Audit reveals COVID grant dollars given to ineligible Illinois applicants

[February 21, 2024]  By Catrina Petersen | The Center Square

(The Center Square) – The Business Interruption Grant Program was to provide $585 million for small businesses hit hardest by COVID-19, but an audit done by the Office of the Auditor General shows $11 million was paid to applicants who weren’t eligible under state law.

During a Legislative Audit Commission hearing Tuesday at the state capitol in Springfield, the Department of Commerce and Economic Opportunity was shown to have used their own eligibility category for the small business component of the program that was not specified in the law passed by the legislature. House Minority Leader Tony McCombie, R-Savanna, questioned DCEO Director Kristin Richards.

“DCEO’s highest priority was to support Illinois businesses as efficiently as possible,” said Richards. “After developing a first of its kind program during an unprecedented global economic crisis, the agency learned valuable insights and has since vastly improved processes through additional large-scale funding programs.”

McCombie pointed out in the Legislative Audit Commission meeting that DCEO delegating its administering of the grant money to outside community partners came at a cost to taxpayers.

“Why did DCEO outsource the grant program rather than do the grant administration themselves,” McCombie asked.

Officials from DCEO said because of the amount of funds, it had to bring in an outside vendor and they could do this under the Grant Accountability and Transparency Act. Richards, who was the director of the Illinois Department of Employment Security at that time, didn’t sign off on the outside grant administrator for DCEO but said in 2020, everyone was making the best decisions with the information they had available.

State Sen. Chapin Rose, R-Mahomet, questioned DCEO about a $5,000 campaign contribution to former Assistant Director Michael Negron from the lead main grant administrator Accion. The audit shows DCEO didn’t administer grants themselves but delegated it.

“I am shocked that the taxpayer has been fleeced yet again,” Rose said. “I’m particularly interested in a $5,000 campaign contribution to the former assistant director [of DCEO] that was given by one of these outside grant administrators. During the course of the audit, the question came up: Was this a conflict of interest? Maybe it was decided it wasn’t a conflict of interest. But at the end of the day, it turns out no disclosure or documentation surrounding this apparent conflict of interest could be found.”

DCEO officials said they did an investigation and took appropriate action.

“We did not know of the campaign contribution until the audit was performed. DCEO employees are required to report apparent conflicts of interest. We started an investigation and spoke with Michael Negron, and after that we sent a referral to [the Office of Executive Inspector General] reporting what our findings were,” said DCEO general counsel Garrett Carter. "We did not produce that at the time of this audit given that referrals to OEIG investigations are kept confidential. The OEIG has closed their investigation. We did not find an actual conflict of interest."

Carter said by the time the DCEO found out about the contribution, Negron had left the DCEO.