Text Size:   A+ A- A   •   Text Only
Site Image
Oregon Internal Control Toolkit for the American Recovery & Reinvestment Act of 2009
The American Recovery and Reinvestment Act of 2009 (ARRA) provides for extraordinary levels of transparency, this will result in a great deal of scrutiny over the way funds are expended.  It is increasingly important to ensure your programs are operating effectively and efficiently.  The Federal Office of Management and Budget has created a website to provide information about the ARRA and its progress (www.recovery.gov), this site is intended to provide general information and tracking of the federal stimulus funds to citizens.   It will also be a very valuable tool for government agencies to utilize as well.   
With the passage of the ARRA there could be an increased potential for fraud, waste, and abuse.  It is important to ensure that your agency has considered the potential for misuse and taken steps to ensure there are adequate controls in place.  Controls can take the form of prevention, detection, or monitoring controls.  In grant programs, which will be the case for a large portion of the federal stimulus money that is disbursed through the ARRA, it is especially important to consider preventative controls.  Once grant dollars have been disbursed fraudulently or improperly, the government is likely to recover only a few pennies on the dollar.  In the context of grant programs, preventative controls are the processes and procedures that keep ineligible individuals and questionable organizations from gaining access to grant funds in the first place.  The GAO has recommended that some of the following controls be considered:
  • validating data used in decision making against other government or third party sources;
  • whenever possible inspecting information to confirm its validity prior to payment;
  • conducting system edit checks to identify problems before payments are made; and
  • training staff on fraud awareness. 
The purpose of this webpage is to provide a central location for state agencies to find useful information, resources, tools, and links regarding the ARRA.  This site will be changing as more information and resources become available.  If you have, or are aware of, information that would be beneficial for this webpage please contact Erin Haney, Statewide Financial Internal Controls Officer. 

Increased Federal Oversight
Agency Internal Controls Reviews
There has been significant media coverage not only about the $787 billion federal recovery package, but also concerning the accountability for ensuring that the funds are spent properly and in a transparent manner.  According to a February 9, 2009 memorandum issued by White House Chief of Staff Rahm Emanuel and Office of Management and Budget Director Peter Orszag, stipulations of the economic recovery plan “will require sustained focus by managers throughout the federal government, particularly in planning, awarding, managing, and overseeing contracts and grants.”  As a result, those state agencies that will be receiving funds from the stimulus package should begin developing plans immediately to both track and report expenditures relative to the receipt of these funds as well as ensuring that they have been properly authorized prior to their disbursement.
“We cannot overstate the importance of this effort,” wrote Emanuel and Orszag.  “We are asking the American people to trust their government with an unprecedented level of funding to address the economic emergency.  In return, we must prove to them that their dollars are being invested in initiatives and strategies that make a difference in their communities and across the country.  Following through on our commitments for accountability and openness will create a foundation upon which we can build as we continue to tackle the economic crisis and the many other challenges facing our nation.”  Unquestionably, agencies and authorities receiving funds from the federal recovery package should ensure that they can prove that the funds intended to be used on a specific project or purpose of the funding are traceable to the project.
State Agencies are required to establish significant and effective internal controls, oversight mechanisms, and other approaches to meet the accountability objectives of the act and to expedite, if necessary, the process for awarding and overseeing the funds.  Significant and effective, however, does not necessarily translate into unduly complicated.  With regard to proper authorization for expenditure disbursement, agencies are encouraged to review their internal controls and take steps to ensure a heightened level of oversight from agency management and governing bodies concerning the stimulus funds.  The Oregon State Controller’s Division is available as a resource to agencies with needs for review of internal controls. Contact the SCD Statewide Financial Internal Control Officer at (503)378-3156 ext 277.

Fraud Awareness
Fraud Reporting to the State Controller's Division
Allegations of ARRA fraud can be reported to the SCD Statewide Financial Internal Control Officer at (503) 378-3156 ext. 277 Monday – Friday from 8:00 am - 4:30 pm (if no one is available to take your call, leave a name and call back number). 
The State Controller’s Division recommends each state agency receiving ARRA funds consider designating an individual to assist with any agency-based internal investigation of allegations to determine if there is sufficient credible evidence to make appropriate referrals to the Oregon Department of Justice, Oregon State Police, and the Oregon Secretary of State Audits Division.
The State Controller’s Division further recommends each state agency receiving ARRA funds inform their program administrators and sub-grantees of the whistleblower protection offered in section 1553 of the ARRA.
On March 30, 2009 the GAO issued a press release seeking the public's help in fighting fraud, waste, abuse, and mismanagement of ARRA funds. 
Additional information regarding fraud awareness and whistleblower protections can be found on the State Controller's Division Fraud Webpage

Resources and Links
Oregon State Government
Internal Control Guidebook 
Self-Assessment Tools 
Training Opportunities 
Fraud, Waste, and Abuse 
Grant Guidance 

Federal Government
ARRA - Full Version (pdf)
Guide to Grant Oversight and Best Practices for Combating Grant Fraud (pdf)
GAO's Role in Helping to Ensure Accountability and Transparency (pdf)
OMB Updated Implementation Guidance for the ARRA (pdf)
OMB Circular A-133 Compliance Supplement Appendix VII - ARRA (pdf)
OMB Circular A-133 Compliance Supplement Addendum #1 (pdf)
OMB Circular A-133 Compliance Supplement Part 6 - Internal Controls (pdf)
OMB Implementation Guidance for ARRA Reporting (pdf)

Other States Resources
Pennsylvania Accounting Quality Assurance Review Checklist (xls) - This checklist was designed for Pennsylvania's accounting staff and is geared towards a central reporting solution and enterprise risk planning (ERP).  It has been provided as resource for informational purposes. 
Mississippi ARRA section 1512 preparer and reviewer checklists - These checklists are designed for the structure in Mississippi, as such much of the information is specific to their environment.  These have been provided as a resource for informational purposes.  Please note that a description of the icons used in the checklists is included in the footer of both documents, it may be necessary to use the print preview function in order to view this information. 
Mississippi ARRA Section 1512 Checklist Instructions (pdf)
Mississippi ARRA Section 1512 Preparer Checklist (xls)