(Bloomberg) -- US Treasury Secretary Janet Yellen warned congressional leaders that their action is needed to strengthen her department’s dwindling ability to catch potential fraud in federal stimulus programs for state and local governments.

Yellen, in a letter sent Friday and obtained by Bloomberg News, reiterated the department’s request for administrative funding flexibility and highlighted concerns from oversight watchdogs about its “ability to monitor waste, fraud and abuse” related to several key programs in the $1.9 trillion American Rescue Plan.

“We have scaled back recipient monitoring and compliance functions, which — absent prompt congressional action — will severely curtail our ability to identify improper use of funds and take appropriate remedial action,” Yellen wrote in the letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy, as well as Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell.

The massive pandemic-era stimulus package, also known as ARPA, has become a lightening rod for congressional criticism of President Joe Biden’s economic policies, blamed for helping stoke the worst inflation in 40 years. Together with the earlier Trump-era $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, the spending programs have resulted in rampant fraud across aid for the unemployed and small businesses.

Treasury raised the funding issue to Congress in September, when it asked for authorization to use money from earlier pandemic programs like the CARES Act to support implementation of ARPA programs. Congress didn’t pass a flexibility measure in their stop-gap bill then, so Yellen is now asking leaders to resolve the issue before the current Congress ends in January, which could potentially be done in an omnibus spending bill.

The department has already implemented a hiring freeze, shut down call centers and curtailed email responses that have helped some 30,000 recipients of ARPA funding, including the $350 billion allocated to states, localities and tribal governments. The Treasury and local officials have warned that small jurisdictions in particular will suffer without administrative support in determining compliance with spending regulations and reporting requirements.

“The scale-back of recipient monitoring at a time when these functions should be expanding could create risks for the integrity of these programs,” Yellen wrote.

--With assistance from Erik Wasson.

©2022 Bloomberg L.P.