Agencies, Congress Didn’t Even Try To Stop Fraud In $4T Coronavirus Bailout, Audit Finds

The Government Accountability Office stated Wednesday that the fraud was likely due to the large number of coronavirus-tied bailouts. In some cases, government agencies did not take basic steps to prevent the fraud and in others declined to seek to recover improper payments.

In a searing, comprehensive Report, the nonpartisan auditing arm of Congress excoriated the administration of almost every pandemic-era spending program—and Congress itself—for doling out $4.6 trillion with the prospect of fraud seemingly an afterthought.

Rampant fraud became a very real reality three years after the pandemic.

Unemployment fraud. Coronavirus-era programs flooded cash into a program that already has one of the government’s highest rates of improper payments: unemployment checks. Non-coronavirus unemployment checks Already had an illegal payment rate of almost 19% in fiscal 2021, and more than 22% for fiscal 2022. This was made possible by Coronavirus programs that provided even greater cash access, with $873 billion of checks going to people who claimed they were laid off or their hours cut due to coronavirus. In the best-case scenario–that coronavirus unemployment checks were no more fraudulent than the lower 2021 non-coronavirus value–“at least $163 billion in pandemic UI benefits could have been paid improperly,” According to the GAO.

And that’s likely a vastly optimistic scenario, because the coronavirus unemployment program “allowed applicants to self-certify their eligibility and did not require them to provide any documentation of self-employment or prior income.” The Department of Labor, which administers the program, also encouraged states to waive a standard 21-day waiting period—the period in which anti-fraud scrutiny often occurs.

Even though it significantly loosen controls on a program already atrocious in terms of improper payments rate, the Department of Labor didn’t have a dedicated fraud unit. In fact, DOL stated it was only merely after two years since October 2021 when the GAO first raised the issue. “in the process” This is “proceeding with implementing” the recommendations—long after the pandemic has ended, according to the GAO.

PPP loans The most prominent coronavirus bailouts—forgivable PPP and EIDL loans for businesses—were administered by the Small Business Administration, which did not even set up an anti-fraud entity until after the program was done giving out money, GAO said.

“SBA did not designate a dedicated antifraud entity until February 2022. This new entity—the Fraud Risk Management Board—is to oversee and coordinate SBA’s fraud risk prevention, detection, and response activities. Further, in March 2021, we found that SBA had not conducted fraud risk assessments for PPP and the COVID-19 EIDL program and recommended that it do so. When SBA developed its fraud risk assessments for the programs in October 2021, PPP had already stopped accepting new applications and the COVID-19 EIDL program would stop at the end of that year,” It was written.

EIDL. Together, PPP and EIDL paid out almost $1 trillion. Yet Congress explicitly blocked SBA from using tax returns to verify a business’s eligibility for EIDL loans, even though it is a highly relevant piece of information. “As a result, SBA relied on self-certification,” GAO.

GAO looked at a small sample of loans that were processed without consulting tax returns. “about half of them” It should not have been.

Congress removed the restriction nine months later, but SBA still didn’t bother verifying applications using tax returns in a timely manner. “Specifically, the SBA OIG found that for about 4 months after Congress removed the tax return prohibition, SBA made 133,832 COVID19 EIDL disbursements, totaling about $8.5 billion without proving applicant eligibility using official tax information,” It said.

Congress. Although it might seem that agencies shouldn’t be told to reduce fraud, Congress specifically removed all legal requirements related to the policing of fraud from large scale a href=”https://www.dailywire.com/news/100b-bonanza-pfizer-reports-record-sales-profits-behind-covid-vaccine-oral-treatment”>coronavirus Bills relating to appropriations “Although federal laws have required agencies to submit specific internal control plans for relief funds in previous emergencies, there was no such requirement for the COVID-19 pandemic,” GAO wrote.

The Fraud Reduction and Data Analytics Act of 2015 and Payment Integrity Information Act of 2019 “required agencies to report on their antifraud controls and fraud risk management efforts in their annual financial reports,” However, this requirement was lifted in 2020 and is not being renewed by Congress.

Nearly half of states didn’t even try to get wrongly-paid benefits back. In May 2021, the Department of Labor’s inspector general found that when 19 states overpaid someone’s unemployment benefits, they did not even attempt to get the money back. “From April 2020 through September 2022, states and territories reported about $48.6 billion in overpayments across the UI programs,” GAO.

There was no attempt to screen for fraud in a program that prioritized minority restaurant owner owners. The Restaurant Revitalization Fund has attracted attention. Exclude white malesA provision that a judge has ruled was Unconstitutional. It also appeared to go out of its ways to help minority fraudsters. SBA