Sneak Preview: House Panel Hears Recommendations To Address COVID-19 Funding Fraud
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) To help the federal government better prevent risks of potential fraud and financial mismanagement during future national emergencies, the head of the Government Accountability Office (GAO), in recent testimony before the House Committee on Oversight and Accountability, urged Congress to provide resources to permanently establish an analytic center of excellence similar to the former Recovery Operations Center (ROC) to help the oversight community address fraud and improper payments.
As of Nov. 30, 2022, the government had obligated $4.4 trillion and expended $4.1 trillion, or 97% and 89%, respectively, of the $4.6 trillion appropriated under six COVID-19 relief laws, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Pub. L. 116-136) and the American Rescue Plan Act (Pub. L. 117-2). However, numerous GAO reports have found that this funding has been subject to widespread fraud, improper payments and accountability deficiencies during the pandemic. For example, GAO found that from March 2020 through Jan. 13, 2023, at least 1,044 individuals pleaded guilty to or were convicted at trial of federal charges of defrauding COVID-19 relief programs.
During the hearing, Comptroller General Gene Dodaro identified several major factors that contributed to federal programs’ exposure to fraud and improper payments. One factor he addressed was the federal government’s lack of a permanent, governmentwide analytic center to help agencies identify fraud. He alluded to the ROC, which was created under the American Recovery and Reinvestment Act (Pub. L. 111-5) to use data analytics to monitor the expenditure of Recovery Act funding and support federal Offices of the Inspector General (IGs) and law enforcement agency investigations. Although GAO encouraged Congress and the Department of the Treasury to retain the ROC, it was terminated in September 2015.
“The ROC helped prevent fraud and enabled the IGs to work together because the fraudsters often hit multiple [federal financial assistance] programs, and [the center] provided a great analytics experience,” Dodaro explained. “Unfortunately, this center was terminated. Fraud and improper payments occur in regular programs [as well as COVID-19 relief programs], and if you had this permanent capability, it would not only deal with regular fraud, but it would be ready when emergencies occur and you won’t waste time setting up such a center. Every day wasted is another day that you could have improper payments.”
(The full version of this story has now been made available to all for a limited time here.)
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