DHS seeking intervention of Attorney General's Office in possible fraud involving Covid-19 funds

(Kim Jarrett -The Center Square)

The Arkansas Department of Human Services has turned over questions about the distribution of COVID-19 relief funds to the U.S. Attorney's office.

The DHS selected the Little Rock-based Urban League of the State of Arkansas to distribute $450,000 in Coronavirus Relief Funds, DHS officials told the Legislative Auditing Committee. The ULSA subcontracted with Performance Tax Group to dole out the funds to 17 organizations. USLA and PTG were allowed to keep more than $45,000 for administrative costs.

While the rest of the money was distributed, an examination of PTG's bank records and ULSA's summaries of the distribution showed some irregularities, and the records were difficult to decipher in some cases, according to a DHS audit.

In one instance, PTG withdrew a total of $165,750 from 36 cashier's checks. The records show 26 cashier's checks were distributed for a total of $85,000.

In a separate instance, two groups received more than $21,000 each, but the organizations were not considered food or meal services. The funds could have been distributed to organizations that provided those services, but the documentation was not clear, according to the report.

The agreements signed by the grant recipients, USLA and PTG, did not include the amount of the award.

DHS has turned the information over to the U.S. Attorney's Office for the Eastern District of Arkansas. Because of a possible criminal investigation, DHS Secretary Mark White said he could not elaborate on the details. White was appointed DHS Secretary by Gov. Asa Hutchinson last month after serving as chief of staff.

Scott Hamilton, CEO of ULSA, told The Center Square he was not aware of the report. No one from the U.S. Attorney's office has contacted him, he said.

Other irregularities have been found and DHS is seeking reimbursement, White told the committee.