The Department has designated the Under Secretary for Management as the Senior Accountable Official for the Recovery Act. The Office of Management Policy, Rightsizing and Innovation is coordinating the Department’s work under the Recovery Act, in full cooperation and coordination with the budget and program offices. The Department will leverage our existing organizations and processes to the greatest extent possible for oversight functions, including the Management Controls Steering Committee and Senior Assessment Team.
The Department has already undertaken several risk management activities. To the greatest possible extent, we have imposed budgetary funds control in our financial systems to budget levels lower than usual. The Department has proactively engaged the Office of the Inspector General, and we fully intend to coordinate and leverage any oversight activities that they undertake. The Department will place specific Recovery Act language into the annual A-123 assurance letters that are signed by the Assistant Secretaries to the Secretary to ensure:
•Obligations and costs are in compliance with applicable law
•Funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or misappropriation
•Revenues and expenditures applicable to agency operations are properly recorded and accounted for to permit the preparation of accounts and reliable financial and statistical reports, and to maintain accountability over the assets.
In addition to the risk management activities outlined above, the Department is developing a risk profile that will be used to establish mitigation plans and processes. We plan to prioritize and monitor our risks, assessing and utilizing (but not limited to) factors such as:
•funding level of the program
•cost type (e.g., competitive contract)
•the kind and scope of activities to be performed
•the characteristics of the financial awards to be used
•delivery schedules and project plans
•expected outcomes and outputs
•characteristics of recipients and ability to identify any wrong-doings or improprieties
•prior and existing audits and findings
•the extent currently subjected to existing internal control processes
•management and oversight structures
The Department will track the program plan obligations, milestones and performance measures. Analysis and reporting on obligations, outlays, funding modifications and unliquidated obligations will be undertaken in a timely fashion. We plan to monitor the entire lifecycle of the programs.
At this time, we do not think that Recovery Act programs and amounts are risk-susceptible for significant improper payments at or above the threshold levels required for reporting under OMB Circular A-123, Appendix C. However, the Department does perform elective procedures as part of our improper payments program to determine if improper payments were made for payments we categorize as sensitive. Sensitive payments are those that are not large enough to meet the threshold levels for improper payments reporting, or materially affect the fair presentation of our financial statements, but the public disclosure of any improper payments may result in criticism of the Department. For example, we perform elective procedures to review for improper payments associated with business class travel. We consider the spending of Recovery Act funds to be sensitive and are planning to perform elective procedures in FY 2009 and 2010 (depending on FY 2009 results).