CARES Act
expenditures through the end of ﬁscal year 2020 would not be available until November 2020, after the period of our
review. As a result, we were not able to evaluate those data for this report, but plan to report on them in our March 2021
report.
203USAspending.gov, accessed on October 19, 2020.

Page 128 GAO-21-191
Funds Available for the Department of Defense to Transfer from the CARES Act Appropriations for the Army and
Air National Guards’ Personnel and Operations and Maintenance Accounts
Total Funds made
appropriations
a Total available for
b b c
($ Total obligations expenditures transfer
Account thousands) ($ thousands) ($ thousands) ($ thousands)

Personnel, total 1,228,716 56,089 41,111 1,101,743

Army National Guard 746,591 51,353 38,920 677,004

Air National Guard 482,125 4,736 2,191 424,739

Operation and Maintenance, total 262,450 55,401 9,788 180,932

Army National Guard 186,696 51,730 7,671 122,132

Air National Guard 75,754 3,671 2,117 58,800

Total 1,491,166 111,490 50,899 1,282,675

Source: GAO analysis of Department of Defense and USAspending.gov data. I GAO-21-191.

Note: In October 2020, Department of Defense (Comptroller) oﬃcials told us that the department’s report on CARES Act
expenditures through the end of ﬁscal year 2020 would not be available until early November 2020–after the period of our
review.
a
Appropriation amounts were identiﬁed through the CARES Act.
b
Obligation and expenditure amounts were obtained from USASpending.gov, accessed on October 19, 2020. These amounts
were identiﬁed as of August 31, 2020. We plan to obtain ﬁnal obligation and expenditure amounts from DOD once they become
available in November 2020.
c
Funds made available for transfer were identiﬁed through DOD’s internal reprogramming actions and information provided
National Guard oﬃcials. These amounts were identiﬁed as of September 30, 2020.

According to a September 2020 DOD reprogramming action, the department, for example,
transferred $24.4 million from the Army National Guard’s Personnel account to the Army
Research, Development, Test, and Evaluation account. According to the reprogramming action, the
funds were available due to the increased use of Army National Guard members for additional
FEMA mission assignments and the use of base Military Personnel appropriated funds to support
COVID-19 costs. The reprogramming action also stated that the funds were needed to assess
COVID-19 testing capability for the Army force and would be used to evaluate the viability and
reliability of two COVID-19 testing systems for operational settings. We will continue to work with
the DOD Comptroller’s oﬃce to obtain additional detailed information on these reprogramming
actions and the accounts to which these funds were transferred, and plan to report our ﬁndings in
a future update.

According to DOD’s May 2020 CARES Act Spend Plan, the department requested that CARES Act
funding for DOD’s support of states’ COVID-19 response be provided as an appropriation into
the Emergency Response Fund, Defense account along with the authority for DOD to provide

Page 129 GAO-21-191
nonreimbursable support to other federal departments, states, local, and tribal governments.204
Congress, however, chose to appropriate CARES Act amounts into existing National Guard
accounts without authority for DOD to provide nonreimbursable assistance. Additionally, as
noted previously, a series of presidential memorandums directed FEMA to fund 100 percent of
emergency assistance associated with COVID-19 response activities undertaken by the National
Guard.

As we noted in our September 2020 report, DOD oﬃcials stated that the total amounts
appropriated to the National Guard in the CARES Act could not be fully obligated before they
expired at the end of ﬁscal year 2020. DOD oﬃcials further stated that National Guard support
to the states for the COVID-19 response was fully reimbursed by FEMA. Consequently, amounts
appropriated to the National Guard in support of states’ COVID-19 response were identiﬁed as
available for transfer to other DOD accounts for COVID-19-related priority activities.

Overview of Key Issues
DOD support eﬀorts. According to DOD oﬃcials, as of September 30, 2020, DOD had received
368 FEMA mission assignments and other requests for assistance.205 Further, as of September
30, 2020, approximately 40 active-duty medical personnel were providing support under FEMA
mission assignments, and an additional 93 medical personnel were in a restriction of movement
status after supporting a FEMA mission in Texas. In addition, as of September 30, 2020, more than
16,000 National Guard members remained on orders in 43 states and 3 territories to support the
response to COVID-19,206 which is fewer than half of the number of National Guard personnel on
orders at the peak of the response in spring 2020.207

According to DOD oﬃcials, the department’s support to the states has continued to shift over
the course of the pandemic, particularly as civil authorities became better equipped to manage
the response and the demand for medical and other assistance from the department declined.
For example, the focus of the initial response was on building ﬁeld hospitals and providing staﬀ
for those facilities; however, the focus of the more recent support was on sending DOD medical
personnel into local hospitals to augment the medical staﬀ. According to oﬃcials, DOD medical
personnel will be sent in when the need for medical support exceeds local capabilities or what the

204Under Secretary of the Defense (Comptroller), Department of Defense Spend Plan for Funding Received in the
Coronavirus Aid, Relief, and Economic Security “CARES” Act (P.L. 116-136) (May 2020).
205According to DOD oﬃcials, this total comprised 328 FEMA mission assignments and 40 requests for assistance.
206National Guard forces may provide support to civil authorities when ordered to active duty—commonly referred to
as Title 10 duty status—and are funded and commanded by DOD. National Guard members may also be placed in a
duty status pursuant to section 502(f)(2)(A) to support operations or missions undertaken by the member's unit at the
request of the President or the Secretary of Defense. When operating in Title 32 duty status, National Guard forces are
funded by DOD and commanded by the state.
207According to DOD oﬃcials, approximately 3,570 medical personnel provided support at the peak of the COVID-19
response in late April 2020. In addition, more than 41,000 National Guard personnel in Title 32 status provided support
at the peak of the response to the COVID-19 pandemic.

Page 130 GAO-21-191
Department of Health and Human Services can provide. Oﬃcials explained that this approach has
also facilitated the department’s eﬀorts to balance internal requirements with the demand for
support from the states.

According to the National Guard Bureau, the vast majority of the support currently provided by
the National Guard is related to testing and screening activities. The following are examples of civil
support provided by the National Guard through September 2020:

• Testing and screening. National Guard members in 44 states and territories, including Alaska,
California, Colorado, Florida, and Ohio, assisted with testing and screening for COVID-19.
This remains the priority eﬀort for National Guard support in the states. For example, Florida
National Guard support to the state’s testing eﬀorts has assisted in the testing of more than
1,400,000 residents for COVID-19.

• Warehouse operations and supplies. In 36 states and territories, National Guard members
provided support to warehouse operations. For example, Vermont National Guard members
continue to support Strategic National Stockpile warehouse operations and reception of
FEMA deliveries. Colorado National Guard members assisted with inventorying supplies and
distributing personal protective equipment to public schools.

• Food bank and program support. National Guard members in 24 states and territories are
providing support to food banks. For example, California National Guard members have
provided such support to, among other things, help ensure continuity.

• Nursing home support. California National Guard members assisted by backﬁlling staﬀ
shortages at skilled nursing facilities. National Guard members in Ohio also provided support
to nursing homes and other long-term care facilitates.

• COVID-19 mapping. National Guard members in 15 states and territories, including Colorado,
Nevada, and Washington are supporting COVID-19 mapping. The states are working with
health departments to manage and analyze data.

Reimbursement for National Guard support. In a series of presidential memorandums issued
in spring 2020, the White House provided for the use of National Guard forces to assist FEMA
with emergency assistance associated with the COVID-19 response to states. The White House
memorandums also directed that FEMA fund 100 percent of the support provided by the National
Guard forces. In a June 2, 2020, memorandum, the White House extended this authorization
through August 21, 2020.208

A presidential memorandum issued on August 3, 2020, terminated the requirement that FEMA
fund 100 percent of that National Guard costs for providing assistance to the majority of states as
of August 21, 2020.209 Instead, FEMA was directed to fund 75 percent of the emergency assistance

208Presidential Memorandum, Governors’ Use of the National Guard to Respond to COVID-19 and to Facilitate Economic
Recovery, 85 Fed. Reg. 34955 (June 5, 2020) (signed June 2, 2020).
209Presidential Memorandum, Extension of the Use of the National Guard to Respond to COVID-19 and to Facilitate Economic
Recovery, 85 Fed. Reg. 47885 (Aug. 6, 2020) (signed Aug. 3, 2020).

Page 131 GAO-21-191
activities associated with preventing, mitigating, and responding to the threat to public health and
safety posed by COVID-19 in the named states through December 31, 2020.210 As a result of this
change, certain states became responsible for reimbursing FEMA for 25 percent of the cost of their
National Guard’s support to the COVID-19 response after August 21, 2020.

Subsequent presidential memorandums issued throughout August 2020 extended 100-percent
cost sharing through December 31, 2020, for Florida and Texas, and restored 100-percent cost
sharing through September 30, 2020, for Arizona, California, Louisiana, and Connecticut.211

According to DOD oﬃcials, historically the department has been reimbursed for 100 percent
of the costs of providing National Guard assistance when supporting states and territories
and, therefore, any changes to the percentage funded by the federal government through
other agencies does not impact department’s response.212 DOD oﬃcials stated that federal
agencies, such as FEMA, and states are typically required to share the cost of National Guard
assistance because states bear some responsibility for funding their response eﬀorts. DOD
oﬃcials further stated that support for the COVID-19 pandemic has been diﬀerent than other
support missions—such as responding to a hurricane––because the COVID-19 pandemic has
impacted all states and U.S. territories and necessitated a response from them.

According to National Guard Bureau oﬃcials, the states are evaluating the level of support they
can maintain, given the portion that they are required to fund. National Guard oﬃcials further
stated that some states adjusted the number of National Guard members providing support
based on their budgets. In addition, they also stated that many states have asked for the cost-
share ratio be re-evaluated.

210Arkansas, Florida, Idaho, Minnesota, Texas, and Wyoming were not included among those named states receiving 75-
percent cost share assistance upon termination of the 100-percent cost share support.
211The memorandums aﬀecting Arizona, California, Louisiana, and Connecticut added an additional 25 percent to the
revised 75-percent cost share. Upon expiration of the additional 25 percent, the total federal cost share will return to 75
percent. With respect to Louisiana, the August 29, 2020, memorandum noted the need to maximize the assistance to
the Governor of Louisiana where the National Guard was fully deployed and engaged to help the state recover from the
devastation of Hurricane Laura.
212No amounts appropriated to the National Guard are available to support state-level response activities.

Page 132 GAO-21-191
GAO’s Methodology
To conduct this work, we reviewed documentation and the most recent data available from DOD
through September 30, 2020, and USAspending.gov through August 31, 2020, and interviewed
DOD oﬃcials.

Contact information: Diana Maurer, (202) 512-9627, maurerd@gao.gov.

Page 133 GAO-21-191
HHS COVID-19 Funding
The COVID-19 relief laws appropriated more than $250 billion to the Department of Health and
Human Services to address various aspects of the public health response to COVID-19. About $163
billion (65 percent) had been obligated and about $117 billion (47 percent) had been expended
as of October 31, 2020, according to department oﬃcials. This represents an increase of about
13 percent and 18 percent since July 31, 2020, when reported obligations and expenditures were
$144 billion and $99 billion, respectively.

Entity involved: Department of Health and Human Services

Key Considerations and Future GAO Work
We will continue to examine the Department of Health and Human Services’ (HHS) use of
appropriations contained in four relief laws enacted to help fund the COVID-19 response.
Speciﬁcally, we will examine the status of obligations and expenditures of these funds; the
activities funded, including how those activities were determined; and eﬀorts to monitor funding
use and any related challenges.

Background
HHS received approximately $251 billion in supplemental appropriations from four relief laws
enacted to assist the response to COVID-19 (see table below).213

213Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134 Stat.
146 (2020); Families First Coronavirus Response Act, Pub. L. No. 116-127, 134 Stat. 178 (2020); CARES Act, Pub. L. No.
116-136, 134 Stat. 281 (2020); Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139, 134
Stat. 620 (2020).

Page 134 GAO-21-191
Supplemental Appropriations to HHS for COVID-19 Response
Appropriations
Legislation ($ millions)

Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 6,497.0
(Pub. L. No. 116-123)

Families First Coronavirus Response 1,314.0
Act (Pub. L. No. 116-127)

CARES Act 142, 833.4
(Pub. L. No. 116-136)

Paycheck Protection Program and Health Care Enhancement Act 100,000.0
(Pub. L. No. 116-139)

Total 250,644.1

Source: Department of Health and Human Services (HHS) data and GAO analysis of appropriation warrant information provided by the Department of the Treasury. | GAO-21-191

Note: HHS reported that of its total COVID-19 supplemental appropriations, the agency transferred $289 million to the
Department of Homeland Security, and $300 million in appropriations are not available until HHS takes certain actions.

Overview of Key Issues
Of the approximately $251 billion appropriated, HHS reported that it had obligated about $163
billion and expended about $117 billion, as of October 31, 2020—an increase of about 13 percent
and 18 percent respectively since July 31, 2020. (See ﬁgure below.)

Page 135 GAO-21-191
Supplemental Appropriations to HHS for COVID-19 Response and HHS’s Reported Obligations and Expenditures,
as of October 31, 2020

HHS reported appropriations, obligations, and expenditures by agency. As of October 31, 2020,
the Indian Health Service had expended the largest portion of their supplemental appropriations
(59 percent). The following table provides HHS’s reported appropriations, obligations, and
expenditures by HHS agency.

Page 136 GAO-21-191
Department of Health and Human Services (HHS) Reported Appropriations, Obligations, and Expenditures for
COVID-19 Response, by Agency, as of October 31, 2020
Appropriations Obligations Expenditures
Agency or key fund ($ millions) ($ millions) ($ millions)

Administration for Children and Families 6,274.0 6,198.0 2,362.5

Administration for Community Living 1,205.0 1,205.0 541.3

Agency for Toxic Substances and Disease Registry 12.5 12.3 1.9

Centers for Disease Control and Prevention 6,500.0 3,729.0 967.9

a
Centers for Medicare & Medicaid Services 200.0 84.2 14.7

Food and Drug Administration 141.0 41.8 10.8

Health Resources and Services Administration 1,320.0 1,319.3 659.9

Indian Health Service 1,096.0 732.1 647.8

National Institutes of Health 1,781.4 863.9 158.7

b
Public Health and Social Services Emergency Fund (PHSSEF) 231,689.6 148,166.0 111,770.3

Oﬃce of the Assistant Secretary for Preparedness and
c
Response 12,393.0 10,364.0 4,986.8

c
Biomedical Advanced Research and Development Authority 17,838.6 16,318.3 1,923.9

c
Provider Relief Fund 175,000.0 104,467.1 101,432.0

c
Testing for uninsured 2,000.0 668.9 667.3

c
Other PHSSEF 24,458.0 16,347.7 2,760.3

Substance Abuse and Mental Health Services Administration 425.0 423.3 26.0

Total 250,644.4 162,774.9 117,161.8

Source: Department of Health and Human Service (HHS) data. | GAO-21-191

Note: The COVID-19 relief laws included provisions for HHS to transfer appropriated funds to various HHS agencies. HHS also
reported that of its total COVID-19 appropriation, the agency transferred $289 million to the Department of Homeland Security,
and $300 million in appropriations are not available until HHS takes certain actions.
a
These amounts do not reﬂect Medicaid and Medicare expenditures. As of October 31, 2020, COVID-19 related federal Medicaid
expenditures totaled approximately $23 billion, or 7 percent of total federal spending on Medicaid services for January through
October 2020. In addition, the Congressional Budget Oﬃce estimated that some provisions of the CARES Act will increase
Medicare payments to providers by $8 billion in 2020 and 2021.
b
The Public Health and Social Services Emergency Fund (PHSSEF) is an account though which funding is provided to certain HHS
oﬃces, such as the Oﬃce of the Assistant Secretary for Preparedness and Response. Amounts have been appropriated to this
fund for the COVID-19 response to support certain HHS agencies and response activities. PHSSEF appropriations transferred to
other HHS agencies or key funds not speciﬁcally listed are included under “Other PHSSEF.” For example, the Health Resources

Page 137 GAO-21-191
and Services Administration received $975 million in transfers from the PHSSEF, and this is represented in the table in “Other
PHSSEF.”
c
The italicized amounts are subtotals of the PHSSEF and are not added in the total since they are included in the PHSSEF
amount. Italicized amounts listed under the PHSSEF appropriations column are HHS allocations based on appropriations made
in the relief laws and approved allotment decisions made by HHS in coordination with the Oﬃce of Management and Budget.
The Provider Relief Fund reimburses eligible health care providers for health care related expenses or lost revenues that are
attributable to COVID-19. The CARES Act and Paycheck Protection Program and Health Care Enhancement Act appropriated
$175 billion for provider relief. In addition, the Families First Coronavirus Response Act appropriated $1 billion and the
Paycheck Protection Program and Health Care Enhancement Act appropriated up to $1 billion to reimburse providers for
COVID-19 testing for uninsured individuals. Provider Relief Fund expenditures also may be referred to as disbursements.

HHS reported allocations, obligations, and expenditures for a variety of COVID-19 response
activities, including activities to support testing, the development of vaccines or therapeutics,
and the acquisition of critical supplies. As of October 31, 2020, 58 percent of funds allocated to
the Provider Relief Fund had been expended, compared with less than 5 percent of the funding
allocated each for telehealth and global disease detection. The following table provides HHS’s
reported allocations, obligations, and expenditures by selected key response activity.

Page 138 GAO-21-191
Department of Health and Human Services (HHS) Reported Allocations, Obligations, and Expenditures for
COVID-19 Response, by Selected Key Response Activity, as of October 31, 2020
Total HHS Total HHS
Total HHS allocations obligations expenditures
Key activity ($ millions) ($ millions) ($ millions)

a
Health centers 2,020.0 2,018.3 927.5

Head Start 750.0 743.3 182.1

b
Provider Relief Fund 175,000.0 104,467.1 101,432.0

Testing for uninsured 2,000.0 668.9 667.3

Support to state, local, territorial, and tribal
organizations for preparedness 13,990.0 13,133.8 1,769.4

Strategic National Stockpile 10,669.9 8,904.4 4,061.2

Telehealth 175.0 39.7 4.8

Testing 4,491.8 3,544.5 981.4

Vaccines 13,814.7 13,341.0 1,279.3

Drugs and therapeutics 3,013.0 2,796.4 622.1

Global disease detection and emergency response 800.0 250.1 37.4

c
Other response activities 23,920.0 12,867.4 5,197.3

Total 250,644.4 162,774.9 117,161.8

Source: Department of Health and Human Services (HHS) data. | GAO-21-191

Note: HHS reported allocations, obligations, and expenditures for these activities based on the primary programmatic recipient
organization of the funds, although some activities apply to multiple categories. For example, certain funds in the “support to
state, local, territorial, and tribal organizations for preparedness” category were provided for testing but are not reﬂected in
the “testing” category. According to HHS oﬃcials, the allocations reported for the key activities above are based on amounts
appropriated for these activities in the relief laws and approved allotment decisions made by HHS in coordination with the
Oﬃce of Management and Budget.
a
Health centers provide a comprehensive set of primary and preventative health care services to individuals regardless of their
ability to pay. Approximately $17 million of this funding is for Health Center Program look-alikes, which are centers that do not
receive Health Center Program funding but meet program requirements.
b
The Provider Relief Fund reimburses eligible health care providers for health care related expenses or lost revenues that are
attributable to COVID-19. The CARES Act and Paycheck Protection Program and Health Care Enhancement Act appropriated
$175 billion for provider relief. In addition, the Families First Coronavirus Response Act appropriated $1 billion and the
Paycheck Protection Program and Health Care Enhancement Act appropriated up to $1 billion to reimburse providers for
COVID-19 testing for uninsured individuals. Provider Relief Fund expenditures may also be referred to as disbursements.
c
According to HHS oﬃcials, other response activities include Centers for Disease Control and Prevention agency-wide activities
and program support, health care preparedness and response activities, Biomedical Advanced Research and Development
Authority diagnostics development, and various activities conducted by the National Institutes of Health.

Page 139 GAO-21-191
Agency Comments
We provided HHS and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
HHS and OMB did not provide comments on this enclosure.

GAO’s Methodology
We requested, and HHS provided, data on appropriations, allocations, obligations, and
expenditures by HHS agency and by key response activity, as of October 31, 2020. We also
obtained and analyzed appropriation warrant information provided by the Department of the
Treasury as of May 31, 2020. To assess the reliability of the data reported by HHS, we reviewed
information from the federal spending database, USAspending.gov, as well as HHS’s spending
database, taggs.hhs.gov, and HHS’s documentation on spending, and we determined that the data
were suﬃciently reliable for the purposes of our reporting objective.214 We also reviewed the four
relief laws enacted to assist the response to COVID-19.

Contact information: Carolyn L. Yocom, (202) 512-7114, yocomc@gao.gov

214We searched HHS’s Tracking Accountability in Government Grants System website and USAspending.gov—a publicly
available website developed and operated by the Department of the Treasury that includes detailed data on federal
spending, including obligations, across the federal government. See https://taggs.hhs.gov/coronavirus, accessed
11/2/2020, and https://USAspending.gov, accessed 11/2/2020. We did not independently validate the data provided by
HHS.

Page 140 GAO-21-191
Health Disparities
Data collected or made available by the Department of Health and Human Services on indicators
of COVID-19 are incomplete, but available data continue to demonstrate racial and ethnic
disparities.

Entities involved: Department of Health and Human Services, including the Centers for Disease
Control and Prevention, Centers for Medicare & Medicaid Services, Health Resources and Services
Administration, Indian Health Service, National Institutes of Health, Oﬃce of the Assistant
Secretary for Health, and Oﬃce of Minority Health

Key Considerations and Future GAO Work
The Department of Health and Human Services (HHS), including the Centers for Disease Control
and Prevention (CDC), collects and makes some data available on indicators of COVID-19 by race
and ethnicity, but gaps exist in these data, particularly in four areas:

• Testing. Both race and ethnicity information was missing for 82.0 percent of COVID-19
laboratory tests reported to CDC as of October 11, 2020.215

• Cases. Race and ethnicity information was missing for 41.5 percent of COVID-19 cases with
case report forms received by CDC, or 62.7 percent of total cases reported, as of October 20,
2020.216

• Hospitalizations. CDC’s hospitalization data for COVID-19 are limited to select counties in 14
states, and race and ethnicity information are not complete in the reported data.

• Deaths. Race and ethnicity data were missing for 14.0 percent of COVID-19-related deaths
with case report forms received by CDC, or 44.9 percent of total deaths reported through case
reporting, as of October 20, 2020.217

On July 22, 2020, CDC released a COVID-19 Response Health Equity Strategy to accelerate progress
towards reducing disparities in indicators of COVID-19, among other eﬀorts to achieve health

215CDC data represent viral COVID-19 laboratory test results from laboratories in the U.S., including commercial
laboratories, public health laboratories, and other testing locations from 45 jurisdictions. The data represent total
laboratory tests, not individual people, and exclude antibody and antigen tests.
216CDC oﬃcials noted that the number of cases with case report forms received by CDC is less than the total
number of reported cases because there is generally a 2-week lag from when total cases are reported by state
and jurisdictional health departments to when CDC receives the case report forms. Total cases reported by CDC
include both probable and conﬁrmed cases as reported by states or jurisdictions. A probable case does not have
conﬁrmatory laboratory evidence, but meets certain other criteria.
217CDC oﬃcials noted that the number of deaths with case report forms received by CDC is less than the total
number of reported deaths through case reporting because there is generally a 2-week lag from when total deaths
are reported by state and jurisdictional health departments to when CDC receives case report forms noting deaths.
CDC also makes data available on COVID-19 deaths from death certiﬁcate data through its National Vital Statistics
System (NVSS). CDC stated that over 99 percent of deaths in NVSS have race and ethnicity information.

Page 141 GAO-21-191
equity.218 As CDC implements its strategy, we recommended in September 2020 that the Director
of CDC

• determine whether having the authority to require states and jurisdictions to report race
and ethnicity information for COVID-19 cases, hospitalizations, and deaths is necessary for
ensuring more complete data, and if so, seek such authority from Congress;

• involve key stakeholders to help ensure the complete and consistent collection of
demographic data; and

• take steps to help ensure its ability to comprehensively assess the long-term health outcomes
of persons with COVID-19, including by race and ethnicity.

HHS, including CDC, agreed with the recommendations. In response to our recommendations,
CDC stated that the agency is committed to having discussions with stakeholders to assess
whether having the authority to require states and jurisdictions to report race and ethnicity
information for COVID-19 cases would result in improved reporting. CDC also noted that the
agency is convening a team to develop a plan to monitor the long-term health outcomes of
persons with COVID-19 by identifying health care surveillance systems that can electronically
report health conditions to state and local health departments. We will continue to conduct
work examining HHS, CDC, and other component agencies’ ongoing work regarding indicators of
COVID-19 and disparities that exist for various populations.

Background
HHS and its agencies, including CDC, collect and make data available on various indicators of
COVID-19, including testing, cases, hospitalizations, and deaths. (See our related July 2020 report
on COVID-19 data quality and considerations for modeling and analysis.) These data are collected
from a variety of sources, such as health care providers, laboratories, funeral homes, and state
and jurisdictional health departments. Data collected and made available by CDC on indicators of
COVID-19 by race and ethnicity are important for assessing potential disparities between diﬀerent
racial and ethnic minority groups and can help decision-makers understand the spread and
severity of COVID-19 in diﬀerent populations. (See our related Health Care Indicators enclosure.)

218Centers for Disease Control and Prevention, CDC COVID-19 Response Health Equity Strategy: Accelerating Progress
Towards Reducing COVID-19 Disparities and Achieving Health Equity (July 2020).

Page 142 GAO-21-191
Overview of Key Issues
Disparities by race and ethnicity in COVID-19 indicators. Though limited, available data
from CDC and others demonstrate disparities in COVID-19 indicators by race and ethnicity, with
racial and ethnic minorities bearing a disproportionate burden of COVID-19 positive tests, cases,
hospitalizations, and deaths.

• Testing. CDC race and ethnicity data on the percent of positive test results, while incomplete,
suggest disproportionate test positivity rates for racial and ethnic minority groups. Among
COVID-19 diagnostic test results reported to CDC from laboratories from 45 jurisdictions as of
October 11, 2020, the percent of positive COVID-19 tests were 18.0 percent for non-Hispanic
American Indian/Alaska Native, 15.1 percent for non-Hispanic Native Hawaiian or Other Paciﬁc
Islander persons, 17.9 percent for Hispanic or Latino persons, and 13.1 percent for Black
persons, compared to 7.7 percent for non-Hispanic White persons.219

• Cases. CDC race and ethnicity data on COVID-19 cases, while incomplete, demonstrate that
racial and ethnic minority groups have been disproportionately aﬀected.220 Among cases with
known race and ethnicity reported to CDC as of October 20, 2020, 29.4 percent of cases were
for persons who were Hispanic or Latino (compared to 18 percent of the U.S. population),
17.4 percent were non-Hispanic Black (compared to 13 percent of the U.S. population), 1.2
percent were non-Hispanic American Indian/Alaska Native (compared to 0.7 percent of the U.S.
population), and 45.1 percent were non-Hispanic White persons (compared to 60.1 percent of
the population).221

• Hospitalizations. CDC data indicate that racial and ethnic minority groups are
disproportionately hospitalized with COVID-19 in select counties in 14 states included in CDC’s
COVID-19-Associated Hospitalization Surveillance Network (COVID-NET).222 According to
CDC’s analysis of data in select counties in 14 states included in COVID-NET hospitalizations
between March 1, 2020 and October 10, 2020, Hispanic or Latino persons were hospitalized
with COVID-19 at a rate 4.5 times that of non-Hispanic White persons. Non-Hispanic American
Indian/Alaska Native and non-Hispanic Black persons were hospitalized at a rate 4.4 times that
of non-Hispanic White persons when adjusting for age (see ﬁgure).

219CDC data represent total laboratory tests, not individual people, and exclude antibody and antigen tests. Both
race and ethnicity information was missing for 82.0 percent of COVID-19 laboratory tests reported to CDC as of
October 11, 2020.
220Additional disparities may be observed at the state or jurisdictional level. For example, CDC reported that as of
October 13, 2020, counties with large non-Hispanic Black populations were more likely to have a recent high burden
of COVID-19 cases.
221Centers for Disease Control and Prevention, Morbidity and Mortality Weekly Report, Vol. 69, No. 24 (June 19, 2020).
We compared the population distribution data by race and ethnicity in this report with data from the CDC COVID
Data Tracker, accessed October 20, 2020, https://www.cdc.gov/covid-data-tracker.
222COVID-NET is a surveillance system maintained by CDC that collects data on COVID-19 hospitalizations that are
conﬁrmed by laboratory testing. It includes data from select counties in California, Colorado, Connecticut, Georgia,
Iowa, Maryland, Michigan, Minnesota, New Mexico, New York, Ohio, Oregon, Tennessee, and Utah, representing
approximately 10 percent of the U.S. population. As of October 10, 2020, approximately 5.3 percent of the data
reported in COVID-NET lacked data on race and ethnicity.

Page 143 GAO-21-191
Cumulative COVID-19-Associated Hospitalization Rates per 100,000 Population from Select Counties in 14 States,
Adjusted for Age, by Race and Ethnicity, March 1, 2020 through October 10, 2020

Note: American Indian/Alaska Native, Asian or Paciﬁc Islander, Black, and White persons were non-Hispanic. Hispanic or Latino
persons might be of any race. Hospitalization data are from Centers for Disease Control and Prevention’s Coronavirus Disease
2019 (COVID-19)-Associated Hospitalization Surveillance Network (COVID-NET), which provides data from select counties in 14
states, representing 10 percent of the U.S. population. Age-adjusted rates, which hold constant the age distributions between
diﬀerent population groups, allow researchers to focus analyses on other demographics, such as race and ethnicity, without
being concerned about diﬀerences that are due to diﬀerent age distributions of the racial and ethnic groups. Age-adjusted
rates are particularly important to consider for indicators of COVID-19 because persons in older age groups are more likely to
experience hospitalizations and racial and ethnic groups have diﬀerent age distributions in the U.S. population.

• Deaths. A CDC analysis of National Center for Health Statistics (NCHS) death certiﬁcate data
indicated a disproportionate number of deaths among non-Hispanic Black persons, who
represent more than one in ﬁve COVID-19 deaths in the U.S.223 As of October 7, 2020, NCHS
data show that non-Hispanic Black persons died of COVID-19 at a rate almost two times higher
than non-Hispanic White persons (see ﬁgure).224

223The National Center for Health Statistics’ (NCHS) National Vital Statistics System is the source of oﬃcial statistics
on deaths in the U.S.
224Department of Health and Human Services, Centers for Disease Control and Prevention, Report to Congress on
Paycheck Protection Program and Health Care Enhancement Act Disaggregated Data on U.S. Coronavirus Disease 2019
(COVID-19) Testing, 5th 30-Day Update & COVID-19 Diagnosis, Hospitalizations, and Deaths (October 2020). Disparities
by race and ethnicity can also be observed at the state or jurisdictional level. GAO analyzed CDC’s NCHS death
certiﬁcate data in states with more than 100 deaths and 10 or more deaths for the race or ethnicity group, and
found that non-Hispanic Black persons had an elevated share of deaths in 26 of 40 states, Hispanic persons had
an elevated share in 35 of 45 states, and non-Hispanic American Indian/Alaskan Native persons had an elevated
share in 17 of 29 states, as of the data released on October 21, 2020. We deﬁned an elevated share of deaths as
having a relative diﬀerence of 30 percent or more, accounting for the geographic location of the deaths and the age
distribution of the population groups.

Page 144 GAO-21-191
COVID-19 Death Rates, by Race and Ethnicity, through October 7, 2020

Note: Data are from Department of Health and Human Services, Centers for Disease Control and Prevention, Report to Congress
on Paycheck Protection Program and Health Care Enhancement Act Disaggregated Data on U.S. Coronavirus Disease 2019 (COVID-19)
Testing, 5th 30-Day Update & COVID-19 Diagnosis, Hospitalizations, and Deaths (October 2020). American Indian/Alaska Native,
Asian, Black, Native Hawaiian or Other Paciﬁc Islander, and White persons were non-Hispanic. Hispanic or Latino persons
might be of any race. Death rates include deaths reported in the U.S., and are reported by CDC/NCHS from its National Vital
Statistics System (NVSS), which is the source of oﬃcial statistics on deaths in the U.S. CDC noted that death certiﬁcate data
are provisional, and may not include all deaths. CDC stated that over 99 percent of deaths in NVSS have race and ethnicity
information.

CDC reported that the percentage of higher than expected deaths—that is, the percent increase
in deaths during the COVID-19 pandemic compared to the average number of deaths from 2015
through 2019 during the same time period—also shows disparities by racial and ethnic minority
groups.225 Speciﬁcally, the highest increases in weekly deaths among Hispanic or Latino (114.7
percent), Non-Hispanic Asian (110.4 percent), and Non-Hispanic Black (112.1 percent) persons
were approximately four times the highest increase in deaths among Non-Hispanic White persons
(27.8 percent) (see ﬁgure).

225Centers for Disease Control and Prevention, Morbidity and Mortality Weekly Report, Vol. 69, No. 41 (October 20, 2020).
According to CDC, while some higher than expected deaths may be directly attributable to COVID-19, the extent to
which excess deaths above the 2015 through 2019 average weekly death rate may be attributable to COVID-19 is not yet
known.

Page 145 GAO-21-191
Deaths in 2020 as a Percentage of 2015-2019 Deaths, by Race and Ethnicity, January through October 2020

Note: American Indian/Alaska Native, Asian, Black, Other or White persons were non-Hispanic. Hispanic or Latino persons might
be of any race. “Other” includes non-Hispanic Native Hawaiian or other Paciﬁc Islander, non-Hispanic multiracial, and unknown.
Death data by week includes deaths reported in the U.S. as of data downloaded on November 10, 2020, from the National
Center for Health Statistics’ (NCHS) National Vital Statistics System (NVSS), which is the source of oﬃcial statistics on deaths in
the U.S. NCHS noted that death certiﬁcate data are provisional and may not be complete, especially for the most recent weeks.
Percentages greater than zero show higher than expected deaths during the COVID-19 pandemic compared to the average
number of deaths from 2015 through 2019 during the same time period. Percentages were weighted to account for potential
underreporting in the most recent weeks, but may not fully account for underreporting. According to NCHS, while some higher
than expected deaths may be directly attributable to COVID-19, the extent to which excess deaths may be directly or indirectly
attributable to COVID-19 is not yet known. See CDC’s National Center for Health Statistics webpage on excess deaths for further
details: https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm, accessed on November 12, 2020.

Additional race and ethnicity disparities within age groups. Additional disparities by race and
ethnicity may be observed within age groups, including persons age 65 and older who are covered
by Medicare.

Page 146 GAO-21-191
• Cases. A Centers for Medicare & Medicaid Services (CMS) preliminary analysis of Medicare
fee-for-service claims data and Medicare Advantage (Medicare’s managed care program)
encounter data for services from January 1 through August 15, 2020, received by September
11, 2020, found racial and ethnic disparities in COVID-19 case rates. Case rates were highest
for Black beneﬁciaries (2,799 cases per 100,000), Hispanic or Latino beneﬁciaries (2,627 cases
per 100,000), and American Indian/Alaska Native beneﬁciaries (2,152 cases per 100,000) and
lowest among White beneﬁciaries (1,272 cases per 100,000) and Asian beneﬁciaries (1,243
cases per 100,000).226

• Hospitalizations. As part of a preliminary analysis of Medicare claims and encounter data
for services from January 1 through August 15, 2020, received by September 11, 2020,
CMS found racial and ethnic disparities in COVID-19 hospitalization rates among Medicare
beneﬁciaries, with hospitalization rates highest for Black beneﬁciaries (1,114 hospitalizations
per 100,000), American Indian/Alaska Native beneﬁciaries (917 hospitalizations per 100,000),
and Hispanic or Latino beneﬁciaries (831 hospitalizations per 100,000) and lowest among
White beneﬁciaries (303 hospitalizations per 100,000) as of August 15, 2020.227

• Deaths in younger age groups. In September 2020, CDC reported that 78 percent of COVID-19
deaths in persons under age 21 were among Hispanic, non-Hispanic Black, and non-Hispanic
American Indian/Alaska Native persons, according to case reporting.228 In addition, racial and
ethnic minority populations comprise a larger proportion of COVID-19 deaths at younger age
groups (35-44 and 45-54), according to death certiﬁcate data (see ﬁgure).229

• Deaths in older age groups. CDC also reported that as of October 7, 2020, non-Hispanic Black
persons older than age 85 had the highest death rate (1,589.4 per 100,000), followed by
Hispanic or Latino persons older than age 85 (1,422.4 per 100,000) and non-Hispanic American
Indian/Alaskan Native persons older than age 85 (910.4 per 100,000), according to case
reporting.230 (See ﬁgure.)

226Department of Health and Human Services, Centers for Medicare & Medicaid Services, Preliminary Medicare
COVID-19 Data Snapshot (September 11, 2020).
227Department of Health and Human Services, Centers for Medicare & Medicaid Services, Preliminary Medicare
COVID-19 Data Snapshot (September 11, 2020). The rate of Medicare COVID-19 hospitalizations per 100,000
people is calculated by taking Medicare COVID-19 hospitalizations divided by the Medicare population with Part A
insurance, expressed as per 100,000 people. For more details about the metrics used in the snapshot, see CMS’s
Preliminary Medicare COVID-19 Data Snapshot Methodology, accessed October 9, 2020, at https://www.cms.gov/
ﬁles/document/medicare-covid-19-data-snapshot-methodology.pdf. Medicare claims and encounter data are
collected for payment and other program purposes, not public health surveillance, so caution must be used when
interpreting the data.
228Centers for Disease Control and Prevention, Morbidity and Mortality Weekly Report, Vol. 69, No. 37 (Sept. 18,
2020).
229The age distribution of the population and of COVID-19 deaths may vary between race and Hispanic origin
groups.
230Department of Health and Human Services, Centers for Disease Control and Prevention. Report to Congress on
Paycheck Protection Program and Health Care Enhancement Act Disaggregated Data on U.S. Coronavirus Disease 2019
(COVID-19) Testing, 5th 30-Day Update & COVID-19 Diagnosis, Hospitalization, and Deaths (October 2020).

Page 147 GAO-21-191
Distribution of COVID-19 Deaths, by Race and Ethnicity and Age Group, through October 14, 2020

Note: American Indian/Alaska Native, Asian, Black, Native Hawaiian or Other Paciﬁc Islander, and White persons were non-
Hispanic. Hispanic or Latino persons might be of any race. Death data includes deaths reported in the U.S., and is from the
National Center for Health Statistics’ (NCHS) National Vital Statistics System (NVSS), which is the source of oﬃcial statistics on
deaths in the U.S. NCHS noted that death certiﬁcate data are provisional, and may not be complete, especially in the most
recent weeks. NVSS also provides data on individuals younger than age 35 and on individuals of more than one race and of
unknown race, which were not included in this ﬁgure.

Factors potentially contributing to COVID-19 disparities. We previously reported that HHS’s
Oﬃce of Minority Health, CDC, the Indian Health Service (IHS), and researchers noted various
social and health-related factors that may contribute to disparities by race and ethnicity in
COVID-19 disease burden. These factors included higher rates of employment in essential
industries, such as service, health care, and agriculture with limited or no ability to work from
home; joblessness; higher rates of uninsurance and other barriers to accessing care, such as
mistrust of the health care system, language barriers, and cost of missing work; higher population
density and overcrowded, multigenerational, or multi-family homes; and experiences of racism,
stigma, and systemic inequities.231

231For example, see M. L. Wang, et al., “Addressing inequalities in COVID-19 morbidity and mortality: research and policy
recommendations,” Translational Behavioral Medicine. (2020) and Selden T. M. and Berdahl T. A., “COVID-19 and racial/
ethnic disparities in health risk, employment, and household composition,” Health Aﬀairs 39, No. 9. (2020).

Page 148 GAO-21-191
As of October 2020, HHS’s Oﬃce of the Assistant Secretary for Health, NIH, and HRSA noted
additional factors that may contribute to health disparities in indicators of COVID-19, including the
following:

• uneven geographic distribution of health resources and health care;

• reduced access to health care and supportive services due to closure of schools, community
health centers, senior centers, and home visitation programs due to COVID-19, particularly for
children and women;

• environmental health inequities such as concentration of respiratory hazards and toxic sites in
low-socioeconomic status areas with high minority representation;

• advanced aging caused by bodily wear and tear from ﬁght-or-ﬂight responses to external
stressors, especially racial discrimination;

• higher rates of pre-existing behavioral health conditions, such as substance use disorders;

• lack of digital literacy by providers, patients, families, and caregivers;

• lack of internet connectivity including broadband, connection speed, and WIFI internet service;

• presence of food deserts in rural and urban areas;

• lack of access to reliable, aﬀordable, and safe transportation; and

• inequitable application of the law and access to aﬀordable legal services.

Agency Comments
We provided HHS, including CDC and CMS, and the Oﬃce of Management and Budget (OMB) with
a draft of this enclosure. CDC, CMS, and HHS provided technical comments on this enclosure,
which we incorporated as appropriate.

GAO’s Methodology
To conduct this work, we reviewed the most recent agency data on indicators of COVID-19
reported by CDC and CMS as of October 20, 2020; reviewed federal laws, agency guidance and
documentation; and interviewed or obtained written responses from HHS oﬃcials, including those
from its Oﬃce of Minority Health, Oﬃce of the Assistant Secretary for Health, CDC, CMS, HRSA,
IHS, and NIH. We assessed the reliability of the datasets used in our analyses by reviewing relevant

Page 149 GAO-21-191
CDC and CMS documentation and interviewing agency oﬃcials. We determined the data were
suﬃciently reliable for the purposes of our reporting objective.

Contact information: Alyssa M. Hundrup, (202) 512-7114, hundrupa@gao.gov

Related GAO Product
COVID-19 Data Quality and Considerations for Modeling and Analysis. GAO-20-635SP. Washington,
D.C.; July 30, 2020.

Page 150 GAO-21-191
Behavioral Health
Evidence suggests that eﬀects of the COVID-19 pandemic and related economic crisis—such
as increased social isolation, stress, and unemployment—are potentially driving an additional
national crisis related to behavioral health. At the same time symptoms of behavioral health
conditions—mental health and substance use disorders—are shown to be worsening, access to
treatment may be declining due to factors such as treatment providers closing or limiting hours,
and loss of employer-based health insurance. Multiple federal agencies are taking actions to help
address the impacts of the COVID-19 pandemic on behavioral health.

Entities involved: Department of Health and Human Services, including its Centers for Disease
Control and Prevention, Commissioned Corps of the United States Public Health Service, Health
Resources and Services Administration, National Institutes of Health, Oﬃce of the Assistant
Secretary for Preparedness and Response, and Substance Abuse and Mental Health Services
Administration; and the Federal Emergency Management Agency, within the Department of
Homeland Security

Key Considerations and Future GAO Work
Our work examining the behavioral health impacts of the COVID-19 pandemic is ongoing. We will
continue to examine the pandemic’s impacts on Americans’ behavioral health; demand for and
access to treatment—particularly among populations especially vulnerable to negative impacts;
and the federal response.

Background
Behavioral health conditions—mental health and substance use disorders—aﬀect a substantial
number of adults in the United States, and have been of growing concern even before the
COVID-19 pandemic.232 For example, in 2019, an estimated 52 million adults in the United States
(21 percent) had “any mental illness”—including 13 million adults (5 percent) with a serious mental
illness.233 Additionally, 20 million people aged 12 or older (or 7 percent of this population) had a
substance use disorder—alcohol use disorder, an illicit drug use disorder, or both.

232We deﬁne behavioral health conditions as all mental, emotional, and behavioral disorders that are included in the
Diagnostic and Statistical Manual of Mental Disorders. Examples of mental health conditions that are included are
anxiety disorders, including post-traumatic stress disorder; mood disorders, including depression and bipolar disorder;
and schizophrenia. Examples of substance use disorders are alcohol use disorder and opioid use disorder.
233See Substance Abuse and Mental Health Services Administration (SAMHSA), Key Substance Use and Mental Health
Indicators in the United States: Results from the 2019 National Survey on Drug Use and Health, (Rockville, M.D.: September
2020). SAMHSA classiﬁed adults aged 18 or older as having any mental illness if they had any mental, behavioral, or
emotional disorder in the past year of suﬃcient duration to meet criteria in the Diagnostic and Statistical Manual of
Mental Disorders (excluding developmental disorders and substance use disorders). SAMHSA classiﬁed adults with
any mental illness as having serious mental illness if they had any mental, behavioral, or emotional disorder that

Page 151 GAO-21-191
In October 2017, the Acting Secretary of Health and Human Services ﬁrst declared the opioid crisis
a public health emergency and a declaration has been in eﬀect since that time.234 In March 2020,
we determined drug misuse (the use of illicit drugs and the misuse of prescription drugs) was
high-risk and reported that we would include this issue in our 2021 High-Risk Series update.235
We noted then that the COVID-19 pandemic could fuel some of the contributing factors of drug
misuse, such as unemployment, highlighting the need to sustain and build upon ongoing federal
eﬀorts to address drug misuse.

Various federal agencies regularly conduct behavioral health-related work, including the Substance
Abuse and Mental Health Services Administration (SAMHSA), Centers for Disease Control and
Prevention (CDC), Health Resources and Services Administration (HRSA), and National Institutes
of Health (NIH). Further, in times of disasters or emergencies such as the COVID-19 pandemic,
additional federal agencies may take on roles to address behavioral health concerns, including the
Oﬃce of Assistant Secretary for Preparedness and Response (ASPR), the Commissioned Corps of
the U.S. Public Health Service, and the Federal Emergency Management Agency (FEMA).

Under the CARES Act, SAMHSA was appropriated $425 million for health surveillance and program
support related to the COVID-19 pandemic.236 Of this, the Act speciﬁed that

• at least $250 million is available for the Certiﬁed Community Behavioral Health Clinic
Expansion Grant program,237

• at least $50 million shall be available for suicide prevention programs,

• at least $100 million is available for noncompetitive grants, contracts, or cooperative
agreements to public entities to address emergency substance abuse or mental health needs
in local communities, as authorized under section 501(o) of the Public Health Service Act, and

• at least $15 million shall be allocated to tribes, tribal organizations, urban Indian health
organizations, or health or behavioral health service providers to tribes.

substantially interfered with or limited one or more major life activities. In its estimates of those with a substance use
disorder, SAMHSA included those reporting an alcohol use disorder, illicit drug use disorder, or both in the past year.
234A public health emergency declaration is in eﬀect until the Secretary declares the emergency no longer exists, or 90
days after the declaration, whichever occurs ﬁrst. A declaration that expires may be renewed by the Secretary. See 42
U.S.C. § 247d(a). The opioid crisis was ﬁrst declared a public health emergency in October 2017, and the declaration has
been renewed 12 times, most recently in October 2020.
235Our High-Risk List is a regularly updated list of programs and operations that are “high risk” because, among other
things, they need transformation. For more information about GAO’s High Risk List, see https://www.gao.gov/highrisk/
overview.
236Pub. L. No. 116-136, div. B., tit. VIII, 134 Stat. 281, 556 (2020). In addition to the funds appropriated to SAMHSA,
other agencies such as NIH, HRSA, and FEMA received supplemental appropriations under the CARES Act and/or other
COVID-19 relief acts. While these supplemental appropriations were not speciﬁcally targeted for behavioral health,
agencies may be using some of them for behavioral health related eﬀorts.
237According to SAMHSA, the purpose of the this expansion grant program is to increase access to, and improve
the quality of, community mental health and substance use disorder treatment services through the expansion of
Certiﬁed Community Behavioral Health Clinics. Such clinics provide access to a continuum of coordinated services
and supports, including rapid-response 24/7 crisis services, peer and family support, targeted case management,
and clinical outpatient psychotherapeutic interventions.

Page 152 GAO-21-191
Overview of Key Issues
Expected increases in substance use, mental health disorders, and suicidality. As a result of
the COVID-19 pandemic, federal oﬃcials and stakeholder organizations who address behavioral
health issues told us that they expect increases in substance use, mental health disorders, and
suicidality, with some noting that the behavioral health consequences resulting from the pandemic
are likely to persist after the risk from COVID-19 has decreased. Data collected to date during
the pandemic corroborates these concerns. For example, in September 2020, SAMHSA reported
increases in opioid overdose deaths in some areas of the country as much as 25 to 50 percent
higher during the pandemic than the comparison time period in 2019.238

Regarding anxiety and depression, from April through October 2020, the Census Bureau, in
collaboration with CDC and other federal agencies, collected information for its Household Pulse
Survey on the percentage of U.S. adults reporting symptoms of anxiety disorder and depressive
disorder during the COVID-19 pandemic.239 Results of the Household Pulse survey found that the
percentage of adults reporting experiencing these symptoms began at about 36 percent at the
start of the survey period (April 23-May 5), generally increased over time to a peak of about 41
percent from July 16-21, and then decreased slightly to about 38 percent at the end of the survey
period (October 14-26).240 In comparison, a CDC survey conducted in 2019 using similar questions

238See Dr. Elinore McCance-Katz, Assistant Secretary for Mental Health and Substance Use, Substance Abuse and
Mental Health Administration, The National Survey on Drug Use and Health: 2019 [Webcast Slides], September 2020,
accessed October 9, 2020, https://www.samhsa.gov/data/report/dr-elinore-f-mccance-katz-webcast-slides-national-2019.
Additionally, data from the Overdose Detection Mapping Application Program—a surveillance system that provides
near real-time suspected overdose data nationally—showed that between March and May 2020, over 61 percent of
participating counties experienced an increase in overdose reports with an 18 percent increase in suspected overdose
reports when comparing the weeks prior to and following the commencement of state-mandated stay-at-home orders.
The Washington/Baltimore High Intensity Drug Traﬃcking Area, housed within the University of Baltimore Center for
Drug Policy and Enforcement, develops and maintains the Overdose Detection Mapping Application Program.
239These mental health indicators are based on responses to two questions about symptoms of depressive disorder
and two questions about symptoms of anxiety disorder in the prior 7 days. The percentage of adults include those who
reported symptoms that generally occurred more than half the days or nearly every day. The 2020 Household Pulse
Survey, an experimental data product, is an interagency federal statistical rapid response survey to measure household
experiences during the COVID-19 pandemic. Sample sizes were determined such that a two-percentage point detectable
diﬀerence in weekly estimates for an estimate of 40 percent of the population would be detectable with a 90 percent
conﬁdence interval within each sample area. Weighted response rates have ranged from 1.3–10.3 percent. The Census
Bureau reports that it will conduct a nonresponse bias assessment. Measures, such as the demographic distribution
of the survey respondents compared to benchmarks, will be produced for data users to consider in their analysis. See
https://www.cdc.gov/nchs/covid19/pulse/mental-health.htm and https://www2.census.gov/programs-surveys/demo/
technical-documentation/hhp/Source-and-Accuracy-Statement-July-16-July-21.pdf for more information about the survey
methodology and mental health results.
240There were two data collection phases in the Household Pulse Survey. The ﬁrst phase collected information from
April to July 2020 in multi-day collection periods—April 23-May 5 was the start of the survey period and July 16-21 was
the end. The second phase of the survey collected information from August to October 2020 in multi-day collection
periods—August 19-31 was the start of the survey period and October 14-26 was the end.

Page 153 GAO-21-191
found that about 11 percent of U.S. adults reported experiencing these symptoms from January to
July 2019.241

The results of the Household Pulse Survey also suggest that the percentage of U.S. adults
experiencing symptoms diﬀers by age, with more individuals aged 18-29 experiencing symptoms
of anxiety disorder or depressive disorder compared to other age groups.242 With regard to race
or ethnicity, a higher percentage of individuals identifying as Hispanic, Black, and other or multiple
races reported symptoms of anxiety disorder or depressive disorder compared to White and Asian
individuals consistently over the survey period.243 (See our Health Disparities enclosure.)

In addition, in August 2020, CDC published the results of other surveys conducted during late
June 2020 related to mental health, substance use, and suicidal ideation during the COVID-19
pandemic.244 Overall, about 41 percent of 5,412 respondents who completed surveys during
June reported symptoms of at least one adverse behavioral health condition, including about 26
percent of respondents who reported trauma- and stressor-related disorder symptoms related to
COVID-19.245

Among other survey ﬁndings, persons aged 18 to 24 years most commonly reported symptoms
of various behavioral health conditions, and prevalence decreased progressively with age. Other
subgroups reporting higher prevalence of symptoms of adverse behavioral health conditions
included Hispanic respondents, non-Hispanic Black respondents, self-reported unpaid caregivers
and essential workers, and those receiving treatment for a previously diagnosed mental health
condition.

For example, speciﬁc to suicidal ideation, about 11 percent of respondents overall reported having
seriously considered suicide in the preceding 30 days, although this response was more prevalent
among certain subgroups—as shown in the ﬁgure below. In comparison, results from the 2019

241See Centers for Disease Control and Prevention, National Center for Health Statistics, Early Release of Selected Mental
Health Estimates Based on Data from the January–June 2019 National Health Interview Survey (May 2020). This estimate
is based on responses to two questions about symptoms of anxiety disorder and two questions about symptoms of
depressive disorder in the prior 14 days. The percentage of adults include those who reported symptoms that generally
occurred more than half the days or nearly every day. This estimate was published prior to ﬁnal data editing and ﬁnal
weighting to provide benchmarks for recent mental health estimates derived from the U.S. Census Bureau’s Household
Pulse Survey.
242The percentage of individuals aged 18-29 experiencing symptoms of anxiety disorder or depressive disorder
increased from about 47 percent at the start of the survey (April 23-May 5) to just over 50 percent at the end of the
survey (October 14-26). The percentage of U.S. adults experiencing symptoms of anxiety disorder or depressive
disorder decreased by age group (e.g. 30-39 years, 40-49 years, etc.) consistently over the survey period. See https://
www.cdc.gov/nchs/covid19/pulse/mental-health.htm for more details about the percentage of U.S. adults in each age
group reporting symptoms of anxiety disorder or depressive disorder.
243Individuals identifying as White, Black, Asian, and other or multiple races were non-Hispanic. Hispanic individuals
might be of any race.
244See M. É. Czeisler, R. I. Lane, E. Petrosky, et al., Mental Health, Substance Use, and Suicidal Ideation During the COVID-19
Pandemic — United States, June 24–30, 2020, MMWR Morbidity and Mortality Weekly Report, vol. 69, no. 32 (2020): p.
1049-1057 (Atlanta, Ga: Centers for Disease Control and Prevention, Aug. 14, 2020).
245Disorders classiﬁed as trauma- and stressor-related disorder in the Diagnostic and Statistical Manual of Mental
Disorders include posttraumatic stress disorder, acute stress disorder, and adjustment disorders, among others.

Page 154 GAO-21-191
National Survey on Drug Use and Health showed that about 5 percent of U.S. adults had thought
seriously about suicide in the past year.246

Centers for Disease Control and Prevention (CDC) Reported Survey Findings Regarding Suicidal Ideation, June 24–
30, 2020

Notes: See M. É. Czeisler, R. I. Lane, E. Petrosky, et al., Mental Health, Substance Use, and Suicidal Ideation During the COVID-19
Pandemic — United States, June 24–30, 2020, MMWR Morbidity and Mortality Weekly Report, vol. 69, no. 32 (2020): p. 1049-1057
(Atlanta, Ga: Centers for Disease Control and Prevention, Aug. 14, 2020). For this study, representative panel surveys were
conducted among adults aged ≥18 years across the U.S. during June 24–30, 2020. Quota sampling and survey weighting were
used to improve representativeness by gender, age, and race/ethnicity. A total of 5,412 adults completed web-based surveys.
The survey instruments included a combination of individual questions, validated questionnaires, and COVID-19 speciﬁc
questionnaires, which were used to assess respondent attitudes, behaviors, and beliefs related to COVID-19 and its mitigation,
as well as the social and behavioral health impacts of the COVID-19 pandemic.

Similarly, while about 13 percent of overall respondents reported having started or increased
substance use to cope with stress or emotions related to COVID-19, this response was more
common among certain subgroups—(see ﬁgure).

246See Substance Abuse and Mental Health Services Administration. Key Substance Use and Mental Health Indicators in the
United States: Results from the 2019 National Survey on Drug Use and Health. (Rockville, MD.: September, 11, 2020).

Page 155 GAO-21-191
Centers for Disease Control and Prevention (CDC) Reported Survey Findings Regarding Substance Use, June 24–
30, 2020

Demand for services increasing and access to treatment expected to worsen. Although not
all individuals experiencing new or exacerbated behavioral health symptoms will require or seek
treatment, there is preliminary data indicating that demand for treatment services is increasing.247
For example, data provided by SAMHSA indicate that call and text volume to its Disaster Distress
Helpline increased considerably during the pandemic as compared to 2019.248

Speciﬁcally, between March and August 2020, call volume peaked at 9,965 calls in April 2020—an
890 percent increase over April 2019, and then tapered oﬀ in the following months to 3,778 calls
in August 2020 (a 340 percent increase). Text volume increased by even greater percentages, also
peaking in April 2020. Call volume to SAMHSA’s National Helpline—a mental health and substance
use treatment referral and information service—also increased during the pandemic. SAMHSA

247NIH oﬃcials noted that while there will likely be increases in clinical need, the current increases in symptoms of
anxiety and depression, for example, are not necessarily indicative of large increases in serious and enduring mental
and behavioral disorders.
248SAMHSA’s Disaster Distress Helpline provides crisis counseling and support to people experiencing emotional
distress related to natural or human-caused disasters. The Disaster Distress Helpline is staﬀed by trained counselors
from a network of crisis call centers located across the United States.

Page 156 GAO-21-191
data show that call volume to this helpline began increasing over 2019 volume beginning in May
2020 (from 54,203 to 64,177 calls, or an 18 percent increase), and peaked in August 2020 (at
80,348 calls or a 35 percent increase).

Moreover, an August 2020 survey by the National Council for Behavioral Health found that 52
percent of the 343 provider member organizations surveyed reported demand for their services
increasing in the 3 months before the survey.249

At the same time as demand increases, access to behavioral health treatment services is expected
to worsen as a result of the COVID-19 pandemic. SAMHSA cites contributing factors such as layoﬀs
of behavioral health staﬀ and the loss of providers without the ﬁnancial reserves to survive long-
term and those unable to generate suﬃcient revenue to continue to operate.250 According to the
August 2020 survey of the National Council for Behavioral Health provider member organizations,
as a result of the COVID-19 pandemic:

• 26 percent of organizations reported laying oﬀ employees,

• 24 percent furloughed employees,

• 43 percent decreased the hours for staﬀ, and

• 65 percent of organizations reported having to cancel, reschedule, or turn away patients in the
last 3 months.

SAMHSA oﬃcials and several stakeholder organizations cited additional factors that might limit
access to care, such as loss of employer-based health insurance, and lack of broadband access or
access to telehealth-capable devices as providers switched to telehealth-based treatment during
the pandemic.

As we previously reported in June 2015, concerns about the availability of behavioral health
treatment, particularly for low-income individuals, have been longstanding. For instance, before
the COVID-19 pandemic, HRSA reported that by 2025 shortages of seven selected types of
behavioral health providers were expected, with shortages of some provider types expected to
exceed 10,000 full-time equivalents.251 As of September 30, 2020, HRSA designated more than

249See National Council for Behavioral Health. Member Survey: National Council for Behavioral Health Polling Presentation
(September 2020), accessed October 15, 2020, https://www.thenationalcouncil.org/wp-content/uploads/2020/09/
NCBH_Member_Survey_Sept_2020_CTD2.pdf.
250As a result of the COVID-19 pandemic, behavioral health care providers, like other health care providers, may be
experiencing ﬁnancial losses and changes in operating expenses due to factors such as decreased revenues from
cancellations of in-person visits, limitations in services due to social distancing requirements, and increased expenses,
such as for purchasing personal protective equipment.
251See Health Resources and Services Administration, National Center for Health Workforce Analysis, National
Projections of Supply and Demand for Selected Behavioral Health Practitioners: 2013-2025 (Rockville, M.D.: November 2016).
A total of nine types of behavioral health practitioners were considered in these estimates: psychiatrists; behavioral
health nurse practitioners; behavioral health physician assistants; clinical, counseling, and school psychologists;
substance abuse and behavioral disorder counselors; mental health and substance abuse social workers; mental health

Page 157 GAO-21-191
5,700 mental health provider shortage areas, aﬀecting more than 119 million Americans. In these
areas, about 27 percent of the estimated need for behavioral health providers is met.252

Federal agencies are taking actions to help address behavioral health impacts. Multiple
federal agencies are taking actions to help address impacts of the COVID-19 pandemic on
behavioral health, including the following:

SAMHSA. SAMHSA established a website, https://www.samhsa.gov/coronavirus, on which it has
posted guidance and other documents related to providing behavioral health treatment services
during the pandemic. For example, SAMHSA and the Centers for Medicare & Medicaid Services
issued guidance encouraging health insurance issuers to expand coverage for mental health
and substance use disorder services delivered via telehealth, among other things. 253 SAMHSA
also released guidance related to other topics, such as considerations for outpatient mental and
substance use disorder treatment settings, and state psychiatric hospitals during the COVID-19
pandemic.

In partnership with the Drug Enforcement Administration, SAMHSA announced ﬂexibilities related
to the provision of methadone and buprenorphine for the treatment of opioid use disorder in
response to the COVID-19 pandemic. For example:

• For new patients treated with buprenorphine, SAMHSA is exempting opioid treatment
programs (OTPs) from the requirement to perform an in-person physical evaluation, allowing
for the evaluation of the patient to be accomplished via telehealth.254

• For existing OTP patients, SAMHSA released guidance allowing for practitioners in OTPs to
continue treatment with methadone and buprenorphine via telehealth, as long as certain
conditions are met.255

A SAMHSA oﬃcial told us that SAMHSA is also undertaking other eﬀorts related to behavioral
health and the COVID-19 pandemic, including oﬀering training and technical assistance to

counselors; school counselors; and marriage and family therapists. These professions were chosen because they have
the largest number of providers within behavioral health care.
252HRSA computes the percent of need met by dividing the number of mental health providers available to serve
the population of the area, group, or facility by the number of mental health providers that would be necessary to
reduce the population-to-provider ratio below the threshold that would allow it to eliminate the designation as a Health
Professional Shortage Area for mental health.
253The Centers for Medicare & Medicaid Services, within the Department of Health and Human Services, administers
Medicare, and oversees Medicaid at the federal level. The agency provides information about the behavioral health
services covered by Medicare and Medicaid.
254OTPs, sometimes referred to as narcotic treatment programs or methadone clinics, oﬀer medication-assisted
treatment (including medications like methadone and buprenorphine, counseling, and other services) for
individuals addicted to heroin or other opioids.For new OTP patients treated with buprenorphine, SAMHSA is
temporarily exempting OTPs from the requirement to perform an in-person physical evaluation prior to admission
if an authorized physician determines that an adequate evaluation of the patient can be completed via telehealth.
This exemption does not apply to new OTP patients treated with methadone.
255In addition, OTPs can dispense certain quantities of methadone or buprenorphine based on a telehealth
evaluation, depending on a patient’s clinical stability and ability to safely manage medication.

