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:
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 Recovery.gov include:
The agencies will also be carefully reviewing the quarterly data that Northwestern submits to FederalReporting.gov 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.
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 FederalReporting.gov and Recovery.gov 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 FederalReporting.gov, 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.
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:
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.