Ranking Member’s News | Newsroom
June 06,2022
Senators ask GAO for detailed information on how $350 billion in relief funds has been used
Washington,
D.C.–Senate
Finance Committee Ranking Member Mike Crapo (R-Idaho) and Senate Homeland
Security and Government Affairs Committee Ranking Member Rob Portman (R-Ohio)
joined all Finance Committee Republicans in requesting the Government and
Accountability Office (GAO) provide a detailed accounting of the $350 billion
of COVID relief funds appropriated to governments of states, localities,
territories and tribes under the American Rescue Plan Act (ARPA).
From
the letter to GAO:
“Unfortunately, ARPA, unlike the Coronavirus Aid, Relief,
and Economic Security (CARES) Act, has no meaningful built-in nonpartisan
oversight mechanism that allows for necessary Congressional oversight and there
is lack of transparency on uses of the funds provided to various governments.
…
“Because
of the lack of information and transparency on uses of and accounting for these
federal funds, we request that the Government Accountability Office (GAO) help
to ensure there is proper oversight of at least $350 billion of ARPA funding
and necessary accountability to Congress and the American people.”
The
senators ask a series of oversight questions, including:
- Whether Treasury is using risk assessments and
monitoring components to ensure efficient and transparent use of taxpayer
resources, and whether Congress and the American people can verify that
such controls meet standards;
- How Treasury has tracked whether states have satisfied
the objectionable requirement that funds not constitute a “tax cut,” and
whether the requirement served any useful purpose;
- Information on reporting errors, and whether the
practice of ignoring such errors adheres to principles of sound federal
financial management;
- What controls have been established to ensure that
reported expenditures by states and localities abide by the restrictions
on uses put in place in ARPA;
- How has Treasury enforced a legal restriction against a
government using state and local funds for deposit into pension funds; and
- How much of the $350 billion allocated by Treasury to
state and local governments has been recouped to date, and how can
Congress and the American people monitor any such recoupments?
Read
the full list of questions and the letter, signed by all Senate
Finance Committee Republican members, below.
____________________________________
Comptroller Dodaro:
Section 9901 of the American Rescue Plan Act (ARPA; Public
Law No. 117-2) appropriated $350 billion of COVID relief funds to governments
of states, localities, territories and tribes. Clarity and oversight of
how these funds are being expended, obligated, and administered by the
Department of the Treasury is important and a responsibility of the Senate
Finance Committee, on which we serve. Unfortunately, ARPA, unlike the
Coronavirus Aid, Relief, and Economic Security (CARES) Act, has no meaningful
built-in nonpartisan oversight mechanism that allows for necessary
Congressional oversight and there is lack of transparency on uses of the funds
provided to various governments.
Based on several discussions with officials at the
Department of the Treasury (Treasury) regarding obligations, expenditures, and
uses of Coronavirus State and Local Fiscal Recovery Funds (SLFRFs) provided for
in ARPA, there remains insufficient information on details, and reporting that
is publicly available to date, which Treasury appears to take with casual
indifference. Because of the lack of information and transparency on uses of
and accounting for these federal funds, we request that the Government
Accountability Office (GAO) help to ensure there is proper oversight of at
least $350 billion of ARPA funding and necessary accountability to Congress and
the American people.
We request that GAO promptly engage in review and assessment
of administration of the SLFRFs at the Treasury and address the following:
- What oversight is Treasury performing on ARPA state and
local funds, if any, and how can taxpayers learn of any possible Treasury
oversight actions?
- What federal control standards
apply, or should be applied, to administration of SLFRFs by Treasury, and
is Treasury applying such controls, properly designing such controls, and
monitoring of control activities?
- Are risk assessments and monitoring components of
internal controls significant to the objective of the efficient and
transparent use of taxpayer resources, and are there any means by which
Congress and the American people can verify that monitoring components and
internal controls at Treasury meet standards.
- Do standards and internal controls related to the
SLFRFs adhere to those set by the Comptroller General (as in the Standards
for Internal Control in the Federal Government; the “Green Book”) issued
in compliance with Sec. 3512 (c) and (d) of Title 31 of the United States
Code, and with any associated Office of Management and Budget Circular
(e.g., OMB Circular No. A-123)?
- Noting that Treasury has
released its initial “Interim Reports and Recovery Plan Performance
Reports – 2021” and that several reports seem to indicate zero obligations
or expenditures, are reporting requirements established by Treasury,
especially for small localities, creating undue burdens and
inefficiencies?
- Given that ARPA mistakenly
sought to have the Executive Branch of the federal government prevent
states from using SLFRF funds to provide tax cuts deemed by states to be
beneficial to their citizens, does Treasury’s requirement to have states
report on whether they have satisfied Treasury’s loose approximation of
how state tax policies may or may not constitute a “tax cut” serve any
useful purpose toward the objective of the efficient use of federal
taxpayer resources?
- In Treasury’s Interim Reports
and Recovery Performance Reports—2021, there are instances where
reporting errors are apparent, including cases where a reporting
government identifies fund uses for which it claims that amounts expended
exceed amounts obligated. Treasury officials have indicated no
desire to request corrections of known reporting errors in the Interim
Reports, and Treasury’s position appears to be, with respect to the
errors, to treat errors as bygones to ignore. Would such a practice adhere
to principles of sound federal financial management and establishment of
principled internal controls?
- In light of reports of SLFRF
funds being used in states and localities for things seemingly unrelated
that have nothing to do with responding to the public health emergency
with respect to the Coronavirus Disease 2019 (COVID-19) or with making
necessary investments in water, sewer, or broadband infrastructure, what
controls in Treasury have been established to ensure that reported
expenditures by states and localities abide by the restrictions on uses put
in place in ARPA?
- Money is fungible across budget
categories in state, local, territorial, and tribal governments, and some
SLFRF funds have accrued to general funds (e.g., the general fund of a
state). ARPA restricts uses of SLFRF funding by stating that no
recipient of such funds may use such funds “for deposit into any pension
fund.” Given that funds are fungible across budget categories, that
some SLFRF funds may accrue to general funds of a government, and that
general funds may be used by governments to fund pensions, how is it
feasible for Treasury to enforce a legal restriction against a government,
in effect, using SLFRF funds for deposit into pension funds? How is
Treasury enforcing such a restriction in its administration of SLFRF usage?
- Noting that ARPA does not
restrict SLFRF funds from being used by a state or local or territorial
government for funding of “other post-employment benefits” (OPEBs), and
that, in addition to massive underfunding of pension obligations in many
states and localities, state and local governments have, according to some
reports, more than $1 trillion of net liabilities for OPEBs, how much of
ARPAs $350 billion of funding for governments of states, localities, and
territories could flow to bailing out OPEB liabilities of those
governments?
- Noting that ARPA grants Treasury the authority to
recoup SLFRF funds from state, local, territorial, or tribal governments
when funds are used in violation of allowable uses, how much of the $350
billion allocated by Treasury to those governments has been recouped to
date, and how can Congress and the American people monitor any such
recoupments?
Thank you for your prompt attention to these matters.
Sincerely,
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