Watchdogs guarding $5 trillion in covid aid say they need more money

“I can tell you the fraud numbers, and the investigative work, is growing,” Horowitz told lawmakers at a congressional oversight hearing, acknowledging at one point it had been “frustrating, frankly” that lawmakers had not provided the funds.

Six months later, the government remains overwhelmed in its task to find and retrieve incalculable sums of stolen federal coronavirus aid. Even as the Biden administration has intensified Washington’s focus on oversight, Congress has continued to underfund and understaff some of the very offices whose chief responsibility is to monitor stimulus cash.

The persistent neglect has hamstrung the country’s last defense against waste, fraud and abuse — and raised the potential that Washington might not learn from its mistakes before the next crisis.

“People have a right to know how their money is being spent,” said Horowitz, the chairman of the federal government’s Pandemic Response Accountability Committee (PRAC), in an interview with The Washington Post. “Is it being spent in a way that’s wasteful? Did the money go to the right place? Was it defrauded? Accountability goes with understanding where the money went.”

The sheer amount of aid involved has made oversight and tracking difficult. Public resources to explore who received federal money, and what they did with it, remain incomplete despite recent improvements. And the network of watchdogs who do the deeper digging have highlighted at times their own lack of resources — even after requests by the White House and others for more money.

The largest responsibilities — and most significant financial constraints — have fallen on inspectors general, who are tasked to serve as independent voices monitoring federal spending. Repeatedly, Congress has failed to supply some of them with the funds they have requested, leading to a $26 million shortfall in five key offices just over the past two fiscal years, according to a Post analysis of budget records.

At the Small Business Administration, for example, the inspector general has flagged potentially more than $4 billion in fraud targeting the country’s top loan program to aid small businesses. But Congress last year clawed back some of the watchdog’s money to pay for other programs, top officials said. The inspector general at the Labor Department, which oversees the nation’s hard-hit unemployment insurance program, said it has already opened roughly 170,000 investigations — yet it remains “hampered” by a continued lack of full funding.

Similar difficulties have plagued other inspectors general across the U.S. government, a problem that predates the pandemic. But lawmakers in the face of a crisis still have failed to heed those warnings — and Republicans instead have opted to trade political barbs as the full extent of the country’s potential losses comes into view.

“The real need for resources, to my mind is with the [inspectors general], primarily because they’re so overwhelmed with trying to figure out what happened,” Horowitz said.

‘It starts to fall apart’

The roughly $5 trillion in federal aid approved since the start of the pandemic helped save a country in economic free fall. It kept families afloat even as millions of Americans were furloughed or laid off and countless businesses shuttered, sometimes for good.

The money also paid for vaccinations, assisted hungry families in need of food and provided support to millions of Americans who were behind on their rent, utility and internet bills. And it addressed a wide array of other economic challenges, including improvements to the nation’s infrastructure.

But the story of the U.S. government’s historic stimulus effort also has been one of grift and loss, as The Post has found in its year-long series, the Covid Money Trail. Criminals repeatedly siphoned off federal cash, emboldened by relaxed rules as the government rushed to get money into the hands of people who needed it.

The Covid Money Trail

It was the largest burst of emergency spending in U.S. history: Two years, six laws and more than $5 trillion intended to break the deadly grip of the coronavirus pandemic. The money spared the U.S. economy from ruin and put vaccines into millions of arms, but it also invited unprecedented levels of fraud, abuse and opportunism.

In a yearlong investigation, The Washington Post is following the covid money trail to figure out what happened to all that cash.

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Fraudsters targeted generous unemployment insurance benefits, contributing to an estimated $163 billion in waste while disrupting weekly checks for out-of-work Americans. Other criminals set their sights on the government’s $800 billion small-business loan program, extracting funds illegitimately while the companies reviewing their applications allegedly overlooked warning signs — and profited in the process.

Some state and local governments that received federal aid put it toward unrelated uses: a golf course in Florida, a border crackdown in Texas and tax cuts in other Republican-leaning states, The Post uncovered, later sparking federal scrutiny. And some private companies treated it as a moneymaker: Funds to help needy Americans afford the internet, for example, opened the door for AT&T, T-Mobile and other telecom giants to foist price hikes and service cuts on their customers.

Horowitz, the leader of the PRAC, said the difficulty keeping track of all the spending stemmed in part from Washington’s “pay-and-chase” approach at the outset of the pandemic: Push out money quickly amid an emergency, and save oversight for later, creating an “extraordinarily challenging” burden on the stewards of federal funds.

Congress adopted its first, large stimulus package in March 2020, responding to historic joblessness and a plummeting stock market with the roughly $2 trillion package known as the Cares Act. The law established the PRAC, a convening body for federal inspectors general tasked with coordinating oversight and publishing data about emergency pandemic spending.

The effort resembled the Recovery Accountability and Transparency Board, the entity set up to monitor the roughly $800 billion…