Smith: New Jersey DEP ‘failed to identify several cases of possible fraud’
(The Center Square) – Ten New Jersey fisheries may have received $2.4 million in overpayments when federal CARES Act relief funds were made available.
States were flooded with cash in the early days of the pandemic and had a mandate to quickly get those funds to individuals and businesses that were suffering, William J. Smith, spokesman for the Garden State Initiative, told The Center Square.
New Jersey marine fisheries might have received nearly $2.4 million in improper COVID-19 relief payments, according to a state comptroller’s report released recently, as reported by New Jersey Monitor.
“Based on the comptroller’s analysis of a pool of applicants, the state DEP [Department of Environmental Protection], in meeting the federal government’s guidance to rapidly distribute the funds, failed to identify several cases of possible fraud or abuse of the program in nearly a quarter of applications reviewed,” Smith said to The Center Square.
The lack of oversight stemmed from the requirement by the federal government to disburse funds as quickly as possible, the DEP said in response, according to the comptroller. But, they failed to adhere to guidance that came with the program – that agencies should balance speed with good stewardship.
“Clearly, that balance was not achieved in this study, but the agency has said they’re committed to doing so going forward,” Smith said.
DEP said the self-certification applicants were explicitly allowed by its federal and state partners in the program, but by “relying on recipients to self-report whether they’d been made more than whole, and failing to consider other COVID-19 assistance received in calculating revenue loss, the Fishery Program was exposed to an increased risk of fraud, waste, and abuse,” according to the comptroller’s report.
Problems the comptroller’s office found included DEP’s failure to address red flags in applications, leading to approximately $240,000 in improper payouts. At least nine recipients failed to disclose other sources of COVID-19 assistance. Ten recipients received assistance which more than covered their 2020 revenue losses. The approximately $2.4 million in overpayments should be returned, under Fishery Program guidelines, the report said. Other recipients reported revenue that was not supported by their documentation or failed to provide the documentation needed for a full analysis.
Smith said this raises issues about how other state agencies administered CARES Act funding.
“The state should commence an internal review of those practices as well,” he said.
The comptroller recommended that fisheries should pay back any overpayments. But, the DEP has not made indications that it will require the businesses to do so.
“While some of the blame here does lie with the federal and state government, the reality is that some recipients received funds well in excess of their losses from the pandemic, and stewardship of public funds would demand those monies be returned,” Smith said.
The funds made a difference for businesses struggling during the pandemic.
“With the complete shutdown of many industries for an extended period, these payments were often the difference between survival or permanent closure for many businesses,” Smith said.
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