Stimulus Spending Strains Energy Department
According to Energy Department Inspector General Gregory Friedman, in a memo sent to Energy Secretary Steven Chu Friday, March 20, 2009, the $165 billion in stimulus cash to be distributed by the Department so dwarfs the annual Department budget of $27 billion that the resources of the agency for getting the money spent while avoiding fraud and abuse will be sorely tested. Friedman wrote that "the infusion of these funds and the corresponding increase in effort required to ensure that they are properly controlled and disbursed in a timely manner will, without doubt, strain existing resources."
In the last four fiscal years the Department of Energy investigations into misspent federal funds have resulted in about 150 criminal convictions, and fines and recoveries of more than $190 million. This represents a little over 17.5% of budget money, and suggests the Energy Department can expect more than $29 billion in waste and fraud just within its slice of the stimulus pie. As Friedman wrote in his memo: "This history suggests that the Department's Recovery Act efforts to establish an effective set of safeguards or internal controls to prevent fraudulent activity should be a priority." You mean it wasn't a priority already?
Friedman's memo acknowledges that low income home weatherization is the program most at risk for fraud, so if you intend to be working on projects of that nature, expect a lot of extra paperwork and figure your bid overhead accordingly.
Meanwhile, Vice President Biden announced the appointment of Edward DeSeve, Bill Clinton's Deputy Director of OMB, as chief adviser to Biden and OMB Director Peter Orszag in the coordination of stimulus package spending across federal departments. According to Biden's announcement, DeSeve's "management efforts inside the Executive Office of the President will complement the oversight work led by the independent Accountability and Transparency Board chaired by Earl Devaney." Watchers watching the watchers!
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