The final session of AGA’s PDC on Wednesday featured a panel discussion on the American Recovery and Reinvestment Act with experts from federal, state and local governments giving varying perspectives on the Act’s risks and challenges.
The panelists highlighted their observations, concerns and hopes for success with presentations by Earl Devaney, chairman of the Recovery Accountability and Transparency Board, Georgia State Auditor Russell Hinton, CGFM, CPA, and City of Tallahassee Auditor Sam McCall, Ph.D., CGFM, CPA, CIA, CGAP.
Devaney, who has a 39-year federal career and is on leave as inspector general at the U.S. Department of the Interior, said that while he had planned to retire after 40 years of service, when Vice President Joe Biden asked him to take on the chairmanship, he could not say no to what is “a grand experiment” in transparency and accountability.
The mission of the board, which includes Devaney and 12 IGs, is two-fold: oversee the $787 billion distributed under the Recovery Act to prevent fraud, waste and abuse and also to “develop the world’s largest IT database,” he said.
Developing the recovery.gov website is a huge challenge and a “high-risk venture,” he said. “We’re trying to create a system to do things government has frankly never done right before.” He said the site improves every month, but it’s “nowhere near where it needs to be.” By October, recovery.gov should be fully operational. “For the very first time the American people will be able to see where their money’s going.”
The board is also doing much work in coordination and outreach. “We want to be a place where people can come and get answers,” he said. Training, risk analysis and feedback on guidance from the U.S. Office of Management and Budget is gained from regular meetings with 28 IGs, he said.
Despite the risks involved, Devaney said he is optimistic that there won’t be massive fraud in the Recovery Act spending. Oversight activities in the area of prevention are going well; the website will be examined not only by the media but “citizen IGs”; and the political awareness on the issue is very high, with intense attention on the stimulus issue. “Wouldn’t you have a lot of chutzpah to steal this money?"
For better or worse, the level of transparency expected will be the prototype for the future. “This cow’s out of the board and running down the yard.”
Hinton told the audience that states and local governments will face many challenges, not the least of which is implementing the Act with no money. Legislation is pending that should provide state and local governments with dollars to implement the many reporting requirements. The first quarterly report is due Oct. 10. “Can these increased expectations be met without available funding?” He noted that his office has lost 37 positions over the last two years.
One concern includes a proposal to reduce the submission deadline for single audits from nine months after the fiscal year end date to six months. While state auditors support the concept, he said it may conflict with Consolidated Annual Financial Report requirements.
Hinton, whose state will receive $6.5 billion from the ARRA, said his office has issued risk alerts, increased internal control training for agencies and developed a web-based system for reporting requirements. “We want transparency to work,” he said.
McCall quoted President Obama, who said that government will be held to account to “spend wisely, reform bad habits and do our business the right way.” He said local governments have not received stimulus funds, but are preparing for the influx.
To get ready, McCall said he has made two presentations to staff, a course on internal controls is being updated and the audit staff has developed a checklist to assist management on internal control conditions at the department and program levels.
McCall echoed many of Hinton’s concerns about the huge increase in mandates that are not funded at a time when Florida’s budget, and local government budgets, are in severe crisis. Other challenges involve tracking spending by nonprofits, which is a problem now without the big infusion of stimulus funds expected. Also, he noted that Tallahassee has put in a “fast-tracking” contracting process, but there’s a possibility the procedures may conflict with federal requirements.
He said the American people expect competent managers to run programs that achieve the expected results and are managed economically, effectively and equitably. “We all have our reputations at stake here.”
—Christina M. Camara
Photos this week by Jennifer I. Curtin. Website support from April Force Pardoe.
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Posted by: Health Resource Center | June 25, 2009 at 03:38 AM