Waiver process for COVID-19 business closures was flawed

Pennsylvania’s auditor general says the process used to determine whether businesses could stay open at the start of the COVID-19 pandemic was flawed and caused confusion for business owners.Auditor General Timothy DeFoor on Tuesday released the results of a performance audit of the waiver process and criticized the way it was handled by the Wolf administration.”While the pandemic certainly presented some unique challenges, the process was hastily assembled on the fly, unevenly administered and should be reformed before anything like it is ever used again,” he said.On March 19, 2020, Gov. Tom Wolf ordered non-life-sustaining businesses to close to slow the spread of the coronavirus. Businesses could ask to remain open by applying for a waiver from the Department of Community and Economic Development (DCED).Changing guidanceDeFoor said the audit found the state’s guidance on what constituted a life-sustaining business was more restrictive than a federal advisory, and many businesses were confused about how they were classified. The guidance was changed several times, DeFoor said, causing further confusion.Inconsistent answers, delaysAuditors reviewed 150 waiver applications, which were selected among requests that received a changed response across certain industries.Final responses to 103 of the requests appeared reasonable, DeFoor said, but auditors questioned the responses issued to 45 of the applications.”These questionable decisions had real-life negative consequences to businesses that should have been able to operate but instead were told they had to close,” DeFoor said.Auditors also reviewed the response time for 148 of the applications and found initial decisions were issued within one to 28 days, with an average of 5.7 days. It appears the other two applications were not issued a response, auditors found.”When the future of your business may be hanging by a thread, waiting even just a few days for an answer can feel like an eternity, ” DeFoor said.DeFoor said other issues with the waiver application and review processes identified by the performance audit included:DCED posted five different versions of the waiver application online between March 20 and April 3, the date that the waiver application period closed. Only the final version included a section requiring business owners to attest that they were presenting accurate information.Waiver applications processed early in the program were reviewed differently than those processed later, with some later applications receiving multiple levels of review.Businesses that included keywords (such as health care workers) on their applications often resulted in favorable, but questionable, responses. Additionally, some business owners argued their businesses were personally life-sustaining rather than explain how their businesses provided life-sustaining products or services to customers.Waiver application databases didn’t retain the identity of all individuals that reviewed an application, along with all decisions made. Only the last decision made was retained.Waiver application databases were not designed to require reviewers to document the justification for decisions made on an application.The wording of the waiver decision responses emailed to businesses by DCED lacked clarity and could have led to confusion for businesses as to what, if any, business operations they could continue.Outside influenceThe audit also explored whether outside influence, such as involvement by lobbyists or legislators, had an impact on the waiver process. There was no formal process to appeal a waiver denial, so numerous business owners reached out to legislators or trade groups for help.DeFoor said the audit found outside involvement doesn’t appear to have had an undue influence on the response issued to businesses. However, the audit noted its possible applications may have been evaluated and a response or corrected response issued sooner as a result of outside influence than would have occurred through the regular review process.Findings and recommendationsThe audit’s five findings and recommendations are as follows, according to a news release:Finding 1Pennsylvania’s business closure order was more restrictive than federal guidelines, which resulted in more business closings.Recommendation: The governor’s office should reevaluate its process for determining life-sustaining and non-life-sustaining industry groups, in consultation with the federal government, the General Assembly, other state agencies and stakeholder groups.Finding 2The guidance available to businesses and used by DCED to determine whether or not businesses are life-sustaining continued to evolve throughout the waiver program.Recommendations: If a waiver program is ever needed again, state officials should attempt to limit the number of changes made to the operating guidance being used and consider identifying/highlighting any necessary changes made in each version of guidance for clarity and ease of use.Finding 3Deficiencies related to the development of the waiver program resulted in a lack of accountability and transparency.Recommendations: If a waiver program is ever needed again, state officials should ensure that the waiver application includes detailed instructions and a section for the applicant to attest to the accuracy of the information they provided. Steps should also be taken to ensure the information entered in the database during the review process cannot be overwritten and contains full justification for decisions made, as well as the dates for each step in the process.Finding 4Questionable decisions by DCED for certain waiver requests potentially resulted in detrimental effects for businesses and an unnecessarily increased risk to public health.Recommendations: If a waiver program is ever needed again, all decisions should be reviewed and approved by a second reviewer prior to responses being issued. A monitoring process should be created to ensure that all responses to businesses are accurate and clear. Also, a planning tool should be developed that includes the guidance reviewers should use when evaluating applications, documents necessary steps of the review process and a requirement to retain support for decisions made.Finding 5Responses to businesses were inconsistent among businesses within the same industry.Recommendations: If a waiver program is ever needed again, officials should ensure that the review process includes a detailed evaluation of decisions made for businesses within the same industries in order to ensure consistency. Also, whenever there is a change in guidance, all applications previously processed for that industry should be immediately and carefully reviewed to determine if a corrected response is necessary and, if so, corrections should be sent to the businesses affected in a timely manner.Wolf administration responseA spokeswoman for the governor deferred comment to the DCED.

