Republican legislative leaders want to make sure municipalities properly account for the federal COVID-19 funds they received and have to use before the end of the year.
On Monday, Senate Republican Leader Kevin Kelly and House Minority Leader Vincent Candelora renewed their calls for the administration to hold public hearings on oversight of these COVID-19 relief funds.
The request follows the alleged theft of over $600,000 in COVID-19 relief funds in West Haven. Last week the Connecticut Mirror reported that the city of West Haven also spent COVID-19 relief funds on a 20-person marching band and transportation, commemorative “thank you” coins for municipal employees, and Christmas decorations, instead of on relief and aid. At the same time the city has been under state oversight due to poor fiscal management.
Cities and towns submitted information about their COVID-19 spending to the state’s Office of Policy and Management.
A spreadsheet of how each town spent their COVID funds is on the website.
The Office of Policy and Management explained in a letter to municipalities that there will be an audit of the spending they do.
“Federal Coronavirus Relief Fund (CARES Act) expenditures are subject to Single Audit by an Inspector General within the U.S. Department of the Treasury,” OPM Undersecretary Martin Heft wrote in an October letter. “Documenting that costs are eligible uses is essential to managing compliance risk and to minimizing the possibility that the costs are deemed ineligible, thereby requiring that the municipality and the state may need to return funds to the federal government.”
There were very specific uses for COVID funds.
The only expenses that can be covered are “necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19).”
When the federal funds started flowing to the state, OPM asked cities and towns to keep track of the funding.
“Please keep accurate records and appropriate back-up materials for any expenses related to the COVID-19 pandemic as they will be subject to review and audit,” Office of Policy and Management Secretary Melissa McCaw warned in an April 2020 letter.
“In your chart of account systems, it is recommended to establish a specific department within the health and welfare function to track COVID-19 related expenditures. This will aid in tracking and seeking reimbursements at a later date,” McCaw wrote.
Kelly and Candelora said the effort to get more transparency from the state should be bipartisan.
“The executive branch established a system to distribute COVID-19 relief funds without legislative input,” Kelly and Candelora wrote. “Within that system, an alleged egregious misuse of funds occurred, in a town the state was already supposed to be watching very closely. We need to determine if lax practices were in place by the state, preferably in a bipartisan effort with full public transparency so that we can take immediate action to strengthen safeguards.”
The city of West Haven was already under the Municipal Accountability Review Board, which oversees the finances of West Haven, Hartford, and Sprague and is chaired by McCaw.
OPM wants outside auditors to review how West Haven officials spent pandemic relief funding, including using money for compensatory payments to employees.
Board member Thomas Hamilton told the New Haven Register that the MARB should withhold any restructuring funds until the conclusion of the investigation; several members concur, including McCaw.
Kelly and Candelora worry the problem goes beyond what happened in West Haven, which is why they want to hold a public hearing.
“The fact that the FBI launched an investigation that led to an arrest is not a shining example of a successful system. It must be a call to action for the legislature to do its job and question the administration to ensure the right safeguards and protections are in place,” Kelly and Candelora said.