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Lawmakers ask auditor general to ensure steps in place to prevent pandemic relief fraud

Pennsylvania lawmakers want to know how the state’s auditor general plans to stem fraud involving CARES Act funds and other COVID-19 grants and stipends.

During this months’s state budget hearings before the Senate Appropriations Committee, Sen. Kristin Phillips-Hill asked Auditor General Timothy DeFoor what accountability and oversight measures his department has in place.

In 2020, the state saw an increase in fraudulent claims related to COVID-19 relief, which includes the Pandemic Unemployment Assistance program, CARES Act and other pandemic-created relief programs.

“There’s a lot of money coming in and a lot of money going out,” she said. “We’ve seen firsthand witnessing individuals attempting to defraud our unemployment compensation system throughout this pandemic.”

DeFoor suggested creating checkpoints in the program to validate relief recipients both in their applications and in disbursing the funds.

“You still have to check each step of the process to determine if it is working and if it is actually vulnerable to fraud, waste and abuse,” he said. “Because in situations like this, we are never going to completely stop fraud.”

Such protections may involve the use of third-party entities to carry out the efforts to deter and mitigate fraud, waste and abuse, he said.

He estimated up to 20% of claims received are fraudulent, be it from federal or state pandemic relief funds.

“So are you saying we have no legal way to get money back that the taxpayers have generously provide if they were not allocated properly?” Phillips-Hill asked.

Any recovered funds would be pennies on the dollar, DeFoor said, reiterating that the best way to curtail fraud is to prevent it.

Phillips-Hill suggested that the current processes were set up very quickly and that moving forward, it was important to ensure that the right processes are in place.

“There’s the possibility of additional federal dollars coming, and I think that’s something we need to have a further conversation on to ensure that people who need those funds are the people who meet the criteria for receiving those funds, are the ones who in fact receive them,” she said.

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