We Followed the Money: Here’s Our Deep Dive into Governor Sununu’s “Unilateral” Decisions on CARES Act Funds

On Saturday morning, May 16, the Concord Monitor reported that “New Hampshire has already spent or allocated three quarters of the $1.2 billion in federal stimulus money it received last month, Sununu said on Friday — after taking suggestions from lawmakers and making some decisions unilaterally.”

This is a huge sum of money — and the stakes for many Granite Staters are life or death, or close to it. Will our hospitals be able to take care of us if we get sick? Will our long-term care facilities be able to keep us and our loved ones safe? Will we be able to keep afloat the small business that is our livelihood and our life’s dream? Will we be able to find safe, reliable child care when we go back to work during this phased re-opening? Or will we have to walk away from our jobs to take care of our kids, putting us in a downward spiral when we can’t keep our homes, our health insurance, or put food on the table?

Because decisions about the federal stimulus money provided by the CARES Act are taking place outside of the regular way we make decisions about these types of public funds — through the Joint Fiscal Committee of the Legislature and full review by the Executive Council — it’s hard for us as citizens to understand who is actually making these decisions, what the standards are for making the decisions, and what the goals of the relief measures are. There are a lot of places and people who need a lot of help; we need to understand how the Sununu administration is deciding who to help, why, and how.

After reading the Monitor’s coverage on Saturday morning, we put down our newspaper and went online to see what additional information was readily available to the public to answer these questions.

First, we went to the Governor’s website and checked out his press release from Friday, May 15, announcing “$595 million in new funding commitments for areas and industries across New Hampshire affected by the COVID-19 public health crisis.”

According to the press release, the funding commitments were “about delivering relief for Granite Staters as quickly as possible,” and the relief funds that are receiving the additional $595 million were created “at the recommendation of the Bipartisan Legislative Advisory Committee.”

The press release, then, tells us that the goal of the decision-making was quick “relief” (which could mean a lot of different things) and that the decision to have the following funds came at the “suggestion” or “recommendation” from lawmakers. The lawmakers on this Committee have responded that some of these allocations do not go far enough in providing relief, which tells us that the Governor’s office is acting “unilaterally” even with funds that lawmakers recommended.

Here are the funds that the Governor’s Office identifies as coming from lawmakers’ recommendation:

• Healthcare Relief Fund: $50,000,000
• Non-Profit Relief Fund: $60,000,000
• Child Care: $25,000,000
• Main Street Relief Fund: $400,000,000
• Farm and Food: $15,000,000
• Public Higher Education Relief Fund: $15,000,000
• Business Finance Authority Safe Harbor Forgivable Loans: $30,000,000

Second, we took a deeper look at a couple of these funds by going to the fund websites listed in the press release. Here are some things that jumped out at us:

- The Healthcare Relief Fund was established to “to provide emergency relief to hospitals and other health care providers that are serving as an essential component of the State’s healthcare system during the COVID-19 state of emergency” and is now shifting its focus to supporting “long-term care providers” and providing “broader relief for all healthcare providers impacted by the COVID-19 emergency.”

When we went to read more about the creation of this fund by clicking on the links provided for Emergency Order 9 and Executive Order 2020–4, we received “page not found” messages.

We looked at the three lists available of zero-interest loan allocations already approved from this fund (April 17, May 5, and May 18). Here are some key take-aways:

o Allocation decisions were made by a 5-person group, with members from DHHS, Department of Revenue, and the Attorney General’s Office.

o All allocation lists explain the decision-making process as follows: “Applications were scored according to the following criteria: Criteria Weight (maximum score of 100 points): Amount of Funds Requested- 5 points; Use of Funds- 25 points; Explanation of why funds are necessary for maintenance of essential component of State’s healthcare system during the COVID-19 state of emergency- 40 points; Impact of denial of request-25 points; Grant or loan requested-5 points.”

o This is a helpful place to start, but there are a lot of gaps in the information it makes available to the public about how these vital allocation decisions are being made. Here are some big ones:

§ On the allocation lists, the scoring criteria were not defined; for example, it’s not clear what counts as an “essential component” of healthcare during the pandemic or how the “impact of denial” is being measured. Impact could be measured in terms of lost revenue to hospitals, risks to front-line healthcare workers, risks to patients, risks to the community, or other factors. How we define “impact” here matters because different ways of measuring impact implicitly set-up different goals: trying to minimize the impact of a loan denial on hospital revenue is different than trying to minimize the impact of a denial on healthcare provider safety.

