PRAC Lessons Learned Report Highlights Need for Timely Guidance
It’s a classic example of putting the cart before the horse. While the preferred procedure for a new grant program is to develop the application requirements and management regulations and guidance first, then issue awards under the program, sometimes financial necessity comes first, and this process gets reversed.
To respond to health and economic disruptions created by the COVID-19 pandemic, Congress has rapidly issued trillions of dollars in emergency assistance since March 2020 under legislation such as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) and the American Rescue Plan Act of 2021 (ARPA) (Pub. L. 117-2). The Pandemic Response Accountability Committee (PRAC), made of federal agency Inspectors General (IGs), was created under the CARES Act to oversee the management of these funds and the potential for fraud.
In a recent report entitled Lessons Learned in Oversight of Pandemic Relief Funds, the PRAC noted that IGs have issued more than 275 oversight reports that reveal common challenges facing agencies across major COVID-19 relief programs. The report points out that one of the PRAC's primary roles is to provide an objective, fact-based answer to this question: “Have the unprecedented levels of pandemic spending been effective, and if not, what needs to change?”
One of the key lessons mentioned in the report is that recipients and award administrators need timely and clear guidance to disburse awards efficiently and accurately. For example, under the Department of the Treasury’s Coronavirus Relief Fund (CRF), which provided $150 billion to governments to cover expenses incurred due to the pandemic, funds were immediately and quickly disbursed, yet guidance was constantly updated through October 2020, as Treasury issued three versions of CRF guidance and eight versions of Frequently Asked Questions (FAQs). These frequent updates caused confusion and delayed the use of CRF money, and in some cases, caused ineligible uses of CRF payments.
ARPA provided an additional $350 billion forth the Coronavirus State and Local Fiscal Recovery Fund, which is similar to CRF, but gives recipients more time to use the funds for authorized purposes. To meet Treasury OIG recommendations and to address some of the confusion that occurred related to CRF funds, the agency in May released an interim final rule, FAQs and fact sheet to provide guidance on eligible uses for the new round of funding. Such steps seem to answer the PRAC’s question about what needs to change.
Likewise, the report explained the CARES Act created three new unemployment insurance (UI) programs, which were overseen by the Department of Labor’s (DOL) Employment and Training Administration (ETA). DOL IG reviews found that timelier and clearer guidance from ETA may have prevented significant overpayments to beneficiaries. ETA guidance also did not establish clear timeframes for sending payments to claimants, so state officials felt obligated to send them as quickly as possible given the employment crisis.
Again in the “what needs to change?” category, the PRAC report added that ETA has since issued guidance in February that establishes expected timeframes from implementation of UI changes and benefit payments to claimants. However, here's something of interest ― DOL told the PRAC that it believes that when Congress creates new and complex benefit programs, it should include a defined and realistic implementation period for agencies. Although this seems like a noble request, we are somewhat skeptical that Congress would provide such level of detail in future emergency funding packages. We'll see what happens going forward.
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Thompson Grants Workshop: Reevaluating Your Policies & Procedures | September 14 - 15, 2021 | Virtual Event
Nonprofit Legal, Finance, and Grants Conference | September 22 - 23, 2021 | Virtual Event
