Four U.S. agencies deficient in controlling stimulus reporting errors, auditors say

Inspectors general found shortcomings in the procedures to monitor data quality for economic stimulus law reporting at the Agriculture, Defense and Homeland Security departments and the Small Business Administration, according to a new report.

The report, released by the Health and Human Services Department's Office of Inspector General (OIG), summarizes the findings of 21 separate reports from federal agency IGs about reporting errors and omissions related to spending from the American Reinvestment  and Recover Act. The summary report, issued Dec. 22, 2009, provides links to Recovery Act reports issued by federal agency IGs through Nov. 3, 2009.

The Recovery Act contains provisions to ensure transparency of and accountability for stimulus spending; agencies have received guidance about how to track their spending, as well as recipients’ spending, of stimulus money.

Of the 21 IG reports governmentwide, only four — USDA, Defense, DHS and SBA — identified deficiencies in data quality reviews. Management officials at those agencies generally agreed with the findings and recommendations for improvements, the summary report said.

USDA, DOD, DHS and SBA had taken some steps to ensure that recipients of funding from their agencies comply with reporting requirements. But their efforts left gaps, according to the summary report.

For example, the Agriculture IG's office reported that the department had not established an internal control structure with clear responsibilities for determining the completeness and validity of recipient reporting. Recipients of stimulus law grants are required to file detailed reports on their spending.

SBA issued an information notice, but it “did not adequately define the review process for identifying material omissions and/or significant reporting errors,” the report said. In addition, one of the SBA components did not have a policy for reviewing recipient data.

DHS' inspector general described the department’s processes for verifying completeness and accuracy of stimulus law data as “evolving.” At the time of the IG’s review, the department had not yet issued detailed procedures for performing limited data-quality reviews to identify significant omissions and errors, and the inspector general recommended that it do so.

The Defense OIG in an audit stated that the department “had neither a well-defined process for performing limited data-quality reviews nor specific policies and procedures to perform these reviews.” The department did not include roles and responsibilities, a detailed description of methodology, processes to identify material omissions and/or significant reporting errors, or milestones.

However, the IG also noted that the Office of Management and Budget issued interim guidance on Sept. 30, 2009, and the first reports were due two weeks later, which may have affected DOD's ability to establish a well-defined process for reviewing data quality, the summary report said.

The Obama administration is publishing the results of economic stimulus law spending on the Recovery.gov Web site, which also has been criticized for data quality problems. The oversight board for Recovery.gov recently described actions it has taken to improve the quality of the reporting.