· We are hearing from individual healthcare providers in the Granite State who are still working through the pandemic and have had their compensation cut or are anticipating having it cut due to the pandemic.

§ The minimum score needed (out of 100) to qualify for a loan was not stated.

§ The score that each loan application was given was not stated; only the amount of the loan was listed.

§ The explanation of why each loan application would go to maintaining an “essential component” of our healthcare system was not stated.

§ The ranking of scores and their link to preference of loan disbursement was not stated; for instance, did the decision-makers prioritize making loans to the highest scores first or did they prioritize making loans to all scores within a certain range or another approach?

§ Details for each loan do not appear to have been shared with the Executive Council (either as a voting or an information item) on the Council’s May 6 or May 20 meeting agendas.

· Several of the loan recipients — such as Convenient MD — have also received retroactive sole-source contracts with the State for telemedicine through the federal stimulus funds. (These contracts are listed on the Council’s May 20 meeting agenda as an “information item,” meaning that Councilors will not be able to vote on these contracts.)

o It makes sense that the same healthcare entity might receive both a loan and a sole source contract: the loan and the contract might be to cover the costs of different things. But it’s important for the public to have more transparency into these loans so we can see for ourselves what the reasons are for both the loans and the retroactive sole source contracts. (New Hampshire Public Radio reporting has identified some important questions about Convenient MD’s status as both a sole source contract recipient and donor to Governor Sununu’s campaign.)

o As of the afternoon of May 19, there was no application available for new loan requests. According to the Fund’s website: “Due to the modifications made to the program, an updated application will be available soon.”

- Childcare Relief: this fund was set up “to support and expand the coordinated work DHHS (Department of Health and Human Services) and DOE (Department of Education) are facilitating to meet the childcare system needs across the State as the economy reopens.”

The Fund’s site states that DHHS and DOE will be issuing “specific guidance” for this program “soon” and to check the Fund site and the Child Care Aware site.

o As of the afternoon of May 19, there was no “specific guidance” available on the Fund’s site on the “coordinated work” that DHHS and DOE are doing to “target operational, workforce and health and safety supports to the childcare system; and coordinate business needs with family needs, which includes summer day camp programs, childcare and Head Start options for the summer and into the fall, and increased need for family support.”

o On the Child Care Aware site, there is a COVID-19 resources tab and a Financial Resources tab. Neither tab contains a link readily identifiable as offering “specific guidance” on “coordinated work” from DHHS and DOE to use federal stimulus funds to support our whole “childcare system” as we enter phased re-opening across the state.

o These tabs do contain information about how providers can apply to become designated as Emergency Child Care Programs (“ECCPs”) to “provide child care services for children and youth whose parents have been deemed as essential workers under Governor Sununu’s Exhibit A to Emergency Order # 17 pursuant to Executive Order 2020–04.” ECCPs are an important resource for many of these workers (as discussed on a recent episode of The Exchange on NHPR).

§ Some CARES Act funds are going to ECCPs.

· While it is crucial to have childcare options in place for essential workers during the pandemic, working families need more “coordinated work” from DHHS and DOE to support the state’s entire “childcare system,” including centers that haven’t stayed open as ECCPs, summer camps, services for youth with disabilities, and other vital components of childcare.

o The other resource links that are available through the COVID-19 resources tab and Financial Resources tab include:

§ An Excel spreadsheet summarizing loans available through the Small Business Administration (SBA) for which some childcare providers might be eligible.

§ A link to a third-party blog post on the impact of COVID-19 on family child care providers.

§ A road map for childcare providers (A Guide for Child Care Programs to Navigate the COVID-19 Crisis, dated May 5, from Early Learning New Hampshire and the State Early Learning Alliance) “informing you of available resources in this changing landscape and guiding you in your personal decision-making process.”

· The Guide explains that the state can use these funds for a number of reasons, including:

o “Provide funding to child care providers who were not participating in subsidy prior to the public health emergency for the purposes of cleaning and sanitation and other activities necessary to maintain or resume the operation of programs.”

o “Funding may be used to continue payments to providers in the case of decreased enrollment or closures, to ensure they are able to remain open or reopen, to eliminate parent co-pays and providers are encouraged to use funds to continue paying staff.”

§ As the NH Senate Democrats have called for in their Granite Promise proposal, we should use these funds “to assist child care centers and child care workers impacted by COVID-19, including the Child and Family Development Center at NHTI, to enable reopening and ongoing operations to ensure child care is available for essential workers and all workers as the economy starts to reopen.”

