By Robert Brodsky
May 5, 2010Federal agencies for the first time now must contact new recipients of Recovery Act funds to notify them of their obligations to file mandatory spending reports, according to governmentwide guidance by Office of Management and Budget Director Peter R. Orszag.
No later than 10 days before the start of each quarterly reporting cycle, agency officials must touch base with first-time recipients of stimulus contracts, grants or loans to remind them of the reporting requirements and the consequences of noncompliance, Orszag wrote in a memo on Tuesday.
Agency officials also must reach out to recipients that were noncompliant in the previous reporting cycle and continue to follow up with them throughout the period "to consistently and comprehensively pursue compliance." Contact should be made by phone and with an accompanying letter faxed or mailed to the recipient, the guidance said.
"The vast majority of recipients have complied with the reporting obligations," Orszag wrote. "However, where a recipient has failed to meet these obligations, agencies will be held accountable for taking appropriate actions to enforce the reporting requirements."
The Recovery Act requires recipients to submit to FederalReporting.gov quarterly information on how they are spending the funds. But during the final three months of 2009, more than 1,000 recipients failed to file reports. More than 300 of those recipients also neglected to file during the initial reporting cycle in October 2009, according to data from the Recovery Accountability and Transparency Board. Later this month the board plans to post the list of nonfilers for the first quarter of 2010.
The agencywide guidance implements an April presidential directive to more aggressively crack down on awardees that refuse to disclose their spending.
If delinquent Recovery Act recipients continue to ignore warnings to file their spending reports, then agencies can restrict access to the awarded funds, Orszag said. Stimulus recipients that are noncompliant for two or more consecutive reporting periods could face stiffer punishments, including canceling the award, withholding funds, downgrading the company's performance record, or initiating suspension and debarment proceedings.
An amendment to the Senate's unemployment and tax extender bill, sponsored by Sens. Mark Warner, D-Va., and Mike Crapo, R-Idaho, would authorize the attorney general to pursue civil penalties of up to $250,000 against grant recipients who knowingly and consistently fail to report their stimulus spending. The bill is awaiting action in the House.
By Robert Brodsky
May 5, 2010