Stimulus oversight panel continues to staff up

The oversight board responsible for monitoring stimulus efforts is still hiring staff and plans to convene for the first time next week, the panel's chairman told lawmakers on Thursday.

Earl Devaney, chairman of the Recovery Act Accountability and Transparency Board, said the group is in the process of acquiring staff, equipment and office space. Devaney was named to his position on Feb. 23, but board members were announced on March 18.

The board's staff will include audit, investigative, procurement and intergovernmental professionals. Devaney said these watchdogs most likely will have to shift from the mind-set that has guided them through their oversight careers.

"The status of the board is what you might expect just 30 days after the Recovery and Reinvestment Act of 2009 was signed into law," Devaney testified at a House Oversight and Government Reform Committee hearing. "The board is … essentially trying to keep our heads above water and ensure that the board fulfills all of its responsibilities under the Recovery Act."

"Most IGs, including myself, generally spend considerable time detecting fraud or waste and then examining such fraudulent or wasteful activities through either a traditional audit or criminal investigation," Devaney said. "It strikes me that, although those traditional tools will undoubtedly serve an essential purpose once recovery funds have been awarded and as they are being spent, IGs may be better able to maximize their value to the accountability goal of the Recovery Act by concentrating their effort on prevention."

Committee Chairman Edolphus Towns, D-N.Y., agreed that preventing fraud was necessary to ensure that billions of dollars aren't wasted. Citing fraud analysts, he estimated that U.S. organizations lose 7 percent of revenue to fraud and waste annually. When applied to the stimulus package, that 7 percent would amount to $55 billion in lost funds. "And the sad truth is, once fraudulent dollars go out the door, the federal government historically is only able to collect pennies on the dollar," Towns said.

Devaney said despite unprecedented transparency and accountability measures attached to the stimulus, expecting little or no fraud and waste is "naïve."

"I think we have to expect it, have a coordinated effort between law enforcement and the IG level … and take a sort of zero-tolerance attitude about fraud."

Lawmakers expressed concern that the transparency measures in place are not being implemented properly, particularly the Recovery.gov Web site. Towns and Rep. Darrell Issa, R-Calif., ranking member of the committee, said standardizing data and reporting is crucial, and federal agencies must move fast.

"The fact of the matter is Recovery.gov is currently not a usable database," Towns said. "In order for this to work we need to have uniform standards for collection and reporting of this information."

Devaney expects that data issues will be one of the board's greatest challenges in promoting transparency of the stimulus spending.

"Simply stated, the federal government's systems have never been fully successful at producing timely and reliable data. Add to that problem the difficulty of transmitting and reporting data up through multiple layers of government, as this act contemplates, and you begin to understand the basis for my concern," Devaney said.

Towns announced he has sent a letter to Vice President Joe Biden, who is responsible for overseeing the recovery efforts, and asked him to convene a technology roundtable of federal, state and private sector information technology officials to devise a standard approach to track and account for stimulus funding. With federal agencies already moving money out the door, putting tracking measures in place immediately is necessary, lawmakers said. "If we don't get this right, hundreds of billions of dollars could vanish in the blink of an eye without the administration, Congress or the American people having a chance of knowing where the money went, who received it, and whether it actually created or saved jobs," Issa said.