Lancaster county cleared after treasury review questioned $38. 7 million in covid relief spending

Lancaster, PA — Lancaster County resolved all questioned COVID-19 relief spending flagged by federal auditors after providing additional records that satisfied Treasury investigators reviewing the county’s pandemic-era expenditures.

A final determination letter issued March 9 by the U.S. Department of the Treasury Office of Inspector General said Lancaster County supplied sufficient documentation to support the full $38.79 million in questioned Coronavirus Relief Fund costs identified during an earlier federal desk review.

The finding closes a years-long review tied to CARES Act funding distributed during the COVID-19 emergency and removes the threat that the county could have been required to repay unsupported federal funds.

Federal auditors initially raised concerns in a 2023 review that questioned whether Lancaster County had fully documented several categories of pandemic spending, including personal protective equipment purchases, prison payroll costs, distance learning programs, emergency medical services, housing assistance, and telework equipment.

Treasury says county corrected all questioned costs

According to the Treasury OIG letter, Lancaster County responded after federal officials requested additional support in April 2025.

Between June and December 2025, the county provided documentation that addressed the entire $38,793,071.36 identified during the original desk review, Treasury officials said.

The questioned costs stemmed from multiple spending categories reviewed under federal Coronavirus Relief Fund oversight rules.

Auditors had originally identified:

$33.97 million tied to personal protective equipment and distance learning grants
$3.93 million connected to prison payroll expenses
$743,935 related to emergency medical services, housing assistance, and teleworking equipment
$142,779 linked to developmental training and law enforcement costs

Those expenditures were not initially classified as fraudulent or improper spending. Instead, federal auditors categorized them as “unsupported questioned costs,” meaning supporting records were missing or incomplete during the initial review process.

Key Points

• Treasury initially questioned $38.7 million in Lancaster County COVID relief spending
• County later submitted documentation supporting all flagged expenses
• Federal auditors closed the corrective action review with no repayment ordered

CARES Act funding faced nationwide scrutiny

The review formed part of a broader federal oversight effort examining how states, counties, and local governments spent billions in Coronavirus Relief Fund money authorized under the CARES Act.

Under federal rules, governments could only use the funds for expenses directly tied to the COVID-19 public health emergency, costs not already included in approved budgets, and expenditures incurred within the authorized pandemic timeframe.

Lancaster County’s original desk review was conducted by an independent public accounting firm working under Treasury OIG supervision. The county reported its spending through the federal GrantSolutions reporting portal used nationwide for CARES Act oversight.

The March 9 determination marks a significant contrast from other recent Treasury oversight actions in which federal auditors recommended repayment of unsupported or ineligible pandemic spending after recipients failed to provide records.

In Lancaster County’s case, Treasury officials ultimately concluded the county’s corrective actions fully resolved the issues identified during the earlier review.

County avoids potential repayment fight

Had the county failed to produce supporting records, Treasury officials could have sought repayment of some or all questioned costs.

Instead, the Office of Inspector General formally acknowledged that Lancaster County’s additional submissions addressed the audit findings.

“We appreciate the courtesies and cooperation provided to our staff during the desk review follow-up,” Assistant Inspector General for Audit Pauletta Battle wrote in the final determination letter.

The federal review is now considered resolved, with no additional corrective action announced in the letter.

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