Page 158 GAO-21-191
behavioral health providers and educators, and focusing on public awareness messaging with
entities such as school systems and local news organizations.

From its CARES Act funding, in July 2020, SAMHSA announced grant awards totaling over $424
million. This funding went to support various behavioral health related service providers, including
Certiﬁed Community Behavioral Health Clinics, tribal behavioral health programs, states and
territories, and local- and state-funded crisis centers, according to SAMHSA (see table). A SAMHSA
oﬃcial told us that the demand for these awards exceeded available funds, and that SAMHSA was
not able to fund all applicants.

Page 159 GAO-21-191
Substance Abuse and Mental Health Services Administration (SAMHSA) COVID-19 Related Grants
Grant Amount awarded ($)

Certiﬁed Community Behavioral Health Clinics expansion grants
a 249,657,910

Emergency grants to address mental and substance use disorders during COVID-19
b 109,791,641

Tribal Behavioral Health program supplemental funding
c 14,999,908

Suicide Prevention Lifeline Crisis Center follow-up expansion grants
d 2,978,828

Suicide Lifeline/Disaster Distress Helpline supplemental funding
e 7,021,172

COVID-19 emergency response for suicide prevention grants
f 39,795,212

Total 424,244,671

Source: GAO summary of SAMHSA data. | GAO-21-191

Notes: Grants noted were awarded through July 20, 2020.
a
SAMHSA reports that the purpose of the Certiﬁed Community Behavioral Health Clinics (CCBHC) expansion grants is to
increase access to and improve the quality of community mental and substance use disorder treatment services through
CCBHC expansion, and that it awarded expansion grants to 64 CCBHCs.
b
SAMHSA reports that the purpose of this emergency grant program is to provide crisis intervention services, mental and
substance use disorder treatment, and other related recovery supports for children and adults aﬀected by the COVID-19
pandemic. Funding was available to states, territories, and tribes, and 96 awards were made.
c
SAMHSA reports that the purpose of the Tribal Behavioral Health program is to prevent suicide and substance misuse, to
reduce the impact of trauma, and to promote mental health among American Indian/Alaska Native (AI/AN) youths up to 24
years old. SAMHSA provided supplemental funding to 154 current tribal behavioral health grant recipients in the amount of
$97,402 each.
d
The National Suicide Prevention Lifeline (NSPL) is a network of over 170 local- and state-funded crisis centers located across
the United States. Eligibility for these grants was limited to NSPL Crisis Centers, and 3 awards were made.
e
SAMHSA reports that the purpose of this supplemental funding was to support the Lifeline’s use of text messaging and expand
access to the Lifeline services across the nation in response to the COVID-19 pandemic. This funding was provided to the
organization which runs the NSPL and Disaster Distress Hotline.
f
SAMHSA reports that the purpose of this grant program is to support states and communities during the COVID-19 pandemic
in advancing eﬀorts to prevent suicide and suicide attempts among adults age 25 and older. Funding was available to states,
territories, tribes and tribal organizations, community-based primary care or behavioral healthcare organizations, community-
based service providers able to meet psychiatric and psychosocial needs of clients, public health agencies, and emergency
departments. Fifty awards were made.

CDC. In addition to CDC’s partnership with the Census Bureau on the Household Pulse Survey
and publication of the June survey related to mental health, substance use, and suicidal ideation
during the COVID-19 pandemic, CDC reported that it modiﬁed some of its existing, ongoing data
collection eﬀorts on behavioral health in response to the COVID-19 pandemic. For example,
starting in July 2020, CDC added questions to identify those diagnosed with COVID-19 to its
annual National Health Interview Survey so the agency can examine the mental health of those
individuals.256 According to CDC oﬃcials, the agency has also been involved in disseminating

256The National Health Interview Survey collects data on a broad range of health topics, including mental health,
through personal household interviews.

Page 160 GAO-21-191
resources to the public to respond to behavioral health impacts of COVID-19. For example, the
CDC Foundation provided support for the interactive website How Right Now, which provides tools
to help individuals experiencing feelings of grief, loss, or worry during COVID-19 identify resources
to help meet their needs.257

HRSA. HRSA indicated that one of its primary actions during the COVID-19 pandemic related
to behavioral health has been to support its grantees in their eﬀorts to continue providing
or expanding access to behavioral health services.258 For example, HRSA reported that it has
awarded more than $2 billion in supplemental funding to support health centers in responding
to COVID-19, including maintaining or increasing health center capacity to support the continued
delivery of primary care services, including substance use disorder and mental health services.

HRSA also reported that in response to the pandemic, the agency has focused on increasing
access to telehealth for mental health and substance use services. For example, HRSA noted that
it has awarded $15 million in CARES Act funding to increase telehealth access and infrastructure
to support four areas of maternal and child health—one of which is services and supports for
delivering trauma-informed health care, including behavioral health care. Additionally, HRSA’s
behavioral health training programs incorporated telehealth and distance learning models in their
education, training, and practice programs.

Further, HRSA administers the Provider Relief Fund, which reimburses eligible providers for
health care-related expenses or lost revenues attributable to COVID-19.259 Behavioral health
providers may have been eligible to receive some of the Provider Relief Fund disbursements to
date, if, for example, they participate in Medicare or Medicaid. Additionally, on October 1, 2020,
the Department of Health and Human Services, through HRSA, announced a new allocation of
$20 billion from the Provider Relief Fund, noting that an expanded group of behavioral health
providers will be eligible for these relief payments, such as addiction counseling centers, mental
health counselors, and psychiatrists. (See the Relief for Health Care Providers enclosure for more
information on Provider Relief Fund allocations and disbursements.)

NIH. NIH oﬃcials reported that the agency has made changes to its behavioral health research
plans based on the COVID-19 pandemic.260 The agency reported in its July 2020 Strategic Plan for
COVID-19 Research that it planned to support research to understand and address the impacts
of COVID-19 on behavioral health including potential impacts of the public health measures used
to prevent the spread of the virus which may aﬀect behavioral health.261 NIH reported that the

257See https://howrightnow.org/ for more information.
258HRSA reports that one of the ways it fulﬁlls its mission to improve health outcomes and address health disparities
through access to quality services, a skilled health workforce, and innovative, high-value programs, is through grants
and cooperative agreements. In addition to grants made through HRSA’s Behavioral Health Workforce Education and
Training Program, grants that may support behavioral health are made through programs such as its Health Center
Program, Maternal and Child Health Programs, Ryan White HIV/AIDS Program, and Rural Health Program.
259$175 billion was appropriated to reimburse eligible providers for health care-related expenses or lost revenues
attributable to COVID-19, known as the Provider Relief Fund. Speciﬁcally, the CARES Act appropriated $100 billion and
the Paycheck Protection Program and Health Care Enhancement Act appropriated an additional $75 billion for the fund.
Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 563 (2020); Pub. L. No. 116-139, div. B, tit. I, 134 Stat. 620, 622 (2020).
260NIH oﬃcials reported that the agency is using its regular appropriations to accommodate these changes.
261See National Institutes for Health (NIH), NIH-Wide Strategic Plan for COVID-19 Research (July 2020).

Page 161 GAO-21-191
agency had made numerous COVID-19 speciﬁc awards related to behavioral health research.262
For example, the National Institute on Drug Abuse issued a notice in March 2020 to solicit research
on risks and outcomes for COVID-19 in individuals with substance use disorders. As a result, in
ﬁscal year 2020, NIH funded 70 awards under this notice, many directly focused on behavioral
health.263

Additionally, NIH oﬃcials told us that various NIH institutes and oﬃces have coordinated research
eﬀorts through an NIH-wide workgroup intended to examine a broad range of topics. These
include the social and economic impacts of various eﬀorts to mitigate the pandemic; the eﬀects
of these impacts on mental health, suicide, substance use, violence, and other disorders; and the
eﬀects of the pandemic and its mitigation on health care access.264 As of September 2020, this
workgroup had issued two funding opportunities focused on interventions to reduce the impact of
the pandemic on vulnerable populations, such as those with health disparities.

NIH is also internally conducting research related to the behavioral health impacts of the COVID-19
pandemic. For example, the National Institute of Mental Health began studying the mental health
impact of the COVID-19 pandemic in April 2020 to learn how stressors related to the COVID-19
pandemic aﬀect mental health over time.

ASPR. ASPR reported in October 2020 that it had deployed 20 National Disaster Medical System
mental health specialists and one psychologist, both in-person and virtually, to help address
behavioral health needs related to the COVID-19 pandemic.265 For example, ASPR reports that
National Disaster Medical System teams providing medical support for state and local facilities in
relation to COVID-19 usually include a mental health specialist to provide responders with support
and guidance on managing extreme stress.

ASPR also reported that it was engaged in ongoing activities with other federal departments
related to behavioral health and COVID-19. For example, an ASPR oﬃcial chairs a behavioral health
work group that also includes SAMHSA, CDC, and nonfederal participants. ASPR reports that the
group aims to support mental health and substance use disorder treatment systems through
eﬀorts such as promoting promising practices and strategies for system sustainability.

Commissioned Corps. The Commissioned Corps of the United States Public Health Service
reported that as of September 15, 2020, it had deployed 165 behavioral health oﬃcers in support
of the COVID-19 pandemic response. These behavioral health support missions included activities
such as providing behavioral health support for:

262Some of the NIH institutes that have ongoing or planned research related to mental health and substance use
include the National Institute on Alcohol Abuse and Alcoholism, the National Institute on Drug Abuse, the National
Institute of Mental Health, and the National Institute on Minority Health and Health Disparities.
263NIH reports that these awards were a combination of supplements and urgent competitive revisions—revisions to
awards to meet immediate needs to help address a speciﬁc public health crisis.
264The workgroup—called the “Social, Behavioral, and Economic Health Impacts of COVID-19, Particularly in Vulnerable
and Health Disparity Populations”—is led by oﬃcials from NIH’s National Institute of Mental Health, National Institute
on Minority Health and Health Disparities, National Institute on Aging, Oﬃce of Behavioral and Social Sciences Research,
and Oﬃce of Extramural Research.
265The National Disaster Medical System is the main program through which the Department of Health and Human
Services enrolls responders to assist with the federal medical and public health response to public health emergencies.

Page 162 GAO-21-191
• quarantined residents on Air Force bases,

• residents of long-term care facilities, and

• patients in Indian Health Service facilities.

FEMA. As of October 15, 2020, FEMA reports that it has awarded more than $302 million to 48
states and territories through its Crisis Counseling Assistance and Training program, which assists
individuals and communities in recovering from the psychological eﬀects of natural and human
caused disasters through community-based outreach and educational services.266 Some states
have reported that they are using this funding, for example, to fund local hotlines, and deploy
outreach counselors and clinicians to provide basic education and counseling around issues
related to the pandemic, and assess high-risk individuals for mental health referrals.

In addition to the actions taken by the federal agencies listed above, on October 3, 2020 the
President signed an Executive Order, which, among other things, established a Coronavirus Mental
Health Working Group to be co-chaired by the Secretary of Health and Human Services and the
Assistant to the President for Domestic Policy (or their designees). According to the Executive
Order, the working group will include representatives from numerous federal agencies, as well as
the Oﬃce of National Drug Control Policy and the Oﬃce of Management and Budget. It directs
the working group to examine existing protocols and evidence-based programs that may serve
as models to better support mental and behavioral health conditions of vulnerable populations,
and to submit a plan to the President within 45 days of the date of the order for improved service
coordination between all relevant stakeholders and agencies to assist individuals in crisis.267

Agency Comments
We provided a draft of this enclosure to the Department of Health and Human Services, the
Department of Homeland Security, and the Oﬃce of Management and Budget. The Department of
Health and Human Services provided technical comments, which we incorporated as appropriate.
Neither the Department of Homeland Security nor the Oﬃce of Management and Budget
provided comments on this enclosure.

266See 42 U.S.C. § 5183; 44 C.F.R. § 206.171. When states or tribal entities request major disaster declarations, they may
request assistance under the Crisis Counseling Assistance and Training program. Likewise, when the President makes
a major disaster declaration, the declaration may authorize FEMA’s Individual Assistance program, which may also
include the Crisis Counseling Assistance and Training program. On April 28, 2020, President Trump delegated authority
to approve the Crisis Counseling Assistance and Training program for COVID-19 pandemic related disasters to the FEMA
Administrator for disasters declared prior to that date.
267Exec. Order No. 13,954, 85 Fed. Reg. 63,977 (Oct. 8, 2020). The Executive Order includes in its description of
vulnerable populations: minorities, seniors, veterans, small business owners, children, and individuals potentially
aﬀected by domestic violence or physical abuse; those living with disabilities; and those with a substance use disorder.

Page 163 GAO-21-191
GAO’s Methodology
To conduct this work, we reviewed federal law, agency guidance and documents; and interviewed
or obtained written responses from agency oﬃcials, including those from SAMHSA, CDC, HRSA,
NIH, ASPR, and FEMA. We reviewed data from Phase 1 and 2 of the Household Pulse Survey
through October 26, 2020, as reported by CDC’s National Center for Health Statistics, and
SAMHSA’s Disaster Distress Helpline and National Helpline data provided for January through
August 2019 and January through August 2020. We assessed the reliability of these data, and the
June survey data published in CDC’s Morbidity and Mortality Weekly Report, by reviewing relevant
agency documentation, requesting written information from agency oﬃcials, and checking for
obvious errors. We determined that these data were suﬃciently reliable for the purpose of
describing reported impacts of the COVID-19 pandemic on behavioral health symptoms and
demand for treatment.

We also conducted interviews, and reviewed written responses and other reports and
documentation provided by organizations that represent various types of behavioral health
service providers, referred to as stakeholders, to obtain their perspectives on behavioral health
concerns, challenges, and federal agency actions.268 We reviewed the ﬁndings from the National
Council for Behavioral Health’s August 2020 member survey, and assessed the reliability of
these data by requesting information from the Council, and reviewing survey documentation.
We determined that these data were suﬃciently reliable for the purpose of describing reported
impacts of the COVID-19 pandemic on behavioral health treatment providers. In addition to
federal agency and stakeholders’ reports and documentation, we also reviewed other published
reports and research papers related to behavioral health and the COVID-19 pandemic.

Contact information: Alyssa M. Hundrup, (202) 512-7114, hundrupa@gao.gov

Related GAO Products
Drug Misuse: Sustained National Eﬀorts Are Necessary for Prevention, Response, and Recovery.
GAO-20-474. Washington, D.C.: March 26, 2020.

Behavioral Health: Options for Low-Income Adults to Receive Treatment in Selected States. GAO-15-449.
Washington, D.C.: June 19, 2015.

268We interviewed or received written responses from stakeholders including the American Psychiatric Association,
American Psychological Association, American Society of Addiction Medicine, National Alliance on Mental Illness,
National Council for Behavioral Health, and National Association of Addiction Treatment Providers.

Page 164 GAO-21-191
States’ Perspectives on Medical Supply Availability
States and territories in our nationwide survey continue to report limitations in the availability of
certain medical supplies, such as nitrile gloves and reagents used for COVID-19 testing.

Entities involved: The Federal Emergency Management Agency, within the Department of
Homeland Security; and the Department of Health and Human Services, including its Oﬃce of
the Assistant Secretary for Health and Oﬃce of the Assistant Secretary for Preparedness and
Response.

Key Considerations and Future GAO Work
In September 2020, we reported ongoing constraints with the availability of certain types of
personal protective equipment (PPE) and testing supplies due to a supply chain with limited
domestic production and high global demand. Speciﬁcally, we found that the Food and Drug
Administration (FDA) and Federal Emergency Management Agency (FEMA) had both identiﬁed
shortages of certain supplies. Oﬃcials from seven of the eight states, as well as stakeholder
groups GAO interviewed in July and August 2020, identiﬁed constraints around PPE and testing
supplies. We also found that states and other nonfederal entities have experienced challenges
tracking supply requests made through the federal government and budgeting for ongoing needs.

To address these issues, we recommended that the Department of Health and Human Services
(HHS)—the lead agency in charge of the federal public health response to the pandemic—in
coordination with FEMA:

• further develop and communicate to stakeholders plans outlining speciﬁc actions the federal
government will take to help mitigate supply chain shortages for the remainder of the
pandemic.

• immediately document roles and responsibilities for supply chain management functions
transitioning to HHS, including continued support from other federal partners, to ensure
suﬃcient resources exist to sustain and make the necessary progress in stabilizing the supply
chain.

• devise interim solutions, such as systems and guidance and dissemination of best practices,
to help states enhance their ability to track the status of supply requests and plan for supply
needs for the remainder of the COVID-19 pandemic response.

HHS and the Department of Homeland Security (DHS) disagreed with these recommendations,
noting, among other things, the work that they had done to manage the medical supply chain and
increase supply availability.

We recognize the eﬀorts of federal agencies in improving the supply chain. However, in light of
reported shortages, and our October 2020 nationwide survey of state and territorial public health
and emergency management oﬃcials described below, we underscore the critical imperative that

Page 165 GAO-21-191
HHS and FEMA implement our September 2020 recommendations. Taking these actions could
help address the ongoing medical supply chain challenges identiﬁed in our survey and related
work.

We will continue to monitor the implementation of our recommendations and continue our work
reviewing the medical supply chain, to include pharmaceuticals, supplies for testing, and the
management of the Strategic National Stockpile.

Background
Medical supplies are crucial to preventing, detecting, and treating COVID-19, and will be needed to
administer a COVID-19 vaccine when available.

PPE and testing supplies. Typically, the commercial medical supply chain supports the needs
of health care providers (such as hospitals and nursing homes), and laboratories—which can be
hospital-based, private, public health, or commercial.

However, the demands of the global COVID-19 pandemic overwhelmed the medical supply chain,
causing constraints in the availability of PPE supplies like N95 respirator masks, surgical gowns,
and gloves; as well as of supplies needed to test patients for COVID-19. (See ﬁgures below.) These
testing supplies include nasal swabs used to collect viral specimens from patients, transport media
that keep samples viable for testing, reagents used to process tests, testing instruments, and
rapid point-of-care tests. As a result, health care providers and laboratories have had challenges in
obtaining timely and complete access to needed supplies through the commercial market.

Examples of Personal Protective Equipment

Page 166 GAO-21-191
Examples of COVID-19 Testing Supplies

The federal government and the states have taken multiple actions to help ensure supplies are
available where they are needed. For example,

• According to FEMA oﬃcials, if a local entity, such as a nursing home or hospital, has issues
acquiring PPE on the commercial market, it can turn to the state, tribe, or territory, which may
be able to provide assistance. However, if a state is unable to meet local PPE needs through
the purchase of materials from the commercial market or other state-initiated eﬀorts (e.g.,
donations), it can make a resource request to the federal government.

• HHS distributes monthly allocations of certain testing supplies (nasal swabs and transport
media) to states based, in part, on each state’s testing plan, utilization of supplies from the
prior month, epidemiological indicators, and logistical considerations.269

• The federal government has, at times, distributed supplies directly to health care providers.
For example, FEMA and HHS’s Oﬃce of the Assistant Secretary for Health coordinated the
delivery directly to each Medicare- and Medicaid-certiﬁed nursing home of a 14-day supply of
gloves, surgical masks, gowns, and eye protection from May through August 2020. They later
distributed point-of-care testing devices and kits to all nursing homes.

Vaccine administration supplies. The quantity of supplies needed to administer the COVID-19
vaccine to the U.S. population is so large that the federal government has contracted for the
production and assembly of vaccine-related supplies into kits that will be distributed along with
the vaccine. In its September 2020 COVID-19 Vaccination Program Interim Playbook for Jurisdiction
Operations, the Centers for Disease Control and Prevention stated that ancillary supply kits would
be distributed along with vaccines that contain needles, syringes, alcohol prep pads, surgical
masks, face shields, and vaccination cards.270 The Interim Playbook also noted that these kits will

269HHS does not provide supplies directly to commercial laboratories, which account for about half of all COVID-19
tests performed nationwide.
270The exact content may vary depending on the speciﬁc vaccine. See our enclosure on the Strategic National Stockpile
in this report for more information on vaccine supply kits.

Page 167 GAO-21-191
not include other supplies such as sharps containers, gloves, and bandages. In an October 19,
2020, letter to the President, the National Governors’ Association relayed states’ concerns about
how the federal government would manage the supply chain for vaccine administration supplies
such as needles, syringes, alcohol pads, and bandages.

Overview of Key Issues
Our survey results indicate states and territories—hereafter, states—have experienced challenges
in procuring adequate quantities of supplies to meet the needs of local entities within their states
and at testing sites.271 The majority of the 47 states that responded to our survey reported that
they received and were able to fulﬁll requests for certain PPE, while other supplies remained
constrained. States also expressed concerns about having adequate supplies to administer a
future COVID-19 vaccine, and they noted some challenges in tracking and budgeting associated
with supplies received from the federal government.272

States are fulﬁlling PPE requests, but supplies of some PPE remain constrained. The majority
of states that responded to our survey received requests for supplies from organizations and
entities within their states and were mainly able to fulﬁll them. However, availability constraints
continue with certain PPE, such as nitrile gloves.

Almost all (46 of 47) responding states reported that they had received requests for at least
one type of PPE from organizations or entities within their states in the 30 days preceding the
survey. The presence of these requests indicates that these organizations remain challenged in
their ability to procure adequate quantities of supplies to meet their needs. The most commonly
requested supplies were surgical masks (46 states), followed by N95 respirators, nitrile gloves, and
face shields and goggles (45 states received requests for each of these supplies).

We found that while many states are receiving requests for PPE, they are able to fulﬁll those
requests, with a few exceptions. For example, 38 states responded that they were able to fulﬁll
requests greatly or completely for non-surgical masks in the previous 30 days. (See ﬁgure below.)
In contrast, less than half (22 states) responded that they were greatly or completely able to fulﬁll
requests for nitrile gloves, and 11 states reported slightly or not at all fulﬁlling those requests. In
open-ended responses, one of the reasons given for the lack of complete fulﬁllment was a lack
of availability of certain sizes of nitrile gloves—two states noted an inability to obtain extra-large
nitrile gloves, for example.

271The results are based on our survey sent to senior oﬃcials in the public health and/or emergency management
departments of all 50 states; Washington, D.C.; and the U.S. territories (American Samoa, Guam, Commonwealth of the
Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands); ﬁelded from October 10 through October 21, 2020.
We received responses from 47 of the 56 locations, representing 41 states, Washington, D.C., and all ﬁve territories. Not
all states responded to each survey question.
272FEMA generally reimburses 75 percent of the eligible cost of medical supplies that states purchase under its Public
Assistance program and receive through mission assignments. See 44 C.F.R. § 206.47 (2019). Conversely, supplies that
states and other recipients receive directly from the Strategic National Stockpile are covered at 100 percent and are not
subject to cost sharing.

Page 168 GAO-21-191
Extent that States and Territories Fulﬁlled Requests for Selected Personal Protective Equipment (PPE)

Note: The results are based on our survey sent to senior oﬃcials in the public health and/or emergency management
departments of all 50 states; Washington, D.C., and the U.S. territories (American Samoa, Guam, Commonwealth of the
Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands), ﬁelded from October 10 through October 21, 2020. We
received responses from 47 of the 56 locations, representing 41 states, Washington, D.C., and all ﬁve territories. Not all states
responded to each survey question. For this survey question, we asked states to what extent they were able to fulﬁll requests
received for selected PPE types in the 30 days prior to the survey. At least 44 states responded for all PPE types listed above
except for surgical gowns (42) and boot covers (31).

A majority of states reported that they had a 30-day stockpile of six of the seven PPE types in our
survey, consistent with what we reported in September 2020. (See ﬁgure below.) In addition, in
their open-ended responses, more than one-third of the states indicated that they had 30-day
stockpiles of additional PPE items; two commonly stockpiled items were coveralls (full-body suits)
and bouﬀant caps (hair coverings).

Page 169 GAO-21-191
Number of States Reporting 30-day Stockpiles of Selected Personal Protective Equipment (PPE)

Note: We sent a survey to senior oﬃcials in the public health and/or emergency management departments of all 50 states;
Washington, D.C.; and the U.S. territories (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, Puerto
Rico, and the U.S. Virgin Islands), ﬁelded from October 10 through October 21, 2020. We received responses from 47 of the 56
locations, representing 41 states, Washington, D.C., and all ﬁve territories. Not all states responded to each survey question.
For this survey question, we asked states whether they had at least a 30-day supply on hand (stockpiled) of selected PPE. All
47 states responded to this question; the table represents only those states that responded “yes” for each PPE type (other
response options were no, unsure, or not applicable). States responding that stockpiling was not applicable were as follows:
one state each for surgical masks and surgical gowns; two states for non-surgical masks; and 10 states for boot covers.

More than half the states reported having obtained supplies from either the commercial market or
FEMA in the past 30 days, indicating that states could not completely fulﬁll requests from supplies
they had on hand.

• Almost all states (44) reported having obtained PPE from the commercial market. Of those 44
states, 17 reported that they were able to greatly or completely obtain supplies to meet their
states’ needs; 22 states responded that they were moderately able to do so.

• Almost three-quarters of states (34) reported having obtained PPE from FEMA, which indicates
challenges in procuring these supplies from the commercial market, as states would only
request supplies from FEMA when they were unable to meet their needs through the
commercial market. Of those 34 states, 12 reported that they were greatly or completely able
to obtain supplies from FEMA to meet their states’ needs; 8 states reported slightly or not at
all being able to obtain needed supplies. In an open-ended response, one state noted that
supplies received from FEMA in the past 30 days were ordered 6 months prior.

The extent to which states expressed conﬁdence in their ability to fulﬁll PPE requests they may
receive over the 60 days following the survey varied among states and by PPE type. (See ﬁgure
below.) For example, 32 states were greatly or completely conﬁdent in their ability to fulﬁll future
requests for face shields and goggles. In contrast, about one-third (17) of states were greatly or
completely conﬁdent in their ability to fulﬁll future requests for nitrile gloves; 15 states responded
that they were only slightly conﬁdent or not at all conﬁdent in their ability to fulﬁll future requests
for nitrile gloves.

Page 170 GAO-21-191
Extent of States’ Conﬁdence in Ability to Fulﬁll Future Requests for Selected Personal Protective Equipment
(PPE)

Note: We sent a survey to senior oﬃcials in the public health and/or emergency management departments of all 50 states;
Washington, D.C.; and the U.S. territories (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, Puerto
Rico, and the U.S. Virgin Islands), ﬁelded from October 10 through October 21, 2020. We received responses from 47 of the 56
locations, representing 41 states, Washington, D.C., and all ﬁve territories. Not all states responded to each survey question. For
this survey question, we asked states the extent to which they were conﬁdent in their ability to fulﬁll requests for selected PPE
items in the 60 days following the survey. All 47 states responded for all PPE types listed above except for non-surgical masks
(46) and boot covers (45).

Shortages reported for three of ﬁve types of testing supplies. In our survey, we asked whether
states’ testing sites or laboratories had experienced shortages of ﬁve selected testing supplies in
the previous 30 days. Most states reported no shortages of swabs or transport media, but one-
third to one-half of the 47 states reported shortages in the other three types of testing supplies:
reagents (21 states), testing instruments (16 states), and rapid point-of-care tests (24 states). (See
ﬁgure below.)

Page 171 GAO-21-191
State-Reported Supply Shortages for Testing Sites or Laboratories

Note: We sent a survey to senior oﬃcials in the public health and/or emergency management departments of all 50 states;
Washington, D.C.; and the U.S. territories (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, Puerto
Rico, and the U.S. Virgin Islands); ﬁelded from October 10 through October 21, 2020. We received responses from 47 of the 56
locations, representing 41 states; Washington, D.C.; and all ﬁve territories. Not all states responded to each survey question.
For this survey question, we asked states whether testing sites or laboratories had experienced shortages of selected testing
supplies in the 30 days preceding the survey. Forty-six states responded for all testing supply types listed above.

When asked about testing supply availability at testing sites and laboratories for the 60 days
following the survey, half the states (22) expected there would be shortages in rapid point-of-care
tests, and 20 states expected there would be shortages in reagents. (See ﬁgure below.) This is also
consistent with our September 2020 report, where we reported that oﬃcials in several states we
interviewed identiﬁed diﬃculties in acquiring reagents and test kits from the commercial market.
In contrast, more than half the states reported that they did not expect to experience shortages
in swabs (29 states) or transport media (28 states). (See our related COVID-19 Testing Guidance
enclosure.)

States’ Anticipated Supply Shortages for Testing Sites or Laboratories

Page 172 GAO-21-191
locations, representing 41 states; Washington, D.C.; and all ﬁve territories. Not all states responded to each survey question. For
this survey question, we asked states whether they anticipated that testing sites or laboratories would experience shortages of
selected testing supplies in the 60 days following the survey. Forty-six states responded for all testing supply types listed above
except for transport media (45).

Planning for future COVID-19 vaccine supply needs. States responding to our survey expressed
concerns about having adequate supplies to distribute and administer a future COVID-19 vaccine.
In our survey:

• About one-third of the states (17 of 47) responded that they were greatly or completely
concerned about having suﬃcient vaccine-related supplies to administer COVID-19 vaccines in
their state or territory. An additional 21 states were moderately concerned.

• In their open-ended responses, senior oﬃcials from six states stated they were speciﬁcally
concerned about the federal government’s ability to supply needles given reports of
shortages; three of those states also reported challenges maintaining supplies of needles for
their state’s ﬂu vaccination eﬀorts.

Working with the federal government to meet supply needs. We reported in September 2020
that state and other nonfederal partners experienced three types of challenges in working with
the federal government to meet supply needs: (1) knowing which federal supplies would arrive
and when; (2) conﬁrming the right entities received correct and usable supplies when federal
programs delivered them directly to local organizations or entities; and (3) determining how
to plan and budget for future supply needs, in part due to uncertainty about which programs
provided which supplies.

Our survey results indicate that while most states did not report challenges in knowing which
supplies would arrive and when, many states reported experiencing other types of challenges.

• Most states (41 of 47) responded that they had a slight or no challenge in knowing which
supplies would arrive and when.

• A majority of states (26) reported experiencing a moderate to great challenge in tracking
supplies that were delivered directly to local points of care.

• About half the states (23) responded that budgeting for future supply needs was greatly or
completely challenging, and an additional 17 reported a moderate challenge.

• One-quarter of the states (12) responded that it was either a great or complete challenge to
gain clarity on the state’s share of the cost for supplies already requested and delivered; an
additional 15 states reported this was a moderate challenge.

Page 173 GAO-21-191
Agency Comments
We provided HHS, DHS, and the Oﬃce of Management and Budget (OMB) with a draft of
this enclosure. HHS, in its comments, repeated its disagreement with our September 2020
recommendations and noted its eﬀorts to meet the needs of states. Our report acknowledges
those eﬀorts, but we continue to maintain that our recommendations are warranted.

In its comments, HHS incorrectly stated that our survey results showed that few states had
experienced or anticipated shortages in medical or testing supplies. Rather, our survey results
show that fewer than half the states (22 of the 45 that received requests) reported being able to
completely fulﬁll supply requests for nitrile gloves. Similarly, 21 states reported shortages in the
availability of reagents needed to process COVID-19 tests in the 30 days preceding our survey.
About one-third of the states also remained concerned about having adequate supplies available
to administer a COVID-19 vaccine.

HHS also reiterated its request for the names of states with reported shortages and identifying
information for senior state oﬃcials with whom we spoke. As we stated in our September report,
our ﬁndings and recommendations are not that HHS should follow up to adjudicate individual
issues that have already occurred. Rather, our ﬁndings from our nationwide survey of state public
health and emergency management oﬃces could help inform the department’s supply eﬀorts
moving forward by providing a snapshot of states’ needs and concerns. Further, the intent of the
recommendations is that HHS and FEMA, as leads for this pandemic response, seek to better
understand the problems we continue to identify and devise solutions to help ensure the federal
government can mitigate remaining medical supply gaps and assist states, tribes, and territories in
serving their citizens eﬀectively.

DHS provided technical comments, which we incorporated as appropriate. OMB did not provide
comments on this enclosure.

GAO’s Methodology
To conduct this work, we designed and ﬁelded a survey to senior state and territorial public
health and/or emergency management oﬃcials in the 50 states; Washington, D.C.; and the U.S.
territories (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, Puerto
Rico, and the U.S. Virgin Islands). We asked senior state oﬃcials to respond to each question
from the perspective of their state or territory as a whole; however, we did not independently
verify whether senior oﬃcials sought input from other state oﬃces when completing the
survey. The survey contained questions designed to obtain senior state oﬃcials’ perspectives
on the availability of PPE, testing, and vaccine administration supplies. We asked about supply
availability within the 30 days preceding the survey, as well as projected availability over the 60
days following the survey. The survey also contained questions designed to obtain senior state
oﬃcials’ perspectives on working with the federal government to meet supply needs.

Page 174 GAO-21-191
We ﬁelded this survey from October 10, 2020 through October 21, 2020. We pretested a draft of
the survey with state oﬃcials in two states—a public health oﬃcial in one state and an emergency
management oﬃcial in another—to help ensure that the questions were understandable
and answerable. We received survey responses from 41 states, Washington, D.C., and all ﬁve
territories—47 responses total.273 We assessed data reliability by checking for missing values and
survey response errors. We followed up with state oﬃcials on survey responses as appropriate.
After completing these checks, we determined that the ﬁnal survey data were suﬃciently reliable
for the purpose of obtaining states’ perspectives on medical supply availability.

Contact information: Mary Denigan-Macauley, 202-512-7114; DeniganMacauleyM@gao.gov

273We did not receive responses from the following states: California, Colorado, Delaware, Florida, Massachusetts,
Mississippi, Nebraska, Nevada, and New Mexico.

Page 175 GAO-21-191
COVID-19 Cyber Response
The Department of Health and Human Services has increased collaboration and coordination
to respond to cyber threats that attempted to exploit COVID-19 to target health care
organizations. In addition, the department has made progress in implementing our prior
recommendations regarding cybersecurity weaknesses at its component agencies. However,
several recommendations remain unimplemented.

Entities involved: Department of Health and Human Services; Cybersecurity and Infrastructure
Security Agency, within the Department of Homeland Security; and Federal Bureau of
Investigation, within the Department of Justice

Key Considerations and Future GAO Work
We are currently reviewing the Department of Health and Human Services’ (HHS) roles and
responsibilities for assisting with cybersecurity in the health care and public health critical
infrastructure sector. This review includes an evaluation of the department’s eﬀorts to collaborate
and coordinate as part of its response to COVID-19-related cyberattacks. In addition, we are
monitoring the department’s eﬀorts to expedite implementation of our prior cybersecurity-
related recommendations at its component agencies. Since we last reported in September
2020, the component agencies—Centers for Medicare & Medicaid Services, Food and Drug
Administration (FDA), and Centers for Disease Control and Prevention—implemented an
additional 54 cybersecurity recommendations. This brings the total number of implemented
recommendations to 404 of 434, which reﬂects a 12 percent increase of corrective actions taken to
bolster cybersecurity at the component agencies.274

Background
National emergencies, such as the current COVID-19 public health emergency, call for coordinated
eﬀorts to strengthen and maintain secure, functioning, and resilient critical infrastructure, as is
set out in Presidential Policy Directive 21.275 In this regard, the directive requires sector-speciﬁc
agencies to work with critical infrastructure owners and operators and other sector partners to
manage risk and strengthen the security and resilience of the nation's critical infrastructure.276
According to the directive, these eﬀorts should consider all hazards, including cybersecurity
threats, and are intended to identify and disrupt threats and hasten response and recovery,

274For two of the recommendations to FDA, the agency previously issued a waiver for one and accepted the risk for the
other; as a result, the recommendations were not implemented.
275Critical infrastructure includes assets, networks, and systems that are vital to the nation’s safety, prosperity, and well-
being. Presidential Policy Directive 21 on critical infrastructure security and resilience identiﬁes health care and public
health as one of 16 critical infrastructure sectors.
276Sector-speciﬁc agencies are federal agencies with institutional knowledge and specialized expertise about a particular
sector and have been designated to have a lead role in critical infrastructure protection eﬀorts for that sector.

Page 176 GAO-21-191
among other things. Presidential Policy Directive 21 designated HHS as the sector-speciﬁc agency
for health care and public health. In this role, HHS is responsible for collaborating with sector
partners and coordinating activities to strengthen cybersecurity in the sector.

Overview of Key Issues
Given the increase in cyberattacks against health care organizations since March 2020, HHS
increased its collaboration eﬀorts and coordination with other federal agencies to respond to
cyber threats that attempted to leverage the COVID-19 pandemic to target those organizations.277
The department leads, or co-leads, several collaborative eﬀorts intended to strengthen
cybersecurity in the health care and public health sector. Since March 2020, the department
increased collaborative eﬀorts to address cybersecurity concerns associated with COVID-19, as
described in the table below.

277As we previously reported in September 2020, malicious cyber actors have used, for example, phishing attacks
referencing COVID-19 as a means to obtain patient information, intellectual property, public health data, and intelligence
from health care organizations, such as pharmacies, academic institutions, and medical research organizations.

Page 177 GAO-21-191
Department of Health and Human Services’ (HHS) Collaborative Eﬀorts to Respond to Increased Cyberattacks
Associated with COVID-19 since March 2020
HHS-led collaborative group Description Collaborative eﬀort

HHS Chief Information Security A collaborative eﬀort led by the HHS Chief During the council’s April and May
Oﬃcer Council Information Security Oﬃcer that facilitates 2020 meetings, participants received
the sharing of information among the chief a demonstration of the HHS Protect
information security oﬃcers across the a
system; information on the Department
department. of Homeland Security’s cybersecurity
support (i.e., staﬃng and funding) to the
department in light of COVID-19; and
notiﬁcation of the release of best practices
b
for using Zoom and video conferencing.

HHS Cybersecurity Working Group A forum of HHS staﬀ divisions and The working group has met monthly—with
component agencies led by the Oﬃce of the exception of May 2020—to discuss
the Assistant Secretary for Preparedness and coordinate eﬀorts focused on health
and Response (ASPR) that facilitates care sector cybersecurity. For example,
discussions and coordination of during the April 2020 meeting, the Food
cybersecurity issues in the health care and Drug Administration (FDA) provided
sector. updates on its eﬀorts to engage with the
sector’s industry partners for medical
device security.

Government Coordinating An ASPR-led group of federal, state, The working group collaborated to
Council’s Cybersecurity Working local, tribal, and territorial health care establish a Telehealth Task Group to
Group partners. It coordinates to enhance critical address cybersecurity risks to the
infrastructure resiliency and to reduce telehealth industry. The task group, which
cyber risks across the public landscape of was formally established on August 26,
the health care sector. 2020, has met biweekly to discuss ongoing
telehealth-related activities, such as those
led by HHS’s component agencies.

Joint Healthcare and Public Health The working group is co-led by ASPR, the The working group has collaborated to
Sector Cyber Working Group HHS Oﬃce of the Chief Information Oﬃcer, discuss establishment of the Telehealth
and FDA, along with industry partners. It Task Group described above. The working
is a forum of government and industry group also collaborated to develop
partners that facilitates discussion of and distribute guidance on managing
issues and development of resources to cybersecurity risks while teleworking.
enhance cybersecurity among health care
sector stakeholders.

Healthcare Threat Operations A collaborative eﬀort between the The federal health care partners
Center federal health care partners—HHS, the have shared cybersecurity threat
Department of Veterans Aﬀairs, and the information among each other through
Defense Health Agency—that is intended c
the ThreatConnect secure portal. For
to improve the computer security and example, HHS shared information
incident response capabilities of those regarding a phishing campaign that
agencies. attempted to trick users into thinking that
HHS had sent them a legitimate email
requesting face masks and forehead
thermometers that were listed in a
malicious email attachment.

Page 178 GAO-21-191
Source: GAO analysis of HHS documentation. | GAO-21-191

a
HHS Protect is intended to serve as a secure data ecosystem for collecting, sharing, and analyzing near-real-time COVID-19
data.
b
According to its website, Zoom is a cloud platform for video and voice conferencing, content sharing, and chatting that works
across several devices, including mobile devices, desktop computers, and telephones.
c
ThreatConnect is a secure portal that allows users to share information related to cyber alerts, cyber warnings, and cyber
threat intelligence.

In addition to the increased collaboration eﬀorts, HHS expanded cybersecurity coordination with
the Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency
(CISA) and the Federal Bureau of Investigation (FBI) to address cyber threats associated with
COVID-19, as described below.

• According to oﬃcials in the HHS Oﬃce of the Chief Information Oﬃcer (OCIO) and the Oﬃce
of the Assistant Secretary for Preparedness and Response (ASPR), ASPR coordinated meetings
with CISA and FBI to identify and notify critical organizations and organizations with critical
assets that need extra protection during the nation’s response to COVID-19. The HHS oﬃcials
informed us that these eﬀorts began in March 2020 and are still ongoing.

• Between March and July 2020, HHS’s Health Sector Cybersecurity Coordination Center (HC3)
routinely provided information on cybersecurity threats, vulnerabilities, and incidents to
CISA.278 According to oﬃcials at CISA, the agency disseminated the information provided by
HC3 more broadly to federal, state, and local partners; private industries; critical infrastructure
partners; and international partners through various information-sharing platforms.

• ASPR, HC3, CISA, and FBI meet weekly as part of the Cyber Watch Project, which is intended
to execute and coordinate government-wide cyber engagements in support of health care
sector entities that are developing and testing COVID-19 therapeutics and vaccines. They
jointly develop and prioritize a list of sector entities involved in developing therapeutics and
vaccinations. After the prioritized list is developed, they oﬀer cybersecurity support through
engagements intended to ensure that the identiﬁed entities are not impacted or interrupted
by cyber threats. According to HHS OCIO and ASPR oﬃcials, these eﬀorts began in March 2020
and are still ongoing.

• Between April and July 2020, ASPR held joint weekly webinars with DHS and the InfraGard
National Capital Region that focused on physical security and cybersecurity during
COVID-19.279

278HC3 is a component of HHS’s Oﬃce of the Chief Information Oﬃcer. HC3 is intended to support the defense of
the health care and public health sector’s information technology infrastructure by providing technical analysis and
information sharing within the sector.
279The InfraGard program is a public/private cooperative eﬀort dedicated to improving national security. The
Infragard National Capital Region consists of professionals intending to create a more resilient critical infrastructure
in the Washington, D.C., metro area.

Page 179 GAO-21-191
Agency Comments
We provided HHS and the Oﬃce of Management and Budget (OMB) a draft of this enclosure for
review and comment. HHS and OMB did not provide any comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed the most recent charters and concept of operations describing
the collaborative groups led by HHS to strengthen cybersecurity in the health care and public
health critical infrastructure sector. We also obtained documentation demonstrating recent
eﬀorts of those groups to collaborate and coordinate with other entities on cybersecurity issues
related to COVID-19. In addition, we interviewed oﬃcials from HHS OCIO, ASPR, and CISA to obtain
information and documentation on their eﬀorts to collaborate and coordinate in response to the
increased cyberattacks associated with COVID-19. To update the status of the recommendations
made to the HHS component agencies, we assessed the eﬀectiveness of corrective actions taken
by these agencies to resolve the cybersecurity weaknesses identiﬁed in our prior reports.

Contact information: Jennifer R. Franks, (404) 679-1831, franksj@gao.gov

Page 180 GAO-21-191
Nutrition Assistance
The Department of Agriculture has disbursed most of the additional funding provided for federal
nutrition assistance programs during the pandemic to respond to increased demand, and recent
legislative changes may help address challenges states faced implementing the programs earlier
in the pandemic.

Entity involved: Food and Nutrition Service, within the Department of Agriculture

Key Considerations and Future GAO Work
In June 2020, we reported that states and local governments faced challenges operating federal
nutrition assistance programs during the pandemic and that some vulnerable populations may
not have access to assistance. We will continue to monitor challenges states and local agencies
face in implementing federal nutrition assistance programs during the COVID-19 pandemic, as well
as their use of program ﬂexibilities authorized in relief laws. We will also continue to monitor the
Food and Nutrition Service’s (FNS) use of COVID-19 relief funds and the agency’s eﬀorts to help
states collect and report accurate and reliable participation data.

Background
The COVID-19 pandemic has threatened to reverse recent gains in low-income households’ access
to food, and has increased demand for federal nutrition assistance programs. The largest of these
programs—the Supplemental Nutrition Assistance Program (SNAP)—served more than 35 million
individuals per month on average in ﬁscal year 2019. In September 2020, the Department of
Agriculture (USDA) estimated that one in 10 U.S. households were food insecure in 2019—meaning
they lacked consistent access to food—continuing a downward trend for several years.280 USDA
does not yet have estimates on the extent of the increased need for assistance due to the
pandemic’s eﬀect on issues such as employment and food costs.

FNS, within USDA, administers SNAP and other federal nutrition assistance programs, including
the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and the
Emergency Food Assistance Program (TEFAP) (see table). Eligibility criteria vary across FNS’s
nutrition assistance programs, and individuals and households may receive assistance from
multiple programs.

FNS also administers the Pandemic Electronic Beneﬁts Transfer (Pandemic EBT) program—a new
program authorized under the Families First Coronavirus Response Act (FFCRA) to provide beneﬁts

280Alisha Coleman-Jensen, Matthew P. Rabbitt, Christian A. Gregory, and Anita Singh, Household Food Security in the
United States in 2019, ERR-275 (Department of Agriculture, Economic Research Service, 2020). The prevalence of food
insecurity peaked at about 15 percent in 2011 following the Great Recession, and 2019 marked the ﬁrst time the national
food insecurity rate dipped back below the 2007 pre-recession level.

Page 181 GAO-21-191
to households with children who would have received free or reduced-price school meals if not for
school closures due to COVID-19.281 All states are operating the program.282 Pandemic EBT was set
to expire at the end of ﬁscal year 2020, but on October 1, 2020, the Continuing Appropriations Act,
2021 and Other Extensions Act (Continuing Appropriations Act) extended the program through
ﬁscal year 2021 and expanded it to include younger children aﬀected by day care closures, among
other provisions.283

281See Pub. L. No. 116-127, § 1101, 134 Stat. 178, 179 (2020).
282For reporting purposes in this enclosure, we refer to the District of Columbia as a state.
283See Pub. L. No. 116-159, § 4601, 134 Stat. 709, 744.

Page 182 GAO-21-191
Key Information on Federal Nutrition Assistance Programs during the COVID-19 Pandemic
FY 2020 COVID-19 expenditures
appropriation Total COVID-19 as of September 30,
Program Description ($) funding ($) 2020

SNAP Provides low-income individuals and 56.2 billion
a 15.5 billion FNS has disbursed all
households with beneﬁts to purchase allowed $15.5 billion.
food items and achieve a more nutritious diet.

WIC Provides eligible low-income women, infants, 6 billion 500 million FNS has not needed to
and children up to age 5 who are at nutrition use any of the additional
risk with nutritious foods to supplement diets, WIC funding and plans
information on healthy eating, and referrals to to disburse the funds in
health care. ﬁscal year 2021.

TEFAP Provides groceries to low-income individuals 401.9 million 850 million FNS has disbursed
through food banks. $257.4 million.

Pandemic Provides beneﬁts to purchase food to Indeﬁnite 12.8 billion
b FNS has disbursed $8.4
EBT households with children who would have appropriation billion.
received free or reduced-price school meals if of necessary
not for school closures due to COVID-19. amounts

Source: GAO analysis of relevant provisions of the Families First Coronavirus Response Act and the CARES Act; information from the Department of Agriculture’s Food and Nutrition
Service; and the Further Consolidated Appropriations Act, 2020, and the Joint Explanatory Statement accompanying the Further Consolidated Appropriations Act, 2020 (ﬁscal year
2020 appropriations). | GAO-21-191

Notes: COVID-19 = Coronavirus Disease 2019, Pandemic EBT = Pandemic Electronic Beneﬁts Transfer, SNAP = the Supplemental
Nutrition Assistance Program, TEFAP = the Emergency Food Assistance Program, and WIC = the Special Supplemental Nutrition
Program for Women, Infants, and Children.
a
This amount is the ﬁscal year 2020 appropriation for SNAP beneﬁts only. SNAP also receives funding for administrative costs,
employment and training activities, and other purposes.
b
This amount is the apportionment for Pandemic EBT as of September 30, 2020. This amount will increase as states implement
Pandemic EBT in ﬁscal year 2021.

Overview of Key Issues
Spending for federal nutrition assistance programs increased during the pandemic, but
data reliability issues have kept USDA from reporting data on participation increases.

SNAP. In ﬁscal year 2020, FNS provided approximately $75 billion in SNAP beneﬁts—nearly
matching the historic high for the program, according to FNS data.284 This amount includes the
entire ﬁscal year 2020 appropriation for beneﬁts, the $15.5 billion provided for SNAP in the CARES
Act, and approximately $4 billion in SNAP reserves, according to FNS data.285 Increases reﬂect

284In nominal terms, SNAP expenditures peaked in ﬁscal year 2013, when beneﬁts totaled $76.1 billion, according to FNS
data. SNAP expenditures had declined since then, with beneﬁts totaling $55.6 billion in ﬁscal year 2019.
285FNS receives $3 billion each ﬁscal year for a SNAP contingency reserve that is available for multiple years in the case
of an emergency or a lapse in appropriations, according to FNS oﬃcials. FNS began ﬁscal year 2020 with $9 billion in this
reserve and needed to use approximately $4 billion of it to cover SNAP program costs for that year.

Page 183 GAO-21-191
both increases in participation and emergency increases in the amount of certain households’
beneﬁts. Through October 2020, nearly all states were continuing to issue emergency allotments
authorized in FFCRA, which increased some households’ monthly SNAP beneﬁts.286 FNS estimated
that emergency allotments increased SNAP expenditures by about $2 billion per month in ﬁscal
year 2020.

Though increases in SNAP expenditures reﬂect, in part, increases in participation, FNS does not
currently have reliable data on SNAP participation during the pandemic. In August 2020, FNS
announced it had identiﬁed signiﬁcant issues with the accuracy of state-reported data, and that
FNS would not release updated program data until it could resolve the issues. Speciﬁcally, FNS
noted that SNAP participation data beginning in April 2020 might erroneously include Pandemic
EBT participants, leading to larger-than-actual estimates for SNAP participation. Consequently,
SNAP data for March 2020 are the most recent available that were not subject to these data
quality issues. The March 2020 data do not yet reﬂect increases in SNAP participation during the
pandemic, nor do they account for any additional changes in eligibility or demand for SNAP after
the Federal Pandemic Unemployment Compensation program expired in July 2020.287

FNS oﬃcials said the agency is actively working to address SNAP data quality issues, including
reiterating reporting guidance to states and changing how FNS’s data systems generate reports.
While FNS worked to identify the root cause of the issues, it opted not to release participation data
for SNAP or any other federal nutrition assistance programs for May 2020. FNS oﬃcials said they
expect that states were able to report reliable data for June and July 2020, but as of mid-November
2020, FNS had not released any data beyond April 2020.

WIC. The April 2020 data show that WIC participation remained steady early in the
pandemic—approximately 6.3 million individuals received WIC beneﬁts that month, a slight
increase from March 2020, but a slight decrease compared to April 2019.288 FNS oﬃcials said
the agency had suﬃcient WIC funding available from the regular ﬁscal year 2020 appropriation
to support states and continue to provide beneﬁts and services to WIC participants throughout
ﬁscal year 2020. FNS had not disbursed any of the $500 million provided for WIC in FFCRA, as of

286Some territories have also issued emergency allotments to eligible SNAP households. In June 2020, we reported
that FNS denied several states’ requests to provide SNAP emergency allotments to households already receiving the
maximum beneﬁt, which accounted for about 37 percent of SNAP households in ﬁscal year 2018, the most recent data
available. FNS oﬃcials told us that issuing emergency allotments to households already receiving the maximum beneﬁt
was prohibited based on provisions in the Food and Nutrition Act of 2008 as well as FFCRA. Since then, we have become
aware of litigation in federal district courts challenging USDA’s interpretation and implementation of the emergency
allotments. See Gilliam v. U.S. Dep’t. of Agric., No. 2:20-CV-03504 (E.D. Pa. ﬁled July 16, 2020); Hall v. U.S. Dep’t. of Agric.,
No. 4:20-CV-03454 (N.D. Cal. ﬁled May 21, 2020).
287The Federal Pandemic Unemployment Compensation program generally authorized an additional $600 beneﬁt that
augmented weekly unemployment insurance beneﬁts through July 2020. Unemployment insurance is treated as income
for purposes of SNAP eligibility. Claimants who were no longer receiving unemployment insurance after the Federal
Pandemic Unemployment Compensation program expired may have turned to SNAP for assistance.
288WIC participation varies considerably by state. For example, North Carolina experienced an 8 percent increase
in WIC participation from March to April 2020, while Arkansas experienced a 5 percent decrease during that period,
according to FNS data. Representatives from the National WIC Association noted several factors that could cause state-
level variation in participation, including whether the state has technology to issue beneﬁts on an EBT card, and whether
that technology allows for remote beneﬁt issuance. In states without this technology, participants must go in-person to
receive WIC beneﬁts, a potential barrier to participation during the public health emergency.

Page 184 GAO-21-191
September 30, 2020, according to FNS data. The funds are available through ﬁscal year 2021, and
FNS oﬃcials said the agency plans to disburse the funds during that ﬁscal year.

TEFAP. States do not report data to FNS on the number of individuals or households served
through TEFAP, and therefore nationwide data on TEFAP participation are not available. However,
TEFAP expenditures reﬂect the increased need for assistance due to the COVID-19 pandemic.289
As of September 30, 2020, FNS had disbursed $257.4 million of the $850 million appropriated for
TEFAP by FFCRA and the CARES Act. The funds are also available through ﬁscal year 2021.

Challenges to implementing federal nutrition assistance programs during the COVID-19
pandemic. The COVID-19 relief laws provided ﬂexibilities for operating some federal nutrition
assistance programs during the pandemic. FNS also provided guidance on how states could
adjust operations consistent with existing program regulations. These adjustments helped states
administer the programs during the pandemic, such as by operating the program remotely to
minimize exposure to COVID-19 for state employees and program participants, according to
FNS and state oﬃcials. However, states also identiﬁed several challenges to implementing these
programs during the pandemic, including with FNS’s approach to reviewing states’ requests for
various ﬂexibilities and the timing of FNS’s decisions.

SNAP. FFCRA allowed states to request from FNS various adjustments to federal requirements
for SNAP related to how states issue beneﬁts, review applications, and report data during the
pandemic. In several cases, FNS required states to apply for extensions of certain adjustments
each month, rather than extending adjustments for multiple months. FNS used a month-to-
month approach to minimize program integrity issues, discourage states from using long-term
adjustments, and encourage states to return to normal operations as soon as possible, according
to oﬃcials.

FNS had instructed states to prepare for a “new normal” for SNAP operations in September
2020. Speciﬁcally, FNS notiﬁed states via email and letters that extensions of SNAP adjustments
would be extremely limited and based on the individual circumstances in a given state, such as
substantial increases in new applications or sizable increases in case backlogs. FNS’s website
did not include information on the criteria or thresholds FNS used to determine if state data
warranted extensions of SNAP adjustments. When we requested this information, FNS provided
two emails sent to FNS regional oﬃces in August 2020 outlining the criteria states needed to meet
in order to adjust certain eligibility veriﬁcation and interview requirements. For example, according
to the emails, states could demonstrate a need for these adjustments if they had experienced a
50 percent increase in new SNAP applications in the previous 3 months compared to the same
months in the prior year.

Representatives we interviewed from several national research and advocacy organizations
noted that FNS’s month-to-month approach to reviewing and extending SNAP adjustments
caused uncertainty for states and made implementing the program diﬃcult. For example, they
explained that in some cases FNS decided late in the preceding month to approve or deny a state’s

289For more information on the experiences of emergency feeding organizations during the COVID-19 pandemic,
including the federal programs available to them, see Congressional Research Service, Food Banks and Other Emergency
Feeding Organizations: Federal Aid and the Response to COVID-19, R46432 (Washington, D.C.: June 25, 2020).

Page 185 GAO-21-191
request to extend an adjustment for the subsequent month (e.g., informing states of decisions
for July 2020 in late June 2020). They explained that such adjustments included those related to
interviewing new SNAP applicants or assessing participants’ continued eligibility. States had to
plan for SNAP operations without knowing whether FNS would approve their extension request
each time, according to these representatives. We asked FNS to provide its rationale for waiting
until the end of the month to approve or deny certain state requests for SNAP adjustments. FNS
oﬃcials said they issued decisions as soon as they were ready.

In a September 2020 letter to FNS, attorneys general from 22 states echoed many of these
challenges, including that requesting extensions each month was time-consuming. They added
that FNS had not provided clear public guidance on how much or what kind of data states would
need to provide to obtain SNAP adjustments in fall 2020.290

Provisions in the Continuing Appropriations Act may help address the challenges states faced
working with FNS to implement SNAP during the pandemic. The Continuing Appropriations
Act granted states broader authority to adjust SNAP operations into ﬁscal year 2021 without
obtaining prior approval from FNS. For example, states can adjust deadlines for interviewing SNAP
applicants and assessing participants’ continued eligibility based on the needs of their state.291

WIC. In contrast to SNAP, FNS generally provided states with longer-term waivers for WIC
operations during the pandemic, but in some cases issued extensions only days before waivers
were set to expire, leading to some uncertainty among states. Speciﬁcally, on June 29, 2020, FNS
extended WIC waivers through the end of ﬁscal year 2020; the waivers were set to expire on June
30, 2020. On September 21, 2020, FNS further extended certain WIC waivers until 30 days after the
COVID-19 public health emergency ends; the waivers were set to expire on September 30, 2020.
We asked FNS to provide its rationale for waiting to extend WIC waivers until a few days before
expiration. FNS oﬃcials said they had heard from state partners about the continued need for
WIC waivers and accommodated states’ requests to ensure there were no gaps in service. The
Continuing Appropriations Act extended USDA’s authority to grant certain WIC waivers through
ﬁscal year 2021.292 FNS oﬃcials said they would continue to support states as they provide
services to WIC participants and work toward a safe and timely transition back to in-person
appointments and regular documentation.

WIC waivers allowed individuals to apply for WIC without being physically present in a WIC oﬃce
and allowed states to issue beneﬁts remotely, among other things. Representatives from the
National WIC Association said the timing of FNS’s decisions about extensions to WIC waivers
caused uncertainty among states about program operations, such as when local WIC oﬃces
would need to return to in-person services. Because FNS extended WIC waivers until after the
public health emergency ends, states now have greater clarity on waivers available for WIC at the
beginning of ﬁscal year 2021.

290Karl A. Racine, Attorney General, Government of the District of Columbia, Letter to Secretary of Agriculture George E.
Perdue and Administrator of the Food and Nutrition Service Pamilyn Miller in Conjunction with 21 States, September 17,
2020.
291Pub. L. No. 116-159, § 4603, 134 Stat. 709, 745 (2020).
292Pub. L. No. 116-159, § 4602(b), (c), 134 Stat. 709, 745.

Page 186 GAO-21-191
TEFAP. FFCRA and the CARES Act did not provide states with additional authority to adjust TEFAP
operations during the pandemic, though states could revise their TEFAP distribution plans
consistent with current program regulations. FNS oﬃcials said the agency approved the majority
of TEFAP distribution plan revisions that states have submitted during the pandemic. They said
that common revisions included accommodations for social distancing, removing signature
requirements, simplifying income eligibility requirements, and changing state policy on using a
proxy system for TEFAP distributions to allow another individual to pick up food for an eligible
household.

In addition, organizations we interviewed identiﬁed several challenges to implementing TEFAP
during the pandemic. For example, representatives from the American Commodities Distribution
Association and Feeding America—members of these organizations distribute food for TEFAP
and other FNS programs—said it was diﬃcult for food banks to collect household information at
TEFAP distribution sites due to social distancing protocols.293 These representatives said that FNS
has also canceled multiple TEFAP food orders during the pandemic—such as orders for canned
meats, soups, and vegetables—which has left food banks without the commodities they expected
to distribute to participants. For example, representatives from one organization noted that food
banks are having a particularly diﬃcult time weathering order cancelations at a time when they
are receiving less in food donations and have fewer state agency staﬀ available to process orders.

FNS oﬃcials and representatives from these organizations explained several factors that
contributed to canceled TEFAP orders during the pandemic, including that no vendors bid on
a given order, the food was unavailable due to supply chain issues, and increased costs for
transportation and raw materials. According to FNS data, the magnitude of canceled TEFAP orders
in terms of both estimated value and total truckloads was similar from March to September 2020
compared to the same months in 2019.

Agency Comments
We provided a draft of this enclosure to FNS and the Oﬃce of Management and Budget (OMB) for
review and comment. FNS provided technical comments, which we incorporated as appropriate.
OMB did not provide comments.

293Food banks and other sites distributing TEFAP foods must collect addresses at the time of a household’s application
to receive TEFAP foods for home consumption. FNS noted that these sites can collect household information by text
messaging or in drop boxes. FNS also clariﬁed that it is not necessary to re-collect addresses at future distributions and
provided states with guidance on distributing TEFAP while adhering to social distancing, such as by placing food directly
into participants’ vehicles at drive-up distributions.

Page 187 GAO-21-191
GAO’s Methodology
To conduct our work, we reviewed the most recent FNS data on participation as of mid-November
2020 and expenditures as of September 30, 2020. With the exception of SNAP and Pandemic
EBT participation data after March 2020, we determined these data were suﬃciently reliable for
the purposes of reporting on levels of participation in the programs and related expenditures
during the pandemic. We also reviewed relevant federal laws, regulations, agency guidance and
documents, and FNS’s written responses to our questions. Additionally, we interviewed oﬃcials
from the American Public Human Services Association; the National WIC Association; the American
Commodities Distribution Association; and several national research and advocacy organizations,
including the American Enterprise Institute, the Center on Budget and Policy Priorities, Feeding
America, the Food Research and Action Center, and No Kid Hungry. While not representative,
information gathered from these interviews provides examples of challenges states faced
implementing nutrition assistance programs during the COVID-19 pandemic.

Contact information: Kathryn A. Larin, (202) 512-7215 or larink@gao.gov

Page 188 GAO-21-191
Child Welfare
Child welfare agencies face challenges ensuring the well-being of children impacted by the
COVID-19 pandemic, and to assist them, the Administration for Children and Families has
distributed CARES Act funds; provided guidance and ﬂexibilities, such as on conducting virtual
visits with foster families; and facilitated information sharing.

