A surprise notification from the federal government that the state must return nearly half a billion dollars in COVID-19 funds has several major funding issues on hold.
These last days of the regular session are typically when state budget issues are debated and resolved.
A surprise notification from the federal government that the state must return nearly half a billion dollars in COVID-19 funds has several major funding issues on hold.
These last days of the regular session are typically when state budget issues are debated and resolved.
But when federal dollars were funneled into West Virginia local school districts in the early days of the pandemic, rules on how to spend that money did not come until later.
Facing crucial budget bill deliberations, the House Finance Committee Chairman, Del. Vernon Criss, R-Wood, said it was a shock when learning this week the federal government was looking at a $465 million clawback of the state’s CARES Act education spending.
“It was just amazing that the feds can do something like this to you,” Criss said. “We’re not the only state they’re doing it today. There are other states that are in the same position. I don’t know to what degree, but this is a sizable amount of money to the state of West Virginia.”
It’s not just education funding that’s in jeopardy. The budget bill passed by the Senate this week did not include Social Security tax cuts and has no mention of state employee pay raises. The House Finance Committee Minority Chairman, Del. Larry Rowe, D-Kanawha, is concerned about the effect on a number of what he calls programming possibilities.
“West Virginia State is in for a $50 million agriculture lab that they need,” Rowe said. “And this, you know, will put that kind of a project in jeopardy in a new project. So and if it moves off several years, that would be a real problem.”
Rowe says he’s concerned this could also affect senior services projects.
Officials from Gov. Jim Justice’s office say the federal expectation was the state would match the federal pandemic grants going to education.
Sen. Eric Tarr, R-Putnam, the Senate Finance chairman, says that’s easier said than done.
“West Virginia is very unique, and how we fund K-12 education relative to a lot of other states,” Tarr said. “Because we’re formulary based, so you can’t just suddenly increase the formula with some of the rules they had around the CARES dollars the way that they would need to spend.”
Now, Criss says the governor’s office is working with the feds on a waiver, showing that they are providing more state money toward education.
“Things like the school building authority that we appropriated, then we authorized the spending a couple days ago, we authorized the monies to go into the account yesterday,” Criss said. “So now is as that bill progresses, then we’ll have part of that $465 million taken care of.”
Criss said the governor’s office is also trying to communicate to the federal government how the state used that money in accordance with the state’s statutes and formulas.
“We’ve done the pay raises with the benefit package, we’ve also confirmed that we’re continuing to put in the monies into the Teachers Retirement Program in the 40-year plan as well as the current amount needed,” Criss said.
Criss, Tarr and the governor’s office all seem confident, with hopes for a quick resolution and no loss of funds. But with a week left in the regular session and no budget yet passed, Criss says the timing couldn’t be worse.
“It’s just poor timing on the Fed announcement to the governor’s office,” Criss said. “And we are here today, knowing that we have one week left, we need to get the budget process concluded on both sides so we could start putting the bills together and come up with a compromise for the first week. So everybody will have an opportunity to see what we’ve got.”
The deadline for putting the budget in isn’t until June 30. Criss said that while the deadline for the budget isn’t technically until June 30, he would have to break a promise and nearly decade tradition of having the budget done by the 60th day of session.
“We’re going to fix it. It’s a one-time thing,” Criss said. “We’ve got the funds available. And it’s just a matter of trying to figure out where they all have to go before the first of July.”
Criss said he thinks that everyone currently included in the budget will stay covered, but that it’s an evolving situation.
With the federal COVID-19 public health emergency ending, West Virginia will issue Pandemic Electronic Benefits Transfer (P-EBT) to qualifying K-12 students over the summer. This will be the final payment with CARES funds.
With the federal COVID-19 public health emergency ending, West Virginia will issue Pandemic Electronic Benefits Transfer (P-EBT) to qualifying K-12 students over the summer. This will be the final payment with CARES funds.
The West Virginia Department of Health and Human Resources (DHHR) announced on April 5, that they have received approval from the United States Department of Agriculture to issue Summer P-EBT.
Devon Lopez is the associate director of customer and community success at Unite Us West Virginia.
“Eligible students are going to receive $120, on either a new EBT card if they newly qualify, or if they’ve already qualified that will be preloaded onto that card, and it’s going to be a final of a continuation that we’ve seen of pandemic era benefits,” Lopez said. “We saw these implemented three years ago when students were at home and really extending those benefits COVID era benefits into the summertime to allow them to have additional ability to get resources and food.”
