In a new report, D.C.’s chief auditor points to failures in how nearly half a billion dollars in federal COVID-19 relief funds were appropriated without the required approval by the city council.
In a 52-page report released Thursday, the Office of the District of Columbia Auditor (ODCA) said that while Mayor Muriel Bowser’s Administration had complied with federal requirements on how the 2020 CARES Act funds could be spent, the $495 million in relief was appropriated without approval from the D.C. Council.
D.C. Auditor Kathy Patterson told WTOP that skipping that approval process “is in fact a violation of the Home Rule Act, which is our Constitution, congressionally enacted almost 50 years ago.”
In addition, Patterson said that D.C.’s Chief Financial Officer failed to exercise his independent role when the appropriation went from the U.S. Treasury to D.C.’s treasury — without the council’s approval.
“An independent CFO was one of the checks and balances put in when the city was in financial straits in the late ’90s. So to see that role not being followed, as it should have been, was kind of a concern,” Patterson said.
The report also found that, in a sampling of awards made from the first round of COVID relief, “neither program nor financial staff” were appropriately trained in federal requirements for monitoring sub-grantees, who were mostly nonprofits.
Though the report said appropriation for 2020’s first round of COVID-19 relief “did not follow legal requirements,” Patterson said in a news release that the money went where it was supposed to go.
“The good news is our private accounting firm found that the Bowser administration’s actual spending of CARES Act CRF funds complied with federal rules on how funds could be used,” Patterson said. “But it was a significant failure on the part of every branch of D.C. government that the first round of relief fund spending did not follow legal requirements.”
The ODCA report does point out that by the time the $2.3 billion in the second round of federal COVID funding was approved in 2021, issues regarding the independent role of the city’s CFO and council in appropriating these funds had been resolved.
Among other rebuttals included in the ODCA report, D.C. City Administrator Kevin Donahue said that the auditor’s interpretation of the law was inaccurate and didn’t apply to the 2020 federal COVID spending.
“While such an allegation surely would be newsworthy, it is totally unfounded,” Donahue said. “The Office of the Attorney General (OAG) has previously confirmed the Executive’s interpretation that … Official Code § 7-2304(b) (1) authorized the spending of the CARES Act funds without specific Council approval.”
Donahue went on to criticize the ODCA for using an outside legal firm — EFPR Group LLP — for their report, instead of the Office of the Attorney General for the District of Columbia.
“Moreover, it is unclear why ODCA sought the opinion of an outside law firm — at taxpayer expense — when OAG was available to provide an opinion and is far better positioned to analyze this District law-specific issue. D.C.’s Attorney General would have been more appropriate for interpreting current D.C. law,” Donahue said in his response to the report.
Moving forward, Patterson told WTOP that it will be vital for the mayor’s office and the council to work together for budget challenges.
The report also recommends the District should develop procedures and a system to clearly outline legal requirements for the release of federal funds and monitor sub-grantees, as well as invest in training for all staff involved.
“We’re losing all that federal money that we’ve been spending happily for the last couple of years,” Patterson said. “Looking to budget year 2025, they’ll need to cut about half a billion [dollars], either that or raise taxes. So having our mayor and council work together is going to be even more important in the future.”
