Corporate Counsel published the first article in a series by Bass, Berry & Sims attorneys Lisa Rivera and Brian Irving discussing what companies can do now to protect themselves during future government investigations and enforcement actions related to COVID-19 relief funding.
The government has distributed an unprecedented amount of money in response to the pandemic, including more than $1 trillion in loans, grants and tax credits under the Coronavirus Aid, Relief and Economic Security (CARES) Act. However, the government will inevitably turn its attention to scrutinizing how companies obtained and used funds, just as it did following the 2008 financial crisis.
The primary risks tied to coronavirus relief funding include:
- Eligibility requirements.
- Representation in applications.
- Use of funds.
- Follow-on certifications.
While we’re still in crisis, Lisa and Brian outline steps companies can take to reduce risk in later government investigations and enforcement while moving forward with needed funding, including:
- Leverage compliance resources: Assess government requirements and monitor any new or changed requirements.
- Document the application/funding process: Maintain documentation used to support your application and decision to apply, including government guidance, communications with government employees, industry resources or any other information your company relied upon during the process.
- Document how money was ultimately used: Create clear documentation to show how your company used the funding, including an account of who was involved in the decision-making and their rationale for each purpose.
- Schedule an interim internal review: Plan to perform internal reviews once the crisis begins to abate to identify potential problems so they can be proactively addressed on your terms.
- Respond to complaints: Be responsive to issues raised by employees or others, and take those opportunities to double-check your processes.
- Preservation: Be intentional about preserving the document trail that supports your decision-making, or you may be limited to just the documents in the government’s files or that a whistleblower has taken from the company.
The articles in the series are available on the Corporate Counsel website and on the firm’s related blogs, links below:
- “How Public Companies Can Protect Against SEC Scrutiny Related to COVID-19,” (September 16, 2020) and Securities Law Exchange blog (September 16, 2020).
- “How Health Care Companies Can Protect Against Government Scrutiny of COVID-19 Relief,” (July 10, 2020) and Inside the FCA blog (July 28, 2020).
- “What Your Company Can Do Today to Protect Against Government Scrutiny of COVID-19 Relief Funding,” (June 9, 2020) and Inside the FCA blog (July 23, 2020).