Government inspectors in the United States have found out that more than $1.4bn of its pandemic rescue funds were sent by the US Treasury to people who we4re already dead by mistake.
This disclosure was among the several “challenges” that were identified in the official review of federal coronavirus aid.
In an effort to shield the US economy from the novel coronavirus pandemic induced slowdown, about $2.6tn has been pumped into the economy by the US Congress since March.
But the inspection showed that the mistakes had occurred as the government rushed to deliver the money.
No check of the death records was conducted by the Treasury Department, which was in charge of mailing stimulus cheques to American families, found the Government Accountability Office (GAO) report. It also mentioned that concerns about the risk of erroneous mailings were also raised by some of the tax officials working on the programme.
There was “significant risk” of fraud in the Paycheck Protection Program for small businesses – a low-cost loan fund that makes up about 26 per cent of the total US pandemic spending, the report also warned. The report claimed that the Small Business Administration had not responded to requests for information by the inspectors about the loans and its plans for oversight.
“Because of the number of loans approved, the speed with which they were processed, and the limited safeguards, there is a significant risk that some fraudulent or inflated applications were approved,” the inspectors said.
Changes to respond to those risks were “essential”, the report said.
Currently, lawmakers in Washington are debating on whether or not more assistance was needed to stabilize the American economy.
Pointing out high levels of unemployment, recommendations of further relief have been made by Democrats and many economists – including the head of America’s central bank. However there is reluctance among many Republicans to dole out more money.
“We should be very, very careful in evaluating what’s necessary before we go forward,” Republican Senator Pat Toomey said at a recent hearing.
While saying that additional stimulus is likely, White House officials have said that it would make sense to review how the efforts so far are working. However, federal programmes have resisted oversight efforts, said critics.
The official in charge of overseeing coronavirus spending was removed in April by President Donald Trump.
The audit had revealed “mishandling and negligence” and “mismanagement of taxpayer funds”, said Congresswoman Nydia Velázquez, a Democrat from New York. “If today’s report makes one thing clear, it is the need for transparency and accountability,” she said. “Administration officials must answer that call.”
Unclear rules and lack of oversight have goofed up the distribution of those funds, said critics. This view was also supported by the GAO report.
“Consistent with the urgency of responding to serious and widespread health issues and economic disruptions, agencies have given priority to moving swiftly where possible to distribute funds and implement new programs,” it said.
“As trade-offs were made, however, agencies have made only limited progress so far in achieving transparency and accountability goals.”
(Adapted from BBC.com)