Preparation, Roles, & Responsibilities General Accounting Office May 7, 2009 American Recovery and Reinvestment Act Addressing State and Local Fiscal Challenges Through the American Recovery and Reinvestment Act April 2009 Federal Grants to State and Local Governments by Function
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Preparation, Roles, & Responsibilities
General Accounting Office
May 7, 2009
Addressing State and Local Fiscal Challenges
Through the American Recovery and Reinvestment Act
Source: Budget of the U.S. Government, Fiscal Year 2009, H. Doc. 110-84, Vol. III.
Note: Data shown are 2007 Actual Outlays.
Percent of GDP
Operating Surplus/Deficit Fall 2008
Operating Surplus/Deficit Jan 2009
Source: Historical data from National Income and Product Accounts. Historical data from 1980 – 2007, Sept. 2008 & January, 2009 GAO projections from 2008 – 2050 using many CBO projections and assumptions, particularly for next 10 years.
Percent of GDP
State and Local Government Non-Health Care Expenditures
State and Local Government Health Care Expenditures
Source: Historical data from National Income and Product Accounts. Historical data from 2000 – 2007, projections from 2008 – 2050.
Note: Health care expenditures include health care benefits for employees and retirees and medical spending on behalf of individuals, such as Medicaid and SCHIP; Non-Health Care Expenditures include all expenditures with the exception of health care and interest payments.
Taxes as a percent of GDP
Historical Growth Relative to GDP
Source: Historical data from National Income and Product Accounts
Note:Historical data from 2000 – 2007, projections from 2008 – 2050
1. Bimonthly reports on State and local use of funds
2. Comment (with CBO) on quarterly recipient reports
3. Short-term reporting requirements, including:
4. Longer-term reporting requirements, including:
GAO Analysts’ Role
The audit function is key to accountability of public
programs and use of public funds.
Obtaining an understanding of internal control is
considered a basic audit requirement for financial and
performance audits, in U.S. and international standards.
Yellow Book has specific requirement for considering
Internal control in the planning phase, when determining
the objectives, scope and methodology for the job.
…is the identification and analysis of relevant risks from both external
and internal sources that could negatively impact the organization’s
ability to achieve program or agency objectives.
…generally includes estimating the risk’s significance, assessing the
likelihood of its occurrence, and deciding how to manage the risk and
what actions should be taken.
…is generally part of an overall strategic approach to management and
is important for decisions on allocating resources and responsibility (accountability)
Red Flags include when the agency or program does not have:
adequate performance measures
an adequate strategic plan
The agency or program has recently undergone major change– e.g. new responsibilities,
reorganization, cuts in funding, expansion of programs, changes in management.
Agency or program is understaffed and/or workload has drastically increased, and staff
are having difficulties handling operational workload.
There have been previous issues with fraud, waste, or abuse.
Employees are unaware of policies and procedures, but do things the way “they have always been done.”
Operating policies and procedures have not been developed or are outdated.
Key documentation is often lacking or does not exist.
Control environment is bad
Employee morale is bad
Information and Communication
Information is needed by management and employees to monitor program implementation while maintaining proper accountability and internal control.
Pertinent information should be regularly tracked and communicated throughout the organization (down, up, and across) so that employees in all levels of the organization understand their role in achieving the organization’s mission and objectives, and their roles and responsibilities in maintaining proper internal controls.
Information and Communication
When top management needs information, there is a mad scramble to assemble the
information, or the process is handled through ad hoc mechanisms.
Key information requests for basic information on the status of operations are difficult for
the agency to respond to and require extra resources or special efforts.
Management is using poor quality information or outdated information for
Staff are frustrated by requests for information because it is time consuming
and difficult to provide the information.
Management does not have reasonable assurance that the information it is using is accurate
Internal control systems should be monitored to assess their effectiveness and to modify procedures as appropriate based on results of the monitoring activities (feedback).
Monitoring is accomplished through routine, ongoing
activities, separate evaluations, or both, and should be built
into the normal, recurring operating activities of an entity.
The monitoring process should also be used to ensure that audit findings and recommendations are adequately and promptly resolved.
What can agencies do?
Consider multiple perspectives: agency activity, sub-recipients, etc.