Entity involved: The Administration for Children and Families, within the Department of Health
and Human Services

Key Considerations and Future GAO Work
Physical distancing measures to prevent the spread of COVID-19 and the pandemic’s eﬀects on the
economy have disrupted operations for state and local child welfare agencies. We plan to continue
work to understand how these agencies have responded to needs stemming from the pandemic
and what lessons can be learned to help them better respond to such events in the future.

Background
Though states are primarily responsible for administering their child welfare programs, the
Department of Health and Human Services’ (HHS) Administration for Children and Families (ACF)
distributes and oversees federal funding that states can use for these programs. One of the
primary sources of federal funding authorized for child welfare services is Title IV-B of the Social
Security Act.294 In ﬁscal year 2020, approximately $268.7 million was provided to states under
Title IV-B subpart I, and the CARES Act appropriated an additional $45 million for child welfare
services as authorized under Title IV-B subpart 1 to be used to prevent, prepare for, and respond
,
to COVID-19.295 296

State child welfare programs provide a continuum of services intended to prevent the abuse or
neglect of children; ensure they have safe, permanent homes; and promote the well-being of

294Title IV-B of the Social Security Act is codiﬁed at 42 U.S.C. §§ 620-629m. Title IV-B funds can be used to accomplish the
following purposes: (1) protect and promote the welfare of all children; (2) prevent the abuse, neglect, and exploitation
of children; (3) support at-risk families through family preservation and uniﬁcation services; (4) promote the safety,
permanence, and well-being of children in foster care and adoptive families; and (5) provide training, professional
development, and support to ensure a well-qualiﬁed child welfare workforce.
295Pub. L. No. 116-136, div. B, tit. VIII, 34 Stat. 281, 558.
296Though we focused on child welfare services under Title IV-B subpart 1 for the purposes of this enclosure, funding
under Title IV-E of the Social Security Act can be used by states to help cover the costs of operating their foster care,
adoption, and guardianship assistance programs. 42 U.S.C. §§ 670-679c. Title IV-E funds appropriated speciﬁcally for
foster care programs totaled nearly $5.3 billion in ﬁscal year 2020.

Page 189 GAO-21-191
families.297 For example, state and local child welfare agencies receive and investigate reports of
child abuse and neglect, and assess child and family needs. For children who are removed from
their homes, child welfare caseworkers must visit them in foster or relative homes or in other
living arrangements to ensure their health, education, and other needs are met.

Caseworkers also facilitate visits between children in foster care and their biological parents
and siblings. For children exiting foster care, caseworkers may coordinate family reuniﬁcations,
adoptions, and legal guardianships, or provide transitional supports such as housing and job
search services for children who age out of care. State juvenile or family courts are also involved in
decisions regarding a child’s removal, placement, and services.

Overview of Key Issues
Disruptions due to the COVID-19 pandemic have raised a number of concerns about the well-
being of children and families and the continuity of child welfare services. Representatives from
eight national organizations that conduct child welfare advocacy, training, and research described
these concerns, including:

• Declines in child abuse reports. Representatives from ﬁve of the eight national organizations
we interviewed raised concerns about declines in child abuse reports, particularly as some
noted that families may be experiencing increased stress and hardship during this time and
children have less frequent contact with mandatory reporters, such as school and medical
personnel. Though nationwide data are unavailable, one national research organization
reported that in March 2020, some states noted a decline of between 20 and 70 percent in
the number of child abuse reports.298 Representatives from three national organizations
said that while reporting declines are concerning, little is known about the extent to which
abuse is occurring. One representative told us that studies are under way to understand the
implications of reporting declines.

• Court delays in child welfare decisions. Representatives from ﬁve national organizations
discussed how court closures and limited schedules, particularly at the beginning of the
pandemic, delayed decisions in child welfare cases. They said delays can aﬀect when children
are able to see their biological parents, and how soon children can return home or be
adopted.

• Financial and housing instability for youth aging out of foster care. Representatives
from four of the eight national organizations we spoke with described how the pandemic has
exacerbated challenges for youth aging out of foster care. For example, one representative

297State child welfare agencies investigated or assessed over 2.4 million reports of child abuse and neglect in 2018, the
most recent year of data that are available. In ﬁscal year 2019, nearly 424,000 children were in foster care and about
249,000 exited, most commonly through reuniﬁcations with their parents or primary caretakers (47 percent), adoptions
(26 percent), guardianships (11 percent), and aging out (8 percent).
298These data were gathered from media reports, and we did not assess their reliability or consistency among
states. We plan to further examine data on child abuse reports as part of our continuing work.

Page 190 GAO-21-191
said the pandemic’s economic impact has left youth out of work. Another representative said
the closure of college campuses may result in youth losing their housing. One representative
noted that aging out of foster care is already diﬃcult for youth, even without a pandemic,
because they may lose the supports they received in foster care and may not have a network
to rely on.

• Health risks and limitations with in-person visits for children in foster care.
Representatives from ﬁve national organizations discussed challenges state child welfare
agencies faced early in the pandemic either accessing personal protective equipment
or technology needed to protect the health of caseworkers, families, and children while
continuing visits to ensure children’s safety and well-being. For example, representatives from
two national organizations said agencies struggled to get caseworkers designated as essential
personnel so they would have priority access to masks, hand sanitizer, and other personal
protective equipment. Representatives from three national organizations said agencies also
faced challenges obtaining laptops, cellphones, internet, and other technology for child
welfare caseworkers, families, and children so that caseworkers can visit children in foster
homes and children can visit their biological families virtually. We plan to examine these and
other ongoing challenges for state child welfare agencies as part of our continuing work.

• Overall budgetary constraints for child welfare agencies. Representatives from ﬁve
national organizations raised concerns about budgetary constraints for child welfare
agencies as a result of the pandemic’s economic impact on state budgets. For example, one
representative explained that decreases in state revenues during the pandemic contributed
to decisions by some states to implement spending cuts, including for child welfare services.
Another representative said limited funding has aﬀected agencies’ ability to assist service
providers as well as families caring for children in foster care, including some who may be in
ﬁnancial distress or have additional needs due to school closures.

To help child welfare agencies address the impacts of COVID-19, ACF has distributed funds,
provided guidance and ﬂexibilities, and facilitated information sharing. ACF reported that it issued
the supplemental grant awards from the $45 million provided under the CARES Act to all Title IV-
B grantees on April 23, 2020, and that grants were awarded according to statutory formula.299 The
amounts provided to states ranged from $15,686 to $4,690,717, with an average of $847,907 per
state. According to ACF oﬃcials, examples of early actions by states include purchasing personal
protective equipment for child welfare caseworkers and technology for families and children;
extending support services to youth who have aged out of foster care (e.g., up to age 23); and
providing additional funds to support foster care families.
ACF has also issued guidance and ﬂexibilities to help state child welfare agencies address the
eﬀects of the pandemic, including concerns described by the national organization representatives
with whom we spoke (see table). Last, ACF has met with various stakeholder groups to listen to
their concerns, and facilitated phone calls with state child welfare oﬃcials and others to share
information on actions taken during the pandemic. For example, ACF oﬃcials said the agency has

299Funds were distributed to states in proportion to their population of children under age 21 multiplied by the
complement of their average per capita income (i.e., states with a lower per capita income receive a higher per child
federal funding level). See 42 U.S.C. § 623.

Page 191 GAO-21-191
met with human services, parent, youth, foster care, and legal organizations in addition to state
agency staﬀ, and has conducted two town halls with older and transitioning youth.

Page 192 GAO-21-191
Examples of ACF Guidance and Flexibilities Provided to Help State Child Welfare Agencies Respond to Pandemic
Concerns Described by National Organizations
Concerns related to child welfare
services ACF guidance and ﬂexibilities

Declines in child abuse reports A joint letter to stakeholders with HHS’s Health Resources and Services
Administration on May 28, 2020, outlines concerns about the well-being of
families during the pandemic and encourages continued partnerships with
families and providers as well as virtual service delivery

Court delays in child welfare decisions A letter to child welfare legal and judicial leaders on March 27, 2020,
encourages them to continue hearings for child welfare cases as required
under law, and underscored the need for children in foster care to have
ongoing contact with their parents
A letter to chief justices and state court administrators on April 14, 2020,
outlines opportunities to use existing federal funds for court improvement
programs to support telework and videoconferencing capabilities for virtual
hearings
Guidance on April 16, 2020, through ACF’s Capacity Building Center for Courts,
outlines best practices for virtual hearings in child welfare cases

Financial and housing instability for A letter to child welfare agencies on March 12, 2020, encourages them to
youth aging out of foster care contact current and former foster youth in colleges or other settings who may
need assistance while their campus is closed
Program instructions to child welfare agencies on May 8, 2020, provide
ﬂexibilities for agencies to extend federal support to youth in foster care up to
age 21, such as by waiving education and employment requirements for youth
if they are unable to meet them due to the pandemic
A letter to child welfare agencies on May 26, 2020, outlines opportunities to
use existing federal funds to extend services for youth currently and formerly
in foster care

Health risks and limitations with in- A letter to child welfare agencies on March 18, 2020, provides ﬂexibilities for
person visits for children in foster care caseworkers to conduct required visits with children in foster care virtually.
A letter issued on April 15, 2020, expands on these ﬂexibilities and outlines
ﬂexibilities for new foster parent ﬁngerprints to be collected for background
checks
A letter to governors on April 17, 2020, encourages them to classify child
welfare caseworkers and providers as essential personnel to allow them
greater access to personal protective equipment

Overall budgetary constraints for child A letter to child welfare agencies on April 17, 2020, outlines opportunities
welfare agencies to use existing child welfare funds for personal protective equipment and
cellphones
Program instructions to child welfare agencies on June 8, 2020, provide
information on the allowable uses of and reporting requirements for funds
provided under the CARES Act

Source: GAO analysis of information from the Department of Health and Human Services’ (HHS) Administration for Children and Families (ACF) and obtained in interviews with
representatives from eight national advocacy, training, and research organizations. | GAO-21-191

ACF plans to collect information on states’ use of the additional child welfare funds provided
under the CARES Act. The agency required states to submit a brief narrative in July 2020 describing

Page 193 GAO-21-191
their plans for using the funds. We will examine these plans as part of our continuing work. States
will be required to submit information on how they used these funds as part of their regular
annual reports required under Title IV-B of the Social Security Act, which are due in June 2021.

Agency Comments
We provided HHS and the Oﬃce of Management and Budget with a draft of this enclosure. Neither
agency had any comments on the draft enclosure.

GAO’s Methodology
To conduct this work, we reviewed relevant federal laws and regulations and ACF policies and
guidance. We also interviewed representatives from eight national organizations that conduct
child welfare related advocacy, training, and research, and may specialize in certain aspects of
child welfare, such as the workforce, foster youth, and family courts.

Contact information: Kathryn A. Larin, (202) 512-7215, larink@gao.gov

Page 194 GAO-21-191
Leave Beneﬁts and Tax Relief for Employers
The Department of Labor is reviewing employee complaints about potential employer violations of
paid leave requirements, and the Internal Revenue Service continues to process employers’ claims
for refundable tax credits and employer payroll tax deferrals to mitigate the cost of paid leave and
other pandemic related costs.

Entities involved: Department of Labor; Department of the Treasury, including the Internal
Revenue Service; and the Small Business Administration

Key Considerations and Future GAO Work
Administering and enforcing the paid leave provisions of the Families First Coronavirus Response
Act (FFCRA) helps ensure that employers covered under FFCRA (covered employers) are aware of
their obligations under the law and that eligible employees understand their rights and receive the
beneﬁts to which they are entitled. We have ongoing work that will examine the Department of
Labor’s (DOL) eﬀorts to enforce FFCRA paid leave provisions.

We will also examine information on employers’ use of tax credits under FFCRA and the CARES Act
as the Internal Revenue Service (IRS) processes employment tax data on returns ﬁled electronically
and catches up on the paper returns.

As a result of ﬁnalizing a data sharing agreement with the Small Business Administration (SBA),
IRS received Paycheck Protection Program (PPP) loan data on September 25, 2020. These data will
help IRS ensure that PPP loan recipients did not inappropriately claim the Employee Retention
Credit. On October 29, IRS oﬃcials said that they plan to use the SBA loan data but did not provide
any documentation or timeframes for this plan. We will continue to monitor these issues and will
include updates in our bimonthly CARES Act reports and in a separate report planned for 2021.

Background
FFCRA, as amended by the CARES Act, requires covered employers to provide emergency paid sick
leave and expanded family and medical leave to eligible employees aﬀected by COVID-19, through
December 31, 2020.300 FFCRA and the CARES Act also provide tax credits to mitigate the cost of
paid sick and family leave for covered employers, as well as provide an employee retention credit
for all employers, among other tax relief.

300In addition to FFCRA paid leave provisions, the Family and Medical Leave Act of 1993, as amended, (FMLA) generally
requires employers to provide up to 12 weeks of unpaid leave per year for eligible employees to help care for a spouse,
child, or parent with a serious health condition or for their own serious health condition, among other things. Employees
are generally eligible if they meet certain requirements related to length of employment and size of employer. State laws
in some states also provide paid sick or family leave, and eligibility rules vary by state.

Page 195 GAO-21-191
FFCRA paid leave provisions for employees. Covered employers generally must provide
eligible employees (1) up to 80 hours of emergency paid sick leave, subject to daily and aggregate
payment caps, and (2) up to 12 weeks of emergency family and medical leave, including 2 weeks
unpaid and 10 weeks paid at no less than two-thirds the eligible employee’s regular rate of pay,
subject to daily and aggregate payment caps.301 All employees of a covered employer are eligible
to take emergency paid sick leave regardless of their duration of employment. Moreover, all
employees who have been employed by a covered employer for at least 30 calendar days are
eligible to take expanded family and medical leave. However, an employer may exclude employees
who are health care providers or emergency responders from the application of these leave
requirements.

Covered employers generally face liability for not providing or for improperly denying emergency
paid sick leave or expanded family and medical leave or for discharging, disciplining, or
discriminating against any employee for taking either type of leave.302 Covered employers
include most public employers and private employers with fewer than 500 employees. Small
businesses—those with fewer than 50 employees—may qualify for an exemption from certain
paid leave requirements. More speciﬁcally, if an employee requests leave due to school, place of
care, or child care provider closures or unavailability and the requested leave would jeopardize the
viability of the business, a small business may claim an exemption from providing this leave.303

DOL’s Wage and Hour Division (WHD) administers and enforces FFCRA paid leave requirements.
Employees who believe their covered employer violated FFCRA may call a toll-free number for
assistance or to ﬁle a complaint. When an employee ﬁles a complaint related to FFCRA paid leave
provisions, WHD determines if it meets the criteria for investigation. If so, it registers the complaint
as a case, determines the priority level of the complaint, and determines what type of compliance
action to take.

There are four types of compliance actions for FFCRA complaints—conciliation, oﬃce audit, limited
investigation, or full investigation—with conciliations requiring WHD to utilize minimal resources
and full investigations requiring WHD to allocate the most resources. The type of compliance
action taken depends on factors such as the number of employees involved, level of resources
involved, or the level of fact ﬁnding required to investigate the complaint. The diﬀerent compliance
actions are discussed in greater detail later. In addition to taking compliance actions in response
to complaints, WHD may initiate compliance actions—known as agency-directed actions—to

301Pub. L. No. 116-127, §§ 3101–3106, 5101–5111, 134 Stat. 178, 189-192, 195-201 (2020); Pub. L. No. 116-136, §§ 3601,
3602, 134 Stat. 281, 410 (2020).The emergency paid sick leave may be used for quarantine and other situations related
to COVID-19 that leave employees unable to work, and both leave provisions cover care for a child whose school, place
of care, or child care provider is closed or unavailable due to COVID-19.
302Covered employers that fail to provide emergency paid sick leave to eligible employees are considered to have
committed minimum wage violations under the Fair Labor Standards Act of 1938, as amended, and they are subject to
penalties described therein, including being liable to the aﬀected employees. See Pub. L. No. 116-127, § 5105(a), 134
Stat. at 197. Covered employers are subject to additional penalties for discharging, disciplining, or discriminating against
any employee for taking emergency paid sick leave. See id. § 5105(b), 134 Stat. at 197. The prohibitions and enforcement
provisions in FMLA apply to leave under the expanded family and medical leave provisions. See 26 U.S.C. §§ 2615 and
2617. Employees may also bring civil action against covered employers that violate the expanded family and medical
leave provisions. See 26 U.S.C. § 2617(a).
303See 29 C.F.R. § 826.40(b).

Page 196 GAO-21-191
expand on an existing complaint or based on a lead from another source, such as a newspaper
account or a federal or state agency. However, WHD oﬃcials said the vast majority of agency-
initiated investigations are data-driven initiatives in key priority industries.

Tax credits for employers. IRS is administering tax credits authorized by the FFCRA and CARES
Act among other tax relief. The Joint Committee on Taxation estimates that these provisions will
lead to about $172 billion in foregone revenue for ﬁscal years 2020-2030. The IRS’s capacity to
implement new initiatives, such as the CARES Act tax measures, is an ongoing challenge cited in
our 2019 High Risk Report. The tax provisions include:

• Paid leave credits. Businesses and tax-exempt organizations with fewer than 500 employees, as
well as self-employed individuals, are eligible for refundable FFCRA credits.304 The credits are
equal to qualiﬁed leave wages, plus the employer share of Medicare taxes paid with respect
to qualiﬁed wages and allocable health plan expenses, from April 1 through December 31,
2020. Credit recipients who receive PPP loans cannot count the wages paid for by the credit as
payroll costs toward loan forgiveness.305

Payroll tax credits may be claimed on the employer’s employment tax return, typically Form
941, Employer’s Quarterly Federal Tax Return. To receive immediate relief, employers may
reduce their semiweekly or monthly payroll tax deposits by the amount of their credit.306 If
an anticipated credit amount remains after reducing deposits, the employer may receive an
advance refund by ﬁling Form 7200, Advance Payment of Employer Credits Due to COVID-19.
Form 7200 must be submitted using electronic fax (e-fax).

• Employee Retention Credit. Under the CARES Act, eligible employers of any size—including tax-
exempt entities and self-employed individuals with employees—can receive the refundable
Employee Retention Credit. The credit equals 50 percent of qualiﬁed wages (up to $10,000
per employee for a maximum credit of $5,000) paid from March 13 through December 31,
2020, including certain health care expenses.307 Eligible employers are those who experience,
in calendar year 2020, either (1) full or partial suspension of operations due to government
orders limiting activity in response to COVID-19 during any calendar quarter, or (2) a decline in
gross receipts of more than 50 percent, compared with the same quarter in 2019.

PPP recipients are not eligible for the Employee Retention Credit, except for certain employers
that repaid their PPP loans by May 18, 2020.308 Qualiﬁed leave wages for which FFCRA
credits are allowed are not included in qualiﬁed wages for which an employer may claim the

304Pub. L. No. 116-127, §§ 7001–7004, 134 Stat. 178, 210–219 (2020). A refundable tax credit reduces tax liability,
dollar for dollar; if the credit exceeds tax liability, a refund is due. Full-time and part-time employees are counted.
Both credits have maximum payouts. Self-employed individuals may not ﬁle for advances on their credit refunds.
30515 U.S.C. § 636(a)(36)(A)(viii)(II)(dd), (ee). PPP recipients must meet certain criteria for loan forgiveness.
306Internal Revenue Service, COVID-19-Related Tax Credits: General Information FAQs (Sept. 19, 2020), accessed online
on October 21, 2020, https://www.irs.gov/newsroom/covid-19-related-tax-credits-general-information-faqs.
307Pub. L. No. 116-136, § 2301, 134 Stat. at 347–351. For employers with more than 100 full-time employees in
2019, the credit is calculated on wages paid to employees for time they are not providing services. For smaller
employers, all wages are countable.
308See 85 Fed. Reg. 23450 (Apr. 28, 2020); 85 Fed. Reg. 29845 (May 19, 2020); 85 Fed. Reg. 31357 (May 26, 2020).

Page 197 GAO-21-191
Employee Retention Credit, among other wages for which an employer may not claim the
Employee Retention Credit.309 Employers can claim the credit on their employment tax returns
and may reduce payroll tax deposits by the credit amounts, or ﬁle Form 7200 for advance
refunds.

• Deferred payroll tax payments for employer share of Social Security. The CARES Act granted all
employers the option to defer deposits and payments of the employer share of Social Security
tax that they would otherwise be required to make during the period beginning March 27
through December 31, 2020, and payments of the tax imposed on wages paid during that
period.310 Self-employed individuals may defer half of their Social Security taxes imposed on
net earnings from self-employment during the period beginning March 27 through December
31, 2020.311 Deferred deposits are to be reported on Form 941.

Overview of Key Issues
Administration and enforcement of FFCRA paid leave provisions. WHD oﬃcials said they
have conducted outreach, provided customer service, and issued guidance on FFCRA paid leave
provisions. They have also responded to complaints related to FFCRA paid leave provisions; WHD
reported that it has received 4,233 FFCRA paid leave complaints, of which 3,459 (82 percent)
resulted in a compliance action and 595 (14 percent) resulted in no action.312 WHD also reported
initiating additional agency-directed compliance actions, for a total of 3,463 compliance actions, as
of September 16, 2020.

• As of September 16, 2020, WHD reported conducting 2,160 outreach events to educate
employers about their obligations under the new law and to make employees aware of their
rights. These eﬀorts included conducting compliance consultations with employers, holding
webinars, and making presentations, among others.

• WHD oﬃcials said that more calls to the toll-free number are now being answered by WHD
staﬀ rather than by an automated system to help reach resolution on questions or complaints
faster.

• WHD has issued and updated its rules and guidance since FFCRA paid leave provisions went
into eﬀect. Most notably, DOL issued revisions and clariﬁcation to its April 2020 temporary

309For example, employees counted under a Work Opportunity Tax Credit are not counted for purposes of the
Employee Retention Credit.
310Pub. L. No. 116-136, § 2302, 134 Stat. at 351–352, as amended by the Paycheck Protection Program Flexibility
Act, Pub. L. No. 116-142, § 4, 134 Stat. 641, 643 (2020). To be considered timely, deferred payments of 50 percent
of tax are to be made by December 31, 2021, with the remainder due December 31, 2022. The employer share of
Social Security tax is 6.2 percent of taxable earnings up to the cap on taxable income. The tax ﬁnances the Social
Security trust funds.
311Self-employed individuals pay the employer and employee tax share, which is 12.4 percent of taxable earnings,
up to the cap on taxable income.
312The remaining 4 percent of cases were in the intake or review stages of processing.

Page 198 GAO-21-191
rule implementing FFCRA paid leave provisions, eﬀective September 16, 2020.313 DOL made
these revisions in response to a federal court ruling that invalidated certain provisions of
the April 2020 temporary rule.314 DOL also revised its frequently asked questions website
to reﬂect these revisions. Among other things, DOL revised its deﬁnition of “health care
provider” because the federal court found DOL’s original deﬁnition to be overly broad. DOL
revised the deﬁnition to include only employees who either (1) meet the deﬁnition of a health
care provider under the Family and Medical Leave Act regulations or (2) are employed to
provide diagnostic services, preventative services, treatment services or other services that
are integrated with and necessary to the provision of patient care, which, if not provided,
would adversely impact patient care.315 The April 2020 rule estimated that 9 million individuals
employed in the health care and social assistance industry by employers with fewer than 500
employees were exempt from utilizing FFCRA paid leave. These individuals could be aﬀected
by the September 2020 change in the health care provider deﬁnition, though the impact of the
change could aﬀect more individuals than the April 2020 rule estimated. An August 2020 DOL
Oﬃce of Inspector General report found that DOL’s estimate of 9 million individuals aﬀected
by the April 2020 rule may understate the true number of aﬀected individuals.316

WHD began enforcement actions related to FFCRA paid leave provisions on April 18, 2020, after
a limited stay of enforcement to enable public and private employers who are covered by the act
to come into compliance with the new law.317 To familiarize their staﬀ with the law and instruct
them on how to respond to complaints, WHD oﬃcials said they provided training to all WHD
enforcement staﬀ, conducted webinars, and issued guidance.

WHD reported that 2,398 (69 percent) of the 3,463 compliance actions it has taken had been
concluded, as of September 16, 2020. The vast majority of compliance actions were concluded
using a conciliation (see table below). WHD oﬃcials said that conciliation—which is limited to the
correction of minor violations consisting of a single issue aﬀecting only one or a few employees
and does not involve any fact ﬁnding—is usually the most appropriate action for FFCRA paid
leave complaints because most complaints are straightforward and involve only one or a few
employees. They further said that the use of conciliation provides the quickest relief for the

313See 85 Fed. Reg. 57,677 (Sept. 16, 2020).
314See New York v. U.S. Dep't of Labor, No. 20-CV-3020 (JPO), 2020 WL 4462260 (S.D.N.Y. Aug. 3, 2020).
315In addition to changing the deﬁnition of health care provider, the September 2020 revisions reaﬃrm and further
explain that emergency paid sick leave and expanded family and medical leave may only be taken if an employee
has work from which to take leave; reaﬃrm and further explain that an employee must obtain approval from
their employer to take FFCRA leave intermittently; clarify that employees must provide required documentation
supporting their need for FFCRA leave to their employers as soon as practicable; and correct an inconsistency
regarding when employees may be required to provide notice of a need to take expanded family and medical leave
to their employers.
316The DOL Oﬃce of Inspector General conducted a performance audit to examine how WHD has implemented
its FFCRA responsibilities. See Department of Labor, Oﬃce of Inspector General, COVID-19: WHD Needs to Closely
Monitor the Pandemic Impact on Its Operations, 19-20-009-15-001 (Washington, D.C.: August 2020).
317During the limited stay of enforcement period starting April 1, 2020, the date the FFCRA leave provisions became
eﬀective, WHD reserved its right to exercise its enforcement authority if the employer violated FFCRA willfully, failed to
provide a written commitment to future compliance with FFCRA, or failed to remedy a violation upon notiﬁcation by
DOL. After April 17, 2020, this limited stay of enforcement was lifted.

Page 199 GAO-21-191
aﬀected employee or employees, while educating the employer on their responsibilities. WHD
oﬃcials said they use a variety of remedies for employees when a compliance action is concluded,
such as requiring employers to pay lost wages, restore jobs that employees had lost, or provide
leave.

Page 200 GAO-21-191
Number and Type of Compliance Actions Related to Families First Coronavirus Response Act Paid Leave
Provisions, as of September 16, 2020
Average number of
Number of cases Number of cases Percent of cases days to conclude
a b
Enforcement action registered concluded concluded cases

Conciliation 2,811 2,146 76 13

Oﬃce Audit 623 248 40 59

Limited Investigation 12 3 25 71

Full Investigation 17 1 6 56

Total 3,463 2,398 69 50

Source: Department of Labor data. | GAO-21-191

a
Registered cases result from a complaint or an agency-directed action.
b
Wage and Hour Division oﬃcials said concluded cases are those that went through the entire investigation process. They said
some cases result in a compliance action for which the Department of Labor is unable to complete the investigative process
because, for example, an employer is out of business.

For complaints it receives from employees of small businesses, WHD oﬃcials said they may ask for
documentation to support an exemption claim in the course of investigating a complaint. While
small businesses do not formally apply or submit documentation to WHD to claim the exemption
from providing paid leave for an employee due to school, place of care, or child care closures or
unavailability, they must document the basis for the exemption for their own records and retain
the documentation for 4 years. WHD oﬃcials said each small business must determine whether
the exemption is warranted based on the speciﬁc circumstances of the individual employee and
business.

WHD established new performance measures to capture its enforcement, outreach, and customer
service eﬀorts under FFCRA. WHD oﬃcials said they collected baseline data in ﬁscal year 2020 to
determine the targets for these performance measures for ﬁscal year 2021 (see table below).

Page 201 GAO-21-191
New FFCRA-related Performance Measures for Department of Labor’s Wage and Hour Division
a
Performance measure FY 2020 result FY 2021 target

Percent of Families First Coronavirus Response Act (FFCRA) 78.6% 70%
conciliations concluded in 15 calendar days

Number of outreach events involving FFCRA
b 2,160 200

Percent of public calls answered live
c 87.4% 55%

Source: Department of Labor documentation. | GAO-21-191

a
These values are as of September 16, 2020.
b
The Department of Labor’s (DOL) FY 2021 Operating Plan did not include a FY 2020 result; however, DOL reported conducting
2,160 outreach events related to FFCRA paid leave.
c
This measure is not speciﬁc to FFCRA but includes all calls received by DOL’s call center.

IRS processing of tax credits and employer share of Social Security payroll tax deferrals.
On September 22, 2020, IRS and SBA ﬁnalized a data-sharing agreement that allows IRS to use
SBA data to help ensure that PPP loan recipients did not also inappropriately claim the Employee
Retention Credit. IRS received data on September 25, 2020, and will periodically receive updated
data. IRS oﬃcials said they plan to use SBA loan data to reverse inappropriately claimed credits but
need to review the data before developing a programming plan to use it, and will not be able to
use it while processing third-quarter employment tax returns.

As of October 29, 2020, there were ﬁlings claiming about $1.3 billion for the FFCRA leave tax
credits and about $4.5 billion for the Employee Retention Credit (see table below).318

318The tax credit dollar ﬁgures we are reporting are as reported by taxpayers and are subject to taxpayer reporting
error. These ﬁgures may diﬀer from IRS’s reported ﬁgures because we are reporting what was ﬁled on second quarter
Form 941s without adjustments.

Page 202 GAO-21-191
Summary of Claims Requested on Filed Quarterly Employment Tax Returns, as of October 29, 2020

Number of employers Dollars claimed
a
Provision claiming ($ billions)

Families First Coronavirus Response Act leave credits 149,830 1.3

Employee Retention Credit 26,604 4.5

Deferred employer-share Social Security tax 105,657 27.6

Source: Internal Revenue Service data. | GAO-21-191

Notes: The table includes second quarter electronically ﬁled returns and 145,077 paper returns. The second quarter returns
include amounts for the Employee Retention Credit from the end of the ﬁrst quarter because legislation passed too late in the
quarter to be reported then. Figures in this table include some electronically ﬁled Forms 941 that have not yet been accepted
and processed by IRS. Dollars claimed include advance credits also claimed on Form 7200. IRS continues to process a paper
return backlog, which makes the data in the table above incomplete, particularly for small employers.
a
The tax credit dollar ﬁgures we are reporting are as reported by taxpayers and are subject to taxpayer reporting error. These
ﬁgures may diﬀer from IRS’s reported ﬁgures because we are reporting what was ﬁled on second quarter Form 941s without
adjustments.

Of the 3.4 million quarterly employment tax return ﬁlings, less than 1 percent of employers ﬁled
for the Employee Retention Credit.

Of employers for whom the IRS collects data on closures, 197 employers claiming one of the tax
credits or deferring payroll taxes reported their business would be closing or stopping payment
of wages in the second quarter.319 The 197 employers claimed $1,298,470 in tax credits through
the paid leave credits and Employee Retention Credits and deferred $1,263,038 in employer
share of Social Security payroll tax payments. IRS oﬃcials said they have existing rules and
procedures—such as through bankruptcy proceedings—to collect taxes from closed businesses.

IRS continues to process a paper return backlog, which makes the data in the table above
incomplete, particularly for small employers. Oﬃcials at a payroll professional organization we
interviewed told us that employers ﬁling Form 941 on paper are more likely to be smaller than
those ﬁling electronically. As of October 19, 2020, IRS facilities that process paper Forms 941 are
operating at reduced capacity after being closed for months during the spring. IRS oﬃcials said
they were experiencing a backlog and they have a goal to open all of the mail by November 9,
2020.

IRS also continues to process Forms 7200 for tax credit advance refunds. As of October 18, 2020,
IRS had issued $583.17 million in advance credits.320 Of the $5.7 billion in claims for the Employee

319This number is likely an undercount because it is based on e-ﬁled returns only, and does not include the 63,633
employers who do not provide this information because their information is reported on Schedule R, Allocation Schedule
for Aggregate Form 941 Filers. According to IRS oﬃcials, the 197 employers may also include employers who have
switched to a third-party ﬁler or, in certain circumstances, who have been acquired, merged, or consolidated.
320Some of these advances are also included in the table above because employers are to report on Form 941 the
advance credits they have received.

Page 203 GAO-21-191
Retention Credit and leave credits on the second quarter Forms 941, as of October 29, 2020, about
3 percent were ﬁled as advance refunds through a Form 7200 ﬁling.321

Oﬃcials at a payroll professional association told us that employers who ﬁled a Form 7200 for
advance refunds experienced long processing times in the spring that did not give them much
advantage over ﬁling a Form 941 and may have discouraged continued ﬁlings for advance refunds.
IRS oﬃcials said the backlogs that occurred in the spring have been resolved. On average, IRS
oﬃcials said they are processing employers’ Forms 7200 within 15 to 20 days from initial receipt
to refund issuance. To prevent duplicate or improper payments, additional analysis may be
warranted if an employer submits multiple forms during a speciﬁed period. Such analyses may
cause longer processing times.

IRS designated 14,604 of the 26,748 submissions of Form 7200 claims it received as of October
19, 2020 as “rejected.” IRS sent letters to employers whose forms were rejected. According to IRS
oﬃcials, the most common reasons for rejecting a Form 7200 claim were that the ﬁler provided an
unauthorized signature or ﬁled a Form 7200 after submitting a Form 941 for the quarter or after
the due date of the Form 941 for the quarter. Since IRS resumed sending mail on June 19, 2020,
as of October 19, 2020 it has mailed 13,688 letters to employers whose Form 7200 claims were
rejected.

Agency Comments
We provided IRS, Treasury, the Small Business Administration (SBA), the Department of Labor
(DOL) and the Oﬃce of Management and Budget with a draft of this enclosure. IRS’s written
comments are reproduced in appendix VI, and IRS and Treasury provided technical comments,
which we incorporated as appropriate. SBA, DOL, and the Oﬃce of Management and Budget did
not have any comments on this enclosure.

GAO’s Methodology
To conduct our work, we reviewed DOL data as of September 16, 2020, and IRS data as of October
29, 2020. We determined the data were suﬃciently reliable for the purposes of this report. We
also reviewed federal laws and agency documents; and interviewed oﬃcials at DOL and IRS and at
payroll and tax professional associations.

Contact information: Thomas Costa, (202) 512-7215, costat@gao.gov; Jessica Lucas-Judy, (202)
512-9110, lucasjudyj@gao.gov

321This calculation is based on the amount of advance credits received reported by taxpayers on Form 941, which diﬀers
from the amount of advance credits IRS has issued.

Page 204 GAO-21-191
Page 205 GAO-21-191
HUD Programs
While the Department of Housing and Urban Development continues to obligate CARES Act
funding, as of September 2020, expenditures were low in some of its programs, particularly its
community development and homelessness programs.

Entity involved: Department of Housing and Urban Development

Key Considerations and Future GAO Work
In June 2020, we noted concerns about the potential for grantee oversight and management
challenges in the Department of Housing and Urban Development’s (HUD) CARES Act programs
based on our prior work. Speciﬁcally, in our March 2019 report on Community Development
Block Grant Disaster Recovery grants, we recommended that HUD develop and implement a
comprehensive monitoring plan for its disaster recovery grant portfolio. In our July 2016 report on
HUD management, we recommended that HUD incorporate management practices designed to
improve agency governance and operations. HUD agreed with both recommendations but they
remain open as of mid-October 2020. We maintain that by implementing these recommendations,
HUD will be better positioned to address the challenges posed by COVID-19.322

Since June 2020, we have identiﬁed additional concerns regarding HUD grantees’ rate of
expenditures. To help grantees expend funds, HUD plans to provide them with technical
assistance and has issued clarifying guidance and additional waivers to provide grantees with
more ﬂexibility. We have ongoing work on HUD’s implementation and oversight of CARES Act
funds.

Background
The CARES Act appropriated over $12 billion to HUD programs for purposes of providing
additional resources to prevent, prepare for, and respond to housing needs related to COVID-19
(see ﬁgure).323

322We sent a letter to HUD in April 2020 highlighting recommendations that we consider to be high-priority due to their
potential to improve government operations.
323Pub. L. No. 116-136, div. B, tit. XII, 134 Stat. 281, 601-13.

Page 206 GAO-21-191
Status of Supplemental CARES Act Funding for HUD Programs, as of September 30, 2020

a
The CARES Act also appropriated $50 million to HUD for management and administration of CARES Act funding and $5 million
to the HUD Oﬃce of the Inspector General for audits and investigations. Pub. L. No. 116-136, div. B, tit. XII, 134 Stat. at 601, 612.
b
Funding for permanent supportive housing competitive grantees ($10 million) is to remain available until September 30, 2022.

Key programs include the following:

• Community Development Block Grant Coronavirus Response (CDBG-CV). This program
helps states and entitlement communities support a wide variety of activities, including
emergency payments to families and individuals and business assistance.324

• Emergency Solutions Grants Coronavirus Response (ESG-CV). This program supports
homelessness assistance and prevention activities. Eligible activities include street outreach,
temporary emergency shelter, rental assistance, and housing relocation and stabilization
services. 325

324Entitlement communities generally are principal cities of metropolitan statistical areas, other metropolitan cities
with populations of at least 50,000, and qualiﬁed urban counties with populations of 200,000 or more (excluding
the populations of entitlement cities).
325ESG grantees are generally metropolitan cities, urban counties, territories, and states. These grantees may
award their ESG funds to subrecipients.

Page 207 GAO-21-191
• Oﬃce of Public and Indian Housing assistance for public housing agencies (PHA). This
assistance helps with COVID-19-related expenses (for example, purchasing personal protective
equipment), housing assistance payments, and regular eligible activities.326

The CARES Act provided HUD with broad authority to waive statutes and regulations related to
many of its programs. For example, it waived CDBG’s 15 percent spending cap on public services
(which include job training and childcare). HUD also issued waivers for PHAs allowing them to
delay annual reexamination of family income and inspections.

Overview of Key Issues
Implementation challenges. As of September 30, 2020, HUD had obligated over $6.4 billion—or
52 percent—of its CARES Act funds, up from $2.26 billion, as of May 31, 2020. However, HUD data
indicate that only about $2.1 billion—or 17 percent—had been expended.

Oﬃce of Community Planning and Development. About 1 percent of the $9 billion appropriated to
CDBG-CV and ESG-CV had been expended as of September 2020. In September 2020, HUD oﬃcials
and an industry association representative of CDBG and ESG grantees told us that low initial
expenditures were due in part to grantees taking additional planning time, especially since some
are designing new programs (for example, using CDBG-CV funds for rental assistance or business
assistance).327 The industry association representative also told us that CDBG grantees were
hesitant to spend funds until HUD issued a Federal Register notice with guidance and program
waivers—particularly since many are designing new programs. 328

HUD oﬃcials told us that a number of ESG grantees also chose to wait for the publication of a
similar notice for ESG-CV before making funding decisions.329 HUD issued the CDBG-CV notice
in August 2020 and the ESG-CV notice in early September 2020 (about 4 months after funding
was initially available in April). In September 2020, HUD issued a waiver in response to grantee

326A public housing agency is typically a local agency created under state law that manages housing for low-income
residents at rents they can aﬀord. HUD oﬀers assistance to low-income renters through the public housing and
voucher programs. HUD’s public housing program oﬀers units for eligible tenants in properties generally owned
and administered by state and local public housing agencies. HUD’s voucher program subsidizes private-market
rents for low-income households.
327Some grantees received funding from other sources, such as the Federal Emergency Management Agency and the
Coronavirus Relief Fund, which have earlier spending deadlines or less ﬂexible uses. Additionally, grantees could also
reallocate their original ﬁscal year 2019 and 2020 CDBG grants to COVID-19 activities.
328A CDBG grantee association sought input from its 453 grantee members on issues and challenges in administering
CDBG-CV to date. This was the most common response among the 103 who responded. Notice of Program Rules, Waivers,
and Alternative Requirements Under the CARES Act for Community Development Block Grant Program Coronavirus Response
Grants, Fiscal Year 2019 and 2020 Community Development Block Grants, and for Other Formula Programs, 85 Fed. Reg.
51457 (Aug. 20, 2020).
329Department of Housing and Urban Development, Waivers and Alternative Requirements for the Emergency Solutions
Grants (ESG) Program Under the CARES Act, CPD Notice 20-08 (Sept. 1, 2020).

Page 208 GAO-21-191
reports that individuals experiencing homelessness were staying in institutions longer due to
COVID-19 (for example, longer hospital stays when infected with COVID-19 or extended jail stays
due to delays in hearings when courts are closed or operating at reduced capacity). Speciﬁcally,
the waiver expanded the deﬁnition of homelessness for the ESG-CV program to include homeless
individuals who had stayed in such institutions for up to 120 days (an increase from the previous
90 days)—allowing greater ﬂexibility for grantees’ usage of ESG-CV funds.330

HUD oﬃcials and the industry association representative also noted that some grantees may
have limited capacity to quickly spend a large increase in funding.331 To help grantees manage
additional funds, the CARES Act provided CDBG-CV and ESG-CV with a total of $50 million for
technical assistance to build grantees’ capacity. However, HUD data show that less than 3 percent
of technical assistance funds had been expended, as of September 2020. With respect to ESG-
CV, HUD oﬃcials told us that, as of mid-October 2020, they had held 12 training webinars, issued
a toolkit on avoiding duplicating beneﬁts between programs, and provided direct technical
assistance to over 47 grantees, including assistance on COVID-19-related health and safety in
collaboration with the Centers for Disease Control and Prevention. HUD oﬃcials also noted that
ESG-CV technical assistance providers obligated $17 million in technical assistance funds. In
early October 2020, HUD launched a CDBG-CV webpage where grantees can submit questions
and request technical assistance for complex issues. HUD plans to roll out additional CDBG-CV
technical assistance throughout 2021, including guidance for providing rental and economic
development assistance, a virtual conference for its CARES Act grantees, and 10 problem-solving
clinics. In March 2019, we reported that CDBG Disaster Recovery grantees that received funding in
response to the 2017 hurricanes also experienced a lag in accessing funds and capacity issues.

Oﬃce of Public and Indian Housing. HUD announced funding allocations to PHAs in May and August
2020. However, PHA association representatives told us that PHAs were initially hesitant to spend
funds due to a lack of clarity on eligible uses and because reporting requirements for the funds
had not yet been issued. In August 2020, the Assistant Secretary for Public and Indian Housing
sent a letter to PHA directors expressing concern about the slow expenditure of public housing
operating funds and clarifying that these funds could be used for both COVID-19-related expenses
and regular PHA expenses (e.g., maintenance costs).332 In September 2020, HUD issued guidance
on how PHAs should report the supplemental funds.333 PHA associations with whom we spoke

330Speciﬁcally, HUD considers an individual homeless if they have resided in an emergency shelter or place not meant
for human habitation immediately before entering institutions such as hospitals or jails. The waiver also applies to the
regular ESG program. Department of Housing and Urban Development, Availability of Additional Waivers for Community
Planning and Development (CPD) Grant Programs to Prevent the Spread of COVID-19 and Mitigate Economic Impacts Caused by
COVID-19 (Washington, D.C.: Sept. 30, 2020).
331For both programs, the CARES Act appropriation was larger than their initial ﬁscal year 2020 appropriations ($3.425
billion for CDBG and $290 million for ESG).
332Department of Housing and Urban Development, Letter from Assistant Secretary for Public and Indian
Housing, August 4, 2020, accessed September 18, 2020, https://www.hud.gov/sites/dﬁles/PIH/documents/
CARES_Act_Spending_Final.pdf.
333Department of Housing and Urban Development, Extension of Period of Availability for CARES Act Supplemental Public
Housing and Housing Choice Voucher Funds, Guidance on CARES Act Financial Reporting Requirements (FDS and Quarterly
Reporting), and Other CARES Act Provisions, Notice PIH-2020-24 (Sept. 14, 2020). This notice also extended the deadlines
for some of these funds from December 31, 2020 and March 31, 2021, to December 31, 2021.

Page 209 GAO-21-191
said that their members were using many of the waivers HUD implemented, particularly waivers
on income recertiﬁcation and inspections.334

Oversight challenges. According to HUD oﬃcials, HUD’s CARES Act Compliance Response
Team (HCCRT) worked with program oﬃces to identify top oversight risks—including eﬀective
monitoring and reporting—along with initial steps to address them.335 To help ensure program
oﬃces’ existing data collection processes comply with CARES Act reporting requirements, HCCRT
created a template for program oﬃces to identify data and reporting needs and requirements and
is developing speciﬁc guides for each program oﬃce based on this template. In addition, HCCRT is
working with the program oﬃces to develop strategies to oversee CARES Act-speciﬁc requirements
remotely, such as preventing duplication of beneﬁts. As of early October, HUD oﬃcials said they
were developing a timeline for developing and implementing these strategies.

Further, several program oﬃces reported concerns that staﬃng levels were insuﬃcient for
overseeing CARES Act funds and concerns about administering funds during the agency-wide shift
to telework. In early November 2020, HUD oﬃcials commented that 96 new positions had been
approved to help with CARES Act administration, of which 40 had been on-boarded and 39 were in
the recruitment process.336 Oﬃcials also told us that the Oﬃce of the Chief Human Capital Oﬃcer,
in consultation with the Oﬃce of the Chief Financial Oﬃcer, developed an approach to streamline
and expedite CARES Act hiring, which includes guidance for creating CARES Act-related job listings
and a unique identiﬁcation number that distinguishes CARES Act hires from other hires.337 In mid-
October 2020, HUD oﬃcials told us that the Oﬃce of Community Planning and Development had
hired 11 employees to assist with CARES Act implementation and compliance activities.

Agency Comments
We provided HUD and the Oﬃce of Management and Budget with a draft of this enclosure. In
its comments, reproduced in appendix V, HUD noted that funds from its Oﬃce of Community
Planning and Development (which includes CDBG-CV and ESG-CV) are available for 3–6 years and
provided more detail about its technical assistance eﬀorts. In addition, HUD provided updated

334In June 2020, we reported that some industry groups warned that because the PHAs are not required to implement
such waivers, they may not use them. However, industry representatives told us that PHAs have willingly implemented
many waivers, such as those allowing virtual property inspections (and thus minimizing potential exposure between
residents and inspectors) and providing ﬂexibility in income reexamination (in response to diﬃculties accessing income
documentation).
335We reported in June 2020 that HUD had established HCCRT to implement an oversight plan focusing on the impact of
the CARES Act on HUD people, processes, and technology.
336According to HUD oﬃcials, the agency’s hiring eﬀorts were ongoing. Appointments under the CARES Act must be
made by December 31, 2020. See Pub. L. No. 116-136, § 4010, 134 Stat. 478.
337Similarly, in March 2019, we reported on numerous challenges that HUD encountered when administering CDBG
Disaster Recovery funds in response to the 2017 hurricanes, including a lack of workforce planning. As mentioned
previously, we recommended that HUD develop and implement a comprehensive monitoring plan and conduct
workforce planning to eﬀectively manage the CDBG Disaster Recovery grant portfolio.

Page 210 GAO-21-191
information on its hiring eﬀorts and other technical comments, which we incorporated as
appropriate. The Oﬃce of Management and Budget did not have any comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed HUD guidance and documentation and written responses from
HUD oﬃcials. In addition, we interviewed selected industry organizations representing CDBG-
CV and ESG-CV grantees and PHAs to obtain their views on HUD’s administration and oversight
of CARES Act funds. Their views are not generalizable to other associations that represent HUD
grantees or PHAs, but oﬀered important perspectives. We assessed the reliability of HUD’s data by
comparing them to publicly available data and reviewing written responses from agency oﬃcials.
We determined that the data were suﬃciently reliable for reporting on the status of HUD’s CARES
Act spending.

Contact information: Alicia Puente Cackley, (202) 512-8678, cackleya@gao.gov

Related GAO Products
Priority Open Recommendations: Department of Housing and Urban Development. GAO-20-500PR.
Washington, D.C.: April 23, 2020.

Disaster Recovery: Better Monitoring of Block Grant Funds Is Needed. GAO-19-232. Washington, D.C.:
March 25, 2019.

Department of Housing and Urban Development: Actions Needed to Incorporate Key Practices into
Management Functions and Program Oversight. GAO-16-497. Washington, D.C.: July 20, 2016.

Page 211 GAO-21-191
Unemployment Insurance Programs
Weekly news releases issued by the Department of Labor have improperly presented state-
reported claims volumes as the number of individuals claiming beneﬁts in unemployment
insurance programs because the number of claims has not been an accurate approximation of the
number of individuals claiming beneﬁts during the pandemic. Each week, the agency publishes
the number of weeks of unemployment beneﬁts claimed by individuals in each state during
the period, and reports the total count as the number of people claiming beneﬁts nationwide.
Department of Labor oﬃcials told us that they have traditionally reported the numbers in this way
because they were a close approximation of each other. However, because backlogs in processing
a historic volume of claims have led to individuals claiming multiple weeks of beneﬁts at a time
for previous weeks of unemployment, as well as other data issues, these traditional estimates
have not been appropriate in the context of the pandemic. For example, by using claims counts
to represent the number of people, individuals who submitted multiple claims are counted more
than once in the Department of Labor’s estimate. At the same time, not all states have been
included in each weekly estimate due to delays in states’ data submissions. As the demand for
unemployment insurance beneﬁts remains high, state resources are strained, and reports of fraud
in the system continue, the Department of Labor has taken steps to monitor and assist states with
program integrity issues.

Entity involved: Department of Labor

Recommendations for Executive Action
We are making the following two recommendations to the Department of Labor:

The Secretary of Labor should ensure the Oﬃce of Unemployment Insurance revises its weekly
news releases to clarify that in the current unemployment environment, the numbers it reports
for weeks of unemployment claimed do not accurately estimate the number of unique individuals
claiming beneﬁts.

The Secretary of Labor should ensure the Oﬃce of Unemployment Insurance pursues options
to report the actual number of distinct individuals claiming beneﬁts, such as by collecting these
already available data from states, starting from January 2020 onward.

Key Considerations and Future GAO Work
The unemployment insurance (UI) system provides a vital safety net for individuals who become
unemployed through no fault of their own, and this support is essential during widespread
economic downturns. As certain CARES Act UI programs approach their scheduled expiration in
December 2020, the UI system continues to experience high numbers of claims as a result of the
COVID-19 pandemic. However, the Department of Labor (DOL) does not currently collect or report
reliable counts of the number of individuals claiming beneﬁts, which could inform policy makers

Page 212 GAO-21-191
and the public about how the size of the population being supported has changed during the
pandemic, and the potential eﬀects of the expiration of CARES Act beneﬁts.

We continue to focus on the implications of persistently high numbers of claims for UI beneﬁts.
Enhanced beneﬁts under the Federal Pandemic Unemployment Compensation program expired
at the end of July 2020 and supplemental payments under the federal lost wages assistance
program covered weeks of unemployment through September 5, 2020, at the latest. Individuals
claiming beneﬁts for unemployment after the expiration of these supplemental beneﬁts will be
more reliant on the beneﬁts provided by the UI system in their state, and their household income
may no longer exceed poverty guidelines. States also face continued ﬁnancial pressure in paying
claims. As of November 9, 2020, 21 states and territories held about $40.2 billion in federal loans
to pay UI beneﬁts.

We also remain concerned about potential fraud throughout the system. States have identiﬁed
schemes that reportedly could account for tens of thousands of fraudulent claims and potentially
millions of dollars in improper payments. Federal agencies are working with states to detect and
respond to UI fraud. For example, DOL’s Oﬃce of Inspector General (OIG) designated UI as a high
priority for addressing program integrity issues and has ongoing fraud investigations. We will
continue to monitor OIG ﬁndings and DOL actions to provide guidance and support to states to
help ensure UI program integrity.

Following a recommendation in our June 2020 report, DOL issued guidance on August 12, 2020,
addressing potential risks that certain workers being paid wages with proceeds from the Paycheck
Protection Program (PPP)—administered by the Small Business Administration—could also
simultaneously be receiving UI beneﬁts.338 The guidance clariﬁed that individuals working full-
time and being paid through PPP are not eligible for UI, and that individuals working part-time
and being paid through PPP would be subject to certain state policies, including policies on partial
unemployment, to determine their eligibility for UI beneﬁts.

Background
The UI program is a federal-state partnership that provides temporary ﬁnancial assistance
to eligible workers who become unemployed through no fault of their own. States design
and administer their own UI programs within federal parameters, and DOL oversees states’
compliance with federal requirements, such as ensuring states pay beneﬁts when they are due.
Regular UI beneﬁts—those provided under the state programs in place before the CARES Act was
enacted—are funded primarily through federal and state taxes levied on employers.339

338Department of Labor, Unemployment Insurance Program Letter, No. 14-20, Change 1 (Aug. 12, 2020).
339To be eligible for regular UI beneﬁts, applicants generally must be able and available to work, and be actively seeking
work. 42 U.S.C. § 503(a)(12).

Page 213 GAO-21-191
The CARES Act created three federally funded temporary UI programs that expanded beneﬁt
eligibility and enhanced beneﬁts.340

1. Pandemic Unemployment Assistance (PUA), available through December 2020, generally
authorizes up to 39 weeks of UI beneﬁts to individuals not otherwise eligible for UI beneﬁts,
such as self-employed and certain gig economy workers, who are unable to work as a result of
COVID-19.341

2. Federal Pandemic Unemployment Compensation (FPUC) generally authorized an additional
$600 beneﬁt through July 2020 that augmented weekly beneﬁts available under the regular UI and
CARES Act UI programs.342

3. Pandemic Emergency Unemployment Compensation (PEUC), available through December 2020,
authorizes an additional 13 weeks of UI beneﬁts to those who exhaust their regular UI beneﬁts.343

On August 8, 2020, the President signed a memorandum directing the Department of Homeland
Security’s Federal Emergency Management Agency (FEMA) to provide up to $44 billion in lost
wages assistance (LWA).344 Pursuant to the presidential memorandum, upon receiving a FEMA
grant, states and territories may provide eligible claimants $300 or $400 per week—which includes
a $300 federal contribution—in addition to their UI beneﬁts.345

Overview of Key Issues
The number of weekly initial claims for UI beneﬁts remains persistently high, though at a
lower level than early in the pandemic. UI beneﬁts provide a vital safety net for unemployed
individuals. DOL reported 723,105 initial claims for regular UI beneﬁts and 298,154 initial claims
for PUA beneﬁts were submitted nationwide during the week ending November 7, 2020.346 The

340The CARES Act also addressed other aspects of the UI system, such as authorizing certain ﬂexibilities for states to
hire additional staﬀ and to participate in Short-Time Compensation programs. In addition to the CARES Act, the Families
First Coronavirus Response Act provided up to $1 billion in emergency grant funding to states in ﬁscal year 2020 for UI
administrative purposes.
341Pub. L. No. 116-136, § 2102, 134 Stat. at 313.
342Pub. L. No. 116-136, § 2104, 134 Stat. at 318.
343Pub. L. No. 116-136, § 2107, 134 Stat. at 323.
344The White House, Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations
Related to Coronavirus Disease 2019 (Aug. 8, 2020). The additional beneﬁts are funded by the Department of Homeland
Security’s Disaster Relief Fund.
345To be eligible for LWA, individuals need to be receiving at least $100 per week in UI beneﬁts, such as regular UI or
PUA beneﬁts, or in beneﬁts from certain other programs. According to FEMA, states providing $400 per week in LWA
would contribute $100 each week in state funds, while states providing $300 per week in LWA may count existing state
funding used to pay regular UI beneﬁts to satisfy the state match.
346An initial claim is the ﬁrst claim ﬁled by an individual to determine eligibility for UI beneﬁts after separating from an
employer. Initial claims counts presented are not seasonally adjusted, and counts for the week ending November 7,
2020 reﬂect advance initial claims, which are preliminary and subject to revision. In some cases, advance initial claims

Page 214 GAO-21-191
number of regular UI initial claims submitted in recent weeks is considerably lower than the peak
of about 6.2 million submitted in the week ending April 4 (see ﬁgure). Inconsistent state reporting
of PUA initial claims limits the conclusions that can be drawn about trends in that program. The
general decline in overall initial claims suggests that workers are losing jobs at a slower rate
nationwide than in the early weeks of the pandemic. However, the number of regular UI initial
claims submitted each week has remained relatively steady since the week ending August 8, and
remains considerably higher than pre-pandemic levels. For example, the 723,105 regular UI initial
claims submitted during the week ending November 7, 2020—which does not include the 298,154
PUA initial claims—is about 3 times as high as the 238,996 submitted during the corresponding
week in 2019.

Weekly Initial Claims Submitted Nationwide for Regular Unemployment Insurance (UI) and Pandemic
Unemployment Assistance (PUA) Beneﬁts

Notes: The weekly counts of initial claims shown in the ﬁgure are not seasonally adjusted. Counts for weeks through October
24, 2020 are from Department of Labor (DOL) data ﬁles that include any adjustments submitted by states as of November 12,
2020. Counts for the weeks ending October 31 and November 7 are from DOL’s weekly report released on November 12, and
the November 7 numbers reﬂect advance initial claims, which are preliminary and subject to revision. The number of states
reporting PUA data is out of a potential total of 53 states and territories.

represent estimates submitted by states. For example, in late September, California paused its acceptance of initial
claims to reduce its backlog of claims and to implement tools to help prevent fraud in the program. As a result, California
submitted estimated numbers of initial claims to DOL for the weeks ending September 26, October 3, and October 10.
Because states did not implement the PUA program or begin reporting claims data at the same time, we do not identify
a peak in PUA initial claims.

Page 215 GAO-21-191
In addition, the number of initial claims is not intended to measure how many claimants were
determined eligible to receive beneﬁts or how many who ﬁled for beneﬁts earlier in the pandemic
are still unemployed. For example, analyses of state data by the California Policy Lab show that
the number of initial claims submitted in California peaked at about 1.1 million for the week
ending March 28, 2020, and then fell to a low of about 298,000 for the week ending May 23.347
However, because some individuals remain unemployed for multiple weeks and can submit
claims retroactively, the number of initial claims is not necessarily equivalent to the number of
unemployed individuals receiving beneﬁts each week. In California, the number of individuals
who received beneﬁts for unemployment increased from about 3.1 million for the week ending
March 28 to about 4.6 million for the week ending May 23, even as the number of initial claims
declined.348 In addition, from early June through mid-July, the California Policy Lab also found that
about 1 to 3 percent of PUA claimants and about 4 to 5 percent of regular UI claimants exited the
program each week due to, for example, obtaining employment.

DOL’s characterization of state-reported continued claims as representing the number
of individuals claiming beneﬁts is not appropriate in the context of the pandemic. DOL’s
weekly UI news releases include valuable state-reported data on claims volume, but they have
improperly represented the number of unique individuals claiming UI beneﬁts and the changes
in these numbers from week to week. Each week, DOL publishes the number of continued claims
submitted by states in all UI programs (i.e., weeks of unemployment claimed by individuals during
a reporting period), and reports it as the total number of people claiming beneﬁts in all programs.

While DOL oﬃcials told us that they have traditionally used the number of continued
claims to represent the number of individuals claiming beneﬁts because they were a close
approximation of each other, various issues arising from the pandemic have made this practice
problematic—potentially overstating the number of individuals in certain circumstances and
understating the number in others.

Prior to the pandemic, according to DOL oﬃcials, the number of continued claims approximated
the number of people claiming beneﬁts because each week individuals typically ﬁled a claim
for just the previous one week of continued unemployment.349 However, this has not been
the case during the pandemic because of challenges implementing the newly created PUA
program and backlogs in processing historic numbers of claims in many states. For example,

347The peak in initial claim submissions in California in the week ending March 28, 2020, was prior to any PUA claims
being counted. Alex Bell, Thomas J. Hedin, Geoﬀrey Schnorr, and Till von Wachter, California Policy Lab, Policy Brief: An
Analysis of Unemployment Insurance Claims in California During the COVID-19 Pandemic (California Policy Lab, Sept. 15,
2020). The California Policy Lab is an organization that facilitates partnerships between state and local policymakers
and university researchers to conduct and share research and technical assistance on issues such as unemployment,
according to its website.
348Unlike DOL’s reporting of claims, the California Policy Lab’s analysis identiﬁed and counted actual individuals who
ﬁled regular UI or PUA claims as of August 29, 2020 and also accounted for retroactive claims. Thus, in this case, if an
individual ﬁled a claim during the week ending August 29 that included retroactive claims for unemployment from the
week ending May 23, onward, the individual was counted as an unemployed claimant in each week from May 23 through
August 29. The number of individuals claiming UI or PUA beneﬁts peaked at about 5.0 million the week ending May 2,
2020. The numbers presented are from data tabulations for ﬁgures and analysis in the California Policy Lab report that
we received from the California Employment Development Department, Labor Market Information Division.
349In some states, individuals certify continued unemployment on a biweekly schedule, and thus may submit claims for
2 weeks at a time.

Page 216 GAO-21-191
for the week ending October 24, 2020, states reported about 21.2 million continued claims in all
programs—about 6.8 million in the regular UI program, about 9.4 million in the PUA program,
and about 4.9 million in other programs, such as the PEUC program.350 However, the number of
continued claims is not equivalent to the number of individuals claiming beneﬁts.

If an individual claims beneﬁts for multiple weeks of unemployment during a single reporting
period, each week is counted as a separate continued claim. This could happen if an individual
was unemployed for multiple weeks before their application was processed—due to claims
backlogs—or if the individual claimed beneﬁts retroactively in the PUA program.351 Thus, by using
claims counts to represent the number of people, individuals who submitted multiple claims are
counted more than once in DOL’s estimate, which has been prevalent during the pandemic. For
example, according to a news release by the California Employment Development Department, as
of September 16, 2020, the state had a backlog of nearly 600,000 individuals who had applied for
UI beneﬁts and whose applications had not been processed for more than 21 days.

The reliability of DOL’s weekly reporting of claims data is also aﬀected by inconsistent state
reporting of PUA data, which has resulted in ﬂawed week-to-week comparisons of total claims
numbers. From April through October, diﬀerent numbers of states reported PUA data in many
weeks. For example, states started reporting PUA claims data at diﬀerent times, depending on
how quickly they were able to implement the new program and establish reporting processes. In
addition, even after implementing the program, in certain weeks some states did not report data
to DOL to include in its weekly news releases.

The inconsistency in the group of states reporting each week undermines meaningful
comparisons over time and may have led DOL to inaccurately characterize changes in claims
numbers in their weekly UI news releases. For example, in its July 23, 2020, publication, DOL
reported that the number of continued claims in all programs for the week ending July 4
decreased by about 200,000 from the previous week. However, Arizona did not report PUA data
for that week, after reporting almost 2.3 million claims the previous week. Had Arizona submitted
data, DOL likely would have reported a signiﬁcant increase in claims from the prior week instead
of a decrease. Arizona stopped reporting data that week due to suspected fraud in the PUA
program, according to DOL oﬃcials.

