US watchdogs warn of fraud and error risks in stimulus delivery

By on 23/06/2020 | Updated on 24/09/2020
President Trump signed the US$2.2 trillion relief package bill on 27 March. (Photo by Shealah Craighead, courtesy the White House via flickr).

US federal agencies face significant challenges distributing the country’s US$2.2 trillion coronavirus relief fund, a committee of government watchdogs has found.

In its first report on delivery of the stimulus package said out in the CARES Act, the Pandemic Response Accountability Committee – a council made up of more than 20 inspectors general from across federal government – lists financial management as a key concern.

The report notes that “even before the pandemic, [inspectors general] reported that the ability of agencies to track and report financial data was insufficient to meet agency needs and was a top management and performance challenge”. Now weaknesses in agency internal controls and outdated financial management systems are affecting the reporting and oversight of the COVID-19 stimulus package, it says.

The inspectors general of both the General Services Administration and the Department of Homeland Security have identified weaknesses that could affect the accuracy of their data on CARES Act spending, financial planning and payments, the committee reports.

It also notes that according to the National Reconnaissance Office inspector general, the CARES Act provisions governing reimbursement of government contractors create a significant opportunity for “double dipping” by companies if funds are not accurately tracked across government.

“The combination of substantial increases in funding and reduced supervision creates a heightened risk of misuse and fraud. Formal deliberative agency processes and program integrity safeguards may be incompatible with the need to distribute funds quickly, and accountability mechanisms may be overwhelmed,” the report concludes.

The committee also identifies serious concerns over cybersecurity, the health and safety of government employees, and maintaining effective operations in the midst of the crisis.

About Mia Hunt

Mia is a journalist and editor with a background in covering commercial property, having been market reports and supplements editor at trade title Property Week and deputy editor of Shopping Centre magazine, now known as Retail Destination. She has also undertaken freelance work for several publications including the preview magazine of international trade show, MAPIC, and TES Global (formerly the Times Educational Supplement) and has produced a white paper on energy efficiency in business for E.ON. Between 2014 and 2016, she was a member of the Revo Customer Experience Committee and an ACE Awards judge. Mia graduated from Kingston University with a first-class degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.

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