by Louise Gannuch 

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The Coronavirus Aid, Relief, and Economic Security ACT (CARES Act) provides much-needed relief to individuals, industries, and government entities impacted by the pandemic. With approximately $2 trillion available, there is an inherent risk of fraud, waste, abuse, and mismanagement. This risk is only further compounded by the pressures people, businesses, and governments across America are experiencing, which is one of the factors that create favorable conditions for fraud.

While monitoring and oversight activities are effective internal controls, they are also vital components to address transparency and accountability in relief programs. The CARES Act includes several oversight provisions, including, but not limited to, the following:

• Section 15010 establishes a Pandemic Response Accountability Committee to promote transparency and conduct and support oversight of all covered funds related to the coronavirus response to prevent and detect fraud, waste, abuse, and mismanagement and mitigate major risks that cut across program and agency boundaries.
• Section 4018 creates the Special Inspector General for Pandemic Recovery, in accordance with Section 4(b)(1) of the Inspector General Act of 1978, to conduct, supervise, and coordinate audits and investigations of the purchase and management of funds by the Secretary of any program established under the CARES Act.
• Section 4020 establishes the Congressional Oversight Commission to conduct oversight related to the implementation of the CARES Act by the Department of the Treasury and Federal Reserve Board.
• Existing Offices of Inspector General will receive additional appropriations. For example, Section 1107(a)(3) directly appropriates $25 million for the Small Business Administration Office of Inspector General for necessary expenses associated with the oversight related to the funds made available through Division I, Title I - Keeping American Workers Paid and Employed Act.

What remains uncertain is how and when compliance requirements, reporting measures, and other oversight and monitoring provisions will be implemented or expanded.  In the meantime, it is imperative for individuals and entities participating in these programs to not only be knowledgeable of the regulations to ensure compliance, but also to be knowledgeable of best practices to prevent and deter the occurrence of fraud, waste, and abuse.

Help Is Available

As the CARES Act is finalized, future legislation is developed, deadlines are updated, and additional challenges and opportunities are uncovered, P&N’s dedicated professionals are committed to understanding and applying this information to help our clients. Please contact us or connect with your P&N advisor to discuss your organization’s questions, concerns, and priorities.