The US Government Recovers Millions of Dollars from COVID-19 Aid through Audits

• The US Department of the Treasury is seeking to recover funds allocated for COVID-19 aid
• 740 local governments submitted reports, 235 remain as noncompliant
• GAO confirmed noncompliance in 3,500 governments

Jefferson City, Missouri — The US Department of the Treasury is seeking to recover funds allocated for aid during the COVID-19 pandemic from hundreds of local governments that received millions of dollars but did not meet requirements for reporting how those funds were used.

The federal government distributed $350 billion among state, local, territorial, and tribal governments as part of the American Rescue Plan, approved by Congress and President Joe Biden in 2021. Over 30,000 governments, from the largest to the smallest, received a portion of the funds.

Governments must use the funds by the end of 2024 for specific projects and report on progress—quarterly or annually, depending on the population and amount of funds received. Most complied with these requirements. However, as of June 24, nearly 1,000 mostly small governments had not submitted any reports to the Department of the Treasury regarding the use of $139 million, according to an analysis by the US Government Accountability Office (GAO).

According to the GAO report released last week, the Treasury Department sent notifications to local governments requiring them to return funds. As of June 24, 740 local governments submitted reports and no longer had to return funds. Thirty governments returned the funds they received. However, there are still 235 local governments that did not submit reports and did not return funds.

GAO informed the Associated Press that it does not have a list of specific governments that did not meet reporting requirements. The Treasury Department did not respond to an AP inquiry regarding the list of 13 governments that returned funds and those that still did not report on spending.

This is not the first instance where there have been revelations regarding governments not disclosing how they are spending their pandemic relief funds. In July 2023, GAO reported that the Treasury Department sent notifications regarding noncompliance to more than 3,500 local governments that did not submit reports on progress. At that time, the Treasury Department declined to provide the AP with those letters regarding noncompliance. In January 2024, AP submitted a request for copies of letters regarding noncompliance and related correspondence in accordance with the Freedom of Information Act. The Treasury Department still has not fulfilled this request.

In its latest report, GAO noted that noncompliance by local governments with regular reporting limits the Treasury Department's ability to determine whether they are spending funds appropriately.

Tags: USA/Politics/Economy