State Audit: $29 Million In Federal Funds Misspent In 2021

A state audit of 2021 funding finds that millions of COVID relief money was misspent. State Auditor Cindy Byrd says the state dropped the ball on government oversight and compliance, and now it could be up to the taxpayer to pay the consequences.

The report finds over $29.2 million in questioned spending, or misused funds. 

The state typically spends $7 billion annually, but this audit covered $14 billion spent in 2021, about half of which was COVID relief grant funding.

“One of the things that we found is there's a systemic issue across state governments with not making sure we're following the guidelines of the grant requirements,” said State Auditor Cindy Byrd.

The audit found four main grant programs that had millions of dollars misspent. Part of that mismanagement was over CARES funding. This was a $1.1 billion grant that was supposed to go to cities and state agencies to pay for COVID relief.

“What we found was that $12.2 million has been spent with no proper documentation, and that passed through many different agencies,” said Byrd.

The state also received over $376 million for Emergency Rental assistance. This was meant to help people who lost their jobs during the pandemic, to help pay for utilities and rent expenses.

Initially, Byrd’s office found that $1.6 million of that was misused, but says over the past two years, that number has increased.

“We have found that that has increased to close to $15 million and the problem with that- if we're not monitoring the excessive management cost, we're not getting the money to the people that need the assistance,” said Byrd.

The state also received about $40 million in Governor’s Emergency Education Relief Funds. This was a grant that was given to all governors who were given leniency on what education funding they wanted the money to go towards. 

The governor’s office sent a statement saying, “During the COVID pandemic, Governor Stitt had a duty to get federal relief funds to students and families in Oklahoma as quickly as possible and he responsibly accomplished just that. The State maintains its position that a negligent out-of-state vendor should be held accountable to recover the federal taxpayer dollars in question, and the auditor’s report further supports that is what ought to happen.”

Part of the money went to the “Stay in School" program- to help low-income families cover part of their children’s private school tuition. 

“What we found was a deliberate operation to give certain schools and students early access for submission prior to this being offered to the general public,” said Byrd.

Byrd says this caused over 1,000 families who didn’t have an economic hardship due to COVID to receive the funds, leaving 657 low-income families without any of that grant money left.

Another GEER funded program was Bridge the Gap- which is commonly known as ClassWallet. This paid for a digital wallet for parents to buy technology and tutoring to help with remote learning.

“The person put in charge of administering this program did not utilize the proper controls and as a result 20 percent of these funds were not used for educational purposes and we questioned $1.8 million dollars,” said Byrd.

That person put in charge was Ryan Walters, who was acting as Secretary of Education at the time. He has been criticized for signing a no-bid state contract to quickly distribute the GEER funds to families. It was later discovered a large chunk of the money went to buy Christmas trees, gaming consoles, fireplaces and outdoor grills.

“At any point if the federal government comes in and makes the state pay these funds back, it is you and I, the taxpayer, that will be stuck paying this bill,” said Byrd.

Attorney General Gentner Drummond is now calling for an investigative audit, saying in a statement:

“The audit report is deeply troubling and illustrates the need for an investigative audit of GEER funds, which I requested shortly after taking office. A number of concerning items from the audit will require further investigation. I refuse to tolerate what amounts to a pervasive culture of waste, mismanagement and apparent fraud.”

Read the full audit report by clicking here.