Harrisburg, PA-Today, September 14, Audit & Supervisory Board Member Timothy L. Defloor announces a performance audit criticizing the Wolf administration’s exemption process for companies seeking to remain open early in the COVID-19 pandemic. bottom.
“This audit revealed a flawed process that provided inconsistent answers to business owners and caused confusion,” said De Foor.
“The pandemic did present some unique challenges, but the process needs to be rushed on the fly, managed unevenly, and reformed before it can be used again.” March 2020 On the 19th, Governor Tom Wolf ordered a Pennsylvania company that was not classified as “life-sustaining” to shut down to delay the spread of COVID-19.
Companies can request that they continue to operate by applying for an exemption from the Regional Economic Development Authority (DCED). Many business owners and legislators complained that the exemption process was not transparent, moved too slowly, provided inconsistent or changing responses, and urged the Directorate General to conduct audits. I did.
“Our audit focused specifically on how the exemption process was developed and implemented,” DeFoor said. “Our goal is to recognize the importance of businesses to the economic health of Pennsylvania and to ensure that the state provides a place of equal competition as much as possible.”
Guidance changes, confusion auditor
General DeFoor said that from the beginning of the closure, many companies were confused as to whether they would be classified as “life-sustaining,” according to official state guidance. Approximately one-third of the total of 42,380 exemption applications came from companies that were informed that they did not even need an exemption to continue their business.
DeFoor issued government guidance to determine if a business is life-sustaining, first issued on March 19, and then changed nine more times from March 21, 2020 to May 28, 2020. Said it was done. The “Frequently Asked Questions” document has been revised 14 times to guide the business.
“These changes were understandable to some extent in the light of changing circumstances, but they certainly contributed to the confusion felt by the business community,” said De Foor.
According to audits, state guidance on what constitutes a life support business was more restrictive than federal recommendations issued at about the same time. Pennsylvania was one of at least 13 states that created its own guidance.
Inconsistent answers, delays
The auditor reviewed the 150 exemption applications received by DCED. The application was discretionarily selected across a particular industry from the requests that received the modified response.
Auditors said the final response issued to 103 of the exemption requests they considered seemed valid, but questioned the response issued to 45 applications.
“Some of the results of these suspicious answers had a real negative impact on the companies that could have run the business, but were informed that they had to be closed instead,” DeFoor said. Stated.
The auditor also reviewed 148 response times frames out of 150 sample applications. They found that the first decision was issued to these applications in an average of 5.7 days, ranging from 1 to 28 days. The other two applications don’t seem to have issued a response.
“When the future of your business may be at stake, waiting for an answer for just a few days can feel like eternity,” DeFoor added. “Delays were stressful not only for business owners, but also for employees and their families.”
Other issues related to the exemption application and review process identified by the performance audit include:
- DCED published five different versions of the exemption application online between March 20th and April 3rd, when the exemption application period ended. Only the final version contained a section that required the employer to prove that they were presenting accurate information.
- Exemption applications processed early in the program are reviewed differently than those processed later in the exemption program, and later applications have undergone multiple levels of review, including attorney review. There is also.
- Companies that included keywords (such as healthcare professionals) in their applications often gave positive but suspicious reactions. In addition, some business owners claimed to be personally life-sustaining rather than explaining how their business provided life-supporting products or services to their customers.
- The waiver application database retains the identities of all individuals who have reviewed the application, not with all decisions made, but only the last decision made.
- The waiver application database is not designed to require reviewers to document the legitimacy of decisions made in the application.
- The wording of the waiver decision response emailed to the company by DCED was lacking in clarity and could confuse the business operations that the company could continue to carry out.
The audit also investigated whether external influences, such as lobbyist and legislator involvement, affected the exemption process. Many business owners sought help from legislators or trade associations because there was no formal process for DCED’s refusal to waive.
While such external involvement does not appear to have overly influenced the type of response issued to the enterprise, audits evaluate, respond to or modify the application as a result of the external impact. It points out that the answer may have been issued earlier. It happened through a regular review process.
“Getting a quick answer shouldn’t depend on having a’right’connection in Harrisburg,” DeFoor said.
Survey results and main recommendations
The main recommendations (paraphrased parts) associated with the five audit findings are:
Find 1 – Pennsylvania’s business closure orders are more restrictive than federal guidelines, resulting in more business closures.
Main recommendations: The Governor’s Office should consult with the federal government, general assembly, other state agencies and stakeholder groups to reassess the process for determining life-supporting and non-life-supporting industry groups.
Discovery 2– The guidance DCED uses to determine whether a company is available and sustains life continues to evolve throughout the exemption program.
Main recommendations: If the exemption program is needed again, state authorities will limit the number of changes made to the operational guidance used and need to be added to each version of the guidance for clarity and ease of use. You should consider identifying / highlighting certain changes.
Find 3 – Defects associated with the development of exemption programs have resulted in a lack of accountability and transparency.
Main recommendations: If the exemption program is needed again, state authorities must ensure that the exemption application contains detailed instructions and a section to prove the accuracy of the information provided by the applicant. I have. You also need to take steps to prevent the information entered in the database from being overwritten during the review process. It also includes the full legitimacy of the decision, as well as the date of each step in the process.
Find 4 – DCED’s suspicious decisions on certain exemption requests could adversely affect businesses and unnecessarily increase public health risks.
Main recommendations: If the exemption program is needed again, all decisions must be reviewed and approved by a second reviewer before a response is issued. You need to create a monitoring process to ensure that all responses to your business are accurate and clear. You also need to develop planning tools that include guidance that reviewers need to use when evaluating your application. Document the required steps in the review process. Requirements to maintain support for decisions made.
Discovery 5– There was inconsistency in dealing with companies within the same industry.
Main recommendations: If the exemption program is needed again, authorities need to ensure that the review process includes a detailed assessment of decisions made against companies in the same industry to ensure consistency. there is. Also, whenever there is a change in guidance, all previously processed applications in the industry are immediately and carefully reviewed to determine if a modified response is needed and, if necessary, impact. Corrections will be sent to the receiving company in a timely manner.
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