USDA oversight of Recovery Act spending faulted by OIG

By Daniel Enoch

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WASHINGTON, Sept. 2, 2014 - A USDA Inspector General's review has determined that the department was not sufficiently prepared to handle the mountain of cash - more than $28 billion -- that it was handed by the Recovery and Reinvestment Act of 2009.

As a result, the OIG said it uncovered a total of about $5 billion in questionable or unsupported costs which it said it has documented in 80 previous reports. The OIG audits resulted in 84 convictions and total recoveries of $11 million, and an additional $1.5 million in forfeitures and seizures.

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The report - “Lessons Learned from the Recovery Act: an OIG Perspective” - found that a number of USDA programs that were funded were not able to quickly stimulate the economy, although they were supposed to be “shovel ready.”

One example was the Natural Resources Conservation Service's Recovery Act plan for the Watershed Rehabilitation Program. While NRCS had stated that some 27 projects were supposed to be ready to go, none met certain Recovery Act goals, including that half of the funding be spent within the first 120 days, OIG said.

“As a result, NRCS spent almost $943,000 on projects that could not be completed and missed an opportunity to use $1.4 million Recover Act funds to help the U.S. economy during the recession,” OIG said in the report.

The Rural Utilities Service (RUS) controls over water and waste disposal loan and grant programs were also faulted. The OIG said its review found that RUS did not clearly convey to the public the additional time it takes once a project is obligated to begin construction. In 22 such projects that were audited, OIG said than less than 20 percent of the actual jobs identified in planning estimated had been created over 30 months after passage of the Recovery Act.

The OIG also concluded that:

-USDA could have done more to adequately oversee and monitor Recovery Act programs.

-While agencies needed quantifiable outcomes for Recovery Act progams, certain measures used by USDA were “not meaningful or realistic.”

-Agencies did not always report accurate information measuring how effective USDA was in accomplishing Recovery Act objectives, such as creating new jobs and protecting existing jobs.

One example of poor oversight was in the way officials in the Rural Development's Rural Business-Cooperative Service (RBS) reviewed Rural Business Enterprise Grant Projects for compliance. OIG found that RBS “did not obtain or review a significant number of required project forms and did not always ensure that grant recipients spent prior grant and matching funds before receiving funding for another project.”

“Based on overall sample results, we found that 49 percent of RBS grants may have similar issues, with a projected total value of $4.6 million,” OIG said.

In a letter to Agriculture Secretary Tom Vilsack accompanying the report, Inspector General Phyllis Fong noted that the report is a compilation of previously issued audits that have already been discussed with USDA management and that the OIG has not evaluated the adequacy of any corrective action that has been undertaken.

“The objective of this report is to consolidate our Recovery Act work to identify the cumulative lessons that can be learned to improve the integrity, efficiency, and effectiveness of USDA programs,” the OIG stated.

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