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GAO Urges Action: 10 Ways to Improve Oversight of Emergency Relief Funds And Future Federal Spending

WASHINGTON, D.C. (March 17, 2022)—In testimony today before the Senate Homeland Security and Governmental Affairs Committee, Gene L. Dodaro, Comptroller General of the United States and head of the U.S. Government Accountability Office (GAO), outlined 10 steps lawmakers can take to strengthen oversight based on its review of the trillions of dollars in COVID-10 relief funds provided to individuals, businesses, and localities. 

“More than $4 trillion has been provided for pandemic recovery. This money has provided critically needed relief to address the public health and the economic repercussions of the pandemic. Unfortunately, key financial safeguards to reduce the risk of fraud and improper payments were not always in place as funds were distributed,” Dodaro said. 

“Congress can take a number of actions right now to significantly improve accountability and transparency over federal spending in both nonemergency and emergency situations. Going forward, these reforms will help the federal government avoid many of the pitfalls seen in the COVID-19 response,” he added.

Dodaro suggested a range of legislative changes, including:

-- Requiring the Office of Management and Budget (OMB) to provide guidance to help agencies develop plans for internal controls that could immediately be adapted for future emergencies or crises.  Agencies would need to report such plans to OMB and Congress. Internal controls are the plans, methods, policies, and procedures organizations use to meet agency objectives. They go hand-in-hand with effective financial management and fraud risk management.

--Establishing a permanent analytics center of excellence to help the oversight community better identify improper payments and fraud.

-- Amending the Payment Integrity Information Act of 2019 to designate all new federal programs making more than $100 million in payments in any one fiscal year as “susceptible to significant improper payments” for their first year of operation. Based on OMB guidance, some agencies may not report improper payment estimates for new COVID relief programs until 2 to 3 years after they are established. In some cases, agencies may not report at all, because these programs are no longer operational.

-- Amending the Payment Integrity Information Act of 2019 to reinstate the requirement that agencies report on their antifraud controls and fraud risk management efforts in their annual financial reports.

-- Clarifying that Chief Financial Officers (CFOs) at CFO Act agencies have oversight responsibility for internal controls over financial reporting and key financial management information that includes spending data and improper payment information. Executive agency internal control assessment, reporting, and audit requirements for key financial management information should also include internal controls over spending data and improper payment information.

-- Requiring agency CFOs to submit a statement in agencies’ annual financial reports certifying the reliability of improper payments risk assessments and the validity of improper payment estimates, and describing the actions of the CFO to monitor any corrective action plans.  They should also approve any methodology that is not designed to produce a statistically valid estimate.

-- Requiring that improper payment information mandated by the Payment Integrity Information Act of 2019 be included in agencies’ annual financial reports.

-- Amending the Digital Accountability and Transparency Act of 2014 (DATA) Act to extend the requirement that agency inspectors general review the completeness, timeliness, quality, and accuracy of their respective agency data submissions to USAspending.gov on a periodic basis.

-- Amending the DATA Act to clarify the responsibilities and authorities of OMB and Treasury for ensuring the quality of data on USAspending.gov.

-- Amending the Social Security Act to accelerate and make permanent the requirement for the Social Security Administration to share its full death data with the Treasury’s “Do Not Pay” working system.

For more information, contact Chuck Young, Managing Director for Public Affairs at YoungC1@gao.gov or (202) 512-4800.

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The Government Accountability Office, known as the investigative arm of Congress, is an independent, nonpartisan agency that exists to support Congress in meeting its constitutional responsibilities. GAO also works to improve the performance of the federal government and ensure its accountability to the American people. The agency examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO provides Congress with timely information that is objective, fact-based, nonideological, fair, and balanced. GAO’s commitment to good government is reflected in its core values of accountability, integrity, and reliability.

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