HARRISBURG, Pa. — "Puzzlnig decisions" and inconsistencies are what Pennsylvania's Auditor General Eugene DePasquale is revealing about his audit of the COVID-19 business waiver process in the state. The process allowed the Department of Community and Economic Development to decide which businesses could remain open when counties were in the red or yellow phases.
"Our analysis is this was not a level playing field for businesses across Pennsylvania," said DePasquale.
He says, the waivers granted to businesses appealing the Wolf Administrations COVID-19 closure order do not appear to have been handed out consistently.
"The waiver program appears to be a subjective process built on shifting sands of changing guidance which lead to significant confusion among business owners," said DePasquale.
DePasquale says, his audit has revealed there were key words like 'PPE' and 'life sustaining,' that if written in justification statements by businesses, would significantly increase their chances of receiving a waiver.
"So, one would ask the question, if you didn't put 'life sustaining' in it the first time, then applied again and put 'life sustaining,' and then got it, what was actually different other than the buzzword," asked DePasquale.
Of the 42,000 waiver requests, DePasquale says, more than 500 received answers that later changed from yes to no or no to year without explanation as to why:
- 171 waiver applications were changed from “No” to “Yes”
- 151 waiver applications were changed from “No” to “Not Required”
- 73 waiver applications were changed from “Yes” to “No”
- 48 waiver applications were changed from “Not Required” to “No”
"It's been hinted that some 'yes' and 'no' have been changed from the governor's office," said DePasquale. "That may not be the case but if there were we would like to know the rationale for why."
FOX43 reached out to the governor's office, which declined to comment. However, DCED, which handled the waiver process, sent us this statement:
"The Department of Community and Economic Development (DCED) appreciates the Department of the Auditor General’s efforts to ensure that Pennsylvania’s businesses were served fairly and appropriately during the business exemption process. The Wolf Administration shares this goal, which is why the exemption process was implemented and why we have been committed to being open and transparent about it.
When the Wolf Administration issued the business closure order to mitigate the spread of COVID-19 in the commonwealth, an exemption process was put into place in a matter of days to ensure that businesses that offer life-sustaining services continued to remain open. In some cases, businesses switched operations to manufacture PPE; for example, distilleries began producing hand sanitizer. It's important to note that those businesses were only to remain open for the life-sustaining services; it was not a blanket approval to operate.
Pennsylvania was one of just a few states to implement this type of exemption process to ensure that as many life-sustaining services could remain in operation; in fact, the National Governors Association sought guidance from Pennsylvania.
DCED did not make waiver decisions based upon pre-determinations or pressure from the governor's office or other outside influences. When reviewing applications, DCED consulted existing guidance, including those from CISA and the Department of Homeland Security, while cross-referencing industry codes to determine if a business was operating in a life-sustaining industry or if they were providing a life-sustaining service. This process was not static and guidance was refined to ensure that businesses with life-sustaining services remained open. Only a fraction of the requests required correction through the quality assurance process, reaffirming the effectiveness of DCED’s process and its implementation under extraordinary circumstances.
Reviewers were tasked with making decisions based on information that was submitted by businesses, and a quality review process was put into place to ensure consistency and that details provided by the business in their application accurately depicted day-to-day operations. As noted in the status update, some businesses submitted multiple applications. The businesses were entrusted to provide accurate information about their operations and while the vast majority did so, unfortunately, a few misrepresented themselves. And, while there were some inconsistencies noted, we worked to address any inconsistencies, and overall the process was consistent given that our commonwealth was responding to a global pandemic from a novel virus and prioritizing public health and safety.
The exemption process demonstrated our commitment to Pennsylvania’s businesses to ensure that businesses offering life-sustaining services were able to remain operational. It's important to note that this is a status update. The Wolf Administration will continue to cooperate with the Department of the Auditor General and DCED looks forward to reviewing and formally responding to the final report when it is issued, and is confident that any concerns expressed in this status update will be addressed appropriately."
Jennifer Kocher, Office of the Senate Majority Leader Communications Director, released this statement:
"In April, the Senate called on the Auditor General to begin this audit after we watched countless employers be shuttered in Pennsylvania and not in other states, pushing 1.6 million Pennsylvanians into the unemployment system. Today’s update by the Auditor General confirmed what we have been saying about the Governor’s waiver process for six months – it lacked clarity, consistency, common sense and transparency.
At this point, his findings mirror much of what we have been seeing as we review the 40,000 plus documents that have been turned over to us as part of this process. We will continue with our review so we can understand the methods behind granting waivers to some employers and not others. All of this information will allow us to craft legislation bring accountability and transparency to this process should we ever find ourselves in this situation again."
DePasquale says, he has requested all documents and emails from the governor's office regarding the waiver process and decisions made.