From the U.S. Government Accountability Office, www.gao.gov

Transcript for: An Update on Our Review of the Federal Response to
COVID-19 

Description: Today, we issue our latest and ninth comprehensive report
with recommendations to improve the federal response to COVID-19
response. Hear more from four GAO experts about our latest findings,
including deficiencies in coordination and leadership, as well as
oversight of emergency relief such as; rental housing assistance, food
assistance programs and tax relief for businesses. 

Related GAO Work: GAO-22-105291, COVID-19: Significant Improvements Are
Needed for Overseeing Relief Funds and Leading Responses to Public
Health Emergencies

Released: January 2022

[Music]

[Holly Hobbs:] We were all hoping that on January 1, we would have left
the old year and the coronavirus behind us. But as we enter the third
year of the pandemic, we continue to see disruptive and devastating
impacts it's had on our nation. And here at GAO, we continue to monitor
the federal response to COVID-19, and are issuing our latest and ninth
comprehensive report with recommendations to improve this response. 
Today, we'll talk with four GAO experts about our latest findings.
Joining us first to talk about federal coordination and leadership of
public health emergencies is Jess Farb, the Managing Director of our
Health Care Team. Thanks for joining us.

[Jess Farb:] Thanks for having me, Holly. 

[Holly Hobbs:] So within this latest report, we took the significant
step of designating the Department of Health and Human Services'
coordination and leadership of health emergencies as a new High Risk
area. Can you tell us why we did this?

[Jess Farb:] Yeah, sure. So for over a decade, we found fairly
persistent deficiencies in the way HHS has executed its lead role in
preparing for and responding to public health emergencies. And of course
this current pandemic, COVID-19, has highlighted some of these
longstanding concerns. Since 2007, we've made over 100 recommendations
to HHS related to this leadership and coordination, and not all of them
have been fully implemented. And so we still think there's plenty of
work for HHS to do. And we most recently raised this as an emerging
issue requiring some close attention in our March 2021 High Risk report.
We kept observing continued issues this year and decided to add the
topic now to help ensure that there's sustained leadership and attention
from both the Executive Branch and the Congress so that we're prepared
for the future in terms of emergencies. And this really includes
strengthening HHS leadership and coordination role. 

[Holly Hobbs:] And what does it mean for HHS's role to be designated as
High Risk? 

[Jess Farb:] So as you know, since 1990, we've been reporting on
government programs and operations that we think are High Risk. And we
think the list has served to identify and help resolve some really
serious weaknesses. And we consider some qualitative factors, such as
whether this risk could involve public health or safety. And in this
case, it does. And HHS has a lead role, as I mentioned, for coordinating
all matters, related to public health and medical preparedness for these
kinds of emergencies, whether they're naturally occurring or
intentional. This really requires a whole of nation, multidisciplinary
approach. It involves multiple federal agencies, as you can imagine, and
coordinating with a lot of different nonfederal entities --like states and
tribes and the private sector. And this response to COVID-19 has
highlighted these concerns we've raised, including the response to a lot
of past threats --such as the H1N1 pandemic, Zika, and Ebola -- and then
extreme weather events such as hurricanes. We think that there's going
to continue to be extreme weather events, new viruses, bad actors that
may cause harm. And this makes it really concerning that we see these
deficiencies. So, not being sufficiently prepared for a public health
emergency could negatively affect the time and resources that are needed
to achieve full recovery, even from this pandemic. 

[Holly Hobbs:] So this sounds very significant. What steps could HHS
take to get off our High Risk list? 

[Jess Farb:] I want to acknowledge that sustaining attention and
preparing for and responding to public health emergencies can be
challenging --both because we're currently responding to a COVID-19
pandemic, but also because people sort of forget once for past
something. H1N1, for example, hasn't been in the news in a long time.
But we can't wait to address the deficiencies that we've identified. So
we think there's several recommendations that HHS could implement, and
that would be a good starting place. 

[Holly Hobbs:] And, what did we recommend?

