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Two Tips to Quickly Improve Stimulus Funds Tracking
There’s one catch with the billions of dollars in stimulus funds that could pour into government agencies throughout the world this year: the onus will be on state, regional, and local governments to adequately track and take responsibility for how the funds are being spent.
For example, the portions of the US$787 billion American Recovery and Reinvestment Act (ARRA) that will fuel state and local projects in the U.S. are “suddenly federal funding on steroids,” says Wayne Bobby, Oracle vice president of the Oracle Public Sector solutions in North America. “But the Obama administration is saying there are going to be more eyes on you than ever before, and you are expected to take seriously your responsibility to be accountable.”
The stimulus measure, which was signed into law in February, requires state or local governments to certify that ARRA-related infrastructure investments receive a “full review and vetting” to ensure that the spending represents “an appropriate use of taxpayer dollars.”
Bobby says a similar push for greater financial transparency in the public sector isn’t just a U.S. phenomenon. As other nations enact or contemplate similar economic stimulus measures, officials are looking for quick ways to shore up or in some cases jump-start oversight measures. “The big challenge for public officials is to accurately know what money they have and to constantly track where it’s going,” Bobby says.
As a result, governments are racing to plug any gaps in their existing accounting, reporting, and analysis systems. In the U.S., the first formal spending reports are due in July. “This means that most agencies are looking for quick answers. There’s no time to implement applications that are going to take a year or more to launch. So it comes down to, ‘What quick things can I do?’” Bobby says.
To help state and local governments, Bobby advises officials to focus on two important areas.
First, assess the strength of existing accounting systems for their ability to accurately manage all the various types of incoming stimulus funds. For example, ARRA funding designations range from investments for infrastructure and local water projects to aid for education, job training, and Medicare. “Governments need a firm grasp of the monies that have been awarded to them and where that money is going,” Bobby says.
In addition to ERP systems, business intelligence applications can help managers track and analyze spending.
Second, organizations need a comprehensive governance, risk, and compliance (GRC) system that can integrate business intelligence, process management, and automated controls for risk and compliance management. “These capabilities help organizations establish policies and procedures for dispersing the funds and provide guidance for how all of the people who receive funds should proceed,” he explains.
GRC systems are especially important given the short deadlines to enact governance controls. “There’s a tendency when agencies are doing something quickly to just plug holes, which can create vulnerabilities,” Bobby says. “These governance and risk mitigation capabilities make sure you document practices and put the right policies and procedures in place.”
Get more information about the American Recovery and Reinvestment Act.
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