How Was Coronavirus Relief Money Spent? $1.4 Billion In Stimulus Checks Went To Dead People, Congressional Watchdog Says

The Treasury Department sent $1.4 billion in economic impact payments to 1.1 million dead Americans, and it will be up to the Internal Revenue Service to recoup the funds, the nonpartisan Government Accounting Office reported Thursday.

The congressional watchdog agency issued its first bi-monthly assessment of emergency economic assistance approved by Congress in March, noting it will not have access to complete data until next month. The report was based on financial and expenditure data from various federal agencies.

“It is unfortunate that the public will have waited more than four months since the enactment of the CARES Act for access to comprehensive obligation and expenditure information about the programs funded through these relief laws,” GAO said.

President Trump has been pushing for another round of stimulus checks, and House Democrats included more assistance in their HEROES Act.

GAO said the errant $1,200 payments were made due to the speed with which the IRS and Treasury moved to disburse $269.3 billion to 160.4 million taxpayers but noted Social Security data should have been used to minimize payments to dead taxpayers. Part of the problem was that Treasury and its Bureau of Fiscal Service did not have access. Improper payments were made not only to those who had died since 2018, but also due to fraud.

“According to the Treasury Inspector General for Tax Administration, as of April 30, 2020, almost 1.1 million payments totaling nearly $1.4 billion had gone to decedents,” GAO said. “GAO recommends that IRS should consider cost-effective options for notifying ineligible recipients how to return payments. IRS agreed.”

As for other aspects of the CARES Act:

• The Department of Health and Human Services provided $7 billion in COVID-19 Medicaid funding;
• The Centers for Disease Control and Prevention has been unable to obtain consistent and reliable data from states to track the level of coronavirus testing;
• The Paycheck Protection Program processed $512 billion in loans to 4.6 million businesses as of June 12 and had paid lenders $2 billion in fees as of May 31 amid confusion about eligibility and other issues;
• The Department of Labor has no mechanism to track whether people receiving unemployment payments also received wages through the Paycheck Protection Program, and
• The federal government had $17 billion in procurement contracts for such items as ventilators and vaccine development as of May 31.

The GAO recommended Congress mandate the Department of Transportation develop an aviation-preparedness plan for communicable disease outbreaks, but there currently is no plan and the department wants the departments of Health and Human Services and Homeland Security to take the lead.

“GAO recommends Congress take legislative action to require DOT … to develop a national aviation-preparedness plan to ensure safeguards are in place to limit the spread of communicable disease threats from abroad while at the same time minimizing any unnecessary interference with travel and trade,” the agency said.

GAO also recommended Congress revise the Medicaid formula to address needs during an economic downturn.