Pennsylvania’s auditor general says the process used to determine whether businesses could stay open at the start of the COVID-19 pandemic was flawed and caused confusion for business owners.

Auditor General Timothy DeFoor on Tuesday released the results of a performance audit of the waiver process and criticized the way it was handled by the Wolf administration.

“While the pandemic certainly presented some unique challenges, the process was hastily assembled on the fly, unevenly administered and should be reformed before anything like it is ever used again,” he said.

On March 19, 2020, Gov. Tom Wolf ordered non-life-sustaining businesses to close to slow the spread of the coronavirus. Businesses could ask to remain open by applying for a waiver from the Department of Community and Economic Development (DCED).

Changing guidance

DeFoor said the audit found the state’s guidance on what constituted a life-sustaining business was more restrictive than a federal advisory, and many businesses were confused about how they were classified. The guidance was changed several times, DeFoor said, causing further confusion.

Inconsistent answers, delays

Auditors reviewed 150 waiver applications, which were selected among requests that received a changed response across certain industries.

Final responses to 103 of the requests appeared reasonable, DeFoor said, but auditors questioned the responses issued to 45 of the applications.

“These questionable decisions had real-life negative consequences to businesses that should have been able to operate but instead were told they had to close,” DeFoor said.

Auditors also reviewed the response time for 148 of the applications and found initial decisions were issued within one to 28 days, with an average of 5.7 days. It appears the other two applications were not issued a response, auditors found.

“When the future of your business may be hanging by a thread, waiting even just a few days for an answer can feel like an eternity, ” DeFoor said.

DeFoor said other issues with the waiver application and review processes identified by the performance audit included:

  • DCED posted five different versions of the waiver application online between March 20 and April 3, the date that the waiver application period closed. Only the final version included a section requiring business owners to attest that they were presenting accurate information.
  • Waiver applications processed early in the program were reviewed differently than those processed later, with some later applications receiving multiple levels of review.
  • Businesses that included keywords (such as health care workers) on their applications often resulted in favorable, but questionable, responses. Additionally, some business owners argued their businesses were personally life-sustaining rather than explain how their businesses provided life-sustaining products or services to customers.
  • Waiver application databases didn’t retain the identity of all individuals that reviewed an application, along with all decisions made. Only the last decision made was retained.
  • Waiver application databases were not designed to require reviewers to document the justification for decisions made on an application.
  • The wording of the waiver decision responses emailed to businesses by DCED lacked clarity and could have led to confusion for businesses as to what, if any, business operations they could continue.

Outside influence

The audit also explored whether outside influence, such as involvement by lobbyists or legislators, had an impact on the waiver process. There was no formal process to appeal a waiver denial, so numerous business owners reached out to legislators or trade groups for help.

DeFoor said the audit found outside involvement doesn’t appear to have had an undue influence on the response issued to businesses. However, the audit noted its possible applications may have been evaluated and a response or corrected response issued sooner as a result of outside influence than would have occurred through the regular review process.

Findings and recommendations

The audit’s five findings and recommendations are as follows, according to a news release:

Finding 1

Pennsylvania’s business closure order was more restrictive than federal guidelines, which resulted in more business closings.

Recommendation: The governor’s office should reevaluate its process for determining life-sustaining and non-life-sustaining industry groups, in consultation with the federal government, the General Assembly, other state agencies and stakeholder groups.

Finding 2

The guidance available to businesses and used by DCED to determine whether or not businesses are life-sustaining continued to evolve throughout the waiver program.

Recommendations: If a waiver program is ever needed again, state officials should attempt to limit the number of changes made to the operating guidance being used and consider identifying/highlighting any necessary changes made in each version of guidance for clarity and ease of use.

Finding 3

Deficiencies related to the development of the waiver program resulted in a lack of accountability and transparency.

Recommendations: If a waiver program is ever needed again, state officials should ensure that the waiver application includes detailed instructions and a section for the applicant to attest to the accuracy of the information they provided. Steps should also be taken to ensure the information entered in the database during the review process cannot be overwritten and contains full justification for decisions made, as well as the dates for each step in the process.

Finding 4

Questionable decisions by DCED for certain waiver requests potentially resulted in detrimental effects for businesses and an unnecessarily increased risk to public health.

Recommendations: If a waiver program is ever needed again, all decisions should be reviewed and approved by a second reviewer prior to responses being issued. A monitoring process should be created to ensure that all responses to businesses are accurate and clear. Also, a planning tool should be developed that includes the guidance reviewers should use when evaluating applications, documents necessary steps of the review process and a requirement to retain support for decisions made.

Finding 5

Responses to businesses were inconsistent among businesses within the same industry.

Recommendations: If a waiver program is ever needed again, officials should ensure that the review process includes a detailed evaluation of decisions made for businesses within the same industries in order to ensure consistency. Also, whenever there is a change in guidance, all applications previously processed for that industry should be immediately and carefully reviewed to determine if a corrected response is necessary and, if so, corrections should be sent to the businesses affected in a timely manner.

Wolf administration response

A spokeswoman for the governor deferred comment to the DCED.

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