Treasury OIG Discusses Lessons Learned from CRF Program
As federal agencies implement COVID-19 emergency relief funding programs under the American Rescue Plan Act (Pub. L. 117-2), the Department of the Treasury Office of Inspector General (OIG) notes that it learned some “valuable” lessons while overseeing federal assistance under the Coronavirus Relief Fund.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-138) appropriated $150 billion for Treasury to make payments to states, tribal governments, units of local government, the District of Columbia, and U.S. territories for necessary expenditures incurred due to the public health emergency created by the COVID-19 pandemic. Recipients are were allowed to use CRF proceeds to cover costs incurred between March 27, 2020, and Dec. 31, 2021.
However, in a recent report to Treasury, OIG listed several lessons learned from monitoring the program and made certain recommendations for Treasury to take in providing ARPA funds. For example, it noted that Treasury issued various guidance and Frequently Asked Questions (FAQs) related to the program, creating challenges for CRF recipients trying to ensure compliance with program requirements. “The lack of comprehensive, timely guidance on eligible uses caused confusion among recipients, and in some cases was a factor in ineligible uses of CRF payments,” OIG explained. “For ARPA programs, we recommend that Treasury management finalize guidance concurrent with funds distribution in order to facilitate efficient administration of programs and minimize confusion and misuse of funds.” It further noted that while FAQs are an effective tool to clarify existing guidance, they should not be used to establish new guidance.
OIG also explained that Treasury did not require recipient reporting of performance measures for the CRF, which prohibited the agency from assessing the impact of CRF funding on assisting with the pandemic. It pointed out that the Office of Management and Budget (OMB) recently issued OMB Memorandum M-21-20, which stress the importance of performance measures, adding that “performance planning, management and agency reporting for ARPA funding should be incorporated into agencies’ existing organizational performance management routines.” Treasury officials agreed and stated that the agency will require large Fiscal Recovery Fund recipients under ARPA to submit annual performance reports “and how they are planning to ensure program outcomes are achieved in an effective, efficient and equitable manner.”
Over the past year, we have heard from many grantees of CARES Act funds struggling to ensure that these funds were used correctly. Hopefully, other agencies can learn from this OIG report to make management of their ARPA programs more efficient when compared to CARES Act programs, and make processes clearer for recipients of these funds.
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