The Department of Administrative Services and local governments can do more to ensure that expenditures under the CARES Act meet federal standards, according to a management letter issued today by Secretary of State Bev Clarno. The letter, addressed to DAS Director Katy Coba, outlines findings from a real-time Audits Division review of local government reimbursement requests.

The $2 trillion federal Coronavirus Aid, Relief, and Economic Security Act, signed into law in late March, provides financial assistance to individuals, businesses, community organizations, and state and local governments. Oregon is estimated to receive about $13 billion in total CARES Act funding.

Coronavirus Relief Funds must be used for non-budgeted COVID-related expenditures incurred between March 1, 2020, and December 30, 2020. At the direction of the Legislature, DAS is paying reimbursements for $200 million in federal Coronavirus Relief Fund money to help Oregon’s cities, counties and special districts respond to COVID-19. Auditors selected a sample of reimbursement requests from 32 jurisdictions totaling $21.7 million, or 47%, of the total amount requested in the first round. The requests primarily covered employee leave and local government payroll related to COVID-19. Auditors evaluated requests for adequacy of documentation and allowability under vague and frequently changing U.S. Treasury guidance.

Overall, auditors found three of the 35 reimbursement requests reviewed were at high risk for questioning by municipal or federal auditors. Twelve requests, including the three considered high risk, lacked clear documentation. Other issues identified included risky submission practices for payroll and leave costs, significant mathematical errors, and expenses reported in incorrect federal categories.

Auditors suggested six actions DAS can take to promote accuracy and help reduce the risk of expenses being questioned. The real-time aspect of this review allows DAS and local governments to address outstanding issues before the cutoff date of December 30, 2020, for Coronavirus Relief Fund expenditures.

“It is crucial this funding be used to help Oregon communities overcome the public health crisis,” Secretary Clarno said. “Local governments are working hard on this, but the state can do more to ensure accuracy, transparency, and adequate support for these funds.”


--Staff Reports

Post Date: 2020-10-21 18:07:16