What We Did:
The objective of this audit was to determine whether North American Aerospace Defense Command (NORAD) and U.S. Northern Command (USNORTHCOM) officials used Coronavirus Aid, Relief, and Economic Security (CARES) Act funding to prevent, prepare for, and respond to the coronavirus disease–2019 (COVID 19) pandemic.
We conducted this audit in response to an allegation made to the DoD Hotline regarding the improper use of CARES Act funds. Specifically, the complainant alleged that NORAD and USNORTHCOM officials used CARES Act funds for information technology projects that were unrelated to the COVID 19 pandemic response.
What We Found:
For the 25 COVID 19 transactions we reviewed, NORAD and USNORTHCOM officials used $34.4 million of $61.0 million in CARES Act funds to prevent, prepare for, and respond to the COVID 19 pandemic. However, NORAD and USNORTHCOM officials did not use $19.2 million for the COVID 19 pandemic response. In addition, NORAD and USNORTHCOM officials did not maintain adequate evidence to support whether they used $7.4 million for the COVID 19 pandemic response. Furthermore, we substantiated the DoD Hotline allegation that NORAD and USNORTHCOM officials did not use all CARES Act funds for the COVID 19 pandemic response.
The improper use of CARES Act funds and lack of adequate evidence occurred because NORAD and USNORTHCOM officials did not develop effective internal controls for CARES Act funding to ensure that they used those funds for COVID 19 efforts. Instead, NORAD and USNORTHCOM officials followed their existing process for unfunded requirements, which did not require adequate evidence to support that goods and services acquired were to prevent, prepare for, and respond to the COVID 19 pandemic, as required by the CARES Act guidance.
The improper use of CARES Act funds and lack of adequate evidence also occurred because Air Force financial management officials did not verify whether funds spent on information technology equipment and support, and DoD operations, were COVID 19 related prior to reimbursing NORAD and USNORTHCOM, as required by the Air Force guidance. (U) As a result, NORAD and USNORTHCOM officials used $19.2 million in CARES Act funds that did not contribute to the overall Federal and DoD priorities for the COVID 19 pandemic response. Consequently, the officials may have violated the purpose statute by using CARES Act funds to pay for projects unrelated to COVID 19. NORAD and USNORTHCOM officials’ improper use of CARES Act funds diminishes Congressional and taxpayer trust in the DoD.
Additionally, for transactions without adequate evidence, NORAD and USNORTHCOM officials did not provide reasonable assurance that they used $7.4 million in CARES Act funds to prevent, prepare for, and respond to the COVID 19 pandemic. Inadequate evidence along with non specific transaction descriptions prevent DoD management, Congress, and the public from determining whether officials used CARES Act funds as intended.
What We Recommend:
We recommend that the NORAD and USNORTHCOM Commander develop internal controls that implement emergency funding guidance, ensure proper use of emergency authorized funds, and require officials to retain sufficient evidence, including a clear and accurate description of the goods and services purchased, that demonstrates how those goods and services supported the specific emergency.
We also recommend that the Director, Budget Operations and Personnel, Office of the Deputy Assistant Secretary of the Air Force (Budget), review the transactions related to $19.2 million (in questioned costs) that did not support the COVID 19 pandemic and another $7.4 million (in unsupported costs) that did not have adequate evidence to support whether officials used funds for the COVID 19 pandemic. Based on the review, the Director should determine whether any purpose statute violations and resulting Antideficiency Act violations exist.