The inspector general offices of a number of agencies have recently warned management about the potential for misspending, waste and fraud as those agencies distribute additional money recently appropriated under Coronavirus relief laws, in particular the $2 trillion CARES Act.
They cited problems revealed in past audits including those that reviewed the infusion of funding under the 2009 American Recovery and Reinvestment Act, which similarly sought to stimulate the economy through increased federal spending after a significant downturn. The IG of the Commerce Department for example said a main lesson learned then was that the department “must ensure that program oversight over the use of the stimulus funding is sufficiently designed and executed—and benefit outlays are accurately tracked and reported.”
“A great sense of urgency has arisen in response to the COVID-19 outbreak. However . . . we advise that—in the rush to disseminate stimulus funding—the department provide the necessary, additional guidance to direct spending more effectively and to track and report more meaningful results,” it said in a memo summarizing the management challenges related to the money.
Similarly, the DoD IG’s office provided management with a document of “best practices and lessons learned that we have identified during our previous oversight work” including the importance of well-defined work orders, vetting of contractors, oversight and surveillance, and complete, consistent, and accurate contract files and accounting records.
The IG of the SBA meanwhile noted that “prior audits and reviews identified areas of risk” in grants programs and suggested controls similar to those recommended by the Defense IG, including clear oversight requirements, outcome-oriented performance measures, tracking of data to validate performance, and establishing a quality assurance program to prevent and detect improper payments.
The Labor Department IG said much the same of the additional unemployment insurance funding, saying that while the department has taken steps in response to its prior findings, “initiating corrective actions does not assure such actions are effective or will continue to be effective in addressing program risks and weaknesses” and that “more needs to be done to ensure those receiving compensation are eligible and receive accurate and timely payment.”
The Interior IG noted that it is conducting “outreach sessions with DOI employees and recipients of DOI funds to remind them of their role in deterring, detecting, and disclosing wrongdoing and mismanagement. We tailored our existing outreach material to include risks, red flags, and fraud schemes associated with CARES Act spending. We will focus on contracting and grants officials and purchase cardholders.”