Legislative auditor finds some Louisiana COVID-19 business grant recipients were not eligible

By David Jacobs | The Center Square

Almost 6% of a slice of the grant funding awarded through a Louisiana program meant to help small businesses recover from the COVID-19 pandemic went to recipients who were not eligible under program rules, though most of those issues have been resolved, a state auditor’s report said.

The Louisiana Legislature created the Louisiana Main Street Recovery Program last year with $275 million from the federal Coronavirus Aid, Relief and Economic Security Act. Small companies that had unexpected expenses and/or business interruptions related to the COVID-19 pandemic were eligible for grants of up to $15,000 each.

The Louisiana legislative auditor (LLA) reviewed a sample of 7,323 grants totaling almost $87.8 million of the $262 million that had been spent as of Jan. 31. Of those, $4,962,530 worth, or 5.65%, went to applicants that were not eligible or did not provide proper documentation of their expenses, according to the LLA’s report, which was released Monday.

Program staff worked with recipients of the grants the LLA flagged to resolve the issues for more than $3.8 million of the grants, leaving about $1.16 million, or 1.32%, unresolved among the sample. In a letter to the auditor’s office responding to the report, Louisiana State Treasurer John Schroder, whose office oversaw the program, said his goal was to keep the exception rate below 3% and said he “could not be more pleased” with the audit’s results.

“The time your staff spent assisting us to establish the parameters of the program before accepting applications, and the audit work after the program’s conclusion, was instrumental in what I consider a model grant program,” Schroder wrote.

In addition to the exceptions noted in the audit, Schroder’s office has recovered almost $177,000 and referred 108 applications to the Office of the Inspector General for fraud or attempted fraud, Schroder said.