[Jess Farb:] So clearly defining the roles and responsibilities of the
various actors and entities that need to coordinate are really
important. Making sure that we have complete and consistent data. We
found that complete collection of public health data wasn't available.
It's still lagging two years into the pandemic. We need a standardized
data set that we can really look to, to make decisions. And then clear
and consistent communication both across agencies and entities involved
in the effort, but also to the general public. For example, there wasn't
consistent guidance at the beginning of the pandemic on the personal
protective equipment, and use, and how to handle it. Also, transparency
and accountability to make sure that there's a transparent and clear
process for how to procure vaccines, supplies, and other materials, for
example. And then understanding your key partners' capabilities and
limitations. We've observed that some of the key federal response
partners wasn't clear what their capabilities and limitations would be
at the beginning of the pandemic. So things like going out and testing
those agencies' response, you know, through simulations is really
important. So we hope that HHS, by responding to some of these
recommendations will be better positioned to help prepare for and
respond to any future public health emergency. 

[Holly Hobbs:] So we just heard that GAO has taken a critical step in
declaring HHS's preparation and response to public health emergencies as
a new High Risk area. But some other agencies and programs are also
involved in the federal response to COVID-19. For example, federal
rental housing assistance.

[Beryl Davis:] At the end of November, the Department of the Treasury
had disbursed nearly $38 billion of the $47 billion that Congress had
set aside for two emergency rental assistance programs. 

[Holly Hobbs:] That's director Beryl Davis, an expert on federal
financial management, who led work about Treasury's oversight of this
program. 

[Beryl Davis:] Now, Treasury gives these funds to state, local
governments, tribes and other grantees. Then in turn, the grantees use
this money to pay for rent, utilities and other housing expenses of
renters, who are facing financial hardship due to the pandemic. Usually,
priority is given to households with very low income. 

[Holly Hobbs:] So Treasury's role was to oversee the disbursement of
these funds, but we found some gaps in that oversight. 

[Beryl Davis:] That's right, Holly. The way the programs were designed,
Treasury disperses funds to the grantees, to support existing rental
assistance programs or to establish new ones. And from there, the
grantees make payments to renter households that meet certain
eligibility requirements, or they can make payments directly to the
landlords and utility companies on behalf of those households. Now, in
any program of this type, there's always the possibility that
overpayments are going to occur. And during our review, we found that
Treasury has not yet designed needed processes --such as post payment
reviews and recovery audits --for identifying and recovering overpayments
at that second level where grantees --such as state and local
governments --pay the households, landlords or utility providers. I think
it's important to emphasize that reviews are needed of payments after
the money is disbursed --we call these post payment reviews -- in order to
verify the eligibility of renters and that the payments were correctly 
calculated. In fact, without these type of reviews, Treasury's ability
to identify overpayments, including those resulting from fraud, is
certainly going to be limited. So the opportunities then to recover any
overpayments may be delayed or they may be impossible to recover. 

[Holly Hobbs:] And given these gaps, did we find any ways that Treasury
could improve its oversight? 

[Beryl Davis:] Yes, we did, Holly. We recommended that Treasury design
and implement processes such as post payment reviews and recovery audits
to pull back any funds not properly disbursed. We believe this can help
ensure the timely identification of recovery of overpayments in the
Emergency Rental Assistance programs. And Treasury did agree with our
recommendation. But Holly, I want to also note that we made a
recommendation to the Office of Management and Budget based on the fact
that OMB and Treasury have not yet issued guidance to auditors of the
Emergency Rental Assistance programs. And in this case, we recommended
that OMB, while consulting with Treasury, issue needed auditing
guidance. So we believe that including auditing guidance for the
Emergency Rental Assistance programs can also help in identifying any
deficiencies in grantees compliance with the program's requirements.

{Music}

[Holly Hobbs:] So while GAO is making recommendations to improve
Treasury's and OMB oversight of COVID-related rental assistance, we also
looked at oversight of food assistance programs that were used during
the pandemic. What are these programs and what did we find? For that, we
spoke with Director Kathy Larin, an expert on programs that help
vulnerable populations. 

