State Auditor Issues High-Risk Report on Federal COVID-19 Funding
This week, California State Auditor Elaine Howle issued a report detailing the state’s management and administration of federal Coronavirus Relief Funds (CRF) appropriated to California by Congress in March 2020. Recall, Auditor Howle designated the state’s management of federal funds to respond to the COVID-19 pandemic as a “high-risk statewide issue” given the significant amount of funding appropriated.
The audit report provides background on the allocation of $9.5 billion in CRF for five priority areas consisting of K-12 education and community colleges, Department of Housing and Community Development, Counties, Cities, and State General Fund. The report determined that the $1.3 billion allocated to counties disadvantaged smaller counties because they received significantly less funding per person than the state’s 16 largest counties. Allocations to the largest counties (more than 500,000 residents) resulted in at least $190 per person while allocations to the 42 smaller counties (less than 500,000 residents) resulted in $102 per person. Auditor Howle calls into question the CRF allocation methodology employed by the Department of Finance (DOF).
Further, the audit report concluded that the Newsom Administration did not consistently evaluate cities’ adherence to state public health orders in administering CRF funds. Recall, local governments were required to certify compliance with public health orders to receive their CRF allocations. According to Cal OES, DOF withheld funds from two cities, though Cal OES could not demonstrate that they evaluated all cities’ compliance with public health orders. The audit report goes on to detail recently implemented DOF procedures improve monitoring of CRF expenditures.
Auditor Howle concludes the report by providing recommendations in the event the federal government provides California with additional funding similar to CRF, encouraging DOF to propose a method to the Legislature to provide equitable per-capita funding to local governments and ensure a formal process to evaluate local government adherence to the Legislature’s requirements.
The full audit report is available here.