Are you getting Federal Stimulus Money? Be Sure to Document, Document, Document!
As you know, the Federal Government has allocated over $2.5 trillion to “stimulate” the economy in the wake of Covid-19. If you are one of the organizations that has or will be receiving funds under one of these packages, we want to give you a word of advice… Document, Document, Document!!!
We said it three times for emphasis, but it is the one word you must adhere to. Once the economy returns to some normalcy, federal agencies will begin to ask for further documentation to prove that you deserved the money you received and that you spent it in a way that was intended. The hardest part of this is that the Federal Government is constantly changing what the eligibility requirements are and even what the interpretation of the current guidelines are. Many agencies, such as Health and Human Services (HHS) and the Small Business Administration (SBA), were given wide latitude by Congress on how and where they money should be distributed.
We have already seen cases where companies are giving money back that may have been eligible in their lawyers’ and bankers’ eyes, but not in the court of public opinion or in the eyes of the regulators. The House of Representatives, controlled by Speaker Pelosi and House Democrats, has announced a special oversight committee to investigate how the stimulus money was spent. Specifically, they will look into waste, fraud, and abuse. This may be obvious to most of us, but there will be cases where entities and industries received money thinking they were totally in the right but Congress sees it differently. As well, agencies will come under fire for sending money to certain industries and companies and will begin clawing back funds for what may be good reasons. Because of this, many will be doing audits of the funds they sent out, and if you do not have proper documentation you may be facing a clawback.
Several members of the Envision Strategy team have seen this happen with both the 9/11 stimulus and the 2008 stimulus after the financial meltdown. Just because you have received your check does not mean Uncle Sam wont come knocking in three to six months to make sure you should keep it.