Virginia had more than $870.6 million in questioned spending using federal funding from the pandemic-era CARES Act, an accounting and auditing firm said in a recent memo to the Treasury Department’s Inspector General.
The firm Castro & Company reviewed transactions made using the funding, made possible through GrantSolutions.
The CARES Act stipulated that states had to report information like the total amount of "large covered funds" that were received and spent, along with the projects they were spent on and any subcontracts or subgrants that were involved.
Castro & Company reviewed 50 transactions made by Virginia in the GrantSolutions portal and found that “Virginia did not comply with the CARES Act and Treasury’s Guidance.”
Castro questioned $870.6 million worth of expenditures and concluded that “Virginia’s risk of unallowable use of funds is high.”
Spending is a “questioned cost, according to federal regulations:
(a) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;
(b) where the costs, at the time of the audit, are not supported by adequate documentation; or
(c) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.
For context, Virginia received $3.1 billion in such funds, meaning about 28% of expenditures resulted in questioned costs. Castro has recommended that the Treasury Inspector General follow up with Virginia to ensure compliance in reporting.
If states accept and spend federal funds, the least they can do is take the time to comply with the law and report spending so the federal government can provide oversight. Now, without additional information, it’s impossible to determine if these costs went to legitimate relief programs, or if they were spent on wasteful pet projects so common in the pandemic era.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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