NEA IG Recovery Act Work Plan

As of March 31, 2009

The American Recovery and Reinvestment Act of 2009 ("Recovery Act") recognizes that the non-profit arts industry is an important sector of the economy. The National Endowment for the Arts is uniquely positioned to fund arts projects and activities that preserve jobs in the nonprofit arts sector threatened by declines in philanthropic and other support during the current economic downturn. The NEA has received $50 million under the Recovery Act. As part of this important investment, the Arts Endowment has developed a plan to expedite distribution of critical funds at the national, regional, state, and local levels for projects that focus on the preservation of jobs in the arts.

The Office of Management and Budget, in its "Initial Implementing Guidance for the American Recovery and Reinvestment Act" dated February 18, 2009, and subsequent related guidance, directs Inspectors General (IG) to perform audits and inspections of their respective agencies' awarding, disbursing, and monitoring of Recovery Act funds to determine whether safeguards exist to ensure funds are used for their intended purposes.

To ensure effective and efficient OIG oversight responsibilities, we have developed a two part plan:

Phase 1 – Immediate and short-term actions taken during the agency's planning and development stage for eligibility and selection process for potential fund recipients.

Phase 2 – Ongoing and proposed long-term actions. The overall objectives of the IG's oversight of the Recovery Act funds are to ensure (1) timely and effective implementation of NEA stimulus related activities, (2) proper internal control procedures are established and maintained, (3) fund recipients meet eligibility requirements; and (4) fund recipients properly comply with award requirements.

Phase 1

  1. Monitor and evaluate the development of the agency's program guidance and requirements for distributing stimulus funding, including eligibility requirements to determine agency compliance with the Recovery Act.
  2. Evaluate the agency's internal control systems utilized to ensure program objectives are achieved and program participants fully meet eligibility and reporting requirements.
  3. Increase staff. Submitted request for additional auditor to assist in Recovery Fund activity oversight. Vacancy announcement closed 4/1/09.
  4. Collaborative Activities - Designated an auditor as the OIG's representative to the ARRA – Investigative Working Group (Department of Justice Anti-Fraud Division), which will provide training, best practices, lessons learned and other resources from a working group of larger agencies receiving Recovery Act funds and the Department of Justice Anti- Fraud Division. The staff will also participate in other forums, training and working groups with other agencies, such as the Procurement Task Force, to identify other proactive and oversight measures to effectively and efficiently monitor Recovery activities.
  5. Outreach Activities – Working with the agency to provide and efficiently disseminate outreach materials, training and activities to both agency personnel and recipients of funding. Outreach materials will include fraud awareness literature and hotline information.
  6. Monitor agency website to evaluate information on applications, guidelines, eligibility requirements and other information dedicated to Recovery activities.
  7. Meet with key staff responsible for Recovery Act activities to (1) determine status of process and (2) provide recommendations or technical advice on internal controls, procedures or best practices of other agencies receiving Recovery funds.
  8. Review selected sample of application packages for approved recipients, before award notification, to determine if applications/awards meet NEA and Recovery Act eligibility requirements. (First sample review planned the week of 4/5/2009)
  9. Modify OIG website to include Recovery Act information. Requested toll-free hotline number and web-based reporting capability of fraudulent and improper activities from the IG website, which will include specific Recovery Act reporting.
  10. Utilize, as appropriate, legal counsel and investigative services obtained through Memorandums of Understanding (MOU) per interagency agreements with other IG offices.

Phase 2

  1. Develop an overall oversight plan to continuously monitor the agency's Recovery Act activities, including monitoring recipients of funding. Plan will provide a systematic approach designed for continuous and effective oversight throughout the period of Recovery funds program.
  2. Fund Recipient Outreach Effort - Review a sample of selected recipients to identify organizations which had prior OIG reviews, to 1) determine if any had open recommendations and (2) identify prior weaknesses such as problems in financial management and internal controls. We will follow-up with organizations to determine whether prior weaknesses have been corrected and/or advise them on possible controls to ensure effective expenditure of funding.
  3. Develop audit/evaluation programs to specifically cover Recovery Act funding requirements.
  4. Strengthen hotline procedures. Develop tracking system for hotline/fraud complaints to enable us to separately track, identify and report on: whistleblower complaints (federal and non-federal); Recovery Act allegations, as well as non-Recovery allegations. Assess hotline complaints received, to determine suitability for referral for investigation.
  5. Audit reports will be issued as necessary. A priority will be placed on quick turn-around reports, notifying the agency of any problems as quickly as possible so that immediate corrective action can be taken. Priority will be given to systemic problems. All reports will be made available on the IG website.
  6. Monitor and evaluate the agency's compliance activities such as reporting requirements and the accountability and transparency guidelines.
  7. Submit periodic reports as required by the Act.
  8. Attend weekly meetings with key staff responsible for agency Recovery fund activities, to discuss agency planned and completed tasks to determine where our efforts may be most effective.
  9. Evaluate agency's determinations of Recovery Act program effectiveness through analysis of performance (outcome) measures.

Note: This plan is preliminary and will be revised as new information is provided, priorities change and areas of vulnerability and risk are identified.