There’s a lot of federal stimulus money — $2.6 billion — targeted to provide relief for Pennsylvania’s nursing homes, small businesses and local governments. What there isn’t at the moment is much oversight as to how the money is to be spent and accounted for.
The state agencies responsible for overseeing the programs that will distribute the money need to provide clear rules upfront in an effort to stave off fraud and waste. And there needs to be transparency in detailing who received funding and for what purpose.
The money is part of the state’s $3.6 billion share from the federal Coronavirus Aid, Relief and Economic Security (CARES) Act approved in March. The remaining $1 billion has yet to be allocated.
Spotlight PA, an independent newsroom of which the Pittsburgh Post-Gazette is a partner, reported that a federal oversight committee created by the CARES Act warned that the money, intended to be distributed quickly to those in need, also carries “unmatched prospects for fraud, misuse of the funds and other criminal conduct.”
Among the programs that lack specific regulation are an ambitious initiative to increase COVID-19 testing capacity at nursing homes and improve their infection control practices. The state has allocated $175 million for the program, but critics say it is unknown where the money will go and how it will be used.
The state Department of Human Services, which will oversee the program, is also in charge of another initiative that would provide millions of dollars for one-time payments to all nursing homes, assisted-living facilities, adult day care centers and home health care providers. Recipients will have broad discretion in how to use the money because the law says it “may only be used to cover necessary COVID-19 related costs.” The department is waiting on more federal guidance regarding any reporting or auditing requirements.
There are similar issues with a $225 million allocation for small-business assistance; state lawmakers have yet to craft legislation detailing its distribution.
And counties that receive some of the $625 million in grant money can decide how to spend it as long it goes toward the cost of responding to the outbreak, aid for local municipalities, behavioral health and substance abuse treatment, or grants for small businesses and nonprofits. The unknown is how and in what detail the spending will be documented.
The federal stimulus money is intended to be put to use quickly for those most in need. That doesn’t, however, eliminate the need for transparency in detailing where the money went and for what purpose.
— Pittsburgh Post-Gazette
COVID-19 and cost of doing business
A price tag is more than just a number on a piece of paper. The cost of an item on a menu isn’t pulled out of a hat.
At least, it isn’t if a business wants to stay in business. It’s a complicated dance of expenses and projected revenues, all designed to keep the doors open.
Let’s look at a simple sandwich. There is the cost of the bread and the cheese and the meat. Add the lettuce and tomato, a little mustard inside and a little butter to grill it. You could buy those pieces for — let’s ballpark it at $2.
So why does it cost $8 on the menu?
Because the price also includes rent, electricity, the gas that fires up the grill, business licenses and insurance, and that’s before we mention even one employee and, oh yeah, like six different kinds of taxes. The ham in your ham sandwich is probably the smallest part of that cost.
That is why COVID-19 surcharges are fairly unsurprising. They aren’t happening everywhere, but they aren’t being received well when they do. But if more customers appreciated what restaurant operators are facing, they might be more understanding.
Since coronavirus pandemic lockdowns and quarantine measures started in March, the story of impact on business has been second only to the coverage of the health hit of the disease.
Restaurants — one of the most common types of small business in America — are among the most hard-hit by the pandemic. Some estimates say one in five could close permanently. Others have gone as high as 75%. The truth is we just won’t know until the dust settles and the disease is under control.
What we do know is the cost of doing business is higher than it used to be.
Today, that sandwich has to make up for all the other things that aren’t being sold the way they were a few months ago, including the bar business and upsells like appetizers and dessert that have higher margins.
The rent, the utilities, the insurance and taxes? All still have to be paid. The price of the food went up. But on top of that, there are the costs of take-out containers, the fees to participate in delivery services like DoorDash or GrubHub or the cost of in-house delivery staff and vehicles.
If a restaurant is reopening its dining room as the state transitions to fewer restrictions, there are the costs of disposable menus, masks for the staff, intense and frequent cleaning and sometimes physical boundaries like plexiglass. All of that is on top of the state’s mandate restaurants operate at only 50% capacity in order to accommodate social distancing.
And that’s assuming nothing else happens. When restaurants have someone test positive, there is a new wrench thrown in the works. Closed doors. More deep cleaning. Waiting to see if anyone else is affected before trying it all again.
That’s a lot of pressure to put on an $8 sandwich.
A specified surcharge may be the more open way to address the situation. Not every restaurant — or other business — is being so transparent about their costs. There is an unfortunate but refreshing honesty to a small disclaimer that tells people up front, “We didn’t want to charge more. We wish we weren’t being hit with extra costs, too. But this is what is happening, and we just want you to know because our customers are important to us.”
Because the costs will have to be absorbed somewhere. Maybe the sandwich becomes $9. Maybe there are fewer employees. Maybe costs are cut elsewhere. But if opening the doors costs more money than it used to, the only way for the doors to stay open is to pass that fee along.
But sometimes that’s just the cost of doing business.
— Pittsburgh Tribune-Review