OMB has issued a memo providing an overview of the internal control planning and reporting requirements for all programs funded under the Disaster Relief Act signed in January, which provides $50 billion for Hurricane Sandy relief.
The memo, M-13-07, focuses on additional internal controls, improper payments protocols and recapture of unexpected grant funds 24 months after agency obligation. It also provides information on the role of the Hurricane Sandy Task Force to support the recovery priorities and integrity of federal funds provided for disaster relief efforts.
The act requires federal agencies supporting Sandy recovery and other disaster-related activities to implement additional internal controls to prevent waste, fraud, and abuse of relief funds – partly building on lessons through Hurricane Katrina relief efforts. For example, at a minimum, agency internal control plans must reflect consideration for conducing additional levels of review, increased monitoring and oversight of grant recipients, collaboration with the IG community, expedited review and resolution of audit findings, and adopting improper payment management protocols.
Agencies are required to submit internal control plans to OMB, GAO and their inspectors general leading up to September 30, after which agency heads must annually certify that the appropriate policies and controls are in place and that any corrective actions have been taken to mitigate the risk of fraud and inappropriate spending practices regarding activities and expenses related to Hurricane Sandy.
