Transcript Slide 1

Unprecedented
Accountability and
Transparency of
Recovery Act Funds—
Wave of the Future?
Toronto, Ontario Chapter
Professional Development Day
October 20, 2010
Jeff Hart, CGFM, CFE
AGA Past National President
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AGENDA
•
Overview of American Recovery and
Reinvestment Act (ARRA) and Impact on EPA
Operations
•
Job Creation/Saving
•
Environmental Results
•
Some Questions &
Key Points To Take Away
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Some Questions For Today
How has this unprecedented level of
accountability and transparency
raised the bar for all US-EPA
programs?
Has it also raised the bar for all
government programs?
Has it raised the bar in Canada?
Might it raise the bar around the
world?
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The American Recovery and
Reinvestment Act (ARRA)
President Obama signed the
$787 Billion
American Recovery and Reinvestment
Act (ARRA, or Recovery Act) of 2009
into law on February 17, 2009 in
Denver, CO
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The Recovery Act’s 3 Goals
Create new jobs and save
existing jobs
Spur economic activity and
invest in long-term growth, and
Foster unprecedented levels
of accountability and
transparency in government
spending.
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ARRA Funding - $787 Billion
Grants,
Contracts and
Loans
Tax Cuts
$288
$275
Entitlements
$224
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Where is The $787 Billion Going?
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$275 Billion for Federal
Contracts, Grants and Loans
300 different programs spanning
dozens of Federal Agencies
EPA
$7.22 Billion for 6 programs
$20 Million -- Inspector General
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EPA’s ARRA Funding
$7.22 Billion
DERA
LUST BF
CWSRF-$4B
DWSRF-$2B
SF
SF-$600M
CWSRF
DWSRF
DERA-$300M
LUST-$200M
BF-$100M
OIG-$20M
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Region 8 ARRA Funding
$384 Million
$371M in Grants and Contracts
$3.5M in ARRA Management and
Oversight Funding
$9.5M in set-asides for R8 Tribes
This funding is managed out of HQ
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Current Progress
Q3 2010 Quarterly Report
15,764 jobs created or retained (36,092 to
date)
935 in Region 8
57 % CWSRF funds spent
74% in Region 8
62% DWSRF funds spent
74% in Region 8
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Current Progress
Q3 2010 Quarterly Report
51 Superfund sites
initiated construction
9 in Region 8
8,500 diesel engines retrofitted, replaced or
retired--reduced the lifetime emissions of carbon
dioxide by 230,000 tons and particulate matter by
1,100 tons
268 in Region 8
649 LUST site assessments begun
55 in Region 8
263 Brownfields site assessments initiated
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10 initiated in Q2 2010 in Region 8
Colorado’s “Top 10” Categories
of $1.588 Billion ARRA Funds
State Fiscal Stabilization Fund
$760,242,539
IDEA Part B Grants to States
$148,730,571
MEDICAL ASSISTANCE PROGRAM
$140,911,583
Title I Grants to Local Educational
Agencies
$110,905,813
Weatherization Assistance for LowIncome Persons (A)
$79,531,213
State Energy Program (A)
$49,222,000
Section 8 Housing Assistance
Payments Program Special
Allocations
$35,545,846
EPA Drinking Water SRF
$34,352,000
EPA Clean Water SRF
$31,347,700
Tax Credit Assistance Program
$27,349,670
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Gene L. Dodaro , Acting Comptroller General ,
U.S. Government Accountability Office
“Experience
tells us that the risk
of fraud and abuse grows when
billions of dollars are going out
quickly, eligibility requirements
are being established or
changed, and new programs are
being created.”
– GAO’s Role in Helping to Ensure Accountability and
Transparency, March 9, 2009
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A key objective of ARRA is to minimize fraud,
waste, and abuse
–
Even a 5% error rate places $40 billion of total program
funding potentially at risk for fraud, waste and abuse
–
The federal government expects States to embed antifraud, waste and abuse efforts into ongoing oversight of
programs
–
Existing systems and controls may not be capable of
addressing increased expectations
–
The public has zero tolerance for fraud, waste and abuse
–
Additional funding for audits, law enforcement and
inspector general oversight
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OMB’s Recovery Act Guidance
Stresses Accountability
o Funds awarded in a prompt, fair, reasonable
manner
o Recipients and uses of funds transparent
o Funds used for authorized purposes and instances
of fraud, waste, error, and abuse mitigated
o Unnecessary delays and cost overruns avoided
Achieve programmatic goals
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Section 1512 Reporting : Data
Elements
Data elements to be collected were published in Federal Register
4/1/09
Requires one report per award
There are five sections:
1.
