Opinion from a Libertarian ViewPoint

Dailywire Article – Agencies, Congress Didn’t Even Try To Stop Fraud In $4T Coronavirus Bailout, Audit Finds

Posted by M. C. on February 2, 2023

Health is their main concern, but who’s?

By  Luke Rosiak

Alan Schein Photography / The Image Bank / Getty Images

Not only did the glut of coronavirus-tied bailouts likely result in billions of dollars of fraud, but it happened because government agencies in many cases did not take even basic steps to prevent it, and in other cases have declined to try to claw back improper payments, the Government Accountability Office said Wednesday.

In a searing, comprehensive report, the nonpartisan auditing arm of Congress excoriated the administration of almost every pandemic-era spending program—and Congress itself—for doling out $4.6 trillion with the prospect of fraud seemingly an afterthought.

Three years after the pandemic began, rampant fraud turned out to be very much a reality.

Unemployment fraud. Coronavirus-era programs flooded cash into a program that already has one of the government’s highest rates of improper payments: unemployment checks. Non-coronavirus unemployment checks already had an improper payment rate of nearly 19% in fiscal year 2021 and more than 22% in 2022. Coronavirus programs flooded this with even easier access to even more cash, with $873 billion in checks to people who said they were laid off or had hours reduced because of coronavirus. In the best-case scenario–that coronavirus unemployment checks were no more fraudulent than the lower 2021 non-coronavirus value–“at least $163 billion in pandemic UI benefits could have been paid improperly,” the GAO said.

And that’s likely a vastly optimistic scenario, because the coronavirus unemployment program “allowed applicants to self-certify their eligibility and did not require them to provide any documentation of self-employment or prior income.” The Department of Labor, which administers the program, also encouraged states to waive a standard 21-day waiting period—the period in which anti-fraud scrutiny often occurs.

Even as it dramatically loosened controls on a program that already had an atrocious rate of improper payments, the Department of Labor did not have a dedicated fraud unit in place, and more than two years after the GAO first warned of the problem in October 2021, DOL said it was merely “in the process” of “proceeding with implementing” the recommendations—long after the pandemic has ended, according to the GAO.

PPP loans. The most prominent coronavirus bailouts—forgivable PPP and EIDL loans for businesses—were administered by the Small Business Administration, which did not even set up an anti-fraud entity until after the program was done giving out money, GAO said.

“SBA did not designate a dedicated antifraud entity until February 2022. This new entity—the Fraud Risk Management Board—is to oversee and coordinate SBA’s fraud risk prevention, detection, and response activities. Further, in March 2021, we found that SBA had not conducted fraud risk assessments for PPP and the COVID-19 EIDL program and recommended that it do so. When SBA developed its fraud risk assessments for the programs in October 2021, PPP had already stopped accepting new applications and the COVID-19 EIDL program would stop at the end of that year,” it wrote.

EIDL. PPP and EIDL together paid out nearly $1 trillion. Yet Congress explicitly blocked SBA from using tax returns to verify a business’s eligibility for EIDL loans, even though it is a highly relevant piece of information. “As a result, SBA relied on self-certification,” GAO said.

GAO reviewed a sample of loans processed without consulting tax returns and found that “about half of them” should not have been approved.

See the rest here

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