Finding Text
2022-004) Allowable Activities Questioned Costs: $612,283 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) Grant No(s): N/A Criteria: Activities funded by the program must satisfy the eligibility requirements of the Treasury?s Final Rule which outline four broad categories of use in responses to the global pandemic: 1) replacement of lost revenue; 2) public health and negative economic impacts; 3) premium pay for essential workers; and 4) sewer, water and broadband infrastructure. Furthermore, guidance issued by the Treasury (frequently asked questions dated 4/10/2023, question 4.2) suggests that outside of the revenue loss category, road and bridge constructions may not meet the eligibility requirements of the Final Rule. Condition: The City-Parish used funds to replace the Twin-Oaks bridge. This activity may not be an allowable activity. The costs incurred for this project in 2022 was $612,283. Universe/ Population: Of 40 separate cash disbursements tested, 1 was found to be of questionable compliance. Effect: The City-Parish?s bridge replacement project may not have been an allowable use of program funds. Questioned costs of $612,283. Cause: The City-Parish may have an overly broad interpretation of the Final Rule when determining allowable projects and activities. Additionally, we found that the process for determining allowable projects lacks formality, documentation, and a trail of accountability. Recommendation: The City-Parish should follow the Final Rule and associated guidance. If proposed projects and activities lack clear guidance, the justifications should be thoroughly explained, documented and approved through signature by appropriate personnel. View of Responsible Official: After reviewing the project scope, along with the U. S. Treasury Final Rule, the City-Parish believes that the bridge replacement is an allowable use of funds. Twin Oaks bridge was closed in 2015 in a very rural area. During the pandemic it became evident that citizens were unable to access healthcare quickly with the bridge closure. In addition, the bridge is causing major drainage issues in the Baker Canal. The replacement bridge will use watertight expansion joints so that all surface water can drain off the structure and collect in inlets placed at the bridge ends. The downstream ends of bridges need special attention which will collect and concentrate the stormwater away from the bridge. The concentrated flow will be directed into a low-risk erosion area. All runoff shall be directed away from wing walls, fill slopes, and embankments, so that no material is susceptible to erosion. Bridge drains are designed to reduce the amount of concentrated flows off a structure. The replacement of the bridge allows the Parish to address the subsurface drainage issues as well as respond to the public health and negative economic impacts of the pandemic.U.S. Treasury has specifically enumerated the flexibility provided under this expenditure category in the Final Rule excerpt: (second paragraph on the page 4411) ?Although the meaning of water and sewer infrastructure for purposes of sections 602(c)(1)(D) and 603(c)(1)(D) of the Social Security Act does not include all water-related uses, Treasury has made clear in this final rule that investments to infrastructure include a wide variety of projects. Treasury interprets the word ``infrastructure?? in this context broadly to mean the underlying framework or system for achieving the given public purpose, whether it be provision of drinking water or management of wastewater or stormwater. As discussed below, this can include not just storm drains and culverts for the management of stormwater, for example, but also bioretention basins and rain barrels implemented across a watershed, including on both public and private property, that together reduce the amount of runoff that needs to be managed by traditional infrastructure.?