· When it comes to how providers can access these funds, the Guide states that: “The state is currently developing mechanisms for distributing this new federal funding” and refers readers to the NH Covid-19 site through DHHS, which does not appear to have information about funding distribution mechanisms for CARES Act funds for childcare providers.

o On May 18, the Governor’s Economic Reopening Task Force issued re-opening guidance for childcare providers. This guidance sets forth detailed changes to childcare settings, from pick-up and drop-off to classroom spacing (“space activities so children are at least six feet apart, whenever possible”) to how to handle toys (“Playdough cannot be cleaned or sanitized, so consider individual containers labeled with names, or discontinue use.”)

§ To make these and related public health and safety requirements feasible for childcare providers (as well as other educational settings for children, like summer camps), we need to transparently, fairly, and quickly determine how to allocate a sufficient amount from the Childcare Relief Fund to reach childcare providers directly so they can “resume the operation of programs” under these and other applicable guidelines or best practices to ensure safe operation as the state re-opens.

Third, in a late-breaking development, we looked at the “more than 250 pages of documents” that Sununu provided to the Executive Council on May 19 on how, as WMUR reported, he “intends to spend about $440 million in federal COVID-19 relief money ahead of a vote scheduled for Wednesday [May 20] on whether to authorize spending for the month of June or essentially shut down state government.”

We focused on what more these documents can tell us about the Healthcare Relief and Childcare Relief Funds. Here are our key takeaways:

- Healthcare Relief: on p. 5 of the documents, we found a copy of Emergency Order 9 (that didn’t come up via the link from the Healthcare Relief Fund site). This Order requires DHHS to develop a “standard application and written criteria” for disbursing zero interest loans from this Fund.

o The documents on healthcare (pp. 5–22) set forth the same written criteria found in the lists of approved loan disbursements from the Healthcare Relief Fund site. Our questions about these criteria, written up in the second part of this post (above), weren’t answered by these documents. Significantly, we still couldn’t tell from these documents what the zero-interest loans were for and how the purposes of these loans related to the purposes of sole-source contracts entered into with several of the same providers.

- Childcare Relief: on pp. 190- 228 of the documents, we did learn more about childcare relief plans.

o We saw that DHHS and DOE plans include “ensuring financial stability, including specific targeted stabilization/retention grants for the childcare industry and family resource centers during the pandemic” (p. 192) and getting “cleaning supplies, PPE and increased staff to meet health and safety guidelines” for centers (p. 198).

§ These are important goals; now it is crucial to have a concrete, fair, transparent plan for reaching them so that childcare centers have the resources they need to give working families confidence participating in the state’s phased re-opening.

o We also saw the timeline that DHHS and DOE are proposing for their coordinated work, which includes a “recovery and reopening” period from June-December 2020 and a “build it back — better” (beyond Covid) phase from April 2020- September 2023 (p. 216).

§ It is prudent to expect that there will be a new normal for childcare as we recover and rebuild from the pandemic; it is vital that DHHS, DOE, and other state actors move expeditiously so that parents aren’t forced to choose between returning to their jobs and staying home to keep their kids safe.

§ There is a big difference between how quickly funds have moved to healthcare providers and how they are moving to childcare providers. Of course, it’s crucial to have our hospitals and other healthcare facilities open during a pandemic but, now that we’re moving into phased re-opening, we can’t afford to lag in getting our childcare centers what they need.

§ We also need to stay vigilant about emerging health concerns for children related to the COVID-19 virus, which has been generally understood to be less dangerous for kids than other populations. But the Centers for Disease Control and Prevention (CDC) recently issued an alert on a “multisystem inflammatory syndrome in children” linked to the virus. With roughly 150 children in New York City alone already sick with this “rare, potentially deadly syndrome,” we need to be out in front of protecting our kids from the potential spread of this syndrome here in the Granite State.

Last but not least, we reflected that the role of the Executive Council in serving as the “watchdogs of the state treasury” is more vital today than any time in recent history. There is a lot of money moving through the state right now with high stakes consequences and little to no legislative involvement. It is difficult, sometimes impossible, for members of the public to follow the decision-making process. We encourage the public to dial in and listen to Executive Council meetings, send in questions and reflections to your Councilor, or send them to us at leah@plunkettnh.com and we’ll get them to your Councilor. Together, we can stand up for transparent, fair stimulus funding decisions that keep our kids, families, communities, and workforce safe and strong — and we can let Sununu know he doesn’t get a blank check to make “unilateral” decisions.