The Washington PostDemocracy Dies in Darkness

A federal watchdog for coronavirus aid warns Congress it is nearly out of money

The special inspector general for pandemic recovery told lawmakers that relief money has been subject to "unprecedented levels of crime and fraud”

Brian Miller, left, and Dana Wade testify before a Senate panel in May 2020 in Washington, D.C. (Alex Wong/Getty Images)
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A federal watchdog overseeing billions of dollars in coronavirus aid told lawmakers late Thursday that it is now facing a “terminal budget crisis,” as its fast-dwindling funds in the face of congressional inaction threaten to shutter the office as soon as this summer.

The warning arrived from the Special Inspector General for Pandemic Recovery (SIGPR), an oversight body chartered by Congress in 2020 to oversee a portion of the country’s first major stimulus package. The leader of the office, Brian D. Miller, stressed that its coffers are at risk of running dry unless Democrats and Republicans fill them swiftly as part of an upcoming debate over government funding levels.

Under the earlier stimulus law, known as the Cares Act, Congress set aside $25 million to SIGPR. The start-up investment allowed Miller to hire staff, bulk up on technical capabilities and set about scrutinizing early-pandemic initiatives, including the Main Street Lending Program, an effort by the Federal Reserve to sustain cash-starved small and medium-size businesses as well as nonprofits.

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Aides to the watchdog say they now have opened more than two dozen cases, as they keep guard over a total of $22.5 billion in outstanding loans and other stimulus assistance. Their efforts helped lead to an enforcement effort announced last week, after a woman in Oklahoma pleaded guilty to federal charges of fraud. But the special inspector general said that its initial $25 million allocation still “is not enough money” to sustain its current level of operations, especially since it has a five-year mandate for oversight.

Without another infusion of funds, the office could run out of cash by July 2022, Miller wrote in a series of letters to lawmakers, one of which was obtained by The Washington Post late Thursday. Even before that deadline, he wrote, the office may have to wind down some of its operations under federal law as soon as March. And already, Miller froze planned hiring and halted expansions pending a resolution on Capitol Hill.

“The covid-19 pandemic is not over, and Congress’s unprecedented investment in the American economy has been prey to unprecedented levels of crime and fraud,” Miller wrote, later adding: “Without such funding, for the first time in history, an inspector general office will close prematurely for want of funding.”

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The letters underscore the vast and expensive task facing the U.S. government as it tries to keep watch over about $6 trillion in federal stimulus approved since the start of the coronavirus pandemic. The money helped revive an economy in the throes of a deep recession, yet it also has tempted criminals and fraudsters, putting unprecedented pressure on federal watchdogs to ensure the quickly disbursed sums land in the hands of those who need it most.

The task has fallen to a slew of committees on Capitol Hill, a wide array of inspectors general scattered across government and other oversight agencies, including the Government Accountability Office.

At times, though, some of the efforts have generated controversy. Last spring, the Special Inspector General for Pandemic Recovery, in particular, tangled with the Justice Department over the scope of its jurisdiction. Top Biden administration officials ultimately determined that Miller, who was appointed during the Trump administration, had purview over only a small slice of the Cares Act and not the broader tranche of funds allotted to the Treasury Department.

The oversight office criticized the decision at the time, arguing the limitations threatened to “diminish the oversight over government funds in the hundreds of billions of dollars.” Months later, the special inspector general for pandemic recovery said in a separate letter to Congress that the decision forced it to “terminate and transfer multiple audits and investigations.”

The funding debacle arrives amid an already pitched congressional battle over the future of federal spending, just weeks before an existing agreement is set to expire. Democrats and Republicans have less than a month to broker a new deal; otherwise, the government is set to shut down after Feb. 18.

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In recent months, lawmakers have narrowly avoided a shutdown by adopting short-term measures that mostly sustain existing federal programs at their current levels. This time, though, top House and Senate appropriators are hoping to strike a deal that could fund Washington operations until the end of the fiscal year, which concludes in September. The two sides have insisted they are making progress toward such a resolution, which could open the door for domestic spending increases previously proposed by President Biden.

As part of his 2022 fiscal year blueprint, Biden proposed to augment the funding for the special inspector general for pandemic recovery, providing it with another $25 million. “This funding is critical in ensuring that SIGPR’s audit and investigative services have the necessary resources to protect the integrity of CARES Act funds,” the president’s budget proposal specified at the time.

Senate Democrats soon after pursued a $10 million appropriation of their own, though the politically deadlocked chamber failed to move any of its spending bills. Instead, lawmakers enacted a series of short-term stopgaps, which ultimately meant that the office never received additional money.

With so much still uncertain in the latest round of talks, Miller urged lawmakers to approve more funding in a long-term deal or make them a special exception that boosts their budget in any short-term stopgap. He hinted at “bipartisan support” for such an outcome, though he warned lawmakers in his letter that the watchdog is “nearing exhaustion” of its earlier tranche of funds.