Study: Crowdsourcing, social networking urged in stimulus oversight

A report issued earlier today finds that proper management, monitoring and the use of new technology tools can mitigate fraud and waste in the stimulus funds.

Deloitte Consulting released “Going Beyond Compliance,” a guide for local, state and federal agencies to deal with the American Recovery and Reinvestment Act (ARRA) objectives of fast, transparent and accountable spending under the stimulus package. The report focuses on “shovel-ready” infrastructure projects, but should be applied to any area receiving large amounts of money, says global public sector director for Deloitte Research William D. Eggers.

“To prevent large amounts of fraud, waste and abuse from derailing stimulus projects, it is critical for every organization receiving substantial ARRA funds to understand all the risks, put the basic controls in place — from planning all the way through to closeout audits — and then to effectively execute them,” Mr. Eggers said in a statement.

This study comes on the heels of a report filed by Oklahoma Republican Senator Tom Coburn, detailing $5.5 billion in stimulus spending he considers wasteful. The 45-page deep report (.pdf) includes a Top 10 list and a breakdown of questionable projects by region.

“I opposed the stimulus bill because I was concerned that 80 to 90 percent of the spending would not be true stimulus. I hope I am proven wrong. Yet, our initial findings continue to show that taxpayers are not getting the value they deserve and need,” Coburn said in a statement released by his office.

White House senior adviser for Recovery Act Implementation Ed DeSeve retorted, “If Sen. Coburn has found any problematic projects, we will address them immediately – but much of this seems to be little more than an objection to the Recovery Act itself, which Sen. Coburn opposed,” according to a story by Politico.

The Deloitte report finds that Recovery Act projects can be derailed by any number of problems from insufficient planning and inaccurate cost projections to outright fraud. But according to Deloitte Consulting principal Eric Friedman, innovation in management and creative planning can mitigate the risks.

“Only after the basics are in place can program management and anti-fraud program controls be further strengthened by utilizing more innovative management and technology practices,” Mr. Friedman said. “Even in planning, it’s important to be innovative and creative.”

Included in the report’s suggested management and technology practices are crowdsourcing, “to help oversee ARRA spending” and social networking tools, “to respond to the hundreds of thousands” of suggestions and inquires surrounding the Recovery Act.

A different report, filed earlier this month, by Deloitte Touche predicted as much as $50 billion may end up being fraudulently spent.

Related articles concerning Recovery Act reporting requirements and fraud detection:

“The Mile-High approach to transparency,” 5-28

“Recovery Act ROI: A conversation with CGI’s Caroline Rapking,” 4-13

“Selling efficiency in a down market,” 4-29

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