The latest news headlines about the pandemic and its impact on employees, organizations, and governments.
May 26, 2020
Hospitals and health-care providers that received federal relief under the U.S. Coronavirus Aid, Relief, and Economic Security Act should ready themselves for eventual audits, despite the lack of clear guidance from the Department of Health and Human Services on how those funds can be used. Keeping clear documentation will be critical because it will "act as a compass for the organization in working through how to use relief funds and a source of protection in the event of scrutiny from regulators," says Meenakshi Datta, global co-leader of Sidley Austin LLP's health-care practice, in an article from Bloomberg Law. According to John Kelly, a health-care attorney at Bass Berry & Sims PLC, a robust compliance program that assesses the allowable uses of relief funds for the business, communicates that assessment throughout the organization, tracks how the funds are used, and documents everything is an essential part of preparing for an audit.
Compliance departments in sectors hit hardest by the pandemic are now seeing layoffs and furloughs, while those less affected are seeing budget cuts and compliance-related expenses trimmed, according to this article in The Wall Street Journal. This raises concerns about the risks of misbehavior going undetected, misappropriated assets, or altered financials. Compliance staff should consult their internal risk assessments to help them prioritize in light of the economic downturn and work with other control functions – including internal audit or risk management – to understand how cuts could affect antifraud and ethics measures overall, says Andi McNeal, director of research at the Association of Certified Fraud Examiners.
Companies are deploying monitoring technologies to more closely watch their workers in an effort to further slow the spread of coronavirus as they reopen for business throughout the U.S., according to The Boston Globe. These include health checks administered by smartphone apps, thermal monitors that can detect body temperature, and cameras and Bluetooth radio beacons that can track peoples' movements. Critics, such as the American Civil Liberties Union, are concerned about privacy issues surrounding these technologies, which it says can be upgraded to monitor sensitive medical data. Employers have considerable latitude in tracking workers, thanks to a recent ruling from the Equal Employment Opportunity Commission.
Gross domestic product (GDP) fell 1.8% in the first quarter of 2020 among the 37 Organisation for Economic Co-operation and Development nations, CNBC reports. It was the largest drop since the 2.3% contraction in 2009 during the financial crisis. GDP declined 3.3% in the European Union, with France and Italy suffering the largest declines attributed to stringent restrictions to combat the coronavirus. U.S. GDP fell 1.2%. Internal auditors should note that the first quarter data was compiled during the early stages of the COVID-19 pandemic — a steeper contraction is expected in the second quarter.
Weekly lending from the U.S. government's Paycheck Protection Program (PPP) has declined since mid-May, with fewer companies applying for loans and some borrowers returning funds, Reuters reports. The Small Business Administration has approved $512.2 billion in loans out of the $660 billion allocated to PPP. A source at one lender says some borrowers haven't accessed loan deposits in part because they don't understand the terms. The funds were intended to enable small companies to retain employees, but many may be laying off workers rather than using the money. Internal auditors of eligible companies should advise them on the terms for using PPP funds and remind them that loans are still available, if needed.
As organizations grapple with retaining customers during the pandemic, they are looking to ensure they have leaders in place in customer-facing roles, Agenda reports. Corporate task forces are looking beyond the executive level to make sure they have supervisors, managers, and directors in place to manage customer experience and service operations. They also are including technical personnel in those units as part of succession and continuity plans. Internal audit can advise these task forces on the leadership and technical needs of customer service operations and help assess whether the organization has the people they need in key roles.