New bipartisan legislation from Sens. Gary Peters, D-Mich., and Ron Johnson, R-Wis., aims to improve the quality, usability, and completeness of grant recipient audit data.
State, local, Tribal, and territorial governments receiving over $1 million in Federal grants must submit annual independent audits of their financial controls, but the resulting public data is often fragmented, limiting Federal oversight and informed decision-making in grant allocation, the senators said on July 19.
The Financial Management Risk Reduction Act would act on key recommendations from a recent Government Accountability Office (GAO) report that highlighted issues affecting the reliability and usefulness of independent audits for state, local, Tribal, and territorial governments receiving over $1 million in Federal grants.
According to the report, these issues include inconsistent audit data quality, instances of noncompliance with auditing requirements, and difficulties in accessing and analyzing the resulting data.
“Effective oversight of federal grants is crucial to ensuring taxpayer dollars are spent wisely and efficiently,” said Sen. Peters, who chairs the Senate Homeland Security and Governmental Affairs Committee. “My bipartisan bill will enhance our nation’s ability to fight fraud and minimize financial risk to the federal government. By improving the quality and accessibility of audit data, we’re increasing transparency and safeguarding billions in public funds.”
The bill would streamline how the government analyzes independent audit data and improve its ability to combat fraud.
Specifically, the bill directs the Office of Management and Budget and the General Services Administration to identify fraud risk with a new cross-governmental strategy and advanced analytical tools.
To improve the quality of independent audit data, the bill will also require periodic governmentwide reviews of audit quality that incorporate findings from Federal oversight entities.
Lastly, the bill would increase Federal agency coordination to ensure recipients of Federal awards are complying with requirements and submitting their required audits.
“I am very pleased that the bill incorporates multiple GAO recommendations to help improve the quality and completeness of information on single audit results. It is a step in the right direction in helping to ensure federal award recipients are complying with the requirements of their awards. If effectively implemented, the provision in the bill will strengthen accountability and transparency over federal funds,” said Eugene Dodaro, head of the GAO.