General Section:
– One report for each award that includes project period and awarding
Federal agency
2.
Section 1: Project & Activity - Cash Received & Disbursements
3.
Section 2: Project & Activity - Outputs & Outcomes
– Status of Work Completed
– Jobs Created or Retained
4.
Section 3: Subrecipient Information
– Cash Disbursed by Recipient
– Date of subaward and grant period
5.
Section 4: Aggregate Awards - Total awards <$25,000
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Certification and Maintenance of
Effort
Certification
Certification elevated to the Governor, Mayor or other
State officials
Upfront certification prior to spending
– Infrastructure investment has been reviewed
– Full responsibility is accepted as to the appropriate use of the
taxpayers’ funds
Maintenance of Effort
Federal funds cannot be used to supplant local funding
Must be used for additive projects, not applied to cut-backs
Governments will need to document current level of effort
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Recovery Accountability and
Transparency Act Board
coordinate and conduct oversight
quarterly reports
recommendations
may send Flash reports to the President and
Congress problems that require immediate
attention
established and maintains a user friendly website,
Recovery.gov, to foster . accountability and
transparency
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Recovery Accountability and
Transparency Act Board
The Honorable Earl E. Devaney, Chairman
The Honorable Phyllis K. Fong, Inspector General Department of
Agriculture
The Honorable Todd J. Zinser, Inspector General Department of
Commerce
The Honorable Gregory H. Friedman, Inspector General Department of
Energy
The Honorable Daniel Levinson, Inspector General Department of Health
and Human Services
The Honorable Richard L. Skinner, Inspector General Department of
Homeland Security
The Honorable Glenn A. Fine, Inspector General Department of Justice
The Honorable Calvin L. Scovel, Inspector General Department of
Transportation
The Honorable Eric M. Thorson, Inspector General Department of
Treasury
The Honorable J. Russell George, Treasury Inspector General for Tax
Administration
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Mary Mitchelson, Acting Inspector General Department of Education
Recovery.gov Website
Detailed data on contracts and grants
Progress reports on spending and accomplishments
Links to grant, loan, contract opportunities
Map-based view of where the spending is going
Subscription content to be informed with targeted changes
Ability for access to bulk data for individual analysis
Reports from GAO, IG, CEA
Vignettes on results/accomplishments
Responses addressing public feedback
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EPA Oversight
Assistant Administrator---”Senior
Accountable Official”--lead and coordinate
all agency activities related to stimulus
funding
Steering Committee--senior managers
monitor stimulus project planning and
implementation meets weekly
Inspector General--$20 million for oversight
Public can track EPA's distribution of
stimulus cash on the agency's Web site
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Development of the Stewardship Plan
Required broad participation
Plan addresses following areas:
Grants management
Interagency Agreements
Contracts management and procurement issues
Payroll and human capital
Budget Execution
Performance reporting
Financial reporting
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DRAFT RECOVERY ACT STEWARDSHIP PLAN
EXECUTIVE SUMMARY
May 5, 2009
The Recovery Act Steering Committee established an Agency-wide Internal Controls Workgroup that
was charged with creating the Recovery Act Stewardship Plan.
Subcommittees are made up of Program Office, administrative, and Regional representatives with an
OIG advisor.
The Stewardship Plan is based on the five GAO Internal Control
Standards: Control Environment, Risk Assessment, Control
Activities, Information and Communication, and Monitoring.
Risk mitigation strategies from the OMB 02/18/2009 and
04/03/2009 Recovery Act Guidance documents and the OIG’s
“Initial Plan for Oversight of Recovery Act Funds” were addressed.
Additionally, OIG Open Audit Issues, OEI’s Management Action
Plan, other agencies’ best practices (DOJ, USPS, Commerce, DOI,
and NSF), and the Agency’s Katrina Stewardship Plan were all
considered during the development of the Recovery Act
Stewardship Plan.