Potential fraud in the UI system, and particularly in the PUA program, according to DOL, further
complicates counts, as some states’ claims numbers may be inﬂated due to fraudulent claims,
while others’ numbers may not be. For example, Maine canceled almost 24,000 initial claims and
41,000 continued claims between late May and late June that it determined to be fraudulent,
according to a state labor department news release.

350The number of PEUC continued claims has increased in recent weeks, likely due to individuals exhausting their
regular UI beneﬁts as the length of the pandemic has extended. For example, DOL reported that PEUC continued
claims increased from about 2.0 million in the week ending September 19, 2020, to about 4.1 million in the week ending
October 24.
351Beneﬁt payments under PUA are retroactive, for weeks of unemployment starting on or after January 27, 2020,
according to DOL. Thus, according to DOL oﬃcials, eligible individuals claiming PUA beneﬁts at any time during the
pandemic could have claimed retroactive weeks of beneﬁts, which has occurred in part because of the time it took
states to implement the new program.

Page 217 GAO-21-191
Backlogs in states’ claims processing and the ability to claim beneﬁts retroactively have resulted
in individuals claiming multiple weeks of beneﬁts in single reporting periods. Multi-week
claims are especially prevalent in the PUA program because individuals accumulated weeks of
unemployment as states implemented the new program. PUA continued claims make up a large
part of DOL’s reported total number of people claiming beneﬁts. However, analyzing data for 20
selected states, we found that the number of continued claims submitted in the PUA program
through June 27, 2020, exceeded by almost 20 million the cumulative number of individuals who
had submitted an initial claim since the program began (see ﬁgure).352

Over-reporting of Individuals Claiming Pandemic Unemployment Assistance (PUA)

Notes: We selected the 20 states included in the ﬁgure because they had started to report PUA initial claims to DOL within 1
week of the implementation date they reported to DOL, and because of data reliability considerations. The diﬀerences shown
are illustrative examples and represent how much higher the reported count of continued claims in a given week was than
the cumulative count of initial claims through that week. The cumulative count of initial claims represents an upper bound
estimate of the number of individuals who could submit a continued claim in any period. The actual number of individuals
would be lower than this estimate because some initial claims are denied during eligibility reviews and for other reasons,

352We selected states from among the 26 that began reporting PUA initial claims to DOL within 1 week of the
implementation date they reported to DOL. We excluded several of these states due to data reliability concerns. We
calculated the states’ total initial claims submitted from the beginning of the program through the week ending June
27, 2020, and compared this to the number of continued claims submitted each week. Because individuals cannot
submit a continued claim without having ﬁrst been counted as an initial claim, the cumulative count of initial claims
submitted represents an upper bound estimate of the number of individuals who could submit a continued claim in
any period. The actual number of individuals would be lower than this estimate because some initial claims are denied
during eligibility reviews and for other reasons, and some individuals exit the PUA program each week due to obtaining
employment or for other reasons. Because initial claim denials and program exits occur each week, an estimate of
cumulative initial claims that does not account for these reductions is less accurate the more weeks it includes—i.e., the
estimated count is increasingly higher than reality each week, thus underestimating the diﬀerence with the number of
continued claims. For that reason, our analysis only runs through the week ending June 27, 2020.

Page 218 GAO-21-191
and some individuals exit the PUA program each week due to obtaining employment or for other reasons. Because initial
claim denials and program exits occur each week, an estimate of cumulative initial claims that does not account for these
reductions is less accurate the more weeks it includes—i.e., the estimated count is increasingly higher than reality each week,
thus underestimating the diﬀerence with the number of continued claims. For that reason, our analysis only runs through the
week ending June 27, 2020.

Similarly, in California—where claimants generally certify for 2 weeks of beneﬁts at a
time—analysis by the California Policy Lab suggests that the number of continued claims in the
state consistently exceeded twice the number of individuals submitting those claims. For example,
during the week ending August 8, 2020, the California Policy Lab found that about 2.2 million
individuals submitted about 6.3 million continued claims—almost 2 million greater than the 4.4
million that might be expected based on the number of claimants.353 The excess claims likely
reﬂect retroactive weeks claimed and demonstrate how counts of continued claims can cause
over-reporting of the number of individuals claiming beneﬁts. In this case, most of this over-
reporting occurred in the PUA program. According to the California Policy Lab, PUA claimants, on
average, ﬁled claims for about 4 to 9 weeks of unemployment each week from early May through
late August. Over the same period, regular UI claimants, on average, ﬁled for slightly more than 2
weeks of beneﬁts each week.354

To understand the supportive role UI and PUA beneﬁts are playing in the economy during the
pandemic, reliable data are needed on both the number of new claimants each week and the
number of continuing claimants who are relying on program beneﬁts. Federal standards for
internal control state that management should process data into quality information that is
complete, accurate, and readily available to the intended audience when needed. DOL has
continued to collect and report claims data in the ways it has historically, which provides some
valuable information about the volume of claims submitted. However, because of the atypical
unemployment environment during the pandemic, the use of these traditional methods has
resulted in the inaccurate reporting of information about the number of individuals receiving
beneﬁts. States already collect information to identify and pay unique individuals claiming
UI beneﬁts, and could use this information to provide DOL with an accurate weekly count of
individuals submitting initial and continued claims, along with the number of claims submitted.

Without an accurate accounting of the number of individuals who are relying on UI and PUA
beneﬁts in as close to real-time as possible, policy makers may be challenged to respond to the
crisis at hand. In addition, with the looming expiration of the PUA program in December 2020,
policy makers may need better information about how many individuals face a loss of beneﬁts
and what segments of the population and the economy may be most aﬀected.

Average weekly regular UI and PUA beneﬁts vary by state, and the majority of states have
been paying PUA claimants the minimum allowable beneﬁt instead of the amount they are
eligible for based on prior earnings. The average regular UI beneﬁts paid by states in September
ranged from about $181 to about $466 per week, with the median state paying an average of

353California Policy Lab, An Analysis of Unemployment Insurance Claims in California During the COVID-19 Pandemic. The
numbers presented are from data tabulations for ﬁgures and analysis in the California Policy Lab report that we received
from the California Employment Development Department, Labor Market Information Division.
354California Policy Lab, An Analysis of Unemployment Insurance Claims in California During the COVID-19 Pandemic. The
numbers presented are from data tabulations for ﬁgures and analysis in the California Policy Lab report that we received
from the California Employment Development Department, Labor Market Information Division.

Page 219 GAO-21-191
$295 per week. Among the 41 states reporting PUA data for September, average beneﬁts paid
ranged from about $114 to about $357 per week.355 However, the average weekly PUA beneﬁts
reported by a majority of these states were close to their minimum beneﬁt amounts, as set by
DOL guidance.356

Speciﬁcally, 27 of the 41 states reported average weekly PUA beneﬁts paid that were within
25 percent of the state’s minimum PUA beneﬁt amount; 10 of these states reported average
beneﬁts within 10 percent of the minimum. This suggests that many individuals in these states
are receiving the minimum beneﬁt—because the average is close to the minimum. For example,
in Maine, the PUA minimum beneﬁt amount is $172 per week and the state reported average
beneﬁts paid in September of about $194 per week.357 According to a July 2020 Maine Department
of Labor news release, in order to expedite payments, individuals initially received the minimum
PUA beneﬁts, and the state planned to update beneﬁt amounts based on tax information, starting
at the end of July. If a new beneﬁt amount was determined, individuals would receive retroactive
beneﬁts payments for all weeks previously paid.

DOL oﬃcials told us that to facilitate implementation of the new program most states decided to
initially pay PUA claimants the minimum allowable beneﬁt, rather than calculate beneﬁt amounts
based on claimants’ documentation of their prior earnings. States have previously used this
approach to pay beneﬁts more expediently under the Disaster Unemployment Assistance (DUA)
program, according to DOL oﬃcials. DOL guidance notes that when individuals submit suﬃcient
documentation of wages, states must immediately recalculate their weekly beneﬁts.358 States
should pay the diﬀerence between the amount previously paid and the amount owed for all
weeks of unemployment that an individual ﬁles during the Pandemic Assistance Period. Based
on DUA regulations, states must pay the full PUA beneﬁt amount with the greatest promptness
that is administratively feasible.359 DOL oﬃcials said they did not know how many states have
begun recalculating individuals’ beneﬁts and making these payments. According to California’s
website, the state initially paid claimants the minimum PUA beneﬁt and, as of October 30, 2020,

355We calculated average beneﬁt amounts for regular UI and PUA by dividing the state-reported monthly amounts for
total compensation paid by total weeks compensated. These amounts do not include supplemental beneﬁts provided by
FPUC or LWA. Beneﬁt amounts are based on data reported by states as of November 9, 2020, at which point one state
had reported PUA data for October. Thus, we analyzed beneﬁt payment data for September. The following states either
did not report PUA monthly data in September or were excluded from our analysis due to data reliability concerns:
Alabama, Alaska, Delaware, Florida, Illinois, Indiana, New Hampshire, Puerto Rico, South Carolina, South Dakota,
Vermont, and Wyoming.
356The minimum beneﬁt for PUA aligns with the minimum beneﬁt for the Disaster Unemployment Assistance
program and is set in Unemployment Insurance Program Letter (UIPL) 3-20. Department of Labor, Minimum Disaster
Unemployment Assistance (DUA) Weekly Beneﬁt Amount: January 1 - March 31, 2020, UIPL 3-20 (Washington, D.C.: Dec. 12,
2019).
357Some states reported average weekly PUA beneﬁts paid in certain months that were slightly lower than their
minimum beneﬁt amount. This may be because PUA beneﬁt payment data include full and partial claims, and partial
beneﬁts may be lower than the minimum allowable beneﬁt amount. DOL does not collect data on how many partial
weeks of PUA beneﬁts are claimed. We examined data for the regular UI program and found that across states, about 87
percent of weeks compensated in September 2020 were for full weeks of total unemployment.
358Department of Labor, CARES Act of 2020 – Pandemic Unemployment Assistance (PUA) Program Reporting Instructions and
Questions and Answers, UIPL 16-20, Change 1 (Washington, D.C.: Apr. 27, 2020).
359See 20 C.F.R. § 625.9(e). Under the CARES Act, the regulations for DUA generally apply to PUA. Pub. L. No. 116-136, §
2102(h), 134 Stat. 281, 317.

Page 220 GAO-21-191
was recalculating beneﬁt payments based on individuals’ total earnings in 2019. The diﬀerence in
beneﬁt amounts will be back-paid to claimants, according to the state website.

The expiration of supplemental payments for UI claimants may mean that some
households’ income no longer exceeds poverty guidelines. Claimants’ households vary in
size and may have multiple earners. In addition, the UI system is intended to be a temporary
safety net for unemployed individuals. In September, not including supplemental payments,
the average weekly regular UI beneﬁts paid in 13 states and the average weekly PUA beneﬁts
paid in 29 of the 41 states reporting data were lower than the approximately $245 per week
needed to remain above the 2020 poverty guidelines for a 1-person household (annual income
of $12,760).360 Supplemental payments issued under FPUC and LWA through early September, at
the latest, exceeded the weekly amount needed for a 1-person household to remain above the
2020 poverty guidelines. However, those supplemental beneﬁts have ended. In addition, with the
scheduled expiration of certain CARES Act beneﬁts in December 2020, PUA claimants who remain
unemployed may face additional hardship.

For weeks of unemployment starting in late March through the end of July, eligible claimants
received an additional $600 weekly beneﬁt under FPUC. After FPUC expired at the end of
July, eligible claimants in most states could receive an additional $300 or $400 per week in
supplemental payments as LWA. As of November 9, 2020, 49 states, the District of Columbia, and
four territories were approved for funding to provide LWA, with grants totaling $42.8 billion of
$44 billion available, according to FEMA.361 FEMA approved states and territories to pay at most
6 weeks of beneﬁts, retroactively, beginning with claims ﬁled for the week ending August 1, 2020,
and continuing through the week ending September 5.

An increasing number of states are taking out federal loans to pay UI beneﬁts. As the
number of regular UI continued claims remains historically high, more states are facing increased
ﬁnancial strain, and some have sought loans from the federal government to pay UI beneﬁts.362
Since we last reported in September 2020, seven additional states have taken out federal loans
to pay UI beneﬁts. As of November 9, 2020, more than 7 months since the March 2020 spike in
UI claims, 20 states and the U.S. Virgin Islands held federal loans totaling about $40.2 billion.
This total loan balance is about equal to the approximately $40.2 billion held by 30 states and
territories at the end of 2010, the height of borrowing after the 18-month long 2007-2009

360The poverty guidelines are issued each year by the Department of Health and Human Services to be used for
administrative purposes, such as determining ﬁnancial eligibility for certain federal programs; the $12,760 poverty
guideline is for the 48 contiguous states and the District of Columbia. For household sizes of 2, 3, and 4 people, the 2020
poverty guideline is an annual income of $17,240, $21,720, and $26,200 per year (about $332, $418, or $504 per week),
respectively.
361The four territories are the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin
Islands.
362While the CARES Act UI programs are federally funded, regular UI is primarily funded through state and federal
taxes on employers. When a state exhausts the funds available for regular UI beneﬁts, it may borrow from the federal
government. According to DOL data, even before the pandemic, many states were not taking in enough UI tax revenue
to satisfy the solvency standard speciﬁed in DOL regulations providing for interest-free loans to states. See 20 C.F.R. §
606.32.

Page 221 GAO-21-191
recession and early recovery.363 If unemployment remains high, it is likely that additional states
may have to take out loans to pay UI beneﬁts, and states with existing loans may need to borrow
more.

States may take years to reestablish ﬁnancial solvency in their UI programs. For example, 19 of the
30 states and territories holding the approximately $40.2 billion in federal loans to pay UI beneﬁts
at the end of 2010 took 4 or more years to repay the loans.364 With some states already exceeding
the amount they borrowed then, it is likely that states may take years to repay federal loans taken
out to pay UI beneﬁts during the pandemic.

DOL continues to support states’ implementation of CARES Act UI programs; however, the
DOL OIG has reported that additional actions would strengthen UI program integrity. Since
March, according to DOL, the agency has addressed program integrity in numerous guidance
documents and has taken steps to reinforce its importance, such as through calls with states,
coordinated workgroups, and a partnership with the UI Integrity Center to provide states and
other partners with technical assistance, training, and other program integrity resources. The UI
Integrity Center operates an Integrity Data Hub (IDH), a multi-state data system that states can use
to support the prevention and detection of fraud. DOL issued three notices since late August to
encourage states to use the UI Integrity Center’s resources and remind them of tools available to
prevent and detect improper and potentially fraudulent payments.

In September, according to DOL, the Secretary of Labor sent letters to governors requesting their
leadership to implement key strategies to prevent and detect fraud in the UI system, and DOL
hosted a call with state workforce agencies to discuss the importance of addressing UI fraud.
Also in September, DOL’s regional oﬃces began formal monitoring reviews of the CARES Act UI
programs. These reviews will include many questions related to program integrity and improper
payment prevention, detection, and recovery. DOL is also working with the DOL OIG to ensure
states are actively working with the OIG and other federal law enforcement entities to prevent and
detect fraud.

In August and October, the DOL OIG issued reports that addressed UI program integrity. The
August report acknowledged that while DOL is leveraging existing tools to combat fraud, more
needs to be done.365 For example, the report stated that DOL should do more to ensure that
states are eﬀectively using existing program integrity tools, such as the State Information Data

363DOL compiles and publishes historical data on outstanding federal loan balances in its annual program and ﬁnancial
data handbook, ETA Financial Data Handbook 394. The 20 states with outstanding federal loans to pay UI beneﬁts are
California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Massachusetts,
Minnesota, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Texas, Virginia, and West Virginia. According to DOL,
the U.S. Virgin Islands had a residual loan balance of about $0.06 billion at the beginning of 2020 left from the 2007-2009
recession. According to the National Bureau of Economic Research, the 2007-2009 recession began in December 2007
and ended in June 2009.
364The loan data we analyzed is a year-end snapshot. Thus, we counted repayment time from the year a state ﬁrst had a
loan balance to the year the state no longer had a balance. For example, if a state had a loan balance that ﬁrst appeared
in 2009 and last appeared in 2012, we counted the state as having taken 4 years to repay the loan. Almost all states
increased their loan balances after the ﬁrst year a loan appeared, before beginning to repay the loan.
365Department of Labor Oﬃce of the Inspector General, COVID-19: More Can Be Done to Mitigate Risk to Unemployment
Compensation Under the CARES Act, 19-20-008-03-315 (Washington, D.C.: Aug. 7, 2020).

Page 222 GAO-21-191
Exchange System, to combat fraud and improper payments. In addition, the report noted that
DOL could provide additional guidance to further reduce the risk of fraud or improper payments
related to PUA program eligibility and individuals refusing return to work opportunities.

In October, the DOL OIG issued a report on actions states are taking to deter and detect fraud
relating to the self-certiﬁcation process in their PUA programs.366 These actions include using
predictive analytics to identify suspicious claims and cross-matching with other databases to
verify eligibility. The OIG found that regardless of actions taken to detect and deter fraud, some
states reported that fraud vulnerabilities still exist, such as those inherent to self-certiﬁcation or
inadequate fraud screen ﬁlters, tools, and program controls. The DOL OIG continues to review UI
programs as part of its Pandemic Response Oversight Plan.

Potentially large fraud schemes have prompted several federal agencies to assist states with
their investigations. As of November 5, 2020, DOL’s OIG had publicly released information on 14
ongoing investigations of UI fraud during the pandemic that the agency was supporting, some
of which concern millions of taxpayer dollars potentially paid improperly, according to the OIG.
DOL’s OIG is conducting these investigations in coordination with state workforce agencies and
other federal agencies. For example, in September, the Maryland Department of Labor reported
it had coordinated with the DOL OIG and the U.S. Attorney’s Oﬃce to uncover a scheme involving
about 45,800 UI claims that the state determined were fraudulent. According to the state press
release, blocking the fraudulent claims saved hundreds of millions of dollars. In September, DOL
provided $100 million in funding to support state eﬀorts to combat fraud and recover improper
payments, speciﬁcally in the PUA and PEUC programs. States may use this funding to hire or train
investigators, or to implement tools to prevent, detect, and recover fraudulent payments.

The U.S. Secret Service is also conducting UI fraud investigations in coordination with various
federal, state, and local partners, including the DOL OIG. As of October 19, 2020, since
approximately March 2020, the Secret Service had established almost 150 investigations related
to UI fraud, arrested 7 individuals, seized $6.4 million, and coordinated the return of $750 million
in potentially fraudulent UI beneﬁts to state UI programs, according to the agency.367 In addition,
the Department of Justice established the National UI Fraud Task Force to coordinate eﬀorts
across the federal government. In September, the National UI Fraud Task Force issued a consumer
protection guide, advising the public on what to do if they suspect their identity has been exploited
by UI fraudsters, among other things.368

State workforce agencies also continue to identify and respond to UI fraud. For example, in June
the Michigan Unemployment Insurance Agency stopped beneﬁt payments to approximately
340,000 active accounts suspected of fraud. The state agency worked with fraud experts and law
enforcement to examine these claims—where claims were identiﬁed as legitimate, the agency
resumed payments. In September, California paused new UI applications for two weeks to, in part,

366Department of Labor Oﬃce of the Inspector General, COVID-19: States Cite Vulnerabilities in Detecting Fraud While
Complying with the CARES Act UI Program Self-Certiﬁcation Requirement, 19-21-001-03-315 (Washington, D.C.: Oct. 21, 2020).
367These investigations fall within Secret Service’s jurisdiction to investigate cyber-enabled ﬁnancial crimes, according to
the agency.
368Department of Justice, National Unemployment Insurance Task Force, Unemployment Insurance Fraud Consumer
Protection Guide (Washington, D.C: Sept. 21, 2020).

Page 223 GAO-21-191
combat fraud in the system. During this 2-week reset, the California Employment Development
Department implemented a new identity veriﬁcation tool, according to a press release from the
department.

Agency Comments
We provided the Department of Homeland Security (DHS), DOL, and the Oﬃce of Management
and Budget (OMB) with a draft of this enclosure. DHS and OMB did not have any comments
on this enclosure. DOL provided written comments, reproduced in appendix VII, and technical
comments, which we incorporated as appropriate.

In its comments, DOL agreed with our recommendation to revise its weekly news releases, and
partially agreed with our recommendation to pursue options to report the actual number of
distinct individuals claiming beneﬁts, starting from January 2020 onward.

• DOL stated it plans to clarify in its weekly news releases that the numbers it reports for weeks
of unemployment claimed do not accurately estimate the number of unique individuals
claiming beneﬁts.

• DOL agreed with our recommendation to pursue options to report the actual number of
distinct individuals claiming UI beneﬁts. However, DOL did not agree with the retroactive
eﬀective date of the reporting. DOL indicated that state UI programs may face challenges
implementing any new reporting requirements, particularly retroactively. In addition, DOL
stated that the CARES Act UI provisions are scheduled to expire in December 2020 and noted
that requirements to provide notice and comment for the new data collection could take up to
a year to complete, further reducing the utility of retroactive reporting.

We maintain that DOL should pursue options to report the actual number of distinct individuals
claiming UI beneﬁts, retroactive to January 2020. These data are vital to understanding how
many individuals are receiving UI beneﬁts, as well as the size of the population supported by
the UI system during the pandemic. We acknowledge that certain provisions of the CARES Act
are scheduled to expire in December 2020 and that the process to begin collecting new data
may take months. However, our recommendation to pursue options to report on the number of
distinct individuals claiming beneﬁts applies to the CARES Act UI programs as well as the regular UI
program, which is not expiring.

Even if the information is unavailable for some time, reporting numbers retroactively, beginning
with calendar year 2020, will help DOL and policy makers identify lessons learned about the
administration and utilization of regular and expanded UI beneﬁts programs during the pandemic.
As of September 30, 2020, hundreds of billions of dollars have been obligated for UI programs as
part of COVID-19 relief funds. Given this substantial investment, an accurate accounting of the size
of the population supported by this funding, even retroactively, may be critical to understanding
the eﬃciency and eﬀectiveness of the nation’s response to unemployment during the pandemic.

Page 224 GAO-21-191
DOL has reported ﬂawed estimates of the number of individuals receiving beneﬁts each week
throughout the pandemic. This record should be corrected so that future analyses of the
eﬀects of expanded UI beneﬁts rely on accurate information. Retroactive data collection and
reporting would provide an opportunity for future analyses to identify lessons learned from the
pandemic, which could be valuable in considering policy solutions to address any future economic
disruptions of a similar magnitude. In addition, establishing a way of accurately reporting the
number of individuals claiming beneﬁts now would help ensure DOL is ready to report this
information in real time in the future, especially in times of increased demand and if the expanded
UI programs are reauthorized.

We encourage DOL to pursue options to report the actual number of individuals claiming beneﬁts
in the most feasible and least burdensome way. Collecting already available data from states
is one way DOL can address the recommendation, but DOL could also develop other ways of
gathering and reporting this information.

GAO’s Methodology
To conduct this work, we analyzed regularly reported DOL data for calendar years 2019 and
2020, with our most recent data obtained as of November 12, 2020. For our comparison of PUA
continued claims and cumulative initial claims, we analyzed DOL data for 20 states that began
reporting PUA initial claims to DOL soon after they reported implementing the program and that
had reliable data. We also used California state data from the California Policy Lab’s analyses;
reviewed state agency documents, relevant federal laws, DOL guidance, and DOL Oﬃce of
Inspector General reports; and interviewed DOL oﬃcials about program data and agency actions.
We determined the various data we used were suﬃciently reliable for the purposes of this report.

Contact information: Thomas Costa, (202) 512-7215, costat@gao.gov

Related GAO Product
Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.: Sept. 10,
2014.

Page 225 GAO-21-191
Economic Impact Payments
The Department of the Treasury and the Internal Revenue Service extended the online ﬁling
deadline for economic impact payments and have conducted additional outreach, but could take
additional steps to monitor the outcomes of their outreach eﬀorts to potentially eligible economic
impact payment recipients who have yet to ﬁle for a payment.

Entity involved: Internal Revenue Service, within the Department of the Treasury

Recommendations for Executive Action
The Secretary of the Treasury, in coordination with the Commissioner of Internal Revenue, should
begin tracking and publicly reporting the number of individuals who were mailed an economic
impact payment notiﬁcation letter and subsequently ﬁled for and received an economic impact
payment, and use that information to inform ongoing outreach and communications eﬀorts.

Key Considerations and Future GAO Work
We have made three recommendations related to economic impact payments (EIP). In June, we
recommended that the Commissioner of Internal Revenue should consider cost-eﬀective options
for notifying ineligible recipients on how to return payments. The Internal Revenue Service (IRS)
agreed with this recommendation and continues to take steps to recover payments.

In September, we recommended that the Secretary of the Treasury, in coordination with the
Commissioner of Internal Revenue, should update and reﬁne the estimate of eligible recipients
who have yet to ﬁle for an EIP to help target outreach and communications eﬀorts. We also
recommended that the Secretary of the Treasury, in coordination with the Commissioner of
Internal Revenue, should make estimates of eligible recipients who have yet to ﬁle for an EIP, and
other relevant information, available to outreach partners to raise awareness about how and
when to ﬁle for an EIP. Treasury and IRS neither agreed nor disagreed with the recommendations.

The Department of the Treasury (Treasury) and IRS took actions that are consistent with our
recommendations, such as using tax return information to identify and notify nearly 9 million
individuals that they may be eligible for an EIP. However, Treasury and IRS have not updated
estimates of those who could be eligible, but have yet to ﬁle. Without an updated estimate,
Treasury, IRS, other federal agencies, and IRS’s outreach partners may be limited in their ability to
appropriately scale and target outreach and communication eﬀorts to additional individuals who
may be eligible for a payment.

IRS extended the deadline for using its Non-Filers Tool to November 21, 2020; the online portal
had allowed individuals who do not normally ﬁle a tax return to claim an EIP. In September,
Treasury and IRS sent nearly 9 million notices to non-ﬁlers to raise awareness about EIPs. In
addition, the IRS set November 10 as ‘National EIP Registration Day’ in which the agency and

Page 226 GAO-21-191
outreach partners across the country launched a ﬁnal push to encourage non-ﬁlers to register to
receive an EIP. However, Treasury and IRS are not monitoring the eﬀectiveness of the outreach
notices. If the agencies knew how many non-ﬁlers who received notices ultimately received an EIP,
then they could better determine whether additional or targeted outreach is needed for the 2021
ﬁling season.

Our work on EIPs is ongoing. We will continue to examine Treasury and IRS eﬀorts to identify and
notify individuals about their eligibility for the EIP and their eﬀorts to recoup payments sent to
ineligible individuals, and we will review how many taxpayers claim the EIP as part of their 2020 tax
ﬁling. We will also examine challenges eligible recipients faced ﬁling for an EIP, including through
the online Non-Filers Tool.

Background
The CARES Act included direct payments for eligible individuals to address ﬁnancial stress due to
the pandemic. These Economic Impact Payments (EIP) provide up to $1,200 per eligible individual
or $2,400 for individuals ﬁling a joint tax return, plus up to $500 per qualifying child.369 The
payment phases out gradually based on adjusted gross income (AGI). The payments can be oﬀset
by the federal government only to collect delinquent child support obligations.370 Treasury and IRS
have been working together to identify eligible recipients and process payments.371

As of September 30, 2020, Treasury and IRS had disbursed over 165.8 million payments to
individuals, totaling $274.7 billion.372 According to IRS data, more than 26 million non-ﬁlers
received a payment, including around 21 million who received an automatic payment and more
than 5 million non-ﬁlers who used the online tool to receive an EIP.

369Pub. L. No. 116-136, 134 Stat. 281, 335–340 (2020) (to be codiﬁed at 26 U.S.C. § 6428). These payments are in an
advance refund for a tax year 2020 tax credit. The CARES Act refers to this credit and the advance refund as Recovery
Rebates for Individuals. IRS refers to the advance refunds as Economic Impact Payments.
370The Economic Impact Payments can be oﬀset through the Treasury Oﬀset Program (TOP) only to collect delinquent
child support obligations that have been referred by the state to TOP.
371IRS sends payment ﬁles to Treasury’s Bureau of the Fiscal Service, which then processes the payments.
372The volume of payments is taken from the IRS Master File and does not include reversals or payments to residents
of territories. The amount of payments is taken from the IRS general ledger and includes reversals and $4.6 billion in
payments to the U.S. Territories.

Page 227 GAO-21-191
Number of Filers and Non-Filers Issued an Economic Impact Payment as of September 30, 2020

Note: Volumes reﬂect the latest cycle and payment type in which an economic impact payment was paid to an individual.
Likewise, payments are the net of all payment attempts and reversals. Non-ﬁlers may receive more than one of the relevant
government beneﬁts, and therefore are counted multiple times even though they received a single EIP.

Overview of Key Issues
Eligible individuals who have not yet received an EIP were given extra time to ﬁle for one, after
Treasury and IRS extended the deadline for using the online Non-Filers Tool from October 15,
2020, to November 21, 2020. Treasury and IRS have continued outreach eﬀorts to potentially
eligible individuals who had yet to ﬁle for an EIP, but they have not updated their estimate of
individuals who have not ﬁled. Therefore, it is not clear how many eligible individuals missed the
deadline and remain at risk of not getting a payment in 2020.373

Treasury and IRS used information that they have on reportable payments to individuals from
third parties such as payroll processors and banks to identify and notify individuals who could
potentially be eligible for an EIP.374 Starting on September 17, 2020, IRS sent a notice to nearly 9
million individuals who had not received an EIP and were potentially eligible. The notice explained
who is eligible for an EIP and provided instructions about how to claim an EIP.375

373 Eligible individuals who do not receive a payment may claim a 2020 recovery rebate credit on their Tax Year 2020
return ﬁled in 2021.
374According to Treasury oﬃcials, Treasury identiﬁed potentially EIP eligible individuals using the following information
returns from Tax Year (TY) 2019 or TY 2018, W-2, Wage and Tax Statement; Form 1095-A, Health Insurance Marketplace
Statement; Form 1095-B, Health Coverage; Form 1095-C, Employer-Provided Health Insurance Oﬀer and Coverage; Form
1099-MISC, Miscellaneous Income; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Proﬁt-Sharing
Plans, IRAs, Insurance Contracts, etc.; Form 1098-T, Tuition Statement; Form 1098-E, Student Loan Interest Statement;
and Form SSA-1099, Social Security Beneﬁt Statement.
375To view the notice, see https://www.irs.gov/pub/irs-pdf/n1444aes.pdf, accessed October 21, 2020.

Page 228 GAO-21-191
Treasury, in an eﬀort to assist other federal agencies and IRS’s outreach partners in appropriately
scaling and targeting outreach and communication eﬀorts to individuals who may be eligible for
an EIP, posted publicly and shared with these agencies and organizations a count broken down by
state and zip code of individuals who were mailed a notice.376 While those actions are signiﬁcant,
we maintain that Treasury and IRS should update and reﬁne the estimate of eligible recipients
who have yet to receive an EIP. An updated estimate will help Treasury, IRS, and Congress better
understand the magnitude of the eligible population that has not received an EIP. This information
can also inform and support ongoing outreach eﬀorts.

Further, Treasury and IRS oﬃcials initially said they did not plan to track and analyze the outcomes
of their EIP notice-mailing strategy until February or March 2021. According to federal standards
for internal control, management should monitor activities and periodically evaluate the
quality of information received to achieve its objective.377 Treasury oﬃcials said they had other
priorities—namely, starting the 2020 tax ﬁling season, which usually begins at the end of January,
and producing estimates for the administration’s budget. After that, they said they could analyze
data on the number of individuals who were mailed a notice and subsequently ﬁled for and
received an EIP. However, in response to a draft of this enclosure, Treasury said that it planned to
start the analysis and tracking in January 2021

Timely analysis would provide Treasury and IRS with data to assess the eﬀectiveness of their
notice strategy and redirect resources as needed to other outreach and communication eﬀorts.
For example, we analyzed data from the Non-Filer’s Tool, which showed an overall increase in use
after IRS sent the notices. This increase suggests that the notices may have been a contributing
factor.

376Internal Revenue Service, https://www.irs.gov/newsroom/irs-releases-state-by-state-breakdown-of-nearly-9-million-
non-ﬁlers-who-will-be-mailed-letters-about-economic-impact-payments, accessed October, 21, 2020 and https://
www.irs.gov/pub/irs-utl/number-of-eip-letter-recipients-by-state-and-zip-code.xlsx, accessed October 30, 2020
377GAO, Standards for Internal Control in the Federal Government, GAO-14-704G (Washington, D.C.: Sept. 10, 2014).

Page 229 GAO-21-191
Number of Non-Filers Who Used IRS Non-Filers Tool to File for and Received an Economic Impact Payment

Note: Data as of November 6, the most recent date for which IRS had data at the time this report was issued.

Additional analysis on the part of Treasury and IRS could potentially provide more information
that Treasury and IRS could use to determine if their strategy was more eﬀective among certain
populations. For example, Treasury and IRS could compare performance across locations, points
in time, or subgroups of the population to identify important variations in performance. They
could share this information with their outreach partners to amplify their message and bolster
outreach eﬀorts where needed.

In those areas where notices are not leading to an increase in the number of people ﬁling for an
EIP, Treasury and IRS could use this information to develop alternative strategies for reaching
potential recipients. Although the Non-Filers Tool deadline has passed, eligible non-ﬁlers can
still ﬁle for an EIP by ﬁling a 2020 tax return before April 15, 2021. By delaying their analysis of
the EIP notice-mailing strategy, Treasury and IRS are missing an opportunity to use their data to
determine whether the strategy is eﬀectively reaching those who are outside the tax system and
likely vulnerable and in need of an EIP.

IRS worked with its community outreach partners to raise awareness about the Non-Filers Tool
deadline and ways in which non-ﬁlers can ﬁle for an EIP in 2021. For example, IRS set November
10 as National EIP Registration Day, an eﬀort to broadcast information about how to ﬁle for an
EIP in advance of the November 21 Non-Filers Tool deadline. According to IRS oﬃcials, IRS worked
with its partners inside and outside of the tax community to try to reach eligible non-ﬁlers, with a
focus on low-income and other underserved communities. To support the ongoing eﬀort as well
as “National EIP Registration Day,” IRS worked with its partners to translate and make available EIP
information and resources in 35 languages.

Representatives from IRS outreach partners we spoke with said IRS took certain actions that were
helpful to the communities they support. For example, two partners commended IRS’s decision to
reopen the registration period for qualifying children, stating that the decision positively impacted

Page 230 GAO-21-191
many federal beneﬁciaries, such as veterans and Social Security recipients.378 However, partners
suggested that IRS could improve its outreach to hard-to-reach non-ﬁlers by coordinating with
state beneﬁt agencies and by increasing its frequency of communication with organizations that
work directly with these populations, namely low-income or homeless communities.

According to IRS oﬃcials, they have been working with other federal agencies, through the Council
on Economic Mobility, which includes the Departments of Agriculture and Health and Human
Services, among others, and asking those contacts to push out their EIP materials to their state
and local contacts. IRS oﬃcials also said they have been conducting train-the-trainer sessions with
social services organizations. These sessions are intended to show the organizations how the Non-
Filers Tool works, so the organizations can assist their clients.

In July 2020, we tested 289 EIP transactions processed by IRS between April 10 and May 29,
2020.379 We found that IRS’s controls over the processing of EIP transactions were operating
eﬀectively; however, we identiﬁed instances in which IRS erroneously disbursed EIPs of up to $500
for children who did not have valid identiﬁcation numbers.380 Further, we found one instance
in which IRS did not disburse an EIP to a deceased individual’s spouse, who was eligible for
the payment.381 To address erroneous payments of EIPs, IRS posted instructions for returning
payments on its Economic Impact Payment Information Center website.382

IRS continues to correct underpayments and other errors (e.g., disbursements to spouses of
deceased individuals) for EIPs it has already sent. For example, the table below shows the groups
that had received an incorrect payment, the estimated size of that group, and the date IRS sent the
corrected payment amount.

378In September, we reported that IRS reopened the registration period for federal beneﬁts recipients who had not
previously received $500 per qualifying child. Opening the registration period and extending it by six weeks allowed
more eligible recipients to seek the ﬁnancial relief to which they were entitled and owed by law.
379This testing was performed in connection with our audit of IRS’s FY20 ﬁnancial statements and consisted of a
monetary unit sample of 112 EIPs as well as 177 EIPs that were greater than or equal to $8,000.
380Pub. L. No. 116-136, div. A, § 2201, 134 Stat. 281, 335–340 (Mar. 27, 2020) (codiﬁed at 26 U.S.C. § 6428(g)). This CARES
Act provision prohibits a payment to a taxpayer of up to $500 for a child without a valid identiﬁcation number.
381IRS is aware of the issue and, as noted in the table Groups That Can Expect Corrected Economic Impact Payment (EIP) in
2020, has planned to disburse corrected EIPs to eligible spouses of deceased individuals.
382The Economic Impact Payment Information Center website is https://www.irs.gov/coronavirus/economic-impact-
payment-information-center, updated October 6, 2020.

Page 231 GAO-21-191
Groups That Can Expect a Corrected Economic Impact Payment (EIP) in 2020
Group characteristic Approximate group size Date IRS sent corrected EIP

Spouses of deceased individuals
a 649,000 9/24/2020 and 11/12/2020

Individuals who are incarcerated
b 28,100 9/24/2020, 10/29/2020, and 11/19/2020

SSA/SSI/RRB/VA recipients with Representative 5,793 11/12/2020
Payees having foreign addresses

Non-debtor spouses that had a full or partial oﬀset 145,000 11/12/2020
to debtor spouse’s child support oﬀset

Eligible EIP recipients treated as ineligible due to 10,500 10/29/2020
commercial tax software error

Qualiﬁed Child recovery for SSA/SSI/RRB/VA 28,000 10/29/2020
individual paid prior to receipt of return providing
dependent information

Military members with ITIN spouse (programming 10,000 11/12/2020
did not calculate EIP if the ITIN was expired)

Source: Internal Revenue Service data. | GAO-21-191

Note: SSA=Social Security Administration; SSI=Supplemental Security Income; RRB= Railroad Retirement Board; VA=Department
of Veterans Aﬀairs; ITIN=Individual Taxpayer Identiﬁcation Number
a
IRS sent corrected payments to spouses of deceased or incarcerated individuals in two batches. The ﬁrst batch was sent on
September 24 to spouses whose payments were stopped at the Bureau of the Fiscal Service. The second batch was sent on
November 12 to spouses whose payments were returned as rejected deposits.
b
Due to a federal district court order, IRS sent payments to incarcerated individuals who are eligible for an EIP starting on
September 24, 2020.

In May, IRS piloted a dedicated email box for congressional staﬀ to inquire about constituents’
EIP challenges and concerns. From early May to late August, IRS received approximately 700 to
1,000 emails per day from congressional oﬃces. Since late August, the average number of emails
received per day has decreased to 500 to 600 per day. According to IRS oﬃcials, Legislative Aﬀairs
staﬀ review all emails and forward the EIP-related ones to a dedicated Wage and Investment (W&I)
EIP team.

W&I staﬀ may contact taxpayers directly; there is also a process to let congressional staﬀ know
when a case is resolved. According to IRS oﬃcials, upon request, they provide status updates on
the number of emails received. However, they also said they cannot provide additional status
information, such as actions taken to research or resolve the inquiry, because the volume of
emails received has been overwhelming. The congressional inbox is one of several options that
individuals can use to get information on the status of their EIP; other options include contacting
the Taxpayer Advocate, the Get My Payment website, or the helpline number IRS established.383

383The Get My Payment website is https://www.irs.gov/coronavirus/get-my-payment. The number for the IRS EIP
helpline is 800-919-9835. The website for the Taxpayer Advocate is TAS Coronavirus (COVID-19) Tax Relief site.

Page 232 GAO-21-191
We will continue to review these options and how well they performed as part of our longer-term
work.

Treasury and IRS also continue to take steps to recover payments sent to decedents, including
posting instructions on the IRS website requesting that individuals voluntarily mail these payments
back to IRS. Of the $1.2 billion in EIP sent to decedents, as of September 30, 2020, around 57
percent (just over $700 million) had been recovered. There are also likely more returned payments
in unopened mail that IRS has yet to process.384 Treasury and IRS continue to review and monitor
data on the number of payments that were sent to decedents and have since been recovered to
determine whether further action may be warranted.

IRS had been taking similar steps to recover payments through a voluntary process from
individuals who are incarcerated. We reported in June 2020 that, according to IRS oﬃcials,
IRS worked with federal and state prison oﬃcials to assist in the return of payments made to
individuals who are incarcerated. On August 1, 2020, two individuals ﬁled a class action suit in
federal district court on behalf of individuals who have been incarcerated in the United States any
time from March 27, 2020, to the present to stop the withholding of their EIPs. On September 24,
2020, the court provisionally certiﬁed the class action and issued a preliminary injunction ordering
IRS to stop withholding EIPs from individuals on the basis of their incarcerated status.385

On October 7, 2020, the court ordered IRS to take certain steps to provide notice to class
members, including updating the IRS website, communicating with prison oﬃcials, and mailing
individualized notices to class members for whom IRS has a mailing address.386 On October 19,
IRS updated its website with instructions explaining how individuals who are incarcerated can ﬁle
for an EIP using the Non-Filers Tool or a simpliﬁed paper return. According to IRS, approximately
2.3 million individuals currently incarcerated have a Social Security number valid for employment;
IRS determined that approximately 977,000 of those individuals could be eligible for an EIP.

Agency Comments
We provided a draft of this enclosure to Treasury, IRS, and the Oﬃce of Management and Budget.

In its comments, reproduced in appendix X, Treasury reaﬃrmed its commitment to encouraging
as many non-ﬁlers as possible to claim their EIP before the Non-Filers Tool closed and described
actions it took to support that goal. Treasury also agreed with our recommendation. In its letter,
Treasury noted that it intends to begin tracking and publicly reporting the number of individuals

384According to Treasury oﬃcials, IRS has a backlog of 5.8 million pieces of unopened mail in its processing sites and will
not be able to provide further data on any additional returned payments until after the end of the year.
385 Order Granting Motion for Preliminary Injunction and Motion for Class Certiﬁcation, Scholl v. Mnuchin, No. 20-05309
(N.D. Cal. Sept. 24, 2020).
386 Order Re: Notice to Class Members, Scholl v. Mnuchin, No. 20-05309 (N.D. Cal. Oct. 7, 2020). The court also
recognized that IRS extended the deadline for ﬁling simpliﬁed paper returns to October 30, 2020. The government has
ﬁled a Notice of Appeal for both the September 24 and October 7 orders.

Page 233 GAO-21-191
who received a notice and subsequently ﬁled for an EIP in January 2021, sooner than it previously
planned. Treasury also noted it will use this information to inform outreach and communication
eﬀorts.

In its comments, reproduced in appendix VI, IRS described the range of steps it has taken to
ensure all EIP eligible recipients could access the program. These steps include its ongoing
outreach, education, and communications campaign, partnerships with hundreds of organizations
outside the traditional tax community, sending nearly 9 million notices to potentially eligible
recipients, and declaring November 10 as National EIP Registration Day. IRS also said that it plans
to provide additional reminder messages and outreach through the 2021 ﬁling season for those
individuals who have not received a payment and can claim it on next year’s tax return.

Treasury and IRS also provided technical comments, which we incorporated as appropriate. The
Oﬃce of Management and Budget, which reviewed the enclosure, had no comments.

GAO’s Methodology
To review how Treasury and IRS administered payments, we reviewed Treasury and IRS data as
of September 30, 2020, examined federal laws and agency guidance, and interviewed Treasury
and IRS oﬃcials. We assessed the reliability of the data by reviewing relevant Treasury and IRS
documents, reviewing GAO’s prior use of the data sources, and interviewing agency oﬃcials. We
determined the data were suﬃciently reliable to describe the number and amount of payments
disbursed.

We asked representatives from ﬁve selected IRS outreach partners to provide us with their
perspectives on IRS outreach eﬀorts leading up to the November 21 Non-Filers Tool deadline.
The outreach partners were the AARP, Feeding America, the United Way, the Code of Support
Foundation, and the National Low Income Housing Coalition. These organizations were selected
for their work on a national scale and their work with constituencies such as low-income families,
veterans, and seniors. This sample is not representative, but the interviews provided us with
illustrative examples of how organizations worked with IRS to reach traditionally underserved
communities and what aspects of the IRS communications plan worked well, and also highlighted
potential areas for improvement.

To test IRS’s controls over the processing of EIPs and to determine whether IRS complied with
the EIP provisions of the CARES Act, we statistically selected a monetary unit sample of 112 EIPs,
totaling $230,264, from the population of approximately $269 billion processed between April 10
and May 29, 2020. In addition, during the review of the EIP population, we identiﬁed 177 EIPs that
were greater than or equal to $8,000, totaling approximately $1.6 million, which we selected for
testing. Our test consisted of reviewing IRS tax module records and relevant IRS records including
ﬁles of individuals who are incarcerated, individual tax returns, and payment conﬁrmations from
the Bureau of the Fiscal Service to determine whether IRS issued any duplicate EIPs or EIPs to
ineligible individuals and applied no oﬀsets against EIPs other than for past-due child support,

Page 234 GAO-21-191
and to validate that IRS’s records, which were used to determine eligibility and calculate EIPs, were
accurate.

Contact information: James R. McTigue Jr., (202) 512-9110, mctiguej@gao.gov

Page 235 GAO-21-191
SSA Disability Service Delivery
The Social Security Administration experienced service disruptions related to processing disability
claims and appeals due to oﬃce closures as a result of the COVID-19 pandemic. The agency has
taken steps to increase the use of telework, conduct business by phone, and expand its online
services.

Entity involved: Social Security Administration

Key Considerations and Future GAO Work
We will continue to monitor the Social Security Administration’s (SSA) provision of disability
services as part of our ongoing work examining SSA’s service delivery during the COVID-19
pandemic.

Background
SSA manages two of the nation’s largest disability programs, Disability Insurance (DI) and
Supplemental Security Income (SSI). In ﬁscal year 2019, these programs received more than 2.34
million claims and paid about $185 billion in beneﬁts. As of December 2019, approximately 12.3
million adults with disabilities and their eligible dependents received either DI or SSI beneﬁts.387

Determining eligibility based on disability for these programs may involve several levels of
decision-making:

• Field oﬃce. Staﬀ in SSA ﬁeld oﬃces review applications from individuals who want to claim
disability beneﬁts (claimants) and determine whether the claimants meet nonmedical eligibility
requirements. If they do, their applications are forwarded to state Disability Determination
Services (DDS) oﬃces.

• Disability Determination Services Oﬃce. DDS staﬀ review initial-level claims forwarded by ﬁeld
oﬃces based on medical and vocational requirements. Speciﬁcally, DDS examiners assemble
medical and vocational information for each claim. If recent medical records to support
a claim are unavailable, an examiner may refer the claimant for consultative exams with
physicians or psychologists. The DDS examiner uses this information to determine whether
the claimant is eligible for beneﬁts. Claimants who are dissatisﬁed with the initial-level DDS
eligibility determination may request a “reconsideration” of their claim. The reconsideration is
conducted by a DDS examiner who was not involved in the original determination.

387The 12.3 million adults with disabilities described here do not include individuals who receive SSI beneﬁts because
they are 65 or over and meet the program’s income and asset requirements.

Page 236 GAO-21-191
• Administrative Law Judge Hearing. Claimants who are dissatisﬁed with the DDS’s initial
and reconsideration determination may appeal by requesting a hearing before an SSA
administrative law judge (ALJ). The ALJ may review new evidence and ask other witnesses, such
as medical and vocational experts, to testify at the hearing. Claimants whose claim for beneﬁts
is denied at the hearings level may appeal the decision to SSA’s Appeals Council—comprised
of administrative appeals judges and appeals oﬃcers—and subsequently in federal court.

SSA received $300 million under the CARES Act to prevent, prepare for, and respond to the
COVID-19 pandemic.388 According to SSA oﬃcials, SSA used most of this money to pay the salaries
and beneﬁts of staﬀ who normally conduct program integrity work that was suspended for the
ﬁrst several months of the pandemic.389 Oﬃcials also reported using the CARES Act funding
to cover leave for staﬀ unable to telework and other COVID-19 related expenses, including
information technology to expand telework.

We have previously reported on SSA’s long-standing challenges with managing disability-related
workloads and deciding who is eligible for disability beneﬁts in a timely way. In part because
of these persistent challenges, “Improving and Modernizing Federal Disability Programs” has
remained on our High-Risk List since 2003.390 Our prior work on this high-risk area has highlighted
the potential for these challenges to grow as 80 million members of the baby boom generation
reach their most disability-prone years. The COVID-19 pandemic adds a new and unprecedented
challenge for SSA’s delivery of services to individuals with disabilities.

Overview of Key Issues
In response to the pandemic and to prevent the spread of COVID-19, SSA took several steps to
protect the safety of its staﬀ and the public. Beginning March 17, 2020, SSA closed all oﬃces to the
public, including its ﬁeld and hearings oﬃces, except for limited in-oﬃce appointments for critical
services. SSA encouraged individuals seeking assistance from ﬁeld oﬃce staﬀ to ﬁrst try to use
SSA’s online and telephone services. At the hearings level, SSA also halted all in-person hearings
and conducted hearings by phone if claimants consented to do so. In September 2020, SSA made
available to some claimants and representatives the option to attend online video hearings, and
intends to expand this option to all claimants over time. SSA also temporarily suspended referrals
for in-person consultative exams for claimants at the initial and hearings levels, from March

388Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 572.
389Speciﬁcally, SSA suspended continuing disability reviews (CDR), in which the agency examines whether current
beneﬁciaries continue to meet the eligibility criteria for disability beneﬁts. SSA received dedicated funding authority for
ﬁscal year 2020 for program integrity eﬀorts, including CDRs, and according to SSA oﬃcials, the agency would have used
this funding to pay the salaries of staﬀ conducting CDRs. The oﬃcials stated, however, that the agency was not able to
fully use this funding in ﬁscal year 2020 because the agency conducted fewer CDRs than planned. The oﬃcials stated
that the staﬀ who normally perform CDRs performed other assigned workloads, and SSA paid a portion of those staﬀ’s
salaries with the CARES Act funding.
390GAO, High-Risk Series: Substantial Eﬀorts Needed to Achieve Greater Progress on High-Risk Areas, GAO-19-157SP
(Washington, D.C.: Mar. 6, 2019).

Page 237 GAO-21-191
through the issuance of a framework on May 29, 2020, for resuming in-person consultative exams
on a voluntary basis.

DDS administrators and ALJs we surveyed reported various challenges to maintaining service
delivery during the pandemic, and the number of DDS determinations and hearings decisions
through September 2020 declined compared to months before the pandemic.

Challenges processing initial claims remotely. DDS oﬃces varied in their response to the
pandemic and the extent to which they were able to provide continuous service delivery.
According to our July 2020 survey of all 52 DDS administrators, nine DDS oﬃces reported shutting
down for some period of time because of the pandemic.391 All DDS oﬃces reported reducing the
number of staﬀ on-site, with 27 reporting their staﬀ worked alternative shifts and 51 reporting
their staﬀ teleworked oﬀ-site. One DDS administrator reported expanding the hours during which
staﬀ could telework or work on-site.

DDS administrators cited two challenges with transitioning to a telework environment that
aﬀected DDS operations:

• Lack of technology among staﬀ. Ten of 52 DDS administrators stated that technology challenges
had aﬀected their operations. For example, one reported that staﬀ in their DDS oﬃce did
not have access to technology needed to telework oﬀsite, such as laptops and other related
equipment.392

• Inability to schedule consultative exams. Eight DDS administrators reported that the inability
to schedule consultative medical exams for claimants had aﬀected their operations.393 To
address this challenge, SSA issued guidance that permitted the use of virtual consultative
exams, which use video telehealth technology for cases in which a physical exam was not
needed, such as for psychiatric consultative exams. By the third week in June 2020, SSA
reported that 33 DDSs had resumed scheduling in-person CEs, and by September 2020, all
DDSs were doing so.

In light of these challenges, from March 2020 through September 2020, initial-level claims
processing declined compared to the same period last year, and the number of pending cases
grew. Speciﬁcally, the average number of initial determinations processed per month during
this period was about 152,000—a 23 percent decline from the previous year’s average of about
198,000 per month (see ﬁgure). From March 2020 through September 2020, new disability claims

391There are 52 DDS oﬃces located in 50 states, the District of Columbia, and Puerto Rico.
392Our survey of DDS administrators included an open-ended question: “What additional context would your DDS
like to provide about how COVID-19 aﬀected operations in your DDS?” We included the number of administrators
that reported challenges with technology in response to this question.
393Our survey of DDS administrators included an open-ended question: “What additional context would your DDS
like to provide about how COVID-19 aﬀected operations in your DDS?” We included the number of administrators
that reported challenges with their staﬀ’s inability to schedule consultative exams in response to this question.

Page 238 GAO-21-191
have decreased somewhat—about 14 percent—compared to the same period last year.394
Because the decrease in determinations was greater than the decrease in new claims, the number
of pending claims has generally increased during the pandemic, although the number of pending
claims decreased in September 2020. Speciﬁcally, the number of pending claims at the end of
September 2020 was 21 percent higher than in February 2020.

Social Security Administration Initial-level Disability Determination Workloads, March 2019 through September
2020

Challenges conducting hearings by phone. ALJs and SSA headquarters oﬃcials cited several
challenges to conducting hearings during the COVID-19 pandemic. In a survey of ALJs located in
six hearings oﬃces, we asked how the pandemic was aﬀecting ALJs’ ability to meet productivity
goals, which involve making a certain number of decisions each year.395 Of the 53 ALJs who
responded, 39 reported challenges with claimants or claimant representatives declining phone
hearings. At the beginning of the pandemic, SSA oﬃcials indicated that about 1 in 4 claimants
were declining phone hearings. In October 2020, about 1 in 10 claimants were declining phone
hearings, according to SSA oﬃcials.

394Disability claims may subsequently rise if claims follow the pattern of the 2007-2009 Great Recession, when new
disability claims did not reach peak levels until well after the technical end of the recession. Disability applications
peaked in October 2010 and plateaued at high levels through 2012.
395We surveyed 58 ALJs, and 53 responded. These ALJs were from six hearing oﬃces (in three regions), with whom
we also held virtual discussion groups. The oﬃces were selected for variation in geography, average size of case ﬁles,
median ALJ productivity, and minimum number of ALJs. The information gathered from the survey is not intended to be
representative, but provides examples of challenges ALJs are facing during the COVID-19 pandemic.

Page 239 GAO-21-191
Further, in our survey, 17 ALJs reported challenges reaching claimants for phone hearings. For
example, one judge stated that staﬀ faced challenges contacting the claimant prior to hearings,
while another cited challenges locating the claimant at the time of the hearing. Sixteen ALJs also
cited limitations with technology, and nine said that phone hearings took longer to conduct.
Eight ALJs also cited challenges obtaining medical evidence or consultative exams. In addition to
claimants declining phone hearings, SSA headquarters oﬃcials cited other reasons for hearings
postponements including scheduling conﬂicts, the late submission of evidence, and the lack of
availability of expert witnesses.

Finally, during the pandemic, hearings oﬃces were not scheduling hearings for cases that involve
paper records and do not have electronic records that can be accessed remotely. These cases
represent approximately 4 percent of SSA’s total pending cases (disability, non-disability, and
overpayment cases) at the hearings level, according to SSA oﬃcials. In response to our survey,
seven of 53 ALJs said that their inability to process paper cases was impeding their ability to
meet their productivity goals. According to SSA oﬃcials, the agency has recently begun using a
temporary solution to scan these paper-based workloads into an electronic format, allowing staﬀ
to develop these cases remotely.

In light of these challenges, the daily average hearings in a given week fell dramatically during
the ﬁrst months of the pandemic compared to past months (see ﬁgure). Speciﬁcally, between the
week of March 20, 2020, and October 16, 2020, the average number of hearings per day ranged
from 967 to 2,045. In contrast, during the ﬁrst 5 months of ﬁscal year 2020 prior to the pandemic,
SSA held 2,228 hearings per day on average, according to SSA oﬃcials.

Page 240 GAO-21-191
Daily Average Number of Social Security Administration Disability Hearings Held, March 20, 2020 through
October 16, 2020

Agency Comments
We provided SSA with a draft of this enclosure. SSA provided comments, which are reproduced in
appendix IX. In its comments, SSA noted its progress towards reducing wait times at the hearings
level. SSA also provided information on the number of DDSs that had resumed scheduling in-
person consultative exams and technical comments, which we incorporated as appropriate.

GAO’s Methodology
We interviewed SSA oﬃcials, analyzed SSA’s case-processing data, and surveyed DDS
administrators and SSA administrative law judges to understand how SSA responded to the
COVID-19 pandemic. Speciﬁcally, we surveyed the administrators of all 52 DDS oﬃces, and all 52
administrators responded. We also surveyed a nongeneralizable sample of 58 ALJs (out of 1,377
full time ALJs at the end of ﬁscal year 2020, according to SSA oﬃcials), of whom 53 responded.
To understand how productivity levels changed at DDS oﬃces in response to the pandemic, we
analyzed administrative data on the number of initial decisions processed per month from March

Page 241 GAO-21-191
2019 through September 2020. To understand how productivity levels changed at the hearings
level, we obtained and analyzed data on the number of hearings conducted per day during and
prior to the pandemic. We conducted data reliability checks on the initial and hearings-level case-
processing data and found them to be suﬃciently reliable for the purposes of this analysis.

Contact information: Elizabeth Curda, (202) 512-7215, curdae@gao.gov

Related GAO Products
High-Risk Series: Substantial Eﬀorts Needed to Achieve Greater Progress on High-Risk Areas.
GAO-19-157SP. Washington, D.C.: Mar. 6, 2019.

Social Security Disability: Better Timeliness Metrics Needed to Assess Transfers of Appeals Work.
GAO-18-501. Washington, D.C.: July 19, 2018.

Social Security Administration: Continuing Leadership Focus Needed to Modernize How SSA Does
Business. GAO-18-432T. Washington, D.C.: Mar. 7, 2018.

Social Security Disability: Additional Measures and Evaluation Needed to Enhance Accuracy and
Consistency of Hearings Decisions. GAO-18-37. Washington, D.C.: Dec. 7, 2017.

Social Security Administration: Improvements Needed in Facilities Planning and Service Delivery
Evaluation. GAO-17-597. Washington, D.C.: July 25, 2017.

Social Security Administration: Long-Term Strategy Needed to Address Key Management Challenges.
GAO-13-459. Washington, D.C.: Mar. 29, 2013.

Page 242 GAO-21-191
Employee Payroll Tax Deferrals
Payroll and accounting representatives told us very few employers are implementing employee
payroll tax deferrals; and the Internal Revenue Service still has a few remaining implementation
steps.

Entities involved: Department of the Treasury, including the Internal Revenue Service; the Oﬃce
of Management and Budget

Key Considerations and Future GAO Work
The Internal Revenue Service (IRS) quickly issued guidance and updated forms and instructions
to implement the deferral of the employee share of certain payroll taxes, but IRS still has some
decisions to make regarding how employers should report the deferrals and whether employers
need additional guidance to help with reporting. We will review employment tax data for the
third and fourth quarters of 2020 to assess the extent to which employers are implementing the
deferrals, and we will continue to monitor any compliance plans that IRS develops to examine
reported deferrals.

Background
On August 8, 2020, the President signed a Presidential Memorandum that, in part, directed the
Secretary of the Treasury to exercise his authority under section 7508A of the Internal Revenue
Code.396 It would defer the withholding, deposit, and payment of the employee share of certain
employment taxes imposed on wages or compensation paid from September 1, 2020, through
December 31, 2020, if an employee’s wages or compensation are below a certain amount in a
pay period. If an employee’s employment taxes are deferred, that employee’s take-home pay
is increased by the amount of the deferred taxes, but, absent a change in statute, the amount
deferred must be paid once the deferral period ends. The Presidential Memorandum directs the
Secretary of the Treasury to make this deferral available to an employer for employees whose
earnings during any biweekly pay period generally are less than $4,000 on a pre-tax basis, or the
equivalent amount with respect to other pay cycles.

On August 28, 2020, IRS and the Department of the Treasury (Treasury) issued Notice 2020-65
implementing the Presidential Memorandum. The notice states employers can defer the
withholding and payment of the employee share of Social Security payroll taxes or the railroad
retirement tax equivalent on applicable wages or compensation paid to employees for the period

396 U.S. Presidential Memorandum, Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing
COVID-19 Disaster (Aug. 8, 2020), accessed online August 20, 2020, https://www.whitehouse.gov/presidential-actions/
memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster/. The memorandum also directs the
Secretary to “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the
implementation of this memorandum.”

Page 243 GAO-21-191
covered in the Presidential Memorandum.397 According to the guidance, employers must withhold
and pay the deferred taxes during the period beginning on January 1 and ending April 30, 2021.398
During this period, employees will have payroll taxes withheld from their pay as they normally
would and will also be subject to withholding to recoup the previously deferred taxes. This will
result in a reduction in take-home pay as compared to what would have occurred without the
deferral. Employers are to report deferred taxes on their employment tax returns, typically on
Form 941, Employer’s Quarterly Federal Tax Return.

Overview of Key Issues
IRS revised the third-quarter Form 941 to allow participating employers to report any deferral
of the employee share of Social Security taxes. IRS also distributed information on the deferral
through instructions to the Form 941 and, according to IRS oﬃcials, provided information
on monthly calls with the payroll industry. As of October 2020, IRS oﬃcials said they are still
determining what information to provide with respect to reporting on Form W-2, Wage and Tax
Statement and Form W-2c, Corrected Wage and Tax Statement.

IRS established a telephone hotline to answer questions related to Notice 2020-65, and, in an
outgoing recorded message for the hotline, answered common questions. Among other things,
the recorded message said that, if the employer is unable to withhold the deferred taxes from
the employee’s wages or compensation because an employee terminates employment before
April 30, 2021, or for another reason, the employer may make other arrangements to collect the
deferred taxes from the employee. The employer is liable to pay the deferred taxes to the IRS,
according to the recording. IRS oﬃcials said they do not have plans to issue additional guidance,
but may consider it.

Initial data on the deferrals—such as the number of participating employers and the amount
of deferred payroll taxes—will not begin to be available until the third-quarter employment tax
returns are processed, beginning in November 2020. Those returns will include deferrals from
September 1 to September 30, and the remainder of the deferrals will be reported after December
31, 2020, for the fourth-quarter returns.

IRS implemented controls to ﬂag employers that report more taxes deferred—for both the
employee and employer share—than their amounts allowed. Other checks on compliance, yet to
be determined, will occur during examinations, according to IRS oﬃcials.

