2. Leaders Must Ensure Oversight and Accountability
Because relief funds are allocated separately at the state, local and municipal levels, there’s a real risk of overlap and waste. While government leaders should make every effort to coordinate spending to avoid duplicate programs by state, county and city officials, controls must be put in place to ensure oversight and accountability.
States and localities should consider establishing an independent, nonpartisan commission to monitor and administer federal funds.
Such a commission’s main goal is to develop policies, procedures and reporting systems to distribute money wisely. Still, its primary charter is the efficient and timely release of funds. Keeping the commission lightweight and free of bureaucracy will ensure a happy medium between ensuring funds have a real, sustainable impact and minimizing wasteful spending.
3. Governments Should Establish Spending Guidelines
Although there’s greater flexibility in how funding from the American Rescue Plan Act can be spent than previous aid packages, it’s not a free-for-all.
To ensure alignment with spending priorities and federal parameters, clear and stringent spending guidelines are needed. These guidelines can help officials set limits on the types of products and services that can be procured and approved, aiding with compliance reporting and ensuring everyone is marching in the same direction.
There will be exceptions, of course, and allowances must be made for the priorities of individual municipalities. If a request for funds falls outside the guardrails, leeway must be factored into the approvals process so cities get the funds they urgently need.
4. Agencies Must Monitor for Waste and Fraud
Even with these checks and balances in place, wasteful and unauthorized spending unaligned with pandemic recovery priorities is inevitable — and hard to detect.
Siloed legacy systems don’t always provide the transparency needed to track and monitor each pandemic relief-related purchase, and states and localities simply don’t have the staffing capacity to comb through everything.
A better approach is to leverage artificial intelligence and machine learning to detect anomalous behavior. These combined technologies look for unusual events or deviations from the norm that might merit a follow-up investigation. Models can be created to detect larger expenditures, multiple smaller purchases from the same vendor, credit card purchases and the use of unauthorized vendors. The same technology can be used to identify and deny fraudulent unemployment and benefits claims.
Agencies can also apply data analytics to automatically scan funding requests and purchase orders for keywords such as “COVID” or “pandemic response” and flag them for closer scrutiny to determine if they represent an acceptable use of funds.
Wish Lists Require Structure and Control
The American Rescue Plan Act provides a rare opportunity for state and local governments to repair the damage caused by the pandemic and create a more prosperous future.
But while states are making plans for the influx of federal money, it behooves them to develop a framework to ensure appropriate planning, oversight and visibility.
More than just working against fraud and wasteful spending, this framework is about transparency. It’s what keeps governments accountable, and constituents informed.