When the COVID-19 pandemic hit, U.S. government agencies sent out over $5 trillion in funding to help everyone – from individuals and businesses to nonprofits and various government levels. Now, any organizations that received a chunk of federal funds need to brace themselves for potential scrutiny and should be on top of their game when it comes to their processes and controls.
The fast-tracked nature of these programs made them a prime target for fraudsters. Some authorities reckon that as much as 10%, which is a whopping $500 billion, may have been fraudulently claimed or misused.
Fast-forward to January 2023, the Pandemic Response Accountability Committee (PRAC) and the U.S. Government Accountability Office dropped a bombshell report. They suggested over $65 billion had been improperly paid out across programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). The Small Business Administration’s Office of the Inspector General thinks there could be as much as $80 billion in unidentified fraud just within the PPP.
In response, federal agencies are ramping up the fight against pandemic fraud, vowing to “prevent, deter, and punish” such activities. Following this, on March 2, 2023, a plan was released to pump an additional $1.6 billion into strengthening oversight, beefing up investigations and prosecutions, and helping victims of identity theft tied to COVID-relief programs.
So, regrettably, a large chunk of the money set aside for COVID relief was misused or defrauded. Looking ahead, the government’s got its sights set on rooting out and investigating fraud across all COVID funding streams.