New Jersey may revoke half of Covid-19 relief funds distributed to commercial fishermen

The U.S. state of New Jersey is considering taking back millions of dollars in Covid-19 relief from commercial fishermen after an audit found multiple issues.

In May 2020, the federal government announced USD 300 million (EUR 270 million) in fisheries assistance funding as part of the CARES Act. New Jersey was awarded USD 11.2 million (EUR 10 million) of that funding and established the Marine Fisheries Assistance Grant Program to distribute the money to fisheries-related businesses that had suffered at least a 35 percent loss in revenue from Covid-19. 

New Jersey’s program ultimately distributed USD 14.4 million (EUR 12.9 million) in relief funds. However, the state is now considering recouping half of that money due to several issues discovered in an audit by the state comptroller, as first reported by The Center Square.

“Agencies administering COVID-19 relief programs have an obligation not only to have sufficient controls in place to prevent fraud and improper payments, but also to respond quickly when potentially improper payments are later detected,” Acting State Comptroller Kevin Walsh said in a memo.

According to the audit, USD 5.9 million (EUR 5.3 million) was awarded to businesses who were ineligible or were made “more than whole” by the funding. A further USD 1.1 million (EUR 988,000) was awarded to applicants who failed to provide the necessary documentation. Under the program, the state may recoup the full payment made to applicants who cannot provide complete documentation.

In two examples provided in the March audit, recipients self-reported revenue loss in early 2020 due to Covid-19, when their revenue actually was above their four-month averages. Other recipients failed to disclose other Covid-19 funding they had received, such as Paycheck Protection Program loans, that would have changed their eligibility for awards.

The audit determined that the state Department of Environmental Protection (EDP), which ran the Covid-19 relief program, acted in accordance with federal guidance in prioritizing “the rapid distribution of funding,” but failed to address red flags in applications.

“Through this review, [the Office of the State Comptroller] found that DEP appears to have focused on expedience without taking adequate steps to mitigate the risk of fraud, waste, abuse, and improper payments,” the comptroller’s report found.

DEP has begun reviewing the flagged awards and seeking recoupment where appropriate. The department also has been in contact with federal agencies for advice on its recoupment activities.

Photo courtesy of Shutterstock / Erin Cadigan