Lopez said pandemic-era benefits have built a foundation of assistance she hopes to see continue in the future.
“I think it’s really important to note that, it’s not that these problems didn’t exist before (the pandemic), they did,” Lopez said. “What we do know with COVID is that it did expose other critical needs that maybe others weren’t considering existed in the community. Hopefully we can now evaluate that data and those resources to understand what we can do to continue supporting in the long term.”
To be eligible, students must have attended a West Virginia school that participates in the National School Lunch Program, actively enrolled in the 2022-2023 school year on May 15, 2023, and qualify for free or reduced-price meals.
All students who attend a Community Eligibility Provision school and receive free or reduced-priced meals also qualify for P-EBT.
The DHHR will mail an eligibility letter to each student who qualifies for Summer P-EBT. Students who qualify will receive a one-time Summer P-EBT payment of $120 to existing WV P-EBT cards in June 2023.
For additional information, visit the West Virginia P-EBT website or contact the P-EBT call center at 1-866-545-6502.
Senate Finance Committee Chairman, Sen. Eric Tarr, R-Putnam, is questioning if Gov. Jim Justice has violated federal law and has requested the federal Office of the Inspector General to investigate.
Updated on Monday, March 20, 2023 at 5:50 p.m.
Senate Finance Committee Chairman, Sen. Eric Tarr, R-Putnam, is questioning if Gov. Jim Justice has violated federal law and has requested the federal Office of the Inspector General to investigate.
At issue is the movement of $28,375,985.43 in CARES Act funding to a special account controlled by the governor’s office for non-COVID-19 related expenses.
Congress passed the Coronavirus Aid, Relief, and Economic Security Act in 2020 at the beginning of the pandemic to provide aid to individuals struggling with job loss. The state of West Virginia received $1.25 billion in aid as well, but it came with stipulations on how the state could spend the money as well as time limitations.
In a Senate Finance Committee meeting on Feb. 3, during the regular session of the West Virginia Legislature, the governor’s chief counsel, Berkeley Bentley, explained that the governor approved the transfer of the money to his discretionary fund.
Testimony indicated the money was to be used for COVID-19-related expenses for the Department of Corrections and Rehabilitation. Jeff Sandy, the secretary of the Department of Homeland Security, testified that prior to this transfer, the department did have COVID-19 expenses, but it had already been reimbursed for that expense. After that transfer, only an additional $280,721 was transferred to the Department of Corrections.
State Auditor J.B. McCuskey testified that the transfer was unusual for its type and amount for this fund. Previously, the largest transfer into the fund was $250,000. One of the most notable uses of the money was $10 million to Marshall University for the baseball stadium.
Tarr sent his letter to the Office of the Inspector General in Washington, D.C. asking for a response regarding concerns about the ethics, legality and risk of any future clawbacks of the money by the federal government.
In an emailed statement from the governor’s office, Press Secretary C.J. Harvey said, “This letter is simply a regurgitation of old news. Unfortunately, Senator Tarr can’t let it go. The Governor’s Office firmly believes that all transactions involving the use of CARES Act funds were legal and appropriate. Decisions on the use of funds were made with the advice of legal counsel and two national CPA firms, including one who completed an independent audit and found no issues.”
The Senate Finance Committee wants to know how $10 million in CARES money ended up being donated by Gov. Jim Justice’s administration to Marshall University for its new baseball stadium.
The Senate Finance Committee wants to know how $10 million in CARES money ended up being donated by Gov. Jim Justice’s administration to Marshall University for its new baseball stadium.
The money was donated to the university from the governor’s Gifts, Grants and Donations Fund, and was transferred into that account days before the federal deadline to spend CARES funds.
Senate Finance Chair Sen. Eric Tarr, R-Putnam, questioned why a total of $28 million of CARES money was transferred to the gifts account in the first place, given the qualifying expense for the money was listed as the Division of Corrections and Rehabilitation.
“I understand that we still have National Guard in our corrections facilities and we have 1,000 FTEs [full-time employees] unfilled in our corrections facilities and we have a request for a $200 million deferred maintenance to go to corrections,” Tarr said.
“We’re under that state of emergency right now, and when you transfer the last $28 million, which doesn’t come close to covering any of those corrections expenses, the governor decides to put it into a discretionary account and then start putting AstroTurf on baseball fields. I want to ask you what part of that is appropriate,” Tarr said to Berkeley Bentley, general counsel to Justice.
