Improper oversight by state officials led to more than $29 million in federal funds being misspent that may have to be repaid to the federal government, Oklahoma Auditor & Inspector Cindy Byrd said Tuesday.
Byrd's office released a scathing audit of about $14 billion in spending made by the state in fiscal year 2021, most of it in the form of COVID-19-relief funds.
“Oklahoma has systemic issues that make me very concerned for taxpayers,” Byrd said in a statement following the release of the 250-page audit. "If the federal government decides the state must pay back these questioned costs, you and I will end up paying the bill.
“If that happens, gross mismanagement and lack of compliance and oversight will be to blame.”
Oklahoma is not alone in having questionable oversight of COVID-19 relief funding. An Associated Press analysis found that fraudsters potentially stole more than $280 billion in federal pandemic-relief funds, making it the greatest grift in U.S. history. The analysis found another $123 billion was wasted or misspent, making a combined loss of 10% of the $4.2 trillion the U.S. government has so far disbursed in pandemic relief aid.
In Oklahoma, the audit of about $1.1 billion in federal funds through the Coronavirus Aid, Relief and Economic Security Act of 2020 (CARES) to mitigate the effects of the pandemic found more than $12.2 in questioned costs, which refers to spending that failed to align with the objectives of the grant.
The audit found the state also failed to properly oversee more than $376 million of expenditures for the Emergency Rental Assistance program aimed at helping households pay rent or utilities during the pandemic. The audit determined the administrator of the funding, Community Cares Partner, a program of Communities Foundation of Oklahoma, charged the program $1.6 million in excessive management fees.
Because of the administrative overcharge, many Oklahomans who applied for ERA awards were denied assistance because the unallowable charges were kept by the foundation, Byrd said.
A message left Tuesday with a spokesperson for Communities Foundation of Oklahoma was not immediately returned.
The audit also targeted more than $8 million in questioned expenditures designated for the Governor's Emergency Education Relief fund, or GEER, which was designed for governors to help meet the needs of educating students during the pandemic.
The program offered 5,000 families $1,500 each to spend at designated retailers, but the audit found the state didn't place any restrictions on what families could purchase.
“We found that $1.7 million was spent on various non-educational items such as kitchen appliances, power tools, furniture and entertainment,” Byrd said.
Kate Vesper, a spokesperson for Gov. Kevin Stitt, said in a statement Tuesday that his office maintains the position that “a negligent out-of-state vendor should be held accountable to recover the federal taxpayer dollars in question.” But federal auditors rejected that argument after it released a report on the same program last year. Federal auditors said at the time that the state did not take advantage of an available internal control option offered by ClassWallet, the contractor hired to administer the program.
Oklahoma Attorney General Gentner Drummond said the audit report, particularly with respect to the GEER funds, was “deeply troubling.”
“A number of concerning items from the audit will require further investigation,” Drummond said in a statement. “I refuse to tolerate what amounts to a pervasive culture of waste, mismanagement and apparent fraud.”
