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Why Oklahoma is still sitting on COVID-19 relief funds

Oklahoma's Chief Financial Officer John Laws (left) answers questions from senators at a Jan. 18, 2023, hearing about the pace of sending out funds from the state's $1.87 billion in federal American Rescue Plan Act money. Lawmakers concluded a special session in September 2022 to allocate the funds.
Paul Monies
Oklahoma Watch
Oklahoma's Chief Financial Officer John Laws (left) answers questions from senators at a Jan. 18, 2023, hearing about the pace of sending out funds from the state's $1.87 billion in federal American Rescue Plan Act money. Lawmakers concluded a special session in September 2022 to allocate the funds.

Six months after a special legislative session ended to allocate almost $1.7 billion, just a fraction of those federal coronavirus relief funds have been sent from state coffers to agencies or other entities.

Meanwhile, the state has earned more than $21.6 million in interest from the $1.87 billion it received from the federal government under the American Rescue Plan Act.

Some lawmakers are concerned the delays along with rising inflation and ongoing supply-chain issues for basic materials will translate to higher-than-expected costs for many of the projects.

“My frustration is that these dollars get caught up in government bureaucracy,” Sen. Chuck Hall, R-Perry, chairman of a new Senate subcommittee overseeing the implementation of relief funds, said in a January hearing.

The Office of Management and Enterprise Services and its grant management office is responsible for coordinating the relief projects with various agencies and boards. Itslatest snapshot shows just 2.58% of funds disbursed to relief projects.

Senate Pro Tem Greg Treat, R-Oklahoma City, said he shared his colleagues' frustration with the pace of funds disbursed.

“Although I’m frustrated up to this point, I do have hope after seeing money is starting to flow now,” Treat said in a March 13 press conference. “Some of these projects have seen increased costs just because of supply-chain issues and costs from inflation.”

To be fair, almost half of the state’s coronavirus relief funding is going to two major infrastructure needs in water and sewer projects ($436.6 million) and broadband expansion ($382 million). The state Broadband Office and theOklahoma Water Resources Board are overseeing competitive grant programs for those upgrades.

Hall said last week, OMES has made progress since the Senate subcommittee first met in January. It has grant agreements in place with state agencies, but some of the sub-recipients have yet to request the money.

“They might not have project engineering complete or reporting processes adopted internally, or they are evaluating inflation-related costs,” Hall said.

John Laws, the state’s chief financial officer, said earlier this year the federal government would prefer relief funds be expended first by an agency or sub-recipient and get reimbursed later. That led to some confusion among agencies that don’t have the ready cash flow to spend on large projects. OMES sent a clarifying email this month to grantees that it could also advance the money for projects.

“When the Legislature appropriated funds to these projects, the expectation was that funds would be put toward the projects as expediently as practicable,” said the March 3 email from state Chief Operating Officer John Suter. “Recently, there has been some concern expressed to OMES by the Legislature related to the pace of the project execution and funds disbursement.”

Hall said OMES had sent nearly $42 million in relief funds for projects so far, up from $5.4 million in January.

“I still remain hopeful that money will start to flow very quickly over the next couple of months,” Hall said.

Expanding the nursing workforce was one of the top priorities for coronavirus relief funding. Among the projects approved by lawmakers last year was $64.4 million to go to regional universities, community colleges and CareerTechs to expand nursing programs. The money flows through the Healthcare Workforce Training Commission, formerly the Physicians Manpower Training Commission.

The appropriations bills for that funding became effective in September, but it took some time for the commission to add staff and get grant agreements in place to be ready to send out the money. Administering grants for nurse training is a new role for the commission, which historically has approved loan repayments for physicians, residents and nurses in under-served parts of the state.

Janie Thompson, the commission’s executive director, said it has begun reimbursements to projects that have submitted requests. The commission is meeting monthly to approve submissions in excess of $50,000.

In their special session last year,lawmakers approved dozens of bills to fund relief projects in water infrastructure, broadband, mental health and workforce development. They punted on a $95.2 million spending bill for the Department of Human Services to expand childcare services, food programs and relief for the effects of domestic violence.

The House and Senate advanced a pared-down, $65 million version of that DHS bill last week in appropriations committees. The full House later passed House Bill 2884 on Tuesday by a vote of 77-5. It now awaits a vote in the Senate.

HB 2884 does not include the $30 million proposed initially for Oasis Food Market in Tulsa which was to support wrap-around social services for communities with a lack of grocery stores. NonDoc earlierreported some issues with Oasis’ governance board and oversight. Lawmakers said they were withholding funding for that project until more could be shared about Oasis’ oversight.

“I think some additional vetting is warranted,” Hall said in a March 13 Senate appropriations committee meeting. “I think the project and the program is fantastic. I would just like to get some more information related to how they would be able to handle the money.”

Oklahoma has until the end of 2024 to allocate the American Rescue Plan Act funds and until the end of 2026 to spend the money. The federal government gave states a combined $198 billion under the law to combat the effects of the pandemic. Additional funds went to large cities, counties and tribal governments.

Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.

Paul Monies has been a reporter with Oklahoma Watch since 2017 and covers state agencies and public health.
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