Diagnóstico Financiero

Oversight of Federal Contract Spending

The Recovery Accountability and Transparency Board (the Board) has launched a number of oversight initiatives on Recovery Act funds since it began meeting in March 2009. These initiatives include the establishment of a public Web site and the Recovery Board Fraud Hotline. The Board’s initiatives are being executed by the Board’s executive staff, as well as by the 29 inspectors general responsible for Recovery Act oversight. The initiatives include reviewing federal contracts and grants to help ensure they meet applicable standards, follow OMB guidance, and satisfy applicable competition requirements; the initiatives also are aimed at identifying risk areas for fraud, waste, and abuse. The Board, with the help of the inspectors general, is assessing the capacity of federal agency acquisition workforces to determine if they have sufficient numbers of trained acquisition and grants personnel to manage the Recovery Act workload. Because many of the initiatives are in their early stages of

implementation, it is too soon to evaluate their success or shortcomings for providing sound oversight.

The Board is responsible for providing information about Recovery Act spending via www.recovery.gov (Recovery.gov). This Web site was

created to provide accurate, user-friendly information to the public related to spending on Recovery Act programs. Recovery.gov is the official source of information related to the Recovery Act, and it contains official data for use in public debate, assists in providing fair and open access to Recovery Act opportunities, and promotes an understanding of the local impact of Recovery Act funding.

Providing Information to and Access for the Public

On September 28, 2009, the Board established the Recovery Board Fraud Hotline for the public to report potential cases of fraud, waste, and abuse via telephone, facsimile, Recovery.gov, or postal mail. This hotline service maintains a database of all reported incidents to identify recurring issues, companies, or participants related to potential cases.¹¹¹ The Board reviews the complaints and refers potential cases to the respective inspector general or agency for further review. As of January 19, 2010, the Board had received 948 complaints and has referred 79 cases to various inspectors general.¹¹²

The Board uses several approaches to monitor federal contracts, including a manual review performed on the contract solicitations and awards posted daily on the Federal Business Opportunities Web site

(FedBizOpps.gov) to ensure that Recovery Act-related Federal Acquisition Regulation requirements are followed and to identify any contracts that were awarded to contractors that might be in the Excluded Parties List System.¹¹³ In addition, Board staff review data on Recovery Act-funded Monitoring Federal Recovery

Act Contracts and Identifying Areas Vulnerable to Risk

111According to Board staff, the government-managed hotline was set up using a previously established cooperative agreement between the Department of Justice and Louisiana State University.

112According to the Board staff, the majority of the complaints received via the fraud hotline did not contain any actionable information; for example, some complaints contained a generalized comment on the Recovery Act rather than any specific allegation of wrongdoing. The Board refers those that are actionable to the appropriate inspector general when there is a specific allegation of wrongdoing or multiple factors indicate a possible area of risk.

113The Excluded Parties List System, which is maintained by the General Services Administration, is a database listing the parties suspended, proposed for debarment, debarred, declared ineligible, or excluded or disqualified from government contracting.

contracts from the Federal Procurement Data System-Next Generation to identify the reasons for the noncompeted contracts.

The Board also established a Recovery Operations Center, which became operational the last week of October 2009, and supports a three-tiered system to identify potential risk areas related to Recovery Act spending for oversight purposes. The first tier of the system uses screening models to analyze volumes of data to isolate potential high-risk recipients. The second tier uses a link-analysis tool to uncover nonobvious relationships between entities. The third tier uses the results of the first two tiers, along with historical risk factors and present-day trends, to create risk-based resource management tools for the oversight community. The results of these analyses are shared with the inspectors general to provide

information for (1) investigations or audits of federal programs and

recipients of Recovery Act funds and (2) decisions related to expanding or helping focus oversight resources. According to a Board representative, Board staff started identifying high-risk areas at the end of 2009 and have provided information to the inspectors general that is being used in active investigations.

The Board’s Recovery Funds Working Group, which includes

representatives from the 29 inspectors general, meets monthly to discuss issues related to oversight of Recovery Act funds. The working group representatives identify specific initiatives that the inspectors general are expected to carry out to support the Board’s oversight of Recovery Act funds. In August 2009, for example, 28 of the 29 inspectors general on the working group administered a survey to their respective agencies to assess their overall workforce capacity for handling the management and

oversight of contracts and grants being awarded with Recovery Act funds.

The results of the survey are expected to be issued by the end of April 2010.

Oversight and Coordination of Inspectors General Efforts

The inspectors general also report monthly to the Board on the number and status of Recovery Act-related audits and investigations they have initiated. As of December 31, 2009, the inspectors general reported they had 141 investigations and 457 audits, inspections, evaluations, or reviews in process. They also reported they have issued 324 reports on Recovery Act-related issues since the act was passed. The scope of the inspectors general reports varied and ranged from compliance with program requirements at individual states or localities within a given program to assessments of internal controls across entire programs or agencies. Many of the reports did not identify wrongdoing or systematic weaknesses in management but did make recommendations to improve the

implementation and oversight of programs using Recovery Act funds. For example, the Department of Energy Inspector General had published 13 reports on Recovery.gov as of February 2010 that addressed aspects of Recovery Act issues—one issued in December 2009 identified the

department’s efforts and challenges in implementing the Recovery Act in selected program offices. The report contained a number of

recommendations aimed at addressing the department’s remaining challenges, including the need to revise financial assistance guidelines to incorporate additional Recovery Act requirements for monitoring and oversight and the need to perform staffing reviews to determine the level of personnel needed to oversee Recovery Act projects. As another example, the General Services Administration Inspector General has published two reports since the Recovery Act was passed.¹¹⁴ A September 2009 report provided observations related to the use of project plans on the Public Building Service’s major construction and modernization projects being funded under the Recovery Act. Additional information about program-specific audit work of the inspectors general is located in the program sections of this report.

Federal, State, and Local