(The Center Square) – An audit of the $585 million Business Interruption Grant, the Illinois program using federal tax dollars to give to businesses for relief during COVID-19, reports checks on the spending “failed to work as advertised” with insufficient oversight.
The BIG program was operated by Gov. J.B. Pritzker’s administration and the Illinois Department of Commerce and Economic Opportunity and other state agencies. A new, similar program is currently underway called Back 2 Business for a total of $175 million split between restaurants, hotels and creative arts venues.
Illinois Auditor General Frank Mautino’s office released the BIG audit Wednesday with more than a dozen findings and 15 recommendations for DCEO.
Among the findings, the audit says “DCEO could not provide documentation to show how or why it selected organizations to administer Round 1 of the BIG program.” The finding goes on to show administrators did not comply with conflict of interest policies.
Other findings include the program being initiated without emergency administrative rules in place. While DCEO allowed self-certification of grant applications, the audit found “that not all applicants’ certifications were accurate.”
“Nonetheless, DCEO and its grant administrators awarded funding to these applicants,” the audit said.
Some grantee businesses were not eligible for the program.
“Our analysis found 196 ineligible applicants received $3.42 million,” the audit said. “Additionally, the application system developed by a DCEO grant administrator that was supposed to not allow ineligible applicants to submit finalized applications failed to work as advertised.”
The audit said the review of the program for small business grants found “significant deficiencies.”
“In Round 1, we were only able to concur with 8 percent of the BIG awards from our sample,” the audit said. “We also questioned 76 percent of the BIG awards, totaling $1,980,000, in our sample due to lack of required documentation being submitted by the applicant.”
For Round 2, the audit only concurred with 41% of awards from their sample.
“We determined that 29 percent of the BIG awards in our sample had one or more questioned elements,” the audit said.
Additionally, the audit found “DCEO became aware of notices of BIG Program violations from news stories, forwarded complaints, and internal agency reviews. Businesses most often having documented violations were restaurants failing to follow local mitigations and executive orders. We found that DCEO was not prepared to handle such notices of violation, did not have complete information on all violators, and did not always enforce a return of funds when such violations were confirmed.”
The findings continued, showing the process failed to follow the directive of state statute, awarded funding in excess of program policy, failed to execute grant agreements, required funding applicants to submit multiple pieces of confidential information, failed to conduct routine monitoring of the funds provided, and did not claw back funds for noncompliance.
“Testing for the child care component and the livestock management component did not find any significant or pervasive issues. We concurred with all of the grant awards and grant denials in our sample,” the audit found.
Among the 15 recommendations of the report, the auditor directed DCEO to develop and maintain documentation on how it selects grant administrators, develop administrative rules, check for accuracy of applications and comply with state statute.