What does a new road in Houston have in common with the installation of a more energy-efficient boiler at a Navy base? The same thing new cops in Cleveland have in common with biofuel researchers in California. All are being funded through the nearly $800 billion 2009 American Recovery and Reinvestment Act. And all will be on the radar of federal financial chiefs.
"It's a very interesting time," said Tom Cooley, chief financial officer at the National Science Foundation, in a recent interview. Besides the normal intensive machinations of developing an incoming administration's first budget, agency financial managers are working closely with the Office of Management and Budget to craft spending plans for the economic stimulus package.
While details of spending programs and solicitations associated with the stimulus package are starting to trickle out from the agencies, the real work for CFOs and their staffs will be in tracking how that money is spent.
"There's a fair amount of risk associated with [the stimulus spending] because of the dual goals -- getting the money out quickly while still maintaining sound and effective controls to prevent fraud and minimize waste," said Jeanette Franzel, managing director for financial management and assurance at the Government Accountability Office.
OMB is requiring agencies to track stimulus spending separately from other appropriations, which by itself will be a challenge. "Right now agencies are looking at their systems and figuring out how to do this," Franzel said.
The strict stimulus spending accounting requirements stem largely from a desire to avoid the pitfalls of the fall 2008 financial sector bailout under the Troubled Asset Relief Program, according to Franzel.
"The economic recovery funds are going out with that backdrop, so OMB has put in place a lot of transparency and accountability reporting requirements to help instill confidence and accountability in these monies," she said.
Exercising appropriate oversight of grants will be especially difficult, Franzel said, because much of that money will be managed by state and local governments. The state and local levels are "where the specific procedures are in place for preventing improper payments, making sure that individuals receiving funds are actually eligible to receive funds, etc.," she said. "That's a real challenge."
-Katherine McIntire Peters, GovExec.com