Federal Stimulus Funds – Items to Consider

Has your company received a portion of the American Recovery and Reinvestment Act of 2009 funds or do you anticipate applying to receive such funds?  If so the following are a few key points that should be discussed/considered:Consider appointing a Recovery Act “Czar” who is responsible for becoming familiar with the numerous requirements associated with the Recovery Act funds and communicate them to others in the organization.  They will also be a resource for others in the organization and be indicative of a strong “tone at the tope” for the importance of compliance with Recovery Act awards.

• Additional controls and systems may be required to ensure that Recovery Act funds are separately identified and tracked in the accounting system.  This segregation will have to carry through to the Schedule of Expenditures of Federal Awards and the Data Collection Form.
• Additional controls and systems may be required to meet the stringent reporting requirements to the federal agencies. 
• Internal control over compliance is extremely important to ensure funds are spent appropriately.  Consider the following:
  • Are control procedures over federal expenditures appropriate, working properly and designed to prevent unallowable expenditures?
  • Are additional controls and systems required to ensure that Recovery Act funds are separately identified and tracked?
  • Are new controls needed to meet the stringent reporting requirements to the federal government?
  • If Recovery Act funds are passed down to subrecipients are controls in place to ensure appropriate monitoring and reporting requirements?
• The Federal Audit Clearinghouse is required to provide public access, via the internet, to all single audit reports filed with the FAC for fiscal years ending 9/30/09 and later.  This will include the Schedule of Findings and Questioned Costs, if applicable.
• With the addition of Recovery Act funds, there will likely be more high-risk programs and additional compliance requirements that auditors will need to test.

For more information, see the Government Audit Quality Center Alert No.’s 106, 111 and 112 and the OMB Circular A-133 Compliance Supplement Appendix 7.