Every once in a while, a news reporter reviewing the alleged misuse of Recovery Act funds will ask me a fundamental question: When can the public expect to see criminal indictments in the Recovery program? Prosecutions eventually will emerge, I explain, but then I go on to add that there’s a lot more to protecting the taxpayers’ pocketbook than bringing high-profile indictments. Indeed, the Recovery Board’s most important challenge is to prevent fraud and waste before they occur in Recovery programs.
With that challenge in mind, the Board’s oversight program combines difficult grunt work with cutting edge technology to allow for careful analysis of contracts, grants and loans awarded under the Recovery program. Prevention also means conferring regularly with our partners, including the 29 Inspectors General who monitor their agency’s Recovery projects and other oversight officials at federal and state levels.
Looking back over the Board’s 18-month existence, I can say without hesitation that our oversight program has been successful and will help transform the way the Inspector General community combats corruption in the future. Is our program perfect? Certainly not: There are nimble crooks out there who will elude the government’s noose. But having said that, I believe the public can feel confident that we are using the best investigative tools available to detect and prevent fraud. We are doing our best to keep your pocketbooks secure.
Let’s pull back the curtain and take a look inside.
Back in February 2009, Congress enacted the American Recovery and Reinvestment Act of 2009. Section 1526 required the Board to establish a website that would display data from states, companies and other entities that received Recovery funds. Another section of the law gave the Board broad powers to monitor spending in the $787 billion stimulus program.
Early on, the Board decided that we needed to build a state-of-the-art command center that would allow us to keep a close eye on the flow of Recovery money and ensure that contracts, grants and loans are subjected to comprehensive scrutiny.
To accomplish our goals, we built the Recovery Operations Center. The operations center combines traditional law enforcement analysis with sophisticated software tools, government databases and open-source information to track the money. Simply put, our skilled analysts look for early warning signs of trouble. They use the software to search across databases, looking for potential problems such as criminal convictions, lawsuits, tax liens, bankruptcies, risky financial deals, and suspension and debarment proceedings. Once a problem is pinpointed, the analysts do an in-depth analysis of an award and send their report on to the appropriate agency Inspector General for further inquiry.
But as a veteran investigator, I am not one to discount the value of old-fashioned shoe leather—that is, hunting for the proverbial needle in a haystack. Each day, the Board’s procurement staff plows through individual Recovery awards to identify issues that perhaps should be addressed by federal authorities.
A few sample cases:
- A federal agency cancelled a research grant to a company after our staff discovered that the recipient had been previously debarred from receiving federal funds.
- A $1 million award to a company was revoked by a federal agency after we discovered that the recipient was not eligible for the award under federal guidelines.
- A federal agency canceled a company’s contracts worth more than $7 million after our staff’s analysis showed that the recipient had been debarred.
- Another company with multiple awards of nearly $10 million was debarred from doing government business after we uncovered information showing the company was not eligible to receive contract awards.
When we stop wasteful spending, taxpayer dollars are saved. But keep in mind that our early intervention in the process also can save the cost of agency investigations—no small matter when you consider that a single inquiry can take many months, even a couple years to complete.
Of course, we are not alone in fighting this battle. Federal Inspectors General have been tenacious partners in our anti-crime efforts, initiating hundreds of investigations, audits and reviews in the past year. Other federal investigators, along with their state and local counterparts, also have been monitoring Recovery projects. Because so many eyes are focused on the money, the Recovery program is not likely to become enmeshed in scandal.
Postscript: The Recovery Operations Center has been lauded in recent weeks for its use of technology to identify potential fraud and waste. Our technology tools will soon be deployed in a pilot program that will examine fraud in the Medicare program. But we are not resting on our laurels. As I write this, we are developing a plan to make our operations center even more innovative.
Watch a video of the Recovery Operations Center.