Waste of the Day: Ineligible Nevada Businesses Got $10.7M During Pandemic

Topline: The State of Nevada awarded $10.7 million of COVID-19 relief grants to businesses with late tax payments or expired licenses that disqualified them from receiving funding, according to the state’s legislative auditor.

Nevada ineligible businesses scored 10 percent of the COVID grant money

Key facts: The funds represented more than 10% of federal grants awarded through Nevada’s Commercial Rental Assistance Program and Pandemic Emergency Technical Support Program, which combined to give up to $30,000 to eligible businesses for rent payments and operating expenses.

Some businesses were late filing required tax returns or didn’t have an active Nevada state business license, the audit found, and the state didn’t monitor the businesses to ensure they spent funds appropriately.

The programs accepted 689 businesses that owed a combined $6.3 million in late state tax payments, the audit found. There were 113 businesses that owed $10,000 or more.

Meanwhile, 692 small businesses were denied awards because funding ran out. Even more would have applied if there was money left, according to the audit. Applications were supposed to be open for 12 days in October 2020 but closed after four days once funds dried out.

Applicants were required to submit spending plans for their COVID-19 grants, but nobody at the state Treasurer’s Office followed up to see if businesses followed those plans. There were also 324 businesses that submitted incomplete plans, leaving $804,000 that may have been spent improperly.

Employees still drew hefty salaries while making elementary mistakes

Background: Employees at the Nevada Governor’s Office of Economic Development — who auditors blamed for poor fiscal oversight — continued to collect six-figure salaries while the mistaken payments were being made. Eighteen staffers made between $100,000 and $180,000 in 2020, according to records at OpenTheBooks.com

The grants are just one small piece of the fraud and mismanagement that plagued COVID-19 spending in Nevada and around the country.

Nevada has paid $2 billion in fraudulent payments. Nationwide, the amount lost to fraud during the pandemic is believed to be over $1 trillion.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.

Supporting quote: Employment department director Christopher Sewell told CBS8 that because Nevada doesn’t charge income tax, there were fewer ways to identify those who had suddenly gained a large sum of money.

“We had to trust people — and unfortunately there’s people out there that took advantage of that system,” Sewell said.

Summary: The pandemic should serve as a reminder that oversight is never a waste of time, no matter how urgent the situation.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.