Why are COVID small business grants being delayed? SC Senate Dems want investigation

The State
December 24, 2020

By Joseph Bustos


Hundreds of South Carolina’s small and minority-owned businesses and nonprofits may have to wait longer to get federal relief through the state, angering state Senate Democrats who called for an investigation this week into the delay of the COVID-19 relief.

The state’s Department of Administration had originally planned to send checks out of a $65 million pot to approved applicants by mid-December. But now that money isn’t expected to be sent out to successful applicants until later this month or until January.

“The lack of urgency displayed by those in power while South Carolinians struggle is disgraceful,” the Senate Democratic Caucus said in a statement. “We’re calling for a Senate committee to be formed to investigate what exactly went wrong, and who should be held accountable. Those who oversaw this situation and the distribution process of these grants knew there would be a large volume of applicants — but they never took action to mitigate what would end up being a bureaucratic disaster.”

More than 9,600 small and minority-owned businesses applied for $213 million worth of federal funding, and nearly 1,600 nonprofits requested nearly $76 million worth of assistance. But the General Assembly, using federal COVID-19 relief money, only set aside $40 million for businesses and $25 million for nonprofits.

On Dec. 10, panels made recommendations on which nonprofits should get grants between $2,500 and $50,000, and on Dec. 15 a panel recommended which small businesses should get grants worth between $2,500 and $25,000 due to COVID-19-related revenue losses.

Although the names of entities who are slated to receive assistance have yet to be released, as of Wednesday, 576 small businesses have been notified they will be receive grants totaling $10.1 million. The state has notified 872 nonprofits that they will receive grants so far totaling $20.8 million.

The state agency charged with handling the checks said there’s a reason for the delay.

DOA, the state’s Department of Revenue and third-party grants manager Guidehouse are conducting “due diligence” to review for tax delinquencies or business license issues, DOA spokeswoman Kelly Coakley told The State.

Coakley said DOA and Guidehouse are contacting small businesses and nonprofits who have been slated to get money. She said DOA is awarding grant dollars “as quickly as the legislatively-required mandates and the volume of applications would allow.”

Despite the delay, agreements are expected to be finalized on Dec. 30, which is required under the federal CARES Act legislation meaning the state won’t have to send the money back to Washington.

Owners of businesses and nonprofits who don’t receive funding will be notified later this month or in January, DOA said.

The state rolled out the program in October, using a four-point scale to give priority to small businesses that did not get funding through the federal Paycheck Protection Program. The state looked at whether the businesses were minority owned, have fewer than 15 employees and were either fully or partially closed.

The money came out of a $1.9 billion federal CARES Act account, much of which spent to replenish the state’s unemployment insurance trust fund.

The relief comes as the federal government is preparing to extend the federal paycheck protection program as part of a new COVID-19 stimulus bill passed by Congress this week. However, President Donald Trump has indicated he won’t sign the legislation unless direct one-time payments to individuals increases from $600 to $2,000 for those earning less than $75,000 a year.

A delay in assistance could be the difference between a business shutting its doors or remaining open, said Frank Knapp, president of the S.C. Small Business Chamber of Commerce.

“Here’s the problem, we don’t know how they did this,” Knapp said, referring to how DOA reviewed applications. “Wouldn’t you have thought that they would have taken all the ones who got four points, … and work those first, and see how much money was spent, and then move down to level three? I don’t know if they did an analysis of all 9,600 who applied. I hope they didn’t do that, but I don’t know.”

SC Senate Democrats want answers to COVID-19 grant delays | The State

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