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Home News Archive GAO Discusses RATB and ARRA Funds

GAO Discusses RATB and ARRA Funds

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On November 30, 2009 the Government Accountability Office (GAO) issued report GAO-10-216R with the catchy title, “Recovery Act: Contract Oversight Activities of the Recovery Accountability and Transparency Board and Observations on Contract Spending in Selected States.”  In related news, there is an entity called the Recovery Accountability and Transparency Board (RATB) with oversight responsibilities covering the use of American Recovery and Reinvestment Act (ARRA) funds.  But that’s not the only set of eyes scrutinizing the use of ARRA funds.  In addition to the RATB, various Federal agency Inspectors General (IGs) “are expected to audit the programs, grants, and projects funded under the Recovery Act, both within their particular agency or department and collectively.” Moreover, “the Recovery Act requires GAO to perform bimonthly reviews of the use of funds by selected states and localities and to comment on estimates of jobs created or retained in the quarterly reports of Recovery Act fund recipients.” In its report, GAO discusses the RATB’s oversight of Federal agency spending of ARRA funds, as well as how 16 states (and the District of Columbia) are awarding ARRA contracts, after six months of activity.

 

The RATB consists of a chair, 12 Federal agency IGs, and 39 staff (20 of whom are seconded from other Federal agencies). The RATB includes three committees:  (1) Recovery.gov Committee, (2) Accountability Committee, and (3) Recovery Funds Working Group Committee.  According to the GAO report, the RATB monitors various Federal data sources, operates the Recovery Board Fraud Hotline, and operates the Recovery Operations Center (ROC).  The RATB ROC “provides two core functions—predictive analytics and in-depth risk analysis. The [ROC] uses software that allows for in-depth analyses of a large volume of publicly available data on entities receiving Recovery Act funds. … The results provide oversight authorities with information to focus limited resources on cities, regions, and high-risk government programs where historical data and current trends suggest the likelihood of future risk.”  GAO noted that “… about two weeks after the center became operational, Board staff told us they had two active investigations under way based on the in-depth analysis tool.”

 

The RATB has been busy providing oversight for a lot of activity.  According to the GAO report, there have been (to date) 27,774 ARRA-related contract actions.  The General Services Administration (GSA) has issued 16,878 of the total and the Department of Defense (DOD) has issued 6,357 of the total number of contract actions.  Of the total number, 25,666 (or 92 percent) were competitively awarded.  Interestingly, while DOD contract actions comprise only 23 percent of the total, DOD’s number of contract actions awarded without competition accounted for 59 percent of the total number of single or sole-source awards.

 

The other ARRA oversight team, consisting of the Federal agency IGs, has been busy as well.  GAO reported—

 

As of September 30, 2009, the [IGs] reported they had 77 investigations and 391 audits, inspections, evaluations, or reviews in process. They also reported they have issued 163 reports on Recovery Act-related issues since the act was passed—70 reports were issued but not published because they contain proprietary information that cannot be made available to the public, and 93 reports have been published on Recovery.gov. For example, the Department of Energy [IG] had issued 8 reports as of September 30, 2009, that addressed aspects of Recovery Act issues…. These reports identified the relevance of their issues to Recovery Act implementation. As another example, the General Services Administration [IG] has issued two reports since the Recovery Act was passed. The most recent report, issued in September 2009, provided observations on the Public Building Service’s major construction and modernization projects being funded under the Recovery Act.

 

GAO also looked at how states were awarding contract actions that used ARRA funds.  According to the GAO report, 122 such contracts were reviewed, of which 87 percent were awarded competitively.  Of the 122 contracts reviewed, 73 percent were awarded on a fixed-priced basis.

 

(Note these metrics are important because of the Obama Administration’s expressed commitment to using competition and fixed-price contract types to manage contract cost-growth.  See the Administration’s memo here.)

 

We visited http://www.recovery.gov and looked at how the states were spending ARRA funds.  According to the Government’s site, California has awarded $18.5 billion in awards, Texas has awarded $10.7 billion, and New York has awarded $10.6 billion in Recovery-related awards.  In contrast, Arkansas has awarded $1.36 billion in such awards, while Delaware has awarded only $514 million in awards.

 

To conclude, after six months of activity, billions in ARRA funds are being spent by many states and Federal agencies, and the RATB is trying to stay on top of it all.  That GAO had little to offer in the way of criticism says quite a bit about how well the RATB is doing so far … or perhaps maybe it is simply too early for any conclusions to be drawn.

 

See the GAO’s entire report here.


 

 

Newsflash

Effective January 1, 2019, Nick Sanders has been named as Editor of two reference books published by LexisNexis. The first book is Matthew Bender’s Accounting for Government Contracts: The Federal Acquisition Regulation. The second book is Matthew Bender’s Accounting for Government Contracts: The Cost Accounting Standards. Nick replaces Darrell Oyer, who has edited those books for many years.