397IRS Notice 2020-65, 2020-38 I.R.B. 567 (Sept. 14, 2020), available online at: https://www.irs.gov/irb/2020-38_IRB
(accessed Oct. 21, 2020). We were asked to issue a legal decision regarding whether Notice 2020-65 is a rule under the
Congressional Review Act. We determined that since IRS submitted Notice 2020-65 to us under the Congressional Review
Act, there is no need for a legal decision from our oﬃce. See GAO, Request for a Congressional Review Act Opinion on IRS
Notice 2020-65, B-332517 (Washington D.C.: September 2020). As noted in our correspondence, on September 4, 2020,
Representative John Larson of Connecticut introduced House Joint Resolution 94 which is a resolution of disapproval of
the Notice. H. R. J. Res. 94, 116th Cong. (2020).
398The guidance directs employers to ratably withhold and pay the deferred taxes, meaning, in general, equally
apportioned across the period.

Page 244 GAO-21-191
Representatives from an accountant industry group and two payroll industry groups told us
very few of their clients had implemented the deferrals. Very few employees whose employers
oﬀered an option to participate did so, according to the payroll representatives. The payroll and
accounting representatives also highlighted several concerns with the deferral. For example, some
representatives indicated that they believe the deferrals are a disservice to employees and will put
employees in a poor position next year when withholding of the deferred payroll taxes resumes.
According to one payroll professional, “It’s deceiving to employees when they think they’re getting
a tax break. A lot of them don’t understand they would have to pay it back in the spring so they
would be paying double at that time.”

Moreover, employers, according to some payroll professionals, fear liability for the taxes if an
employee departs. Another payroll professional told us, “If we had to lay people oﬀ because of
the economy and business not returning quickly enough, the company would have been on the
hook for paying these taxes. While I know we could try to get the former employees to pay, the
likelihood of this happening is not realistic.”

Several industry representatives said if an employee departs before withholding resumes in 2021,
the employer’s legal options for collecting deferred taxes are unclear, potentially leaving the
employer with the obligation to pay the taxes. For employers that may go out of business before
they resume withholding, IRS oﬃcials said the agency would use its normal procedures, such as
those associated with bankruptcy proceedings, to recoup the taxes.

The issue of employer liability has implications for the federal government. The Oﬃce of
Management and Budget directed executive branch agencies to defer the applicable payroll taxes
for all employees who earn less than the $4,000 biweekly threshold and to inform and educate
employees on the deferral’s anticipated impact on their paychecks in the coming months.399 For
example, oﬃcials at the General Services Administration (GSA) said GSA processes payroll for
about 16,400 federal employees at GSA and other agencies. This represents about 0.8 percent of
the executive branch.400 Of the approximately 16,400 employees, 47 percent had their employee
share of certain payroll taxes deferred for the pay period ending September 12, 2020, according to
GSA oﬃcials.

Agency Comments
We provided IRS, Treasury, GSA, and the Oﬃce of Management and Budget with a draft of this
enclosure. IRS, Treasury, and GSA provided technical comments, which we incorporated as
appropriate. The Oﬃce of Management and Budget did not have any comments on this enclosure.

399Oﬃce of Management and Budget, Guidance on Implementing Payroll Tax Deferral for Federal Employees (Sept. 11,
2020), accessed online Oct. 19, 2020, https://www.whitehouse.gov/wp-content/uploads/2020/09/M-20-35.pdf. The
memorandum does not cover legislative and judicial branch entities.
400This percentage is based on data on most executive branch employees, except for U.S. Postal Service employees, as
of September 30, 2019, obtained from the Oﬃce of Personnel Management’s Enterprise Human Resources Integration
database.

Page 245 GAO-21-191
GAO’s Methodology
We interviewed agency oﬃcials, representatives from a payroll industry group, and
representatives from an accounting industry group, and gathered written responses from
another payroll industry group. We selected these groups because they represent large numbers
of professionals assisting employers with payroll tax ﬁling. We also reviewed IRS and GSA
documentation.

Contact information: Jessica Lucas-Judy, (202) 512-9110, lucasjudyj@gao.gov

Page 246 GAO-21-191
Tax Relief for Businesses
The Internal Revenue Service cannot yet know the extent to which businesses are taking
advantage of certain tax relief options—such as carrying additional losses back to prior tax
years—but refunds may be delayed for businesses that submit amended returns on paper.

Entities involved: Department of the Treasury, including the Internal Revenue Service

Recommendation for Executive Action
We are making the following recommendation to the Internal Revenue Service:

The Commissioner of Internal Revenue should update the Form 1040-X instructions to include
information on the electronic ﬁling capability for tax year 2019.

Key Considerations and Future GAO Work
As the Internal Revenue Service (IRS) continues to receive net operating loss (NOL) carryback
tentative refund requests from taxpayers, it has begun oﬀering alternative options that would
allow taxpayers to ﬁle amended federal income tax returns by some means other than paper,
such as electronic fax (e-fax). For some refunds, the IRS must process a taxpayer’s amended return
before issuing a carryback claim or carryback tentative refund.

The IRS now allows taxpayers to electronically ﬁle (e-ﬁle) Form 1040-X, Amended U.S. Individual
Income Tax Return, for tax year 2019. To help taxpayers bypass mail backlogs and to expedite
refunds, it is important that IRS include e-ﬁle information in the procedures and instructions that
taxpayers may use to ﬁle their form. The Form 1040-X instructions do not include this e-ﬁle option.
We will continue to monitor how IRS communicates this change, and the status and content of
IRS’s plans in these areas. We will also continue to monitor IRS’ eﬀorts to ensure compliance with
the CARES Act.

Background
To provide liquidity to businesses during the COVID-19 pandemic, the CARES Act includes tax
measures to help businesses—including sole proprietors, estates, and trusts—receive cash
refunds or other reductions to tax obligations.401 The Joint Committee on Taxation estimates

401Pub. L. No. 116-136, §§ 2301–2306, 134 Stat. 281, 347–359 (2020). In addition to the provisions below, the CARES Act
also included increased limits on business interest and changed the rule on excess business losses.

Page 247 GAO-21-191
these measures will lead to about $174 billion in foregone revenue in ﬁscal years 2020-2030. The
IRS’s capacity to implement new initiatives, such as the CARES Act tax measures, is an ongoing
challenge we cited in our 2019 High Risk Report.

The CARES Act modiﬁed, among other provisions of the tax law, provisions enacted as part of the
2017 legislation known as the Tax Cuts and Jobs Act (TCJA):402

• NOL carrybacks. The CARES Act allows carrybacks for up to 5 years for NOLs beginning in
tax years 2018, 2019, and 2020, which may provide a cash refund for certain taxpayers.403
Tax years prior to 2018 had a higher tax rate, which increases the incentive to carryback
post-2018 NOLs from lower tax rate years, in order to generate a carryback refund. The use of
a carryback is optional and may aﬀect other tax obligations.404 For NOLs arising in tax years
beginning after 2017, TCJA limited the deduction of NOL carrybacks and carryforwards to 80
percent of taxable income.405 Under the CARES Act, those NOLs can reduce 100 percent of
taxable income for tax years beginning before 2021.406

Taxpayers who have amounts included in their income because of the transitional repatriation
tax established in the TCJA (referred to as “section 965” tax), can elect to exclude those
inclusion years from the carryback period to produce an NOL refund in other years.407 NOL
refunds are typically claimed on Form 1120-X, an Amended U.S. Corporation Income Tax Return;
paper Form 1139, Corporate Application for Tentative Refund, or paper Form 1045, Application
for Tentative Refund (for individuals, including sole proprietors, estates and trusts). However,
in April 2020 IRS issued temporary procedures to allow for e-fax of Forms 1139 and 1045 for
a quick tentative refund during the period that IRS campuses were closed and mail was not
being processed due to COVID-19.408 The IRS updated these procedures in October 2020 to
state that the last day to e-fax an eligible refund claim under these procedures is December
31, 2020.

• Acceleration of alternative minimum tax (AMT). TCJA repealed the corporate AMT, but most
corporations could claim their remaining unused minimum tax credits as a refundable credit

402Pub. L. No. 115-97, 131 Stat. 2054 (2017).
403Pub. L. No. 116-136, § 2303, 134 Stat. at 352–356. An NOL occurs when a taxpayer's allowable deductions exceed
its gross income for a tax year. During an NOL year, a taxpayer generally does not owe any income taxes. TCJA
generally repealed NOL carrybacks and required NOLs to be carried over indeﬁnitely. Pub. L. No. 115-97, § 13302(b),
131 Stat. at 2122. The NOL oﬀsets the taxpayer's taxable income in other tax years. 26 U.S.C. § 172(a). For ease of
reporting, we use the term taxpayer to refer to an entity that may use the CARES Act tax relief provisions described
in this enclosure.
404 NOLs must be carried back unless taxpayers make a valid election to waive the carryback. 26 U.S.C. § 172(b)(3).
405Pub. L. No. 115-97, § 13302(a)(1), 131 Stat. at 2121.
406Pub. L. No. 116-136, § 2303(b)(1), 134 Stat. at 353–354. Losses carried forward can reduce future taxable income
and tax, but cannot reduce taxable income below zero.
40726 U.S.C. § 965. Corporations that elect to exclude the transition tax years from the carryback period may receive
a higher refund. 26 U.S.C. § 172(b)(1)(D)(iv), (v).
408Corporations ﬁle Form 1139, Corporation Application for Tentative Refund. Individuals, estates, and trusts ﬁle
Form 1045, Application for Tentative Refund. See: IRS, Temporary procedures to fax certain Forms 1139 and 1045
due to COVID-19, accessed June 3, 2020, https://www.irs.gov/newsroom/temporary-procedures-to-fax-certain-
forms-1139-and-1045-due-to-covid-19.

Page 248 GAO-21-191
for tax years 2018 through 2021.409 Under the CARES Act, corporations with AMT credits may
claim a refund for tax years beginning in 2018 and 2019 and may either ﬁle Form 1139 or
Form 1120-X to receive a refund for some or all of these credits.410

Overview of Key Issues
Complete data on the number of taxpayers taking advantage of these provisions, and the
associated dollar amounts, will not be available until after tax year 2020 income tax returns are
processed in 2021. The table shows information on tentative refund requests, as of October 19,
2020.

409Pub. L. No. 115-97, § 12001(a), 131 Stat. at 2092. Prior to TCJA, corporations were required to calculate their tax
liability under two sets of rules—they compute their regular tax liability and their tentative AMT liability and pay
whichever is greater. If the tentative AMT is more than the regular tax, the diﬀerence between them is AMT. The
purpose of the AMT is to prevent companies from eliminating their tax liability from overuse of certain corporate
tax preferences. In general, AMT applies a lower tax rate to a broader tax base by limiting the use of tax preferences
and disallowing credits and deductions.
410Pub. L. No. 116-136, § 2305, 134 Stat. at 357. Under the CARES Act, corporations with AMT credits in excess
of the credit allowed to oﬀset regular tax liability (excess credit), may claim 50 percent of the excess credit as a
refundable credit for the ﬁrst tax year beginning in 2018 and then claim any remaining excess credit as a refundable
credit in 2019. Alternatively, a taxpayer may elect to claim the entire excess credit as a refundable credit in the tax
year beginning in 2018. If a corporation elects to claim all of the excess credit as a refundable credit in 2018, the
Form 1139 may be used to receive a tentative refund for this credit. If this election is not made, a Form 1120-X must
be ﬁled to obtain a refund for this refundable credit.

Page 249 GAO-21-191
CARES Act Net Operating Loss (NOL) and Alternative Minimum Tax (AMT) Tentative Refund Cases, as of October
19, 2020
Number of cases in
a b
Form and provision All cases Number of taxpayers ﬁling suspense

Form 1139, AMT only 943 916 5

Form 1139, NOL or AMT 10,397 9,120 64

Form 1045, NOL 9,696 8,412 77

Source: Internal Revenue Service data. | GAO-21-191

a
A single case may include multiple e-fax submissions. Submissions for the same identiﬁcation number, form, and tax period
generally are one case. Submissions for the same number and form, but for diﬀerent tax periods, are separate cases.
b
A case is in suspense because additional information is needed.

Since May 31st, 14,070 more taxpayers have ﬁled for NOL or AMT carryback refunds. The
percentage of forms in suspense—not being processed due to missing information—has
decreased by 66 percent since May 31st and 86 percent since July 31st.411

Data on refund dollar amounts is being captured, according to IRS oﬃcials, but they are still
extracting pertinent data from the tentative refund applications so that it may be accessed and
reported. The IRS does not yet have a date for when the data will be available. However, when a
carryback application is received via e-fax, IRS groups it by the total dollar amount of the claim.412
The table below shows the number of tentative carryback applications received requesting an
NOL or a combination of an NOL and a 100 percent AMT refund per group.413 Over 65 percent
of the received Form 1045 and Form 1139 were for refunds below $100,000. Although the exact
dollar amounts are not known, the lower bound estimate of total NOL or NOL and AMT refund
applications received via Form 1139 is $1.57 billion and via Form 1045 is $632 million.

411The IRS reported 1,018 Forms 1139 and 1045 in suspense as of July 31st. The decrease from July to October shows
that they have been working through this problem.
412If the taxpayer submits multiple claims on Form 1120-X/Amended 1040 or includes a Form 1139/Form 1045 for the
same loss year, the IRS combines the amounts from all the forms to determine the correct grouping. If the forms are for
diﬀerent loss years, the amount of each separate claim determines the grouping.
413Form 1139 and Form 1045 received via e-fax are only related to CARES Act NOL and AMT tentative refund claims.

Page 250 GAO-21-191
CARES Act Application for Tentative Refund Cases Received via E-fax, by Refund Amount, as of October 19, 2020
> $1Million $100,000 to $999,999 $5,000 to $99,999 $0 to $4,999
Form refund refund refund refund Total cases

Form 1139 1,300 2,451 4,163 1,497 9,411

Form 1045 362 2,441 5,273 1,584 9,660

Source: GAO analysis of Internal Revenue Service data. | GAO-21-191

Note: This does not include 943 Forms 1139 ﬁled requesting only the AMT credit. There were no dollar amounts collected for
those forms, which is why this data is not included in the above table.

Alternative ways for IRS to receive amended returns that aﬀect Form 1045.

Some taxpayers need to ﬁle an amended income tax return before using e-fax to ﬁle Forms 1139
and 1045. Starting August 17, 2020, IRS has allowed taxpayers, including sole proprietors, to e-
ﬁle their Form 1040-X, for tax year 2019.414 IRS oﬃcials said they will oﬀer e-ﬁling for future tax
years as well. E-ﬁling allows taxpayers to avoid delays with mail and paper processing that have
increased during the pandemic.

However, due to system limitations, IRS will only allow taxpayers to e-ﬁle Form 1040-X if the
taxpayer has e-ﬁled Form 1040.415 If the taxpayer has ﬁled a paper Form 1040, that taxpayer will
not be able to e-ﬁle Form 1040-X. This aﬀects mainly sole proprietors who are trying to claim
tentative refunds on their business. The amended return for corporate ﬁlers was already available
for e-ﬁling, but faces the same system limitation that requires the initial return be e-ﬁled.416

COVID-19 caused IRS facilities to shut down and the subsequent large-scale staﬃng changes
prevented the timely processing of paper returns. This backlog of paper returns is preventing IRS
from processing paper-ﬁled Forms 1040-X for tax year 2018 and paper-ﬁled returns from 2019 in a
timely manner, according to IRS oﬃcials. IRS processing centers re-opened in June and IRS oﬃcials
said they have been processing mail in the order of receipt while operating at partial capacity to
accommodate social distancing.

IRS oﬃcials said they anticipate opening all of the mail, but not processing all of the returns, by
early November. Without the timely processing of paper-ﬁled Forms 1040-X, some taxpayers’
Forms 1045 will be held “in suspense” and their CARES-Act-related NOL refunds cannot be issued.
As of October 19, 2020, 77 Forms 1045 are in suspense, which according to IRS oﬃcials, could be
because they are awaiting a processed amended return, or for other reasons. This number has
greatly declined since IRS reported 805 Forms 1045 in suspense as of July 31, 2020.

IRS oﬃcials were unsure if the 16-week estimated processing time for Form 1040-X, as stated on
irs.gov, and provided prior to the pandemic and e-ﬁling, is still valid. According to IRS oﬃcials,

414Internal Revenue Service, Major IRS milestone helps taxpayers correct tax returns with fewer errors, speeds processing
(Aug. 17, 2020), accessed online October 21, 2020, https://www.irs.gov/newsroom/now-available-irs-form-1040-x-
electronic-ﬁling.
415Amended returns that do not match an e-ﬁled Form 1040 will get rejected.
416Corporations ﬁle Form 1120-X, Amended U.S. Corporation Income Tax Return.

Page 251 GAO-21-191
employees were prioritizing the e-fax Form 1139 and 1045 ﬁlings, but as of August 2020, they
are processing carryback claims and tentative refund applications—including those ﬁled prior
to the CARES Act—on a ﬁrst-in ﬁrst-out basis. They are meeting the statutory 90-day time frame
for processing NOL and AMT refunds ﬁled on Form 1139 and Form 1045, according to IRS
oﬃcials.417 As of October 19, 2020, it has taken an average of 40 days to process a refund,
including suspended returns.

For refund requests that are incomplete or potentially cannot be processed, IRS internal guidance
instructs staﬀ to contact the taxpayer or the taxpayer’s representative via telephone to determine
if an issue can be resolved by having the taxpayer or representative fax any missing information.
However, it was unclear if IRS staﬀ were consistently using the guidance in this way. In September
2020, we discussed with IRS potential strategies to mitigate the backlog of paper Form 1040-X and
identiﬁed an opportunity for IRS staﬀ to ask the taxpayer to send a missing Form 1040-X directly
via fax so that IRS can process the taxpayer’s Form 1045. This step could be especially helpful
for taxpayers who already paper-ﬁled their Form 1040-X, but whose form has not been reviewed
because of the backlog.

As a result of these discussions, IRS issued an alert on October 1, 2020, that reminds staﬀ to
contact the taxpayer to request a copy of their amended return if it has not yet been received.418
This alert can help taxpayers that previously paper-ﬁled their Form 1040-X to bypass the paper
backlog and ultimately help taxpayers receive their NOL refunds faster. Representatives from
diﬀerent companies told us that this backlog has been an issue for their clients who are trying to
receive CARES Act NOL refunds.

Additional ways for IRS to promote e-ﬁling of the 2019 Form 1040-X. As discussed above,
in August 2020 IRS began allowing taxpayers, who e-ﬁled Form 1040 to e-ﬁle Form 1040-X. IRS
oﬃcials told us that they have issued many press releases and posted announcements to irs.gov
about the e-ﬁle capability. However, as of October 15, 2020, the temporary procedures for ﬁling
Form 1045, and the ﬁling instructions for Form 1040-X, did not state that the 1040-X can be e-
ﬁled.419 The procedures state that the Form 1040-X must be ﬁled in accordance with existing form
instructions. Since the form instructions were also not updated to include the e-ﬁle information,
this makes the procedures inaccurate as written.

In a draft of this report, we recommended IRS update the agency’s Temporary procedures to fax
certain Forms 1139 and 1045 due to COVID-19 to include information on the Form 1040-X electronic
ﬁling capability for tax year 2019. Prior to ﬁnal issuance of this report, IRS oﬃcials implemented
this recommendation by adding a note to these temporary procedures on October 29th indicating
that IRS recently announced that taxpayers can now submit Form 1040-X electronically. However,
the form instructions were not updated to include the e-ﬁle information, so taxpayers who go
directly to the form instructions may not know about the e-ﬁle option.

41726 U.S.C. § 6411(d)(2); Pub. L. No. 116-136, § 2305(d)(1), 134 Stat. at 357.
418Servicewide Electronic Research Program alerts notify users of system problems and "need to know" information that
does not change procedures or guidelines in the IRS’s oﬃcial guidance, the Internal Revenue Manual.
419Temporary procedures to fax certain Forms 1139 and 1045 due to COVID-19, accessed October 16, 2020, https://
www.irs.gov/newsroom/temporary-procedures-to-fax-certain-forms-1139-and-1045-due-to-covid-19.

Page 252 GAO-21-191
The IRS Strategic Plan states that IRS will empower and enable all taxpayers to meet their tax
obligations by simplifying the process for tax ﬁling and improving education and outreach on
taxpayer rights and obligations. In the case of the COVID-19 response, it is important to provide
taxpayers with ample information for them to ﬁle for their CARES Act beneﬁts eﬀectively. Including
the 2019 Form 1040-X e-ﬁle information in the temporary procedures for Form 1045, and in
the Form 1040-X instructions will help the IRS provide taxpayers with the most recent available
information and clear procedures to enable them to ﬁle their amended returns and tentative
refund claims eﬀectively. This will help reduce paper submissions and potential delays.

Agency Comments
We provided IRS, Treasury, and the Oﬃce of Management and Budget with a draft of this
enclosure, which included two recommendations. IRS provided written comments that are
summarized below and reproduced in Appendix VI. IRS also provided technical comments, which
we incorporated as appropriate. Treasury and the Oﬃce of Management and Budget did not have
any comments on this enclosure.

In its written comments, IRS agreed with both recommendations, and took action before
this report issued to update the Temporary procedures to fax certain Forms 1139 and 1045 due
to COVID-19 to include information on the Form 1040-X e-ﬁling capability. We removed this
recommendation and no further action is required. The IRS also said that it will initiate the actions
to update the Form 1040-X instructions to include information on the e-ﬁle capability for tax
year 2019, but did not indicate a timeframe for this update. We will continue to monitor this, as
it is important that the Form 1040-X instructions accurately reﬂect all ﬁling options. It would be
beneﬁcial if this were done in time for taxpayers to submit their refund applications before the e-
fax line closes on December 31, 2020.

GAO’s Methodology
We reviewed IRS data as of October 19, 2020, federal laws, and agency guidance; and interviewed
IRS oﬃcials. To analyze IRS data, we compared the numbers we received from them in May, July,
and October to determine what has changed. We also calculated a lower bound estimate of the
Form 1139 and Form 1045 tentative refund applications to determine what the lowest possible
amount of refunds could be.

Contact information: Jessica Lucas-Judy, (202) 512-9110, lucasjudyj@gao.gov

Page 253 GAO-21-191
Financial Assistance to Aviation and Other Eligible Businesses
The Department of the Treasury has provided over $28 billion in payroll support to the nation’s
aviation sector, but has not yet ﬁnalized a plan to fully monitor recipients’ compliance with the
terms of this assistance or to take action if noncompliance is found.

Entities involved: Department of Transportation and the Department of the Treasury

Recommendation for Executive Action
The Secretary of the Treasury should ﬁnish developing and implement a compliance monitoring
plan that identiﬁes and responds to risks in the Payroll Support Program to ensure program
integrity and address potential fraud, including the use of funds for purposes other than for the
continuation of employee wages, salaries, and beneﬁts.

Key Considerations and Future GAO Work
According to aviation industry forecasts, demand for air travel is not expected to recover to
prepandemic levels until 2024. As a result, many aviation sector businesses, including air carriers
and other air service companies, will likely continue to struggle to generate enough revenue to
cover their expenses.

In June and September 2020, we reported that the Department of the Treasury (Treasury) has
continued to provide ﬁnancial assistance required by the CARES Act as payroll support to help
the aviation industry retain employees. With air travel remaining far below last year’s levels, we
continue examining the eﬀects of the COVID-19 pandemic on the aviation sector.

By the end of November 2020 Treasury expects to have ﬁnished providing CARES Act ﬁnancial
assistance through loans and loan guarantees for passenger and cargo air carriers, ticket agents,
repair station operators, and other businesses critical to maintaining national security, including
for nonaviation sector businesses. We have ongoing work examining Treasury’s implementation
of this loan program, the extent to which Treasury’s policies and procedures were consistent
with statutory requirements and other standards, and the extent to which eligible businesses
participated in the program.

Page 254 GAO-21-191
Background
The CARES Act authorized Treasury to provide ﬁnancial assistance in the form of payroll support
payments and loans.420 The Payroll Support Program (PSP) provides $32 billion in ﬁnancial
assistance divided among three categories of applicants—up to $25 billion for passenger
air carriers, up to $4 billion for cargo air carriers, and up to $3 billion for certain aviation
contractors—that shall exclusively be used for the continuation of payment of employee wages,
salaries, and beneﬁts. These entities were entitled to receive up to the amount of compensation
and beneﬁts paid to their employees for the period from April 1, 2019, through September 30,
2019, as reported to the Department of Transportation (DOT) or certiﬁed, as applicable.421

As of September 30, 2020, Treasury had obligated and expended $28 billion of the $32 billion that
Congress appropriated for PSP. As required by statute, PSP recipients were to agree to refrain from
conducting involuntary furloughs or reducing pay rates and beneﬁts until September 30, 2020, and
to refrain from certain share buybacks, dividend payments, and other capital distributions until
September 30, 2021, among other conditions.422 Further, DOT required scheduled passenger air
carriers receiving ﬁnancial assistance to maintain minimum scheduled passenger service through
September 30, 2020.423

According to Treasury guidance, on August 14, 2020, PSP recipients were to begin reporting
quarterly to Treasury information on their compliance with PSP agreement terms.424 The
recipients, for example, are to submit through Treasury’s web portal information on employee
headcount, wages, salaries, beneﬁts, and other information.

Overview of Key Issues
Treasury had awarded 88 percent of the $32 billion in payroll support program funds as
of October 2020.425 According to October 5, 2020, data from Treasury, 610 PSP agreements
were executed with 352 passenger air carriers, 38 cargo air carriers, and 220 aviation contractors

420Pub. L. No. 116-136, § 4112, 134 Stat. 281, 498 (2020).
421CARES Act, § 4113(a)(1)-(3), 134 Stat at 498. Certain air carriers report wages and salaries pursuant to 14 C.F.R. part
241; air carriers that do not, as well as contractors, must certify the amount of wages, salaries, beneﬁts, and other
compensation paid to employees using sworn ﬁnancial statements or other appropriate data. The CARES Act provided
Treasury the authority to reduce, on a pro rata basis, the amounts due to these entities to address any shortfall in
assistance that would otherwise be provided under the program. CARES Act, § 4113(c), 134 Stat at 499.
422CARES Act, § 4114(a), 134 Stat. at 499.
423CARES Act, § 4114(b), 134 Stat. at 499-500. DOT did not extend these minimum service obligations beyond September
30, 2020.
424For most PSP recipients, quarterly compliance reports must be submitted to Treasury through May 2022.
425As of October 16, 2020, Treasury had ﬁnished executing PSP agreements. Up to $4 billion was appropriated for
cargo air carriers; however, total demand by cargo air carriers for PSP funds was far below available funds. Therefore,
$3 billion of funds in this category were not awarded and cannot be reallocated by Treasury to other categories of
recipients.

Page 255 GAO-21-191
that totaled $28.2 billion or about 88 percent of available funds.426 While the average PSP award
amount for passenger air carriers was nearly $71 million, 13 passenger air carrier recipients
had awards greater than $100 million and ﬁve of those recipients had awards greater than $1
billion. For aviation contractors, the average award amount was nearly $11 million, but six of those
contractors had awards greater than $100 million.

PSP funds have provided beneﬁts to recipients, but certain factors contribute to the
potential risk of funds being used for purposes other than payroll support. Some PSP
recipients accessed other assistance under the CARES Act that risks overlap with PSP funds,
while others received PSP funds in excess of their current number of employees. For some
smaller businesses, one potential risk is that other CARES Act assistance could be obtained to
pay salaries, wages, or beneﬁts to the same employees over the same time period. For example,
many PSP recipients also received federal assistance through the Small Business Administration’s
Paycheck Protection Program (PPP).427 Speciﬁcally, at least 66 percent of PSP recipients received
PPP loans.428 To be eligible for PPP loans, these recipients had to make a good faith certiﬁcation
that economic uncertainty made the PPP loan necessary to support ongoing operations. These
PPP recipients also had to meet other eligibility requirements including a limit on the number of
employees.429 Businesses in our analysis that were PSP recipients and received PPP loans had
an average of 90 employees. According to several industry associations representing smaller
air carriers and other eligible businesses, these two federal assistance programs oﬀered critical
support to their members during a period of economic hardship and uncertainty. According
to one industry association, it was initially unclear to their members if businesses could access
both programs, but Treasury conﬁrmed that it was permitted if a business was eligible for both
programs.430

426As the total demand for PSP funds exceeded available funds in the passenger air carrier and aviation contractor
categories, Treasury applied an initial proration of 76 percent to passenger air carrier awards and 69.7 percent to
aviation contractor awards. However, since some applicants were not approved for payments or dropped out of the
PSP, Treasury adjusted the proration percentage to 78.2 percent for passenger air carriers. This adjustment resulted in
additional funds being disbursed to certain passenger air carrier recipients around September 27, 2020. As of October
31, 2020, Treasury is still determining the ﬁnal proration percentage for aviation contractors.
427The CARES Act and the Paycheck Protection Program and Health Care Enhancement Act appropriated a total of $670
billion for the Paycheck Protection Program (PPP) under the Small Business Administration’s 7(a) small business lending
program. PPP loans are made at 1 percent interest and will be fully forgiven if certain conditions are met. In general,
small businesses with 500 or fewer employees, including tax-exempt nonproﬁt organizations, veteran’s organizations,
and tribal businesses were eligible. Businesses in certain industries with more than 500 employees were eligible for
loans.
428Based on PSP data as of July 31, 2020, and PPP data as of August 8, 2020, about 380 of 580 PSP recipients had also
received a PPP loan.
429In order for a PPP loan recipient to qualify for full loan forgiveness, a loan recipient must use at least 60 percent
of the covered loan amount for payroll costs, and may use up to 40 percent of such amount for non-payroll costs,
as deﬁned by the CARES Act. Paycheck Protection Flexibility Act of 2020, Pub. L. No. 116-142, § 3, 134 Stat. 641-642
(amending § 1106 of the CARES Act).
430In a Frequently Asked Questions (FAQ) document dated April 2, 2020 posted under program information on
Treasury’s website, Treasury noted that “an air carrier or contractor that has applied for or received support under other
provisions of the CARES Act is not precluded, by virtue of such applications or support, from applying for and receiving
Payroll Support.”

Page 256 GAO-21-191
For some larger businesses that received PSP awards, a potential risk is related to the size of
their PSP awards when compared to actual employment levels. For example, we and others have
reported about PSP recipients’ reductions in employment levels before receiving PSP funds.
Speciﬁcally, in September 2020, we reported layoﬀs and furloughs announced by several large
aviation contractors before signing their PSP agreements with Treasury. In addition, several major
airlines reported using voluntary measures to reduce employment levels—including voluntary
separation through early retirement programs and extended leave programs—to allow them to
reduce costs.

As a result, while these actions could be determined to be consistent with statutory and program
requirements, they make it more diﬃcult to ensure that PSP funds are used exclusively to continue
to pay employees. This risk is also heightened by certain program circumstances and decisions.
These include the range of dates PSP agreements were signed—from April through October
2020—and Treasury’s decision to put no deadline on recipients’ use of PSP funds.

PSP recipients that signed award agreements by end of June 2020 were required to submit
their ﬁrst compliance reports in August, but Treasury has not fully established a monitoring
system. According to Treasury guidance, PSP recipients that signed award agreements before June
30, 2020, were required to submit their ﬁrst quarterly compliance report by August 14, 2020.431
According to Treasury oﬃcials, they have taken the following steps to monitor PSP recipients’
compliance with award agreement terms:

• Performing an initial automated review of quarterly reports to assess recipient compliance
with PSP agreement terms and conditions, including a review of the use of PSP funds,
involuntary terminations or furloughs, and involuntary reductions of compensation pay rates
and beneﬁts. This review resulted in a scorecard that presented the potential for compliance
issues for each recipient and for each compliance test applied. The scorecards have been
reviewed by Treasury personnel to determine if recipients are either in compliance or appear
to be out of compliance.

• Performing a second level of in-depth review, for any recipient deemed potentially
noncompliant, by Treasury analysts. Recipients may be asked to provide additional
information. Recipients may be cleared or found to be out of compliance. Treasury also plans
to include additional recipients, beyond those deemed potentially noncompliant, in this
second level of review to ensure a mix of all types of PSP recipients get an in-depth review.

Three months have passed since the ﬁrst compliance reports were due and Treasury has not
completed its plan and guidance to fully describe how it will monitor the extent to which PSP
recipients are complying with PSP agreement terms. As a result, some details of its monitoring
still have to be determined. For example, the PSP agreement term prohibiting involuntary
terminations or furloughs expired on September 30, 2020. In our discussions with Treasury
oﬃcials, they said they have not determined whether employee headcount data would be
required for quarterly compliance reports on the use of funds in reports covering the period after
this requirement expired (that is reports submitted after November 14, 2020). However, they may

431According to Treasury, 489 PSP recipients—the number of recipients that signed agreements as of June 30,
2020—have submitted their ﬁrst quarterly compliance reports and have undergone Treasury review.

Page 257 GAO-21-191
tailor future requests for headcount data to fulﬁll compliance and other reporting requirements in
future quarterly compliance reports.

Regarding guidance on enforcing penalties for noncompliance, according to Treasury oﬃcials,
Treasury is still in the process of determining remedies for recipients deemed to be noncompliant
due to, for example, conducting involuntary terminations or furloughs or not submitting quarterly
compliance reports. Treasury plans to ﬁnalize its internal guidance on enforcing compliance
in November 2020. Certain decisions on penalties for noncompliance will be determined by
Treasury’s compliance team and senior management regarding the severity of the noncompliance
issue.

Fully developing and implementing a monitoring system to identify and respond to the risk
of noncompliance with PSP agreement terms is especially important given the complexity of
the entities that Treasury will be monitoring––recipients that include large corporations with
operations across the country and small businesses serving their local communities. Without risk-
based monitoring that takes into account the diﬀerences in recipients’ ﬁnancial conditions and
actions, Treasury may not be able to detect misuse in a timely manner that allows for remediation.
Federal internal control standards state that management should consider the potential for
fraud—such as misuse—when identifying, analyzing, and responding to risks.

Agency Comments
We provided DOT, the Small Business Administration (SBA), Treasury, and the Oﬃce of
Management and Budget (OMB) with a draft of this enclosure. DOT and Treasury provided
technical comments, which we incorporated as appropriate. Treasury’s general comments
are reproduced in appendix X. In its management response, Treasury agreed that compliance
monitoring is a critical element of the PSP and reiterated the compliance monitoring steps it is
currently taking. Treasury neither agreed nor disagreed with our recommendation, but committed
to reviewing additional measures that may further enhance its compliance monitoring and ensure
that PSP funds are used as intended. OMB and SBA did not provide comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed the most recent Treasury data on ﬁnancial assistance to
aviation sector businesses as of October 5, 2020, which through interactions with Treasury
oﬃcials we found to be reliable for the purposes of summarizing the number and value of PSP
awards to recipients; the CARES Act; and related agency guidance. We examined the extent to
which recipients of PSP funds were also awarded federal credit assistance through the Paycheck
Protection Program (PPP) by matching unique identiﬁers for each PSP recipient to PPP recipients.
We also reviewed current reports (Form 8-Ks) ﬁled with the Securities and Exchange Commission
from March 2020 through October 2020 by major airlines and other public companies that

Page 258 GAO-21-191
received PSP awards over $100 million for passenger air carriers, over $50 million for cargo air
carriers, and over $37.5 million for aviation contractors. We reviewed these reports to understand
those companies’ rationales and plans to use the assistance programs and the eﬀects of these
programs. In addition, we interviewed and/or received written responses from Treasury and DOT
oﬃcials and industry associations representing businesses eligible to apply to the PSP.

Contact information: Heather Krause, (202) 512-2834, krauseh@gao.gov

Related GAO Product
Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.:
September 10, 2014.

Page 259 GAO-21-191
Agriculture Spending
The U.S. Department of Agriculture continues to spend CARES Act funds for direct payments to
agricultural producers and food purchases for redistribution to food banks, nonproﬁts, and other
entities.

Entities involved: U.S. Department of Agriculture, including its Agricultural Marketing Service and
Farm Service Agency

Key Considerations and Future GAO Work
Our work on the U.S. Department of Agriculture’s (USDA) implementation and oversight of a range
of CARES Act funds, including any implementation challenges, is ongoing. Among other things, we
will continue to examine the department’s

• veriﬁcation of eligibility and distribution of direct payments to agricultural producers and

• contracting decisions and characteristics of food purchases and redistributions.

Background
COVID-19 has caused disruptions in the U.S. food supply chain, from the farms where raw
agricultural commodities are produced, to the food processing and distribution network that
enables these commodities to be used by consumers.432 As a result, prices for many major
agricultural commodities, including livestock (cattle, hogs, poultry, and dairy), signiﬁcantly
decreased, which has meant a loss in income for many producers. In addition, the closure
of institutions (schools, restaurants, and hotels, for example) made it diﬃcult for agricultural
producers to market their commodities, leading to the spoilage of crops, dumping of milk, and
euthanization of livestock.

This enclosure discusses the following amounts Congress provided to USDA through coronavirus
relief legislation, among other things:

• $9.5 billion to USDA’s Oﬃce of the Secretary through the CARES Act,433

• $14 billion to the Commodity Credit Corporation through the CARES Act,434 and

432COVID-19 aﬀected consumer prices for food. In May 2020, the U.S. Bureau of Labor Statistics reported that April 2020
saw the sharpest increase in grocery store prices since 1974.
433The CARES Act, Pub. L. No. 116-136, div. B, tit. I, 134 Stat. 281, 505 (2020).
434 Pub. L. No. 116-136, 134 Stat. at 509. Generally, appropriations acts enacted annually reimburse the Commodity
Credit Corporation for its net realized losses.

Page 260 GAO-21-191
• $4 billion through the Families First Coronavirus Recovery Act.435

In addition, USDA has made available $6.5 billion for direct payments to agricultural producers
from funding generally available to the agency through its Commodity Credit Corporation.436 The
Commodity Credit Corporation is a wholly government-owned entity that ﬁnances a broad array of
agricultural support programs. It has permanent authority to borrow up to $30 billion at any given
time from the Treasury.

Overview of Key Issues
Coronavirus Food Assistance Program—direct payments. USDA continues to spend CARES
Act and other funds for direct payments to agricultural producers. In total, USDA announced it
will provide up to $30 billion in direct payments through two programs, the Coronavirus Food
Assistance Program 1 (CFAP 1) and the Coronavirus Food Assistance Program 2 (CFAP 2). The
payments for the programs come from the CARES Act appropriations and the Commodity Credit
Corporation.

For CFAP 1, on May 19, 2020, USDA announced up to $16 billion in direct payments to agricultural
producers—up to $9.5 billion from CARES Act appropriations to USDA’s Oﬃce of the Secretary
and up to $6.5 billion from funds the agency previously made available through the Commodity
Credit Corporation. For CFAP 2, on September 17, 2020, USDA announced up to $14 billion would
be available through the Commodity Credit Corporation.437

In CFAP 2, USDA added commodities that were previously ineligible for payments under CFAP
1 and created new payment formulas.438 CFAP 2 will provide up to $100 million to tobacco
producers using part of the $9.5 billion that the CARES Act appropriated to the Oﬃce of
the Secretary for coronavirus relief because, as stated in USDA’s Federal Register notice, the
Commodity Credit Corporation Charter Act does not allow payments to tobacco producers.439

435Families First Coronavirus Recovery Act, Pub. L. No. 116-127, div. A, tit. I §1101(g) and (i), 134 Stat. 178, 180
(2020). See also, https://www.usda.gov/media/press-releases/2020/05/19/usda-announces-details-direct-assistance-
farmers-through.
436The Commodity Credit Corporation Charter Act is codiﬁed at 15 U.S.C. §§ 714-714p.
437The application period for CFAP 1 was May 26, 2020, through September 11, 2020, with an extension to October 9,
2020, for producers in certain locations impacted by natural disasters. The application period for CFAP 2 is September
21, 2020, through December 11, 2020.
438CFAP 2 created formulas for three categories of commodities: (1) “price trigger commodities” that receive payments
based on price declines, (2) “ﬂat-rate crops” that receive $15 per acre, and (3) “sales commodities” that receive payments
based on a percentage of sales.
439In general, the Commodity Credit Corporation can exercise its powers only with regard to agricultural commodities
other than tobacco. 15 U.S.C. § 714c. USDA states in its Federal Register notice that funds available under 15 U.S.C. §
714c(b), (d), and (e) cannot be used to provide assistance for tobacco. 85 Fed. Reg. 59,380 (Sept. 22, 2020).

Page 261 GAO-21-191
As of October 19, 2020, USDA paid about $10.3 billion in CFAP 1 payments for 647,362 approved
applications.440 About half of the payments ($5 billion) were for livestock, of which about 87
percent were for cattle. The second highest payments were for nonspecialty crops ($2.6 billion), of
which about 67 percent were for corn. The third highest payments were for dairy ($1.8 billion), of
which over 99 percent were for milk.

As of October 19, 2020, USDA paid about $6.1 billion in CFAP 2 payments for 349,747 approved
applications.441 Over half of the payments ($3.2 billion) were for acreage-based crops, of which
about 57 percent were for corn. The second highest payments were for livestock ($1.7 billion), of
which about 80 percent were for cattle. The third highest payments were for dairy ($626 million),
all of which were for milk.

Producers received payments based on a self-certiﬁcation of the amount they produced or sold
on certain dates. According to USDA’s plan for reviewing CFAP, USDA will spot check a minimum
of 5 percent of the applications to verify the applicants’ self-reported data.442 USDA oﬃcials told
us they will begin spot checks of CFAP 1 applications in late October 2020. We plan to evaluate
USDA’s eﬀorts to verify the accuracy of applications as part of our ongoing review of CFAP 1 and 2.

According to USDA oﬃcials, it is not possible to track how USDA is spending the $14 billion
provided under the CARES Act to the Commodity Credit Corporation for its net realized losses.
As discussed above, USDA announced it will provide up to $14 billion in direct payments
under CFAP 2. While the CARES Act provided a $14 billion reimbursement of the Commodity
Credit Corporation, agency oﬃcials explained that USDA is not tracking whether the $14
billion reimbursement from the CARES Act is the same $14 billion that it is using to fund
CFAP 2. In general, USDA states it does not track the source of Commodity Credit Corporation
reimbursements with speciﬁc Commodity Credit Corporation spending. USDA does not track the
CARES Act reimbursement separately. Therefore, USDA cannot specify how much of the $14 billion
reimbursement of the Commodity Credit Corporation provided under the CARES Act is being used
for CFAP 2. A further diﬃculty in tracking the funding is that USDA made the following transfers
from the Commodity Credit Corporation to the Oﬃce of the Secretary:

• $6.5 billion on May 1, 2020, and

• $14 billion on September 16, 2020.443

440See https://www.farmers.gov/cfap/data, accessed on October 21, 2020.
441See https://www.farmers.gov/cfap/data, accessed on October 21, 2020.
442USDA, Farm Production and Conservation (FPAC), Farm Service Agency (FSA), Coronavirus Food Assistance Program
(CFAP) Internal Controls and Integrity Plan (May 12, 2020).
443According to USDA oﬃcials, the $14 billion transfer resulted in a corresponding net realized loss for the
Commodity Credit Corporation. USDA received a reimbursement of the Commodity Credit Corporation in the
Continuing Appropriations Act, 2021 and Other Extensions Act, enacted on October 1, 2020, for the net realized
losses as of September 17, 2020. Pub. L. No. 116-159, div. A, § 173, 134 Stat 709, 725. This reimbursement
replenished the Commodity Credit Corporation’s maximum borrowing authority of $30 billion.

Page 262 GAO-21-191
We are seeking additional information from USDA regarding the $14 billion reimbursement to
the Commodity Credit Corporation provided under the CARES Act, and the use of the Commodity
Credit Corporation for CFAP 1 and CFAP 2 payments.

See table below for the amounts USDA has made available for CFAP 1 and 2 direct payments to
agricultural producers.444

444The funding comes from the CARES Act and available borrowing authority of the Commodity Credit Corporation.

Page 263 GAO-21-191
Funding Amounts and Funding Sources for Coronavirus Food Assistance Program (CFAP) 1 and 2 Direct Payments
to Agricultural Producers, as of September 30, 2020
Program Funding amount Funding Source

CFAP 1 Up to $6.5 billion
a b
CCC Charter Act authorities

Up to $9.5 billion Appropriations under the CARES Act

CFAP 2 Up to $14 billion
c CCC Charter Act authorities

Up to $100 million
d Appropriations under the CARES Act

Total Up to $30 billion NA

Legend:
NA = Not applicable
USDA = U.S. Department of Agriculture
Source: GAO analysis of USDA data. | GAO-21-191

a
USDA transferred $6.5 billion from the Commodity Credit Corporation account to the Oﬃce of the Secretary account on May 1,
2020.
b
Recent laws that replenished the Commodity Credit Corporation include the CARES Act, Pub. L. No. 116-136, 134 Stat. at
509, which reimbursed $14 billion of the Commodity Credit Corporation’s net realized losses (spending) and the Further
Consolidated Appropriations Act, 2020, Pub. L. No. 116-94, 133 Stat. 2625, which replenished the Commodity Credit
Corporation’s full $30 billion borrowing authority.
c
USDA transferred $14 billion from the Commodity Credit Corporation account to the Oﬃce of the Secretary account
on September 16, 2020. USDA received an early reimbursement of the Commodity Credit Corporation in the Continuing
Appropriations Act, 2021 and Other Extensions Act, enacted on October 1, 2020, for the net realized losses as of September 17,
2020. Pub. L. No. 116-159, div. A, § 173, 134 Stat 709, 725. This reimbursement replenished the Commodity Credit Corporation’s
maximum borrowing authority of $30 billion.
d
This $100 million for CFAP 2 from the CARES Act, Pub. L. No. 116-136, 134 Stat. at 505, is a subset of the $9.5 billion
appropriation and will be used for payments to tobacco producers. Therefore, this column does not total.

Coronavirus Food Assistance Program—food purchases. USDA also continues to spend funds
for food purchases for redistribution to food banks, nonproﬁts, and other entities as part of
its Farmers to Families Food Box Program. On August 25, 2020, the administration and USDA
announced that USDA would add up to $1 billion to the third round of the program for a total of
up to $4 billion.445 In September 2020, we noted that there are opportunities to identify successes
and challenges that could be used to inform future similar eﬀorts if the program is extended; we
recommended that USDA conduct an evaluation of the Farmers to Families Food Box Program
after the third round of the program.446 The ﬁgure below shows the obligations and purchases (or
expenditures), as of September 30, 2020, for each round of the program.

445On October 23, 2020, USDA announced that it had authorized $500 million for a fourth round of purchases for the
Farmers to Families Food Box Program. According to a USDA oﬃcial, the funding will come from unobligated balances of
the CARES Act $9.5 billion appropriation to USDA’s Oﬃce of the Secretary.
446GAO, Agriculture Spending: Opportunities Exist for USDA to Identify Successes and Challenges of the Farmers to
Families Food Box Program to Inform Future Eﬀorts, GAO-20-711R (Washington, D.C.: Sept. 16, 2020). USDA provided
comments on this report and did not explicitly agree or disagree with our recommendation. In response to our
recommendation, USDA said that it had initiated an internal review of the program at the beginning of August 2020
that would verify that procurements were properly accounted for and that payments made to vendors were based
on appropriate documentation provided by nonproﬁt organizations. We responded that we continued to believe

Page 264 GAO-21-191
Obligations and Purchases for Each Round of the U.S. Department of Agriculture’s Farmers to Families Food Box
Program, as of September 30, 2020

Note: According to the U.S. Department of Agriculture, it determines expenditures (or purchases) by the payments USDA makes
on invoices it receives from contractors.

Agency Comments
We provided a draft of the report and this enclosure to the Oﬃce of Management and Budget and
USDA for review and comment. The Oﬃce of Management and Budget and USDA’s Agricultural
Marketing Service and Farm Service Agency did not comment on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed the most recent data on the USDA website as of October 21,
2020, for CFAP 1 and CFAP 2 spending; reviewed federal laws, agency policy and other guidance,
and expenditure and budgetary data provided to us by USDA as of September 30, 2020; reviewed
written responses to our questions by USDA oﬃcials in the Agricultural Marketing Service and
Farm Service Agency; and interviewed USDA oﬃcials. We found the data mentioned above to be
reliable for our purposes of describing USDA spending.

that by conducting an overall evaluation of the Farmers to Families Food Box Program after the third round of the
program, USDA would have better assurance it has identiﬁed successes and challenges which could inform future
eﬀorts to address similar situations. In October 2020, a USDA oﬃcial said that Agricultural Marketing Service intended to
implement our recommendation.

Page 265 GAO-21-191
Contact information: Steve D. Morris, (202) 512-3841, morriss@gao.gov

Page 266 GAO-21-191
Federal Food Safety Inspections and Inspectors’ Exposure to
COVID-19
The U.S. Department of Agriculture continues to spend CARES Act funds—at least $12 million
spent of the $33 million appropriated—to maintain staﬃng for federal inspections of meat and
poultry plants, as well as to provide personal protective equipment and supplies for employees.

Entities involved: Food Safety and Inspection Service, within the U.S. Department of Agriculture

Key Considerations and Future GAO Work
Our work on the U.S. Department of Agriculture’s (USDA) implementation and oversight of a range
of CARES Act funds, including on any implementation challenges, is ongoing. We will continue to
examine the department’s capacity to ensure the continuity of food safety inspections.

The Food and Drug Administration (FDA) did not receive CARES Act funds for food safety-related
activities. We plan to examine FDA’s response to COVID-19 with respect to food safety inspections
and related activities.

Background
COVID-19 has caused disruptions in the U.S. food supply chain, from the farms where raw
agricultural commodities are produced, to the food-processing and distribution network that
enables these commodities to be used by consumers.447 The 7,850 inspectors and other staﬀ
from the USDA’s Food Safety and Inspection Service (FSIS) work in 6,458 federally inspected
meat and poultry plants and other establishments. These inspectors help ensure the safety and
wholesomeness of the meat and poultry that enter interstate commerce, and some have been
exposed to COVID-19. According to April 2020 interim guidance from the Centers for Disease
Control and Prevention and the Occupational Safety and Health Administration, working in close
conditions may contribute to exposure to COVID-19.

As of September 30, 2020, USDA had obligated $17 million and spent $12 million of the $33 million
in CARES Act funds that Congress appropriated to FSIS to prevent, prepare for, and respond to
COVID-19 with regard to food safety inspections.448

447COVID-19 continues to aﬀect consumer prices for food. In May 2020, the U.S. Bureau of Labor Statistics reported that
April 2020 saw the sharpest increase in grocery store prices since 1974.
448Pub. L. No. 116-136, div. B, tit. I, 134 Stat. 281, 506.

Page 267 GAO-21-191
Overview of Key Issues
USDA oﬃcials told us that, as of October 1, 2020, they continued to use CARES Act funds for the
procurement and distribution of FSIS worker safety items: masks, face shields, sanitizer, and
disinfectant. The agency will also use funds to cover the expenses for additional hours of part-time
inspectors; the additional inspectors needed from other USDA oﬃces, and associated travel; and
nonreimbursable overtime, as needed.449

The agency has maintained all required inspection services to ensure that establishments
can operate, according to USDA oﬃcials. USDA continues to track USDA inspectors’ absences
because of COVID-19-related illness or quarantine. USDA employs 7,850 FSIS inspectors and staﬀ.
According to USDA documentation, as of September 30, 2020, 682 FSIS employees (including
inspectors) reported a COVID-19 diagnosis conﬁrmed by a test or medical professional. Of these
employees, 653 had returned to work, 18 were self-quarantining, and seven had died.450 FSIS
employees deceased from COVID-19 are not included in the cumulative count of employees
who had a COVID-19 diagnosis, according to USDA documentation. Although FSIS does not
have a speciﬁc requirement to report COVID-19 infections and relies on staﬀ to self-report,
FSIS employees are required to report an absence from work.451 USDA oﬃcials said that as of
September 30, 2020, there were no establishments that had to close because of a lack of available
USDA inspectors.

FSIS employees have expressed concern about exposure to COVID-19 as outbreaks occurred at
some meatpacking plants. According to oﬃcials, USDA received 25 reports from FSIS employees
that identiﬁed COVID-19 as a health-related occupational hazard in meat and poultry plants
and other establishments.452 In addition, according to FSIS oﬃcials, FSIS has been involved in
numerous Department of Labor Occupational Safety and Health Administration inspections and
investigations concerning exposure to COVID-19.

FSIS oﬃcials stated that the agency continues to follow national guidance for meat and poultry
processing workers and employers. To mitigate risks associated with COVID-19, FSIS directs
inspection personnel to wear face coverings or masks in conjunction with face shields. The agency
has made personal protective equipment available to employees, in addition to hand sanitizer,

449According to a USDA FSIS oﬃcial, nonreimbursable overtime occurs when an inspector has already worked a full shift
and needs to work additional hours at another establishment that is not in an overtime status and subject to paying FSIS
an overtime fee.
450This number combines inspectors and staﬀ whose occupational exposures may vary. According to USDA
documentation, the number of employees who had a COVID-19 diagnosis is cumulative and this cumulative number
includes employees who have returned to work (i.e., recovered from the disease).
451According to USDA’s FSIS Human Pandemic Operations Plan, under the agency’s leave directive, FSIS employees
are required to report to their supervisors if they will be absent from duty and, in the event of a human pandemic,
supervisors and managers should initiate a follow-up for any unscheduled employee absence. See U.S. Department of
Agriculture, Oﬃce of the Administrator, The Food Safety and Inspection Service Human Pandemic Operations Plan, March
2020. U.S. Department of Agriculture, Food Safety and Inspection Service, Leave, FSIS Directive 4630.2 (Washington, D.C.:
Sept. 15, 2010).
452USDA FSIS employees report safety and health hazards by submitting a form to their supervisors or to designated
oﬃcials in charge. See U.S. Department of Agriculture, Food Safety and Inspection Service, Reporting and Correcting
Occupational Hazards, FSIS Directive 4791.12 (Washington, D.C.: June 19, 1996).

Page 268 GAO-21-191
according to oﬃcials. According to USDA oﬃcials, as of September 30, 2020, the agency spent over
$4 million dollars for FSIS inspectors’ personal protective equipment, including for supplies to
combat heat stress.453 The ﬁgure below lists the quantity and costs of the agency’s purchases of
personal protective equipment for inspectors and other FSIS staﬀ.

U.S. Department of Agriculture Food Safety and Inspection Service’s Personal Protective Equipment Purchases
by Type, Quantity, and Cost, as of September 30, 2020

Note: Amounts are rounded up to the nearest whole number.
a
This amount includes the cost of a “discontinued” face shield that the agency no longer purchases.
b
Some purchases combined two types of products (e.g., sanitizers and stands or wipes and stands). Therefore, we were unable
to report these quantities separately and we counted them as one. Regarding the volume of each sanitizer product, it varied
from ounces to gallons.
c
For costs, this personal protective equipment category includes costs for storing and transporting supplies.
d
Supplies for heat stress included electrolyte ﬂuids, neck cooling scarves, cooling vests, cooling hat liners, evaporative cooling
hard hats, evaporative cooling bandanas, and cooling tie hats.

Agency Comments
We provided a draft of this enclosure to USDA and the Oﬃce of Management and Budget for
review and comment. USDA provided technical comments that we incorporated as appropriate.
The Oﬃce of Management and Budget did not have any comments related to this enclosure.

GAO’s Methodology
To conduct this work, we reviewed the most recent USDA data on COVID-19 illnesses and
exposures among FSIS employees available as of September 30, 2020; the CARES Act; agency
policy and other guidance; USDA expenditure data including purchases of personal protective
equipment, as of September 30, 2020; and written responses to questions we emailed USDA

453According to USDA oﬃcials, this includes personal protective equipment purchased for in-plant personnel in the ﬁeld
and personal protective equipment for FSIS employees based in laboratories and oﬃce locations.

Page 269 GAO-21-191
oﬃcials in the FSIS. We assessed the reliability of agency data by reviewing relevant USDA FSIS
documents, reviewing our prior use of the data sources, and reviewing written responses from
the agency about the data. We determined the data were suﬃciently reliable for our purposes of
determining (1) the number of FSIS staﬀ; (2) the number that had become ill with COVID-19; and
(3) the types, quantity, and cost of personal protective equipment for FSIS staﬀ.

Contact information: Steve D. Morris, (202) 512-3841, morriss@gao.gov

Page 270 GAO-21-191
USDA Support for Rural America
The U.S. Department of Agriculture has made progress in awarding CARES Act funding for grants
to improve broadband access and for business development loans to help address the COVID-19
pandemic in rural America.

Entities involved: U.S. Department of Agriculture, including the Rural Utilities Service and Rural
Business-Cooperative Service

Key Considerations and Future GAO Work
In our June 2020 CARES Act report, we stated that the U.S. Department of Agriculture (USDA)
oﬃcials said they are still working to implement three open recommendations from our April 2017
report examining the Rural Utilities Service’s (RUS) broadband grant and loan program. Those
recommendations address USDA’s management of the program related to periodic evaluations of
completed grant projects, monitoring grantees, and developing written policies and procedures.
USDA oﬃcials said that they plan to complete their eﬀorts by the end of 2020. We will continue
monitoring the implementation of these recommendations.

Background
USDA Rural Development agencies support economic development and essential services to help
improve the economy and quality of life in rural America. These agencies include RUS, which works
to address rural infrastructure needs, and the Rural Business-Cooperative Service (RBCS), which
oﬀers programs to support businesses and job training.

The CARES Act provided $145.5 million in funding for three Rural Development programs to
prevent, prepare for, and respond to coronavirus:454

• ReConnect. $100 million for RUS to provide additional grants to support broadband
deployment projects in rural areas that lack suﬃcient access to broadband

• Distance Learning and Telemedicine. $25 million for RUS to provide ﬁnancial assistance
to help rural areas develop and acquire distance learning and telemedicine equipment and
services

• Rural business development programs. $20.5 million for RBCS to make loans to improve
business, industry, and employment and the economic and environmental climate in rural
communities

454Pub. L. No. 116-136, 134 Stat. 281, 507, 510 (2020).

Page 271 GAO-21-191
Overview of Key Issues
USDA has made progress in providing the $145.5 million in CARES Act funding for the ReConnect,
Distance Learning and Telemedicine, and rural business development programs.

ReConnect. From June through September 2020, USDA announced nine ReConnect awards
funded by the CARES Act for broadband providers in seven states: Georgia, Maryland, Mississippi,
Missouri, North Carolina, Oklahoma, and Tennessee.455 These nine awards totaled about
$90 million, of which about $85 million will be provided in grants, with one award consisting
of a combination of a $4.9 million grant and a $4.9 million loan from CARES Act funding and
second round ReConnect Program funding.456 According to USDA documents, these projects
are collectively estimated to serve about 15,700 households, 1,800 farms, and 420 businesses,
in addition to also serving schools and other community institutions. USDA received two other
applications for ReConnect grants; however, USDA oﬃcials said there were issues with the
applications that prevented the agency from making awards. Oﬃcials said that USDA will reach out
to these two applicants to obtain additional documentation to support their applications.

USDA oﬃcials said they veriﬁed the eligibility of award recipients through a three-step process
consisting of:

1. an initial review to determine if basic eligibility requirements had been satisﬁed;

2. a detailed ﬁnancial, technical, and environmental review; and

3. a validation process to check that the area the provider proposes serving currently lacks
broadband service as speciﬁed by the requirements of the program.457

Award recipients we interviewed told us they took steps to make sure their applications included
only eligible areas by eliminating potential service areas from their applications that could make
their applications ineligible.

USDA oﬃcials said they are addressing risks of fraud in the program by updating its fraud risk
assessment and monitoring grantees in the same manner as other ReConnect grantees to ensure
compliance with program requirements. Award recipients we interviewed acknowledged that

455Once ReConnect applicants are announced as receiving awards, they must meet any applicable additional terms and
conditions speciﬁc to the award before funds are provided.
456The ReConnect program distributes awards as (1) grants, (2) loans, or (3) combinations of grants and loans. The
CARES Act provided funding to USDA to make additional awards as grants. Prior USDA appropriations for the program
included funding for grants and loans.
457To be eligible for ReConnect, the proposed service area must be rural and at least 90 percent of its households
must lack access to ﬁxed broadband of at least 10 megabits per second (Mbps) download speed and 1 Mbps upload
speed. See Consolidated Appropriations Act, 2018, Pub. L. No. 115-141, § 779, 132 Stat. 348, 399; Consolidated
Appropriations Act, 2019, Pub. L. No. 166-6, § 762(a), 133 Stat. 13, 88. Similarly, the CARES Act requires that at least
90 percent of the households to be served by a project receiving a grant from the $100 million appropriated for
ReConnect be in a rural area without suﬃcient access to broadband.

Page 272 GAO-21-191
they must report to USDA on their progress once they start using grant funds.458 Awardees we
interviewed said that they had not yet started deploying broadband using the grants, as the
awards are in various stages of review before USDA ﬁnalizes them and makes funds available.

Distance Learning and Telemedicine. USDA is using CARES Act funds for a second round of
grants under its existing Distance Learning and Telemedicine Grants program. Of the total $25
million appropriated, USDA oﬃcials told us they allocated $24.25 million for grants and that
the remaining $750,000 is being used for administrative and oversight-related expenses for the
program.459 As of October 2020, USDA oﬃcials said that they were reviewing the 534 applications
they received as of July 2020 and expected to complete their review and make awards later in the
2020 calendar year.460 Of the 534 applications, 189 were from nonproﬁt organizations.

According to USDA, while the CARES Act requires these funds be used to prevent, prepare for,
and respond to COVID-19, the agency believes projects funded under its existing program already
serve that purpose. As a result, USDA is encouraging applicants to identify speciﬁc ways in which
their application addresses COVID-19, but the agency is not requiring applicants to do this. For
example, one applicant stated that the funds would allow the entity to assess patients in their
homes to determine if there is an emergent need to be seen and, if so, allow staﬀ to prepare to
care for patients with full personal protective equipment once they arrive on site.

Rural business development programs. According to USDA oﬃcials, as of September 25, 2020,
they had made 70 loans for a total of about $214 million. USDA has stated that agricultural
producers that are not eligible for USDA Farm Service Agency loans may receive funding through
the program. As of September 25, 2020, 9 of the 70 loans that had been approved were for
agricultural producers. USDA plans to provide funding for approved loans through September
2021 (or until the funding runs out), after which no loans from this program funded by the CARES
Act will be approved.

Agency Comments
We provided a draft of this enclosure to USDA and the Oﬃce of Management and Budget (OMB)
for review and comment. USDA and OMB did not provide comments on the enclosure.

458USDA published a notice in April 2020 that informs the public that the CARES Act provides an additional $100 million
for ReConnect grants. The funding notice provides for awardees to follow the same eligibility and other requirements as
a December 2019 notice announcing application procedures for funding under ReConnect, which includes semiannual
reports for 3 years after the completion of construction.
459CARES Act, § 11001, 134 Stat. at 509 (allowing up to 3 percent of the funds made available to the Rural Development
mission area to be used for administrative costs).
460The application window for the second round of grants closed as of July 13, 2020.

