American Recovery And Reinvestment Act Of 2009 Internal Control Pilot Project State Of Colorado Financial Audit Fiscal Year Ended June 30 2009

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Download or read book INFORMATION written by and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The American Recovery and Reinvestment Act of 2009 (Recovery Act) was established to jumpstart the U.S. economy, create or save millions of jobs, and invest in the Nation's energy future. The Department of Energy received approximately $37 billion through the Recovery Act to support a variety of science, energy and environmental initiatives. The Office of Management and Budget (OMB) issued guidance for carrying out stimulus-related activities which requires, among other things, that recipients ensure funds provided by the Recovery Act are clearly distinguishable from non-Recovery Act funds in all reporting systems and that recipients' actions are transparent to the public. To meet these requirements, the Department's recipients must clearly and accurately track and report on 18 separate data elements. In addition, the Department was to develop and implement a process to ensure that recipient information reported to the public was free from material omissions and significant reporting errors. Our recent report (OAS-RA-10-01, October 2009) noted that the Department had developed a quality assurance process to facilitate the quarterly reviews of recipient data and planned to test it during the first quarterly reporting cycle. To determine whether the Department's quality assurance process was effective, we examined information reported by recipients of Departmental funding as of September 30, 2009. We also sought to determine whether the Department's prime contractors were prepared to track and report on Recovery Act activities. The Department had taken a number of actions designed to ensure the accuracy and transparency of reported Recovery Act results. This process identified potential anomalies with information reported by 1,113 of 2,038, or 55 percent of recipients. We view the Department's data quality assurance efforts as both timely and significant. As noted by our audit testing, however, opportunities exist to strengthen the process. In particular: (1) Site officials did not always ensure that anomalies, once identified during the quality assurance process, were actually resolved. For example, the Department's process identified that about 740 of the approximately 10,000 jobs reported in the first quarter of Fiscal Year 2010 as created/retained were for projects reported as having no funds spent. Although these problems were referred to site officials for follow-up and/or correction, the information was never actually changed; (2) The Department did not always utilize the correct basis when evaluating the accuracy of 'funds provided' data submitted by grant recipients. For example, in its analysis process, the Department used data reflecting 'funds obligated' rather than the correct amount of 'total grant awards'. This generated a number of potential false positives; and, (3) Duplicate reports by certain recipients, resulting in overstatements of as much as $137 million of the more than $18 billion obligated, were not corrected. We observed that the Department had taken prompt action to ensure that its prime facility management contractors could properly report Recovery Act information. Notably, the seven contractors in this category included in our review had modified their accounting systems, as necessary, to ensure that they could accurately track and report on Recovery Act activities. The systems at each of these entities had been restructured so that they: (i) could separate Recovery Act and non-Recovery Act funds; and, (ii) had adequate processing capacity to handle the projected increase in transactions. We found the Department's decision to limit its reviews to the four elements that it considered to be critical (award amount, invoiced amount, jobs created/retained, and project status) to be reasonable. We concluded, however, other elements or dependent relationships should not be completely excluded from review. Beyond its initial development and implementation of its quality assurance process, the Department had taken steps to improve its ability to ensure that Recovery Act information was both accurate and transparent to the public. Specifically, officials changed the quality assurance plan based on initial data reviews. Department officials also informed us that they are in the process of updating their quality assurance process to meet new OMB requirements. For example, recent guidance directed agencies to focus on certain data elements, such as award number and recipient name, during their quality assurance reviews. In addition, subsequent to our review, the Department added two more data elements and comparisons to its quarterly assurance process, including an analysis of costs/expenditures and a comparison of the recipient reported project status to the Department's data contained in its financial system.