Why It Matters
New Jersey could be required to return approximately $90 million in federal coronavirus relief funds after a U.S. Treasury review identified expenditures the state has not yet documented. The state received over $2 billion in Coronavirus Relief Fund aid under the 2020 CARES Act and says it can prove the questioned spending was legitimate.
The findings highlight ongoing federal scrutiny of pandemic aid distribution as oversight continues through 2034. More than $215 million in misspent Coronavirus Relief Fund resources has been recovered nationwide as of June 2025.
What Happened
A desk review conducted by Castro & Co., a contractor for the Treasury Department’s Office of Inspector General, flagged $1.11 billion in New Jersey expenditures for which the state did not initially provide adequate documentation. The review, dated February 7, 2025, examined 25 contracts, grants, transfers and direct payments from the state’s allocation.
The accountants cited concerns about expenditures including state worker pay, a temporary Atlantic City hospital and child nutrition programs. Data were maintained by dozens of state agencies rather than collected centrally, according to the review.
State officials say they have since substantiated more than 91 percent of the questioned costs and are working with the inspector general to resolve the remaining $90 million. The Governor’s Disaster Recovery Office said supporting documentation exists and blamed the initial discrepancy on an extremely tight deadline imposed by the contractor’s expiring agreement.
By the Numbers
New Jersey received over $2 billion in Coronavirus Relief Fund aid as part of the $2.2 trillion CARES Act signed in March 2020. The federal Pandemic Response Accountability Committee has recovered more than $215 million in misspent funds nationwide. The state reported approximately 35,500 deaths linked to the virus. Castro’s review initially flagged $1.11 billion, which the state says it has reduced to $90 million in outstanding questions.
Zoom Out
At least 40 state and local governments have been ordered by Treasury to account for sampled uses of their Coronavirus Relief Fund allocations. Many inquiries have been resolved. California, which received $15.2 billion, had just one questioned expenditure totaling $6,952 that was later deemed appropriate. Mississippi returned $1.3 million and Nebraska sent back $1.2 million. Bergen County in New Jersey returned $57,000 in extra-duty pay for government workers that it failed to substantiate.
Oversight of the $150 billion Coronavirus Relief Fund was assigned to Treasury’s inspector general under the CARES Act. The federal Pandemic Response Accountability Committee will continue analyzing data through 2034.
What’s Next
The Governor’s Disaster Recovery Office says it is working cooperatively with the inspector general to provide all requested documents. The U.S. Treasury has not provided a timeline for resolving outstanding inquiries nationwide. Treasury Inspector General auditors are continuing to review documentation submitted by recipients selected for further review. Once each review is complete, a summary will be published on the inspector general’s website.