JEFFERSON CITY, Mo. (AP) — The U.S. Treasury is taking action to recover COVID-19 pandemic relief funds from numerous local governments that received significant financial assistance but failed to meet reporting requirements regarding the utilization of those funds.
In 2021, the federal government allocated $350 billion through the American Rescue Plan, aimed at supporting state, local, territorial, and tribal governments. Over 30,000 governmental entities, ranging from large states to small towns, were entitled to receive a portion of these funds.
These governments were required to obligate the money by the end of 2024 for designated projects and to submit either quarterly or annual progress reports, based on their population size and the amount of funding received. While the majority adhered to these guidelines, by January 2023, around 1,000 predominantly smaller governments had not submitted any reports to the Treasury, concerning the use of a total of $139 million, as reported by the U.S. Government Accountability Office (GAO).
A recent GAO report indicated that the Treasury took steps to recoup these funds by sending notices to the non-compliant local governments. As of June 24, 2023, a total of 740 local governments complied and submitted their reports, thus alleviating their obligation to repay the funds. Meanwhile, 13 governments opted to return their funds. However, 235 local governments remained unresponsive, neither filing reports nor returning the federal relief money.
While the GAO has announced the non-compliance, it has not released the list of specific governments involved, nor has the Treasury responded to requests for the names of the 13 governments that returned funds and those still in non-compliance. This is not the first incident that has raised red flags about government transparency regarding pandemic relief funds.
In its report from October 2023, the GAO highlighted that the Treasury had sent noncompliance notices to more than 3,500 local governments that did not fulfill their obligation for submitting progress reports on the usage of their relief funds. Despite these issues, the Treasury has declined to share noncompliance letters with the Associated Press, leading the outlet to file a Freedom of Information Act request in January 2024 for copies of the related correspondence. As of now, this request remains unfulfilled.
The GAO's latest findings emphasize that the lack of regular progress reports from local governments significantly hampers the Treasury's capability to verify whether the funds are being allocated for permissible uses. This situation leaves a gap in accountability and prevents oversight over the spending of pandemic relief funds.
As the Treasury and GAO work to address these compliance issues, the emphasis remains on ensuring that governmental entities uphold their commitments to transparency and responsible spending of federal relief funds.
