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United States Department of Education auditors have recommended more than $650,000 in misspent federal coronavirus relief funds be returned by Gov. Kevin Stitt. They are also reviewing an additional $5.5 million in purchases, according to a federal audit released Tuesday.
The questioned spending came from Stitt’s Bridge the Gap Digital Wallet program, which gave $1,500 grants to low-income families for educational purchases like computers and school supplies during the pandemic.
According to The Frontier, auditors pinpointed questionable expenditures like arcade games, Christmas trees, smart watches, sofas, televisions and refrigerators totaling $652,720. The extraneous items made up more than 10% of all purchases. The $5.5 million is the total of purchases the auditors did not analyze and could contain unauthorized items.
The tally of noneducational items families purchased with program funds was higher than previously reported in a joint investigation The Frontier and Oklahoma Watch published in May.
Auditors find Stitt played loose and fast with federal guidelines and bookkepping
The auditors also found the state of Oklahoma failed to follow federal guidelines for four of Stitt’s five educational relief programs.
State officials gave the Florida-based company ClassWallet a no-bid contract to administer the Bridge the Gap Digital Wallet program and distribute grants to families.
According to The Frontier, auditors also found poor record keeping for another relief program managed by ClassWallet called Stay in School. The program distributed tuition grants for up to $6,500 to students already attending private schools during the pandemic.
Oklahoma could not provide supporting documentation that students who received grants were actually enrolled and registered at private schools, per the audit.
Kate Vesper, a spokeswoman for the governor, said Tuesday that the state started an internal audit of Oklahoma’s educational relief funds several months ago and would defend Stitt’s commitment to transparency. However, the state has refused to release a review of the program by a private contractor.
Though the state said it would take steps to improve its monitoring of federal grants, Oklahoma placed blame on ClassWallet, saying the company assured there would be no fraud.
According to the audit, Oklahoma said that it was working in a ”high-pressure environment” due to the effects of COVID and that it acted in good faith to “ensure funds associated with Bridge the Gap initiative were properly expended when it contracted with ClassWallet.”
However, auditors claim the state cannot just pass blame to ClassWallet even if officials say it was their responsibility to oversee the relief money. The state of Oklahoma has also threatened to sue the company.
Oklahoma did not say it would return the funds or review for any other unallowable Bridge the Gap expenditures, auditors wrote.
The auditors found that “Oklahoma did not use all available controls in ClassWallet’s digital wallet system” to monitor how grant money was spent.
For the full story, read The Frontier’s coverage.