Last year’s spending reflects a sharp spike in federal transfers of funds and the state’s expenditures, exceeding a spike in spending between 2005 and 2010 amid weak economic conditions and in the wake of the Great Recession. The $6.74 billion in federal funds spent in 2020 represented more than 25% of Utah’s total fiscal year 2020 expenditures of $26.63 billion, according to the auditor’s office. Dougall’s office audited state agencies’ compliance with federal regulations governing the use of the money. The report listed a slew of recommendations to increase compliance to address various issues found.
Dougall said auditors predict the state of Utah “will continue to experience increased dependency on federal money over the next five to 10 years as federal stimulus money continues to be sent to the state for multiple programs.” He also noted that some of the coronavirus relief money may have gone to “nonessential” needs because of a lack of proper oversight on local spending.
“I urge caution as state leaders navigate the challenges that come with increased demands for ongoing spending built on one-time money,” he said. “The magnitude of the ongoing federal subsidy is troubling, due to Congress’ complete disregard for any sense of fiscal responsibility, the increasing dependence of state and local governments on federal subsidies, and the heightened economic and inflationary reactions from the magnitude of irresponsible federal spending,” Dougall said in Tuesday’s statement.
Amid a long list of recommendations included in the audit, Dougall’s office pinpointed some weaknesses that impacted the ability of the Governor’s Office of Management and Budget to manage disbursement of the funds. “The Governor’s Office of Management and Budget (GOMB) did not have adequate federal grant management experience when the state received $943 million in Coronavirus Relief Fund (CRF) monies to aid in the state’s response to the pandemic” auditors wrote in the report. “As a result … its internal controls over compliance with CRF requirements were insufficient.” Lack of expertise in handling the funds cited
Dougall thanked state agencies that, “despite managing the ongoing influx of federal pandemic money, supported the completion of this audit as quickly as possible after the guidance was issued.” Dougall said the annual federal funds compliance audit is typically completed by December of each year, but “excessive delays by the federal government impacted this year’s reporting.” Federal guidance for auditing Coronavirus Aid, Relief, and Economic Security Act money wasn’t issued until late December, Dougall said, “more than nine months after that program started and after the office typically completes this audit work.”
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