Energy improves Recovery Act reporting, IG says
Although work remains, department is developing financial controls for stimulus spending and mitigating fiscal risk.
When Congress gave the Energy Department an unprecedented cash infusion earlier this year as part of the economic stimulus plan, the agency's watchdog was concerned about its ability to account for the $38 billion in new spending authorized by the 2009 American Recovery and Reinvestment Act.
Some of those fears appear to be assuaged. A new report by Energy Inspector General Gregory Friedman found that "the department had devoted a great deal of time and resources to identifying and mitigating Recovery Act-related risks."
For example, the IG found that officials at multiple levels were involved in designing control and accountability programs and Energy had developed a risk assessment tool intended to assist program managers in identifying potential problems that could prevent Recovery Act projects from meeting their intended goals.
"Efforts ranged from updating existing information systems to developing matrices designed to ensure that all required reporting and performance elements were addressed. Each of these activities required substantial effort and was accomplished within a relatively short period," the report said.
Further, the IG singled out the Office of the Chief Financial Manager for its role in helping departmental entities identify potential hurdles to meeting accounting, reporting and performance-monitoring responsibilities.
Friedman did identify a number of issues that still need to be addressed. Program officials have yet to determine if existing information systems will be able to process more transactions associated with Recovery Act spending. Nor have officials tested modifications to Energy's performance management system to accommodate Recovery Act performance measures.
"A significant portion (91 of 142, or 64 percent) of the performance measures developed for Recovery Act activities were not quantifiable," Friedman found.
The IG also noted a lack of coordination between headquarters offices in developing estimates for jobs created as a result of the stimulus.
"The need to report accurate and complete information to the public and the [Office of Management and Budget] is a Recovery Act imperative. We are concerned that the department's information systems supporting Recovery Act activities may be unable to handle significant increases in workload or provide appropriate mechanisms to ensure that funds are accurately tracked and reported," the IG wrote.
Among other things, Friedman recommended that Energy direct formal testing of the information systems that will be used in stimulus reporting, share best practices among programs, and conduct periodic tests to ensure users are properly segregating Recovery Act transactions.
In response to the report, Steve Isakowitz, Energy's chief financial officer, concurred with most of the IG's findings and recommendations. Isakowitz, however, disagreed with the assertion that all Recovery Act project operating plans must have quantifiable metrics, and said Energy has complied with all of the law's and OMB's requirements relating to performance measures.