An audit conducted on $5 million in retention bonuses earmarked for Gracedale employees from pandemic-releif funds found that half of the money cannot be accounted for. The Northampton County Controller’s Office, issued the report Wednesday. The audit found that, although the $5 million was designated by County Council as retention bonuses for the county-run nursing home, less than half the money can be confirmed going toward extra payments. “The Controller’s Office could not determine the exact Gracedale expenses paid with those ARPA funds after they were combined with other Gracedale resources,” said Tara Zrinski, Northampton County controller, in a statement. The report does not allege any wrongdoing, but does highlight issues with transparency when it comes to the use of American Rescue Plan Act funds. The funds were awarded to replace revenue lost during the COVID pandemic, but recipients are not require to disclose specific expenditures. Lehigh, Northampton counties got millions of dollars in pandemic relief. How they spent it and what’s left.

However, the release of the report stirred criticism from county officials — both on how the money was spent, and how it’s being called into question. Northampton County Executive Lamont G. McClure defended how the money was spent, saying it is included in Gracedale’s overall funding and that, approximately one year ago, he told County Council that the bonuses were ending. The audit was authorized by County Council in March. Council members, including Vice President John Goffredo, have said they have heard reports that at least some Gracedale employees have not received the bonuses they were promised. The audit found that the county paid $2,360,891 in retention bonuses to eligible union and nonunion Gracedale employees from 2022 through 2024, and an additional $156,450 was paid in 2025. That leaves an unaccounted balance of $2,639,109. Under the original plan approved by County Council in 2022, eligible Gracedale employees would receive a $2,500 retention bonus annually through 2026, with the hopes of helping the Upper Nazareth Township nursing home battle labor shortages. To verify the accuracy of the bonus payments, the audit looked at 40 employees; each received the correct number and amount of bonuses, the audit said. Under union contracts, bonuses ended Dec. 31, 2023 for members of the Steelworkers union, while other employees continue to receive bonuses through the end of this year. The remainder of the ARPA funds, while allocated to Gracedale, could not be specifically tracked once transferred to Gracedale in 2023 and commingled with other funds, according to the audit. “Because the management responsible for that decision is no longer in that position, we cannot determine why the money was not tracked in a more transparent manner,” Zrinski said in the release. Michelle Morton took over as administrator of Gracedale in March. She succeeded Jennifer Stewart-King, who is in another position at the county nursing home, Zrinski said.

But McClure countered that the money from the federal American Rescue Plan Act went toward Gracedale’s general fund, and administrators did not assign the money to a particular budget line. “So as near as I can tell,” he said Wednesday, “what Gracedale’s administration was doing was paying people to do the work.” He also said from 2022 through 2024, Gracedale paid more than $7.3 million in overtime to union and nonunion workers. “The issue is what did Gracedale’s administration use the money for, and this is what they used it for,” McClure said. He said during last fall’s budget hearings, council members, who must vote on the administration’s spending plan, did not ask about the Gracedale pay. The county was not required to report “specific non-retention bonus expenses” paid by the ARPA funds to the federal government, the audit says. “All that was required was to report that the ARPA funds were used to replace lost revenue,” the report says. “So, there was no reason for federal purposes to track these funds separately after the County contributed them to the Gracedale fund.” Goffredo on Wednesday said union workers agreed to forgo remaining bonuses, but the same agreement was not reached with nonunion employees. He also said there is a difference between paying overtime for work versus retention bonuses. “I’m upset that this was not brought before us,” Goffredo said of nonunion workers and their bonuses. “Our understanding is that the money was spent, but I’m not exactly sure how it was spent.” “When I came on [council], we came out of the pandemic and we were trying to spend COVID money in a way that would help retain employees,” he added. The audit will be presented to council’s finance committee later this month, according to the controller’s office. The committee is scheduled to meet 4:30 p.m. June 17 in council chambers, which is on the third floor of the county government center in Easton.

Zrinski, who served on council and voted to approve the bonuses, said she could not comment beyond what is in the controller’s report. “We can only report numbers and facts,” she said. “We cannot make any conjectures statements or opinions as a standard.” Contact Morning Call reporter Anthony Salamone at [email protected].