Department of Justice Inspector General Michael Horowitz prepares to testify in a Senate committee in December. Horowitz is serving as acting chair of the Pandemic Response Accountability Committee, which released its report Wednesday.
CNN  — 

The committee of government watchdogs overseeing the federal government’s response to the Covid-19 pandemic warned Wednesday that federal agencies face significant challenges rapidly doling out $2 trillion in relief money while stopping fraud and misuse of the funds.

More than three dozen inspectors general across the federal government summarized the biggest challenges Covid-19 poses to their agencies in the first report released by the Pandemic Response Accountability Committee, the council of inspectors general tasked with coronavirus oversight.

The inspectors general said that financial management of relief funds was a top concern, along with cybersecurity issues and protecting the health and safety of federal employees while keeping operations running amid the pandemic.

There’s already tensions over the oversight efforts and the amount of transparency the federal government will provide related to spending. A bipartisan group of lawmakers is demanding that the Treasury Department release a list of recipients who received significant under the Payment Protection Act, while the committee of watchdogs could be curtailed by a Trump administration legal position.

The 92-page report was intended to lay out the terrain that the committee created by the $2 trillion coronavirus relief legislation, known as the CARES Act, will be monitoring as funds are spent to aid small businesses, corporations, states and local governments and unemployed workers.

The oversight from the inspectors general is just one of the mechanisms Congress created to keep tabs on the coronavirus spending. The law established a five-person congressional commission, which does not yet have a chair, and a new inspector general for pandemic recovery. Brian Miller, who was a lawyer in the White House counsel’s office, was confirmed to the role on a 51-40 vote earlier this month.

The committee of inspectors general also does not have a chair, after Trump replaced the first named chair, then-acting Pentagon inspector general Glenn Fine, making him ineligible to serve on the committee. Justice Department inspector general Michael Horowitz is serving as acting chair.

Impact on federal agencies

While the CARES Act provided federal agencies with trillions of dollars in additional funding to support programs in order to help the public during the pandemic, federal agencies are facing some of the same problems the pandemic has caused for the Americans they’re trying to serve, including providing a safe environment for staff to work and remotely managing government operations, like processing tax refunds.

They are also tasked with providing emergency support as quickly as possible to help people in need, whether through financial assistance from the $1,200 stimulus payments the IRS issued earlier this year or through food stamps from the USDA. These realities have caused agencies to face their own set of challenges, even with the additional funding.

Agencies are trying to keep essential workers going to work as safely as possible, despite the pandemic’s continued spread throughout the United States. They are also trying to maintain proper technological infrastructure to prevent security breaches as many agencies have moved most of their workforce from the office to a telework environment, the inspectors general said.

Because the IRS has closed their offices and are operating remotely, it has not “been able to perform many of its essential customer service, processing and compliance functions,” including completing tax refunds from people who mailed their tax forms to the offices. The IRS estimates that over 13.6 million “paper-filed business and individual tax returns remain unprocessed” as of April 25, according to the report.

The Small Business Administration received a total of $659 billion for the Paycheck Protection Program and Health Care Enhancement Act, designed to provide small business loans to businesses impacted by coronavirus. In an attempt to provide relief to these businesses quickly, the report said the program is vulnerable to “fraud and unnecessary losses” when “loan transactions are expedited to provide quick relief and sufficient controls are not in place.”

The report cited high turnover in leadership roles at both the Department of Health and Human Services and the Department of Homeland Security as a potential challenge for managing the additional coronavirus funding and implementing it through the department’s programs. DHS has had three different secretaries in the past two years, the report noted.

Within DHS, the Transportation Security Administration spent $75 million to train more than 9,000 new TSA officers in 2017, “about 20% of whom left within 6 months,” the inspector general said. The report also cited low staffing levels in Customs and Border Protection and said the agency needs to hire additional border patrol agents and immigration officers to fulfill a November 2019 executive order.

CNN’s Phil Mattingly contributed to this report.