mismanagement of COVID-19 relief funds

The state auditor said California has collected billions of US dollars in federal mismanagement of Covid-19 relief funds and, creating significant risks to residents.

The released annual report on the high-risk state audit plan outlines a list of potential accountabilities related to certain departments of the California state government.

The auditor’s office warned last year in August that the federal COVID-19 relief fund may have been mishandled. And called the Department of Finance (Finance), the Employment Development Department (EDD), and the California Department of Public Health (Public Health) as sources of mismanagement.

One of the reasons believed behind the misusage is the imbalance in relief funds between the most populous counties and the least populated major rural counties.

The state employment department is responsible for issuing more unemployment checks than any other state had in modern history which has been getting investigated. Unfair distribution of CRF funds by the finance department increases the risk of unmet funding needs related to pandemics in small counties.

Specifically, EDD waited around four months to automate a key anti-fraud measure, took incomplete measures on suspicious address claims, and removed a key anti-fraud measure that was Incomplete action according to Elaine Howle, the state auditor Incorrect payment measures were also taken while fully understanding the importance of the safeguard. As a result, Californians have experienced delays and confusion in the state distribution of unemployment funds, the report said.

As per further investigation, a large amount of funds is also estimated to have been misused for pandemic-related unemployment benefits. Similarly, the CARES Act has not been taken at the right time by the Housing and Community Development Department to secure those funds that promptly benefited that population.

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