Page 273 GAO-21-191
GAO’s Methodology
To conduct this work, we reviewed federal laws and agency documents, including program funding
notices, and we requested and reviewed updates from USDA oﬃcials about their ongoing eﬀorts
to implement provisions of the CARES Act. We also interviewed three broadband providers that
were awarded CARES Act-funded grants through the ReConnect program to learn more about
how they intend to use the grants and any challenges they experienced. We selected providers
among those USDA had announced would receive ReConnect grants funded through the CARES
Act to represent a variety of providers serving diﬀerent states with a focus on those with larger
grant awards; larger square-mileage served; and a greater number of households, people, and
businesses served. Finally, we reviewed written responses to our questions by USDA oﬃcials
in Rural Development on the status of spending for the ReConnect, Distance Learning and
Telemedicine, and rural business development programs.

Contact information: Andrew Von Ah, (202) 512-2834, vonaha@gao.gov

Related GAO Product
Rural Broadband Deployment: Improved Consistency with Leading Practices Could Enhance
Management of Loan and Grant Programs. GAO-17-301. Washington, D.C.: April 13, 2017.

Page 274 GAO-21-191
Community Economic Development Support
As of September 30, 2020, the Economic Development Administration had obligated over half of
its CARES Act funds to existing grantees, primarily to provide lending capital to local businesses,
and was ﬁnalizing its performance monitoring system.

Entity involved: Economic Development Administration, within the Department of Commerce

Key Considerations and Future GAO Work
We reported in June 2020 that the Department of Commerce’s (Commerce) Economic
Development Administration (EDA) would need to ensure that CARES Act funds are distributed in a
timely and transparent way to support local economies while providing suﬃcient oversight. Since
June 2020, we have monitored EDA’s eﬀorts to distribute and oversee CARES Act funds. Our work
in these areas is ongoing.

Background
EDA received about $1.5 billion through the CARES Act to fund grants under its Economic
Adjustment Assistance program to help communities prevent, prepare for, and respond to
COVID-19.461 EDA has traditionally supported communities experiencing long-term economic
distress or sudden economic dislocation through public infrastructure investments, technical
assistance and research, and comprehensive economic development strategies. EDA provides
grants to EDA-designated district organizations, Indian tribes, institutions of higher education,
state and local governments, and nonproﬁts that support businesses and organizations in
distressed communities.462

As of September 30, 2020, EDA had obligated 54 percent of these funds ($805 million) and
expended $22 million.463 In comparison, in June 2020, we reported that EDA had obligated
less than 1 percent of these funds. The CARES Act provided that all EDA funds are available for
obligation until September 30, 2022.

461Pub. L. No. 116-136, 134 Stat. 281, 510-511(2020). Up to 2 percent of the CARES Act funds may be used by EDA for
salaries and expenses for related administration and oversight activities. An additional $3 million were to be transferred
to Commerce’s Oﬃce of Inspector General to carry out investigations and audits related to appropriated funds.
Although the amount appropriated to EDA through the CARES Act was about ﬁve times its annual appropriation for ﬁscal
year 2020, EDA received a total of $1.2 billion in ﬁscal years 2018 and 2019 to respond to the economic eﬀects of natural
disasters occurring in 2017–2019.
462According to EDA, the agency is not authorized to provide economic adjustment assistance grants to individuals or
for-proﬁt entities. See generally 42 U.S.C. § 3122(4) and 13 C.F.R. § 300.3. District organizations include multi-jurisdictional
entities, commonly composed of multiple counties.
463Obligated and expended amounts do not include the $3 million transferred to the Department of Commerce’s Oﬃce
of Inspector General to carry out investigations and audits related to the appropriated funds.

Page 275 GAO-21-191
Overview of Key Issues
Status of funds. In recognition of the national eﬀects of COVID-19, EDA allocated funds among
its six regions, each of which received between $193 million and $266 million (see ﬁgure).464
EDA oﬃcials said they based the regional allocations on indicators of the preexisting economic
conditions and on information on the regional eﬀects of the pandemic, and noted that EDA may
update the allocations as needed.465 As of September 30, 2020, the largest portion of EDA’s
obligated CARES Act funds (26 percent, or $208 million) was awarded to states in the Northeast
region, and the amount obligated to individual states nationwide ranged from $300,000 (Hawaii) to
$56 million (California) (see ﬁgure). According to EDA oﬃcials, approximately 60 percent of funds
were obligated to entities located in regional or multi-jurisdictional areas that encompass both
urban and rural areas, 17 percent to entities in rural areas, and 23 percent to entities in urban
areas.466

464According to EDA oﬃcials, EDA also allocated $40 million to support innovation and entrepreneurship challenge and
national technical assistance grants made through its headquarters.
465In determining these regional allocations, EDA oﬃcials explained that they considered prepandemic unemployment
rates and per capita income, among other things. As of September 2020, EDA oﬃcials stated that they had not changed
their initial allocations.
466Urban areas represent densely developed territory and encompass residential, commercial, and other nonresidential
urban lands and are identiﬁed as those areas with 50,000 or more people or clusters of at least 2,500 and less than
50,000 people. Rural areas encompass all population, housing, and territory not included within an urban area. Regional
or multi-jurisdictional areas are those that include both urban and rural communities.

Page 276 GAO-21-191
Economic Development Administration Grants Awarded with CARES Act Funds by State and U.S. Territory, as of
September 30, 2020

Further, to distribute funds quickly and mitigate compliance risks from entities unfamiliar with
EDA’s grant process, EDA oﬃcials told us they initially prioritized noncompetitive awards to
existing grantees because they are already familiar with EDA processes and have experience
responding to economic dislocation caused by disasters.467 As of September 30, 2020, EDA had
obligated $778 million in CARES Act funds through noncompetitive grant awards to existing
grantees.468 The majority of these grant funds (78 percent, or $605 million) went to approximately
300 revolving loan funds to provide access to capital for businesses aﬀected by COVID-19.469

467EDA also limited its noncompetitive awards to certain activities (economic recovery planning and coordination,
technical assistance, and rapid delivery of lending capital to small businesses) that it identiﬁed as essential for the
immediate response to COVID-19.
468According to EDA oﬃcials, as of September 30, 2020, 784 of EDA’s 851 eligible existing grantees had received
a noncompetitive CARES Act award. Only existing grantees that are in substantial compliance with the terms and
conditions of their awards and whose awards are not suspended or in the process of termination and, for revolving loan

Page 277 GAO-21-191
EDA oﬃcials told us that they are taking steps to encourage new grantees to participate in
the competitive award process by holding virtual meetings with regional and local economic
development stakeholders, issuing social media advisories, and providing guidance on the grant
application process to local organizations. As of September 30, 2020, EDA had obligated $27
million in CARES Act funds through competitive grant awards to 10 grantees, including one new
grantee. EDA oﬃcials told us that approximately 44 percent of the approximately 950 competitive
award applications it had received as of September 30, 2020, were from new applicants.470

Spending challenges. EDA oﬃcials told us that they anticipate obligating approximately 90
percent of the $1.47 billion available for grants under the CARES Act by the third quarter of ﬁscal
year 2022, and the remaining 10 percent by the fourth quarter of ﬁscal year 2022. According to
EDA oﬃcials, some of the challenges to distributing funds are limited local capacity to prepare
and submit applications and the length of the required review processes for some types of
projects, such as infrastructure projects, which may require environmental or historic preservation
reviews.471 EDA oﬃcials noted that they are still hiring the additional staﬀ authorized by the CARES
Act. As of September 30, 2020, EDA oﬃcials said they had hired 70 of the approximately 100
additional staﬀ they plan to bring on to help manage and oversee their CARES Act activities. EDA
expects to complete hiring for CARES Act-funded-positions by spring 2021.

Oversight. EDA oﬃcials said they are taking steps to integrate oversight best practices identiﬁed
by Commerce’s Oﬃce of Inspector General into their CARES Act response.472 This includes
updating existing procedures, hiring a new executive manager responsible for managing and
coordinating EDA’s CARES Act activities, and participating in training on grant management,
oversight, and fraud awareness led by the Oﬃce of Inspector General. As of late September
2020, EDA had hired a new executive manager and was ﬁnalizing its performance monitoring
system for the CARES Act awards. To oversee grantee activities, the agency plans to increase the
frequency of CARES Act award progress reviews and ﬁnancial monitoring to at least semiannually,

fund recipients, whose EDA-funded revolving loan funds were rated “A” or “B” under EDA’s Revolving Loan Fund Risk
Analysis System were eligible to apply for a noncompetitive CARES Act award.
469EDA provides grants to eligible entities to capitalize revolving loan funds that lend to businesses that cannot
otherwise obtain traditional bank ﬁnancing. As of September 30, 2020, the remaining $173 million in grants was
awarded to 365 economic development districts and 46 Indian tribes to help develop COVID-19 economic recovery
strategies, and to 62 universities to provide technical or other assistance to businesses’ and communities’ economic
recovery eﬀorts.
470New applicants are those that have never applied for an EDA grant or have not applied within the last 10 years.
471EDA anticipates making awards for infrastructure projects that address the eﬀects of COVID-19 on various
communities. Examples of such projects include broadband infrastructure to support telecommuting, public
infrastructure to support local manufacturing facilities producing pandemic response items, and infrastructure to
support diversiﬁcation of local economies that are highly dependent on sectors vulnerable to COVID-19 (e.g., tourism).
472Department of Commerce, Oﬃce of Inspector General, Bipartisan Budget Act of 2018: Oversight Challenges Facing
the Economic Development Administration, OIG-18-022 (Washington, D.C.: June 4, 2018). The Oﬃce of Inspector General
identiﬁed ﬁve actions EDA should take to oversee 2018 disaster relief funds: (1) follow a comprehensive oversight
implementation strategy; (2) acquire suﬃcient staﬀ with the appropriate proﬁciency; (3) develop a risk management
strategy to strengthen internal control; (4) mitigate fraud, waste, and abuse; and (5) identify unused funds for use on
other eligible projects.

Page 278 GAO-21-191
as opposed to the annual ﬁnancial monitoring conducted as part of its regular oversight.473 In
addition, according to EDA oﬃcials, CARES Act awards for all noninfrastructure grantees will be
subject to EDA’s new performance measurement and evaluation process beginning in December
2020.474

Agency Comments
We provided EDA (within Commerce) and the Oﬃce of Management and Budget with a draft of
this enclosure. Neither agency had comments.

GAO’s Methodology
To conduct this work, we reviewed EDA’s grant award data as of September 30, 2020, federal laws
and agency documents, and written responses from EDA oﬃcials. We assessed the reliability of
EDA’s data by reviewing relevant documentation and written responses from agency oﬃcials.
We determined that the data were suﬃciently reliable for the purpose of describing state-
level award distribution. To better understand local community experience with EDA funds, we
also interviewed two nationwide organizations that represent organizations responsible for
economic development activities in their communities. Their views are not generalizable to other
associations that work in community economic development, but oﬀered important perspectives.

Contact information: John Pendleton, (202) 512-8678, pendletonj@gao.gov

473For CARES Act–funded grantees, EDA plans to perform quarterly progress reviews and semiannual ﬁnancial
monitoring of infrastructure grants and semiannual progress reviews and ﬁnancial monitoring of noninfrastructure
grants.
474Under EDA’s new performance measurement and evaluation system, all noninfrastructure grantees are required to
report semiannually on the outputs of their activities (such as the number of trainings held or loans made) and annually
on the outcomes of those activities (such as the number of jobs created).

Page 279 GAO-21-191
Paycheck Protection Program
The Small Business Administration has started accepting decisions from lenders on Paycheck
Protection Program loan forgiveness, and the loan forgiveness process will be ongoing for some
time.

Entities involved: Small Business Administration, Department of the Treasury

Key Considerations and Future GAO Work
In June 2020, we recommended that the Small Business Administration (SBA) develop and
implement plans to identify and respond to risks in the Paycheck Protection Program (PPP) to
ensure program integrity, achieve program eﬀectiveness, and address potential fraud, including
in loans of $2 million or less. Consistent with our recommendation, SBA has developed oversight
plans but has not provided requested documentation yet detailing its plans and how it will
implement them.

Our work on PPP is ongoing. We continue to examine the borrowers that received the PPP loans,
the safeguards SBA implemented to help ensure that lenders and borrowers complied with
program requirements, and the loan forgiveness process.

Background
The CARES Act and the Paycheck Protection Program and Health Care Enhancement Act
appropriated a total of $670 billion for PPP under SBA’s largest guaranteed loan program, its 7(a)
small business lending program.475 PPP loans, made by lenders but guaranteed 100 percent by
SBA, are low interest (1 percent) and fully forgivable if certain conditions are met.476

As of August 8, 2020 (the close of the program’s application period), lenders had made over 5.2
million PPP loans totaling more than $525 billion.477 According to SBA oﬃcials, SBA had obligated

475See Pub. L. No. 116-136, §§ 1102(b), 1107(a)(1), 1112, 134 Stat. 281, 293, 301; Pub. L. No. 116-139, § 101(a), 134 Stat.
620, 620 (2020).
476As originally implemented by SBA, at least 75 percent of the loan forgiveness amount must have been for payroll
costs. In addition, the CARES Act required loans to be used within an 8-week period in order for the loans to be fully
forgiven. However, the Paycheck Protection Program Flexibility Act of 2020 modiﬁed this to at least 60 percent and
allowed borrowers to pay or incur those expenses over a 24-week period. Pub. L. No. 116-142, § 3, 134 Stat. 641, 641-42
(2020). Under the Paycheck Protection Program Flexibility Act of 2020, the covered period for PPP loans ends the earlier
of 24 weeks after origination or December 31, 2020.
477Totals exclude canceled loans. According to SBA, canceled loans may include, but are not limited to, duplicative
loans, loans not closed for any reason, and loans that were fully paid oﬀ. In our September 2020 report, we provided
information on the types of borrowers that received PPP loans and the size of PPP loans.

Page 280 GAO-21-191
about $532 billion for PPP, including lender fees, and expended about $528 billion as of October
31, 2020.

Overview of Key Issues
Loan forgiveness process. As shown in the ﬁgure below, the PPP loan forgiveness process
will be ongoing for some time. The period for requesting loan forgiveness varies because the
borrower may submit the loan forgiveness application any time on or before the maturity date
of the loan—including before the end of the 8- or 24-week covered period—if the borrower has
used all of the loan funds for which the borrower is requesting forgiveness.478 Borrowers are
incentivized to wait no more than 10 months after the last day of the covered period to apply
for loan forgiveness because the loan deferral period ends then (meaning that borrowers must
start making payments of principal, interest, and fees).479 However, as of October 19, 2020, not
all lenders had begun accepting loan forgiveness applications. Once a borrower submits a loan
forgiveness application, lenders have 60 days to make a decision, and SBA has 90 days after the
lender issues its decision to SBA, subject to any SBA review of the loan or loan application, to remit
the appropriate forgiveness amount to the lender. As a result, borrowers that choose not to apply
for forgiveness until October 2021 may not get resolution on their loan forgiveness application
until March 2022 (or later if there are appeals or the borrower waits until after the deferment
period to apply for loan forgiveness).

478For loans made before June 5, 2020, the maturity is 2 years; however, borrowers and lenders may mutually agree
to extend the maturity of such loans to 5 years. For loans made on or after June 5, 2020, the maturity is 5 years. For
purposes of loan forgiveness, the covered period is generally the 24-week period beginning on the date the lender
disburses the PPP loan. Alternatively, a borrower that received a PPP loan before June 5, 2020, may elect for the covered
period to end 8 weeks after the date of disbursement of the PPP loan.
479The loan deferral period can extend past the 10-month mark if the borrower’s loan forgiveness application is still
being processed because the deferment does not end until SBA remits the forgiveness payment (if any).

Page 281 GAO-21-191
Paycheck Protection Program (PPP) Loan Forgiveness Process Time Frames

a
The maximum time for PPP loan forgiveness may take longer if the borrower waits until after the deferment period to apply
for loan forgiveness.
b
SBA’s Loan Review Procedures Interim Final Rule subjected the 90 day remittance timeline to any SBA review of the loan or
loan application. 85 Fed. Reg. 33,010, 33,013 (June 1, 2020).

According to SBA oﬃcials, SBA had received about 397,000 loan forgiveness decisions from
lenders (about 7.6 percent) as of November 4, 2020, and had reviewed all of these decisions
using an automated review tool to identify potential indicators of noncompliance with select
eligibility requirements, fraud, or abuse. SBA oﬃcials stated that as of October 2, 2020, SBA had
begun remitting loan forgiveness payments for loans of less than $2 million that were not ﬂagged
by the automated tool.480 As of October 30, 2020, SBA was still ﬁnalizing documentation on its
procedures for reviewing lenders’ loan forgiveness decisions.

In September 2020, 10 trade associations representing banks and credit unions of all sizes
sent a letter to Congress that called for simplifying the “overly complicated” loan forgiveness
process.481 They expressed support for proposed legislation that would simplify the forgiveness
application process for the smallest borrowers, stating that such measures would eliminate
the existing requirement to spend several hours completing onerous paperwork or hiring
consultants to comply with the existing PPP loan forgiveness forms. On October 8, 2020, SBA
and the Department of the Treasury (Treasury) posted an interim ﬁnal rule that simpliﬁed the
forgiveness and loan review processes for PPP loans of $50,000 or less.482 In conjunction with the
rule, SBA released a new form that requires fewer calculations and less documentation for eligible
borrowers.483

480According to SBA oﬃcials, as of November 4, 2020, SBA had made about 168,000 forgiveness payments totaling $20.2
billion.
481In the letter, the lender associations also asked Congress to extend PPP. According to SBA oﬃcials, loan forgiveness
is prescribed by statute but SBA has worked to make the process as user-friendly as possible, consistent with the statute
and the agency’s obligation to protect taxpayer dollars.
48285 Fed. Reg. 66,214 (Oct. 19, 2020). According to SBA, there are approximately 3.57 million outstanding PPP loans of
$50,000 or less, totaling approximately $62 billion.
483Borrowers that use the new form are exempt from reductions in loan forgiveness amounts based on reductions
in full-time equivalent (FTE) employees or in employee salaries or wages. They also are not required to show the

Page 282 GAO-21-191
SBA oversight plans. In our June 2020 report, we recommended that SBA develop and implement
plans to identify and respond to risks in PPP to ensure program integrity, achieve program
eﬀectiveness, and address potential fraud, including in loans of $2 million or less. SBA neither
agreed nor disagreed with our recommendation at that time. Because SBA had limited time to
implement up-front safeguards for the PPP loan approval process and assess program risks,
we reported that ongoing oversight would be crucial. We also reported that although SBA had
announced eﬀorts to implement safeguards after loan approval, the agency provided limited
information on how it would implement these safeguards.

As we reported in September 2020, SBA has said that it plans to review all PPP loans of $2 million
or more and further stated that it may review any PPP loan it deems appropriate, including loans
of less than $2 million.484 They also told us at the time that a contractor would use the automated
review tool previously discussed to ﬂag potentially questionable loans and that contractor and
SBA staﬀ would conduct a manual review of loans ﬂagged by the tool. According to SBA oﬃcials
in October 2020, SBA was also ﬂagging loans for manual review identiﬁed through a variety of
ways, including Department of Justice (DOJ) or SBA Oﬃce of Inspector General referrals, fraud tips,
credible media reports, or whistleblowers.

According to Treasury oﬃcials, the loan review process will test loans for compliance with program
requirements and evaluate the accuracy of PPP borrowers’ self-certiﬁcations and material
representations. SBA oﬃcials told us that as of October 30, 2020, they had developed the review
process and tested it on some loans but were still reﬁning the process and ﬁnalizing documents
that summarize it. They also told us that they would provide us a document outlining the loan
review process when it was ﬁnalized.

Cases of potential PPP fraud. We reported in October 2020 that given the immediate need for
PPP loans, SBA worked to streamline the program so that lenders could begin distributing these
funds as soon as possible. As a result, we noted that there may be signiﬁcant risk that some
fraudulent or inﬂated applications were approved.

Since May 2020, DOJ has publicly announced charges in over 60 fraud-related cases associated
with PPP funds.485 The charges—ﬁled across the U.S. and investigated by a range of law
enforcement agencies—include allegations of making false statements and engaging in identity
theft, wire and bank fraud, and money laundering. As of September 2020, DOJ estimated that the
defendants in these cases sought to get more than $175 million in PPP loans and actually received
more than $70 million in PPP loans, of which law enforcement agencies have recovered more than
$30 million. Additionally, according to SBA’s Oﬃce of Inspector General, as of October 1, 2020, it
had received tens of thousands of complaints of wrongdoing on its hotline and initiated hundreds
of investigations involving complaints of fraud associated with SBA loan programs.

calculations used to determine their loan forgiveness amount. However, SBA may request information and documents
to review those calculations as part of its loan review process.
484See 85 Fed. Reg. 33,010, 33,012 (June 1, 2020).
485Both SBA and Treasury oﬃcials observed that the number of fraud-related cases was small relative to the large size
of the PPP program.

Page 283 GAO-21-191
Agency Comments
We provided SBA, Treasury, and the Oﬃce of Management and Budget (OMB) with a draft of this
enclosure. SBA and Treasury provided technical comments that we incorporated as appropriate.
OMB did not have any comments.

SBA made one comment that we considered more than technical in nature. It disagreed with
our statement that SBA had not provided documentation detailing its oversight plans and how
it will implement them. Speciﬁcally, SBA stated that it had provided us with a copy of a contract
statement of work and explained in detail the loan review process with its layers of review. SBA
provided us the contract statement of work and a high-level overview of the layers of review in
interviews. However, SBA has not provided documents we have requested, such as procedures
and checklists that SBA and contractor staﬀ will follow during the review process, that would allow
us to evaluate the eﬃcacy of the reviews in identifying noncompliance and potential fraud. In
other comments on the draft report, SBA acknowledged that it was still ﬁnalizing documents that
summarize the loan review process.

GAO’s Methodology
To conduct this work, we reviewed interim ﬁnal rules and guidance issued by SBA and Treasury
and interviewed SBA and Treasury oﬃcials. We assessed the reliability of SBA’s data by
interviewing SBA oﬃcials. We determined that the data were suﬃciently reliable for reporting on
the number and dollar amount of PPP loans and the status of expenditures.

Contact information: William B. Shear, (202) 512-8678, shearw@gao.gov

Related GAO Product
Small Business Administration: COVID-19 Loans Lack Controls and Are Susceptible to Fraud,
GAO-21-117T. Washington, D.C.: October 1, 2020.

Page 284 GAO-21-191
Economic Injury Disaster Loan Program
The Small Business Administration’s cumulative average processing time for Economic
Injury Disaster Loan applications has increased from about 29 to about 31 days since our
September 2020 report. We continue to have concerns about the agency’s communication of
program information, such as what information applicants should provide to SBA to request
reconsideration of declined applications, and management of fraud risk.

Entity involved: Small Business Administration

Key Considerations and Future GAO Work
We remain concerned about challenges we reported in September 2020 related to the Small
Business Administration’s (SBA) communication of program information to Economic Injury
Disaster Loan (EIDL) applicants. Stakeholders also continue to raise questions about loan caps
and the extent to which the EIDL program is meeting small business needs, as businesses face
uncertainties surrounding the duration of the pandemic. Finally, we continue to be concerned
about the potential for fraud in the program and have ongoing work related to internal control
and fraud prevention.

As we reported on October 1, 2020, we have experienced delays in obtaining data and information
requested from SBA. SBA has provided some of the information we requested, and we are working
with SBA to obtain complete records in order to continue our work.

Background
To assist small businesses adversely aﬀected by COVID-19, in the Paycheck Protection Program
and Health Care Enhancement (PPPHCE) Act, Congress appropriated $50 billion in loan credit
subsidies for SBA to make EIDL loans. Additionally, in the CARES Act and the PPPHCE Act, Congress
appropriated $20 billion for advances, a new component of the program.486 On July 11, 2020, SBA
announced that it had fully allocated the $20 billion in funding for EIDL advances and stopped
accepting requests for them. The agency plans to continue to accept applications for EIDL loans
through either December 31, 2020, or when funding is exhausted, whichever comes ﬁrst.487

486The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, made businesses experiencing
economic injury caused by COVID-19 eligible for the EIDL program. As a result, SBA has used its existing $1.1 billion in
loan credit subsidy to provide between $7 billion and $8 billion in EIDL loans to aﬀected businesses. The loan credit
subsidy covers the government’s cost of extending or guaranteeing credit and is used to protect the government
against the risk of estimated shortfalls in loan repayments. SBA also provided advances using the $10 billion Congress
appropriated under the CARES Act. Under the Paycheck Protection Program and Health Care Enhancement Act,
Congress appropriated another $10 billion for advances and $50 billion in loan credit subsidy for EIDL loans.
487SBA’s application deadline for COVID-19-related EIDL loans is December 31, 2020, and CARES Act changes to
application requirements for EIDL loans due to COVID-19 are in eﬀect through December 31, 2020. However, Congress
did not include an application deadline for EIDL loans due to COVID-19.

Page 285 GAO-21-191
Overview of Key Issues
SBA continues to process EIDL loan applications. As of October 3, 2020, SBA had accepted
about 15.5 million applications for EIDL loans related to COVID-19 and approved about 3.6 million
of these applications, totaling about $194.2 billion in loans (or an average of about $53,000 per
loan). As of September 30, 2020, SBA oﬃcials said the agency had $24.89 billion in loan credit
subsidy remaining and estimated that the agency could make about $279.1 billion in additional
loans.

Loan recipient characteristics vary. EIDL loan data as of October 4, 2020 indicate that
businesses in certain states obtained higher amounts of EIDL loans. The average loan size for each
borrower by state ranged from about $42,000 in Mississippi to about $63,000 in North Dakota.
In 21 states, the average loan size was below the national average of $53,000. In 29 states and
the District of Columbia, the average loan size was at or above $53,000. Additionally, the average
dollar amount of EIDL loans relative to the total number of small businesses in each state ranged
from about $3,500 in Kentucky to about $8,200 in California (see ﬁgure).

Average Dollar Amount of Economic Injury Disaster Loans Relative to the Total Number of Small Businesses in
Each State, as of October 4, 2020

Note: Numbers of small businesses are from the Small Business Administration’s 2020 Small Business Proﬁle, and dollar
amounts of loans are from its Economic Injury Disaster Loan program data as of October 4, 2020. We excluded U.S. territories
from the ﬁgure because the 2020 Small Business Proﬁle used diﬀerent measures for them.

Application processing times increased. As of October 3, 2020, SBA’s cumulative average
processing time for all EIDL loan applications was about 31 days, an increase of 2 days compared

Page 286 GAO-21-191
to the approximately 29-day processing time we reported as of August 22, 2020.488 This
increase resulted primarily from an increase in cumulative average processing time for declined
applications from about 17 days to about 22 days. In comparison, the cumulative average
processing time for approved applications remained at around 44 days.

Applicant understanding of ﬁnancial terms and missing information may aﬀect application
outcomes. Representatives of a few state or regional Small Business Development Centers (SBDC)
that assist small businesses told us that SBA could better communicate certain information
about the application and reconsideration process. For example, representatives from ﬁve of
the six SBDCs we spoke with told us that some applicants did not understand certain terms
on the EIDL application—such as “cost of goods”—which resulted in some applicants inputting
incorrect information. SBA uses “cost of goods” to determine whether an applicant should
receive a loan and how much. Inputting incorrect information may result in application denials
or inaccurate estimates of applicants’ need. Representatives from four SBDCs told us SBA did not
provide reasons for declined applications to some applicants, resulting in uncertainty as to what
information applicants should provide to SBA to request reconsideration.489

Internal control and fraud risk management appear to be deﬁcient. We reported in
September 2020 and again in October 2020 that eﬀorts to expedite processing may have
contributed to increased fraud risk in the EIDL program.490 In July 2020, the SBA Oﬃce of Inspector
General (OIG) issued a preliminary review of the EIDL program and warned SBA about indicators
of widespread potential fraud and deﬁciencies with SBA’s internal control.491 In October 2020, the
SBA OIG reiterated these concerns and stated that relaxed internal controls and unprecedented
demand for EIDL loans put signiﬁcant stress on SBA’s existing controls.492 Further, it reported
that SBA approved billions of dollars in potentially fraudulent EIDL loans to applicants who later
changed the bank account number associated with the loan, applicants who submitted duplicate
information, and ineligible entities.

The SBA OIG made 10 recommendations for SBA to strengthen its controls to lower fraud risk and
recover funds from ineligible businesses. SBA partially agreed with 9 of the recommendations and
disagreed with 1 recommendation. While SBA noted that there was insuﬃcient evidence that loans
were approved and disbursed to ineligible businesses, SBA OIG stated that SBA is taking corrective
actions to fully implement its recommendations. In addition, since May 2020, the Department of

488These data include applications that were declined, approved, and withdrawn. They exclude declined applications
that SBA is reconsidering.
489For declined applications, SBA provides applicants up to 6 months to request a reconsideration of the decision.
SBA may request additional information as part of the reconsideration, such as an applicant’s tax returns and driver’s
license.
490SBA oﬃcials stated that CARES Act changes eased EIDL program requirements, such as acceptance of an applicant’s
self-certiﬁcation of eligibility for advances and not requiring tax returns.
491Small Business Administration, Oﬃce of Inspector General, Serious Concerns of Potential Fraud in Economic Injury
Disaster Loan Program Pertaining to the Response to COVID-19, Report No. 20-16 (Washington, D.C.: July 28, 2020).
492Small Business Administration, Oﬃce of Inspector General, Inspection of Small Business Administration’s Initial Disaster
Assistance Response to the Coronavirus Pandemic, Report No. 21-02 (Washington, D.C.: Oct. 28, 2020).

Page 287 GAO-21-191
Justice has announced fraud investigations related to the EIDL program and, in conjunction with
other federal agencies, announced charges related to EIDL fraud.493

Other challenges may aﬀect EIDL applicants during the COVID-19 pandemic. SBDC
representatives told us that in general, EIDL had helped many small businesses but had not
suﬃciently met some businesses’ ﬁnancial needs. One reason for this is the limit on loan
amounts. As we reported in September 2020, on May 4, 2020, SBA placed a limit of $150,000 on
EIDL loans. SBA data show that the agency approved about 544,000 EIDL loans in the amount
of $150,000 for businesses that had an estimated economic injury greater than $150,000, as of
October 3, 2020. For some small businesses, in particular larger small businesses, loans capped
at $150,000 were insuﬃcient to cover operating expenses, according to representatives from ﬁve
state or regional SBDCs and the national SBDC association. Also, representatives from four SBDCs
said that as businesses reopen, they could beneﬁt from an additional round of EIDL funding due
to uncertainties surrounding the duration of the pandemic, among other things. Representatives
from three SBDCs said that although some businesses are seeking additional funding beyond
SBA—through lenders, for example—pandemic closures and conservative lending practices in
response to pandemic-related uncertainty makes such funding diﬃcult to obtain.494

Agency Comments
We provided SBA and the Oﬃce of Management and Budget with a draft of this enclosure; neither
had any comments.

GAO’s Methodology
To conduct this work, we reviewed publicly available SBA data on EIDL loans as of October 4,
2020 and SBA data on EIDL loan applications and processing times as of October 3, 2020. We
assessed the reliability of SBA’s data by reviewing relevant documentation and written responses
from agency oﬃcials. We determined that the data were suﬃciently reliable for our purposes of
describing program trends. In addition, we interviewed representatives from the national SBDC
association and a nongeneralizable sample of six state or regional SBDCs located in California,
Illinois, Georgia, New York, Oklahoma, and Puerto Rico about their clients’ experiences with
the EIDL program. We selected these SBDCs based on factors including the share of a state’s
businesses that received EIDL loans and the share that experienced a large negative impact from
the pandemic, according to U.S. Census Bureau data.

493Since May 2020, the Department of Justice has announced charges in 13 fraud-related cases involving EIDL funds.
The charges—based on investigations by a range of law enforcement agencies—include making false statements and
engaging in identity theft, wire and bank fraud, and money laundering.
494The Federal Reserve’s Senior Loan Oﬃcer Opinion Survey for the third quarter of 2020 showed that banks have
tightened their credit standards and terms on commercial and industrial loans to small businesses.

Page 288 GAO-21-191
Contact information: William B. Shear, (202) 512-8678, shearw@gao.gov

Related GAO Product
Small Business Administration: COVID-19 Loans Lack Controls and Are Susceptible to Fraud.
GAO-21-117T. Washington, D.C.: October 1, 2020.

Page 289 GAO-21-191
Federal Reserve Lending Facilities
The CARES Act lending facilities’ transaction volume and purchases of assets remain limited,
and the use of non-CARES Act facilities has diminished since May 2020. On November 19, 2020,
Treasury announced that it plans to allow the CARES Act facilities to expire on December 31, 2020.

Entities involved: Department of the Treasury, Federal Reserve System

Key Considerations and Future GAO Work
In July 2011, we made two recommendations regarding lending programs (or facilities) that the
Board of Governors of the Federal Reserve System (Federal Reserve) established in response to
the 2007–2009 ﬁnancial crisis. These two recommendations are to (1) strengthen procedures
related to high-risk borrowers and (2) estimate and track losses within and across all facilities.
Both recommendations are relevant for the recently established facilities because they operate
similarly. We continue to examine the status of our recommendations as part of our ongoing
review of the Federal Reserve’s design, implementation, and monitoring of the facilities, and the
extent to which markets disrupted by the pandemic are recovering.495

Background
The CARES Act appropriated $500 billion to the Department of the Treasury (Treasury) and
authorized at least $454 billion of that total for Treasury to support the Federal Reserve in
establishing lending facilities to provide economic relief to states, tribes, municipalities, and
eligible businesses and nonproﬁt organizations.496 As of October 15, 2020, Treasury had
committed about 43 percent of these funds, which remains unchanged from what we reported
in June 2020. The Federal Reserve also established four facilities that do not receive CARES
Act–appropriated funds; these facilities aim to provide liquidity to the ﬁnancial sector and
businesses.

495Federal Reserve has taken actions that addressed the intent of the ﬁrst recommendation. Federal Reserve oﬃcials
said they have taken some actions to address the second recommendation. However, some documentation we need for
a full assessment of the actions were not available at the time of our reporting.
496The facilities are authorized under Section 13(3) of the Federal Reserve Act, which permits the Federal Reserve to
provide emergency lending, and are approved by the Secretary of the Treasury. Section 13(3) facilities must comply with
requirements relating to loan collateralization and taxpayer protection, among others. Of the $500 billion appropriated
under Section 4027 of the CARES Act, $25 million shall be made available to the Special Inspector General for Pandemic
Recovery.

Page 290 GAO-21-191
Overview of Key Issues
As of October 15, 2020, all nine Federal Reserve lending facilities with CARES Act funding were
operational. The transaction volume across these facilities remained limited. As of the same date,
all four facilities without CARES Act funding also were operational.

CARES Act facilities. As of October 15, 2020, the Federal Reserve lending facilities supported by
Treasury’s CARES Act funding had conducted almost $21 billion in transactions (see table).

Page 291 GAO-21-191
Federal Reserve Lending Facilities with CARES Act Funding, as of October 15, 2020
Starting Transaction
activity date volume, as of
(all end Dec. Oct. 15, 2020
Name of facility Purpose Facility activity 31, 2020) ($ billions)

Primary Market Support large Primary market facility: purchase June 29, 2020 0
Corporate Credit businesses qualifying bonds, and purchase May 12, 2020 13.15
Facility portions of qualifying syndicated loans
or bonds at issuance.
Secondary Market
Corporate Credit Secondary market facility: purchase
Facility qualifying corporate bonds, certain
bond portfolios, and U.S.-listed
exchange-traded funds in the
secondary market.

Businesses Businesses Businesses Businesses 3.04 total, for
Main Street New Loan Support small New loan and priority loan facilities: July 6, 2020, all Main Street
Facility and mid-sized purchase 95 percent participation for facilities facilities
businesses interest in newly issued eligible supporting
Main Street Priority
loans that eligible lenders make to small and
Loan Facility Nonproﬁts
eligible small and mid-sized for-proﬁt mid-sized
Main Street Expanded Support small and borrowers. businesses
mid-sized nonproﬁt
Loan Facility
organizations Expanded loan facility: purchase 95 Nonproﬁts
Nonproﬁts percent participation interest in a new Sept. 4, 2020,
Main Street Nonproﬁt extension of credit under an existing for facilities
Organization New eligible loan made by an eligible lender supporting
Loan Facility to an eligible small and mid-sized for- nonproﬁt
Main Street Nonproﬁt proﬁt borrower. organizations
Organization Nonproﬁts
Expanded Loan Nonproﬁt new loan facility: purchase
Facility 95 percent participation interest in
newly issued eligible loans that eligible
lenders make to eligible nonproﬁt
organization borrowers.
Nonproﬁt expanded loan facility:
purchase 95 percent participation
interest in a new extension of credit
under an existing eligible lender
to eligible nonproﬁt organization
borrowers.

Municipal Liquidity Support states and Purchase eligible notes directly from May 26, 2020 1.65
Facility certain counties, eligible issuers at time of issuance.
cities, multistate
entities, and revenue
bond issuers

Term Asset-Backed Support consumers Provide nonrecourse loans to U.S. June 17, 2020 3.24
Securities Loan and businesses companies secured by qualifying asset-
Facility backed securities generally backed
by recently originated consumer and
business loans.

Page 292 GAO-21-191
Source: GAO analysis of Board of Governors of the Federal Reserve System (Federal Reserve) documents and data. | GAO-21-191

As of October 15, 2020, Treasury had committed $195 billion, or about 43 percent, of the $454
billion from the CARES Act available to support the facilities and disbursed $102.5 billion of that
commitment.497 As of the same date, the nine facilities in operation had conducted about $21
billion in transactions—with the Secondary Market Corporate Credit Facility accounting for $12
billion. October’s total transaction volume of $21 billion is a 31 percent increase from August’s
volume of $16 billion (which we reported in September 2020). Overall, the Federal Reserve has
determined that all CARES Act facilities combined may hold a maximum of $1.95 trillion in assets.
Although demand for the CARES Act facilities continues to be relatively limited, the Main Street
facilities experienced a sizeable increase in activity from August to October. Speciﬁcally, as of
October 15, 2020, the Main Street facilities serving small and mid-sized businesses had conducted
$3.04 billion in transactions, an increase of 769 percent from $350 million in August.498

On November 19, 2020, the Secretary of the Treasury issued a letter to the Chairman of the
Federal Reserve Board announcing that all of the CARES Act facilities will stop purchasing eligible
assets or extending credit on December 31, 2020, the date previously established for the facilities’
termination.499 In the letter, the Secretary stated that “while portions of the economy are still
severely impacted and in need of additional ﬁscal support, ﬁnancial conditions have responded
and the use of these facilities has been limited.” The letter cited improvements in conditions in
certain markets targeted by some of the facilities and stated that banks currently have the lending
capacity to meet the borrowing needs of their corporate, municipal, and nonproﬁt customers.
The letter also requested the Federal Reserve return the unused CARES Act funds to Treasury.
In a statement provided to the press on November 19, 2020, the Federal Reserve stated that
it “would prefer that the full suite of emergency facilities established during the coronavirus
pandemic continue to serve their important role as a backstop for our still-strained and vulnerable
economy.”

In the most recent periodic reports to Congress on the lending facilities, the Federal Reserve Board
stated it continues to expect that the facilities will not result in losses to the Federal Reserve. 500

Non-CARES Act facilities. As of October 15, 2020, all four of these facilities were operational and
had conducted more than $293 billion in transactions—with the Paycheck Protection Program

497To implement these facilities, the Federal Reserve is using legal entities known as special purpose vehicles to
purchase qualifying assets from, or initiate lending to, eligible institutions. Treasury also has made equity investments
in the special purpose vehicles with CARES Act funds. For Treasury loan program subsidies under Section 4003 of the
CARES Act (Economic Stabilization Program), total obligations of budget authority are recorded on a net present value
basis. As a result, total Economic Stabilization Program subsidy obligations related to the Federal Reserve facilities are
$30.12 billion with outlays of $19.07 billion.
498Recently, on October 30, 2020, the Federal Reserve lowered the minimum loan amount for most Main Street facilities
from $250,000 to $100,000. The Main Street Expanded Loan Facility and Nonproﬁt Organization Expanded Loan Facility
have a minimum loan requirement of $10 million.
499See https://home.treasury.gov/news/press-releases/sm1190, accessed Nov. 20, 2020. For CARES Act and non-CARES
Act facilities that include a special purpose vehicle, the responsible Federal Reserve Banks will continue to fund the
vehicle after the facility’s termination date until the vehicle’s underlying assets mature or are sold.
500According to Federal Reserve oﬃcials, the expectation of the facilities incurring no losses for the Federal Reserve
takes into account Treasury’s support using funds appropriated under the CARES Act.

Page 293 GAO-21-191
Liquidity Facility and the Primary Dealer Credit Facility accounting for about $101 billion and
nearly $130 billion, respectively (see table). The majority of transactions in non-CARES Act facilities
occurred before May 15, 2020. In the November 19, 2020 letter to the Chairman of the Federal
Reserve Board, the Secretary of the Treasury requested that the Federal Reserve approve an
extension of 90 days for all four non-CARES Act facilities. 501

501In the November 19, 2020 letter to the Chairman of the Federal Reserve Board, the Secretary of the Treasury
requested that the Board of Governors of the Federal Reserve System approve an extension of 90 days for the non-
CARES Act facilities. As of November 20, 2020, the Federal Reserve had not updated the terms of these facilities to reﬂect
an extension. The Primary Dealer Credit Facility will remain available to primary dealers until December 31, 2020, unless
extended; the Money Market Mutual Fund Liquidity Facility and Paycheck Protection Program Liquidity Facility will not
make credit extensions after December 31, 2020, unless extended; and the Commercial Paper Funding Facility will
terminate on March 17, 2021, unless extended.

Page 294 GAO-21-191
Federal Reserve Lending Facilities without CARES Act Funding, as of October 15, 2020
Transaction
volume, as of
Starting Oct. 15, 2020
Name of facility Purpose Facility activity activity date ($ billions)

Commercial Paper Serve as funding backstop Purchase commercial paper from Apr. 14, 2020 4.27
Funding Facility to provide liquidity for U.S. eligible companies; eligible issuers
issuers of commercial paper include U.S. issuers of commercial
paper, including municipal issuers
and U.S. issuers with a foreign
parent company

Money Market Assist money market mutual Make nonrecourse loans available Mar. 23, 2020 58.01
Mutual Fund funds in meeting demands for to eligible ﬁnancial institutions
Liquidity Facility redemption by households that are secured by high-quality
and other investors assets purchased by the ﬁnancial
institution from money market
mutual funds

Paycheck Protection Facilitate lending by eligible Lend to institutions eligible for Apr.16, 2020 101.22
Program Liquidity institutions that provide loans making PPP loans on a nonrecourse
Facility to small businesses under the basis, taking PPP loans as
Paycheck Protection Program collateral
a
(PPP)

Primary Dealer Provide support to primary Provide loans to primary dealers in Mar. 20, 2020 129.83
Credit Facility dealers to facilitate the exchange for collateral
availability of credit to
businesses and households

Source: GAO analysis of Board of Governors of the Federal Reserve System (Federal Reserve) documents and data. | GAO-21-191

a
The Federal Reserve established the PPP Liquidity Facility under its Section 13(3) authority to encourage participation in the
PPP established under the CARES Act.

Agency Comments
We provided a draft of this enclosure to the Federal Reserve, Treasury, and the Oﬃce of
Management and Budget for review. The Federal Reserve and Treasury provided technical
comments that we incorporated, where appropriate.

GAO’s Methodology
To conduct this work, we reviewed Federal Reserve documentation on each facility, including
term sheets and related press releases; reports to Congress on the facilities; and the most recent
agency transaction data on the facilities available, as of October 15, 2020. We also interviewed

Page 295 GAO-21-191
Federal Reserve oﬃcials and oﬃcials of industry and state and local government associations, and
we obtained updated information from Treasury.

Contact information: Michael E. Clements, (202) 512-8678, clementsm@gao.gov

Related GAO Product
Federal Reserve System: Opportunities Exist to Strengthen Policies and Processes for Managing
Emergency Assistance. GAO-11-696. Washington, D.C.: July 21, 2011.

Page 296 GAO-21-191
Cleaning Federal Buildings
The U.S. General Services Administration plans to obligate most of the $275 million in CARES
Act funds provided to the Federal Buildings Fund in ﬁscal year 2021 for enhanced cleaning and
additional labor, supplies, and operations.

Entity involved: U.S. General Services Administration

Key Considerations and Future GAO Work
We will continue to monitor the U.S. General Services Administration’s (GSA) management of
federal real property as part of our ongoing High Risk Updates.

Background
GSA provides centralized procurement for the federal government, oﬀering billions of dollars’
worth of products, services, and facilities that federal agencies need to serve the public. GSA uses
the Federal Buildings Fund (FBF) for the acquisition, operation, and maintenance of assets in its
building portfolio. The Public Buildings Amendments of 1972 established the FBF, into which GSA
deposits rent collected from tenant agencies.502 Congress exercises control over the FBF through
the appropriations process by determining how much of the FBF can be obligated for various
activities. In addition, it periodically provides supplemental appropriations for the FBF.

The CARES Act provided $275 million to the FBF for GSA to prevent, prepare for, and respond to
COVID-19, domestically and internationally.503 These funds are available to GSA to obligate until
expended without ﬁscal year limitation. The CARES Act also exempts GSA from submitting to
Congress a proposed facility prospectus and reviews under the National Environmental Policy Act
of 1969 when acquiring real property or taking other speciﬁed actions in response to COVID-19.

Overview of Key Issues
GSA had obligated $45,565,052 of the funds provided by the CARES Act to the FBF as of September
30, 2020 and plans to obligate the remaining funds in ﬁscal year 2021 for enhanced cleaning
and additional labor, supplies, and operations. GSA oﬃcials explained that about half of the
funds obligated were used for enhanced cleaning and responding to COVID-19 events and the

502Pub. L. No. 92-312, § 3, 86 Stat. 216, 218-19, codiﬁed as amended at 40 U.S.C. § 592.
503Pub. L. No. 116-136, 134 Stat. 281, 531-532 (2020).The CARES Act also provided $18,650,000 for GSA’s Federal Citizen
Services Fund and $1,500,000 for GSA’s Working Capital Fund. We did not include these funds in our review.

Page 297 GAO-21-191
other half were used for labor, supplies, and operations. GSA oﬃcials explained that the agency
had large labor costs in the beginning of the pandemic due to the need to develop protocols
for responding to the pandemic, but oﬃcials did not anticipate similarly large labor costs going
forward. GSA oﬃcials explained that the agency plans to use most of the funds in ﬁscal year 2021
for cleaning federal buildings. Since most GSA tenants’ workers are still teleworking full time,
GSA has obligated its CARES Act funds slowly. However, the cadence of obligations is expected
to increase as federal workers return to buildings, prompting additional cleaning needs. GSA
oﬃcials said that GSA follows guidance for expending emergency COVID-19 funding outlined in
Oﬃce of Management and Budget (OMB) Memorandum M-20-21, Centers for Disease Control
and Prevention (CDC) guidelines for enhanced cleaning as a result of COVID-19, and GSA guidance
outlining speciﬁc emergency acquisition authorities.504

GSA plans to obligate $200 million of the CARES Act funds for cleaning services and $75 million for
labor, supplies, and operations by the end of ﬁscal year 2021. GSA’s spending plan states that the
agency may need additional funding in 2021 and beyond to support its COVID-19-related eﬀorts.

Enhanced daily cleaning and response to COVID-19 events. GSA oﬃcials explained that all
facilities under GSA’s custody or control will require enhanced cleaning and disinfecting services.
This enhanced cleaning applies to over 8,000 leases and at least 1,500 federally owned buildings.
In conducting these cleaning activities, GSA oﬃcials told us GSA adheres to its Communicable
Disease Pandemic Plan for confronting and managing the COVID-19 pandemic. GSA oﬃcials
explained that the plan applies to all GSA services, including all GSA-controlled facilities. Oﬃcials
also explained that there are two types of increased cleaning: regular cleaning in compliance with
CDC standards and cleaning in response to a COVID-19 event.

• Regular cleaning in compliance with CDC standards. Based on currently issued guidance, GSA has
modiﬁed its speciﬁcations for regular custodial service to help reduce the risk and spread of
COVID-19, and is incorporating new disinfection requirements into existing custodial and lease
contracts.505 GSA will provide cleaning services as outlined in the applicable custodial or lease
contract, including the incorporation of routine cleaning and disinfection of frequently touched
surfaces in common and high-traﬃc areas. GSA estimated the increased cost of cleaning
for routine high touch surface areas for both leased and owned spaces. Once it estimated
these costs, GSA made quarterly timing assumptions for the expenditure of funds based on

504See OMB Memorandum M-20-21, Implementation Guidance for Supplemental Funding Provided in Response to the
Coronavirus Disease 2019 (COVID-19), 2020.
505In a September 2020 Alert Memorandum, the GSA Oﬃce of Inspector General (OIG) explained that GSA does
not have assurance that contractors are cleaning and disinfecting space in accordance with GSA and CDC guidance.
Speciﬁcally, the report found that GSA did not update its contractor oversight plans for COVID-19 cleaning, and
as a result, it does not have assurance that contractors are cleaning and disinfecting space in accordance with
applicable requirements. GSA acknowledged that it did not modify or enhance its custodial contracts in some
cases; however, GSA stated that the GSA Communicable Disease Pandemic Plan does not require the contracts to
be modiﬁed or enhanced and that the decision whether to modify or enhance these plans is left to Contracting
Oﬃcers’ discretion. GSA also stated that, prior to the pandemic, GSA required custodial contracts to include a
pandemic plan. GSA explained that, at the onset of the COVID-19 pandemic, GSA took steps to conﬁrm that all
of its custodial contracts included the pandemic plan and, for the contracts that did not, GSA modiﬁed them to
include a requirement for a pandemic plan. U.S. General Services Administration Oﬃce of Inspector General,
Alert Memorandum: Concerns Regarding PBS’s Communication and Cleaning Procedures for Coronavirus Disease 2019
(COVID-19) Exposures, Memorandum No. A201018-2 (Sept. 3, 2020).

Page 298 GAO-21-191
individual agency plans to return to facilities. GSA oﬃcials said that these assumptions may
change as more data are received and agency plans change.

• Cleaning in response to a COVID-19 event. GSA will also respond to the need for detailed cleaning
and disinfection when a COVID-19 event occurs in buildings under GSA’s control.506 Should an
employee, contractor, or visitor to a GSA-controlled facility develop a conﬁrmed or suspected
case of COVID-19, GSA will provide cleaning of speciﬁc portions of the facility accessed by the
infected individual in accordance with the recommended CDC protocol. As of August 31, 2020,
GSA had addressed 3,409 COVID-19 incidents. However, the GSA Inspector General found in
a September 2020 report that GSA did not always receive timely notice of COVID-19 incidents
from building occupants and did not always provide timely notiﬁcation to tenants of conﬁrmed
COVID-19 cases.507 The cost of the enhanced cleaning for a COVID-19 event may exceed the
applicable custodial or lease contract. GSA oﬃcials explained that GSA estimated obligating
$2.5 million per month to respond to COVID-19 events based on early indicators.508 Oﬃcials
provided an example in which GSA cleaned areas of the Edward R. Roybal Federal Building and
U.S. Courthouse in Los Angeles per CDC guidelines after a tenant reported a COVID-19 case in
April 2020, at a cost of $13,125, according to GSA.

Labor, supplies, and operations. GSA plans to obligate $75 million of the CARES Act funds
on contract support services, overtime labor requirements, supplies, and operational needs at
its facilities. GSA has obligated funds for supplemental labor hours speciﬁcally related to the
pandemic response eﬀort. These supplemental labor hours will be required on an ongoing
basis. Many of the employees that will require supplemental labor hours represent ﬁrst-line
staﬀ working in or directly supporting GSA’s facilities to sustain the new building operations
requirements. In addition, GSA plans to procure incidental items to support GSA-controlled
facilities to educate employees and provide necessary supplies required to abide by safety
protocols. For example, GSA plans to purchase hand sanitizer and stations, hand foam, wipes,
dispensers, reﬁlls, batteries, wayﬁnding signage, signs and stickers for lobbies and common
areas, sneeze guards and barriers, disinfection webinars and training, and portable hand washing
stations for the majority of buildings.

506A COVID-19 event is an instance when someone who is conﬁrmed or suspected to have COVID-19 enters or
occupies a GSA-controlled facility.
507GSA OIG found that GSA did not always receive timely notice of positive COVID-19 test results from building
occupants. GSA OIG selected a limited sample of 11 conﬁrmed COVID-19 cases reported in GSA-owned or leased
locations between March 23, 2020, and May 14, 2020. GSA OIG found two cases of signiﬁcant lags in time between
when tenant agencies became aware of an employee’s positive COVID-19 test result and when the agencies notiﬁed
GSA. In both cases, approximately 1 week passed before GSA was notiﬁed. Additionally, GSA did not always provide
timely notiﬁcation of positive COVID-19 cases to building occupants. In two of seven GSA-owned locations sampled,
GSA did not notify occupants of the positive COVID-19 cases within 24 hours of the reported incident, as required
by GSA and CDC guidance. In one instance, GSA notiﬁed occupants 16 days after receiving notiﬁcation. In another,
GSA notiﬁed occupants 7 days after receiving notiﬁcation. U.S. General Services Administration Oﬃce of Inspector
General, Alert Memorandum: Concerns Regarding PBS’s Communication and Cleaning Procedures for Coronavirus Disease
2019 (COVID-19) Exposures, Memorandum No. A201018-2 (Sept. 3, 2020).
508This estimate includes a contingency amount to cover variations from those indicators. GSA oﬃcials said that
this contingency amount is necessary until GSA can obtain more ﬁrm agency plans, get updated contract pricing
data, and adjust estimates accordingly.

Page 299 GAO-21-191
Agency Comments
We provided a draft of this enclosure to GSA and OMB for review and comment. GSA and OMB
provided technical comments on this enclosure, which we incorporated as appropriate.

GAO’s Methodology
To conduct this work, we reviewed agency documents and interviewed GSA oﬃcials about how
they plan to implement provisions of the CARES Act.

Contact information: David Trimble, (202) 512-2834, trimbled@gao.gov

Page 300 GAO-21-191
Amtrak Grants
Amtrak used CARES Act funds to address shortfalls in ticket revenue, pay employee salaries, and
cover other operational expenses, but faces immediate and longer-term challenges.

Entities involved: Amtrak; Federal Railroad Administration, within the Department of
Transportation

Key Considerations and Future GAO Work
We will continue to monitor how the National Railroad Passenger Corporation (commonly known
as Amtrak) uses CARES Act funds and any future supplemental ﬁnancial assistance, as well as its
rail service and workforce levels.

Background
Amtrak provides almost all intercity passenger rail service in the U.S. across an approximately
21,000-mile rail network. This system includes three lines of business: the Northeast Corridor,
28 state-supported short-distance (750 miles or less) routes funded in part by the 17 states they
serve, and long-distance (greater than 750 miles) routes that connect rural areas with major
cities.509 Amtrak has seen steady increases in ridership and revenues on its network in recent
years, with over 32 million trips taken in ﬁscal year 2019, but operated at an overall loss of $881
million.510

Amtrak depends on grants from the federal government to operate the national passenger rail
system and reinvest in the underlying infrastructure. Amtrak receives federal funding through
grants from the Federal Railroad Administration (FRA), which executes and oversees grant
agreements with Amtrak. The Further Consolidated Appropriations Act, 2020, provided $700
million for the Northeast Corridor Grants program and $1.3 billion for the National Network Grant
program, which includes the state-supported and long-distance routes.511

As a result of the COVID-19 pandemic, Amtrak has experienced a signiﬁcant drop in ridership
and corresponding revenue from ticket sales across its network. In response, Amtrak signiﬁcantly
reduced, and in some cases temporarily suspended, its service. Amtrak received $1.018 billion
through the CARES Act to prevent, prepare for, and respond to COVID-19, including $492 million

509Amtrak owns about 360 of the 457 miles of the Northeast Corridor, which generally runs from Boston,
Massachusetts, to Washington, D.C. However, Amtrak provides the majority of its long-distance and state-supported
service on infrastructure (tracks and other facilities) owned by others, such as freight railroads or public agencies.
510Amtrak oﬃcials thought that Amtrak might for the ﬁrst time generate passenger revenues exceeding operating
expenses in ﬁscal year 2020.
511Pub. L. No. 116-94, 133 Stat. 2959-60 (2019). This law also allowed the Department of Transportation to retain up to
one-half of 1 percent of the $2 billion in funds for speciﬁed activities of FRA and other entities.

Page 301 GAO-21-191
through the Northeast Corridor Grants program and $526 million through the National Network
Grants program.512 Of the $526 million provided through the National Network Grants program, at
least $239 million must be made available to be used to oﬀset payments by states to Amtrak for
operating its state-supported routes.513 FRA has awarded all of these funds to Amtrak, and as of
September 30, 2020, Amtrak had expended $871 million, or 86 percent of the funds (see table).

512Pub. L. No. 116-136, 134 Stat. 281, 598-599 (2020).
513The CARES Act limits the amount that Amtrak can invoice the states for their share of routes that Amtrak operates on
behalf of states in ﬁscal year 2020 to 80 percent of the amount each state paid in ﬁscal year 2019. For example, if a state
paid the company $1 million for this service in ﬁscal year 2019, the state cannot pay more than $800,000 in ﬁscal year
2020. To oﬀset this reduction, the CARES Act provided $239 million in funds that Amtrak is to draw down each month to
cover the diﬀerence between the full cost of providing state-supported services and the reduced amount the company
can charge the states. The CARES Act also allowed FRA to transfer and merge the funds provided for the Northeast
Corridor Grants and National Network Grants programs.

Page 302 GAO-21-191
Amtrak Expenditure of CARES Act Funds by Grant Program, as of September 30, 2020
National Network State-
Northeast Corridor National Network supported routes Total
(in dollars) (in dollars) (in dollars) (in dollars)

Total CARES Act funds 492 million 287 million 239 million 1.018 billion
received

Total expended as of 423 million 287 million 161 million 871 million
September 30, 2020

Total available on 69 million 0 78 million 147 million
October 1, 2020

Source: GAO presentation of Amtrak data. | GAO-21-191

Amtrak established four expenditure categories for the CARES Act funds to support immediate
response activities on both the Northeast Corridor and the National Network. The ﬁgures below
are what Amtrak had expended as of September 30, 2020:514

• Operating labor. Amtrak expended a large portion of the CARES Act funds to oﬀset its loss in
ticket revenue—which Amtrak uses to pay its employees—and to avoid staﬀ furloughs in ﬁscal
year 2020 ($297 million).

• Direct COVID-19 expenditures. Amtrak expended CARES Act funds for supplies to increase
train, station, and oﬃce cleaning, protective gear, and improve train ventilation ($2.1 million).

• Protected pay. Amtrak expended CARES Act funds to provide up to 14 days of paid leave for
workers aﬀected by COVID-19 ($4.5 million).

• Other qualifying expenses. Amtrak expended CARES Act funds for train-related expenses
such as fuel, power, and commissary food ($408 million).

Overview of Key Issues
Amtrak oﬃcials said they had not faced signiﬁcant challenges expending the CARES Act funds and
said that they were able to modify their existing processes for managing the Northeast Corridor
and the National Network grants to account for the CARES Act funds. The Amtrak Oﬃce of
Inspector General reported in August 2020 that Amtrak moved swiftly to develop a comprehensive
plan for using, tracking, and reporting on CARES Act funds.515 Amtrak oﬃcials stated that they
faced some initial challenges in facilitating the distribution of funds for the state-supported routes,
but said that they are working with their state partners to administer the state payments and that

514The remaining $161 million are the state-supported funds allocated to date.
515Amtrak, Oﬃce of Inspector General, Governance: Observations on Amtrak’s Use of CARES Act Funds, OIG-MAR-2020-013
(Washington, D.C.: Aug. 5, 2020).

Page 303 GAO-21-191
collaboration has improved. However, the Inspector General reported that while Amtrak is taking
steps to provide transparency over how it is allocating the $239 million of CARES Act funds set
aside for state-supported routes, the Inspector General has an ongoing audit assessing the cost-
sharing and billing processes between Amtrak and its state partners.516

Immediate and long-term challenges. While Amtrak is not currently experiencing challenges
expending the CARES Act funds, according to oﬃcials, Amtrak continues to face both immediate
and longer-term eﬀects on its operations stemming from the pandemic that include reduced
ridership and revenue, loss of state and commuter rail support, and uncertainty over long-term
ﬁnancial sustainability.

• Ridership and revenue. Amtrak continues to face reduced ridership on all of its lines of business
after experiencing an overall 80 percent reduction in ridership from average prepandemic
levels as of September 2020 on all lines of business (see ﬁgure). 517 According to Amtrak
oﬃcials, ridership slowly began increasing in April 2020, and they initially expected ridership
to increase to about 50 percent of ﬁscal year 2019 levels by September 2020. However,
ridership has plateaued since July 2020. Amtrak now expects that system-wide ridership in
ﬁscal year 2021 will be about 34 percent of ﬁscal year 2019 levels, in part because it anticipates
widespread telework to continue into the summer of 2021 or later.

Amtrak Ridership Actuals and Forecast, October 2018–September 2021

Note: The forecast for the ﬁrst half of 2021 is tentative due to the uncertainty in the improvement in travel rates, the
availability of a vaccine to the public, and the end of the seasonal ﬂu, according to Amtrak oﬃcials.

516The Inspector General audit is not speciﬁcally looking at CARES Act funds, but according to oﬃcials, some pandemic
issues could arise.
517The prepandemic average is from October 2018 to February 2020. The post-pandemic average is from March
2020 to September 2020.

Page 304 GAO-21-191
Because revenue from ticket sales has fallen along with ridership, Amtrak has also dealt with
reduced revenues and budget shortfalls. For example, Amtrak revenues were on average 81
percent lower than their average prepandemic levels as of September 2020.

• Loss of state and commuter rail support. In addition to potential loss of ridership and revenue
on its service, Amtrak also faces the potential loss of ﬁnancial support from state- supported
and commuter rail services. While the decline in ridership on Amtrak’s network initially allowed
Amtrak to accelerate some capital projects, sustained reductions in ridership on these systems
could aﬀect Amtrak’s revenue in ﬁscal year 2021 and beyond. For example, according to
Amtrak oﬃcials, given growing state revenue shortfalls, states may be unable to pay Amtrak
their portion of the costs on the state-supported routes. In ﬁscal year 2019, Amtrak revenue
from state-supported routes was $538.1 million.518

In addition, while some commuter railroads on the Northeast Corridor have resumed full
operations, they are operating at signiﬁcantly reduced capacity, raising questions about
the sustainability of their operations without additional ﬁnancial support. As a result, some
commuter railroads that operate on Amtrak’s infrastructure may no longer be able to pay for
that access, thereby reducing Amtrak’s overall income.519 In ﬁscal year 2019, Amtrak received
about $158 million from commuter railroads for access to the Northeast Corridor.