[Kathy Larin:] I'd like to start by recognizing that the Food and
Nutrition Service, which is part of USDA, worked incredibly hard during
the pandemic to get food to those in need. Demand for food assistance
during this time really skyrocketed. But there have certainly been
challenges along the way. 

[Holly Hobbs:]  Kathy, what were some of the challenges USDA's Food and
Nutrition Service faced in providing assistance during the pandemic? 

[Kathy Larin:] FNS' Emergency Food Assistance Program is a key program
for getting food to food banks and other emergency providers. But
throughout the pandemic, there were supply chain issues that led to
canceled orders and food banks not receiving the food that they were
expecting. 

[Holly Hobbs:] And what about the Pandemic Electronic Benefits Transfer
program?

[Kathy Larin:] That program was created by Congress at the beginning of
the pandemic to help fill the gap for children who wouldn't be receiving
a meal at school or at their child care facility because of COVID-19
closures. And that program has provided over $40 billion in food
assistance since March 2020. However, we found that states have
struggled to obtain reliable and comprehensive data on who's eligible
for that program. So that led to major delays in the issuing benefits to
eligible students, and it may have meant that some students fell through
the cracks.

[Holly Hobbs:] Given all of that how prepared do we think the Department
of Agriculture was in providing this emergency assistance? 

[Kathy Larin:] So the Department of Agriculture did take action as soon
as the pandemic hit. But they did run into a few obstacles. For one, the
agency had outdated pandemic plans for its programs. So when the
pandemic hit, there wasn't actionable guidance for FNS and state
agencies on how they should respond. Another obstacle was communication
with states and other stakeholders. Sometimes it just took the agency
too long to finalize and communicate policies. This presented major
challenges to those who were on the frontlines trying to provide food
assistance. 

[Holly Hobbs:] So, is FNS taking any of these lessons learned and moving
them forward? 

[Kathy Larin:] Yeah, FNS has started the process of identifying
incorporating lessons learned so far. You know, one example is that FNS
learned that states needed more certainty about the types of
flexibilities that would be available to them as the pandemic continues.
Some programs have waived the requirement for face-to-face meetings with
participants. And, you know, knowing that some of these flexibilities
will carry forward has helped give states certainty and flexibility that
they need to plan their program operations. Another thing that the
agency has identified is that the pandemic disproportionately affected
food insecurity for people of nonwhite races and ethnicities. These
disparities are linked to longstanding structural issues, but FNS has
said they'll be addressing those in the pandemic recovery and in future
reforms. That being said, we also identified that there is more FNS
could do to obtain comprehensive information on lessons learned and to
incorporate that information into their plans movin
g forward. 

[Holly Hobbs:] So given this, what recommendations did we make?

[Kathy Larin:] We made two recommendations. So first, we recommended
that FNS develop a comprehensive strategy for the agency's nutrition
assistance programs to respond to emergencies. The strategy should
include lessons learned, as I talked about, but also a mechanism to
periodically review and update the strategy. This can help FNS help
states and other stakeholders, not just respond to the ongoing pandemic,
but also be better prepared for future emergencies. Second, we
recommended the FNS further assist state and local agencies in their
efforts to obtain reliable and comprehensive eligibility data for the
Pandemic Electronic Benefits Transfer Program. This would allow them to
determine eligibility and benefit amounts more accurately. 

[Holly Hobbs:] And the last topic we'll cover in today's podcast
involves tax relief for businesses. This tax relief was aimed at
providing businesses with additional liquidity during the pandemic.
Director Jessica Lucas-Judy, a tax policy expert, led our work reviewing
tax relief and explains just how these relief laws were supposed to
work.