Bentley told the committee that as special federal revenue, the money could only be transferred into a special revenue account.
“When the state reimburses itself, there is no direction under federal law or state law that directs where that money goes. It could not go into the governor’s civil contingent fund, rather it had to go to a special revenue account, and the most likely candidate was the gifts and grants fund,” Bentley replied.
“And ultimately a baseball field,” Tarr said.
Earlier this week, the Senate Finance Committee heard directly from the Division of Corrections and Rehabilitation about their $200 million deferred maintenance costs, including at least $27 million worth of locks that need to be replaced across the system.
Bentley told the committee that the transfer was made to officially spend the CARES money by the Sept. 30 deadline, and avoid returning the money to the federal government. Once the qualifying expense was paid, he said the state can use those funds for any legal purpose.
“We spent $1.25 billion. We did that, and we transferred it out. It’s no longer CARES, but the money is still available for any lawful purpose,” Bentley said. “The money was transferred over to pay the invoices we hadn’t received yet, not timely, what have you, but it’s also available for any other purpose that is legal under state law, no longer subject to the CARES Act requirements.”
Tarr also called on State Auditor JB McCuskey to discuss the process around the fund transfer. Under questioning from Tarr, McCuskey categorized the requested transfer of funds as “unusual.”
“We were working with cities and counties a lot to try to make sure that they were able to obligate their funds legally to ensure that the money that was given to us was spent on things that were legal,” McCuskey said. “Our office processes thousands of transfer requests a week probably … but this was a large number. And I was unfamiliar with the fund, but prior to that request, and you know, pretty obviously the name of it, it pops out pretty quickly.”
When asked why his office approved such a large and unusual transfer request, McCuskey said the governor’s office provided detailed opinions on the legitimacy of the transfer from global accounting firm BDO and the law firm Bailey Glasser.
“We can’t supplant our legal opinion of what their appropriations are if there’s a rational basis for them, and it was close,” McCuskey said. “We decided at the end of the day, it was better to make sure that effectuated what the governor’s office wanted, but to keep a record and an accounting of what happened and why.”
The meeting ended with the Senate Finance Committee agreeing to request more information on the COVID-19 money transfer from the Office of the Inspector General, as well as the Department of the Treasury.
Barely any of the money, earmarked for pandemic relief, will actually connect homes and businesses to the internet
This story was originally published by Mountain State Spotlight. For more stories from Mountain State Spotlight, visit www.mountainstatespotlight.org.
For Gov. Jim Justice, the announcement was the easy part. In September, he promised to spend $50 million of the state’s federal coronavirus response fund to bring internet to underserved areas of West Virginia.
He held multiple press conferences to flesh out his goal of “covering up West Virginia in broadband,” and even floated a way to do it: give companies $1,000 for every household they hook up.
Making that happen by the end-of-the-year deadline, however, proved much harder.
By December, Justice admitted he would only spend around $33 million. And documents obtained by Mountain State Spotlight show that almost none of that money will actually go to the governor’s stated goal: delivering better internet to homes and businesses as the pandemic forces West Virginians to adapt to working and learning from home.
Instead, among other things, the money will go to new school textbooks and a resurfaced wilderness trail.
Only one grant — the sole one publicly announced by the governor — went to internet service. Justice gave that $2.3 million grant to a newly-formed nonprofit, run by a state senator, that promises to build 11 miles of fiber around Huntington. The rest, amounting to the vast majority of the money, was allocated to three different state agencies for purposes barely related, if at all, to the governor’s goal.
Back in September, at the press conference announcing the $50 million fund, the governor sketched out where he planned to spend it. He showed a map of West Virginia, which included red areas that supposedly already had internet, and blue areas, where the Federal Communications Commission planned to install broadband using hundreds of millions of dollars in federal incentives.
And then there were white areas – covered by neither.
In these places — and many others across the state — new necessities of modern life, from telemedicine to Zoom, are impossible because there’s no decent internet. This is at least partly because, for the past decade, West Virginia has been reliant on Frontier Communications, a bankrupt telecommunications company with an appalling track record, to serve rural areas of the state. But it’s also the fault of West Virginia leaders, who have failed to provide substantial state funding to address the problem.
“We want to target those areas,” Justice said.
Here’s where the money actually went:
License: Creative Commons
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Tunnel Number 10 along the North Bend Rail Trail. Photo: Mike Tewkesbury via Flickr.
