HAGÅTÑA — Assistant Inspector General Rob Knox warned yesterday that fraud remains a likely specter as the region is set to share in billions of dollars in stimulus funds.
“Past experience has proved that there is an increased risk of fraud and waste when large dollars are coupled with quick spending and new requirements,” Knox told participants at the 20th Annual Association of Pacific Islands Auditors conference.
Knox fears that although grants funded by the American Recovery and Reinvestment Act of 2009 require unprecedented levels of accountability and transparency, some government officials will still find ways to personally benefit from these funds.
With the passing of the recovery act, Knox was selected as the assistant inspector general to form a new office in the Office of the Inspector General.
The Office of Recovery Oversight provides direct oversight on over $3 billion in Department of the Interior expenditures through contracts or financial assistance. His office focuses on preventing, detecting, and reporting failures in project performance or instances of fraud occurring in recovery spending.
The U.S. Congress has identified more than $800 billion in unprecedented economic stimulus, a response to a financial crisis not seen since the Great Depression in the 1930s.
Knox said Americans will be watching closely to see how and where their tax money is being spent.
He added that there are risks associated with the distribution of stimulus funds and that oversight is extremely critical to ensure the monies are utilized for their intended purposes he told the public auditors and financial professionals at the conference which concludes today.
“Old crimes are not going to go away,” said Knox. “That’s why it is so important that public auditors learn how to detect fraud and abuse of stimulus money.”
The assistant inspector general advised auditors to be on the lookout for fraud indicators like altered records, missing documents and unusually large amounts of cash payments. He added that officials who embezzle grant money have become increasingly sophisticated over the years, something auditors must keep in mind.
According to Knox, the only way agencies can stay ahead of the game is to ensure its employees are properly trained and familiar with grant management procedures.
However, some local auditors expressed grave concern over the additional expectations and higher degree of accountability they must now meet as a result of stringent regulations that come with the federal stimulus windfalls.
An employee from the Office of Public Accountability griped that the U.S. government is not providing any funding for local auditors to receive up-to-date grant management training.
“It’s like they are setting us up to fail,” said the OPA staffer who asked not to be identified. “They want to implement all these accountability regulations, but they don’t seem interested in investing in the people tasked to carry them out.”
The OPA staffer further complained to Variety that the new regulations will increase the workload for local auditors, who must do additional work for the same amount of pay. She also admitted her general discontent with the federal stimulus strategy in the first place saying she did not agree with President Obama’s plan.
Knox, who had earlier noted that financial conservatives were not happy with the federal stimulus policy, however, countered observations like those made by the unnamed staffer as not quite right.
He pointed out, for example, that there is, in fact, funding available for the administrative costs associated with increased transparency and accountability requirements of stimulus dollars.
Knox further explained that it is incorrect to assume there are no monies available for staff training as the anonymous OPA staffer claimed. Knox said that the U.S. Office of the Interior allows for five percent of its stimulus package to address such needs.
“The funding is there,” said Knox. “Agencies just need to apply.”