• Long-term ﬁnancial sustainability. There may also be uncertainties about the long-term ﬁnancial
sustainability of Amtrak stemming from the impact COVID-19 has had on ridership. Amtrak
oﬃcials said it may take 3 to 5 years for operations on its network to recover to 2019 levels.
To develop its forecasts, Amtrak analyzes reservation data on all portions of its network and
conducts ridership surveys of its customers. In addition, Amtrak monitors overall COVID-19
infection rates in areas where it operates, along with eﬀorts to develop a vaccine; travel
trends in the airline industry as an indicator of consumers’ willingness to travel; and broader
economic trends, such as unemployment.
However, Amtrak oﬃcials stated that it is diﬃcult to develop accurate forecasts due to the
unpredictability of various factors, such as shifting workforce trends and economic pressures.
For example, Amtrak anticipates that ridership demographics could permanently change as
business travel—which accounts for a high portion of Amtrak’s overall ticket revenues—may
not return to the same levels in the future. For example, ridership on the Acela line, which
carries mostly business travelers on the Northeast Corridor, remains over 90 percent lower
than its prepandemic average, while the other routes have increased slightly since April 2020.
On the other hand, Amtrak oﬃcials stated that going forward the average age of Amtrak riders
may skew younger, which may help oﬀset some ridership losses.

FRA support and oversight of funding. According to FRA oﬃcials, they have not experienced any
challenges in overseeing Amtrak’s use of the CARES Act funds. FRA oﬃcials told us they amended
the existing Northeast Corridor and National Network grants to include the CARES Act funds,

518National Railroad Passenger Corporation and Subsidiaries (Amtrak), Management’s Discussion and Analysis
of Financial Condition and Results of Operations and Consolidated Financial Statements with Report of Independent
Auditors, Fiscal Year 2019.
519See the January 2016 report listed in Related GAO Products for further information on Amtrak’s cost sharing
with commuter railroads.

Page 305 GAO-21-191
rather than create a separate program, which allowed FRA to leverage existing monitoring and
oversight structures. For example, to monitor the use of the funds, FRA established a new line
of accounting in its ﬁnancial system, and requires Amtrak to report monthly on how the funds
are being spent, including the funds used to oﬀset payments on the state-supported routes.520
According to FRA oﬃcials, they have experienced delays in receiving a sample audit of CARES
Act expenditures from Amtrak as experienced quality assurance staﬀ have accepted voluntary
separations in response to Amtrak’s cost saving measures. In August 2020, the Amtrak Oﬃce of
Inspector General reported that Amtrak had not yet conducted testing of its expenditures and
therefore cannot be assured that the data it is reporting to FRA are accurate and complete.521 In
response to the Inspector General ﬁndings, Amtrak agreed to implement timelier testing of its
CARES Act expenditures.

Amtrak oﬃcials said that the CARES Act funds will only get Amtrak through ﬁscal year 2020 and
will run out early in ﬁscal year 2021. As a result, in October 2020, Amtrak submitted an updated
supplemental funding request stating that Amtrak had updated its forecast and now anticipates
needing up to $4.9 billion in funding to operate and invest in its network, support its state and
commuter partners, and address various congressional concerns, such as avoiding employee
furloughs and maintaining daily long-distance service. Amtrak has started to furlough employees
and plans to furlough over 2,000 employees total.522 Amtrak also reduced the frequency of service
on most of its long-distance routes from daily to three times a week, which it expects will reduce
costs by $150 million.523 Amtrak oﬃcials also said they may have to postpone capital projects if
they do not receive supplemental funding.

Agency Comments
We provided Amtrak, FRA, and the Oﬃce of Management and Budget (OMB) with a draft of this
enclosure. Amtrak and OMB did not have comments on this enclosure. FRA provided technical
comments that we incorporated, where appropriate.

520The CARES Act requires the Department of Transportation to notify the House and Senate Committees on
Appropriations, the Committee on Transportation and Infrastructure of the House of Representatives, and the
Committee on Commerce, Science, and Transportation of the Senate of any Amtrak employee furloughs as a result of
eﬀorts to prevent, prepare for, and respond to COVID-19.
521Amtrak, Oﬃce of Inspector General, Governance: Observations on Amtrak’s Use of CARES Act Funds, OIG-MAR-2020-013
(Washington, D.C.: Aug. 5, 2020).
522According to Amtrak, 116 employees have been furloughed as of November 5, 2020, which does not include 87
management employees that have been or will be involuntarily separated.
523According to Amtrak, the reduction of long-distance service should provide $300 million in costs savings, which is
oﬀset by a $150 million loss in ticket revenues, for an expected overall savings of $150 million. Amtrak oﬃcials said
they would consider resuming daily service on the long-distance routes using three metrics: 1) COVID-19 pandemic
hospitalization rates, 2) the percentage of trips booked for 2021, and 3) actual ridership levels.

Page 306 GAO-21-191
GAO’s Methodology
To conduct this work, we reviewed the most recent agency data Amtrak provided to FRA as of
September 30, 2020, relevant laws, and agency guidance on the Northeast Corridor and National
Network Grant programs. We also met with senior Amtrak and FRA oﬃcials to discuss Amtrak’s
plans to recover from the pandemic-driven decline in ridership and revenue, as well as FRA’s plans
and actions to oversee Amtrak’s use of the funds. To assess the reliability of the Amtrak data, we
conducted interviews with knowledgeable oﬃcials and reviewed documentation. We determined
that the data were reliable for our purposes. Finally, we met with the Amtrak Oﬃce of Inspector
General to discuss its issued and ongoing work related to Amtrak’s use of CARES Act funds and
the Northeast Corridor Commission to discuss the access payments made by railroads on the
Northeast Corridor.

Contact information: Elizabeth Repko, (202) 512-2384, repkoe@gao.gov

Related GAO Product
Amtrak: Better Reporting, Planning, and Improved Financial Information Could Enhance Decision
Making. GAO-16-67. Washington, D.C.: January 6, 2016.

Page 307 GAO-21-191
Assistance for Fishery Participants
The Department of Commerce’s National Oceanic and Atmospheric Administration has obligated
about $297 million of the $300 million in CARES Act funding for ﬁshery participants, and as of
October 23, 2020 about $16.5 million had been disbursed because the agency continues to work
with stakeholders involved in the process to disburse funds.

Entity involved: National Oceanic and Atmospheric Administration, within the Department of
Commerce.

Key Considerations and Future GAO Work
We will continue to monitor CARES Act assistance to ﬁshery participants in ongoing and planned
work.

Background
Commercial and recreational marine ﬁsheries are critical to the nation’s economy, contributing
approximately $99.5 billion to the U.S. gross domestic product and supporting approximately
1.7 million jobs in 2016, according to the Department of Commerce’s National Oceanic and
Atmospheric Administration (NOAA).524 Widespread restaurant closures in the spring of 2020 led
to a decrease in demand for seafood, adversely aﬀecting the ﬁsheries industry.

The CARES Act authorizes the Department of Commerce to provide assistance to eligible tribal,
subsistence, commercial, and charter ﬁshery participants aﬀected by COVID-19, which may include
direct relief payments.525 Under the act, Congress appropriated $300 million to the Department
of Commerce to assist ﬁshery participants, which include tribes, persons, ﬁshing communities,
aquaculture businesses not otherwise eligible for certain assistance, processors, and other
ﬁshery-related businesses, who have incurred, as a direct or indirect result of COVID-19, certain
speciﬁed economic revenue losses or other negative impacts.526 Businesses such as vessel repair

524U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service,
Fisheries Economics of the United States, 2016, Technical Memorandum NMFS-F/SPO-187a (Silver Spring, MD: December
2018). Information on gross domestic product and jobs includes data on commercial seafood harvesters, processors,
dealers, wholesalers, distributors, importers, and retailers, as well as recreational ﬁshing trips and ﬁshing equipment.
Data for 2016 were the most recent available at the time of our review.
525Pub. L. No. 116-136, § 12005(a), 134 Stat. at 518.
526Pub. L. No. 116-136, § 12005(b), (d), 134 Stat. at 518. Speciﬁcally, ﬁshery participants are deﬁned as belonging to
these categories and as having incurred, as a direct or indirect result of the COVID-19 pandemic, economic revenue
losses greater than 35 percent as compared with their prior 5-year average revenue or any negative impacts to
subsistence, cultural, or ceremonial ﬁsheries. Additionally, the CARES Act provided that the Department of Commerce
may use up to 2 percent of the $300 million for administration and oversight activities.

Page 308 GAO-21-191
businesses, restaurants, and seafood retailers are not considered ﬁshery-related businesses
eligible to receive CARES Act funding, according to NOAA’s website.

Overview of Key Issues
On May 7, 2020, the Secretary of Commerce announced the allocation of CARES Act funding to
states, tribes, and territories with ﬁshery participants, as shown in the table. NOAA used this
allocation to obligate funding to three interstate marine ﬁsheries commissions between June 30
and July 2, 2020.527 These commissions have been working with states, tribes, and territories in
their regions to develop spend plans for NOAA approval and eventual implementation. These
plans explain how states, tribes, and territories will verify whether ﬁshery participants meet the
requirements of the CARES Act to receive funds.

527Puerto Rico and the U.S. Virgin Islands are not part of an interstate commission. Funds were obligated to Puerto Rico
on July 14, 2020, and NOAA anticipates obligating funds to the U.S. Virgin Islands in ﬁscal year 2021.

Page 309 GAO-21-191
Allocation of CARES Act Funding for Fishery Participants Made to States, Tribes, and Territories on May 7, 2020
a
Allocation
Interstate commission State/territory/tribe ($ thousands)

Atlantic States Marine Fisheries Commission Massachusetts 27,808
Florida 23,471
Maine 20,166
New Jersey 11,259
New York 6,703
North Carolina 5,422
Virginia 4,489
Maryland 4,096
Pennsylvania 3,345
Rhode Island 3,271
New Hampshire 2,713
Georgia 1,908
Connecticut 1,823
South Carolina 1,515
Delaware 993

Gulf States Marine Fisheries Commission Louisiana 14,682
Texas 9,173
Alabama 3,277
Mississippi 1,524

Paciﬁc States Marine Fisheries Commission Alaska 49,650
Washington 49,650
California 18,222
Oregon 15,871
West Coast Tribes 5,062
Hawaii 4,307
American Samoa 2,535
Alaska Tribes 993
Guam 993
Commonwealth of the Northern Mariana 993
Islands

Territory of Puerto Rico
b 993

b
Territory of the U.S. Virgin Islands 993

Total $297,902

Page 310 GAO-21-191
Source: GAO analysis of Department of Commerce data. | GAO-21-191

Note: The CARES Act appropriated $300 million to the Department of Commerce to assist ﬁshery participants. Pub. L. No.
116-136, § 12005(d), 134 Stat. at 518.
a
According to National Oceanic and Atmospheric Administration (NOAA) oﬃcials, allocations represent the maximum amount
of total funding that ﬁshery participants in a particular state, tribe, or territory can receive. These allocations are net of
administrative fees that NOAA assessed. Additional administrative fees can be assessed by grantees, such as the interstate
marine ﬁsheries commissions, according to NOAA oﬃcials.
b
Puerto Rico and the U.S. Virgin Islands are not part of an interstate marine ﬁsheries commission.

According to NOAA oﬃcials, the agency is in the process of reviewing and approving spend plans
from states, tribes, and territories. NOAA oﬃcials said they expect to receive 30 spend plans from
states and territories and 30 from tribes. As of September 30, 2020, NOAA had received 23 of the
30 plans it anticipated from the states and territories. Of these 23 plans, 12 had been approved,
and 11 were under review. As of September 30, 2020, 30 tribal spend plans had been submitted
and were all still under review by NOAA.
Once a spend plan has been approved by NOAA, the agency anticipates that the states, tribes,
or territories will solicit and review applications from ﬁshery participants and decide whether
they meet the criteria in an approved spend plan to receive funding and how much funding they
should receive according to the approved spend plan.528 The respective interstate marine ﬁsheries
commissions will disburse the appropriate amount of funds directly to the ﬁshery participant
consistent with the approved spend plan, though some states and tribes may distribute funds
themselves.529

As of October 23, 2020, about $16.5 million had been disbursed to ﬁshery participants, according
to NOAA oﬃcials. NOAA oﬃcials reported there is not a set schedule for disbursing funds to
ﬁshery participants. They said it takes time to review the associated spend plans to ensure they
are in compliance with the CARES Act and for states, territories, and tribes to implement these
plans. For example, they can have diﬀerent timelines for implementing their plans, including
diﬀerent application periods. In September 2020, the Department of Commerce’s Inspector
General started an evaluation of NOAA’s implementation of CARES Act funding.

Agency Comments
We provided the Department of Commerce with a draft of this enclosure for review, and the
department did not have any comments on it.

528NOAA oﬃcials said that states, tribes, or territories can also use existing records, such as ﬁshing permits, to identify
eligible recipients.
529Puerto Rico and the U.S. Virgin Islands are not part of an interstate marine ﬁsheries commission, so they will disburse
funds directly to ﬁshery participants.

Page 311 GAO-21-191
GAO’s Methodology
To conduct this work, we reviewed data provided by NOAA. We also reviewed the CARES Act and
agency documents and interviewed NOAA oﬃcials.

Contact information: Anne-Marie Fennell, (202) 512-3146, fennella@gao.gov

Page 312 GAO-21-191
K-12 Education
Issues remain with federal guidance on schools’ operating status and English learners and
students with disabilities face challenges with distance learning.

Entities involved: Centers for Disease Control and Prevention, within the Department of Health
and Human Services; Oﬃce of Elementary and Secondary Education, within the Department of
Education

Key Considerations and Future GAO Work
We continue to monitor challenges related to educating children during the COVID-19 pandemic.
In September 2020, we recommended that the Director of the Centers for Disease Control and
Prevention (CDC) ensure that, as it makes updates to its federal guidance related to reassessing
schools' operating status, the guidance is cogent, clear, and internally consistent. In its response
letter dated September 4, CDC agreed with our recommendation, noting that it strives to ensure
that all content is consistent and current and that it was working to update its reopening guidance.
However, this recommendation remains open as of November 12, as CDC has made progress but
the guidance remains inconsistent and unclear in places. We will continue to review guidance from
the CDC.

In addition, in November 2020 we issued a report on some of the remote learning challenges
school districts faced providing remote education to K-12 English learners and students with
disabilities and on lessons learned from how selected school districts addressed aspects of these
challenges.

Finally, we also have recently begun work that will examine the pandemic’s eﬀect on learning loss,
as well as disparities in the access to technology for all students—a key tool in distance learning.

Background
While K-12 education is a fundamentally state and local issue, the Department of Education
(Education) quickly made available more than $13.2 billion through the Elementary and Secondary
School Emergency Relief Fund established by the CARES Act to support, among other things,
continued learning for K-12 students whose educations have been disrupted by the pandemic.

Both CDC and Education have provided information and guidance to help state and local school
district oﬃcials fulﬁll their roles as key decision makers regarding how and when to reopen
schools for in-person learning. For example, CDC’s guidance includes considerations on whether
and how to screen students and staﬀ for symptoms of COVID-19, considerations for school
readiness and planning, and frequently asked questions (FAQ) for school administrators, teachers,
parents, and childcare providers.

Page 313 GAO-21-191
Further, Education has provided guidance on various topics during the pandemic. For example,
in March and May 2020 it issued guidance pertinent to the 5 million public school students
(about 10 percent) who are English learners and over 7 million (14 percent) who receive special
education services. Speciﬁcally, Education noted that if school districts provide educational
opportunities to the general student population during a school closure, they must also provide
services to English learners and ensure that students with disabilities have equal access to the
same educational opportunities as other students. 530 Education has also recognized that during
the national emergency, schools may not be able to provide all services in the same manner they
are typically provided. 531 More recently, in September 2020, Education released a Questions and
Answers document about providing certain special education services in the current COVID-19
environment.

Education plays many roles in supporting educational opportunities for English learners and
students with disabilities, including overseeing federal education and civil rights laws, and related
funding, such as:

• The Individuals with Disabilities Education Act (IDEA), which was enacted to ensure among
other things, that all children with disabilities have access to a free appropriate public
education that emphasizes special education and related services designed to meet their
unique needs and prepare them for further education, employment, and independent
living.532

• Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color,
or national origin in any program that receives federal funds or assistance.533 In order to
comply with Title VI, school districts must take aﬃrmative steps to ensure that students with
limited English proﬁciency can meaningfully participate in the district’s educational programs
and services.534

• The Elementary and Secondary Education Act (ESEA), as amended, which among other
things, promotes eﬀorts to close educational achievement gaps by, in part, focusing attention

530Department of Education, Questions and Answers on Providing Services to Children with Disabilities During the COVID-19
Outbreak (Washington, D.C.: Mar. 12, 2020) and Department of Education, Oﬃce of Elementary and Secondary
Education, Fact Sheet: Providing Services to English Learners During the COVID-19 Outbreak (Washington, D.C.: May 18, 2020).
531Department of Education, Supplemental Fact Sheet Addressing the Risk of COVID-19 in Preschool, Elementary and
Secondary Schools While Serving Children with Disabilities (Washington, D.C.: Mar. 21, 2020).
53220 U.S.C. § 1400(d). For additional information on our work on IDEA, see GAO, Special Education: Varied State
Criteria May Contribute to Diﬀerences in Percentages of Children Served, GAO-19-348 (Washington, D.C.: Apr. 11, 2019).
53342 U.S.C. § 2000d.
534Lau v. Nichols, 414 U.S. 563 (1974). Furthermore, according to guidance from the Department of Education and
the Department of Justice, school districts generally may not segregate students on the basis of national origin or
English learner status, though certain programs may involve English learners receiving separate instruction for a
limited portion of the day or period of time.

Page 314 GAO-21-191
on historically low-performing subgroups, including English learners and students with
disabilities.535

Overview of Key Issues
As of November 12, 2020, portions of CDC’s guidance for K-12 schools remain internally
inconsistent although the agency updated some of its guidance since our September 2020
report.536 CDC’s guidance on symptom screening and daily health checks for K-12 students and
staﬀ still includes contradictory recommendations. For example, as of November 12, although
CDC updated its Screening K-12 Students for Symptoms of COVID-19: Limitations and Considerations
guidance to include additional information on methods of screening and school based testing,
the guidance did not recommend that schools conduct daily symptom screening for all K-12
students.537 However, its Considerations for K-12 Schools Readiness and Planning Tool still directed
schools to develop a plan to conduct daily health checks (e.g., temperature screening or symptom
checking) of staﬀ and students.538 CDC also took steps to more clearly identify when guidance
has been updated and what changes have been made, with notices at the top of guidance pages;
however, our daily reviews of CDC’s website found that not all updates are identiﬁed and changes
were not made consistently within or across guidance documents. For example, CDC’s November
update to its screening guidance removed the symptoms fever, chills, and cough; but did not do
so consistently throughout the document and those symptoms were later reinserted, potentially
creating confusion.

In addition, in September and October of 2020, in response to our recommendation, CDC took
steps to better align its guidance with risk-based decision-making. For example, CDC posted
Indicators for Dynamic School Decision-Making, which includes risk-based indicators for decision
makers to consider when deciding to open, close, or reopen schools over time.539 In this guidance,
CDC recommends thresholds for assessing inherent risk of transmission in schools (i.e. lowest,
lower, moderate, higher, and highest). The guidance states that if school oﬃcials determine that
a school is at “moderate,” “higher,” or “highest” risk of transmission, it should consider alternative

535The Every Student Succeeds Act, enacted on December 10, 2015, reauthorized the Elementary and Secondary
Education Act of 1965 (ESEA). Pub. L. No. 89-10, 79 Stat. 27 (1965), as amended by Pub. L. No. 114-95, 129 Stat. 1802
(2015).
536See Centers for Disease Control and Prevention, Coronavirus Disease 2019: Schools and Childcare Programs; Plan,
Prepare, and Respond, accessed November 12, 2020, https://www.cdc.gov/coronavirus/2019-ncov/community/schools-
childcare/index.html.
537See Centers for Disease Control and Prevention, Screening K-12 Students for Symptoms of COVID-19: Limitations and
Considerations, accessed November 12, 2020, https://www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare/
symptom-screening.html.
538See Centers for Disease Control and Prevention, Considerations for K-12 Schools: Readiness and Planning Tool: CDC
Readiness and Planning Tool to Prevent the Spread of COVID-19 in K-12 Schools, accessed November 12, 2020, https://
www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare/symptom-screening.html.
539See Centers for Disease Control and Prevention, Coronavirus Disease 2019: Indicators for Dynamic School Decision-
Making, accessed October 21, 2020, https://www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare/
indicators.html.

Page 315 GAO-21-191
learning models (e.g., mix of in-person and virtual learning, also known as hybrid learning, or
virtual-only).

However, other portions of CDC guidance remained internally inconsistent for weeks. For
example, on October 13, CDC published Interim Considerations for Testing for K-12 School
Administrators and Public Health Oﬃcials, which provides guidance on the appropriate use of
testing in K-12 schools for, among other things, screening.540 The guidance recommends testing
approaches based on level of risk of transmission in schools, and suggests a tiered approach to
determine which individuals and schools should be prioritized for testing (e.g., close contacts,
potential contacts, and potentially exposed individuals). However, as of November 12, CDC’s
previous screening remained prominent on CDC’s website and did not recommend testing as an
appropriate screening method. In addition, long-standing guidance urging schools to reopen in
person--a statement that appears misaligned with CDC’s own statements on risk-based decision-
making—remained prominently on CDC’s main internet page for schools and child care facilities
throughout the fall. Then, while a draft of this report was with CDC for review, the link to the
statement was removed from CDC’s main page. As the school year progresses and as local health
conditions change--cogent, clear, and consistent federal guidance remains critical to helping
state and local oﬃcials make safe, risk-based decisions for their students, teachers, staﬀ, and
communities.

Observations about distance learning for English learners and students with disabilities. At
the same time that key decision makers are trying to determine how and whether to return to in-
person education, they are also faced with the logistical and instructional challenges of educating
students via distance learning. These challenges can particularly aﬀect certain subgroups of
students with additional needs, such as English learners and students with disabilities, whom
research shows already experience persistent academic achievement gaps.541 In addition, early
observations and lessons learned from districts that found successful strategies to at least
partially address such challenges in spring 2020 may beneﬁt other decision makers as they
continue to navigate distance learning in their own districts. In November 2020, we reported on
the challenges and lessons learned from teaching English learners and students with disabilities
during COVID-19-related school closures in the spring of the 2019-2020 school year.

Oﬃcials we interviewed from advocacy and professional organizations and four selected school
districts said some English learners and their families faced challenges to fully participating in
distance learning due to the lack of necessary technology, language barriers, and the demands of
meeting basic family needs. For example, they told us that during distance learning students did
not have the opportunities they normally would during the school day to practice their language
skills with English speakers, and others noted that limited English comprehension aﬀected the
ability of families to assist students with the distance-learning curriculum. They also told us that

540See Centers for Disease Control and Prevention, Interim Considerations for Testing for K-12 School Administrators and
Public Health Oﬃcials, accessed October 14, 2020, https://www.cdc.gov/coronavirus/2019-ncov/community/schools-
childcare/k-12-testing.html. In addition to screening, the guidance also describes testing as appropriate for surveillance,
diagnosis, or outbreak response.
541The academic achievement gap between English learners and students that are not English learners has remained
roughly the same over the last decade. The gap between students with and without disabilities has also remained
roughly the same. Department of Education, Institute of Education Sciences, National Center for Education Statistics,
Digest of Education Statistics, 2019, tables 221.12 (October 2019) and 222.12 (November 2019).

Page 316 GAO-21-191
some school districts addressed aspects of challenges created by distance learning by increasing
access to the internet and devices and adapting materials and instructional methods. For example,
one school district partnered with a Spanish language TV network to broadcast curriculum for an
hour every morning. This made learning more accessible for both students and families, according
to the oﬃcial.

Similarly, a variety of factors made it more diﬃcult to deliver special education services during
distance learning, according to oﬃcials from selected school districts, national organizations
representing school administrators and service providers, and researchers we interviewed.542 Such
factors included the wide range of student needs and the services speciﬁed in their individualized
education programs (IEP); and the capacity of parents or caregivers to assist teachers and services
providers in delivering general education, specialized instruction, and related services to their
children. For example, school oﬃcials we interviewed from all four districts told us that delivering
related services—such as occupational therapy, physical therapy, or speech therapy—for students
with complex needs was particularly diﬃcult in a virtual setting.

School district oﬃcials we spoke with noted success addressing some challenges to providing
distance learning to students with disabilities by modifying instruction, meeting with parents
virtually, and encouraging teacher collaboration. In some cases, some districts modiﬁed students’
goals and services to account for the limitations of distance learning by adding temporary distance
learning plans to students’ IEPs.543 Oﬃcials from two districts told us they are considering using
virtual IEP meetings even after they fully return to in-person education and would most certainly
use them as warranted during any future school closures.

In contrast with some of the challenges district oﬃcials noted, all of the school district oﬃcials and
some researchers we spoke with told us that some students with disabilities thrived in the virtual
environment. For example, an oﬃcial from one of the districts stated that some students with
social anxiety and other mental health conditions were able to focus better outside of a classroom
of their peers. Oﬃcials from several school districts told us that future special education and
service delivery may include additional elements of virtual learning.

542According to guidance from Education, states, school districts, and schools must ensure that, to the greatest extent
possible, each student with a disability can be provided the special education and related services identiﬁed in the
student’s individualized education program.
543Under IDEA, meetings of the IEP team may occur through alternative means, such as videoconferencing and
conference telephone calls, subject to the agreement of the parent and the public agency. Education guidance from
March 12, 2020 stated “IEP teams may, but are not required to, include distance learning plans in a child’s IEP that could
be triggered and implemented during a selective closure due to a COVID-19 outbreak. Such contingent provisions may
include the provision of special education and related services at an alternate location or the provision of online or
virtual instruction, instructional telephone calls, and other curriculum-based instructional activities, and may identify
which special education and related services, if any, could be provided at the child’s home.” Department of Education,
Oﬃce of Special Education and Rehabilitative Services and Oﬃce of Special Education Programs, Questions And Answers
On Providing Services To Children With Disabilities During The Coronavirus Disease 2019 Outbreak (Washington, D.C.: Mar. 12,
2020).

Page 317 GAO-21-191
Agency Comments
We provided HHS (including CDC), Education, and the Oﬃce of Management and Budget (OMB)
with a draft of this enclosure. While HHS provided general comments on this report, which are
reproduced in appendix IV, it did not comment on the issues raised in this enclosure. CDC and
Education provided technical comments, which we incorporated as appropriate. OMB did not
comment on this enclosure.

GAO’s Methodology
To conduct our work on guidance for K-12 schools, we reviewed CDC’s guidance on reopening
schools, as well Education’s information for schools on COVID-19. We reviewed relevant federal
laws. We also reviewed the administration’s public statements about school reopening guidance
and interviewed Education oﬃcials.

For our work on distance learning for English learners and students with disabilities we also
reviewed “distance learning plans” from a nongeneralizable selection of 15 school districts selected
for their high proportion of either English learners or students with disabilities to determine how
they served English learners and students with disabilities. We interviewed oﬃcials from four
of the 15 school districts that sent us documents for review. We also interviewed a wide variety
of representatives and subject matter experts, including representatives of organizations that
advocate for English learners or students with disabilities; associations of educators, school
administrators, and special education administrators; and several diﬀerent types of related
service providers; three technical assistance centers supported by Education; and four research
organizations. We also reviewed relevant federal laws, regulations, and guidance.

Contact information: Jacqueline M. Nowicki, (617) 788-0580, nowickij@gao.gov

Related GAO Product
Distance Learning: Challenges Providing Services to K-12 English Learners and Students with Disabilities
during COVID-19. GAO-21-43. Washington, D.C.: November 19, 2020.

Page 318 GAO-21-191
Transit Industry
Transit agencies have used CARES Act grants primarily to cover operating expenses and mitigate
the eﬀects of the COVID-19 pandemic, but transit agency oﬃcials report uncertainty about future
ridership and revenue.

Entity involved: Federal Transit Administration, within the U.S. Department of Transportation

Key Considerations and Future GAO Work
We will continue to monitor the status of CARES Act grants to transit agencies in ongoing and
planned work.

Background
Millions of Americans rely on public transportation systems for mobility and access to jobs,
education, and essential services, such as medical care and grocery shopping. Within the
Department of Transportation (DOT), the Federal Transit Administration (FTA) provides grants
to state Departments of Transportation, local public transit systems, and tribes to support and
expand services. These services may include buses, subways, light rail, commuter rail, trolleys, and
ferries in urban, rural, and tribal areas.

The CARES Act appropriated about $25 billion to the FTA to support the transit industry through
its Urbanized Area ($22.7 billion) and Rural Area ($2.2 billion) formula programs.544 Of the
funds appropriated to the Rural Area formula program, $30 million is set aside for tribal transit
programs.545 FTA allocated the $25 billion on April 2, 2020, and posted information on allocation
amounts to urbanized areas, states, and tribes to its website. Transit agencies that receive grants
from these allocations may use the funds for any expenses incurred related to COVID-19 on
or after January 20, 2020, and there is no limit on the amount of funds recipients may use for
operating expenses.546

544Pub. L. No. 116-136, 134 Stat. 281, 599 (2020).
545 An additional $75 million is set aside for the administration and oversight of the funds.
546These ﬂexibilities are exceptions to the usual process for FTA’s Urban and Rural formula programs. An additional
exception is that there is no requirement for local matching funds for grants provided to large and small urban areas
and rural areas. All other Urbanized Area and Rural Area program requirements apply to CARES Act funds, with the
exception that operating and certain capital expenses do not need to be included in a transportation improvement
program, a long-range transportation or statewide transportation plan, or a statewide transportation improvement
program.

Page 319 GAO-21-191
Overview of Key Issues
FTA has continued to distribute CARES Act grant funds and support transit agencies. As of
September 30, 2020, FTA had awarded 758 grants, representing 93 percent of allocated CARES Act
funding. FTA oﬃcials reported that an additional 75 grants were in progress. FTA oﬃcials said that
as of September 30, 2020, recipients had obligated 90 percent of CARES Act funds for operating
expenses, though obligating funds for capital and planning expenses is also allowed (see table).

Page 320 GAO-21-191
Transit Agency Obligations of CARES Act Grant Funds by Expense Category in Urban, Rural, and Tribal Areas, as of
September 30, 2020
Urban Rural Tribal Total
Expense ($ millions) ($ millions) ($ millions) ($ millions)

Operating 20,722.7 1,584.2 17.5 22,324.5

Capital 685.4 86.9 3.2 775.5

a 34.9 166.4 0.8 202.1
Other

b 21,443.0 1,837.5 21.6 23,302.1
Total

Source: GAO analysis of Federal Transit Administration data. | GAO-21-191

Note: The law appropriating the amounts obligated here is the CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020).
a
Includes expenses for project and program administration, intercity bus, planning, job access and reverse commute, and
training expenses.
b
Numbers may not total due to rounding.

FTA continues to report no challenges with administering CARES Act grants and overseeing
recipients’ use of the funds. FTA oﬃcials said the agency continues regular outreach to recipients
through industry calls, and regional staﬀ are in regular contact with recipients as they develop
their applications. Oﬃcials we interviewed from 22 transit agencies said they had not experienced
any challenges related to the distribution of CARES Act grants from FTA, and oﬃcials from all but
one of the 22 agencies said they had not faced any challenges getting assistance from FTA during
the awards process.

FTA has postponed its routine program oversight reviews that were scheduled for ﬁscal year 2020
until ﬁscal year 2021, but continues to monitor and provide guidance to grant recipients.

Transit agencies have reported using CARES Act grants to mitigate the eﬀects of COVID-19,
but concerns remain about future ridership and revenue. Oﬃcials from the 22 transit agencies
we interviewed said they had used CARES Act grants to cover operating expenses, which included
those incurred in retaining employees or providing paid sick leave (8 of 22), providing personal
protective equipment for employees such as face masks or shields (5 of 22), and implementing
enhanced cleaning and sanitation procedures on their vehicles (7 of 22).

Oﬃcials from some agencies we interviewed said they were holding CARES Act funds in reserve
to mitigate anticipated budgetary shortfalls. Of the 22 agencies interviewed, 3 said they had
already obligated all funds, and 12 expected to do so within 6 months to one year. However,
about one-third (7 of 22) of the agencies said they did not expect to use all their CARES Act funding
until a year or more, for reasons that included helping to ensure that they do not encounter
any unanticipated budgetary shortfalls amid continued uncertainty and the expectation of a
slow economic recovery. Oﬃcials from about 85 percent (19 of 22) of the agencies said they had
imposed reductions in transit service.

Oﬃcials from most agencies we interviewed anticipated lasting eﬀects from the pandemic to their
transit operations. For example, about two-thirds (15 of 22) of the agencies said they experienced

Page 321 GAO-21-191
reduced ridership and were concerned it would continue. Similarly, some oﬃcials expressed
concerns about prolonged reductions in revenue from state and local sales tax (8 of 22) or other
sources of revenue (8 of 22). As a result of decreased revenue, oﬃcials from about one-third (8 of
22) of the agencies we interviewed said they were concerned that they may need to reduce their
workforces, which could negatively impact their operations in the future.

When asked to describe steps they took to mitigate the spread of COVID-19 among their
passengers and employees, transit agency oﬃcials said they took steps such as enhanced cleaning
and sanitation, requiring the use of masks, and social distancing, among others (see table). FTA
has provided a COVID-19 resource tool for public transportation on its website, which organizes
federal agency guidance on many of these measures.

Page 322 GAO-21-191
Steps Oﬃcials from 22 Transit Agencies Reported Having Taken to Mitigate the Spread of COVID-19 among
Passengers and Employees
Number of agencies that reported
Step taking this step

Enhancing the cleaning and sanitation of vehicles, stations, and high- 22
frequency points of physical contact

Requiring the use of masks by riders and drivers and other employees 18

Practicing social distancing, such as by limiting the number of passengers in 16
a vehicle, blocking out seats, or placing markers on station ﬂoors

Providing hand sanitizer to employees and passengers on vehicles and at 15
stations

Providing masks to drivers, other employees, and passengers 14

Installing barriers to shield drivers and minimize contact between drivers and 11
passengers

Boarding vehicles from the rear to reduce contact between drivers and 8
passengers

Instituting employee health screening, such as through contact tracing or by 8
monitoring employees’ temperatures

Suspending fare collection to limit the proximity of drivers and passengers, 8
reduce the points of physical contact, and facilitate social distancing

Oﬀering telework for administrative staﬀ and other eligible employees 7

Source: GAO analysis of transit agency information. | GAO-21-191

Tribal recipients have started to expend CARES Act grant funds. As of September 30, 2020,
82 tribal recipients had obligated $21.6 million of the total $30 million available. Like other transit
program recipients, tribal recipients obligated a majority of their allocated CARES Act funds (57
percent) for operating expenses.

Tribal recipients have not obligated or expended as much of their CARES Act grants as recipients
of other program funds. As of September 30, 2020, 16 tribal organizations had expended about
$2.7 million, or about 13 percent of obligated funds, compared to expenditures of about half of
obligations for the other program funds. Also, about 40 percent of the expended tribal transit
program funds were for one tribe, which was a $1 million disbursement to the Menominee
Indian Tribe in Wisconsin. Fifty-six tribal recipients had not yet obligated or expended any tribal
transit funds. FTA oﬃcials told us that one reason for this diﬀerence, compared to other program
recipients, is that many tribes closed transit operations during summer 2020 which delayed their
obligations.

Further, in June 2020 we reported that the COVID-19 pandemic was having a disproportionate
economic eﬀect on tribal communities. FTA oﬃcials also told us that transit agencies in urban

Page 323 GAO-21-191
areas typically expend funds at a faster rate than agencies in rural areas, which include many
tribal recipients. In addition, we have previously reported that some rural transit providers,
including tribal transit providers, may face staﬃng constraints. For example, some staﬀ take on
multiple duties, such as serving as a bus driver and dispatcher in addition to grant and program
manager. Such staﬃng constraints could make it diﬃcult for tribal transit providers to fulﬁll the
administrative requirements necessary to obtain FTA funding.

Agency Comments
We provided DOT and the Oﬃce of Management and Budget (OMB) with a draft of this enclosure.
DOT provided technical comments, which we incorporated as appropriate. OMB did not provide
comments on this enclosure.

GAO’s Methodology
To conduct this work, we analyzed DOT and FTA data on transit industry grant funding, including
on tribal transit funding, as of September 30, 2020, which we found to be reliable for the purposes
of describing federal allocations and transit agency obligations and expenditures. We reviewed
written responses from DOT and FTA oﬃcials about how they were implementing provisions of
the CARES Act. We also spoke to or reviewed responses from 22 of 30 selected transit agencies on
challenges they had experienced with the pandemic and the provision of CARES Act grants. We
selected the 30 transit agencies based on the size of their CARES Act allocations, as well as their
geographic distribution across all 10 FTA regional oﬃces. Finally, we interviewed the Community
Transportation Association of America to discuss the impact of the CARES Act on their members.

Contact information: Andrew Von Ah, (202) 512-2834, vonaha@gao.gov

Related GAO Product
Public Transportation: Enhanced Federal Information Sharing on Coordination Could Improve Rural
Transit Services. GAO-20-205. Washington, D.C.: January 7, 2020.

Page 324 GAO-21-191
FEMA Disaster Relief Fund
We continue to be concerned about the demands on the Disaster Relief Fund and challenges
the Federal Emergency Management Agency faces managing a signiﬁcant number of concurrent
disaster operations, among those being the 57 major disaster declarations for COVID-19 issued for
each U.S. state, the District of Columbia, one tribe, and each U.S. territory.

Entity involved: Federal Emergency Management Agency, within the Department of Homeland
Security

Key Considerations and Future GAO Work
In June 2020 we reported that the Federal Emergency Management Agency’s (FEMA) Disaster
Relief Fund—the primary source of federal funding to provide disaster assistance to state, local,
tribal, and territorial governments—had never been used to provide assistance for a nationwide
public health emergency on the scale required by the COVID-19 pandemic. At that time, we
noted that the scale and scope of federal eﬀorts and funding required to address the COVID-19
pandemic is testing FEMA’s and other federal agencies’ capacity to mount an equitable and
eﬀective nationwide response.

Since that time, FEMA has spent billions from its Disaster Relief Fund to address the
unprecedented number of simultaneous major disaster declarations in response to the COVID-19
pandemic; emerging disasters such as Western wildﬁres; recent hurricanes; and ongoing recovery
operations from past disasters, including several large-scale hurricanes and wildﬁres in 2017
and 2018. One new but time-limited use of the fund—for the Lost Wages Assistance program
(described in more detail below and in the Unemployment Insurance enclosure)—resulted in
particularly rapid expenditures from the fund.

Since 2012, we have raised concerns about FEMA’s ability to assess jurisdictions’ capability to
respond to and recover from disasters without federal aid. In our June 2020 report, we noted that
with the scale and uncertainty surrounding the COVID-19 pandemic response, it will be even more
important for FEMA to have a sound basis for determining what kind of aid it provides in order to
uphold its responsibility to serve as a good steward of federal funds.

We will continue to monitor FEMA’s role in coordinating response and recovery eﬀorts and to
provide disaster assistance to individuals and communities for the COVID-19 pandemic response
and other concurrent disaster operations.

Background
The Disaster Relief Fund receives an annual appropriation that since ﬁscal year 2012 has been
based primarily on a 10-year rolling average of past obligations for noncatastrophic disasters
(less than $500 million) and an estimate of needs for past catastrophic disasters (more than $500

Page 325 GAO-21-191
million). In addition, the fund has routinely received supplemental appropriations. Appropriations
to the Disaster Relief Fund are generally available until obligated, and FEMA uses a ﬁrst-in, ﬁrst-
out accounting method to track its obligations. As of February 29, 2020, the fund had a balance of
approximately $42.6 billion. The CARES Act appropriated an additional $45 billion.547 The ﬁgure
below shows the Disaster Relief Fund’s monthly balance from February 2020 through October
2020.

Monthly Disaster Relief Fund Balance, February 2020 through October 2020

Overview of Key Issues
This is the ﬁrst time in U.S. history that every state and territory has had simultaneous open
declarations for the same disaster event.548 The ﬁgure below shows FEMA’s obligations from the
Disaster Relief Fund for COVID-19 by state and territory as of October 2020.

547CARES Act, Pub. L. No. 116-136, div. B, tit. VI, 134 Stat. 281, 543 (2020).
548Under the Robert T. Staﬀord Disaster Relief and Emergency Assistance Act (Staﬀord Act), the President may declare
that a major disaster exists in response to a governor’s or tribal chief executive’s request if the disaster is of such
severity and magnitude that eﬀective response is beyond the capabilities of a state, tribe, or local government and
federal assistance is necessary. See 42 U.S.C. § 5170. As of September 2020, FEMA had issued 57 major disaster
declarations for COVID-19 for each U.S. state, the District of Columbia, each U.S. territory, and one tribe.

Page 326 GAO-21-191
FEMA Obligations from the Disaster Relief Fund for COVID-19 by State and Territory, as of October 2020

Note: Since enactment of the Sandy Recovery Improvement Act of 2013, federally recognized tribes have had the option to
make major disaster and emergency declaration requests directly or to join a state's request for federal disaster assistance.
See Pub. L. No. 113-2, § 1110, 127 Stat. 4, 47-49 (codiﬁed at 42 U.S.C. §§ 5170(b), 5191(c)). Prior to this, tribes had to receive
assistance through a state. Of the 574 federally recognized tribes, there are 89 tribes working with FEMA as of September 30,
2020—about half of those 89 tribes are direct recipients with emergency declarations and about half are recipients under state
major disaster declarations. One tribe, the Seminole Tribe of Florida, is a direct recipient with a major disaster and emergency
declaration.

As of October 31, 2020, FEMA had obligated $54.15 billion to respond to the COVID-19
pandemic. Through the Disaster Relief Fund, FEMA provides grants—Individual Assistance and
Public Assistance grants, among others—to disaster-aﬀected individuals and state, local, tribal,
and territorial governments after a presidential emergency or major disaster declaration. FEMA
also issues mission assignments—work orders directing other federal agencies to provide direct
assistance to state, local, tribal, and territorial governments—to support disaster response and
recovery, which FEMA may reimburse through the Disaster Relief Fund. The ﬁgure below shows
that as of September 2020 FEMA had obligated most of the funds for Individual Assistance. 549

549FEMA’s Disaster Relief Fund data as of October 31, 2020 combines program actual October 2020 COVID-19
obligations with program estimated November and December 2020 COVID-19 obligations, so we cannot provide
COVID-19 obligations from the Disaster Relief Fund by program or activity as of October 31, 2020.

Page 327 GAO-21-191
COVID-19 Obligations from the Disaster Relief Fund by Program or Activity, as of September 2020

FEMA generally awards Individual Assistance grants directly to disaster-aﬀected individuals and
households. The Individual Assistance program has a number of facets used to cover a range
of disaster needs. For weather- and climate-related and earthquake disasters, the majority of
these needs consist of sheltering and housing needs, and assistance includes repairing damaged
dwellings and providing immediate and interim shelter for individuals whose homes were
damaged. Before August 8, 2020, Individual Assistance had been used, in the COVID-19 context,
only to provide crisis counseling. However, on August 8, 2020, the President issued a presidential
memorandum that directed that up to $44 billion be made available from the Disaster Relief Fund
to provide Lost Wages Assistance to supplement unemployment insurance compensation.550

FEMA generally awards Public Assistance grants for states and other jurisdictions to use for life-
saving and emergency protective measures and for longer term recovery needs. In weather- and
climate-related and earthquake disasters, the larger Public Assistance expenditures have tended
to be for permanent reconstruction projects such as rebuilding damaged public infrastructure.
These permanent reconstruction projects may take years to complete. For all 57 major disaster
declarations for COVID-19, FEMA has authorized Public Assistance grants for emergency
protective measures only. In general, this has meant making reimbursements for medical care,
food purchase and distribution, non-congregate medical sheltering, some personal protective
equipment, and limited other activities.551

For the COVID-19 response, as of October 2, 2020, FEMA had issued a total of 1,424 mission
assignments for a range of activities, from providing cleaning and medical supplies to building

550The presidential memorandum directed that the program would end when $44 billion had been obligated; the
balance of the Disaster Relief Fund reached $25 billion; on December 27, 2020; or upon the enactment of legislation
providing supplemental federal unemployment compensation, whichever comes ﬁrst. Although FEMA has a disaster
unemployment assistance program, this is the ﬁrst time it has implemented and funded through the Disaster Relief
Fund this type of Lost Wages Assistance program.
551FEMA Policy FP 104-009-19, Coronavirus (COVID-19) Pandemic: Work Eligible for Public Assistance (Interim), September 1,
2020.

Page 328 GAO-21-191
large temporary medical facilities. As shown in the ﬁgure below, nearly 70 percent of these mission
assignments were tasked to four federal agencies—the Department of Defense, the Department
of Veterans Aﬀairs, the Department of Health and Human Services, and the U.S. Army Corps of
Engineers. Over half of all mission assignments tasked to these four federal agencies are related to
personnel.

Four Federal Agencies Tasked with the Most Mission Assignments

Note: Percentages may not add to 100 due to rounding. The “other” category includes, among other things, amendments
to existing mission assignments that do not represent new activities. For each agency listed, the category that included
amendments and administrative assignments made up from 9 to 31 percent of the total number of mission assignments. The
“personnel” category includes but is not limited to activities such as the deployment of National Guard personnel, Disaster
Medical Assistance Teams, and a system of healthcare workers mobilized to augment healthcare systems. The “medical
facilities” category includes but is not limited to mission assignments such as deployable temporary medical treatment facilities.
Less than 0.5 percent of mission assignment data did not include information on the nature of the request.

Our concerns about the ability of the Disaster Assistance Fund to meet demands continue.
In addition to the 57 major disaster declarations for COVID-19, as of October 15, 2020, FEMA had
about 500 non-COVID-19 active major disaster declarations in various states of response and
recovery. The ﬁgure below compares obligations from the Disaster Relief Fund for the ﬁve costliest
storms with obligations for COVID-19.552

552We identiﬁed the ﬁve costliest storms based on data from the National Oceanic and Atmospheric Administration’s
National Centers for Environmental Information (NCEI), Costliest U.S. Tropical Cyclones, (October 7, 2020). NCEI
determined the estimated total costs in terms of dollars (values based on the 2020 Consumer Price Index adjusted cost)
that would not have been incurred had the disaster event not taken place. Insured and uninsured losses are included
in damage estimates. Sources include the National Weather Service, FEMA, the U.S. Department of Agriculture, the U.S.
Army Corps of Engineers, individual state emergency management agencies, state and regional climate centers, media
reports, and insurance industry estimates. This chart depicts Disaster Relief Fund obligations for these storms and
COVID-19, as of October 2020.

Page 329 GAO-21-191
Obligations from the Disaster Relief Fund for COVID-19 and the Five Costliest Storms, as of October 2020

The number of concurrent demands on the Disaster Relief Fund and the unpredictability of
future response needs raise questions about its availability for both the COVID-19 response and
the signiﬁcant number of active disasters in diﬀerent stages of recovery, including the ongoing
recovery in Puerto Rico—one of the largest recovery eﬀorts in FEMA history. According to the
Congressional Research Service, the balance in the Disaster Relief Fund previously has dropped to
a point that raised concerns about the availability of adequate resources. In those circumstances,
FEMA implemented restrictions aimed at prioritizing Individual Assistance and emergency
response and emergency protective measures, while temporarily putting on hold funding for long-
term recovery projects and hazard mitigation projects.553

Given that the COVID-19 pandemic calls for a diﬀerent kind of response than past disasters and
all Public Assistance obligations have been for emergency protective measures, it is not clear what
it would mean to the COVID-19 pandemic response or to the other disaster recoveries should
FEMA have to implement restrictions. According to senior oﬃcials responsible for FEMA’s Public
Assistance program, they work closely with the Oﬃce of the Chief Financial Oﬃcer to monitor
balances and upcoming needs. These oﬃcials said they are not worried about Disaster Relief Fund
balances in the immediate term, but if they did confront this kind of low balance situation, they
would likely restrict or slow down project obligations in some way, as they have in the past.

In addition, while FEMA has experience determining when the emergency response phase has
ended in the wake of weather- and climate-related disasters and earthquakes, and the temporal
and geographical bounding of these disasters makes doing so more clear cut, it is not clear when
nonfederal governments will no longer require FEMA help to fund their emergency protective

553Congressional Research Service, The Disaster Relief Fund: Overview and Issues, R45484 (Washington, D.C.: Apr. 16,
2020).

Page 330 GAO-21-191
measures for the COVID-19 pandemic. According to senior FEMA oﬃcials, they will continue to
monitor the whole-of-nation COVID-19 response and evaluate a framework for deciding when
states have capacity to respond without federal support, but they are not currently at the point of
making any of these kinds of decisions. We will continue to monitor the use of the Disaster Relief
Fund for COVID-19, including evaluating any criteria used to determine how and when to close out
existing major disaster declarations for the COVID-19 pandemic.

Agency Comments
We provided the Department of Homeland Security (DHS) and the Oﬃce of Management and
Budget (OMB) with a draft of this enclosure. DHS provided technical comments, which we
incorporated as appropriate. OMB did not provide comments on this enclosure.

GAO’s Methodology
To conduct this work, we reviewed FEMA documentation on its disaster assistance programs
and relevant federal law, including the March 2020 CARES Act and the Staﬀord Act, and analyzed
the most recent data on congressional appropriations and FEMA obligations in response to the
COVID-19 pandemic. We also reviewed the August 8, 2020, presidential memorandum and past
Congressional Research Service work on the Disaster Relief Fund. We interviewed FEMA oﬃcials
regarding federal disaster assistance eﬀorts and challenges the agency has faced in eﬀectively
helping aﬀected state and local governments to respond and recover from disasters.

Contact information: Chris Currie, (404) 679-1875, curriec@gao.gov

Related GAO Product
Federal Disaster Assistance: Improved Criteria Needed to Assess a Jurisdiction's Capability to Respond
and Recover on Its Own. GAO-12-838. Washington, D.C.: September 12, 2012.

Page 331 GAO-21-191
Airport Grants
The Federal Aviation Administration is administering funding for grants to help the nation’s
airports respond to and recover from the economic eﬀects of the COVID-19 pandemic.

Entity involved: Federal Aviation Administration, within the U.S. Department of Transportation

Key Considerations and Future GAO Work
Since we reported on airport grants in September 2020, we have identiﬁed continued concerns
from airports about declines in revenue from reduced aircraft operations and passengers, and
about the uncertainty of receiving additional federal funding. We will continue to monitor CARES
Act grants to airports in ongoing and planned work.

Background
U.S. airports are important contributors to the U.S. economy and fulﬁll a variety of vital roles, from
supporting scheduled commercial air service to supporting freight transportation, emergency
medical transportation, and disaster relief. Approximately 3,300 airports in the U.S. are part of
the national airport system and are eligible to receive federal Airport Improvement Program (AIP)
grants to fund infrastructure projects. As we reported in February 2020, from ﬁscal years 2013
through 2017 airports received an average of $3.2 billion annually in federal AIP grants.

Historic decreases in passenger demand for air travel due to the COVID-19 pandemic are
signiﬁcantly aﬀecting U.S. airports’ abilities to generate the revenue needed for operating and
infrastructure costs. According to recent data ﬁled with the U.S. Department of Transportation
(DOT), U.S. airlines operated 65 percent fewer ﬂights in June 2020 than in June 2019. While federal
AIP grants are used to fund capital infrastructure projects, airport owners—also known as airport
sponsors—may use CARES Act funds for any purpose for which airport revenues may be lawfully
used, including for airport operating expenses and debt service. The CARES Act provided $10
billion to support U.S. airports of all sizes experiencing severe economic disruption caused by the
COVID-19 pandemic through four diﬀerent funding groups (see table).554

554Pub. L. No. 116-136, 134 Stat. 281, 596-597. The CARES Act gives the Federal Aviation Administration (FAA) the
authority to retain up to 0.1 percent of the $10 billion (up to $10 million) provided for Grants-in-Aid for Airports to fund
the award and oversight by FAA of grants made under the CARES Act.

Page 332 GAO-21-191
CARES Act Airport Grants by Funding Group
Funds appropriated
a
CARES Act funding group (in dollars) Formula applied

Group 1: Increase federal share for 2020 At least 500 million Increase the federal share to 100 percent for grants
Airport Improvement Program (AIP) awarded for airport infrastructure projects under ﬁscal
grants year 2020 AIP and supplemental discretionary grants
b

Group 2: Commercial service airports At least 7.4 billion Allocate based on a formula that considers an airport’s
(i.e., publicly owned airports with at least passenger boardings, the airport sponsor’s debt
2,500 passenger boardings per year and service, and the sponsor’s ratio of unrestricted
scheduled air service) reserves to debt service
c

Group 3: Primary airports (i.e., large, Up to 2 billion Allocate based on statutory AIP entitlement formulas
medium, and small hub and non-
hub airports with more than 10,000
d
passenger boardings per year)

Group 4: General aviation airports (i.e., At least 100 million Allocate based on the categories these airports are
airports with fewer than 2,500 passenger placed in given activity measures (e.g., volume and
boardings per year and no scheduled air type of ﬂights) and other factors in the most current
service) National Plan of Integrated Airport Systems

Source: GAO analysis of CARES Act. Pub. L. No. 116-136, 134 Stat. 281 (2020). | GAO-21-191

a
The CARES Act gives the Federal Aviation Administration (FAA) the authority to retain up to 0.1 percent of the $10 billion (up
to $10 million) provided for Grants-in-Aid for Airports to fund the award and oversight by FAA of grants made under the CARES
Act.
b
National system airports are eligible to receive federal funding from AIP grants for infrastructure development. The
distribution of federal AIP grants is based on a combination of formula funds—also referred to as entitlement funds—that are
available to national system airports, and discretionary funds that FAA awards for selected eligible projects. Entitlement funds
are apportioned by formula to airports and may generally be used for any eligible airport improvement or planning project.
Discretionary funds are approved by FAA based on FAA selection criteria and a priority system, which FAA uses to rank projects
based on the extent to which they reﬂect FAA’s nationally identiﬁed priorities. The federal share for AIP grants generally ranges
from 75 percent to 95 percent.
c
The FAA used ﬁscal year 2018 Certiﬁcation Activity Tracking System data, reported as of March 14, 2020, to calculate allocations
under the CARES Act formulas for commercial service airports. More speciﬁcally, the total allocation to a commercial service
airport is determined by a formula that considers an airport’s passenger boardings for calendar year 2018 (50 percent), the
airport sponsor’s debt service for ﬁscal year 2018 (25 percent), and the sponsor’s ratio of unrestricted reserves to debt service
for ﬁscal year 2018 (25 percent).
d
This funding group may also include non-primary commercial service airports with 8,000 – 9,999 passenger boardings. CARES
Act, Div. B, Title XII, para. (3), 134 Stat. at 597.

Obligations and expenditures. Following the enactment of the CARES Act, the Federal Aviation
Administration (FAA) ﬁnalized grant allocation amounts totaling nearly $10 billion.555 As of
September 30, 2020, FAA had obligated about $9.4 billion and expended over $3.1 billion to
reimburse airports for eligible costs, according to FAA oﬃcials (see table).

555Speciﬁcally, FAA assigned $500 million to increase the federal share for grants awarded for airport infrastructure
projects under ﬁscal year 2020 AIP and supplemental discretionary grants, and allocated $9.1 billion to the remaining
grant funding groups. FAA has not yet allocated $350 million of the up to $2 billion in grant funding available to primary
airports. FAA oﬃcials stated that this funding may be used to increase the federal share to 100 percent for grants
awarded for airport infrastructure projects, or distributed to commercial service airports.

Page 333 GAO-21-191
Federal Aviation Administration Obligations and Expenditures for CARES Act Airport Grants, by Funding Group,
as of September 30, 2020
Obligations Expenditures
CARES Act funding group ($ millions) ($ millions)

Group 1: Increase federal share for 2020 Airport Improvement 507 49
a
Program (AIP) grants

Group 2: Commercial service airports
b 7,118 2,955

Group 3: Primary airports
c 1,633 106

Group 4: General aviation airports
d 100 25

Total 9,358 3,134
e

Source: GAO analysis of CARES Act. Pub. L. No. 116-136, 134 Stat. 281 (2020), and data from the Federal Aviation Administration. | GAO-21-191

a
National system airports are eligible to receive federal funding from AIP grants for infrastructure development. The CARES Act
appropriated at least $500 million to increase the federal share to 100 percent for grants awarded for airport infrastructure
projects under ﬁscal year 2020 AIP and supplemental discretionary grants.
b
Commercial service airports are publicly owned airports with at least 2,500 passenger boardings per year and scheduled air
service. The CARES Act appropriated at least $7.4 billion in funding to airports in this funding group, and allocated funds based
on a formula that considers an airport’s passenger boardings, the airport sponsor’s debt service, and the sponsor’s ratio of
unrestricted reserves to debt service.
c
Primary airports are large, medium, and small hub and non-hub airports with more than 10,000 passenger boardings per year.
The CARES Act appropriated up to $2 billion in funding to airports in this funding group, and allocated funds based on statutory
AIP entitlement formulas. This funding group may also include non-primary commercial service airports with 8,000 – 9,999
passenger boardings. CARES Act, Div. B, Title XII, para. (3), 134 Stat. at 597.
d
General aviation airports are airports with fewer than 2,500 passenger boardings per year and no scheduled air service. The
CARES Act appropriated at least $100 million in funding to airports in this funding group, and allocated funds based on the
categories these airports are placed in given activity measures (e.g., volume and type of ﬂights) and other factors in the most
current National Plan of Integrated Airport Systems.
e
Data do not sum to totals due to rounding.

Workforce retention requirements. Certain airport sponsors accepting CARES Act grant funds
must continue to employ, through December 31, 2020, at least 90 percent of the number of
individuals employed as of March 27, 2020. According to FAA, the 130 largest U.S. airports are
subject to this requirement, and are to submit to the agency workforce retention reports, which
we discuss below. These 130 airports served approximately 96 percent of commercial service
passenger boardings in the U.S. in 2018. Airports with limited commercial service or that primarily
serve general aviation ﬂights are exempt from this requirement.556

556Speciﬁcally, non-hub and nonprimary airports are excluded from the workforce retention requirement. As a result,
non-hub primary commercial service airports (airports with more than 10,000 annual passenger boardings, but less
than .05 percent of total annual passenger boardings), nonprimary commercial service airports (airports with at least
2,500 and no more than 10,000 annual passenger boardings), general aviation airports (public-use airports that do not
have scheduled service or have scheduled service with fewer than 2,500 annual passenger boardings), and reliever
airports (airports designated by FAA to relieve congestion at commercial service airports) are all exempt from the
workforce retention requirement.

Page 334 GAO-21-191
Overview of Key Issues
Program administration and monitoring. According to FAA oﬃcials, since we last reported in
September 2020, FAA has continued to process grant applications, obligate funds, and review
invoices to reimburse airport sponsors. As of September 30, 2020, FAA had processed grant
applications for 3,234 U.S. airports, including for those in territories and tribes, totaling about $8.8
billion.

Moreover, since we last reported, FAA has taken additional actions to oversee and monitor
airports’ compliance with workforce retention requirements. According to FAA, the agency sent
letters to 88 airports that had not yet submitted requested workforce retention reports as of
August 2020. FAA oﬃcials said that, as of October 2020, all 130 airports had submitted initial and
June 30 reports on workforce retention statistics. FAA oﬃcials said they will continue to work
with airports to obtain timely reporting for September 30 and December 31, but airports that
fail to report could be subject to suspension of reimbursements or possibly grant termination.
FAA would resort to these consequences only if repeated outreach eﬀorts with the airport
were unsuccessful. FAA oﬃcials said airport sponsors have asked for additional information
on workforce retention requirements, including for information about the reporting format,
applicability of the requirements, and implications of not meeting the requirements.

As we previously reported in September 2020, FAA has identiﬁed challenges with administering
and monitoring CARES Act airport grants, including the need to process grants for over 3,000
airport sponsors under expedited time frames, with expanded eligible uses for these funds. To
address the increased workload of processing and monitoring these grants, FAA rehired three
annuitants in September, and is in the process of hiring a contractor to help with internal auditing,
documentation processing, and reporting. FAA oﬃcials also stated they are updating guidance to
incorporate lessons learned through the invoicing process to streamline processes and reduce
workload. Selected airport sponsors and airport association representatives that we spoke to
noted that FAA has provided timely guidance and assistance on how to apply for federal funds and
determine the eligibility for and claim reimbursement for airport costs.

Airport grant funding’s uses and needs. According to FAA oﬃcials, airports continue to use
CARES Act grant funds primarily for payroll and debt service. Airport association representatives
told us that the federal funding provided has been critical to the survival of the industry. However,
airport concerns continue due to declines in revenue from reduced aircraft operations and
passengers, and the uncertainty of additional federal funding. Some airports said that, as a
result, they have deferred some of their planned capital improvements. Some general aviation
airports said that they are beginning to experience growth in chartered ﬂight operations, as some
passengers seek alternatives to commercial airlines. However, for some airports, activity levels
overall are still signiﬁcantly lower due to the ongoing eﬀects of the pandemic.

According to airport associations, additional federal aid will be needed for airports to, among
other things, continue to pay their employees and meet their debt obligations. In addition, airport
associations we spoke with said that any future federal funding should be based on an airport’s

Page 335 GAO-21-191
prepandemic activity level, such as on the number of passenger boardings for commercial service
airports and operations for general aviation airports, rather than on the CARES Act grant allocation
formulas currently used (summarized in the ﬁrst table). For example, as we reported in June 2020,
the grant formula in the CARES Act and available data for calculating the awards for commercial
service airports (i.e., passenger boardings, debt service, and the ratio of unrestricted reserves
to debt service) resulted in some small airports being allocated large amounts relative to their
passenger activity or annual operating budgets. In other cases, the formula and available data
resulted in some airports with large annual passenger boardings being awarded less funding than
airports with fewer annual passenger boardings. Finally, some airport association representatives
and airport oﬃcials we spoke with said that, in addition to airport relief, they are also supportive
of additional federal assistance for airport tenants and related businesses who have been
signiﬁcantly impacted by the pandemic.

GAO’s Methodology
To conduct this work, we reviewed FAA data on airport funding as of September 30, 2020,
which we found to be reliable for the purposes of describing obligations and expenditures
through interviews with agency oﬃcials and reviewing relevant documentation, and we reviewed
federal laws and agency guidance related to the CARES Act. We also conducted interviews with
representatives from three airport associations, selected to represent a wide variety of industry
and airport types, and from a nongeneralizable selection of several general aviation airports.