Trail remediation
Mountain State Spotlight obtained the original requests for CARES Act funding submitted to the governor. Four were categorized as broadband-related, each with Justice’s signature of approval. They totaled just over $32 million.
The strangest was the one from the Department of Natural Resources, requesting $1.4 million to rebuild a 72-mile trail through the wilderness outside Parkersburg.
To justify the use of CARES Act funding, the department’s director, Stephen McDaniel, argued that the North Bend Rail Trail’s “proximity” to a new interstate fiber-optic telecommunications cable required its “remediation.”
But Zayo, the Colorado telecommunications company that was installing the fiber, had already promised to fix any damage done by the heavy equipment it had brought in to do the job.
According to a spokeswoman for the company, they did. “Zayo restored the trail to its current condition and even made some minor fixes,” Rebecca Whalen wrote in an email.
But the trail is still closed due to damage. It is unclear why the state is now footing the bill to fix it, and why it’s using funds earmarked for the coronavirus response to do so.
“I would love to talk to you about that, but I cannot,” Elliott said, sounding genuinely apologetic, when reached by Mountain State Spotlight over the phone.
A spokesman for the department offered little clarification.
“As you are aware, this project provides an opportunity to expand much needed high-speed internet services to rural parts of West Virginia,” Andy Malinoski wrote in an emailed statement.
Textbooks for virtual learners
Another $8 million is going to the West Virginia Department of Education to fill a hole in its budget produced by the expansion of the state’s virtual school program. The free program expanded ten-fold this year as students — primarily in more populated counties — opted to forgo the classroom entirely during the pandemic.
Classifying this as a broadband-related expense is odd, since kids who voluntarily enrolled in the state’s virtual school program are nearly certain to already have reliable internet access.
In some counties, they even had to sign a contract asserting such before they could apply.
And now they will get the benefit of millions in federal coronavirus relief funds, to be spent on the teachers, textbooks and curriculums that are necessary for them to learn safely while at home.
Students in rural areas of the state where the internet is unreliable or nonexistent will not.
In some counties, including Mineral and Summers, not a single kid signed up to the state’s program, according to data released by the state’s Department of Education in November.
Barely 1% of students in Roane County ended up in the program. The superintendent, Richard Duncan, explained one reason why.
“People hear ‘virtual school’ here, and they just gloss over: well, we can’t do that — we live in Roane County, we don’t have … [a] high speed internet connection” he said.
The “inequities” caused by the state’s poor internet caught state superintendent Clayton Burch by surprise, he told West Virginia Public Broadcasting in July.
“We just didn’t know how wide the gap was when it comes to broadband,” he said.
Although the governor categorized Burch’s $8 million funding request as broadband-related, the money will do nothing to close that gap.
Upgraded public safety radio
Another $20.5 million was allocated to the Department of Homeland Security, for upgrades to the state’s public safety radio network.
“The bandwidth… needs to be upgraded… to carry the additional amount of communication the pandemic has caused,” reads the justification for the expenditure submitted to the governor by Jeff Sandy, head of the state’s Department of Homeland Security.
But if the network is overloaded, no one seems to have noticed.
After a reporter reached out to the network’s coordinator at the Division of Emergency Management, a spokesman issued a statement.
“There has been no significant effect on the State Interoperable Radio Network resulting from the pandemic response,” wrote Lawrence Messina, referring to SIRN, the public safety communications network.
Other inconsistencies in Sandy’s justification to the governor raise further questions about the necessity of the expenditures.
He claims that “much of the equipment” in the network “is at end of life, with limited to no additional parts available.” This issue is so pressing, he wrote, that it could lead to “loss of life.”
In that same paragraph he claims that the money will be used to install over 51 microwave repeaters that the department has kept “in storage” — and then requests to purchase 61 more.
Sandy also claims the upgrade will increase “network capacity” to 1 gigabit per second while acknowledging that, under normal use, the network transports a similar amount of data, in addition to standard voice service, over an entire day.
The no-bid contract to build and install the new microwave equipment will go to Texas-based Aviat Networks.
That name might sound familiar. Both SIRN and Aviat have a scandal-ridden history in West Virginia involving the misuse of federal funds earmarked for broadband expansion.
In 2010, the state used $33 million of federal stimulus funds to upgrade SIRN with equipment purchased from Aviat. Auditors later found that officials circumvented state purchasing laws.
At the time, state officials promised it would help bring internet to hard-to-reach hollows in West Virginia. Many of the towers are located in rural areas that are underserved — or not served at all — by Frontier.
