Smithsonian Misused Federal COVID Relief Funding, Finds Internal Audit

The Smithsonian’s internal Office of the Inspector General last month released a report saying that the institution misused a portion of the $7.5 million it received in Covid relief funds from the 2020 CARES Act

The report, which was released on February 23, says the Smithsonian failed to properly justify purchases from single vendors made with money granted to the institution. This is in breach of a Smithsonian policy that “requires competition for purchases in excess of $10,000, and any exceptions are required to be justified in writing.”

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Of the 436 transactions that used Covid relief money, 49 were investigated. Nine transactions worth $1.7 were sourced from a single vendor without the sufficient reason. “Management’s justifications lacked certain details such as why only one vendor was considered and how the price was determined to be fair and reasonable,” investigators said in the report.

Of those nine, “two…purchase orders for cleaning services were awarded to the same vendor, resulting in one vendor receiving $745,390—approximately 10 percent of the Smithsonian’s total CARES Act funding,” the report said. One transaction totaling $97,125, had no justification at all. 

Among the transactions that did not fulfill the three-vendor competition policy was a purchase cards transaction of more than $500,000 for 190,000 face masks and 3,800 bottles of hand sanitizer.

“Additionally, a medical doctor charged 100 percent of their salary to the CARES Act even though they performed duties unrelated to Covid-19. Smithsonian management corrected these transactions during the audit,” investigators said.

The report also said the Smithsonian’s National Museum of Natural History had failed to properly track two laptops, worth $1,594 each, purchased with CARES Act money. 

The CARES Act was signed into law on March 27, 2020, and doled out $2.2 trillion in stimulus funding. Since then, the urgency to administer relief funds has slowed significantly. However, the report says misuse of funds, high-profile fraud, and disregard for competitive pricing policies have spiked, instances which make audits of relief fund all the more important. 

The Smithsonian Institute did not directly respond to ARTnews’s request for comment but rather pointed to a memo attached to the report. In that memo, Ronald Cortez, the Smithsonian’s Under Secretary for Administration, writes, “we continue to be grateful to OIG’s attention to detail as we collectively improve our processes. Management concurs with all recommendations provided within this report.”

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