Sneak Preview: GAO Seeks Uniform Guidance for Federal Disaster Funding

January 15, 2014 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from an article in the Single Audit Information Service.) Because of the necessity to deliver federal relief funding quickly following natural disasters, the Office of Management and Budget recently concurred with a Government Accountability Office recommendation that standard guidance for federal agencies is necessary to better distribute funds as quickly as possible while reducing potential fraud and abuse that can often occur in these situations.

After Hurricane Sandy ravaged many East Coast states in October 2012, President Obama signed the Disaster Relief Appropriations Act, which provided about $50 billion in supplemental appropriations to 61 programs across 19 federal agencies. The act required agencies to submit plans related to the Sandy recovery funding in accordance with OMB criteria by March 31, 2013. OMB on March 12, 2013, issued Memorandum M-13-07, Accountability for Funds Provided by the Disaster Relief Appropriations Act, which directed federal agencies to provide a description of incremental risks they identified for Sandy disaster relief funding as well as an internal control strategy for mitigating these risks.

Although federal agencies prepared the internal control plans, GAO found that they did not consistently apply OMB’s guidance, because of the escalated nature of disaster funding to distribute as quickly as possible.  Agencies’ plans ranged from providing most of the required information to not providing any information on certain programs, GAO found.

For example, OMB required each of the 61 programs to discuss its protocol for improper payments, adding that all federal programs or activities receiving funds under the act are required to calculate and report an improper payment estimate, and that agencies should manage all Sandy-related funding with the same discipline and rigor as programs that are traditionally designated as high-risk for improper payments. However, GAO found that this improper payment protocol was included in federal agency plans for only 38 programs, while 11 programs included partial information and 12 programs had no information on improper payments.

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