“No,” Messina replied when asked if SIRN was currently used for any commercial purposes.
‘Make it happen’
Other states are trying something different.
At least six states have created new broadband infrastructure grant programs using the CARES Act money, according to an analysis by Pew Charitable Trusts. Mississippi is giving away $75 million to rural utility cooperatives.
West Virginia has its own cooperatives, including Hardy Telecommunications, which has been remarkably successful at bringing high-speed internet to rural communities. The company recently was denied subsidies from the Federal Communications Commission to expand its network in the state — the co-op was likely outbid by Frontier.
Other ideas have been thrown around inside the governor’s mansion.
In early October, a small group of government officials and telecommunications executives met there to brainstorm ways to spend the $50 million.
Various ideas were presented, including building out the state’s internet backbone and rewiring SIRN to service homes and businesses in rural communities.
At the end, a source familiar with the meeting, who was not authorized to discuss it publicly and spoke on condition of anonymity, said Justice was receptive.
He turned to Bray Cary, a former broadcast media executive who earns minimum wage as an advisor to the governor.
Make it happen, Justice told him.
Why it hasn’t is unclear. The governor’s office did not respond to a request for comment
Reach reporter Lucas Manfield at lucasmanfield@mountainstatespotlight.org
Many challenges parents and caretakers face under normal circumstances are exacerbated by the coronavirus pandemic. Through the CARES Act, additional federal dollars were granted to help essential workers with things like child care regardless of income. Still, not every new challenge for working parents has been addressed during the pandemic.
Resource and referral agencies across the state such as Mountain Heart Community Services Inc., which is in 30 West Virginia counties, are processing the increased applications.
Susan McCoy is a supervisor and case management auditing coordinator with Mountain Heart Community Services, a resource and referral agency that provides child care for working parents along with other services.
Essential workers have been reaching out to Mountain Heart in 30 counties in West Virginia since April.
“In the beginning, once the changes came down in March and April,” McCoy said, “we did see a lot of frontline workers, nurses, doctors, emergency medical services, police officers, folks of that, you know, doing those kinds of jobs who weren’t eligible before.”
Since April, the agency has seen at least 30 more cases every month compared to the same time last year. In April alone, there were almost 130 more families who asked for help compared to the previous year.
“I do believe it is because the income limitations for essential workers have been waived,” McCoy said.
The stay-at-home order forced more parents to juggle child care while working from home. While essential workers such as custodians, doctors, and nurses were eligible for financial assistance, no policies existed then or now to help parents trying to stay productive at home while also taking care of their kids.
“It has been a challenge, especially when they have younger children who are not in school,” McCoy said. “And just overall income situations have been really difficult for families. You know, if you’re not working, you’re not making money. It’s hard to pay for childcare and you know, bills that are adding up for families.”
West Virginia is a rural state, and many times, day care isn’t an option. But those who are looking for employment can start their own daycares. Through Mountain Heart, child-care providers can get trained to provide care for up to six children in their own home. An additional service of the agency helps provide resources in remote and rural parts of the state that may not have the population to support a daycare center.
“You don’t have to go to a childcare center or facility to receive Mountain Heart (benefits),” Burdette said. “You can have an individual person that goes to the training program and takes care of your child while you’re at work or at school.”
Burdette looks for funding opportunities along with sources to partner with, and to help with program development within the agency.
The solutions or resources have been in place since the War on Poverty was declared in the 1960s, and it’s helped single parents go to school or work, while someone else cared for their children.
No program is not perfect, and the pandemic has magnified these challenges. Burdette was recently one of 40 professionals across Appalachia to attend economic skills training at the Appalachian Leadership Institute. It’s part of the Appalachian Regional Commission (ARC) fellowship program.
Burdett hopes the fellowship will reveal strategies and resources that would work for West Virginia.
“I think the whole area of jobs and economic development is very important,” Burdette said. “If we could figure out better ways to allow people to work. You know that the ways that other people do it in rural areas, even in other states or other regions outside Appalachia is through telework or telecommunications. And of course, we don’t always have that, especially with, you know, the issues we have with connectivity and broadband and those types of things.”
After completing the nine-month series of online meetings, Appalachian Leadership Institute Fellows will become part of a peer-to-peer working group committed to Appalachia’s future.
The benefits are part of the federal CARES, or Coronavirus Aid, Relief, and Economic Security Act.
The federal benefits that provide financial assistance to essential workers regardless of income, are expected to run out after December.