[Jessica Lucas-Judy:] The CARES Act and related legislation included
several tax relief measures for businesses, such as the net operating
loss carrybacks, as well as alternative minimum tax credits. So if a
business's deductions are more than its income in a given year, it can
carry some of those losses back to offset income in an earlier year and
in some cases, get a refund for the taxpayer. Similarly, corporations
with alternative minimum tax credits could claim them for earlier years. 

[Holly Hobbs:] So what went wrong? 

[Jessica Lucas-Judy:] Well, during this time, IRS was dealing with a
number of different challenges from the pandemic, such as staffing
challenges and other problems, as well as multiple changes that were
being made to the tax law that IRS had to accommodate. The carryback
refund filings increased 276% from fiscal year 2020 to 2021. IRS is
generally required to issue refunds within 90 days, and it used to be
able to do that. However, we found the IRS started missing that deadline
in September 2020, and those delays continue throughout 2021. For
example, as of November 2021, the carryback refunds were taking an
average of more than 165 days, plus as much as two more weeks to get the
refund to the taxpayer.

[Holly Hobbs:] And some of these delays you're talking about at IRS,
they aren't just impacting businesses. Individuals are seeing delays in
getting their tax returns or other actions processed by the IRS. Do we
know what's causing the delays? 

[Jessica Lucas-Judy:] Well, as I mentioned, IRS had received more than
200% more filings for the carryback refunds than it had in prior years.
COVID-19 pandemic also caused IRS facilities to shut down. They had a
lot of staffing changes to deal with. Their processing centers were
opening and closing. They were dealing with social distancing. So a lot
of different challenges happening, all sort of at the same time. At the
end of 2021, IRS was still processing 460 business filings from 2020
that it hadn't even put into its systems at that point. So the tax
relief provisions that we're talking about here, they're for businesses,
but they also include corporations and individual-sole proprietors as
well as estates and trusts. And these processing delays, they affect
many different types of taxpayers. So we'll be reporting later this year
on COVID-related tax relief for employers, as well as the regular tax
filing season for individuals. 

[Holly Hobbs:] And did we make any recommendations for IRS?

[Jessica Lucas-Judy:] We did. IRS, of course, was trying to get payments
out quickly. The Service was monitoring processing times and workloads,
and it made adjustments to address specific cases. But it didn't take
more comprehensive service-wide actions until April 2021, which was
about seven months after it was consistently missing that 90-day mark.
So we're recommending the IRS establish some kind of threshold indicator
that would trigger mitigation activities much sooner. We think that this
can help IRS better manage unexpected backlogs in the future and make
sure that businesses are getting the tax relief that they need.

[Holly Hobbs:] So to recap, our new report looked at HHS's a response to
public health crisis, as well as oversight of federal rental housing and
food assistance programs, and tax relief for businesses. To come full
circle, let's bring it back to Jess Farb, who led off our podcast. Jess,
what's the bottom line here?

[Jess Farb:] Yeah, I mean, I think it's very similar to our previous
comprehensive reporting that we've been doing. But the federal
government, you know, is continuing to respond and recover from
COVID-19. And the way the pandemic has been changing, including the
emergence of new variants and the lingering economic effects, really
illustrate continued challenges that we face and the work that still
remains. While we're pleased that agencies have so far addressed many of
these recommendations that we've made, fully addressing the
recommendations we're making, including the new ones we're making in
this report, would really help improve the federal response and recovery
efforts. And as we talked about, really central to the federal
government's response is HHS is leadership and coordination, which we're
designating as High Risk in this report in hopes that it will receive
sustained attention from both the executive branch and Congress. 

[Holly Hobbs:] That was GAO's Jess Farb, Beryl Davis, Kathy Larin and
Jessica Lucas-Judy talking about our newest report on the federal
response to COVID-19. Thank you for your time, ladies, and for sharing
this work. And thank you to our listeners for tuning in to the Watchdog
Report. To hear more podcasts, subscribe to us on Apple Podcasts and
make sure you leave a rating and review to let others know about the
work we're doing. For more from the congressional watchdog, the U.S.
Government Accountability Office, visit us at GAO.gov.