Preparing for the Coming Onslaught of Government Investigations and Audits of COVID-19 Relief Funds and Contracting—Part I

Pratt's Government Contracting Law Report

This is the first in a series of articles concerning the audits and investigations related to the contracts and grants awarded, and relief funds provided, in response to the COVID-19 pandemic. In this article, the authors discuss the enforcers and the likely targets of audits and investigations related to COVID-19.

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which created the Paycheck Protection Program (“PPP”), and supplemental funding such as the Families First Coronavirus Response Act, the United States government already has made available an estimated four trillion dollars in relief funds to businesses and individuals, and the Biden administration has proposed roughly two trillion dollars more.

In addition to the relief funds, the government has easily awarded more than billions in pandemic-related contracts for everything from vaccines to personal protective equipment (“PPE”) to hand sanitizers. These levels of funding and spending are unprecedented and have been made at breakneck speed (for the government). Based on these factors and lessons from the past, audits of relief recipients and contractors to confirm appropriate use of government funds are inevitable. And the government has said as much. Of course, if an audit reveals potential wrongdoing or malfeasance, relief recipients and contractors should expect follow-on investigations and enforcement activity.

This article first identifies the myriad of entities that are or will be reviewing—and potentially investigating—relief recipient and contractor representations made to obtain, and subsequent use of, government funds. It then identifies three categories of programs, contracts, and companies we believe are more likely to be investigated or audited.

To read the full article, please click here.

“Preparing for the Coming Onslaught of Government Investigations and Audits of COVID-19 Relief Funds and Contracting—Part I,” by Merle M. DeLancey Jr. and Craig Stetson* was published in the June 2021 edition of Pratt’s Government Contracting Law Report (Vol. 7, No. 6), an A.S. Pratt Publication, LexisNexis. Reprinted with permission.

Craig Stetson is a partner with Capital Edge Consulting where he focuses on assisting contractors interpret and apply the accounting and regulatory compliance requirements associated with federal government contracts.