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Rice, Curran, State Senators Call for Federal Investigation into Town of Hempstead’s Use of CARES Act Coronavirus Relief Funding

The group of elected officials sent a letter requesting the Treasury Department to launch an investigation after recent Town documents raised concerns of unlawful spending

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Washington, December 10, 2020 | comments

GARDEN CITY, NY – U.S. Representative Kathleen Rice (NY-04), Nassau County Executive Laura Curran, and New York State Senators Kevin Thomas, Todd Kaminsky, Anna Kaplan, and John Brooks today sent a letter urgently requesting the U.S. Department of Treasury to open an investigation into how the Town of Hempstead is spending the $133 million in federal funding it received through the Coronavirus Relief Fund under the CARES Act.

Despite explicit Treasury Department guidance on how Coronavirus Relief Fund monies must only be allocated for COVID-19-related expenses, recent Town hearing documents show the Town allocated $43,649,245 of this funding to the “Sanitation Operating Fund” and $17,345,824 to the “General Fund,” without providing explanation to how these allocations will be used.

The full text of the letter can be found here and below:

The Honorable Justin Muzinich

Deputy Secretary of the Treasury

U.S. Department of Treasury

1500 Pennsylvania Ave. NW

Washington, DC 20220

 

The Honorable Brian D. Miller

Special Inspector General for Pandemic Recovery

U.S. Department of Treasury

1500 Pennsylvania Ave. NW

Washington, DC 20220

Dear Deputy Secretary Muzinich and Special Inspector General Miller:

We write to you today with an urgent request that you open an investigation into how the Town of Hempstead (the Town) is spending the $133 million it received through the Coronavirus Relief Fund under the CARES Act (P.L. 116-136).

The Town is located entirely within Nassau County, New York and due to an unanticipated quirk in the formula used to award the Coronavirus Relief Fund, the Town was the only township in the country to receive funding through this Fund. In fact, it received more funding than the county in which it is entirely located. Since May, when the Fund was disbursed, the Town of Hempstead Supervisor has been charged with the critical responsibility of ensuring this funding was distributed meaningfully and quickly to assist the Town’s residents with surviving the COVID-19 pandemic.

However, recent hearing documents have raised questions about how the Town of Hempstead is planning to use this funding. The Treasury Department’s guidance explicitly states that the Coronavirus Relief Fund may be used to cover: “… expenditures incurred to allow the State, territorial, local, or Tribal government to respond directly to the emergency, such as by addressing medical or public health needs, as well as expenditures incurred to respond to secondorder effects of the emergency, such as by providing economic support to those suffering from employment or business interruptions due to COVID-19-related business closures.”

Specifically, on Tuesday, December 8, the Town allocated $43,649,245 of the CARES Act funding to the “Sanitation Operating Fund” and $17,345,824 to the “General Fund,” with little to no detail on what these allocations will be used for. Further, the hearing documents show that the Town has left more than one million dollars unbudgeted and is planning to use the funding to cover costs associated with ambiguous items like “Parks Operating” and “Water Operating.”

The lack of transparency with regard to how the CARES Act funding is being spent by the Town and the length of time it has taken the Town to spend this money – the deadline for expenditures is quickly approaching and these hearing documents were just made public – necessitate an immediate investigation. As elected officials from the region, we implore your offices to provide much needed oversight here so that our communities, who have already been through so much, can survive the winter.

We thank you for your consideration of this request and look forward to your response.

Sincerely, 

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