SBA Contractors Profiteered During Pandemic

August 7, 2023

In yet another instance of mismanagement of pandemic programs by the Small Business Administration, the SBA had over $5 million in questioned costs associated with contracts for loan support services, according to a recent Inspector General report. 

The SBA contracted with a firm called Highlight Technologies LLC for loan support services from 2017 to 2021. When demand for loan support services increased during the pandemic because of the SBA relief programs, the SBA issued additional labor hour contracts with Highlight Technologies to meet demand for loan support services.

These contracts were issued using an existing blanket purchase agreement. Unfortunately, the Inspector General found a number of problems with these additional contracts that led to the SBA, “awarding contracts that were not the best use of taxpayer funds.”

The IG found the SBA did not always perform price analyses, leading it to allow Highlight Technologies to charge higher labor rates than the parties had previously agreed. This led to the SBA paying $3.8 million more in one year than it should have for this pricey labor without any added benefit received.

Additionally, SBA didn’t monitor contracts in accordance with the law, which led to Highlight Technologies using subcontractors that should not have received the majority of the work, which meant another $1.2 million going to businesses that did not meet eligibility standards.

Combined, the SBA wasted $5 million in just one year because of a lack of basic analysis and oversight. If the SBA is going to continue to be trusted with multi-million-dollar loan and grant programs, it needs to seriously clean house and increase its financial controls to ensure taxpayers’ money is used wisely.

 

NYC Settles for $1.8B Over Biased Teaching Exam

August 8, 2023

California is spending $250 million to tear down four hydroelectric dams on the Klamath River in Northern California over environmental concerns, according to the American Society of Civil Engineers magazine.

The dams were owned by the utility company PacifiCorp and have been around for decades, with the newest of the four constructed in 1962. After years of complex regulatory and legal proceedings, the final hurdle to closure was cleared in November of 2022, clearing the way for the dams’ decommissioning and destruction.

Environmentalists were concerned that the dams impeded local anadromous fish species like chinook salmon, coho salmon, and steelhead trout from reaching their breeding grounds, along with other concerns over algal blooms and water quality impairments caused by the dams. While these are legitimate concerns, these dams also provided electricity to Northern California residents, and could provide freshwater to a region that suffers from chronic draughts.

Regardless, decommissioning, destruction, and restoration have all proven to be lengthy and expensive processes. The total cost of the project is estimated at $450 million, with PacifiCorp contributing $200 million, California spending $250 million, with an additional contingency fund of $45 million split between PacifiCorp, California, and Oregon.

Californians ended up footing the majority of the bill. While they obviously are paying for the $250 million the state put up for the project, Californians also ended up paying for PacifiCorp’s share, which was funded through utilities surcharges on customers.

This is an expensive way to save some fish. And it comes at a high expense to Californians, from the direct cost of state spending, to the surcharges utilities consumers paid, to the inevitable increase in energy prices that will follow.

 

New Orleans Fined $38 Million for Losing Police Officers—Police Dept. Considered ‘Partially Dissolved’

August 9, 2023

New Orleans has lost so many police officers that it could be responsible for $38 million in fines over the next 15 years thanks to a state law meant to protect pension funds, according to 4WWL, a New Orleans CBS affiliate.

The Louisiana law is meant to ensure municipal pensions are fully funded, and it stipulates that cities or municipalities may be responsible for lost pension fund contributions if municipal pension funds have unfunded liabilities.

The New Orleans Police Department had so many departures in 2021 and 2022 that the Municipal Police Employee Retirement System considers the department partially dissolved. This triggered the state law, which in effect makes the city pay for the lost pension contributions of the departed officers.

The city already paid $50,314 in July, and is set to owe $214,000 per month, totaling $38 million over the next fifteen years. These payments could be avoided if the city hired more officers. Returning their staffing numbers to their June 2021 level, 1,119 staff participants in the fund, would stop the need for payments.

New Orleans is struggling to find money to make the payments with, as these sizable monthly installments were not budgeted for. In fact, many city council members were taken by surprise at the bills. For this fiscal year alone, New Orleans will be on the hook for about $600,000 in payments.

As police departments across the country face staffing shortages, it’s important to remember there is a cost to downsize major institutions, a lesson New Orleans is quickly learning.

 

Throwback Thursday: U.S. Spent $15.5 Million on Extravagant Inauguration

August 10, 2023

Throwback Thursday! 

In 1985, the Presidential Inaugural Committee spent $15.5 million – worth almost $44 million in 2023 dollars – on extravagant services and events for VIPs at the 1985 Presidential Inauguration, but only reimbursed taxpayers for about 4% of the cost.

Sen. William Proxmire, a Democrat from Wisconsin, awarded the Presidential Inaugural Committee his Golden Fleece Award for this extravagant expenditure.

According to Proxmire, most of the money went towards providing VIPs with luxurious arrangements, including 8,400 Department of Defense professionals that served as chauffeurs, personal aides, and ushers to top dignitaries. For example, First Family members and the VP’s party were assigned 23 military aides, while Governors received 56 aides, and other special guests had 71 aides.

Joining this army of aides were 270 coordinators that were essentially party planners. They were tasked with making luxurious arrangements for the special ceremonies. They were needed to plan nine inaugural balls, along with a gala. There were also commemoratives items sold below cost, with the government losing a total of $98,000 on these items.

A review later found that, “a significant amount of DOD’s support was again provided without proper legal authority.” This led Proxmire to suggest that Congress should pass a law to clarify what types of support were legal, as well as suggest that the private beneficiaries of these exclusive activities should be responsible for funding them.

Taxpayers shouldn’t be on the hook for luxurious galas, personal drivers, and party planners for these types of events. Forcing the recipients of these benefits to pay for them might help curb the ever-expanding list of extravagant events associated with a presidential inauguration. 

 

 

State Dept. to Spend $250,000 on Investigative Journalism to Stop Illicit Fishing in Senegal

August 11, 2023

The Department of State recently released a Notice of Funding Opportunity for a grant worth $250,000 to train investigative journalists in Senegal on how to identify and report on illicit fishing and illicit trafficking of humans, wildlife, and forestry products.

The U.S. Embassy in Senegal is making this award on behalf of the State Department, and plans to make one award to a U.S. or international non-profit for this grant.

The recipient will train journalists in investigative techniques specific to combatting and raising awareness over Illegal, Unreported, and Unregulated (IUU) fishing and illicit trafficking of humans, wildlife, and forestry.

The project will train at least 18 journalists from anywhere on the west coast of Africa over a multi-day course specializing in investigative journalist techniques related to IUU fishing and illicit trafficking. This may prove difficult to host, however, since the grant requires the training and all materials to be in English, French, and Portuguese.

The objectives of the program are to, “Provide journalists an in-depth understanding of the impact and trends related to Illegal, Unreported and Unregulated (IUU) fishing and the illicit trafficking of humans, wildlife and forestry products” and to, “Provide journalists techniques and best practices to publish or produce written or audio-visual products as well as effective methods to release information.”

This grant is unserious on many fronts. The U.S. and Senegal face many problems, including poverty, hunger, and economic development, all of which should take precedence over training journalists. Additionally, even if training journalists is a laudable goal, investigating things like political corruption seem far more pressing than unreported fishing.

This grant is yet another example of how bureaucrats carelessly ship your money overseas to fund pet projects and strategic initiatives instead of actually helping Americans or citizens of other countries.

The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.