(The Center Square) — New Jersey fishermen could be on the hook for $7 million in COVID-19 funds that may have been improperly distributed, according to a report.
An audit conducted by Acting State Comptroller Kevin Walsh’s office found that more than half of the $14.4 million New Jersey distributed in federal funds to commercial fishermen through the pandemic-related program may need to be returned because the recipients might not have been eligible to receive the money.
The comptroller’s office determined that about 41% of the payments, or $5.9 million, are subject to possible recoupment because the applicants were made “more than whole” by the money or were ineligible for relief payments under the program guidelines.
Another $1.1 million in relief payments are subject to recoupment because the applicants failed to provide enough documentation to support their awards when requested, according to the comptroller’s report.
The fisheries relief funds, provided through the federal CARES Act in 2020, were intended to help businesses recover from the economic impact of the pandemic.
In the memo to Deputy Commissioner Department of Environmental Protection Sean Moriarty, Walsh noted that the state agency’s “responsibility to ensure that taxpayer dollars are used effectively and efficiently does not end when the payments are distributed.”
“Agencies administering COVID-19 relief programs have an obligation not only to have sufficient controls in place to prevent fraud and improper payments, but also to respond quickly when potentially improper payments are later detected,” he wrote.
The pandemic fisheries program first came under scrutiny last year when the comptroller’s office detailed examples of overpayments requiring an additional layer of review to determine whether they were appropriate.
The comptroller’s office said the state agency has pledged to provide updates on its review of the flagged applications and efforts to seek recoupment of the funds.
The agency has also implemented new controls for distributing federal funds in other COVID-19 programs that it administers to reduce the opportunity for fraud, waste or abuse, the comptroller’s office said.
“Receiving and processing applications and distributing funds in a timely manner were critical to the success of the Fisheries Program, but the work is not done when the funds are distributed,” Walsh wrote.
New Jersey’s commercial fishing industry is one of the largest in the nation, generating over $8 billion a year and supporting over 50,000 jobs, according to industry figures.