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OIG Focus
IG focus on OMB accountability objectives
Evaluate the process for awarding funds
Review the quality of data systems
Assess performance
IG will conduct:
Performance audits
Financial audits
Investigations of fraud, waste, and abuse
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Types of OIG Reviews
Forensic Audits
Performance Audits
Program Evaluations
Investigations
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Forensic Audits
of
Recipients and
Subrecipients
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Identifying Candidates
Unusual Patterns of Drawdowns
Prior Report Findings
Hotlines
Recovery Accountability and Transparency
Board Referrals
Prior Issues with Recipient or Subrecipient
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What Does the OIG Review?
Construction Site
Progress/Materials
Individuals Working
Buy American Requirements
Davis Bacon Requirements
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What Is OIG Reviewing?
Loan-Recipient Office
Procurement
Financial Systems
Project Oversight
Recipient Reporting
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On-Going Performance Audits
Competition for DERA Grants
Contractor Performance Evaluations
EPA and State Oversight of Clean Water
SRF Projects
Implementation of Recovery Act
Stewardship Plan for Superfund Remedial
Program Contracts
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On-Going Performance Audits
Resources for Recovery Act Oversight
Use of Interagency Agreements
Financial Reporting of ARRA
Effectiveness of EPA Data Quality Review
Process
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GAO Findings to Date
May 26, 2010--Clean Water Projects Are
Underway, but Procedures May Not Be in Place
to Ensure Adequate Oversight
Dec. 10, 2009—One Quarter of Recovery Act
Funds Administered by States and Localities
Has Been Paid Out
Nov. 19, 2009--Recipient Reports: Good Initial
Efforts to Ensure Accurate Reporting but
Significant Data Quality Issues Need
Addressing
Sept. 23, 2009--Need for Recovery Act
Accountability and Reporting Challenges to Be
Fully Addressed
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GAO Findings to Date
May 26, 2010--Clean Water Projects Are
Underway, but Procedures May Not Be in Place
to Ensure Adequate Oversight
June 22, 2010--EPA Submitted Accurate and
Timely Recovery Act Financial Reports
September 27, 2010-- EPA Effectively Reviewed
Recovery Act Recipient Data but Opportunities
for Improvement Exist --Identified errors in 3
percent of recipient entries. EPA did not identify any
of these errors as significant.
Several OIG site inspections revealed nothing that
would require action.
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GAO Findings to Date
May 26, 2010--Clean Water Projects Are
Underway, but Procedures May Not Be in Place
to Ensure Adequate Oversight
Dec. 10, 2009—One Quarter of Recovery Act
Funds Administered by States and Localities
Has Been Paid Out
Nov. 19, 2009--Recipient Reports: Good Initial
Efforts to Ensure Accurate Reporting but
Significant Data Quality Issues Need
Addressing
Sept. 23, 2009--Need for Recovery Act
Accountability and Reporting Challenges to Be
Fully Addressed
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Region 8 ARRA Monthly Report
Sept. 2010 Outlay Rate and Jobs Reported
Program
(A) Amount
Awarded
(B) Total
Outlays (thru
6/30/10)
(B/A)
Cumulative
%
National
Average
% Outlays
Reported
Jobs (for
FY10
Q3)**
Drinking
Water SRF
$134,452,000
$99,708,207
74%
62%
357
Clean Water
SRF
$126,354,000
$93,932,258
74%
57%
363
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$1,303,000
$761,574
58%
N/A
(included in
CWSRF)
Superfund
$64,150,180
$32,960,256
51%
56%
140
DERA
$17,770,597
$12,551,798
71%
43%
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LUST
$9,773,000
$4,286,841
44%
38%
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Brownfields
$5,429,900
$2,009,292
37%
26%
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$359,232,677
$246,210,226
69%
57%
935
604b
Totals
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*Full Jobs Created number unavailable for Eureka IAG
R8 Outlays Compared to Awards
Cumulative through the end of May 2010
Amounts in millions
$140
$120
74%
74%
$100
$80
Awarded
Outlays
$60
51%
$40
71%
$20
44%
37%
58%
$0
DWSRF
CWSRF
SF
DERA
LUST
BF
604b
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Regional Accomplishments
Cumulative through FY10 Q3 (6/31)
Nearly $312M in CW and DW SRF projects have
started construction.
