How the Federal Government will Ensure the Transparency and Accountability of Northwestern’s Recovery Funds

Email us.

Role of Agencies | Role of the OMB | Agency Inspectors General | A-133 Audit

Expectations for Northwestern

The American Recovery and Reinvestment Act (ARRA) commits $21.5 billion of the $787 billion in stimulus funds to research and development. With an allocation of ARRA funding to the NIH and NSF that is equal to a third or half of their annual budget, respectively, comes the expectation of an unprecedented level of transparency and accountability that is beyond standard practice typically associated with a federal award. Northwestern University has received in excess of $100 million of ARRA funding.

Because the federal government has an obligation to taxpayers to ensure that recipients are efficient in the delivery of the services or goods they were trusted to deliver, the White House has created numerous standards for the accountability, oversight, and transparency of stimulus funding. For Northwestern and other research institutions, the receipt of stimulus funds will have clear and significant implications on our pre- and post-award functions as well as the information systems that support sponsored research.

Administrative and reporting requirements for Northwestern include:
  • Distinguishing recovery act funding from non-recovery act funding
  • Quarterly ARRA reporting of up to 99 data fields with the highest degree of accuracy and quick turn-around times (i.e., within 10 days after the end of the quarter)
  • The number of jobs created and retained, including subrecipients’ and some vendors’ jobs data
  • Accurate tracking of each award’s progress and completion status
  • Timely expenditure of funds, with an expectation of a government response if funds are not being spent fast enough
  • Close adherence to purpose of spending and monitoring to ensure that fraud or waste does not occur
  • More detailed cash management for some agencies, including individual draw-down of funds for each NIH ARRA award
  • Heightened audit attention under OMB Circular A-133

back to top

Role of Agencies in the Reporting Process

The federal agencies are responsible themselves for reporting their Recovery data to the government. The financial and activity reports that each agency must submit on a weekly basis to include:

  • The amount of Recovery funds that the agencies have made available to Northwestern
  • The amount of Recovery funds actually paid out to the Northwestern
  • The types of awards—grant, contract, or loan

The agencies will also be carefully reviewing the quarterly data that Northwestern submits to to ensure that data elements such as the amount and dates of the award match their own data and that expenditures and jobs created/retained are within expected ranges. Agencies will contact Northwestern’s ARRA reporting team if any clarification or correction is needed.

back to top

Role of the OMB

The concept of transparency is a core component of Recovery Act spending. By law, the actual implementation of the Recovery Act is under the White House Office of Management and Budget (OMB). OMB works with the Offices of the Inspectors General to assure the prevention and detection of waste, fraud, and abuse and assuring transparent reporting of Recovery-related funds as they are distributed and used.

The OMB, together with the Recovery Board, will play a major role in assuring the transparency and accountability of research awards made with ARRA funds. In addition to creating the and websites for collection and reporting of stimulus data, the OMB provides specific guidance to the agencies on the accountability expectations of their own awards. The agencies in turn have passed the OMB requirements to their awardees in the form of additional terms and conditions. Some of these additional terms and conditions of ARRA awards include the need for Northwestern to report quarterly on its awards to, the need to collect and report subrecipient demographic information , and the need to report any credible evidence of fraud or misconduct to the relevant Office of Inspector General.

back to top

Agency Inspectors General

As part of the ARRA, the 28 federal agencies distributing Recovery funds have received a large infusion of funds for the specific purpose of hiring additional staff in the Offices of the Inspectors General to oversee the proper stewardship of Recovery funds by both the agencies, who provide the funds, and recipient universities, who expend the funds. Inspectors General continually review their agencies’ management of Recovery funds to verify that the projects meet legal and administrative requirements. In addition, Inspectors General submit monthly status reports on costs incurred, Recovery-related actions, and plans outlining general goals for overseeing the agency’s Recovery spending.

To ensure that accountability requirements are being met, the Inspectors General will continually review their agencies' management of Recovery funds with the following objectives:

  • Were the Recovery funds awarded and distributed in a prompt, fair, and reasonable manner?
  • Is the public clear on the identity of the recipients and how the Recovery funds have been used?
  • Are the public benefits from the use of Recovery funds being reported clearly, accurately, and in a timely manner?
  • Are Recovery funds being used for authorized purposes, and are adequate steps being taken to prevent instances of fraud, waste, and abuse?
  • Are Recovery projects avoiding unnecessary delays and cost overruns?
  • Do Recovery programs meet specific goals and targets?
The Inspectors General also work with managers of federal programs and recipients of Recovery funds to help prevent fraud, waste, and abuse. When cases of potential fraud, waste, and abuse are reported (the reporting of fraud, waste, and abuse is incumbent upon Northwestern), the Inspector General of each agency will decide whether to investigate and determine the validity of the allegations.

back to top

A-133 Audit

A-133 audits are performed annually to assure the Federal government that Northwestern has complied with applicable Federal laws in receiving Federal sponsored funds. The effects of Recovery funding on audits under OMB Circular A-133 will increase significantly during calendar years 2010 and 2011 as awards and expenditures under ARRA programs increase. The A-133 audit process will be a key factor in achieving the following accountability objectives in the OMB Guidance: (1) that recipients and uses of all funds are transparent to the public, and the public benefits of these funds are reported clearly, accurately, and in a timely manner; and (2) that funds are used for authorized purposes and instances of fraud, waste, error, and abuse are mitigated.

In addition to a rigorous reporting process for each individual ARRA award, Northwestern’s awards will come under heightened scrutiny by our certified public accounting firm, Deloitte and Touche. Due to the inherent risk with the new transparency and accountability requirements over expenditures of ARRA awards, auditing firms are being instructed to consider all Federal programs with expenditures on ARRA awards to be programs of higher risk than conventional (or standard) research funding.

back to top