Transparency a concern on how SC will spend COVID-19 money

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While billions of dollars are set to pour into South Carolina from the American Rescue Plan, a committee tasked with crafting recommendations on how the money is spent is worried about whether the appropriate oversight is in place.

South Carolina is set to receive $8.9 billion in new federal COVID relief money. However, the General Assembly has say over only about $2.6 billion of that cash.

The rest of the money from the federal plan signed in March is earmarked for specific purposes, including $1.6 billion being sent to local governments.

Accelerate SC, a committee created last year early in the pandemic by Gov. Henry McMaster and tasked with advising him on how federal COVID relief money should be allocated, is worried about transparency and oversight on how those federal dollars will be spent.

The group ultimately plans to provide recommendations on how the General Assembly should allocate the $2.6 billion worth of new COVID relief money.

A total of $3.4 billion will go toward education and child care services, which includes $2.2 billion to be distributed by the Department of Education, according to Accelerate SC documents.

More than $391 million is being sent to the state for public health efforts, including money for vaccine administration, COVID testing in schools and community health centers.

The state will receive more than $605 million for public assistance programs such as Head Start, home energy assistance, and rental assistance programs, among other things.

Nearly $61 million will be sent to South Carolina for economic relief, almost all of which can be used for small business assistance.

“A lot of the funding, I will say, is an enhancement of an existing program or some program created from a previous federal COVID bills,” said Brian Gaines, director of the Executive Budget Office, during Tuesday’s Accelerate SC meeting.

More than $245 million also is coming to the state for transportation and infrastructure projects, including almost $188 million for a coronavirus capital projects fund, which the the General Assembly will have to dole out.

Members of the Accelerate SC committee on Tuesday formally recommended the state again use Guidehouse, a third-party grant administrator firm that was hired last year to vet, process and audit the federal relief.

“We have to have a third party monitor this to make sure it’s accountable and transparent,” said Accelerate SC member Pam Lackey, a former president of AT&T in South Carolina who currently serves on the SC Ports Authority board.

Last year, lawmakers authorized paying Guidehouse $10 million to provide oversight over how the state spent federal money. Guidehouse was available to local governments as well to ensure they used money appropriately. State agencies also would have access to Guidehouse on whether their expenditures would qualify.

Some members during Tuesday’s Accelerate SC meeting, however, wanted to require that local governments go through Guidehouse to increase oversight.

“They have to follow the federal guidance as well, but the state cannot require locals to spend that money in any particular way other than federal guidance,” Department of Administration Executive Director Marsha Adams said.

Adams suggests a cost-share program on infrastructure projects between the state and local governments. It allows local governments to get needs addressed but also ensures it would be spent in a way that is in accordance with the federal government rules.

“It makes that money turn into even more money,” Adams said.

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The federal government does have some reporting requirements outlined for counties, said Josh Rhodes, the deputy executive director of the South Carolina Association of Counties.

Every county in the state is receiving money directly from the federal government. Counties by the end of August have to report to the federal government they’ve received the money, whether they’ve used it and for what purpose. Counties with more than 250,000 people have to provide quarterly reports as well.

Other reporting rules may also be published by the U.S. Treasury Department in the future.

“County government in general is good about being transparent with how they spend money,” Rhodes said. “The federal government made the decision to provide counties with direct funding. We’ll be as transparent as we need to be under the federal law that provides us direct funding.”

American Rescue Plan money that hasn’t been specifically earmarked for certain programs can be used to support the public health response to COVID-19, including health-related infrastructure programs needed to respond to COVID.

The state can use money to expand broadband internet, to support the hospitality, travel and tourism industries, and to provide aid to small businesses impacted by the pandemic. The state and local governments can use the money to address water and sewer infrastructure needs.

Most of the American Rescue Plan money must be used by Dec. 31, 2024, and money allocated for certain infrastructure projects doesn’t have to be spent until 2026.

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Joseph Bustos is a state government and politics reporter at The State. He a Northwestern University graduate and previously worked in Illinois covering government and politics. He has won reporting awards in both Illinois and Missouri. He moved to South Carolina in November 2019.
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