Contact information: Heather Krause, (202) 512-2834, or krauseh@gao.gov

Related GAO Product
Airport Infrastructure: Information on Funding and Financing for Planned Projects. GAO-20-298.
Washington, D.C.: February 13, 2020.

Page 336 GAO-21-191
Federal Contracts and Agreements for COVID-19
As of October 15, 2020, government-wide contract obligations totaled about $33.4 billion, and
agencies reported an additional $10 billion for other transaction agreements in response to
COVID-19. In the past, our work has noted that the use of other transaction agreements carries a
risk of reduced accountability and transparency.

Entities involved: Department of Health and Human Services; Department of Defense; and
Department of Homeland Security, among others

Key Considerations and Future GAO Work
As federal contracting activity continues to play a critical role in response to the pandemic,
ensuring that criteria for tracking contract actions and associated obligations are consistently
applied and account for the long-term needs of users—such as federal agencies and Congress—is
critical. In September 2020, we recommended that the Secretaries of Homeland Security
and Defense (1) revise the criteria in the 2019 National Interest Action code memorandum of
agreement to clearly identify steps they will take to obtain input from key federal agencies prior to
extending or closing a National Interest Action code, (2) establish timelines for evaluating the need
to extend a National Interest Action code, and (3) deﬁne what constitutes a consistent decrease
in contract actions and routine contract activity to ensure the criteria for extending or closing
the National Interest Action code reﬂect government-wide needs for tracking contract actions in
longer term emergencies, such as a pandemic.

The Department of Defense (DOD) and the Department of Homeland Security (DHS) did not agree
with our recommendations. However, in October 2020 in response to our recommendations, DOD
and DHS oﬃcials said they plan to review the 2019 National Interest Action code memorandum
of agreement by the end of calendar year 2020. At that time, oﬃcials stated they intend to update
the agreement to include additional details on practices for communicating with other agencies,
and will consider whether additional changes should be incorporated into the agreement. We
continue to believe that revising the memorandum of agreement is necessary to ensure consistent
application of the criteria and increased transparency regarding the process for extending and
closing National Interest Action codes.

We have additional work underway related to the federal government’s use of contracts to
respond to COVID-19, including, among other things, assessing (1) contracts awarded by selected
agencies in response to COVID-19, including agencies’ eﬀorts to review prospective contractor
qualiﬁcations in advance of awarding a contract; (2) selected agencies’ use of contracting
ﬂexibilities, such as other transaction agreements and undeﬁnitized contracts; (3) the use of
contractor paid leave provisions in the CARES Act.

Page 337 GAO-21-191
Background
To facilitate the U.S. response to COVID-19, federal agencies have used a variety of contracting
mechanisms to provide vital goods and services in support of federal, state, and local COVID-19
response eﬀorts. Our prior work has found that contracts play a key role in federal emergency
response eﬀorts, and that contracting during an emergency can present a unique set of challenges
as oﬃcials can face a signiﬁcant amount of pressure to provide critical goods and services as
expeditiously and eﬃciently as possible.557

The CARES Act authorized additional contracting ﬂexibilities for federal agencies. For example,
the CARES Act relaxed certain limitations on the use of other transactions for the Department of
Health and Human Services (HHS) and DOD, such as congressional reporting requirements and
requirements for who can approve certain transactions.558

Overview of Key Issues
Government-wide contract obligations. In response to the COVID-19 pandemic, contract
obligations totaled about $33.4 billion as of October 15, 2020.559 HHS accounted for about 39
percent of the total obligations made by federal agencies (see ﬁgure).

557GAO, Disaster Contracting: FEMA Continues to Face Challenges with Its Use of Contracts to Support Response and Recovery,
GAO-19-518T (Washington, D.C.: May 9, 2019); 2017 Disaster Contracting: Actions Needed to Improve the Use of Post-Disaster
Contracts to Support Response and Recovery, GAO-19-281 (Washington, D.C.: Apr. 24, 2019); and 2017 Disaster Contracting:
Action Needed to Better Ensure More Eﬀective Use and Management of Advance Contracts, GAO-19-93 (Washington, D.C: Dec.
6, 2018).
558Pub. L. No. 116-136, §§ 3301, 13006, 134 Stat. at 383, 522.
559For the purposes of this report, “contract obligations” refers to obligations on contracts that are subject to the Federal
Acquisition Regulation and does not include, for example, grants, cooperative agreements, loans, other transactions for
research, real property leases, or requisitions from federal stock.

Page 338 GAO-21-191
Contract Obligations in Response to COVID-19 by Federal Agency, as of October 15, 2020

In our September 2020 report, we reported that government-wide contract obligations related to
COVID-19 totaled $24.3 billion through July 31, 2020; by October 15, 2020, those obligations had
increased by about $9.2 billion—to $33.4 billion. See ﬁgure for a week by week accounting of these
obligations.

Page 339 GAO-21-191
Government-wide Contract Obligations Related to COVID-19 by Week, February–October 2020

Consistent with what we reported in September 2020, medical equipment and supplies—including
ventilators and personal protective equipment—continue to be the largest area of government-
wide contract obligations in response to COVID-19. As of October 15, 2020, these obligations
had increased by about $1.5 billion since July 31, 2020, and accounted for about $8.3 billion, or
25 percent of government-wide contract obligations. Since July 31, 2020, obligations for fruits
and vegetables—made primarily in support of the U.S. Department of Agriculture’s Farmers
to Families Food Box Program—rose to the second highest area of government-wide contract
obligations, increasing by $885.4 million to $1.9 billion. See ﬁgure for obligation amounts for the
most-procured goods and services.

Page 340 GAO-21-191
Contract Obligation Amounts for Goods and Services Most Procured in Response to COVID-19, as of October 15,
2020

Similar to what we reported in September 2020, half of government-wide contract
obligations—about $16.9 billion as of October 15, 2020—were on contracts we identiﬁed as
having been awarded noncompetitively. Agencies cited an urgent need for awarding contracts
noncompetitively for about 68 percent, or $11.5 billion, of the contract obligations that were
awarded noncompetitively. 560 Awarding contracts under the unusual and compelling urgency
exception to full and open competition can be necessary in certain circumstances. However,
our prior work has noted that promoting competition—even in a limited form—increases the
likelihood of acquiring quality goods and services at a lower price in urgent situations. 561

Contracts for goods continued to be competed less frequently than contracts for services: about
63 percent of the obligations for goods were on contracts that were not awarded competitively,
compared with about 36 percent of the obligations for services. For example, about $7.2 billion, or
87 percent of the $8.3 billion in obligations for medical and surgical equipment, were on contracts
awarded noncompetitively.

Agencies have reported using a variety of contracting techniques to respond to COVID-19. For
example, undeﬁnitized contracts can enable the government to quickly fulﬁll requirements that
are urgent or need to be met quickly by allowing contractors to begin work before reaching a

560For the purposes of this report, obligations on contracts identiﬁed as using the unusual and compelling urgency
exception include those associated with contracts subject to Federal Acquisition Regulation 6.302-2, as well as orders
under multiple award contracts, which are subject to separate competition requirements under Federal Acquisition
Regulation Part 16. Speciﬁcally, under Federal Acquisition Regulation 16.505(b)(2), orders on multiple award contracts
require contracting oﬃcers to give every awardee a fair opportunity to be considered for a delivery order or task order
exceeding $3,500, with exceptions, including if the agency need for the supplies or services is so urgent that providing
a fair opportunity would result in unacceptable delays. When using the unusual and compelling urgency exception to
full and open competition, agencies still must request oﬀers from as many potential sources as is practicable under the
circumstances.
561GAO, Federal Contracting: Noncompetitive Contracts Based on Urgency Need Additional Oversight, GAO-14-304
(Washington, D.C.: Mar. 26, 2014).

Page 341 GAO-21-191
ﬁnal agreement with the government on all contract terms and conditions.562 From July 31, 2020,
through October 15, 2020, undeﬁnitized contract obligations increased by $99.6 million to about
$2.3 billion, and accounted for about 7 percent of government-wide contract obligations on
contracts awarded in response to COVID-19. DOD reported the highest amount of undeﬁnitized
contract obligations, identifying about $1.6 billion, or about 18 percent of its COVID-19-related
contract obligations as being undeﬁnitized. Our prior work has shown that these types of
contracts can pose risks to the government. For example, contractors may lack incentives to
control costs before all contract terms and conditions are deﬁned.563

Other transaction agreements. In addition to contract obligations, agencies have continued to
report using other transaction agreements in response to COVID-19. These agreements can enable
federal agencies to negotiate terms and conditions speciﬁc to a project without requiring them
to comply with certain federal laws and regulations. However, our prior work has noted that their
use carries the risk of reduced accountability and transparency. 564 From July 31, 2020, through
October 15, 2020, reported obligations associated with other transaction agreements increased
from about $6.6 billion to about $10 billion.

DOD has reported obligating about $8.7 billion of that total in prototype and production other
transaction agreements, including a $2.1 billion agreement for large-scale antibody and vaccine
manufacturing in response to COVID-19. Within the Federal Procurement Data System-Next
Generation, we found that HHS reported obligating about $1.3 billion for other transactions,
including for vaccine development and manufacturing. 565

Agency Comments
We provided HHS, DOD, DHS, and the Oﬃce of Management and Budget with a draft of this
enclosure. The agencies did not provide comments on this enclosure.

562Undeﬁnitized contracts include letter contracts, as well as other undeﬁnitized actions.
563GAO, Defense Contracting: DOD Has Enhanced Insight into Undeﬁnitized Contract Action Use, but Management at Local
Commands Needs Improvement, GAO-10-299 (Washington, D.C.: Jan. 28, 2010).
564GAO, Department of Homeland Security: Improvements Could Further Enhance Ability to Acquire Innovative Technologies
Using Other Transaction Authority, GAO-08-1088 (Washington, D.C.: Sept. 23, 2008) and Defense Acquisitions: DOD Has
Implemented Section 845 Recommendations but Reporting Can Be Enhanced, GAO-03-150 (Washington, D.C.: Oct. 9, 2002).
565We identiﬁed actions associated with at least four other transaction agreements that HHS has reported as Federal
Acquisition Regulation based contract obligations in the Federal Procurement Data System-Next Generation. For those
actions that HHS conﬁrmed were other transaction agreements, we removed those obligations from our reported
contract obligations and are reporting them as other transaction agreement obligations.

Page 342 GAO-21-191
GAO’s Methodology
To identify agencies’ federal contract obligations and competition rate on contracts in response to
COVID-19, we reviewed Federal Procurement Data System-Next Generation data through October
15, 2020.566 We identiﬁed contract obligations related to COVID-19 using the National Interest
Action code, as well as the contract description ﬁeld.567 For contract actions over $1 million, we
removed obligations that were identiﬁed in the contract description as not related to COVID-19.
We assessed the reliability of federal procurement data by reviewing existing information about
the Federal Procurement Data System-Next Generation and the data it collects—speciﬁcally, the
data dictionary and data validation rules—and by performing electronic testing. We determined
that the data were suﬃciently reliable for the purposes of describing agencies’ reported contract
obligations in response to COVID-19.

Contact information: Marie A. Mak, (202) 512-4841, MakM@gao.gov

566Data from FPDS-NG.gov accessed October 15, 2020. For purposes of this report, “competition rate” is the percentage
of total obligations associated with contracts awarded competitively. We calculated competition rates as the percentages
of obligations on competitive contracts and orders over all obligations on contracts and orders annually. Competitive
contracts included contracts and orders coded in the Federal Procurement Data System-Next Generation as “full
and open competition,” “full and open after exclusion of sources,” and “competed under simpliﬁed acquisition
procedures” as well as orders coded as “subject to fair opportunity” and as “fair opportunity given,” and “competitive
set aside.” Noncompetitive contracts included contracts and orders coded in the Federal Procurement Data System-
Next Generation as “not competed,” “not available for competition,” and “not competed under simpliﬁed acquisition
procedures,” as well as orders coded as an exception to “subject to fair opportunity,” including “urgency,” “only one
source,” “minimum guarantee,” “follow-on action following competitive initial action,” “other statutory authority,” and
“sole source.” Even for contracts identiﬁed as noncompetitive, agencies may have solicited more than one source.
567Our prior work has identiﬁed some inconsistencies in the information agencies report in the contract description
ﬁeld in the Federal Procurement Data System-Next Generation. See GAO, DATA Act: Quality of Data Submissions Has
Improved by Further Action Is Needed to Disclose Known Data Limitations, GAO-20-75 (Washington, D.C.: Nov. 8, 2019).

Page 343 GAO-21-191
International Trade
U.S. imports of COVID-19-related products in July and August 2020568 were lower than the peak
level in June, and U.S. agencies have taken trade-related actions to address medical supply chain
issues and to support businesses to strengthen the domestic industrial base in response to
COVID-19.

Entities involved: Export-Import Bank of the United States; U.S. International Development
Finance Corporation.

Key Considerations and Future GAO Work
We plan to continue to monitor the eﬀect of COVID-19 on international trade and the medical
supply chain. In particular, we are expanding our review of the U.S. International Development
Finance Corporation’s (DFC) use of Defense Production Act (DPA) funding.

Background
The COVID-19 pandemic has disrupted businesses around the world. The World Trade
Organization reported on June 23, 2020, that international trade fell sharply as the COVID-19
pandemic upended the global economy, estimating a drop of almost 19 percent from 2019. In the
face of disrupted international supply chains, U.S. imports of COVID-19-related products such as
face masks, ventilators, gloves, and hand sanitizers have ﬂuctuated.

U.S. agencies, including the Export-Import Bank of the United States (EXIM) and DFC, have taken
steps to address issues that aﬀect the U.S. supply of such essential products, and trade in general.

Overview of Key Issues
U.S. imports of COVID-19-related products have declined. Available data indicate that the
upward trend in imports of product categories related to the COVID-19 response has halted.
Imports of these products increased by roughly 46 percent from February to June 2020, but
declined by about 8 percent from June to July, and increased by roughly 5 percent from July to
August 2020 (see ﬁgure).569 In particular, imports from China increased signiﬁcantly between

568This was the latest data available when we completed our analysis for this area. Future reports will include updated
information.
569These product categories were identiﬁed by the U.S. International Trade Commission (USITC) in its report, COVID-19
Related Goods: U.S. Imports and Tariﬀs, Investigation No. 332-576, USITC Publication 5073 (Washington, D.C.: June

Page 344 GAO-21-191
March and May 2020, but decreased by 25 percent from May to August 2020. Meanwhile, imports
from other countries declined signiﬁcantly between March and May 2020, but increased by 14
percent from May to August 2020. Imports from China accounted for close to 22 percent of overall
COVID-19-related product categories imported in August 2020, compared to roughly 5 percent in
March 2020.

Monthly U.S. Imports of Categories Containing COVID-19-Related Products by Type, January 2019–August 2020

Notes: Census trade statistics, a widely used source analyzing U.S. international trade, do not contain precise data on imports
of COVID-19-related products. As a result, we estimated the import value of all product categories and types using Harmonized
Tariﬀ Schedule of the United States (HTS) statistical reporting numbers and associated product groupings listed in COVID-19
Related Goods: U.S. Imports and Tariﬀs, Investigation No. 332-576, USITC Publication 5073 (Washington, D.C.: June 2020). USITC
changed 12 of these product categories in its July 1, 2020, revision to the HTS. We identiﬁed these product categories and
included them in the July and August 2020 data for our analysis. Some HTS categories represent more than one product,
and some categories contain products that are not directly relevant to COVID-19 responses. Product types only refer to the
subset of goods considered COVID-19 related in each HTS-10 statistical reporting number. Therefore, the values presented
may overestimate the imports of products directly relevant to COVID-19 responses. Nevertheless, they are useful indicators for
tracking import trends of such products.

The decline in COVID-19-related imports was largely driven by a decrease in goods related to
personal protective equipment (PPE). Since May 2020, imports of PPE declined for 3 consecutive
months, and the imports in August were 26 percent lower than in May. Policies to encourage
domestic production and restrict exports may help explain the decline of imports of COVID-19-
related products since June.

EXIM has approved transactions under its COVID-19 economic support measures. As part of
the government’s response to the COVID-19 pandemic, and to help American businesses facilitate
international sales and compete in the global marketplace, EXIM has taken temporary economic
support measures to provide relief to exporters and ﬁnancial institutions, and, according to EXIM
oﬃcials, has indeﬁnitely restricted its export support for certain scarce medical supplies, such as
PPE.

2020). USITC changed 12 of these product categories in its July 1, 2020, revision to the Harmonized Tariﬀ Schedule. We
identiﬁed these product categories and included them in the July and August 2020 data for our analysis.

Page 345 GAO-21-191
In March 2020, EXIM announced several new or expanded programs, eﬀective through April 2021,
to support U.S. exporters by addressing temporary liquidity problems caused by the pandemic.
These programs include

• new short-term bridge ﬁnancing for foreign customers of U.S. exporters,

• expanded pre-export ﬁnancing to support progress (installment) payments on manufactured
capital goods,

• expanded supply chain ﬁnancing for suppliers, and

• increased ﬂexibility in EXIM’s working capital guarantees.

In July 2020, EXIM approved two transactions using these programs to support the export of
aircraft and aircraft engines. According to EXIM, the ﬁnancing support provided under these
transactions is necessary due to the economic conditions associated with the pandemic, including
the lack of commercial ﬁnancing capacity and risks associated with the aircraft manufacturing
industry.

According to EXIM oﬃcials, as of August 2020, ﬁve other transactions under consideration would
use these COVID-19 economic support programs. These transactions under consideration and
those already approved total approximately $1.5 billion, and represented approximately 3
percent of EXIM’s current $45.6 billion portfolio, as of June 30, 2020. EXIM oﬃcials also stated that
exporters, borrowers, and lenders have expressed interest in these programs, and they anticipate
additional applications under the programs.

EXIM has also provided ﬂexibilities for EXIM customers using certain loan guarantee and insurance
programs, such as extended reporting and payment deadlines and insurance policy renewal
processing, among others. EXIM oﬃcials said these ﬂexibilities are intended to provide short-term
relief during the crisis to EXIM borrowers whose current liquidity challenges are temporary and are
not an indication of long-term issues. EXIM recently extended these ﬂexibilities through April 2021.

DFC to oﬀer ﬁnancing assistance to strengthen domestic industrial base in response
to COVID-19. As part of U.S. eﬀorts to strengthen industrial base capabilities in response to
COVID-19, DFC stated that it plans to award loans to U.S. private sector projects that supply
resources to respond to COVID-19 or strengthen relevant supply chains under the authority of
the Defense Production Act (DPA). Executive Order 13922, signed May 14, 2020, delegated the
authority to make these loans to the chief executive oﬃcer of DFC. According to DFC oﬃcials, DFC
will use $100 million of the Department of Defense’s CARES Act funding to cover the program’s
direct and indirect implementation costs, including loan subsidy costs and administrative costs.
In its June 2020 Request for Proposals, DFC stated that it seeks to ﬁnance projects focused on
producing or distributing PPE, medical testing supplies, vaccines, pharmaceuticals, ventilation
equipment, or relevant materials and technologies. As of September 30, 2020, DFC had received
67 applications for DPA ﬁnancing, but had not awarded any DPA loans.

Page 346 GAO-21-191
Agency Comments
We provided DFC, EXIM, and the Oﬃce of Management and Budget with a draft of this enclosure.
We incorporated technical comments, as appropriate.

GAO’s Methodology
To conduct this work, we reviewed the most recent trade statistics from the Census Bureau
combined with U.S. International Trade Commission data on Harmonized Tariﬀ Schedule codes
associated with COVID-19 products, and reviewed agency announcements and guidance from
EXIM and DFC. We found the data to be suﬃciently reliable to describe trade in general and trade
in COVID-19-related products.

Contact information: Kimberly Gianopoulos, (202) 512-8612, gianopoulosk@gao.gov

Page 347 GAO-21-191
Payment Integrity
Delays in improper payment reporting may prevent timely identiﬁcation and resolution of
COVID-19 spending issues, including potential fraud.

Entities involved: Government-wide

Matter for Congressional Consideration
To hold agencies accountable and increase transparency, Congress should consider, in any future
legislation appropriating COVID-19 relief funds, designating all executive agency programs and
activities making more than $100 million in payments from COVID-19 relief funds as “susceptible
to signiﬁcant improper payments” for purposes of 31 U.S.C. § 3352.

Recommendations for Executive Action
We are making the following two recommendations—one each to the Oﬃce of Management and
Budget and the Small Business Administration.

The Director of the Oﬃce of Management and Budget should develop and issue guidance
directing agencies to include COVID-19 relief funding with associated key risks, such as provisions
contained in the CARES Act and other relief legislation that potentially increase the risk of
improper payments or changes to existing program eligibility rules, as part of their improper
payment estimation methodologies. This should especially be required for already existing federal
programs that received COVID-19 relief funding.

The Administrator of the Small Business Administration should expeditiously estimate improper
payments and report estimates and error rates for the Paycheck Protection Program due to
concerns about the possibility that improper payments, including those resulting from fraudulent
activity, could be widespread.

Key Considerations and Future GAO Work
We will monitor the status of our matter for congressional consideration and recommendations in
future reports and continue our oversight of government-wide payment integrity eﬀorts.

Page 348 GAO-21-191
Background
Agency-reported improper payment estimates for ﬁscal year 2019 were about $175 billion,
based on improper payment estimates reported by federal programs, an increase from the
ﬁscal year 2018 total of $151 billion.570 An improper payment is deﬁned as any payment that
should not have been made or that was made in an incorrect amount (including overpayments
and underpayments) under statutory, contractual, administrative, or other legally applicable
requirements, and it includes any payment that is the result of fraud.571 According to statute,
when an agency cannot determine, due to insuﬃcient documentation, whether a payment is
proper, the payment shall be treated as an improper payment for the purpose of conducting a
risk assessment to determine susceptibility to signiﬁcant improper payments or producing an
improper payment estimate. To help ensure that federal funds are appropriately safeguarded,
executive branch agencies are required to take various steps regarding improper payments under
the Payment Integrity Information Act of 2019 (PIIA) and as directed by Oﬃce of Management and
Budget (OMB) guidance.572

Under OMB guidance, a risk assessment to determine susceptibility to signiﬁcant improper
payments should be completed after the ﬁrst 12 months of program operations.573 In the ﬁscal
year following the ﬁscal year in which the risk assessment was conducted, programs that are
determined to be susceptible to the risk of signiﬁcant improper payments are to develop and
report improper payment estimates, including root causes and corrective actions.

COVID-19 relief laws appropriated about $2.6 trillion to fund response and recovery eﬀorts. Of
these appropriations, over $1 trillion may be spent through newly established COVID-19 programs.
Unless these funds are incorporated into the improper payment risk assessment and reporting
processes for existing programs, new risk assessments will need to be performed to determine if
they are susceptible to signiﬁcant improper payments.

570See 31 U.S.C. §§ 3351-3352. For purposes of this enclosure, we deﬁned “programs” to include both programs and
activities.
571Improper payment is deﬁned at 31 U.S.C. § 3351(4). While an improper payment may be the result of fraudulent
activity, not all improper payments are the result of fraud. Fraud involves obtaining something of value through
willful misrepresentation. Whether an act is in fact fraud is a determination to be made through the judicial or other
adjudicative system.
572Under PIIA, agencies are required to perform a risk assessment of all programs at least once every 3 ﬁscal years
and identify those that are susceptible to “signiﬁcant” improper payments. Improper payments and payments whose
propriety cannot be determined by the executive agency due to lacking or insuﬃcient documentation are considered
“signiﬁcant” if in the preceding ﬁscal year they may have exceeded either (1) 1.5 percent of program outlays and $10
million or (2) $100 million (regardless of the improper payment rate). PIIA, Pub. L. No. 116-117, 134 Stat. 113, 114
(Mar. 2, 2020), codiﬁed at 31 U.S.C. § 3352(a). PIIA repealed the prior improper payment statutes but instead enacted
substantially similar provisions in a new subchapter of the U.S. Code. However, the core structure of executive branch
agency assessment, estimation, analysis, and reporting of improper payments remains consistent with the prior
statutory framework. See 31 U.S.C. §§ 3351-3352. See also Oﬃce of Management and Budget, Appendix C to OMB Circular
A-123, Requirements for Payment Integrity Improvement, OMB Memorandum M-18-20 (Washington, D.C.: June 26, 2018);
Oﬃce of Management and Budget, Financial Reporting Requirements, Circular No. A-136, (Washington, D.C.: Aug. 27,
2020).
573OMB M-18-20.

Page 349 GAO-21-191
The extent and signiﬁcance of improper payments associated with COVID-19 relief funds has not
yet been determined. However, the impact of these improper payments, including those that are
the result of fraud, could be substantial. Even if improper payments are limited to 1 percent of
the COVID-19 relief funds appropriated to date, this would equate to $2.6 billion. We also have
concerns about the possibility that improper payments could be widespread based on indications
of fraud across federal programs. For example:

• Eight individuals pleaded guilty to federal charges of defrauding COVID-19 relief
programs—including the Small Business Administration’s (SBA) Paycheck Protection Program
and Economic Injury Disaster Loan (EIDL) program and the Department of Labor’s (DOL)
unemployment insurance program—from March through September 2020. In one case,
an individual pleaded guilty to conspiring to defraud the U.S. by applying for 18 separate
Paycheck Protection Program loans for four shell companies, falsely claiming, among other
things, that the businesses had employees and needed the loans to pay employees’ salaries,
thereby fraudulently inducing banks to distribute approximately $1.4 million in loans.

• There are 130 individuals facing federal charges related to attempting to defraud these
programs.574

• Oﬃces of inspector general and other law enforcement agencies have initiated numerous
fraud-related investigations.575

These federal charges and investigations may eventually result in further fraud convictions. One
of the many challenges, however, is that because of fraud’s deceptive nature, programs can incur
ﬁnancial losses related to fraud that are never identiﬁed, and such losses are diﬃcult to reliably
estimate.

Overview of Key Issues
As the four COVID-19 relief laws appropriated about $2.6 trillion to fund COVID-19 response
and recovery eﬀorts, reporting of improper payment estimates, including losses that are the
result of fraud, for such programs is critical to agency accountability and transparency over
whether appropriated funds were spent for their intended purposes. As part of government-wide
payment integrity eﬀorts, agencies must (1) identify risk-susceptible programs, (2) develop reliable
estimates of improper payments and implement corrective action plans to reduce them, and (3)
report improper payment information.

574A charge is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a
reasonable doubt in a court of law.
575In addition, federal hotlines have received numerous complaints from the public alleging potential fraud
involving COVID-19 relief funds. For example, the Inspector General for SBA testiﬁed on October 1, 2020, that
the hotline operated by his oﬃce has received tens of thousands of allegations of wrongdoing. Similarly, from
March 13, 2020, through September 30, 2020, our hotline—known as FraudNet—received over an estimated 1,000
complaints related to the CARES Act, many of which involve SBA’s Paycheck Protection Program and EIDL program.

Page 350 GAO-21-191
Identifying risk-susceptible programs. Properly executed improper payment risk assessments
are the cornerstone of the government-wide eﬀort to identify and reduce improper payments. For
new programs, under OMB guidance, a risk assessment to determine susceptibility to signiﬁcant
improper payments should be completed after the ﬁrst 12 months of program operations, and
a determination of susceptibility triggers reporting requirements in the following ﬁscal year.576
However, the supplemental appropriations acts that provided for disaster relief related to the
2017 hurricanes and California wildﬁres required agencies to deem all programs receiving
these relief funds that expended more than $10 million in any one ﬁscal year as "susceptible to
signiﬁcant improper payments."577 Agencies were therefore required to report improper payment
estimates for such programs without the need to conduct a risk assessment.

The COVID-19 relief laws did not contain a similar provision. OMB staﬀ informed us that OMB will
not direct agencies to expedite the risk assessments of new COVID-19 programs for susceptibility
to improper payments.578 OMB staﬀ stated that this decision was due, in part, to their assessment
that it is unclear that (1) the beneﬁt of increased reporting would outweigh the added burden to
do so and (2) the current controls and guidance in place are insuﬃcient. While we recognize the
importance of reducing agency burden, we believe that reporting improper payment estimates
quickly for risk-susceptible programs helps hold agencies accountable and provides additional
transparency for Congress and others in their oversight of government-wide improper payments.
In addition, estimating improper payments and identifying root causes would help ensure that
agencies develop and implement corrective actions to help reduce them.

Additionally, OMB staﬀ stated that the COVID-19 relief laws appropriated additional funding
to the inspectors general to assist in their eﬀorts to prevent and detect fraud, waste, abuse,
and mismanagement. While we acknowledge that independent oversight by inspectors general
is critical to enhancing government accountability, agency management ultimately retains
responsibility for enhancing payment integrity through eﬀorts to prevent and reduce improper
payments, including those resulting from fraudulent activity.

According to OMB staﬀ, current statute and OMB guidance requires agencies to identify and
recover overpayments for all programs regardless of whether a program formally reports an

576OMB M-18-20.
577Supplemental Appropriations for Disaster Relief Requirements Act, 2017, Pub. L. No. 115-56, div. B, 131 Stat. 1129,
1136 (2017), Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2017, Pub. L. No. 115-72,
div. A, 131 Stat. 1224, 1224-1229 (2017), and Further Additional Supplemental Appropriations for Disaster Relief
Requirements Act, 2018, Pub. L. No. 115-123, div. B, subdiv. 1, 132 Stat. 64, 65-110 (2018), provided certain federal
agencies with at least $120 billion in supplemental appropriations related to the 2017 hurricanes and California wildﬁres
and stated that all programs expending more than $10 million in any one ﬁscal year were deemed to be “susceptible to
signiﬁcant improper payments.”
578OMB M-18-20 authorizes each federal agency to determine the deﬁnition of “program” that most clearly identiﬁes
and reports improper payments for the agency. However, OMB M-18-20 also states that agencies should not put
programs into groupings that may mask signiﬁcant improper payment rates by the large size or scope of a grouping.
Depending on how agencies classify or group the newly established COVID-19 programs, agencies may consider them
to be part of their existing programs. Furthermore, M-18-20 provides that, “if a program that is on a three year risk
assessment cycle experiences a signiﬁcant change in legislation and/or a signiﬁcant increase in its funding level, agencies
may need to reassess the program’s risk susceptibility during the next annual cycle, even if it is less than three years
from the last risk assessment.” In such instances, agencies may choose not to assess the newly established COVID-19
programs after the ﬁrst 12 months of program operations and instead wait until the next 3-year risk assessment cycle.

Page 351 GAO-21-191
improper payment estimate or performs an improper payment risk assessment. Although we
acknowledge that agencies may take actions to identify and recover overpayments, we believe that
quickly identifying programs that are susceptible to signiﬁcant improper payments is critical. Such
identiﬁcation is an important ﬁrst step to estimating improper payments, identifying root causes,
and developing corrective actions to address improper payments.

Congress appropriated over $1 trillion for newly established COVID-19 programs. Given the
time frames of the payment integrity process, these appropriations may be spent before the
programs are assessed for susceptibility to signiﬁcant improper payments. For example, SBA’s
Paycheck Protection Program was appropriated about $670 billion. According to SBA oﬃcials,
SBA is designing a plan for estimating Paycheck Protection Program improper payments that will
go through the standard OMB review channels. As such, SBA stated that it expects to include the
Paycheck Protection Program in its ﬁscal year 2021 reporting of improper payments. However,
SBA oﬃcials did not provide us with a time frame for when the agency expects to ﬁnalize the plan.
Because SBA has not yet ﬁnalized the plan, as stated below, we are retaining our recommendation.

In addition, the COVID-19 relief laws established new programs within previously existing
programs. For example, the COVID-19 relief laws created three new, federally funded
unemployment insurance programs within DOL: the Pandemic Unemployment Assistance, the
Federal Pandemic Unemployment Compensation, and the Pandemic Emergency Unemployment
Compensation programs. These new programs were appropriated about $144 billion by the
COVID-19 relief laws.

DOL’s Oﬃce of Inspector General (OIG) previously reported that by not including CARES Act
programs in the unemployment insurance improper payment estimates, DOL will materially
underestimate unemployment insurance improper payments for ﬁscal years 2020 and 2021.579
DOL OIG recommended that DOL include CARES Act unemployment insurance transactions in
its current sampling methodology or develop an alternative methodology to reliably estimate
improper payments for those programs. DOL did not agree with the recommendation.

According to DOL oﬃcials, DOL plans to follow OMB guidance for identifying risk-susceptible
programs and developing improper payment estimates for the newly established programs. DOL
oﬃcials stated that DOL will conduct a risk assessment after the ﬁrst year of each program’s
operations and, if the programs remain in place, will include estimates, if required, in its reporting
for ﬁscal year 2022. According to the agency, DOL has begun developing a statistical methodology
for estimating improper payments for the CARES Act programs, and stated that this is a complex
endeavor that will take at least 12–16 months. DOL oﬃcials stated that this process includes
designing statistical sampling and case investigation processes tailored to the speciﬁc eligibility
requirements associated with the CARES Act programs, and developing and implementing
information technology systems at both the state and federal levels to support reporting and data
analysis.

Federal internal control standards state that management should use quality information to
achieve the entity’s objectives. As part of these standards, management obtains data on a

579Department of Labor, Oﬃce of Inspector General, COVID-19: More Can Be Done to Mitigate Risk to Unemployment
Compensation Under the CARES Act, 19-20-008-03-315 (Washington, D.C.: Aug. 7, 2020).

Page 352 GAO-21-191
timely basis so that they can be used for eﬀective monitoring. Without a statutory requirement
designating all executive agency programs making more than $100 million in payments from
COVID-19 relief funds as “susceptible to signiﬁcant improper payments,” substantial time may
elapse before agencies start reporting improper payments for these new programs. It is especially
important for agencies with large appropriated amounts to expeditiously estimate their improper
payments, identify root causes, and develop corrective actions when there are concerns about
the possibility that improper payments, including those resulting from fraudulent activity, could
be widespread. Given the rapid timeline of COVID-19 program-related spending, such time lags
in assessing risk and developing corrective actions may result in improper payment issues within
COVID-19 programs, including those resulting from fraudulent activities, not being identiﬁed or
addressed until after most or even all funds are disbursed.

Developing reliable estimates of improper payments and implementing corrective action
plans to reduce them. Given that the COVID-19 relief laws appropriated about $2.6 trillion to
fund response and recovery eﬀorts for COVID-19, developing reliable improper payment estimates
is essential for understanding and addressing ﬁnancial vulnerabilities. Additionally, developing
corrective action plans that respond to the root causes of payment errors, which can include
failure to verify eligibility and identify fraud, is a key component in government-wide eﬀorts to
reduce improper payments. These steps are particularly critical for newly established programs
receiving signiﬁcant COVID-19 relief funds. These steps are also important for existing programs
receiving signiﬁcant COVID-19 relief funding that have previously reported high estimated
improper payment rates. For example:

• The Department of Health and Human Services’ Medicaid program (which is expected
to increase spending by about $50 billion over ﬁscal years 2020 through 2021 because
of COVID-19) reported ﬁscal year 2019 estimated improper payments of $57.4 billion,
representing a 14.9 percent estimated improper payment rate.

• DOL’s unemployment insurance program (which was appropriated about $394.3 billion
for COVID-19 relief) reported ﬁscal year 2019 estimated improper payments of $2.9 billion,
representing a 10.6 percent estimated improper payment rate.

• SBA’s Disaster Loans program (which was appropriated about $20 billion for the EIDL program)
reported ﬁscal year 2019 estimated improper payments of $103 million, representing a 6.3
percent estimated improper payment rate.

Reliable improper payment estimates and eﬀective corrective action plans are key in helping to
prevent and reduce improper payments of COVID-19 relief funds. PIIA requires OMB to issue
guidance for agencies to follow in developing their improper payment estimates. OMB guidance
for developing improper payment estimates focuses on the statistical nature of the estimates
and provides agencies with ﬂexibility in developing their estimates.580 According to OMB staﬀ, in
working with the chief ﬁnancial oﬃcer community, OMB has identiﬁed multiple risk factors caused
by COVID-19 that are likely to alter payment integrity risks, such as the creation of new programs,
new legal provisions, changes to existing eligibility rules, diﬀerent payment processes, increased

580OMB M-18-20.

Page 353 GAO-21-191
funding, and limited time to spend funding. OMB issued a memorandum providing agencies the
option to incorporate new COVID-19 relief funding into their normal sampling processes; however,
it does not speciﬁcally direct agencies to do so.581

We reported in May 2018 that agencies use a variety of processes to develop their improper
payment estimates and that certain diﬀerences in these processes may aﬀect the quality of the
resulting estimates and consequently these agencies’ eﬀorts to reduce improper payments.
Without an OMB directive for agencies to include COVID-19 relief funding and associated key
risks as part of their improper payment estimation methodologies, there is an increased risk that
agencies’ processes may not result in reliable estimates, calling into question their usefulness for
developing eﬀective corrective actions.

Reporting improper payment information. According to OMB guidance, for newly established
programs, agencies are given until the ﬁscal year following the risk assessment to develop and
report improper payment information, including estimates, root causes, and corrective actions.582
As a result, in some instances, improper payment estimates associated with new COVID-19
programs established in March 2020 may not be reported until November 2022, as shown in the
ﬁgure below.

Example Timeline for Newly Established COVID-19 Programs’ Reporting of Improper Payment Estimates

Note: Annual agency reporting is typically due in the November following the end of each ﬁscal year. According to Oﬃce of
Management and Budget (OMB) staﬀ, for ﬁscal year 2020 reporting, OMB provided an extension until December 2020 given the
demands placed on agencies in connection with COVID-19.
a
Depending on agencies’ improper payment estimation methodologies, spending for this time period may or may not be
included in a future improper payment estimate.

Agencies may never report an improper payment estimate for certain COVID-19 programs—such
as the Department of the Treasury’s economic impact payments—if the programs expend all of
their funds within a 12-month period. In addition, agencies may never report improper payment
estimates for COVID-19 programs if their future risk assessments do not determine the program
to be susceptible to signiﬁcant improper payments. According to OMB staﬀ, requiring improper

581Oﬃce of Management and Budget, Risk-Based Financial Audits and Reporting Activities in Response to COVID-19
(Washington, D.C.: June 17, 2020).
582According to OMB staﬀ, giving agencies until the following year is necessary due to multiple factors, such as the time
needed to secure a contract for a statistician and develop an appropriate sampling and estimation methodology, and
the need for programs to report on 12 full months of data in their annual reporting.

Page 354 GAO-21-191
payment reporting for COVID-19 programs that do not extend beyond a single year would not
be useful, as once a program has ended, developing an estimate, identifying root causes, and
developing corrective actions cannot improve the payment integrity of the program.

OMB staﬀ further stated that OMB will continue to assess the analyses of oversight bodies such
as GAO and the oﬃces of inspector general to determine whether additional government-wide
guidance or reporting is needed for all programs, including those that expend all of their funding
in less than 12 months.

We believe that requiring agencies to report improper payment estimates for COVID-19 programs
and implement corrective actions could improve transparency at individual agencies and
government-wide. This information would also be a critical component of the government-wide
improper payment estimate OMB is required to report each ﬁscal year under PIIA.583

According to OMB guidance, to the extent possible, the data that agencies currently reporting
improper payment estimates use for estimating improper payments in a given program should
coincide with the ﬁscal year being reported. However, agencies may use a diﬀerent 12-month
reporting period with approval from OMB.584 For example, for most programs that reported
estimates for ﬁscal year 2019, agencies sampled from the population of payments during ﬁscal
year 2018 to estimate the reported ﬁscal year 2019 improper payment rate and amounts. As
a result, reporting of improper payment estimates related to expenditures for programs that
received COVID-19 relief funds will likely not take place until ﬁscal year 2021 reporting or later.

Changes to OMB payment integrity reporting directives. OMB Circular A-136, Financial
Reporting Requirements, provides guidance for agencies on preparing their agency ﬁnancial
reports or performance and accountability reports, including the reporting of improper payment
information.585 In its most recently issued Circular A-136 guidance for ﬁscal year 2020 reporting,
instead of directing agencies to include improper payment information in their agency ﬁnancial
reports or performance and accountability reports as done in prior years, OMB directed agencies
to provide such information to OMB to be included on its www.paymentaccuracy.gov website.586
Agencies are then directed to provide a link to this website in their agency ﬁnancial reports or
performance and accountability reports. According to OMB oﬃcials, centralized reporting of
agencies’ improper payment information on www.paymentaccuracy.gov facilitates eﬃcient
analysis and increased transparency of government-wide improper payment information.

583PIIA, Pub. L. No. 116-117, § 2(a), 134 Stat. 113, 114 (Mar. 2, 2020), codiﬁed at 31 U.S.C. § 3352(f).
584According to OMB M-18-20, agencies do not need to resubmit a request for approval every year, only when they are
planning to change their reporting time period.
585OMB Circular No. A-136.
586An oﬃcial website of the U.S. government managed by OMB, www.paymentaccuracy.gov contains information about
current and historical rates and amounts of estimated improper payments, why improper payments occur, and what
agencies are doing to reduce and recover improper payments.

Page 355 GAO-21-191
Agency Comments
We provided OMB, SBA, Treasury, and DOL with a draft of this enclosure for comment. We received
written comments from SBA, which are reproduced in appendix VIII and summarized below.
OMB provided comments in an email, which are summarized below. SBA, Treasury, and DOL also
provided technical comments, which we incorporated as appropriate.

In their comments, OMB staﬀ neither agreed nor disagreed with our recommendation. OMB
stated that additional clarity could be aided by indicating the types of information that deﬁne
the scope of associated key risks within the recommendation. We clariﬁed this portion of our
recommendation by including examples of risks identiﬁed by OMB that are likely to alter payment
integrity risks.

In its written comments, SBA neither agreed nor disagreed with our recommendation. SBA stated
that it is planning to conduct improper payment testing for the Paycheck Protection Program.
However, SBA has not ﬁnalized the plan for estimating improper payments for its Paycheck
Protection Program. Therefore, we believe that our recommendation is important to help expedite
the identiﬁcation and reduction of improper payments.

GAO’s Methodology
To conduct this work, we reviewed relevant improper payment legislation and guidance, COVID-19
relief laws, and COVID-19 appropriation amounts for new and established programs.

Contact information: Beryl H. Davis, (202) 512-2623, davisbh@gao.gov

Related GAO Products
Improper Payments: Actions and Guidance Could Help Address Issues and Inconsistencies in
Estimation Processes. GAO-18-377. Washington, D.C.: May 31, 2018.

Standards for Internal Control in the Federal Government. GAO-14-704G. Washington, D.C.:
September 10, 2014.

Page 356 GAO-21-191
Appendix II: List of Ongoing GAO Work Related to COVID-19,
as of November 10, 2020
Repatriation Program COVID-19 Response

Oversight of Unemployment Insurance during COVID-19

Higher Education Aid and Student Loan Flexibilities in Response to COVID-19

Early Care and Education and the Coronavirus Pandemic Response

Agency Information Technology Preparedness in Response to Coronavirus Pandemic

Tracking Funds and Associated Activities Related to Federal Response to COVID-19

Diagnostic Testing

Strategic National Stockpile

Worker Safety in the Pandemic

Distance Learning Challenges for English Learners and Students with Disabilities

Business/Employer Tax Provisions

Nutrition Assistance

Agencies' Telework Readiness and Use of Telework for Employees

Internal Revenue Service Administration of Economic Impact Payments

Housing Finance System in the Pandemic

Military Health System COVID Response

COVID-19-Related Grant Flexibilities

Bureau of Prisons’ Emergency Preparedness & Response

Transportation Security Administration (TSA) Measures to Prevent COVID-19 at Checkpoints

Nursing Home Infection Prevention and Control

Biodefense Preparedness and Response for COVID-19

Federal Agencies' Reentry

Agencies' Human Capital Flexibilities in Response to Coronavirus Pandemic

Page 357 GAO-21-191
Immigration Detention Facilities and Operations

Federal Emergency Management Agency Response to COVID-19

Department of Veterans Aﬀairs’ (VA) COVID-19 Procurement Response

Election Funding and Administration during the Pandemic

Defense Production Act

Eﬀects of COVID-19 on Dedicated Fees

School Meals during the Pandemic

VA's Civilian Public Health Response to the COVID-19 Pandemic

CARES Act Housing Protections

Bureau of Indian Education Distance Education

Child Welfare Services

Department of the Interior and Department of the Treasury’s (Treasury) Actions for Tribal
Governments in Response to the Pandemic

Department of State Repatriation Eﬀorts

Small Business Administration’s Implementation of the Paycheck Protection Program

Indian Health Service Response to COVID-19

Vaccine Development

Nurse Loan Repayment Program

Coronavirus Economic Stabilization Act Loans and Investments Programs

Coast Guard COVID-19 Response Eﬀorts

Human Pandemic Preparedness Plan for Food Safety Inspections

CARES Act Assistance to Farmers

COVID-19 Impacts on Customs and Border Patrol Operations

Medicaid Waivers and Flexibilities for COVID-19

Immigration Courts Response

Page 358 GAO-21-191
Department of Defense Depot COVID-19 Impacts

Economic Injury Disaster Loans and Advances

Federal Air Marshal Service Response

Treasury Debt Management Response

Services for Older Adults

Characteristics of Paycheck Protection Program Loans

Aviation Operations in a Pandemic Environment

International Humanitarian Assistance

United States Postal Service

Behavioral Health Impacts

Unemployment Support for Contingent Workers

CARES Act Aviation Loans

VA's Preparedness for, Response to, and Recovery from COVID-19

Operation Warp Speed

Department of Health and Human Services Medicare Waivers for COVID-19 (including Telehealth)

Vaccine Distribution and Communication

VA Nursing Homes

Community Behavioral Health Demonstrations

VA COVID-19 Supplemental Funding

VA Access to Community Care

State and Local Fiscal Conditions & Federal Implications

Bureau of Prisons' Response to COVID-19

VA COVID-19 Financial Controls

Pandemic Learning Loss

Strategic National Stockpile Internal Controls

Page 359 GAO-21-191
COVID-19 Contracting Flexibilities

Agencies' COVID-19 Contract Planning and Review of Contractor Qualiﬁcations

Department of State & U.S. Agency for International Development Continuity of Operations

Farmer Food Purchases and Distribution

Department of Housing and Urban Development CARES Act Oversight

Internal Controls over Higher Education Emergency Relief Fund

Supply Chain and the Defense Production Act

Eﬀect of Tax Policies on Women and Minority Led Households

Contractor Paid Leave Reimbursement Approaches

Paid Leave Enforcement

Therapeutics and Vaccines

Aviation Disease Research and Development

K-12 Digital Divide

Tax Policy Eﬀects on Businesses by Gender and Race

TSA Process for Restricting International Air Travel

Defense-wide Working Capital Fund COVID-19 Eﬀects

Contact Tracing App Technology Assessment

Scientiﬁc Integrity at CDC and FDA

Treasury Coronavirus Relief Fund

Page 360 GAO-21-191
Appendix III: Status of Our Recommendations
In our June 2020 CARES Act report, we made three recommendations; in our September 2020
CARES Act report, we made 16 recommendations; and in November 2020 we issued a report on
COVID-19 vaccines and therapeutics and made one recommendation. To date, the status of these
recommendations is as follows:

Status of recommendations made in our June 2020 CARES Act report
Recommendation 1. The Secretary of Labor should, in consultation with the Small Business
Administration (SBA) and the Department of the Treasury (Treasury), immediately provide
information to state unemployment agencies that speciﬁcally addresses SBA's Paycheck Protection
Program (PPP) loans, and the risk of improper payments associated with these loans.

Status: Closed

Comment: The Department of Labor (DOL) neither agreed nor disagreed with our
recommendation. Following our recommendation, DOL issued guidance on August 12, 2020,
that clariﬁed that individuals working full-time and being paid through PPP are not eligible for
unemployment insurance (UI), and that individuals working part-time and being paid through PPP
would be subject to certain state policies, including state policies on partial unemployment to
determine their eligibility for UI beneﬁts. Further, the guidance clariﬁed that individuals being paid
through PPP but not performing any services would similarly be subject to certain provisions of
state law, and noted that an individual receiving full compensation would be ineligible for UI.

Recommendation 2. The Commissioner of Internal Revenue should consider cost-eﬀective
options for notifying ineligible recipients on how to return payments.

Status: Open

Comment: The Internal Revenue Service (IRS) agreed with our recommendation. Treasury and
IRS have taken steps to implement this recommendation and are considering further actions.
Currently, IRS has instructions on its website requesting that individuals voluntarily return by mail
the appropriate economic impact payment (EIP) amount sent to a decedent, for both electronic
and paper check payments. Also, the envelopes in which paper checks were sent have a checkbox
to indicate if the recipient is deceased, and individuals could mail envelopes with that checkbox
indicated to the Bureau of the Fiscal Service. Finally, Treasury has held and canceled EIPs to
decedents in addition to the EIPs that have been returned.

Of the $1.2 billion in EIPs sent to decedents, as of September 30, 2020, around 57 percent (just
over $700 million) had been recovered. There are likely more returned EIPs in unopened mail that
IRS has yet to process. Treasury and IRS continue to review and monitor data on the number of
EIPs that were sent to decedents and have since been recovered to determine whether further
action may be warranted.

Page 361 GAO-21-191
Treasury was considering sending letters to request the return of outstanding checks and the
repayment of amounts already paid by direct deposit or by checks that have been cashed.
However, according to Treasury, it has not moved forward with this eﬀort because Congress is
currently considering legislation that would clarify or change the eligibility requirements of the
EIPs, including payments to deceased individuals.

Our work on EIPs is ongoing. We will continue to examine Treasury and IRS eﬀorts to recoup
payments sent to ineligible individuals.

Recommendation 3. The Administrator of SBA should develop and implement plans to identify
and respond to risks in PPP to ensure program integrity, achieve program eﬀectiveness, and
address potential fraud, including in loans of $2 million or less.

Status: Open

Comment: SBA neither agreed nor disagreed with our recommendation. In response to
our recommendation, SBA has developed oversight plans but has not provided requested
documentation yet detailing its plans and how it will implement them. As we reported in
September 2020, SBA has said that it plans to review all PPP loans of $2 million or more and
further stated that it may review any PPP loan it deems appropriate, including loans of less than $2
million. SBA also told us at that time that a contractor would use an automated review tool to ﬂag
potentially questionable loans and that contractor and SBA staﬀ would conduct a manual review
of loans ﬂagged by the tool. As of October 2020, SBA oﬃcials told us that they had developed the
review process and tested it on some loans but were reﬁning the process and ﬁnalizing documents
that summarize it. According to SBA and Treasury oﬃcials, SBA’s loan review process will test loans
for compliance with program requirements and evaluate the accuracy of PPP borrowers’ self-
certiﬁcations.

Status of recommendations made in our September 2020 CARES Act
report
Recommendation 1. The Secretary of Health and Human Services in coordination with the
Administrator of the Federal Emergency Management Agency—who head agencies leading the
COVID-19 response through the Uniﬁed Coordination Group—should immediately document roles
and responsibilities for supply chain management functions transitioning to the Department of
Health and Human Services (HHS), including continued support from other federal partners, to
ensure suﬃcient resources exist to sustain and make the necessary progress in stabilizing the
supply chain, and address emergent supply issues for the duration of the COVID-19 pandemic.

Status: Open

Comment: HHS disagreed with our recommendation, noting, among other things, the work that
the department had done to manage the medical supply chain and increase supply availability.

Page 362 GAO-21-191
Recommendation 2. The Secretary of Health and Human Services in coordination with the
Administrator of the Federal Emergency Management Agency—who head agencies leading
the COVID-19 response through the Uniﬁed Coordination Group—should further develop and
communicate to stakeholders plans outlining speciﬁc actions the federal government will take
to help mitigate remaining medical supply gaps necessary to respond to the remainder of the
pandemic, including through the use of Defense Production Act authorities.

Status: Open

Comment: HHS disagreed with our recommendation, noting, among other things, the work that
the department had done to manage the medical supply chain and increase supply availability.

Recommendation 3. The Secretary of Health and Human Services—who heads one of the
agencies leading the COVID-19 response through the Uniﬁed Coordination Group—consistent
with their roles and responsibilities, should work with relevant federal, state, territorial, and tribal
stakeholders to devise interim solutions, such as systems and guidance and dissemination of best
practices, to help states enhance their ability to track the status of supply requests and plan for
supply needs for the remainder of the COVID-19 pandemic response.

Status: Open

Comment: HHS disagreed with our recommendation, noting, among other things, the work that
the department had done to manage the medical supply chain and increase supply availability.

Recommendation 4. The Administrator of the Federal Emergency Management Agency—who
heads one of the agencies leading the COVID-19 response through the Uniﬁed Coordination
Group—consistent with its roles and responsibilities, should work with relevant federal, state,
territorial, and tribal stakeholders to devise interim solutions, such as systems and guidance and
dissemination of best practices, to help states enhance their ability to track the status of supply
requests and plan for supply needs for the remainder of the COVID-19 pandemic response.

Status: Open

Comment: The Department of Homeland Security (DHS) disagreed with our recommendation,
noting, among other things, the work that they had done to manage the medical supply chain and
increase supply availability.

Recommendation 5. The Secretary of Health and Human Services, with support from the
Secretary of Defense, should establish a time frame for documenting and sharing a national plan
for distributing and administering a COVID-19 vaccine and, in developing such a plan, ensure that
it is consistent with best practices for project planning and scheduling and outlines an approach
for how eﬀorts will be coordinated across federal agencies and nonfederal entities.

Status: Open

Comment: HHS neither agreed nor disagreed with our recommendation.

Page 363 GAO-21-191
Recommendation 6. As the Centers for Disease Control and Prevention (CDC) implements its
COVID-19 Response Health Equity Strategy, the Director of CDC should determine whether having
the authority to require states and jurisdictions to report race and ethnicity information for
COVID-19 cases, hospitalizations, and deaths is necessary for ensuring more complete data and, if
so, seek such authority from Congress.

Status: Open

Comment: CDC agreed with our recommendation. In response to our recommendation, CDC
stated that the agency is committed to having discussions with stakeholders to assess whether
having the authority to require states and jurisdictions to report race and ethnicity information for
COVID-19 cases would result in improved reporting. We will continue to conduct work examining
HHS, CDC, and other component agencies’ ongoing work regarding indicators of COVID-19 and
disparities that exist for various populations.

Recommendation 7. As CDC implements its COVID-19 Response Health Equity Strategy, the
Director of CDC should involve key stakeholders to help ensure the complete and consistent
collection of demographic data.

Status: Open

Recommendation 8. As CDC implements its COVID-19 Response Health Equity Strategy, the
Director of the Centers for Disease Control and Prevention should take steps to help ensure CDC’s
ability to comprehensively assess the long-term health outcomes of persons with COVID-19,
including by race and ethnicity.

Status: Open

Comment: CDC agreed with our recommendation. In response to our recommendation, CDC
noted that the agency is convening a team to develop a plan to monitor the long-term health
outcomes of persons with COVID-19 by identifying health care surveillance systems that can
electronically report health conditions to state and local health departments. We will continue
to conduct work examining HHS, CDC, and other component agencies’ ongoing work regarding
indicators of COVID-19 and disparities that exist for various populations.

Recommendation 9. The Secretary of the Treasury, in coordination with the Commissioner of
Internal Revenue, should update and reﬁne the estimate of eligible recipients who have yet to ﬁle
for an EIP to help target outreach and communications eﬀorts.

Status: Open

Page 364 GAO-21-191
Comment: Treasury neither agreed nor disagreed with our recommendation. In response to our
recommendation, Treasury and IRS took actions that are consistent with our recommendation,
such as using tax return information to identify and notify nearly 9 million individuals that they
may be eligible for an EIP. However, Treasury and IRS did not update estimates of those who could
be eligible, but have yet to ﬁle. Without an updated estimate, Treasury, IRS, other federal agencies,
and IRS’s outreach partners are limited in their ability to appropriately scale and target outreach
and communication eﬀorts to individuals who may be eligible for a payment.

Our work on EIPs is ongoing. We will continue to examine Treasury and IRS eﬀorts to identify and
notify individuals about their eligibility for an EIP and we will review how many taxpayers claim an
EIP as part of their 2020 tax ﬁling.

Recommendation 10. The Secretary of the Treasury, in coordination with the Commissioner of
Internal Revenue, should make estimates of eligible recipients who have yet to ﬁle for an EIP, and
other relevant information, available to outreach partners to raise awareness about how and
when to ﬁle for EIPs.

Status: Open

Comment: Treasury neither agreed nor disagreed with our recommendation. Treasury and IRS
took actions that are consistent with our recommendation, such as using tax return information
to identify and notify nearly 9 million individuals that they may be eligible for an EIP. Without an
updated estimate, Treasury, IRS, other federal agencies, and IRS’s outreach partners are limited in
their ability to appropriately scale and target outreach and communication eﬀorts to individuals
who may be eligible for an EIP.

In November, the IRS’s Non-Filers Tool closed, which had allowed individuals who do not normally
ﬁle a tax return to claim an EIP. In September, Treasury and IRS sent nearly 9 million notices
to nonﬁlers to raise awareness about EIPs. However, Treasury and IRS are not monitoring the
eﬀectiveness of the notices. If they knew how many nonﬁlers who had received notices ultimately
received an EIP, they could then determine whether additional or targeted outreach is needed for
the 2021 ﬁling season.

Our work on EIPs is ongoing. We will continue to examine Treasury and IRS eﬀorts to identify and
notify individuals about their eligibility for an EIP, and we will review how many taxpayers claim an
EIP as part of their 2020 tax ﬁling.

Recommendation 11. The Director of the Oﬃce of Management and Budget, in consultation with
Treasury, should issue the addendum to the 2020 Compliance Supplement as soon as possible to
provide the necessary audit guidance.

Status: Open

Comment: The Oﬃce of Management and Budget neither agreed nor disagreed with the
recommendation. The Oﬃce of Management and Budget indicated that it planned to issue the
compliance supplement addendum in mid-November. We will continue to monitor the issuance of
the addendum.

Page 365 GAO-21-191
Recommendation 12. The Director of CDC should ensure that, as it makes updates to its federal
guidance related to reassessing schools’ operating status, the guidance is cogent, clear, and
internally consistent.

Status: Open

Comment: CDC agreed with our recommendation, noting that it strives to ensure that all content
is consistent and current and that it is working to update its reopening guidance. However, this
recommendation remains open as of November 12, as CDC has made progress but the guidance
remains inconsistent and unclear in places. We will continue to review guidance from CDC.

Recommendation 13. The Secretary of Homeland Security, in coordination with the Secretary of
Defense, should (1) revise the criteria in the 2019 National Interest Action code memorandum of
agreement to clearly identify steps they will take to obtain input from key federal agencies prior to
extending or closing a National Interest Action code, (2) establish timelines for evaluating the need
to extend a National Interest Action code, and (3) deﬁne what constitutes a consistent decrease
in contract actions and routine contract activity to ensure the criteria for extending or closing
the National Interest Action code reﬂect government-wide needs for tracking contract actions in
longer term emergencies, such as a pandemic.

Status: Open

Comment: DHS disagreed with our recommendation. DHS oﬃcials said they plan to review the
2019 National Interest Action code memorandum of agreement by the end of calendar year 2020.
At that time, oﬃcials stated they intend to update the agreement to include additional details on
practices for communicating with other agencies, and will consider whether additional changes
should be incorporated into the agreement.

Recommendation 14. The Secretary of Defense, in coordination with the Secretary of Homeland
Security, should (1) revise the criteria in the 2019 National Interest Action code memorandum of
agreement to clearly identify steps they will take to obtain input from key federal agencies prior to
extending or closing a National Interest Action code, (2) establish timelines for evaluating the need
to extend a National Interest Action code, and (3) deﬁne what constitutes a consistent decrease
in contract actions and routine contract activity to ensure the criteria for extending or closing
the National Interest Action code reﬂect government-wide needs for tracking contract actions in
longer term emergencies, such as a pandemic.

Status: Open

Comment: The Department of Defense (DOD) disagreed with our recommendation. DOD oﬃcials
said they plan to review the 2019 National Interest Action code memorandum of agreement by the
end of calendar year 2020. The oﬃcials stated that at that time they will update the agreement to
include additional details on practices for communicating with other agencies, and will consider
whether additional changes should be incorporated into the agreement.

Recommendation 15. The Secretary of Health and Human Services, in consultation with the
Centers for Medicare & Medicaid Services (CMS) and CDC, should develop a strategy to capture
more complete data on conﬁrmed COVID-19 cases and deaths in nursing homes retroactively

Page 366 GAO-21-191
back to January 1, 2020, and to clarify the extent to which nursing homes have reported data
before May 8, 2020. To the extent feasible, this strategy to capture more complete data should
incorporate information nursing homes previously reported to CDC or to state or local public
health oﬃces.

Status: Open

Comment: HHS partially agreed with our recommendation. HHS continues to consider how to
implement our recommendation.

Recommendation 16. Based on the imminent cybersecurity threats, the Secretary of Health
and Human Services should expedite implementation of our prior recommendations regarding
cybersecurity weaknesses at its component agencies.

Status: Open

Comment: HHS agreed with our recommendation and is considering how to implement it.
Although HHS has not taken action on this recommendation at the department-level, the relevant
component agencies—the Food and Drug Administration (FDA), CMS, and CDC—have addressed
additional cybersecurity weaknesses since we reported in September 2020. Speciﬁcally, FDA,
CMS, and CDC implemented an additional 54 of our cybersecurity recommendations, bringing
the total number of implemented recommendations to 404 of the total 434 we made to these
agencies. This reﬂects a 12-percent increase in corrective actions taken to bolster cybersecurity at
the component agencies.

Status of recommendation made in our November 2020 report on
vaccines and therapeutics
Recommendation 1. The Secretary of Health and Human Services should direct the FDA
Commissioner to identify ways to uniformly disclose to the public the information from FDA’s
scientiﬁc review of safety and eﬀectiveness data—similar to the public disclosure of the summary
safety and eﬀectiveness data supporting the approval of new drugs and biologics—when issuing
EUAs for therapeutics and vaccines, and, if necessary, seek the authority to publicly disclose such
information.

Status: Open

Comment: We plan to provide an update on the status of this recommendation in our January
2021 CARES Act report.

Page 367 GAO-21-191
Appendix IV: Comments from the Department of Health and
Human Services

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Appendix V: Comments from the Department of Housing and
Urban Development

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Appendix VI: Comments from the Internal Revenue Service

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Appendix VII: Comments from the Department of Labor

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Appendix VIII: Comments from the Small Business
Administration

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Appendix IX: Comments from the Social Security
Administration

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Appendix X: Comments from the Department of the Treasury

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Appendix XI: Comments from the Department of Veterans
Aairs

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