As the $787 billion in recovery funds begins trickling down to states and cities across the country, what is the government doing to ensure that taxpayer dollars are spent responsibly? The Senate Homeland Security and Governmental Affairs Committee explored these and other important questions at a hearing this morning entitled “Follow the Money: Transparency and Accountability for Recovery and Reinvestment Spending.”
From POGO's perspective, the hearing provided useful answers to some ongoing questions about stimulus oversight, while at the same time raising additional concerns that will need to be examined in the weeks ahead.
Phyllis Fong, Inspector General (IG) at the Department of Agriculture and Chair of the Council of the Inspectors General on Integrity and Efficiency, addressed an important question about IG independence. Amit Paley at The Washington Post and others have reported on concerns about a provision in the stimulus bill that would allow the Recovery Accountability and Transparency Board to request that IGs initiate or call off an investigation. Although we did our best to convince reporters that the provision would not actually hinder IG independence, this concern has lingered in the press over the past few weeks.
So we were very glad to hear Fong explain in her opening statement why complaints about this provision have been overblown: 1) the Board will be composed entirely of IGs; 2) the Board will be chaired by the "Big Guy," former Interior IG Earl Devaney; and 3) section 1527 of the stimulus bill explicitly recognizes the independence of IGs and clarifies that they can deny any request made by the Board.
Nonetheless, the Committee did raise other concerns about recovery oversight that are deserving of much greater attention.
As always, Sen. Claire McCaskill (D-MO) led the way. She asked the witnesses about a troubling provision in the Office of Management and Budget's (OMB) initial guidance to federal agencies which states that “reporting requirements only apply to the prime non-Federal recipients of Federal funding, and the subawards (i.e., subgrants, subcontracts, etc.) made by these prime recipients. They do not require each subsequent subrecipient to also report.” As she pointed out, the public should be able to examine how the stimulus funds are actually spent on the ground level. OMB Deputy Director Robert Nabors explained that the administration was concerned about imposing a reporting burden on small businesses, but McCaskill was not satisfied. She told Nabors that "this guidance doesn't match what we've advertised," and asked OMB to review its reporting requirements.
McCaskill also brought up the need to hire additional auditors and investigators to oversee recovery spending. Drawing on her experience as a Missouri state auditor, she said that the oversight bodies should be enlisting the services of former state auditors who were forced into early retirement due to budget concerns. She argued that many of these auditors would probably be willing to work on a short-term basis to assist with the oversight effort. The witnesses fully agreed with her recommendation, and observed that their offices would have much greater flexibility to recruit former auditors and investigators if the Office of Personnel Management (OPM) issued a blanket waiver to allow retirees to return to work without an offset to their pensions. As it currently stands, agencies would have to request a waiver from OPM on a case-by-case basis.
Legislation now pending in the House would allow the Special IG for the Troubled Asset Relief Program to hire 25 of these so-called retired annuitants. Hiring these retirees, who are already trained in government oversight, would allow these offices to ramp up quickly. We'd frankly like to see these waivers granted more often in the case of all IGs.
Finally, McCaskill remarked that she would like to see fewer pictures and videos of President Obama on Recovery.gov, and more links to audit and investigative reports.
We take great comfort in knowing that a strong watchdog like McCaskill is heading up the new Subcommittee on Contracting Oversight, and we hope that Congress will continue to ask tough questions about the expenditure of billions of taxpayer dollars.
-- Michael Smallberg