1 Superfund project achieved design completion.
1 Brownfields property has been cleaned up.
1,000 diesel engines have been retrofitted,
replaced or retired.
25,000 tons of CO2-equivalent emissions have been
avoided.
32 LUST assessments and 15 cleanups have
been completed.
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Selected 2010 Brownfields
Accomplishments
City of Missoula, MT
$25,000 -- asbestos abatement at former
freight depot
Now a community nutrition center + 17
low-income homes
Provides fresh local food for neighborhood
with household income level $7,000 below
median
households receiving public assistance is
twice as high as the city overall
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Selected 2010 DERA
Accomplishments
Sioux Falls, SD School District
Replacing 10 buses, new loweremission models + installing 20 preheaters
New engines + idle reduction + fuel
conservation programs
Highest honor possible--Gold Level
“Green Fleet Certification”
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ARRA Success – Diesel Emissions
Reduction Act (DERA), Decker, Montana
State of MT in
partnership with
Decker Coal Company
$700k to repower 4
high emissions
oversized coal-hauling
dump truck engines
Old engines used
Ultra Low-Sulfur
Diesel fuel but still
emitted high levels of
particulate matter and
toxics
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Jobs, Health, + 76% Return on
Investment
9.29 mechanical and
administrative jobs created
or retained in
environmental justice
community
$532k in health care cost
savings associated with
premature mortality
chronic & acute bronchitis
respiratory symptoms
asthma exacerbation
nonfatal heart attacks
hospital admissions
emergency room visits
work loss days, and minor
restricted activity days
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Exceeded Original Pollution Reduction
Goals by 114%
Actual Results
N0x
PM
HC
CO
CO2
Total
Projected Results
Lifetime (tons)
2,136.86
148.08
78.66
196.33
Annual (tons)
118.71
8.23
4.40
10.91
Annual (tons)
24.8
3
3.3
21.7
9,478.29
12,038.22
526.57
668.82
303.6
356.40
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Implications to EPA
ARRA significantly increased EPA’s Budget
and Increases Risk of Error/Mistakes
With limited time to obligate funds and high
priority from the Administration to spend
funds quickly/accurately/well, stewardship of
funds takes on a “higher profile”
Unprecedented transparency to public – EPA
records/results open to increased scrutiny
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Some Themes From PSMWHalifax (June 2010)—Same in
U.S.
Difficult Economy
Structural Deficits
Unsustainable
“Back to Balance”
Cut Services/Costs
Increased Public Pressure to Reduce
Costs Yet Maintain/Increase Services
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Implications of Increased
Transparency & Accountability
Increased Scrutiny
Increased Risk & Decreased
Tolerance for Mistakes &
“Mismanagement”
Increased Demand for Improved
Management/Results
Increased Demand for Quality
Data/Info
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Open Government Directive
December 2009, Office of
Management and Budget
publish government information online,
improve information quality,
create and institutionalize an open
government culture, and
create an enabling policy framework for
open government.
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High Note!
Implications/Opportunities for Us
FM’s Role More Important Than Ever
Increased Attention on:
Data/Info for Decision-making
Internal/Management Controls
ID & Mitigating Risks (financial &
program)
Measuring/Improving Program Results
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Recovery.gov opening book on open
government
“Agencies at all levels of government
must view this as not just a passing
management phenomenon, but as a
way to rethink how government
communicates with the public.
…the new accountability and
transparency movement will likely
increase public expectations for realtime spending information.
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October 17, 2010-- Jeffrey C. Steinhoff,
executive director of KPMG Government
Institute and managing director of KPMG LLP
“…government managers will be on the hot
seat like never before.
Is government turning a new page in
accountability, transparency and
intergovernmental relations?
It will be up to everyone to find new ways
to meet the goals of open government and
satisfy a public that is more insistent than
ever on knowing what it is getting for its tax
dollars.”
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Questions?
Jeff Hart
[email protected]
303-907-4664
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