Special Inspector General for Pandemic Recovery Calls for Increased Funding and Expanded Jurisdiction in Quarterly Report to Congress | Sheppard Mullin Richter & Hampton LLP


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On July 30, 2021, Special Inspector General for Pandemic Recovery (“SIGPR”) Brian D. Miller submitted his quarterly report in Congress. The SIGPR was established as an independent oversight body of the Treasury Department under the CARES Act. He’s charged with investigating the fraud and abuse of federal stimulus funds in response to COVID-19, and works in conjunction with law enforcement and US prosecutor’s offices across the country. These investigative efforts have resulted in civil and criminal enforcement actions against federal funding recipients across the country, and these enforcement investigations will certainly continue. The quarterly report showed that the federal government has been active in investigating fraud and abuse related to stimulus funds, and its call for additional funding signals a future increase in enforcement against recipients of stimulus funds. federal.

The report highlighted a number of developments with SIGPR. From April to June 2021, SIGPR worked on 20 investigations and preliminary inquiries, 16 of which were initiated by its own proactive efforts. It also received and investigated 620 hotline complaints and referred 201 complaints to other agencies for further investigation. SIGPR also announced an audit of the Main Street loan program and continued its audit of the direct loan program.

The SIGPR has also created a Self-disclosure website for recipients of federal stimulus measures to report fraud, waste and abuse. While it may seem counterintuitive for recipients to report alleged misconduct, the SIGPR report reiterated the Justice Department’s policy of giving those found to be at fault the credit for potentially reducing liability. of this fault, including the reduced liability under civil law for false claims.

The SIGPR concluded its quarterly report by asking Congress to expand its jurisdiction. That request included expanding its jurisdiction over all federal pandemic-related programs managed by the Treasury Department to expand the scope and information it can access. SIGPR called for this expansion to access additional information from the Main Street loan program, including improved access to information on borrowers and direct lender loans”}” data-sheets-userformat=”{“2″:513,”3”:{“1″:0},”12″:0}”>direct lender loans.

SIGPR’s quarterly report serves as the government’s most recent warning that companies that have received federal funding in response to COVID-19 (including payroll support under the Paycheck Protection Program) could be audited in the near future. To prepare for such an audit, grantees should consider doing proactive diligence now to ensure that they are still in compliance with the requirements associated with these funds, and that they were in compliance when the linked funds. to COVID were initially received. Due diligence in complying with federal funding requirements will enable recipients to detect and prevent problems. In the event that the recipient has made a misstep along the way, this will give businesses ample time to make informed decisions, including whether to take corrective action and refer themselves to the government, if necessary. Recipients who discover a nonconformity should take voluntary corrective action now to correct it before it is audited or reviewed by SIGPR and other regulatory and enforcement bodies, which could lead to more serious consequences. .

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