Nye County COVID grant program gone awry, many businesses in noncompliance

During the Nye County Commission’s Wednesday, July 7 meeting, commissioners were informed that the county is facing a serious problem: dozens of Nye County businesses have failed to adhere to the requirements attached to receiving financial assistance through the Nye County CARES Act Program and the Nye County COVID Relief Program.

Because of this, Nye County is currently facing liabilities of over $1.27 million and that stark fact prompted county commissioners to take action last week to assure that if those businesses continue in their noncompliance, they can be turned over the to Nye County District Attorney’s Office for prosecution.

Criminal charges are not something that officials would prefer to see happen, however, so at that same meeting commissioners also approved new policies for each COVID grant program that would give businesses options to address their noncompliance.

For the Nye County CARES Act Program, the county is still awaiting information from nearly a third of those businesses which had received funding detailing how they spent the funds, with 31% marked as “pending documentation”.

Under the Nye County COVID Relief Program, the percentage of noncompliance is even higher with a total of 58% of businesses labeled as not responding to the county while a further 16% have submitted incomplete documentation. Nye County Grant Administrator Samantha Kramer explained that as a result, Nye County is facing $204,579.14 in liabilities from the CARES Act small business grant program for working capital and $1,070,746.22 in liabilities from the COVID Relief Program for small businesses, for a total of $1,275,325.36 in liabilities.

Beginning with the Nye County CARES Act Program, Kramer told commissioners, “We have identified areas of concern with administration that include lack of accountability from applicants, lack of compliance with approved applicants and lack of timely communication.”

Nye County Comptroller Savannah Rucker chimed in to state, “I wanted to elaborate on that a little bit and let the board know what that means. We need backup for all expenditures associated with federal grant dollars.”

She emphasized that if it is not able to obtain the proper documentation, the county would be on the hook for the money that had not yet been accounted for. “It is critical that the board be aware of what’s going on and we take action to make sure we are helping these businesses as much as possible, whether it’s through a grant agreement extension or some type of repayment plan, because we don’t want to put that burden on the other taxpayers within Nye County,” Rucker stated.

“We’re looking for their use of grant funds,” Kramer replied when asked for clarification by Nye County Commission Chair Debra Strickland on what sort of documents the county was in need of. “We have to show what was purchased, and ensure that is was an allowable expenditure under the CARES Act and show that is was paid.”

Rucker added, “We also need to make sure that the expense was not claimed twice, whether it be through another federal program or through a Nye County program. So there is a lot of verification that is occurring within the finance office and the grants team.”

The issue was obviously one that bothered Strickland and she didn’t have to reach far to predict what the future might bring. “You can see that we’re building a big problem that could escalate through the next process, the next bunch of money that is coming,” Strickland remarked, referring to money the county will be receiving as part of the American Rescue Plan Act. She then went to the heart of the matter, asking what the county could do to address the situation.

Kramer said she was prepared with a recommendation involving updating the CARES Act grant program policy to add options for an extension of time or a repayment plan agreement.

“Options include completing a no-cost extension agreement through December 31, 2021 or a repayment plan agreement,” Kramer stated. “We have identified that if the applicant does not respond to Nye County and is in breach of their agreement, they will be turned over to the district attorney’s office for prosecution.”

“Holy Toledo!” Strickland responded.

Nye County Commissioner Bruce Jabbour then reminded his fellow commissioners and the public that the requirement to provide documentation showing how the grant funds were used was fully disclosed when applicants applied.

“We asked the question, are we subject to an audit? Are we subject to scrutiny? And the answer was, yes, absolutely,” Jabbour said. “We gave a very friendly and warm warning to the applicants… and if they are in breach of contract, they need to prove why or why not… This should not be a surprise to them, for you (county finance) trying to do your jobs to require additional documentation.”

Moving on to the Nye County COVID Relief Program, which was created to utilize the funding left over from the CARES Act program, Kramer said the circumstances were very similar. The areas of concern in terms of administration were the same, with the addition of one more concern, double dipping.

“What we have found is that some applicants are submitting the same documentation under this program that was submitted under CARES,” Kramer stated. “So it’s quite a review process to ensure they are aware they are unable to do that and to go back and review each piece of documentation submitted to ensure that doesn’t happen.”

Rucker said the finance department had been discussing the possibility of providing businesses with the assistance of a local CPA and that could be paid for in one of two ways, either by the county or counted as an expense against the grant dollars a business received. “Because we agree, this is extremely concerning,” Rucker said. She noted that the ultimate goal is not to shift the problem off to the DA’s office but to help businesses come into compliance and be successful.

For the COVID Relief Program, Kramer said she was not requesting a no-cost extension agreement be added to the policy because that particular program contract is in effect for 12 months from when the applicant signed it, so the COVID Relief Program grant contracts are still current. However, she did recommend adding a repayment plan agreement option, to which commissioners agreed.

Businesses that are not in compliance and do not obtain a repayment plan agreement or an extension of time will be mailed a certified letter giving them 30 calendar days to contact the Nye County Finance Department to determine corrective actions. Those who fail to respond will be turned over to the DA’s office.

The bottom line is that all businesses that applied for and received funding through either of the county’s COVID grant programs need to ensure that they maintain a line of communication with the county so they do not end up on the wrong side of the law.

The policy changes for both the Nye County CARES Act Program and the Nye County COVID Relief Program were approved 3-0 with commissioner Donna Cox absent and commissioner Leo Blundo recusing himself.

The Nye County Finance Department can be reached at 775-751-6390.

Contact reporter Robin Hebrock at rhebrock@pvtimes.com