The following article was written by AINS CEO Moe Goswami in response to expected oversight of CARES Act funding.
To view the original article, click here.
Just a few weeks ago, President Trump signed the historic Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion stimulus bill to combat the economic effects of COVID-19. As a provision of the bill, a committee was established to provide oversight of CARES spending.
The Pandemic Response Accountability Committee (PRAC) involves inspectors general from the agencies responsible for allocating CARES Act funding. The committee was assembled in order to “promote transparency and . . . prevent and detect fraud, waste, abuse, and mismanagement; and mitigate major risks that cut across program and agency boundaries” with regards to the 2020 stimulus bill.
Historically, special task committees have been instrumental to providing oversight to major disaster and stimulus funding. Like the Katrina Contract Audit Task Force assembled in 2005 to oversee Hurricane Katrina relief funding, PRAC will conduct “comprehensive risk assessment” to determine areas that will require increased oversight and additional resources.
Contract fraud is already a prevalent issue. The Department of Defense tried over 1,000 cases of defense contracting fraud resulting in the criminal conviction of 1,087 defendants between 2013 and 2017. Since the stimulus package constitutes such a large amount of money which must be distributed over a short period of time, the risk of fraud, waste, and abuse is much higher than it would be for most other programs. The committee and OIGs impacted by CARES will have to ask the question: how can we determine the most risky situations and address those quickly?
Studying the lessons of previous economic stimulus programs will help the IG community prepare for common scenarios of misuse and fraud, and implementing tools specifically for COVID-19 funding-related tracking and audits will ensure seamless execution of agency oversight.
Looking at U.S. economic stimulus and relief programs over time shows that the amount and frequency has been increasing with each bill. The most recent stimulus program, the American Recovery and Reinvestment Act of 2009, cost about $831 billion as of 2019. Meanwhile, the Congressional Budget Office (CBO) estimates that the Economic Stimulus Act of 2008 cost $146 billion, and Hurricane Katrina relief funding and supplemental appropriations cost $94.8 billion. Prior stimulus programs cost even less—for example, President Franklin D. Roosevelt’s many New Deal stimulus programs at the time cost an estimated $50 billion in total between 1933 and 1940.
An increase in total spending means a wealth of new management and oversight problems for executives overseeing the CARES Act bill. According to policy experts Tim Conlan and Priscilla Regan, expanding resources like the Small Business Administration (SBA)’s small business loan program as was done during the Recovery Act of 2009 is likely to overwhelm staff and procedures and create “a high-risk area for implementation bottlenecks and confusion.” Additionally, “implementation of the Recovery Act was hampered by conflicts between two parallel networks with competing goals: a set of programmatic networks focused on job creation and rapid program implementation, and a parallel accountability network of oversight entities and Inspectors General focused on preventing waste, fraud, and abuse.”
With $2 trillion allocated to the CARES Act and unemployment trending upward, the stakes for misuse are higher than they have ever been. Because auditors typically use similar, completed audits to build their next program, the PRAC can look to programs like the Recovery Accountability and Transparency Board (RATB) audits of Recovery Act spending, or audits by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) in order to develop objectives, scope, and justification for the audits of CARES programs.
For instance, SIGTARP chose to focus their immediate efforts on “opportunities to strengthen controls to avoid undue external influence” after funds were distributed. Meanwhile, in a 2011 report to the White House, RATB named five “Lessons Learned” following their oversight of the Recovery Act. Among these, they identified “a lack of data standards and overly complicated and antiquated methods and systems to collect spending information.”
Since the publication of the RATB report, government agencies and OIGs have made strides to implement technology solutions to address data management and spending information. But ultimately, PRAC and affected OIGs will need to enhance their existing tools to allow them to track special projects related specifically to COVID-19 funds, report on those findings to the Council of the Inspectors General on Integrity and Efficiency (CIGIE), and for CIGIE to quickly aggregate those findings to the White House and to Congress.
Many more questions will need to be asked to develop a comprehensive system for conducting oversight of CARES programs. Will PRAC use procedures laid out in early stimulus bill audits to develop their own audit programs? When determining appropriate audit staff for a project, it is vital to have experience in the area in which the audit is covering. Are RATB and SIGTARP offering any resources as experts in evaluating the effectiveness of distributing large stimulus packages? What tools will PRAC utilize in accomplishing their mission?
A proven audit management solution will help to ensure that PRAC and the IG community is able to complete and manage their oversight activities of CARES Act funding. Our company has experience delivering innovative software to federal investigations and audit programs, and we have developed a reputation as a strong and capable partner for government agencies and OIGs. We stand ready to support PRAC and agency inspectors general in oversight of the CARES Act and other COVID-19 relief measures.
  U.S. Congress, House, H. R. 748: Coronavirus Aid, Relief, and Economic Security (CARES) Act, 116th Cong., 2nd sess., introduced in House January 24, 2019, https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf.
 President’s Council on Integrity and Efficiency, A Progress Report to the President: Fiscal Year 2005 (Washington, DC, 2005), https://www.ignet.gov/sites/default/files/files/fy05apr.pdf.
 U.S. Department of Defense, Office of the Under Secretary of Defense for Acquisition and Sustainment, Report to Congress: Report on Defense Contracting Fraud (Washington, DC, 2018), https://fas.org/man/eprint/contract-fraud.pdf.
 Congressional Budget Office, Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2011 Through December 2011 (Washington, DC, 2012), http://www.cbo.gov/sites/default/files/cbofiles/attachments/02-22-ARRA.pdf.
 Congressional Budget Office, H.R. 5140: Recovery Rebates and Economic Stimulus for the American People Act of 2008 (Washington, DC, 2008), https://www.cbo.gov/sites/default/files/110th-congress-2007-2008/costestimate/hr51400.pdf.
 Congressional Budget Office, The Federal Government’s Spending and Tax Actions in Response to the 2005 Gulf Coast Hurricanes (Washington, DC, 2007), https://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/85xx/doc8514/08-07-hurricanes_letter.pdf.
 Jim Powell, “The ‘Old’ New Deal Still Isn’t Paid For,” Forbes, February 2009, https://www.forbes.com/2009/02/11/new-deal-stimulus-opinions-contributors_0211_jim_powell.html#7efda2e545b3.
 Tim Conlan and Priscilla Regan, “Implementing the 2020 Stimulus: Lessons From the 2009 Recovery Act,” Government Executive, April 2020, https://www.govexec.com/oversight/2020/04/implementing-2020-stimulus-lessons-2009-recovery-act/164319/.
 Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Opportunities to Strengthen Controls to Avoid Undue External Influence Over Capital Purchase Program Decision-Making (Washington, DC, 2009), https://www.sigtarp.gov/Audit%20Reports/Opportunities_to_Strengthen_Controls.pdf.
 Government Accountability and Transparency Board, Report and Recommendations to the President (Washington, DC, 2011), https://obamawhitehouse.archives.gov/sites/default/files/gat_board_december_2011_report_and_recommendations.pdf.
AINS, Inc. has provided innovative adaptive case management products and services since 1988. Our digital process automation platform, eCase, is deployed at over 400 installations, including federal agencies and offices, state and local governments, educational systems, health institutions, and commercial customers. Unlike BPM products that were retrofitted for case management, eCase was built for case management from the ground up, enabling faster prototyping and production of solutions across diverse business processes. By leveraging the power of eCase, AINS excels at analyzing client business requirements and quickly configuring (not coding) scalable solutions that adapt to the needs of our customers.